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HANANIA v. LOREN-MALTESE

March 16, 2004.

RAY HANANIA and ALISON RESNICK, Plaintiffs,
v.
BETTY LOREN-MALTESE, et al., Defendants



The opinion of the court was delivered by: JAMES MORAN, Senior District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Alison Resnick and Ray Hanania, former employees of the Town of Cicera (Cicero), brought this action against Cicero's former president, Betty Loren-Maltese; members of Cicero's Board of Trustees (Trustees); Cicero's newsletter, the Cicero Town News; and the Cicero Town Republican Organization and its newsletter, the Cicero Town Observer. Plaintiffs also filed suit against their former attorneys, Jerome Torshen and Torshen, Spreyer, Garmisa & Slobig, Ltd., who were previously dismissed from the lawsuit See Hanania v. Loren-Maltese, 56 F. Supp.2d 1010 (N.D. Ill. 1999) aff. 212 F.3d 353 (7th Cir. 21100). Though several counts of the complaint have been dismissed, numerous counts still remain. In count I plaintiffs allege that Cicero, Loren-Maltese, and the Trustees retaliated against them for exercising their rights of free speech, in violation of 42 U.S.G § 1983. Counts II and III are conspiracy claims against all defendants. Plaintiffs allege intentional infliction of emotional distress against Cicero and Loren-Maltese in count V and defamation against all defendants, except Cicero, in count VIII. Finally, in count IX plaintiffs seek to impose indemnification, alleging that Cicero must pay any damages for which its employees are liable. Page 2

Defendants move for summary judgment on all counts pursuant to Federal Rule of Civil Procedure 56. In addition, plaintiffs file a partial summary judgment motion for defendants' advice-of-counsel defense. Before turning to the parties' arguments on those motions, we must address defendants' motion to strike certain facts from plaintiffs' Rule 56.1 statement of additional facts.

  Motion to Strike

  Plaintiffs filed a 176-paragraph statement of additional facts, from which defendants want to strike 79 paragraphs. As several judges in this district have pointed out, motions to strike, while permissible, are often unnecessary because a party can contest a fact's validity in his response to the statement See, e.g., Fenje v. Feld, 2003 WL 22922162 at *3 (N.D.Ill. 2003)(finding motions to strike unnecessary because a statement will be disregarded to the extent it is not supported); Newsome v. James. 2000 WL 528475 at *3 (N.D.Ill 2000). However, as the defendants have filed the motion, the court will rule on It. Defendants claim that a large number of these paragraphs are merely argument disguised as facts. They cite paragraph 17 as an example. It states, "In the face of growing pressure, Maltese announced on or about November 8, 1996 that she planned to hire William Kunkle to Investigate the Specialty Risk overpayments." While plaintiffs' commentary, "In the face of growing pressure," is unsupported by the citations provided, Maltese's employment of Kunkle to investigate the Specialty Risk affair is a supported fact Plaintiffs should take better care to avoid argument in their statement of facts — it only frustrates a court's identification of the uncontested facts. However, the court will not strike paragraphs from plaintiffs' statement of additional facts for containing argument Rather, the court will disregard any statements Page 3 that are merely unsupported argument, when reaching its decision on the motions for summary judgment.

  Defendants also argue that numerous paragraphs are not supported by the record and others are merely speculation and conjecture. The majority of these paragraphs are supported by plaintiffs' citations; however, paragraphs 14, 138, 163, 164, and part of 13 are not The article from the October 25, 1996, edition of the Chicago Sun-Times does not mention John La Giglio, nor that Loren-Maltese's $300,000 Investment was never repaid, as paragraph 13 states. The article also fails to support paragraph 14, The memo and affidavit cited in paragraph 138 do not establish that Cicero attorney Merrick Rayle was conducting an investigation of misconduct by Hanania. In paragraph 163 plaintiffs state that defendants conspired with El Dia; however, neither citation, an El; Dia newspaper article and Cicero's response to paragraph 3 of the first set of Interrogatories, supports this assertion. Nor is paragraph 164's statement, "Maltese and the Board are the municipal policymakers for with [sic] final policy making authority for the Town of Cicero," confirmed by its citations.

