                                  Illinois Official Reports

                                          Appellate Court



                   Control Solutions, LLC v. Elecsys, 2014 IL App (2d) 120251



Appellate Court              CONTROL SOLUTIONS, LLC, Plaintiff-Appellant and Cross-
Caption                      Appellee, v. ELECSYS, a Division of DCX-CHOL Enterprises, Inc.,
                             Defendant-Appellee and Cross-Appellant.


District & No.               Second District
                             Docket No. 2-12-0251


Filed                        June 23, 2014



Held                         In an action arising from the cancellation of a contract for supplying
(Note: This syllabus         controllers for military equipment, the judgment for plaintiff, the “sole
constitutes no part of the   source” supplier under the contract, was affirmed, notwithstanding
opinion of the court but     plaintiff’s contention on appeal that the trial court erred in admitting
has been prepared by the     settlement communications in violation of Illinois Rule of Evidence
Reporter of Decisions        408, since the communications plaintiff objected to predated any
for the convenience of       dispute between the parties and did not fall within the scope of Rule
the reader.)                 408, the jury clearly accepted defendant’s theory that the contract
                             contained a termination-for-convenience provision as a flow-down
                             from defendant’s underlying contract with the Army, and under the
                             circumstances, plaintiff failed to establish that any proven elements of
                             damages were ignored.




Decision Under               Appeal from the Circuit Court of Du Page County; No. 09-L-1225; the
Review                       Hon. Hollis L. Webster, Judge, presiding.



Judgment                     Affirmed; cross-appeal dismissed.
     Counsel on                Thomas I. Matyas, Tracy A. Hannan, and Erin L. Brechtelsbauer, all
     Appeal                    of Edwards Wildman Palmer LLP, of Chicago, for appellant.



                               James F. McCluskey, James S. Harkness, Jennnifer L. Friedland, and
                               Patrick R. Boland, all of Momkus McCluskey, LLC, of Lisle, for
                               appellee.




     Panel                     JUSTICE HUDSON delivered the judgment of the court, with
                               opinion.
                               Justices Hutchinson and Jorgensen concurred in the judgment and
                               opinion.


                                                OPINION

¶1          Plaintiff, Control Solutions, LLC, filed a complaint in the circuit court of Du Page County,
       alleging breach of contract by defendant, Elecsys, a division of DCX-CHOL Enterprises, Inc.
       The matter proceeded to a jury trial. The jury returned a verdict in favor of plaintiff and
       awarded damages in the amount of $106,950. Following the denial of the parties’ posttrial
       motions, plaintiff filed a notice of appeal and defendant filed a notice of cross-appeal. In its
       appeal, plaintiff argues that the trial court committed reversible error by admitting settlement
       communications at trial in violation of Illinois Rule of Evidence 408 (eff. Jan. 1, 2011).
       Plaintiff also contends that, for various reasons, it was “deprived of a true jury trial” and
       therefore the jury’s award of damages should be reversed and the matter remanded for a new
       trial on damages alone, or in the alternative a new trial on liability and damages. In its
       cross-appeal, defendant asserts that, if this court grants plaintiff’s request for a new trial, the
       trial court’s order finding moot defendant’s “Unconscionability Motion” should be reversed
       and the motion should be considered on remand. For the reasons set forth below, we affirm the
       trial court’s judgment and dismiss defendant’s cross-appeal.

¶2                                         I. BACKGROUND
¶3         In February 2008, the Department of the United States Army (Army) solicited bids for the
       purchase of controllers to be delivered to the Rock Island Arsenal. The controllers are used in
       military equipment to assist in opening the doors of vehicles damaged in attacks. Under the
       terms of the Army’s solicitation, the controllers were required to be obtained from a “sole
       source” supplier. The “sole source” supplier for the controllers at issue was plaintiff. As a
       result, any party wishing to contract to sell the controllers to the Army was required to first
       purchase the controllers from plaintiff.
¶4         Defendant decided to bid on the Army’s contract. To this end, on February 20, 2008, Jill
       Hoover, defendant’s contract administrator, requested a quote from plaintiff for the purchase

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     of 4,010 controllers, part number CS3225N. Later that same day, George Roy Kell, then
     plaintiff’s director of business development, sent an email to Hoover that provided in relevant
     part:
             “THe [sic] price for the CS3225N is $930 @ at the 4-5K qtys. I will get you a formal
             quote tomorrow, the terms are FOB Origin, Net 30, NCNR [noncancellable,
             nonreturnable]. Delivery is 200/week, with a 10-12 week standard leadtime ARO [after
             receipt of order]. We understand this may be a DX rated contract, in which case we will
             typically do much better on the lead time with the contract and DX letter.”1
     In the same email, Kell asked Angelica Martinez, an employee in plaintiff’s accounting
     department, to provide Hoover a formal quote the following day, noting that the “destination is
     Rock Island.”
¶5       On February 21, 2008, Martinez provided Hoover a formal quote, quote No. Q020800004,
     incorporating the same terms as Kell’s email, including the noncancellable language. Attached
     to the quote was a document entitled “Quotation Terms,” which included an “Exceptions”
     clause providing in relevant part:
             “If Buyer’s acceptance of a quotation, proposal, acknowledgment of an order, or order
             itself contains verbal, written, printed, or stamped provisions or conditions inconsistent
             with the verbal, written, printed or stamped provisions and conditions of the quotation,
             proposal or acknowledgment of order, the provisions and conditions of Control
             Solutions, Inc., shall prevail.”
¶6       On or about March 3, 2008, after receiving plaintiff’s formal quote, defendant entered into
     a contract with the Army, designated as contract number W9098S-08-P-0430, for the sale of
     4,010 controllers, part number CS3225N. Under the terms of defendant’s contract with the
     Army, the Army expected the first shipment of 200 controllers to be delivered to the Rock
     Island Arsenal by May 30, 2008.
¶7       On March 5, 2008, Shauna Shay, an employee in defendant’s purchasing department, sent
     Kell the following email:
             “Per our convo [sic] this afternoon here is Purchase Order ELE0021671–for Quotation
             Number Q020800004[.] I have also attached a copy of [the] Government Rating
             Letter[.] Packaging Requirements (52.0000-4148) attached–per convo [sic] please
             send quotation to [my email address].”
     Defendant’s purchase order requested delivery of the first shipment of 200 controllers on May
     13, 2008. In addition, the purchase order made the following reference: “THIS PO IS
     GOVERNED BY THE TERMS AND CONDITIONS FOUND AT HTTP://WWW.
     DCXCHOL.COM/DCX/SUP.HTML[.]” The terms and conditions on defendant’s website
     provided that they “supersede any submitted by the Seller in any proposal or
     acknowledgment.” The terms and conditions also provided that “[t]he Buyer may terminate
     this order in whole or in part at any time upon written or telegraphic notice to the Seller” and
     that the contract is subject to Federal Acquisition Regulations (FAR), including a
     termination-for-convenience provision under FAR 52.249 (48 C.F.R. § 52.249-2 (2006)). In
         1
          According to testimony at trial, the government rates the priorities of its contracts. A DX rating is
     the highest priority, meaning that it takes precedence over other contracts. Although Hoover’s request
     for a quote did not mention the contract’s rating, Kell stated at trial that he had been told verbally by
     Hoover that the contract was DX rated.

