Fischer v. First Chicago Capital Markets, Inc.

First Chicago Capital Markets, Inc. (FCCM) (defendant) hired Thomas Fischer (plaintiff) to help develop a health care accounts-securitization program. The parties signed a letter of understanding under which FCCM agreed to pay Fischer based on an hourly fee. The letter also stated that, if the program was successful, FCCM hoped to move to an ongoing consulting agreement on a fee basis and that FCCM was thinking of a sliding fee scale from between 8 and 5 basis points (between .008 and .005 percent of the program’s value) per year. The program was completed, and two bonds totaling $32 million were issued to support the program. When the original, hourly fee arrangement expired, Fischer continued to consult on the program. Fischer invoiced FCCM for $25,600 after the first year, which he calculated by multiplying 8 basis points by $32 million. When FCCM refused to pay, Fischer sued for breach of contract and promissory estoppel. Fischer claimed that, both before and after the letter of understanding was signed, FCCM assured him that he would continue to consult on the program in exchange for basis points for the duration of the two bonds. The district court dismissed Fischer’s suit, finding that the letter of understanding was not definite enough to create an enforceable contract and that the promissory estoppel claim was defeated by the Illinois statute of frauds. Fischer appealed, arguing that he was entitled to payment based on the parties’ oral agreement.