Lawlor v. North American Corporation of Illinois , 2012 IL 112530 ( 2013 )

ILLINOIS OFFICIAL REPORTS
Supreme Court
Lawlor v. North American Corp. of Illinois, 2012 IL 112530
Caption in Supreme KATHLEEN LAWLOR, Appellee, v. NORTH AMERICAN
Court: CORPORATION OF ILLINOIS, Appellant.
Docket No. 112530
Filed October 18, 2012
Rehearing denied January 28, 2013
Held The tort of intrusion upon seclusion was recognized where an ex-
(Note: This syllabus employee sought to hold her former employer vicariously liable after it
constitutes no part of hired detectives who impersonated her in order to obtain her personal
the opinion of the court phone records but a punitive damage award was reduced to the amount
but has been prepared of compensatory damages.
by the Reporter of
Decisions for the
convenience of the
reader.)
Decision Under Appeal from the Appellate Court for the First District; heard in that court
Review on appeal from the Circuit Court of Cook County, the Hon. Carol Pearce
McCarthy, Judge, presiding.
Judgment Appellate court judgment affirmed in part and reversed in part.
Circuit court judgment affirmed in part, reversed in part, and modified in
part.
Counsel on Eric N. Macey, Steven J. Ciszewski and Julie Johnston-Ahlen, of Novack
Appeal and Macey LLP, and Michael D. Richman, of Reed Smith LLP, all of
Chicago, for appellant.
Mitchell B. Katten, Nancy A. Temple and Joshua R. Diller, of Katten &
Temple, LLP, of Chicago, for appellee.
Justices JUSTICE THEIS delivered the judgment of the court, with opinion.
Justices Freeman, Thomas, Garman, Karmeier, and Burke concurred in
the judgment and opinion.
Chief Justice Kilbride concurred in part and dissented in part, with
opinion.
OPINION
¶1 Plaintiff, Kathleen Lawlor, brought this action in the circuit court of Cook County
alleging, inter alia, the tort of invasion of privacy by intrusion upon seclusion against her
former employer, defendant North American Corporation of Illinois (North American). In
a counterclaim, North American alleged, inter alia, that Lawlor breached her fiduciary duty
of loyalty while an employee. Both parties prevailed in the trial court on their respective
claims. Lawlor was awarded $65,000 in compensatory damages and $1.75 million in punitive
damages after a jury trial. North American was awarded $78,781 in compensatory damages
and $551,467 in punitive damages after a contemporaneous bench trial. The trial court
remitted the jury’s punitive damages award to $650,000. The appellate court affirmed the
jury’s verdict on Lawlor’s intrusion claim, reinstated the $1.75 million punitive damages
award, and reversed the trial court’s judgment on North American’s breach of fiduciary duty
claim. 409 Ill. App. 3d 149.
¶2 In this appeal, we are asked to consider whether there was sufficient evidence to support
the jury’s verdict that North American was vicariously liable for the tortious conduct of
investigators on the intrusion claim; whether the jury’s award of $1.75 million in punitive
damages was excessive and in violation of Illinois common law and federal due process
principles; and whether there was sufficient evidence to support the trial court’s
determination that Lawlor breached her fiduciary duty to North American. For the following
reasons, we affirm in part and reverse in part the judgment of the appellate court, and affirm
in part, reverse in part, and modify in part the judgment of the circuit court.
¶3 BACKGROUND
¶4 The following facts are not in dispute. Lawlor was employed by North American as a
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commission-based salesperson from August 1998 until her separation from the company in
June 2005. Lawlor worked in North American’s graphic services group and primarily sold
customized corporate-branded promotional items. Her role was to generate business, after
which the day-to-day management of the account was handled by other employees. In August
2005, Lawlor began working for Shamrock Companies, Inc. (Shamrock), a competitor of
North American, which sold similar promotional items. Prior to her departure from North
American, Lawlor had interviewed for a sales position with Shamrock and communicated
with its management.
¶5 Shortly after Lawlor left North American, the company began an investigation to
determine if she had violated a noncompetition agreement. North American asked its
longtime corporate attorney, Lewis Greenblatt, to conduct the investigation, and assigned its
vice president of operations, Patrick Dolan, to serve as the company contact person.
Greenblatt retained Probe, a private investigation firm which had previously conducted
noncompetition investigations. Dolan provided Greenblatt and Albert DiLuigi, Probe’s
principal, with Lawlor’s date of birth, her address, her home and cellular telephone numbers,
and her social security number. Probe subsequently used this information when it requested
that another investigative entity, Discover, obtain Lawlor’s personal phone records. These
records included information of the date, time, duration, and numbers called on her home and
cell phones for certain periods in 2005. The material obtained by Discover was forwarded
to Probe, who faxed the information to North American. Thereafter, some of North
American’s employees attempted to verify if any of the numbers belonged to one of their
customers.
¶6 In August 2005, Lawlor filed suit against North American seeking outstanding
commissions that she alleged were owed and a declaration concerning the enforceability of
the noncompetition agreement. After learning of North American’s investigation, she
amended her complaint and alleged an intrusion upon seclusion tort based upon a “pretexting
scheme” in which someone pretended to be her in order to obtain private phone records
without her permission from her telephone carriers. In a counterclaim, North American
alleged that Lawlor breached her fiduciary duty of loyalty by attempting to direct business
to a competitor while in North American’s employ and by communicating confidential
corporate sales information to a competitor. North American also sought reimbursement of
excess commission draw payments it had made to Lawlor. A six-day trial ultimately ensued
on the parties’ various claims in September 2009. The relevant evidence adduced at trial
concerning North American’s involvement in the investigation which led to investigators
obtaining phone records, as well as Lawlor’s alleged attempt to steer business and disclose
confidential sales information to North American’s competitors, is summarized below.
¶7 Testimony Relevant to Intrusion Claim
¶8 Relevant to Lawlor’s intrusion claim, she testified that a few weeks after leaving North
American, she suspected that she was being investigated by her former employer. In October
2005, she learned that North American had obtained records concerning her home and cell
phones between April and September 2005. Lawlor’s home telephone provider at the time
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was AT&T, and her cell phone service provider was U.S. Cellular. She testified that she did
not request call logs from either company in 2005, nor did she consent to their release. She
testified that after learning North American had obtained her phone records, she vomited,
experienced anxiety for herself and her family, and had periods of sleeplessness. She further
testified that she enhanced the security features on her phone, changed the locks on her home,
and installed a security system. Lawlor testified that she had incurred $620,000 in legal fees
to two law firms who had represented her in this case and that she had paid $335,000 of that
amount. No other evidence was presented concerning her legal fees.
¶9 John Miller, North American’s chief executive officer and president, testified that he
made the decision to investigate Lawlor after she left North American. He asked Greenblatt
to be in charge of the investigation and assigned Dolan to be North American’s contact
person. He was aware that Greenblatt had hired Probe to conduct the investigation. Miller
testified that Dolan had the authority to provide Lawlor’s personal information from her
employee file to obtain phone records. Miller further testified that Dolan showed him a list
of handwritten phone numbers in relation to the Lawlor investigation. He reviewed the
numbers but did not recognize any of them. He further testified that he assumed North
American wanted phone records in connection with the investigation.
¶ 10 Greenblatt testified that he retained Probe to investigate a possible violation of Lawlor’s
noncompetition agreement. The investigation was for North American’s benefit. He testified
that he did not have any role in the investigation and he did not limit what Probe could do.1
Greenblatt testified that he did not have any discussion with Probe concerning investigative
techniques and he did not receive any updates or documents to review. He testified that he
did not know whether Probe obtained Lawlor’s phone records. Greenblatt’s law firm paid
Probe and was then reimbursed by North American.
¶ 11 DiLuigi testified that he is the president of Probe, a private investigation firm, and that
he was hired by Greenblatt to investigate Lawlor. Probe had conducted other noncompetition
investigations and had obtained phone records. He testified that Dolan wanted him to obtain
Lawlor’s phone records. In order to do so, Probe would fill out preprinted forms from
Discover and include the name, address, telephone number, date of birth, and social security
number of the person whose records he sought. After receiving Lawlor’s phone records, he
would forward them to Dolan. DiLuigi was subsequently asked by Dolan to try to identify
the owner of some of the numbers. The investigation ended around August 2005 when Dolan
informed DiLuigi that there was no need to order more records. DiLuigi believed Discover
was based in Florida, but that it was no longer in business. No witness from Discover
1
In a pretrial motion opposing Lawlor’s request to enforce a subpoena for records pertaining
to Probe’s investigation, North American represented that Probe and Discover were agents of its
attorney. Attached to this motion was an affidavit in which Greenblatt averred that he retained Probe
to investigate Lawlor at his direction. He also averred that Probe performed investigatory services
as his agent and at his direction concerning the circumstances of Lawlor’s employment at North
American. The trial court allowed this affidavit to be published to the jury over North American’s
hearsay objection after mistakenly concluding that Greenblatt had already testified consistent with
the representations made in the affidavit.
