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COUNTY OF COOK v. LYNCH

October 23, 1985

COUNTY OF COOK, PLAINTIFF,
v.
JOAN LYNCH, ET AL., DEFENDANT.



The opinion of the court was delivered by: Norgle, District Judge.

ORDER

After a jury trial in 1981, Joan Lynch ("LYNCH") was convicted of participating in a conspiracy to obtain fraudulent real estate tax assessment reductions in violation of the Racketeer Influence and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(d). The "pattern of racketeering activity" with which Lynch was charged consisted of "multiple acts of bribery and mail fraud, involving payments of money to Jimmie Smith, James Woodlock and other officials at the Board of [Tax] Appeals." Indictment, U.S. v. Lynch, # 84 CR 97, at Count 14, ¶ 6. Her conviction was affirmed by the Seventh Circuit Court of Appeals in September of 1982, United States v. Lynch, 699 F.2d 839 (C.A.7 1982). While Lynch's appeal was pending, the County of Cook ("COUNTY") filed this suit to recover treble damages under § 1964(c) of RICO (Count I) and an equitable accounting by Lynch (Count II). Judge Decker granted the County's motion for partial summary judgment on Count I and summary judgment on Count II. County of Cook v. Lynch, 560 F. Supp. 136, 140-41 (N.D.Ill. 1982).

In granting the County's motion for partial summary judgment on Count I, Judge Decker held that Lynch's prior conviction under § 1962(d) estopped her from denying liability in the County's civil suit. 560 F. Supp. at 140. At the same time, however, Judge Decker noted the burden of establishing the "remaining elements of liability under 18 U.S.C. § 1964(c), i.e., that (1) the Plaintiff was injured in its business or property (2) by reason of the Defendant's violation of Section 1962" remained with the County. Id. The County now uses Lynch's conviction under § 1962(d) and Judge Decker's grant of partial summary judgment as the basis for its present motion for summary judgment on the remainder of Count I — the § 1964(c) claim for treble damages.

The County maintains it was injured in its business or property by reason of Lynch's violation of RICO because it was forced to pay for the services of two corrupt officials (Woodlock and Smith) which were never performed. Lynch does not deny that such an injury is cognizable under § 1964(c). E.g., Hellenic Lines Ltd. v. O'Hearn, 523 F. Supp. 244, 248 (S.D.N.Y. 1981). Nor does Lynch disagree that the County's injury resulted from a violation of RICO.

The County suggests the proper measure of damages in this case is the entire salaries of the two corrupt officials during the period of the bribery scheme. This measure of damages is drawn from the common law remedy provided by Illinois courts for a tortious interference with an employment contract. E.g., ABC Trans National Transport v. Aeronautics Forwarders, 413 N.E.2d 1299 (1st Dist 1980); Vendo Co. v. Stoner, 58 Ill.2d 289, 321 N.E.2d 1 (1974). See also NSC International Corp. v. Ryan, 531 F. Supp. 362, 363 (N.D.Ill. 1981) (on issue of availability of jury trial in civil RICO action; court found civil RICO "most closely resembles an action for tortious interference with economic relations"). Strictly speaking, Lynch does not object to the County's position that its damages under RICO should be measured with reference to the common law remedy for a tortious interference with contract. See Deft's Memo at 9. See generally Sutherland Statutory Construction § 50.01 et seq. (4th ed. 1984). She does argue, however, that the County has failed to meet its burden under Fed.R.Civ.P. 56 and that she cannot be held liable for damages caused by other independent conspirators. The former argument raises issues involving the County's use of collateral estoppel in this action; the latter argument raises the issue of whether Lynch may be held liable for damages potentially resulting from the acts of other independent conspirators. This opinion first discusses the issues raised by the County's theory of damages and then proceeds to determine the reach, if any, of collateral estoppel in this lawsuit.

DAMAGES

The County maintains the proper measure of damages in this case is supplied by analogy to the remedy provided for the common law tort of intentional interference with contract. The remedy provided by Illinois courts for a tortious interference with an employment contract is the entire amount of the disloyal employee's salary during the period of disloyalty. See ABC, supra, at 1315. The caselaw does not make an allowance in damages for a disloyal employee's periodic loyalty. The entire salary is forfeited under the rationale that the employer is paying for all of the disloyal employee's performance and not just part of it. ABC, id., at 1314, 1315. The same result could be reached on a breach of fiduciary duty theory. See Monotronics Corp. v. Baylor, 107 Ill.App.3d 14, 62 Ill. Dec. 760, 765, 436 N.E.2d 1062, 1067 (2d Dist. 1982). Thus, if several parties conspire to interfere with an employer/employee contract, they will be jointly and severally liable for the entire salary of the disloyal employee. There can be no apportionment of damages among co-conspirators. Lynch does not dispute this.

Lynch contends that she was not the only person paying bribes to Woodlock and Smith. She names various persons ("on information and belief") who were making payments to the two Board members and insists that those independent payments were made without her knowledge or participation. Deft's Memo at 7-8. From this Lynch argues she may not be held jointly and severally liable for the conduct of persons with whom she neither conspired nor acted in concert. In essence, Lynch argues she is only liable for only a portion of the County's damages because others were also paying bribes to Woodlock and Smith. Such an argument suggests damages in this case can and should be apportioned.

The County maintains that its damages are not susceptible to apportionment among all potential defendants. Consequently, because apportionment is not possible, Lynch may be held solely liable for its entire damages notwithstanding the existence of independent bribery schemes involving other potential defendants. See generally Prosser and Keeton on Torts § 52 (1984) ("PROSSER & KEETON").

Ordinarily a tort plaintiff bears the burden of proof of his damages as to each defendant. However, where the independent, successive acts of several tort-feasors result in an indivisible injury to the plaintiff, then the burden of proof shifts and the tort-feasors are required to bear the burden of proving any reasonable apportionment of damages. To do otherwise would penalize an innocent plaintiff merely because his injury was caused by several tort-feasors. Thus, if the County's damages are indivisible, the burden of apportioning damages rests with Lynch. Her inability to carry that burden will result in liability for the entirety of the County's damages. This principle is applied most frequently in personal injury cases (e.g., Phennah v. Whalen, 28 Wn. App. 19, 621 P.2d 1304, 1309-10 (1980)), but it also has been applied in other contexts as well (e.g., Ricky Smith Pontiac v. Surbaru of New England, 14 Mass. App. 396, 440 N.E.2d 29 (1982) (unfair and deceptive trade practices in violation of state statute)).

The issue, therefore, is whether the County's damages are subject to any rational apportionment among the several independent tort-feasors. Illinois caselaw (c.f. Monotronics Corp. v. Baylor, 107 Ill.App.3d 14, 62 Ill.Dec. 760, 765, 436 N.E.2d 1062, 1067 (2d Dist. 1982)) and The Restatement (Second) Torts ("RESTATEMENT") suggest the County's injury (deprivation of the loyal services of its employees resulting from an intentional interference with contractual relations) is not the kind of injury which is capable of apportionment.

Section 433A of the Restatement states the rule for apportionment of damages among two or more causes:

  (1) Damages for harm are to be apportioned among two
    or ...

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