Opinion ID: 689908
Heading Depth: 2
Heading Rank: 2

Heading: The Conflict-of-Laws Problem

Text: 20 In light of the fact that Florida will not recognize a cause of action for breach of promise to marry, and Illinois will, the parties hotly contest which state's law governs the claim. Richard contends that Sharon's claim is barred because Florida does not recognize the cause of action, and the parties became engaged in Florida. Sharon, however, claims that the place of making the contract is not dispositive. Instead, she suggests that we apply the Second Restatement's most significant contacts test because the place of contracting (Florida) was different from the place where the parties planned to marry (Illinois). In light of Illinois's contacts with the facts of the dispute, she claims that Illinois law controls the fate of her claim. The district court found that Illinois law applied to Sharon's claim. We agree with that conclusion. 8 21 As a federal court sitting in diversity, we must look to the conflict-of-laws rules in the jurisdiction in which we sit to choose the substantive law applicable to the case. Florida Risk Planning Consultants, Inc. v. Transport Life Ins. Co., 732 F.2d 593, 595 (7th Cir.1984) (quoting Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)). Under the law of Illinois, Richard relies on an appeal to traditional conflict-of-laws principles governing contracts. These traditional principles suggest that a contract is construed according to the law of the state in which it was entered, unless performance was to be in another state--in which case that state's law governs. William J. Lemp Brewing Co. v. Ems Brewing Co., 164 F.2d 290, 293 (7th Cir.1947), cert. denied, 333 U.S. 863, 68 S.Ct. 745, 92 L.Ed. 1142 (1948). If the state in which the contract was formed does not recognize a cause of action for its breach, however, comity demands that a court refuse to enforce the contract at all. Frankel v. Allied Mills, Inc., 369 Ill. 578, 17 N.E.2d 570, 572 (1938). A straightforward application of the traditional rules would result in the application of Florida law because the agreement to marry was first formed in Florida, and Florida refuses to recognize a cause of action for breach of promise to marry. 22 We do not believe that traditional choice-of-law principles should control here, however. Illinois courts have long since abandoned a formalistic resort to the traditional conflicts rules. Palmer v. Beverly Enterprises, 823 F.2d 1105, 1107 (7th Cir.1987). The Illinois Supreme Court refuses to appeal to the more traditional principles when a wooden application of them would result in unjust and anomalous results. Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593, 596 (1970). Therefore, that court expressed considerable doubt about the efficacy of the vested rights doctrine because it ascribes undue significance to the place at which the rights of the parties vest. Id., 262 N.E.2d at 595. In Ingersoll, the vested rights doctrine would have required the court to look to the law of the jurisdiction where the injury occurred to conclude that the plaintiff possessed a cause of action not recognized by the state where the parties had the most significant contacts. 262 N.E.2d at 596. Instead, the Ingersoll court adopted the Second Restatement's most significant relationship test. Id. See generally Restatement (Second) of Conflicts Sec. 145 (1971). 23 We find Ingersoll's reasoning persuasive here. The cause of action for a breach of a promise to marry has a hybrid character. Although it is premised on the existence of a contract, or an exchange of promises between the parties, White v. Prenzler, 7 Ill.2d 624, 131 N.E.2d 540, 543 (1956), it nevertheless recognizes tort-like elements of damage. Stanard v. Bolin, 88 Wash.2d 614, 565 P.2d 94, 96 (1977). This hybrid character does not itself compel the adoption of conflicts principles governing torts. It does, though, render a strict application of the traditional conflict-of-laws principles for contracts somewhat less appealing. Our holding does not, however, rest on these grounds. 24 Instead, we believe that Ingersoll is indicative of the approach the Illinois Supreme Court would take if confronted with the question that we decide today. As we have previously noted, Ingersoll's reasoning extends to contract cases. Palmer, 823 F.2d at 1107. The criticism of choice of law rules grounded on the vested rights doctrine applies with full force to [the] case where [a state's] only interest in [the] dispute is by virtue of the alleged making of the contract there ... and the significance traditionally bestowed upon that fact by the vested rights doctrine. Id. at 1108. Although we deal with comity here, the same considerations are relevant. The appeal to Florida law is premised entirely on the fact that the parties became engaged in the Orlando airport while waiting for a return flight to Chicago. Florida's connection to the case is therefore tenuous, and the belief that Florida law should govern can only be defended with reference to the earliest conflict-of-law principles. 25 We continue to believe, however, that the Illinois Supreme Court would apply the Second Restatement's most significant contacts test. See generally, Restatement (Second) of Conflicts Sec. 188 (1971). This is the test that we have relied upon in the past to govern contract disputes. Palmer, 823 F.2d at 1107-08; Florida Risk Planning, 732 F.2d at 595. And this is the test that a number of Illinois appellate courts have endorsed. See generally Champagnie v. W.E. O'Neil Construction Co., 77 Ill.App.3d 136, 32 Ill.Dec. 609, 614-16, 395 N.E.2d 990, 995-97 (1979). That State's appellate courts have continued to apply this test in both substantive contract cases, see, e.g., Purcell and Wardrope v. Hertz Corp., 175 Ill.App.3d 1069, 125 Ill.Dec. 585, 592, 530 N.E.2d 994, 1001 (1988); Boise Cascade Home & Land Corp. v. Utilities, Inc., 127 Ill.App.3d 4, 82 Ill.Dec. 180, 186-87, 468 N.E.2d 442, 448-49 (1984), and in forum non conveniens cases involving contracts. See Certain Underwriters at Lloyd's London v. Bertrand Goldberg Ass'n, 238 Ill.App.3d 692, 179 Ill.Dec. 709, 714, 606 N.E.2d 541, 546 (1992); Illinois Tool Works v. Sierracin, 134 Ill.App.3d 63, 89 Ill.Dec. 40, 44-45, 479 N.E.2d 1046, 1050-51 (1985). In fact, we have no indication that the Illinois Supreme Court would be dissatisfied with the most significant contacts approach. Quite to the contrary, at least where insurance contracts are concerned, the Illinois Supreme Court seems to approve of the factors considered by the Second Restatement test. See Lee v. Interstate Fire & Casualty, 826 F.Supp. 1156, 1159 (N.D.Ill.1993) (discussing dicta in Hofeld v. Nationwide Life Ins. Co., 59 Ill.2d 522, 322 N.E.2d 454 (1975)). 