Stein v. Clinton A. Krislov & Krislov & Assocs., Ltd.

• Decision Date: 13 September 2013
• Docket Number: Docket No. 1–11–3806.
• Parties: Robert J. STEIN III, Plaintiff–Appellant, v. Clinton A. KRISLOV and Krislov and Associates, Ltd., Defendants–Appellees.
• Court: United States Appellate Court of Illinois

2013 IL App (1st) 113806
999 N.E.2d 345
376 Ill.Dec. 462

Robert J. STEIN III, Plaintiff–Appellant,
v.
Clinton A. KRISLOV and Krislov and Associates, Ltd., Defendants–Appellees.

Docket No. 1–11–3806.

Appellate Court of Illinois, First District, Sixth Division.

Opinion filed June 28, 2013
Rehearing Denied Sept. 9, 2013
Modified Opinion filed Sept. 13, 2013

Reversed and remanded.

[999 N.E.2d 348]

DiVencenzo Schoenfield Swartzman (Anthony S. DiVincenzo, of counsel), and Law Offices of Bahtiar Hoxha (Bahtiar Hoxha, of counsel), both of Chicago, for appellant.

Ungaretti & Harris LLP, of Chicago (Susan G. Feibus, Richard H. Tilghman IV, and Alexander J. Darr, of counsel), for appellees.

[999 N.E.2d 349]

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

OPINION

¶ 1 Plaintiff Robert Stein sued defendants Clinton Krislov and Krislov & Associates, Ltd. (K & A), for libel, violation of the Illinois Wage Payment and Collection Act (Wage Act) (820 ILCS 115/1 (West 2002)), and breach of contract. Upon defendants' motion, the trial court dismissed plaintiff's third amended complaint, finding that defendants were entitled to immunity from all of plaintiff's claims pursuant to the Citizen Participation Act (Act) (735 ILCS 110/1 et seq. (West 2008)), commonly referred to as the anti-SLAPP (Strategic Lawsuits Against Public Participation) statute.

¶ 2 On appeal, plaintiff argues the Illinois Supreme Court's recent decision in Sandholm v. Kuecker, 2012 IL 111443, 356 Ill.Dec. 733, 962 N.E.2d 418, requires reversal because plaintiff's claims were not solely based on defendants' acts in furtherance of their rights of petition, speech, association, or other participation in government. Defendants respond that dismissal of all of plaintiff's claims was proper because they are entitled to immunity under the Act. Defendants also argue that the alleged defamatory act was protected by the absolute privileges for statements made in judicial proceedings and statements made in the discharge of a duty under the express authority of law.

¶ 3 Based on the following, we reverse the trial court orders dismissing plaintiff's third amended complaint and awarding defendants attorney fees under the Act, and we remand this cause.

¶ 4 I. BACKGROUND

¶ 5 This case appears before us a second time. In the previous interlocutory appeal, defendants argued the trial court erred in denying their motion to dismiss, which raised the defense of absolute privilege against plaintiff's libel claims. We dismissed defendants' interlocutory appeal for lack of jurisdiction and concluded that the Act did not confer subject matter jurisdiction on this court. Stein v. Krislov, 405 Ill.App.3d 538, 345 Ill.Dec. 675, 939 N.E.2d 518 (2010). Thereafter, however, the Illinois Supreme Court, on February 16, 2011, amended Supreme Court Rule 306(a)(9) to allow an interlocutory appeal by permission from an order denying a motion to dismiss under the Act.

¶ 6 We adopt from our prior opinion those facts relevant to the current appeal:

“Plaintiff is an attorney that was employed by K & A from 1994–2001. Krislov is the sole shareholder. After leaving K & A, plaintiff and his firm were named as one of three firms representing the plaintiff on a motion for class certification in an action in a federal district court in Pennsylvania. While performing unrelated research, Krislov discovered plaintiff's motion for class certification in the Pennsylvania case. Attached to the motion was a description of plaintiff's and his firm's prior experience. On June 13, 2005, Krislov sent an unsigned letter to the judge presiding over the Pennsylvania case, advising that the representations made by plaintiff regarding his experience were ‘beyond puffing’ and were ‘simply misstatements, known by the filers to be untrue.’ The federal judge contacted the attorneys for the parties and provided them with a copy of Krislov's letter. On June 24, 2005, plaintiff responded by letter to the federal judge, disputing Krislov's claims and providing supporting documentation to verify plaintiff's and his firm's experience. On July 14, 2005, Krislov sent a reply letter to the federal judge, responding to plaintiff's June 24,

[999 N.E.2d 350]

2005, letter. Ultimately, class certification was granted as to count I and denied, for reasons unrelated to Krislov's letter, as to counts II and III.