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testified at trial.
¶ 12 Dolan testified that he relied on Greenblatt and DiLuigi in performing the investigation
and he did not instruct them on how it should be conducted. He provided Greenblatt and
DiLuigi with Lawlor’s address, social security number, date of birth and her cell and home
phone numbers. Dolan was unaware of what they would do with this information. He
testified that he did not request phone logs in this case, but that DiLuigi informed him that
he typically obtains such logs in employment noncompetition cases. Dolan received from
DiLuigi several faxes which contained hundreds of phone numbers in connection with the
Lawlor investigation. He never asked how the phone records were obtained, but he was not
surprised to receive them. Dolan conducted Internet searches on some of the phone numbers
and consulted with other North American employees to see if they recognized any of the
numbers. North American did not pay Probe directly, but Dolan “signed-off” on two separate
payments to Greenblatt’s law firm for the cost of the investigation.
¶ 13 Todd Van Paris, North American’s vice president and general manager, testified that he
reviewed faxes with phone numbers from Probe that he assumed were Lawlor’s and that he
researched some of those numbers on the Internet. Van Paris testified that he was unaware
of how Lawlor’s phone records were obtained prior to this lawsuit.
¶ 14 Rosemarie Egan, North American’s chief financial officer, testified that North
American’s net worth was approximately $50 million. In April 2006, she approved an
invoice to Greenblatt’s law firm which included a payment for investigative services
provided by Probe.
¶ 15 Roosevelt Boykins, a manager with AT&T, testified that the company would not release
any information on a telephone account without first confirming the identity of the customer
by asking for the social security number or account number. Similarly, Traci Hart, a
subpoena specialist with U.S. Cellular, testified that her company would not release such
information on an account if the caller did not provide sufficient information to confirm his
or her identity.
¶ 16 Testimony Relevant to Breach of Fiduciary Duty Claim
¶ 17 Relevant to North American’s counterclaim, Lawlor testified that Greg Christenson, a
former North American colleague, had recruited her to join Shamrock prior to her departure
from North American and that she first interviewed with him and other Shamrock executives
in November 2004. The following month, she sent Christenson a follow-up letter
summarizing her sales history at North American, which provided, in pertinent part:
“Per our discussion, I will highlight where I currently am as far as total volume.
By year-end, I will have billed $2,000,000 in sales with a [gross profit] of 34%.
In addition, Komatsu, which is shared with Jennifer Hall, will be an additional
[$]1,600,000 with a [gross profit] of 44%. The $2,000,000 is made up of many
accounts to include FTD, Mobil Travel Guide, MapQuest, Vista Management and
Pilant as the majors.”
¶ 18 Lawlor further testified that in December 2004, she was contacted by Kevin Bristow, an
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outside consultant hired by MapQuest to negotiate its print business. MapQuest had
previously placed an order with North American and Lawlor had received the commission.
Bristow informed her about a new business opportunity with MapQuest which could be
significant for North American. She met with Bristow in January and February 2005, but was
informed in March 2005 by Mike Perez, her direct supervisor, that the “pitch” would be
handled by another employee. In May 2005, she was told that North American intended to
have the MapQuest account handled by a salaried employee. In June 2005, Lawlor was
informed that North American wanted to change her compensation agreement. She chose not
to sign the new agreement and left North American the same month. Lawlor testified that
while employed by North American, she never mentioned Shamrock to MapQuest or any of
her other customers. After leaving North American, she decided to take the summer off to
spend time with her children and began working at Shamrock in September 2005.
¶ 19 Bristow testified that in June 2005, he met with Perez and Van Paris. Bristow was
irritated to learn about Lawlor’s departure from North American via a third party and the two
invited him to their office to discuss the matter. On October 13, 2005, Bristow signed an
affidavit prepared by North American concerning his statements at the June meeting which
he disavowed at trial.2 Concerning the execution of the affidavit, Bristow testified that on
October 13, 2005, Perez and Van Paris contacted him and related that he needed to sign it
immediately. He was on his way to London to see his aunt who was ill, and Perez met him
with a notary at an oasis near the airport. Bristow testified that he signed the affidavit despite
the fact that the statements contained therein were untrue because he was only concerned
about seeing his aunt who died two days later. At trial, he testified that Lawlor did not
provide him with any information regarding companies other than North American.
Specifically, she never recommended, nor did he consider, involving Shamrock with the
MapQuest business.
¶ 20 Perez testified that Bristow had reviewed the affidavit multiple times prior to signing it
and that it had been revised based upon his feedback. He responded “yes” to a question of
whether the discussion at the June 2005 meeting was consistent with the affidavit. Perez
further testified that North American considers its gross profit margin to be confidential
information. He claimed that if the company’s competitors “knew what our margin was, then
they could undercut us and provide those services to our customer.” Van Paris also
responded “yes” when asked a single question of whether Bristow made statements at the
meeting consistent with the affidavit.
2
Bristow’s affidavit was admitted into evidence over Lawlor’s hearsay objection. The
affidavit provided, in pertinent part: (1) between December 2004 and February 2005, Lawlor asked
him on several occasions to delay the process of awarding the MapQuest business to North American
given the possibility that she might change jobs to Shamrock; (2) Lawlor offered to introduce him,
if necessary, to someone at Shamrock who could be his point person until she started to work for
them; (3) MapQuest would be better served by Shamrock on the service side rather than North
American, who did not care about servicing the account; and (4) he advised Lawlor to proceed
cautiously as it was unethical to be pursuing business for one company while still employed by
another.
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¶ 21 Jury Verdict and Trial Court Rulings
¶ 22 At the close of Lawlor’s case, North American moved for a directed verdict on the
intrusion upon seclusion claim. North American asserted, in pertinent part, that in the
absence of an agency relationship it could not be held liable for any improper conduct by
either Probe or Discover. The trial court denied the motion. North American renewed its
motion on the same grounds at the close of all the evidence and the trial court reserved ruling
on the motion. The jury subsequently returned a verdict in Lawlor’s favor and awarded her
$65,000 in compensatory damages and $1.75 million in punitive damages.3
¶ 23 The jury answered several special interrogatories establishing, inter alia, the following
factual findings: (1) Discover obtained information about Lawlor’s telephone calls without
her authorization through pretexting in that it called her telephone carriers and pretended to
be her in order to obtain the information; (2) Probe knew that Discover obtained information
about Lawlor’s telephone calls without her authorization through pretexting; (3) Probe was
acting as North American’s agent when it got information about the phone calls from
Discover; (4) Discover was acting as Probe’s agent when it obtained information about the
telephone calls; (5) Probe was acting within the scope of authority granted by North
American when information about Lawlor’s telephone calls were obtained without her
authorization through pretexting; and (6) North American knew that Discover obtained
information about Lawlor’s phone calls without her authorization through pretexting.
¶ 24 The trial court subsequently entered judgment against Lawlor on North American’s
breach of fiduciary duty claim. The trial court found that she breached her duty of loyalty by
disclosing confidential business information to Shamrock through the Christenson letter and
by attempting to steer the MapQuest business from North American to Shamrock. The trial
court quoted from portions of the Bristow affidavit in its order. It also found that Bristow’s
testimony at trial disavowing the affidavit was not credible. The trial court awarded North
American $78,781 in compensatory damages and $551,467 in punitive damages.
¶ 25 North American then filed a posttrial motion, requesting that the trial court grant its
motion for directed verdict, or enter judgment n.o.v., or order a new trial. North American
also asked the trial court to vacate or reduce the amount of the jury’s punitive damages
award. The trial court denied the posttrial motion, but reduced the punitive damages award
from $1.75 million to $650,000. Lawlor also filed a posttrial motion challenging, inter alia,
the trial court’s reliance on the Bristow affidavit as substantive evidence to support North
American’s counterclaim because it was admitted solely for purposes of impeachment. In
denying the motion, the trial court stated that it did not rely on the Bristow affidavit as
substantive evidence when concluding that Lawlor had breached her fiduciary duty to North
3
Lawlor and North American were also awarded damages, respectively, in their breach of
contract claims. Additionally, the trial court granted North American’s motion for a directed verdict
on Lawlor’s claim that she was entitled to commissions on certain sales made after she left North
American. Lawlor had also alleged as part of her intrusion upon seclusion claim that Probe removed
items without her permission from her mailbox. The jury rejected the claim. The parties do not raise
any issues here regarding those claims.
