Midwest Mailing & Shipping Sytems, Inc. v. Schoenberg, Finkel, Newman & Rosengerg

2023 IL App (1st) 220562-U

• Court: Appellate Court of Illinois
• Decided: January 26, 2023
• Docket: 1-22-0562
• Status: Unpublished

Opinion

2023 IL App (1st) 220562-U Order filed: January 26, 2023

FIRST DISTRICT FOURTH DIVISION

No. 1-22-0562

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

MIDWEST MAILING & SHIPPING SYSTEMS, INC., ) Appeal from the a Wisconsin corporation, ) Circuit Court of ) Cook County. Plaintiff-Appellee, ) ) No. 17 L 2513 v. ) ) Honorable SCHOENBERG, FINKEL, NEWMAN & ROSENBERG, ) Daniel J. Kubasiak, an Illinois limited liability company, ROBERT C. ) Judge, presiding. GOLDBERG, and LEONARD J. GAMBINO, ) ) Defendants ) ) (Robert C. Goldberg, ) ) Defendant-Appellant). ) ______________________________________________________________________________

JUSTICE ROCHFORD delivered the judgment of the court. Presiding Justice Lampkin and Justice Martin concurred in the judgment.

ORDER

¶1 Held: Judgment entered against defendant-appellant following a jury trial is affirmed, where the evidentiary issue presented on appeal was not raised in a posttrial motion and the admission of purportedly improper evidence at trial was not shown to be prejudicial.

¶2 Defendant-appellant, Robert C. Goldberg, appeals from the $700,000 judgment entered

against him following a jury trial in this legal malpractice lawsuit. Goldberg contends that the trial

court improperly admitted evidence at trial from the damages expert of plaintiff-appellee, Midwest No. 1-22-0562

Mailing & Shipping Systems, Inc., a Wisconsin corporation (Midwest). Because Goldberg failed

to file a posttrial motion raising this issue and as the admission of the purportedly improper

evidence was not shown to be prejudicial, we affirm.

¶3 This matter has a lengthy procedural history, some of which was set out in a prior opinion

entered by this court affirming the dismissal of a third-party complaint for contribution. See

Midwest Mailing & Shipping Systems, Inc. v. Schoenberg, Finkel, Newman & Rosenberg, LLC,

2021 IL App (1st) 200669. We therefore restate only those facts necessary to resolve this appeal,

with portions taken from our prior opinion.

¶4 On March 9, 2017, Midwest filed this legal malpractice complaint against defendants, the

law firm of Schoenberg, Finkel, Newman & Rosenberg, an Illinois limited liability company, and

two of its attorneys, Goldberg, and Leonard J. Gambino. In its complaint, Midwest alleged that it

is a Wisconsin corporation, doing business in Illinois and with a principal place of business in

Bloomington, Illinois, and is engaged in the business of selling, leasing, installing, and servicing

postage meters. In 1996, Midwest and F.M.E. Corporation, doing business as Neopost, entered

into a dealership agreement, providing that Midwest would be Neopost’s exclusive dealer to sell,

lease, install, and service certain of its products, including postal meters and registers, in certain

geographic territories. Midwest retained defendants, in part, to represent it in disputes Midwest

had with Neopost concerning the dealership agreement over the years. Specifically, in 2002,

defendants represented Midwest in litigation alleging that Neopost was in breach of the dealership

agreement, which was resolved pursuant to a settlement agreement in 2004.

¶5 In 2015, Midwest retained defendants to prepare a lawsuit against Neopost once again, due

to Neopost’s alleged breaches of the dealership agreement and the 2004 settlement agreement. At

approximately the same time, defendants were also providing Midwest with legal advice regarding

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a potential corporate reorganization. Specifically, defendants allegedly advised Midwest to

incorporate a new entity in Illinois, assign Midwest’s business to the new Illinois entity, and

terminate Midwest’s incorporation in Wisconsin. However, the dealership agreement provided that

Neopost could terminate that agreement in the event that Midwest made an unauthorized

assignment of its rights under the dealership agreement or in the event that Midwest abandoned its

business. Midwest alleged that the dealership agreement was the basis for Midwest’s ability to sell

Neopost products, which accounted for most of Midwest’s business and, as such, termination of

the dealership agreement would “devastate and potentially destroy” Midwest’s business.

