The opinion of the court was delivered by: Matthew F. Kennelly, District Judge
MEMORANDUM OPINION AND ORDER
This breach of contract suit is set for trial on Monday, June 16, 2008. In this decision, the Court decides certain issues addressed at the final pretrial conference on June 11, 2008 which have been the subject of further briefing.
I. Interpretation of "Full Access" Provision of Contract
The parties dispute whether the Court should instruct the jury as to the meaning of the contractual term on which Wehrenberg's claim hinges: "full access" to the funds held on his behalf by Federal Signal in the "Rabbi Trust," under paragraph 3.6 of his Separation Agreement with Federal Signal. For the reasons set out below, the Court determines that (1) the Separation Agreement is clear on its face, such that its interpretation is properly the role of the Court as a matter of law; (2) contrary to Federal Signal's argument that "full access" must be read to mean access pursuant to the terms of the company's employee-benefit plan, the contract's plain language imposes no such qualification; and (3) the Court will instruct the jury that "full access" means that Wehrenberg had immediate and unimpeded access to the funds held on his behalf in the "Rabbi Trust" as of September 1, 2004, which the parties agree is the "Separation Date" as contemplated by the contract.
Under Illinois law, which governs under paragraph 12 of the Separation Agreement, "contracts are interpreted according to the 'four corners' rule: an agreement, when reduced to writing, must be presumed to speak the intention of the parties who signed it. It speaks for itself, and the intention with which it was executed must be determined by the language used. It is not to be changed by extrinsic evidence." Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992-93 (7th Cir. 2007) (quoting Davis v. G.N. Mortgage Corp., 396 F.3d 869, 878 (7th Cir. 2005)) (alterations and internal quotation marks omitted). The Court looks first to the contract's language-and only to that language. Id. at 993 (citing Air Safety, Inc. v. Teachers Realty Corp., 185 Ill. 2d 457, 462, 706 N.E.2d 882, 884 (1999)). If that language is free of ambiguity, the Court interprets the contract's terms with reference to their plain meanings (unless otherwise defined) and does not draw on extrinsic evidence. Id. (citing Utility Audit, Inc. v. Horace Mann Serv. Corp., 383 F.3d 683, 687 (7th Cir. 2004)); see also LaSalle Nat'l Trust, N.A. v. ECM Motor Co., 76 F.3d 140, 144-45 (7th Cir. 1996) (citing La Throp v. Bell Fed. Savings & Loan Ass'n, 68 Ill. 2d 375, 370 N.E.2d 188 (1977)) (interpretation of unambiguous contract is for the court). Ambiguity is present when the contract language is susceptible to more than one interpretation. Camico Mut. Ins., 474 F.3d at 993 (citing Air Safety, Inc., 185 Ill. 2d at 462-63, 706 N.E.2d at 884); see also Pioneer Trust and Sav. Bank v. Lucky Stores, Inc., 414 N.E.2d 1152, 1154, 91 Ill. App. 3d 573, 575 (citing First Nat'l Bank v. Victor Comptometer Corp., 123 Ill. App. 2d 335, 341, 260 N.E.2d 99, 102 (1970)). "If . . . the court concludes that the contract is ambiguous, the resolution of the ambiguity becomes a question of fact, to be decided by the trier of fact." LaSalle Nat'l Trust, 76 F.3d at 145 (citing Farm Credit Bank of St. Louis v. Whitlock, 144 Ill. 2d 440, 447, 581 N.E.2d 664, 667 (1991)).
With regard to the first step of "four corners" analysis, Federal Signal argues that paragraph 3.6 of the Separation Agreement is unambiguous: "the plain meaning is that Plaintiff is entitled to receive his stock in the Rabbi Trust pursuant to the terms of the Plan." Def. Br. at 5. The Court disagrees. Paragraph 3.6 of the separation agreement reads in full as follows:
3.6 Other Benefits. WEHRENBERG shall be entitled to all vested rights and benefits under FEDERAL'S other employee benefit plans in accordance with their terms.
Additionally, as of the Separation Date, he shall have full access to the funds which are held on his behalf under a Federal Signal Corporation Rabbi Trust.
