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Valerio v. Cygnus Business Media

March 31, 2008


The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer


Patricia Valerio ("Valerio"), an Illinois resident, applied to work as a sales representative for two publications owned by a Wisconsin-based Cygnus Business Media, Inc. ("Cygnus"). Cygnus hired Valerio for this position, but rescinded the offer of employment prior to Valerio's start date. Valerio filed a complaint against Cygnus in the Circuit Court of Cook County, Illinois alleging breach of contract, promissory estoppel, and fraud. Cygnus removed the lawsuit to this court based on diversity of citizenship of the parties. Valerio voluntarily dismissed her breach of contract claim, and Cygnus now moves for summary judgment on the remaining claims. For the reasons stated below, Cygnus's motion is granted in part and denied in part.


Cygnus, a Delaware corporation with its principal place of business in Fort Atkinson, Wisconsin, is engaged in the publication of business-to-business media products. (Compl. ¶ 2.) Among the magazines published by Cygnus were Professional Tool and Equipment News ("PTEN"), Fleet Maintenance ("FM"), Professional Distributors ("PD"), and Collision Repair Product News ("CRPN"), all of which were part of Cygnus's Transportation Group publications. (Cygnus 56.1 ¶ 8.) In August 2005, Thomas Lynch ("Lynch") became the Group Publisher of the trade magazines comprising Cygnus's Transportation Group, reporting to Paul Bowers, a Group Vice President. (Cygnus 56.1 ¶¶ 7, 9.) At the time of his appointment as Group Publisher, Lynch promoted Eric Wixom from a position as sales representative for PTEN and PD to Associate Publisher for the newly-launched CRPN magazine. (Cygnus 56.1 ¶ 11.)

In the fall of 2005, Cygnus advertised to fill the position of sales representative for its PTEN and PD publications. (Cygnus 56.1 ¶ 15.) Patricia Valerio, who was at that time employed by Western Printing Machinery as Director of Sales for its "Cutting Technology" division, applied for the Cygnus job. (Valerio 56.1 ¶ 1, 2.) Valerio earned $65,000 per year at Western Printing Machinery, plus a bonus paid on each contract she entered into on its behalf; in 2004, she earned a total of $113,487.18 at Western. (Valerio 56.1 ¶ 3.) In late October or early November, Lynch interviewed Valerio twice in Fort Atkinson. (Cygnus 56.1 ¶ 17.) During these interviews, Valerio had the opportunity to meet with other Cygnus employees, including Bowers and Wixom. (Valerio 56.1 ¶¶ 10-11.) Lynch expressed urgency about filling the position as soon as possible and told Valerio that Cygnus wanted someone in the position around December 1, 2005. (Valerio 56.1 ¶ 14.)

After the interviews, around mid-November, Valerio called Lynch regarding the employment position at Cygnus. (Valerio 56.1 ¶ 15.) Cygnus does not deny that Valerio made this call, but the contents of the conversation are disputed. (Cygnus 56.1 Reply ¶ 15.) Valerio contends that Lynch told her that there was a possibility that one of the publications in his group might be cancelled and that she expressed concern about this, asking Lynch whether such a cancellation would prevent Cygnus from filling the sales representative position. (Valerio 56.1 ¶¶ 16-17.) According to Valerio, Lynch assured her that any cancellation would affect Lynch and his team but would not affect Valerio's hire. (Valerio 56.1 ¶¶ 18-19.) Cygnus denies that Lynch revealed the possible cancellation of a publication to Valerio; Lynch stated in his affidavit that he was unaware in late November that the CRPN might be discontinued and that, in any event, a magazine's termination, or its effect on a hiring decision, "is not something I would ever raise with a candidate we were interviewing." (Cygnus 56.1 ¶ 20, citing Lynch Aff. ¶ 16; Lynch Aff. ¶ 28.)

On November 28, 2005, Judy Heidebrecht, Cygnus's Vice President of Human Resources, telephoned Valerio and orally offered her the sales representative position at a base salary of $53,000 plus commissions. (Cygnus 56.1 ¶ 22.) Valerio accepted that same day and informed her supervisor at Western Printing that she was leaving the company. (Cygnus 56.1 ¶¶ 22, 25; Valerio 56.1 ¶¶ 27, 29.) Valerio apparently had second thoughts, however; on November 30, 2005, she called Lynch and withdrew her acceptance of the employment offer because she considered the salary too low. (Cygnus 56.1 ¶ 26; Valerio 56.¶ 30.) Soon afterwards (the parties do not identify the date), Lynch called Valerio back and increased the base pay offer to $60,000; Valerio again accepted and asked Lynch to put her offer in writing. (Cygnus 56.1 ¶¶ 28-29.) On December 2, 2006, Judy Heidebrecht sent Valerio, by e-mail, Cygnus's standard offer letter, which included the statement, "This is not an employment contract, as all employment at Cygnus Business Media is 'at will.'" (Cygnus 56.1 ¶ 31, quoting Dec. 2, 2005 letter, Ex. 1 to Heidebrecht Aff.) Valerio admits that the "at-will" nature of employment at Cygnus is expressly conveyed in all employment offers, that she read this language in the December 2, 2005 letter, and that Heidebrecht's letter did not offer to employ her permanently or for any definite term. (Cygnus 56.1 ¶¶ 33, 35, 38.) Because Valerio withdrew her earlier acceptance, her expected start date was pushed back from December 9 to December 12, 2005. (Cygnus 56.1 ¶ 40.) After accepting the second offer, Valerio contacted Western Printing again and resigned. (Valerio 56.1 ¶ 33.)

