Chicago Regional Council of Carpenters v. Jursich ( 2013 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
Chicago Regional Council of Carpenters v. Jursich, 2013 IL App (1st) 113279
Appellate Court CHICAGO REGIONAL COUNCIL OF CARPENTERS, Plaintiff and
Caption Counterdefendant-Appellant, v. EARL JURSICH, Defendant and
Counterplaintiff-Appellee, and (Daniel McLaughlin and Larry Carroll,
Third-Party Defendants-Appellants).
District & No. First District, Sixth Division
Docket No. 1-11-3279
Filed February 22, 2013
Held In an action to reduce to judgment the fines imposed on defendant for
(Note: This syllabus violating the constitution and rules of a carpenters’ union by operating a
constitutes no part of nonunion construction company, the trial court properly denied the
the opinion of the court motion to dismiss defendant’s counterclaim for defamation filed against
but has been prepared the union members who brought charges and testified against defendant
by the Reporter of in the union’s disciplinary proceedings, notwithstanding the union’s
Decisions for the claim that the defamation action was barred by Illinois’s version of an
convenience of the anti-SLAPP statute, since counterdefendants failed to establish that the
reader.)
defamation action was retaliatory.
Decision Under Appeal from the Circuit Court of Cook County, No. 07-M1-149659; the
Review Hon. Anita Rifkin-Carothers, Judge, presiding.
Judgment Affirmed.
Counsel on Raymond J. Sanguinetti, of Whitfield, McGann & Ketterman, of Chicago,
Appeal for appellants.
James Maher, of Chicago, for appellee.
Panel JUSTICE HALL delivered the judgment of the court, with opinion.
Presiding Justice Lampkin and Justice Reyes concurred in the judgment
and opinion.
OPINION
¶1 The plaintiff and counterdefendant, the Chicago Regional Council of Carpenters (the
CRCC), filed a complaint to reduce to judgment fines imposed against defendant and
counterplaintiff, Earl Jursich. Mr. Jursich filed a counterclaim for defamation against the
CRCC and the third-party defendants, Daniel McLaughlin and Larry Carroll (collectively the
defendants). The defendants moved to dismiss the counterclaim pursuant to the Illinois
Citizen Participation Act (735 ILCS 110/1 et seq. (West 2008)) (the Act). The circuit court
denied the motion to dismiss. This court granted the defendants’ petition for leave to appeal.
See Ill. S. Ct. R. 306(a)(9) (eff. Feb. 16, 2011).
¶2 On appeal, the defendants contend that they were entitled to immunity under the Act and,
therefore, the circuit court erred when it denied their motion to dismiss. We affirm the
judgment of the circuit court.
¶3 FACTS
¶4 Mr. McLaughlin, a member of the CRCC, brought charges against a fellow member, Mr.
Jursich, accusing him of violating the constitution and rules of the CRCC by operating a
nonunion construction company and by not paying the area’s wages and benefits amounts
to his employees. On October 26, 2005, the CRCC held a disciplinary hearing on the charges.
Mr. Jursich was not present at the hearing.
¶5 At the hearing, Mr. McLaughlin stated that Mr. Jursich was an alderman in the City of
Genoa and was using his political influence to establish his nonunion company, E. Joseph
Construction. He also stated that Mr. Jursich “uses his political position as 4th ward
alderman to strong arm clients ***. [Mr. Jursich] doesn’t have ethics, doesn’t live up to his
obligation as a union carpenter.” Pointing out that Mr. Jursich’s wife had worked in the
mayor of Genoa’s office, Mr. McLaughlin stated that Mr. Jursich had done residential and
commercial work in Genoa, and thus, “he’s just a rotten SOB as far as I’m concerned.”
Finally, Mr. McLaughlin accused Mr. Jursich of defrauding the CRCC and of using it to
-2-
advance his political position.
¶6 In support of Mr. McLaughlin’s charges, Larry Carroll, another CRCC member, stated
that a contractor had his business shut down because he refused to hire Mr. Jursich to do
subcontracting work for him. Mr. Carroll stated:
“I don’t like to roll over on my brother carpenters. We’re kind of like cops and in
essence that it might be wrong, but–you know, but for him to do this to another person,
tactics that he used to squash a guy, use his power as alderman and as far as I know, the
union had also put money into this guy’s campaign to become an alderman and then on
the side he’s building houses, buying lots.
***
That’s–I would love to have–after this go to the city and say this is the type of person
that you have working for you using their weight.”
The CRCC imposed fines totaling $45,300 on Mr. Jursich for the violations.
