June 26, 1998
BRIAN ZDEB AND PRIME MEDICAL PRODUCTS, INC., PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS,
BAXTER INTERNATIONAL, INC., AND BAXTER HEALTHCARE CORPORATION, DEFENDANTS-APPELLANTS AND CROSS-APPELLEES.
The opinion of the court was delivered by: Justice Greiman
Appeal from the Circuit Court of Cook County
Honorable Willard J. Lassers, Judge Presiding.
In a cause of action for tortious interference with a prospective economic advantage, a jury entered a verdict against defendants Baxter International, Inc., and Baxter Healthcare Corporation (collectively referred to as Baxter) and awarded approximately $8 million in damages to plaintiffs Brian Zdeb (Zdeb) and Prime Medical Products, Inc. (Prime) (collectively referred to as plaintiffs). We affirm.
On appeal, Baxter asserts that the trial court erred (1) in denying Baxter's motion for judgment non obstante veredicto; (2) in ruling that absolute privilege did not apply to a letter 1written by Baxter's in- house counsel that denied Zdeb a release to market a device he had developed (hereinafter referred to as the January 1991 letter); and (3) in failing to rule that a qualified privilege applied to the January 1991 letter. In addition, Baxter challenges certain evidentiary rulings, jury instructions, and the damage award.
On cross-appeal, plaintiffs request this court to consider several issues if we were to remand the matter for a new trial. Since we affirm the judgment, we do not address the issues raised on cross-appeal.
The product at issue in the present case is an infuser designed by Zdeb. An infuser is a medical device used to infuse drugs into a patient on a constant flow basis. Infusers used for this purpose are worn by the patient so that the patient can be ambulatory and receive drug treatment outside the hospital. Infusers are disposable and portable so that a patient can wear an infuser in a pant or coat pocket and it injects drugs into the patient without altering the patient's routine. It basically is a syringe, prefilled with medicine, that regulates a constant flow of the medicine into an administration tubing that then infuses the drug into the patient. Infusion therapy is used to inject chemotherapy for cancer patients and antibiotics for serious infections.
Baxter is a health care company that develops, manufactures, and markets a wide variety of health care products and services, including intravenous drug delivery systems known as infusers. Baxter launched the first disposable elastomeric or balloon-type infuser and marketed them during the 1980s. In 1990, Block Medical, a competitor of Baxter, launched another elastomeric infuser called the Homepump. In 1992, McGaw, a third competitor, distributed another elastomeric infuser called Readymed. The marketplace for disposable infusers is well established and profitable. During the 1980s and currently, Baxter's I.V. Systems Division, located in Round Lake, Illinois, was and is responsible for developing and improving infuser products.
During the 1980s Baxter employees developed improvements to the existing infuser technology. In 1984, Steve Pearson, a Baxter engineer, devised a model for a disposable vacuum-powered infuser. In 1984, Derek Walsh, a Baxter technician, created an improved infuser model that included a connector which is referred to by his name, the Walsh connector. In March 1988, Richard Mitchell, another Baxter employee, invented "preload" to be used in vacuum infusion devices to produce a constant rate of flow of the drug throughout the entire infusion, which had previously been problematic. To prevent the preloaded vacuum from dissipating during storage, preload in Mitchell's device also called for the chamber holding the drugs to be disconnected from the vacuum chamber. Baxter's position was, and is, that Zdeb had been exposed to Baxter technology during his tenure as a Baxter employee and that three parts of the infuser created by Zdeb, after leaving its employment, incorporated Baxter technology: (1) preload; (2) the Walsh connector; and (3) storage.
From January 14, 1980, through December 6, 1988, Zdeb worked as an engineer at Baxter in Round Lake. When hired, Zdeb signed an employment agreement that required him to protect the confidentiality of Baxter's trade secrets and other confidential information. The agreement further provided that Baxter would own any inventions that related to its business which Zdeb conceived or reduced to practice during his tenure at Baxter or during a period of 90 days after his termination. When his position with Baxter was eliminated in December 1988, Zdeb entered into a severance agreement that amended his employment contract and provided in relevant part that "[a]ll inventions or trade secrets developed by Brian Zdeb shall be the property of Brian Zdeb after 3/6/89 *** and shall not be treated as confidential information to Baxter." Zdeb received compensation from Baxter until March 6, 1989, his effective date of termination.
In April 1989, after leaving Baxter, Zdeb designed a device, referred to as the Zdeb infuser. Zdeb conceived the idea of an infuser that used a vacuum to drive the infusion. On October 31, 1989, Zdeb applied for a patent on his infuser and ultimately obtained the patent in August 1992. In July 1989, Zdeb entered into a business relationship with Charles Manker, another former Baxter employee, and formed Prime for the purpose of marketing Zdeb's infuser. Zdeb and Manker first pitched the Zdeb infuser to Baxter.
During December 1989 and January 1990, Zdeb and Manker met with Baxter personnel three or four times to present the Zdeb infuser to Baxter. During the meetings with Baxter personnel, Zdeb and Manker presented various models, diagrams, and engineering drawings of the Zdeb infuser.
After the multiple meetings, Baxter executives informed Manker that Zdeb had incorporated Baxter technology into the Zdeb infuser. Manker responded that he was "totally shocked and taken aback." Manker offered to assign the patents to Baxter if Baxter could show that Zdeb had taken ideas from Baxter to develop his infuser. In subsequent conversations about the Zdeb infuser, Manker conveyed this offer to other Baxter personnel, including James Carne, Baxter's vice president of business development for the pharmacy group. By March 1990, Manker and Zdeb ended their business relationship because of their unsuccessful efforts to market the Zdeb infuser to Baxter.
In March 1990, Zdeb contacted Carne to present again his infuser to Baxter. At Carne's suggestion, Zdeb met with and demonstrated his infuser to Steve Hessel, the person in charge of product development for Baxter's infusion systems group. At this meeting, Hessel asked Zdeb if his device had a preload space in it and Zdeb responded "no." Zdeb acknowledged that there was a gap in his infuser but stated that the gap was filled with silicone oil and was not a vacuum preload.
Prior to March 1990, Zdeb had one or two meetings with Smith and Nephew Solopak (Solopak) about the Zdeb infuser. Smith and Nephew was a multinational health care company headquartered in London, England, had 10 subsidiaries and operated in about 35 different countries. Solopak was the United States subsidiary of Smith and Nephew, and had a significant presence in the infusion therapy market by 1990. If Solopak obtained the Zdeb infuser, Solopak would have been Baxter's competitor in both the domestic and European markets.
Between April and December 1990, Zdeb and Solopak engaged in negotiations, discussing licensing fees, royalties, incentive payments and consulting services. Zdeb and Solopak reached agreement which was set forth in an unexecuted draft dated December 20, 1990.
During these negotiations, various attempts were made by Solopak personnel and Zdeb to confirm with Baxter that Zdeb owned this infuser technology. C. Richard Piazza, president of Solopak in Chicago, was involved in the negotiations with Zdeb. Upon reviewing Zdeb's employment agreement and the addendum to the employment agreement executed at Zdeb's leaving Baxter, Piazza understood that Zdeb "was free to pursue this product," i.e., the Zdeb infuser. In January 1991, Piazza, frustrated by the lack of response from Baxter, talked to Terry Furness, a group president at Solopak. Furness said that he had worked for 10 years at Baxter and he called James Tobin, the second-ranking executive at Baxter. Furness told Tobin that Solopak was about to conclude a deal with Zdeb and they needed a response from Baxter about Zdeb's right to the technology. Tobin said that he would look into the matter.
