Robinson v. Seidman

• Court: Appellate Court of Illinois
• Decided: August 24, 2006
• Docket: 1-05-3867 Rel
• Status: Published

Opinion

FOURTH DIVISION August 24, 2006

No. 1-05-3867

DOUGLAS ROBINSON, ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County. ) v. ) No. 04L11212 ) BDO SEIDMAN, LLP, ) The Honorable ) Stuart A. Nudelman, Defendant-Appellee. ) Judge Presiding.

JUSTICE GREIMAN delivered the opinion of the court:

Plaintiff Douglas Robinson appeals the trial court=s dismissal of his first amended

complaint with prejudice pursuant to section 2-615 of the Code of Civil Procedure (the Code)

(735 ILCS 5/2-615 (West 2004)). In the complaint, plaintiff alleged claims of breach of contract

and promissory estoppel against defendant BDO Seidman, LLP, which, plaintiff alleged, had

terminated plaintiff=s employment without cause. On appeal, plaintiff contends that his

complaint was wrongly dismissed when he sufficiently pled that the oral employment contract

was supported by consideration, was clear and definite in its terms and was not barred by the

statute of frauds and that he sufficiently pled the necessary elements of promissory estoppel.

Plaintiff=s first amended complaint, filed April 18, 2005, alleged the following facts.

From May 2002 until the end of February 2004, plaintiff was employed by Huron Consulting

Group (Huron) as a director of financial and economic consulting. At Huron, plaintiff was paid

a $118,500 salary per year and a $10,000 bonus per year and received benefits including a

401(k) plan, health insurance and stock options.

In August 2003, plaintiff was contacted by a headhunter on behalf of defendant. The 1-05-3867

headhunter explained that defendant intended to establish a division devoted to computer fraud

and forensic investigation and was looking for someone to head the division. In August or

September 2003, plaintiff met with Irv Levinson, an employee of defendant, to discuss the

position. Levinson and plaintiff met again in October and December of that year. At the

December 2003 meeting, another of defendant=s employees, Susan Henry, was also present.

During the December meeting, Levinson and Henry told plaintiff that if he accepted the position

as head of defendant=s new department, Ahe would be employed as long as it takes to successfully

build the department, and then as long as plaintiff desired.@ On January 15, 2004, plaintiff flew

to New York, where he met with defendant=s employee Carl Pergola for a final interview.

On January 23, 2004, defendant offered plaintiff the position and presented plaintiff with

an employment package that would entitle him to a salary of $126,000 per year, benefits

including a 401(k) plan and health insurance, but no annual bonus or stock options. Plaintiff

accepted the offer in early February 2004 and resigned from his position at Huron on February

16, 2004. Plaintiff began working for defendant on March 1, 2004. On May 1, 2004, plaintiff=s

employment was terminated.

Defendant filed a motion to dismiss plaintiff=s first amended complaint on June 14, 2005.

Defendant alleged that plaintiff=s complaint failed to state a cause of action upon which relief

could be granted. The trial court granted defendant=s motion and dismissed plaintiff=s first

amended complaint with prejudice on October 25, 2005.

AIn reviewing the granting of a motion to dismiss, this court must accept as true all well-

pleaded facts. [Citation.] A court should not dismiss a cause of action on the merits unless it

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clearly appears that no set of facts can be proved which would entitle the plaintiff to recover.@

Jago v. Miller Fluid Power Corp., 245 Ill. App. 3d 876, 878 (1993). We review the trial court=s

dismissal of a complaint de novo. Storm & Associates, Ltd. v. Cuculich, 298 Ill. App. 3d 1040,

1047 (1998).

Essentially, plaintiff=s amended complaint alleged that in terminating his employment in

May 2004, defendant breached two of the oral employment contract terms. First, defendant

breached its agreement to employ plaintiff until the new computer fraud and forensic

investigation department was successfully established, and second, defendant breached its

agreement to employ plaintiff for as long as plaintiff desired.

Plaintiff first contends and defendant does not dispute that the terms of the oral

employment contract were adequately supported by consideration. Plaintiff argues that in

exchange for his promise to leave his higher paying job at Huron, defendant relinquished its right

to terminate plaintiff at will.

We agree that the contract was supported by adequate consideration. In McInerney v.

Charter Golf, Inc., 176 Ill. 2d 482 (1997), the supreme court held that when Athe employee

relinquishes something of value in a bargained-for exchange for the employer=s guarantee of

permanent employment, a contract is formed.@ McInerney, 176 Ill. 2d at 488. There, as here, the

employee opted not to take a more lucrative job in exchange for the employer=s promise of

permanent employment. The court held that the contract was supported by consideration.

Having made that determination, we focus now on the first allegedly breached contract

term: defendant=s agreement to employ plaintiff Aas long as it takes to successfully build the

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department.@

Generally, an employment agreement that does not specify a definite duration Awill last

for as long as is mutually satisfactory, and either employer or employee may terminate the

employment >at will,= without liability for breach of contract.@ Martin v. Federal Life Insurance

Co., 109 Ill. App. 3d 596, 600 (1982). Thus, an employee at will may be discharged for any

reason or for no reason at all. Martin, 109 Ill. App. 3d at 600. In order to overcome the

assumption that an employment is at will, the terms of an oral contract for employment for a

specific duration must be clear and definite. Wilder v. Butler Manufacturing Co., 178 Ill. App.

