Kreg Therapeutics , Inc. v. Vital G O, Inc.

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 17‐3005 & 17‐3227
KREG T HERAPEUTICS , I NC.,
Plaintiff‐Appellee,
v.
VITAL G O, I NC.,
Defendant‐Appellant.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:11‐cv‐06771 — Robert M. Dow, Jr., Judge.
____________________
A RGUED D ECEMBER 3, 2018 — D ECIDED MARCH 14, 2019
____________________
Before SYKES , BARRETT, and ST . EVE , Circuit Judges.
ST . EVE , Circuit Judge. Kreg Therapeutics, Inc., a medical‐
supply company, contracted with VitalGo, Inc., maker of the
Total Lift Bed® (or the “bed”), for exclusive distribution
rights in several markets. A year and a half later, the arrange‐
ment soured. VitalGo told Kreg that it had not made the min‐
imum‐purchase commitments required by the contract for
Kreg to keep its exclusivity. Kreg thought VitalGo was wrong

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2 Nos. 17‐3005 & 17‐3227
on the facts and the contract’s requirements. This lawsuit en‐
sued.
In the district court, VitalGo did not make a strong show‐
ing in defending its case. The district court ruled during the
summary‐judgment stage that VitalGo breached the agree‐
ment, and the court treated that ruling as established for the
case. That left only Kreg’s damages. The case went to a bench
trial, despite an eleventh‐hour request from VitalGo to have it
dismissed on pleading grounds. After the bench trial, the dis‐
trict court ordered VitalGo to pay Kreg a little over $1,000,000
in lost‐asset damages and prejudgment interest.
VitalGo appeals, arguing that the district court made a
host of reversible errors. We see none and affirm.
I. Background
A. Factual History
The Total Lift Bed, as the name suggests, can incline to a
near 90‐degree angle with the occupant harnessed and up‐
right. Hospitals use the beds when treating obese and elderly
patients. And the beds are expensive, with some models run‐
ning more than $10,000. Kreg is in the business of selling and
renting specialty medical equipment to medical providers,
and it sought a distribution arrangement with VitalGo for the
beds.
The two parties entered into a written agreement in De‐
cember 2009. The agreement conferred exclusive distribution
rights of the Total Lift Bed to Kreg in several geographic re‐
gions: Indiana, Illinois, Wisconsin, and Atlanta, Georgia (the
“original territories”). Those rights lasted until January 31,
2011, but paragraph 1.B. of the agreement contemplated their
extension. If Kreg made a minimum‐purchase commitment of

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Nos. 17‐3005 & 17‐3227 3
$200,000 in each of the four territories before January 31, 2011,
then paragraph 1.B. extended exclusivity for another year.
The agreement also contained an in‐writing clause. Per para‐
graph 23, any “notice or communication required or permit‐
ted” under the agreement “shall be made in writing and shall
be sent by registered mail, return receipt requested.”
In April 2010, a few months into the agreement, Kreg and
VitalGo added an amendment to it. The amendment granted
Kreg exclusivity in several additional territories, including
parts of Florida, New Jersey, and St. Louis, Missouri (the “ad‐
ditional territories”), through May 2012. The amendment did
not make clear whether that date applied to the additional ter‐
ritories only or whether it covered the original territories as
well.
Kreg and VitalGo went about their business uneventfully
until mid‐2011. On June 2, 2011, Ohad Paz, VitalGo’s CEO and
Managing Director, emailed Craig Poulos, Kreg’s President,
complaining that Kreg had not performed under the contracts
as required to maintain exclusivity. The email read: “Despite
our conversation in January 2011 and the different options we
spoke about, you did not make any commitment for purchase
of our products for 2011, as you should have, in order to keep
your exclusivity.” Poulos responded a few days later that
Kreg was “willing to agree to commit to future minimum pur‐
chases in 2011,” but that it needed updates on design prob‐
lems Kreg saw in the beds first. About a week later, on June
15, 2011, VitalGo and one of Kreg’s competitors, RecoverCare,
issued a press release announcing a nationwide exclusivity
arrangement for the Total Lift Bed. They entered a multiyear
agreement in August 2011.