Zdeb also made efforts to get a response from Baxter in order to conclude his deal with SoloPak. Zdeb contacted Mark McGarvie, a Baxter attorney, and Paul Schaafsma, another Baxter attorney.
Eventually, Baxter's attorney Schaafsma sent a letter dated January 31, 1991, to Zdeb and copied to several Solopak personnel. The January 31 Baxter letter stated in relevant part: "With regard to the vacuum infuser described in your January submission, it is Baxter's position that this infuser was not solely developed by you while you were employed at Baxter. It is based on a Baxter developed vacuum infuser prototype to which you were exposed while employed at Baxter.
While the infuser in your January submission includes superficial design modifications which are different than Baxter's prototype, your infuser uses the same approach as Baxter's prototype to overcome the significant technological hurdles of end of infusion pressure drop, storage of the device without compromising the vacuum, and connection of the administration tubing to the pressurized fluid source. Therefore, Baxter does not grant your request for a 'release' on the infuser." After receipt of this Baxter letter, Solopak terminated all relationship with Zdeb.
Plaintiffs filed a two-count complaint against Baxter alleging tortious interference with prospective economic advantage (count I) and libel per se (count II). Baxter filed counterclaims, alleging that Zdeb breached his employment agreement with Baxter, misappropriated Baxter's trade secrets and confidential information. In the pleadings that followed, Baxter filed the affirmative defense of justification. Thereafter the trial court dismissed plaintiffs' libel per se count and allowed the tortious interference count to proceed to trial.
On September 30, 1996, trial commenced and continued for more than three weeks. The jury returned a verdict in favor of plaintiffs on both the claim for tortious interference and on Baxter's counterclaims. The jury awarded Zdeb $156,000, and Prime $7.9 million. Thereafter, the trial court denied Baxter's posttrial motion.
The critical issues for our consideration are whether the contents of the January 1991 letter are protected by an absolute privilege because the letter was executed by a lawyer or whether the contents are, at least, protected by a qualified privilege occasioned by a corporate officer and employees to protect the property rights of the corporation.
Second, Baxter asserts that the absolute privilege provided in section 586 of the Restatement (Second) of Torts applies to the January 1991 letter as an attorney's communication relating to a seriously contemplated lawsuit and, therefore, Baxter is entitled to judgment n.o.v. Baxter argues that: (1) the protection afforded Baxter's attorney extends to Baxter as the attorney's employer under master/servant and principal/agent rules; (2) absolute privilege is recognized in causes of action other than defamation; and (3) absolute privilege applies to attorney communications made in contemplation of litigation. We disagree.
Whether a statement is protected by absolute privilege is a question of law. Bushell v. Caterpillar, Inc., 291 Ill. App. 3d 559, 561 (1997); Barakat v. Matz, 271 Ill. App. 3d 662, 667 (1995).
Section 586 of the Restatement (Second) of Torts, which is included in the chapter entitled "DEFENSES TO ACTIONS FOR DEFAMATION," provides:
"An attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding." Restatement (Second) of Torts §586 (1977).
The purpose of absolute privilege is stated, in relevant part, in Comment a of section 586:
"a. The privilege stated in this Section is based upon a public policy of securing to attorneys as officers of the court the utmost freedom in their efforts to secure Justice for their clients. Therefore the privilege is absolute. It protects the attorney from liability in an action for defamation irrespective of his purpose in publishing the defamatory matter, his belief in its truth, or even his knowledge of its falsity." Restatement (Second) of Torts §586, Comment a, at 247 (1977).
The scope of absolute privilege is addressed in Comment e of section 586:
"e. As to communications preliminary to a proposed judicial proceeding the rule stated in this Section applies only when the communication has some relation to a proceeding that is contemplated in good faith and under serious consideration. The bare possibility that the proceeding might be instituted is not to be used as cloak to provide immunity for defamation when the possibility is not seriously considered." Restatement (Second) of Torts §586, Comment e, at 248 (1977).
In its memorandum and order denying Baxter summary judgment on plaintiffs' interference count, the trial court addressed Baxter's section 586 absolute privilege argument as follows:
"The short answer to this assertion is that §586 by its terms protects counsel; it does not protect the client. Here, plaintiff is suing Baxter, he is not suing Baxter's counsel. A holding that §586 provides a shield to both counsel and the client would eviscerate the tort of intentional interference. One intending to commit the tort could obtain an absolute shield by conveying information to the third party through an attorney."
We agree with the trial court for several reasons. First, the language of section 586 speaks directly and solely to attorneys, i.e., absolute privilege "protects the attorney from liability." Restatement (Second) of Torts §586, Comment a, at 247 (1977). Second, the impenetrable shield of absolute privilege should not be extended or available for the possible widespread abuse recognized by the trial court, i.e., a party simply could convey information through an attorney and escape any liability by crying privilege. The privilege's alleged limitation to communications relating to seriously contemplated litigation is not a safeguard feature as advanced by Baxter but, rather, a vast, limitless loophole into which all attorney communication could escape.
In addition, Illinois courts have not extended the section 586 privilege to claims for intentional interference with prospective economic advantage, which was the only claim presented to the jury. Plaintiffs correctly observe that section 586: (a) falls within the Restatement sections entitled "DEFAMATION: DEFENSES"; (b) expressly states that an attorney is privileged to "publish defamatory matter"; and (c) provides, in comment e that the privilege "protects the attorney from liability in an action for defamation." (Emphasis added.) Restatement (Second) of Torts §586, Comment e (1977).
Notwithstanding these facts, Baxter maintains that the absolute privilege allowed in defamation actions under section 586 has been extended by Illinois courts to causes of actions other than defamation, relying on McGrew v. Heinold Commodities, Inc., 147 Ill. App. 3d 104, 115 (1986). Baxter's argument is misleading.
The McGrew case concerned a false light claim, which is recognized in section 652A of the Restatement (Second) of Torts as an invasion of privacy cause of action. Restatement (Second) of Torts §652A (1977). This court in McGrew applied the Restatement's absolute privilege to the false light claim, noting that section 652F expressly provides that the rules on absolute privileges as stated in the defamation section apply to invasion of privacy suits. McGrew, 147 Ill. App. 3d at 114; Restatement (Second) of Torts §652F (1977). Accordingly, as the Restatement afforded absolute privilege for defamation actions under section 586, the Restatement expressly afforded the privilege under section 652F to false light claims.
For all of the above-stated reasons, we find that absolute privilege under section 586 does not apply to the January 1991 letter. In light of this holding, we also reject Baxter's alternative assertion that the trial court erred in refusing to give a jury instruction on section 586 absolute privilege.
Baxter asserts that absolute privilege should apply based on section 587 of the Restatement (Second) of Torts, which is directed to parties, not attorneys, in judicial proceedings (Restatement (Second) of Torts §587 (1977)). We find that Baxter waived this theory because Baxter first raised section 587 in its posttrial brief.
