## Facts

- Med + Plus Neck & Back Pain Center, S.C. (Med Plus) hired Daniel Noffsinger, a chiropractor, under a written employment contract dated February 23, 1995.
- The contract term was two years and compensated Noffsinger based on a percentage of his gross billings.
- The contract included an early-termination provision aimed at recouping the costs of training a new associate chiropractor.
- To implement that provision, Noffsinger was required to sign a $50,000 promissory note that decreased by $2,083 per month over 24 months.
- If Noffsinger ended the employment early, the remaining balance on the note became immediately due as “liquidated damages”; if he completed two years, the obligation would be reduced to zero.
- Noffsinger resigned about 10 months into the two-year term.
- Med Plus sued for breach of contract, seeking actual damages (including claimed lost profits and training-related costs), enforcement of the liquidated-damages/promissory-note provision, and attorney’s fees under the contract.
- After a bench trial, the circuit court found that Noffsinger breached the contract but ruled that Med Plus failed to prove compensable damages and that the liquidated-damages provision was an unenforceable penalty.
- The trial court ultimately awarded attorney’s fees to neither party, and Med Plus appealed.

## Issues

1. Whether Med Plus proved actual damages from Noffsinger’s early resignation (including lost profits and training-related losses) with reasonable certainty.
2. Whether the contract’s $50,000 promissory note/early-termination provision was enforceable liquidated damages or an unenforceable penalty.
3. Whether Med Plus was entitled to attorney’s fees under the contract’s fee-shifting provision after establishing breach of contract, despite recovering no damages.

## Decision

- The appellate court affirmed the trial court’s finding that Noffsinger breached the employment contract.
- The appellate court affirmed the determination that Med Plus failed to prove actual damages with reasonable certainty and therefore could not recover lost profits or other claimed damages on the record presented.
- The appellate court affirmed the ruling that the promissory-note/liquidated-damages provision was an unenforceable penalty rather than a valid liquidated-damages clause.
- The appellate court reversed the denial of attorney’s fees, holding that Med Plus was entitled to fees as the prevailing party under the contract based on the breach finding.
- The case was remanded for the trial court to determine and award a reasonable attorney’s fee amount to Med Plus.

## Legal Principles

- A plaintiff seeking contract damages must prove both the existence of damages and a non-speculative basis to calculate them; claimed lost profits require reasonably certain proof rather than conjecture.
- A stipulated-damages clause is enforceable only if (at the time of contracting) actual damages would be difficult to measure and the stated amount is a reasonable estimate of anticipated loss; a sum that is disproportionate and functions to compel performance is a penalty and is unenforceable.
- Where a contract provides for attorney’s fees to the prevailing party in litigation to enforce the agreement, a party may “prevail” by obtaining a judgment establishing the other party’s breach, even if the prevailing party does not recover compensatory damages; the proper remedy is a fee award in a reasonable amount.

## Conclusion

The Illinois Appellate Court held that although Noffsinger breached his two-year employment contract, Med Plus failed to prove actual damages with sufficient certainty and could not enforce the $50,000 promissory note because it operated as an unenforceable penalty; however, because Med Plus proved breach and thus prevailed under the contract’s fee clause, the court reversed the fee denial and remanded for a reasonable attorney’s fee award.


Med + Plus Neck & Back Pain Center, S.C. v. Noffsinger, 726 N.E.2d 687 (2000)