Trustmark Insur Co v. Gen'l & Cologne Life ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 04-3216
TRUSTMARK INSURANCE COMPANY,
Plaintiff-Appellant,
v.
GENERAL & COLOGNE LIFE RE OF AMERICA,
formerly known as COLOGNE LIFE
REINSURANCE COMPANY,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 00 C 1926—Blanche M. Manning, Judge.
____________
ARGUED FEBRUARY 7, 2005—DECIDED SEPTEMBER 13, 2005
____________
Before ROVNER, WILLIAMS, and SYKES, Circuit Judges.
WILLIAMS, Circuit Judge. Surely, if there is any moral
to this story, it is to “get it in writing.” It is astounding
in this day and age to find it necessary to repeat this
admonition, but no less so than to find a sophisticated party
willing to leverage an agreement involving multiple years
and millions of dollars solely on the enforceability of a
simple handshake. Yet that is precisely what has happened
in this case. Plaintiff Trustmark Insurance Company
(“Trustmark”) brought suit against defendant General &
Cologne Life Re of America (“Cologne”), another insurance
2 No. 04-3216
company, over an alleged reinsurance deal that was not
committed to writing.
Nonetheless, Trustmark presses its claims under theories
of breach of contract, breach of fiduciary duty, and promis-
sory estoppel, alleging that Cologne breached an unwritten
joint-venture agreement and amorphous promises to
acquire a block of individual disability insurance (“IDI”)
policies. The district court granted partial summary
judgment in Cologne’s favor on the breach of contract and
breach of fiduciary duty claims, finding no joint-venture
because the parties did not exercise mutual control over a
joint enterprise. The court further found, in entering final
judgment in favor of Cologne after a subsequent bench trial,
that plaintiff ’s promissory estoppel claim was barred by the
statute of frauds. Because we find that plaintiff has failed
to proffer sufficient evidence of mutual control over a joint-
venture, and that the availability of an adequate remedy at
law precludes Trustmark from invoking the partial perfor-
mance exception to the statute of frauds, we affirm both
rulings.
I. BACKGROUND
In early 1998, Trustmark and Cologne jointly investi-
gated, with a view toward acquiring, a block of 7000 IDI
policies offered for sale by Hartford Life Insurance Co.
(hereinafter, “the Hartford Block” or “the Block”). In the
course of their investigation, the record suggests that
these parties talked about a lot of things that would hap-
pen in the event of a successful purchase of the Block. They
talked about sharing profits and the risk of loss. They even
talked about Trustmark taking on the responsibility for
administering claims on the purchased policies, as Cologne
lacked the capacity to do so itself. The problem is, none
of this talk was committed to writing.
Despite having no written agreement—even as to how
No. 04-3216 3
this investigation itself would proceed—the parties together
performed the actuarial work and due diligence necessary
to determine a purchase price for the proposed acquisition.
Negotiations over the purchase, however, took place solely
between Trustmark and Hartford. These negotiations bore
fruit on October 28, 1998, when, after some back and forth,
Trustmark and Hartford signed a letter of intent on the sale
of the Block. Although Cologne had reviewed, commented
on, and approved this letter of intent, it did not sign the
letter and its name is not mentioned anywhere. On its face,
the letter sets forth a relationship solely between
Trustmark and Hartford.
In conjunction with the letter of intent, Trustmark also
entered into a separate claims-administration agreement
with Hartford, immediately conferring upon Trustmark the
responsibility for administering claims on the pur-
chased policies after signing the letter of intent. Trustmark
did not consult Cologne regarding the terms of this separate
agreement, nor did it seek the defendant’s approval of the
document prior to its execution. This separate agreement
makes no mention of Cologne whatsoever.
