Agreement because the agreement was not actually performed within one year and should not be
deemed to have been capable of performance within one year. Two established principles of contract
law defeat Valley Hyundai’s argument. First, at-will contracts are enforceable even if they arc made
orally and even if actual performance took more than one year so long as the contract could have
been performed within one year. Second, complete performance by one party renders oral contracts
enforceable under the statute of frauds, particularly where the only performance obligation remaining
for the other party is the payment of money.

The viability of Brakulis’s counterclaim tums on whether the Employment Agreement is
barred by the statute of frauds. The statute of frauds provides that “[nJo action shall be
brought...upon any agreement that is not to be performed within the space of one year from the
making thereof, unless.,.in writing and signed by the party to be charged.” 740 ILCS 80/1. To
determine whether an oral contract falls under this provision, a court must decide not if the contract
was actually performed within a year’s time, but rather if the contract could have been performed
within a year’s time. Stein v. Malden Mills, Inc., 292 N.E.2d 52, 57 (1972). A “contract is
unenforceable only if it is impossible of performance in one year.” Balstad v. Solem Machine Co.,
168 N.E.2d 732, 734 (7th Cir. 1960). This means that the court must consider if there are any
conditions under which the contract could have been performed within one year. Jd.

In the present case, the Employment Agreement is silent as to the duration of Brakulis’
engagement as general manager of Valley Hyundai. Unless otherwise specified, Illinois law
presumes employment contracts to be ““‘at will’ and therefore terminable by cither party for good
reason, bad reason, or no rcason at all.” Tolmie v. United Parcel Serv., 930 F.2d 579, 580 qm" Cir.

1991). Parties may prove otherwise as long as the terms are clear and definite. See Duldulao v. St.

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original terms of the Employment Agreement were between Valley Hyundai and Brakulis.

On or about May 6, 2002, Lunn terminated Brakulis as general manager of Valley Hyundai.
At the time of the termination, Lunn, acting for Valley Hyundai, and Brakulis agreed to specific
monetary values for the severance benefits contemplated at the time the Employment Agreement was
made. These terms included a one-year severance salary. On or about June 6, 2002, Valley Hyundai
began paying Brakulis his severance salary in weekly installments of $2,500. However, Valley
Hyundai made only 23 of 52 weekly installments to Brakulis, making its last payment on November
15, 2002, upon the sale of the dealership assets. Valley Hyundai has not resumed payment of these
weckly installments. According to Brakulis, Valley Hyundai also has not repaid Brakulis’s capital
investment or his investment in the real estate where the dealership was operated. As yet unpaid
severance pay and other monies Brakulis contends are owed to him by Valley Hyundai under the
terms of the Employment Agreement total over $350,000.

ANALYSIS

“A complaint or counterclaim is subject to dismissal under (Fed. R. Civ. P.] 12(b) (6) only
if the nonmoving party can prove no set of facts consistent with its complaint or counterclaim that
would entitle it to relic.” Northern Trust Co. v. Peters, 69 F.3d 123, 129 (7th Cir. 1995) (citing
Warzon y,. Drew, 1995 WL 422847 (7" Cir. 1995)). To withstand a motion to dismiss, a complaint
must assert facts that would provide a sufficient basis for the claim. Gray v. Dane County, 854 F2d.
179, 182 (7th Cir. 1988). The court must accept all well-pleaded factual allegations in the
counterclaim as true and must make all reasonable inferences in favor of the claimant. Northern
Trust, 69 F.3d at 129 (7th Cir. 1995).

Valley Hyundai argues that the statute of frauds bars enforcement of the oral Employment

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Mary of Nazareth Hosp. Cir., 115 Ill.2d 482, 490 (1987). The facts discussed by the parties in
connection with this motion do not suggest ‘clear and definite” proof of a specified duration of
employment in the agreement, and nothing in the counterclaim attests to the Agreement being
anything but “at-will.” The court therefore concludes that under Illinois law the Employment
Agreement is an at-will contract that could be terminated at any time,

Still, Valley Hyundai argues that it was impossible for the Employment Agreement to have
been performed within one year. First, it argues that the actual performance of the contract occurred
over a two-year period. Second, it contends that since payment of the severance is contingent upon
Brakulis having working for at least one day and since the severance package was structured to be
payable over one year’s time, performance required a minimum ofa year and aday. However, since
the Agreement was an at-will contract, Valley Hyundai could have terminated it at anytime, Tolmie,
930 F.2d at 580 (at-will contracts do not fall under the one-year provision of the statute of frauds
since cither party could terminate the contract within a year’s time), and Valley Hyundai could have
structured the severance to be paid out within less than a year from termination, as in onc lump sum.
Since these conditions would have rendered the contract performance within a year, the statute of
frauds does not apply.

