Leyshon v. Diehl Controls North Am. Inc.
| Decision Date | 25 January 2011 |
| Docket Number | No. 1–09–1848.,1–09–1848. |
| Parties | Wallace C. LEYSHON, Plaintiff–Appellee,v.DIEHL CONTROLS NORTH AMERICA, INC. and Christoph Weigand, Defendants–Appellants. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
E. King Poor, Charles Harper, J., Jacquelyn T. Pinnell, Joshua M. Schneider, Quarles & Brady LLP, Chicago, IL, for Appellants.Constantine L. Trela, Jr., Jeremy G. Mallory, Sidley Austin LLP, Chicago, IL, Caesar A. Tabet, Mark H. Horwich, Tabet DiVito & Rothstein LLC, Chicago, IL, for Appellees.Presiding Justice HALL delivered the opinion of the court:
[407 Ill.App.3d 2 , 349 Ill.Dec. 371] The plaintiff, Wallace C. Leyshon, brought suit against the defendants, Diehl Controls North America, Inc. (DCNA) and Christoph Weigand,1 alleging their breach of an employment contract, violation of the Illinois Wage Payment and Collection Act ( 820 ILCS 115/1 et seq. (West 2006)), and defamation. Following trial, the jury returned a verdict for the plaintiff and awarded damages. On the defamation
[349 Ill.Dec. 372 , 946 N.E.2d 868]
claim, the jury awarded the plaintiff $2 million in compensatory damages and $10 million in punitive damages. The trial court denied the defendants' posttrial motion but granted their request for a remittitur, reducing the punitive damages award to $6 million.
On appeal, the defendants challenge only the finding of liability on the defamation claim and the amount of the damages awarded on that claim. They contend that: (1) under the innocent-construction rule, there was no defamation per se, as a matter of law, (2) “invited defamation” was a complete defense to the defamation per se claim; (3) the compensatory damages award was excessive, and (4) the punitive damages award was excessive under Illinois common law and violated due process.
I. Facts
Diehl AKO Stiftung & Company, KG (Diehl), located in Germany, is the parent company of DCNA. The plaintiff had been president of DCNA since 2001. The plaintiff's employment was pursuant to a written contract. His most recent contract was effective January 1, 2005, through December 31, 2007. The contract was signed on behalf of Diehl by Dieter Neugebauer, chairman of the supervisory board of Diehl, and Dr. Weigand, a member of the supervisory board.
Relevant to the defamation allegations, the contract provided as follows:
On February 1, 2006, Dr. Weigand informed the plaintiff that he was terminated for cause.
The parties do not dispute the facts surrounding the utterance of the words or the words themselves the plaintiff alleged defamed him. Those facts are summarized below.
On February 1, 2006, the plaintiff was in his office at DCNA. At 11 a.m., Heinz Ruediger Kraemer, chief financial officer of DCNA, entered the plaintiff's office accompanied by Dr. Weigand, the new chairman of DCNA. Almost immediately, Dr. Weigand announced to the plaintiff that he was fired. When the plaintiff asked the reason, Dr. Weigand replied that he was not required to give a reason. Citing the investment of his time and his career in DCNA, the plaintiff continued to press Dr. Weigand for a reason for his termination. Again, Dr. Weigand told the plaintiff he did not have to tell him the reason.
After summoning John Dugan, a part-time human resources employee, to serve as a witness, the plaintiff requested that Dr. Weigand repeat what he had stated to the plaintiff. Dr. Weigand repeated that the plaintiff was terminated. When the plaintiff then asked what he was terminated for, Dr. Weigand responded, “ ‘for cause.’ ” When the plaintiff expressed incredulity, Dr. Weigand stated, “ ‘You are terminated for cause under the terms of your employment agreement.’ ” The plaintiff responded, “ ‘You are telling me that you are firing me for gross insubordination, for gross misconduct, for gross negligence and willful violation of the law?’ ” Dr. Weigand responded, “ ‘Yes' ” and would not elaborate further. When the defendant asserted he had rights as an employee, Dr. Weigand informed him that Diehl was fully committed to this decision
[349 Ill.Dec. 373 , 946 N.E.2d 869]
and would commit its “ample” resources to contest any steps the plaintiff might take. The plaintiff was ordered to vacate his office immediately.
