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THIRD DIVISION
June 17, 1998 Nos.
1-97-0605, 1-97-0622, Consolidated
MODIFIED ON DENIAL OF REHEARING
JUSTICE CAHILL delivered the opinion of the court:
We revisit plaintiffs' breach of contract suit against defendants
Mundelein College and Loyola University.
In an earlier appeal, we reversed summary judgment for
defendants, holding that an issue of fact remained about whether the
coming together of Loyola and Mundelein extinguished Mundelein's tenure
obligations to plaintiffs. After
a trial on remand, the trial court entered judgment for plaintiffs Yohma
Gray and Elvira Fernandez Hasty against Mundelein only, including
prejudgment interest. Judgment was entered against plaintiff Judith Myers.
The trial court also granted summary judgment to Loyola on
plaintiffs' successor liability claims.
We now affirm the trial court's judgment in favor of plaintiffs
Gray and Hasty against Mundelein and summary judgment for Loyola.
We reverse the judgment against plaintiff Myers and the award of
prejudgment interest to plaintiffs.
Defendants Loyola and Mundelein argue on appeal that: (1) the trial
court exceeded the mandate of Gray v. Loyola University of Chicago,
274 Ill. App. 3d 259, 652 N.E.2d 1306 (1995) (Gray I); (2) the
trial court's interpretation of Mundelein's faculty manual
"contradicts all evidence of intent presented at trial"; (3)
plaintiffs did not prove that Mundelein's breach caused damages beyond two
years' salary; (4) the trial court erroneously retained jurisdiction to
award future damages; and (5) the trial court erred in awarding
prejudgment interest.
Plaintiffs cross-appeal. They
argue that the trial court erred by finding Loyola, as a successor
corporation, is not liable for Mundelein's breach.
Plaintiff Myers argues that the trial court erred in finding that
she waived her right to sue for loss of her tenure at Mundelein by
accepting a five-year teaching contract with Loyola.
Plaintiffs were tenured professors at Mundelein College until 1992.
Under Mundelein's faculty manual, tenured positions could be
terminated for the following reasons: (1) financial exigency; (2) the
discontinuance of a program or department; (3) health; or (4) cause.
The manual also explained how "financial exigency" was to
be established:
"If, after consultation with the administration, faculty, and
other bodies, the [board of trustees] determines that the financial
viability of the institution is endangered and that a state of exigency
exists, the Board shall so declare a state of financial exigency."
In 1989 and 1990, Mundelein was faced with serious financial
problems. But the board of
trustees never declared a state of financial exigency.
In the summer of 1989, Mundelein borrowed $4 million from
Continental Bank. The
Catholic Order of the Sisters of Charity of the Blessed Virgin Mary (the
BVM Order) agreed to guarantee the loan.
In exchange, Mundelein gave the BVM Order a security interest in
some of its property. Mundelein
also agreed not to obtain other loans without approval of the BVM Order
and not to borrow from Mundelein's endowment fund.
Should Mundelein violate the agreement, Mundelein's board of
trustees would have 90 days to either "cure the breach" or vote
to close the college within 18 months.
In October and November 1990, Mundelein borrowed from its endowment
fund to pay bills. The BVM
Order demanded that Mundelein's board of trustees "cure the
breach" or vote to close the school.
To prevent closing, Mundelein negotiated with Loyola.
On April 15, 1991, Mundelein and Loyola agreed to an
"affiliation." Under
their agreement, Loyola acquired Mundelein's assets and assumed certain
Mundelein financial obligations. Mundelein
was to remain in existence as a separate college governed and administered
by Loyola. Loyola agreed to
continue Mundelein's educational mission and to accept its students.
Loyola agreed to offer 26 of Mundelein's tenured faculty tenured
positions at Loyola; to offer 11 tenured faculty a five-year appointment;
and to offer three tenured faculty payments equal to two years' salary in
lieu of employment. The
agreement was finalized on June 14, 1991.
