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Price v. Philip Morris12/15/2005
ere the same at all times, the special concurrence concludes that "while PMUSA's misrepresentations may have deceived consumers into altering their purchasing decisions, the net change in consumers' economic position as a result of those misrepresentations was zero." Slip op. at 80 (Karmeier, J., specially concurring, joined by Fitzgerald, J.).
The special concurrence's analysis, as it applies to both the class representatives and to the members of the class, suffers from a fundamental misunderstanding of the measure of damages in an action that is based upon a fraudulent misrepresentation made by a defendant. This court's opinions in Drew v. Beall, 62 Ill. 164 (1871), and Gerill Corp. v. J. L. Hargrove Builders, 128 Ill. 2d 179 (1989), are particularly instructive. In Drew, the plaintiff traded a house and lot in Dixon, Illinois , in return for acreage in Missouri and the sum of $800. The plaintiff charged that the defendant had made certain misrepresentations concerning the Missouri land. The defendant sought to limit the plaintiff's damages, arguing the proper measure of damages was the value of the house and lot in Dixon, less the $800, and less the actual value of the land in Missouri. The defendant maintained that this would restore the plaintiff to the condition he was in before the exchange of property. On appeal, the defendant argued the trial court should have allowed the jury to hear testimony regarding the value of the house and lot in Dixon. This court disagreed, holding that the proper measure of damages was "the difference between the actual value of the land and the value of such a tract of land as defendant's land was represented to be, and the value of the Dixon house and lot was not properly involved." Drew, 62 Ill. at 168. The court reasoned that the "parties had, by their agreement fixed an estimate and value upon the property which each sold and transferred to the other, and it was not for the jury to make a new contract for them, or fix a new price upon the plaintiff's property for them. The plaintiff was entitled to the benefit of his bargain." Drew, 62 Ill. at 168.
The court in Drew thus sharply distinguished between the benefit-of- the-bargain rule for the measure of damages in cases of fraud and deceit and the out-of-pocket rule measure of damages. The plaintiff in a fraud and deceit case is not merely entitled to be placed in the condition he was in before the bargain was made. He is entitled to the benefit of his bargain. Moreover, the courts will not rewrite the plaintiff's bargain by assigning a different price to an item than what the plaintiff and defendant originally agreed to.
In Gerill, 128 Ill. 2d at 179, Gerill Corporation and Jack L. Hargrove Builders, Inc., had formed a joint venture to develop land owned by Gerill in Woodridge, Illinois . Eventually, the parties approached John Rosch with the proposition that Rosch purchase Hargrove's interest in the joint venture. Rosch purchased Hargrove's interest after reviewing a 19-page handwritten list of the joint venture's outstanding loans and open invoices prepared by Hargrove. Upon consummation of the sale, Rosch's accountant discovered that Hargrove had misrepresented the joint venture's liabilities in that a number of liabilities related to the Woodridge properties had either been omitted from the list or misstated. The circuit court awarded damages to Rosch for Hargrove's fraudulent misrepresentations and the appellate court affirmed.
In this court, Hargrove argued that the circuit court's computation of damages was incorrect. Hargrove claimed that under the benefit-of- the-bargain rule, damages for fraudulent misrepresentation must be based upon the amount of money the plaintiff paid
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