Stein v. Krislov

ILLINOIS OFFICIAL REPORTS

Appellate Court

Stein v. Krislov, 2013 IL App (1st) 113806

Appellate Court ROBERT J. STEIN III, Plaintiff-Appellant, v. CLINTON A. KRISLOV

Caption and KRISLOV AND ASSOCIATES, LTD., Defendants-Appellees.

District & No. First District, Sixth Division

Docket No. 1-11-3806

Opinion filed June 28, 2013

Rehearing denied September 9, 2013

Modified opinion filed September 13, 2013

Held In an action arising from a letter plaintiff attorney’s former employer

(Note: This syllabus wrote to the judge in a federal action in which plaintiff was seeking class

constitutes no part of certification, the dismissal of plaintiff’s claims for libel, a violation of the

the opinion of the court Wage Act, and breach of contract was reversed, since the trial court

but has been prepared improperly applied the attorney litigation privilege to the defendant’s

by the Reporter of letter, the libel claim was not meritless and did not fall within the scope

Decisions for the of the SLAPP Act, and there was no showing that the Wage Act and

convenience of the breach of contract claims were without merit.

reader.)

Decision Under Appeal from the Circuit Court of Cook County, No. 06-L-4914; the Hon.

Review Allen S. Goldberg, Judge, presiding.

Judgment Reversed and remanded.

Counsel on DiVincenzo Schoenfield Swartzman (Anthony S. DiVincenzo, of

Appeal counsel), and Law Offices of Bahtiar Hoxha (Bahtiar Hoxha, of counsel),

both of Chicago, for appellant.

Ungaretti & Harris LLP, of Chicago (Susan G. Feibus, Richard H.

Tilghman IV, and Alexander J. Darr, of counsel), for appellees.

Panel JUSTICE LAMPKIN delivered the judgment of the court, with opinion.

Justices Hall and Reyes concurred in the judgment and opinion.

OPINION

¶1 Plaintiff Robert Stein sued defendants Clinton Krislov and Krislov & Associates, Ltd.

(K&A), for libel, violation of the Illinois Wage Payment and Collection Act (Wage Act) (820

ILCS 115/1 (West 2002)), and breach of contract. Upon defendants’ motion, the trial court

dismissed plaintiff’s third amended complaint, finding that defendants were entitled to

immunity from all of plaintiff’s claims pursuant to the Citizen Participation Act (Act) (735

ILCS 110/1 et seq. (West 2008)), commonly referred to as the anti-SLAPP (Strategic

Lawsuits Against Public Participation) statute.

¶2 On appeal, plaintiff argues the Illinois Supreme Court’s recent decision in Sandholm v.

Kuecker, 2012 IL 111443, requires reversal because plaintiff’s claims were not solely based

on defendants’ acts in furtherance of their rights of petition, speech, association, or other

participation in government. Defendants respond that dismissal of all of plaintiff’s claims

was proper because they are entitled to immunity under the Act. Defendants also argue that

the alleged defamatory act was protected by the absolute privileges for statements made in

judicial proceedings and statements made in the discharge of a duty under the express

authority of law.

¶3 Based on the following, we reverse the trial court orders dismissing plaintiff’s third

amended complaint and awarding defendants attorney fees under the Act, and we remand this

cause.

¶4 I. BACKGROUND

¶5 This case appears before us a second time. In the previous interlocutory appeal,

defendants argued the trial court erred in denying their motion to dismiss, which raised the

defense of absolute privilege against plaintiff’s libel claims. We dismissed defendants’

interlocutory appeal for lack of jurisdiction and concluded that the Act did not confer subject

matter jurisdiction on this court. Stein v. Krislov, 405 Ill. App. 3d 538 (2010). Thereafter,

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however, the Illinois Supreme Court, on February 16, 2011, amended Supreme Court Rule

306(a)(9) to allow an interlocutory appeal by permission from an order denying a motion to

dismiss under the Act.

¶6 We adopt from our prior opinion those facts relevant to the current appeal:

“Plaintiff is an attorney that was employed by K&A from 1994-2001. Krislov is the

sole shareholder. After leaving K&A, plaintiff and his firm were named as one of three

firms representing the plaintiff on a motion for class certification in an action in a federal

district court in Pennsylvania. While performing unrelated research, Krislov discovered

plaintiff’s motion for class certification in the Pennsylvania case. Attached to the motion

was a description of plaintiff’s and his firm’s prior experience. On June 13, 2005, Krislov

sent an unsigned letter to the judge presiding over the Pennsylvania case, advising that

the representations made by plaintiff regarding his experience were ‘beyond puffing’ and

were ‘simply misstatements, known by the filers to be untrue.’ The federal judge

contacted the attorneys for the parties and provided them with a copy of Krislov’s letter.