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4 Nos. 17‐3005 & 17‐3227
In September 2011, Kreg requested five new beds from Vi‐
talGo. VitalGo refused to fill the order. Kreg responded by fil‐
ing this lawsuit.
B. Procedural History
Kreg’s complaint brought one cause of action—breach of
contract—and it sought only injunctive relief. On the day it
filed the complaint, Kreg also moved the district court for a
temporary restraining order. After a hearing, the district court
denied the request and concluded that Kreg had not shown
irreparable harm caused by VitalGo’s alleged breach. VitalGo
filed counterclaims, including for breach of contract, and the
case entered discovery.
In March 2012, the parties cross‐moved for summary judg‐
ment. Kreg argued that there was no genuine issue of material
fact relating to its breach‐of‐contract claim and that injunctive
relief was warranted. VitalGo, meanwhile, contended that
Kreg had not shown irreparable harm or performance under
the contracts.1 Those motions, like all summary‐judgment
motions filed in the Northern District of Illinois, were subject
to Local Rule 56.1. Pursuant to Local Rule 56.1(a), both Kreg
and VitalGo filed a statement of uncontested facts with their
motions. But there ended VitalGo’s compliance with the rule.
VitalGo did not support its statement of facts with contempo‐
raneously filed record evidence, as Local Rule 56.1(a) requires
(and as Kreg did). Nor did VitalGo file a response to the op‐
position’s statement of facts, as Local Rule 56.1(b) requires
1 VitalGo also argued that subject‐matter jurisdiction was lacking, but, as
the district court correctly ruled, diversity jurisdiction exists. Kreg is an
Illinois corporation, VitalGo is a Delaware one, and the amount in contro‐
versy is well above $75,000. See 28 U.S.C. § 1332(a).

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Nos. 17‐3005 & 17‐3227 5
(and as Kreg did). VitalGo also did not file a response to
Kreg’s summary‐judgment motion. The district court tried
twice, unsuccessfully, to alert VitalGo’s counsel to the filing
failures.
In March 2013, the district court issued a thorough opinion
ruling on the cross motions. The court addressed at the outset
VitalGo’s noncompliance with Local Rule 56.1. According to
well‐established Seventh Circuit law, that noncompliance
meant that the district court could exercise its discretion to ac‐
cept Kreg’s statements of fact as undisputed. See, e.g., Curtis v.
Costco Wholesale Corp., 807 F.3d 215, 219 (7th Cir. 2015). The
court did so, “to the extent” the facts were “supported by ad‐
missible and docketed evidence.”
On the merits, and applying New York law, the district
court first decided that the agreement and the amendment
were two distinct contracts. The agreement covered exclusiv‐
ity obligations with respect to the original territories; the
amendment governed the additional territories. As to the
original territories, the district court ruled that Kreg had per‐
formed under the agreement and that VitalGo had breached
it. Kreg’s undisputed evidence showed that Poulos and Paz
met in Chicago in December 2010—before the original territo‐
ries’ commitment date of January 2011—and there Poulos
orally agreed to purchase $800,000 worth of beds from Vi‐
talGo. That constituted Kreg’s performance under the agree‐
ment, according to the district court. That Kreg’s commitment
was not in writing did not doom its claim, the court ruled,
because the agreement did not require all communications to
be made in writing, paragraph 23 notwithstanding.
The district court therefore decided that, even viewing the
facts in the light most favorable to VitalGo, Kreg had

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6 Nos. 17‐3005 & 17‐3227
established the first three elements of a breach of contract: the
existence of a contract, its performance, and VitalGo’s breach.
But it found Kreg’s case lacking with respect to the fourth el‐
ement: damages. See, e.g., Johnson v. Nextel Commc’ns, Inc., 660
F.3d 131, 142 (2d Cir. 2011) (identifying the four elements of a
breach‐of‐contract claim under New York law). Kreg had
claimed losses from the breach, but it had not shown that the
parties foresaw such losses when they made the agreement—
as required to collect consequential damages under New York
law. See, e.g., Awards.com, LLC v. Kinkoʹs, Inc., 834 N.Y.S.2d 147,
152 (N.Y. App. Div. 2007). Kreg had also not established irrep‐
arable harm, a requirement for the injunctive relief Kreg re‐
quested. Yet not all was lost for Kreg, the district court ex‐
plained. Under Federal Rule of Civil Procedure 54(c), a party
can obtain any form of relief to which it is entitled—like mon‐
etary damages—even if the party did not expressly seek it.
As to the additional territories, the district court saw no
evidence of actual commitments from Kreg. The June 2011
emails evidenced only a willingness to commit. The district
court thus granted in part and denied in part VitalGo’s mo‐
tion and denied Kreg’s motion.
The court held a status hearing the next month to chart the
case’s course. VitalGo’s counsel failed to attend. Kreg’s coun‐
sel told the court that it read the summary‐judgment opinion
as, in part, a ruling under Federal Rule of Civil Procedure
56(g), which permits a court to “enter an order stating any
material fact … that is not genuinely in dispute and treating
the fact as established in the case.” Kreg’s counsel added that,
after the opinion, “the only thing left” to address was dam‐
ages with respect to the original territories. The district court

