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PASANT v. JACKSON NATL. LIFE INS. CO. OF AMERICA

July 29, 1991

THOMAS PASANT, Plaintiff,
v.
JACKSON NATIONAL LIFE INSURANCE COMPANY OF AMERICA, Defendant



The opinion of the court was delivered by: BUA

 NICHOLAS J. BUA, UNITED STATES DISTRICT JUDGE

 Plaintiff in this action, Thomas Pasant, claims that defendant, Jackson National Life Insurance Company of America ("Jackson Life"), was not true to a settlement agreement. Therefore, Pasant has brought suit. Jackson Life has moved for partial summary judgment on the relief requested in Count I of Pasant's complaint. For the reasons stated herein, Jackson Life's motion for partial summary judgment is granted.

 FACTS

 On October 28, 1988, a Michigan lawsuit involving Pasant and Jackson Life was dismissed pursuant to a settlement agreement. The agreement compromised various claims and obligations which had arisen from a previous employment relationship. Under the agreement, Jackson Life agreed to pay Pasant $ 100,000 and to waive its right to enforce a covenant not-to-compete. Pasant relinquished any claims he may have had regarding commission and incentive compensation as well as a tort claim for intentional infliction of emotional distress.

 In July of 1989, Pasant, relying on Jackson Life's waiver, incorporated Agency of America and began competing with Jackson Life. On October 31, 1989, Jackson Life filed a suit against Pasant in Illinois state court which sought, in part, an ex parte temporary restraining order directing Pasant to cease soliciting (and refrain from entering into) business relationships with agents who had contractual relationships with Jackson Life ("Illinois suit"). This suit was voluntarily dismissed by Jackson Life with prejudice.

 Pasant then commenced the present action. Pasant alleges that the Illinois suit was calculated to prevent and/or interfere with his ability to compete with Jackson Life. In Count I of the complaint, Pasant claims that Jackson Life breached the settlement agreement by failing to adhere to its waiver of the covenant not-to-compete. As relief, Pasant asks for: 1) consequential damages resulting from Jackson Life's interference with his ability to compete in the open market place, 2) renewal and outstanding commissions, and 3) incentive compensation under the Profit Incentive Plan. Jackson Life now moves for partial summary judgment on Count I contending that Pasant may not, as a matter of law, recover the commissions and incentive compensation.

 DISCUSSION

 Count I of Pasant's complaint implicitly invokes two inconsistent contractual theories. First, Pasant seeks consequential damages resulting from Jackson Life's alleged breach of the settlement agreement. Under this theory, Pasant affirms the existence of the agreement and seeks consequential damages flowing from Jackson Life's alleged breach thereof. Second, Pasant seeks to enforce his rights concerning commissions and incentive compensation, rights which Pasant forewent under the settlement agreement. That is, Pasant seeks to pursue his original claims which were compromised by the settlement agreement. Implicitly, then, he seeks disaffirmance of the agreement.

 Jackson Life asserts, among other arguments, that Pasant may not invoke (or at least be granted) a remedy based on affirmance of the agreement along with a remedy based on disaffirmance, such as a repudiation of the settlement agreement. Jackson Life further argues that Pasant must elect one of the two inconsistent remedies he seeks in order to avoid a threat of double recovery.

 Jackson Life, however, has missed the boat on this point. Pasant has not "invoked" any remedy. Pasant has merely pled in the alternative pursuant to Fed. R. Civ. R. 8(e)(2) which states, "A party may set forth two or more statements of a claim . . . alternatively or hypothetically . . . . A party may also state as many separate claims . . . as the party has regardless of consistency. . . ." In Braman, this court found that "under Rule 8(e)(2) plaintiffs may raise alternative claims of breach of contract and unjust enrichment despite the inconsistency of these claims." Braman v. Woodfield Gardens Associates, 715 F. Supp. 226, 229 (N.D. Ill. 1989). While it is true that Pasant must elect one of two inconsistent remedies at some time; that time is not now. Double recovery is not threatened in the pleading stage and pleading rules allow a plaintiff, such as Pasant, to plead inconsistent contractual theories. Therefore, the court finds that Pasant's request for commissions and incentive compensation is not barred on grounds that such remedy is inconsistent with his alternative remedy of suing for damages on the agreement.

 In addition, Jackson Life argues that Pasant's request for commissions and other monetary relief is barred on grounds that Pasant has failed to tender the consideration he received pursuant to the settlement agreement prior to or at the time of his filing suit. Jackson Life contends that the remedy is barred by a well-settled rule of Michigan law which states that "tender of consideration received is a condition precedent to the right to repudiate a contract of settlement". Stefanac v. Cranbrook Educ. Community, 435 Mich. 155, 163, 458 N.W.2d 56, 60 (1990). Contrary to Pasant's assertions, this tender rule is not limited to claims seeking the recision of a contract. See Kirl v. Zinner, 274 Mich. 331, 264 N.W. 391, 392 (1936) ("it is a general and salutary rule that one repudiating or seeking to avoid a compromise settlement or release, and thereby revert to the original right of action, must place the other party in statu quo . . . .").

 Jackson Life correctly relies on Stefanac. First, the tender rule discussed in the case applies to settlement agreements, not original contracts. Id. The subject matter of the present suit is indeed a "settlement agreement" by its nature and by admission of the parties. (Settlement Agreement at paras. 7-9.) Second, Stefanac is Michigan precedent and this court has determined previously that Michigan law controls the contract dispute. See Pasant v. Jackson Nat'l Life Ins. Co. of America, 751 F. Supp. 762, 764 (N.D. Ill. 1990). *fn1"

 The court is in agreement with Jackson Life that Stefanac bars the pursuit of repudiation remedies in the present case. The agreement entered into by the parties was "in consideration for resolving the claims which each . . . raised [in the Michigan suit]." (Settlement Agreement at 1.) For its part, Jackson Life claims that it paid Pasant $ 100,000 and retirement plan distributions. (Defendant's Statement of Uncontested Material Facts for its Motion for Summary Judgment at para. 4.) Since the Michigan case was dismissed with prejudice ...


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