Slovinski v. Elliot

• Decision Date: 15 April 2010
• Docket Number: No. 107146.,107146.
• Citation: 340 Ill.Dec. 210,927 N.E.2d 1221,237 Ill.2d 51
• Parties: Jerry SLOVINSKI, Appellant,v.James ELLIOT et al., Appellees.
• Court: Illinois Supreme Court

237 Ill.2d 51

927 N.E.2d 1221

340 Ill.Dec. 210

Jerry SLOVINSKI, Appellant,v.James ELLIOT et al., Appellees.

No. 107146.

Supreme Court of Illinois.

April 15, 2010.

Tom Leahy and Michael Alkaraki, of Leahy & Hoste, of Chicago, for appellant.

Jeffrey Patrick Guzak, of Inverness, for appellee James Elliott.

David M. Hundley, of Chicago, for amicus curiae Ill. Trial Lawyers Ass'n.

OPINION

Justice BURKE delivered the judgment of the court, with opinion.

Following the entry of a default judgment in a defamation lawsuit, a jury awarded the plaintiff, Jerry Slovinski, $81,600 in damages for emotional distress and $2 million in punitive damages. The circuit court of Cook County remitted the punitive damage award to $1 million. On appeal, the appellate court affirmed the default judgment and the award for emotional damage but remitted the punitive damage award further, to $81,600. No. 1-05-0423 (unpublished order under Supreme Court Rule 23). Plaintiff appeals, challenging only the appellate court's judgment remitting the punitive damage award. We affirm the judgment of the appellate court.

Background

In July 1997, plaintiff filed a one-count complaint alleging defamation per se against Cherry Communications, Inc. (Cherry), and its chief executive officer, defendant James Elliot. Cherry was a telecommunications company which bought long-distance phone minutes in bulk at a discounted rate and then resold them for a profit. Plaintiff's cause of action was stayed in November of 1997 after Cherry filed for bankruptcy. Cherry has since dissolved and is no longer a party to this action.

The bankruptcy stay was eventually lifted and, in April of 2003, plaintiff filed a second amended complaint. In his complaint, plaintiff alleged that he was the chief financial officer of Cherry from July 1995 to May 1996. Plaintiff further alleged that one of his responsibilities as chief financial officer was to prepare monthly and annual financial statements, which would allow Cherry's suppliers to assess the financial strength and creditworthiness of the company.

In May 1996, plaintiff's employment was terminated. According to plaintiff's complaint, prior to his departure from Cherry he had completed Cherry's 1995 annual financial statement and the monthly statements for January, February, and March 1996. Plaintiff maintained that the financial statements demonstrated that the overall financial situation of Cherry was worsening.

Several months after his employment was terminated, plaintiff learned of a meeting that occurred in July 1996 between defendant and representatives from WorldCom, one of Cherry's suppliers. During this meeting, defendant and the WorldCom representatives discussed Cherry's debt to WorldCom, and WorldCom requested Cherry's 1995 annual financial statement and updated monthly statements. Plaintiff alleged that, during the meeting, defendant made false statements about plaintiff to the WorldCom representatives. Specifically, according to plaintiff, defendant stated that Cherry's financial statements were not available because plaintiff had not completed them, plaintiff “was not doing his job,” plaintiff “came in late and left early,” plaintiff was “sneaking off to do workouts,” and plaintiff “spent his time chasing pussy all day.”

After defendant failed repeatedly to answer discovery requests, the circuit court entered a default judgment against defendant pursuant to Supreme Court Rule 219(c)(v) (210 Ill.2d R. 219(c)(v)). A hearing was subsequently held before a jury on the question of damages. See 735 ILCS 5/2-1206(a) (West 2000).

At the hearing, plaintiff and his wife, Bonita Slovinski, were the only witnesses to testify. The bulk of plaintiff's testimony consisted of extensive descriptions of his work and salary history after leaving Cherry. Through this testimony, plaintiff attempted to show that defendant's defamatory statements had damaged his reputation in the telecommunications industry and resulted in a reduction in his income. Plaintiff also testified that defendant's defamatory statements caused him emotional distress. Plaintiff stated that he had a “very difficult conversation” with his wife about the defamatory statements and had to explain to her that they were not true. Plaintiff also testified that, because his professional reputation had suffered, he had been forced to take jobs out of town and had lost time with his family. Finally, plaintiff stated that he had not yet told his children about the statements, that this was something else he had to do, and that this was something that caused him emotional stress. On cross-examination plaintiff acknowledged that his firing, which occurred some two months prior to defendant's meeting with the WorldCom representatives, was unrelated to defendant's defamatory statements.