¶6 Midwest allegedly asked defendants if the corporate reorganization would negatively

impact its position in its litigation against Neopost. Defendants advised that the reorganization

would not have an adverse impact. Midwest then agreed to move forward with the reorganization.

On August 14, 2015, defendants filed a request with the Illinois Secretary of State, asking it to

withdraw Midwest’s authorization to do business in the state of Illinois, and formed a new Illinois

corporation with the same legal name. On August 21, 2015, defendants filed a complaint on behalf

of Midwest against Neopost. On August 25, 2015, Midwest assigned all its rights and obligations

under the dealership agreement to the new Illinois corporation. Finally, on September 14, 2015,

defendants filed Midwest’s dissolution with the Wisconsin Department of Financial Institutions

¶7 On September 21, 2015, Neopost sent Midwest a termination notice, informing Midwest

that Neopost sought to terminate the dealership agreement based on Midwest’s reorganization. The

termination notice provided that Neopost had the right to terminate the dealership agreement

because Midwest abandoned its right to do business in Illinois and assigned its rights and

obligations under the dealership agreement to the new corporation. On September 24, 2015,

Neopost filed a declaratory judgment lawsuit against Midwest in the United States District Court

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for the Southern District of New York, seeking a declaration that Neopost could properly terminate

the dealership agreement because of Midwest’s failure to obtain prior approval for Midwest’s

corporate reorganization.

¶8 On September 25, 2015, four days after Neopost sent the termination notice and one day

after the filing of Neopost’s lawsuit, defendants filed a revocation of voluntary dissolution of

Midwest with the Wisconsin Department of Financial Institutions. On October 12, 2015,

defendants filed an application to the Illinois Secretary of State for Midwest to be reinstated as a

foreign corporation with the authority to do business in Illinois. Finally, on October 20, 2015, the

new corporation assigned all its rights and obligations under the dealership agreement back to

Midwest, with the assignment being made effective as of August 25, 2015.

¶9 Midwest’s complaint alleged that Neopost’s lawsuit “threatened to destroy” Midwest’s

business and that, soon after Midwest realized that defendants’ advice was the basis for the

termination notice and the lawsuit, Midwest’s relationship with defendants became adversarial.

Midwest alleged that defendants “began pressuring” Midwest to settle its disputes with Neopost

in order to protect defendants from liability, rather than acting in Midwest’s best interests. Midwest

therefore sought and retained new counsel.

¶ 10 Midwest and Neopost subsequently resolved their differences, with each party dismissing

its lawsuit against the other—Midwest dismissed its Illinois lawsuit, while Neopost dismissed its

New York lawsuit. Midwest also, inter alia, relinquished its “Territorial Exclusivity Right” to sell

Neopost products under the dealership agreement in exchange for the payment of $300,000.

Midwest alleged that, but-for defendants’ advice, Midwest “would not have had to compromise its

contractual rights and claims” and would not have incurred substantial attorney fees in responding

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to the New York litigation. Midwest’s complaint therefore sought to recover damages for legal

negligence (count I) and breach of fiduciary duty (count II).

¶ 11 In response to this lawsuit, defendants denied the material allegations of Midwest’s

complaint. Defendants also filed a third-party complaint for contribution against Midwest’s new

counsel, the law firm of Massey & Gail, LLP, attorney Eli Kay-Oliphant, and attorney Ryan Rappa,

the son of Midwest’s owners and the “outside general counsel to Midwest.” Therein defendants

alleged that the third-party defendants had contributed to any injury sustained by Midwest. The

complaint for contribution was dismissed with prejudice in late 2019, and defendants filed a timely

interlocutory appeal. The dismissal of the third-party complaint was affirmed by this court in an

opinion entered in March 2021. Midwest Mailing, 2021 IL App (1st) 200669.

