Matland v. Loyola University Chicago
Filing
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Enter MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 11/27/2012. Mailed notice (jdh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
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DR. RICHARD E. MATLAND,
Plaintiff,
v.
LOYOLA UNIVERSITY OF CHICAGO,
Defendant.
No. 12 C 5165
MEMORANDUM OPINION AND ORDER
Plaintiff Richard E. Matland has sued his employer,
defendant Loyola University Chicago, for violations of the
Americans with Disabilities Act, 42 U.S.C. § 12101, et seq.
(Counts I – II), and for claims alleging promissory estoppel
(Count III) and fraudulent misrepresentations (Count IV).
Defendant has moved to dismiss Counts III and IV of plaintiff’s
complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure.
For the reasons state below, I grant defendant’s
motion.
I.
Plaintiff was a tenured professor at the University of
Houston in Houston, Texas, when he was actively recruited by
defendant.
In January 2006, he accepted defendant’s offer of an
appointment as the Rigali Professor (“Rigali Chair”).
At the
time the offer was made, defendant’s agent orally represented to
plaintiff that the Rigali Chair “was to be permanent in nature”
subject to a “retention review.”
(Compl., at ¶ 39).
Ultimately,
defendant sent a written offer of employment dated February 16,
2006, which plaintiff countersigned on that same day.
The resulting employment contract explains that plaintiff’s
appointment to the Rigali Chair was for a five-year renewable
term, beginning with the 2006-2007 academic year and continuing
through 2010-2011.
The contract details the standards by which
defendant would decide whether it was going to renew plaintiff’s
appointment to the Chair.
Specifically, the contract states that
[c]riteria to determine possible reappointment as the
Rigali
Professor
excellence
in
may
include
research
a
and
sustained
teaching,
record
of
continued
recognition for a record of excellence in research and
teaching,
continued
recognition
for
a
record
of
excellence in research and scholarship internal and
external to the University, and an ongoing contribution
to your field of learning and to the University.
The
appointment carries the academic rank of Professor and
includes, subject to the approval of faculty committees,
tenure.
Additionally, the employment contract explains that should
plaintiff’s appointment to the Rigali Chair come to an end, he
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could remain on the faculty and assume full-time teaching and
research responsibilities.
After beginning to work for defendant as the Rigali Chair,
plaintiff began to experience health problems and was diagnosed
with interstitial lung disease in 2007.
Plaintiff underwent
extensive medical treatments, and these treatments continued
through subsequent years.
In May 2010, defendant informed
plaintiff that his review for renewal of the Rigali Chair would
take place in the fall of 2010.
materials in June 2010.
Plaintiff submitted the required
During the review process, four
nationally recognized scholars at top universities evaluated
plaintiff’s materials and wrote letters in support of his
reappointment to the Rigali Chair.
Still, at the close of the
review defendant advised plaintiff that his appointment to the
Rigali Chair would not be renewed.
Plaintiff appealed the decision utilizing defendant’s
internal procedures.
Initially, plaintiff’s appeal was rejected,
but subsequently, the relevant committee concluded that the
review process had failed to adequately account for plaintiff’s
health and medical condition.
review process be redone.
The committee recommended that the
Despite this decision, defendant’s
president, Michael Garanzini, overturned the committee’s decision
and again advised plaintiff that he was not to be retained as the
Rigali Chair.
Plaintiff continues to be employed by defendant.
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II.
A motion to dismiss tests the sufficiency of the claims, not
their merit.
Cir. 1990).
Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th
I must accept all well-pleaded allegations in the
complaint as true and draw all reasonable inferences in
plaintiff’s favour.
Cir. 2006).
McCann v. Neilsen, 466 F.3d 619, 622 (7th
Dismissal is warranted only if the factual material
in the complaint fails plausibly to suggest that defendant is
entitled to relief.
Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555-56 (2007).
As a general rule, I may consider only the pleadings at the
motion to dismiss stage.
Rosenblum v. Travelbybus.com Ltd., 299
F.3d 657, 661 (7th Cir. 2002).
Defendant has attached the
employment contract (i.e. the executed offer letter) to its
motion to dismiss, though plaintiff did not attach it to his
complaint.
For purposes of a 12(b)(6) motion, a document
attached to the defendant’s motion to dismiss is considered part
of the pleadings only if it is “referred to in the plaintiff’s
complaint and [is] central to her claim.”
