Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

LILLIEN v. PEAK6 INVESTMENTS

June 25, 2004.

JEFFREY LILLIEN, Plaintiff,
v.
PEAK6 INVESTMENTS, L.P. and PEAK6 L.L.C., Defendants.



The opinion of the court was delivered by: JAMES ZAGEL, District Judge

MEMORANDUM OPINION AND ORDER

I. Background

In March 2001, Plaintiff Jeffrey Lillien, who had been an in-house attorney with First Chicago and its successor, Bank One, for over eighteen years, decided to enter the job market. By May of that year, Lillien had received two competing offers, one from UBS, a large multinational financial services company, and one from Defendants Peak6 Investments, L.P. and Peak6 L.L.C. (collectively "Peak6"), a smaller options trading firm. Ultimately, Lillien passed up UBS's offer for a senior position in its law department, which included a base salary of $150,000, a guaranteed bonus of $175,000, and $150,000 of UBS stock, to become Peak6's General Counsel. In its May 4th and May 9th offer letters, Peak6 promised to provide Lillien with a base salary of $150,000, a discretionary bonus, and stock options from the company's pending IPO. Lillien alleges that Peak6 principals Matthew Hulsizer and Jennifer Just also promised him that, barring a catastrophe, he would receive a year-end target bonus of $100,000 and roughly $500,000 worth of stock options. Lillien alleges that Hulsizer and Just assured him, during their negotiations, that the IPO would occur in late May or early June and that the company was in a strong financial position. According to Lillien, these assurances led him to accept Peak6's offer on May 9, 2001.

  When Lillien started work, he realized that Peak6 was not doing as well as he had expected. Upon starting, Lillien learned that the IPO was postponed, Peak6's second quarter revenues were reported as "flat," Peak6 has suffered severe financial losses in mid-May, and Peak6's CFO had quit and had not yet been replaced. In November 2001, Peak6 finally, after many postponements, cancelled its plans for an IPO. In January 2002, Hulsizer and Just fired Lillien and informed him that his year-end bonus would be $30,000, less than a third of what Lillien expected. Thereafter, Lillien brought this suit claiming breach of contract and fraudulent inducement.

  II. Analysis

  Peak6 now moves for summary judgment on both of Lillien's claims. Summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). In determining whether any genuine issue of material fact exists, I must construe all facts in the light most favorable to the non-moving party and draw all reasonable and justifiable inferences in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A genuine issue of fact exists only when, based on the record as a whole, a reasonable jury could find for the nonmovant. Pipitone v. United States, 180 F.3d 859, 861 (7th Cir. 1999).

  A. Lillien's Breach of Contract Claims

  In Count I of his complaint, Lillien claims that he was entitled to a pro-rated bonus in excess of $50,000 and stock options in the amount of $500,000. Lillien bases these claims on representations made to him by Peak6 principals Hulsizer and Just. Lillien alleges that Hulsizer assured him that he would receive a bonus in excess of $100,000 and that both Hulsizer and Just assured him that Peak6's IPO was a virtual certainty.

  1. Lillien's Bonus

  With regards to Lillien's bonus, Peak6 argues that Lillien could not have believed Hulsizer's statements concerning the bonus target of $100,000 constituted an offer because they ran contrary to the terms of Peak6's written offers to Lillien. Under Illinois law, a statement constitutes an employment contract only if it "set[s] forth a promise in terms clear enough to cause a reasonable employee to believe that an offer has been made." Tatom v. Ameritech Corp., 305 F.3d 737, 742 (7th Cir. 2002) (quoting Duldulao v. St. Mary of Nazareth Hosp. Ctr., 505 N.E.2d 314, 318 (Ill. 1987)). "Whether a contract exists, and in particular whether a clear and definite promise has been made," is a threshold issue of law for the court. Grottkau v. Sky Climber, No. 93 C 6277, 1995 U.S. Dist. LEXIS 902 at *48 (N.D. Ill. Jan. 24, 1995). Absent a "clear promise," summary judgment must be granted. Stacey v. Insurance Corp. of Ireland, 545 N.E.2d 221, 224 (Ill.App. Ct. 1989).