                                                     -3-
       addition, the terms and conditions set forth specific remedies for the seller in case the contract
       is terminated for convenience.
¶8          On March 6, 2008, Kell sent Shay an email notifying her that the price per controller with
       packaging, handling, and insurance was $946 each and that a formal quote would follow. Later
       that day, Martinez sent Shay a revised quote. As with the original quote, the revised quote
       advised that “[a]ll orders are non-cancelable.” Attached to the revised quote were the same
       “Quotation Terms” that accompanied the original quote.
¶9          On March 14, 2008, Martinez sent Shay an email asking if she had revised the purchase
       order to reflect the new pricing of $946 per controller. Martinez also stated in the email that
       plaintiff would start shipping 200 pieces per week starting on May 13, 2008. On March 17,
       2008, Shay responded that she had been asked by Mike Jamison, defendant’s vice president,
       “to advise that parts should be wrapped in bubble wrap *** and sent in regular packaging box.”
¶ 10        On March 20, 2008, defendant submitted a revised purchase order ELE0021671 for 4,211
       controllers at $930 each. The revised purchase order requested that “order confirmation of
       increase” be sent to Shay’s email address. In addition, as with the original purchase order, the
       revised purchase order referenced that it was governed by the terms and conditions found on
       defendant’s website. On April 3, 2008, Martinez sent an email to Shay with the subject line
       “Revised Purchase order ELE0021671.” In the email, Martinez wrote: “[P]lease take this
       email as confirmation of the above PO. I also attached a shipping schedule.” The shipping
       schedule provided that weekly shipments of 200 controllers would commence on May 13,
       2008, and continue through September 30, 2008, when a final shipment of 211 controllers
       would be made.
¶ 11        On April 24, 2008, Michael McKee, plaintiff’s chief technology officer, sent the following
       email to Kell:
               “Please make sure we have not accepted [defendant’s] PO. If we have, please let me
               know immediately. Their terms and conditions are unacceptable in their present form
               *** and we’ll have to resolve the discrepancies before we give them any product.”
       Later the same morning, Kell emailed Martinez in reference to her April 3, 2008, email to
       Shay, stating, “This is an acknowledgment of the modified PO, do you have any record of
       acknowledgment of the original PO?”
¶ 12        On April 25, 2008, Shay sent Kell a revised purchase order ELE0021671, which contained
       a new shipping address. On May 12, 2008, Kell informed Shay by email that 200 controllers
       were scheduled to ship that week. However, in an email dated May 15, 2008, Shay noted that
       she received a call from Kell to inform her that, due to production delays, manufacture of the
       controllers was a week behind schedule.
¶ 13        Meanwhile, on May 19, 2008, Carrie Kammer, a contract specialist with the Army, sent an
       email to Nancy Melton, a representative of defendant. Kammer asked Melton to provide a cost
       estimate to the government for cancelling the contract for the controllers. Kammer advised that
       she was not sure that the Army would be cancelling, but that she needed the information to take
       to her superiors. Kammer further advised defendant to keep working on the order until further
       instruction. In response to Kammer’s email, Melton wrote, “No parts can be cancelled. Our
       cost will be the total contract.”
¶ 14        On May 20, 2008, Shay sent Kell an email requesting an update on defendant’s order. In
       response, Kell wrote that plaintiff was “planning on a shipment of 200 pcs on Friday.” The


                                                   -4-
       email further provided, “Attached is our standard order acknowledgment, we need your
       acceptance of that prior to shipping.” The order acknowledgment provided in part that “[a]ll
       orders are non-cancelable and non-returnable” and that “[c]ustomer acceptance of shipments
       or any other customer action from this acknowledgment shall signify acceptance of Control
       Solutions’ general Terms and Conditions of Sale that have been provided (see attached).” The
       “Terms and Conditions of Sale” included a “Cancellation” clause that stated:
               “In the event that a contract is cancelled by Buyer, or by Control Solutions, Inc.,
               because of default by the Buyer, then Buyer shall pay Control Solutions, Inc. for all
               damages sustained, including payment for partially or totally completed circuit boards
               or inventory required for the purpose of fulfilling said contract at the current applicable
               price.”
       Shay responded later the same day, writing, “On page 2 of order acknowledgment–states
       packaging in bubble wrap in cardboard box–5-10 per box–please note that each unit is to be
       packaged in its own box.” On May 21, 2008, Shay sent to Kell by email a letter on defendant’s
       letterhead. The letter paraphrased the order acknowledgment that Kell sent the prior day,
       including the provision that all orders are noncancellable, but included the packaging change
       requested by Shay.
¶ 15       Plaintiff shipped 100 controllers on or about May 23, 2008, and another 100 controllers on
       or about May 27, 2008. Defendant paid in full for the 200 shipped controllers. In an email to
       defendant dated May 29, 2008, Kell acknowledged that plaintiff was “behind *** our
       confirmed delivery plan.” Attributing the delay to “a supply chain issue,” Kell promised to
       have a “recovery plan” the following week and noted that plaintiff had “decided to ship the
       parts to [defendant] in the custom boxes and absorb the cost.”
¶ 16       Meanwhile, in a letter dated May 28, 2008, the Army notified defendant that “[p]ursuant to
       the clause of the contract entitled ‘Termination for Convenience of the Government,’ FAR
       52.249-2, you are hereby notified that contract #W9098S-08-P-0430 is completely terminated
       effective May 28, 2008.” The letter also instructed defendant to “[s]top all work immediately,
       terminate subcontracts, and place no further orders except to the extent that you or a
       subcontractor wish to retain and continue any work-in-process or other material for your own
       account. Telegraph or datafax similar instructions to all subcontractors and suppliers.”
¶ 17       On June 5, 2008, Shay sent plaintiff the following email:
               “I have attached a copy of letter from Department of the Army regarding Contract
               W9098S-08-P-0430, for all components purchased from Control Solutions on
               Purchase Order ELE0021671. This letter is a stop all work immediately order–due to
               engineering change because of weight of components. Please advise where Control
               Solutions is in production and any cancellation costs that there maybe [sic].”
       In response, Kell informed Shay that plaintiff “will meet to gather the non-cancellable
       obligated costs and *** get back to you.” In an email dated June 12, 2008, Kell wrote to
       defendant, “FYI, we have analyzed the situation, we have shipped 200 units to you so far, out
       of the 4211 total on the PO, leaving a balance of 4011. Our contract is NCNR, so at $930@, the
       cancellation liability is $3,730,230.” In response, Jamison wrote Kell that, when he received
       the cancellation audit forms from the Army, he would submit them to plaintiff to complete.
¶ 18       On August 26, 2008, Shay sent Kell the following email:



