First, the directors argue they owed Dr. Turnbeaugh no fiduciary duty because her allegations deal with her individual rights as an employee, and an employment relationship doesn't give rise to a fiduciary duty. Gross v. Univ. of Chi., 302 N.E.2d 444, 453 (Ill. 1973) (no fiduciary duty of employer to employee under Illinois law). Then they argue that even if they owed her a fiduciary duty, none of their alleged actions were to the detriment of the Board or its stockholders, so there's no breach alleged.
Szplett's breach of fiduciary duty claim (Count 15), conspiracy to commit breach of fiduciary duty claim (Count 16), a portion of the tortious interference with prospective economic advantage claim (Count 17), and aiding and abetting claim (Count 20) are dismissed on the merits. As to the fiduciary duty claim, Szplett does not plead any facts establishing that Mars, Kenco, or the individual defendants owed him a fiduciary duty, see Patel v. Boghra, 2008 WL 2477695, at *6 (N.D. Ill. June 18, 2008) ("An employer does not owe an employee a fiduciary duty simply because they have entered into an employer/employee relationship together.") (citing Gross v. Univ. of Chi., 302 N.E.2d 444, 454 (Ill. App. 1973)), and the complaint alleges nothing suggesting that Hartford was implicated in any alleged breach of fiduciary duty. Because the breach of fiduciary duty claim fails, so too does the conspiracy claim.
"The [fiduciary] relationship may arise by operation of law, e.g., attorney and client, guardian and ward . . . ." Gross v. Univ. of Chi., 302 N.E.2d 444, 453 (Ill. App. Ct. 1973). "[A]bsent the existence of the relationship by law, it must be proved by the party asserting it; and it must be shown by proof so clear and convincing, so strong, unequivocal and unmistaking that it leads to only one conclusion." Id.
In Illinois, a fiduciary duty may exist through operation of law or it may be proven to exist by the party asserting it through clear and convincing evidence. See Gross v. University of Chicago, 302 N.E.2d 444, 453 (Ill.App. 1973). If a duty does not exist by operation of law, the proponent must show the existence of "confidence reposed by one side and domination and influence exercised by the other." Id.
Plaintiff cites no authority, however, indicating that Brougher's fiduciary responsibilities extended to other non-shareholding officers such as Zusy. See Needham v. Innerpac, Inc., 2006 WL 2710617, at *14 (N.D. Ind. Sept. 19, 2006) ("the mere breach of an employment contract is insufficient to give rise to a claim of constructive fraud"), citing Gross v. University of Chicago, 302 N.E.2d 444, 453-54 (Ill.App. 1973) (employer/employee relationship does not create a fiduciary duty on the part of the employer). Moreover, while officers and directors owe fiduciary duty to corporation as well as corporate stockholders, this is so only regarding matters that affect the general well-being of a corporation.
But, the mere breach of an employment contract is insufficient to give rise to a claim of constructive fraud. See Gross v. University of Chicago, 302 N.E.2d 444, 453-54 (Ill.App. 1973) (employer/employee relationship does not create fiduciary duty on the part of the employer). As the court has said with respect to the conversion and actual fraud claims, this case is indistinguishable from any other case in which an employer allegedly breached an employment contract.
Vargas v. Esquire, 166 F.2d 651 (7th Cir. 1948); Hurd v. Illinois Bell Telephone Company, 136 F. Supp. 125 (N.D.Ill. 1955), aff'd 234 F.2d 942 (7th Cir.), cert. denied sub nom. Seybold v. Western Electric Co., 352 U.S. 918, 77 S.Ct. 216, 1 L.Ed.2d 124; Gross v. University of Chicago, supra, 302 N.E.2d at 454. In this case, it is evident that defendant acted quickly and efficiently in disseminating notice of the changes.
Ch. July 5, 1995) (citations omitted). BAE Sys. N. Am. Inc. v. Lockheed Martin Corp., 2004 WL 1739522, at *8 (Del. Ch. Aug. 3, 2004) (quoting Gross v. Univ. of Chi., 302 N.E.2d 444, 453-54 (Ill. App. Ct. 1973)). Ramsey v. Toelle, 2008 WL 4570580, at *6 (Del.
Such a relationship would require "confidence reposed by one side and domination and influence exercised by the other." Gross v. Univ. of Chi., 302 N.E.2d 444, 453-54 (Ill.App.Ct. 1973). Lehner v. Crane Co., 448 F. Supp. 1127, 1131 (E.D. Pa. 1978), one of the few cases to deal expressly with this provision of the Restatement as it pertains to fraud outside of the securities context, implies that a "special relationship of trust and confidence" would also have to meet the standard for a fiduciary relationship spelled out in Gross.