26 The fact that Illinois's appellate courts might occasionally depart from the otherwise general application of the Second Restatement test does not alter our analysis. See, e.g., Olsen v. Celano, 234 Ill.App.3d 1045, 175 Ill.Dec. 799, 803-04, 600 N.E.2d 1257, 1261-62 (1992) (applying the traditional principle that a brokerage contract that is invalid under the law of the place of contracting is unenforceable everywhere). We are not required to follow the holding of a state appellate court if we do not believe it reliably predicts the state supreme court's stance on an issue. Indiana Harbor Belt R. Co. v. American Cyanamid, 916 F.2d 1174, 1176 (7th Cir.1990). Courts have previously recognized that the choice-of-law rule in Illinois for contracts cases appears to be in flux. Barry Gilberg, Ltd. v. Craftex Corp., Inc., 665 F.Supp. 585, 590 (N.D.Ill.1987); see also Lee, 826 F.Supp. at 1159-60 (finding the fact that the appellate court has occasionally stated a choice-of-law rule different from the most significant contacts test insignificant). But this hardly alters our responsibility to adopt the approach by which we believe the Illinois Supreme Court would abide. Absent indication that the Illinois Supreme Court is moving away from the common-sense conflicts approach that it embraced in Ingersoll, 262 N.E.2d 593, we will continue to apply the Second Restatement's most significant contacts test. 27 The appellate court's holding in Olsen, contrary to the defendant's contention, does not constitute such an indication. Olsen involved a contract for the sale of real estate. In it, the appellate court affirmed the dismissal of a complaint because the contract involved was void under the law of the state where it was made. In resorting to this older rule, the appellate court relied on Frankel v. Allied Mills, Inc., 369 Ill. 578, 17 N.E.2d 570 (1938) (holding that the validity of a contract for a commission for the sale of real estate is determined by the law of the state where the contract is made), and did not apply the significant contacts test. 175 Ill.Dec. at 802-03, 600 N.E.2d at 1260-61. While this holding might have some predictive validity for Illinois's approach to cases involving real estate (a subject on which we offer no opinion), it hardly governs here. 28 The present case involves a broken engagement. For reasons noted earlier, this cause of action is not purely contractual in nature. Neither is it in any way tied to Florida. Instead, the fact that the agreement to marry was first discussed in Orlando was something of a fortuity. A glance at the record reveals a fair amount of wrangling about what exactly counts as a complete and formal engagement. Sharon apparently argued to the district court, for instance, that despite the original Florida discussion, the contract to marry was not consummated until the parties later purchased an engagement ring and set a wedding date in Illinois. Mem.Op. at 10-11. Whatever logical difficulties one might have with such an argument, we note that a more formal engagement--in the sense that Richard got down on one knee and proffered a diamond ring--later occurred in Chicago (according to Richard, once, and according to Sharon, twice). The amount of confusion surrounding the finality of the parties' agreement to marry demonstrates the transitory nature of an engagement. Unlike land, it is not invariably tied to a particular place. 29 In contracts involving the transfer of an interest in land, on the other hand, traditional rules typically require a court to look to the situs of the land to determine the governing law. See Eugene F. Scoles & Peter Hay, Conflict of Laws Sec. 18.23 (1992); see also Restatement (Second) of Conflicts Secs. 188 & 189. Although Olsen stated a somewhat different rule, the court in fact applied the law of the situs in that situation. 175 Ill.Dec. at 803, 600 N.E.2d at 1261. We therefore find Olsen unpersuasive in the present case. Whatever its import for conflicts cases involving real estate, it has no application here. 30 In light of the stated considerations, we believe the Second Restatement's most significant contacts test should govern choice of law analysis. See generally, Restatement (Second) of Conflicts Sec. 188. Under that test, the contacts relevant to a choice-of-law decision include the place of contracting, negotiation, performance, location of the subject matter of the contract, and the domicil[e], residen[ce], place of incorporation, and business of the parties. Palmer, 823 F.2d at 1109-10 (quoting Champagnie, 32 Ill.Dec. at 615, 395 N.E.2d at 996). 31 Illinois law clearly governs under the most significant contacts test. To the extent that the parties ironed out the details of the proposed marriage, they did so in Illinois (or on a plane back to Chicago), where Sharon lived and worked. Richard purchased Sharon's wedding ring in Chicago, and he got down on one knee and restated the marital promise there. The parties eventually planned to be married in Chicago, and had begun searching for appropriate wedding locations in that area. These aspects of the agreement to marry are sufficient to convince us that Illinois law should govern the parties' transaction. 9