                                                    -5-
                   “I have been asked by Mike Jamison to contact you regarding information needed
               for government. If possible please provide the following[.]
                   How many pcs are built and ready for shipment[?]
                   What is the component inventory for this order that you have at your location and
               cost on this[?]
                   If you can provide cost break down and send via email to myself or fax.”
       Shay informed Kell that the information was required no later than September 5, 2008.
¶ 19       On September 5, 2008, Kell sent Shay an email with the title “Information Needed
       8.26.2008 Request” in the subject line. The email provided as follows:
               “After review, CSI has determined the following liability. Since the CS3225N is a
               modified COTS [commercial off-the-shelf] product, there is significant commonality
               with other CSI products. This means that the Finished Product only is unique. As such,
               CSI is willing to consider foregoing [sic] the true cancellation charges of 100% of the
               balance of the PO. This offer is predicated on the expectation that a speedy resolution
               of this matter will occur, as we are a small business and a cancellation of this
               magnitude is a significant impact on our financial status and cash flow as we planned
               both material and capacity to accomplish the expected delivery schedule.
                       1. Finished Goods–100 pcs at $930@=$93,000
                       2. WIP [works in process]–none, all WIP can be reallocated to other products
                       3. Raw Materials–none, all Raw can be reallocated to other products
                       4. Lost Profits–As this PO was NCNR, we expect to recover lost profits on the
                   balance of the unshipped units. Note that the issuance of this PO to CSI caused us to
                   add capacity for the entire order. We are submitting for 15% lost profits on the
                   balance of the order, assuming the 100 pcs of Finished Good [sic] are shipped and
                   paid for. Our records show that we have shipped and received payment for 200
                   units of the total 4211 on the PO, leaving a balance of 4011. If the 100 pcs of
                   [Finished Goods] are shipped and paid for, the new balance will be 3911. At a sell
                   price of $930, that leaves a balance of $3,637,230 due on the PO. At 15% profit as a
                   % of sales, that is a lost profit of $545,584.50.
               Please let me know if you have any questions, and your expected time to process these
               payments.”
¶ 20       On September 25, 2008, defendant submitted to the Army standard form 1435, entitled
       “Settlement Proposal (Inventory Basis).” Defendant’s proposal listed 100 finished controllers
       at $930 each, for a total of $93,000. Defendant also requested 11.4% of the cost of the 100
       finished controllers, or $10,602, for “general and administrative expenses.” On October 7,
       2008, Kell wrote to defendant regarding the status of the cancellation. Jamison responded that
       a claim was submitted to the Army late in September and that he would check the status.
¶ 21       On December 29, 2008, plaintiff generated invoice No. 10260, billing defendant for
       $638,584.50, consisting of $93,000 for the 100 finished but unshipped controllers and
       $545,584.50 as a 15% lost profit charge on the balance of the unfinished units. Kell informed
       Jamison of the invoice by email the following day, writing, “as of my last communication with
       your contracts person just prior to Christmas break, I understand the final settlement is not yet
       signed by the government, and we do not know the terms.” Kell explained, nevertheless, that
       plaintiff was issuing the invoice because it needed “to get our books in order for the end of the


                                                   -6-
       year.” Martinez posted the total amount of the invoice ($638,450.50) in plaintiff’s books as an
       accrued receivable.
¶ 22        Ultimately, the Army determined that the settlement proposed by defendant was fair and
       reasonable. Accordingly, early in January 2009, defendant and the Army finalized a document
       titled “Modification of Contract,” which reflected an agreement reached between the Army
       and defendant.
¶ 23        On March 30, 2009, plaintiff sent defendant an email inquiring about the status of the “past
       due” invoice. In response, on March 31, 2009, Shay wrote Jamison, stating that on March 19,
       2009, she contacted plaintiff and spoke with Paul Abbott. Shay informed Abbott that the cost
       amount on the invoice for the 15% lost profit charge “needs to be removed based on the fact
       that Purchase Order ELE0021671 was placed with Government flow down requirements of
       Contrat [sic] W9098S-08-P-0430, which means that [plaintiff] is unable to invoice for loss
       [sic] profit because [the] government does not allow payment for loss [sic] profit.” Shay
       further indicated that she asked plaintiff “that a letter stating the finial [sic] settlement in the
       amount of $93,000.00 be sent via email or fax on company letter head, and that payment would
       be able to be processed for $93,000.00 the following day.” In an email to plaintiff dated April
       1, 2009, Jamison explained that the purchase order that defendant submitted to plaintiff “was a
       flow down contract” from the United States government. Jamison added that the government
       “does not allow profit on a cancelled orders [sic] where parts are not delivered.”
¶ 24        On April 2, 2009, McKee and Kell engaged in an internal email exchange. As part of the
       exchange, McKee asked if Kell had indicated that lost profits were allowed. Kell replied, “I
       said I was going to claim them. I still think we need a legal/contracts opinion because of our
       way of acknowledging the PO’s [sic].” McKee answered, “Sure–I thought u [sic] said that
       there were provisions in the FAR for this. Either way, I agree with your approach.” Kell
       responded, “Actually, I had done it successfully in the past, but I had contracts and legal
       backup.”
¶ 25        On September 25, 2009, plaintiff filed suit against defendant for breach of contract. On
       May 31, 2011, defendant filed a “Motion for Evidentiary Hearing and for Summary Judgment
       as to the Issue of Contract Unconscionability” (Unconscionability Motion). In the
       Unconscionability Motion, defendant alleged that plaintiff’s last-minute demand that
       defendant accept the order acknowledgment before plaintiff would ship the controllers was
       unconscionable as a matter of law and that therefore the noncancellable language in the order
       acknowledgment should not be enforced against defendant. On September 21, 2011, the trial
       court denied the Unconscionability Motion without prejudice to its being raised after the court
       heard the evidence at trial.
¶ 26        On October 25, 2011, plaintiff filed various pretrial motions, including a “Motion in limine
       to Exclude Evidence of Settlement” pursuant to Illinois Rule of Evidence 408 (eff. Jan. 1,
       2011). In its motion, plaintiff claimed that, following defendant’s cancellation of the contract,
       the parties engaged in settlement discussions. Plaintiff asserted that, to this end, on September
       5, 2008, it conveyed to defendant by email a settlement offer in the total amount of
       $638,584.50. Plaintiff further asserted that it followed up on this offer in December 2008,
       when it sent an invoice to defendant for the same amount. According to plaintiff, defendant
       recognized that its offer was a “settlement overture” when, late in March 2009, Shay sent an
       email with a “counteroffer” of $93,000. The trial court denied plaintiff’s motion, finding that
       the parties’ communications “predate the dispute here.” The court allowed that plaintiff “may

