Dugas-Filippi et al v. JP Morgan Chase & Co
Filing
153
MEMORANDUM Opinion and Order Signed by the Honorable John Z. Lee on 9/4/14Mailed notice(ca, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DORI DUGAS-FILIPPI and ROBERT
FILIPPI,
Plaintiffs,
v.
JP MORGAN CHASE, N.A.,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
Case No. 10 C 2023
Judge John Z. Lee
MEMORANDUM OPINION AND ORDER
Plaintiff Dori Dugas-Filippi (“Dugas-Filippi”) filed suit against Defendant JP Morgan
Chase, N.A. (“Chase”), her former employer, for various alleged wrongs stemming from her
termination.
Chase has moved for summary judgment on Dugas-Filippi’s claims of breach of
contract, promissory estoppel, fraud, and conversion.
In turn, Dugas-Filippi has brought a
cross-motion for summary judgment on her conversion claim.
For the reasons provided herein,
the Court denies Chase’s motion as to Dugas-Filippi’s breach of contract and promissory
estoppel claims, grants Chase’s motion as to Dugas-Filippi’s fraud claim, and denies both
parties’ motions as to Dugas-Filippi’s conversion claim. 1
Factual Background
The following facts are undisputed, except where otherwise noted.
1
Dugas-Filippi is a
The Court also dismisses Robert Filippi as a party to this suit because he lacks standing to bring
any of the stated claims against Chase, and the parties have stipulated to his dismissal. See Pls.’ Resp.
Def.’s Mot. Summ. J. 2.
former employee of Chase, where she began working as an administrative specialist on or about
October 29, 2001.
Def.’s Rule 56.1 Stmt. Material Facts (“Def.’s LR 56.1(a)(3)”) ¶¶ 2, 5.
On
or about March 16, 2006, Dugas-Filippi was promoted to Senior Executive Assistant and began
reporting to Chris Deveny (“Deveny”), Managing Director of Investments for the Private Bank
and head of the Midwest Private Bank in Chicago.
Id. ¶¶ 6, 8.
Deveny considered
Dugas-Filippi an excellent employee and they shared a good working relationship.
Id. ¶ 9.
In January 2007, Deveny and Dugas-Filippi had two conversations central to this dispute.
Id. ¶ 29.
husband.
In the first conversation, Dugas-Filippi requested a paid leave to take care of her ailing
Id. ¶ 30.
Deveny responded that he would “think about it or look into it or
something and let [her] know.” Id. ¶ 31.
Because Dugas-Filippi was an excellent employee,
Deveny wanted to accommodate her request for scheduling flexibility.
Pls.’ Rule 56.1 Stmt.
Material Facts (“Pls.’ LR 56.1(b)(3)”) ¶ 3.
The parties dispute what transpired at the second meeting.
Dugas-Filippi does not recall
the “exact words” or “exact conversation” that took place at the meeting.
¶ 32.
Def.’s LR 56.1(a)(3)
She remembers, however, that Deveny told her (1) she could take a six-month, paid leave,
(2) she would have a job when she returned, but possibly a different job, and (3) she would not
be fired for taking the paid leave. Pls.’ LR 56.1(b)(3) ¶ 5. 2
2
Deveny, on the other hand, denies
Here, and in response to many of Dugas-Filippi’s factual statements contained in her LR
56.1(b)(3) statement, Chase denies the assertion on the basis that “[p]laintiffs misstate the record in part
because the cited testimony contains no evidence in support of” all or part of the allegation, after which
Chase then admits to the truth of all or part of the allegation. See, e.g., Def.’s Resp. Pls.’ LR 56.1(b)(3) ¶
5. Chase also devotes the first four pages of its reply brief to pointing out perceived procedural and
factual errors in Dugas-Filippi’s response brief and LR 56.1(b)(3) statement. See Def.’s Reply Supp.
Mot. Summ. J. 1-4. The Court has considered Chase’s objections, and in determining the undisputed
material facts of this case, the Court relies only on the admissible portions of the parties’ statements of
facts. To the extent deficiencies exist in Dugas-Filippi’s factual assertions, the Court disregards those
assertions.
2
promising Dugas-Filippi paid leave, or that she would not be fired for taking paid leave.
According to Deveny, he approved only unpaid leave and promised only that Dugas-Filippi
would have a job when she returned.
Def.’s LR 56.1(a)(3) ¶ 32.
The parties also dispute whether Deveny was authorized to grant Dugas-Filippi paid
leave.
Chase contends that its written policy addressing discretionary leave—available to
employees on Chase’s intranet—unambiguously denies the availability of paid discretionary
leave.
Id. ¶¶ 20, 23.
Chase also notes that Dugas-Filippi received no documentation from
Deveny acknowledging approval of her request for paid leave.
Id. ¶ 34.
Dugas-Filippi, on the
other hand, argues that she trusted Deveny, given his position of authority as her manager, and
believed he could grant paid leave in an effort to accommodate her request for scheduling
flexibility.
See Pls.’ LR 56.1(b)(3) ¶¶ 2-3, 5. 3
She also states that in other instances,
employees have received paid discretionary leave from Chase.
Id. ¶ 11. 4
Dugas-Filippi took her discretionary leave from Chase starting on February 5, 2007,
continuing to August 5, 2007, and received compensation from Chase during that period.
3
Chase objects to Dugas-Filippi’s assertion that Deveny had authority to deviate from the terms of
Chase’s discretionary leave policy on the basis that the assertion reaches improper conclusions from the
testimony it cites. The Court agrees that the cited testimony does not support the conclusion that Deveny
could unilaterally change any aspect of Chase’s discretionary leave policy. However, Dugas-Filippi’s
claim that, because Deveny was her supervisor, she relied on his alleged promise of paid leave
notwithstanding the policy has sufficient support in the record.