Notwithstanding Cologne’s omission from the operative
paperwork, over the next ten months while the final
purchase documents were being drafted, representatives
of Cologne and Trustmark continued to speak as if the
defendant was still a part of the deal. For example, in
sales pitch letters to third parties dated December 30,
1998, and February 9, 1999, Andrew Perkins, Senior Vice
President of Cologne’s Individual Health Group, referred to
the Cologne and Trustmark as “successful partners” in the
purchase of the Hartford Block. On February 23, 1999,
Perkins sent a draft of the Coinsurance/Assumption
Reinsurance Agreement between Trustmark and Hart-
ford to his assistant with a handwritten note stating
4 No. 04-3216
“we’ll end up with a retro1 to us from Trustmark, follow-
ing this language.” In addition, Cologne made several
reassurances to Trustmark between February and July
1999—in the face of mounting losses on the Hartford
acquisition—that it remained committed to sharing the
risk on the Hartford Block. But, throughout all this, the
final purchase agreement with Hartford had yet to be
finalized and signed, and Cologne’s name had yet to appear
formally on paper.
On September 3, 1999, after learning of additional and
substantial losses on the Block, but prior to final consum-
mation of the acquisition, Cologne informed Trustmark that
it would not go forward with the purchase. Cologne claims
that its decision to renege was based on Trustmark’s poor
ability to administer policy claims; the failure of the parties
to agree upon or even discuss Trustmark’s compensation for
administering claims (a figure that would determine how
much premium Cologne would receive on the back end); and
the delay of Trustmark and Hartford, by the terms of their
own letter of intent, in entering into a “definitive agree-
ment” on the Block purchase. Each of these items, according
to Cologne, were understood conditions to its involvement
in the deal. Trustmark claims the decision to renege came
upon Cologne’s discovery that Hartford Block was losing a
lot of money. Whatever the reason, Cologne was out, and
Trustmark was unhappy. Notwithstanding this abandon-
ment, Trustmark went on to finalize the purchase from
Hartford on December 28, 1999.
In February 2000, Trustmark brought suit against
Cologne under five counts. Under Count I, Trustmark
sought a declaratory judgment that Cologne was obliged to
reinsure Trustmark on the Hartford Block in accordance
1
Refering to a “retrocession,” which is a transfer of risks as-
sumed by one reinsurer to a second reinsurer.
No. 04-3216 5
with an alleged joint-venture agreement. Count II sought
specific performance on this alleged joint-venture agree-
ment. Count III sought damages for breach of the alleged
joint-venture agreement, while Count IV sought damages
for breach of fiduciary duty. Count V claimed damages
under a theory of promissory estoppel. In October 2001, the
district court granted the defendant’s motion for summary
judgment as to Counts I through IV, rejecting those counts
premised on the existence of a joint-venture agreement as
a matter of law. In particular, the court found that
Trustmark had failed to show that the parties had main-
tained joint control over an IDI policy purchasing enter-
prise. The court also denied a motion by Trustmark to
amend its complaint to add a claim of “equitable estoppel,”
finding that the plaintiff failed to show good cause to
add the claim more than nine months after the deadline
for amending pleadings, and that such a late amend-
ment would prejudice the defendant by necessitating
additional discovery.
This left Trustmark with only its promissory estoppel
claim, which survived Cologne’s statute of frauds challenge
at summary judgment only by virtue of the potential
applicability of the doctrine of partial performance. Other-
wise, the district court determined that the stat-
ute of frauds applied to the alleged joint-venture promise at
the heart of Trustmark’s promissory estoppel claim, and
there was no writing to satisfy the statute’s prescriptions.
With the statute of frauds bar so avoided, however, the
district court found that Trustmark had created a genuine
issue of fact as to whether Trustmark entered into the let-
ter of intent with Hartford in reliance on Cologne’s al-
leged promise to join in the purchase of the Block.
In June 2002, however, Cologne requested that the
district court reconsider its October 2001 order with re-
spect to Trustmark’s promissory estoppel claim. In particu-
lar, the defendant noted that the doctrine of partial perfor-
6 No. 04-3216
mance, upon which the plaintiff’s only surviving claim
relied, is an equitable doctrine. Trustmark’s promissory
estoppel claim, in contrast, explicitly sought damages.
