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December 16, 1996

McDONALD'S CORPORATION, CHICAGO AVIATION PARTNERS, a joint venture of McDonald's Corporation and Duty Free International, Inc., and CARSON INTERNATIONAL INC., Defendants.

The opinion of the court was delivered by: GETTLEMAN



 In December 1990, the City of Chicago issued a request for proposal No. C-96191001 ("RFP1"), seeking proposals for the development and operation of the concessions and duty-free shops at the international terminal at O'Hare Airport. Shortly thereafter, plaintiff, McDonald's and Carson entered into discussions about creating a joint venture for the purposes of operating the concessions and duty-free shops. The parties disagree as to whether any joint venture was formed, and if formed, the extent of its purpose and when it terminated. Plaintiff asserts that a joint venture was formed for the purpose of obtaining the contract from the City, and operating pursuant thereto. Defendants assert that no joint venture was ever formed, that the parties merely agreed to submit a proposal pursuant to RFP1, which they did, and that all obligations ended at that point.

 On March 29, 1991, plaintiff, McDonald's and Carson signed a letter of intent (the "Letter of Intent"), which is the only document signed by all three parties that purports to define any rights and obligations. The preamble to that letter indicates that its purpose was to set forth the parties' mutual intent with respect to the negotiation or transaction between the three whereby a joint venture "would be formed for the purpose of performing the obligations of the concession developer/operator for the new international terminal at O'Hare International Airport." The Letter of Intent also indicates that it was subject to execution by the parties of a definitive agreement covering the transaction, and was not binding on any party except as expressly set forth.

 Paragraph 1 of the letter, titled "Submission of Proposal," provides that the parties will use their best efforts to jointly formulate and timely submit a proposal in response to RFP1. The proposal was to indicate that performance would be through a joint venture owned equally by the three parties. Paragraph 2, entitled "Exclusivity," provides that "for a period of thirty days after the date hereof, no party hereto shall, directly or indirectly, solicit or initiate discussions concerning, or enter into negotiations with, any other party concerning joint submission of a proposal for the Project." Paragraph 4, entitled "Joint Venture," provides that the parties will promptly commence negotiations in good faith to complete preparations of the Agreement on the terms contemplated in the letter. Finally, paragraph 12 indicates that the letter is a letter of intent only, and that no party shall have any legal obligation to the others as a result of the letter, other than the obligations contained in paragraphs 1, 2 through 4, 12 and 13.

 It is undisputed that the parties used their best efforts to formulate a proposal, and that a proposal was in fact submitted to the City on April 1, 1991. That proposal was submitted in the name of "Creative Forces Partnership," the name the letter of intent set forth as the name of the planned joint venture. The cover letter submitted with the proposal specifically states that Creative Forces Partnership "is planned as a joint venture of Carson International/Dobbs Houses, McDonald's Corporation and SAS Trading . . . ." The proposal itself, however, indicates that Carson, McDonald's and SAS "have formed a joint venture." It also indicates that the joint venture is "to be" owned equally by McDonald's, SAS and Carson, and that it will be organized as a partnership under Illinois law. Additionally, in the disclosure of ownership interest, the proposal indicates one-third ownership by each partner, and that "the parties have signed a letter of intent. It is contemplated that formal partnership documents will be prepared after the bid award."

 In June 1991 the parties made a joint oral presentation to the City in support of their proposal, and in July they submitted a supplemental response per a request from the City.

 On July 2, 1992, the City selected Host International as the successful bidder, and began to negotiate a contract with it. By letter dated July 27, 1992, the City informed the parties that it had selected another firm, and intended to proceed to negotiate an agreement with that firm.

 On or about November 6, 1992, however, the City terminated its negotiations with Host because Host had been purchased by Marriott. The following month, the City re-issued a request for proposal ("RFP2"). In January 1993, McDonald's and Duty Free International, Inc. submitted a proposal to the City in response to RFP2 under the name Chicago Aviation Partners ("CAP"). CAP's proposal was accepted on February 13, 1993, and CAP and the City entered into a contract on March 25, 1993.

 In this lawsuit plaintiff alleges that by failing to inform it of RFP2, and by entering into a contract with the City in response to RFP2, McDonald's breached its joint venture agreement with Carson and plaintiff.


 Plaintiff has sued defendants for breach of contract, appropriation of business opportunity, and breach of fiduciary duty. The first count obviously sounds in contract, while the other two are torts. Nonetheless, the parties are in agreement that the success of all three counts is determined by the relationship between them. Defendants assert that that relationship is governed solely by the Letter of Intent, which is the only written agreement signed by all three parties, and that any obligations and rights among them are defined by that letter. Plaintiff, on the other hand, asserts that the parties entered into an oral joint venture relationship for the purpose of seeking the contract from the City. Plaintiff admits, however, that that relationship was "initially formed in the letter of intent," but asserts that the parties' joint efforts began before the execution of and extended well beyond that letter's terms, as evidenced by subsequent oral and written representations and course of conduct.

 A joint venture is an association of two or more persons to carry on a single enterprise for profit. Partnership legal principles govern joint ventures, and the only distinction of consequence between the two is that a joint venture relates to a single enterprise or transaction, whereas a partnership relates to a general business of a particular kind. A joint adventurer, like a partner or corporate officer or director, is a fiduciary and owes a duty of loyalty to the person or entity for whom it acts. ...

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