"[I]ssues raised for the first time in a post-trial motion will not be considered." Antol v. Chavez-Pereda, 284 Ill. App. 3d 561, 566 (1996) (the issue of duty, even though such an issue is a question of law, was waived on appeal in a negligence action). The rules are well settled:
"The theory upon which a case is tried cannot be changed upon review. *** It is also a rule that a party will not be permitted to argue on appeal a defense not interposed by his answer. [Citations.] The fact that certain evidence lends support to the defense does not mitigate the force of this rule [citation] and asserting a new defense in final argument does not do so. *** The issues are determined from the pleadings and the evidence. To have evidence without pleading an issue is just as fatal as pleading an issue and not supporting it with evidence. Both are essential and each must conform to the other." Consoer, Townsend & Associates v. Addis, 37 Ill. App. 2d 105, 109-10 (1962). Applying these rules, this court in Addis restricted its opinion "to the one defense raised in the answer and to the one theory upon which the case was tried." Addis, 37 Ill. App. 2d at 110; see also, e.g., Ellerby v. Spiezer, 138 Ill. App. 3d 77, 80 (1985) (a party's failure to plead a claim in his answer waived that claim on review); Kaufman & Broad Homes, Inc. v. Allied Homes, Inc., 86 Ill. App. 3d 498, 502 (1980) (waiver applied where the defense was not set forth in the pleadings and the new defense was asserted for the first time in final argument).
In the present case, the record reveals that in its motion for summary judgment, Baxter posited that absolute privilege under section 586, not section 587, applied to the January 1991 letter. In their memorandum in opposition to Baxter's motion for summary judgment, plaintiffs specifically opposed Baxter's section 586 theory. In its memorandum and order, the trial court expressly considered and rejected Baxter's absolute privilege theory premised on section 586. In addition, in its proposed jury instruction on absolute privilege, Baxter specifically relied on section 586. Baxter first mentioned section 587 in its posttrial motion. Section 587, which applies to parties in a judicial proceeding, clearly raises an entirely different theory than section 586, which applies to attorneys. Thus, we find that Baxter waived the issue of absolute privilege under section 587.
The real heart of this case relates to the possible existence of a qualified privilege and who must plead and prove such a qualified privilege.
Baxter asserts that the January 1991 letter was qualifiedly privileged, as a matter of law, because it was (1) an action to protect its proprietary and commercial interests, and (2) a response to an authorized inquiry. In its appellate brief, Baxter argues that "[t]he trial court erroneously failed to make an initial determination that Baxter had a qualified privilege defense to plaintiffs' tortious interference claim."
Plaintiffs contend that Baxter waived this issue because it filed an affirmative defense of justification. Plaintiffs further argue that their complaint nowhere suggested that Baxter acted pursuant to a recognized privilege and, in fact, expressly alleged that Baxter's conduct was not privileged and Baxter's statements were false.
In the present case, just prior to trial, Baxter filed a motion in limine asserting that the trial court should determine whether Baxter's actions were protected by qualified privilege. The trial court denied this motion, stating that "the jury is going to have to decide whether there *** is justification for this by virtue of intellectual patent or whatever." By its ruling, the trial court rejected the existence of qualified privilege and ordered that the trial would proceed on Baxter's written affirmative defense of justification.
"In Illinois, the issue of whether a qualified privilege exists has been a question of law for the court, and the issue of whether the privilege was abused has been a question of fact for the jury." Kuwik v. Starmark Star Marketing & Administration, Inc., 156 Ill. 2d 16, 25 (1993); Barakat, 271 Ill. App. 3d at 667 (whether a statement is protected by a qualified privilege is question of law to be determined by the court). Qualified privilege can apply in an action for interference with a prospective economic advantage. Fellhauer v. City of Geneva, 142 Ill. 2d 495, 512 (1991).
Whether or not a qualified privilege exists determines the burden of proof upon the respective parties. Where the conduct of the defendant is privileged, the plaintiff bears the burden to plead and prove that the defendant's actions were unjustified or malicious. Fellhauer, 142 Ill. 2d at 512-13. Where the conduct of the defendant does not invoke a privilege, the defendant shoulders the burden to plead and prove justification as an affirmative defense. Roy v. Coyne, 259 Ill. App. 3d 269, 283-84 (1994).
Courts will recognize a privilege "where the defendant was acting to protect an interest which the law deems to be of equal or greater value than the plaintiff's contractual rights." HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill. 2d 145, 157 (1989).
In HPI Health Care, the supreme court found that the defendants' actions were privileged and held that "the duty owed by hospital management companies to their hospitals should take precedence over their duty to the hospitals' contract creditors." HPI Health Care, 131 Ill. 2d at 157-58. In its reasoning, the supreme court analogized to three prior decisions in which it "recognized a privilege for corporate officers and directors to use their business judgment and discretion on behalf of their corporations." HPI Health Care, 131 Ill. 2d at 157. "The existence of the privilege was based upon this court's recognition that the duty of corporate officers and directors to their corporations' shareholders outweighs any duty they might owe to the corporations' contract creditors." HPI Health Care, 131 Ill. 2d at 157. Courts have also held that an employer may invoke conditional privilege to respond and disclose limited information to prospective employers. Anderson v. Vanden Dorpel, 268 Ill. App. 3d 907, 917-18 (1995) (and cases cited therein), rev'd on other grounds, 172 Ill. 2d 399 (1996).
To determine whether a privilege applies, the court looks to the complaint. "[I]f the complaint may not fairly be said to introduce the existence of a recognized statutory or common law privilege, it is not the duty of the plaintiff to plead and prove lack of justification, but it becomes the defendant's burden to plead and prove the privilege as an affirmative matter, for there may be no way for a plaintiff to know in advance whether the defendant enjoys a privilege or, indeed, whether he will ever claim that he does." Roy, 259 Ill. App. 3d at 283.
We first observe that the decisions in HPI Health Care and Roy involved pleadings and motions under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1996)), in contrast to the instant appeal, which comes to us after a trial lasting nearly four weeks, a jury verdict and a $7.9 million judgment. Most notably, however, in the instant case, Baxter filed an affirmative defense specifically in response to the Roy decision.
In Roy, the court painfully concluded that HPI Health Care had imposed upon the trial court the curious allocation formula for the burden of proof, i.e., the plaintiff has the pleading and proof burdens if a qualified privilege is apparent but the defendant has such burdens by way of affirmative defense in the absence of a qualified privilege being fairly disclosed by the complaint. Were we writing with a clean slate, we would ignore this subtle distinction and allow the issue of justification to be raised by the defendant in the form of an affirmative defense. However, we are an intermediate court of review and must follow the dictates of our supreme court and give deference to precedent in our own district.
In any event, the specific allegations of plaintiffs' complaint are somewhat murky as to whether a conditional privilege is fairly shown. Paragraph 34 of the complaint alleges that during September and October of 1990, "Baxter was advised by SoloPak of the negotiations with Zdeb about a license of the PCA and the Zdeb Infuser." The complaint does not provide a context for the manner in which Baxter was "advised" and only in the January 1991 letter by Baxter attached to and incorporated into the complaint do we find a reference to "your non-confidential submission of January 17, 1991." The complaint is silent as to any inquiry by Zdeb, the recipient of the letter, and states conflicting dates of reference between the fall of 1990 and January of 1991. In addition, paragraph 42 of the complaint expressly states that Baxter's actions were "without justification or a privilege" and further alleges malicious intent on the part of Baxter.