On June 24, 2005, plaintiff responded by letter to the federal judge, disputing Krislov’s

claims and providing supporting documentation to verify plaintiff’s and his firm’s

experience. On July 14, 2005, Krislov sent a reply letter to the federal judge, responding

to plaintiff’s June 24, 2005, letter. Ultimately, class certification was granted as to count

I and denied, for reasons unrelated to Krislov’s letter, as to counts II and III.

On May 10, 2006, plaintiff filed his first amended complaint against defendants,

alleging libel and libel per se as a result of Krislov’s letter, in addition to claims for

vacation and bonus pay allegedly owed to him from his K&A employment. Defendants

filed a motion under section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-

619 (West 2004)) to dismiss the libel claims, arguing that the June 13, 2005, letter was

absolutely privileged. On September 20, 2006, the trial court granted defendant’s motion

to dismiss the libel claims. In response, plaintiff filed a motion to reconsider. On

December 6, 2006, the trial court reversed its September 20, 2006, order, finding instead

that the June 13, 2005, letter was not absolutely privileged. The libel claims were

reinstated.

On January 11, 2007, defendants moved to reconsider the December 6, 2006, order.

On February 1, 2008, the trial court denied the motion to reconsider, finding that

‘[a]bsolute privileges must be narrowly construed, and where an attorney has injected

himself into litigation with which he has absolutely no connection, we do not find that

any kind of absolute privilege exists’ (emphasis in original), and that Krislov had no

absolute duty under the Illinois Rules of Professional Conduct to report misconduct

elsewhere.

On February 29, 2008, plaintiff filed a third amended complaint,[1] realleging the

libel claim and claims for uncompensated vacation and bonus pay. On August 26, 2009,

1

Plaintiff’s second amended complaint is not relevant to this appeal.

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defendants filed a motion to reconsider the trial court’s February 1, 2008, order denying

defendants’ motion to reconsider the trial court’s September 20, 2006, finding that the

letter was not absolutely privileged. Defendants additionally filed a motion to dismiss the

libel claim based on the Citizen Participation Act (Act). Defendants argued, for the first

time, that they were immunized under the Act because the libel suit was filed in response

to Krislov’s exercise of his constitutional rights to free speech and participation in

government.

On November 20, 2009, the trial court denied defendants’ motion to reconsider its

finding that the letter was not absolutely privileged where defendants relied on Ficaro

v. Funkhouser, Vegosen, Liebman & Dunn, Ltd., Nos. 1-07-1469, 1-07-3433 cons. (July

31, 2009) (unpublished order pursuant to Supreme Court Rule 23), to support the

allegation that there had been a change in the law. The trial court held that defendants’

reliance on an unpublished, nonprecedential order was improper. The trial court further

held that the Act, which was enacted on August 28, 2007, could not provide immunity

because it was not created until after plaintiff’s June 13, 2005, letter and the filing of

plaintiff’s lawsuit on May 10, 2006, and the Act did not have retroactive application.

Defendants filed a notice of interlocutory appeal citing Supreme Court Rule 307(a)

(188 Ill. 2d R. 307(a)) and section 20(a) of the Act (735 ILCS 110/20(a) (West Supp.

2007)) on December 17, 2009.” Id. at 538-40.

As previously stated, in November 2010, we dismissed the interlocutory appeal for lack of

jurisdiction.

¶7 In January 2011, defendants moved the trial court to reconsider its denial of their motion

to dismiss under the Act, arguing that Shoreline Towers Condominium Ass’n v. Gassman,

404 Ill. App. 3d 1013, 1023 (2010), recently held that the Act had retroactive application. On

March 16, 2011, the trial court granted defendants’ motion and dismissed plaintiff’s third

amended complaint in its entirety. In July 2011, the trial court entered final judgment and

awarded attorney fees and costs to defendants pursuant to the Act in the amount of

$99,334.18.

¶8 In November 2011, the trial court entered a written order denying plaintiff’s motion to

reconsider the dismissal of his third amended complaint. For the first time, plaintiff argued

that defendants’ conduct was not immunized by the Act and that the court separately should

have considered plaintiff’s libel, wage, and contract claims. The trial court disagreed.

Relying on Hytel Group, Inc. v. Butler, 405 Ill. App. 3d 113 (2010), the trial court found that

plaintiff’s wage and contract claims were “filed only in response to Defendants’ motion to

dismiss based on” the Act and that plaintiff failed to present clear and convincing evidence

that the claims were not in response to or in retaliation for defendants’ protected conduct.

¶9 Finally, in December 2011, the trial court granted defendants’ supplemental petition for

attorney fees, awarding defendants a total of $120,420.43 in fees and costs. This timely

appeal followed.

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¶ 10 II. ANALYSIS

¶ 11 Plaintiff contends the trial court erred in dismissing his meritorious claims for libel,

violations of the Wage Act, and breach of contract where the Illinois Supreme Court’s recent

decision in Sandholm established that the Act did not create a new immunity for defamation

and that the Act applies only to meritless, retaliatory lawsuits, which is not the case here.

