Appeal from the Circuit Court of Lake County. No. 98-L-422 Honorable Charles F. Scott, Judge, Presiding.
The opinion of the court was delivered by: Justice Galasso
The defendant, the Herman M. Finch University of Health Sciences/The Chicago Medical School (the University), appeals from a trial court judgment awarding the plaintiffs, Patricia Hentosh and Dennis Peffley, damages in the amount of $1.1 million for the University's breach of its contractual duties to the plaintiffs and a declaratory judgment in favor of Dr. Peffley. On appeal, the University contends that the trial court erred in granting judgment to the plaintiffs or, in the alternative, that the damage award was improper as a matter of law. No issue is raised on appeal with regard to the declaratory judgment awarded to Dr. Peffley.
The pertinent facts are summarized below.
The plaintiffs are husband and wife and have been employed by the University as associate professors since approximately October 1990. They have been engaged full time in teaching and research in the University's department of pharmacology and molecular biology.
In 1997, Dr. Gary Oltsman was the interim chairman of the department of pharmacology and molecular biology. In September 1997, Dr. Oltsman invited all non-tenured faculty in the department, which included the plaintiffs, to apply for tenure. The plaintiffs submitted their tenure applications by December 1997. However, the plaintiffs' tenure applications were never submitted to the dean, the faculty peer-review committee, the promotions and appointments committee, or to the University credentials and tenure committee. The plaintiffs were never told that their tenure applications had not been submitted for review.
On January 12, 1998, Dr. Francis White accepted the position of chairman of the department of pharmacology and molecular biology. Originally the appointment was to become effective July 1, 1998; however, the date was changed to March 16, 1998. Dr. White was given authority by Theodore Booden, dean of the medical school, to take part in departmental decisions prior to the effective date of his appointment. He made the decision not to renew the plaintiffs' appointments because they did not fit into the research focus and plans he had for the department once he became the chairman. On March 27, 1998, the plaintiffs were notified that their appointments would not be renewed.
The parties stipulated that the University By-laws, Regulations, and Faculty Benefits (bylaws), the Faculty Handbook of Policies and Procedures (faculty handbook), and the University's Guidelines for Appointment, Promotion, and Tenure created and delineated the contractual rights and duties existing between the University and the plaintiffs. The parties also stipulated to the admissibility of the reports of the experts on the issue of damages.
The facts in this case were either stipulated to by the parties and/or were uncontested. Therefore, as this case presents only questions of law, we shall review the issues de novo.
The University contends that the trial court erred in finding that it had breached its contracts with the plaintiffs.
The University argues that it properly exercised its right not to renew the plaintiffs' faculty appointments. It is well established that hiring and employment terms are presumptively subject to the will of the employer unless the parties specifically contract otherwise. Jacobs v. Mundelein College, Inc., 256 Ill. App. 3d 476, 480-81 (1993). When traditional requirements for contract formation are present, an employee handbook or other policy statement creates binding contractual rights. Jacobs, 256 Ill. App. 3d at 481. In this case, the parties stipulated that such contractual rights have been created by the provisions of the documents referred to above.
We observe that there is no dispute that the University had the authority not to renew the plaintiffs' faculty appointments based upon Dr. White's determination that the plaintiffs' work did not fit into the plans he had for the department. Other than to extend the date of Dr. Peffley's termination, there was no finding by the trial court that the University did not follow its procedures for terminating the plaintiffs' employment. Nor have the plaintiffs raised any issue in this appeal with regard to their terminations as non-tenured faculty.
In order to determine whether the University breached its contracts with the plaintiffs, we must determine first whether the tenure process was actually begun. Secondly, if the tenure process was begun, did the plaintiffs have a right, pursuant to their contracts with the University, to the completion of the tenure process after notification of the non-renewal of their faculty appointments? In order to resolve these questions, we must review the pertinent portions of the documents comprising the contract between the parties.
We turn first to section 2:1-03 of the bylaws, which states, in pertinent part regarding the granting of tenure, as follows:
"Academic review for awarding tenure is initiated: 1) by the Chair of the department through the Dean of the school, or 2) by the Dean upon petition by eligible full-ranked Faculty following seven years of continuous appointment at the University ***. All such recommendations must then be considered by the appropriate faculty peer-review committee which will be provided for in each school's by-laws. The school's review committee will forward its recommendation to the Dean who conveys it to the University Credentials and Tenure Committee. Upon conclusion of the University Credentials and Tenure Committee deliberations, its recommendation shall be transmitted in writing through the respective Dean to the Chief Academic Officer, and finally ...