Geise v. Phoenix Co. of Chicago, Inc., 2-92-0642

• Decision Date: 24 May 1993
• Docket Number: No. 2-92-0642,2-92-0642
• Citation: 186 Ill.Dec. 122,615 N.E.2d 1179,246 Ill.App.3d 441
• Parties: , 186 Ill.Dec. 122, 8 IER Cases 1070 Melody C. GEISE, Plaintiff-Appellant, v. THE PHOENIX COMPANY OF CHICAGO, INC., Defendant-Appellee (William Walthall, Defendant).
• Court: United States Appellate Court of Illinois

Page 1179

615 N.E.2d 1179

246 Ill.App.3d 441, 186 Ill.Dec. 122,

8 IER Cases 1070

Melody C. GEISE, Plaintiff-Appellant, v. THE PHOENIX COMPANY OF CHICAGO, INC., Defendant-Appellee

(William Walthall, Defendant).

No. 2-92-0642.

Appellate Court of Illinois,

Second District.

May 24, 1993.

Rehearing Denied July 30, 1993.

Thomas F. Howard, Jr. (argued), Bloomingdale, for Melody Geise.

Chester A. Lizak (argued), Paula S. Goldberg, DiMonte & Lizak, Park Ridge, for Phoenix Co. of Chicago, Inc.

Justice GEIGER delivered the opinion of the court:

The plaintiff, Melody C. Geise, brought this suit against her employer, the Phoenix Company of Chicago, Inc. (the company), and the company's national sales manager, William Walthall (the manager). The trial court dismissed the complaint counts against the company, with prejudice. It also found that there was no just reason to delay enforcement or appeal on that dismissal. (See 134 Ill.2d R. 304(a).) The plaintiff brought this appeal from the court's dismissal of the company. We reverse.

In her complaint, the plaintiff alleged generally that on May 7, 1990, she was employed as an inside sales representative for the company. At all times relevant to the plaintiff's claims, the manager was the company's national sales manager. The plaintiff alleged that during the time she was employed the manager made numerous, specific, unsolicited and nonconsensual sexual advances toward her and that she made numerous reports of his conduct to her supervisors. Among other things, the plaintiff alleged the manager's unwanted physical advances, including attempts to kiss and touch her body, offensive placement of his hand on her body, and his placement of objects down the front of her blouse. According to the complaint, the company took no action on those reports until on or about January 21, 1991. Then, the company's president investigated and confirmed the plaintiff's allegations against the manager.

After verifying the plaintiff's allegations, and with knowledge of the manager's "previous propensity for sexual harassment," the complaint alleges, the company took no action against the manager. According to the complaint, the plaintiff's employment was terminated by the manager on or about May 1, 1991. The complaint asserts that the plaintiff's termination was in retaliation both for her failure to submit to the manager's sexual advances and for her attempts to inform the company about his actions.

Counts I and II of the complaint were made against the manager. They charged, respectively, battery and intentional infliction of emotional distress. Those counts are not involved in this appeal.

In count III of the amended complaint, the plaintiff claimed "negligent retention of employee." Therein, she alleged that the manager was employed (1) with primary supervisory duties; (2) to evaluate employees such as the plaintiff; and (3) to determine the professional advancement of numerous employees throughout the company. Count III further alleged that the plaintiff informed the company on numerous occasions of the manager's harassment and that on at least one occasion the company investigated and acknowledged that the claims were accurate. Despite that acknowledgment, the complaint continues, the company failed to take "corrective action to remedy said harassment."

Count III asserts that in view of the relationship of authority and control conferred on the manager, the company owed its employees a duty "to protect them from harm to their persons, property and career advancement." The complaint charges that the company breached its duty of care to its employees when, after having factual knowledge and confirmation of the manager's sexual harassment toward the plaintiff, it failed to take remedial action and, thus, ratified the manager's actions.

Count III further alleged that prior to the manager's assault and harassment of the plaintiff the company knew, or should have known, that the manager was unfit for his job assignment. That assignment required him to work with and have authority over women. Count III concludes with a claim that the company was negligent, reckless, and grossly negligent in hiring the manager.

Count IV of the complaint is based on a theory of negligent hiring. It adopts all the complaint's preceding allegations and adds that when the company employed the manager, he had a history of sexual discrimination and harassment and had been dismissed from previous employment for reasons of sexual discrimination and harassment.

