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Hearst Corp. v. Associated Trade Press

AUGUST 5, 1968.

THE HEARST CORPORATION, A CORPORATION, PLAINTIFF-APPELLANT,

v.

ASSOCIATED TRADE PRESS, INC., A CORPORATION, DEFENDANT, AND JAMES R. COMPTON, DEFENDANT-PETITIONER-APPELLEE.



Appeal from the Circuit Court of Cook County; the Hon. DONALD J. O'BRIEN, Judge, presiding. Judgment reversed.

GOLDENHERSH, J.

Plaintiff appeals from the judgment of the Circuit Court of Cook County in the amount of $750 entered upon allowance of the petition of defendant, James R. Compton, based upon section 41 of the Civil Practice Act (c 110, sec 41, Ill Rev Stats 1967) seeking the taxing of attorney's fees and expenses.

Defendant's petition states that the court allowed successive motions to strike plaintiff's original and first amended complaints; defendants moved to strike plaintiff's second amended complaint; the court denied the motion with respect to the corporate defendant, and as to the defendant, James R. Compton, it allowed the motion, and dismissed the action with the comment that the second amended complaint stated no cause of action against him; upon the court's making this statement, counsel for plaintiff (not present counsel) stated that plaintiff knew it had not stated a cause of action against the defendant, James R. Compton, that it had no evidence upon which it could state a cause of action against him, and he was joined as a party defendant for fear that if the court granted an injunction against the corporate defendant, defendant, James R. Compton, might change the name of the corporation and do business under another name.

In its answer, plaintiff did not deny the allegations contained in the petition, but pleaded contentions, which are, in substance, the same as are presented and argued in this appeal.

The trial court entered an order finding that the petition should be allowed and at a later date heard testimony with respect to the value of defense counsel's services.

Defense counsel testified that defendant, James R. Compton, president of the corporate defendant, retained him to represent both the corporation and himself in the litigation. He stated that the services performed on behalf of both defendants were substantially the same as would have been required in the representation of either defendant, had only one of them been sued. The record shows that defendants, in each instance, filed a joint motion and were represented by the same counsel. He testified that the reasonable value of the work performed was $2,330. The court found that of this sum $750 was to be attributed to services performed for the defendant, James R. Compton, and entered judgment in that amount.

Plaintiff appeals from the judgment, and defendant has cross-appealed, contending that the judgment should have been entered in the amount of $1,165, one-half the sum shown to have been expended for attorney fees.

Plaintiff contends that (a) there can be no recovery under section 41 unless the allegations in the complaint or amended complaints are found to be untrue, (b) the successive motions to strike admitted the truth of the allegations, (c) there was no showing that the allegations were made without reasonable cause and not in good faith, and (d) there was no evidence of any services rendered by defense counsel which related to the dismissal of the complaints as to the individual defendant, James R. Compton.

Defendant contends that section 41 is not to be construed as applicable only to situations involving untrue statements, but is intended to prevent harassment by bringing actions which are vexatious or without legal foundation, or the pleading of frivolous matter. The parties have cited, and this court has reviewed, a number of cases which arose under this section of the Civil Practice Act. In Awotin v. Abrams, 309 Ill. App. 421, 33 N.E.2d 179, it was held that there could be no recovery of fees and expenses under section 41 for the reason that although the allegations in the complaint were found to be insufficient when tested by a motion to strike, they were not "untrue" within the meaning of the statute. The court did not further define the term "untrue."

In Ready v. Ready, 33 Ill. App.2d 145, at page 161, 178 N.E.2d 650, the court said "Section 41 is an attempt of the legislature to penalize the litigant who pleads frivolous or false matters or brings a suit without any basis in law and thereby puts the burden upon his opponent to expend money for an attorney to make a defense against an untenable suit. The failure of the courts to apply the sanction provided in this section of the Practice Act has been frequently criticized by writers in the various law reviews.

"One of the purposes of section 41 is to prevent litigants being subjected to harassment by the bringing of actions against them which in their nature are vexatious, based upon false statements, or brought without any legal foundation."

Prior to making the quoted statement the court said, "The trial court on the motion of the defendant included in the transcript of the record filed in this court certain depositions of Walter Ready, Jr. We must assume that those depositions either were attached to the petition or were considered by the court, and the statements made by the court during the hearing so indicated. From those depositions it is evident that most of the allegations made in the complaint were untrue. The order made by the trial court allowing attorneys' fees was an exercise of its sound discretion under the statute."

Under the circumstances, it is not clear to us whether, absent the finding "that most of the allegations made in the complaint were untrue," the court would have affirmed the judgment.

In Urban v. Brady, 86 Ill. App.2d 158, 230 N.E.2d 65, the court rejected a cross-appeal seeking the taxing of fees and expenses under section 41 and in so doing said at page 162, "That section provides for such an allowance where allegations or denials are made without reasonable cause and are found to be untrue. No specific finding of this ...


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