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Nos. 17‐3005 & 17‐3227 7
agreed and set a briefing schedule for a second summary‐
judgment motion on damages.
A couple months later, Kreg filed its second summary‐
judgment motion. VitalGo replaced its counsel before re‐
sponding, and the court gave new counsel leave to take dis‐
covery on Kreg’s damages. When VitalGo did respond—this
time in compliance with Rule 56.1—it addressed Kreg’s dam‐
ages argument. But it also contended that Rule 56(g) should
not apply, and that the issues of performance and breach
should still be on the table. The district court, in ruling on the
second motion, admitted that it should have cited Rule 56(g)
in its first opinion, but it affirmed that its previous opinion
established performance and breach as undisputed facts of
the case. The court, however, again concluded that material
issues of fact existed with respect to Kreg’s damages.
The court put the litigation on pause for about two years,
after VitalGo entered bankruptcy in late 2014. When it
emerged, the district court set a bench trial on the issue of
damages for September 2016. A couple weeks before trial, Vi‐
talGo moved to dismiss the case pursuant to Federal Rule of
Civil Procedure 12(c) and alternatively Rule 12(h)(2)(c), con‐
tending that Kreg had never pleaded damages. Kreg re‐
sponded by filing a Rule 15 motion to amend its complaint to
add damages allegations. The district court took those mo‐
tions under advisement pending trial.
Trial lasted two days, and the parties’ principals and dam‐
ages experts testified. In September 2017, the district court is‐
sued another thorough opinion resolving the case. The court
first granted Kreg’s motion for leave to amend, mooting Vi‐
talGo’s pending motion to dismiss. It then made detailed fac‐
tual findings and decided damages. The district court

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8 Nos. 17‐3005 & 17‐3227
determined that Kreg was entitled to consequential damages
because VitalGo should have foreseen that its breach would
cause Kreg to lose its exclusive business segment—a lost as‐
set, according to the court. Turning to the amount of damages,
the district court found Kreg’s expert persuasive and used his
assumptions with certain tweaks. It awarded $642,610 in lost‐
asset damages plus $364,593 in prejudgment interest to Kreg.
This appeal followed.
II. Discussion
VitalGo makes many arguments on appeal. The through
line is that the district court erred with each step it took in
finding VitalGo liable, from the first summary‐judgment de‐
cision through the posttrial opinion. We will take VitalGo’s
arguments in two sets—those related to the summary‐judg‐
ment decisions and those concerning the posttrial rulings—
and address them in turn.
A. VitalGo’s Challenges to the Summary‐Judgment Deci‐
sions
VitalGo contends that the district court first erred in con‐
cluding that the agreement allowed Kreg to make commit‐
ments orally. From that error, VitalGo says, the district court
made more: deciding that there was no issue of fact with re‐
spect to which party breached; entering a Rule 56(g) order;
and denying VitalGo’s summary‐judgment motion. We, how‐
ever, see neither an error of law nor an abuse of discretion in
the district court’s decisions.
1. The In‐Writing Requirement
Paragraph 23 of the agreement reads: “Any notice or com‐
munication required or permitted hereunder … shall be in
writing and shall be sent by registered mail, return receipt

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Nos. 17‐3005 & 17‐3227 9
requested, postage prepaid.” According to VitalGo, this para‐
graph unambiguously requires any communication—includ‐
ing paragraph 1.B.’s minimum‐purchase commitments—to
be made in writing. Because there was no evidence Kreg did
so, VitalGo argues, the district court should have granted Vi‐
talGo, not Kreg, summary judgment. The parties agree that
New York law governs the agreement’s interpretation.
Under New York law, contract interpretation should give
effect to the parties’ intent “as revealed by the language of
their agreement.” Chesapeake Energy Corp. v. Bank of New York
Mellon Tr. Co., 773 F.3d 110, 113–14 (2d Cir. 2014). It follows
that we start by asking whether the contract is ambiguous, a
question of law. See U.S. Fid. & Guar. Co. v. Fendi Adele S.R.L.,
823 F.3d 146, 149 (2d Cir. 2016); JA Apparel Corp. v. Abboud, 568
F.3d 390, 396–97 (2d Cir. 2009). New York law provides that a
contract term is ambiguous if it is reasonably subject to more
than one meaning. Law Debenture Trust Co. of N.Y. v. Maverick
Tube Corp., 595 F.3d 458, 466 (2d Cir. 2010); Morgan Stanley
Grp. Inc. v. New England Ins. Co., 225 F.3d 270, 275 (2d Cir.
2000).
Paragraph 23 fits that definition. It applies to “any … com‐
munication” made under the agreement. Read literally and
absolutely, those words cover the “communicating” of a min‐
imum‐purchase commitment. But one might reasonably read
paragraph 23 more narrowly. For one, an absolute reading
would limit the parties to registered mail for the bulk of their
discussions—almost certainly not what two modern‐day
business partners intended. See, e.g., Duane Reade, Inc. v. Card‐
tronics, LP, 863 N.Y.S.2d 14, 18–19 (N.Y. App. Div. 2008) (in
deciding whether a contract is ambiguous, courts should not
disregard “common sense … in favor of formalistic

