United States District Court, S.D. New York
December 14, 2005.
KEVIN P. BROOKS, Plaintiff,
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 of employment," and
thus "the alleged promises were too indefinite, as a matter of law").
Here, O'Halleran's twice-made statement that Aon would "match"
the value of Brooks's Gen Re offer does not reach the level of
definiteness required by both Connecticut and Illinois in this
context. In the first such statement, on March 22, O'Halleran
said, at most, that if the expected position opened up and if it
was offered to Brooks, it would not be "a problem" for Aon to
"match" Gen Re's $2.45 million offer to Brooks. See Trial Tr.,
supra. No employment offer was made. Id. at 108. Brooks was
given no specifics whatever regarding the position to be offered
beyond that it would be a "very senior [and] high-level," Id.
at 56. In turn, Brooks relayed the $2.45 million severance
package from Gen Re to O'Halleran in the most broad terms: "I
said to Mr. O'Halleran that I had a package at a value of, and I
expressed that number [as] 2.4 million and that had included two
years of continuation of salary and the lump sum bonus at the end
of two years." Id. at 142-43. Brooks left the March 22 meeting
without any knowledge of what his job title or duties might be,
what the new company might look like, or what his salary or
long-term compensation terms might be, if the job were offered at
all. See id. at 56, 166.
Given this lack of detail, the "promise" made on March 22 was
even less definite than the promise of a new teacher position
found legally insufficient in D'Ulisse-Cupo, see
520 A.2d at 221, or the promise of a new position with specified pension benefits
or retention of plaintiff's current job found legally
insufficient in Sembos. See 376 F.3d at 704.
O'Halleran's repetition of the "match" statement on April 30,
2001 fares no better. It is true that, by this point, Brooks knew
what position he was being offered, had discussed Aon's proposed
overall salary structure, and had proposed that he make a 5-year
commitment. Nevertheless, the April 30 promise to match the value
of Gen Re's offer is too indefinite to enforce because, inter
alia, Brooks and Aon had no discussions whatsoever regarding
what "matching" the $2.45 million offer might mean in this
context. Brooks did not know whether the $2.45 million was to be
included in the basic framework of salary, bonus, and stock
options, whether it was to be a separate severance agreement, or
over what period the money would be paid to him. See Trial Tr.,
Mar. 16, 2004, at 73, 120-21, 151, 172-73, 179. Indeed, he never
asked Aon for clarification as to how Aon was going to pay him
the promised $2.45 million at any time. Id. at 120-21.*fn5
Moreover, even assuming arguendo that O'Halleran's April 30
statement was sufficiently clear and definite to meet the foregoing standards, there is no material evidence that Brooks
detrimentally relied on it or that any such reliance, if it
existed, was reasonable. As noted, Brooks let his Gen Re offer
expire well before the April 30 meeting; thus, his sole claim of
detrimental reliance on the April 30 promise relates to his
decision to end employment negotiations with an Aon competitor
after accepting his offer with Aon. See id. at 101; Pl. Mem.
at 8, 21-22. But there is no evidence that O'Halleran's promise
to match was a material factor in this decision. Specifically,
when twice asked, on his direct examination, why he accepted the
Aon offer over that of Aon's competitor, Brooks did not identify
compensation as having played a role in his decisionmaking,
citing instead greater satisfaction with the responsibilities and
autonomy he would be given at Aon. See Trial Tr., Mar. 16,
2004, at 101-02.*fn6 Moreover, Brooks, by his own admission,
was willing to turn down Aon's offer unless he was paid more than
$300,000 in annual salary, even after he had let Gen Re's offer
lapse and despite O'Halleran's promise to match.
Finally, even if the evidence did somehow show that Brooks would have accepted employment with Aon's competitor rather than
with Aon had O'Halleran not made his promise, such reliance would
have been unreasonable, since no one at Aon had even seen
Brooks's Gen Re offer when making the promise to match, nor did
they ever request to do so. Id. at 182. Thus, any statement
purporting to agree to match its value was based solely on
Brooks's representations as to both the components of the
agreement and their valuations. No reasonable fact-finder could
find that a sophisticated senior executive such as Brooks could
reasonably believe that the two most senior executives of a large
insurance corporation would agree to match an offer that would
require it to pay one of its employees $2.45 million without
first requesting to verify that offer's terms.
Accordingly, defendants' renewed motion to dismiss as a matter
of law is hereby granted, and plaintiff's remaining claim for
promissory estoppel is dismissed with prejudice. Clerk to enter
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