Harris Trust and Sav. Bank v. Phillips

• Decision Date: 31 March 1987
• Docket Number: No. 85-3168,85-3168
• Citation: 154 Ill.App.3d 574,107 Ill.Dec. 315,506 N.E.2d 1370
• Parties: , 107 Ill.Dec. 315 HARRIS TRUST AND SAVINGS BANK, Plaintiff-Appellant, v. John G. PHILLIPS and John G. Phillips, Ltd., Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1370

506 N.E.2d 1370

154 Ill.App.3d 574, 107 Ill.Dec. 315

HARRIS TRUST AND SAVINGS BANK, Plaintiff-Appellant, v. John G. PHILLIPS and John G. Phillips, Ltd., Defendants-Appellees.

No. 85-3168.

Appellate Court of Illinois,

First District, Second Division.

March 31, 1987.

Chapman and Cutler, Chicago (Richard A. Makarski, Stephen H. Pugh, Jr., and John Robert Weiss, of counsel), for plaintiff-appellant.

John G. Phillips, John G. Phillips, Ltd., Chicago (Sidney Z. Karasik, Chicago, of counsel), for defendants-appellees.

Justice BILANDIC delivered the opinion of the court:

Plaintiff Harris Trust and Savings Bank (Harris Bank) appeals from the trial court's dismissal of its second amended complaint against defendants John G. Phillips and his law firm of John G. Phillips, Ltd. (Phillips). Count I alleges slander and Count II alleges intentional interference with judicial process. Both counts were dismissed for failure to state a cause of action. The issues to be determined are: (1) whether the alleged defamations are actionable under the innocent construction rule; (2) whether, in the alternative, plaintiff alleged a cause of action for slander per quod; and (3) whether plaintiff alleged a cause of action for intentional interference with judicial process.

The origin of this lawsuit can be traced to a dispute between Harris Bank and Myrtle Seigel which culminated in the filing of two lawsuits in 1976 in the circuit court of Cook County: Harris v. Seigel, 76 CH 1405, and Seigel v. Harris, 76 L 4927.

The litigation centered on two trusts created by Mrs. Seigel's late husband. Harris served as a trustee and Mrs. Seigel was an income beneficiary. When she made a demand for distribution under one of the trusts, the bank refused, and filed a complaint for instructions from the court with respect to further administration of the trust. Mrs. Seigel countered with an action against the bank alleging breach of fiduciary duty. The two cases were consolidated and placed on the trial calendar of Judge Albert S. Porter, then sitting in the Chancery Division.

Mrs. Seigel was represented in that litigation by Attorney Charles Pressman. Pressman sought out John G. Phillips and asked him to enter the case as guardian ad litem and trustee for unborn beneficiaries of the two trusts. Phillips was duly appointed guardian by the court.

The consolidated cases proceeded to a bench trial in late 1981, and were continued from time to time until early 1982. Judge Porter announced that he would rule on the case on July 22, 1982. With this background we now turn our attention to the case before us.

Plaintiff's second amended complaint alleged that Phillips met Pressman for lunch on July 14, 1982. At that meeting, Phillips was alleged to have used the following words:

"That the bank has had dinner with the judge and that [therefore] ¹ Mrs. Seigel would lose the case unless $10,000 be paid to the judge by July 19, 1982. * * * If the $10,000 were paid, a verdict would result in Mrs. Seigel's favor in the amount of $750,000."

In Count I alleging slander, Harris Bank claims that Phillips' words were meant and understood by Pressman and others to mean that Harris Bank had unlawfully, wilfully and feloniously offered and paid a bribe to the trial judge in order to obtain a favorable verdict. As a result, Harris Bank's reputation was damaged and it was exposed to public hatred, contempt and ridicule. Count II alleges that Phillips' statements and conduct intentionally, wilfully and wrongfully interfered with and obstructed Harris Bank's right to a fair and impartial trial on the merits.

The complaint did not have any allegations which denied the truth of the words allegedly used by Phillips. However, the complaint denied the truth of the meaning which Harris Bank placed on the words used by Phillips.

Mrs. Seigel's attorneys moved for the recusal of Judge Porter on July 22, 1982. Judge Porter took the motion under advisement. Shortly thereafter, Judge Porter denied the motion as without foundation and entered his ruling on the case in chief. He ruled in favor of Harris Bank on the major issue of Harris' fiduciary duty to Mrs. Seigel, and in favor of Mrs. Seigel on the issue of Harris' timing in paying over the corpus of the trust properties. On this issue, he awarded Mrs. Seigel damages in an amount far less than that originally sought in the case.

Harris moved the court for reconsideration of the latter issue. After lengthy briefing and a hearing, Judge Porter declined to rule on the motion for reconsideration, and rather decided to recuse himself from the case altogether. On March 14, 1983, he stated in open court that:

" * * * and it is my understanding from the information that I can piece together that this Court was--it was inferred or said that this Court had met with officials of the Bank and had lunch with officials of the Bank during the course of these proceedings, which inferred that this Court had improperly colluded with officials of the Bank; and further, that this Court had made some type of demand for payment for favorable decision for the Seigel side of the case.