4
Chase objects to this observation, arguing that the cited testimony lacks foundation, is immaterial,
and constitutes hearsay. The Court disagrees. Plaintiff cites to a human resources official’s firsthand
account of how Chase handled other employees’ claims of paid leave and does not lack foundation.
Additionally, the fact is material to whether Chase could have foreseen that Dugas-Filippi would rely on a
promise that she would not be terminated for taking paid leave. Finally, Plaintiff cites to deposition
testimony, which is otherwise admissible. See Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir.
1997) (noting that while “hearsay is inadmissible in summary judgment proceedings to the same extent
that it is inadmissible in a trial[,] . . . except that affidavits and depositions . . . are admissible in summary
judgment proceedings to establish the truth of what is attested or deposed”) (internal citations omitted).
3
Def.’s LR 56.1(a)(3) ¶¶ 36-37.
leave.
The parties dispute why Dugas-Filippi was paid during her
Chase asserts that “[e]ither someone at Chase did not process Dugas-Filippi’s leave at
all, or processed it incorrectly.” Id. ¶ 37.
Conversely, Dugas-Filippi maintains that Deveny
promised her paid leave, and so Chase paid her during her leave.
56.1(a)(3) ¶ 37.
Pls.’ Resp. Def.’s LR
The parties agree, however, that upon Dugas-Filippi’s return to Chase, she was
placed in a new position, Trust Assistant, and reported to a different supervisor.
56.1(a)(3) ¶ 38.
Def.’s LR
Dugas-Filippi viewed this new position as a “step down” from her previous
position as a Senior Executive Assistant.
Pls.’ LR 56.1(b)(3) ¶ 23.
Chase denies that the Trust
Assistant position was a “step down.” Def.’s Resp. Pls.’ LR 56.1(b)(3) ¶ 23.
Chase subsequently discovered that it had not properly processed Dugas-Filippi’s leave of
absence.
Def.’s LR 56.1(b)(3) ¶ 40.
Chase then retroactively designated the leave as unpaid
and requested that Dugas-Filippi repay the compensation she had received.
refused.
Id. ¶ 42.
Id. ¶¶ 40-41.
She
From Dugas-Filippi’s return in 2007 to her termination in 2009, Chase
made numerous attempts to collect the compensation it paid her during her leave, but was
refused.
Pls.’ LR 56.1(b)(3) ¶ 36. 5
During this period, Chase also paid Dugas-Filippi two
bonuses, the first in 2008 for $7,000.00, and the second in 2009 for $8,000.00.
Id. ¶¶ 25, 31. 6
According to one of Chase’s human resources officers, Deveny arranged the bonuses in order to
alleviate the financial pressure that Chase’s repayment demand had placed on Dugas-Filippi.
5
Chase’s objections to this factual assertion is misplaced. The fact that Chase requested
Dugas-Filippi to return the pay she received during her leave is central to this dispute. Additionally, the
human resources official providing the cited testimony had the requisite knowledge to support the
assertion.
6
Chase objects to these facts on the basis that they are immaterial. These facts are material,
however, to Dugas-Filippi’s fraud claim. See Pls.’ Resp. Def.’s Mot. Summ. J. 13.
4
Id. ¶¶ 27-28. 7 Notwithstanding, Dugas-Filippi refused to repay the compensation she received
during her leave.
Def.’s LR 56.1(a)(3) ¶ 47.
Chase terminated Dugas-Filippi on October 29,
2009, for “refusing to repay funds that Chase believed should have been repaid.” Id. ¶ 48. 8
As an additional matter, Chase used part of the compensation paid to Dugas-Filippi
during her leave to purchase 143.6199 shares of Chase common stock as part of Chase’s
Employee Stock Purchase Plan (“ESPP”).
Def.’s LR 56.1(b)(3) ¶¶ 51-52.
Under the plan,
eligible employees were allowed to purchase discounted Chase shares with their compensation.
Id. ¶ 51.
Employees would then sell or trade those shares, but were required to request a
certificate describing the shares, which required some delay for administrative processing.
Rule 56.1 Stmt. Facts Cross-Mot. Summ. J. ¶ 7. 9
Pls.’
When Chase discovered Dugas-Filippi’s
leave had not been processed properly, Chase advised her that it would “pull back” the shares,
and did so.
Id. ¶¶ 52, 54. 10
7
Chase argues that this statement relies on inadmissible hearsay. Plaintiff, however, cites to
deposition testimony, and the statement is therefore admissible. See Eisenstadt, 113 F.3d at 742 (7th Cir.
1997).
8
Chase insists that it did not terminate Dugas-Filippi for taking paid leave, but for “failing to repay
money that Chase believed should have been repaid.” Def.’s Mem. Supp. Mot. Summ. J. 8. As
Plaintiffs correctly argue, this is a distinction without a difference. Pls.’ Resp. Def.’s Mot. Summ. J. 7.
Firing an employee for refusing to pay back money earned during a paid leave is for all relevant purposes
equivalent to firing the employee for taking the paid leave where the employee had permission to do so.
9
Chase objects to these assertions on the basis that they constitute speculation and lack foundational
support. In support of these facts, however, Dugas-Filippi relies primarily on Chase’s ESPP manual.
The manual, which Chase distributed for the purpose of explaining employee rights and privileges under
the ESPP, is neither speculative nor without foundation. In fact, Chase refers to the manual in supporting
many of its own assertions. See, e.g., Def.’s LR 56.1(a)(3) ¶¶ 51, 57-58.