Sandholm was decided on January 20, 2012, while this case was pending on appeal.

Generally, a decision of our supreme court applies retroactively to causes pending at the time

it is announced, including cases on direct review in the appellate court. Miller v. Gupta, 174

Ill. 2d 120, 128 (1996). According to plaintiff, application of Sandholm to this case

demonstrates that the trial court erred in granting defendants’ motion to dismiss under the

Act. We agree.

¶ 12 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 2010)) wherein

the legal sufficiency of the plaintiff’s complaint is admitted, but the motion asserts certain

defects or defenses outside of the pleadings defeat the claim. Sandholm, 2012 IL 111443,

¶ 55. When ruling on a section 2-619 motion, the court should construe the pleadings and

supporting documents in a light most favorable to the nonmoving party, while accepting as

true all well-pleaded facts in the complaint and drawing all reasonable inferences in the

plaintiff’s favor. Id. On appeal, the question for the court is “whether the existence of a

genuine issue of material fact should have precluded dismissal or, absent such an issue of

fact, whether dismissal is proper as a matter of law.” (Internal quotation marks omitted.) Id.

We review de novo the dismissal of a complaint pursuant to section 2-619 of the Code. Id.

¶ 13 A. The Citizen Participation Act

¶ 14 The Act was created as anti-SLAPP legislation. Sandholm, 2012 IL 111443, ¶ 33.

SLAPPs are lawsuits “ ‘aimed at preventing citizens from exercising their political rights or

punishing those who have done so.’ ” Id. (quoting Wright Development Group, LLC v.

Walsh, 238 Ill. 2d 620, 630 (2010)). “Plaintiffs 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.” Sandholm, 2012 IL 111443, ¶ 34. “SLAPPs use the

threat of money damages or the prospect of the cost of defending against the suits to silence

citizen participation.” Wright Development Group, LLC, 238 Ill. 2d at 630. “The purpose of

the Act is to give relief, including monetary relief, to citizens who have been victimized by

meritless, retaliatory SLAPP lawsuits because of their ‘act or acts’ made ‘in furtherance of

the constitutional rights to petition, speech, association, and participation in government.’ ”

Id. at 633 (quoting 735 ILCS 110/15 (West 2008)).

¶ 15 Plaintiff’s lawsuit may only be dismissed due to immunity under the Act if (1) the

defendants’ acts were in furtherance of their rights to petition, speak, associate, or otherwise

participate in government to obtain favorable government action; (2) plaintiff’s claims were

solely based on, related to, or in response to defendants’ acts in furtherance of their rights of

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petition, speech, association, or other participation in government; and (3) plaintiff failed to

produce clear and convincing evidence that defendants’ acts were not genuinely aimed at

procuring favorable government action. 735 ILCS 110/15 (West 2008); Sandholm, 2012 IL

111443, ¶¶ 45, 52, 56. See also Hammons v. Society of Permanent Cosmetic Professionals,

2012 IL App (1st) 102644, ¶ 18. If plaintiff’s claims genuinely sought relief for damages for

the alleged libel, Wage Act violations and breach of contract by defendants, the claims are

not solely based on defendants’ rights of petition, speech, association, or participation in

government (see Sandholm, 2012 IL 111443, ¶ 45), and accordingly, “it is irrelevant whether

the defendants’ actions were ‘genuinely aimed at procuring favorable government action,

result or outcome’ ” (id. ¶ 53 (quoting 735 ILCS 110/15 (West 2008))). The clear language

of the Act establishes that it was not intended to protect those who commit tortious acts and

then seek refuge in the immunity conferred by the Act. Sandholm, 2012 IL 111443, ¶ 45.

¶ 16 In reviewing whether dismissal was appropriate here, we must first determine whether

defendants’ actions were protected by the Act. More specifically, were Krislov’s actions in

furtherance of his constitutional right of speech, association, or participation in government

to obtain favorable government action? The complained-of statements were made by Krislov

in his June 13, 2005 letter2 addressed to the Pennsylvania federal judge considering

plaintiff’s motion for class certification. Krislov’s statements were made to a government

official in an effort to obtain favorable government action by way of barring plaintiff from

obtaining class certification based on inflated credentials. See 735 ILCS 110/10 (West 2008);

see also Hytel, 405 Ill. App. 3d at 120; Cartwright v. Cooney, No. 10-CV-1691, 2012 WL

1021816 (N.D. Ill. Mar. 26, 2012). Accordingly, the first requirement to obtain immunity

under the Act is met here. However, merely because defendants’ activities were the kind that

the Act is designed to protect does not necessarily mean that plaintiff’s lawsuit is a SLAPP

and is therefore subject to dismissal under the Act.

