Illinois Supreme Court reverses appellate ruling, negates $5.3M judgment against Hawthorn Woods
The Illinois Supreme Court has reversed an appellate court decision and found that both parties in the yearslong case of PML Development LLC vs. Hawthorn Woods are entitled to seek damages.
How much that may amount to will be determined by a lower court with potentially millions of dollars at stake. Initially, the lower court ordered the village to pay PML $5.3 million plus legal fees.
Hawthorn Woods appealed, saying that because PML breached the contract it should not have been awarded damages.
The Second District Appellate Court agreed, and last summer reversed the circuit court judgment against the village, saying neither party was entitled to damages because both had breached the contract.
The appellate court ruled the lower court erred in excusing PML from its contractual obligations because the village had "breached first," and said the company should not have been awarded damages.
On appeal by PML, the Illinois Supreme Court affirmed the lower court's judgment in favor of the company on its breach of contract claim. But it also reversed the finding barring the village from collecting on its counterclaims.
The case stems from a 2012 agreement involving 62 acres between Fairfield and Midlothian roads in the south-central portion of the village. PML was to accept fill materials, grade the property and then donate it to the village for future development.
Disputes over various aspects of the project and agreement resulted in claims and counterclaims.
The Supreme Court found each party had a viable breach of contract claim and the appellate court erred when it held that neither could recover damages.
Both parties had challenged the circuit court's calculation of damages. PML said the amount should be increased and the village said it failed to prove its damages.
"The trial court should enter a new judgment under the correct legal framework," the high court found. "It should also reconsider its award of attorney fees."
Joseph Cohen, a partner with Chicago-based Fox Rothschild LLP, said he was pleased with the high court finding and thought PML will come out ahead because its damages are "so much more" than the village's.
"The (lower) court is going to look at the damages both have sustained in determining an outcome," he said.
Pam Newton, Hawthorn Woods' chief operating officer, said she expects to learn more at the June 26 village board meeting.
"This opinion vindicates the village, which has always argued that it is the aggrieved party. The village intends to aggressively pursue redress for its damages in the trial," she said.