Wright Dev. Group Llc v. Walsh

• Decision Date: 21 October 2010
• Docket Number: No. 109463.,109463.
• Parties: WRIGHT DEVELOPMENT GROUP, LLC, Appellee,v.John WALSH et al. (John Walsh, Appellant).
• Court: Illinois Supreme Court

238 Ill.2d 620

939 N.E.2d 389

345 Ill.Dec. 546

WRIGHT DEVELOPMENT GROUP, LLC, Appellee,

v.John WALSH et al. (John Walsh, Appellant).

No. 109463.

Supreme Court of Illinois.

Oct. 21, 2010.

Terrence J. Sheahan, Michael T. Franz, Joseph D. Newbold, of Freeborn & Peters, LLP, of Chicago, for appellant.Julie A. Bauer, Lindsay M. Beyer, of Winston & Strawn LLP, of Chicago, Christopher T. Bavitz, of Cambridge, MA, for amici curiae Citizen Media Law Project.David B. Goodman, Joseph L. Cohen, of Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, of Chicago, for appellee.

[345 Ill.Dec. 547 , 238 Ill.2d 622] OPINION

Chief Justice FITZGERALD delivered the judgment of the court, with opinion.

In this appeal, we are asked if defendant John Walsh's statement to a reporter

[345 Ill.Dec. 548 , 939 N.E.2d 391]

made during a public forum inside an alderman's office was immunized from a defamation lawsuit under the Citizen Participation Act (735 ILCS 110/1 et seq. (West 2008)). The trial court found the statement was not immune from suit. The appellate court dismissed Walsh's appeal as moot. No. 1–08–2783 (unpublished order under Supreme Court Rule 23). For the following reasons, we reverse and remand.

BACKGROUND

The following facts are found in the record and are not in dispute. Two limited liability companies, Sixty Thirty LLC and Wright Management, LLC, and two individuals, W. Andrew Wright and his son James A. Wright, were involved in the conversion of a 22–story, 262–unit condominium building at 6030 North Sheridan Road in Chicago. Andrew and James Wright are members of both Sixty Thirty and Wright Management. Andrew and James Wright are also members of a third limited liability company, the present plaintiff, Wright Development Group, LLC. Wright Development, Wright Management, and Sixty Thirty all share the same business address in Palatine.

Defendant John Walsh purchased a unit at 6030 North Sheridan Road (hereinafter 6030 building) and later became the 6030 N. Sheridan Condominium Association's president. On May 5, 2006, the Association filed a lawsuit in the circuit court of Cook County alleging, inter alia, fraud against various persons and entities responsible for the conversion of the building into condominiums. The defendants in the 6030 building lawsuit included Sixty Thirty, Wright Management, and Andrew and James Wright. Wright Development Group, LLC, was not a named defendant.

On July 10, 2007, a public meeting was held at the office of the local alderman, Mary Ann Smith. The alderman's chief of staff indicated the purpose of the meeting was to provide the local residents of the 48th Ward with a public forum to communicate the problems they had experienced with developers and contractors building and renovating condominium buildings in the ward. A public notice stated the purpose of the meeting was to obtain public input for a proposal to reform the Municipal Code with respect to the sale of condominiums.

Walsh attended the public meeting with another 6030 building resident, Mark Hrycko. Walsh stated he attended the meeting for the purpose of providing information to his elected representative and her staff regarding problems his condominium association experienced with the developers of his condominium building. Out of the dozens in attendance, approximately 12 persons spoke at the meeting, which was moderated by two aldermanic representatives. During the meeting, Walsh raised his hand, stood up, and discussed the repairs at his building and the lawsuit against the developer. Other citizens also shared their experiences and problems with condominium construction in the area. After the formal question and answer session had ended, they remained at the office for approximately 15 or 20 minutes, standing with the other participants in a “mingling” session with representatives from the alderman's office.

During this mingling session, Walsh spoke with other citizens about the problems with their buildings. As he was walking toward the exit, Walsh was approached by a staff reporter for a local newspaper, Lorraine Swanson. According to Walsh, the reporter asked him and other citizens “follow up” questions relating to the earlier provided information. Walsh believed his discussions with the reporter were “continuing to further participate in

[345 Ill.Dec. 549 , 939 N.E.2d 392]

what the purpose of the meeting was” because he discussed the problems with his building, including the association's need to take out a $1.8 million loan, and the lawsuit against the developer. Walsh did not refer to the builders as Sixty Thirty, but as the “Wright Development Group” or “the Wright Group * * *. Because that's what it is. It's the Wright Group. It's the Wrights.” He stated, “whenever I think of the developer, I think of the Wrights * * * because to me that's the developer * * *. I think of Andrew and Jamie.” He was unaware of the full, specific name “Wright Development Group, LLC,” prior to the lawsuit.