10
Dugas-Filippi argues that Chase did not “cancel” the shares of stock, but merely refused to issue a
certificate for the 143.6199 shares issued during Dugas-Filippi’s leave. Pls.’ Rule 56.1 Resp. Def.’s
Stmt. Facts ¶ 54. Conversely, Chase denies that it “interfered with the issuance of [a] stock certificate”
including the shares at issue, and denies that a certificate was issued less 143.6199 shares. Def.’s Resp.
Pls.’ Rule 56.1 Stmt. Facts Cross-Mot. Summ. J. ¶¶ 15-16. Because Dugas-Filippi could bring a
conversion claim regardless of the dispute, the Court does not find this issue material.
5
The parties dispute whether Dugas-Filippi was qualified to participate in the ESPP while
on leave, and how and if Dugas-Filippi controlled the 143.6199 shares.
Dugas-Filippi asserts
that she was eligible to participate in the ESPP, and as a qualified shareholder, could request a
stock certificate and sell or trade all or some of her shares at any time.
Id. ¶ 7; Pls.’ Resp.
Def.’s LR 56.1(a)(3) ¶ 52. Chase, however, denies that Dugas-Filippi was eligible to participate
in the ESPP because she was not “regularly scheduled to work [twenty] or more hours per week”
as required by Chase’s ESPP policy.
See Def.’s LR 56.1(a)(3) ¶ 57.
Accordingly, in Chase’s
view, Dugas-Filippi cannot sell or trade the shares which it believes were mistakenly issued.
Def.’s Resp. Pls.’ Rule 56.1 Stmt. Facts Cross-Mot. Summ. J. ¶¶ 7, 12.
Legal Standard
Summary judgment is proper for cases in which “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. (“Rule”) 56(a).
For cases in which the parties enter cross-motions for summary
judgment, as here for Dugas-Filippi’s conversion claim, both parties must satisfy the
requirements of Rule 56(a).
“[I]f the evidence is such that a reasonable jury could return a
verdict for the nonmoving party[,]” a genuine issue of material fact exists for trial, rendering
summary judgment improper. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The movant bears the burden of establishing that there is no genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the movant satisfies this burden, the
non-movant must set forth specific facts supported by admissible evidence that establish a
genuine issue for trial. Id. at 324.
6
Analysis
I. Breach of Contract Claim
Dugas-Filippi alleges that, pursuant to her conversations with Deveny, she entered into an
oral contract with Chase under which Chase agreed not to terminate her for taking paid leave. 11
Chase contends that Dugas-Filippi’s contract claim must fail because: (1) Dugas-Filippi cannot
show Deveny made a clear and definite promise that Dugas-Filippi would not be terminated for
taking paid leave; (2) even if Deveny made such a promise, Dugas-Filippi could not have
reasonably relied on it; (3) Dugas-Filippi offered no consideration for Deveny’s purported
promise; and (4) even if Dugas-Filippi reasonably relied on a clear and definite promise
supported by consideration, the Statute of Frauds renders the alleged oral contract unenforceable.
A. Offer and Acceptance
Chase first argues that Dugas-Filippi’s alleged contract with Deveny was not formed
through a valid offer and acceptance. Under Illinois law, oral employment contracts must
satisfy the traditional requirements of contract formation.
See McInerney v. Charter Golf, Inc.,
680 N.E.2d 1347, 1349 (Ill. 1997) (citing Duldulao v. St. Mary of Nazareth Hosp. Ctr., 505
N.E.2d 314, 318 (Ill. 1987)).
Contracts must consist of an offer made in clear and definite
terms and an acceptance of that offer.
See id.
An offer’s terms are clear and definite “as long
as ‘an employee would reasonably believe that an offer has been made.’” Kiddy-Brown v.
Blagojevich, 408 F.3d 346, 363 (7th Cir. 2005) (quoting Duldulao, 505 N.E.2d at 318).
11
The First Amended Complaint contains some allegations to suggest that Chase modified
Dugas-Filippi’s status as an at-will employee. See, e.g., First Am. Compl. ¶¶ 3-4. In Dugas-Filippi’s
response brief, she appears to concede that her at-will status never changed, but instead argues that she
entered into a contract that, while not displacing her at-will status, prohibited Chase from firing her for
taking the paid leave she requested. Pls.’ Resp. Def.’s Mot. Summ. J. 2-3.
7
Illinois courts have struggled to consistently determine when an offer is sufficiently clear
and definite to support contract formation.
As a general matter, Illinois courts construe oral
employment contracts, as opposed to written contracts, with greater scrutiny.
408 F.3d at 363 (internal citations omitted).
Kiddy-Brown,
This scrutiny is highest in instances involving
contracts for lifetime or permanent employment, or contracts that rebut the presumption of
at-will employment. See id.; see also Chism v. Kenall Mfg. Co., No. 06 C 3374, 2008 WL
506115, at **16-17 (N.D. Ill. Feb. 15, 2008).
This scrutiny is less pronounced, however, in
instances that involve the assertion of contractual rights that fall short of permanent employment.
In those cases, courts have been more willing to find that oral employment contracts exist.
See,
e.g., Johnson v. George J. Ball, Inc., 617 N.E.2d 1355, 1359 (Ill. App. Ct. 1993) (finding oral
employment contract for set duration clear and definite).
Here, Dugas-Filippi’s alleged contract
does not ensure permanent employment, but merely excludes a single reason for which she could
be terminated.
While acknowledging that “Illinois case law on this issue is certainly not a seamless
garment,” Taylor v. Canteen Corp., 69 F.3d 773, 783 (7th Cir. 1995), the Court holds that a
reasonable jury could conclude that Deveny’s promise consisted of clear and definite terms that
Dugas-Filippi could have reasonably believed constituted a contractual offer.