After the entry of the Roy decision, Baxter filed a motion for leave to amend its affirmative defenses. In its motion, Baxter stated that the Roy "court held that, with certain limited exceptions, defendants now bear the burden of pleading and proving justification to interfere with a plaintiff's prospective economic advantage; prior to the Roy decision, a defendant's lack of justification was considered an element of the plaintiff's prima facie case." By its filing of this affirmative defense based on Roy, Baxter assumed the burden as stated therein. Moreover, Baxter never asked for leave to withdraw this affirmative defense.
We are faced with the difficulty imposed upon the parties by HPI Health Care. As Roy indicates, a plaintiff is faced with a dilemma as to whether his complaint introduces a privilege. Perhaps, if the present plaintiffs had filed their complaint after the Roy decision had been entered, they would have opted to omit paragraph 42, which alleged that Baxter acted "without justification or privilege to do so," because that allegation may be deemed to have raised, rather than denied, a privilege.
In the case at bar, Baxter is faced with the other side of that dilemma. If Baxter concludes that the complaint establishes a qualified privilege, a denial of the allegation negating justification is all that is required of it. If the existence of the privilege is less clear, Baxter will be required to raise justification by affirmative defense. Here, Baxter put its dilemma to rest by filing its amended affirmative defenses based on Roy. Important litigation should not turn upon such a Catch- 22! We believe that the circumstances of the instant case, therefore, fall within an exception to HPI Healthcare.
Accordingly, the trial court conducted the trial and instructed the jury on the basis of the filed affirmative defense, which was never withdrawn. The issues of justification and qualified privilege were appropriately and fairly considered during this trial.
In conjunction with this finding, we also hold that the jury instructions on this issue properly stated the law. The jury instruction on justification as an affirmative defense, as opposed to lack of justification as an element of the plaintiffs' cause of action, was correct. As stated in the jury instructions, defendants asserted the affirmative defense of justification and had the burden of proving the affirmative defense.
Next, Baxter asserts that the jury instructions included an incorrect standard for justification. Baxter argues that a "reckless disregard of the truth" standard should apply based on Kuwik, 156 Ill. 2d 16. We reject Baxter's assertion because, unlike the present case, a qualified privilege applied in the Kuwik case. Kuwik, 156 Ill. 2d at 30 ("to prove an abuse of the qualified privilege"). Under the circumstances of this case, Baxter asserted justification as an affirmative defense. In addition, the cause of action in Kuwik was for defamation and there is no authority for the ruling to apply to a cause of action for interference with a prospective economic advantage.
***** UNPUBLISHED TEXT FOLLOWS ***** [THE FOLLOWING MATERIAL IS NONPUBLISHABLE UNDER SUPREME COURT RULE 23.]
Baxter asserts that it is entitled to judgment non obstante veredicto (judgment n.o.v.) because the evidence did not establish that Baxter wrongfully interfered with plaintiffs' proposed licensing agreement. Baxter argues that its January 1991 letter concerned only the infuser shown in Zdeb's written submission and reflected Baxter's good-faith determination that the infuser in Zdeb's submission was based on proprietary Baxter ideas to which Zdeb had been exposed as a Baxter employee. In the alternative, and based on the same grounds presented for judgment n.o.v., Baxter requests a new trial, arguing that the verdict was contrary to the manifest weight of the evidence.
Judgment n.o.v. should be "entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors the movant that no contrary verdict based on that evidence could ever stand." Pasquale v. Speed Products Engineering, 166 Ill. 2d 337, 351 (1995). The Illinois Supreme Court explained the standard for judgment n.o.v. as follows:
"In ruling on a motion for a judgment n.o.v., a court does not weigh the evidence, nor is it concerned with the credibility of the witnesses; rather it may only consider the evidence, and any inferences therefrom, in the light most favorable to the party resisting the motion. [Citations.] Most importantly, a judgment n.o.v. may not be granted merely because a verdict is against the manifest weight of the evidence. [Citation.] *** The court has no right to enter a judgment n.o.v. if there is any evidence, together with reasonable inferences to be drawn therefrom, demonstrating a substantial factual dispute, or where the assessment of credibility of the witnesses or the determination regarding conflicting evidence is decisive to the outcome." Maple v. Gustafson, 151 Ill. 2d 445, 453-54 (1992).
To succeed in a cause of action "for tortious interference with a prospective economic advantage, a plaintiff must prove: (1) his reasonable expectation of entering into a valid business relationship; (2) the defendant's knowledge of the plaintiff's expectancy; (3) purposeful interference by the defendant that prevents the plaintiff's legitimate expectancy from ripening into a valid business relationship; and (4) damages to the plaintiff resulting from such interference." Fellhauer v. City of Geneva, 142 Ill. 2d 495, 511 (1991) (and cases cited therein). Absent a recognized privilege, justification is an affirmative defense that the defendant must plead and prove. American States Insurance Co. v. Bailey, 285 Ill. App. 3d 687, 691 (1996); Roy v. Coyne, 259 Ill. App. 3d 269, 283-84 (1994).
In light of the high standard required to obtain judgment n.o.v. and the record in the present case, we cannot say that the trial court erred in denying Baxter's motion for judgment n.o.v. Notwithstanding the primary focus on the January 1991 letter, the parties agree that the entire course of events and circumstances, not just one letter, and the totality of the evidence must be considered. Baxter presented evidence to support its position that certain Baxter technology was used to develop the Zdeb infuser and, therefore, Baxter was justified in writing the January 1991 letter. On the other hand, Zdeb testified contrary to Baxter's claims, presented evidence to demonstrate the differences between his infuser and the infuser ideas formulated by Baxter employees, and, thus, claimed that Baxter's conduct was not reasonable and taken in good faith. At a minimum, the evidence and reasonable inferences derived from the evidence established a substantial factual dispute as to whether Baxter acted reasonably and in good faith in claiming that Zdeb used Baxter technology to develop his infuser that Solopak wanted to market. Indeed, this factual dispute was the very core of the parties' controversy. The determination of this substantial factual dispute alone was decisive to the outcome of the case and precludes a court from entering judgment n.o.v. In addition, however, the credibility of the witnesses, particularly Zdeb and Manker, and the resolution of the conflicting evidence were necessarily crucial to the outcome of this trial. These factors also preclude the entry of judgment n.o.v.
Unlike a court's determination on a motion for judgment n.o.v., a court will weigh the evidence and grant a new trial where the verdict is contrary to the manifest weight of the evidence on a motion for a new trial. Maple, 151 Ill. 2d at 454. The determination of whether to grant a new trial rests within the sound discretion of the trial court and its ruling will not be reversed where there is sufficient evidence to support the jury's verdict. Maple, 151 Ill. 2d at 455-56. Moreover, we must remain mindful that the trial Judge, in deciding a motion for new trial, has the benefit of his previous observation of the appearance of the witnesses, their manner in testifying, and of the circumstances aiding in the determination of credibility. Maple, 151 Ill. 2d at 456. "'A verdict is against the manifest weight of the evidence where the opposite Conclusion is clearly evident or where the findings of the jury are unreasonable, arbitrary and not based upon any of the evidence.'" Maple, 151 Ill. 2d at 454, quoting Villa v. Crown Cork & Seal Co., 202 Ill. App. 3d 1082, 1089 (1990). In light of these principles and the instant record, we cannot say that the trial court abused its discretion in denying Baxter's motion for a new trial.
