The opinion of the court was delivered by: Allen Sharp, Chief Judge[fn*]. [fn*] Sitting by designation pursuant to 28 U.S.C. § 292.
This cause is before the court on the motion for partial
summary judgment of defendants, R.B.A. Inc., and Stauffer
Chemical Co. (both Stauffer) filed March 15, 1985. Stauffer moves
for summary judgment on Counts I, II, IV, V, VI, VII, VIII, IX,
XI, XII, XIII and XIV of the Second Amended Complaint. For the
reasons set forth below, defendants motion for partial summary
judgment is granted with respect to Counts I, IV, V, VI, VIII,
XI, XII, XIII; such motion is denied with respect to Counts II,
VII, and IX and XIV.
In the time period relevant to this motion, plaintiff, J.
Robert Robertson (Robertson) was a Vice President of R.B.A. Inc.,
a Minnesota Seed Company in bankruptcy. On September 22, 1980,
Stauffer Chemical Co. acquired R.B.A. Inc. and entered into a
written employment contract retaining Robertson as Area Marketing
Manager to serve at the pleasure of the board for a salary of
Fifty-five thousand and no/100 Dollars ($55,000.00). In dispute
in this action is the length of the fixed term of the contract.
The original contract retained by Stauffer reads as follows:
2. Term: The term of this Agreement shall begin on the
effective date hereof and shall continue for a period of two
Robertson maintains that the term of the contract was for a
period of three (3) years.*fn1
Robertson was relieved of all his duties with Stauffer on or
about October 5, 1981. Although he did not function in any
capacity with Stauffer for the next year, Stauffer continued to
pay him a salary until the expiration of the two (2) year
contract term on or about September 22, 1982. Robertson commenced
this action on November 8, 1982 in the Circuit Court for the
County of Sagamon, Case No. 82-L-420, entitled J. Robert
Robertson v. Stauffer Chemical Company. Soon thereafter on
December 12, 1982, Stauffer removed this cause to this court
pursuant to 28 U.S.C. § 1441. Stauffer filed its motion for
partial summary judgment on March 15, 1985 and the accompanying
brief on March 20, 1985. Robertson's response was docketed May 8,
1985. On May 28, 1985, this court heard oral argument on this
motion in Springfield, Illinois and granted the parties leave to
file supplemental authority. Subsequently, Stauffer filed a
supplement to it original memorandum in support of its motion for
partial summary judgment on May 24, 1985. Jurisdiction of this
court is predicated upon 28 U.S.C. § 1332(a)(1).
A threshold issue that must be addressed by this court is the
choice of law to be applied in this diversity action. Stauffer
contends that Minnesota law applies here. It relies on the
contract provision that specifies that the document be governed
by the law of Minnesota. Robertson maintains that choice of law
provision in the contract must yield to the law of the forum
state (Illinois) where there is a fundamental public policy which
would be violated if that law were not applied. In addition,
plaintiff contends that the contract is an "adhesion contract"
and the choice of law provision should be unenforceable on that
In a diversity case, a federal court must follow the conflict
of laws principle of the state in which it sits. Klaxon Co. v.
Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed.
1477 (1941). In Illinois, where the parties expressly choose
another state's law to govern their contract, their expressed
choice will be honored. Hofeld v. Nationwide Life Insurance
Company, 59 Ill.2d 522, 322 N.E.2d 454, 458 (1975); Swanberg v.
Mutual Benefit Life Insurance Company, 79 Ill. App.3d 81, 34 Ill.
Dec. 624, 627, 398 N.E.2d 299, 302 (1979); Tele-Controls, Inc.
v. Ford Industries, Inc., 388 F.2d 48, 51 (7th Cir. 1967);
Carter v. Catamore Company, Inc., 571 F. Supp. 94, 95 (N.D.Ill.
To circumvent this rule, Robertson argues that the "most
significant contacts" test is applicable in this situation. He
contends that the contract provision is but one factor to be
considered by this court in determining which jurisdiction has
the most significant contacts with the matter at issue. He
concludes that in this case where the substantive law of Illinois
and Minnesota are the same, Minnesota law will govern the issue.
Where the law expresses a different policy between the two
states, Illinois law will govern since Illinois is the state of
performance and has the most interest in the action.
This court does not agree with Robertson's conclusions on the
choice of law question. Initially, the court observes that the
"most significant contacts" test has not be extended to contract
actions in the state of Illinois. Charles O. Finley & Co. v.
Kuhn, 569 F.2d 527, 547 (7th Cir. 1978); International Paper
Co. v. Grossman, 541 F. Supp. 1236, 1239-40 (N.D.Ill. 1978).
Robertson cites P.S. & E Inc. v. Selastomer Detroit, Inc.,
470 F.2d 125 (7th Cir. 1972) in support of his position that the
"most significant contacts" test is the correct conflict of law
principle to be applied here. The court finds P.S. & E. Inc.
distinguishable from this action in several respects. First, the
agreement in P.S. & E Inc. contained
no express contract provision setting out the law to be applied
in determining the validity of the contract and the rights
created by the document. Second, the factual situation in P.S. &
E Inc. was such that no existing Illinois authority would
clearly govern the case. Under Illinois conflict of law
principles, if more than one place of performance is involved,
the place of the making of the contract governs its construction
and obligations. Id. at 127. In P.S. & E. Inc., ...