Windy City Limousine Co. v. Milazzo, 1-16-2827

Citation2018 IL App (1st) 162827,123 N.E.3d 469,428 Ill.Dec. 740
Decision Date20 December 2018
Docket NumberNo. 1-16-2827,1-16-2827
Parties WINDY CITY LIMOUSINE COMPANY LLC, an Illinois Limited Liability Company, and Windy City Limousine Manager LLC, an Illinois Limited Liability Company, Plaintiffs-Appellants, v. Sal MILAZZO, Janet Milazzo, and Signature Transportation Group LLC, an Illinois Limited Liability Company, Defendants (Sal Milazzo and Janet Milazzo, Defendants-Appellees).
CourtUnited States Appellate Court of Illinois

2018 IL App (1st) 162827
123 N.E.3d 469
428 Ill.Dec.
740

WINDY CITY LIMOUSINE COMPANY LLC, an Illinois Limited Liability Company, and Windy City Limousine Manager LLC, an Illinois Limited Liability Company, Plaintiffs-Appellants,
v.
Sal MILAZZO, Janet Milazzo, and Signature Transportation Group LLC, an Illinois Limited Liability Company, Defendants

(Sal Milazzo and Janet Milazzo, Defendants-Appellees).

No. 1-16-2827

Appellate Court of Illinois, First District, FOURTH DIVISION.

December 20, 2018


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

428 Ill.Dec. 745

¶ 1 Windy City Limousine Company LLC and Windy City Limousine Manager LLC (collectively, Windy City) sued Sal Milazzo (Sal), Janet Milazzo (Janet) and their company, Signature Transportation Group LLC (Signature), based on the Milazzos' alleged misappropriation of Windy City's confidential information, which they then allegedly used to create Signature, a competing transportation company. During the course of litigation, the circuit court entered an agreed order between the parties that granted Windy City a temporary restraining order, barring the Milazzos from using, accessing, or distributing Windy City's confidential information. In the order, the Milazzos also made a representation about their prior conduct concerning Windy City's confidential information. Several months later, Windy City filed a petition seeking to hold both Milazzos in indirect criminal contempt for making a false representation in the temporary restraining order and violating the order itself. Windy City then dismissed Janet from the contempt proceedings but later reinstated her. Ultimately, on the Milazzos' motion, the circuit court dismissed the petition for failing to allege a violation of the temporary restraining order and denied Windy City's motion to reconsider.

¶ 2 In this appeal, Windy City contends that the circuit court erred when it dismissed its petition for indirect criminal contempt against the Milazzos and denied its motion to reconsider. For the reasons that follow, we affirm the court's rulings.

¶ 3 I. BACKGROUND

¶ 4 Since 2006, Windy City has operated a limousine and transportation company with a fleet of more than 200 vehicles primarily in the Chicagoland area. Windy City had employed the Milazzos, Sal as its vice president of sales and operations, and Janet as its controller. However, during a meeting on February 14, 2014, the Milazzos were fired.

428 Ill.Dec. 746
123 N.E.3d 475

¶ 5 A. Underlying Litigation

¶ 6 In April 2014, Windy City filed a complaint against the Milazzos and Signature, alleging that, after Windy City fired the Milazzos, they misappropriated its confidential information and used the information to create Signature, a direct competitor.

¶ 7 The Milazzos and Signature filed an answer, admitting that, due to the Milazzos' former positions at Windy City, they had access to its confidential information. They also admitted that, during the morning of February 15, 2014, after they were fired, "Janet copied the data in her Outlook file at Windy City," but they could not determine the "exact contents of the file" at the time they filed the answer. The Milazzos also filed various counterclaims against Windy City, including breach of contract and retaliatory discharge.

¶ 8 Windy City subsequently filed an amended complaint, alleging that, after the Milazzos learned of their firing at the February 14, 2014, meeting and while the meeting was still ongoing, Sal left the room and called Ryan Kaszmarski, Windy City's information technology manager. Sal asked Kaszmarski to download all of his computer files, but Kaszmarski refused. Early the following morning, according to the complaint, the Milazzos accessed a plethora of Windy City's records, including financial information, customer information, employee information and marketing information. The complaint alleged that they did this by e-mailing three personal email addresses of Janet's from her Windy City e-mail address and each time including a link to a folder that contained Windy City's information.

¶ 9 The complaint asserted that the Milazzos used this information and unlawfully created their new company, Signature, to directly compete with Windy City. The complaint requested that the Milazzos and Signature be temporarily and permanently enjoined from competing with Windy City and using its confidential information. Windy City brought several counts against them including one based on a violation of the Illinois Trade Secrets Act ( 765 ILCS 1065/1 et seq. (West 2014) ), one based on tortious interference with existing and prospective contractual relations as well as one based on alleged conversion of company assets.