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       argue, at the time of trial, that this was simply an attempt to settle,” but added that “based upon
       what was submitted *** [the communications at issue] are not excluded as offers of
       settlement.” Plaintiff renewed its objection at the start of the trial, but it was again overruled.
¶ 27       The case was tried before a jury from November 7, 2011, through November 15, 2011. The
       jury heard from 10 witnesses, including McKee, Jamison, Hoover, Shay, Martinez, Kell, and 2
       representatives from the Army. In its closing argument, plaintiff maintained that the “final
       signed writing” between the parties was formed on May 21, 2008, when defendant sent
       plaintiff a letter paraphrasing the order acknowledgment, including the noncancellable
       language. Plaintiff further argued that defendant’s cancellation of the contract was a breach,
       for which plaintiff was entitled to recover the remaining contract value minus any expenses
       saved by the breach. Plaintiff calculated this amount at $2.7 million. Defendant’s theory was
       that a contract was formed when plaintiff confirmed the purchase order on April 3, 2008.
       Defendant argued that, pursuant to its agreement with plaintiff, defendant could, and did,
       terminate the contract for convenience. Defendant further argued that its terms and conditions
       “specifically incorporate the government flow-down,” i.e., if the government terminates its
       contract with defendant, then the contract between plaintiff and defendant also terminates.
       Defendant also posited that, pursuant to government regulations, plaintiff’s damages were
       limited to completed items and raw and semiprocessed materials, but not profits.
¶ 28       On November 15, 2011, following deliberations, the jury determined that plaintiff proved
       that a contract had been formed, that defendant breached the contract, and that plaintiff
       sustained damages as a result. The jury awarded damages totaling $106,950, consisting of
       $93,000 for the finished but unshipped goods plus 15% of that amount, or $13,950, which the
       jury categorized as “lost potential investment income.”
¶ 29       On November 29, 2011, defendant filed a motion for judgment notwithstanding the
       verdict. On the same date, plaintiff filed a motion for additur, or, in the alternative, a new trial
       on the issue of damages alone, and for, in the other alternative, a new trial on the issues of
       liability and damages. In support of its motion, plaintiff argued that the jury’s award of
       damages was not based upon the evidence or the submitted instructions. Plaintiff also claimed
       that it sustained prejudicial error because the trial court erroneously admitted evidence of the
       parties’ settlement discussions.
¶ 30       Meanwhile, on December 6, 2011, the trial court revisited defendant’s Unconscionability
       Motion and ruled that it was moot. The court explained:
                    “The jurors’ finding that a contract did exist between the parties, and that it was
                breached by Defendant ElecSys’ failure to pay $93,000 plus $13,950 of loss [sic]
                potential investment income, or 15 percent, means, in this court’s opinion, that the
                jurors found the contract between these parties included the terms and conditions
                contained in the purchase order of ElecSys which included a provision for cancellation
                for convenience as a flow-down from the government contract.
                    It is uncontested that a pallet of a hundred controllers was produced by Control
                Solutions under the terms of this contract, and that ElecSys never paid for these
                controllers or forwarded the funds received by the government for reimbursement
                following its cancellation of the contract. The cost for the controllers was $93,000.
                    Therefore, the jury did not consider the order acknowledgment signed by Mr.
                Jamison on 5/20/2008 [sic] that contained a noncancelable, nonreturnable clause as a
                part of the contract.”

                                                    -8-
¶ 31       On February 2, 2012, the trial court heard oral arguments on the parties’ posttrial motions.
       The trial court denied the motions in their entirety. The court also commented upon its ruling
       with respect to plaintiff’s motion in limine regarding settlement discussions, stating:
                    “I do want to make the record clear for a higher court because I don’t have a
               transcript before me or the specific quotes of my ruling[ ] ***, but I want the Second
               District to understand the basis of my ruling on this very important motion in limine
               relative to the claim that those documents and emails fell within a category of
               settlement documents that for public purposes–public policy purposes should be
               excluded from the jury.
                    My finding did not, and I underscore that, did not be [sic] solely based upon the fact
               that it was prefiling.
                    My ruling was based upon my call at that time and my continued position that these
               documents did not fall within the category of settlement documents.
                    It was argued that they were, and I understand your argument certainly, and I
               understand the importance of that, and it was argued to the contrary by defense, and I
               made a judgment call that based upon the content of those documents, they simply did
               not fall within the bar of permissible evidence to a jury relative to prefiling settlement
               negotiations.
                    So, I just want that to be clear because my recollection of the ruling is somewhat
               different than the argument that was made here, and if I did not articulate myself clearly
               at the time, I wanted–I want to do so now.”
       The court entered judgment on the jury verdict on February 2, 2012. On March 5, 2012,
       plaintiff filed a notice of appeal. On March 15, 2012, defendant filed a notice of cross-appeal.

¶ 32                                           II. ANALYSIS
¶ 33                                        A. Plaintiff’s Appeal
¶ 34                                 1. Illinois Rule of Evidence 408
¶ 35        On appeal, plaintiff first argues that the trial court committed reversible error and
       contravened well-established Illinois public policy by admitting its September 5, 2008, email
       and “related communications,” because they constituted offers of compromise protected by
       Illinois Rule of Evidence 408 (eff. Jan. 1, 2011) (Rule 408). Defendant responds that the trial
       court did not abuse its discretion in admitting the communications at issue, because plaintiff
       failed to establish that the communications were settlement communications. Defendant
       argues that, even if we determine that the communications constituted settlement
       communications, they fall within an exception to Rule 408 and, in any event, their admission
       was harmless error.
¶ 36        The Illinois Rules of Evidence became effective on January 1, 2011. Prior to their
       promulgation, Illinois courts routinely held that matters relating to offers of compromise and
       negotiations for settlement were generally inadmissible. See Liberty Mutual Insurance Co. v.
       American Home Assurance Co., 368 Ill. App. 3d 948, 960 (2006); Garcez v. Michel, 282 Ill.
       App. 3d 346, 348-49 (1996); Barkei v. Delnor Hospital, 176 Ill. App. 3d 681, 694 (1988);
       Sawicki v. Kim, 112 Ill. App. 3d 641, 644 (1983). Two justifications were offered for this rule.
       First, courts held that negotiations and compromises do not constitute admissions of liability
       and are therefore irrelevant. County of Cook v. Illinois Labor Relations Board, Local Panel,

