195 F.3d 279 (7th Cir. 1999), 98-2656, Fischer v. First Chicago Capital Mkt

Docket Nº:98-2656
Citation:195 F.3d 279
Party Name:Thomas P. Fischer, Plaintiff-Appellant, v. First Chicago Capital Markets, Inc., Defendant-Appellee.
Case Date:September 20, 1999
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 279

195 F.3d 279 (7th Cir. 1999)

Thomas P. Fischer, Plaintiff-Appellant,

v.

First Chicago Capital Markets, Inc., Defendant-Appellee.

No. 98-2656

United States Court of Appeals, Seventh Circuit

September 20, 1999

Argued December 9, 1998

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 98-C-79--Charles P. Kocoras, Judge.

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[Copyrighted Material Omitted]

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Before Flaum, Easterbrook, and Diane P. Wood, Circuit Judges.

Diane P. Wood, Circuit Judge.

First Chicago Capital Markets, Inc. (FCCM) hired Thomas P. Fischer to serve as a consultant on a new securitization program. When FCCM refused to pay compensation to which Fischer believed he was entitled, Fischer filed this diversity suit, alleging breach of contract and a variety of quasi-contract claims. The district court dismissed Fischer's complaint for failure to state a claim upon which relief may be granted. For the reasons discussed below, we reverse and remand.

I

Because the district court dismissed under Federal Rule of Civil Procedure 12(b)(6), we recite the facts as Fischer presented them in his complaint. In April 1995, Fischer approached Ken Vallrugo, then the Managing Director at FCCM, with a proposal to help FCCM develop a Healthcare Accounts Receivables Securitization Program (the "Program"). Vallrugo was enthusiastic about the proposition, and he and his supervisor, Senior Managing Director Thomas Campbell, entered into negotiations with Fischer. On May 25, 1995, while their discussions were ongoing, Campbell authorized Fischer to begin work on the Program, and Fischer did so. Shortly thereafter, on July 11, the parties signed a letter of understanding entitled "Consulting Agreement." That document reflected Fischer's agreement to market, originate, and implement the Program from May 25, 1995 to December 31, 1995, subject to early termination or extension by mutual agreement. In exchange, FCCM promised to pay Fischer $12,500 each month (representing 96 hours of work at $130 per hour) for the term of the contract. The Agreement concluded with the following paragraph, which is the crux of the current dispute:

Tom, as we have discussed, we will determine referral fees on a case by case basis. If the Program is successful, we hope to move from this arrangement to an ongoing consulting arrangement on a fee basis that will be paid by Program participants. The following administrative services will need to be performed going forward: (1) the initial calculation and the ongoing (annual) monitoring of the "average useful life" of assets financed in accordance with federal tax guidelines; (2) the monitoring and implementation of annual updated hospital board of directors' resolutions . . . ; (3) the coordination, accumulation and dissemination of information to First Chicago on a quarterly basis; (4) coordination with First Chicago to insure Program effectiveness; and (5) assistance to First Chicago with the marketing of new and/or expanded programs. We are thinking at this time of a sliding fee scale for such services from between 8 basis points per annum and 5 basis points based on the size of the Program, but this agreement will be worked out in the future when both of us know how the Program is working

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and the feasibility of continuing our work together.

Between May and December 1995, Fischer performed his obligations under the Agreement. The parties then agreed to extend the hourly fee arrangement to June 1996, and Fischer continued to work on behalf of the Program. During this period, Fischer completed the start-up process and initiated the Program with bond issues totaling $32 million: a $16 million, 20-year bond issue by the St. Francis Healthcare System and a $16 million, 27-year bond issue by ServantCor. At FCCM's request, Fischer continued to service and market the program from June 1996 through March 1997, despite the fact that his hourly fee arrangement had terminated upon completion of the start-up efforts. As a result of his post-June endeavors, Fischer...

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