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10 Nos. 17‐3005 & 17‐3227
literalism”). What is more, paragraph 23 references undefined
“notices” and “communications,” but those terms are not in‐
cluded in paragraph 1.B.—despite “notices” appearing else‐
where in the agreement. Likewise, paragraph 1.B. makes no
mention of the need for a “written notice” or that the commit‐
ment must be made “in writing”—despite at least six other
provisions containing those terms.
So paragraph 23’s reach is ambiguous. Typically, if a con‐
tract is ambiguous, its meaning is a question of fact not suited
for summary disposition. See, e.g., Utica Mut. Ins. Co. v. Clear‐
water Ins. Co., 906 F.3d 12, 17 (2d Cir. 2018). But not always.
Courts can resolve ambiguities as a matter of law if the record
is “so one‐sided that no reasonable person could decide the
contrary.” Compagnie Financiere de CIC et de L’Union Euro‐
peenne v. Merrill Lynch, Pierce, Fenner & Smith Inc., 232 F.3d
153, 158 (2d Cir. 2000) (Sotomayor, J.). That is the kind of rec‐
ord we have here.
Earlier we noted that the parties could not have intended
paragraph 23 to be absolute. The record demonstrates as
much. It shows scores of communications between the parties
made out of compliance with paragraph 23’s literal meaning,
either by email, regular mail, or in person. And no wonder.
Countless communications follow the formation of an agree‐
ment like Kreg and VitalGo’s, covering order requests,
maintenance needs, and billing inquiries (to name a few). To
require the companies to send every communication via reg‐
istered mail is commercially unreasonable, if not absurd in the
twenty‐first century. See, e.g., Greenwich Capital Fin. Prod., Inc.
v. Negrin, 903 N.Y.S.2d 346, 348 (N.Y. App. Div. 2010) (“[A]
contract should not be interpreted to produce a result that is
absurd, commercially unreasonable or contrary to the

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Nos. 17‐3005 & 17‐3227 11
reasonable expectations of the parties.”). Indeed, neither
party has pointed us to record evidence showing that they
ever used registered mail. Perhaps the parties did for commu‐
nications relating to the provisions that require “written no‐
tice” or delivery “in writing,” but there is no evidence that
they intended paragraph 23 to stretch beyond those provi‐
sions.
New York law frowns upon imposing contractual require‐
ments on sophisticated parties who have not made those re‐
quirements explicit in their contract. Utica Mut. Ins., 906 F.3d
at 24 (citing Glob. Reinsurance Corp. of Am. v. Century Indem.
Co., 91 N.E.3d 1186, 1193 (N.Y. 2017)). The parties here did not
make clear that they intended paragraph 1.B. to be subject to
paragraph 23, and the record can be read only to say the op‐
posite. The district court got it right—the agreement does not
require minimum‐purchase commitments to follow para‐
graph 23.
2. Performance and Breach
VitalGo next challenges the district court’s decisions on
Kreg’s performance and VitalGo’s breach. During the first
round of summary‐judgment briefing, Kreg offered evidence
showing that Poulos made the minimum‐purchase commit‐
ment for the original territories in December 2010. The district
court deemed this fact undisputed because VitalGo failed to
contest it under Local Rule 56.1. With that fact undisputed,
another conclusion had to follow: VitalGo breached the agree‐
ment by terminating exclusivity in June 2011 and by failing to
deliver beds in September 2011.
It is a nonstarter to argue that the district court erred in
deeming the commitment an undisputed fact. We have

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12 Nos. 17‐3005 & 17‐3227
“consistently upheld district judges’ discretion to require
strict compliance with Local Rule 56.1.” Flint v. City of Bel‐
videre, 791 F.3d 764, 767 (7th Cir. 2015) (collecting cases). And
we hasten to do the same here, especially in light of the court’s
repeated efforts to alert VitalGo, a sophisticated company rep‐
resented by counsel, to its filing failures. VitalGo, however,
tries a different tack, arguing that the district court erred by
overlooking conflicting evidence from earlier in the case, most
notably from interrogatories and the TRO briefing and hear‐
ing. But that is essentially the same meritless argument.
Local Rule 56.1 does not provide an exception for cases in
which some conflicting evidence exists in the periphery, evi‐
dence that the district court should have (somehow) clued it‐
self to. That would be self‐defeating. The rule aims to make
summary‐judgment decisionmaking manageable for courts—
an acute concern in complex, drawn‐out disputes like this
one, where theories can shift and reams of evidence can accu‐
mulate. See, e.g., Curtis, 807 F.3d at 219; Waldridge v. Am.
Hoechst Corp., 24 F.3d 918, 920–22 (7th Cir. 1994). That is why
we allow strict enforcement of the local rule, recognizing that
it is “not the duty of the district court to scour the record in
search of material factual disputes.” Roger Whitmore’s Auto.
Servs., Inc. v. Lake Cty., Illinois, 424 F.3d 659, 664 n.2 (7th Cir.
2005); see also Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th
Cir. 2009); FTC v. Bay Area Bus. Council, Inc., 423 F.3d 627, 633
(7th Cir. 2005). VitalGo’s contrary argument, that the district
court should have combed the docket sheet and earlier brief‐
ing to identify evidence that VitalGo itself failed to bring to
the court’s attention, wrongly attempts to foist its obligations
on the court.

