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05/18/88 Robert H. Mittelman, v. John J. Witous Et Al.

May 18, 1988





525 N.E.2d 922, 171 Ill. App. 3d 691, 121 Ill. Dec. 615

May 18, 1988; As Amended December 2, 1988.

Appeal from the Circuit Court of Cook County; the Hon. Myron T. Gomberg, Judge, presiding.

Rehearing Denied July 18, 1988. 1988.IL.766


JUSTICE FREEMAN delivered the opinion of the court. WHITE, P.J., concurs. JUSTICE RIZZI, Dissenting.


Plaintiff, Robert Mittelman, appeals the circuit court of Cook County's denial of his motion to vacate the dismissal of his first-amended complaint for slander per se, and intentional and willful interference with his "prospective business relationship and contractual expectancy" with the law firm of Clausen, Miller, Gorman, Caffrey, and Witous, P.C. (Clausen Miller), and for leave to file a second-amended complaint against defendants, John J. Witous and James T. Ferrini.

The following facts are taken from plaintiff's first-amended complaint, the well-pleaded allegations of which were taken as true for purposes of defendants' motion to dismiss. Plaintiff was an associate attorney at Clausen Miller at the time the events leading to this litigation arose. Defendants Witous and Ferrini are attorneys and were members of Clausen Miller's board of directors at that time. In January 1979, Witous assigned plaintiff to prepare for trial two insurance subrogation actions, generally known as the Kerr-McGee cases, which were pending in a Mississippi State court. Witous retained ultimate responsibility for both cases. The cases had been filed in a Mississippi State court in July and November 1978. Certain defendants in the July 1978 action interposed the six-year Mississippi statute of limitations as an affirmative defense. No defendant in the November 1978 action interposed the defense. In April 1982, the defendants in the November 1978 action moved for leave to raise the statute of limitations as an affirmative defense and the defendants in both cases moved for dismissal on the basis of a 1969 Mississippi Supreme Court case, M. T. Reed v. Jackson Plating Co. (1969), 222 So. 2d 838, which they had recently discovered. The Mississippi court granted the motions. On or about that date, as plaintiff alleged in his first-amended complaint, Witous stated to Ferrini and other members of Clausen Miller's board of directors that plaintiff "sat" on the statute of limitations defense with knowledge of M. T. Reed for three years and as a result cost the firm a considerable amount of money. The firm had taken the Kerr-McGee cases on a contingent fee basis.

Count I of plaintiff's first-amended complaint further alleged that Witous' statement was false and was intended to injure plaintiff by causing criticism properly directed to Witous to be deflected to plaintiff, to Witous' advantage and plaintiff's detriment. Count I also alleged that Witous' statement was intended to and did damage and cause harm to plaintiff's professional reputation. Count II alleged that Witous' statement caused or contributed to the firm's decision to terminate plaintiff's employment, which had been of indefinite duration, and that Witous thus wilfully and intentionally interfered with plaintiff's prospective business relation and contractual expectancy. Count III alleged that, after Ferrini informed him of Witous' statement, plaintiff told Ferrini the true facts. It further alleged that, although Ferrini owed plaintiff a duty to take reasonable steps to protect plaintiff's professional reputation and to prevent further injury to him and although Ferrini informed Witous and others of the true facts, Ferrini and Witous conspired to withhold those facts from the remaining members of the board of directors. Count III lastly alleged that Ferrini thus breached his duty to plaintiff, adopted Witous' statement as his own and intentionally and wilfully interfered with plaintiff's prospective business relation and contractual expectancy.

Pursuant to defendants' motion to dismiss plaintiff's complaint, the trial court struck count I on the basis of the innocent-construction rule. The court reasoned, inter alia, that Witous' statement was so unclear and nebulous that it was open to all kinds of interpretations and that nothing in the complaint indicated that Witous meant plaintiff should have dismissed the Kerr-McGee cases before the statute of limitations defenses were raised. The court also concluded that a qualified privilege did not "come into play" in ruling on count I. However, it did state that, if it did, Witous' alleged motive in making the statement, i.e., to deflect criticism from himself to plaintiff, would be an insufficient allegation of the ill will or malice required to overcome the privilege. The trial court struck count II on the basis of the privilege. As plaintiff's counsel conceded, the qualified privilege which precluded liability for defamation also precluded Witous' liability for tortious interference with the contract. The trial court also struck count III, based on plaintiff's counsel's further concession that count III could not stand based on the court's application of the innocent-construction rule to count I. Finally, because there had already been two complaints filed, the trial court dismissed the action and informed plaintiff's counsel of his right to move to vacate that final order within 30 days as long as he tendered a second-amended complaint with the motion.