On April 29, 1991, Mundelein sent to all tenured faculty a document
entitled "1991-92 CONDITIONAL AND TERMINAL CONTRACT FOR TENURED
FACULTY." This document
stated that it was conditioned on Mundelein remaining independent and that
if Mundelein College became part of Loyola, the document would not take
effect.
When Mundelein joined Loyola, the three plaintiffs in this suit
were not offered tenured faculty positions at Loyola.
Loyola offered Myers a five-year nontenured position.
She accepted. Loyola offered Gray and Hasty two years' salary, which they
rejected.
In the first appeal of this case, we reversed the trial court's
finding that plaintiffs' tenure rights were extinguished when Mundelein
affiliated with another school and ceased to exist as an independent
college. We found "no law to support the proposition that an
independent college ceases to exist and its contractual obligations are
extinguished when it becomes part of a university."
Gray I, 274 Ill. App. 3d at 264.
We held that the question of whether the tenure rights of Mundelein
faculty survived the "coming together" of Mundelein and Loyola
could not be resolved as a matter of law because the faculty manual did
not address "the fate of the faculty in the case of an affiliation,
merger, or de facto merger."
Gray I, 274 Ill. App. 3d at 266.
The silence of the manual on the issue of tenure after affiliation
created a question of fact as to the intent of the parties.
On remand, the trial court heard testimony about the parties'
intent regarding Mundelein's tenure obligations in the event of
affiliation. Plaintiffs testified that, although the effect of an
affiliation on tenure was never discussed, they expected Mundelein to
"safeguard" their tenure rights.
Mundelein presented two witnesses who testified about the custom of
educational institutions with respect to tenure after affiliation.
Peter Ruger, an attorney with 20 years' experience representing
educational institutions, testified that the American Association of
University Professors (the AAUP) publishes a "Red Book" that
contains "views of faculty on a variety of issues that affect
faculty." Ruger
testified that the "Red Book" is "used by the higher
education community to determine the meaning of tenure."
According to Ruger, under the "prevailing view of the academic
community" and the "Red Book," an affiliating college is
not obliged to preserve tenure for all tenured faculty. Ruger testified that under AAUP guidelines a declaration of a
financial exigency is not required before a college terminates tenure as a
consequence of affiliation.
Lawrence White, who served as counsel for the AAUP and as in-house
counsel for several schools, described the AAUP as an organization of
university professors that "formulate[s] and disseminate[s] policies
[about] the rights and duties of faculty members across the country."
White testified that according to the custom of educational
institutions and AAUP standards, an institution that acquires another in
an affiliation is not required to hire all the tenured faculty.
Nor must the acquired institution insist that all its tenured
faculty be hired. Both Ruger
and White suggested that such requirements would hamper negotiations and
discourage affiliation.
The trial court ruled that the Mundelein faculty manual set out the
reasons and procedures for tenure termination and made no provisions for
termination when an affiliation occurs.
Although financial exigency was a valid reason to terminate tenure,
no financial exigency had been declared by Mundelein's board of trustees
as required under the manual. The
trial court further ruled that even if Mundelein had declared a financial
exigency, a bona fide exigency did not exist.
The court acknowledged Mundelein's "cash flow" problems,
but noted that Mundelein still had valuable assets.
The court also found that Mundelein's board of trustees
"triggered a breach" of the agreement with the BVM Order,
thereby causing the financial crisis on which Mundelein relied to
"justify" affiliation.
The trial court did not find useful the testimony regarding the
common practices of affiliating institutions or the AAUP guidelines. The court reasoned that "the parties never agreed that
the AAUP [guidelines] would abrogate tenure rights upon an
affiliation." Even if
the AAUP guidelines controlled, the AAUP guidelines required a bona
fide financial exigency, faculty involvement, and due process to
end tenure in the event of affiliation.
