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12/11/87 George Martin, v. Federal Life Insurance

December 11, 1987





518 N.E.2d 306, 164 Ill. App. 3d 820, 115 Ill. Dec. 781 1987.IL.1839

Appeal from the Circuit Court of Cook County; the Hon. Brian B. Duff, Judge, presiding.


JUSTICE PINCHAM delivered the opinion of the court. LORENZ and MURRAY, JJ., concur.


Plaintiff, George Martin, appeals from an order of the trial court granting defendant Federal Life Insurance Company's (Federal's) motion for summary judgment. We reverse and remand.

This is the second appeal in this case. Martin originally filed a three-count complaint against defendant Federal and its president, Joseph D. Austin, now deceased. On motion of the defendant, the complaint was twice stricken and Martin was granted leave to amend. Thereafter, Martin filed a second amended complaint which contained three counts: one, breach of contract and estoppel; two, breach of implied covenant of good faith and fair dealing; and three, tortious inducement of breach of contract. The essence of Martin's allegations against the defendant follows.

Martin began working for Federal in 1954 as personnel manager. During the ensuing years Martin was promoted to various positions and finally to second vice-president and senior officer. In 1967 Martin was offered an attractive job with a competing insurance company. Martin intended to accept the offer. Upon being informed thereof Joseph D. Austin, Federal's president, promised Martin that if he declined the offer he would keep Martin in Federal's employment until Martin retired or no longer wished to be employed at Federal, so long as Martin performed satisfactorily. Martin relied on Austin's promise, refused the competitor's offer and entered into an oral agreement for permanent employment with Federal. About nine years later, in 1976, Federal's board of directors made Martin company vice-president and a year later Martin was elected to the full board. A few weeks thereafter the executive committee fired Martin without cause.

Martin had been employed at Federal for 22 years and his discharge came 10 years after the aforesaid 1967 agreement for permanent employment. Martin contended that his discharge was instigated by Austin and that he was not charged with poor work or any wrongdoing. Martin further alleged that because of his discharge he was denied the job security for which he had bargained with Federal in 1967. Martin additionally alleged various ingredients of damages for his wrongful employment termination in 1977.

The trial court entered an order which granted the defendant's motion to dismiss Martin's second amended complaint. This dismissal order stated that the law in Illinois was that "mere continuance of an employee is not sufficient consideration to support an alleged oral contract for permanent employment," and that Martin had not alleged the required "separate, independent and substantial consideration" for a legal oral contract for permanent employment.

Martin appealed the order dismissing his second amended complaint. On his appeal, as to count I of Martin's amended complaint -- breach of contract and estoppel -- we stated:

"The primary issue before us is whether [Martin's] allegations of an oral agreement state a cause of action. Defendants view the employment agreement as a terminable at-will relationship that was legally terminated and maintain that the alleged agreement for "permanent" employment lacked sufficient consideration and mutuality of obligation. Alternatively, they contend that if a binding contract for permanent employment was formed, its enforcement is barred by the Statute of Frauds." Martin v. Federal Life Insurance Co. (1982), 109 Ill. App. 3d 596, 599, 440 N.E.2d 998.

We reviewed the law governing employment terminable at will, the requirement of consideration, the requirement of mutuality, and the requirement of writing, which were the only contentions raised by the defendants on that appeal. We concluded that the allegations of count I stated an action for breach of oral contract and that the Statute of Frauds was not a bar to enforcement. We reversed the trial court's dismissal of count I and, after reviewing and discussing the parties' contentions, we affirmed the trial court's dismissal of counts II and III. We remanded the cause for further proceedings and our decision

On remand, Federal presented to the trial court, for the first time, a completely new and different response to Martin's amended count I for breach of contract and estoppel. On remand, Federal asserted for the first time that Martin's alleged employment contract was void and unenforceable under section 245 of the Insurance Code ...

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