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Barwin v. Village of Oak Park

United States District Court, N.D. Illinois, Eastern Division

January 13, 2020




         Plaintiff Thomas Barwin (“Barwin”) filed suit against the Defendant Village of Oak Park (“Oak Park”), alleging breach of contract and promissory estoppel. Before the Court is Oak Park's motion to dismiss Barwin's First Amended Complaint, and Barwin's motion to file a second amended complaint. For the following reasons, Oak Park's motion to dismiss (Dkt. 46) is granted, and Barwin's motion to file a second amended complaint (Dkt. 63) is granted.


         Barwin served as the Village Manager for Oak Park from mid-2006 through early 2012. (Dkt. 63-1, ¶4). In early 2012, after being informed that the Board of Trustees of Oak Park (“Board”) planned to terminate him if he did not resign, Bar-win accepted the Board's offer to resign and was given a severance package. (Dkt. 63-1, ¶¶ 37-38). On August 6, 2014, Barwin filed suit against Oak Park alleging (1) breach of the Village Manager Employment Agreement (“Employment Agreement”) governing Barwin's employment, and (2) promissory estoppel with regards to Oak Park's alleged representations regarding the purchase of out-of-state pension credits. (Dkt. 1).

         On March 25, 2015, the district court granted Oak Park's motion to dismiss Barwin's original complaint in its entirety with prejudice. (Dkt. 19). Accepting the facts alleged in the original complaint as true, the court found that Barwin's breach of contract claim which was based on Oak Park's alleged failure to comply with the evaluation process was (1) not violated and (2) Oak Park “performed its contractual obligations and was within its rights under the Employment Agreement to terminate Barwin in the manner it did.” (Dkt. 19 at 6). In his original complaint Barwin challenged his inability to purchase pension credits under a theory of promissory estoppel. (Dkt. 1 at 12-13). The court found Barwin failed to state a claim for the pension benefits under promissory estoppel because the Employment Agreement did not contain any provision to allow the purchase of pension credits and “the Employment Agreement contains an integration clause that declares the contract to be the complete and final agreement between the parties, with any previous negotiations deemed superseded by the final writing.” (Dkt. 19 at 7). The court found that accepting the oral promises as true, Barwin failed to state a claim for promissory estoppel under Illinois law which prohibits consideration of oral promises made prior to the execution of a contract when the contract contains an integration clause. (Id. at 8). The court noted that Barwin, an experienced municipal manager, was sophisticated and was assumed to understand the terms of the Employment Agreement, including the integration clause. (Id. at 9-10). Finding no way to cure these deficits, the court dismissed the case with prejudice.

         Barwin timely filed a motion for reconsideration and for leave to amend the complaint on April 22, 2015. (Dkt. 21). On August 24, 2018, the district court denied Barwin's motion for reconsideration but granted Barwin's motion to amend his complaint and allowed him to proceed on his new claim that Oak Park breached the Employment Agreement “by interfering with Barwin's expectations under the agreement . . . that Oak Park would not terminate his employment to prevent him from retiring and receiving [his retirement] benefits.” (Dkt. 39 at 8). The court found “Barwin's newly-proffered theory of liability tenuous, given the alleged concerns about his performance acknowledged in his original complaint . . . and that fact that no such theory has been raised by Barwin before (even though it could have been).” (Id. at 9.) However, the court found the amendment was minimally prejudicial to Oak Park and was not futile. Id.

         Barwin filed his first amended complaint on September 17, 2018. (Dkt. 44). On October 23, 2018, Oak Park filed a motion to dismiss the amended complaint.[1]On May 7, 2019, Barwin filed a motion for leave to file a second amended complaint based in part on newly discovered evidence obtained during discovery. (Dkt. 46). The case was reassigned to this Court on August 22, 2019. (Dkt. 80).

         Before the Court are Oak Park's motion to dismiss the first amended complaint and Barwin's motion to file a second amended complaint.