Though the court agreed that the doctrine of partial
performance could not save Trustmark’s promissory
estoppel claim to the extent it sought monetary damages, it
found the claim could nonetheless survive because it
had incorporated the requests for equitable relief sought
in the other (dismissed) counts—namely the declaratory
judgment and specific performance sought in Counts I
and II, respectively. Accordingly, the promissory estop-
pel claim received a bench trial in April 2003.
After the bench trial, the district court entered final
judgment in favor of Cologne on August 3, 2004, finding
that the ability to quantify the extent of Trustmark’s loss on
the Hartford Block left the plaintiff with an adequate
remedy at law—thereby precluding equitable relief and
reliance on the equitable doctrine of partial performance
to preserve the promissory estoppel claim. Trustmark
appeals both this final entry of judgment, and the prior
grant of partial summary judgment.
II. ANALYSIS
A. Cologne and Trustmark Did Not Exercise Suffi-
cient Mutual Control to Establish a Joint-Venture
Trustmark first challenges the district court’s entry
of partial summary judgment on its joint-venture claims
(Counts I through IV). “We review a district court’s decision
to grant a motion for summary judgment de
novo, construing all facts, and drawing all reasonable
inferences from those facts, in favor of the nonmoving
party.” Telemark Dev. Group, Inc. v. Mengelt, 313 F.3d 972,
976 (7th Cir. 2002). Summary judgment is properly granted
when “the pleadings, depositions, answers to interrogato-
ries, and admissions on file, together with the affidavits,
No. 04-3216 7
if any, show that there is no genuine issue as to any
material fact and the moving party is entitled to judgment
as a matter of law.” Fed. R. Civ. P. 56(c); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986).
In granting partial summary judgment, the court found
that the parties were not engaged in a joint-venture
when they worked in concert to acquire the Hartford
Block. To establish a joint-venture under governing Illi-
nois law, a party must prove:
(1) an express or implied agreement to carry on some
enterprise; (2) a manifestation of intent by the parties
to be associated as joint venturers; (3) a joint interest as
shown by the contribution of property, financial re-
sources, effort, skill, or knowledge; (4) a degree of joint
proprietorship or mutual right to the exercise of control
over the enterprise; and (5) provision for joint sharing
of profits and losses.
Minyo v. Minyo, 581 N.E.2d 170, 173 (Ill. App. Ct. 1991)
(citing Ambuul v. Swanson, 516 N.E.2d 427 (Ill. App. Ct.
1987)). Here, the controversy centers around the fourth
element—mutual control over a joint enterprise.
As a threshold matter, there is some discrepancy as to
the scope of the enterprise over which the parties al-
legedly exerted control. Trustmark insists that the joint-
venture at the heart of its claim extended only to the
purchase of the Hartford Block, and not, as the district
court reasoned, to the purchase of IDI policies in general.
Indeed, the size of the enterprise may bear on a plaintiff’s
burden in establishing the control element, for the
bigger the enterprise, the more sweeping the requisite
control; and the more sweeping the control, the more the
plaintiff would have to establish to survive summary
judgment. Thus, Trustmark argues that the district court
erred when it grounded its dismissal of the breach of
contract claim in part on the parties’ inability to control
8 No. 04-3216
each other’s activities in pursuing IDI policies in general.
This argument, however, belies the allegations of Trust-
mark’s own complaint, which by its own terms describes the
joint-venture as existing “for the purpose of acquiring large
blocks of IDI policies from various insurance companies.”
Compl. at 3 (emphasis added). In any event, how great or
small the scope of the averred enterprise is of
little consequence here, for, whether the enterprise’s end
be IDI policies in general or merely the Hartford acquisition
in particular, the record remains devoid of any evidence of
mutual control.
Trustmark’s only hope to establish a genuine issue of
material fact regarding mutual control rests on Cologne’s
involvement in drafting the letter of intent that bound
Trustmark to proceed with the acquisition of the Hartford
Block. Cologne was unquestionably involved in the let-
ter’s drafting: the company reviewed, commented on,
and ultimately approved the terms reflected in the letter
of intent, and its subsidiary, JHA, is credited with deter-
mining the purchase price for the block provided in the
letter. But this involvement does not, as Trustmark con-
tends, exhibit Cologne’s control over the purchase of
the Block. Cologne’s asserted involvement here occurred
well before Trustmark entered into the final purchase
agreement with Hartford, during the preliminary stages
of the purchase negotiations. Indeed, “Illinois . . . allows
parties to approach agreement in stages, without fear that
by reaching a preliminary understanding they have bar-
gained away their privilege to disagree on the specifics.”