¶ 17 Next, we must determine whether plaintiff’s claims were “solely based on” defendants’

protected actions. “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.” Chicago Regional Council of

Carpenters v. Jursich, 2013 IL App (1st) 113279, ¶ 20. To satisfy this burden, defendants

must affirmatively demonstrate that plaintiff’s suit was retaliatory and meritless; if

defendants meet this burden, then plaintiff must provide clear and convincing evidence that

the defendants’ activities were not immunized under the Act. Garrido v. Arena, 2013 IL App

(1st) 120466, ¶ 18; Jursich, 2013 IL App (1st) 113279, ¶ 20; Ryan v. Fox Television Stations,

Inc., 2012 IL App (1st) 120005, ¶ 21.

¶ 18 Although the trial court dismissed plaintiff’s libel and Wage Act/breach of contract

claims as a group, we find it appropriate to discuss each claim separately. Turning first to

plaintiff’s libel claim, we must address whether the claim was retaliatory and meritless. In

2

Plaintiff briefly mentions Krislov’s June 24, 2005 response letter in his third amended

complaint, but does not identify any statements from that letter as a basis for challenge.

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determining whether plaintiff’s libel claim was retaliatory, we note that although Hytel is a

pre-Sandholm decision, it remains useful “for the question of whether a claim is retaliatory

within the meaning of the Act.” Ryan, 2012 IL App (1st) 120005, ¶ 23. Two nonexclusive

factors to consider in determining whether a claim is retaliatory are (1) the proximity in time

between the protected activity and the filing of the complaint, and (2) whether the damages

requested are reasonably related to the facts alleged in the complaint and present a good-faith

estimate of the injury sustained. Id. (citing Hytel, 405 Ill. App. 3d at 126).

¶ 19 In the instant case, plaintiff did not file his first amended complaint3 until May 10, 2006,

which was 11 months after Krislov sent his initial letter to the Pennsylvania federal judge.

Moreover, in his libel claim, plaintiff requested compensatory and punitive damages in

excess of $50,000, yet described his damages as those to his reputation and the costs

associated with defending himself to the federal judge through responsive letters. Plaintiff

did not suffer lost income and it is undisputed that the federal judge’s class certification

decision was not affected by Krislov’s letter. To the extent plaintiff has pled a claim for libel

per se, damage to his reputation is presumed. Bryson v. News America Publications, Inc.,

174 Ill. 2d 77, 87 (1996). However, the requested $50,000 was not a “good-faith estimate”

for the cost of responses to the federal judge. Based on the timing of the lawsuit, in that it

was filed just before the expiration of the statute of limitations (735 ILCS 5/13-201 (West

2002)), and the relief requested, especially for punitive damages, it appears that plaintiff may

have preserved his libel claim in an effort to make defendants “pay” for the letter to the

federal judge despite minimal loss and speculative damages. Accordingly, defendants have

shown some evidence of retaliatory intent for plaintiff’s libel claim.

¶ 20 However, in determining whether a claim is subject to dismissal under the Act as one

“solely based on” protected conduct, the Sandholm court further instructed that a SLAPP is

also “by definition, meritless.” Sandholm, 2012 IL 111443, ¶ 34. It was defendants’ burden

to “show that there are undisputed facts that demonstrate plaintiff’s claim is meritless.”

Ryan, 2012 IL App (1st) 120005, ¶ 26. Keeping in mind that we review a motion to dismiss

under the Act pursuant to section 2-619 of the Code, we must presume the legal sufficiency

of plaintiff’s libel claim. Ryan, 2012 IL App (1st) 120005, ¶ 22. A claim is meritless if the

moving party disproves some essential element of the nonmovant’s claim. Garrido, 2013 IL

App (1st) 120466, ¶ 19. Therefore, we may consider whether plaintiff has alleged sufficient

facts to show the claim was genuine and not factually baseless. Sandholm, 2012 IL 111443,

¶ 45; Garrido, 2013 IL App (1st) 120466, ¶ 23.

¶ 21 Plaintiff’s third amended complaint alleged that Krislov’s June 13, 2005 letter

“knowingly and intentionally made false representations to the court regarding Plaintiff’s

firm[’s] resume that Plaintiff had filed in support of the motion for class certification.”

Plaintiff added that he drafted a response letter with an attached summary and appendix of

supporting documents demonstrating Krislov’s statements were untrue. According to the

third amended complaint, defendants sent a response letter on July 14, 2005. In the

3

The parties refer to the first amended complaint as the initial complaint.

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complaint, plaintiff listed five false statements (i.e., that his previous case accomplishments

were beyond puffing and that he misrepresented and misstated his accomplishments) and

alleged that Krislov’s statements would impugn his integrity and affect his ability to be found

qualified to represent a class in other class action cases. Taking all well-pled facts as true,

drawing reasonable inferences in favor of plaintiff, and viewing the pleading in a light most

favorable to plaintiff, we conclude that plaintiff’s libel claim was not meritless where

defendants failed to satisfy their burden of demonstrating the truth of the contents of

Krislov’s letters. See Ryan, 2012 IL App (1st) 120005, ¶¶ 27-29. Defendants have not offered

any evidence, either in their appellate brief or at oral argument, that plaintiff’s claim lacked

merit. We, therefore, conclude that plaintiff’s libel claim does not qualify as a SLAPP. As

a result, the trial court erred in dismissing the claim.