The terms of the
contract—that Chase would not terminate Dugas-Filippi for taking a paid six-month leave—are
sufficiently clear and definite for the Court to enforce.
Pls.’ LR 56.1(b)(3) ¶ 5.
Additionally,
because Dugas-Filippi relied on Deveny’s position of authority and their past working
relationship in accepting his offer, the Court finds that Dugas-Filippi’s belief was not
unreasonable.
Id. ¶¶ 3, 5. To the extent that Chase’s discretionary leave policy is at odds with
8
Dugas-Filippi’s understanding, this is a matter of dispute that cannot be resolved on summary
judgment.
In its submission, Chase argues that, because Dugas-Filippi cannot remember the “exact
words” or “exact conversation” in which Deveny made this promise to her, the promise was not
clear and definite, relying on Koch v. Illinois Power Co., 529 N.E.2d 281, 284 (Ill. App. Ct.
1988), and Birks v. First Evergreen Corp., No. 92 C 6589, 1994 WL 36884, at *5 (N.D. Ill. Feb.
8, 1994).
Chase, however, misunderstands Koch and Birks, which do not stand for the
proposition that a plaintiff must remember the exact words or conversations, but only that a
plaintiff must show sufficiently clear and definite terms capable of enforcement.
Thus, while
the court in Koch noted that the plaintiff could not remember the exact language of purported
oral agreement, the court based its finding of lack of clarity and indefiniteness largely on the fact
that “the court would have to restructure [the agreement] with new, more definite terms for an
enforceable agreement to exist.” 529 N.E.2d at 284.
case.
No such restructuring is needed in this
Similarly, in Birks, the court found an alleged contractual promise “did not contain the
specificity that ordinarily is present in a discussion of contract terms[,]” and “also” relied on
plaintiff’s inability to cite exact language.
1994 WL 35884, at *5. Dugas-Filippi’s purported
agreement with Deveny satisfies the requirement of specificity.
Chase also maintains that, because Deveny did not have authority under the discretionary
leave policy to grant paid leave, Dugas-Filippi could not have reasonably believed his offer was
contractually enforceable.
Although Chase cites cases in which provisions of employee
handbooks have precluded rebuttal of the presumption of at-will employment, see, e.g., Sinio v.
McDonald’s Corp., No. 04 C 4161, 2005 WL 1311131, at *5 (N.D. Ill. May 16, 2005), it
9
provides no case law that suggests the Court must find Chase’s discretionary leave policy
dispositive of the issues here.
The record does not establish that Chase’s discretionary leave
policy was exhaustive of all leave options available to employees, nor does the record indicate
the scope of the policy or its effective date.
See Def.’s LR 56.1(a)(3) ¶¶ 20, 21.
Additionally, Chase does not explain why it would be unreasonable for Dugas-Filippi to
believe Deveny was making an exception to the policy in this instance.
“[A]n employer
distributing a policy statement . . . does not make a contract, but rather makes a continuing offer
to employees . . . . As with any offer, the employer may rescind or modify its offer . . . .” Hany
v. Gen. Elec. Co., 581 N.E.2d 1213, 1216-17 (Ill. App. Ct. 1991).
Chase attempts to
characterize this case as one in which Dugas-Filippi “harbored a belief” in Deveny’s offer in the
face of “an avalanche of contrary information.” Colella v. Marriott Int'l, Inc., No. 95 C 3005,
1995 WL 562131, at *6 (N.D. Ill. Sept. 20, 1995).
But Chase’s discretionary leave policy is
hardly an “avalanche,” particularly given Dugas-Filippi’s good faith belief in her supervisor’s
alleged promise.
Accordingly, the Court holds that a reasonable jury could conclude that
Deveny made Dugas-Filippi a clear and definite offer, upon which she reasonably relied and
accepted.
B. Consideration
Second, Chase argues that Dugas-Filippi’s alleged contract with Deveny was not
supported by adequate consideration.
Illinois courts define consideration as the “bargained-for
exchange of promises or performances, and may consist of a promise, an act or a forbearance.”
McInerney, 680 N.E.2d at 1350 (quoting the Restatement (Second) of Contracts § 71).
Specifically, contracts for indefinite employment require additional consideration beyond an
10
employee merely continuing to work for the employer.
See Smith v. Bd. of Educ., 708 F.2d 258,
263 (7th Cir. 1983). An employee must make some sacrifice he or she would not have made
otherwise.
Id. However, where an oral employment contract does not promise employment
for life, some courts have not required additional consideration beyond the employee’s agreement
to continue working for the employer.
Johnson, 617 N.E.2d at 1359-60 (collecting cases).
In this case, the Court finds that, regardless of the nature of the alleged contract, a
genuine dispute of material fact exists as to whether Dugas-Filippi supplied adequate
consideration.
By promising to return to Chase after her leave in a different role, including a
role she considered a “step down” from her previous role, Dugas-Filippi made a sacrifice she
would not have made otherwise beyond continuing to work at Chase.
Pls.’ LR 56.1(b)(3) ¶ 23;
see Kamboj v. Eli Lilly & Co., No. 05 C 4023, 2007 WL 178434, at *8 (N.D. Ill. Jan. 18, 2007)
(denying employer’s motion for summary judgment on employee’s breach of contract claim
because reasonable jury could conclude employee’s moving cities at employer’s request was
sufficient consideration for employer’s promise of higher pay and other benefits).
Without the
prospect of paid leave, Dugas-Filippi might have preferred to stay in her current position instead
of agreeing to accept an inferior post upon her return to Chase.