Plaintiff's proposed second-amended complaint alleged certain facts in addition to those alleged in the first-amended complaint. Count I additionally alleged: (1) when plaintiff first reviewed the files after assignment of the Kerr-McGee cases to him in January 1979, he noted a legal memorandum from local counsel in Mississippi stating that the statute of limitations was not a problem in the case filed in July 1978; (2) plaintiff reviewed the law cited in the memorandum and concluded that it supported the memorandum's Conclusion; (3) settlement overtures were rejected after consultation with Clausen Miller's clients in the Kerr-McGee cases; (4) plaintiff kept Witous informed of his activities on the cases from January 1979 to April 1982; (5) after the Kerr-McGee defendants filed the April 1982 motions, plaintiff told Witous that he was not aware of a possible problem with the statute of limitations until the presentation of those motions; (6) at that time, plaintiff also advised Witous, Ferrini and others that, in his opinion, M. T. Reed was directly on point with the Kerr-McGee cases; (7) on or about September 3, 1982, the date of dismissal of the Kerr-McGee cases, Witous, Ferrini and other members of Clausen Miller's board of directors discussed the firm's financial situation, "including a serious cash flow problem"; (8) in the course of this Discussion, Witous was criticized for his handling of the Kerr-McGee cases because, inter alia, their dismissal would cost the firm a considerable amount of money and thus exacerbate its financial crisis; (9) at that time, to deflect that criticism from himself to plaintiff and make plaintiff the scapegoat for the problem, Witous stated the waste of time and money in preparing the Kerr-McGee cases was not his fault but that of plaintiff, who "sat" on the statute of limitations defense with knowledge of M. T. Reed and its applicability for three years without attempting to settle in order to cut the firm's probable losses; (10) the statement was false, Witous knew it was false "or had no reasonable basis for believing it to be true" and "was made maliciously, with an evil motive to injure plaintiff without just cause or excuse."

Plaintiff's second-amended complaint also contained a new count II for slander per quod against Witous based on the same statement as count I. Plaintiff realleged counts II and III of the first-amended complaint as counts III and IV of the second-amended complaint.

In denying plaintiff's motions to vacate the dismissal of the first-amended complaint and for leave to file the second-amended complaint, the trial court concluded that plaintiff's new count I added nothing to the cause of action for defamation per se and that, as a matter of law, Witous' statement could reasonably be interpreted innocently, i.e., as nondefamatory. The trial court further concluded that plaintiff's new count II was also insufficient as a matter of law under the innocent-construction rule. The trial court concluded that there was nothing substantively different in plaintiff's new count III in comparison to the prior pleading and that plaintiff's allegations of malice were still insufficient to overcome the qualified privilege which applied to Witous' statement. Finally, the court concluded that, as to plaintiff's new count IV, Ferrini did not have the duty alleged by plaintiff.


Preliminarily, because it is the duty of a reviewing court to consider its jurisdiction and to dismiss an appeal where jurisdiction is lacking (Archer Daniels Midland Co. v. Barth (1984), 103 Ill. 2d 536, 539, 470 N.E.2d 290) and because the procedural history of this case may cause some doubt as to the appealability of the trial court order from which plaintiff appeals, we address that question sua sponte. Unlike a trial court's non-final and non-appealable orders merely dismissing a complaint and denying a motion to reconsider that dismissal (Ben Kozloff, Inc. v. Leahy (1986), 149 Ill. App. 3d 504, 501 N.E.2d 238), we believe it is beyond peradventure that both the order denying the motion to vacate and the order granting the motion to dismiss the first-amended complaint were final and appealable.

The dismissal order provides that "plaintiff's action is dismissed in all its counts." It was thus final and appealable under those cases holding that orders dismissing a plaintiff's "cause," "cause of action," or "claim," as opposed to a "complaint," are final and appealable. (See Kita v. YMCA (1964), 47 Ill. App. 2d 409, 198 N.E.2d 74; Bates v. Ulrich (1976), 38 Ill. App. 3d 203, 347 N.E.2d 286; Williams v. A. E. Staley Manufacturing Co. (1980), 80 Ill. App. 3d 981, 400 N.E.2d 724, rev'd on other grounds (1981), 83 Ill. 2d 559, 416 N.E.2d 252; Robertson v. Robertson (1984), 123 Ill. App. 3d 323, 462 N.E.2d 712.) Notwithstanding that plaintiff failed to appeal that order but chose, instead, to file a motion to vacate it, the order denying that motion was also final and appealable inasmuch as it terminated the litigation between the parties. See Sanford v. Thompson (1947), 397 Ill. 353, 74 N.E.2d 534; Classen v. Ripley (1950), 407 Ill. 350, 95 N.E.2d 454; Commonwealth Loan Co. v. Baker (1968), 40 Ill. 2d 506, 240 N.E.2d 682; Johnson v. Empire Mutual Insurance Co. (1979), 70 Ill. App. 3d 780, 388 N.E.2d 1042.

Proceeding now to the merits of this appeal, we first note that a trial court's decision whether to allow amendment of pleadings rests within its sound discretion and will not be disturbed absent an abuse of that discretion. The test of abuse is whether the decision furthers the ends of Justice. (Swaw v. Ortell (1984), 137 Ill. App. 3d 60, 74, 484 N.E.2d 780.) Specific factors in that determination are whether the proposed amendment would cure the defective pleading, whether the opponent would be surprised or prejudiced by allowing the amendment and whether previous amendments had been allowed. Hoffman v. Nustra (1986), 143 Ill. App. 3d 259, 265, 492 N.E.2d 981.