¶ 22 We next address whether plaintiff’s Wage Act and breach of contract claims were “solely

based” on protected conduct. Turning our attention to whether those claims were retaliatory,

the two nonexclusive factors provided in Hytel are “(1) the proximity in time between the

protected activity and the filing of the complaint, and (2) whether the damages requested are

reasonably related to the facts alleged in the complaint and present a good faith estimate of

the injury sustained.” Ryan, 2012 IL App (1st) 120005, ¶ 23 (citing Hytel, 405 Ill. App. 3d

at 126).

¶ 23 Plaintiff left his employment at defendant law firm in 2001; however, he did not file a

complaint until May 10, 2006. Based on the lengthy gap in time from having allegedly not

received his vacation and bonus pay prior to leaving defendant firm and the relatively short

span of time between Krislov’s letter and the filing of the complaint, plaintiff’s claims appear

retaliatory. In terms of the damages requested, plaintiff requested a total of $65,007.66 in

damages for the Wage Act and breach of contract claims with $21,807.66 for vacation pay

and $43,200 for 2001 bonus pay. Under the Wage Act claims, plaintiff additionally requested

prejudgment interest. Plaintiff alleged he was owed 42 days of vacation pay and, based on

previous bonuses, a 20% increase from the prior year’s bonus. Although the damages

requested appear reasonably related to the facts alleged in the complaint, defendants have

shown evidence of retaliatory intent where plaintiff sat on his claims for nearly six years and

only filed a complaint after Krislov interfered in the federal lawsuit.

¶ 24 As advised in Sandholm, we must also determine whether plaintiff’s claims for violation

of the Wage Act and breach of his employment contract were meritless. In his claims related

to vacation and bonus pay, plaintiff alleged he was entitled to additional compensation. In

regard to his vacation pay, plaintiff alleged that when he was hired as an attorney at

defendant law firm in 1994 he was informed of the compensation package, which included

paid vacation. Plaintiff alleged that the vacation policy was not written, but was provided

orally by the office manager. When hired, plaintiff was informed that he would earn two

weeks of vacation pay during his first four years of service and three weeks of vacation pay

thereafter. According to plaintiff’s third amended complaint, he signed a nonequity partner

employment agreement in 2000. That agreement was silent to the vacation policy where it

stated that “Plaintiff was entitled to paid vacations and holidays in accordance with the firm’s

customary employment policies.” Plaintiff alleged that he exceeded the three-week vacation

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allotment in 2000, but was allowed to use previously accrued vacation time. According to

plaintiff, there was no notice of a policy change during his employment. In regard to his

bonus pay, plaintiff alleged that defendant law firm customarily paid bonuses to its attorneys

on the last working day before Christmas each year. However, at a meeting in October 2001,

Krislov informed the attorneys that bonuses might be deferred beyond year-end. In late

December 2001, Krislov confirmed that the bonuses were going to be deferred until

defendant law firm received fees from a client. In response, plaintiff informed Krislov that

he was resigning because the bonus pay deferment was “unacceptable.”

¶ 25 Defendants have not produced undisputed facts demonstrating that plaintiff’s Wage Act

and breach of contract claims were meritless. Ryan, 2012 IL App (1st) 120005, ¶ 26. Indeed,

as with the libel claim, defendants failed to produce any evidence to challenge plaintiff’s

claims. Id. ¶¶ 27-29. We, therefore, conclude that plaintiff’s Wage Act and breach of contract

claims do not qualify as SLAPPs. As a result, the trial court erred in dismissing plaintiff’s

third amended complaint.

¶ 26 Due to our finding, we also conclude that the trial court erred in awarding defendants

attorney fees under the Act.

¶ 27 B. Absolute Privilege

¶ 28 Defendants argue that Krislov’s letters were absolutely privileged as either statements

made in a judicial proceeding or as statements made in the discharge of a duty under the

express authority of law. Although the trial court did not rely on either privilege as the basis

for dismissing plaintiff’s third amended complaint, defendants argue that this court can

affirm the trial court’s dismissal on any basis present in the record.

¶ 29 1. Absolute Privilege in Judicial Proceedings

¶ 30 First, defendants argue that “Illinois law affords an absolute privilege to any person who

reports, to a judicial or quasi-judicial body, information that is pertinent to a matter, or

potential matter, under consideration by the judicial body.” Defendants assert that the

absolute privilege applies even if the maker of the statement was not a party to the litigation

or an attorney of record because recognizing an absolute privilege for such statements

furthers Illinois public policy. Specifically, defendants contend public policy is served by

encouraging a freeflow of honest information to a judicial or quasi-judicial body where

persons with knowledge of relevant facts can report to the court or other tribunals without

the fear of civil liability.

