Havoco of America, Ltd. v. Hollobow
| Decision Date | 11 March 1983 |
| Docket Number | No. 81-2751,81-2751 |
| Citation | 702 F.2d 643 |
| Parties | HAVOCO OF AMERICA, LTD., a Delaware Corporation, Plaintiff-Appellant, v. Irving HOLLOBOW, Lawrence Taslitz, James Spear, Illinois Residents, and Hollobow and Taslitz, an Illinois Partnership, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Donald B. Mackay, Chicago, Ill., for plaintiff-appellant.
Marvin A. Miller, Dennis C. Waldon, Gerrald A. Niederman, Marshall Seeder, Roam & Grossman, Chicago, Ill., for defendants-appellees.
Before BAUER and WOOD, Circuit Judges, and CAMPBELL, * Senior District Judge.
The district court granted summary judgment in favor of the defendants and the plaintiff appeals contending that material issues of fact are in dispute and therefore a trial on the merits is necessary. The complaint originally alleged four separate causes of action; Count I claimed tortious interference with plaintiff's prospective business advantage, Count II claimed injurious falsehood, Count III claimed deliberate interference with plaintiff's public offering, and Count IV claimed violations of various Illinois consumer statutes. Judge Marshall, to whom the case was originally assigned, dismissed Counts II and IV. That decision is not at issue in this appeal. Subsequently, the case was reassigned to Judge Getzendanner who granted summary judgment for the defendants on the two remaining counts. The plaintiff then filed this appeal.
We conclude that the district judge properly and thoroughly addressed the issues raised and we hereby affirm and adopt the district court's opinion (reproduced in the Appendix).
APPENDIX
______
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
________
HAVOCO OF AMERICA, LTD., )
a Delaware corporation, )
)
Plaintiff, )
)
v. ) No. 79 C 5261
)
IRVING HOLLOBOW, LAWRENCE )
TASLITZ, JAMES SPEAR, )
Illinois residents, and )
HOLLOBOW & TASLITZ an )
Illinios partnership, )
)
Defendants. )
MEMORANDUM OPINION AND ORDER
This case is before the court on cross-motions for summary judgment. Plaintiff Havoco of America is a Delaware corporation. The defendants are three individuals, Irving Hollobow, Lawrence Taslitz and James Spear, and an Illinois partnership, the law firm of Hollobow & Taslitz. The three individuals were all investors in two limited partnership programs, the general partner of which was a wholly-owned subsidiary of Havoco.
Judge Marshall, to whom the case was previously assigned, dismissed Counts II and IV, as well as two additional individual defendants, in his Memorandum Opinion of August 21, 1980. In the remaining counts, I and III, Havoco seeks to impose liability on defendants for the delay and ultimate cancellation of its plan to offer publicly interests in a third limited partnership. Defendants allegedly conspired to force the cancellation of this plan and, in furtherance of this conspiracy, Havoco asserts that they made spurious accusations to regulatory bodies and filed a groundless lawsuit against plaintiff and its subsidiary. Havoco maintains that this conduct amounts to the tort of interference with prospective business advantage. See Arlington Heights National Bank v. Arlington Heights Federal Savings and Loan Association, 37 Ill.2d 546, 229 N.E.2d 514 (1967).
In their earlier motions to dismiss and again in their motions for summary judgment, defendants have argued that their conduct in making accusations and in filing the lawsuit is privileged under the First Amendment guarantee of the right to petition, as well as under the Illinois constitution and Illinois common law. Regarding this argument, Judge Marshall stated in his opinion (pp. 10-11) that:
Both sides have now submitted extensive exhibits to the court, and on the basis of these materials as well as the legal arguments presented in the briefs, the court is now fully apprised of the relevant undisputed facts in this case and concludes that summary judgment in defendants' favor is appropriate.
In its complaint, Havoco alleges that in April 1977 the three individual defendants complained to the National Association of Securities Dealers (NASD), 1 accusing Havoco of fraud and mismanagement; that as a result, the NASD issued a "suspension of selling" order prohibiting Havoco from proceeding with its public offering; and that after an investigation, the NASD found the charges to be without merit and lifted its suspension order (p 22-24).
The complaint also alleges that in July 1977, the same defendants brought the same charges before the SEC, which then issued a suspension order, but that after an investigation, the SEC "cleared" Havoco and its subsidiaries of all charges (p 25-26). Finally, Havoco alleges that all defendants participated in preparing and filing a lawsuit against Havoco and others in 1978 in a "calculated attempt ... to stop plaintiff's proposed public offering." (p 34). Havoco alleges that this lawsuit is "wholly baseless."
The materials submitted by the parties, which reveal that there are no disputes as to the underlying material facts, portray a very different scenario than the one painted by the complaint. First of all, it appears that neither the NASD nor the SEC ever issued any "stop" or "suspension" order against Havoco or its subsidiaries. (Indeed, the NASD lacks any authority to issue such orders.)
Secondly, as evidenced by the materials Havoco submitted, the only "accusations" made to the NASD were (1) a phone call from Hollobow to the NASD in May 1977, in which he complained that he had asked Havoco for an audited tax return and a financial statement and had not yet received them; (2) a phone call from Spear to an investigator for the NASD, in which he made the same complaint, and (3) a copy of a letter of July 12, 1977, that Spear wrote to Havoco containing questions Spear had regarding the tax return. A copy was sent to NASD to "encourage [Havoco's] prompt reply."
