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Angelika Coghlan, An Individual; and Catwalk v. Valerie Beck

January 22, 2013

ANGELIKA COGHLAN, AN INDIVIDUAL; AND CATWALK
CONSULTING, INCORPORATED, AN ILLINOIS CORPORATION, PLAINTIFFS-APPELLANTS,
v.
VALERIE BECK, AN INDIVIDUAL; REBECCA S. BUSCH, AN INDIVIDUAL; MEDICAL BUSINESS ASSOCIATES, INC., AN ILLINOIS CORPORATION; NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS- CHICAGO CHAPTER, AN ILLINOIS NOT-FOR-PROFIT CORPORATION; AND NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS, INC., A DISTRICT OF COLUMBIA NOT-FOR-PROFIT CORPORATION,
DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County No. 11 CH 16630 Honorable Kathleen M. Pantle, Judge Presiding.

The opinion of the court was delivered by: Justice Delort

JUSTICE DELORT delivered the judgment of the court, with opinion.

Presiding Justice Hoffman and Justice Cunningham concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiffs, Angelika Coghlan and Catwalk Consulting, Inc. (Catwalk), filed a nine-count amended complaint against Valerie Beck, Rebecca Busch, Medical Business Associates, Inc. (MBA), the National Association of Women Business Owners, Inc. (NAWBO), and the National Association of Women Business Owners-Chicago Chapter (NAWBO-Chicago) (collectively, defendants).

Plaintiffs alleged breach of contract, libel per se, slander per se, and civil conspiracy. The trial court granted defendants' motions to dismiss brought under sections 2-615 and 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615, 2-619.1 (West 2010)). On appeal, plaintiffs contend that the trial court erred in (i) finding that plaintiffs' exhibits to the complaint defeated their breach of contract claim (count I); (ii) dismissing plaintiffs' claims of libel per se and slander per se against Beck (counts II, III, and VIII); (iii) dismissing their claim for conspiracy to commit libel per se against Beck and Busch (count V); (iv) finding that Busch's statements in a letter either were subject to a qualified privilege that plaintiffs' allegations did not overcome or were capable of an innocent construction (count IV); (v) finding that Beck's actions were privileged and certain claims against NAWBO-Chicago were not sufficiently specific to determine the nature of the defamatory act (counts VI, VII, and IX); and (vi) dismissing their claim alleging vicarious liability against NAWBO (counts VI, VII, and IX). We affirm.

¶ 2 BACKGROUND

¶ 3 Angelika Coghlan was the managing partner of Catwalk, an information technology services company. NAWBO is an organization dedicated both to encourage women to own businesses and to support women business owners. NAWBO-Chicago is a local chapter of NAWBO. Coghlan has been a member of NAWBO-Chicago since April 1999 and a member of its board of directors since 2005. In addition, Coghlan served as NAWBO-Chicago's president from July 2008 to June 2010, at which point Valerie Beck became the president. Rebecca Busch was the chief executive officer of MBA and a member of NAWBO-Chicago. Among the services NAWBO-Chicago provides to its members is access to a "listserv," whereby members may post information onto NAWBOChicago's Internet messaging board, such as requests for business proposals, advice, or employment. Coghlan, as president of NAWBO-Chicago, was the moderator of the listserv.

¶ 4 Around January 4, 2010, Busch submitted a posting to NAWBO-Chicago's listserv seeking information technology services for her company, MBA. Coghlan reviewed Busch's submission, but before posting it publicly onto NAWBO-Chicago's listserv, Coghlan called Busch because Coghlan believed that her company, Catwalk, might be able to provide the services Busch was seeking for MBA. Coghlan and Busch discussed the opportunity during the call and arranged a meeting in person for February 4, 2010. Coghlan alleged in her first amended complaint that she posted Busch's submission onto the listserv (thus rendering it immediately accessible to all of NAWBO-Chicago's members) before ending the call with Busch.