Next, Baxter asserts that the trial court incorrectly gave the missing-witness instruction based on Baxter's failure to call Derek Walsh, the inventor of the Walsh connector and a Baxter employee, and incorrectly allowed plaintiffs to argue that Walsh was a missing witness. Baxter argues that Walsh's testimony would have been cumulative, uninformative and not adverse to Baxter.
The missing-witness instruction allows a jury to draw an adverse inference from the failure to produce a witness where: (1) the missing witness was under the control of the party to be charged and could have been produced by reasonable diligence; (2) the witness was not equally available to the opposing party; (3) a reasonably prudent person would have produced the witness if he believed that the testimony would be favorable; and (4) no reasonable excuse is shown for the failure to produce the witness. Taylor v. Kohli, 162 Ill. 2d 91, 97 (1994); Simmons v. University of Chicago Hospitals & Clinics, 162 Ill. 2d 1, 7 (1994); Illinois Pattern Jury Instructions, Civil, No. 5.01 (2d ed. 1971). The missing-witness instruction is not warranted if the testimony of the missing witness would be cumulative of facts already established. Chiricosta v. Winthrop-Breon, 263 Ill. App. 3d 132, 157 (1994). Whether to give the missing-witness instruction or to permit the argument is within the sound discretion of the trial court. Taylor, 162 Ill. 2d at 97; Antol v. Chavez-Pereda, 284 Ill. App. 3d 561, 567-68 (1996).
In the present case, Baxter rests its position on the argument that Walsh's testimony would have been cumulative of the favorable testimony of other Baxter witnesses or, where not cumulative, completely uninformative or immaterial to the issues in the litigation because Walsh, in his deposition testimony, could not recall what occurred. One of Baxter's primary assertions in this case, however, is that Zdeb based his infuser, in part, on a connector device invented by Walsh. In his deposition, Walsh testified that he could not recall whether (1) he showed his prototype or his laboratory notebook to Zdeb; (2) Zdeb had ever been exposed to his connector device; (3) he worked directly with Zdeb on any project; or (4) anyone ever told him that Zdeb incorporated his connector device into any infusion device. Walsh did not recall any claim by Baxter that Zdeb had taken his invention and used it in Zdeb's infuser. No one from Baxter ever asked Walsh to compare his invention with any infuser product from Zdeb.
Walsh further testified that he did not "remember hearing anyone say" that Zdeb had taken anything from Baxter. Walsh did not remember "ever talking to [Schaafsma] about [Zdeb]." Referring to the January 1991 letter by Schaafsma, Walsh testified that he never discussed with Schaafsma the letter or any other letter to Zdeb, and that he did not know that Schaafsma was sending this letter or a similar letter to Zdeb. Walsh was not aware of anyone at Baxter ever mentioning to him that Baxter was considering filing a lawsuit against Zdeb.
Baxter's basic premise in this action is that Zdeb was exposed to and used three Baxter ideas to devise the Zdeb infuser: preload, storage and the Walsh connector. Baxter argues that other witnesses were as equally competent as Walsh to testify about the similarities, or arguably differences, between the Walsh connector and the parts in the Zdeb infuser.
Walsh's deposition testimony, however, offers no support for Baxter's premise because Walsh could not say that Zdeb had been exposed to the Walsh connector and could not definitively say that the Walsh connector was used on the Zdeb infuser. Moreover, Walsh's deposition testimony indicates that he was in the dark about all matters concerning Baxter's concern (or possible lawsuit) over the Zdeb infuser. Conceivably, any infuser expert (not necessarily a Baxter employee) could testify at trial about the similarities or differences between the Walsh connector and the Zdeb infuser by simply showing and explaining the two devices. Walsh, on the other hand, could offer non-cumulative testimony about his own invention and about the failure of Baxter to even ask or talk to Walsh about his invention in connection with the Zdeb infuser.
In light of the deposition testimony of Walsh, the trial court reasonably could have concluded that Baxter decided not to call Walsh as a witness because his testimony would not have been favorable to Baxter. The record does not appear as evident as Baxter suggests that Walsh's testimony would have been merely cumulative and not damaging. See Natalino v. JMB Realty Corp., 277 Ill. App. 3d 270, 280 (1995). Accordingly, we cannot say that the trial court abused its discretion in giving the missing-witness instruction.
Baxter also asserts that the trial court abused its discretion by refusing to permit Baxter to argue that Howard Rockman was a missing witness. We disagree.
Howard Rockman is a patent attorney who was retained by plaintiffs to testify as an expert. In his deposition testimony, Rockman criticized the investigation undertaken by Baxter concerning the Zdeb infuser and testified extensively about the Mitchell preload. When asked, "What opinions do you hold regarding the Baxter investigation?" Rockman testified "[t]hat it was not reasonably done." In essence, Rockman testified that Baxter should have engaged in a more particularized and careful investigation into the Zdeb infuser and should have asked Zdeb to explain the infuser in detail to ascertain whether Baxter technology had been incorporated. Rockman also specifically criticized Baxter's technical Conclusion.
Baxter now directs attention to the one italicized sentence in the following excerpt from Rockman's deposition:
"Q If in fact Baxter came to Mr. Zdeb approximately a year before the letter was written and told Mr. Zdeb its Conclusion that preload was in the device, do you place any responsibility to Mr. Zdeb if in fact he disagreed with that Conclusion to point out to Baxter where Baxter was making an error?
A I would say that probably Mr. Zdeb or those with him should have made an effort at least to try to explain to Baxter any errors in their Conclusions that they have reached in view of Mr. Zdeb's efforts to try and market the device free of any restraints put by Baxter. It's my understanding that at one point Mr. Manker told Baxter he would give them the device and give up any effort to sell it if they could show him where they had taken any proprietary information. And I don't believe that request was responded to." (Emphasis added.) This testimony is hardly unique in this trial or adverse to plaintiffs' position that Baxter did not conduct a proper or reasonable investigation. Both Zdeb and Manker testified that they tried to discuss the matter in detail with Baxter personnel but were rebuffed.
Plaintiffs' basic theory in this lawsuit is that Zdeb did not incorporate Baxter technology in his infuser and if Baxter had conducted a proper investigation, then Baxter would not have interfered with Zdeb's business. As an expert for plaintiffs, Professor John Linehan testified about Baxter's investigation and whether the Zdeb infuser incorporated Baxter technology. Rockman's testimony would have been cumulative of the testimony of Linehan regarding Baxter's failure to conduct a proper investigation into whether Zdeb used Baxter technology to develop his infuser and, quite frankly, adverse to Baxter, not plaintiffs. Applying the same legal principles for the missing- witness issue as were applied to Walsh, we find that the trial court did not abuse its discretion in refusing to characterize Rockman as a missing witness.