Empro Mfg. Co. v. Ball-Co. Mfg., Inc., 870 F.2d 423, 426
(7th Cir. 1989). Cologne’s consultations and involvement
at this stage, while not insignificant, remain best char-
acterized as its thorough investigation of a business
opportunity, and its approval of terms as a preliminary
understanding of that opportunity’s contours. Review
and comment on documents that shape preliminary under-
No. 04-3216 9
standings of deals yet to be finalized do not amount to an
exercise of control.
Trustmark next cites Herst v. Chark, 579 N.E.2d 990 (Ill.
App. Ct. 1991) for the proposition that mutual control
necessary to establish a joint-venture will be found where
the parties divide responsibilities along functional lines.
Reading Herst so, Trustmark argues that such responsibil-
ity divisions were made here—with Cologne performing due
diligence on the underwriting of the Hartford Block; Co-
logne’s subsidiary (JHA) determining the acquisition’s
purchase price; Trustmark and JHA undertaking due
diligence on Hartford’s claims handling; and Trustmark
taking sole responsibility for claims administration upon
consummation of the purchase. With this division of
responsibilities in mind, the plaintiff insists that a fact-
ual issue remains as to mutual control.
Even assuming this division of responsibilities to be
accurate, however, Trustmark fundamentally misconstrues
the holding of Herst. The case does not stand for the
proposition that mutual control exists wherever parties
divide responsibilities along functional lines. Rather, the
case merely notes that the fact that one party was not
involved in every aspect of an enterprise does not preclude
the finding of a joint-venture. Id. at 993-94. Nothing
in Herst holds that mutual control could exist notwith-
standing the inability of either party to exercise control over
the other toward achieving the object of the alleged joint-
venture.
In the final analysis, neither Trustmark nor Cologne
could force the other party to enter into an IDI policy
purchase—be it in general or merely for the Hartford
Block—nor could they compel the use of each other’s
employees or resources toward such ends. These parties
could not exercise any control over each other’s operations
or policies whatsoever, and therefore we affirm the dis-
10 No. 04-3216
trict court’s grant of partial summary judgment on the joint-
venture claims for lack of mutual control.
B. Trustmark Proffers no Writings that Could Sat-
isfy the Statute of Frauds
Turning to its promissory estoppel claim, the plaintiff
next contends that the district court erred in finding that
it had proffered no document to satisfy the writing re-
quirement of the statute of frauds. Because the court
made this finding in its October 22, 2001, partial summary
judgment ruling, which tied the fate of Trustmark’s promis-
sory estoppel claim to the applicability of the doctrine of
partial performance, our review is de novo. Telemark, 313
F.3d at 976.
The Illinois statute of frauds provides that
[n]o action shall be brought . . . upon any agreement
that is not to be performed within the space of one
year from the making thereof, unless the promise or
agreement upon which such action shall be brought, or
some memorandum or note thereof, shall be in writing,
and signed by the party to be charged therewith, or
some other person thereunto by him lawfully autho-
rized.
740 ILCS 80/1. It is undisputed that Trustmark and
Cologne have not entered into a written contract. Further-
more, Trustmark does not dispute the district court’s
finding that Cologne’s alleged promise to reinsure the
Hartford Block cannot be performed within one year. And
it is clear that “[u]nder Illinois law, the statute of frauds
is applicable to a promise claimed to be enforceable
by virtue of the doctrine of promissory estoppel.” Fischer v.
First Chicago Capital Mkts., Inc., 195 F.3d 279, 284 (7th
Cir. 1999) (citing Architectural Metal Sys., Inc. v. Consoli-
dated Sys., Inc., 58 F.3d 1227, 1231 (7th Cir. 1995));
No. 04-3216 11
McInerney v. Charter Golf, Inc., 680 N.E.2d 1347, 1352 (Ill.
