United States District Court, N.D. Illinois, Eastern Division
June 21, 2004.
TRUSTMARK INSURANCE COMPANY, Plaintiff,
GENERAL COLOGNE LIFE RE OF AMERICA, Defendant.
The opinion of the court was delivered by: BLANCHE MANNING, District Judge
MEMORANDUM AND ORDER
This matter comes before this Court for judgment after a bench
trial on Plaintiff Trustmark Insurance Company's ("Trustmark")
claim for promissory estoppel against Defendant General Cologne
Life Reinsurance of America ("Cologne"). Normally, pursuant to
Federal Rule of Civil Procedure 52, after carefully observing the
trial and reviewing the transcript and trial exhibits, the Court
would enter written findings of fact and conclusions of law based
upon consideration of all the admissible evidence as well as this
Court's own assessment of the credibility of the trial witnesses.
Here, however, as explained below, because this Court finds that
the statute of frauds bars Trustmark's promissory estoppel claim,
the Court enters judgment in favor of Cologne without making
formal findings of fact or conclusions of law on all the issues
presented at trial.
Before discussing the application of the statute of frauds,
however, the Court will briefly review the procedural history of
this case. Trustmark initially brought this action seeking: (1) a
declaratory judgment that Cologne is obligated under an alleged
joint venture agreement that it made with Trustmark to reinsure a
block of individual disability insurance policies ("IDI Policies") from Hartford Insurance Company ("the Hartford Block")
(Count I); (2) specific performance under the alleged agreement
(Count II); (3) damages for breach of contract (Count III); (4)
damages for breach of fiduciary duty (Count IV); and (5) damages
for promissory estoppel (Count V). After extensive discovery and
briefing, this Court granted Cologne's Motion for Summary
Judgment as to Counts I-IV on the grounds that Trustmark failed
to present sufficient evidence that a joint venture existed but
denied the motion as to the claim for promissory estoppel because
the doctrine of partial performance precluded assertion of the
statute of frauds at that stage of the litigation.
On a motion to reconsider, Cologne contended that the doctrine
of partial performance did not take Trustmark's promissory
estoppel claim out of the statute of frauds because Trustmark
sought only monetary damages in its claim. In denying this
motion, the Court acknowledged that the doctrine of partial
performance only applied to claims for equitable relief.
Trustmark's complaint, however, sought both equitable and
monetary relief and there was no evidence stating that monetary
damages could provide complete relief. Therefore, the Court found
that there was a genuine issue of material fact as to whether
monetary damages could provide Trustmark complete relief and
thus, denied summary judgment as to the promissory estoppel
Now, after hearing all of the evidence and reviewing the
parties' submissions, this Court finds that the doctrine of
partial performance does not apply here because monetary damages
give Trustmark an adequate legal remedy, and therefore, the
statute of frauds bars Trustmark's promissory estoppel claim.*fn1
The parties do not dispute that under Illinois law, promissory
estoppel is not an exception to the statue of frauds or that the
statue applies to the alleged promise that Cologne would share in
the risk to reinsure the Hartford Block. The question thus is
whether the doctrine of partial performance which is an
exception to the statue of frauds applies to Trustmark's claim
for promissory estoppel.
The part performance doctrine is "rooted in the equitable
concept of reliance," Dickens v. Quincy College Corp.,
615 N.E.2d 381, 385 (Ill.App. Ct. 1993), and applies "to cases where
there [has] been such acts of performance by the party" so that
it "cannot be restored to [its] original position." Gibbon v.
Stillwell, 500 N.E.2d 965, 969 (Ill.App. Ct. 1986). The
doctrine, however, does not apply where monetary damages give the
aggrieved party an adequate legal remedy. See Payne v. Mill Race
Inn, 504 N.E.2d 193, 199-200 (Ill.App. Ct. 1987) (part
performance applies only where "it is impossible or impractical
to . . . compensate the performing party for what he has parted
with, or for the value of his performance"); Gibbon, 500 N.E.2d
at 969 (refusing to apply doctrine of part performance where "the
plaintiff had an adequate remedy at law for damages"); Bensdorf
& Johnson Cherry Payment Sys., Inc. v. Rogers, 1995 WL 584062,
at * 3 (N.D. Ill. Oct. 3, 1995) (noting that under Illinois law,
"the availability of damages to compensate [the performing party]
. . . will ordinarily preclude reliance on the equitable doctrine
of partial performance").
Here, after carefully reviewing the evidence presented at
trial, this Court finds that monetary damages would fully compensate Trustmark for the full
value of its performance, and therefore, the doctrine of partial
performance is not available. In its Proposed Conclusions of Law,
Trustmark seeks: (1) $5,724,129.93 in damages for 50% of the
losses that it has allegedly incurred by reinsuring the entire
risk on the Hartford Block; and (2) a judgment compelling Cologne
to accept liability for any future losses on the policies.
Trustmark contends that only a declaration requiring Cologne to
pay for half of all future losses will give it complete relief.
This contention, however, was contradicted by Trustmark's own
witness. At trial, Trustmark's expert witness in actuarial
science testified that it was possible to calculate the future
estimated losses for the Hartford Block using a "gross premium
valuation." (Tr. at 979-81.) Trustmark thus could be fully
compensated for the full value of its performance by a monetary
judgment. The partial performance exception to the statute of
frauds is therefore not available in this case.
Accordingly, this Court finds that the statute of frauds bars
Trustmark's claim for promissory estoppel. CONCLUSION
For the foregoing reasons, the Court finds that the statute of
frauds bars Trustmark's claim for promissory estoppel and
therefore enters judgment in favor of Cologne.