The trial court ruled in favor of plaintiffs Gray and Hasty on
their breach of contract claims and awarded damages in the amounts of
$262,371 and $205,349. The
trial court ruled against plaintiff Myers, holding that she had waived her
claim by accepting a five- year nontenured teaching position at Loyola.
Plaintiffs moved for a recalculation of damages.
The trial court then recalculated damages through December 31,
1996, and ruled that Gray and Hasty were entitled to prejudgment interest.
The trial court also said that plaintiffs may bring future actions
for damages obtained after trial. The
trial court granted summary judgment for Loyola on plaintiffs' successor
liability claim, holding that plaintiffs had not established a de facto
merger.
Mundelein first argues that the trial court exceeded the mandate of
Gray I on remand by finding, after trial, that there was no bona
fide financial exigency. Mundelein
refers to the trial court's comments:
"[I]t is clear that the Board of Trustees never declared a
financial exigency ***.
Even if *** Mundelein had declared a financial exigency this [c]ourt
could not conclude, based on the evidence before the [c]ourt, that a bona
fide financial exigency actually existed.
The evidence clearly indicates that Loyola valued Mundelein at
$65.7 million. *** ***
Mundelein had cash flow problems but, based upon the valuation of
$65.7 million at a cost [to Loyola] of only $12.8 million, there is no
support for the conclusion that a financial exigency existed. ***
The Mundelein Board of Trustees *** intentionally triggered a
breach of the loan guarantee covenant knowing it would result in a call
for a $4 million loan. *** The 'breach' precipitated the 'crisis' which 'justified' the
action *** [of] entering into negotiations with Loyola *** regarding
'affiliation.'"
Mundelein relies on Ptaszek v. Konczal, 10 Ill. 2d 326, 140
N.E.2d 725 (1957). In Ptaszek,
our supreme court had earlier reversed the trial court's ruling and
remanded, noting that one issue, a trustee's duty to account, was
"not at issue." Ptaszek,
10 Ill. 2d at 327. On remand,
the trial court rendered findings on that issue and ordered an accounting.
Our supreme court reversed because
the "trial court did not follow our opinion and mandate."
Ptaszek, 10 Ill. 2d at 327.
Mundelein points out that in Gray I, we held that
Mundelein's "state of severe financial crisis" and that the
affiliation was "a direct result of the financial crisis" were
undisputed facts. Gray I,
274 Ill. App. 3d at 263. Mundelein
argues that, like the trial court in Ptaszek, the trial court here
exceeded its mandate by making a ruling that contradicted our findings of
"undisputed fact."
We acknowledge that the trial court's findings deviate from our
finding in Gray I that the uncontradicted evidence established
affiliation was driven by a legitimate financial crisis.
But the trial court's comments are superfluous in context. In Gray I, the evidence established, and we held, that
financial exigency had to be formally declared to extinguish plaintiffs'
tenure rights. That was never
done. The trial court's
findings that there was no genuine financial crisis were unnecessary to a
resolution of the case and do not require reversal.
Mundelein next argues that the trial court erred in finding that
the parties did not intend affiliation to release Mundelein from tenure
obligations to plaintiffs. The
interpretation of a contract is a question of law to be reviewed de
novo on appeal. Regnery
v. Meyers, 287 Ill. App. 3d 354, 360, 679 N.E.2d 74 (1997).
But Mundelein suggests that something outside the manual, for which
it offered extrinsic evidence at trial, governs here. Where extrinsic evidence is needed to establish the intent of
the parties, that intent is a question of fact and will not be disturbed
on review unless it is contrary to the manifest weight of the evidence.
See Howard A. Koop & Associates v. KPK Corp., 119 Ill.
App. 3d 391, 398, 457 N.E.2d 66 (1983).
Mundelein emphasizes the trial court's finding that "[n]either
the faculty of Mundelein *** nor Mundelein itself ever considered what
would happen if there were an affiliation or merger."
Mundelein maintains that this finding "eliminated any
possibility that Mundelein *** contractually 'intended' to assume
obligations in the event of an affiliation."