On May 10, 2006, plaintiff filed his first amended complaint against defendants, alleging libel and libel per se as a result of Krislov's letter, in addition to claims for vacation and bonus pay allegedly owed to him from his K & A employment. Defendants filed a motion under section 2–619 of the Code of Civil Procedure (Code) (735 ILCS 5/2–619 (West 2004)) to dismiss the libel claims, arguing that the June 13, 2005, letter was absolutely privileged. On September 20, 2006, the trial court granted defendant's motion to dismiss the libel claims. In response, plaintiff filed a motion to reconsider. On December 6, 2006, the trial court reversed its September 20, 2006, order, finding instead that the June 13, 2005, letter was not absolutely privileged. The libel claims were reinstated.

On January 11, 2007, defendants moved to reconsider the December 6, 2006, order. On February 1, 2008, the trial court denied the motion to reconsider, finding that ‘[a]bsolute privileges must be narrowly construed, and where an attorney has injected himself into litigation with which he has absolutely no connection, we do not find that any kind of absolute privilege exists' (emphasis in original), and that Krislov had no absolute duty under the Illinois Rules of Professional Conduct to report misconduct elsewhere.

On February 29, 2008, plaintiff filed a third amended complaint,[¹] realleging the libel claim and claims for uncompensated vacation and bonus pay. On August 26, 2009, defendants filed a motion to reconsider the trial court's February 1, 2008, order denying defendants' motion to reconsider the trial court's September 20, 2006, finding that the letter was not absolutely privileged. Defendants additionally filed a motion to dismiss the libel claim based on the Citizen Participation Act (Act). Defendants argued, for the first time, that they were immunized under the Act because the libel suit was filed in response to Krislov's exercise of his constitutional rights to free speech and participation in government.

On November 20, 2009, the trial court denied defendants' motion to reconsider its finding that the letter was not absolutely privileged where defendants relied on Ficaro v. Funkhouser, Vegosen, Liebman & Dunn, Ltd. [ Betzold ] , Nos. 1–07–1469, 1–07–3433 [391 Ill.App.3d 1110, 367 Ill.Dec. 834, 982 N.E.2d 984] cons. (July 31, 2009) (unpublished order pursuant to Supreme Court Rule 23), to support the allegation that there had been a change in the law. The trial court held that defendants' reliance on an unpublished, nonprecedential order was improper. The trial court further held that the Act, which was enacted on August 28, 2007, could not provide immunity because it was not created until after plaintiff's June 13, 2005, letter and the filing of plaintiff's lawsuit on May 10, 2006, and the Act did not have retroactive application.

Defendants filed a notice of interlocutory appeal citing Supreme Court Rule 307(a) (188 Ill.2d R. 307(a)) and section 20(a) of the Act (735 ILCS 110/20(a) (West Supp.2007)) on December 17, 2009.” Id. at 538–40, 345 Ill.Dec. 675, 939 N.E.2d 518.

As previously stated, in November 2010, we dismissed the interlocutory appeal for lack of jurisdiction.

[999 N.E.2d 351]

¶ 7 In January 2011, defendants moved the trial court to reconsider its denial of their motion to dismiss under the Act, arguing that Shoreline Towers Condominium Ass'n v. Gassman, 404 Ill.App.3d 1013, 1023, 344 Ill.Dec. 441, 936 N.E.2d 1198 (2010), recently held that the Act had retroactive application. On March 16, 2011, the trial court granted defendants' motion and dismissed plaintiff's third amended complaint in its entirety. In July 2011, the trial court entered final judgment and awarded attorney fees and costs to defendants pursuant to the Act in the amount of $99,334.18.

¶ 8 In November 2011, the trial court entered a written order denying plaintiff's motion to reconsider the dismissal of his third amended complaint. For the first time, plaintiff argued that defendants' conduct was not immunized by the Act and that the court separately should have considered plaintiff's libel, wage, and contract claims. The trial court disagreed. Relying on Hytel Group, Inc. v. Butler, 405 Ill.App.3d 113, 345 Ill.Dec. 103, 938 N.E.2d 542 (2010), the trial court found that plaintiff's wage and contract claims were “filed only in response to Defendants' motion to dismiss based on” the Act and that plaintiff failed to present clear and convincing evidence that the claims were not in response to or in retaliation for defendants' protected conduct.

¶ 9 Finally, in December 2011, the trial court granted defendants' supplemental petition for attorney fees, awarding defendants a total of $120,420.43 in fees and costs. This timely appeal followed.

¶ 10 II. ANALYSIS

¶ 11 Plaintiff contends the trial court erred in dismissing his meritorious claims for libel, violations of the Wage Act, and breach of contract where the Illinois Supreme Court's recent decision in Sandholm established that the Act did not create a new immunity for defamation and that the Act applies only to meritless, retaliatory lawsuits, which is not the case here. Sandholm was decided on January 20, 2012, while this case was pending on appeal. Generally, a decision of our supreme court applies retroactively to causes pending at the time it is announced, including cases on direct review in the appellate court. Miller v. Gupta, 174 Ill.2d 120, 128, 220 Ill.Dec. 217, 672 N.E.2d 1229 (1996). According to plaintiff, application of Sandholm to this case demonstrates that the trial...