Gatto v. Frankfurtheimain Gorp.

2024 IL App (1st) 231862-U
CourtAppellate Court of Illinois
DecidedAugust 29, 2024
Docket1-23-1862
StatusUnpublished

This text of 2024 IL App (1st) 231862-U (Gatto v. Frankfurtheimain Gorp.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gatto v. Frankfurtheimain Gorp., 2024 IL App (1st) 231862-U (Ill. Ct. App. 2024).

Opinion

2024 IL App (1st) 231862-U Order filed: August 29, 2024

FIRST DISTRICT FOURTH DIVISION

No. 1-23-1862

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT ______________________________________________________________________________

JOHN GATTO, ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County ) v. ) ) No. 2021 L 9887 FRANKFURTRHEINMAIN CORP., ) an Illinois Corporation, ) Honorable ) Catherine A. Schneider, Defendant-Appellee. ) Judge, presiding. ______________________________________________________________________________

PRESIDING JUSTICE ROCHFORD delivered the judgment of the court. Justices Hoffman and Martin concurred in the judgment.

ORDER

¶1 Held: We reversed the order granting summary judgment for defendant on plaintiff’s complaint for breach of contract and remanded for further proceedings.

¶2 Plaintiff, John Gatto, appeals the circuit court’s order granting summary judgment for

defendant, FrankfurtRheinMain Corporation (FRM), on his complaint for breach of contract.

Plaintiff contends that questions of material fact preclude the entry of summary judgment. We

reverse and remand. No. 1-23-1862

¶3 FRM is a wholly owned subsidiary of FrankfurtRheinMain, GmbH (FRM GmbH). FRM

GmbH is the official government-funded agency promoting business development in the Frankfurt

metropolitan region of Germany. FRM GmbH’s core responsibilities are to attract international

companies to the Frankfurt region and to facilitate the establishment and growth of its business

operations. FRM GmbH operates with a fixed budget each year and allocates operating funds to

each of its representative offices, including FRM as well as offices in London, Tokyo, Ho Chi

Minh City, Shanghai, and Pune, India.

¶4 FRM handles FRM GmbH’s promotion and marketing efforts in the United States and

Canada.

¶5 Plaintiff has a Ph.D. from the University of Giessen in Germany and a juris doctor degree

from the University of Wisconsin Law School. Plaintiff signed a written employment agreement

(agreement) to become President of FRM effective January 1, 2018. The term of the agreement

was for four years, until December 31, 2021. When plaintiff joined FRM, he was its only employee

in the United States. Several months later, plaintiff hired Shannon Lynch to help him manage the

Chicago office.

¶6 Section 2 of the agreement required plaintiff to prepare an annual budget, to be based on

the “initial budget” and the mutually agreed goals and objectives of FRM. Plaintiff was required

to present the annual budget to the “authorized representatives” of FRM GmbH.

¶7 Section 3 of the agreement provided for an initial budget of $500,000 for the year 2018

including all personnel, office and administrative costs. FRM GmbH was to provide those funds

to FRM quarterly.

¶8 Section 8 provided that FRM would reimburse plaintiff for “all reasonable business travel

and other out-of-pocket expenses reasonably incurred” in the performance of his duties. All -2- No. 1-23-1862

reimbursable expenses were to be “appropriately documented in reasonable detail” and submitted

within 30 days of incurring those expenses.

¶9 Section 6(b) of the agreement allowed FRM to terminate plaintiff’s employment for cause.

Cause was defined as:

“(i) conviction of a crime involving moral turpitude;

(ii) willful misconduct or gross neglect of duties which, in either case, has resulted, or in

all probability is likely to result, in damage to [FRM]; provided that within 30 days after

receiving notice of such misconduct or neglect, on which [FRM GmbH] is relying to

terminate you for cause, you shall have the opportunity to defend yourself before the

authorized representatives of [FRM GmbH]; or

(iii) a repeated failure by you to follow the lawful written directives of [FRM GmbH] or

any written policy of [FRM] which has resulted, or is likely to result, in material economic

damage to [FRM]. In any such case, you shall be provided with [FRM GmbH’s] written

statement that it believes, in good faith, that such acts or failures to act by you are a

violation of the Agreement and any relevant facts in support of such position. You, in turn,

shall be afforded the opportunity to discuss the matter with the authorized representatives

of [FRM GmbH] and the reasons for not complying with [FRM GmbH’s] directives or

[FRM] policy.”

¶ 10 Section 6(b) further provided that if plaintiff was terminated for cause, all obligations to

make any further payments under the agreement shall cease immediately, except for accrued,

unused vacation pay and any accrued but unpaid salary up to the date of termination.

¶ 11 Section 6(c) allowed FRM to terminate plaintiff without cause, provided that it pay plaintiff

the entire balance of the contract amount for the remaining term of the agreement. -3- No. 1-23-1862

¶ 12 FRM terminated plaintiff on December 11, 2020, ostensibly for cause. Plaintiff filed a

complaint for breach of contract, alleging that he did not commit a crime involving moral turpitude,

nor did he act with willful misconduct or gross negligence, or repeatedly fail to follow written

directives, as required for a termination for cause. Therefore, plaintiff contended his termination

was without cause, necessitating that FRM pay him the contract amount for the remaining term of

the agreement. FRM’s failure to pay him the monies owed him under the remaining term of the

agreement constituted a breach of contract.

¶ 13 FRM filed a motion for summary judgment, noting that the essential elements of a breach

of contract claim are (1) the existence of a valid and enforceable contract, (2) performance by

plaintiff, (3) breach by defendant, and (4) resulting injury to plaintiff. See Wolff v. Bethany North

Suburban Group, 2021 IL App (1st) 191858, ¶ 62. FRM argued that an “avalanche of evidence”

showed both that plaintiff failed to perform under the agreement and that he committed acts

supporting his termination for cause such that it was not required to pay him any further monies

under the agreement. In support, FRM attached several affidavits.

¶ 14 Eric Menges attested that he is the President and Chief Executive Officer of FRM GmbH.

Menges stated that plaintiff’s job performance at FRM “was well below our expectations and

disappointing in many respects.” Menges terminated plaintiff for cause in 2020 “but only after [he]

had disregarded many warnings and directives from [his principal supervisor Bertram Roth] and

from me, and had failed to improve his performance and communication with us despite being

given multiple opportunities to do so.”

¶ 15 Menges gave specific examples of plaintiff’s poor job performance. Menges explained that

in 2019, plaintiff spent more than the monies allotted to him under the budget, necessitating the

transfer of $55,000 from FRM GmbH to FRM in order to “keep the U.S. operations afloat.” -4- No. 1-23-1862

Plaintiff had not informed Menges of the overspending or the necessity of an influx of cash to

maintain FRM’s viability; Menges heard of it from his accountant, Brad Stake of the accounting

firm Andrea Luehmann, Ltd. (Luehmann). Menges emailed plaintiff on September 20, 2019,

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Bluebook (online)
2024 IL App (1st) 231862-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gatto-v-frankfurtheimain-gorp-illappct-2024.