Now, that is what I have heard, whether it is true or not. This I do know, and this is one of the things that I strongly consider."

The case was transferred to the Honorable Richard L. Curry, who vacated all of Judge Porter's rulings and ordered a new trial on all issues. Harris seeks to recover the cost of retrial as damages.

Harris Bank alleged, in general fashion, that its reputation had been damaged. It also pleaded that Phillips' statements caused the bank to incur attorney and trustee fees and expenses arising out of the retrial of the Seigel litigation. No specific pecuniary losses were alleged, nor did the bank claim that the incurred fees and expenses arising out of the new trial were the result of damage to the bank's reputation.

Defendant's motion to dismiss for plaintiff's failure to state a cause of action pursuant to section 2-615 (Ill.Rev.Stat.1985, ch. 110, par. 2-615) was sustained. Defendant also filed a supplemental motion to dismiss pursuant to section 2-619 (Ill.Rev.Stat.1985, ch. 110, par. 2-619) based on privilege. Having dismissed the action under section 2-615, the trial court determined there was no need to rule on the section 2-619 motion.

I.

A defamation is the publication of anything injurious to the good name or reputation of another, or which tends to bring him into disrepute. A defamation designed for visual perception is a libel; an oral defamation is a slander. (Whitby v. Associates Discount Corp. (3d Dist.1965), 59 Ill.App.2d 337, 340, 207 N.E.2d 482.) The gravamen of an action for defamation is the damage to plaintiff's reputation in the eyes of other persons. (Cowper v. Vannier (3d Dist.1959), 20 Ill.App.2d 499, 503, 156 N.E.2d 761.) Defamatory words may be divided into those which are actionable per se, and those which are actionable per quod. (Cook v. East Shore Newspapers, Inc. (1945), 327 Ill.App. 559, 588, 64 N.E.2d 751.) A publication is defamatory per se if it is so obviously and naturally harmful to the person aggrieved that proof of injurious character can be, and is, dispensed with. (Owen v. Carr (1986), 113 Ill.2d 273, 277, 100 Ill.Dec. 783, 497 N.E.2d 1145.) Words actionable per quod are those which require extrinsic facts or innuendo to give them a slanderous or libelous meaning and require evidence to show that as a matter of fact, some substantial injury has followed from their use. Brewer v. Hearst Publishing Co. (7th Cir.1950), 185 F.2d 846.

Rules applicable to slander are now applicable to libel as well. (Mitchell v. Peoria Journal (3d Dist.1966), 76 Ill.App.2d 154, 159, 221 N.E.2d 516, appeal denied, 35 Ill.2d 631.) In this case, we have a corporate plaintiff. It has been held that an alleged defamation must assail the corporation's financial position, business methods, or accuse it of fraud and mismanagement. American International Hospital v. Chicago Tribune Co. (1st Dist.1985), 136 Ill.App.3d 1019, 1024, 91 Ill.Dec. 479, 483 N.E.2d 965.

In reviewing the trial court's dismissal of this cause of action, we must accept as true all well-pleaded facts in the second amended complaint, and all reasonable inferences therefrom to determine whether, as a matter of law, the complaint states a cause of action. (Szajna v. General Motors Corp. (1986), 115 Ill.2d 294, 104 Ill.Dec. 898, 503 N.E.2d 760.) In a defamation action, a complaint must clearly identify the specific defamatory material. (Heying v. Simonaitis (1st Dist.1984), 126 Ill.App.3d 157, 163, 81 Ill.Dec. 335, 466 N.E.2d 1137, appeal denied, 101 Ill.2d 565.) The dismissal of a complaint for failure to state a cause of action, including one for defamation, rests with the discretion of the trial court. Antonelli v. Field Enterprises, Inc. (1st Dist.1983), 115 Ill.App.3d 432, 436, 71 Ill.Dec. 188, 450 N.E.2d 876.

Plaintiff's complaint does not specify whether a recovery is sought on the basis of slander per se or slander per quod. Therefore, we will first examine the complaint to determine if a cause of action is stated for slander per se.

A.

Words are slanderous per se if they are false and are so obviously and materially harmful to the person aggrieved that proof of injurious character can be, and is, dispensed with. (Owen v. Carr (1986), 113 Ill.2d 273, 277, 100 Ill.Dec. 783, 497 N.E.2d 1145.) The allegedly slanderous words must be considered under the innocent construction rule as stated in Chapski v. The Copley Press (1982), 92 Ill.2d 344, 65 Ill.Dec. 884, 442 N.E.2d 195:

" * * * a written or oral statement is to be considered in context, with the words and the implications therefrom given their natural and obvious meaning; if, as so construed, the statement may reasonably be innocently interpreted or reasonably be interpreted as referring to someone other than the plaintiff it cannot be actionable per se."

92 Ill.2d 344, 352...