¶ 31 As explained by Illinois courts:

“The defense of privilege rests upon the idea ‘that conduct which otherwise would

be actionable is to escape liability because the defendant is acting in furtherance of some

interest of social importance, which is entitled to protection even at the expense of

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uncompensated harm to the plaintiff’s reputation.’ [Citation.] If the policy interest is of

‘paramount importance, considerations of policy may require that the defendant’s

immunity for false statements be absolute, without regard to his purpose or motive, or

the reasonableness of his conduct.’ [Citations.] ‘If it has relatively less weight from a

social point of view, the immunity may be qualified, and conditioned on good motives

and reasonable behavior.’ [Citation.]” Edelman, Combs & Latturner v. Hinshaw &

Culbertson, 338 Ill. App. 3d 156, 164-65 (2003).

Defendants do not argue on appeal that Krislov’s letters are protected by a qualified

immunity.

¶ 32 Whether an otherwise actionable defamatory statement is protected by absolute privilege

is a question of law. Joseph v. Collis, 272 Ill. App. 3d 200, 210 (1995). “In determining the

scope of absolute privilege, Illinois courts have relied upon the Restatement (Second) of

Torts (1977).” Bushell v. Caterpillar, Inc., 291 Ill. App. 3d 559, 561 (1997).

¶ 33 One type of recognized absolute privilege in Illinois is the attorney litigation privilege

as provided in section 586 of the Restatement (Second) of Torts. August v. Hanlon, 2012 IL

App (2d) 111252, ¶ 35. The provision reads:

“An attorney at law is absolutely privileged to publish defamatory matter concerning

another in communications preliminary to a proposed judicial proceeding, or in the

institution of, or during the course and as part of, a judicial proceeding in which he

participates as counsel, if it has some relation to the proceeding.” (Emphasis added.)

Restatement (Second) of Torts § 586 (1977).

The policy supporting this absolute privilege is that “of securing to attorneys as officers of

the court the utmost freedom in their efforts to secure justice for their clients.” (Emphasis

added.) Restatement (Second) of Torts § 586 cmt. a (1977).

¶ 34 Due to the complete immunity provided by the absolute privilege, the scope of absolutely

privileged communication is necessarily narrow. Edelman, Combs & Latturner, 338 Ill. App.

3d at 165. Courts have extended the attorney litigation privilege to out-of-court

communications between opposing attorneys, out-of-court communications between

attorneys and clients related to pending litigation, out-of-court communications between

attorneys representing different parties who are suing the same entities, statements made

during quasi-judicial proceedings, communications necessarily preliminary to quasi-judicial

proceedings, and posttrial remarks related to judicial proceedings made by an attorney to his

client. August, 2012 IL App (2d) 111252, ¶ 36 (citing Golden v. Mullen, 295 Ill. App. 3d 865,

870-71 (1997) (and cases cited therein)). Illinois courts, however, have never extended the

privilege to other persons having no connection to the lawsuit. Edelman, Combs & Latturner,

338 Ill. App. 3d at 166. In fact, Illinois courts have expressly rejected extending the privilege

to third parties lacking a connection to the litigation. August, 2012 IL App (2d) 111252, ¶ 37;

see Kurczaba v. Pollock, 318 Ill. App. 3d 686, 705 (2000) (refusing to extend the privilege

to statements made by an attorney to a reporter in connection with a case); Thompson v.

Frank, 313 Ill. App. 3d 661, 664 (2000) (refusing to extend the privilege to out-of-court

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communications between an attorney and an opposing party’s spouse); Lykowski v. Bergman,

299 Ill. App. 3d 157, 166 (1998) (finding that statements made to the media regarding a case

are not privileged because they are not part of the judicial proceeding); Golden, 295 Ill. App.

3d at 872 (refusing to extend the privilege to an out-of-court communication between an

attorney and a former client’s spouse).

¶ 35 “[C]ourts have required that the act to which the privilege applies must not only bear

some relation to the judicial proceeding but must also be ‘in furtherance of that

representation.’ ” Kurczaba, 318 Ill. App. 3d at 706 (quoting Samson Investment Co. v.

Chevaillier, 1999 OK 90, ¶ 9, 988 P.2d 327). Noting the policy reasons for the privilege were

to protect zealous advocacy, courts have found that the privilege is not applicable under

circumstances for which there are no safeguards against abuse of the privilege, i.e., where

the authorities do not have the ability to discipline the attorney and strike from the record any

statements exceeding the bounds of permissible conduct. Id.

¶ 36 We conclude that the attorney litigation privilege does not apply to this case. In the facts

before us, defendant was essentially acting as a third party with no connection to the federal

litigation. Through his letters to the federal judge, defendant was not attempting to secure

justice for his client in a proceeding in which he participated as counsel, as described in the

Restatement. Restatement (Second) of Torts § 586 cmt. a (1977); see also Edelman, Combs

& Latturner, 338 Ill. App. 3d at 165 (the defendant counsel’s delivery of a memorandum to

a bankruptcy trustee regarding the plaintiff counsel’s misconduct was absolutely privileged

where defendant counsel represented a creditor in the bankruptcy case and, thus, sent the

memo in furtherance of that client’s interest in increasing the chance that the bankruptcy

proceeding would be reopened).