                                                    -9-
       2012 IL App (1st) 111514, ¶ 32; Liberty Mutual Insurance Co., 368 Ill. App. 3d at 960;
       Garcez, 282 Ill. App. 3d at 349; Barkei, 176 Ill. App. 3d at 694; see also Michael H. Graham,
       Graham’s Handbook of Illinois Evidence § 408.1 (10th ed. 2010). Second, courts reasoned that
       admitting evidence of negotiations and compromises violates public policy by discouraging
       litigants from settling their disputes without the need for trial. County of Cook, 2012 IL App
       (1st) 111514, ¶ 32; Liberty Mutual Insurance Co., 368 Ill. App. 3d at 960; Garcez, 282 Ill.
       App. 3d at 349; Barkei, 176 Ill. App. 3d at 694; Sawicki, 112 Ill. App. 3d at 644-45; see also
       Michael H. Graham, Graham’s Handbook of Illinois Evidence § 408.1 (10th ed. 2010).
¶ 37        The common-law principles relating to the admissibility of settlement communications
       were codified by Rule 408. Rule 408 is divided into two parts. Subdivision (a) of the rule
       identifies prohibited communications and provides:
                    “(a) Prohibited Uses. Evidence of the following is not admissible on behalf of any
               party, when offered to prove liability for, invalidity of, or amount of a claim that was
               disputed as to validity or amount, or to impeach through a prior inconsistent statement
               or contradiction:
                        (1) furnishing or offering or promising to furnish–or accepting or offering or
                    promising to accept–a valuable consideration in compromising or attempting to
                    compromise the claim; and
                        (2) conduct or statements made in compromise negotiations regarding the
                    claim.” Ill. R. Evid. 408(a) (eff. Jan. 1, 2011).
       Subdivision (b) of the rule recognizes exceptions to the inadmissibility of certain
       communications. Ill. R. Evid. 408(b) (eff. Jan. 1, 2011). Thus, Rule 408(b) does not require the
       exclusion of any evidence otherwise discoverable, even if it is presented in the course of
       settlement negotiations. Ill. R. Evid. 408(b) (eff. Jan. 1, 2011). In addition, subdivision (b) does
       not require exclusion if the evidence is offered for a purpose not prohibited by Rule 408(a),
       such as proving a witness’s bias. Ill. R. Evid. 408(b) (eff. Jan. 1, 2011).
¶ 38        For Rule 408 to apply, the communications must concern a claim actually in dispute as to
       the validity or amount at the time of the negotiations, or an apparent difference of opinion, and
       the communications must relate to that claim. Bank of America, N.A. v. Sea-Ya Enterprises,
       LLC, 872 F. Supp. 2d 359, 363 (D. Del. 2012); Prudential Insurance Co. of America v. Curt
       Bullock Builders, Inc., 626 F. Supp. 159, 164 (N.D. Ill. 1985).2 The party seeking exclusion of
       the alleged settlement communications must make a “substantial showing” that the
       communications were, in fact, part of an attempt to settle a disputed claim. Raybestos Products
       Co. v. Younger, 54 F.3d 1234, 1241 (7th Cir. 1995); United States v. Mirama Enterprises, Inc.,
       185 F. Supp. 2d 1148, 1156-57 (S.D. Cal. 2002). In making this determination, a court
       examines the totality of the circumstances, carefully reviewing the contents of the
       communications and their timing. Raybestos Products, 54 F.3d at 1241; see also County of
       Cook, 2012 IL App (1st) 111514, ¶ 41. We note, however, that one party’s description of its
       communication as a “settlement offer” does not automatically bar the communication under
       Rule 408. See Cassino v. Reichhold Chemicals, Inc., 817 F.2d 1338, 1343 (9th Cir. 1987). It is

           2
             Illinois Rule of Evidence 408 is modeled after Federal Rule of Evidence 408. See County of Cook,
       2012 IL App (1st) 111514, ¶ 35 (noting that Rule 408 “mirrors” its federal counterpart). As such, we
       find cases interpreting the federal rule persuasive as to the interpretation and application of the Illinois
       rule.

                                                       - 10 -
       within the trial court’s sound discretion to determine the admissibility of evidence pursuant to
       Rule 408, and a reviewing court will not overturn the trial court’s decision absent an abuse of
       that discretion. See Liberty Mutual Insurance Co., 368 Ill. App. 3d at 960; Garcez, 282 Ill.
       App. 3d at 348; Nardi v. Kamerman, 196 Ill. App. 3d 591, 596 (1990). The abuse-of-discretion
       standard is the most deferential standard of review, next to no review at all. People v. Holman,
       402 Ill. App. 3d 645, 650 (2010). An abuse of discretion occurs where the trial court’s decision
       is arbitrary, fanciful, or unreasonable, or where no reasonable person would agree with the
       position taken by the trial court. People v. Becker, 239 Ill. 2d 215, 234 (2010).
¶ 39        As noted above, plaintiff challenges the trial court’s ruling that its September 5, 2008,
       email and “related communications” were not offers of compromise protected by Rule 408.
       Initially, plaintiff suggests that reversal is warranted because the trial court “drew an arbitrary
       line between pre- and post-litigation offers of compromise, holding that only post-litigation
       settlement communications were inadmissible under Rule 408.” We agree that the application
       of Rule 408 does not depend on the timing of a party’s lawsuit. See Cook v. Korshak, 301 Ill.
       603, 610 (1922) (holding that testimony as to settlement was improper regardless of whether
       the settlement offer was made before or after the suit began); Schnuck Markets, Inc. v. Soffer,
       213 Ill. App. 3d 957, 979-80 (1991) (holding that settlement negotiations occurring before
       filing of lawsuit were inadmissible); see also Alpex Computer Corp. v. Nintendo Co., 770 F.
       Supp. 161, 163-64 (S.D.N.Y. 1991) (noting that litigation need not have actually commenced
       for Rule 408’s federal counterpart to apply); Christopher B. Mueller & Laird C. Kirkpatrick,
       Federal Evidence § 4:58 (4th ed. 2009) (“[Federal Rule of Evidence 408] applies when the
       dispute arises even if no suit has been filed, and even if neither party has formally rejected the
       position of the other ***. So long as the parties have expressed disagreement on the amount
       owing or on the validity of the claim, the Rule applies.”). Nevertheless, we conclude that
       plaintiff misconstrues the rationale for the trial court’s ruling.
¶ 40        Significantly, when the trial court initially ruled on plaintiff’s motion in limine, it did not
       state that the communications were admissible because they predated the filing of plaintiff’s
       suit. Rather, the court concluded that, “based upon what was submitted,” the communications
       at issue “are not excluded as offers of settlement,” because they “predate the dispute here.”
       (Emphasis added.) Indeed, the existence of a dispute is at the very core of whether
       communications are inadmissible under Rule 408. Bank of America, N.A., 872 F. Supp. 2d at
       363 (noting that Federal Rule 408 excludes only communications that reflect an actual dispute
       or an apparent difference of view); Prudential Insurance Co. of America, 626 F. Supp. at 164
       (noting that a claim “must actually be in dispute” to fall within the scope of Federal Rule 408).
       To the extent that there were any doubts regarding the basis for the trial court’s ruling, the court
       resolved them on February 2, 2012, when, in denying plaintiff’s posttrial motions, it
       emphasized that its ruling on plaintiff’s motion in limine was based principally upon its
       position that the communications at issue “did not fall within the category of settlement
       documents.” In other words, the trial court concluded that the communications at issue did not
       constitute settlement documents protected by Rule 408, because, when they were made, there
       was no actual or apparent dispute.
¶ 41        Plaintiff, however, also insists that reversal is warranted because, in fact, a bona fide
       dispute over damages existed when it sent its September 5, 2008, email. According to plaintiff,
       in June 2008 it demanded payment from defendant in the amount of $3,730,230, the remaining
       contract value, on the basis that the termination of the contract violated the contract’s


