Lawlor v. N. Am. Corp.

• Decision Date: 28 January 2013
• Docket Number: No. 112530.,112530.
• Citation: 2012 IL 112530,983 N.E.2d 414,368 Ill.Dec. 1
• Parties: Kathleen LAWLOR, Appellee, v. NORTH AMERICAN CORPORATION OF ILLINOIS, Appellant.
• Court: Illinois Supreme Court

2012 IL 112530

983 N.E.2d 414

368 Ill.Dec. 1

Kathleen LAWLOR, Appellee,

v.NORTH AMERICAN CORPORATION OF ILLINOIS, Appellant.

No. 112530.

Supreme Court of Illinois.

Oct. 18, 2012.

Rehearing Denied Jan. 28, 2013.

Eric N. Macey, Steven J. Ciszewski and Julie Johnston-Ahlen, Novack & Macey LLP, Michael D. Richman, Reed Smith LLP, Chicago, IL, for appellant.

Mitchell B. Katten, Nancy A. Temple and Joshua R. Diller, Katten & Temple, LLP, Chicago, IL, for appellee.

OPINION

Justice THEISdelivered the judgment of the court, with opinion.

[368 Ill.Dec. 4]¶ 1Plaintiff, Kathleen Lawlor, brought this action in the circuit court of Cook County alleging, inter alia, the tort of invasion of privacy by intrusion upon seclusion against her former employer, defendantNorth American Corporation of Illinois (North American).In a counterclaim, North American alleged, inter alia, that Lawlor breached her fiduciary duty of loyalty while an employee.Both parties prevailed in the trial court on their respective claims.Lawlor was awarded $65,000 in compensatory damages and $1.75 million in punitive damages after a jury trial.North American was awarded $78,781 in compensatory damages and $551,467 in punitive damages after a contemporaneous bench trial.The trial court remitted the jury's punitive damages award to $650,000.The appellate court affirmed the jury's verdict on Lawlor's intrusion claim, reinstated the $1.75 million punitive damages award, and reversed the trial court's judgment on North American's breach of fiduciary duty claim.409 Ill.App.3d 149, 350 Ill.Dec. 667, 949 N.E.2d 155.

¶ 2 In this appeal, we are asked to consider whether there was sufficient evidence to support the jury's verdict that North American was vicariously liable for the tortious conduct of investigators on the intrusion claim; whether the jury's award of $1.75 million in punitive damages was excessive and in violation of Illinois common law and federal due process principles; and whether there was sufficient evidence to support the trial court's determination that Lawlor breached her fiduciary duty to North American.For the following reasons, we affirm in part and reverse in part the judgment of the appellate court, and affirm in part, reverse in part, and modify in part the judgment of the circuit court.

¶ 3 BACKGROUND

¶ 4 The following facts are not in dispute.Lawlor was employed by North American as a commission-based salesperson from August 1998 until her separation from the company in June 2005.Lawlor worked in North American's graphic services group and primarily sold customized corporate-branded promotional items.Her role was to generate business, after which the day-to-day management of the account was handled by other employees.In August 2005, Lawlor began working for Shamrock Companies, Inc.(Shamrock), a competitor of North American, which sold similar promotional items.Prior to her departure from North American, Lawlor had interviewed for a sales position with Shamrock and communicated with its management.

¶ 5 Shortly after Lawlor left North American, the company began an investigation to determine if she had violated a noncompetition agreement.North American asked its longtime corporate attorney, Lewis Greenblatt, to conduct the investigation, and assigned its vice president of operations, Patrick Dolan, to serve as the company contact person.Greenblatt retained Probe, a private investigation firm which had previously conducted noncompetition investigations.Dolan provided Greenblatt and Albert DiLuigi, Probe's principal, with Lawlor's date of birth, her address, her home and cellular telephone numbers, and her social security number.Probe subsequently used this information when it requested that another investigative entity, Discover, obtain Lawlor's personal phone records.These records included information of the date, time, duration, and numbers called on her home and cell phones for certain periods in 2005.The material obtained by Discover was forwarded to Probe, who faxed the information to North American.Thereafter, some of North American's employees attempted to verify if any of the numbers belonged to one of their customers.