  Defendants contend that plaintiffs fail to lay a proper foundation for their opinion testimony in paragraphs 126, 147, 148, and 151. Resnick's deposition testimony provides proper support for paragraph 126's list of physical ailments that she experienced after defendants' alleged retaliation. Given plaintiffs' experience working for the Town of Cicero, and their exposure to Loren-Maltese, their opinions regarding her influence and operations support paragraphs 147, 148, and 151.

  In their final argument to strike, defendants assert that paragraphs 33, 138, 157 and 158 are based on inadmissible evidence. This argument is moot because the court struck Page 4 paragraph 138 for lack of support in the record and it does not rely on paragraphs 33, 157 or 158 to reach its decision on the motions for summary judgment

  Defendants' motion to strike paragraphs 14, 138, 163, 164, and references in paragraph 13 that are not specifically contained in the October 25, 1996, Chicago Sun-Times article, is granted, but their motion to strike all other paragraphs is denied.

  BACKGROUND

  Once again we summarize the history of this case as told through the hundreds of pages of pleadings, memorandums, statements of fact and depositions. Defendant Betty Loren-Maltese was Cicero's town president from January 1993 until August 2002, when she forfeited her office following a conviction for her involvement in an insurance fraud scheme. Both Alison Resnick and her husband, Ray Hanania, worked for the Town of Cicero during Loren-Maltese's tenure. Hanania was a political and media consultant for Cicero from 1993 until the fall of 1996, while Resnick was Cicero's town collector from February 1996 until December 1997.

  In October 1996, reporters contacted Hanania regarding subpoenas that were issued to Cicero. Hanania called Loren-Maltese to discuss the issue, and they agreed to meet Though the parties disagree over the content of their conversation, they both admit that by the end of the conversation Loren-Maltese had fired Hanania.

  On October 25, 1996, the Chicago Sun-Times reported that the Federal Bureau of Investigations was looking into alleged wrongdoing by Loren-Maltese in connection with Specialty Risk, an insurance carrier for Cicero. At a Cicero Board meeting four days later, Resnick asked Loren-Maltese to explain her involvement with the insurance company; Loren-Maltese declined to do so. Resnick asserts that she and another trustee introduced a resolution Page 5 before the Board to request an investigation into the matter by the state's attorney. Loren-Maltese, who allegedly opposed the resolution, decided to hire a private investigator to look into the Specialty Risk affair. Resnick, along with others in the Cicero government, publicly criticized this decision.

  Resnick, who was appointed town collector in February 1996, to fill a vacancy, planned to run for the office on Loren-Maltese's ticket in the February 1997 Republican primary. However, shortly after Resnick spoke out about Specialty Risk, Loren-Maltese allegedly dropped her from the Republican slate. Resnick, and two other candidates who spoke out against Loren-Maltese, formed an opposition slate: the Restore Honesty in Cicero party. After a contentious campaign during which Resnick and Hanania criticized Loren-Maltese's policies and accused her of corruption, Resnick lost the Republican primary. Despite her loss, Resnick's term as town collector continued until December 1997.

  Beginning in December 1996, the Board of Trustees voted to change the responsibilities of the town collector's office. They eliminated the town collector's authority over business licenses and pet licenses, and transferred employees in the office to other departments. In May 1997, the town collector's office was moved to a smaller area and Resnick was allegedly denied access to her old office files and equipment. Soon thereafter, Cicero's director of human resources, Jim Terracino, terminated Resnick's two remaining employees.

  In response to these actions Resnick filed a complaint against Loren-Maltese, Terracino, and the Town of Cicero, seeking to enjoin them from interfering with her authority as town collector for the remainder of her term. On June 4, 1997, Judge Lester Foreman, of the Circuit Court of Cook County, granted Resnick a temporary restraining order, restraining Loren-Maltese from "taking any action which would prevent or impede the Town Collector for the Page 6 Town of Cicero from performing the duly designated duties and activities of that office," and reinstating Resnick's recently-fired employees. Following a preliminary injunction hearing, Judge Foreman extended the restraining order and set an expedited schedule for discovery. On June 10, 1997, the Board passed several ordinances directing that certain payments be delivered to the town treasurer rather than the town collector. The Board also passed an ordinance eliminating the staff positions of Resnick's recently —reinstated employees. Resnick's amended state court complaint alleged that these ordinances altered the form of government for Cicero, in violation of the Illinois state constitution.