                                                    - 11 -
       noncancellable provision. Plaintiff claims that defendant refused to pay this amount, disputing
       that it owed plaintiff anything other than the cost of any completed controllers. Thus, plaintiff
       reasons, the parties had “conflicting opinions” concerning the amount owed plaintiff and an
       actual dispute existed for purposes of Rule 408. Plaintiff further asserts that the circumstances
       in this case are similar to those in Davis v. Rowe, No. 91 C 2554, 1993 WL 34867 (N.D. Ill.
       Feb. 10, 1993), where the court found that the federal counterpart to Rule 408 applied to the
       parties’ pre-litigation communications. We do not find plaintiff’s arguments persuasive.
¶ 42        In particular, the record establishes that on June 5, 2008, Shay sent plaintiff an email
       notifying it of the Army’s decision to terminate its contract with defendant. In her email, Shay
       asked plaintiff to immediately stop all work and to “advise where [plaintiff] is in production
       and any cancellation costs that there maybe [sic].” In response, Kell informed Shay that
       plaintiff “will meet to gather the non-cancellable obligated costs and *** get back to you.” A
       week later, Kell wrote to defendant, “FYI, we have analyzed the situation, we have shipped
       200 units to you so far, out of the 4211 total on the PO, leaving a balance of 4011. Our contract
       is NCNR, so at $930@, the cancellation liability is $3,730,230.” Jamison responded on
       defendant’s behalf and informed Kell that, when defendant received the cancellation audit
       forms from the Army, it would submit them to Kell to complete.
¶ 43        On August 26, 2008, defendant sent an email to plaintiff, requesting specific information
       on cancellation costs that it needed to provide to the Army, including a breakdown of costs.
       Kell responded that plaintiff “will start the analysis.” On September 5, 2008, Kell sent Shay an
       email with the title “Information Needed 8.26.2008 Request” in the subject line. The email
       detailed plaintiff’s cancellation costs, including finished goods, works in process, raw
       materials, and lost profits. In his email, Kell also noted that all works in process and raw
       materials could be allocated to other products. Thereafter, defendant submitted to the Army a
       “Settlement Proposal.” On October 7, 2008, Kell wrote to defendant regarding the status of the
       cancellation. Jamison responded that a claim was submitted to the Army late in September and
       that he would check the status.
¶ 44        Based on the timeline set forth above, we cannot say that the trial court’s decision not to
       exclude as offers of settlement under Rule 408 the September 5, 2008, email and related
       communications was an abuse of discretion. The trial court could have reasonably concluded
       that the communications at issue constituted an effort to identify and submit cancellation costs
       to the Army for reimbursement as a result of the Army’s termination for convenience of its
       contract with defendant. Significantly, the communications were not adversarial. Shay merely
       requested an itemized list of cancellation costs in order to complete a settlement form that
       defendant was required to submit to the Army. Kell authored the September 5, 2008, email in
       direct response to Shay’s request. Moreover, Kell’s follow-up communication in October 2008
       did not hint at a burgeoning dispute. It merely requested an update on defendant’s submission
       to the Army. See Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 561 F.2d 1365,
       1373 (10th Cir. 1977) (finding that discussions had not crystallized to the point of threatened
       litigation, a clear cut-off point, and were therefore simply “business communications”).
¶ 45        Plaintiff also suggests that the December 2008 invoice constituted an offer of compromise
       and therefore should have been protected by Rule 408. Again, we do not agree. In the email
       informing defendant of the invoice, Kell acknowledged that he was aware that defendant had
       not yet reached a settlement with the Army, but he said that plaintiff was generating the invoice
       “to get our books in order for the end of the year.” Thus, the evidence suggests that the invoice

                                                  - 12 -
       was generated merely for bookkeeping purposes and was not intended as an offer of settlement
       or a document in settlement negotiations. See Winchester Packaging, Inc. v. Mobil Chemical
       Co., 14 F.3d 316, 319 (7th Cir. 1994) (“[A] bill that itemizes what the sender thinks the
       recipient owes him and demands–even under threat of legal action–payment is not an offer in
       settlement or a document in settlement negotiations and hence is not excludable by force of
       Rule 408.”). Accordingly, we cannot say that the trial court’s ruling that the December 2008
       invoice did not fall within the scope of Rule 408 was arbitrary, fanciful, or unreasonable, or
       that no reasonable person would agree with the trial court’s position that the invoice was not
       intended as an offer of settlement or a document in settlement negotiations.
¶ 46        As noted above, plaintiff relies heavily on Davis, 1993 WL 34867, for the proposition that
       an actual dispute existed in this case. In Davis, the plaintiff, an art owner, had consigned art to
       the defendant, a gallery owner, and the art was subsequently destroyed in a gallery fire. The
       plaintiff sued the defendant to recover the value of the lost art. To establish value, the plaintiff
       attempted to introduce communications that occurred between the defendant and its insurer
       shortly after the fire. In particular, the defendant notified the insurer of a claim to recover
       projected sales of the lost art. The insurer disputed the defendant’s right to recover lost
       projected sales. In connection with their disagreement over the defendant’s right to lost sales,
       the defendant notified the insurer that the value of the lost art was $4,635,000. The defendant
       testified that the purpose of providing this valuation was to convince the insurer that the
       projected-sales claim was reasonable and “to settle the business interruption claim without
       suit.” Id. at *3. The plaintiff sought to use this communication to establish the value of the art
       in the lawsuit against the defendant, and the defendant objected on the ground that the evidence
       was inadmissible under Federal Rule of Evidence 408.
¶ 47        In rejecting the plaintiff’s contention that no dispute existed between the defendant and its
       insurer at the time of the disputed communication, the court found that, once the insurer
       informed the defendant that it would oppose any claim based on projected sales under the
       business interruption insurance, “an actual dispute arose between [the parties] to which
       [Federal] Rule 408 applied.” Id. The court further held that the valuation letter was “part of a
       negotiation effort” and therefore inadmissible at trial, including to prove the value of the lost
       art. Id. The court also refused to admit a prelawsuit offer by the defendant to pay the plaintiff a
       portion of any recovered insurance proceeds in exchange for a release from liability. Id. at *4.
       The court found that, while the parties had agreed that the defendant owed the plaintiff some of
       the insurance proceeds, they “were not in agreement over the exact amount owed at the time”
       and thus a dispute for purposes of Federal Rule 408 existed. Id.
¶ 48        We find Davis to be distinguishable for several reasons. Significantly, the Davis court
       found an inherent adversarial relationship between an insurer and an insured–a relationship
       that is not present in the breach-of-contract action here. Id. at *3. We also note that in Davis the
       parties had both retained outside counsel when the communications took place, the insurer had
       retained an accounting expert, and the insured and its counsel engaged in settlement
       discussions with the insured’s adjuster around the time of the communications. Id. at *3-4.
       Here, in contrast, the parties did not retain counsel until 2009 and they did not engage in any
       meetings to discuss a potential settlement.
¶ 49        As noted above, defendant contends that, even if the communications at issue were
       protected by Rule 408, any error in their admission was harmless. See Niehuss v. Merrill
       Lynch, Pierce, Fenner & Smith, Inc., 143 Ill. App. 3d 444, 452-53 (1986) (noting that where it