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American.
¶ 26 The trial court provided the following justification, in pertinent part, when reducing the
jury’s punitive damages award:
“[I]f you believe all of the agency theory, you have to believe that her records
were wrongfully obtained on a number of occasions *** so that is repetitive conduct
and it’s intentional conduct and it’s deceitful conduct. *** The amount of punitive
damages shocks the judicial conscience. *** I don’t think it passes any of the tests
that have been put forward in *** Illinois.
Clearly when this case was argued to the jury, plaintiff argued compensatory
damages in the amount of $500,000. *** The plaintiff further argued that punitive
damages should be *** ten times compensatory damages, and that is what I’m going
to reduce these damages to, exactly what you asked for *** ten times that amount,
which is $650,000. ***
I even took into account *** that this was done to protect business by North
American. I don’t believe that there was any motive to enrich themselves at the
expense of Kathy Lawlor. I don’t find that she was in a vulnerable position. She left
their employ. That was her decision to leave their employ. She decided to take off
about six weeks during the summer *** and she immediately went to work for ***
Shamrock.
She was a highly paid, sophisticated businesswoman. *** I don’t think that she
was the victim that she portrayed herself to be, particularly in light of the fact that
this case involves wrongful, deceitful conduct by both parties as against each other.
*** I think that the imposition of the amount of punitive damages that this jury
gave was a direct result of passion, and the reason I say that is because this jury was
considering the conduct of North American as against Kathy Lawlor.
And by any stretch of the imagination, while it was wrongful, while it was
intentional, and while it was deceitful and while it occurred more than six times, it
was de minimus, fairly much, on all criteria.
You know, this is not something that they subjected her to false light. She was
not financially vulnerable. This does not go to a public policy, where great numbers
of people can be harmed by the conduct in this particular case. It’s not a health and
safety issue. Her life was not impaired. Her future job was not impaired, but the
conduct was, nonetheless, wrongful. And I think that the punitive damage award of
$650,000 is a very lot of money in this instance ***.
This Court has the global ability to look at the conduct of both warring parties
here to determine what this conduct was and whether or not it was deceitful and
reprehensible and how it related one to the other, and that is exactly what I did when
I considered the punitive damages that I entered against Kathy Lawlor and in favor
of North American. I took this all into consideration because, in truth, Kathy Lawlor
hung herself on her own petard.
***
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*** I really don’t have any mechanism to consider legal fees by anybody in this
case. There is no legal basis for me to consider that. Beyond that, nobody has offered
me any billing statements, any timesheets. I have nothing but unsworn statements by
various attorneys in these pleadings[.] ***
***
So what you have here, basically, is a case that started out with less than $25,000
worth of dispute on commissions. North American said that they had overpaid her,
and she said that she was underpaid. And this ballooned into what we have, and both
parties *** won their action against the other.
And Kathy Lawlor has a net gain of $53,542, with all of the setoffs ***.”
¶ 27 Appellate Court
¶ 28 Both parties appealed. The appellate court affirmed the judgment on the intrusion claim
and reinstated the jury’s $1.75 million punitive damages award. 409 Ill. App. 3d at 175. The
appellate court concluded that Lawlor effectively proved that Probe was acting as North
American’s agent when Probe obtained information about her phone calls from Discover. Id.
at 163. The appellate court noted that the jury heard testimony about the critical interaction
of North American’s employees with investigators. Id. The appellate court concluded that
the evidence was sufficient to support the jury’s finding that North American authorized
Probe or Discover to obtain information about Lawlor’s phone calls through pretexting. Id.
The appellate court also found that North American admitted that Probe and Discover were
acting as North American’s agents because the Greenblatt affidavit and the motion to which
it was attached constituted a judicial admission on the issue of agency. Id. The appellate
court reversed the judgment for North American on its counterclaim after concluding that it
was based upon an unproven assertion that Lawlor attempted to steer business from North
American to Shamrock and that the Christianson letter contained confidential sales and profit
information. Id. at 172-73. The appellate court recognized that at oral argument, counsel for
North American specifically conceded that the Christianson letter was “ ‘not, in any legal
sense, confidential.’ ” Id. at 173.
¶ 29 This court granted North American’s petition for leave to appeal. Ill. S. Ct. R. 315 (eff.
Feb. 26, 2010).
¶ 30 ANALYSIS
¶ 31 North American initially contends that the trial court erred in denying its motion for a
directed verdict, its motion for judgment n.o.v., and its motion for a new trial on Lawlor’s
intrusion claim because there was no evidence to support the imposition of vicarious liability
based upon the tortious actions of Probe or Discover.
¶ 32 Tort of Intrusion Upon Seclusion
¶ 33 We first note that the tort of intrusion upon seclusion originates from a right of privacy
and constitutes one of the four branches of the tort of invasion of privacy found in the
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Restatement (Second) of Torts § 652B (1977).4 Section 652B of the Restatement (Second)
of Torts provides: “One who intentionally intrudes, physically or otherwise, upon the solitude
or seclusion of another or his private affairs or concerns, is subject to liability to the other for
invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.”
Restatement (Second) of Torts § 652B (1977). For purposes of illustration relevant to the
facts in this case, comment b to section 652B of the Restatement provides, in pertinent part:
“b. The invasion may be *** by some other form of investigation or examination
into his private concerns, as by opening his private and personal mail, searching his
safe or his wallet, examining his private bank account, or compelling him by a forged
court order to permit an inspection of his personal documents. The intrusion itself
makes the defendant subject to liability, even though there is no publication or other
use of any kind of the *** information outlined.” Restatement (Second) of Torts
§ 652B cmt. b, at 378-79 (1977).
¶ 34 Although not raised by the parties, we recognize that this court has not expressly
addressed whether the tort of intrusion upon seclusion is actionable in Illinois. In Lovgren
v. Citizens First National Bank of Princeton, 126 Ill. 2d 411, 417-18 (1989), we discussed
the tort but declined to comment on its validity because even if the cause of action existed,
the plaintiff’s complaint had failed to allege the requisite elements to show prying into his
personal affairs. Since our decision in Lovgren, all five appellate districts in Illinois have
explicitly recognized the validity of a cause of action for invasion of privacy by intrusion
upon seclusion. See Schmidt v. Ameritech Illinois, 329 Ill. App. 3d 1020 (1st Dist. 2002);
Benitez v. KFC National Management Co., 305 Ill. App. 3d 1027 (2d Dist. 1999); Melvin v.
Burling, 141 Ill. App. 3d 786 (3d Dist. 1986); Burns v. Masterbrand Cabinets, Inc., 369 Ill.
App. 3d 1006 (4th Dist. 2007); Davis v. Temple, 284 Ill. App. 3d 983 (5th Dist. 1996).
Courts in the majority of other states have also recognized this cause of action.5
4
The other three branches include: (1) appropriation of the plaintiff’s name or likeness
(Restatement (Second) of Torts § 652C (1977)); Eick v. Perk Dog Food Co., 347 Ill. App. 293
(1952); (2) disclosure of the details of the plaintiff’s private life (Restatement (Second) of Torts
§ 652D (1977)); Miller v. Motorola, Inc., 202 Ill. App. 3d 976 (1990); see also Family Life League
v. Department of Public Aid, 112 Ill. 2d 449, 456-57 (1986) (referring to the cause of action but
finding that the plaintiff’s claims were purely speculative); and (3) publicity tending to put the
plaintiff in a false light (Restatement (Second) of Torts § 652E (1977)); Lovgren, 126 Ill. 2d at 419.
5
See, e.g., Phillips v. Smalley Maintenance Services, Inc., 435 So. 2d 705 (Ala. 1983);
Luedtke v. Nabors Alaska Drilling, Inc., 768 P.2d 1123 (Alaska 1989); Wal-Mart Stores, Inc. v. Lee,
74 S.W.3d 634 (Ark. 2002); Shulman v. Group W Productions, Inc., 955 P.2d 469 (Cal. 1998);
Goodrich v. Waterbury Republican-American, Inc., 448 A.2d 1317 (Conn. 1982); Barker v. Huang,
610 A.2d 1341 (Del. 1992); Cason v. Baskin, 20 So. 2d 243 (Fla. 1944) (en banc); O’Neil v.
Schuckardt, 733 P.2d 693 (Idaho 1986); Cullison v. Medley, 570 N.E.2d 27 (Ind. 1991); Bremmer
v. Journal-Tribune Publishing Co., 76 N.W.2d 762 (Iowa 1956); Moore v. R.Z. Sims Chevrolet-
Subaru, Inc., 738 P.2d 852 (Kan. 1987); McCall v. Courier-Journal & Louisville Times Co., 623
S.W.2d 882 (Ky. 1981); Estate of Berthiaume v. Pratt, 365 A.2d 792 (Me. 1976); Bailer v. Erie
Insurance Exchange, 687 A.2d 1375 (Md. 1997); Lake v. Wal-Mart Stores, Inc., 582 N.W.2d 231
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¶ 35 Today, we join the vast majority of other jurisdictions that recognize the tort of intrusion
upon seclusion.