¶7 When Mr. Jursich failed to pay the fines, the CRCC filed suit to reduce the fines to
judgment. During the discovery process, Mr. Jursich learned of the statements made by
Messrs. McLaughlin and Carroll during the disciplinary hearing and filed his counterclaim
against the defendants. Subsequently, the circuit court struck all but three counts of Mr.
Jursich’s third amended counterclaim.
¶8 The surviving counts alleged that, during the disciplinary hearing, Mr. McLaughlin and
Mr. Carroll “repeatedly and falsely accused Mr. Jursich of using his political power as an
alderman in the City of Genoa to unlawfully compete with rival construction companies
within the City, to coerce other contractors to hire his company E Joseph Construction, and
to retaliate against those who chose not to do business with E Joseph Construction.” The
third amended complaint further alleged that at the time the alleged slanderous statements
were made, Messrs. McLaughlin and Carroll were employee/agents of the CRCC and were
acting within the scope of their agency. Mr. Jursich sought an unspecified amount of
compensatory and exemplary damages.
¶9 The circuit court denied the defendants’ motion to dismiss the remaining counts of
the third amended complaint. This appeal followed.
¶ 10 ANALYSIS
¶ 11 I. Standard of Review
¶ 12 The defendants sought dismissal of the suit based on section 20 of the Act. See 735 ILCS
110/20 (West 2008). A motion to dismiss based on immunity under the Act is properly raised
under section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West
2008)); “[it] admits the legal sufficiency of the plaintiff’s claim but asserts certain defects
or defenses outside the pleadings which defeat the claim.” Sandholm v. Kuecker, 2012 IL
-3-
111443, ¶ 55. Our review is de novo. Sandholm, 2012 IL 111443, ¶ 55.
¶ 13 When ruling on a motion to dismiss, we construe the pleadings and supporting
documents in the light most favorable to the nonmoving party and accept as true all well-
pleaded facts in the complaint and all inferences that may reasonably be drawn in the
plaintiff’s favor. Sandholm, 2012 IL 111443, ¶ 55. We review the judgment of the lower
court, not its reasoning, and we may uphold the court’s judgment on any grounds called for
by the record. Lane v. Kalcheim, 394 Ill. App. 3d 324, 331 (2009).
¶ 14 II. Discussion
¶ 15 The Act is Illinois’s version of an anti-SLAPP statute. See Hammons v. Society of
Permanent Cosmetic Professionals, 2012 IL App (1st) 102644, ¶ 3. A SLAPP or “Strategic
Lawsuits Against Public Participation” is a meritless lawsuit utilized to retaliate against a
party for attempting to participate in government by exercising first amendment rights such
as the right to free speech or the right to petition. Ryan v. Fox Television Stations, Inc., 2012
IL App (1st) 120005, ¶ 12. As our supreme court explained in Sandholm, “[p]laintiffs in
SLAPP suits do not intend to win but rather to chill a defendant’s speech or protest activity
and discourage opposition by others through delay, expense and distraction. [Citation.]”
Sandholm, 2012 IL 111443, ¶ 34. A SLAPP plaintiff’s goal is achieved not by success on the
merits but by forcing defendants to expend funds on attorney fees and litigation costs, thus
discouraging them from pursuing their protests. Sandholm, 2012 IL 111443, ¶¶ 34-35.
¶ 16 The purpose of the Act is to give relief to citizens who have been victimized by meritless,
retaliatory SLAPP lawsuits. Sandholm, 2012 IL 111443, ¶ 44. Our supreme court construed
the language of section 15 to mean “solely based on, relating to, or in response to ‘any act
or acts of the moving party in furtherance of the moving party’s rights of petition, speech,
association, or to otherwise participate in government.’ ” (Emphasis in original.) Sandholm,
2012 IL 111443, ¶ 45 (quoting 735 ILCS 110/15 (West 2008)). However, the Act was not
intended to protect individuals who commit tortious acts and then invoke the immunity
afforded by it. Id. ¶ 45. Where a complaint genuinely seeks damages for defamation or other
intentional torts, “it is irrelevant whether the defendants’ actions were ‘genuinely aimed at
procuring favorable government action, result or outcome.’ ” Id. ¶ 53.
¶ 17 A claim is subject to dismissal under the Act where: (1) the movant’s acts were in
furtherance of his right to petition, speak, associate, or otherwise participate in government
to obtain favorable government action; (2) the nonmovant’s claims are solely based on,
related to, or in response to the movant’s acts in furtherance of his constitutional rights; and
(3) the nonmovant fails to produce clear and convincing evidence that the movant’s acts were
not genuinely aimed at solely procuring favorable government action. Hammons, 2012 IL
App (1st) 102644, ¶ 18 (citing Sandholm, 2012 IL 111443, ¶¶ 53-57). See also Ryan, 2012
IL App (1st) 120005, ¶ 18.