1997) (“[P]romissory estoppel does not bar the application of
the statute of frauds in Illinois.”). Thus, the issue here is
whether Trustmark has proffered a writing sufficient to
satisfy the statute of frauds.
“A writing sufficient to satisfy the Statute of Frauds
need not itself be a valid contract, but only evidence of one.”
Crawley v. Hathaway, 721 N.E.2d 1208, 1211 (Ill. App. Ct.
1999) (quoting Melrose Park Nat’l Bank v. Carr, 618 N.E.2d
839, 843 (Ill. App. Ct. 1993)). Indeed, a sufficient memoran-
dum may be composed of multiple documents of varying
forms. Am. Coll. of Surgeons v. Lumbermens Mut. Cas. Co.,
491 N.E.2d 1179, 1192 (Ill. App. Ct. 1986). Toward that end,
Trustmark has adduced several writings in an effort to
satisfy the statute’s prescriptions. That said, for multiple
writings to satisfy the statute, “all the essential terms [of
the contract] must be in writing, and there must be an
express reference to the other writings or such a connection
between the documents, physical or otherwise, as to
demonstrate that they relate to the same contract.” Dickens
v. Quincy Coll., 615 N.E.2d 381, 384 (Ill. App. Ct. 1993)
(citing cases). It is here that the multiple documents
proffered by Trustmark fall short, for they neither state
essential terms, refer expressly to each other, nor connect
in such a way as to reflect relation to a particular contract.
Trustmark first cites the sales pitch letter written by
Perkins of Cologne to a third party (Lincoln National
Insurance) stating “Cologne and Trustmark have been
working jointly in pursuit of non-cancellable disability
opportunities and were successful partners in the . . .
Hartford acquisition.” The plaintiff rightly notes that
“letters addressed to a third party, stating and affirming
a contract, may be used against the writer as a memoran-
dum of it.” Gaines v. McAdam, 79 Ill. App. 201 (1898).
However, here the letter to Lincoln National neither
states any terms of the purported contract between
12 No. 04-3216
Trustmark and Cologne (let alone all of them); nor does
it affirm the existence of a contract, as it makes ex-
plicitly clear that the Hartford deal was still “impending.”
At best, this letter indicates that Trustmark and Cologne
were still in the non-binding, preliminary agreement
stage of their negotiations on the Hartford acquisition, at
that time merely exploring the possibility of a joint-venture
on the Block. And even employees of Trustmark who
were intimately involved in the acquisition—such as
Leonard Koloms, Trustmark’s Corporate Actuary, and
Rowen Bell, Trustmark’s point man on the letter of intent
with Hartford—admit that their own use of the term
“partner” was not intended to have any operative legal
connotation.
Trustmark also cites the handwritten note penned
by Perkins on a draft of the Coinsurance/Assumption
Reinsurance Agreement between Trustmark and Hartford.
The note states, “[W]e’ll end up with a retro to us from
Trustmark, following this language.” First, the words “we’ll
end up with” themselves suggest that Cologne had not yet
agreed to reinsure Trustmark on the Hartford deal. And,
again, the attached draft agreement between Trustmark
and Hartford omits several terms that would be essential to
a reinsurance deal between Cologne and Trustmark—terms
such as Trustmark’s share of incoming premium to cover
the expense of its administration of policy claims (and in
turn that share of premiums Cologne could expect to receive
on the back end), or the percentage of risk that Cologne
would assume on the Hartford Block.