Venture Associates
Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.
1993).
Plaintiff refers to the offer in his complaint and even
alleges that in accepting the offer there was a binding contract
between the parties.
(Compl., at ¶ 40).
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While plaintiff does
not assert a breach of contract claim, the employment contract is
at the core of the parties’ relationship and is central to
plaintiff’s claims for promissory estoppel and fraudulent
inducement.
See Midway Home Entm’t, Inc. v. Atwood Richards,
Inc., 1998 WL 774123, at *1 (N.D. Ill. 1998) (concluding that
contract not attached to the complaint but submitted by the
defendant with a motion to dismiss was “central to plaintiffs’
claims that they were fraudulent misrepresented and induced into
entering into this contract”).
I also note that plaintiff does
not dispute that the employment contract attached to defendant’s
motion is the document that governs the parties’ contractual
relationship.
As a result of the foregoing, the employment
contract is considered to be part of the pleadings and I may
consider it in deciding defendant’s motion to dismiss.
Moreover,
to the extent that the terms of the employment contract conflict
with the allegations in the complaint, the employment contract
prevails.
Centers v. Centennial Mortg., Inc., 398 F.3d 930, 933
(7th Cir. 2005).
III.
A.
Promissory Estoppel
Promissory estoppel provides a cause of action “where a
promise has been made which was relied upon by the promisee to
his detriment in such a manner as to make it a fraud or injustice
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not to enforce the promise.”
Newton Tractor Sales, Inc. v.
Kubota Tractor Corp., 906 N.E.2d 520, 526 (Ill. 2009) (quoting R.
Brazener, Annotation, Promissory Estoppel as Basis for Avoidance
of Statute of Frauds, 56 A.L.R.3d 1037, 1042 (1974)).
To state a
claim for promissory estoppel, plaintiff must allege that “(1)
defendant made an unambiguous promise to plaintiff, (2) plaintiff
relied on such promise, (3) plaintiff’s reliance was expected and
foreseeable by defendant[], and (4) plaintiff relied on the
promise to [his] detriment.”
Id., at 523-24 (citing Quake
Constr., Inc. v. Am. Airlines, 565 N.E.2d 990, 1004 (Ill. 1990)).
“A plaintiff’s reliance must be reasonable and justifiable.”
Ross v. May Co., 880 N.E.2d 210, 217 (Ill. App. Ct. 2007) (citing
Quake Constr., 565 N.E.2d at 1004).
The gravamen of defendant’s argument is that plaintiff’s
promissory estoppel claim must be dismissed because the
employment contract addresses the same subject matter as the
alleged promise.
In response, plaintiff contends that defendant
misconstrues Illinois law on promissory estoppel.
But by
insisting that defendant is arguing that a claim for promissory
estoppel is unavailable “if a defendant can point to any document
that is arguably a contract that contains any language at all
that nears the promise at issue” (Pl.’s Memo. in Opp., at 2),
plaintiff overstates defendant’s argument and fails to adequately
address the central issue.
Defendant is not arguing that any
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agreement would necessarily require dismissal of plaintiff’s
promissory estoppel claim.
Instead, defendant is arguing that
the employment contract governs the length and renewal terms of
plaintiff’s appointment to the Regali Chair.
The terms of the
written contract—which specify that the Chair is given for a
five-year term, detail the requirements for renewal, and provide
for a contingency plan should the Chair not be renewed—govern the
relationship and contradict the alleged oral promise that the
Chair position would be “permanent in nature and would entail
merely a ‘retention review’”.
(Compl., at ¶ 40).
Courts have routinely held that a plaintiff cannot maintain
a claim for promissory estoppel where a written contract governs
the relationship between the parties.
“Promissory estoppel is
meant for cases in which a promise, not being supported by
consideration, would be unenforceable under conventional
principles of contract law.
When there is an express contract
governing the relationship out of which the promise emerged, and
no issue of consideration, there is no gap in the remedial system
for promissory estoppel to fill.”
All-Tech Telecom, Inc. v.
Amway Corp., 174 F.3d 862, 869 (7th Cir. 1999) (citations
omitted); see also Prentice v. UDC Advisory Services, Inc., 648
N.E.2d 146, 150-51 (“[O]nce it is established, either by an
admission of a party or by a judicial finding, that there is in
fact an enforceable contract between the parties and therefore
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consideration exists, then a party may no longer recover under
the theory of promissory estoppel.”).