¶ 36 Standard of Review
¶ 37 A motion for judgment n.o.v. should be granted only when “ ‘all of the evidence, when
viewed in its aspect most favorable to the opponent, so overwhelmingly favors [a] movant
that no contrary verdict based on that evidence could ever stand.’ ” York v. Rush-
Presbyterian-St. Luke’s Medical Center, 222 Ill. 2d 147, 178 (2006) (quoting Pedrick v.
Peoria & Eastern R.R. Co., 37 Ill. 2d 494, 510 (1967)). “In other words, a motion for
judgment n.o.v. presents ‘a question of law as to whether, when all of the evidence is
considered, together with all reasonable inferences from it in its aspect most favorable to the
plaintiffs, there is a total failure or lack of evidence to prove any necessary element of the
[plaintiff’s] case.’ ” Id. (quoting Merlo v. Public Service Co. of Northern Illinois, 381 Ill.
300, 311 (1942)). The standard for entry of judgment n.o.v. is a high one and is not
appropriate if “ ‘reasonable minds might differ as to inferences or conclusions to be drawn
from the facts presented.’ ” Id. (quoting Pasquale v. Speed Products Engineering, 166 Ill.
2d 337, 351 (1995)). When the trial court has erroneously denied a motion for judgment
n.o.v., we will reverse the verdict without a remand. See Maple v. Gustafson, 151 Ill. 2d 445,
454 (1992). Although motions for directed verdicts and motions for judgments n.o.v. are
made at different times, they raise the same questions and are governed by the same rules of
law. Id. at 453 n.1. Our standard of review is de novo. York, 222 Ill. 2d at 178.
¶ 38 In contrast, on a motion for a new trial, the trial court will weigh the evidence and order
a new trial if the verdict is contrary to the manifest weight of the evidence. Maple, 151 Ill.
2d at 454. A verdict is against the manifest weight of the evidence only where the opposite
result is clearly evident or where the jury’s findings are unreasonable, arbitrary and not based
upon any of the evidence. Id. This court will not reverse the trial court’s ruling on a motion
for a new trial unless it is affirmatively shown that the trial court abused its discretion. Id.
at 455.
¶ 39 Agency Relationship
¶ 40 North American does not dispute that there was a sufficient basis to conclude that the
actions of the investigators in obtaining Lawlor’s phone records without her authorization
(Minn. 1998); Plaxico v. Michael, 735 So. 2d 1036 (Miss. 1999); Sofka v. Thal, 662 S.W.2d 502
(Mo. 1983) (en banc); Rucinsky v. Hentchel, 881 P.2d 616 (Mont. 1994); People for the Ethical
Treatment of Animals v. Bobby Berosini, Ltd., 895 P.2d 1269 (Nev. 1995); Hamberger v. Eastman,
206 A.2d 239 (N.H. 1964); Rumbauskas v. Cantor, 649 A.2d 853 (N.J. 1994); Sustin v. Fee, 431
N.E.2d 992 (Ohio 1982); Munley v. ISC Financial House, Inc., 584 P.2d 1336 (Okla. 1978); Mauri
v. Smith, 929 P.2d 307 (Or. 1996); Bennett v. Norban, 151 A.2d 476 (Pa. 1959); O’Shea v. Lesser,
416 S.E.2d 629 (S.C. 1992); Valenzuela v. Aquino, 853 S.W.2d 512 (Tex. 1993); Cox v. Hatch, 761
P.2d 556 (Utah 1988); Denton v. Chittenden Bank, 655 A.2d 703 (Vt. 1994); Roach v. Harper, 105
S.E.2d 564 (W. Va. 1958).
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constituted an intrusion or prying into her seclusion, that she had a reasonable expectation
of privacy in her phone records, and the intrusion would be highly offensive to a reasonable
person. Rather, North American contends that there was no evidence that it personally
obtained any of Lawlor’s phone logs and there was a lack of evidence to support an agency
relationship between North American and Probe or Discover. North American asserts that
it lacked knowledge of how the call logs were obtained and it had no control over the manner
in which Probe or Discover did its investigative work. North American contends that Probe
was hired to conduct the investigation and it was free to decide how to do so, including the
manner in which to obtain phone records. North American argues that because no agency
relationship was established it cannot be held liable for the conduct of Probe or Discover.
¶ 41 Lawlor responds that there was a sufficient basis to impose vicarious liability because the
jury heard evidence that North American directed the “pretexting activities” by specifically
requesting that Probe obtain phone records. North American was also responsible for
providing the personal information necessary for Probe and Discover to obtain the records.6
Lawlor also claims that North American was bound by the “judicial admission” contained
in the Greenblatt affidavit in which he averred that Probe and Discover were acting as his
agents.
¶ 42 Generally, a person injured by the tortious action of another must seek his or her remedy
from the person who caused the injury. Adames v. Sheahan, 233 Ill. 2d 276, 298 (2009). The
principal-agent relationship is an exception to this general rule. Woods v. Cole, 181 Ill. 2d
512, 517 (1998). “Under the doctrine of respondeat superior, a principal may be held liable
for the tortious actions of an agent which cause a plaintiff’s injury, even if the principal does
not himself engage in any conduct in relation to the plaintiff.” Id. As a general rule, no
vicarious liability exists for the actions of independent contractors. Petrovich v. Share Health
Plan of Illinois, Inc., 188 Ill. 2d 17, 31 (1999).
¶ 43 “ ‘An independent contractor is one who undertakes to produce a given result but in the
actual execution of the work is not under the orders or control of the person for whom he
does the work but may use his own discretion in things not specified *** [and] without his
being subject to the orders of the [person for whom the work is done] in respect to the details
of the work.’ ” Horwitz v. Holabird & Root, 212 Ill. 2d 1, 13 (2004) (quoting Hartley v. Red
Ball Transit Co., 344 Ill. 534, 539 (1931)). That someone is an independent contractor,
however, does not bar the attachment of vicarious liability for his actions if he is also an
agent. Id.
¶ 44 As this court has previously explained, no precise formula exists for deciding when a
person’s status as an independent contractor is negated. Petrovich, 188 Ill. 2d at 46. The
determination of whether a person is an agent or independent contractor rests upon the facts
6
In March 2009, the trial court granted North American’s motion for summary judgment on
Lawlor’s claim that North American had intruded upon her seclusion by providing Probe with her
social security number, date of birth, and home and cell phone numbers. Lawlor does not raise any
issue here that the trial court’s determination that the information provided to investigators from her
personnel file was not private and could not form the basis of a finding of liability.
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and circumstances of each case. Id. “[T]he cardinal consideration is whether that person
retains the right to control the manner of doing the work.” Id. Courts should also consider
the following factors in considering the question of whether a person is an agent or
independent contractor: (1) the question of hiring; (2) the right to discharge; (3) the manner
of direction of the servant; (4) the right to terminate the relationship; and (5) the character
of the supervision of the work done. Id. “The presence of one or more of the above facts and
indicia are not necessarily conclusive of the issue.” Id. at 47. These factors “merely serve as
guides to resolving the primary question of whether the alleged agent is truly an independent
contractor or is subject to control.” Id. The burden of proving the existence and scope of an
agency relationship is on the party seeking to impose liability on the principal. Adames, 233
Ill. 2d at 299.
¶ 45 If an agent is so authorized, it may also appoint subagents to perform those tasks or
functions the agent has undertaken to perform for the principal. AYH Holdings, Inc. v.
Avreco, Inc., 357 Ill. App. 3d 17, 33 (2005). “Although an agent generally cannot ‘properly
delegate to another the exercise of discretion in the use of a power held for the benefit of a
principal[ ]” [citation]’ the ‘ “authority to conduct a transaction ... includes authority to
delegate to a subagent the performance of incidental mechanical and ministerial acts.’