Next, Baxter asserts that the trial court erred in refusing to give two of its proposed jury instructions on the subject of trade secrets. Baxter argues that the instructions were necessary to correctly state the law of trade secrets and to prevent the jury from being misled.
"The purpose of jury instructions is to advise the jury of the applicable law, and are considered proper in form where the instructions, when viewed in their entirety, formulate a clear and complete picture of the legal principles applicable to the case." Lundquist v. Nickels, 238 Ill. App. 3d 410, 431 (1992).
Each party is entitled to jury instructions on its respective theory where the theory is supported by some evidence. Lundquist, 238 Ill. App. 3d at 431. "The question of what issues have been raised by the evidence is within the discretion of the trial court" and a reviewing court may not reweigh the evidence. Leonardi v. Loyola University of Chicago, 168 Ill. 2d 83, 100 (1995).
Supreme Court Rule 239(a) mandates that Illinois Pattern Jury Instructions (IPI) must be used whenever IPI contains an instruction applicable in a civil case. 134 Ill. 2d R. 239(a). Since no IPI instructions are available on trade secrets, non-IPI instructions were tendered by the parties and given by the trial court. Nonpattern instructions should be "simple, brief, impartial and nonargumentative." Poelker by Poelker v. Warrensburg-Latham Community Unit School District No. 11, 251 Ill. App. 3d 270, 282 (1993).
Absent a clear abuse of discretion, a trial court's determination as to the proper jury instructions to be given will not be disturbed on appeal. Dabros v. Wang, 243 Ill. App. 3d 259, 267 (1993). "The test for determining whether the trial court abused its discretion in instructing the jury is whether, considered as a whole, the instructions are clear enough so as to not mislead the jury and whether they fairly and accurately state the applicable law." Dabros, 243 Ill. App. 3d at 267, citing Saunders v. Schultz, 20 Ill. 2d 301, 314 (1960); see also Leonardi, 168 Ill. 2d at 100.
In the present case, the trial court gave two jury instructions on trade secrets, numbers 16 and 17. Jury instruction number 16 provided:
"The Illinois Trade Secret Act defines a 'trade secret' as information which is:
(1) sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use;
(2) is the subject of efforts that are reasonable to maintain its secrecy or confidentiality.
Matters of general knowledge in an industry cannot be trade secrets." Instruction 16 virtually quotes the definition of trade secret provided in the Illinois Trade Secrets Act (765 ILCS 1065/2(d) (West 1994)).
Jury instruction number 17 provided:
"In determining whether specific information is a trade secret, you may consider the following factors:
(a) The extent to which the information was known outside of Defendants' business;
(b) The extent to which it was known by employees and others involved in Defendants' business;
(c) The extent of measures taken by Defendants to guard the secrecy of the information;
(d) The value of the information to Defendants and their competitors;
(e) The amount of effort or money expended in developing the information;
(f) The ease or difficulty with which the information could be properly acquired or duplicated by others."
Baxter does not dispute that the instructions given by the trial court provided the statutory definition of a trade secret and apparently does not challenge the giving of these two instructions. Instead, Baxter maintains that its two proposed instructions should have been given to supplement the other instructions.
Baxter's proposed instruction No. 16F added to the definition of a trade secret:
"A combination of things, each of which, by itself, is generally known, can be a trade secret where the combination, design and operation of those things form a unique combination which is not generally known and which affords an actual or potential competitive advantage to persons possessing that information."
Baxter's proposed instruction No. 16E addressed misappropriation of trade secrets and provided:
"A trade secret is misappropriated even if the overall structure of a new device is a modification or improvement of the trade secret, is different from the trade secret, or is the subject of a patent, as long as the new device is substantially based on or developed from a trade secret seen or learned about while employed at the owner of the trade secret's business."
We find that the jury instructions given were clear enough not to mislead the jury and they fairly and accurately state the applicable law. We cannot say that the minimal amount of evidence available to support Baxter's proposed instructions was sufficient to warrant more instructions on the issue of trade secrets. Even assuming that the trial court's refusal to give Baxter's proposed instructions was an abuse of discretion, a new trial will not be granted based on a court's refusal to provide tendered instructions unless the refusal seriously prejudiced the party's right to a fair trial. Poelker, 251 Ill. App. 3d at 278. We would find that the failure to give Baxter's two supplemental jury instructions on trade secrets did not so seriously prejudice Baxter's right to a fair trial as to warrant a new trial.
Next, Baxter asserts that the trial court erroneously and prejudicially refused to admit two letters (defendants' exhibits 182 and 183) and allow testimony about those exhibits. Baxter argues that the first letter authored by Manker should have been admitted as a prior consistent statement by Manker to rebut plaintiffs' argument that Manker recently fabricated his trial testimony. Baxter argues that the second letter, authored by Manker's attorney in response to the first letter, should have been admitted as a related and relevant document.
Plaintiffs first contend that Baxter failed to preserve this issue for appeal because its offer of proof at trial was inadequate. Plaintiffs also contend that Baxter failed to meet its burden for admissibility of prior consistent statements because it failed to prove the statement was made before the alleged motive to fabricate arose.
Manker is Zdeb's former business partner who actively marketed the Zdeb infuser. On October 11, 1994, Manker's deposition was taken. On October 16, 1996, Manker testified at trial. The first letter at issue (DX 182) was undated and written by Manker to Edward Cohen, an attorney who represented Manker at his deposition and who was and continues to be plaintiffs' attorney. The letter was evidently written after his deposition in October 1994 because the letter stated "[t]he following points did not come up in my deposition, and some of them may be at variance with my deposition." Manker's letter further stated that he did not understand the concept of oil being used to fill the vacuum space in the Zdeb infuser. Manker further stated that days before his deposition was taken, Zdeb came to Manker's house to "explain" it to him and he could "only surmise that the objective of [Zdeb's] trip to [his] house before [his] deposition was to try to get [him] to change [his] 'understanding' of this."
The second letter at issue (DX 183) was dated March 14, 1995, and was written by Cohen to Manker. In this letter, Cohen stated: "In connection with preparing this case for trial, I recently reviewed your deposition testimony for accuracy. I have concluded that your testimony appears to be entirely consistent with all of your prior and subsequent written communications that I have reviewed."
At trial, Zdeb testified that oil was in the gap in the Zdeb infuser. Zdeb specifically testified that "the piston is filled with a silicone lubricant." To the contrary, Manker testified that oil was used in other areas of the infuser for the purpose of lubricating the barrel. Manker testified that he never had an understanding that there was oil being injected in the gap, i.e., the space at the bottom of the vacuum barrel.
On cross-examination at trial, Manker further testified that he was "totally unaware of the use of oil or the injection of oil into that gap for any purpose whatsoever." Plaintiffs' counsel presented a portion of Manker's deposition testimony for the purpose of impeachment, quoting in part, Manker's statement "the oil, the side walls would be swept when that thing came done [sic], and it would push oil into other spaces down there that probably had effects other than just to solve frictional issues."
Plaintiffs' counsel further questioned Manker about his conversations with John Malarkey, an attorney who was retained by Zdeb in November in 1994 to resolve the business dispute between Zdeb and Manker. Manker testified that he told Malarkey that he (Manker) had many friends at Baxter and had many business relationships and deals with people at Baxter. Manker testified that "Baxter was a partner with me in my company." Manker further told Malarkey that testifying on behalf of Zdeb could jeopardize those relationships and that "litigation against Baxter was something [he] had no interest in trying to do." Manker denied telling Malarkey that he would not testify against Baxter unless he was paid.
