Legal Memorandum: Pecuniary Damages for Lost Earnings in IL

Issue: Under Illinois law, when seeking pecuniary damages, how does a small business owner establish lost earnings?

Illinois cases provide guidance for a sole practitioner or small business owner in establishing pecuniary damages for lost earnings, which clearly is not as straightforward as a salaried wage-earner’s showing.  (There is no requirement under Illinois law that annual profits be broken down by month.)

The case of Sezonov v. Wagner, 274 Ill. App. 3d 511, 654 N.E.2d 252 (1995), is very instructive as to how a sole proprietor or owner of a small business proves lost earnings.  The plaintiff, who was in a motor vehicle accident, owned and operated a pet store with his wife as sole corporate shareholders.  The Sezonov court held that the plaintiff could recover upon adequate proof of the money he personally would have received from the company, that is, his earnings or wages lost.  Id. at 514, 654 N.E.2d at 255.  The proof included evidence that the corporation was unable to timely open a second store because plaintiff was incapacitated by the accident.  Id.  While the court noted that “[t]he measure of lost earnings is more complicated when the injured person is self-employed,” id. at 513, 654 N.E.2d at 254, it applied the rule that “[a] plaintiff injured by a defendant’s tortious act is entitled to recover all damages which flow from that act,” id., and the plaintiff’s accountant’s showing that that store lost profits during the period of delay in the store opening was relevant and admissible in assessing damages for the plaintiff’s […]