         A. Factual Allegations:

         The following facts are alleged in Barwin's First Amended Complaint and are presumed true for the purpose of resolving the pending motion to dismiss. Barwin served as the Village Manager for Oak Park from mid-2006 through early 2012. (Dkt. 44, ¶3). He was recruited for this position in 2006 when he was working as City Manager in Michigan. (Dkt. 44, ¶1). He was concerned about leaving his position as City Manager “because of the impact his departure would have on his retirement benefits.” (Id.).

         On June 29, 2006, Barwin and Oak Park executed the Village Manager Employment Agreement (the “Agreement”), which was an at-will employment contract setting forth the terms of Barwin's employment, including compensation and benefits. (Dkt. 44, ¶15; Dkt. 44-1). Regarding retirement benefits, Section 7A of the Agreement provided that Barwin was required to become a member of the Illinois Municipal Retirement Fund (“IMRF”) upon commencing employment, and both Bar-win and Oak Park were responsible for making IMRF required contributions. (Dkt. 44, ¶2; Dkt. 44-1 at 3). The Agreement also included procedures for terminating Barwin's employment and providing that he would be entitled to a severance package if he were terminated for reasons other than cause. (Dkt. 44-1 at 4-5). Additionally, the Agreement specified procedures for Oak Park to conduct an annual performance evaluation of Barwin, including that both parties were to be afforded an opportunity to: (1) prepare a written evaluation, (2) meet and discuss the evaluation, and (3) present a written summary of the evaluation results. (Dkt. 44, ¶19; Dkt 44-1 at 5).

         From mid-2006 through early 2012, Barwin achieved many successes as Village Manager of Oak Park and faithfully made his IMRF-required contributions. (Dkt. 44, ¶¶3, 17-18). Every year from 2007 through 2011, the Board followed an annual evaluation process whereby: (1) Barwin first prepared a self-evaluation which was presented to the full Board; (2) each Board member then prepared an evaluation of Barwin which was summarized and provided to him; (3) Barwin next met with the full Board to discuss the feedback from the Board; and (4) Barwin then received a final performance evaluation which was used to determine employment actions including salary increases. (Dkt. 44 at ¶20). The amended complaint alleges that in 2012, when it came time to give Barwin his review for 2011, the Board deviated from the procedures it had followed from 2007-2011 and held a closed meeting where the Board discussed Barwin's performance and then decided to terminate his employment at the end of the meeting. (Id. at ¶6, 21-22). The Board withdrew an invitation for Barwin to attend this meeting. (Id. at ¶22). The Board's decision to terminate Barwin came shortly after concerns were expressed in the meeting that Barwin would retire in 2014 and receive pension benefits. One member of the Board stated on the record that Barwin “can't” retire and collect his retirement benefits, indicating that Oak Park “can't afford it.” (Id. at ¶23). The amended complaint also alleges that on numerous prior occasions when discussing hiring decisions with Bar-win, David Pope (“Pope”), the President of the Board of the Village expressed concerns about payment of pension benefits, stating that adding new employees would adversely impact Oak Park's retirement financial obligations. (Id.).

         On February 14, 2012, the day after the Board's closed meeting, Barwin met with Pope and one of the Trustees, and was informed that the Board had authorized a separation package if he would agree to resign within 48 hours and sign a release of claims against Oak Park. (Dkt. 44 at ¶25). He was further advised that the Board would publicly vote to terminate him for cause the following Monday if he did not resign. (Id.). Barwin was then presented scoring sheets from his performance review and asked whether he wanted to discuss them. (Id. at ¶26).

         Since Barwin was told that he would be terminated if he did not resign, he decided that resigning his position would give him the best chance of securing future employment and mitigating his damages. (Dkt. 44 at ¶27). After his resignation, Oak Park denied Barwin's request to purchase enough out-of-state reciprocal pension system credits for his pension to vest, even though it had authorized such purchases for employees who had been employed by Oak Park in the past. (Id. at ¶28).

         B. ...

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