  Thus, it is my job to determine whether Hulsizer's statements concerning the $100,000 target bonus were part of the offer extended to Lillien. To support his claim that the statements were, in fact, part of that offer, Lillien cites Tidwell v. Toyota Auto Mart, Inc., 375 N.E.2d 540 (Ill.App. Ct. 1978), which held that plaintiffs were entitled to an orally set bonus despite the fact that they had signed a form categorizing the bonus plan as discretionary. Id. at 541. While Tidwell does bear certain similarities to this case, key differences exist, which make it inapplicable. In Tidwell, the court found, from the wording of the signed bonus form, that the discretionary language dealt with the dealership's decision to enroll an employee in its bonus plan and not with the amount of the bonus. Id. at 543. In this case, the language of Lillien's offer letters leads to the opposite conclusion. Both the May 4th and May 9th offer letters stated that Lillien would be "eligible for a year-end discretionary bonus . . . distributed based on both the profitability of the company and [Lillien's] contribution to the company's success." Unlike the bonus form in Tiswell, Peak6's offer letter guaranteed Lillien's enrollment in the bonus program but stated that the bonus amount was discretionary. Another key difference between Tidwell and this case is the nature of the respective plaintiffs' employment contracts. Unlike Lillien who received two written offers of employment, the plaintiffs in Tidwell were employed under an oral contract. Thus, it was somewhat more reasonable for the Tidwell plaintiffs to equate oral statements made by the defendant as part of their overall employment contract.

  Peak6's May 9th offer letter to Lillien detailed all the basic terms of his employment (it listed his start date, salary, pay dates, bonus, stock options, 401(k) plan, health insurance, and vacation), clearly stating the bonus was discretionary. Viewed in light of the explicit nature of the offer letters, a reasonable person, let alone an experienced lawyer like Lillien, could not have interpreted Hulsizer's statements as an offer of a target or minimum bonus. Furthermore, the overall circumstances surrounding the offer would not have led a reasonable employee to conclude that the target bonus was part of Peak6's offer. During the same conversations in which Hulsizer allegedly promised Lillien a target bonus of $100,000, he also told Lillien that his bonus could be $0 or $1M depending on the company's performance, indicating again the bonus was discretionary. Additionally, Lillien contacted the Manager of Human Resources and inquired about setting out a specific bonus amount in the offer letter itself. She told Lillien that Peak6 did not put specific bonus targets in writing. Given that the offer letters and Human Resource Manager's statements were wholly contrary to establishing a set bonus, Hulsizer's statements indicating that Lillien's bonus would most likely be $100,000 are not enough to bind Peak6. Creswell v. Bausch & Lomb, Inc., No. 85 C 5822, 1986 U.S. Dist. LEXIS 17414 at *17 (N.D. Ill. Nov 20, 1986) (employer's oral prediction on plaintiff's otherwise discretionary bonus was not sufficient to bind the company.). Since Hulsizer's statements could be reasonably found to change the discretionary nature of Lillien's bonus, I find that summary judgment is appropriate.

  2. Lillien's Stock Options

  With regard to the promised stock options, Peak6 argues that it was not contractually obligated to provide Lillien with stock options because its promise was based on a condition precedent, the planned IPO, which never occurred. Under the prevailing Illinois law, "if the condition [precedent] remains unsatisfied, the obligations of the parties are at an end." Lyntel Products, Inc. v. Alcan Aluminum Corp., 437 N.E.2d 653, 657 (Ill.App. Ct. 1981); See Also Albrecht v. North Am. Life Assurance. Co., 327 N.E.2d 317, 319 (Ill.App. Ct. 1975). When Lillien accepted Peak6's job offer, he was fully aware that no stock plan existed and that any future stock plan would be contingent on a successful IPO. Peak6's May 4th and May 9th offer letters clearly stated that Lillien would receive stock ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.