Cologne’s “percentage of risk assumed” would certainly be
an essential term in this alleged joint-venture, and, toward
that end, Trustmark cites the deposition testimony of
Perkins in an attempt to lock down that term in writing. “A
deposition may qualify as a signed writing for statute of
frauds purposes.” Bower v. Jones, 978 F.2d 1004, 1009 (7th
Cir. 1992). In his deposition, Perkins testified that “it was
No. 04-3216 13
[his] expectation that Cologne would reinsure 50 percent of
this business from Trustmark.” However, he immediately
qualified this statement by stating that “Trustmark in-
tended to reinsure [50 percent of] the business with [Co-
logne] if the transaction went forward as had been
intended.” (emphasis added). Clearly, Perkins’s testimony
does not provide, as Trustmark argues, an unconditional
commitment to a percentage. To the contrary, it serves as
yet further evidence that the purported deal between the
parties was not consummated. The same may be said of the
July 14, 1999 draft report prepared by Cologne’s outside
actuaries, Tillinghast-Towers Perrin. While this report does
muse that Cologne “is 50% retrocessionaire from Trustmark
who has the other 50% and is the administrator,” it is also
littered with terms revealing that a reinsurance agreement
between Cologne and Trustmark on the Hartford deal had
yet to be finalized (stating that the “[r]einsurance contracts
are not signed yet,” and that the “parties are renegotiat-
ing”).
As for the July 28, 1999, letter from Perkins to Trust-
mark, forwarding JHA’s proposal for the subsidiary’s
possible involvement in managing claims on the Hartford
Block, this writing fails to memorialize a single term that
would be essential to a reinsurance agreement. This letter
states, “It is critical that significant additional resource [sic]
be brought to bear as soon as possible in order to limit our
potential losses on this deal.” While this letter has every-
thing to do with potential claims management, it has
little (if anything) to do with a reinsurance agreement
between Trustmark and Cologne. Indeed, there are no
reinsurance agreement terms—let alone essential terms—
to mine from this document, and it is thus of no use
to Trustmark in its efforts to overcome the statute of frauds.
At best, these writings proffered by Trustmark uniformly
reveal a reinsurance agreement between the parties yet
to be finalized—a deal contemplated, though not necessarily
14 No. 04-3216
consummated.2 Between all these writings, there is only one
essential term arguably suggested, and its validity is
dubious at best. These documents fall far short of providing
all requisite essential terms for a reinsurance agreement, to
say nothing of the fact that each fails to reference or
connect to the others in a manner that might confirm
relation to a common contract.
Together, these documents proffered by Trustmark do
make one thing clear: the plaintiff is grasping at straws.
How it came to be in this unfortunate predicament—a
predicament in which it must cobble together a sufficient
writing where none exists—is clear as well. It put itself
there. As Trustmark’s counsel informed us at oral argu-
ment, “reinsurance is something that is often done on a
handshake, . . . perhaps resulting in more litigation than
it should these days.” We may be shocked by the former, but
we see first hand the veracity of the latter. Indeed, we dare
say, it is quite the understatement. Accordingly, like all
those before it, we affirm the district court’s finding where
2
We pause briefly to address Trustmark’s contention that
Cologne has waived its statute of frauds defense by admitting
to the existence and terms of the purported agreement. “When . . .
there is particularly compelling evidence of the contract’s exis-
tence, the strictures of the statute of frauds can safely be relaxed,
for example in the case of an admission.” Consolidation Servs.,
Inc. v. Keybank Nat’l Ass’n, 185 F.3d 817, 821 (7th Cir. 1999).
Toward that end, Trustmark cites those same writings proffered
herein to satisfy the statute of frauds. However, under Illinois law
the admission must be “unequivocal” to constitute waiver of a
statute of frauds defense. See Derby Meadows Util. Co. v. Inter-
Continental Real Estate, 559 N.E.2d 986, 989, 991 (Ill. App. Ct.
1990). Because these writings express at best an expectancy to
reinsure Trustmark on the Hartford Block, not an unequivocal
admission that it was contractually bound, or had promised, to do
so, we find that Cologne’s statute of frauds defense has not been
waived.
No. 04-3216 15
a plaintiff has again failed to adduce written evidence
sufficient to satisfy the requirements of the statute of
frauds.
