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Catalano v. Pechous

OPINION FILED DECEMBER 19, 1978.

JOSEPH G. CATALANO ET AL., PLAINTIFFS-APPELLANTS,

v.

ROBERT C. PECHOUS ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. DANIEL P. COMAN, Judge, presiding.

MR. JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT:

Mr. JUSTICE DOWNING delivered the opinion of the court:

Plaintiffs, seven aldermen of the city of Berwyn (Berwyn), Illinois, appeal an order of the circuit court of Cook County denying their motion for summary judgment and granting summary judgments in favor of defendant Robert C. Pechous and defendants Mark Fineman and Field Enterprises, Inc. Defendant Pechous' statements, made while serving as Berwyn's city clerk and quoted in an article written by Fineman and published by Field, form the basis of this libel suit. The only issue on appeal is whether the trial court erred in denying the plaintiffs' motion for summary judgment and in granting the defendants' motions. We affirm as to defendants Fineman and Field, and reverse and remand as to defendant Pechous.

Prior to January 1976, Berwyn had its garbage collected by city employees. On December 19, 1975, the plaintiffs as trustees of Berwyn voted to advertise for bids from private scavenger firms and to open the bids submitted on January 12, 1976. On December 29, 1975, several representatives from private scavenger firms attended the Berwyn Public Works Committee meeting. Following the adjournment of this meeting, the regular city council meeting was held. Of the representatives attending the Public Works Committee meeting, only the three who had previously submitted bids remained for the regular council meeting. At this meeting the plaintiffs opened these firms' bids and accepted the lowest bid submitted by the Clearing Disposal Company (Clearing). The plaintiffs then voted to declare an emergency and create a $600,000 emergency appropriation for the private scavenger service. It was during this meeting that defendant Pechous first made the following allegedly libelous statement:

"Two hundred and forty pieces of silver changed hands — thirty for each alderman."

The controversial nature of the award of the contract to Clearing is reflected in the actions taken by other city officials and bidders shortly thereafter. On January 5, 1976, Thomas Hett, the city attorney, sent the council a letter stating that its action in declaring an emergency was illegal and questioning the wisdom of the change to a private scavenger firm. On the same day, Emil Vacin, Berwyn's mayor, vetoed the award of the contract to Clearing in a letter, stating that he found the plaintiffs' actions at the December 29 meeting "questionable [and] patently unfair." The mayor's letter further questioned why all of the prospective bidders who were present at the Public Works Committee meeting had not been told to remain for the regular meeting. A second letter from Mayor Vacin to the plaintiffs vetoed the $600,000 appropriation. The plaintiffs' letter in response notified the mayor of their decision to override his veto. On January 12, 1976, Mayor Vacin returned the unsigned contract along with a letter reaffirming his veto on the ground that the contract was not in the best interest of the city.

The results of a survey of Berwyn residents favoring the retention of the city employees for garbage collection were sent to the mayor and to the plaintiffs by the Public Works Committee. The city employees charged that the plaintiffs' actions violated their collective bargaining agreement. One of the private scavenger firms planning to submit a bid by the original January 12 deadline notified the city of its intention to bring suit to have the December 29 bidding declared illegal. Ultimately, the circuit court threw out the December 29 bids and ordered the plaintiffs to readvertise.

Defendant Fineman began his investigation of the Clearing contract early in April 1976. During the course of his investigation, he reviewed the foregoing letters and documents, the minutes of the relevant meetings, and the contract. Before writing the article, defendant Fineman talked to the following people: John Van Tholen, Jr., a former Berwyn employee who had spoken in favor of the change to a private service and who had been employed by Waste Management, Inc. (WMI), the parent company of Clearing, within a month of the award of the contract; John DeBoer, the Clearing representative at the December 29 meeting; Joseph Sevick, whose occupation is not of record; Don Redicliffe, a WMI employee; Mayor Emil Vacin; a source whose name remains unknown; and a number of other persons as part of his general investigation of suburban garbage pickup services.

Defendant Fineman first spoke with defendant Pechous early in April. During the conversation, defendant Pechous made the following statements which were later quoted in the article:

"Something smells in this contract more than garbage. * * * I said at the council meeting when the contract was first awarded that I think 240 pieces of silver changed hands — 30 for each alderman. * * * There was just something suspicious about the way that contract was approved. * * * I've said all along that if it were ever discovered how that contract was really approved, there'd be some vacant chairs in the city council. * * * There are just too many unanswered questions in the contract. The whole thing was railroaded through, and we can't help but think there was some stronger motivation behind it."

Defendant Fineman's article entitled "Berwyn Trash Pact Raises Stink/Berwyn Garbage Agreement Raises Stink" appeared in the May 12-13, 1976, edition of Suburban Week, a weekly supplement to the then Chicago Daily News and the Chicago Sun-Times published by defendant Field.

Defendant Fineman reported that the plaintiffs had vehemently denied having taken payoffs, each claiming that defendant Pechous' statements were politically motivated insofar as Pechous was the democratic candidate for State representative and all but one of the plaintiffs were republicans. Fineman further reported John Van Tholen, Jr.'s support of the Clearing contract, his appointment as Berwyn streets superintendent, the nullification of that appointment, and his subsequent employment by WMI. The article further stated that an inside industry source claimed that Van Tholen had been given the WMI job "as a reward for having made sure the Berwyn contract was given to Clearing." However, Fineman quoted Van Tholen's denial of these charges, and also reported the plaintiffs' denials that Van Tholen had influenced their decision in awarding the contract.