¶ 12 Thereafter, defendants filed a motion for summary judgment which, in part, asserted that

it was entitled to partial summary judgment on count I because Midwest had produced no evidence

to support its contention that, but-for the alleged legal malpractice, Midwest would not have had

to compromise its contractual rights and claims. Defendants contended that therefore “Midwest

cannot prove that [defendants’] purported malpractice proximately caused Midwest to incur any

damages other than litigation attorney’s fees.”

¶ 13 In support of this argument, defendants noted that as part of its settlement with Neopost,

Midwest relinquished its “Territorial Exclusivity Right” to sell Neopost products under the

dealership agreement in exchange for the payment of $300,000. Defendants also noted that

Midwest’s damages expert, Christopher Alexander, had indicated in both a written report and in

his deposition testimony that but-for defendants’ legal malpractice, Midwest would have been

willing to accept, and Neopost would have been willing to pay, $2.73 million in exchange for

Midwest’s relinquishment of its exclusive right to sell Neopost products in certain territories under

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the dealership agreement. Defendants contended that it was entitled to partial summary judgment

because there was simply no evidence to support Alexander’s expert opinion. The trial court denied

defendants’ motion for summary judgment in its entirety.

¶ 14 Subsequently, defendants filed a motion in limine seeking to bar Alexander from testifying

at trial regarding his opinions as to Midwest’s damages. The trial court denied that motion and the

matter proceeded to a jury trial. Defendants unsuccessfully objected both before and after

Alexander’s testimony at trial.

¶ 15 Following the presentation of Midwest’s evidence, the trial court entered a directed verdict

in favor of defendants on count II of the complaint. Thereafter, after defendants presented their

evidence, the jury found in favor of the other two defendants on count I, but against Goldberg and

in favor of Midwest on that count. The jury awarded Midwest $700,000 in damages and a judgment

against Goldberg in that amount was entered on March 21, 2022. Goldberg did not file a posttrial

motion, but he did file a timely notice of appeal on April 20, 2022.

¶ 16 On appeal, Goldberg solely contends that the trial court “abused its discretion by admitting

into evidence the opinions and testimony of Alexander, where such opinions were based upon

guess, speculation and conjecture.” However, as the record clearly reflects and as Midwest

correctly notes in its brief, Goldberg never filed a posttrial motion raising this or any other issue

prior to filing his notice of appeal.

¶ 17 Section 2–1202 of the Illinois Code of Civil Procedure (Code) sets out strict rules for filing

posttrial motions in jury trials. 735 ILCS 5/2-1202 (West 2020). Section 2-1202(b) states that

“[r]elief desired after trial in jury cases, heretofore sought by reserved motions for directed verdict

or motions for judgment notwithstanding the verdict, in arrest of judgment or for new trial, must

be brought in a single post-trial motion.” (Emphasis added.) 735 ILCS 5/2-1202(b) (West 2020).

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Section 2-1202(e) of the Code specifies what happens if a party in a jury case fails to file a posttrial

motion, stating that “[a]ny party who fails to seek a new trial in his or her post-trial motion, either

conditionally or unconditionally, as herein provided, waives the right to apply for a new trial,

except in cases in which the jury has failed to reach a verdict.” 735 ILCS 5/2-1202(e) (2020).

