Delloma v. Consolidation Coal Co., 92-2107

• Citation: 996 F.2d 168
• Decision Date: 14 June 1993
• Docket Number: No. 92-2107,92-2107
• Parties: 62 Fair Empl.Prac.Cas. (BNA) 127, 62 Empl. Prac. Dec. P 42,515, 62 USLW 2031, 8 IER Cases 970 Richard C. DELLOMA, Plaintiff-Appellant, v. CONSOLIDATION COAL COMPANY, and Bobby Brown, individually and as President of Consolidation Coal Company, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 168

996 F.2d 168

62 Fair Empl.Prac.Cas. (BNA) 127,

62 Empl. Prac. Dec. P 42,515, 62 USLW 2031,

8 IER Cases 970

Richard C. DELLOMA, Plaintiff-Appellant, v. CONSOLIDATION COAL COMPANY, and Bobby Brown, individually and as President of Consolidation Coal Company Defendants-Appellees.

No. 92-2107.

United States Court of Appeals Seventh Circuit.

Argued Jan. 8, 1993.

Decided June 14, 1993.

Ronald E. Osman, Sara L. Nierste, Michael W. Maurizio (argued), Osman & Associates, Dongola, IL, for plaintiff-appellant.

Thomas G. Bearden, Bradley J. Washburn (argued), Bearden, Breckenridge, Knoten & Mattern, St. Louis, MO, for defendants-appellees.

Before FLAUM and MANION, Circuit Judges, and MILLER, District Judge. ¹

FLAUM, Circuit Judge.

Richard Delloma was the Superintendent of Consolidation Coal Company's Burning Star # 4 Mine in southern Illinois from 1982 until he was fired in January of 1985. Among his duties at the mine, Delloma determined whether an employee's absence from work would be recorded as excused or unexcused. While acting as the Superintendent, Delloma engaged approximately one-third of the female employees he supervised at the mine in dating or other social relationships. One of those women, Sharon Snider, filed a lawsuit against Delloma and Consolidation Coal, alleging sexual harassment under Title VII and several tort claims including assault, battery, and intentional infliction of emotional distress. Among many allegations of unwanted sexual advances, Snider claimed that Delloma conditioned approval of her absences as excused on her agreement to have sex with him. The jury found for the defendants on the common law claims, but the district court ruled in Snider's favor on the Title VII claim against Consolidation Coal.

Meanwhile, Delloma attempted to find other employment in the mining industry. In the summer or fall of 1986, he spoke to Eugene Samples, the President and Chief Operating Officer for Arch Minerals and an old family friend. After a short interview, Delloma was convinced that he had a job. He met with Terry Sullivan, President of Arch Minerals of Illinois, as Samples directed. Within a week or two, Samples spoke on the telephone to Bobby Brown, President and Chief Operating Officer of Consolidation Coal. Samples asked why Delloma had been discharged and Brown responded to the effect that "[t]here were some record-keeping irregularities that may have been involved." On the basis of Brown's statement, Samples lost his favorable impression of Delloma. Sullivan, who may or may not have heard Brown's remark from Samples, did his own reference check on Delloma in the local coal mining community and, advised that Delloma was a "womanizer" and "boozehound," decided not to hire him. Delloma did not contact or hear from Samples again until the Snider jury verdict in 1989. Then he wrote Samples a letter stating that he had been exonerated, and Samples wrote a pleasant but noncommittal letter back to him.

Disgruntled by the turn of events and perhaps buoyed by the jury verdict in his favor, Delloma sued Snider, Brown, and Consolidation Coal. Subsequently part of the complaint was dismissed, leaving only claims of intentional interference with a prospective contractual relationship against Brown and Consolidation. The district court granted both defendants' motion for summary judgment. Delloma appeals.

We review de novo the district court's grant of summary judgment, drawing all reasonable inferences for the nonmovant. Russo v. Health, Welfare & Pension Fund, 984 F.2d 762, 765 (7th Cir.1993). Summary judgment is appropriate if the movant is entitled to judgment as a matter of law and the record shows no genuine issue of material fact. We will affirm on any basis supported by the record. Klein v. Rush-Presbyterian-St. Luke's Medical Center, 990 F.2d 279 (7th Cir.1993).

The issue presented for review by Delloma is whether the trial court erred in requiring him to show actual malice by the defendants if the defendants' actions were not privileged. Relying on an incorrect list of the elements of the tort provided and argued by both the plaintiff and the defendants, the district court granted summary judgment based on Delloma's inability to show malice. In Illinois, a plaintiff claiming tortious interference with a prospective economic relationship must allege malice only if the defendants' actions were privileged. Fellhauer v. City of Geneva, 142 Ill.2d 495, 154 Ill.Dec. 649, 657, 568 N.E.2d 870, 878 (1991); Kuwik v. Starmark Star Mktg. & Admin., 232 Ill.App.3d 8, 173 Ill.Dec. 543, 547, 597 N.E.2d 251, 255 (2d Dist.1992) ("[A]ctual malice is not a relevant concern until the qualified privilege has been found to apply."). Therefore, the short answer is that to require the plaintiff to allege and show malice when the defendants' actions were not privileged is error. The resolution of this question is not dispositive, however, unless the defendants' conduct was not privileged. Our inquiry, under the appropriate legal standard, reaches two issues never addressed by the district court--conditional privilege ² and truth as a defense.