Mundelein argues that the court inverted the burden of proof and
required Mundelein to "disprove the existence and breach of a
'phantom' contract term." Mundelein contends that plaintiffs must prove
the existence of a contract term obligating Mundelein to safeguard
plaintiffs' contractual rights in the event of affiliation.
But plaintiffs' argument is based on unambiguous contract
terms--that Mundelein can terminate tenure for no reason other than those
listed in the manual. And if
affiliation is driven by a financial exigency, tenured faculty are
entitled to participation in the determination and to a board declaration
that a financial exigency existed. Gray
I left open the possibility that Mundelein could show on remand the
existence of an agreement, other than the faculty manual, that controlled
the parties' tenure obligations in an affiliation.
But where a party suggests that an agreement outside the underlying
contract controls, the party relying on it bears the burden of proof.
Cf. Ashe v. Sunshine Broadcasting Corp., 90 Ill. App.
3d 97, 100, 412 N.E.2d 1142 (1980).
Mundelein further argues that the manual term requiring a
declaration of financial exigency applies only where tenure is terminated
for one of the reasons specified in the manual.
Mundelein suggests that "financial crisis affiliation,"
although not among the reasons listed in the manual, is another way that
termination of tenure may be achieved, and that declaration of financial
exigency is not required before such an affiliation.
Mundelein suggests that in Gray I we already determined that
tenure could be terminated for a reason not listed in the manual.
Mundelein argues that if "this court had already decided that
the [m]anual procedures applied, there would have been no need for a
remand." We agree with the Mundelein analysis, but not with the
conclusion.
In Gray I we acknowledged that the faculty manual outlines
reasons for and procedures by which Mundelein could terminate tenured
faculty. Gray I, 274 Ill. App. 3d at 260. We did not hold that the faculty manual lacked terms on which
plaintiffs could base their breach of contract claim. We addressed only the bases of the trial court's first
judgment: that the yearly employment contract, the affiliation, and the
closure of Mundelein as an "independent college" extinguished
Mundelein's obligations under the manual.
See Gray I, 274 Ill. App. 3d at 262.
We concluded that the trial court erred in finding, as a matter of
law, that they did. We left
open the possibility that, as a matter of fact, the elimination of tenure
was a necessary consequence of affiliation in an educational setting and
could be established as such on remand.
On remand the Mundelein expert witnesses and evidentiary materials
attempted to establish just that.
Mundelein suggests that since the parties did not anticipate
affiliation in the manual, custom and practice of educational institutions
controls this case. Mundelein
argues that the AAUP guidelines should be used to "fill the [m]anual's
silences." This was a
proper argument within the context of the remand.
But it was not an argument that Mundelein was forced to make
because the burden of proof was improperly shifted.
If summary judgment had not been entered in Mundelein's favor,
Mundelein would have been allowed to make the argument at trial.
Custom and usage is an aid to finding the intent of the parties
when the contract was made. See
Chicago Bridge & Iron Co. v. Reliance Insurance Co., 46 Ill. 2d
522, 531-32, 264 N.E.2d 134 (1970). Custom
and usage may only be relied upon to interpret an agreement if the
practice was "so well known, uniform, long-established and generally
acquiesced in as to induce the belief that the parties contracted with
reference to it." Nielsen
v. United Services Automobile Asso'n, 244 Ill. App. 3d 658, 664, 612
N.E.2d 526 (1993). Evidence
of custom and usage is only admissible to explain uncertain or ambiguous
terms. When terms of a
contract are clear, those terms alone determine the obligations of the
parties. Nielsen, 244
Ill. App. 3d at 663-64.
Mundelein would have us refer to the custom and usage of
educational institutions even though clear contract terms apply.
We agree that the evidence shows the parties never considered the
impact of affiliation, but the parties defined precise circumstances under
which Mundelein could terminate tenure.