Moreover, in the case of employment contracts, complete performance by the employee
generally bars application of the statute of frauds. Mapes v. The Kalva Corp., 386 N.E.2d 148, 152
(1979). The actual performance of the employment itself, not the duration of the employment,
determines whether the agreement falls under the statute of frauds. See, e.g., Reiss v. El Bauer
Chevrolet Co., 238 N.E.2d 619 (1968), where the court ruled that the “Statute of Frauds is no

defense to an executed contract of employment, particularly where all that remains to be done by the

Be



inure Order orm (N97)

United States District Court, Northern District of Illinois

Name of Assigned Judge +, Sitting Judge if Other
or Magistrate Judge Joan B. Gottschall than Assigned Judge
CASE NUMBER 03 C 3289 DATE 6/25/2004
CASE Lunn Partners Multiple Opportunities Portfolio, L.P. vs. Brakulis
TITLE
[ln the following box (u) indivate the purty Gling the motion, ¢.z.. plaintiff, deZendunt, 3rd party plaintiff, und (h) state briefly the nature
MOTION: of the motion being presented.]
Counterdefendants’ motion to dismiss
DOCKET ENTRY:
Kay Filed motion of [ use listing in “Motion” box above.|
(2) ia} Brief in support of motion due
(3) a Answer brief to motion due. . Reply to answer brief due
(4) gq Ruling/Hearing on set for at
(5) Oo Status hearing|held/continued to] [set for/re-set for] on set for at
(6) Oo Pretrial conference[held/continued to] (set for/re-set for] on set for at
mM a Trial[sct forire-sct for] on at
(8) a [Bench/Jury trial] [Hearing] held/continued to at
(9) o This case is dismissed [with/without] prejudice and without costs|by/agreement/pursuant to]
CIFRCP4(m) Local Rule 41.1. OO FRCP41(a)(1) OO FRCP41(a)(2).
(io) sil [Other docket entry] For the reasons stated in the attached memorandum opinion and order,
counterdefendants’ motion to dismiss Count II of defendant/counterplaintiff s complaint [23-1] is denied.
(11) [For further detail see order attached to the original minute order.}
No nolices required, advised in open court.
No notices required. number of nrioes
Notices mailed by judge's staff. os TMM
‘tified counscl by telephone, cere
Docketing to mail notices
Mail AO 450 form. docketing deputy fatialy
Copy to judge/magistrate judge.
courtroom
aa ID acpi ow | 2 Hn nll
initials st
Date/time receiys
egntul Planks et ‘mailing deputy initine

twet



other party is the payment of money.” /d at 269. Under an at-will contract of unspecified duration,

the termination of an cmployee is tantamount to full performance. Décor Grates v. Fararo, Case

No. 92 C 6395, 1994 U.S. Dist. LEXIS 13915 at *8 (N.D II. Sept. 23, 1994). Under the reasoning

in Reiss, Brakulis’s claim for severance is not barred by the slatute of frauds because he completely

performed, and Valley must pay him the money promised in the Employment Agreement.
CONCLUSION

For the foregoing reasons, Valley Hyundai’s motion to dismiss Count Il of counterplaintiff

Brakulis’ counterclaim is denied.

ENTER:

OAN $8. GOTTSCHALL
jted States District Judge

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UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
LUNN PARTNERS MULTIPLE
OPPORTUNITIES PORTFOLIO, L.P.,
Case No. 03 C 3289
Plaintiffs,
v. Judge Joan B. Gottschall

JOHN BRAKULIS,

Defendant.
JOHN BRAKULIS, ‘

Defendant/Counterplaintiff,
v.

LUNN PARTNERS MULTIPLE
OPPORTUNITIES PORTFOLIO, L.P.,

Plaintiff/Counterdefendant
and

ROBERT J. LUNN; VALLEY HYUNDAI,
L.L.C, a Nevada limited liability company;
VALLEY HYUNDAI REALTY, L.L.C, a
Nevada limited liabilily company; and
VALLEY AUTOGROUP, INC., a Nevada
corporation,

eee eee

Counterdefendants.

MEMORANDUM OPINION AND ORDER

Defendant/Counterplaintiff John Brakulis (“Brakulis”) filed a counterclaim alleging multiple



brcaches of contractual and monetary obligations by plaintiff/counterdefendants Lunn Partners
Multiple Opportunities Portfolio, L.P. (“Lunn Partners”), Robert J. Lunn (“Lunn”), Valley Hyundai,
LLC (“Valley Hyundai”), Valley Hyundai Realty LLC (“Valley Realty”), and Valley Autogroup, Inc.
(“Autogroup”). Counterdefendants filed a motion to dismiss Count II of Brakulis’ counterclaim,
charging breach of the Employment Agreement. For the reasons stated below, the motion to dismiss
Count II is denied.

BACKGROUND

Tn summer 2000, Lunn decided to purchase 1) a car dealership in Henderson, Nevada and 2)
the real estate on which the dealership is located. In or about June 2000, Lunn formed Valley
Hyundai in order to purchase (he dealership in Henderson. Five months later, in November 2000,
Lunn formed Valley Realty to purchase the real estate upon which the dealership is situated. In order
to become a licensed Hyundai dealer, Valley Hyundai had to be managed by an individual with
“minimum business experience in the automotive industry.” Lunn, as owner of Valley Hyundai,
looked to Brakulis, who had previously operated and managed automobile dealerships in Chicago,
Mllinois, to fulfill this role.

In or about December 2000, Brakulis entered into an oral employment agreement (“the
Employment Agreement”) to act as general manager of Valley Hyundai. In an oral agreement, Lunn,
acting on behalf of Vallcy Hyundai, and Brakulis settled the terms of Brakulis’s employment. The
employment contract enunciated the terms of compensation and severance. The severance portion
of the agreement concluded that upon termination, Brakulis would reccive a package that included
“the return of his investment in the dealership and real estate where the dealership operated.” In his

counterclaim, Brakulis referred specifically to Valley Hyundai as the counterdefcndant since the

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