During Baxter's redirect examination of Manker, plaintiffs objected to the admission of Manker's undated letter to Cohen (DX 182) on the grounds that it was hearsay and it was a prior inconsistent statement. In response, Baxter argued that the letter was admissible as a prior consistent statement and also it explained Cohen's response that Cohen did not see anything that Manker said in the letter as being impeaching. Plaintiffs then argued that Manker's deposition was a prior inconsistent statement as compared to Manker's trial testimony. After counsel's arguments, the following exchange occurred:
"THE COURT: I'm going to sustain the objection to it.
[BAXTER'S COUNSEL]: I'm going to make an offer of proof.
THE COURT: You can make your offer of proof.
[BAXTER'S COUNSEL]: Your Honor --
THE COURT: I have heard. I'm not going to change my opinion."
In plaintiffs' rebuttal, Malarkey, a partner at Sachnoff and Weaver, testified that he was retained by Zdeb in November 1994 to resolve a dispute between Zdeb and Manker concerning an agreement about the sale of stock. Between November 1994 and July 1995, Malarkey had about 10 telephone conversations with Manker. During these conversations, Manker told Malarkey that he (Manker) "was necessary for the success of Mr. Zdeb's lawsuit" and that he was willing to cooperate with Zdeb, but he "conditioned his cooperation" by saying that "he wanted to be paid." Manker wanted "to receive a percentage of any settlement or judgment that was received against Baxter." Manker wanted the agreement in writing but no agreement was ever made.
In closing argument, plaintiffs, referring to Manker's trial testimony and deposition testimony, argued: "Was he [Manker] telling the truth last week, or was he telling the truth two years ago? That's one you're going to have to decide." After plaintiffs' closing argument, Baxter again moved for admission of defendant's exhibits 182 and 183 and the trial court denied the motion.
An offer of proof is generally required to preserve on appeal an issue regarding whether evidence was properly excluded. E.g., Bafia v. City International Trucks, Inc., 258 Ill. App. 3d 4, 7 (1994). The failure to make an offer of proof is not fatal, however, where the content of the excluded evidence is obvious. Bafia, 258 Ill. App. 3d at 7. "[A]n offer of proof is not required where it is apparent that the trial Judge understands the nature of the objection and the character of the evidence sought to be introduced." Bafia, 258 Ill. App. 3d at 7; see also In re Marriage of Fields, 283 Ill. App. 3d 894, 901 (1996) (formal offers of proof are not necessary to preserve the issue where the nature and purpose of the excluded evidence are obvious on the record); State Farm Fire & Casualty Co. v. M. Walter Roofing Co., 271 Ill. App. 3d 42, 45 (1995) ("a formal offer of proof is not the sole means to perfect an appeal from a ruling denying the admission of evidence"); Chicago Title & Trust Co. v. Brooklyn Bagel Boys, Inc., 222 Ill. App. 3d 413, 418 (1991) (offer of proof unnecessary where the nature of the testimony is obvious).
Furthermore, "where the attitude of the trial court is such as to prevent a party from presenting offers of proof, none are necessary in order to preserve for review the court's ruling which exclude evidence." Aguinaga v. City of Chicago, 243 Ill. App. 3d 552, 572 (1993), citing Goad v. Evans, 191 Ill. App. 3d 283, 299 (1989). In Aguinaga, this court held that the issue of exclusion of evidence had not been waived for failure to provide an offer of proof where the record revealed that "plaintiff was attempting to make an offer of proof and that the trial court continued to cut him off." Aguinaga, 243 Ill. App. 3d at 572.
In the present case, plaintiffs' argument that Baxter waived this issue on review for failure to make an adequate offer of proof fails for four reasons. First, as argued by Baxter, the evidence at issue consisted of documents that spoke for themselves on their face. Second, before ruling, the trial court reviewed the exhibits and heard the arguments of counsel regarding the admission or exclusion of the exhibits and, therefore, was sufficiently apprised of the nature and character of the offered evidence. Third, the transcript reveals that the trial court cut off Baxter as it attempted to make an offer of proof. Fourth, Baxter filed a written offer of proof regarding the two exhibits. As to the merits of this issue, the trial court is afforded great discretion. "[T]he relevance and admissibility of evidence at trial is committed to the sound discretion of the trial court and its determination will not be overturned absent a showing of a clear abuse of that discretion resulting in substantial prejudice affecting the outcome of the trial." O'Donnell v. Holy Family Hospital, 289 Ill. App. 3d 634, 648 (1997), citing Leonardi, 168 Ill. 2d 83.
"[P]roof of a prior consistent statement by a witness is generally inadmissible unless it is made to rebut a charge or inference of recent fabrication or motive to testify falsely, so long as the prior statement is made before the alleged motive to fabricate existed." People v. Jones, 293 Ill. App. 3d 119, 126 (1997). To determine the admissibility of a witness's prior consistent statement, it is necessary to analyze whether the witness is alleged to have had the same motive to fabricate at the time the witness made the prior consistent statement as the witness had at the time of trial. Jones, 293 Ill. App. 3d at 126. "The prior consistent statement rebuts the inference of fabrication only if the motive to fabricate is shown not to exist at the time of the prior consistent statement." (Emphasis in original.) Jones, 293 Ill. App. 3d at 126, citing People v. Grisset, 288 Ill. App. 3d 620 (1997) (rejected the contrary holding in People v. Antczak, 251 Ill. App. 3d 709 (1993)).
In the present case, Manker's undated letter (DX 182) fails this admissibility test. In October 1994, Manker's deposition was taken. In November 1994, Manker had a motive to lie according to Malarkey's trial testimony about his conversations with Manker regarding Manker's desire to get paid to support Zdeb's position. Prior to March 14, 1995, Manker sent his undated letter to Cohen (DX 182) according to Baxter's written offer of proof. From this time frame, Baxter failed to establish that Manker's letter (the alleged prior consistent statement) was not written prior to the time Manker had a motive to lie (November 1994). Accordingly, we find that the trial court did not abuse its discretion in excluding Manker's undated letter and Cohen's later-dated response letter.
Next, Baxter asserts that the trial court committed reversible error by refusing Baxter's special interrogatories pursuant to section 2-1108 of the Code of Civil Procedure (735 ILCS 5/2-1108 (West 1994)).
Section 2-1108 provides in relevant part:
"The jury may be required by the court, and must be required on request of any party, to find specially upon any material question or questions of fact submitted to the jury in writing. *** Submitting or refusing to submit a question of fact to the jury may be reviewed on appeal, as a ruling on a question of law." 735 ILCS 5/2-1108 (West 1994). A trial court's decision not to give a special interrogatory is reviewed as a question of law. Morton v. City of Chicago, 286 Ill. App. 3d 444, 451 (1997) (no error in rejecting a special interrogatory request because no evidentiary basis existed for the interrogatory).
