United States District Court, N.D. Illinois, Eastern Division
SAMUEL R. WILLCOXON, Plaintiff,
CONCERTOHEALTH, INC., f/k/a FIDELIS, SENIORCARE, INC., Defendant.
H. Lefkow U.S. District Judge.
Concerto Healthcare, Inc.'s motion to dismiss
plaintiff's complaint (dkt. 11) is granted without
prejudice. See Statement.
Samuel Willcoxon founded Concerto, a primary care and
supporting services provider for complex, frail, elderly, and
dual-eligible patients. (Dkt. 1-1 ¶¶ 7-8.) He most
recently served as its CEO and Chairman of the Board.
(Id. ¶ 8.) In October 2013, Concerto's
Board of Directors approved a Management Incentive Plan
(Plan), intended to encourage its participants to contribute
to Concerto's success by creating a system of
“units” that could later be converted to a
payment if a Plan-defined “change of control”
occurred. (Id. ¶¶ 9-11.) At approximately
the same time, Willcoxon and Concerto entered into a Plan
Award Agreement (PAA), which granted him 250, 000 units (MIP
Award). (Id. ¶ 11.) The MIP Award was to
terminate when Willcoxon left his positions. (Id.
parties later entered into an Amended and Restated Executive
Compensation and Noncompetition Agreement (ECNCA) stating
that Concerto would deem Willcoxon in good standing for the
MIP Award if he remained through July 1, 2015 or the hiring
of a new CEO, and if he did not leave voluntarily without
good cause or was not fired for cause. (Id.
¶¶ 13-14.) The ECNCA was later amended to delete
the provision requiring Willcoxon to stay on through the
employment of a new CEO. (Id. ¶ 14.) Concerto
terminated Willcoxon's employment on June 26, 2015,
though not for cause. (Id. ¶ 15.) At the same
time, the parties entered into a Separation and Release of
Claims Agreement (Separation Agreement), which stated that
Willcoxon's MIP Award “shall not be subject to
forfeiture” excepting violations. (Id. ¶
16.) Those violations never occurred. (Id. ¶
October 2016, Concerto sent Willcoxon a copy of an
“Action by Unanimous Written Consent of the Board of
Directors of Concerto Healthcare, Inc., ” which stated
the Plan was terminated as a condition of the company's
reorganization. (Id. ¶ 18.) This caused the
immediate and complete forfeiture of the MIP Award with no
compensation to Willcoxon. (Id.) Willcoxon moves
under the Declaratory Judgment Act (DJA) for a declaration that
the MIP Award exists and is legally enforceable, and that he
is entitled to payment for the MIP Award in the event of a
change of control at Concerto. (Id. ¶ 1.)
Concerto moves to dismiss the complaint under 12(b)(6),
claiming that Willcoxon is attempting to disguise an action
for breach of contract as one for a declaratory
purpose of the Declaratory Judgment Act “is to avoid
accrual of avoidable damages to one not certain of his rights
and to afford him an early adjudication, without waiting
until his adversary should see fit to begin suit, after
damage had accrued.” NUCOR Corp. v. Aceros Y
Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 577
(7th Cir. 1994) (internal quotation marks and citations
omitted); see also Med. Assur. Co. v. Hellman, 610
F.3d 371, 377 (7th Cir. 2010) (quoting 10B Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal
Practice and Procedure § 2751 (3d ed. 1998)) (“The
remedy made available by the Declaratory Judgment Act . . .
relieves potential defendants from the Damoclean threat of
impending litigation which a harassing adversary might
brandish, while initiating suit at his leisure-or never. It
permits actual controversies to be settled before they ripen
into violations of law or a breach of contractual duty and it
helps avoid a multiplicity of actions by affording an
adequate, expedient, and inexpensive means for declaring in
one action the rights and obligations of litigants.”).
Whether to issue a declaratory judgment is within the sound
discretion of the court. Bell v. Taylor, 827 F.3d
699, 711 (7th Cir. 2016).
argues that Willcoxon inappropriately seeks a declaration
that Concerto has breached the non-forfeiture clause of the
Separation Agreement. (Dkt. 1-1 ¶ 16.) Willcoxon denies
this, responding that the “gravamen of the Complaint is
the continued disclaimer by Concerto of its contractual
duties under the Plan and the PAA . . . .” (Dkt. 17 at
7; see also dkt. 1-1¶ 28 (seeking an
“immediate and definitive determination of
Concerto's purported decision to terminate the Plan and
the alleged forfeiture of Willcoxon's MIP award . . .
accepting Willcoxon's response as true, the claim must be
dismissed. According to Willcoxon, Concerto contends its
refusal to honor the MIP Award is in accordance with the
Plan. (Dkt. 1-1 ¶ 24.) (Section 8 of the Plan is titled
“Amendment and Termination, ” and it describes
the proper procedure for terminating the Plan. (Dkt. 1-1, Ex. A
§ 8.)) Also, Willcoxon pleads that Concerto has
purportedly terminated the Plan. (Dkt. 1-1 ¶ 18.)
Therefore, Willcoxon is asking the court to look backwards to
determine whether Concerto acted in accordance with section 8
when it dissolved the Plan (which in turn dissolved the MIP
Award). “Declaratory judgments, however, are meant to
define the legal rights and obligations of the parties in the
anticipation of some future conduct.” Johnson v.
McCuskey, 72 Fed.Appx. 475, 477 (7th Cir. 2003)
Willcoxon's complaint does not serve the purpose of the
DJA to avoid accrual of avoidable damages to one not certain
of his rights: Willcoxon is not in danger of accruing damages
or of being sued. Rather, based on the alleged facts, any
change of control would cause Willcoxon to suffer
damages; Concerto would accrue them. And if that were to
happen, Willcoxon could bring suit against Concerto, not the
other way around. “In essence, a declaratory judgment
suit allows a party to ask the court if it can do something
without incurring liability. It does not permit a party to
ask if an adversary can do something without incurring
liability.” Int'l Paper Co. v. Androscoggin
Energy LLC, No. 00 C 6215, 2003 WL 21468623, at *3 (N.D.
Ill. June 20, 2003).
Concerto's motion to dismiss is granted without prejudice
to Willcoxon's seeking a remedy for breach of contract.
The case is terminated.
 The court has jurisdiction under 28
U.S.C. § 1331. Venue is proper under 28 U.S.C. §
1391(b) because substantially all of the events giving rise
to the ...