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Appeals panel: Woman says she pitched Getaways concept to Groupon, but no written deal, so no cut

State Court

By Scott Holland | Sep 13, 2019

Groupon 1280

CHICAGO — A state appeals panel has determined a woman cannot sue for a cut of Groupon’s travel business, despite her claim she pitched the concept to the company.

Martha-Jane Foreman-Daitch sued Groupon in state court in August 2015, alleging breach of a partnership agreement, breach of fiduciary duties and unjust enrichment in connection with Groupon Getaways. She said she suggested “Travelon” to Groupon co-founder Eric Lefkofsky in a January 2010 meeting. Foreman-Daitch knew Lefkofsky socially, through his wife, and said the pitch went nowhere until Groupon and Expedia launched Groupon Getaways in July 2011.

Cook County Judge Jerry Esrig granted summary judgment in favor of Groupon. A three-justice panel of the Illinois First District Appellate Court ruled on Foreman-Daitch’s appeal in decision issued Sept. 3. Justice Carl Anthony Walker wrote the decision. Justices Mary Mikva and Daniel Pierce concurred. The order was issued under Supreme Court Rule 23, which restricts its use as precedent, except under very limited circumstances.

Illinois FIrst District Appellate Justice Carl Anthony Walker

Foreman-Daitch argued Esrig erred by dismissing her unjust enrichment claim, limiting the opinion of an expert witness on damages and granting summary judgment on the counts based on the idea of a partnership or joint venture. Her argument hinged on a point during the meeting where Lefkofsky allegedly brought Groupon sales leader Darren Schwartz into the meeting and said, “She has a great idea. Get this done. She knows everybody.”

Despite her implication “Lefkofsky intended to start the process of forming a partnership,” Walker wrote, a formal, legal partnership never materialized.

“Foreman-Daitch admitted that the parties have no written agreement,” Walker wrote. “They never discussed how to split losses or profits, account for the disproportionate capital contributions, or what percentage of the partnership each would own.”

The panel said her argument that the parties had a joint venture similarly failed.

Turning to the unjust enrichment claim, Foreman-Daitch argued Esrig improperly ruled the Illinois Trade Secrets Act precluded her claim because she never alleged the Travelon proposal was original or secretive, openly admitting the concept “bore substantial similarity to Jetsetter and Travelzoo,” Walker wrote.

The panel looked at a 1998 University of Chicago Law Journal article in which Robert Unikel examined possible lawsuits for misappropriation of “confidential information” that is not a secret, but still unknown to many people in a given field. In so doing, it found Foreman-Daitch’s argument lacking.

“Illinois has not adopted Unikel’s proposal,” Walker wrote. “But even if it did, Foreman-Daitch would not have stated a cause of action against Groupon for its use of ideas substantially similar to the well-known ideas used by Jetsetter and Travelzoo.”

Foreman-Daitch also pointed to a 2007 U.S. Seventh Circuit Court of Appeals opinion in Hecny Transportation Inc. v Chu, which held “it is unimaginable that someone who steals property, business opportunities, and the labor of the firm's staff would get a free pass just because none of what he filched is a trade secret.”

However, Walker wrote, Foreman-Daitch did not allege Groupon stole anything, poached staff or even that Expedia would have partnered with her but for Groupon’s intervention.

“Foreman-Daitch has alleged only use of her idea, an idea in which she shows no basis for claiming a proprietary right,” Walker wrote. “The circuit court correctly dismissed her claim for unjust enrichment.”

Because it affirmed Esrig’s judgment on all counts, the court said it did not need to consider Foreman-Daitch’s argument about limits to her witness’ damages testimony.

According to Cook County court records, Foreman-Daitsch has been represented by attorneys with the firm of Funkhouser Vegosen, of Chicago.

Groupon has been represented by attorney Richard J. Prendergast, of Chicago.

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Organizations in this Story

Illinois First District Appellate CourtGrouponRichard J. Prendergast,Ltd.Circuit Court of Cook CountyFunkhouser Vegosen Ltd.

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