3d 819, 821 (1989); see also Jago, 245 Ill. App. 3d at 879. A[I]nformal expressions of goodwill

and hope that naturally occur between a prospective employer and a prospective employee in an

interview situation@ are generally not sufficiently clear and definite to overcome the assumption

that the employment was at will. Wilder, 178 Ill. App. 3d at 822.

A brief examination of the facts of other cases construing Illinois law is helpful to our

analysis of whether defendant=s assurance that if plaintiff accepted the position, he would be

employed as long as it takes to successfully build the new department was sufficiently clear and

definite to overcome the presumption that the employment was at will. In Johnson v. George J.

Ball, Inc., 248 Ill. App. 3d 859 (1993), we found that the employer=s representation that the

employee would be hired to develop and conduct training programs that would last through 1991

was sufficiently clear and definite to establish permanent employment for a term. Similarly, in

Maier v. Lucent Technologies, Inc., 120 F.3d 730 (7th Cir. 1997), the employer=s letter stating

that if the employee worked on a transition team, after the transition team was dismantled, he

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would be assigned to a placement of his choice, was sufficiently clear and definite to overcome

the presumption that the employment was at will.

On the contrary, in Kercher v. Forms Corp. of America, Inc., 258 Ill. App. 3d 743 (1994),

the employer=s representation that the employee would be groomed to be the company president

was not sufficiently clear and definite to overcome the presumption of at-will employment. In

Wilder, the employer=s promise that the employee would never have to anticipate a layoff and

was a permanent employee was also not considered sufficiently clear and definite to overcome

the presumption.

Though the facts of this case resemble those of Johnson in that in both instances the

employee was offered a position in which he would develop the employer=s new department, a

crucial difference exists. In Johnson, a specific limit was placed on the duration of the

employee=s permanent employment: through 1991. Here, on the contrary, no specific duration

was established. The contract terms in Maier were also more clear and definite than those in this

case. In Maier, the employer specifically promised the employee that he would be able to

choose his next assignment upon completion of his tenure on the transition team. Here, no such

specific representations were made. Here, defendant=s representations to plaintiff during the

interview process that he would be employed until the new department was successfully

established are similar to the informal expressions of goodwill and hope that were made to the

employees in Kercher and Wilder. This conclusion is supported by the fact that the

representation was made in conjunction with the very vague promise that plaintiff would be

employed as long as he desired, and by the fact that the representation was made during the

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interview process and plaintiff does not allege that it was mentioned again in a subsequent

interview or when plaintiff was presented with his employment package. Accordingly, we find

that defendant=s assurance that plaintiff would be employed until the new department was

successfully established was merely an Ainformal expression[] of goodwill and hope that

naturally occur[s] between a prospective employer and a prospective employee in an interview

situation@ (Wilder, 178 Ill. App. 3d at 822), and was not sufficiently clear and definite to

overcome the presumption that plaintiff=s employment was at will. We note that, if the parties

had more clearly defined when or what conditions would signify that the department had been

successfully established, for example, when the equipment that would support the department

was put into place, when the employees were hired and working or when the department was

turning a profit, as did the parties in Johnson, we may have decided this issue differently and

found that the contract term was sufficiently clear and definite to overcome the presumption of

at-will employment.

Plaintiff=s claim that defendant breached the employment contract term by which it

agreed to employ plaintiff Aas long as plaintiff desired@ was also properly dismissed as it did not

adequately state a cause of action.

First, the duration of this contract term was insufficiently clear and definite. In fact, the

promise to employ plaintiff for as long as he desired was a mere Ainformal expression of

goodwill and hope,@ referred to in Wilder. Wilder, 178 Ill. App. 3d at 822 (holding that oral

pronouncements by the employer defendant that the employee plaintiff would be employed

permanently and that she would never need to worry about being laid off if she continued to do

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her job were not sufficiently clear and definite to overcome the presumption that the employment

was at will); Jago, 245 Ill. App. 3d 876 (holding that letters written by the employer defendant to

the employee plaintiff that referenced an annual salary and reporting to work permanently was

not sufficiently clear and definite to overcome the presumption that the employment was at will).

Furthermore, the agreement that defendant would employ plaintiff as long as plaintiff

desired is barred by the statute of frauds. The Illinois statute of frauds provides, A[n]o action

shall be brought *** upon any agreement that is not to be performed within the space of one year

from the making thereof, unless *** in writing[] and signed by the party to be charged.@ 740

ILCS 80/1 (West 2004). Put another way, the statute of frauds prohibits oral contracts that

cannot be performed within one year of their making. Martin, 109 Ill. App. 3d at 604. The test

for determining whether the statute of frauds applies to a contract is whether the contract is

capable of being performed within one year of its formation, not whether such occurrence is

likely. Martin, 109 Ill. App. 3d at 604.