In other words, “once
consideration is found to exist, a party to the contract can no
longer maintain an action for promissory estoppel where the
performance which is said to satisfy the requirement of
detrimental reliance is the same performance which supplies the
consideration for the contract.”
Prentice, 648 N.E.2d at 151.
Here, plaintiff admits that there exists an enforceable
contract between the parties.
consideration.
There is also no issue of
Plaintiff alleges that he resigned from his then-
current position both as consideration for the employment
contract and in detrimental reliance on the alleged oral promise.
(Compl., at ¶ 41-42).
Plaintiff pleads himself out of court by
alleging that his performance under the written contract is the
same performance that would, in the absence of the contract,
satisfy the requirement of detrimental reliance.
He therefore
cannot maintain his claim for promissory estoppel.
The cases cited by plaintiff do not dictate a different
outcome.
In Janda v. U.S. Cellular Corp., 961 N.E.2d 425 (Ill.
App. Ct. 2011), the plaintiff’s relationship with the defendant
employer was governed by an employment agreement.
During the
course of his employment, the plaintiff and other employees were
asked to take part in a focus group meeting concerning certain
members of management.
The participants were told that
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everything they said during the focus group would remain
confidential and that there would be no retaliation for any
comments made during the meeting.
In reliance on those
representations, the participants, including the plaintiff, spoke
candidly.
However, after the meeting, the plaintiff and others
who had spoken candidly were terminated, transferred, or left the
company.
The court in Janda reiterated the holding of Prentice,
quoted above, but found that the plaintiff’s promissory estoppel
claim based on the defendant’s promise to keep the contents of
the meeting confidential was not barred by the existence of the
employment agreement.
“[T]he performance giving rise to
plaintiff’s detrimental reliance in his promissory estoppel claim
is not the same performance that supplied the consideration for
the contract.”
Janda, 961 N.E.2d at 444.
Whereas the
plaintiff’s performance satisfying the requirement of detrimental
reliance was his candid participation in the focus group, his
performance supplying consideration for the employment agreement
was merely the plaintiff’s promise to work for the defendant.
Id.
The fact that there were two distinct promises requiring
separate consideration for each in Janda distinguishes that case
from the case here.
Johnson v. George J. Ball, Inc., 617 N.E.2d 1355 (Ill. App.
Ct. 1993) is similarly distinguishable.
In that case there was
no written employment contract, only the defendant’s oral
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promises regarding the plaintiff’s employment.
There, the only
question before the court was whether there was sufficient
consideration to warrant enforcing the oral promises.
As for the
two federal cases cited in Johnson and referred to by plaintiff,
Buian v. J.L. Jacobs & Co., 428 F.2d 531 (7th Cir. 1970) and
Payne v. AHFI/Netherlands, B.V., 522 F.Supp. 18 (N.D. Ill. 1980),
those cases raise the question of when a plaintiff may have a
breach of contract claim where an employment assignment has been
terminated prior to the scheduled completion date.
Here, by
contrast, defendant did not terminate plaintiff’s Regali Chair
position early but instead refused to renew it after the fiveyear term had ended.
Further, neither Johnson, Buian, or Payne
involved any claims for promissory estoppel.
For these reasons, Count III of plaintiff’s complaint is
dismissed with prejudice.
B. Fraudulent Misrepresentation
To state a claim for fraudulent misrepresentation, plaintiff
must allege “(1) a false statement of material fact; (2)
defendant’s knowledge that the statement was false; (3)
defendant’s intent that the statement induced the plaintiff to
act; (4) plaintiff’s reliance upon the truth of the statement;
and (5) plaintiff’s damages resulting from reliance on the
statement.”
Connick v. Suzuki Motor Co., Ltd., 675 N.E.2d 584,
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591 (Ill. 1996) (citations omitted).
Plaintiff’s “reliance upon
the misrepresentation must have been justified.
. . .
That is,
[plaintiff] must have had a right to rely upon the statement.”
Cozzi Iron & Metal, Inc. v. U.S. Office Equip., Inc., 250 F.3d
570, 574 (7th Cir. 2001) (citing Charles Hester Enters., Inc. V.