¶ 6 In August 2005, Lawlor filed suit against North American seeking outstanding commissions that she alleged were owed and a declaration concerning the enforceability of the noncompetition agreement.After learning of North American's investigation, she amended her complaint and alleged an intrusion upon seclusion tort based upon a “pretexting scheme” in which someone pretended to be her in order to obtain private phone records without her permission from her telephone carriers.In a counterclaim, North American alleged that Lawlor breached her fiduciary duty of loyalty by attempting to direct business to a competitor while in North American's employ and by communicating confidential corporate sales information to a competitor.North American also sought reimbursement of excess commission draw payments it had made to Lawlor.A six-day trial ultimately ensued on the parties' various claims in September 2009.The relevant evidence adduced at trial concerning North American's involvement in the investigation which led to investigators obtaining phone records, as well as Lawlor's alleged attempt to steer business and disclose confidential sales information to North American's competitors, is summarized below.

¶ 7 Testimony Relevant to Intrusion Claim

¶ 8 Relevant to Lawlor's intrusion claim, she testified that a few weeks after leaving North American, she suspected that she was being investigated by her former employer.In October 2005, she learned that North American had obtained records concerning her home and cell phones between April and September 2005.Lawlor's home telephone provider at the time was AT & T, and her cell phone service provider was U.S. Cellular.She testified that she did not request call logs from either company in 2005, nor did she consent to their release.She testified that after learning North American had obtained her phone records, she vomited, experienced anxiety for herself and her family, and had periods of sleeplessness.She further testified that she enhanced the security features on her phone, changed the locks on her home, and installed a security system.Lawlor testified that she had incurred $620,000 in legal fees to two law firms who had represented her in this case and that she had paid $335,000 of that amount.No other evidence was presented concerning her legal fees.

¶ 9John Miller, North American's chief executive officer and president, testified that he made the decision to investigate Lawlor after she left North American.He asked Greenblatt to be in charge of the investigation and assigned Dolan to be North American's contact person.He was aware that Greenblatt had hired Probe to conduct the investigation.Miller testified that Dolan had the authority to provide Lawlor's personal information from her employee file to obtain phone records.Miller further testified that Dolan showed him a list of handwritten phone numbers in relation to the Lawlor investigation.He reviewed the numbers but did not recognize any of them.He further testified that he assumed North American wanted phone records in connection with the investigation.

¶ 10 Greenblatt testified that he retained Probe to investigate a possible violation of Lawlor's noncompetition agreement.The investigation was for North American's benefit.He testified that he did not have any role in the investigation and he did not limit what Probe could do.¹Greenblatt testified that he did not have any discussion with Probe concerning investigative techniques and he did not receive any updates or documents to review.He testified that he did not know whether Probe obtained Lawlor's phone records.Greenblatt's law firm paid Probe and was then reimbursed by North American.

¶ 11 DiLuigi testified that he is the president of Probe, a private investigation firm, and that he was hired by Greenblatt to investigate Lawlor.Probe had conducted other noncompetition investigations and had obtained phone records.He testified that Dolan wanted him to obtain Lawlor's phone records.In order to do so, Probe would fill out preprinted forms from Discover and include the name, address, telephone number, date of birth, and social security number of the person whose records he sought.After receiving Lawlor's phone records, he would forward them to Dolan.DiLuigi was subsequently asked by Dolan to try to identify the owner of some of the numbers.The investigation ended around August 2005 when Dolan informed DiLuigi that there was no need to order more records.DiLuigi believed Discover was based in Florida, but that it was no longer in business.No witness from Discover testified at trial.

¶ 12 Dolan testified that he relied on Greenblatt and DiLuigi in performing the investigation and he did not instruct them on how it should be conducted.He provided Greenblatt and DiLuigi with Lawlor's address, social security number, date of birth and her cell and home phone numbers.Dolan was unaware of what they would do with this information.He testified that he did not request phone logs in this case, but that DiLuigi informed him that he typically obtains such logs in employment noncompetition cases.Dolan received from DiLuigi several faxes which contained hundreds of phone numbers in connection with the Lawlor investigation.He never asked how the phone records were obtained, but he was not surprised to receive them.Dolan conducted Internet searches on some of the phone numbers and consulted with other North American employees to see if they recognized any of the numbers.North American did not pay Probe directly, but Dolan “signed-off” on two separate payments to Greenblatt's law firm for the cost of the investigation.

¶ 13Todd Van Paris, North American's vice president and general manager, testified that ...