In order to determine whether plaintiff's second-amended complaint cured the defects found by the trial court in his prior pleadings, we must keep in mind the standards relevant to defamation claims. Preliminarily, we note that all distinctions between libel and slander have been abolished in Illinois, except as to whether the alleged defamation was written or spoken. Mitchell v. Peoria Journal-Star, Inc. (1966), 76 Ill. App. 2d 154, 159, 221 N.E.2d 516.

To be defamatory per se, "words themselves, without the aid of extrinsic facts to explain them," must be "so obviously and inevitably hurtful" that damage is presumed. (Zeinfeld v. Hayes Freight Lines, Inc. (1968), 41 Ill. 2d 345, 348, 243 N.E.2d 217.) Four types of words are considered defamatory per se in Illinois, those: (1) imputing the commission of crime; (2) imputing infection with a communicable disease of any kind which would result in exclusion from society; (3) imputing inability to perform or want of integrity in the discharge of duties of office or employment; (4) prejudicing a person in his profession or trade. (Britton v. Winfield Public Library (1981), 101 Ill. App. 3d 546, 548, 428 N.E.2d 650.) Clearly, the third and fourth type of defamation per se were applicable to count I of plaintiff's amended complaints. To state a claim for libel per quod, on the other hand, a plaintiff must plead an innuendo, i.e., defamatory meaning of otherwise ambiguous words, and special damages. See Renard v. Columbia Broadcasting System, Inc. (1984), 126 Ill. App. 3d 563, 566, 467 N.E.2d 1090, cert. denied (1985), 471 U.S. 1116, 86 L. Ed. 2d 259, 105 S. Ct. 2358; 33A Ill. L. & Prac. Slander & Libel 94-96, 100-102 (1970).

The innocent-construction rule is, in pertinent part, "that a written or oral statement is to be considered in context, with the words and the implications therefrom given their natural and obvious meaning; if, as so construed, the statement may reasonably be innocently interpreted . . . it cannot be actionable per se." (Chapski v. Copley Press (1982), 92 Ill. 2d 344, 352, 442 N.E.2d 195.) This preliminary determination is a question of law to be resolved by the trial court in the first instance and whether the statement was in fact, inter alia , understood to be defamatory is a jury question if the trial court resolves the initial determination in the plaintiff's favor. Chapski, 92 Ill. 2d 344.

Applying these principles here, we believe the trial court abused its discretion in denying plaintiff leave to file a second-amended complaint. We disagree with the trial court that the second-amended complaint did not cure the defects in the prior complaints. Specifically, we do not believe that Witous' statement, as alleged in the second-amended complaint, may reasonably be interpreted innocently as a matter of law. That statement was that the waste of time and money in preparing the Kerr-McGee cases was not Witous' fault but that of plaintiff, who sat on the statute of limitations defense with knowledge of M. T. Reed and its applicability for three years without attempting to settle to cut the firm's probable losses. In stark contrast to this statement is the statement attributed to Witous in the first-amended complaint that plaintiff sat on the statute of limitations defense with knowledge of M. T. Reed for three years and as a result cost Clausen Miller, which had taken the Kerr-McGee cases on a contingent fee basis, a considerable amount of money.

Even a cursory reading of the two statements reveals, contrary to the trial court's Conclusion that there was no change in the statements, that there was a substantial and fundamental change in them. While the meaning of the first statement is, as the trial court had found, unclear, nebulous and thus open to "all kinds of interpretations," the meaning of the second statement is in nowise susceptible to that characterization. Rather, it clearly charges plaintiff with responsibility for the financial losses the firm suffered in the Kerr-McGee cases. We believe that Witous' charge in and of itself, without any aid of extrinsic facts, is so obviously and inevitably hurtful to plaintiff's professional reputation that injury thereto may be presumed. See Annot., Criticism or Disparagement of Attorney's Character, Competence, or Conduct as Defamation, 46 A.L.R.4th 326, 10(a), (1986).

In so concluding, we reject the trial court's characterization of the additional facts alleged in plaintiff's second-amended complaint as innuendo, which may not be considered in a claim for defamation per se. Rather, we believe the trial court should have considered them, as Chapski required it to, as relating the context in which Witous allegedly made the statement at issue. If it had done so and had also given the words and implications therefrom their natural and obvious meanings, as Chapski also requires, we believe it would not have found that Witous' statement was not defamatory per se.

The additional facts to which we refer as establishing the context of Witous' statement are that Witous made the statement in a Discussion by Clausen Miller's board of directors of the firm's financial condition during which Witous was criticized for the firm's losses in the Kerr-McGee cases. Coming in that context and giving Witous' words and the implications therefrom their natural and obvious meaning, his statement cannot be interpreted as other than, at the very least, a charge of professional negligence on plaintiff's part. Such a charge by one attorney against another ...

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