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BROOKS v. AON CORPORATION

December 14, 2005.

KEVIN P. BROOKS, Plaintiff,
v.
AON CORPORATION, VIRGINIA SURETY COMPANY, INC. n/k/a COMBINED SPECIALITY COMPANY, INC, and COMBINED, SPECIALITY GROUP, INC., Defendants.



The opinion of the court was delivered by: JED RAKOFF, District Judge

OPINION AND ORDER

On April 7, 2003, plaintiff Brooks sued defendants Aon Corporation and related entities (collectively "Aon") for breach of contract, fraudulent inducement of a contract, promissory estoppel, violation of New York Labor Law, and violation of ERISA. On December 11, 2003, the Court granted summary judgment to defendants as to the fraudulent inducement, Labor Law, and ERISA claims, and on March 17, 2004, the Court issued a judgment as a matter of law under Fed.R.Civ.P. 50(a) as to the remaining causes of action. Plaintiff appealed the Court's fraudulent inducement, breach of contract, and promissory estoppel rulings. On April 14, 2005, the Second Circuit affirmed the dismissal of the fraudulent inducement and breach of contract claims but vacated the promissory estoppel ruling for reconsideration in light of Cweklinsky v. Mobil Chemical Co., 364 F.3d 68 (2d Cir. 2004). See Brooks v. Aon, 128 Fed. Appx. 807, 808 (2d Cir. 2005).

On remand, the Second Circuit asked this Court to consider

 
(1) whether Stewart*fn1 either in itself or as applied by [the Second Circuit] in Cweklinski [sic], suggests that a difference exists between Illinois law and Connecticut law with respect to the doctrine of promissory estoppel; (2) if there is such a difference, whether that difference would lead to a different result in this case; and (3) if a different result would obtain under Illinois or Connecticut law, which law the New York Court of Appeals would apply. In addition, the court should reconsider, given the applicable law and the record before it, its previous conclusion that a promissory estoppel claim requires that "a promise itself must be at least of the specificity that would support an oral contract," in light of Cweklinsky, 364 F.3d at 78 (evidence required to support a claim of promissory estoppel is not identical to that required to support a claim of breach of implied contract), Stewart, 267 Conn. at 104, 837 A.2d 736 (fundamental element of promissory estoppel is existence of a "clear and definite promise"), and Quake Constr., Inc. v. American Airlines, Inc., 141 Ill.2d 281, 310, 152 Ill.Dec. 308, 565 N.E.2d 990 (Ill. 1990) (promissory estoppel under Illinois law requires proof of "an unambiguous promise," and recovery" on a theory of promissory estoppel [is possible] despite the absence of a contract").
Id. at 808-09.*fn2 The parties briefed these questions for the Court, and oral argument was heard on September 27, 2005.

  The enumerated items are easily addressed, since, as to Question 1, both parties now agree there is no difference between Connecticut and Illinois law regarding promissory estoppel doctrine. See Defendants' Memorandum of Law in Support of the Dismissal of Plaintiff's Promissory Estoppel Claim ("Def. Mem.") at 10-11; Memorandum in Opposition to Dismissal of Plaintiff's Promissory Estoppel Claim ("Pl. Mem.") at 10-12.*fn3 This also moots questions 2 and 3. Accordingly, the remaining question before this Court is whether the plaintiff's claim, as a matter of law, meets the proper standard for promissory estoppel under the uniform law of Illinois/Connecticut.*fn4 For the following reasons, the Court concludes it does not.

  The relevant facts (taken for these purposes most favorably to plaintiff) are as follows. Prior to going to work for Aon, Brooks was President and CEO of General Star Management Company, a division of the General Re Corp. ("Gen Re"), for more than thirty years. Gen Re terminated Brooks on March 12, 2001 and offered him a Severance Agreement conditioned on Brooks's agreeing to a two-year non-competition provision. See Pl. Mem. at 3-4. Brooks placed a value of $2.45 million on Gen Re's proposal, an amount he reached by combining the severance payments and lump sum bonus he was to receive with the value of the stock options offered to him at the time he left Gen Re (even though these stock options would not vest or be paid until after Brooks satisfied the terms of the non-compete clause some two years later). See Trial Tr., Mar. 16, 2004, at 130-34.