Accordingly, the Court holds
that a reasonable jury could find that Dugas-Filippi supplied consideration for Deveny’s alleged
promise. 12
12
Chase claims that Dugas-Filippi provides no evidence that she “agreed” to anything or had any
“obligation” to continue working in another role. Dugas-Filippi’s testimony concerning her conversations
with Deveny, however, plainly undercuts this argument. See Pls.’ LR 56.1(b)(3) ¶ 23. Additionally,
Chase disputes whether Dugas-Filippi’s Trust Assistant position was a “step-down.” Chase’s
understanding, even if true, seems to attack the adequacy, rather than the existence, of consideration,
which misunderstands the requirement, and constitutes a question of fact for the jury. See Wagner v.
NutraSweet Co., 95 F.3d 527, 532 (7th Cir. 1996) (internal citations omitted) (“As long as the person
11
C. Statute of Frauds
Finally, Chase argues that the Statute of Frauds applies to Dugas-Filippi’s alleged
agreement with Deveny, rendering the alleged contract unenforceable.
In Illinois, the Statute of
Frauds requires a signed writing for any contract incapable of being fully performed within one
year.
740 Ill. Comp. Stat. 80/1; McInerney, 680 N.E.2d at 1351. Additionally, Illinois courts
have held that the Statute of Frauds applies to contracts for lifetime employment, because such
contracts “anticipate[] a relationship of long duration[—]certainly longer than one year.” Id. at
1351-52.
The Statute of Frauds does not, however, apply to all contracts of indefinite duration,
nor are all employment contracts without specific duration lifetime contracts.
Czapla v.
Commerz Futures, LLC, 114 F. Supp. 2d 715, 719 (N.D. Ill. 2000).
Here, the Court holds that a reasonable jury could find that Dugas-Filippi’s purported
contract with Chase is not subject to the Statute of Frauds because it is not a contract for
indefinite or lifetime employment. 13
As Dugas-Filippi correctly observes, under the alleged
contract, Chase could terminate Dugas-Filippi for any reason at any time, except for taking six
months’ paid leave.
Additionally, at its inception, the contract did not anticipate a relationship of duration
beyond one year.
See McInerney 680 N.E.2d at 1352.
While Dugas-Filippi may seek to
enforce the contract with Chase more than one year after the contract’s formation, the primary
receives something of value in exchange for her own promise or detriment, [Illinois] courts will not inquire
into the adequacy of the consideration.”).
13
Chase argues that Smith v. Rush Presbyterian-St. Lukes Medical Center, No. 01 C 4971, 2001 WL
1035239, at *4 (N.D. Ill. Sept. 10, 2001), suggests otherwise. The alleged oral contract in Smith,
however, was for an indefinite period (“until retirement”) and only permitted termination for cause. Id.
Thus, the Smith contract is different from that alleged in the present case, in which Chase could terminate
Dugas-Filippi for any reason at any time, other than for taking the paid leave at issue.
12
focus of Dugas-Filippi’s arrangement with Deveny was that she should be able to return to Chase
after six months’ paid leave. The fact that Dugas-Filippi seeks to enforce the contract outside
the one-year period does not render the contract unenforceable.
See Czapla, 114 F. Supp. 2d at
717, 720 (holding plaintiff’s breach of contract claim concerning oral employment contract for
unspecified duration not barred by Statute of Frauds, notwithstanding expiration of the one-year
period following formation). Thus, Chase has failed to meet its burden of establishing that the
Statute of Frauds renders Dugas-Filippi’s alleged contract unenforceable.
For these reasons, the Court denies Chase’s motion for summary judgment on
Dugas-Filippi’s breach of contract claim. 14
II. Promissory Estoppel
As an alternative to her breach of contract claim, Dugas-Filippi seeks to enforce her oral
agreement with Deveny by virtue of the doctrine of promissory estoppel.
To invoke promissory
estoppel, a plaintiff must prove that: (1) the defendant made an unambiguous promise to the
plaintiff; (2) the plaintiff reasonably and justifiably relied on the promise; (3) the plaintiff's
reliance was expected and foreseeable by the defendant; and (4) the plaintiff relied on the
promise to her detriment. Quake Const., Inc. v. Am. Airlines, Inc., 565 N.E.2d 990, 1004 (Ill.
1990) (internal citations omitted).
Chase argues Dugas-Filippi cannot invoke promissory
estoppel because (1) Deveny did not make Dugas-Filippi a clear, unambiguous promise; (2) even
if Deveny had made such a promise, Dugas-Filippi did not reasonably rely on the promise; and
(3) it was not reasonably foreseeable from Chase’s perspective that Dugas-Filippi would rely on
14
Chase also claims the contract was not breached, but for the reasons discussed above Chase’s
argument is unconvincing.
13
Deveny’s promise. 15
These arguments do not withstand scrutiny.
Just as Deveny’s purported offer was clear and definite, a reasonable jury could also find
that his statements were sufficiently defined to invoke promissory estoppel.
It does not matter
that Dugas-Filippi cannot remember Deveny’s exact words or her exact conversation with
Deveny, because Deveny’s alleged promise not to fire Dugas-Filippi for taking paid leave was
unambiguous.
Pls.’ LR 56.1(b)(3) ¶ 5; see, e.g., Lamaster v. Chi. & Ne. Ill. Dist. Council, 766
F. Supp. 1497, 1498 (N.D. Ill. 1991) (finding employer’s promise that employee could “hold
[his] position for as long as he chose to do so” sufficiently unambiguous). Additionally, for the
reasons explained above, a reasonable jury could find that Dugas-Filippi was justified in relying
upon Deveny’s promise because of her working relationship with Deveny and his position of
authority over her.