Restatement (Second) of Agency § 78.” Id. at 34 (quoting United States v. Mendoza-Acuna,
764 F.2d 699, 702 (9th Cir. 1985)).
¶ 46 After a careful review of the record, and with the above framework in mind, we cannot
say when all of the evidence is considered, together with all reasonable inferences from the
evidence in the light most favorable to Lawlor, that there was a total failure or lack of
evidence to support the jury’s determination that Probe was acting within its scope of
authority as North American’s agent when Probe requested that Discover, as a subagent,
obtain Lawlor’s phone records. We recognize that there was no direct evidence that North
American knew how the phone records were acquired by investigators. The jury could
reasonably infer, however, that North American was aware that Lawlor’s phone records were
not publicly available, and that by requesting such records from Probe and providing
DiLuigi, Probe’s president, with Lawlor’s personal information, North American was setting
into motion a process by which investigators would pose as Lawlor to obtain the material.
¶ 47 As recognized by the appellate court, the jury heard testimony about the critical
interaction of North American’s employees with Probe to support its factual determination
that an agency relationship existed between North American and the investigators. Miller,
North American’s president, testified that he personally made the decision to investigate
Lawlor after she left the company. He asked Greenblatt, North American’s corporate
attorney, to be in charge of the investigation and assigned Dolan, a vice president at North
American, to be the company’s contact person. Greenblatt simply retained Probe to conduct
the investigation and, unlike Dolan, had no further role in it. Greenblatt testified that he did
not limit in any way Probe’s activities. While Greenblatt’s law firm paid Probe, it was
ultimately reimbursed by North American. Dolan signed off on the payments.
¶ 48 DiLuigi testified that Dolan wanted him to obtain Lawlor’s phone records. Dolan
provided him with her personal information contained in North American’s files which was
necessary in order for Discover to obtain the records. Dolan testified that he was unaware
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what DiLuigi would do with the information, but he was not surprised when he received the
phone logs. Miller testified that he assumed North American wanted phone records in
connection with the investigation. He further testified that Dolan had the authority to provide
the information to Probe from Lawlor’s personnel file in order to obtain the phone records.
¶ 49 Dolan received numerous faxes from DiLuigi with information pertaining to Lawlor’s
calls during various periods in 2005. These records contained information about the phone
numbers called, the times of the calls, and their duration. After receiving the call logs, Dolan,
Miller, and Van Paris researched some of the numbers to see if they belonged to any
customer. Additionally, Dolan asked DiLuigi to follow up on some of the numbers to see if
they could determine to whom they belonged. DiLuigi testified that the investigation ended
when Dolan informed him that there was no need to order more records.
¶ 50 We agree with the appellate court, when all of the evidence is considered, together with
all reasonable inferences taken from it, in the aspect most favorable to Lawlor, that there was
not a total failure or lack of evidence to support the jury’s determination on agency in this
case. Our standard of review is a high one, and based upon the evidence presented by Lawlor,
it was not unreasonable for the jury to conclude that North American’s conduct was
consistent with a principal exercising control over its agent by directing it to obtain specific
information and providing it with the necessary tools to accomplish the task.
¶ 51 North American’s reliance on Horwitz for the proposition that it cannot be held liable for
the tortious conduct of the investigators is misplaced. In Horwitz, we held that “where a
plaintiff seeks to hold a client vicariously liable for the attorney’s allegedly intentional
tortious conduct, a plaintiff must prove facts demonstrating either that the client specifically
directed, controlled, or authorized the attorney’s precise method of performing the work or
that the client subsequently ratified acts performed in the exercise of the attorney’s
independent judgment.” Horwitz, 212 Ill. 2d at 13-14. We explained that “to hold otherwise,
we would in effect compel clients in similar cases to oversee or micromanage every action
taken by their attorneys during the course of the attorney-client relationship, and obligate
clients to take control of their representation at the slightest hint of potentially wrongful
conduct on the part of their attorneys.” Id. at 17. Because there was no genuine issue of
material fact presented regarding whether the client directed, controlled, authorized, or
ratified the allegedly tortious conduct of the attorney, we concluded that the trial court
properly granted summary judgment in the client’s favor. Id. at 23. In contrast to Horwitz,
this case does not concern the imposition of vicarious liability on North American for the
actions of its attorney and, as previously determined, there was a sufficient basis for the jury
to conclude that North American directed, controlled, or authorized the method in which
investigators performed the work in obtaining Lawlor’s phone records.
¶ 52 Due to our determination that the evidence adduced at trial was sufficient to support the
jury’s finding on agency, we need not address Lawlor’s claim that North American was
bound by the so-called “judicial admission” contained in the Greenblatt affidavit in which
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he averred, prior to trial, that Probe and Discover were acting as his agents.7
¶ 53 For these reasons, we find the appellate court properly concluded that the trial court did
not err either by denying North American’s motion for a directed verdict on Lawlor’s
intrusion claim, or in denying its motion for judgment n.o.v. For the same reasons
highlighted above, we agree with its determination that the jury’s verdict that investigators
were acting as agents of North American was not against the manifest weight of the evidence
because the opposite result was not clearly evident and the jury’s finding was not
unreasonable, arbitrary, and not based upon any of the evidence. Consequently, we find the
appellate court correctly held that the trial court did not abuse its discretion in denying North
American’s motion for a new trial.
¶ 54 Punitive Damages
¶ 55 We next consider North American’s contention that the $1.75 million punitive damages
award reinstated by the appellate court does not comport with Illinois common law
principles.
¶ 56 As a threshold matter, we reject North American’s reliance on Mattyasovszky v. West
Towns Bus Co., 61 Ill. 2d 31 (1975), for the proposition that the issue of punitive damages
should not have been presented to the jury because North American did not personally obtain
any phone records in this case. In Mattyasovszky, this court explained that the punitive and
admonitory justifications for the imposition of punitive damages are sharply diminished in
those cases in which liability is imposed vicariously. Id. at 36. This court held, however, that
punitive damages could properly be awarded against a principal because of an act by an
agent, inter alia, if the principal authorized the doing and the manner of the act. Id. As
previously determined, sufficient evidence was proffered in this case for the jury to conclude
that North American authorized the manner in which investigators obtained Lawlor’s phone
records. We therefore decline North American’s request to reverse the punitive damage
award outright.
¶ 57 Turning to the remainder of its argument, North American does not argue that the trial
court erred by allowing the jury to consider whether the conduct at issue in obtaining
Lawlor’s phone records was egregious enough to warrant any punitive damages. Instead,
North American argues that the trial court should have remitted the award further to no more
than actual damages. North American contends that the evidence does not support a higher
award because the conduct at issue was minimally reprehensible; it pursued the investigation
7
We note, however, that it was undisputed that this affidavit did not dispense with the need
for Lawlor to prove the existence of an agency relationship, which was a fact question presented to
the jury. See Konstant Products, Inc. v. Liberty Mutual Fire Insurance Co., 401 Ill. App. 3d 83, 86
(2010) (a judicial admission is a formal admission in the pleading that has the effect of withdrawing
a fact from issue and dispensing wholly with the need for proof of the fact). We further note that the
jury returned special interrogatories finding the existence of an agency relationship, which would
have been unnecessary if the Greenblatt affidavit had the effect of withdrawing this issue from the
jury.
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to protect a legitimate business interest; the limited nature of the harm done was reflected by
the jury’s modest award of actual damages; and it was undisputed that Lawlor did not seek
any medical or psychological treatment. Lawlor responds that the evidence supports the
jury’s award because North American intentionally invaded her privacy and it did so on more
than one occasion through the use of fraud and deception.
¶ 58 This court recently addressed a similar challenge in Slovinski v. Elliott, 237 Ill. 2d 51
(2010), and set forth the common law principles under which punitive damages may be
awarded:
“Punitive damages ‘are not awarded as compensation, but serve instead to punish
the offender and to deter that party and others from committing similar acts of
wrongdoing in the future.’ Loitz v. Remington Arms Co., 138 Ill. 2d 404, 414 (1990).
Punitive damages may be awarded when the defendant’s tortious conduct evinces a
high degree of moral culpability, that is, when the tort is ‘committed with fraud,
actual malice, deliberate violence or oppression, or when the defendant acts willfully,
or with such gross negligence as to indicate a wanton disregard of the rights of
others.’ Kelsay v. Motorola, Inc., 74 Ill. 2d 172, 186 (1978). To determine whether
punitive damages are appropriate, ‘the trier of fact can properly consider the character
of the defendant’s act, the nature and extent of the harm to the plaintiff that the
defendant caused or intended to cause and the wealth of the defendant.’ Restatement
(Second) of Torts § 908(2) (1979). Because punitive damages are penal in nature,
they ‘are not favored in the law, and the courts must take caution to see that punitive
damages are not improperly or unwisely awarded.’ Kelsay, 74 Ill. 2d at 188.