A special interrogatory is not intended to instruct the jury but rather operates as a check on the jury's general verdict. Hills of Palos Condominium Ass'n v. I-Del, Inc., 255 Ill. App. 3d 448, 468 (1993). "The purpose of special interrogatories is to ascertain the jury's finding on a specific issue of ultimate fact and serve as a check upon the jury's deliberations by testing the jury's general verdict against its determination on the ultimate fact at issue in the special interrogatory." Lundquist, 238 Ill. App. 3d at 433; see also Lozado v. City of Chicago, 279 Ill. App. 3d 285, 289 (1996)(same). Where an answer responsive to a special interrogatory is inconsistent with some general verdict which might be returned upon the issues in the case, the answer controls an inconsistent general verdict. 735 ILCS 5/2-1108 (West 1994).
A trial court generally has no discretion to refuse a special interrogatory that is proper in form. Morton, 286 Ill. App. 3d at 451. "To be proper in form, a special interrogatory must relate to a material issue of ultimate fact, should use the same terms as those set forth in the court's instructions to the jury, and should not be repetitive, misleading, confusing, or ambiguous." Lundquist, 238 Ill. App. 3d at 434 (no error in refusal to submit the special interrogatories); see also Lau v. West Towns Bus Co., 16 Ill. 2d 442, 445 (1959).
A special interrogatory is improper if it contradicts a ruling made by the trial court (Lundquist, 238 Ill. App. 3d at 434) or if it asks for a finding as to a mere evidentiary fact (Meister v. Henson, 253 Ill. App. 3d 619, 628 (1993)).
In the present case, Baxter submitted 11 special interrogatories. On appeal, Baxter generically asserts that the refusal to give the 11 proposed special interrogatories was error but particularly sets forth arguments for four proposed special interrogatories (interrogatory numbers 4, 6, 7, and 8).
Baxter's proposed special interrogatory number 4 asked: "Did Baxter make the January 31st Statements solely with an intent to do wrongful harm to Zdeb and Prime Medical Products, Inc., and without any justification for its actions?" This interrogatory, which is directed at the justification issue, is improper because it does not track with the language in the jury instructions on justification and is misleading as to that issue.
Baxter's proposed special interrogatory number 6 asked: "Was Baxter's January 31, 1991 letter sent at a time when defendants were seriously considering in good faith bringing a lawsuit against Zdeb or plaintiffs?" Number 6 is not a proper special interrogatory because it related to absolute privilege which the trial court had previously rejected.
Baxter's proposed special interrogatory number 7 asked: "If Baxter had not made the January 31st Statements, would Solopak have entered into an agreement with plaintiffs for Zdeb's vacuum infuser?" Proposed special interrogatory number 8 asked: "If Baxter had not made the January 31st Statements, would Solopak have been able to make sales of Zdeb's vacuum infuser in the marketplace?" Regarding numbers 7 and 8, Baxter argues that they posed the ultimate issue of whether plaintiffs proved any damages and that the evidence raised these issues. Both of these proposed interrogatories are improper because they ask the jury to speculate about issues not in the case and about facts directly contrary to the evidence. The evidence clearly and indisputably reveals that Baxter made "the January 31st Statements" in its letter. These interrogatories do not relate to the ultimate issues in the case and are too speculative.
Next, Baxter asserts that the damage award for lost royalties is erroneous as a matter of law under the "new business" rule, which bars recovery of lost profits from sales of a new product.
"[R]ecovery of lost profits cannot be based upon conjecture or sheer speculation." Midland Hotel Corp. v. Reuben H. Donnelley Corp, 118 Ill. 2d 306, 316 (1987). Since lost profits are merely prospective, they are not capable of calculation with mathematical precision and are recoverable where the probable profits can be estimated with reasonable certainty. Midland Hotel, 118 Ill. 2d at 316.
The "new business" rule was described as follows: "Illinois courts have generally found in situations where lost profits are sought for interruption or delay in a business that the reasonable certainty' requirement may be satisfied through evidence of a plaintiff's past profits in an established business, but that the lost profits of a new business would be too speculative." Malatesta v. Leichter, 186 Ill. App. 3d 602, 621 (1989). In Malatesta, this court allowed damages for lost profits in a cause of action for tortious interference with the plaintiff's prospective economic advantage. The plaintiff in Malatesta was prevented from acquiring a car dealership that was in existence before, during and after the defendant's alleged wrongful conduct. The business was never interrupted or delayed but was owned by a person other than the plaintiff. The Malatesta court found that the "new business" rule did not fit these circumstances because the business was in existence. The Malatesta court held that "evidence of the profits of a person other than plaintiff, who operated the same established business at the identical location for the period of time which plaintiff seeks damages, is not of such a speculative nature to require a finding that plaintiff's lost profits may not be proved to a reasonable certainty." Malatesta, 186 Ill. App. 3d at 622.
The parties direct attention to two cases. Plaintiffs rely on Milex Products, Inc. v. Alra Laboratories, Inc., 237 Ill. App. 3d 177 (1992), to support lost profits. In contrast, Baxter relies on SK Hand Tool Corp. v. Dresser Industries, Inc., 284 Ill. App. 3d 417 (1996), to bar lost profits.
In Milex, the court allowed lost profits for a new drug product where the evidence showed it to have an established market and the credible expert testimony "concerning lost profits was based upon actual products in the marketplace as well as authoritative sources for the data he used." Milex, 237 Ill. App. 3d at 192. The court reasoned that "while the product is a new one, the evidence showed it to have an established market. Given that fact, together with [the expert's] testimony, we conclude that the proof of lost profits was neither speculative nor the product of conjecture but was based upon a reasonable degree of certainty." Milex, 237 Ill. App. 3d at 193.
In SK Hand Tool, the plaintiffs purchased an established but unprofitable business (hand tools). The SK Hand Tool court distinguished Milex, and the cases cited in Milex, by finding that the case before it "involves an award based on the hypothetical profits of an established, unprofitable business." SK Hand Tool, 284 Ill. App. 3d at 428. The court in SK Hand Tool also found that the records in the two cases set them apart. SK Hand Tool, 284 Ill. App. 3d at 429.
Recovery for lost profits of a new product or a new business is not always barred and the exception is not as narrow as Baxter suggests. Instead, as discussed in both SK Hand Tool and Milex, the general rule has exceptions in which an award of lost profits has been upheld. In the present case, although the Zdeb infuser was a new product, evidence was presented to show that an established market existed for infusers and that Solopak was a well-established medical products company that sold infusion therapy products. We find that the present case falls within the parameters outlined in Milex and, therefore, the new business rule does not bar the award for lost royalties.
Lastly, Baxter challenges the award on alternative grounds: (1) the evidence failed to prove lost royalties to a reasonable degree of certainty; (2) the trial court gave a misleading jury instruction on damages because it failed to inform the jury that, with limited exceptions, a new business cannot recover for lost profits; and (3) the jury's award was excessive and unsupported by the evidence. We find Baxter's alternative arguments meritless in light of the extensive evidence presented by plaintiffs to establish damages to a reasonable degree of certainty, the proper jury instructions given by the trial court, and the parameters afforded to a jury to determine an appropriate award. [THE PRECEDING IS UNPUBLISHED MATERIAL.]
For all of the foregoing reasons, we affirm the judgment of the trial court.
ZWICK and QUINN, JJ., concur.