The plaintiff testified as follows. After his termination, he returned home and informed his wife that he had been terminated for cause. She became extremely upset. The plaintiff found it very humiliating to have to tell his teenage son that he had been fired for cause. Two weeks later, he attended an employees dinner at which “nobody could look [him] in the eye.”
The plaintiff explained that he took his reputation very seriously because it was the basis of his career in the industry in which he worked. The plaintiff's reputation impacted how effective he was in business and whether he appealed to business people. Given his experience, the companies he had worked for and how he was able to attract people to work for him, his reputation was very valuable. He was shocked by his termination because there was no basis for it. He was very humiliated to be terminated for cause. The view in the United States is that termination for cause means it is felony based or involves sexual misconduct.
According to the plaintiff, the alleged defamatory statement impacted his standing in the business community and his ability to find work. He contacted several of the companies he had done business with while at DCNA, as well as several competitors. Despite repeated attempts to make contact with people at these companies, he received no response from any of them. Even the people he had regularly communicated with prior to his termination did not return his calls.
Kathleen Leyshon, the plaintiff's wife, testified as follows. Over the years, Mrs. Leyshon had been involved with the plaintiff's various business ventures. From her attendance at industry meetings and conventions, she observed that the plaintiff was highly regarded among the leaders in his industry. The plaintiff was honored with the Illinois Entrepreneur of the Year award, as well as a supplier award from Maytag, which was viewed as beneficial to DCNA.
According to Mrs. Leyshon, when the plaintiff returned home after his termination, he did not look well and was quite pale. When he told her the reasons for the termination, she was shocked and found it unbelievable. After building up a very good reputation, the whole experience of being terminated and having to remove his belongings from his office was extremely traumatic, upsetting and humiliating for the plaintiff. At a party the plaintiff and she organized to say goodbye to the employees, many of them expressed concern for the plaintiff and his family.
The plaintiff also presented evidence that his termination was the result of the defendants' premeditated scheme to rid themselves of the plaintiff. The plan required that the plaintiff be fired for cause, even though the defendants knew there was no basis for doing so. Mr. Neugebauer testified that Dr. Weigand wanted the plaintiff terminated for cause in order to avoid having to pay him the sums he would be entitled to under his contract. In addition, the plaintiff had voiced concern to Dr. Weigand over certain of Diehl's tax practices.
Richard Sbarbaro, an executive search management consultant, testified regarding the effect termination for cause had on the plaintiff's ability to find employment. Based on Mr. Sbarbaro's experience, the plaintiff would not be considered for a comparable position because of the implications of the termination for cause. Termination for cause referred to gross misconduct
[349 Ill.Dec. 374 , 946 N.E.2d 870]
significant financial malfeasance, sexual harassment or drug use on the job. Mr. Sbarbaro would never recommend a candidate who had been terminated for cause to a prospective employer.
Based on his 30 years of experience and his sensitivity to such issues, Mr. Sbarbaro believed that the plaintiff's termination for cause was known in the market place. He explained that it was very difficult to maintain confidentiality in business. The fact that the plaintiff's significant contacts refused his telephone calls signaled that the plaintiff's termination for cause was known outside of DCNA. In addition, it had been 2 1/2 years, and the plaintiff had yet to secure gainful employment.
According to the defendants' witnesses, following the plaintiff's termination from DCNA, DCNA customers were told that the plaintiff was no longer with DCNA but were not told that the plaintiff was discharged for cause. While searching for a replacement for the plaintiff, Dr. Weigand told a recruiter that the plaintiff had been terminated suddenly because, while sales were increasing, profits were not.
The jury returned a verdict finding in favor of the plaintiff and against the defendants on the claim of defamation per se.2 The jury awarded the plaintiff $2 million in compensatory damages and $10 million in punitive damages. The trial court denied the defendants' posttrial motion but granted a remittitur of the punitive damages award and reduced the award to $6 million. The defendants appeal.
The defendants contend that the denial of their motion for a judgment n.o.v. was error because, under the innocent-construction rule, Dr. Weigand's statement, “ ‘You are terminated for cause under the terms of your employment agreement,’ ” was not actionable.3
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