¶ 18 The Code treats nonjury cases very differently. Section 2-1203(a), governing the filing of

posttrial motions in nonjury cases, states that a party “may” file a posttrial motion within 30 days

after entry of judgment. 735 ILCS 5/2-1203(a) (2020). Section 2-1203 does not specify what

should be included in posttrial motions and says nothing about forfeiture or waiver. Id. “Thus, the

plain language of the Code and its separate sections for jury and nonjury cases indicate that the

legislature intended different requirements and results for jury and nonjury cases, with the failure

to file a posttrial motion resulting in waiver in jury cases but not in nonjury cases.” Arient v. Shaik,

2015 IL App (1st) 133969, ¶ 28.

¶ 19 The same result is directed by Illinois Supreme Court Rule 366, which states in relevant

part that, in jury cases, “[a] party may not urge as error on review of the ruling on the party's post-

trial motion any point, ground, or relief not specified in the motion.” Ill. S. Ct. R. 366(b)(2)(iii)

(eff. Feb. 1, 1994). Case law is consistent with the clear language of both the Code and the Rule;

the failure to file a posttrial motion in a jury case consistently results in forfeiture of all arguments

on appeal. Arient, 2015 IL App (1st) 133969, ¶ 34 (and cases cited therein). As such, Goldberg

forfeited any issue on appeal when he failed to file a posttrial motion following the jury verdict.

¶ 20 In reaching this conclusion, we reject two contrary arguments raised by Goldberg on

appeal. First, we reject Goldberg’s contention that he did not need to file a posttrial motion to

preserve the issue raised on appeal because this issue was raised in defendants’ motion for

summary judgment and section 2-1202 of the Code “does not require a party to file a post-judgment

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motion to preserve for appeal a circuit court’s ruling on summary judgment.” However, here the

trial court denied the motion for summary judgment, and it is axiomatic that “[w]hen a motion for

summary judgment is denied and the case proceeds to trial, the denial of summary judgment is not

reviewable on appeal because the result of any error is merged into the judgment entered at trial.

[Citations.] The rationale for this rule is that review of the denial order would be unjust to the

prevailing party, who obtained a judgment after a more complete presentation of the evidence.”

Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 355 (2002). The cases

Goldberg cites on appeal in support of this argument are thus inapposite, where there the reviewing

courts only reached issues not raised in posttrial motions where those issues were decided in orders

granting partial summary judgment prior to trial. See Mohn v. Posegate, 184 Ill. 2d 540, 546

(1998); Mount Zion State Bank & Trust v. Central Illinois Annual Conference of United Methodist

Church, 198 Ill. App. 3d 881, 889 (1990).

¶ 21 We also reject Goldberg’s argument that section 2-1202 “does not apply to a circuit court’s

rulings as to the admission of expert testimony.” In support of this contention, Goldberg cites to

Wartalski v. JSB Construction & Consulting Co., 384 Ill. App. 3d 139, 145-46 (2008), where the

appellate court reviewed the trial court’s decision to allow the admission of expert opinions

without first conducting a hearing pursuant to Frye v. United States, 293 F. 1013 (D.C. Cir. 1923),

even though no posttrial motion raising the issue was ever filed.

¶ 22 First of all, the parties in that case framed the issue as one of the appellate court’s

jurisdiction to review the issue, rather than as an issue of forfeiture. Id. Second, while the decision

in Wartalski discussed section 2-1202 of the Code, it did not discuss the forfeiture mandated by

Rule 366. Finally, Wartalski appears to be an outlier decision, as we have found no cases favorably

citing it for the proposition that section 2-1202 “does not apply to a circuit court’s rulings as to the

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admission of expert testimony.” In contrast, numerous cases have specifically found issues

regarding the admission of expert testimony to be forfeited on appeal where they were not raised

in a posttrial motion. Lopez v. Northwest Memorial Hospital, 375 Ill. App. 3d 637, 650 (2007);

Cohan v. Garretson, 282 Ill. App. 3d 248, 260 (1996); Dep't of Public Works & Buildings v.

Todaro, 90 Ill. App. 2d 245, 249 (1967). For all these reasons, we decline to follow the decision

in Wartalski rather than the clear weight of authority cited above, and we therefore conclude that

Goldberg forfeited any argument on appeal as to the admission of Alexander’s testimony by failing

to file a posttrial motion raising the issue.

