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03/31/95 PAUL LEVIN v. ROBERT C. KING

March 31, 1995

PAUL LEVIN, PLAINTIFF-APPELLANT,
v.
ROBERT C. KING, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Cook County. The Honorable John Virgilio, Judge Presiding.

The Honorable Justice T. O'brien delivered the opinion of the court: Cousins, P.j., and Mcnulty, J., concur.

The opinion of the court was delivered by: O'brien

JUSTICE T. O'BRIEN delivered the opinion of the court:

Plaintiff, Paul Levin, appeals from an order of the circuit court which granted defendant, Robert C. King, judgment on the pleadings in a malicious prosecution action. The circuit court ruled that Levin had failed to plead special damages as required under Illinois law. We affirm.

FACTS

The history of this case spans some 10 years. In early 1984, King, a land developer, became interested in competing for the right to participate in the development of low-to-middle income housing. The proposed housing, planned by the United States Department of Housing and Urban Development, was to be built in the Jefferson Park neighborhood in Chicago, Illinois. To that end, King sought financing from the issuance of bonds backed by the Illinois Housing Development Authority (IHDA) and the Chicago Metropolitan Housing Development Commission.

The IHDA initially included the development in a May 1984 bond sale. Four days before the bond sale, Levin, a Jefferson Park resident, contacted the IHDA and threatened litigation to stop the project. *fn1 The IHDA withdrew the development from the bond sale because the timing of Levin's phone call left the IHDA with little time to disclose the opposition or to obtain a "no merit" letter from the bond counsel. The IHDA's general counsel, however, believed Levin's threatened litigation had no merit.

King subsequently filed an action against Levin for tortious interference with advantageous business relationship. King alleged that he incurred damages from the loss of the IHDA funding as a result of Levin's baseless threat of litigation. At the ensuing trial, the circuit court directed a verdict against King, ruling that he had failed to prove Levin's protest was not protected by a first amendment privilege. The appellate court affirmed. King v. Levin (1989), 184 Ill. App. 3d 557, 558, 540 N.E.2d 492, 132 Ill. Dec. 752.

Levin then filed the malicious prosecution suit against King, which is the subject of this appeal. In his complaint, Levin alleges that, as a result of King's tortious interference suit, Levin ceased voicing his opposition to the proposed housing development and "substantially reduced his activities in public affairs." Levin asserts that King's suit was, in reality, a suit designated by some commentators as a "SLAPP suit," an acronym fashioned by some commentators and courts for "Strategic Lawsuit Against Public Participation," brought by King without probable cause. Levin maintained King's litigation "substantially chilled [his] exercise of his rights of free expression and petition of government *** [and] induced fears of adverse financial consequences to himself and jeopardized other persons who opposed" the housing development. Levin claimed special damages in the nature of the "loss, damage and harm to constitutional rights of free speech and the right to petition government" in addition to emotional distress, fees, and expenses.

The circuit court granted King judgment on the pleadings, ruling that Levin had failed to allege specific facts that King either constructively or actually seized Levin's right to free speech or that King actively sought issuance of any court remedy such as an attachment or injunction to prevent Levin's free speech. As a result, the damages sought by Levin did not fall outside those damages incurred during the course of normal litigation. The court, as a matter of law, found Levin failed to allege the element of special injury necessary to establish a malicious prosecution action.

The issues presented to this court are of apparent first impression. Levin maintains that he need not allege a special injury because he has alleged an interference with his first amendment right to petition the government for redress. He further contends that King's tortious interference action did not constitute ordinary civil litigation and that as, such, he need not allege any special injury. We disagree.

Illinois courts have long disfavored actions for malicious prosecution. (See e.g., Schwartz v. Schwartz (1937), 366 Ill. 247, 250, 8 N.E.2d 668; Shedd v. Patterson (1922), 302 Ill. 355, 359, 134 N.E. 705.) To discourage such actions and promote a policy of open access to the courts, a plaintiff, in a suit for malicious prosecution, must show that the wrongfully filed action was terminated in his favor and was brought maliciously and without probable cause. Finally, he must plead and prove some "special injury" or special damage beyond the usual expense, time or annoyance in defending a lawsuit. ( Schwartz, 366 Ill. at 250-51.) "Special injury", therefore, has usually been identified with an arrest or seizure of property or some constructive taking or interference with the person or property. Schwartz, 366 Ill. at 250.

In one of the earliest references to the special injury requirement, our supreme court addressed "whether damages can be recovered for malicious prosecution without probable cause of an ordinary civil suit, begun by personal service of process and unaccompanied either by an arrest of the person or by seizure of property." (Emphasis added.) Smith v. Michigan Buggy Co. (1898), 175 Ill. 619, 624, 51 N.E. 569.) The court answered the question in the negative: "an action for the malicious prosecution of a civil suit without probable cause will not lie where the process in the suit so prosecuted is by summons only, and is not accompanied by arrest of the person or seizure of the property or other special injury not necessarily resulting in all suits prosecuted to recover for like causes of action." (Smith at 627.) As a result, the court affirmed the dismissal of a malicious prosecution case brought as a result of an unsuccessful civil action by an employer against its salesman alleging fraudulent misrepresentation.

Twenty two years later, the supreme court revisited the issue of special injury in Norin v. Scheldt Mfg. Co. (1921), 297 Ill. 520, 130 N.E. 791. In the suit giving rise to the malicious prosecution charge, Scheldt Manufacturing Company (Scheldt) filed a petition in bankruptcy against Norin, requesting that Norin be adjudged a bankrupt. Scheldt filed the petition on publication alone. When Norin failed to appear in the proceeding, the court entered a bankruptcy judgment against him. Norin later learned of the bankruptcy action and commenced vacatur proceedings. During the hearing to set aside the default, one of Scheldt's officers admitted he had known Norin's place of residence at the time service by publication was obtained. Moreover, Scheldt admitted that it had been unable to prove Norin's insolvency at the time it filed its ...


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