Appeal from the Circuit Court of Kane County; the Hon. Richard
Weiler, Judge, presiding.
JUSTICE HOPF DELIVERED THE OPINION OF THE COURT:
Plaintiff Dr. Norris A. Erickson filed this libel action in the circuit court of Kane County seeking damages from defendant Aetna Life & Casualty Company (Aetna). Dr. Erickson, a chiropractor, treated a patient insured by defendant. Subsequently, on the basis of information contained in the defendant's file regarding plaintiff's treatment of the insured, plaintiff brought a claim against defendant for libel. After a jury trial plaintiff was awarded both compensatory and punitive damages. Defendant appeals.
On appeal defendant Aetna contends that the statement contained in defendant's file was not libel per se and that the statement was absolutely privileged because it was used in a workers' compensation proceeding. Defendant argues it was entitled to judgment notwithstanding the verdict because the evidence overwhelmingly favored defendant on the following issues: (a) whether the statement was defamatory; (b) whether the statement was false; (c) whether the defendant knew the statement to be false; and (d) whether defendant acted with actual malice on the punitive damages question. Defendant also contends that it is entitled to a new trial because the verdict is against the manifest weight and because the trial court failed to give defendant's tendered special interrogatories.
Plaintiff treated Pauline Ratajczak for injuries she sustained while employed as a school bus driver. Ratajczak saw two other doctors after her November 16, 1979, injury. In early 1980 plaintiff sent a bill for chiropractic services. When a period of time had passed and he was not paid he contacted defendant. Plaintiff testified that John Markuson, a senior account supervisor for defendant Aetna, told him that the bill was not paid because plaintiff was not a physician. Markuson testified that he discussed the case with Sheila Lance, medical cost coordinator for defendant, and they determined that the treatment rendered was unnecessary and the amount of the bill was unreasonable.
The alleged defamatory publication in this case was made by defendant on a form entitled "Chiropractic Claims Review Committee of Illinois, Claim Evaluation Report." In June of 1980 Aetna was advised of the existence of this committee. The purpose of the committee was to provide claims review of individual chiropractic claims that involved the relationship between the doctor, patient and "third party payer." A blank "Claim Evaluation Report" accompanied the letter from the chairman of the committee.
The Ratajczak case was assigned to Richard O'Brien, a trainee claim representative for defendant. He was told to obtain a chiropractic claim review on the file. O'Brien testified that after a cursory reading of the instructions, he filled out the form himself. He conceded that it was a mistake for him to have filled out the form and that he did not discuss the contents of the form with anybody in his office. The form was filled out as follows:
The "Claim Evaluation Report" in issue was a printed form which contained six printed comments regarding the type of care received by the claimant. As is apparent from the form itself, O'Brien indicated that both the frequency of care rendered and the term of care was not what was usually and customarily seen in evaluating chiropractic claims, relative to the diagnosis, type of case, and information submitted. O'Brien also entered the following language: "The duration of the care and treatment in this case appears to be unreasonable and unnecessary for the injury involved. Pauline Ratajczak treated with Dr. Erickson from November 19, 1979, until June 3, 1980. The total charge for this treatment was $892.50." O'Brien had no medical or chiropractic background other than his experience with workers' compensation files.
O'Brien testified that the claim report he prepared required that a check be attached to it, but he did not know if a check was prepared or whether or not the form was ever sent to the chairman of the Chiropractic Claims Review Committee of Illinois. O'Brien had made two status reports on the file which noted that they were waiting for the outcome of the chiropractic review committee.
Defendant's attorney, William Vanderwater, read O'Brien's report and believed that it supported Aetna's contention that the chiropractic care was not necessary and had been unnecessarily prolonged. Vanderwater showed the claim report to the attorney for Ratajczak, Richard Hannigan. Hannigan considered the report to be damaging to his client's case, and testified that the report "blew his case out of the water." Vanderwater introduced the report in evidence at the workers' compensation hearing. Ratajczak did not receive the temporary benefits or payment of the chiropractor's bill she had sought at that stage of the proceedings. Subsequently, Dr. Erickson contacted Hannigan and told him that the committee report had never been prepared by the chiropractic review committee. Later, Vanderwater also told Hannigan that the exhibit was a phony. Hannigan contacted the arbitrator and determined that it would be necessary to appeal the decision of the arbitrator to the full commission. After he discussed this with Aetna, Aetna was willing to negotiate a settlement for the first time. Aetna settled the case for $30,000, conditional upon Ratajczak paying her own chiropractic bills out of that sum.
In early June of 1981, Hannigan received a letter from Aetna, addressed to Dr. Erickson, which stated that Aetna would pay the chiropractic bill in full and conceded that it had made a serious error. Within a few days of receiving the letter Hannigan received a call from John Markuson of Aetna, who requested that Hannigan send the letter back because it was mailed by mistake. Hannigan responded by saying, "You're kidding."
Sheila Lance, medical cost controller for defendant Aetna, testified that she received a telephone call from a member of the chiropractic review committee inquiring about the Ratajczak file. Lance pulled the file. When she saw the report she realized it had been filled out by O'Brien, not by the Claims Review Committee. She showed it to Markuson, her supervisor, and told him what she had discovered. Lance and Markuson were both surprised at the development, and Lance contacted attorney Vanderwater. Vanderwater then talked to Hannigan, and they appeared before the arbitrator again. Lance wrote the letter explaining the "serious error" and offered to pay plaintiff's bill. However, Lance testified that although she had written this letter, the offer to pay the bill had been retracted. They still refused to pay the bill and maintained that the treatment was not "reasonable and necessary." She testified that on the basis of the other medical care received by Ratajczak, the chiropractic treatment was not needed. The Lance letter was never sent to plaintiff, but did go to other parties, including plaintiff's attorney.
On June 10, 1981, John Markuson, Lance's supervisor, wrote a letter which did not concede a serious error, but rather indicated that the request for chiropractic review was being resubmitted and that when the results of that review committee were received they would be substituted in the record before the Industrial Commission. Markuson did not know if the chiropractic review committee ever made a finding on this case. Markuson testified that even though he thought there had been a mistake made he felt that the treatment was not reasonable and necessary and that the bill should not be paid at that time.
Plaintiff presented evidence that workers' compensation claims amounted to 19 to 20% of plaintiff's practice in 1979 and at the time of trial in 1983 those claims represented 15 1/2% of his practice. After the trial the jury found in favor of plaintiff. Damages were assessed in the amount of $25,000 and punitive damages were assessed in the amount of $67,000.
Defendant's first contention on appeal is that the trial court erred in denying its motions for summary judgment and directed verdict because plaintiff did not have a cause of action against defendant and/or failed to sustain his burden on essential elements of his cause of action for libel. The first consideration we discuss is the question of whether the words used in this case are actionable under the innocent construction rule discussed in Chapski v. Copley Press (1982), 92 Ill.2d 344, 442 N.E.2d 195. Chapski modified that rule and found that a preliminary determination on this question should be made as a question of law. The Chapski court held that the alleged defamatory statement is ...