Count IV charges that the company owed the plaintiff a duty to investigate and that it breached its duty of care to the company employees by hiring the manager when it knew or should have known of his propensity for sexual harassment and discrimination. Count IV also charges that before it hired the manager, a reckless and grossly negligent act according to the complaint, the company knew or should have known that he was unfit for the manager position which required him to work with and have authority over women.

Count IV asserts that the manager's behavior toward female employees of his former employer was discoverable by reasonable inquiry to the manager's former employer. It also asserts that had the company known of that prior behavior, it would not have hired the manager. According to count IV, the company's acts and omissions (1) in failing to discover the manager's history and predisposition and (2) in retaining the manager were the direct and proximate cause of the plaintiff's injuries.

The plaintiff's complaint sought compensatory and exemplary damages, costs, and fees. The company brought a motion to dismiss under section 2-615 of the Code of Civil Procedure (Ill.Rev.Stat.1991, ch. 110, par. 2-615). In that motion, the company argued that the complaint failed to state a cause of action. The court's order granted dismissal with prejudice of counts III and IV. This appeal is taken from that dismissal order.

On appeal, the plaintiff argues that the trial court should have recognized an employer's duty to make a reasonable sexual harassment investigation into the employment history of a prospective manager. She also argues that the court erred in dismissing her negligent retention claim, because Illinois law has established an employer's duty to protect employees from sexual harassment propensities known to it.

The company's motion to dismiss under section 2-615 asserted (1) that there was no public policy requiring employers to check sexual harassment history of potential sales manager hirees; (2) that the plaintiff's claim that the company "should have known" of the manager's propensity for sexual harassment was not sufficient to state a cause of action for negligent hiring; and (3) that the plaintiff's allegations of negligent retention were not sufficient, as there was no allegation that the manager sexually harassed the plaintiff after the company investigated and ascertained that there was a basis for the plaintiff's complaints against him. The company also moved to strike the plaintiff's prayers for punitive damages and attorney fees, asserting merely that "that there is no factual basis alleged that would allow" either.

A motion under section 2-615 addresses defects on the face of the pleading; it admits all well-pleaded facts and attacks only the legal sufficiency of the complaint on its face. (Aguilar v. Safeway Insurance Co. (1991), 221 Ill.App.3d 1095, 1100, 164 Ill.Dec. 418, 582 N.E.2d 1362.) In reviewing a dismissal order, we must determine whether the complaint's allegations, when interpreted in a light most favorable to the plaintiff, are sufficient to set forth a cause of action on which relief may be granted. (221 Ill.App.3d at 1101, 164 Ill.Dec. 418, 582 N.E.2d 1362.) A cause of action should not be dismissed unless it clearly appears that no set of facts could be proved which would entitle the plaintiff to recover. 221 Ill.App.3d at 1101, 164 Ill.Dec. 418, 582 N.E.2d 1362.

Illinois courts have a long history of recognizing the availability of tort damages for an employer's negligent selection and employment of employees. In 1894, our supreme court observed that a "master" has a duty to exercise ordinary and reasonable care in the employment and selection of careful and skillful co-employees. (Western Stone Co. v. Whalen (1894), 151 Ill. 472, 484, 38 N.E. 241.) The court went on to state that ordinary care in the employment of "servants" requires a degree of diligence and caution proportionate to the exigencies of the particular service in question; the care required is what a reasonably prudent person would exercise in view of the consequences that might reasonably be expected if an incompetent or reckless person was employed. 151 Ill. at 485, 38 N.E. 241.

In Western Stone, the plaintiff was awarded tort damages against his employer, based on jury findings that his injury was the result of negligence by his co-employee, a captain of a steam propeller who had been hired by the defendant company. The court observed that where the service in which one is to be employed may endanger "the life and persons" of co-workers, upon the plainest principles of justice and good faith, the employer should be required to make a reasonable investigation into the potential hiree's "character, skill and habits of life." (151 Ill. at 485, 38 N.E. 241.) The court further observed that courts had been practically unanimous that a master's failure to make such a reasonable investigation is negligence and that the master is held liable for a co-employee's injury resulting from the "negligence, incapacity or intemperance" of the negligently hired servant. (151 Ill. at 485, 38 N.E. 241.) Furthermore, the court suggested that the employer's actual knowledge of the offending employee's character and habit was not necessary to the employer's liability. 151 Ill. at 486-87, 38 N.E. 241.

The approach in Western Stone has also been followed...