Section 2-1207 of the Code of Civil Procedure (735 ILCS 5/2-1207 (West 2000))
provides that the ‘trial court may, in its discretion, with respect to punitive damages,
determine whether a jury award for punitive damages is excessive, and if so, enter a
remittitur and a conditional new trial.’ ***
***
An award of punitive damages must be remitted to the extent that there is no
material evidence to support it.” Slovinski, 237 Ill. 2d at 57-58, 64.
¶ 59 When a trial court reduces the jury’s punitive damages award by remittitur, as in this
case, we review the trial court’s decision for an abuse of discretion. Id. at 58. An abuse of
discretion will be found where there is no recognizable basis in the record to support the
remittitur order entered by the trial court. Id. at 60.
¶ 60 North American relies on Slovinski for the proposition that the punitive damages award
in this case should not exceed the actual damages award. In Slovinski, the plaintiff filed a
complaint alleging defamation per se against Cherry Communications, Inc., and its chief
executive officer, defendant James Elliot. Id. at 54. According to the plaintiff’s complaint,
prior to his termination from the company, he had completed its 1995 annual financial
statement and the monthly statements for January, February, and March 1996. Id. Several
months after the plaintiff’s employment was terminated, he learned of a meeting that
occurred between the defendant and representatives from WorldCom, one of Cherry’s
suppliers. Id. During the meeting, WorldCom requested his former employer’s 1995 annual
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financial statement and updated monthly statements. Id. at 54-55. Plaintiff alleged that during
this meeting Elliott made false statements about him to the WorldCom representatives. Id.
at 55. Specifically, defendant allegedly stated that Cherry’s financial statements were not
available because the plaintiff had not completed them; he “ ‘was not doing his job’ ”; he
“ ‘came in late and left early’ ”; he was “ ‘sneaking off to do workouts’ ”; and he “ ‘spent his
time chasing pussy all day.’ ” Id.
¶ 61 Following the entry of a default judgment in the plaintiff’s defamation lawsuit, the jury
awarded him $81,600 in damages for emotional distress and $2 million in punitive damages.
Id. at 53. The trial court remitted the punitive damage award to $1 million. Id. The appellate
court affirmed the default judgment and the award for emotional damage, but remitted the
punitive damages award to $81,600. Id. at 53-54. This court upheld the appellate court
decision reducing the punitive damages award to an amount equal to that of the actual
damage award. Id. at 65. We explained that the defamatory statements at issue were made
only once in the presence of a limited number of individuals and there was no evidence of
an intentional, premeditated scheme to harm the plaintiff. Id. at 64. This court further noted
that although there was a damage award returned for emotional distress, there was no
evidence of visits to a doctor or therapist, missed work, or any alteration in plaintiff’s daily
normal activities. Id. Consequently, we concluded that these facts put the conduct at issue
on the low end of the scale for punitive damages. Id.
¶ 62 We find this case is similar to Slovinski and warrants the same outcome of an award of
punitive damages equal to the award of compensatory damages. There was no evidence
presented to the jury that North American had an intentional, premeditated scheme to harm
Lawlor. As recognized by the trial court, the phone records were obtained as part of a
legitimate investigation into a possible violation of a noncompetition agreement, not out of
any animus toward Lawlor, and concerned a private dispute which did not implicate any
general public policy. As in Slovinski, this places North American’s conduct on the low end
of the scale for punitive damages, far below those cases involving a defendant’s deliberate
attempt to harm another person. Id.
¶ 63 There are other factors which also lead us to conclude that neither the appellate court’s
judgment reinstating the punitive damage award nor the trial court’s remittitur order can
stand. Lawlor’s phone records were only viewed internally by a handful of North American’s
employees. No evidence was presented that the records were distributed outside of the
company, or that they were used for any purpose other than to determine if Lawlor had
contact with one of North American’s customers. Additionally, the jury’s verdict with respect
to compensatory damages shows limited harm to Lawlor. She began her employment with
Shamrock within months of voluntarily leaving North American after choosing to take a few
months off. Lawlor testified that after learning North American had obtained her phone
records, she vomited, experienced anxiety, and had periods of sleeplessness. Additionally,
she enhanced the security features on her phone and at her home. Therefore, similar to the
plaintiff in Slovinski, the evidence showed that she never sought medical or psychological
treatment and there was no evidence of any alteration in her normal daily activities or that
she missed work.
¶ 64 Lawlor suggests that her attorney fees should be considered in the award of punitive
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damages. We need not consider this argument, however, because as recognized by the trial
court there was no basis upon which to consider her attorney fees on this record. Lawlor
simply testified that she incurred $620,000 in legal fees to two firms and that she had paid
approximately half of that amount. It was entirely unclear what amount of those fees had
been incurred as part of her intrusion claim and there were various other claims that she both
pursued and defended in this case. Similarly, there is no basis for us to consider her
contention that North American’s investigation of other former employees, which she claims
included obtaining phone records, should be considered in determining the appropriateness
of the punitive damage award here. As acknowledged by Lawlor, the trial court barred any
evidence of other investigations that North American may have pursued concerning other
former employees.
¶ 65 We agree with the trial court that the evidence was sufficient to support the jury’s
determination to award some measure of punitive damages for North American’s wrongful
conduct in obtaining the phone records in this case. We also recognize that evidence was
presented that North American has a net worth of approximately $50 million. The conduct
at issue also apparently occurred on more than one occasion because phone records were
obtained by the investigators for different time periods in 2005. We do not believe, however,
that a punitive damage award of $650,000 is warranted in this case, particularly when the
trial court specifically found that the conduct at issue was “de minimus, fairly much, on all
criteria.” We also recognize that this case concerns the imposition of punitive damages in a
case of vicarious liability, and that this court has previously held that the justification for
punitive damages are sharply diminished in such matters. See Mattyasovszky, 61 Ill. 2d at 36.
For these reasons, we find the trial court abused its discretion by not further reducing the
jury’s punitive damages award. We conclude, as in Slovinski, that the highest award the
evidence of record may support is equal to the award of compensatory damages, or $65,000.
¶ 66 Based upon this outcome, we need not address North American’s alternative contention
that the punitive damages award violated federal due process because we conclude that under
state common law principles the award should not exceed the actual damages award in this
case.8
¶ 67 North American’s Counterclaim
¶ 68 Finally, we turn to North American’s contention that the appellate court erred in
concluding that the trial court’s finding that Lawlor breached her fiduciary duty of loyalty
while in its employ was against the manifest weight of the evidence. North American
contends that it introduced sufficient evidence to support the trial court’s determination that
Lawlor attempted to steer the MapQuest business to Shamrock at a time when she was still
employed by North American, but was actively seeking employment at Shamrock.
8
We note, however, that the Supreme Court has stated that under federal due process “few
awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant
degree, will satisfy due process.” State Farm Mutual Automobile Insurance Co. v. Campbell, 538
U.S. 408, 425 (2003). The ratio following the trial court’s remittitur in this case was 10 to 1.
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¶ 69 To state a claim for breach of fiduciary duty, it must be alleged and ultimately proved:
(1) that a fiduciary duty exists; (2) that the fiduciary duty was breached; and (3) that such
breach proximately caused the injury of which the party complains. Neade v. Portes, 193 Ill.
2d 433, 444 (2000). Employees as well as officers and directors owe a duty of loyalty to their
employer. Mullaney, Wells & Co. v. Savage, 78 Ill. 2d 534, 546-47 (1980); E.J. McKernan
Co. v. Gregory, 252 Ill. App. 3d 514, 529 (1993). Accordingly, a fiduciary cannot act
inconsistently with his agency or trust and cannot solicit his employer’s customers for
himself. ABC Trans National Transport, Inc. v. Aeronautics Forwarders, Inc., 62 Ill. App.
3d 671, 683 (1978).
¶ 70 Our standard of review is whether the trial court’s finding of breach of fiduciary duty was
against the manifest weight of the evidence. Addison Insurance Co. v. Fay, 232 Ill. 2d 446,
452 (2009). A judgment is against the manifest weight of the evidence only when an opposite
conclusion is apparent or when findings appear to be unreasonable, arbitrary, or not based
on the evidence. Bazydlo v. Volant, 164 Ill. 2d 207, 215 (1995).