¶ 5 Following various in-person meetings, Coghlan and Busch entered into a written contract. The contract comprised two sections, the "Agreement," and the "Health$hield Implementation Plan" (the Plan). The Agreement provided in pertinent part that fees and payment terms were "[t]o be determined," the agreement could not be changed or terminated orally, and all modifications had to be in writing and agreed to by both parties. Finally, the Agreement indicated that either party could cancel it by providing 30 days' written notice, and that no compensation, reimbursements or damages would be paid, but that "any and all amounts due and payable up to the date of termination shall be paid in accordance with this Agreement."

¶ 6 The Plan, bearing a copyright in the name of Catwalk, described the contract's scope and terms related to the project. In the plan, the "Fees" section stated that the various resources assigned to the project would have billing rates of between $90/hour to $150/hour but that "the blended rate [would] be targeted at $115/hour." The following provision immediately followed:

"In order to provide you with the opportunity to plan for the associated costs of this project, we have outlined the resource costs in Figure 1 ***. The resource costs were calculated using the standard number of working days for the period."

¶ 7 Under a subsection entitled, "Potential Timeline and Resource Requirements," Catwalk indicated that its time line "in no way implies a commitment to meet this schedule." Various tasks were then listed along with a "Low End" and "High End" number of days to complete the task. Figure 1, entitled "Detailed Resource Costs," consisted of a table listing various tasks, the Low End costs (totaling $93,380), and the High End costs (totaling $110,400).

¶ 8 Finally, the Plan included an "Assumptions" section, providing in relevant part that, if Catwalk determined that an assumption was no longer valid and would affect the completion of the "deliverables," then Catwalk would "raise it as an issue and work with MBA to arrive at a mutually acceptable resolution." One of the assumptions was that changes to the scope would result in a delay of the project schedule.

¶ 9 Through January 14, 2011, Catwalk received $110,400 in payments on behalf of MBA. On March 21, 2011, Busch notified Catwalk of MBA's intention to terminate the contract. Catwalk immediately ceased all activities on behalf of MBA and sent MBA an invoice dated March 25, 2011, for $42,550.

¶ 10 On April 6, 2011, NAWBO-Chicago held a monthly meeting of its board of directors. In advance of the meeting, Beck prepared a written statement claiming that Coghlan: (1) is a "corrupt Director [who] must indeed go," (2) "intercepted a listserv posting for her own benefit, which is indeed a classic conflict of interest," (3) "gave away proprietary NAWBO information," (4) "induced [Busch] to contract with her and to take out a loan for $100,000," (5) "pocketed the money," (6) "failed to give the deliverable that was contracted for," (7) "used bully tactics to try to gain yet more money," (8) was "using NAWBO to operate a fraud machine," (9) used "smokescreen tactics to conceal this wrongdoing," and (10) is an "offending Director."

¶ 11 Attached to the letter were various e-mails and other documents. One document, entitled "Board Principles of Operations: Conflict of Interest" for NAWBO, provides that board members should avoid conflicts of interest, inter alia, by placing "the interests of the general membership and the board over and above personal professional and political interests as a director of the board" and by refusing to "secure special services, favors, honoraria or exemptions that are not available to the general membership." In addition, an e-mail dated March 8, 2011, from Busch to Beck indicates that Coghlan sent to Busch and one of MBA's employees a list of people who had attended "NAWBO Day" and a membership list, with the following comment from Coghlan: "If anyone ever asks about the list you didn't get it from me. :)"

¶ 12 Immediately prior to the meeting, Beck told Coghlan that Beck planned to inform the other NAWBO-Chicago board members of the contents of the statement. During the meeting, Beck distributed a copy of the written statement and attachments to every member of NAWBO-Chicago's board. Coghlan did not consent to the distribution. In addition, Beck repeated some of the comments in the written statement.

