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July 12, 1996



As Modified on Denial of Rehearing September 20, 1996. Rehearing Denied September 18, 1996. Released for Publication October 4, 1996.

The Honorable Justice Cousins delivered the opinion of the court: Hourihane, J., concurs. McNULTY, P.j., dissents.

The opinion of the court was delivered by: Cousins


The Honorable Justice COUSINS delivered the opinion of the court:

Plaintiff, Shirley Kincaid, sued her employer, Ames Department Stores (Ames), and two of Ames' security officers, Jerald Smith and Santos Cruz, for false arrest and malicious prosecution. A jury found for plaintiff on both counts, awarding compensatory damages of $75,700 against all defendants and punitive damages of $750 against Santos, $1,750 against Smith, and $250,000 against Ames. The trial court granted defendants' motion to reduce compensatory damages to $61,850, and defendants appeal from the denial of their motions for judgment n.o.v. or a new trial. Plaintiff cross-appeals the denial of her motion for fees as a sanction for a discovery violation.

We affirm the denial of plaintiff's motion for fees. We reverse the judgment against the defendants, and we remand for a new trial.


Plaintiff worked as an assistant manager in an Ames store at 10 West 63rd Street in Westmont, Illinois. In March 1989, Cruz was head of security for plaintiff's store. That month, Cruz received several anonymous phone calls in which he was told that people were stealing from the store. Following the second call, Cruz notified Smith, the district manager at plaintiff's store, and they began a surveillance operation at the Ames store. On April 5, 1989, Smith and Cruz confronted two Ames employees - Ermine Jennings and Darryl Smallwood - who had taken merchandise from the store without a receipt. Both employees signed statements implicating the plaintiff, and she was arrested for theft on April 5, 1989.

On July 19, 1989, when plaintiff's case came up for trial, the State moved for a continuance because the police officer who arrested plaintiff was on vacation. The court granted a continuance until September 5, 1989. On that day, the State again moved for a continuance when only two of its four witnesses came to court. The court denied the motion, at which point the prosecutor stated:

"Based on the witnesses I had, when they were interviewed in the office today, upon talking to them I find their testimony insufficient to proceed with the case. Based on that the State has a motion to nolle pros at this time."

The court allowed the nolle prosequi after confirming that the State would not refile any charges.

Plaintiff filed a complaint against the defendants on February 26, 1990, and filed her amended complaint on May 1, 1991. Count I of the amended complaint was for false arrest, and count II was for malicious prosecution. For both counts, plaintiff alleged, "Before her detention and arrest, Kincaid had done no criminal act nor did she do anything which would give any Defendant probable cause or legal justification to believe she had committed a criminal act."

The sheriff attempted to serve process on Smith three times in March 1990, noting that his apartment appeared vacant although his name still appeared on the bell. On May 25, 1990, Ames wrote a letter to plaintiff's counsel stating that Ames had entered into bankruptcy proceedings on April 25, 1990, and that the Bankruptcy Code automatically stayed all litigation from claims that arose before April 25, 1990. Ames further stated that violation of the stay could result in a civil contempt proceeding in bankruptcy court. On June 7, 1990, plaintiff wrote to Ames' bankruptcy counsel to ask if she could proceed against the other defendants, who were employees of the store. Ames talked with plaintiff, and plaintiff confirmed in a letter dated October 2, 1990, that Ames' position was that the codefendants were closely tied to it so that the stay also related to the codefendants such that plaintiff could not take any action against them.

On November 28, 1990, plaintiff persuaded the bankruptcy court to lift the automatic stay because Ames had insurance coverage for plaintiff's claim. Plaintiff filed a summons for Smith at his new address on December 12, 1991, and he was successfully served on January 4, 1992. Smith moved to dismiss the case pursuant to Supreme Court Rule 103(b) (134 Ill. 2d R. 103(b)) for plaintiff's failure to render timely service, but the court denied the motion after finding that plaintiff's efforts to serve Smith showed due diligence.

On March 29, 1994, plaintiff and defendants went to New Mexico to take deposition testimony from Smith, who was suffering from dementia. Smith answered questions from defendants' counsel and was cross-examined, but Smith then refused to undergo a direct examination by the plaintiff. When Smith was too ill to appear at trial, the court barred defendants from reading their deposition testimony into the record. The court also denied plaintiff's motion to recover costs of her trip to New Mexico as a penalty for Smith's discovery violation.