¶ 23 Even if we were to overlook Goldberg’s forfeiture of this issue, consider it on the merits,

and assume that the admission of Alexander’s testimony at trial was improper, we would still not

grant Goldberg any relief on appeal. Reversal on appeal is not required unless an erroneous

evidentiary ruling was substantially prejudicial, and the burden of establishing prejudice is on the

party seeking reversal. DiCosolo v. Janssen Pharmaceuticals, Inc., 2011 IL App (1st) 093562, ¶

40. As such, any improper evidentiary rulings may be considered harmless error. Wade v. City of

Chicago, 364 Ill. App. 3d 773, 784 (2006). In other words, the judgment will not be reversed if

“no harm has been done.” Jackson v. Pellerano, 210 Ill. App. 3d 464, 471 (1991). Where it appears

an error did not affect the outcome of the trial, or where the reviewing court can see from the entire

record that the error did not result in substantial prejudice, the judgment will not be disturbed.

Cairns v. Hansen, 170 Ill. App. 3d 505, 511 (1988).

¶ 24 Furthermore, the amount of a verdict is generally at the discretion of the jury and is not

subject to precise calculation. Velarde v. Illinois Central R.R. Co., 354 Ill. App. 3d 523, 540 (2004).

All the law requires is that the evidence presented tends to establish, with a fair degree of

probability, a basis for the assessment of damages. F.L. Walz, Inc. v. Hobart Corp., 224 Ill. App.

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3d 727, 733-34 (1992). Even where competing experts testify as to damages, a jury is not required

to accept one opinion, and its award does not have to be capable of precise determination. Id. “In

short, damages are the jury's prerogative, not the appellate courts'.” Nilsson v. NBD Bank of

Illinois, 313 Ill. App. 3d 751, 764 (1999).

¶ 25 Here, Midwest sought to recover for damages resulting from Goldberg’s legal malpractice,

which included attorney fees and other damages, including damages resulting from the reduced

price of $300,000 it was required to accept for the relinquishment of its “Territorial Exclusivity

Right” to sell Neopost products under the dealership agreement. While Alexander testified that

but-for Goldberg’s malpractice the sale of that right alone would have been worth $2.7 million, it

is apparent that the jury did not fully credit that testimony where it only awarded a total of $700,000

in damages. Moreover, Goldberg concedes on appeal that Midwest presented evidence at trial of

approximately $400,000 in damages exclusive of any damages resulting from the reduced price

Midwest was required to accept for the relinquishment of the territorial exclusivity right.

Furthermore, we find that sufficient evidence was presented at trial to support the jury’s award of

an additional $300,000 in damages related to the relinquishment of the territorial exclusivity right.

¶ 26 For example, the jury was presented with evidence that the sale of Neopost products

represented most of Midwest’s business, and that it rejected a $1 million offer for the business in

2015. Also in 2015, prior to Goldberg’s legal malpractice, Midwest intended to ask Neopost for

$5 million in exchange for the relinquishment of the territorial exclusivity right, as part of

settlement negotiations with Neopost. Moreover, a Neopost representative testified at trial that it

was offering a premium to buy-out the territorial exclusivity rights of dealers such as Midwest

prior to Midwest’s corporate reorganization and Neopost’s delivery of the termination notice. The

representative could not rule out the possibility that prior to that time, it would have paid Midwest

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as much as $600,000 for the relinquishment of the territorial exclusivity right.

¶ 27 In sum, on this record Midwest has not met its burden to show that any possible error in

the introduction of Alexander’s testimony at trial was substantially prejudicial. DiCosolo, 2011 IL

App (1st) 093562, ¶ 40. As such, any possible error in admitting that evidence may be considered

harmless error. Wade, 364 Ill. App. 3d at 784.

¶ 28 For the foregoing reasons, we affirm the judgement of the circuit court.

¶ 29 Affirmed.

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