                                                    - 13 -
       appears that an error did not affect the outcome of the trial, or where the court can see from the
       entire record that no injury has been done, the judgment will not be disturbed). Plaintiff
       counters that the admission of the communications at issue was far from harmless. We agree
       with defendant. Although the September 5, 2008, email and the December 29, 2008, invoice
       indicated that plaintiff completed 100 controllers, the controllers cost $930 per unit, and
       plaintiff reallocated its works in process and raw materials, this evidence is also found in a
       number of other places in the record without reference to the September 5, 2008, email or the
       December 29, 2008, invoice. Additionally, although the parties do not point to any evidence
       other than the September 5, 2008, email and the December 29, 2008, invoice to establish
       plaintiff’s claim for 15% lost profits, the jury’s use of this damages calculation did not
       prejudice plaintiff. Indeed, it benefitted plaintiff. Had the jury adopted defendant’s calculation
       of damages, it would have awarded only $93,000 for finished goods and no “lost potential
       investment income.”
¶ 50       In short, based on the evidence of record, the trial court could have reasonably concluded
       that plaintiff failed to make a substantial showing that an actual or apparent dispute existed
       between the parties when the communications at issue were exchanged. Moreover, even if the
       disputed communications were improperly admitted, any error was harmless where some of
       the information was elicited in testimony and exhibits outside of the purported settlement
       communications and where other information benefitted plaintiff. We therefore decline to
       overturn the trial court’s judgment on this basis.

¶ 51                                             B. Damages
¶ 52       Next, plaintiff requests reversal of the jury’s award of damages. The jury was given several
       instructions related to the issue of damages. Jury Instruction 11 provided in relevant part:
                   “You must decide whether Control Solutions sustained damages as a result of a
               breach by Elecsys.
                                                     ***
                   Control Solutions must prove it sustained damage resulting from Elecsys’ breach.
               To recover on its claim, Control Solutions must prove that because Elecsys breached its
               promises under the contract, Control Solutions has been damaged by not receiving the
               full value of its contract with Elecsys to which it is entitled.
                   Elecsys denies that Control Solutions sustained damage or sustained damage to the
               extent claimed.”
       Jury Instruction 13 provided:
                   “If you find in favor of Control Solutions, you must then decide how much money,
               if any, would fairly compensate Control Solutions for the breach of the contract by
               Elecsys. Control Solutions has the burden of proving each element of damages claimed
               and that they occurred as a direct and natural result of a breach by Elecsys. In
               calculating Control Solution’s damages, you should determine that sum of money that
               will put Control Solutions in as good a position as it would have been in if both Control
               Solutions and Elecsys had performed all of their promises under the contract.
                   Control Solutions seeks an award for direct damages for Elecsys’ failure to make
               payment to Control Solutions pursuant to the contract.


                                                   - 14 -
                   ‘Direct Damages’ are the amount of gain Control Solutions would have received if
               the parties had fully performed the contract. You calculate the amount of this gain by
               determining the value of the contract benefits Control Solutions did not receive
               because of Elecsys’ breach and then subtracting from that value, the amount you
               calculate the value of whatever expenses Control Solutions saved because of the
               breach.”
¶ 53       The verdict form required the jury to provide yes-or-no answers to the following six
       questions: (1) Did plaintiff prove that there was a contract? (2) Did plaintiff prove that it
       performed its obligations under the contract or had a valid excuse for not doing so? (3) Did
       plaintiff prove that defendant breached the contract by its failure to perform its obligations
       under the contract? (4) Did plaintiff prove that it sustained damages? (5) Did plaintiff prove
       that the damages it suffered were caused by defendant’s breach of contract? and (6) Did
       plaintiff present evidence from which you can determine the fair and reasonable value of the
       loss? The jury answered each of the foregoing questions in the affirmative. The remainder of
       the verdict form was dedicated to calculating damages. It provided:
               “7. What is the value of the contract benefits Control Solutions proved it should have
               received:
                                                                                    [a] = $ _____
               What are the expenses Control Solutions saved because of the breach:
                                                                                    [b] = $ _____
               8. Control Solution’s Total Direct Damages (a minus b):
                                                                                    [c] = $ _____”
       With respect to line 7[a] of the verdict form, the jury determined that the value of the contract
       benefits that plaintiff proved it should have received was $93,000 plus $13,950, or a total of
       $106,950. To the left of line 7[a] the jury indicated that the $13,950 represented 15% of the
       $93,000 award for “lost potential investment income.” The jury left blank line 7[b]. The jury
       wrote $106,950 on line 8[c].
¶ 54       Plaintiff argues that it was deprived of a “true jury trial” and that therefore the jury’s award
       should be reversed and the cause remanded for a new trial on the issue of damages, or
       alternatively on the issues of liability and damages. In particular, plaintiff asserts that the jury’s
       damages award should be reversed because: (1) the jury ignored proven elements of damages;
       (2) the award resulted from prejudice; and (3) the award bears no reasonable relationship to the
       loss sustained. Defendant responds that the award of damages is not against the manifest
       weight of the evidence, as the jury accepted its theory of liability and damages.
¶ 55       The question of damages is peculiarly one of fact. Snover v. McGraw, 172 Ill. 2d 438, 447
       (1996). Accordingly, in a jury trial, it is the function of the jury to weigh contradictory
       evidence, to judge the credibility of the witnesses, and to draw the ultimate conclusion as to the
       facts. Profit Management Development, Inc. v. Jacobson, Brandvik & Anderson, Ltd., 309 Ill.
       App. 3d 289, 306 (1999). Courts of review are reluctant to interfere with a jury’s discretion in
       assessing damages and will overturn an award only if it is against the manifest weight of the
       evidence. Profit Management Development, Inc., 309 Ill. App. 3d at 306. Thus, a reviewing
       court will not upset a jury’s award of damages unless a proven element of damages was
       ignored, the verdict resulted from prejudice, or the award bears no reasonable relationship to