While Mundelein offered evidence that custom and usage would
dictate that affiliation abolished tenure, they offered no evidence that
plaintiffs were aware of such custom and usage or that plaintiffs
understood that the faculty manual tenure provisions would not apply in an
affiliation scenario. Absent
such knowledge, plaintiffs had a right to rely on the manual.
The manual provisions are controlling here.
Mundelein next argues, without citing authority, that the trial
court's decision violates public policy by encouraging school closures
rather than affiliations. We
disagree. Requiring Mundelein to adhere to the terms set out in a
manual it drafted before terminating tenure violates no public policy.
Nor does it encourage school closure.
Mundelein could have taken whatever course was necessary to remedy
its financial difficulties without continued obligation to tenured faculty
if it had followed the procedures set out in its manual.
Mundelein next argues that plaintiffs failed to prove damages
beyond the two years' salary they were offered.
Plaintiffs were awarded damages through December 31, 1996. Mundelein argues that if Mundelein had not affiliated with
Loyola, Mundelein would have closed in 1992, and plaintiffs could not have
earned more than one year's additional salary.
The measure of damages for breach of an employment contract is the
amount the plaintiff would have earned absent the breach, less what he
earned or could have earned during the contract period after his
termination. Ashe v. Sunshine Broadcasting Corp, 90 Ill. App. 3d
97, 100, 412 N.E.2d 1142 (1980).
Mundelein argues that the following evidence showed that Mundelein
would have closed in 1992: plaintiffs' allegations in their pleadings that
Mundelein was insolvent at the time of the affiliation; the chair of
Mundelein's board of trustees' testimony that the college's financial
crisis was severe; a faculty committee's report to the board of trustees
in April 1991 that a "state of exigency exists, and *** the [c]ollege
is insolvent"; the 1991-92 annual contract provision that "all
employment of faculty by the college shall terminate on June 30,
1992"; and testimony from a representative of the BVM Order that the
BVM Order was serious about forcing Mundelein to close.
We decline to rely on the imprecise use of the term
"insolvent" in plaintiffs' pleadings and the faculty committee
recommendations. The term "insolvency," as used in those documents,
is vague. Under Illinois and
federal bankruptcy law, a debtor is insolvent if the sum of his debts is
greater than his property at a fair valuation.
See 11 U.S.C. '101(32)(A)
(1994); 740 ILCS 160/3 (West 1996). There
was no judicial finding of insolvency here.
Mundelein cites no authority that plaintiffs must prove Mundelein
"[w]ould have survived" absent Mundelein's breach.
And Mundelein's claim that it would have closed is speculative.
The fate of Mundelein is not "undisputed," as Mundelein
suggests. Mundelein ignores
the chair of Mundelein's board of trustees' testimony that if affiliation
negotiations with Loyola had failed, Mundelein would have attempted to
"restructure" or to affiliate with another school.
The board chair further testified that if affiliation did not work
out and "it came down to a restructuring versus a close [of the
school, there] would have been a restructuring."
Helen Garvey, a representative of the BVM Order and a member of
Mundelein's board of trustees, testified that she was "very serious
about closing the college" in accord with the BVM Order's agreement
with Mundelein. But she also
said, "We didn't want to *** close ***. What we hoped was that affiliation would work and if it
didn't we'd have to look at something else."
Just as Mundelein continued to exist when it affiliated with
Loyola, it may have continued to exist if it restructured or affiliated
with another school.
We next address an argument advanced in Mundelein's original brief
that "[t]here is no basis in the record for [the trial court] to
retain jurisdiction or entertain future proceedings to award damages for
additional lost compensation."
In the trial court's November 7, 1996, order, the court awarded
damages and "reserve[d] the right to adjust this figure during the
continued pendency of this case and in the interest of both fairness and
judicial economy to provide a suggested procedure for 'future
damages.'" Plaintiffs then filed a post trial motion asking the court to
recalculate damages. In its
January 23, 1997, order, the court recognized that it could not award
future damages (see Lewis v. Loyola University of Chicago, 149 Ill.
