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Price v. Philip Morris12/15/2005
as a result of the misrepresentation. Thus, Hargrove argued, the circuit court should not have excluded evidence that the misrepresented liabilities were either never paid or were not paid until after Rosch sold his interest in the joint venture. The court rejected this argument, reasoning:
"Under the benefit-of-the-bargain rule, which governs the damage computations in fraudulent misrepresentation cases, damages are determined by assessing the difference between the actual value of the property sold and the value the property would have had if the misrepresentations had been true. (Hicks v. Deemer (1900), 187 Ill. 164, 170; Munjal v. Baird & Warner, Inc. (1985), 138 Ill. App. 3d 172, 186-87; Kinsey v. Scott (1984), 124 Ill. App. 3d 329, 341.) In this case, it was found that Hargrove represented the joint venture's liabilities as being less than they actually were. The proper measure of damages under the benefit-of-the-bargain rule, then, and the formula that was used by the circuit court, was the difference between the joint venture's liabilities as misrepresented by Hargrove and what those liabilities actually were. How Rosch or the joint venture subsequently dealt with those liabilities was irrelevant to this determination." Gerill, 128 Ill. 2d at 196.
The Gerill court restated that the proper measure of damages in an action for fraudulent misrepresentation is the difference between the actual value of the property sold and the value the property would have had if the misrepresentations had been true. The court added that the bargain, and the measure of damages, are not affected by subsequent actions. Rosch might or might not have been held liable for the full amount of the liabilities of the joint venture. However, whether Rosch was made to pay for the liabilities mattered not to the determination of damages. See also Antle & Brothers v. Sexton, 137 Ill. 410, 416 (1891) (where the land conveyed consisted of 30 acres rather than 80 acres as represented, the trial court did not err "in refusing evidence tending to show that notwithstanding the shortage [in acreage] plaintiffs got the worth of their money in the whole trade"); Kinsey v. Scott, 124 Ill. App. 3d 329 (1984) (holding the proper measure of damages was the difference in value between the apartment building as a five-unit structure including a basement unit and as a four-unit structure in 1973, the year of the purchase. In addition, the rental income which the plaintiff received from the basement unit, which defendant had not built to code, from 1973 to 1981 also belonged to the plaintiff as owner of the building). And see City of Chicago v. Michigan Beach Housing Cooperative, 297 Ill. App. 3d 317 (1998) (observing that in an appropriate case, a plaintiff may recover the difference between the value of the note or security interest as represented, and the value of the note or security interest received); Kleinwort Benson N. America v. Quantum Financial Services, 285 Ill. App. 3d 201 (1996) (reversing entry of summary judgment and holding that a question for a fact finder existed as to the amount of damages where counterclaimant purchased the company at a premium and evidence showed that, without the promised institutional sale force, the company had no value beyond the book value of assets); Poeta v. Sheridan Point Shopping Plaza Partnership, 195 Ill. App. 3d 852 (1990) (holding that a benefit-of-the-bargain analysis for damages is appropriate in an action for fraud); Four "S" Alliance, Inc. v. American National Bank & Trust Co. of Chicago, 104 Ill. App. 3d 636, 640 (1982) (trial court properly applied the benefit-of-the-bargain formula in awarding plaintiff "the profit difference for the gas actually sold during the three month
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