¶ 13 On April 22, 2011, Busch sent a letter signed by her to the Global Financing Division of International Business Machines Corporation (IBM). In the letter, Busch stated that her company "financed $100,000 worth of work" through Catwalk, an "IBM Business Partner," and that although Catwalk had been "paid in full for the contracted services," it had not provided "the contracted deliverable." According to Busch, Catwalk refused to return MBA's intellectual property and attempted to sell that property as well as a portion of MBA's program. Busch noted that a portion of its intellectual property still being held by Catwalk might include individually identifiable information subject to "HIPAA statu[t]es." Busch then informed IBM that both it and NAWBO "share in this exposure since Ms. Coghlan used both organizations and continues to use IBM as a conduit to continue her misrepresentations along with the current pending theft of MBA property."

¶ 14 Plaintiffs subsequently filed a nine-count verified first amended complaint. Count I alleged breach of contract against MBA for its failure to pay the $42,550 that plaintiffs alleged Catwalk was owed. Count II alleged libel per se against Beck for the written statement that she distributed to the NAWBO-Chicago board members, and count III alleged slander per se against Beck because she allegedly "repeated some and/or all of the defamatory statements" in the written statement. Plaintiffs asserted that the statements were unprivileged and related to plaintiffs' inability to perform professional or business duties, reflected negatively on plaintiffs' professional reputation, and "impute onto Plaintiffs the commission of a criminal offense."

¶ 15 Count IV alleged libel per se against Busch based upon her April 22, 2011, letter to IBM, specifically, the statement in the letter that Coghlan used IBM and NAWBO "as a conduit to continue her misrepresentations along with the current pending theft of MBA property." Plaintiffs asserted, similarly to count III, that the statement was defamatory per se because it related to plaintiffs' inability to perform professional or business duties, reflected negatively on plaintiffs' professional reputation, and "imputes onto Plaintiffs the commission of a criminal offense."

¶ 16 Count V claimed that Beck and Busch conspired to commit libel per se based upon their sharing of information, working together to prepare both the written statement-knowing it contained false information-as well as the letter to IBM, and having Beck distribute the statement at the NAWBO-Chicago board meeting. Plaintiffs argued that Beck and Busch acted willfully or maliciously because they both knew that the statements in the written statement and the letter to IBM were false but published them nonetheless in order to "negatively impact" the professional reputations of plaintiffs.

¶ 17 Counts VI and VIII of the first amended complaint alleged, respectively, libel per se and slander per se against both NAWBO-Chicago and NAWBO. Both counts asserted that Beck, as president of NAWBO-Chicago, was its agent as well as an agent of NAWBO. Count VI then claimed that NAWBO-Chicago and NAWBO committed libel per se when Beck committed the acts alleged in count II, whereas count VII claimed that both entities committed slander per se based upon Beck's actions as described in count III.

¶ 18 Count VIII alleged another claim of libel per se against Beck based upon Beck's alleged sending of an e-mail on May 3, 2011, to several members of the NAWBO-Chicago board that included a copy of the letter to IBM. Plaintiffs stated that Beck acted willfully or maliciously because she knew the statements in the letter were false but published them regardless to hurt plaintiffs' professional reputations. Finally, count IX alleged that NAWBO and NAWBO-Chicago committed libel per se based upon Beck's actions as alleged in count VIII and because, as president of NAWBO-Chicago, she was an agent of both entities.

ΒΆ 19 Defendants filed motions to dismiss under sections 2-615 and 2-619.1 of the Code. On February 24, 2012, the trial court issued a detailed written order granting defendants' motions and dismissing the cause with prejudice. The trial court's order found that the breach of contract claim was negated by the exhibits attached to plaintiffs' complaint. Regarding the defamation claims, the trial court found plaintiffs' allegations to be conclusory, and that the statements at issue were either substantially true, were non-actionable opinion, or were subject to a qualified privilege that plaintiffs failed to overcome. Finally, the trial court found that the civil conspiracy claim was subject to ...


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