Cygnus asserts that at the time of the negotiations with Valerio, Cygnus personnel were not aware that CRPN would be discontinued, or the effect of that decision on Valerio's possible employment. (Cygnus 56.1 Section VI.) In support of this contention, Cygnus presents evidence that in late November or early December 2005, Richard Reiff, the then-President of Cygnus Publishing, met with Paul Meckler, Reiff's boss and CEO/President of Cygnus Business Media, to discuss CRPN's viability. (Cygnus 56.1 ¶ 56.) Cygnus states that Reiff "did not involve and would not have involved" Lynch in these discussions, nor in making the final decision regarding the future of the publication, although Valerio denies this. (Cygnus 56.1 ¶ 57; Valerio 56.1 Resp. ¶57.) Reiff decided that unless the publishing group could guarantee a 20% growth in annual revenues over the next three years, Cygnus would have to end the publication of CRPN. (Cygnus 56.1 ¶ 58.)

Ultimately, on December 9, 2005, Reiff did decide to end the publication. Cygnus asserts that neither Lynch nor Heidebrecht was aware of the decision before that date. (Cygnus 56.1 ¶¶ 59, 65, 67.) In fact, Lynch was actively working on generating the 2006 budget for CRPN as late as December 2, 2005. (Cygnus 56.1 ¶ 60.) Cygnus also states that prior to December 9, Heidebrecht had every expectation that Valerio would start work on December 12. (Cygnus 56.1 ¶ 68.)

On December 9, 2005, Lynch participated in one or more meetings at which CRPN was discussed. (Cygnus 56.1 ¶ 41.) In one of those meetings, Lynch recalls, Reiff sought assurances that CRPN could generate 20% annual growth in sales over the next three years. (Cygnus 56.1 ¶ 41; Lynch Affidavit ¶ 28.) Lynch and his supervisor, Group Vice President Paul Bowers, were unable to make those assurances, and Reiff told them that CRPN was going to be cancelled at the end of December 2005. (Cygnus 56.1 ¶ 43.) Cygnus further states that Lynch and Bowers were disappointed with the decision to close CRPN and wondered how to tell the people involved with the publication, especially Wixom (who had so recently been promoted from his position as sales representative for PTEN and PD), that CRPN was being discontinued. (Cygnus 56.1 ¶ 44; Lynch Aff. ¶ 29.) Lynch and Bowers decided that the fair thing to do was to reinstate Wixom in the PTEN/PD sales position. (Cygnus 56.1 ¶ 45; Lynch Aff. ¶ 29.) Valerio objects to many of these statements as "vague, conclusory, and speculative," but she offers no evidence in rebuttal. (Valerio 56.1 Resp. ¶¶ 41-45.) She acknowledges that Wixom's transfer back to the position as sales representative for PTEN and PD meant that Lynch no longer had a position within his group for her. (Cygnus 56.1 ¶ 46.)

On the weekend prior to Valerio's planned December 12 start date, Lynch called Valerio to inform her not to drive up to Fort Atkinson from her home in Chicago. (Cygnus 56.1 ¶ 48.) During this conversation, Lynch tried to explain to Valerio what had happened and to make clear that the decision to pull the magazine had been made by the Board of Directors. (Cygnus 56.1 ¶ 50.) Because Lynch and Bowers believed Valerio was a strong candidate, Lynch told her that there might be an opening in a different group and that he had already made arrangements for another Group Publisher, Tim Campbell, to interview her on Monday, December 12, 2005. (Cygnus 56.1 ¶ 53.) In fact, Heidebrecht later told Valerio that Cygnus was unable to find another position for her. (Cygnus 56.1 ¶ 54).

After Cygnus withdrew the job offer, Valerio contacted her previous manager at Western Printing Machinery to see if she could return to her job, but her manager told her that Western had already contacted all of her customers and told them that she was leaving the company. (Valerio 56.1 ¶¶ 39-41.) After Cygnus withdrew its offer, the next offer Valerio received was from Clipper Magazine earning a base salary of $40,000. (Valerio 56.1 ¶ 42.) Valerio worked at Clipper Magazine until August of 2006. She now works at Glaxo-Smith Klein Pharmaceuticals as a senior sales representative. (Valerio 56.1 ¶¶ 43-44.)


Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); Timmons v. Gen. Motors Corp., 469 F.3d 1122, 1125 (7th Cir. 2006) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). In determining whether a genuine issue of material fact exists, the court views the evidence in the light most favorable to the non-moving party and draws all reasonable inferences in her favor. Gillis v. Litscher, 468 F.3d 488, 492 (7th Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). If the moving party demonstrates that the evidence is insufficient to establish a material ...

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