Defendant likens this case to McInerney. In McInerney, the plaintiff employee brought a

breach of contract claim against the defendant employer alleging that the defendant had breached

a lifetime employment agreement with the plaintiff. The defendant contended that the lifetime

employment agreement violated the statute of frauds and was unenforceable because it was not

capable of being performed within a year of its making. The supreme court recognized that

many courts have held that a contract for lifetime employment would Abe excluded from the

operation of the statute because the employee could, in theory, die within one year, and thus the

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contract would be >capable of being performed.= @ McInerney, 176 Ill. 2d at 490. However, the

court rejected that reasoning, stating:

AWe find such an interpretation hollow and unpersuasive. A >lifetime=

employment contract is, in essence, a permanent employment contract.

Inherently, it anticipates a relationship of long duration-certainly longer than one

year. In the context of an employment-for-life contract, we believe that the better

view is to treat the contract as one >not to be performed within the space of one

year from the making thereof.= To hold otherwise would eviscerate the policy

underlying the statute of frauds and would invite confusion, uncertainty and

outright fraud. Accordingly, we hold that a writing is required for the fair

enforcement of lifetime employment.@ McInerney, 176 Ill. 2d at 490-91.

Though plaintiff argues that his employment contract is distinguishable from that

considered in McInerney because plaintiff=s contract was for employment Aas long as plaintiff

desired,@ whereas the contract in McInerney was a lifetime employment contract, we find that

the McInerney reasoning applies to plaintiff=s contract, bringing it into the ambit of the statute of

frauds. Under the reasoning of McInerney, like a lifetime employment contract, an employment

contract for as long as the employee desires is, in essence, a permanent contract. Indeed, there is

little difference between a lifetime contract, a contract that would last until the employee retired

and a contract that would last as long as the employee desired. Despite the fact that an employee

could die tomorrow, could retire tomorrow or could simply no longer desire to work for an

employer tomorrow, we are bound to follow the reasoning of McInerney. Pursuant to the

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McInerney court=s reasoning, all of those contracts contemplate a Arelationship of long duration.@

McInerney, 176 Ill. 2d at 490.

Our analysis of the agreement that defendant would employ plaintiff as long as plaintiff

desired parallels the federal district court=s decision in Razdan v. General Motors Corp., 979 F.

Supp. 755 (N.D. Ill. 1997). In Razdan, the defendant employer moved to dismiss the plaintiff

employee=s complaint alleging that the defendant breached his employment contract. The

plaintiff alleged that the defendant had promised to employ the plaintiff for as long as the

plaintiff wished. The Razdan court first found that the terms of the contract were not sufficiently

clear and definite to create an enforceable contract for permanent employment. Furthermore, the

court held, citing McInerney, Aoral contracts for lifetime employment violate the Statute of

Frauds.@ Razdan, 979 F. Supp. at 760.

We also reject plaintiff=s contention that, even if the statute of frauds applies to the

agreement that defendant would employ plaintiff for as long as plaintiff desired, it is inapplicable

because plaintiff partially performed under the contract.

This issue was also addressed in McInerney. There, the court noted, AA party=s partial

performance generally does not bar application of the statute of frauds, unless it would otherwise

be >impossible or impractical to place the parties in status quo or restore or compensate= the

performing party for the value of his performance.@ McInerney, 176 Ill. 2d at 491, quoting

Mapes v. Kalva Corp., 68 Ill. App. 3d 362, 368 (1979); Payne v. Mill Race Inn, 152 Ill. App. 3d

269, 278 (1987). The court held that, because the plaintiff had been fully compensated for the

work he performed, his partial performance did not bar application of the statute of frauds. Here,

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as in McInerney, plaintiff was compensated for his partial performance and therefore the statute

of frauds remains in effect.

Plaintiff further contends that the trial court erred in dismissing his allegation of

promissory estoppel. ATo plead a cause of action for promissory estoppel, plaintiff must allege

that (1) defendants made an unambiguous promise to plaintiff; (2) plaintiff relied on this

promise; (3) plaintiff=s reliance was expected and foreseeable by defendants; and (4) plaintiff

relied to his detriment.@ Jago, 245 Ill. App. 3d at 880.

Concerning plaintiff=s claim that defendant breached its agreements to employ plaintiff

until the new department was successfully established and thereafter for as long as plaintiff

desired, as stated above, plaintiff failed to sufficiently allege that defendant=s promises were

unambiguous offers of permanent employment. Plaintiff does not allege additional facts in his

promissory estoppel claim from which such promises could be inferred.

Moreover, plaintiff=s claim of breach concerning the offer of employment as long as

plaintiff desired is barred by the statute of frauds. A[P]romissory estoppel does not bar the

application of the statute of frauds in Illinois.@ McInerney, 176 Ill. 2d at 492. As the court

pointed out in McInerney, some authorities have used promissory estoppel to bar application of

the statute of frauds in cases in which the performing party would otherwise be without remedy

and the other party would be unjustly enriched. However, as is the case here, in McInerney,

because the plaintiff had been fully compensated for his services, promissory estoppel did not

bar the statute of frauds.

For the above-stated reasons, we affirm the judgment of the trial court.

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Affirmed.

QUINN, P.J., and MURPHY, J., concur.

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