On April 12, 1994, a jury trial began on the complaint. Officer Mark Malloy testified that on the night of April 5, 1989, he arrested plaintiff for theft. After he talked with Smith and Cruz, Officer Malloy charged plaintiff with stealing $600 worth of items found in Smallwood's trunk, including 17 cartons of cigarettes and five individual cigarette packages. Officer Malloy also talked with Smallwood and Jennings. Smallwood described how plaintiff had told him to take the items out to his car so that she could retrieve them later. Jennings told Officer Malloy that plaintiff had requested her to gather certain items and that those were some of the items found in Smallwood's trunk.

Christopher Pearce, a security officer at another Ames store, testified that on April 5, 1989, he had come to the Westmont Ames store to help Smith and Cruz with their surveillance. Pearce conducted undercover surveillance inside the store while Cruz and Smith watched from a van outside. Pearce saw plaintiff take cigarette cartons from the bargain aisle and put them behind the service desk in a cart, but he did not see her put them in a bag. Smallwood and Jennings later placed additional items in the same cart and took the cart outside. They placed the items in the trunk of a car, came back to the store, and then left again with one bag. At this point, Pearce followed Smallwood and Jennings outside and met up with Cruz in his van. They confronted Smallwood and Jennings and found that Jennings' bag contained blouses with no receipt. The security men then asked Smallwood to open up the trunk of his car. After taking the employees back into the store, Smallwood eventually said that plaintiff asked them to take the merchandise to his car. Pearce admitted that Ames' policy was to prosecute if a confession was not signed.

Terry Cole testified that she was an Ames employee working the night of April 5, 1989. She taped cigarette cartons with plaintiff that night. Later, Ms. Jennings came to her to exchange a blouse for another of the same size. Ms. Cole needed a manager's approval for the exchange, but the even exchange did not require a receipt. Ms. Cole called plaintiff at another part of the store, and plaintiff approved the exchange.

Cruz testified that while watching from the van, he saw plaintiff take cigarette cartons and put them in a cart inside a plastic bag. Plaintiff then gave a small nod to Smallwood, who walked towards the cart and pushed it outside. Smallwood and Jennings took the cart's items to Smallwood's car, went back into the store and came out again. Cruz confronted them after Pearce came running out of the store, and Cruz waited until this time so that Pearce could tell him what had happened. After Cruz confronted Smallwood, Smallwood stated that Kincaid told him to take the stuff outside and put it inside his car. Cruz came with Pearce to plaintiff's trial, but the prosecutor told him that Smith was also an important witness.

Although Smith was too ill to testify, plaintiff read portions of Smith's deposition that defendants had admitted pursuant to a request to admit. Smith was in surveillance with Cruz in the van, and he observed plaintiff remove cartons from the rack and place them on the service desk, which was part of her job. Smith did not know if the cartons in Smallwood's trunk were the same ones that plaintiff placed in the cart, and plaintiff did nothing with merchandise other than cigarettes. Whether to prosecute an employee is influenced by his or her signing of a statement. Neither Smallwood nor Jennings implicated plaintiff on items besides cigarettes.

Smallwood testified that "someone" asked him to help take out the items in the cart. He often drove Jennings home, so it was not unusual for her to put items in his car. His job required him to check the items for a receipt before taking them from the store, but he neglected to do so. Plaintiff was standing at the customer service desk at the time, so he did not think there would be a problem. Besides the items from the cart, his car trunk also contained several personal items. Smallwood had many cartons of cigarettes because he sold them to a nursing home in the city after buying them for less in the suburbs. The security men confronted Smallwood and Jennings and began screaming and cussing at them both. He was then interrogated for over an hour while the men continued screaming and cursing at him. He wrote a report implicating plaintiff because the men told him to do so and that he would go to jail if he did not. Plaintiff never asked him to steal any items.

Plaintiff testified that she had been told that security surveillance would occur at the store that evening of April 5, 1989. Ms. Cole called her to approve an even exchange by Ms. Jennings of two blouses, and plaintiff gave her approval. An even exchange did not require a receipt. She taped cigarette ...

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