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Clarage v. Kuzma

July 30, 2003

JAMES CLARAGE, PLAINTIFF-APPELLANT,
v.
SHERYL H. KUZMA, MYERS, DAUGHERITY, BERRY, O'CONOR, KUZMA, LTD, AND MICHAEL SCULLY, DEFENDANTS-APPELLEES (DONALD WAGNER, DEFENDANT).



Appeal from the Circuit Court for the 13th Judicial Circuit, LaSalle County, Illinois No. 02-L-34 Honorable Cynthia M. Racugglia, Judge, Presiding

The opinion of the court was delivered by: Presiding Justice McDADE

UNPUBLISHED

The plaintiff, James Clarage, owns approximately 128 acres of land in Deer Creek Township, LaSalle County, adjacent to the Starved Rock State Park. Clarage attempted to develop the land into a vacation resort, but was unable to complete the project. This lawsuit resulted from the failure and involves claims of defamation per se, defamation per quod, interference with contract, interference with a business expectancy, and civil conspiracy. The claims have been brought against Sheryl Kuzma, the Deer Creek Township attorney, and her law firm Myers, Daugherty, Berry, O'Conor & Kuzma, and also against Michael Scully, a member of the Deer Creek Township board. The circuit court of LaSalle County dismissed all claims. Upon review, we reverse and remand for further proceedings.

FACTUAL BACKGROUND

The dispute arose after Clarage began making plans to develop his 128 acres into a resort. He contacted the Deer Creek Township (the Township) about his plans in 1996. Although the Township had no zoning authority over the property, it did control the maintenance of a road that would be vital to accessing the resort property, and Clarage approached the Township about the possibility of renovating and expanding the road.

After meeting with township officials, Clarage obtained assurances from the Township road commissioner that the Township would support the project and make the necessary upgrades to the road. In November 1996, the Township board voted to approve the road upgrade and to endorse the project.

In 1997, Clarage began negotiations with the Upper Illinois River Valley Development Authority (UIRVDA). The UIRVDA was created by the legislature to issue bonds to fund the development of projects in the upper Illinois River valley. On March 11, 1997, Clarage entered into a "memorandum of agreement" with the UIRVDA in which the Authority agreed that in the event Clarage could satisfy certain conditions, including receiving approval for the project from both UIRVDA and from the Governor, it would issue bonds to finance the development of the resort. Clarage received UIRVDA approval on November 24, 1999.

Clarage also contacted a prominent hotel and golf course planning and construction firm, McGarrity and Company, LLC (McGarrity), requesting its participation in the project. On April 19, 1999, Clarage received a letter from McGarrity which established that they would work together exclusively in the development of the resort. On May 28, 1999, McGarrity received a letter from Starwood Hotels and Resorts Worldwide, Inc., the owner of Sheraton Hotels, indicating that Starwood was interested in participating in the development of the Starved Rock Resort. McGarrity entered into preliminary negotiations with Starwood to have the company manage the resort as a Sheraton property.

Clarage and his attorney, John Vickers, met with Scully and Kuzma on November 8, 1999. At the meeting, Clarage informed the defendants that he had contracted with McGarrity to develop the Starved Rock Resort and that he was arranging with Starwood to have the resort branded as a Sheraton Hotel. He also notified the defendants that he was attempting to obtain a commitment from UIRVDA to issue $43 million in State of Illinois bonds to finance the project and that he was awaiting approval from UIRVDA before finalizing an agreement with Starwood.

After his meeting with Scully and Kuzma, Clarage learned that someone from the Deer Park Township board was contacting McGarrity and Starwood directly about the plans for the resort. On May 17, 2000, Clarage received a letter from Kuzma in which she indicated that the Deer Park Township board intended to revoke its approval of the resort unless Clarage provided the board with more information concerning the details of the project. Clarage responded by indicating that he was willing to share information with the board, but only on the condition that it agree to sign a confidentiality agreement and to no longer attempt to contact other companies and agencies involved in the project.

On July 13, 2000, the Township rejected the confidentiality agreement, citing a need to confirm the accuracy of information received from Clarage about the resort. On August 18, 2000, after failing to reach agreement with Clarage, the board revoked its approval of the project. Board members and Kuzma also resumed contacting the other parties involved in the proposed development and began to write editorials in local papers opposing the development.

On September 20, 2000, both Clarage and Kuzma received a letter from Starwood's general counsel, Nadine Greenwood. The letter stated, in part: "It has come to the attention of Starwood that you have made representations to various parties including LaSalle County, Illinois government officials, Deer Park Board Township [sic] members and the Board of Directors of the Upper Illinois River Valley Development Authority that Starwood is associated with the project which you are proposing for development in Starved Rock. Specifically, Starwood has cause to believe that you have represented that the resort will be branded a Sheraton property.

Please be advised that Starwood has never been and is in no way associated with this project. It has not had discussions or correspondence with you or your company regarding the Starved Rock project. It has no plans to license any hotel or resort which may be constructed in connection with this project as a Sheraton or any of Starwood's other hotel brands. Starwood will not condone any further misrepresentation by you concerning its involvement in the project and demands that such misrepresentation cease immediately."

After receiving the letter, Kuzma sent copies to local media outlets and to the members of the Township board. Michael Scully also distributed copies of the letter to various individuals, including defendant, Donald Wagner. When the UIRVDA learned of the allegations in the letter, it withdrew its approval of the bond issue, thereby effectively ending the development's prospects.

On January 12, 2001, under threat of litigation by Clarage, Starwood issued a partial retraction of the earlier letter. It recited:

"[s]tatements made in [the prior] letter, to the effect that Starwood has never been associated with this project are not true. Furthermore, Starwood had no basis to state that Mr. Clarage misrepresented Starwood's past involvement to any government officials as stated in our letter. Starwood regrets its error."

The plaintiff filed a five-count complaint in the circuit court. He alleged that the publication of the Starwood letter by the defendants supported claims for defamation per se, defamation per quod, tortious interference with contractual relations with both McGarrity and the UIRVDA, tortious interference with a business expectancy with the UIRVDA and Starwood, and civil conspiracy. The defendants filed a combined motion to dismiss pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 2002)). The trial court dismissed the entire complaint, ruling that the plaintiff had not stated a cause of action for any form of defamation because the letter was not defamatory and that there was no ...


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