With regard to the SEC, and again relying on material submitted by Havoco, specifically on what appears to be memoranda to the files by a staff attorney for the SEC, 2 the individual defendants approached the SEC with complaints relating to alleged misstatements by Havoco in selling them their partnership interests and subsequent mismanagement. Mr. Hollobow also contacted the SEC attorney with a list of questions for Havoco's auditor. The SEC attorney made it clear that he could not release any answers to Hollobow, and then spoke with Havoco's attorneys and auditors regarding the complaints and questions raised by defendants. This SEC "investigation" resulted in no formal action either in favor of or against Havoco.
With regard to the lawsuit, in February, 1978, Hollobow and Taslitz filed an 11 count complaint against Havoco, its subsidiary and others, in the Illinois state court. In June, the trial court dismissed all but Count VII of the complaint, on the grounds that Count VII sought recision of the sale of securities and that plaintiffs had elected this exclusive remedy. The dismissal of the other counts was without prejudice. Shortly afterward, the state court defendants' attorney (plaintiff's here) wrote to the state court plaintiffs (defendants here) offering to repurchase their shares.
On motion of Hollobow and Taslitz, the trial court entered an order in February 1979 entering judgment in their favor on the grounds that an enforceable settlement agreement had been reached between the parties. On March 17, 1981, the Illinois Appellate Court reversed the trial court's order and remanded, concluding that (slip op. at 10) "[T]here are substantial questions present relating to the formation and terms of the settlement agreement and that further evidence or testimony is required to satisfactorily resolve these questions."
As of this date, therefore, the case remains pending in the Illinois state courts.
Although this cause is before the court on cross-motions for summary judgment, the court determines that, to the extent Havoco's complaint attempts to base liability on defendants' wrongful filing of a lawsuit, it is legally insufficient under Illinois common law principles. 3
Under Illinois law, the only cause of action recognized for the wrongful filing of a lawsuit is one for malicious prosecution or abuse of process. Lyddon v. Shaw, 56 Ill.App.3d 815, 14 Ill.Dec. 489, 372 N.E.2d 685 (2d Dist.1978). In Lyddon, a doctor who had been sued for medical malpractice brought an action for legal malpractice against the attorney who had filed the suit, alleging that the attorney had failed to determine whether there was any evidence to support the medical malpractice claim. The appellate court stated:
...
To continue reading
Request your trial
-
Snyder v. American Ass'n of Blood Banks
...state and federal authorities and eliciting public interest cannot serve as the basis of tort liability"); Havoco of America, Ltd. v. Hollobow, 702 F.2d 643, 648-51 (7th Cir.1983) (holding that Noerr-Pennington doctrine immunized defendant against liability for tortious interference based o......
-
American Continental Corporation/Lincoln Sav. & Loan Securities Litigation, In re
...analyses to tort claim based on defendants' actions in alerting authorities to plaintiff's violations of law); Havoco of Am., Ltd. v. Hollobow, 702 F.2d 643, 649 (7th Cir.1983) (applying Noerr-Pennington and its sham litigation exception "to protect the First Amendment right to petition aga......
-
Pacific Gas & Electric Co. v. Bear Stearns & Co.
...claims that were not genuinely aimed at securing the government action petitioned for, they were privileged. (Havoco of America Ltd. v. Hollobow (7th Cir.1983) 702 F.2d 643; see also Suburban Restoration Co., Inc. v. Acmat Corp. (2d Cir.1983) 700 F.2d 98; King v. Levin (1989) 184 Ill.App.3d......
-
State of Ill. ex Rel. Hartigan v. Panhandle Eastern, 84-1048.
...intends to harm a competitor's business is irrelevant to the First Amendment's protection of its activity. Havoco of America, Ltd. v. Hollobow, 702 F.2d 643, 650 (7th Cir.1983). The intention to harm a competitor through administrative or judicial proceedings is the precise matter shielded ......
-
Table of Cases
...323 U.S. 386 (1945), 33, 77, 80 Hatley v. Am. Quarter Horse Ass’n, 552 F.2d 646 (5th Cir. 1977), 36 Havoco of Am., Ltd. v. Hollobow, 702 F.2d 643 (7th Cir. 1983), 94 Hawaii v. Standard Oil Co., 405 U.S. 251 (1972), 23 Heary Bros. Lightning Prot. Co. v. Lightning Prot. Inst., 287 F. Supp. 2d......
-
Associations and Immunity for Government-Related Activities
...818, 826 (7th Cir. 1999) (RICO); Hirschfeld v. Spanakos, 104 F.3d 16, 19 (2d Cir. 1997) (Section 1983); Havoco of Am., Ltd. v. Hollobow, 702 F.2d 643, 650 (7th Cir. 1983) (federal securities laws); Eurotech, Inc. v. Cosmos European Travels, 189 F. Supp. 2d 385, 392 (E.D. Va. 2002) (tort cla......
-
SLAPP 2.0: Second Generation of Issues Related to Strategic Lawsuits Against Public Participation
...should be awarded). Protect Our Mountain Env’t v. District Court, 677 P.2d 1361, 1364-66 (Colo. 1984). 68. Havoco of Am. Ltd. v. Hollobow, 702 F.2d 643, 650 (7th Cir. 1983). 69. Further resources and reference material on the subject of SLAPPs can be found at the websites of the Public Part......