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Nos. 17‐3005 & 17‐3227 13
3. The Rule 56(g) Order
VitalGo also argues that, even if the district court was cor‐
rect on performance and breach during the first round of sum‐
mary‐judgment briefing, it erred in entering a Rule 56(g) or‐
der on those issues. Rule 56(g) states: “If the court does not
grant all the relief requested by the motion, it may enter an
order stating any material fact … that is not genuinely in dis‐
pute and treating the fact as established in the case.” Because
Rule 56(g) speaks of what a court “may” do, we review for an
abuse of discretion.
According to VitalGo, because Kreg did not make a show‐
ing on one of the breach‐of‐contract elements (damages), the
burden to show an issue of fact never shifted to VitalGo; and
because the burden never shifted to VitalGo, it cannot be
faulted with a Rule 56(g) order for failing to address the other
elements. That conclusion does not follow from the premise.
It is true that when a movant fails to meet its initial summary‐
judgment burden, the burden does not shift to the nonmovant
and the motion should be denied (as happened here). See, e.g.,
Hotel 71 Mezz Lender LLC v. Natʹl Ret. Fund, 778 F.3d 593, 601
(7th Cir. 2015). That scenario, however, does not sideline Rule
56(g). The rule applies precisely when the court concludes
that a moving party is not entitled to summary judgment. Fed.
R. Civ. P. 56(g) (“If the court does not grant all the relief re‐
quested by the motion, it may enter an order….”); Fed. R. Civ.
P. 56, Committee Notes on Rules—2010 Amendment (Rule
56(g) “becomes relevant only after the court has applied the
summary‐judgment standard”). Rule 56(g) is “ancillary” to
the ultimate summary‐judgment analysis, operating to “sal‐
vage some results” from the time and resources spent in de‐
ciding unsuccessful summary‐judgment motions. Wright &

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14 Nos. 17‐3005 & 17‐3227
Miller, 10B Fed. Prac. & Proc. § 2737 (4th ed. 2018). The district
court properly used the rule here.
The Committee Notes to Rule 56 add that courts should
“take care” to ensure that their use of Rule 56(g) “does not
interfere” with a nonmovant’s ability to accept a fact for “pur‐
poses of the motion only.” VitalGo thinks this clarification
helps its case, but it does not. VitalGo could have told the dis‐
trict court that it accepted Kreg’s performance only for pur‐
poses of the cross motions. Litigants do that often. VitalGo
chose otherwise and expressly (though improperly, under the
rules) challenged Kreg’s performance. As a result, the district
court could not have known that VitalGo wanted to reserve
the performance/breach issue. VitalGo may have had the right
to assume Kreg’s performance, but it had no right to challenge
the performance without evidentiary support. Summary
judgment is no time for half‐hearted advocacy. See Grant v.
Trustees of Indiana Univ., 870 F.3d 562, 568 (7th Cir. 2017).
VitalGo also makes much of Rule 56(e)(2), which states
that a court may deem improperly rebutted facts “undisputed
for purpose of the motion.” Fed. R. Civ. P. 56(e) (emphasis
added). VitalGo understands the italicized language to mean
that “undisputed” labels should expire with the motion’s res‐
olution. That may be true for Rule 56(e) purposes, but not for
Rule 56(g) purposes. The two rules provide distinct discre‐
tionary tools. And Rule 56(g)’s scope is clear—it treats facts
“as established in the case.” Fed. R. Civ. P. 56(g) (emphasis
added).
We owe a word about the timing of the district court’s Rule
56(g) order. As explained earlier, the district court omitted
from the first summary‐judgment opinion any citation to Rule
56(g), although it did say that Kreg had “established the first

