## Facts

- Santorini Cab Corporation, a Chicago taxicab company, contracted in May and July 2006 to buy two Chicago taxicab medallions from Banco Popular North America for $48,000 each.
- Each contract required Chicago Department of Consumer Services (DCS) approval within 90 days, stated “time is of the essence,” specified notice methods, and limited Banco’s liability to refund of the deposit if DCS approval was not obtained or DCS indicated non-approval within the 90-day period.
- Santorini paid earnest money and remained able to perform.
- DCS did not give final approval within the 90-day periods, but the parties continued working toward closing.
- Banco later asserted it could not proceed due to a notice issue in the underlying foreclosure of the medallions and then informed Santorini the deal was terminated.
- Santorini sued for breach of contract, seeking damages including the price/market differential and lost profits.

## Issues

1. Whether the trial court abused its discretion by sanctioning Santorini for discovery violations by barring lost-profits damages.
2. Whether breach-of-contract damages should be measured using the medallions’ fair market value at the time of breach rather than at the time of trial.
3. Whether the parties’ conduct after the 90-day approval period supported waiver of the contractual limitation-of-liability provision.

## Decision

- The appellate court affirmed the circuit court’s judgment.
- The trial court acted within its discretion in precluding lost-profits damages due to Santorini’s failure to comply with discovery obligations supporting that claim.
- The proper damages measure was the difference between the contract price and fair market value at the time of breach, not the higher value at trial years later.
- The trial court did not err in determining market value from contemporaneous sales data and averaging prices after excluding outliers.
- The trial court’s finding that the limitation-of-liability clause was waived by the parties’ post-deadline conduct was left undisturbed.

## Legal Principles

- Trial courts have broad discretion to impose discovery sanctions, including barring an entire damages category, when a party fails to comply with discovery orders necessary to prove that category.
- Contract expectation damages are compensatory and aim to place the nonbreaching party in the position it would have occupied upon performance, not a better position.
- For failure to deliver property with an available market, damages generally equal the contract price minus the fair market value at the time of breach; later market increases do not shift the valuation date to trial.
- Mitigation principles support using a time-of-breach market measure when the subject matter is readily obtainable in the market.
- Contractual limitations and deadline-based provisions may be waived by conduct inconsistent with treating the contract as terminated or void, including continued efforts to close after an express cutoff period.

## Conclusion

The appellate court upheld (1) exclusion of lost-profits damages as a discovery sanction and (2) calculation of breach damages using the medallions’ fair market value at the time of breach, while accepting the trial court’s determination that the parties’ continued performance efforts waived the contractual limitation restricting recovery to return of the deposit.


Santorini Cab Corp. v. Banco Popular N. Am., 2013 IL App (1st) 122070, 999 N.E.2d 46 (Ill. App. Ct. 2013)