Bonita testified that she was “shocked” to learn of defendant's accusation that plaintiff had chased “women all day long.” She initially considered whether the accusation was true but “after thinking about it” realized it “was definitely a false accusation.” According to Bonita, plaintiff appeared less “energetic about going to work” after he learned about the defamatory statements. He also spent less time socializing with friends.

The evidence presented at the hearing regarding defendant's conduct was minimal.¹ Plaintiff testified that he received a phone call from the treasurer of WorldCom in November of 1996. According to plaintiff, the treasurer told him that during a meeting with WorldCom representatives in July 1996, defendant made a number of disparaging comments about plaintiff. Specifically, defendant told the WorldCom representatives that plaintiff had not completed Cherry's financial statements, that plaintiff “was not doing his job,” that plaintiff “came in late and left early,” that plaintiff was “sneaking off to do workouts,” and that plaintiff “spent his time chasing pussy all day.” Plaintiff testified that none of these statements were true. No further evidence was introduced regarding defendant's conduct and no evidence was introduced regarding defendant's finances.

During closing argument, plaintiff's attorney contended that an award of $2 million in punitive damages was necessary to punish defendant, largely because defendant had engaged in a premeditated scheme to harm plaintiff. Defendant's counsel, in turn, declined to address the issue of punitive damages. Instead, defense counsel argued to the jury that since punitive damages could only be awarded if compensatory damages were found, and since, in defense counsel's view, there was no basis for a compensatory award, there was no need to even discuss the issue of punitive damages.

The jury subsequently returned an itemized verdict form awarding plaintiff $0 for lost wages, $0 for damage to reputation, $81,600 in damages for emotional distress and $2 million in punitive damages. The circuit court denied defendant's posttrial motion seeking judgment notwithstanding the verdict, a directed verdict or a new trial. The court also denied defendant's motion seeking remittitur of the compensatory damage award. However, the circuit court granted defendant's motion seeking remittitur of the punitive damage award and reduced the award to $1 million. Defendant appealed. Plaintiff cross-appealed, challenging the circuit court's reduction of the punitive damage award.

The appellate court affirmed the trial court's entry of the default judgment and upheld the award of $81,600 for emotional distress. However, the appellate court entered a remittitur of $1,918,400 on the punitive damage award, reducing it to $81,600, conditioned on plaintiff's consent. No. 1-05-0423 (unpublished order under Supreme Court Rule 23). We granted plaintiff's petition for leave to appeal. 210 Ill.2d R. 315. We also allowed the Illinois Trial Lawyers Association to file an amicus curiae brief in support of plaintiff.

Analysis

Punitive damages “are not awarded as compensation, but serve instead to punish the offender and to deter that party and others from committing similar acts of wrongdoing in the future.” Loitz v. Remington Arms Co., 138 Ill.2d 404, 414, 150 Ill.Dec. 510, 563 N.E.2d 397 (1990). Punitive damages may be awarded when the defendant's tortious conduct evinces a high degree of moral culpability, that is, when the tort is “committed with fraud, actual malice, deliberate violence or oppression, or when the defendant acts willfully, or with such gross negligence as to indicate a wanton disregard of the rights of others.” Kelsay v. Motorola, Inc., 74 Ill.2d 172, 186, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978). To determine whether punitive damages are appropriate, “the trier of fact can properly consider the character of the defendant's act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause and the wealth of the defendant.” Restatement (Second) of Torts § 908(2) (1979). Because punitive damages are penal in nature, they “are not favored in the law, and the courts must take caution to see that punitive damages are not improperly or unwisely awarded.” Kelsay, 74 Ill.2d at 188, 23 Ill.Dec. 559, 384 N.E.2d 353.

Section 2-1207 of the Code of Civil Procedure (735 ILCS 5/2-1207 (West 2000)) provides that the “trial court may, in its discretion, with respect to punitive damages, determine whether a jury award for punitive damages is excessive, and if so, enter a remittitur and a conditional new trial.” Accordingly, when, as in this case, a circuit court reduces a jury's punitive damage award by remittitur, we review the court's decision for an abuse of discretion.

Initially, plaintiff contends that the appellate court erred in not reinstating the jury's original award because the jury's award of $2 million should have been left undisturbed by the circuit court. In plaintiff's view, the circuit court abused its discretion in remitting the jury's punitive damage award by any amount.

In granting defendant's...