¶ 10 In the Milazzos' and Signature's answer, they again admitted that, during the morning of February 15, 2014, Janet copied data in her Outlook file at Windy City. They also stated again that they could not determine the contents of that file at the time.

¶ 11 Shortly thereafter, on May 16, 2014, the parties had a court appearance where their attorneys were present, but the Milazzos themselves were not. The parties' attorneys presented the court with an agreed order that granted a temporary restraining order against the Milazzos and Signature. In the order, prior to the portion specifying the terms of the temporary restraining order, the parties agreed that, for the purposes of the order, confidential information would be defined as any nonpublic information related to Windy City's finances, customers, marketing efforts, research and development data, and employee information—a definition that substantially mirrored the definition of confidential information in Windy City's company operating agreements. Additionally, the order stated that the Milazzos and Signature:

"hereby represent that they have not, from and after February 14, 2014 to and including [May 16, 2014], used, reproduced, disclosed or otherwise distributed Confidential Information, or any materials containing Confidential Information in any manner that would be a violation
428 Ill.Dec. 747
123 N.E.3d 476
of this Order if it had been done after the entry of this Order."

The order continued and specified the terms of the temporary restraining order, which barred the Milazzos, Signature and any of their agents or employees from using, accessing, reproducing, disclosing or distributing any materials containing Windy City's confidential information for any purpose except as necessary to comply with litigation-related discovery. The order also required the Milazzos to return to Windy City within three days "all information, documents and property" that contained confidential information and all other property belonging to Windy City, regardless of whether such information contained Windy City's confidential information, as well as identify any person or entity to which the Milazzos disclosed confidential information.

¶ 12 B. Contempt Proceedings

¶ 13 At some point after the circuit court entered the temporary restraining order, Windy City believed that the Milazzos' representation therein about their actions concerning Windy City's confidential information from February 14, 2014, to May 16, 2014, was untruthful and also that they had violated the order itself.

¶ 14 As a result, on February 5, 2015, Windy City filed a petition for indirect criminal contempt against both Milazzos. Windy City began its petition by reviewing the facts that led to the issuance of the temporary restraining order, including the Milazzos' transfer of information to three personal e-mail addresses of Janet during the early morning hours of February 15, 2014. Windy City also pointed out that the Milazzos retained its property, including two laptop computers, which "revealed use after February 14, 2014." Windy City then highlighted that, in the temporary restraining order, specifically paragraph B, the Milazzos represented that they had not used, reproduced, disclosed or distributed any of its confidential information or any materials containing its confidential information from February 14, 2014 to May 16, 2014. Windy City, however, posited that:

"9. The statement in paragraph B was false.

10. Respondents transferred Confidential Information from the two Windy City computers in violation of the Order of May 16, 2014. Respondents made use of the Confidential Information in the commencement and conduct of the business of Signature in competition with the business of Windy City from and after February 14, 2014.

11. The actions of Respondents were not in the actual physical presence of the Court.

12. The actions of Respondents were contemptuous of the Court, in that Respondents lied as to their actions from February 14, 2014 until May 16, 2014, and procured the entry of the TRO by a statement that was knowingly false.

13. The actions of Respondents have continued to be contemptuous until this date, in that Respondents continue to use the Confidential Information in violation of the TRO."

Based on these alleged actions, Windy City requested that the Milazzos be held in indirect criminal contempt and each sentenced to six months' imprisonment as well as fined $500. Windy City's...

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3 cases
  • Erhardt v. Baldassarre (In re Erhardt), No. 20 C 0006
    • United States
    • U.S. District Court — Northern District of Illinois
    • 15 d3 Julho d3 2020
    ...refers to the fact that the "alleged contemptuous conduct occurs outside the direct presence of a judge." Windy City Limousine Co. v. Milazzo , 2018 IL App (1st) 162827, ¶ 40, 428 Ill.Dec. 740, 123 N.E.3d 469.4 Erhardt referred to 11 U.S.C. § 362(h) as providing relief for a willful violati......
  • Goodwin v. Matthews
    • United States
    • United States Appellate Court of Illinois
    • 20 d4 Dezembro d4 2018
    ... ... City of Evanston, 364 Ill. App. 3d 48, 61, 300 Ill.Dec. 800, 845 N.E.2d 689 ... ...
  • In re Pavlovich
    • United States
    • United States Appellate Court of Illinois
    • 16 d2 Abril d2 2019
    ...trial court prohibited). Second, it was outside the presence of the court; that made the contempt indirect. See Windy City Limousine Co. v. Milazzo , 2018 IL App (1st) 162827, ¶ 40, 428 Ill.Dec. 740, 123 N.E.3d 469 (indirect contempt takes place outside the presence of the court, while dire......

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