¶ 18 Under the analysis set forth above, we must first determine whether the defendants were
acting in furtherance of their constitutional right of speech, association or to participate in
-4-
government to obtain favorable governmental action. By filing a lawsuit to reduce to
judgment the fines assessed against Mr. Jursich, the CRCC was exercising its constitutional
right “to participate in government to obtain favorable governmental action.” The
complained-of statements by Messrs. McLaughlin and Carroll were made in the disciplinary
proceedings and in connection with the charges against Mr. Jursich. See Hytel Group, Inc.
v. Butler, 405 Ill. App. 3d 113, 120 (2010) (the right to petition the government for redress
for grievances includes the right to file a claim before a judicial or administrative body).
¶ 19 The fact that the defendants’ activities are the kind the Act is intended to protect does not
mean that Mr. Jursich’s lawsuit is subject to dismissal as a SLAPP lawsuit. Ryan, 2012 IL
App (1st) 120005, ¶ 20. We must determine whether Mr. Jursich’s lawsuit is “solely based”
on the defendants’ protected acts.
¶ 20 The party moving for dismissal under the Act bears the initial burden of proving that the
claim was solely based on, related to or in response to acts in furtherance of the movant’s
rights of petition, speech and association. Sandholm, 2012 IL 111443, ¶ 56. To satisfy their
burden in this case, the defendants were required to demonstrate affirmatively that Mr.
Jursich’s suit was retaliatory and meritless. Ryan, 2012 IL App (1st) 120005, ¶ 21. The
defendants must meet this burden before Mr. Jursich is required to provide clear and
convincing evidence that the defendants’ activities were not immunized under the Act.
Sandholm, 2012 IL 111443, ¶ 56.
¶ 21 In Hytel Group, Inc., the plaintiff brought suit alleging breach of fiduciary duties and
fraudulent misrepresentation against a former employee who had filed a claim with the
Illinois Department of Labor for $2,300 in final wages. The lawsuit sought $1 million in
compensatory damages and $3 million in punitive damages, as well as forfeiture and
repayment of all wages paid to the employee. Pursuant to the Act, the circuit court dismissed
the lawsuit, and the plaintiff appealed. The appellate court affirmed.
¶ 22 Initially, the appellate court noted that not every later-filed claim is retaliatory. “If it
states a potentially valid cause of action and seeks damages within the ordinary range
recoverable under the facts of the case, and there are no other facts suggesting an intent to
chill the other party’s right to seek redress, then the later claim has not been brought ‘in
response to’ the other party’s exercise of first amendment rights within the meaning of the
Act. Thus, it would not be subject to a motion to dismiss under the Act.” Hytel Group, Inc.,
405 Ill. App. 3d at 126.
¶ 23 The reviewing court examined the factors the circuit court had considered in determining
whether the claim was filed in retaliation or was a valid claim which happened to be filed
later. The circuit court considered whether the complaint stated a valid cause of action. Such
an inquiry was appropriate because retaliatory intent may be inferred where a claim lacking
in merit is filed shortly after the exercise of the protected rights. Hytel Group, Inc., 405 Ill.
App. 3d at 126. The court had also considered whether the extraordinarily high damages
sought in the lawsuit were sufficiently supported by the facts in the record. Extremely high
damages, unsupported by the facts, are intended to strike fear in the defendant rather than
being a good-faith estimate of the injury sustained. Hytel Group, Inc., 405 Ill. App. 3d at 126.
-5-
Finding that the plaintiff’s lawsuit did not state a valid cause of action and that the large
amount of damages sought by the plaintiff was not sufficiently supported by the facts, the
circuit court determined that the lawsuit was a retaliatory claim which fell within the Act.
Finding that the record supported the circuit court’s determination, the reviewing court
affirmed the dismissal of the lawsuit pursuant to the Act. Hytel Group, Inc., 405 Ill. App. 3d
at 126.
¶ 24 The reviewing court in Hytel Group, Inc. cautioned that application of the Act to possibly
retaliatory claims must be done on a case-by-case basis and not applied in a “blanket fashion”
to claims arising in other cases. Hytel Group, Inc., 405 Ill. App. 3d at 126. This court
reiterated that caution, noting that there were maybe other factors relevant to future cases.
Ryan, 2012 IL App (1st) 120005, ¶ 23.