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Nos. 17‐3005 & 17‐3227 15
three elements” of its claim. The court then stated at the fol‐
lowing status hearing—which VitalGo’s counsel failed to at‐
tend or promptly seek the transcript of—that Rule 56(g) ap‐
plied, and the court made that decision doubly clear in the
second summary‐judgment opinion. VitalGo believes this
was too late. We disagree. Rule 56(g) does not say that the dis‐
trict court must issue its order contemporaneously with its
summary‐judgment decision, and it does not say that the or‐
der must be in writing. To be sure, best practices are to do
both (as the district court later recognized). But the district
court’s opinion was clear enough and no one paying reasona‐
ble attention to the litigation after the first summary‐judg‐
ment opinion could have thought Kreg’s performance and Vi‐
talGo’s breach were still open questions, so we see no abuse
of discretion.
4. The Damages Element and Rule 54(c)
VitalGo further challenges how the district court treated
Kreg’s failure to establish damages during the first round of
summary‐judgment. VitalGo contends that once the district
court accepted that Kreg had not shown evidence of damages,
it necessarily had to grant summary judgment to VitalGo.
There are a few problems with this argument.
It is, for starters, unreviewable. After a case goes to trial
and the factfinder decides the merits, previous denials of
summary judgment are old news. The district court here
made a posttrial finding that VitalGo damaged Kreg, a deci‐
sion which we can (and will) review. But its earlier decision,
that there were, at the time, outstanding issues of fact regard‐
ing Kreg’s damages, is not subject to appeal. See Ortiz v. Jor‐
dan, 562 U.S. 180, 184 (2011); Empress Casino Joliet Corp. v. Bal‐
moral Racing Club, Inc., 831 F.3d 815, 823–24 (7th Cir. 2016); see

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16 Nos. 17‐3005 & 17‐3227
also Lawson v. Sun Microsystems, Inc., 791 F.3d 754, 761 (7th Cir.
2015). The argument also flops for another procedural reason:
VitalGo did not move on the damages element below, or at
least did not do so properly. The district court could not have
erred by not granting summary judgment on grounds that Vi‐
talGo failed to raise. See Firestone Fin. Corp. v. Meyer, 796 F.3d
822, 829 (7th Cir. 2015); Williams v. City of Chicago, 733 F.3d
749, 755 (7th Cir. 2013).
VitalGo’s argument fails on its merits, too. Each cross mo‐
vant for summary judgment bears a respective burden to
show no issue of material fact with respect to the claim. See
Fed. R. Civ. P. 56(a). That Kreg did not meet its burden does
not mean that VitalGo did. We corrected this mistaken think‐
ing in Hotel 71 Mezz Lender, where we added that denying a
summary‐judgment motion “normally will leave the movant
in essentially the same position,” not a worse one. 778 F.3d at
602–03. So too here. Kreg did not bear its burden, but Vi‐
talGo—having neither moved on damages nor provided rec‐
ord support—certainly did not either. The district court cor‐
rectly let the case proceed to trial on the question of damages.
VitalGo also criticizes the district court’s reference to Rule
54(c), but it is beside the point. The district court did not, as
VitalGo insists, use Rule 54(c) to save Kreg’s claim from sum‐
mary judgment. The court denied summary judgment to Kreg
because it had not shown damages. It mentioned Rule 54(c) to
indicate that, while Kreg may not be able to obtain injunctive
relief, it could still obtain monetary damages. Nothing about
that ruling was incorrect or improper.

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Nos. 17‐3005 & 17‐3227 17
B. VitalGo’s Challenges to the Posttrial Decisions
The next set of challenges relate to the court’s posttrial rul‐
ings. VitalGo submits that the district court should have dis‐
missed the case rather than allow Kreg leave to amend its
complaint to add damages allegations. It also takes issue with
the posttrial opinion’s liability and damages findings. We
again see no reversible error.
1. The Leave‐to‐Amend Decision
Federal Rule of Civil Procedure 15(a) governs requests to
amend pleadings before trial. 2 It instructs courts to “freely
give leave when justice so requires,” and thus district courts
should not deny leave absent a “good reason”—such as futil‐
ity, undue delay, prejudice, or bad faith. Life Plans, Inc. v. Sec.
Life of Denver Ins. Co., 800 F.3d 343, 357 (7th Cir. 2015); see also,
e.g., Lee v. Ne. Illinois Reg’l Commuter R.R. Corp., 912 F.3d 1049,
1052 (7th Cir. 2019). We examine leave‐to‐amend decisions for
an abuse of discretion. See Manistee Apartments, LLC v. City of
Chicago, 844 F.3d 630, 633 (7th Cir. 2016).
The district court did not abuse its discretion. The amend‐
ment was neither futile nor sought in bad faith, and, as the
district court explained, both parties understood (or should
have understood) that damages remained the only matter to
resolve after the first summary‐judgment decision. There was
therefore no unacceptable delay or prejudice involved.
2 The district court also examined the request under Rule 15(b), which co‐
vers amendments made during or after trial. We think it clear that Rule
15(a) controls a request made before trial, like this one, and so we do not
address Rule 15(b).

