An Illinois state appeals court has affirmed a trial court’s ruling and found that a plaintiff suing the Big Ten Conference for breaching a confidentiality agreement involving the creation of a conference network has failed to define the alleged agreement with enough specificity to overcome the defendant’s motion for summary judgment.
On March 5, 2008, Robert Welsh sued the Big Ten and Big Ten Network Services, LLC, alleging misappropriation of trade secrets and breach of contract. At the heart of the matter was his work in the spring of 1997 when he began developing a business plan to enhance the profitability of Big Ten athletics. One component of Welsh’s plan was the creation of the Big Ten Network, a cable/satellite station providing in-depth coverage of the Big Ten. The details were set forth in a confidential business plan, dated May 1998.
Welsh presented that plan to the Big Ten in “early 1998,” which acknowledged the request for confidentiality in a letter written by Big Ten Commissioner James E. Delany, which he states in relevant part:
“We would like to confirm that the Conference acknowledges the confidential nature of the Business Plan, dated May 1998, for Big Ten Development. However, in that regard, we wish to notify you that many of the concepts set forth in the Business Plan have been considered from time to time by the Conference and other entities that have contacted the Conference. Accordingly, we cannot agree that such concepts are your proprietary property.”
Later that same year, Commissioner Delany wrote another letter, which stated:
“We have enjoyed the opportunity to discuss with you the potential development of an enterprise referred to in your business plan as Big Ten Development. This letter confirms The Big Ten Conference’s continued interest in exploring the development of the relationship between the Conference and Big Ten Development and further implementation of the business plan for Big Ten Development. The Conference shares your view that certain Conference properties (e.g., championship events, related marketing and media rights, etc.) could be better developed. We also agree that the coordination of championship events and the marketing of related rights provide exciting synergistic opportunities.
“The Conference is interested in the potential opportunities and synergies that can be created by Big Ten Development and is prepared to continue to move forward with the development of the relationship. It is understood, however, that this is a letter of interest only and is subject to the Conference’s satisfaction with the development of the proposed venture, the approvals of the board, various committees and groups of the Conference, and the negotiation and execution of definitive agreements. Consequently, this letter does not constitute a binding obligation for either of us.
Welsh alleged that, as a consequence of these promises and inducements, he distributed his business plan on a confidential basis and gave a detailed presentation on the proposed Big Ten Network to Big Ten officials at a May 18, 1998 meeting.
After several weeks, “Welsh was advised that, despite the merits and creativity of the business plan, the Big Ten was unwilling to cede control over such matters to an independent entity,” noted the court. “Several years later, the Big Ten announced it was partnering with other entities to introduce a Big Ten Network.”
Ultimately, Welsh sued, and the defendants countered with a motion to dismiss. The circuit court granted the motion, leading to the appeal. Specifically, Welsh argued that the circuit court erred in dismissing that part of his complaint (Count II) that alleged a violation of a confidentiality agreement.
On appeal, the panel of judges noted that to “properly plead a cause of action in breach of contract,” that among other things, “a plaintiff must establish definite and certain terms of the contract.” Brown & Kerr, Inc. v. American Stores Properties, Inc., 306 Ill. App. 3d 1023, 1030, 715 N.E.2d 804, 240 Ill. Dec. 117 (1999).
Expanding on this point, the court wrote that “Welsh failed to specify whether the alleged contract was written or oral, despite the prior directive of the circuit court to do so. As the type of contract alleged affects the Big Ten’s ability to respond to and defend against the claim, the complaint’s vague and contradictory allegations on this point fail to reasonably inform the Big Ten of the nature of Welsh’s claim.”
The panel was also receptive of the panel’s next argument that “Welsh failed to allege a definite offer and acceptance,” pointing out that the plaintiff cannot “impose a duty of confidence on a prospective buyer without actual notice and consent.”
The Big Ten further argues Welsh failed to plead definite and certain terms of the contract. In particular, the Big Ten notes Welsh failed to allege the duration of the confidentiality pledge. Welsh responds that this court upheld a confidentiality agreement that was unlimited in duration and geography in Coady, where the agreement was in writing and did not otherwise restrain trade. Coady v. Harpo, Inc., 308 Ill. App. 3d 153, 161-62, 719 N.E.2d 244, 241 Ill. Dec. 383 (1999).
Among the defendants’ other compelling arguments was that Welsh “failed to adequately plead a breach of contract. … (C)onfidentiality agreements, like other agreements, must be alleged in sufficiently clear and definite terms to state a claim upon which relief may be granted.”
Robert Welsh v. The Big Ten Conference, Inc.,; App. Ct. Ill., 1st Dist.; No. 1-10-2969, 2011 Ill. App. Unplug. LEXIS 1153; 5/25/11.