Walsh then left the meeting with Hrycko while aldermanic staff remained in the office in discussion with other citizens. Walsh later received a phone call from the reporter requesting the developer's telephone number. Walsh and Hrycko met on another date in front of the building with a photographer to take a picture which appeared with the reporter's article. The topic of the building was not discussed at this session.

The alderman's chief of staff stated, “The information provided by 48th Ward residents at the July 10, 2007, meeting was used by Alderman Smith and her staff for the purpose of developing legislative measures to halt fraud and misconduct by developers and contractors building or renovating condominium buildings.” Alderman Smith further asked a special task force established by the City of Chicago's law department to investigate the outstanding problems experienced with certain buildings discussed at the public meeting. The City of Chicago's law department filed suit against several developers, general contractors, and lenders.

Walsh's statements to the reporter were republished on August 8, 2007, in the Pioneer Press by Pioneer Newspapers, Inc., and Sun–Times Media Group, Inc. The newspaper article, entitled “Condo boom creates glut of horror stories,” referred to “Wright Development Group.” The introductory paragraph to the article states: “Among the signs of saturation in the city's condominium market is the barrage of complaints from new condo owners disillusioned by what they say are shoddy construction and shady deals.” The Pioneer article further provides, in part:

“After racking up a $1.8 million special assessment, an Edgewater condominium association sued Wright Development Group, developers of a 22–story, 262 unit conversion building at 6030 N. Sheridan Rd., for fraud. Residents said that when they bought their units, the developers told them that the building had a new roof and elevator system.

‘The roof was actually a liquid membrane placed over seven layers of old, bad roof. All of the roofing had to be removed down to the concrete deck, with a completely new roof installed,’ said John Walsch [ sic ], president of the 6030 N. Sheridan Road Condominium Association.

While the elevator cabs were brand spanking new, the mechanical and electrical equipment was the same from when the building was first built 50 years ago. The night before the condominium association was to take over the building from the developers and assume legal responsibility for its maintenance and upkeep, the developers allegedly contracted a new management company and retained an attorney to represent the condominium association.

‘We said no, and fired the management company and attorney,’ Walsch [ sic ] said.”

The remainder of the article detailed other citizen complaints and a plan of action by the City's law department.

[939 N.E.2d 393 , 345 Ill.Dec. 550]

On October 4, 2007, Wright Development filed a complaint for defamation action against John Walsh, Pioneer Newspapers, Inc., and Sun–Times Media Group, Inc., alleging defamation per se. The complaint alleges “at the time Walsh published the false statements to Ms. Swanson, Walsh, as the president of the Association, knew the true identity of the developer of the Building to be Sixty Thirty, LLC and not Wright [Development].” Walsh and the other defendants responded to the complaint with various motions to dismiss under section 2–615 of the Code of Civil Procedure (735 ILCS 5/2–615 (West 2008)). Prior to the completion of the briefing schedule on those motions, Walsh filed a separate motion to dismiss, entitled “Motion to Dismiss Plaintiff's Complaint” pursuant to the Citizen Participation Act (735 ILCS 110/1 et seq. (West 2008)). In this motion, Walsh asserted that Wright Development's lawsuit was a “strategic lawsuit against public participation,” or “SLAPP” (735 ILCS 110/5 (West 2008)), which should be dismissed under the Act. Walsh sought a stay of the briefing on the various previously filed section 2–615 motions.

Walsh presented this motion under the Act to the trial court on April 21, 2008. On that date, the trial court stayed all further action, including briefing and discovery, on the section 2–615 motions. The trial court, pursuant to section 20 of the Act, limited Wright Development's discovery to “the issue of whether Walsh's acts are not immunized, or were not in furtherance of acts immunized from, liability under the Citizen Participation Act.” Discovery included depositions of Walsh and Hrycko.

On July 29, 2008, the trial court held a hearing on Walsh's motion under the Act. At the hearing, the trial court ruled in open court in favor of Wright Development and denied Walsh's motion. In an oral statement, it held Walsh's statement to the reporter fell beyond the scope of the Act:

“Because I don't see the Act applying to statements that are made to a reporter after a meeting because the Act talks about giving you the right to address the...