Pls.’ LR 56.1(b)(3) ¶¶ 2-3, 5.
In turn, Deveny should have expected or
foreseen that Dugas-Filippi would take Deveny at his word, notwithstanding Chase’s
discretionary leave policy, because Deveny was Dugas-Filippi’s longstanding supervisor and was
familiar with the family concerns underlying her leave request.
Id.; see Janda v. U.S. Cellular
Corp., 961 N.E.2d 425, 445 (Ill. App. Ct. 2011) (finding employee’s reliance on employer’s
promises ancillary to employee handbook reasonable and foreseeable from perspective of
15
Chase also argues that Dugas-Filippi experienced no detriment in relying on Deveny’s promise,
and that the Statute of Frauds renders the doctrine of promissory estoppel unavailable in this case.
Because Dugas-Filippi was terminated, she experienced material detriment. And because the Statute of
Frauds does not bar Dugas-Filippi’s contract claim, it also does not bar her attempt to invoke promissory
estoppel.
14
employer). 16 Finally, because Dugas-Filippi took leave and was eventually terminated for doing
so, she relied to her detriment on Deveny’s promise. Def.’s LR 56.1(a)(3) ¶¶ 47-48.
Chase’s only argument against Dugas-Filippi’s promissory estoppel claim not duplicative
of arguments already addressed above is that Chase could not have foreseen Dugas-Filippi’s
reliance on Deveny’s promise.
To the extent Chase endeavors to separate Chase from Deveny,
this is a misleading distinction.
Because Deveny acted as Chase’s agent, it was also foreseeable
to Chase that Dugas-Filippi would rely on his promise.
See, e.g,. Bakke v. Cotter & Co., 984 F.
Supp. 1167, 1176 (N.D. Ill. 1997) (finding genuine issue of material fact as to whether plaintiff’s
reliance was foreseeable by defendant corporation when promise made by defendant’s
employee).
Chase also cites Ross v. May Co., 880 N.E.2d 210 (Ill. App. Ct. 2007), to argue that it
was not foreseeable to Chase that Dugas-Filippi would rely on Deveny’s promise.
In Ross, the
court affirmed the lower court’s dismissal of the plaintiff’s promissory estoppel claim because
his reliance on a manager’s statements regarding a change in his at-will employment status was
not reasonable when viewed in light of the employee handbook.
880 N.E.2d at 217.
Dugas-Filippi, however, does not allege that Deveny changed her at-will employment status but
contends that Deveny made a separate promise. Ross, therefore, is distinguishable, and for the
reasons explained above, Dugas-Filippi’s reliance on Deveny’s statement was foreseeable by
16
Chase argues Janda is inapplicable because that case concerned a promise that “did not focus on
an ‘employment aspect’ that would cause the plaintiff to believe that his at-will status changed.” Def.’s
Reply Supp. Mot. Summ. J. 12-13. Thus, Chase reasons, Janda cannot apply in this instance, where the
purported promise concerned an “employment aspect” that modified Dugas-Filippi’s at-will employment
status with Chase. However, as discussed above, Dugas-Filippi does not argue that her at-will status has
been modified. Rather, she seeks to enforce an alleged promise that she could not be fired for taking paid
leave. Thus, not unlike in Janda, Dugas-Filippi was reasonable in relying on Deveny’s promise, and it
was foreseeable to Chase that she would rely on his promise.
15
Chase.
For these reasons, the Court denies Chase’s motion for summary judgment on
Dugas-Filippi’s promissory estoppel claim.
III.
Fraud
Dugas-Filippi also claims that Chase defrauded her through Deveny’s promise that she
would not be terminated for taking paid leave.
To assert a claim of common law fraud,
Dugas-Filippi must show that: (1) Deveny made a false statement of material fact; (2) Deveny
knew the statement was false; (3) Deveny intended the statement to induce Dugas-Filippi to act;
(4) Dugas-Filippi had a right to and did rely on the statement; and (5) the reliance caused
Dugas-Filippi harm.
Connick v. Suzuki Motor Co., Ltd., 675 N.E.2d 584, 591 (Ill. 1996)
(internal citations omitted). Chase maintains that Dugas-Filippi cannot establish a fraud claim
in part because Deveny’s alleged promise manifests a future intention, which cannot serve as the
basis of a fraud claim.
The Court agrees.
To her credit, Dugas-Filippi acknowledges that Deveny’s promise was not a false
statement of material fact, but a statement of future intention.
Summ. J. 13-14.
See Pls.’ Resp. Def.’s Mot.
Dugas-Filippi therefore seeks to invoke the “scheme exception,” which
permits a fraud claim based upon promises or statements of future intention if the promises or
statements are part of a larger scheme to defraud. Stunfence, Inc. v. Gallagher Sec. (USA), Inc.,
No. 01 C 9627, 2002 WL 1838128, at *4 (N.D. Ill. Aug. 12, 2002) (citing Stamatakis Indus., Inc.
v. King, 520 N.E.2d 770, 772 (Ill. App. Ct. 1987)).
The scheme exception, often recast as the
doctrine of promissory fraud, is limited to instances in which the fraud is “embedded in a larger
pattern of deceptions or enticements[,]” Desnick v. Am. Broad. Cos., Inc., 44 F.3d 1345, 1354
16
(7th Cir. 1995), or a “breach that follows so close on the heels of the promise that the intent not
to keep the promise may be inferred.” AAR Int’l, Inc. v. Vacances Heliades S.A., 202 F. Supp.
2d 788, 798-99 (N.D. Ill. 2002).
Dugas-Filippi asserts that Deveny’s promise falls under the scheme exception because it
was part of a larger scheme to defraud her.