The elements of tortious interference with a prospective economic advantage or a prospective contractual relationship are 1) the plaintiff's reasonable expectation of entering into a valid business relationship; 2) the defendant's knowledge of the plaintiff's expectancy; 3) purposeful interference by the defendant that prevents the plaintiff's legitimate expectancy from being fulfilled; and 4) damages to the plaintiff resulting from the defendant's interference. Fellhauer, 154 Ill.Dec. at 657, 568 N.E.2d at 878. If the defendant's interference is privileged, the plaintiff bears the burden of proving that the defendant's conduct was malicious. Id., (citing HPI Health Care v. Mount Vernon Hospital, 131 Ill.2d 145, 137 Ill.Dec. 19, 24, 545 N.E.2d 672, 677 (1989)). In the context of a suit for tortious interference with a prospective economic relationship, the term "malicious" does not carry the ordinary meaning of vindictive or malevolent; it means intentionally and without justification. Fellhauer, 154 Ill.Dec. at 657, 568 N.E.2d at 878; HPI Health Care, 137 Ill.Dec. at 24, 545 N.E.2d at 677; but see Philip I. Mappa Interests v. Kendle, 196 Ill.App.3d 703, 143 Ill.Dec. 936, 939-40, 554 N.E.2d 1008, 1011-12 (1st Dist.1990) (actual malice means a desire to annoy or harm).

Privilege exists if the defendant acted in good faith to protect an interest or uphold a duty. Also the defendant's statement must be limited in scope to that purpose, and must be made on a proper occasion, in a proper manner and to proper parties only. Mittelman v. Witous, 135 Ill.2d 220, 142 Ill.Dec. 232, 240, 552 N.E.2d 973, 981 (1989). Defendant Brown made the statement at issue in response to a direct inquiry by a prospective employer. Delloma argues that Brown had no interest or duty in responding to Samples. The Illinois caselaw dealing with former employer/employee situations is slim. ³ The clearest cases for privilege involve legal and fiduciary duties, like those of corporate officers to their corporation, see HPI, 137 Ill.Dec. at 24, 545 N.E.2d at 677, or of a mayor to his city, see Fellhauer, 154 Ill.Dec. at 658, 568 N.E.2d at 879.

An employer owes no apparent legal duty to any other employer. Brown had no legal obligation to respond to Samples. Illinois courts, however, have recognized some interest of former employers in disclosing limited information to prospective employers. See, e.g., Roemer v. Zurich Insurance Co., 25 Ill.App.3d 606, 323 N.E.2d 582, 587 (1st Dist.1975) (as former supervisor, defendant had "duty to respond in some manner" to inquiries made by placement agencies). In a libel case, the Illinois Supreme Court has found conditional privilege to apply to statements by a former employer to a potential mortgagor, because the subject matter "affected an important interest of the recipient" and the statements were "within generally accepted standards of decent conduct" and were "made in response to a request." Zeinfeld v. Hayes Freight Lines, Inc., 41 Ill.2d 345, 348, 243 N.E.2d 217 (1968).

The Illinois courts have not interpreted the existence of a duty or interest narrowly. See Miller v. Danville Elks Lodge 332, B.P.O.E., 211 Ill.App.3d 145, 155 Ill.Dec. 549, 554, 569 N.E.2d 1160, 1165 (4th Dist.1991) ("The interest ... must not necessarily be a legal one, as it may be sufficient if the speaker has a good faith belief he or she has a moral or social duty to uphold.") (citation omitted). In addition, courts generally recognize more extensive privileges where the claim is merely for a loss of prospective advantage rather than an existing contract. See D. Dobbs, R. Keeton, & D. Owen, PROSSER AND KEETON ON TORTS 1011 (5th ed. 1984). Generally, a former employer who gives a negative reference to a prospective employer holds some qualified privilege against defamation suits. RESTATEMENT (SECOND) OF TORTS § 595, cmt. i (1977); see also Note, Contracting around the Law of Defamation and Employment References, 79 VA.L.REV. 517, 523-26 (1993). By analogy, an employer should hold some privilege against tortious interference suits for limited statements in response to a direct request. We conclude, therefore, that an employer may invoke a conditional privilege to respond to direct inquiries by prospective employers. ⁴

Once a privilege is established, the plaintiff must prove that the defendant acted with malice. The defendant may abuse the privilege, by making unjustified statements, by excessive publication of statements, or by making statements in conflict with the interest which gave rise to the privilege. If the defendant knew the statements were false, he would be unjustified in making them. In a defamation context the plaintiff must prove that "the statement in question was made with knowledge of its falsity or in reckless disregard of whether it was false or not."...