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18 Nos. 17‐3005 & 17‐3227
VitalGo, nonetheless, argues the leave‐to‐amend decision
was reversible error because Kreg did not update its disclo‐
sures under Federal Rule of Civil Procedure 26(a) to include
monetary damages before trial. See Fed. R. Civ. P.
26(a)(1)(A)(iii). Absent prejudice, however, that purported
failure is not a Rule 15(a) problem. Rule 37(c) governs the con‐
sequences of failing to supplement disclosures, and VitalGo
does not challenge any Rule 37(c) decision on appeal (indeed
it appears that VitalGo opted not to move under Rule 37 be‐
low). In the run‐up to trial, VitalGo conducted substantial dis‐
covery into Kreg’s monetary damages and briefed the issue
during the second round of summary judgment. Whatever
the consequence of Kreg’s supposed failure to update its dis‐
closures, it did not prejudice VitalGo under Rule 15(a).
2. The Finding of Harm
VitalGo challenges the district court’s posttrial finding of
harm to Kreg. Because the district court made that finding af‐
ter a bench trial, we review it for clear error. Trovare Capital
Grp., LLC v. Simkins Indus., Inc., 794 F.3d 772, 778 (7th Cir.
2015). If the finding is plausible in light of the record, we may
not reverse even if we might have come out differently. We
resolve all doubts in favor of the district court. Carnes Co. v.
Stone Creek Mech., Inc., 412 F.3d 845, 847–48 (7th Cir. 2005).
The court found harm in Kreg’s loss of exclusivity rights,
future income, customer base, and access to replacement
parts. Evidence supports these findings. Poulos testified to
them, evidence showed that Kreg’s marketing of the beds de‐
clined significantly after the breach, and Kreg’s expert evalu‐
ated the extent of the damage. VitalGo, however, offers three
reasons why the district court’s finding of harm was clearly
erroneous. None has merit.

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Nos. 17‐3005 & 17‐3227 19
First, VitalGo contends that it did not harm Kreg because
Kreg continued to market the Total Lift Bed after the breach,
by advertising the beds online, entering into post‐June 2011
contacts with customers, and attending certain tradeshows.
Those contentions are irrelevant; the record shows that even
if Kreg’s relationship with the Total Lift Bed was not a clean
break in June 2011, Kreg still suffered harm. As the district
court explained, for example, the reference to the beds on
Kreg’s website did not suggest that Kreg could still rent beds
at pre‐breach levels. Poulos testified that Kreg had largely
“switched off” its marketing for the beds after VitalGo’s
breach, testimony which the district court found credible. See
Carnes Co., 412 F.3d at 848 (a credibility determination “can
virtually never amount to clear error”). As for the post‐breach
contacts, those contacts were “negligible,” as the district court
found, compared to Kreg’s pre‐breach business. And regard‐
ing the tradeshows, Kreg booked them “well in advance of
VitalGo’s breach,” and the fact that Kreg attended a few does
not suggest that Kreg could market and rent the beds at the
level it did before VitalGo’s breach.
VitalGo’s second argument challenges causation. Accord‐
ing to VitalGo, Kreg had not ordered a bed in the ten months
before VitalGo breached the agreement in June 2011, and
therefore, there was no evidence that VitalGo’s breach is what
deprived Kreg of the ability to sell and rent the beds. This, too,
does not amount to clear error. See In re Emerald Casino, Inc.,
867 F.3d 743, 755 (7th Cir. 2017) (“[C]ausation is a question of
fact that we review for clear error.”). The record shows that
the ten‐month lull was likely the result of other factors—
Kreg’s Total Lift Bed business was still getting off the ground,
and it had a history of erratic orders—and not a decided dis‐
interest in marketing and selling the beds. We know the latter

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20 Nos. 17‐3005 & 17‐3227
is not the case, because Kreg ordered additional beds in Sep‐
tember 2011.
Third, VitalGo contests Poulos’s testimony that VitalGo
harmed Kreg by refusing to supply replacement parts for the
beds after the breach, despite the agreement obligating Vi‐
talGo to do so for five years after the agreement’s termination.
The district court decided that Poulos’s testimony was credi‐
ble, and nothing in the record causes us to take the unusual
step of upsetting that decision. See, e.g., Madden v. United
States Depʹt of Veterans Affairs, 873 F.3d 971, 973 (7th Cir. 2017).
3. Foreseeability of Damages
VitalGo also argues that the district court erred in finding
that Kreg’s losses were foreseen by VitalGo and thus recover‐
able as consequential damages. See Bi‐Econ. Mkt., Inc. v. Har‐
leysville Ins. Co. of New York, 886 N.E.2d 127, 130 (N.Y. 2008);
Kenford Co. v. Cty. of Erie, 537 N.E.2d 176, 180 (N.Y. 1989).
Where, as here, an agreement is silent on consequential dam‐
ages, New York law takes a “common sense” approach that
examines the “nature, purpose and particular circumstances
of the contract.” Schonfeld v. Hilliard, 218 F.3d 164, 172 (2d Cir.
2000).
The district court made its foreseeability finding based on
Poulos’s testimony, which the court decided was credible and
undisputed. Poulos testified that during contract negotiations
he made clear to VitalGo that Kreg needed exclusive‐distrib‐
utorship protections to make the agreement worthwhile. To‐
tal Lift Beds were a new product at the time, Poulos ex‐
plained, and exclusivity would offset the risks and invest‐
ments Kreg had to make to set up a new business segment
and develop a customer base. According to Poulos, VitalGo