C. Trustmark Cannot Invoke the Doctrine of Partial
Performance
Despite Trustmark’s inability to adduce a writing or
writings sufficient to satisfy the statute of frauds, there are
several exceptions to the statute’s writing requirement. One
such exception, invoked by the plaintiff here in an effort
to save its promissory estoppel claim, is the equitable
doctrine of partial performance. In its post-bench trial entry
of judgment, however, the district court found that
Trustmark could not invoke this doctrine because it had an
available remedy at law. Trustmark challenges this find-
ing on appeal, arguing that it cannot be adequately compen-
sated by monetary damages. In reviewing a bench trial,
conclusions of law are subject to de novo review, while
findings of fact are subject to the deferential clearly errone-
ous standard. Spurgin-Dienst v. United States, 359 F.3d
451, 453 (7th Cir. 2004).
The doctrine of part performance is an equitable doctrine.
Dickens v. Quincy College Corp., 615 N.E.2d 381, 385 (Ill.
App. Ct. 1993). As such, the doctrine excepts only those
actions seeking equitable relief from the writing require-
ment of the statute of frauds, to the exclusion of those
claims where there exists an adequate remedy at law. See
Sjogren v. Maybrooks, Inc., 573 N.E.2d 1367, 1368 (Ill. App.
Ct. 1991) (“Although acts of partial performance are
typically sufficient to take an oral agreement out from
under the operation of the Statute of Frauds in an action at
equity, such acts do not take an action at law outside
the operation of the Statute of Frauds.”) (citing cases);
Gibbon v. Stillwell, 500 N.E.2d 965, 969 (Ill. App. Ct. 1986).
Illinois courts further limit the scope of the exception,
16 No. 04-3216
holding that “part performance will avoid application of [the
Statute of Frauds] only where a party is seeking the
equitable remedy of specific enforcement.” Doherty v. Kahn,
682 N.E.2d 163, 175 (Ill. App. Ct. 1997) (citing Phillips v.
Britton, 516 N.E.2d 692, 697 (Ill. App. Ct. 1987)) (emphasis
added), abrogated on other grounds by Byung Moo Soh v.
Target Mktg. Sys., Inc., 817 N.E.2d 1105, 1109 (Ill. App. Ct.
2004).
Here, in order for the plaintiff to invoke the doctrine of
partial performance, it must first establish entitlement
to equitable relief. And to be entitled to equitable relief,
Trustmark must show that it has no adequate remedy
at law. John O. Schofield, Inc. v. Nikkel, 731 N.E.2d 915,
925 (Ill. App. Ct. 2000) (“[T]he party seeking the application
of equitable principles to defeat the interposition of the
statute of frauds must establish that the promisee cannot
be made whole by damages or by another adequate remedy
at law.”).
Under Illinois law, “damages cannot be based on potential
or future loss, unless it is reasonably certain to occur, nor
can damages be based on speculation or conjecture.”
Platinum Tech, Inc. v. Fed. Ins. Co., 282 F.3d 927, 933 (7th
Cir. 2002). Trustmark insists that money damages would
be inadequate here because its future loss on the Hart-
ford Block cannot be calculated with requisite certainty
considering (1) the volatility of the policies of the Block,
(2) the extended period of time covered by those policies,
and (3) putative legal barriers that ostensibly prohibit that
award of future damages on contracts of indemnity (to
which Trustmark contends its reinsurance agreement to
be akin).
Contrary to its arguments regarding the hopeless uncer-
tainty of future damages, however, is the trial testimony
of Trustmark’s own damages and actuarial sciences ex-
pert. This expert testified that “a best estimate of the actual
No. 04-3216 17
losses on the Hartford block at some point in the future”
could be calculated by using a “gross premium valuation.”
This testimony went uncontested. And though the testi-
mony suggests the availability of nothing better than a
“best estimate,” “the law only requires there be an adequate
basis in the record for the court’s determination of [dam-
ages], and absolute certainty is unnecessary.” Moniuszko v.
Moniuszko, 606 N.E.2d 468, 474 (Ill. App. Ct. 1992); see also
SNA Nut Co. v. The Haagen-Daz Co., Inc., 302 F.3d 725,
733 (7th Cir. 2002) (“[C]ertainty as to the amount of
damages goes no further than to require a basis for a
reasoned conclusion.”); Jabat, Inc. v. Smith, 201 F.3d 852,
857 (7th Cir. 2000) (“In Illinois, the evidence need only tend
to show a basis for the computation of damages with a fair
degree of probability.”).