Fineman's article then reviewed the bids opened at the December 29 meeting. These bids were from C. Groot Automatic Disposal Company, Van Der Molen Disposal Company, and Clearing, and were $3.55, $3.20, and $3.15 per month per family respectively. Based on the Securities and Exchange Commission documents that he had reviewed, Fineman reported that the C. Groot Company was owned by John C. Groot, a WMI stockholder and one of WMI's eight founders. The article stated that a WMI spokesman had confirmed that Groot was one of its stockholders but had denied any connection between the two firms. However, Fineman also reported an inside industry source's claim that the Groot bid was never intended to be competitive with Clearing's bid.

In conclusion Fineman reported that the December 29 bids were thrown out and the plaintiffs ordered to readvertise for bids by Circuit Court Judge Francis Delaney. Reportedly this action was taken in response to suits filed against the plaintiffs by the Berwyn democratic administration officials and a private scavenger firm. Fineman went on to note that Clearing's second bid was still the lowest and that it had again been awarded the contract in February. However, the article continued stating that some Berwyn officials were considering turning over information on the award of the first contract to Federal authorities.

On June 28, 1976, plaintiffs filed a three-count libel complaint. Count I alleged that defendant Pechous' "240 pieces of silver" statement made at the council meeting and his other statements made to defendant Fineman were intended to lead his listeners to believe that the plaintiffs were bribed to vote for the contract or that they voted for personal gain in violation of their fiduciary duties of office. Plaintiffs further alleged that these statements were understood in that manner, were false, and were uttered with malice. Count II iterated the allegations of count I, alleged that malice was the gist of the action, and sought punitive damages. Count III alleged that defendants Fineman and Field's article contained statements that accused the plaintiffs of taking bribes (Pechous' statements), attributed the employment of Van Tholen to the plaintiffs' illegal and improper action, and charged plaintiffs with further "suspicious" and illegal behavior. Count III further alleged that these accusations and implications were false and that the article was written and published knowing that such statements were false or with reckless disregard of their truth or falsity.

Defendant Pechous' answer generally denied the plaintiffs' allegations. Defendants Fineman and Field's answer admitted publishing the article but denied all other allegations. Defendants Fineman and Field also asserted as affirmative defenses that the article was published about public officials and was not published with knowledge of its falsity or probable falsity; that the article was devoted to the public interest; and that defendant Pechous' statements in the article were made at the Berwyn council meeting, and therefore the publication of these statements could not form the basis of a libel action against them.

On October 26, 1976, defendants Fineman and Field moved for summary judgment reasserting the foregoing privileges and contending that defendant Pechous' "240 pieces of silver" statement was an expression of opinion, and that all of the quoted statements were capable of an innocent construction. Defendant Fineman's affidavit stated that he did not believe any statements in the article were false.

On May 31, 1977, the plaintiffs responded to this motion and filed a cross-motion for summary judgment. The plaintiffs contended that the article and the statements of defendant Pechous were incapable of an innocent construction and that the article was not privileged because: (1) defendant Pechous' statements were made in his private capacity and were reported by the defendants three months after the fact, and (2) the constitutional privilege applies only to reports of the actions of public officials in the performance of their public duties and does not apply even then when the statements are libelous per se. The plaintiffs' cross-motion was supported by the affidavit of one of the plaintiffs, stating generally that defendant Pechous had no part to play in awarding the contract. The affidavits of three other plaintiffs filed on June 9, 1977, generally rebutted defendant Fineman's statement that he did not believe any of the statements to be untrue and stated that they believed that the article was published with reckless disregard of whether the statements within it were true or false.

On the basis of these pleadings, and defendant Fineman's answers to interrogatories, investigatory documents, and notes, the trial court granted summary judgment for defendants Fineman and Field on June 9, 1977. The court found that defendant Pechous' statements did not fall within the scope of Lulay v. Peoria Journal-Star, Inc. (1966), 34 Ill.2d 112, 214 N.E.2d 746 (reports of governmental acts and utterances), or Blair v. Walker (1976), 64 Ill.2d 1, 349 N.E.2d 385 (executive privilege), and that there was a question of fact as to whether the article was published with actual malice as defined in New York Times Co. v. Sullivan (1964), 376 U.S. 254, 11 L.Ed.2d 686, 84 S.Ct. 710. However, the trial court also found that the application of the innocent construction rule of John v. Tribune Co. (1962), 24 Ill.2d 437, 181 N.E.2d 105, cert. denied (1962), 371 U.S. 877, 9 L.Ed.2d 114, 83 S.Ct. 148, rendered the statements in the article non-actionable. Accordingly, the court dismissed the action against defendants Fineman and Field and denied the plaintiffs' cross-motion.

On July 18, 1977, defendant Pechous also moved for summary judgment on the grounds that his "240 pieces of silver" statement was an assertion of opinion, that this and the other statements published in the article were capable of an innocent construction, and even if libelous, were privileged under the holdings of New York Times and Blair. Defendant Pechous' affidavit stated that he did not act with malice in making the comments, and that as city clerk he had exercised his constitutional right to inform the Berwyn residents of his opinion of the plaintiffs' actions.

The plaintiffs again filed a cross-motion for summary judgment asserting that defendant Pechous' statements were incapable of an innocent construction, were not privileged under Blair or under Lulay and were made with actual malice. Plaintiff Myrtle D. Slawko's affidavit stated that defendant Pechous had no part to play in awarding the contract and that his statements were untrue.

On September 22, 1977, the trial court granted summary judgment for defendant Pechous and denied the plaintiffs' cross-motion. In so doing, the court found that the defendant's statements did not fall within the scope of the executive privilege cases, but that they were capable of an innocent construction.

It is from these findings and rulings that the plaintiffs appeal.

I.

We first consider the decision as to defendant Pechous. Plaintiffs challenge all of defendant Pechous' statements quoted in the Suburban Week article. However, the plaintiffs' arguments in their briefs and at oral argument before this court were directed to his "240 pieces of silver" statement. For these reasons, we will consider only ...


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