  After a series of continuances and extensions, the parties agreed to a settlement The settlement stated that Resnick would dismiss her suit and finish her term as town collector, without interference. The agreement also provided that Cicero would employ Torshen, Spreyer, Garmisa & Slobig to handle a lawsuit, for which it would be paid $225 an hour. Plaintiffs assert that this agreement was substantially different from an earlier draft and that Resnick signed it, relying on the advice of her attorneys. Regardless, on August 20, 1997, the parties signed the settlement agreement and the suit was dismissed the next day. Though the agreement stated that Resnick would continue to perform her regular duties as town collector, including attending Board meetings, she alleges that Loren-Maltese, through her attorney, suggested that Resnick stay away from the meetings, and Resnick agreed.

  In her affidavit, Resnick maintains that defendants* retaliation against her continued after the settlement agreement was signed. First, the Board of Trustees refused to accept her monthly office statements. Then, on December 9, 1997, the Board declared a vacancy in the town collector position due to Resnick's unexcused absences from Board meetings. They immediately filled the position with the appointment of the town collector-elect Resnick once Page 7 again contacted her attorney, who was also representing Cicero in a different matter. In response to Resnick's premature dismissal from office, Torshen negotiated for her to receive two weeks salary, which Resnick accepted. The parties dispute whether this payment was made in settlement of any claims.

  Resnick maintains that defendants' retaliation did not end after she was terminated. In the 1990s the United States Justice Department sued the Town of Cicero for violation of the Fair Housing Act The Justice Department alleged that Cicero enacted a zoning ordinance regulating how much square footage a dwelling needed to have for each resident, with the intent to discriminate on the basis of familial status and national origin. While the case was pending, Cicero's attorney, Mark Sterk, received three affidavits from an unknown sender. The affidavits, sworn by three residents of Cicero, stated that Resnick had come to the residents' homes and told them not to sell to Hispanics. Though suspicious of the origin of the affidavits, Sterk turned them over to the Justice Department, in accordance with the rules of discovery. On June 16, 1997, Judge Zagel denied Cicero's motion for summary judgment in the case. Among the reasons he cited for his decision, Judge Zagel discussed Resnick's alleged advice not to sell to Hispanics. On December 9, 1997, Cicero issued a press release announcing the resolution of the case by consent decree. The press release also stated that Judge Zagel would have thrown out the case if it had not been for Resnick's comments, that Cicero would hold her personally responsible for the Justice Department's suit and would be suing her for the town's legal fees, and that the taxpayers paid over $300,000 for her bigotry and ignorance. Both the Cicero Town News and the Cicero Observer printed the same statements in 1997 and 1998. On July 2, 1998, Cicero sent every resident a mailer which repeated the claim that "Judge Zagel indicated that he would have thrown this case out had it not been for testimony regarding Page 8 comments made by former Town Collector Alison Resnick to a homeowner planning to sell to a Hispanic family."

  From these facts, the following time-line emerges for some of the events giving rise to Resnick's claims. On October 29, 1996, Resnick asked Maltese to explain her involvement in the Specialty Risk scandal. In December 1996, and January 1997, the Board of Trustees passed ordinances altering the powers of the town collector's office. On June 4, 1997, the Circuit Court of Cook County granted Resnick a temporary restraining order against Cicero and Loren-Maltese. On August 20, 1997, Resnick, Loren-Maltese, and Cicero signed a settlement agreement dismissing Resnick's state lawsuit involving claims of interference with Resnick's responsibilities as town collector. After the settlement, on December 9, 1997, the Board declared the town collector's office vacant and replaced Resnick with the town collector-elect That same day the town issued a press release announcing the consent decree. Thereafter, statements from press releases regarding Resnick were reprinted in the Cicero Town News and Cicero Observer, and on July 2, 1998, the mailer was sent to Cicero residents. Hanania's claims stem from the events of one day, October 29, 1996, when he spoke to Loren-Maltese about Specialty Risk and was then fired.

  As a result of these actions, plaintiffs state that they have suffered economic and other damages from lost pay and vacation time, extreme mental anguish, humiliation, embarrassment, physical effects of stress, and damage to reputation.