Pls.’ Resp. Def.’s Mot. Summ. J. 13-14.
Dugas-Filippi identifies the bonuses Chase paid her in 2008 and 2009, which were issued to ease
the burden of Chase’s repayment demands, as evidence of the scheme.
¶¶ 25, 27-28, 31.
scheme.
See Pls.’ LR 56.1(b)(3)
These assertions, however, are insufficient to demonstrate a fraudulent
First, the bonuses themselves cannot be viewed as indicative of a larger pattern of
deceptions or enticements. See, e.g., Clutch Auto Ltd. v. Navistar, Inc., No. 12 C 9564, 2013
WL 1914328, at **1, 4 (N.D. Ill. May 8, 2013) (concluding misrepresentations during “several
meetings and exchanges” did not constitute a large pattern of deceptions capable of forming the
basis of a promissory fraud claim). Additionally, Chase terminated Dugas-Filippi over two
years after her return from leave, hardly “on the heels” of Deveny’s promise.
Inc., 202 F. Supp. 3d at 798-99.
See AAR Int’l,
Finally, even if the Court were to assume that the purpose of
the bonuses was to relieve Dugas-Filippi’s burden of paying back the compensation received
during her leave, nothing in the record demonstrates that Deveny knew at the outset that his
promise that Dugas-Filippi would not be terminated for taking paid leave was false, or that he
17
intended to defraud her with the promise. 17
For these reasons, the Court grants Chase’s motion for summary judgment on
Dugas-Filippi’s fraud claim.
IV. Conversion
Finally, Dugas-Filippi claims that Chase, by cancelling the 143.6199 shares of Chase
common stock purchased in Dugas-Filippi’s name, illegally converted those shares.
parties have moved for summary judgment on this claim.
Both
To prove conversion, a plaintiff must
establish: (1) a right to the property in question; (2) an absolute and unconditional right to
immediate possession of the property; (3) the plaintiff made a demand for possession of the
property; and (4) the defendant wrongfully and without authorization assumed control, dominion,
or ownership over the property. Cirrincione v. Johnson, 703 N.E.2d 67, 70 (Ill. 1998) (internal
citations omitted).
Chase argues Dugas-Filippi has not established a right to the shares or an
absolute and unconditional right to immediate possession.
Chase also argues that it did not
wrongfully assume control, dominion, or ownership over the shares.
Dugas-Filippi, on the
other hand, argues she has provided sufficient evidence to establish her conversion claim.
A. Right to the Property
The parties first disagree about whether Dugas-Filippi had a right to the shares of Chase
common stock.
Chase argues that Dugas-Filippi was ineligible to participate in the ESPP while
17
Similarly, the cases Dugas-Filippi cites in support of her fraud claim are factually distinguishable
from the present case. Steinberg v. Chicago Medical School, decided well before modern cases
discussing the scheme exception, concerned an alleged medical school application fraud which involved a
large number of applicants relying on a particular promise, in which the promise and breach of the promise
were much closer in time than here. 371 N.E.2d 634, 638, 641 (Ill. 1977). HPI Health Care Services,
Inc. v. Mt. Vernon Hospital, Inc., is similarly outdated and addressed “‘a scheme of repeated and numerous
knowingly false promises and representations’” involving multiple actors. 545 N.E.2d 672, 682-83 (Ill.
1989).
18
on leave, because she was working fewer than twenty hours per week.
Accordingly, Chase
maintains that by cancelling the shares, it was merely exercising its right over the shares, which
never passed to Dugas-Filippi.
For her part, Dugas-Filippi argues that by purchasing the shares
through the compensation paid to her during leave, she acquired a right to the shares.
Dugas-Filippi further asserts that Chase’s ESPP does not deny eligibility to employees on paid
leave, and that she remained eligible for the ESPP during her paid leave.
Finally, Dugas-Filippi
suggests that if Chase thought it had issued Dugas-Filippi’s shares wrongfully, it should have
sued her for the shares, rather than cancelling the shares unilaterally.
Neither party has presented to the Court, nor has the Court found, any case in which a
former employee has brought a conversion claim to recover stocks purchased with the
employee’s compensation that were subsequently cancelled by the issuer (employer) on the
grounds that the stock was wrongfully issued. Dugas-Filippi has cited no helpful legal authority
in support of her position.
Chase’s cited authority is inapposite. 18
In any event, the record
reveals material factual disputes that a jury must resolve.
First, the record does not establish whether Dugas-Filippi was eligible to participate in the
ESPP while on leave.
Dugas-Filippi was not working twenty hours per week during that
period; however, the ESPP deems employees who “regularly” work twenty hours eligible, and
Dugas-Filippi “regularly” worked twenty hours per week when not on leave.
See Def.’s LR
56.1(a)(3) ¶ 51-52; Pls.’ Resp. Def.’s LR 56.1(a)(3) ¶ 52.
18
Paul v. ING Financial Partners, Inc. involved plaintiffs’ claim that defendant converted plaintiffs’
money invested in certain insurance policies. No. 3-09-0588, 2010 WL 8544601, at *7 (Ill. App. Ct.
Sept. 10, 2010). The court denied plaintiffs’ claim because plaintiffs failed to plead facts indicating the
defendant exercised unauthorized control over their funds, not because plaintiffs did not have a right to
their funds. Id. Here, there is a dispute as to whether Dugas-Filippi had a right to the shares, and
whether Chase exercised unauthorized control over the shares.
19
Additionally, the ESPP does not specifically address whether taking paid leave
disqualifies an employee from participation in the ESPP.