App. 3d 88, 500 N.E.2d 47 (1986)), but acknowledged that "plaintiffs
Gray and Hasty may bring future actions during the term of their
employment contract for damages which are sustained subsequent to
trial."
The record shows that the trial judge did not retain jurisdiction
but entered final orders on all matters before him.
We read his remarks as an affirmation of the right of the
plaintiffs to do what, under the law, they were already entitled to do:
bring a cause of action when it is ripe for adjudication.
See Corby v. Seventy-One Hundred Jeffery Avenue Building Corp.,
325 Ill. App. 442, 457, 60 N.E.2d 236 (1945) ("[t]he plaintiff has a
right, if he so desires in the future to institute proceedings from time
to time during the term of the contract for damages which he may have
sustained").
Mundelein next argues that the trial court erred in ruling that the
faculty manual is "an instrument in writing" that supports an
award of prejudgment interest under section 2 of the Interest Act (815
ILCS 205/2 (West 1996)).
Whether to award prejudgment interest is a matter within the sound
discretion of the trial court and will not be reversed absent an abuse of
discretion. Krantz v.
Chessick, 282 Ill. App. 3d 322, 327, 668 N.E.2d 77 (1996).
Section 2 allows creditors to receive 5% interest "for all
moneys after they become due on any bond, bill, promissory note, or other
instrument of writing." 815
ILCS 205/2 (West 1996). We
have held that "[t]he type of instrument contemplated is [one] that
evidences money lent or advanced, thus setting up a creditor-debtor
relationship," and that the writing must "bear a specific date
by which the indebtedness created comes due."
Wilder Binding Co. v. Oak Park Trust & Savings Bank, 173
Ill. App. 3d 34, 42-43, 527 N.E.2d 354 (1988), rev'd on other grounds,
135 Ill. 2d 121 (1990); see also Krantz, 282 Ill. App. 3d 322.
A faculty manual is not an "instrument in writing" for
purposes of the Interest Act. See
Arneson v. Board of Trustees, 210 Ill. App. 3d 844, 853, 569 N.E.2d
252 (1991). We must reverse
the trial court's award of prejudgment interest.
Plaintiffs next argue that the trial court erred in granting
summary judgment to Loyola on the issue of successor liability.
We review summary judgment de novo.
Prettyman v. Commonwealth Edison Co., 273 Ill. App. 3d 1090,
1093, 657 N.E.2d 637 (1995).
As a general rule, when a corporation merges with another, it takes
on the latter's obligations and liabilities.
But when a corporation merely purchases the assets of another
corporation, the purchasing corporation is not liable for the debts and
liabilities of the selling corporation by reason of its succession.
Kaleta v. Whittaker Corp., 221 Ill. App. 3d 705, 708-09, 583
N.E.2d 567 (1991). But a
purchasing corporation will be liable if the plaintiff establishes that
the purchase amounts to a de facto merger.
To establish de facto merger, plaintiffs must show
that: (1) the seller ceased operation and dissolved; (2) the buyer assumed
the seller's liabilities and obligations necessary for the uninterrupted
continuation of business; (3) there is a continuity of shareholders; and
(4) there is a continuity of the business enterprise, including
management, employees, location, general business operations, and assets.
Kaleta, 221 Ill. App. 3d at 709.
All four elements must be proven to establish de facto
merger. Myers v.
Putzmeister, Inc., 232 Ill. App. 3d 419, 424, 596 N.E.2d 754 (1992); Kaleta,
221 Ill. App. 3d at 710.
Plaintiffs do not argue that any of the elements of de facto
merger have been established. Instead
they argue that "[u]nder the unique facts of this case, the four
indicia of de facto merger *** should not be immutable rules
which apply with full force to [not]-for-profit corporations, which do not
have shareholders." But
plaintiffs cite no authority that would allow us to deviate from the clear
requirements to establish a de facto merger.