  DISCUSSION

  Our function in ruling on a motion for summary judgment is merely to determine if there is a genuine issue of material fact for trial. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 249 (1986). Only if the evidence on file shows that no such issue exists, and that the moving Page 9 party is entitled to judgment as a matter of law, will we grant the motion. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Bennett v. Roberts, 295 F.3d 687, 694 (7th Cir. 2002). Defendants argue that they are entitled to summary judgment on all claims. Some of their arguments apply to several claims, while others attack individual counts; some arguments apply to all defendants, while others apply only to certain defendants. We will address the merits of each argument in turn.

  Legislative Immunity

  Though we did not dismiss plaintiffs' federal claims against Betty Loren-Maltese and the Trustees, on the basis of absolute legislative immunity, in our ruling on defendants' 1999 motion to dismiss, we did note that we would need to revisit the issue at a later date. See Hanania, 56 F. Supp.2d at 1014. Now, four years later, we re-examine this defense. Loren-Maltese and the Trustees argue that they have absolute legislative immunity from any liability for damages arising from the alleged harassment of Resnick and her termination as town collector.

  Local legislators, along with federal, state and regional legislators, are absolutely immune from suit under 42 U.S.C. § 1983, for their legislative activities. Bogan v. Scott-Harris, 523 U.S. 44, 49 (1998). "Absolute legislative immunity attaches to all actions taken `in the sphere of legitimate legislative activity." Id. at 54 (citing Tenney v. Brandhove, 341 U.S. 367, 376 (1951)). However, a legislator's administrative or executive acts are not protected by absolute immunity. Tenney, 341 U.S. at 379. To determine whether an official's act is legislative, the court must look to the nature of the act, not the motive or intent behind it Bogan, 523 U.S. at 54. Defendants argue that their actions were legislative and therefore protected. While plaintiffs concede that the Trustees have absolute immunity for their votes Page 10 to alter the powers of the town collector, they contest that the defendants have legislative immunity for their decision to remove Resnick from office. They also contest that Cicero or Loren-Maltese enjoys legislative immunity for any of these actions.

  An employment decision is generally viewed as administrative, not legislative. Rateree v. Rockett, 852 F.2d 946, 950 (7th Cir. 1988). Some terminations are not administrative because they result from broader legislative decisions. In Rateree, the Seventh Circuit found that the city commissioners' termination of the plaintiff employees was protected by legislative immunity because it resulted from legislative action — the passage of a budgetary ordinance. Id. at 948, 950. The Rateree defendants made "public policy choices that necessarily impact[ed] on the employment policies of the governing body." Id at 950. Distinguishing an administrative employment decision from a legislative action, the Seventh Circuit noted that plaintiffs' positions were eliminated and no one was hired to replace them. Id.

  While the parties dispute whether Resnick's termination qualifies as an administrative or legislative action, they overlook a significant distinction between her case and the cases cited. Resnick held an elected office. She was the town collector, a position that also made her a town trustee. While Resnick was appointed to office, not elected, she was nonetheless in an elected position from which she could not be fired by a supervisor. Section 38 of the Cicero Town Charter states that all officers of the town shall remain in office until new officers have been elected and qualified. Despite this provision, the Board removed Resnick from office by relying on an Illinois state statute. Section 1/80-10(c) of Chapter 60 of the Illinois Compiled Statutes allows a Township Board of Trustees to declare a vacancy in the office of a supervisor or trustee if she has five or more consecutive unexcused absences from regularly-scheduled board meetings. The Cicero Town Charter states that in the event of a vacancy, the Board can fill the Page 11 position by appointment for the remainder of the term. Cicero Town Charter § 3. On December 9, 1997, the Board of Trustees declared the office of town collector vacant on the basis of Resnick's absences and appointed the town collector-elect to fill the position.

  The Board relied on these provisions and passed two ordinances in order to perform an action it did not otherwise have the power to perform — the termination of Resnick as town collector. The defendants argue that the form of Resnick's removal renders it a legislative action, but its scope and effect make it more akin to a narrow employment decision than a public policy action that impacted on employment. Unlike in Rateree, the Trustees preserved the position of town collector and filled it immediately after removing Resnick. ...


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