Pls.’ Resp. Def.’s 56.1(a)(3) ¶ 52; see
also App. Supp. Def.’s Mot. Summ. J., Dec. B, Ex. 1, ESPP at 11, 17 (“Generally, for U.S.
employees, you’re eligible to participate [in the ESPP] if you are a full-time or part-time
employee regularly scheduled to work [twenty] or more hours per week.”) (“Several situations
could cause your payroll contributions to the [ESPP] to end. These situations include . . .
[c]hanging to an ineligible work status (for example, becoming regularly scheduled to work
fewer than [twenty] hours per week.”) (emphases added).
Finally, even if Dugas-Filippi were not eligible to participate in the plan, the ESPP does
not state how Chase should have proceeded to recoup the stocks.
The ESPP does not state
Dugas-Filippi had a right to keep the shares, nor does it state that Chase could unilaterally cancel
the shares. App. Supp. Def.’s Mot. Summ. J., Decl. B, Ex. 1. Thus, given the current record,
there are genuine disputes as to issues of material fact that preclude summary judgment. 19
B. Absolute and Unconditional Right to Immediate Possession of the Property
The parties also dispute whether Dugas-Filippi had an absolute and unconditional right to
immediate possession of the shares.
Resolution of this issue depends on whether Dugas-Filippi
had a right to the shares in the first place.
But Chase, in addition to disputing Dugas-Filippi’s
eligibility to participate in the ESPP, also observes that Dugas-Filippi would have needed to
request a certificate describing her shares from Chase in order to sell them.
Chase argues that
the requirement to this request, which would have required administrative processing over the
19
The Court also notes that the issue of whether Dugas-Filippi had a right to the shares is tied to the
resolution of Dugas-Filippi’s breach of contract and promissory estoppel claims. Without knowing if
Dugas-Filippi had a valid contract or legally enforceable promise under which she took her paid leave of
absence, it is difficult to assess the strength of her conversion claim.
20
course of several days, prevents any right of possession Dugas-Filippi may have had in the shares
from being absolute, unconditional, or immediate.
Conversely, Dugas-Filippi maintains that,
notwithstanding the process of requesting a certificate, she had an absolute and unconditional
right to immediate possession of the shares.
Chase’s argument, taken to its logical extent, suggests that shares that are not identified in
a share certificate cannot be converted.
This position is contrary to Illinois law. See Lewis v.
Bidwell Elec. Co., 141 Ill. App. 33, 35 (Ill. App. Ct. 1908) (designating “declar[ing] a forfeiture
of stock [] wrongfully” as a situation in which a corporation can convert stock not yet merged
into a stock certificate); see also Kerrigan v. Am. Orthodontics Corp., 960 F.2d 43, 45 (7th Cir.
1992) (“A corporation accordingly may convert stock by refusing to register a transfer to the
owner; refusal to record the change prevents the buyer from having the benefits of ownership.”).
Thus, insofar as Dugas-Filippi had a right to possession of the shares at issue, Chase’s processing
procedure would not by itself invalidate Dugas-Filippi’s absolute, unconditional, or immediate
right to possession.
The authorities Chase cites in support of its position, which do not concern
shares of stock, do not alter the Court’s analysis. 20
20
First, Antonelli v. Sherrow, where the plaintiff could not immediately possess the relevant property
because he was incarcerated, bears no similarity to the present case. No. 02 C 8714, 2005 WL 2338813,
at *14 (N.D. Ill. Sept. 21, 2005). The same is true in Chemsource, Inc. v. Hub Group, Inc., where the
plaintiffs had not paid for the property in question and thus did not have a right to possess it. 106 F.3d
1358, 1363 (7th Cir. 1997). Lewis v. National City Bank, where the plaintiff had defaulted on payments
for the property in question, removing his absolute and unconditional right in the property, is also factually
dissimilar. 814 F. Supp. 696, 699 (N.D. Ill. 1993). Finally, in Hartford Fire Insurance Co. v. Taylor,
the court denied plaintiff’s motion for summary judgment on a conversion claim involving a car, on the
basis that genuine disputes as to issues of material fact precluded the court from awarding summary
judgment. 903 F. Supp. 2d 623, 653-54 (N.D. Ill. 2012). Hartford also provides no support for Chase’s
position.
21
C. Wrongful Assumption of Control, Dominion, or Ownership over the
Property
Finally, the parties dispute whether Chase wrongfully assumed control, dominion, or
ownership over the shares.
The parties’ arguments are identical to those concerning whether
Dugas-Filippi had a right to the shares in the first place. For the reasons stated above, there are
genuine disputes as to material issues of fact that preclude determination of whether Chase
wrongfully assumed control over Dugas-Filippi’s shares by cancelling them. 21
For these reasons, the Court denies both parties’ cross-motions for summary judgment on
Dugas-Filippi’s conversion claim.
CONCLUSION
For the reasons stated above, the Court denies Chase’s motion for summary judgment as
to Dugas-Filippi’s breach of contract and promissory estoppel claims, grants Chase’s motion as
to Dugas-Filippi’s fraud claim, and denies the parties’ cross-motions for summary judgment as to
Dugas-Filippi’s conversion claim.
SO ORDERED
ENTER:
9/4/14
____________________________
JOHN Z. LEE
United States District Judge
21
Chase’s reliance on Bank of Joliet v. Firstar Bank Milwaukee, in which the plaintiff was “entitled”
to the property at issue, and thus the court denied defendant’s motion for summary judgment on a
conversion counterclaim, is also misplaced. No. 96 C 1145, 1997 WL 619875, at *14 (N.D. Ill. Sept. 30,
1997). Chase has not demonstrated to this point that it was entitled to Dugas-Filippi’s shares.
22
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?