  On March 22, 2001, Brooks met with Aon's President and Chief Operating Officer, Michael O'Halleran regarding his possibly going to work for Aon. At the meeting, according to Brooks, O'Halleran told Brooks that Aon was planning a still-private strategic restructuring that would involve the creation of a new company and that Aon thought Brooks was well-suited to become the new company's lead executive. See id. at 53-56. Brooks told O'Halleran that he already had a "two and a half million dollar offer" from General Re, to which O'Halleran replied, "we can do that, we can match that. That's not a problem." Id. at 54. Based on this response, Brooks permitted the Gen Re offer to expire on April 3, 2001, id. at 143, and continued "serious" employment negotiations with Aon, as well as two other insurance companies. Id. at 143, 163.

  On April 30, 2001, Brooks, O'Halleran, and Aon's CEO Patrick Ryan met to discuss the specifics of Aon's new strategic plan (the details of which had been publicly released on April 23, 2001) and Brooks's potential role in it. Brooks was told generally that his compensation would include salary, bonus, and stock options, but no one from Aon "put numbers on the compensation package." Id. at 65. Brooks states, however, that O'Halleran, in front of Ryan, repeated the promise to match Brooks's Gen Re offer: "Mike reminded me . . . [w]hat you have is covered and matched." Id. Brooks told Ryan that if he accepted a position, he would work for at least five years. Id. at 177.

  On May 7, 2001, Brooks had a further meeting with Ryan, at which some specific numbers were finally discussed. Initially, Ryan offered Brooks an annual salary of $300,000. Brooks turned down this offer the next day, telling O'Halleran "400,000 is the number that I am going to be working for, not 300,000, so I will not be accepting the job at 300,000." Id. at 71. But when Aon subsequently agreed to guarantee Brooks $400,000 for his first year through a combination of salary and guaranteed bonus, id. at 72, Brooks accepted the offer. Id. at 76-77. He began work at Aon on May 14, 2001, id. at 78, and was terminated in February 2002. Id. at 103.

  In his promissory estoppel claim, Brooks contends that O'Halleran's twice-stated promise to match the Gen Re offer requires Aon to pay Brooks the value of that offer: $2.45 million. Id. at 142. In previously dismissing this claim as a matter of law, the Court interpreted the law of Connecticut and Illinois to require in cases of promissory estoppel that the "promise itself . . . be at least of the specificity that would support an oral contract." Trial Tr., Mar. 17, 2004, at 240.

  As the Court of Appeals intimated in its remand opinion, this conclusion was erroneous. The Connecticut Supreme Court, in particular, has held that in promissory estoppel cases generally, "[a]lthough the promise must be clear and definite, it need not be the equivalent of an offer to enter into a contract because `[t]he prerequisite for . . . application [of the doctrine of promissory estoppel] is a promise and not a bargain and not an offer.'" Stewart, 837 A.2d at 742 (quoting 3 A. Corbin, Contracts § 8.9, at 29 (rev. ed. 1996)). And, as noted, the parties are now agreed that Illinois law is effectively identical to that of Connecticut.

  After Stewart, the elements of promissory estoppel in Connecticut are that the defendant have made a "clear" and "definite" promise that was reasonably expected to induce reliance and upon which the plaintiff did, in fact, detrimentally rely. Stewart, 837 A.2d at 742. Likewise, in Illinois, the elements of promissory estoppel are an unambiguous promise by the defendant upon which plaintiff reasonably and foreseeably relied to the plaintiff's detriment. Quake Const., Inc. v. Am. Airlines, Inc., 565 N.E.2d 990, 1004 (Ill. 1990).

  However, in both jurisdictions, application of these requirements is very much affected by context. As Stewart itself noted, where the context is that of "an entirely new employment contract," more may be necessary to meet these requirements than would be necessary in a narrower context. Stewart, 837 A.2d at 745. Thus, the Connecticut Supreme Court in Stewart, while disclaiming the suggestion in its earlier opinion in D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 520 A.2d 217 (Conn. 1987), that "for purposes of a claim of promissory estoppel, the promise upon which the promissee relies must be no less specific and definite than an offer to enter into a contract," Stewart, 837 A.2d at 744, went on to reaffirm the conclusion in D'Ulisse-Cupo that the promises there given of a future teaching position involving specific courses and curricula were, as a matter of law, "insufficiently promissory and definite" to support a promissory estoppel claim. Id.

  Similarly, in such circumstances, Illinois requires a comparable level of definiteness. See Sembos v. Philips Components, 376 F.3d 696, 704 (7th Cir. 2004) (affirming summary judgment under Illinois law on breach of contract and promissory estoppel claims because defendant "did not promise Sembos any specific position, salary, or other terms ...


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