¶ 71 Here, we agree with the appellate court that the record is entirely devoid of evidence to
support the judgment in favor of North American. The trial court’s judgment was based
solely on an unproven assertion that Lawlor unsuccessfully attempted to steer the MapQuest
business from North American to one of its competitors, Shamrock, while still working at
North American. The only evidence that touched on business diversion came by way of the
affidavit of Kevin Bristow, an outside consultant for MapQuest, which was admitted over
Lawlor’s hearsay objection. At trial, Bristow disavowed the affidavit and testified that
Lawlor did not provide him with any information regarding companies other than North
American. Specifically, she never recommended, nor did he consider, involving Shamrock
with the MapQuest business. Lawlor also testified that while employed by North American,
she never mentioned Shamrock to MapQuest or to any of her other customers. In Lawlor’s
posttrial motion, she challenged the trial court’s reliance on the Bristow affidavit as
substantive evidence. In denying the motion, as recognized by North American, the trial court
specifically stated that it did not rely on the affidavit in reaching its decision. We note that
North American does not contend here that the affidavit should be relied upon as substantive
evidence in determining whether the trial court’s judgment is supported by the manifest
weight of the evidence.
¶ 72 North American appears to suggest that the trial court’s judgment was not against the
manifest weight of the evidence because the trial court properly relied upon the testimony
that Bristow contacted North American after Lawlor’s departure from the company and set
up an appointment to meet with Todd Van Paris, North American’s vice president and
general manager, and Mike Perez, Lawlor’s direct supervisor, and that the noncompetition
investigation ensued shortly thereafter. According to North American, based upon this
sequence of events, the trial court could infer that Bristow told Van Paris and Perez that
Lawlor had attempted to steer business to North American’s competitor. North American
also suggests that there was sufficient evidence to support the trial court’s determination
because Lawlor and Bristow had a long-standing prior relationship; they were working
together on the MapQuest account; they frequently communicated with one another and did
not include Lawlor’s supervisors; and Lawlor was actively interviewing with Shamrock. We
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find this evidence too speculative and wholly insufficient to conclude that Lawlor, while
employed by North American, tried to divert business to Shamrock, or to any other
competitor.
¶ 73 We note in conclusion that North American does not raise any claim before this court that
the 2004 letter sent by Lawlor to Greg Christenson, an executive at Shamrock, contained
confidential sales information that could somehow form a basis for upholding the trial
court’s judgment on the breach of fiduciary duty claim. We reiterate that the appellate court
in rejecting this claim recognized that counsel for North American specifically conceded that
the Christianson letter was “ ‘not, in any legal sense, confidential.’ ” 409 Ill. App. 3d at 173.
¶ 74 Accordingly, we find the appellate court properly reversed the trial court’s judgment in
North American’s favor on the counterclaim because its determination that Lawlor breached
her fiduciary duty was against the manifest weight of the evidence.
¶ 75 CONCLUSION
¶ 76 For the reasons stated, we affirm the appellate court’s judgment which affirmed the trial
court with respect to Lawlor’s intrusion claim; reverse the appellate court’s judgment which
reinstated the jury’s award of punitive damages in Lawlor’s favor on the intrusion claim and
affirm the judgment of the circuit court as modified by a reduction in the punitive damage
award from $650,000 to $65,000; and affirm the appellate court’s judgment which reversed
the trial court’s order in favor of North American on the breach of fiduciary duty claim.
¶ 77 Appellate court judgment affirmed in part and reversed in part.
¶ 78 Circuit court judgment affirmed in part, reversed in part, and modified in part.
¶ 79 CHIEF JUSTICE KILBRIDE, concurring in part and dissenting in part:
¶ 80 I join the majority opinion in all but one issue in this appeal. Consistent with my dissent
in Slovinski v. Elliott, 237 Ill. 2d 51 (2010), I respectfully believe that the majority failed to
apply the highly deferential standard of review properly in this case. In determining whether
the appellate court committed error by reinstating the jury’s punitive damages award, we
must also resolve the underlying question of whether “there [is] a basis in the record to
support the remittitur entered by the circuit court.” Slovinski, 237 Ill. 2d at 62. After closely
reviewing the record in this case, I cannot agree with the majority that the trial court abused
its discretion in remitting the jury’s punitive damages award to $650,000. Thus, while I agree
with the majority that the appellate court erred by reinstating the jury’s original punitive
damages award, I respectively dissent from that portion of the opinion rejecting the punitive
damages award entered by the trial court on remittitur (supra ¶¶ 57-66).
¶ 81 The jury initially awarded Lawlor $1.75 million in punitive damages, and the trial court
reduced that award by nearly 63% to just $650,000 on remittitur. As in Slovinski, the
majority acknowledges that this court may overturn the trial court’s determination only if
“there is no recognizable basis in the record to support the remittitur order entered by the
trial court” (emphasis added) (supra ¶ 59), but despite this high bar, the majority rejects the
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trial court’s determination. I dissented in Slovinski because I believed that, while the majority
paid lip service to the proper standard of review, it did not apply that standard, instead
substituting its own judgment for that of the trial court. Slovinski, 237 Ill. 2d at 65 (Kilbride,
J., dissenting). I believe the same is true here.
¶ 82 Indeed, the majority’s error is even more evident here because the record establishes that
Lawlor, unlike the plaintiff in Slovinski, presented evidence showing significant steps she
took to alter both her lifestyle and that of her family, as well as to enhance their security, after
she learned her phone records had been improperly obtained by pretexting. During the
summer of 2005, the evidence shows that Lawlor and her neighbors noticed a number of cars
not belonging to anyone in the neighborhood parked near her residence, with the occupants
watching her home for hours at a time. Subsequently, she found out in October 2005 that, in
addition to her residence being placed under surveillance, her home and cell phone records
had been repeatedly obtained without her permission by someone who was impersonating
her using personal information obtained from North American (pretexting). Lawlor testified
that she immediately became hysterical, vomited, and was “[shaken] *** to the core.” She
“didn’t go outside,” alerted her parents and neighbors to a possible security threat in the area,
“was ill *** nervous *** paranoid ***[, and] didn’t trust anyone.” Before discovering the
pretexting scheme, she never suffered from feelings of paranoia, nervousness, or unusual
stress.
¶ 83 In response to North American’s improper intrusion into her privacy, Lawlor also
severely limited her three young children’s activities, refusing to allow them to go out to play
and requiring them to be with her or her husband “at all times.” She curtailed the children’s
sports activities “because [she] was afraid for what could happen.”
¶ 84 Even four years after discovering her phone records had been improperly obtained,
Lawlor testified to “the stress that this has caused; the strain that it has put on [her] marriage;
the nervousness [she feels] with the kids, whether it’s a sporting event that they’re at, that
I or my husband do not ever leave them at a two-hour practice by themselves, ever.” She
stated that “because of what has been done to [her], [she doesn’t] trust anyone anymore.”
Notably, the trial judge did not find that her testimony lacked credibility.
¶ 85 Moreover, to secure her phone records against further intrusions, Lawlor enhanced her
phone security features, instituting passcodes and requiring her to fax images of the front and
back of her driver’s license to her home phone service provider and to visit her cell phone
service provider’s store personally and show her driver’s license to discuss her accounts.
When asked why she did not change her phone numbers after discovering the theft of her call
logs, Lawlor explained that she believed it would be futile because the defendant would
simply use pretexting again to obtain call logs for the new numbers.
¶ 86 In addition to these alterations in her daily life, Lawlor increased the security at her
residence by changing the locks and installing a home security system that was left on
regardless of whether the family was in or out of the house. She and her husband also revised
the provisions for their minor children’s guardian in their wills in case “anything were to
happen to” them.
¶ 87 Lawlor’s husband confirmed that she “seemed upset a lot, paranoid,” “did not like going
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out as much,” and that their previously quite active social life had “changed a lot.” He stated
that Lawlor no longer went out by herself as often and did not “take the kids out as much.”
“[T]hings that [the family] used to do a lot, [they] don’t do anymore,” such as “go[ing] out
a lot and hav[ing] parties at [their] own house a lot.”
¶ 88 Thus, contrary to the majority’s claim that “there was no evidence of any alteration in her
normal daily activities” (supra ¶ 63), the record is replete with evidence that Lawlor
significantly altered her daily routine and lifestyle, as well as those of her small children, in
response to North American’s improper acquisition of her private call logs.
¶ 89 Although Lawlor admitted she did not seek medical or psychological help before trial
because she “thought [she] could do this on [her] own and just try and figure out how to get
through this,” she eventually decided she was “sick of going through the motions and it just
being a day-to-day thing.” Because she continued to suffer from the negative effects of the
incident, she concluded she needed “help in order to quit living in the past and put this
behind” her. She offered an additional explanation for her failure to seek medical or
psychological treatment before trial as well, stating she did not seek counseling earlier
because she did not “want North American to get those records.” “Because [she] knew that
North American got *** [her] private information, when they shouldn’t have, *** [she]
didn’t want to give them any more information at all.”
