## Facts

- Lightning Litho, Inc. operated a small commercial printing business in South Bend, Indiana.
- Danka Industries, Inc. (and related entities) sold and serviced office equipment, including high-volume copiers.
- Danka repeatedly tried to lease Litho a high-volume Kodak copier; Litho declined because its needed copy volume was far lower and it already had adequate equipment.
- A Danka salesperson later represented that a specific “account” would come with the copier and would generate about six million copies and $50,000 in annual profit.
- A Danka manager reinforced the representation after Litho requested a written commitment, stating that if the salesperson said the account went with the machine, it would.
- Relying on these representations, Litho entered a 60-month copier lease at $755 per month.
- Litho made payments for roughly two years; Danka never provided the promised account, Litho stopped paying, and the copier was repossessed.

## Issues

1. What measure of damages applies in Indiana for fraudulent inducement to contract when the plaintiff seeks money damages rather than rescission.
2. Whether Litho presented sufficient evidence of recoverable damages to submit its fraudulent inducement claim to the jury.

## Decision

- The Indiana Court of Appeals reversed the trial court’s judgment on the evidence for Danka and remanded.
- The court held Indiana applies the benefit-of-the-bargain rule to damages for fraudulent inducement to contract.
- Viewing the evidence favorably to Litho, the court found a jury could reasonably calculate damages based on the promised profits and the value difference between the deal as represented (lease plus account) and the deal received (lease without account).
- The trial court erred by treating Litho’s proof as solely rescissory and concluding no compensable fraud damages were shown.

## Legal Principles

- Fraudulent inducement damages are measured by the benefit-of-the-bargain rule: the difference between the value as represented and the actual value at the time of the transaction.
- A party fraudulently induced to contract may elect legal damages rather than rescission; pursuing damages does not negate the fraud claim.
- On judgment on the evidence, courts must consider the proof and reasonable inferences in the light most favorable to the non-moving party; if there is evidence from which a jury could determine damages, the claim should proceed to the jury.

## Conclusion

The court held that fraudulent inducement damages in Indiana are measured by the benefit-of-the-bargain and that Litho’s evidence of promised profits and payments was sufficient to allow a jury to determine fraud damages, requiring reversal of the directed ruling for Danka.


Lightning Litho, Inc. v. Danka Indus., Inc., 776 N.E.2d 1238 (Ind. Ct. App. 2002)