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Nos. 17‐3005 & 17‐3227 21
agreed with Kreg’s position. Those facts are enough to con‐
clude, as the district court did, that VitalGo foresaw (or
should have foreseen) the losses Kreg would suffer if VitalGo
breached. See id. at 177 (evidence that party would not have
entered an agreement but for a promised feature of the agree‐
ment sufficed to show foreseeability).
This leaves VitalGo to challenge, again, the district court’s
credibility determination. VitalGo says that Poulos’s testi‐
mony is inconsistent with the agreement, which contemplates
Kreg’s payment for beds rather than exclusivity. That is a
reach. The agreement outlines Kreg’s exclusivity rights in the
first paragraph, so we know that exclusivity was a part of the
bargain. VitalGo also calls Poulos’s testimony speculative. We
do not see how. He testified to things he and others said dur‐
ing the negotiation.
4. The Damages Assessment
VitalGo’s last challenge is to the district court’s damages
assessment. It contends that the district court “applied the
wrong damages theory to the wrong asset, in the wrong way.”
We review the district court’s methodology de novo and its
calculation for clear error. Rexam Beverage Can Co. v. Bolger,
620 F.3d 718, 727 (7th Cir. 2010); Int’l Prod. Specialists, Inc. v.
Schwing Am., Inc., 580 F.3d 587, 598 (7th Cir. 2009).
VitalGo’s “wrong damages theory” argument is that alt‐
hough Kreg sought only lost‐asset damages, the district court
applied a lost‐profit calculation. The Second Circuit has ex‐
plained the difference under New York Law:
When the defendant’s conduct results in the loss of
an income‐producing asset with an ascertainable
market value, the most accurate and immediate

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22 Nos. 17‐3005 & 17‐3227
measure of damages is the market value of the asset
at the time of breach—not the lost profits that the asset
could have produced in the future.
Schonfeld, 218 F.3d at 176 (emphases added). VitalGo says the
district court based its damages assessment on the profits
Kreg could have earned in the future, absent the breach. But
that is not what the court did—or that is not all it did. The
district court, adopting Kreg’s expert model, estimated a fair‐
market value for the agreement at the time of the breach. It
did so by doing what a hypothetical buyer would likely have
done: evaluate the profits expected from the agreement, then
reduce the expected profit—here, by 10.08 percent—to ac‐
count for market risk and uncertainty. The court did, then,
take “lost future profits into account,” but only as the first step
in determining “the discounted value” of those profits.
Sharma v. Skaarup Ship Mgmt. Corp., 916 F.2d 820, 826 (2d Cir.
1990). That is what the law prescribes. See id.; Schonfeld, 218
F.3d at 176; see also Anchor Sav. Bank, FSB v. United States, 597
F.3d 1356, 1369 (Fed. Cir. 2010); First Fed. Lincoln Bank v.
United States, 518 F.3d 1308, 1315 (Fed. Cir. 2008).
VitalGo’s “wrong asset” argument fares no better. VitalGo
thinks that the district court should have considered only the
value of the beds and exclusivity for the duration of the agree‐
ment. That conception of the lost asset is too narrow. A hypo‐
thetical buyer stepping into Kreg’s shoes would receive not
only the right to beds and exclusivity for a period, but all that
comes with it. This includes, as Kreg’s expert explained and
the district court found, the opportunity to develop a cus‐
tomer base and reap profits in the future. The record shows
that the agreement was an opportunity to create a lasting

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Nos. 17‐3005 & 17‐3227 23
business segment, as the district court properly considered
the lost asset.
VitalGo’s “wrong way” argument has two parts, each of
which challenges an assumption the district court applied in
calculating the lost‐asset damages. First, the district court as‐
sumed, after crediting Kreg’s expert, that the beds had a ten‐
year useful life. That assumption was not clear error. VitalGo
admitted that the beds were functional for ten years at the
summary‐judgment stage, and it still does not dispute that
some years‐long useful‐life assumption should apply. Its new
position, arguing for an undefined but shorter useful‐life as‐
sumption, rests on limited counter evidence. New‐version
beds are sometimes introduced, VitalGo says, and Kreg itself
preferred to sell new beds. That evidence, however, does not
defeat the district court’s reasoned determination.
Second, VitalGo faults the district court’s 10.08‐percent
discount rate. VitalGo thinks this rate is too low, because it
does not account for the possibility that the hypothetical pur‐
chaser would be a small or new company. The rate therefore
does not account for what VitalGo calls small‐stock risk and
company‐specific premiums. We again see no clear error. The
district court explained why these premiums should not ap‐
ply; they assume, without much record support, particular
characteristics of the hypothetical buyer.
III. Conclusion
For these reasons, we AFFIRM the district court’s judg‐
ment.

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