Pippen v. Pedersen
986 N.E.2d 697
Ill. App. Ct.2013Background
- Pippen and Air Pip sued Pedersen & Houpt, Clarke, and Peer Pedersen for negligence and breach of fiduciary duty in connection with a Gulfstream II aircraft purchase.
- Lunn Partners acted as financial advisor to Pippen; Lunn entities and their interests were involved in the aircraft deal and were represented by Pedersen & Houpt.
- Structured agreements included Air Pip and CF Air acquiring the aircraft for $7 million, with ownership, leasing, and open charter arrangements designed around Air Pip’s 51% interest; Frost and related parties were involved in the transactions.
- Defendants allegedly failed to ensure signed final agreements before Pippen executed key documents, and Frost and CF Air later altered ownership without plaintiffs’ consent.
- Defendants allegedly conducted limited due diligence, relied on Lunn for due diligence despite conflicts of interest, and disbursed substantial funds to Frost and related entities.
- The trial court granted summary judgment on the breach of fiduciary duty claim as duplicative of negligence; the jury later found damages on negligence, with setoffs reducing the award to $790,901.89; the appellate court affirmed the summary judgment ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are negligence and breach of fiduciary duty duplicative? | Pippen contends claims are non-duplicative; conflicts of interest support fiduciary claim. | Defendants contend the claims are duplicative because same operative facts support both. | Yes, duplicative; fiduciary claim dismissed. |
| May plaintiffs plead alternative theories if duplicative claims exist? | Collins allows pleading in the alternative. | Neade rejects dual pursuit of duplicative claims. | No, duplicate claims may not be pursued; summary judgment upheld. |
Key Cases Cited
- Neade v. Portes, 193 Ill.2d 433 (1980) (establishes duplicativeness test for fiduciary vs. negligence claims)
- Nettleton v. Stogsdill, 387 Ill.App.3d 743 (2008) (operative facts determine duplicativeness)
- Majumdar v. Lurie, 274 Ill.App.3d 267 (1995) (duplication analysis for fiduciary vs. malpractice claims)
- Metrick v. Chatz, 266 Ill.App.3d 649 (1994) (fiduciary duty and negligence interplay in malpractice)
- Collins v. Reynard, 154 Ill.2d 48 (1992) (pleading in the alternative; but not for duplicative claims)
- Pegram v. Herdrich, 530 U.S. 211 (2000) (outsized analogy on fiduciary duties and damages)
- Tri-G, Inc. v. Burke, Bosselman & Weaver, 222 Ill.2d 218 (2006) (necessity of duty, breach, and causation elements taken together)
- Owens v. McDermott, Will & Emery, 316 Ill.App.3d 340 (2000) (attorney-client fiduciary considerations)
- First National Bank of LaGrange v. Lowrey, 375 Ill.App.3d 181 (2007) (standard of care in attorney malpractice disputes)