                                                    - 15 -
       the loss suffered. Watson v. South Shore Nursing & Rehabilitation Center, LLC, 2012 IL App
       (1st) 103730, ¶ 32; Profit Management Development, Inc., 309 Ill. App. 3d at 306.
¶ 56       Plaintiff first argues that the jury’s award of damages should be reversed because the jury
       ignored proven elements of damages and fashioned its own measure of damages. Plaintiff
       notes that the jury found in its favor with respect to the initial six questions on the verdict form.
       Yet, plaintiff complains, “when it came to calculating *** direct damages, the jury awarded
       only what it perceived–based upon inadmissible settlement communications–[plaintiff] had
       expended at the time [defendant] breached the contract, plus ‘lost potential investment
       income,’ which had no supporting evidence at all.” According to plaintiff, the “actual
       evidence” established that the remaining contract value when defendant breached the contract
       was $3,730,230 and that the expenses plaintiff saved because of the breach were $952,532.28,
       for total direct damages of $2,777,697.72.
¶ 57       Plaintiff’s position ignores evidence that the contract terms and damages were
       controverted in this case. While the parties do not appear to dispute the formation of a contract,
       we note that the jury was presented with two conflicting theories as to when the contract was
       formed, the terms of the contract, and the resulting damages from the cancellation of the
       contract. These are questions of fact that the jury was tasked with deciding. Profit Management
       Development, Inc., 309 Ill. App. 3d at 306. In particular, plaintiff argued that the contract was
       formed on May 21, 2008, when defendant agreed to the terms and conditions set forth in the
       order acknowledgment attached to Kell’s correspondence of May 20, 2008, which included a
       provision that the contract was noncancellable. Plaintiff argued that its damages were the value
       of the contract it should have received less any expenses saved as a result of the breach, which,
       as noted above, it calculates at $2,777,697.72. In contrast, defendant’s position was that the
       parties formed a contract on April 3, 2008, when Martinez sent an email to defendant
       confirming the purchase order of March 20, 2008, which included a termination-
       for-convenience provision. Defendant argued that plaintiff’s damages were the value of any
       completed but unshipped goods plus works in process and raw materials.
¶ 58       Thus, plaintiff could have received the full amount of its claimed damages only if the jury
       found that the contract was not formed until May 21, 2008, when defendant returned the order
       acknowledgment, and that the noncancellable provision in the order acknowledgment applied.
       However, the verdict form makes clear that the jury did not accept plaintiff’s theory of liability.
       Indeed, the trial court recognized that the jury accepted defendant’s theory of liability, stating,
       “the jurors found the contract between these parties included the terms and conditions
       contained in the purchase order of Elecsys which included a provision for cancellation for
       convenience as a flow-down from the government contract.”
¶ 59       Plaintiff further asserts that, in contravention of the jury instructions and the verdict form,
       the jury did not identify the remaining value of the contract or the expenses that plaintiff saved
       by the breach. We disagree. Again, plaintiff’s argument is based on the premise that the jury
       was required to accept its theory of liability. As noted above, however, it is clear that the jury
       accepted defendant’s theory of liability, i.e., the contract between these parties included the
       terms and conditions contained in defendant’s purchase order, including a
       termination-for-convenience provision as a flow-down from the government contract. Indeed,
       the jury was expressly instructed that defendant “denies that [plaintiff] sustained damage or
       sustained damage to the extent claimed.” (Emphasis added.) On this basis, it is clear that the
       jury found that “the value of the contract benefits [plaintiff] proved it should receive” was

                                                    - 16 -
       $93,000 and that plaintiff did not save any expenses because of the breach. These findings
       were reasonable inferences from the evidence presented at trial. Bonnier v. Chicago,
       Burlington & Quincy R.R. Co., 2 Ill. 2d 606, 614 (1954); Profit Management Development,
       Inc., 309 Ill. App. 3d at 306. While neither party specifically requested that the jury award 15%
       of the finished goods as “lost potential investment income,” the jury was presented with
       evidence that plaintiff sought 15% in lost profits. Moreover, as noted earlier, given that the
       “lost potential investment income” was not a damages award proposed by either party, plaintiff
       actually benefitted from this portion of the award.
¶ 60        Plaintiff nevertheless insists that, if defendant believed that the damages should be based
       on finished goods or “lost potential investment income,” it should have requested a
       corresponding instruction. In particular, plaintiff references Illinois Pattern Jury Instructions,
       Civil, No. 700.16 (2011), which states in pertinent part, “In their contract, the parties agreed to
       the following: [state here the contract terms regulating damages] ***.” However, the jury was
       charged with finding the parties’ contract terms. As such, it would have made little sense for
       this instruction to be submitted to the jury. In short, for the reasons set forth above, we find that
       plaintiff has failed to establish that the jury ignored proven elements of damages.
¶ 61        Plaintiff next claims that the damages award resulted from prejudice. Specifically, plaintiff
       argues that the jury’s award of damages was based upon “the parties’ confidential and
       inadmissible settlement communications.” According to plaintiff, since these communications
       “should have been excluded at trial, and clearly prejudiced the jury’s award of damages, the
       award should be reversed.” Having previously determined that the trial court did not abuse its
       discretion in admitting the communications, we reject this contention.
¶ 62        Finally, plaintiff claims that the damages award bears no reasonable relationship to the loss
       sustained. Plaintiff notes that the jury expressly found that plaintiff had established damages as
       a result of defendant’s breach of contract and that plaintiff had presented evidence from which
       the jury could determine the fair and reasonable value of the loss. Plaintiff asserts that the only
       evidence of damages it presented was that called for by the jury instructions–evidence of
       plaintiff’s “direct damages.” According to plaintiff, however, the jury disregarded the evidence
       of its direct damages and relied instead upon inadmissible settlement evidence. Plaintiff insists
       that the jury should have never heard evidence of settlement communications and that its
       damages award should not be permitted to rest on such communications. Thus, plaintiff
       reasons, the jury’s award did not bear a reasonable relationship to the actual damages suffered
       as a result of defendant’s breach. Again, we reject this contention as it is premised on the
       theory that the trial court improperly admitted the disputed communications, an argument we
       have previously rejected.

¶ 63                                 2. Defendant’s Cross-Appeal
¶ 64      In its cross-appeal, defendant argues that, if we award a new trial to plaintiff, the trial
       court’s order finding defendant’s Unconscionability Motion moot should be reversed and the
       motion should be reconsidered on remand. Because we have determined that reversal is not
       warranted, we dismiss defendant’s cross-appeal as moot.




                                                    - 17 -
¶ 65                                    III. CONCLUSION
¶ 66      For the reasons set forth above, we affirm the judgment of the circuit court of Du Page
       County and we dismiss defendant’s cross-appeal.

¶ 67      Affirmed; cross-appeal dismissed.




                                               - 18 -