¶ 37 Illinois also recognizes an absolute privilege for words used by a party in judicial

proceedings as provided in section 587 of the Restatement (Second) of Torts. Bushell, 291

Ill. App. 3d at 561. The provision reads:

“A party to a private litigation *** is absolutely privileged to publish defamatory

matter concerning another in communications preliminary to a proposed judicial

proceeding, or in the institution of or during the course and as a part of, a judicial

proceeding in which he participates, if the matter has some relation to the proceeding.”

(Emphases added.) Restatement (Second) of Torts § 587 (1977).

This privilege “is based upon the public interest in according to all men the utmost freedom

of access to the courts of justice for the settlement of their private disputes.” Restatement

(Second) of Torts § 587 cmt. a (1977). Clearly, this privilege is inapplicable to the instant

case because defendants were not parties in the Pennsylvania case.

¶ 38 In addition, Illinois recognizes an absolute privilege for a witness in a judicial proceeding

for testimony pertinent and material to the subject of inquiry, as provided in section 588 of

the Restatement (Second) of Torts. Bushell, 291 Ill. App. 3d at 562. The provision reads:

“A witness is absolutely privileged to publish defamatory matter concerning another

in communications preliminary to a proposed judicial proceeding or as a part of a judicial

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proceeding in which he is testifying, if it has some relation to the proceeding.” (Emphasis

added.) Restatement (Second) of Torts § 588 (1977).

This rule “protects a witness while testifying.” (Emphasis added.) Restatement (Second) of

Torts § 588 cmt. b (1977). Because a court’s final judgment must be based upon the facts as

shown by the witness’s testimony and the court can compel the witness’s attendance, this

privilege is necessary so that a full disclosure will not be hampered by the witness’s fear of

private suits for defamation. Restatement (Second) of Torts § 588 cmt. a (1977). Moreover,

the “witness is subject to the control of the trial judge in the exercise of the privilege,” and

may, “for abuse of it, *** be subject to criminal prosecution for perjury and to punishment

for contempt.” Id.

¶ 39 We find that this privilege does not apply to defendants, who did not testify as witnesses

in the Pennsylvania case and were not subject to the control of the Pennsylvania trial judge.

To the contrary, defendant Krislov merely sent an unsigned ex parte letter to the trial judge.

Accordingly, defendants cannot take advantage of this absolute privilege because Krislov’s

letter was not made “in office[, i.e., in the character of a witness, litigant or counsel either]

in the performance of the public duty or in the exercise of the private right upon which the

immunity is based.” (Internal quotation marks omitted.) Laun v. Union Electric Co. of

Missouri, 166 S.W.2d 1065, 1071 (Mo. 1942) (rejecting the assertion of absolute privilege

by defendant corporations, which were not parties to the underlying litigation but owned and

controlled the power companies that were parties to the underlying litigation, where the

defendant corporations were sued for libel for allegedly causing the power companies to

incorporate libelous statements into their pleadings). Because the absolute privilege must be

construed narrowly and Illinois courts have not extended the privilege to uninterested third

parties in judicial proceedings, we find the privilege should not be extended here.

¶ 40 The cases cited by defendants are distinguishable from the case at bar. In Lykowski, this

court concluded that the defendant’s statement to the Attorney Registration and Disciplinary

Commission (ARDC) regarding the plaintiff’s alleged attorney misconduct was absolutely

privileged as a communication made to a quasi-judicial body during a preliminary and

necessary step in maintaining authority. Lykowski, 299 Ill. App. 3d at 165. In Parillo, Weiss,

& Moss v. Cashion, 181 Ill. App. 3d 920 (1989), this court concluded that the defendant’s

statements made in a letter written to the director of this state’s Department of Insurance

were absolutely privileged as a preliminary step toward a quasi-judicial proceeding where

the letter was designed to prompt the regulatory agency to investigate the contents thereof.

Id. at 928-29. In Kalish v. Illinois Education Ass’n, 157 Ill. App. 3d 969 (1987), this court

concluded that the defendant’s statements made to the character and fitness committee were

absolutely privileged as statements made to a quasi-judicial body whose function was to

investigate the moral character and fitness of attorney applicants. Id. at 975-76.

¶ 41 The cases relied upon by defendants involved regulatory bodies that were charged with

the duty of investigating reports of improper activities and enforcing the rules of the

particular agency. In those cases, the absolute privilege was applied because public policy

encourages free communication of relevant information from the public to the agencies in

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order to ensure compliance with the rules of those agencies. In the case before us, however,

the Restatement and cases interpreting the Restatement expressly restrict the absolute

privilege for attorneys, parties and witnesses in judicial proceedings to those instances where

(1) the attorney is involved in the judicial proceeding and is advocating for his client; (2) the

person is a party to the judicial proceeding and is seeking access to the court to settle a

private dispute; and (3) the witness is testifying in the judicial proceeding and is subject to

prosecution for perjury and punishment for contempt for the abuse of the privilege.