The plain meaning of paragraph 3.6 is not, as Federal Signal contends, that Wehrenberg could obtain the Rabbi Trust funds in accordance with the terms of Federal Signal's employee benefit plans, specifically its 401(k) plan. Federal Signal correctly points out that the Rabbi Trust, also called the Supplemental Savings Plan, incorporates by reference Federal Signal's 401(k) employee benefit plan and gives the Supplemental Savings Plan's administrator the same powers with respect to the Rabbi Trust as it does with respect to the 401(k) plan. Federal Signal contends that the 401(k) plan's provisions for distributions to beneficiaries require a written request to the administrator on a form the administrator provides and give the administrator 30 days to respond to the request as well as the discretion to make in-kind distributions rather than cash distributions. Federal Signal argues that these provisions likewise define what "full access" to the Rabbi Trust funds means under paragraph 3.6.
The problem with this analysis is that the plain language of section 3.6 treats Wehrenberg's entitlements to rights and benefits under the other employee benefit plans in one way-in accordance with those plans' terms-but marks out, using distinct language, a different approach to the funds held on Wehrenberg's behalf in the Rabbi Trust. First, the word "additionally" begins the sentence concerning the Rabbi Trust, marking a shift from the previous sentence and the beginning of a discrete, independent idea. Second, the two sentences use distinct verbs and modifiers to describe what Wehrenberg gets: in the first, he is entitled to benefits under those plans "in accordance with" plan terms; in the second, he has "full access" to the Rabbi Trust funds, with the only modifying clause relating to the Separation Date. This last point is particularly significant. As Federal Signal argues, the plan terms on which it relies set out various time frames in which requests for distributions may be satisfied; thus, the timing of Wehrenberg's entitlements as set out in the first sentence depends implicitly on those terms. In contrast, the second sentence sets up its own, explicit timing regime: full access as of the Separation Date. Finally, an additional terminological difference divides the first from the second sentences and suggests that the terms of Federal Signal's employee benefit plans do not inform the meaning of "full access." Specifically, Wehrenberg is entitled to rights and benefits under the benefit plans but is meant to have access to funds held for him in the Rabbi trust.
In sum, Federal Signal is mistaken about the plain meaning of section 3.6. But it is correct when it notes that, because the contract language on which the parties' dispute turns is unambiguous when read for its plain meaning, the contract's interpretation is properly the role of the Court. The meaning of paragraph 3.6, according to the plain meaning of the language used therein, is not susceptible to more than one interpretation. See Pioneer Trust, Inc., 414 N.E.2d at 1154, 91 Ill. App. 3d at 575. As the Court's rejection of Federal Signal's proffered interpretation demonstrates, the provision for "full access" to the Rabbi Trust funds does not come with qualifications-in contrast to the entitlement to rights and benefits under Federal Signal's other plans. The only modifier of "access" is "full," meaning plenary and thus, in the context of access, unimpeded to any degree. "As of the Separation Date" means that this plenary access is immediate, rather than gradual or phased over some series of dates or other benchmarks. Accordingly, the Court will instruct the jury at trial that "full access" means that Wehrenberg was entitled to have immediate and unimpeded access to the assets held on his behalf in the Rabbi trust as of the Separation Date.
II. Materiality Standard and Wehrenberg's Proposed Testimony
Wehrenberg's primary theory of liability is that Federal Signal did not give him "full access" to the funds in the Rabbi Trust because it determined unilaterally to distribute those funds to him in the form of Federal Signal stock and then imposed what his counsel characterizes as the equivalent of a restrictive endorsement, by telling him that Federal Signal was about to issue a quarterly earnings report that would be material and would affect the price of the stock. This, Wehrenberg argues, effectively precluded him from selling the stock, out of fear that he would face liability for insider trading in violation of the federal securities laws. As a result, he says, he was forced to hold the stock until after the earnings report was made public. Once that happened, the stock price dropped, and Wehrenberg lost money he would have made had he been able to sell the stock sooner or had Federal Signal distributed the Rabbi Trust funds in cash.
Both sides agree, and have proposed in draft jury instructions, that the jury should be instructed on certain aspects of insider trading law so that it can determine whether Wehrenberg has proven a breach of the "full access" clause. They dispute, however, the particulars of these instructions. In a somewhat related dispute, concerning three motions in limine filed by Federal Signal, the parties contest whether Wehrenberg should be able to testify regarding his understanding of written communications that he received from Paul Wittig, a Federal Signal employee, and from David Morris, an outside attorney for Federal Signal, regarding his request for a distribution of his Rabbi Trust funds. To some extent, the legal issue underlying these disputes ...