¶ 90 Lawlor further explained that before discovering the pretexting she did not suffer from
any sleep problems, but after making that discovery, she had not slept through the night in
four years, waking up two or three times every night. Her husband confirmed that her sleep
remained “[v]ery fitful.” She also complained that her eating habits had changed, due to
either the added stress or her sleep problems, and that, consequently, she had “put on a lot
of weight,” a fact her husband acknowledged as well. He testified that Lawlor became ill
more often, too, suffering from “headaches a lot more, cold sores, a lot of stress-related
stomach issues.” He explained that she “almost never got sick” before uncovering North
American’s investigation. Unlike Slovinski, here the record contains substantial evidence that
Lawlor suffered both physical and psychological harm from North American’s misconduct.
Cf. Slovinski, 237 Ill. 2d at 64 (stating “there was no evidence of any physical harm to
plaintiff *** no evidence of any alteration in plaintiff’s normal daily activities”). The
plaintiff’s failure in Slovinski to show any physical or psychological harm beyond the
emotional distress the plaintiff felt when he had to explain the defendant’s defamatory
statements to his family (Slovinski, 237 Ill. 2d at 55-56) stands in sharp contrast to Lawlor’s
showing in the instant case.
¶ 91 Despite the majority’s tentative recognition that, unlike the single incident at issue in
Slovinski, “[t]he conduct at issue [here] also apparently occurred on more than one occasion”
(supra ¶ 65), its analysis fails to acknowledge the trial court’s express finding that North
American’s conduct “was wrongful, *** intentional, and *** deceitful and *** occurred
more than six times.” (Emphasis added.) Supra ¶ 26. Instead, the majority focuses on the trial
judge’s next statement, that the misconduct “was de minimus, fairly much, on all criteria,”
as a basis for further slashing the judge’s already nearly 63% reduction in the jury’s punitive
damages award on remittitur. Supra ¶ 65. The majority’s use of the trial judge’s statement
to justify its additional reduction in Lawlor’s punitive damages award cannot withstand close
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scrutiny.
¶ 92 As the record shows, the trial court made it clear that the damage award on remittitur was
the result of its thorough examination of the evidence in its entirety. Thus, its statement that
North American’s misconduct was “de minimus, fairly much” described a general conclusion
it reached before reducing the jury’s award to $650,000. The majority’s interpretation of that
statement, however, implies that the trial court somehow ignored its own conclusion when
it set the award on remittitur, even using the trial court’s statement to support the rejection
of its own award. The trial court’s statement need not be viewed as undermining its judgment
on remittitur. It is indisputable that the court set the punitive damages award fully cognizant
of its own views about the degree of North American’s misconduct. That, however, is not
the only factor to be considered in setting an award for punitive damages. See Slovinski, 237
Ill. 2d at 57-58. Thus, despite the statement relied on by the majority, the trial court
concluded, that taking all the relevant factors into consideration, $650,000 was the proper
punitive damages award on remittitur. Accordingly, I remain unpersuaded by the majority’s
interpretation.
¶ 93 That interpretation fails to recognize that “ ‘the character of the defendant’s act [and] the
nature and extent of the harm to the plaintiff that the defendant caused or intended to cause’ ”
are only two of the criteria used “ ‘[t]o determine whether punitive damages are
appropriate.’ ” Supra ¶ 58 (quoting Slovinski, 237 Ill. 2d at 58). The third criterion is the
defendant’s wealth. Slovinski, 237 Ill. 2d at 58. Here, North American was a $50 million
dollar company. Although the majority mentions this fact, it does not overtly consider the
role North American’s value plays in setting a punitive damages award. Supra ¶ 65. Punitive
damages “ ‘are not awarded as compensation, but serve instead to punish the offender and
to deter that party and others from committing similar acts of wrongdoing in the future.’ ”
Slovinski, 237 Ill. 2d at 57-58 (quoting Loitz v. Remington Arms Co., 138 Ill. 2d 404, 414
(1990)).
¶ 94 To many small companies, punitive damages of far less than $650,000 would indeed be
sufficient punishment to deter similar misconduct in the future. Here, however, after
considering all the evidence, the trial court set $650,000 as the sum necessary to punish
North American, a company with a net worth of 77 times that amount. Unlike the majority
(supra ¶ 65), I cannot conclude that the punitive damages award on remittitur was a clear
abuse of the trial court’s discretion when I consider the purpose served by punitive damages.
Further, given the financial strength of the company, I am forced to question the deterrent
value of the $65,000 punitive damages award imposed by the majority in this case.
¶ 95 Finally, when reviewing the jury’s $1.75 million punitive damages award for Lawlor, the
trial court found it “shocks this judicial conscience,” far surpassing her request for punitive
damages of 10 times her compensatory damages, and was “a direct result of passion,” due
to the jury’s “consider[ation of] the conduct of North American as against Kathy Lawlor,”
without any consideration of her own misconduct. In radically reducing the award by almost
63%, the trial court expressed its belief that both parties engaged in “wrongful, deceitful
conduct *** against each other.” Relying on their joint misconduct, the court commented that
“[t]his is the only case that I have seen in the panoply of cases that have been given to me,
where each side, I believe, was wronged by the other, in a willful and reprehensible way, and
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the consideration of punitive damages was appropriate.” In revising the punitive damages
award, the court noted its “global ability to look at the conduct of both warring parties here”
in evaluating a punitive damage award, again demonstrating its apparent belief that both
parties’ misconduct should be evaluated in setting the punitive damages awards.
¶ 96 To justify its dramatic reduction in Lawlor’s punitive damages award even further, the
trial court expressly stated that it “even took into account the fact that [the pretexting] was
done to protect business by North American” and was done without “any motive to enrich
themselves at the expense of Kathy Lawlor.” In addition, the trial judge found that Lawlor
was not “in a vulnerable position” and was a “highly paid, sophisticated businesswoman,”
not a victim, and that both parties had engaged in wrongful conduct against each other, with
Lawlor violating her fiduciary duty by revealing North American’s confidential sales and
profit information to Shamrock. Indeed, the court attributed much of the initial fault to
Lawlor, stating that she “started a course of conduct that was reprehensible and deceitful”
by giving “confidential information, which [the judge found] to be confidential, even though
it was argued by plaintiff that it wasn’t.”
¶ 97 From these findings, the trial court clearly understood that North American’s conduct
was not based on any personal animus against Lawlor, and the court heavily weighed what
it believed to be her serious misconduct in disclosing North American’s “confidential”
information when it remitted the jury’s punitive damages award by almost 63%. The court’s
comments strongly indicate it was not inclined to limit its reduction in her award due to
favoritism or sympathy for her. Nonetheless, the majority somehow concludes that the trial
court still set Lawlor’s award 10 times too high.
¶ 98 Undermining that conclusion even further, the trial court found that Lawlor actually set
in motion the entire course of misconduct alleged by both parties when she breached her
fiduciary duty to North American by disclosing allegedly “confidential” sales and profit
information to Shamrock. The appellate court, however, reversed “the trial court’s judgment
in North American’s favor on the counterclaim because its determination that Lawlor
breached her fiduciary duty was against the manifest weight of the evidence.” I note that the
majority correctly affirms the appellate court’s decision on that issue. Supra ¶ 74. Because
the trial court relied heavily on its finding that Lawlor breached her fiduciary duty to North
American, the appellate court’s subsequent determination that the evidence failed to establish
any breach substantially undercuts the trial court’s justification for its massive reduction in
her punitive damages award. At a minimum, the rejection of one of the primary bases for the
trial court’s huge reduction on remittitur cannot rationally justify an additional 90% reduction
in that award in this court. Nonetheless, that is what the majority does in this case.
¶ 99 The unpersuasive and counterintuitive rationale of the majority opinion, combined with
the obvious factual distinctions between this case and Slovinski, lead me to conclude that the
majority did not properly review the trial court’s award on remittitur for an abuse of
discretion. Instead, the court appears to have substituted its own view for that of the trial
court. While that would be appropriate if the applicable standard of review were de novo,
here it is not. Supra ¶ 59 (noting the standard of review is abuse of the trial court’s
discretion).
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¶ 100 Accordingly, based on my examination of the record, I cannot say that “there is no
material evidence” or “no recognizable basis in the record” to support the trial court’s
reduced punitive damages award to Lawlor on remittitur. See Slovinski, 237 Ill. 2d at 64;
supra ¶¶ 58, 59. For this reason, I respectfully dissent from the portion of the majority
opinion further cutting the punitive damages awarded to Lawlor on remittitur.
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