Ill. Founders Ins. Co., 499 N.E.2d 1319, 1323 (Ill. 1986)).
Reliance is generally a question of fact but may be determined on
a motion to dismiss as a matter of law “when no trier of fact
could find that it was reasonable to rely on the alleged
statements or when only one conclusion can be drawn.”
Id.
(citing Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v.
Arbor, 692 N.E.2d 812, 819 (Ill. App. Ct. 1998)).
In cases such
as this, where a written contract governs the parties’
relationship, “[a]s long as the complaining party could have
discovered the fraud by reading the contract and had the
opportunity to do so, Illinois courts have refused to extend the
doctrine of fraudulent inducement.”
Id. at 574-75 (citations
omitted).
Defendant raises three arguments in support of its motion to
dismiss Count IV of plaintiff’s complaint, only one of which I
will discuss here.
In relevant part, defendant argues that
plaintiff’s fraudulent misrepresentation claim fails because
plaintiff has not, and cannot, allege reasonable reliance.
According to defendant, the terms of the contract contradict the
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oral promises alleged in the complaint.
Because the contract
contradicts the alleged oral promises, defendant argues,
plaintiff’s alleged reliance on oral statements of defendant’s
agent was unreasonable as a matter of law.
In response,
plaintiff first argues that he has pleaded that he was in fact
misled by the statements.
But this is not enough, as the test is
whether as a matter of law it was reasonable to rely on the
misrepresentations.
While not disputing that he had an
opportunity to read the contract before accepting defendant’s
offer of employment, plaintiff also argues that he could not have
discovered the fraud even by reading the contract.
Where an alleged misrepresentation is directly contradicted
by the terms of a contract and the plaintiff could have
discovered the fraud, reliance on the misrepresentation is
unreasonable as a matter of law.
Cozzi, 250 F.3d at 575; see
also Regensburger v. China Adoption Consultants, Ltd., 138 F.3d
1201, 1208 (7th Cir. 1998) (“[T]he [plaintiffs] cannot establish
that they reasonably relied on the pre-contract promises when the
contractual language was so explicitly to the contrary.”).
The
alleged oral promise of a permanent appointment to the Rigali
Chair is contradicted by the plain language of the contract which
specifies that the “appointment is for a five year renewable term
(with annual review), beginning with Academic Year 2006-07 and
continuing through 2010-2011.”
(Contract, Def.’s Ex. B).
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And
while plaintiff insists that “retention review” is a term of art
in the academic setting, he does not even attempt to argue that
what was promised to him orally is not contradicted by the
criteria for renewal of the Rigali Chair described in the first
paragraph of the contract.
In addition, the terms describing the
contingency of plaintiff losing the Rigali Chair should have
served as further notice that reappointment was not guaranteed.
In other words, plaintiff’s contention that the contract is
nothing more than a vague, standard academic offer letter is
unavailing.
That the employment contract refers to other
documents does not affect the fact that the contract itself
clearly describes the terms of the Rigali Chair appointment.
As
described above, the two page contract contains terms that
contradict both of the alleged misrepresentations.
At bottom,
plaintiff appears to be arguing that while he was led to believe
that defendant would rubber stamp his reappointment to the Rigali
Chair, he was in fact subjected to a review of the type described
in the contract.
Plaintiff cannot sustain a claim for fraudulent
misrepresentation under these circumstances.1
I note briefly that, again, the cases cited by plaintiff do
not help him. Johnson does not touch upon the issue of
reasonable reliance, and, in any case, there was no written
employment contract governing the parties’ relationship.
Similarly, Grundy Cnty. Nat’l Bank v. Westfall, 301 N.E.2d 28
(Ill. App. Ct. 1973) does not discuss reasonable reliance; nor
does that case involve a claim for fraud. Finally, Janda is also
distinguishable in that there was no fraud claim at issue in that
case, and to the extent that the court there analyzed aspects of
the plaintiff’s promissory estoppel claim by analogizing to the
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IV.
For the foregoing reasons, Counts III and IV of plaintiff’s
complaint are dismissed with prejudice.
ENTER ORDER:
____________________________
Elaine E. Bucklo
United States District Judge
Dated: November 27, 2012
reasonable reliance requirement of a fraud claim, Janda is
inapposite for the reasons discussed above.
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