Therefore, we conclude that the absolute privilege granted under certain circumstances to

attorneys, parties and witnesses in judicial proceedings did not protect Krislov’s unsigned

ex parte letter to the Pennsylvania trial judge from potential liability.

¶ 42 2. Discharge of a Duty Under Express Authority of Law

¶ 43 Finally, we have reviewed whether Krislov’s statements were made in the discharge of

a duty under the express authority of law, and conclude that he had no duty to report

plaintiff’s alleged misconduct to the federal Pennsylvania judge. As a result, Krislov’s

statements were not privileged as a discharge of a duty under the express authority of law.

¶ 44 The version of Rule 8.3(a) of the Illinois Rules of Professional Conduct (Ill. R. Prof.

Conduct R. 8.3(a) (eff. Aug. 1, 1990))4 applicable at the relevant time required that an

attorney report the misconduct of another attorney to “a tribunal or other authority

empowered to investigate or act upon such violation,” including criminal acts reflecting on

his trustworthiness, honesty, or fitness as an attorney and conduct involving fraud,

dishonesty, deceit, or misrepresentation. Section 592A of the Restatement (Second) of Torts

(1977) provides immunity for compliance with Rule 8.3(a), such that “one who is required

by law to publish defamatory matter is absolutely privileged to publish it.” Restatement

(Second) of Torts § 592A (1977); see Weber v. Cueto, 209 Ill. App. 3d 936, 942 (1991).

¶ 45 In Skolnick v. Altheimer & Gray, 191 Ill. 2d 214 (2000), the Illinois Supreme Court

clarified that the relevant language of Rule 8.3(a) obligated an Illinois attorney to report

known attorney misconduct to the ARDC. Id. at 229. Relying on the language of the rule, the

supreme court found that, due to the delegation of the supreme court’s singular authority “to

investigate or act upon” a report of attorney misconduct to the ARDC, an attorney’s duty to

report was discharged only by contacting the ARDC with information regarding the alleged

misconduct. Id.

¶ 46 Defendants argue that, because the Pennsylvania federal judge was “empowered to

investigate or act” as provided under the applicable version of Rule 8.3(a), Krislov’s June

13, 2005 letter satisfied his obligation to report alleged misconduct under the rule and was,

therefore, privileged. Defendants’ reasoning is flawed in that, unlike former Rule 8.3(a), the

local Pennsylvania rule cited by defendants did not require Krislov to report plaintiff’s

4

On January 1, 2010, Rule 8.3(a) was amended to require a report to the “appropriate

professional authority.”

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alleged misconduct. Rather, the local Pennsylvania rule merely stated that a judge who

became aware of potentially sanctionable attorney misconduct must “refer the matter to the

Chief Judge who shall issue an order to show cause.” In particular, defendants cited E.D.

Penn. Local R. 83.6, R. V (eff. July 1, 1995), which states:

“When the misconduct or other basis for action against an attorney *** or allegations of

same which, if substantiated, would warrant discipline or other action against an attorney

admitted to practice before this court shall come to the attention of a Judge of this court

*** the judge shall refer the matter to the Chief Judge who shall issue an order to show

cause.”

¶ 47 The rule does not speak to the requisite actions an attorney need take after learning of

alleged attorney misconduct. In contrast, Skolnick did speak to an Illinois attorney’s

obligation under Rule 8.3(a), in that an attorney’s duty is discharged only by reporting

alleged attorney misconduct to the ARDC. Skolnick, 191 Ill. 2d at 229. As a result, we cannot

say that Krislov’s statements in his June 13, 2005 letter were made in the discharge of a duty

under the express authority of law. Cf. Weber, 209 Ill. App. 3d at 942-48; Busch v. Bates, 323

Ill. App. 3d 823, 833-34 (2001) (absolute privilege extended to statements made pursuant to

mandatory duty to report conduct violations in order to avoid the plaintiffs’ own discipline

for failure to report). Therefore, the statements were not protected by an absolute privilege.

See Restatement (Second) of Torts § 592A (1977) (“one who is required by law to publish

defamatory matter is absolutely privileged to publish it”).

¶ 48 III. CONCLUSION

¶ 49 Based on the foregoing, we reverse the trial court’s March 2011 order dismissing

plaintiff’s third amended complaint and its November 2011 order denying plaintiff’s motion

to reconsider the March 2011 order. We further reverse the trial court’s July 2011 and

December 2011 orders granting attorney fees to defendants pursuant to the Act. We remand

this cause for further proceedings.

¶ 50 Reversed and remanded.

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