¶ 25 In Ryan, the defendants broadcast a four-part program detailing an investigation into the
Cook County judiciary. The report resulted in an inquiry from the supreme court, and the
named judges were subject to discipline. Between the broadcast of the third and fourth
installments, the plaintiff filed a lawsuit against the defendants alleging defamation, invasion
of privacy and intentional infliction of emotional distress. The circuit court denied the
defendants’ motion to dismiss based on the Act, and the defendants appealed.
¶ 26 In determining that the plaintiff’s lawsuit was retaliatory, the factors this court considered
were the timing of the filing of the lawsuit and the amount of damages requested. It could
be inferred from the fact that the plaintiff’s defamation suit was filed prior to the airing of
the final segment of the program that the lawsuit was intended to deter the defendants from
further publicizing their investigative findings. Ryan, 2012 IL App (1st) 120005, ¶ 23. The
court found that the request for $28 million in damages was not justified by the nature of the
plaintiff’s alleged injuries. The court noted that demanding millions in damages for alleged
defamation is a classic SLAPP scenario. Ryan, 2012 IL App (1st) 120005, ¶ 24; see Hytel
Group, Inc., 405 Ill. App. 3d at 126.
¶ 27 In the present case, the following factors from Hytel Group, Inc. are relevant to our
determination as to whether Mr. Jursich’s lawsuit was retaliatory: the potential validity of
Mr. Jursich’s cause of action; the timing of the filing of the defamation lawsuit; and the
amount of damages requested.1
¶ 28 The circuit court found that Mr. Jursich’s counterclaim stated a potentially viable cause
of action. While the circuit court also found that the complained-of statements were not
protected by absolute privilege, the defendants have not raised the argument that a cause of
action is not viable because of the existence of an affirmative defense, such as absolute
privilege. Moreover, in Hammons, this court rejected the argument that, for purposes of the
Act, “meritless” lawsuits included those subject to dismissal for failure to state a cause of
1
In Ryan, this court noted that the standard used in Hytel Group, Inc. in determining whether
a claim was meritless was rejected in Hammons. This court did find Hytel Group, Inc. useful in
determining whether a claim was retaliatory. Ryan, 2012 IL App (1st) 120005, ¶¶ 22-23.
-6-
action or barred by the statute of limitations. See Hammons, 2012 IL App (1st) 102644, ¶ 21;
see also Ryan, 2012 IL App (1st) 120005, ¶ 28 n.4 (leaving unresolved the question as to
whether an affirmative defense renders a cause of action “meritless” for purposes of the Act).
¶ 29 As to the timing factor, the statements by Messrs. McLaughlin and Carroll were made
at the disciplinary hearing in October 2005; Mr. Jursich was not present at the meeting. In
2007, the CRCC filed suit to reduce to judgment the fines imposed on Mr. Jursich. It is
undisputed that it was not until November 2008, during the course of that lawsuit, that Mr.
Jursich became aware of the statements made at the October 2005 disciplinary hearing and
filed his counterclaim for defamation. While the time between when Mr. Jursich learned of
the alleged defamatory statements and the filing of the counterclaim appears to have been
brief, it had been almost three years since the statements were made and over a year since the
CRCC filed its suit to reduce the fines to judgment. Finally, rather than millions in damages,
Mr. Jursich’s third amended counterclaim sought an unspecified amount in compensatory
damages and exemplary damages.
¶ 30 The defendants failed to present any affirmative evidence establishing that Mr. Jursich
filed his counterclaim solely in response to the defendants’ activities protected under the Act.
The circuit court’s finding that the counterclaim stated a potentially viable cause of action
and the time and damages evidence in this case do not support the inference that Mr.
Jursich’s lawsuit was filed in order to deter the defendants from the exercise of their
constitutional right to free speech or to proceed with the lawsuit in this case. Rather, the
evidence strongly supports the inference that Mr. Jursich’s counterclaim was filed as a result
of his belief that he had been defamed by the statements made by Messrs. McLaughlin and
Carroll and was intended to seek compensation for the damage to his reputation. Since the
claim must be both retaliatory and meritless, we need not address whether Mr. Jursich’s
claim is also meritless. See Ryan, 2012 IL App (1st) 120005, ¶ 26 (although evidence of
retaliatory intent was shown, the motion to dismiss the complaint under the Act was correctly
denied because the defendants failed to show that the complaint was meritless).
¶ 31 CONCLUSION
¶ 32 The defendants failed to carry their burden to demonstrate affirmatively that Mr. Jursich’s
counterclaim for defamation was retaliatory and therefore a SLAPP lawsuit. We conclude
that the circuit court did not err in denying the defendants’ motion to dismiss the remaining
counts of the third amended counterclaim.
¶ 33 The judgment of the circuit court is affirmed.
¶ 34 Affirmed.
-7-