And plaintiffs do not suggest what "indicia" should be
applied to not-for-profit corporations.
We note that not-for-profit corporations are controlled by
"members" rather than "shareholders."
Compare 805 ILCS 5/7.05 (West 1996) to 805 ILCS 105/107.03 (West
1996). But even disregarding
the requirement that there be a continuation of shareholders, plaintiffs
cannot establish the other elements of de facto merger.
Mundelein did not dissolve. Nor
did Mundelein's business continue "uninterrupted."
There were significant changes in the management, employees, and
business operations after the affiliation.
The "affiliation" of Loyola and Mundelein is not the type
of union covered by the de facto merger doctrine.
Plaintiffs note that "[t]he imposition of liability upon the
successor corporation is grounded upon the notion that no corporation
should be permitted to commit a tort or breach a contract and avoid
liability through corporate transformation in form only."
Munim v. Azar, 648 So. 2d 145, 154 (Fla. Dist. Ct. App.
1994). But Mundelein continues to exist as a corporate entity and
has not avoided liability here.
We next address plaintiff Myers' cross-appeal.
She argues that she did not waive her tenure rights by accepting a
five-year teaching contract with Loyola.
Whether Myers waived her right to sue for loss of tenure is a
question of fact, the resolution of which will not be disturbed unless it
is contrary to the manifest weight of the evidence.
Sexton v. Smith, 112 Ill. 2d 187, 194, 492
N.E.2d 1284 (1986). Waiver
is the relinquishment of a known right.
Pantle v. Industrial Comm'n, 61 Ill. 2d 365, 372, 335 N.E.2d
491 (1975). A waiver may be
made by express agreement or implied from the conduct of the party who
allegedly waived the right. Ryder
v. Bank of Hickory Hills, 146 Ill. 2d 98, 105, 585 N.E.2d 46 (1991).
Waiver will be implied when a party's conduct is inconsistent with
an intention to assert the right. Ryder,
146 Ill. 2d at 105.
Myers argues that nothing she did was inconsistent with asserting
her breach of contract claim against Mundelein.
We agree. Myers'
acceptance of a five-year teaching position and her efforts to obtain
tenure at Loyola are not inconsistent with pursuit of a remedy against
Mundelein. A plaintiff has a
duty to mitigate damages. In breach of employment contract cases, this duty includes
seeking other employment. See
Arneson, 210 Ill. App. 3d at 851-52.
Myers' mitigation of damages by accepting employment with Loyola
does not amount to waiver.
We note that continued employment under new employment conditions
after a breach of employment contract may, in some circumstances, result
in a waiver of a plaintiff's breach of contract claim.
See Vandevier v. Mulay Plastics, Inc., 135 Ill. App. 3d 787,
482 N.E.2d 377 (1985) (finding waiver where plaintiff acquiesced for seven
years to the payment of a lower commission than he alleged he was entitled
to under a contract). But
Myers did not continue to work for Mundelein.
She worked for Loyola. Defendants
cite no case in which the acceptance of employment with a different entity
amounts to waiver.
Mundelein notes that it was the affiliation agreement between
Mundelein and Loyola that created the five-year teaching position Myers
was selected to fill. But
Mundelein does not dispute that Loyola, not Mundelein, selected Myers and
offered her the position. If
Loyola intended to extinguish Myers' tenure claim against Mundelein
through acceptance of Loyola's offer, nothing prohibited Loyola from
including that condition in its offer of employment.
But Myers is entitled only to a declaration that Mundelein breached
its contract. In defendant
Mundelein's petition for rehearing, Mundelein notes that Myers did not
seek damages or prove damages before the trial court.
Myers sought only a declaratory judgment and injunctive relief in
her complaint.
We remand with directions to enter judgment for plaintiff Myers.
The trial court is instructed to recalculate plaintiffs Gray and
Hasty's damages in a manner consistent with this opinion.
Affirmed in part and reversed in part; cause remanded.
GORDON and BURKE, JJ., concur.
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