Nor should the plaintiff take umbrage with the propriety
of using an actuarial model—such as the gross premium
valuation—to calculate future damages. Such models are
not only well accepted in courts throughout the land, but
also staples of the plaintiff’s own industry. Peoples Security
Life Ins. Co. v. Monumental Life Ins. Co., 991 F.2d 141, 148
(4th Cir. 1993) (“Actuarial tables are the life’s blood of the
life insurance industry. It is disingenuous for [the defen-
dant] to question the accuracy of the very methodology
employed by the industry in issuing its policies simply
because actuarial tables were used to determine [an adverse
award].”); MacGregor Yacht Corp. v. State Compensation
Ins. Fund, 63 Cal. App. 4th 448, 460 (1998) (“There
was nothing speculative about the actuary’s damage
analysis. He used the same formulas used by the insurance
industry . . . .”). It is odd—or, in the very least, counter-
intuitive—considering the nature of the business, to find
an insurance company complain of the speculative nature
of actuarial tables, or to learn that an insurer of risk
believes future loss cannot be reliably predicted. In any
event, it suffices to say that Trustmark’s damages could be
18 No. 04-3216
calculated with requisite certainty under Illinois law, and
for that reason the company could avail itself of an ade-
quate remedy at law. Accordingly, Trustmark cannot invoke
the doctrine of part performance to avoid the preclusive bite
of the statute of frauds, and thus its promissory estoppel
claim must fail.
D. District Court Did Not Abuse its Discretion in
Denying Motion to Amend Complaint
Finally, we address Trustmark’s appeal of the district
court’s denial of its motion for leave to amend its complaint
to add a claim of equitable estoppel. We review such rulings
for abuse of discretion. Lac Courte Oreilles Band of Lake
Superior Chippewa Indians of Wis. v. United States, 367
F.3d 650, 668 (7th Cir. 2004). To amend a pleading after the
expiration of the trial court’s Scheduling Order deadline to
amend pleadings, the moving party must show “good cause.”
Fed. R. Civ. P. 16(b). As our sister circuit succinctly stated,
“Rule 16(b)’s ‘good cause’ standard primarily considers the
diligence of the party seeking amendment.” Johnson v.
Mammouth Recreations, Inc., 975 F.2d 604, 609 (9th Cir.
1992). Here, nine months after the prescribed deadline of
June 30, 2000, Trustmark sought leave to amend its
complaint to add a claim of equitable estoppel based on
allegations that Cologne, through its subsidiary (JHA),
failed to perform adequate due diligence on the Hartford
Block, resulting in an overvaluation of the policies. In an
effort to show good cause for the amendment, the plaintiff
contends that it did not confirm its suspicions of this
misrepresentation—and thus the facts supporting its
equitable estoppel claim—until April 26, 2001, when the
depositions of both a JHA employee involved in the valua-
tion (DeMarco) and Cologne’s actuarial experts were
completed.
However, Trustmark concedes that it harbored suspicions
No. 04-3216 19
that JHA had misrepresented the value of the Hartford
Block prior to these depositions, and in fact the deposition
testimony of Trustmark’s actuarial (Daniel Winslow)
reveals that the company was concerned about the quality
of DeMarco’s valuation work as early as the end of
1999—months before the plaintiff filed its original com-
plaint against Cologne. Based on this testimony, the district
court found that Trustmark failed to show good cause for its
failure to amend its complaint in a timely manner, finding
that Trustmark was, or should have been, aware of the facts
underlying its equitable estoppel claim as early as 1999. In
so doing, the court did not abuse its discretion, and we
affirm the denial of leave to amend accordingly.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s
grant of partial summary judgment in Cologne’s favor on
Trustmark’s breach of contract and breach of fiduciary duty
claims, its denial of Trustmark’s motion for leave to amend
its complaint, and its entry of final judgment
on the promissory estoppel claim.
20 No. 04-3216
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—9-13-05