Defamation Per Quod Requires Proof Of Special Damages
HUKIC v. AURORA LOAN SERVICES (November 20, 2009)
Avdo Hukic took out a mortgage in 1997. The monthly obligation was $1335. The agreement allowed him to pay taxes and insurance directly -- as long as he provided proof of payment to the lender. Through no fault of his own, his April 1998 payment was processed for $200 less than the required amount. Although the lender notified Hukic of the error, he took no steps to rectify it. Instead. Hukic continued to pay the correct amount each month, but the lender always considered him one month in arrears because of the continuing shortage. At about the same time, the lender advised Hukic that it would start to pay the taxes and insurance unless Hukic provided proof of payment. Hukic did not respond. The lender set up an escrow for the payments and advised Hukic of a new monthly payment amount. Hukic continued to pay the original $1335 each month. The lender, now Aurora Loan Services, reported the mortgage to credit agencies as delinquent in November of 1999. In early 2000, Aurora assigned the loan to Ocwen. Ocwen notified Hukic of his default but continued to pay the taxes and insurance. In January of 2001, Hukic's lawyer advised Aurora that he was paying his taxes directly and complained about negative information on credit reports. Hukic filed a multiple-count suit against Aurora and Ocwen. The court dismissed seven counts and granted summary judgment to the defendants on the Fair Credit Reporting Act, breach of contract and tortious interference with prospective economic advantage counts. Hukic appeals.
In their opinion, Judges Bauer, Evans and Williams affirmed. The Court first considered its jurisdiction-and first considered diversity jurisdiction, the basis of the original removal to federal court. The Court pointed out several problems: Aurora was a limited liability company, the citizenship of an L.L.C. is the citizenship of its members, its only member was a federally chartered savings association, the citizenship of a federally chartered savings association was in doubt under the law, a federal statute that clarified an association's citizenship was not enacted until after the date of removal, and the statute clarifying the citizenship question only applied if the association was a party in a lawsuit (instead of, as here, the member of a party). Luckily, the Court was able to bypass those issues because it concluded that the presence of the FCRA claim provided federal question jurisdiction. Since the state law claims arose out of the same nucleus of fact, they were covered by supplemental federal jurisdiction. After rejecting several procedural arguments, the Court addressed the merits. The Court affirmed the summary judgment on the breach of contract, tortious interference and FCRA claims. It concluded that Hukic was in default and that Aurora and Ocwen thus never provided false information to credit agencies. The Court then addressed the dismissal of the defamation claim on statute of limitations grounds. Like the jurisdictional analysis, the Court's analytic path was tortured. It included discussion of the defamation limitations period, the discovery rule, the continuing violation rule and the single publication rule. Concluding that the Illinois Supreme Court would apply neither the single publication rule nor the continuing violation rule to the facts and therefore that Hukic could maintain a claim for defamation for statements made by Aurora within a year of the filing of the suit, the Court nevertheless affirmed the dismissal. Illinois requires that special damages be pled in a defamation per quod case, which this is. Hukic alleged no harm from the reports that are actionable. Finally, the Court affirmed the dismissal of the intentional infliction of emotional distress claim because it did not allege conduct so extreme or outrageous to state a claim under Illinois law.
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Kamelgard and Macura are both 
David Farr was a respiratory therapist at St. Francis Hospital. In 2000, he was the only male among the seven respiratory therapists in his department. There was a single computer in the department for the use of all the therapists. Although the hospital policy was for each therapist to log on with a unique password before each use, the practice was quite different. Typically, the first user of the day logged on with his or her password and all later users piggybacked on that login. When one of the therapists discovered inappropriate material on the computer, the hospital conducted an investigation. It found that: a) pornographic and hacking sites were accessed at the computer, b) Farr was logged on to the computer at the time the sites were accessed, and c) that Farr was the only one working on one particular day when a substantial amount of the activity took place. Farr eventually admitted that he was responsible for visiting some of the sites and that the others may have been generated by a computer virus during his use of the computer. The hospital terminated Farr's employment. Farr sued the hospital, alleging gender discrimination and a breach of implied covenant of fair dealing based on the employee handbook. The court granted summary judgment to the hospital. Farr appeals.
Giant Screen Sports (“GSS”) entered into an agreement with Sky High whereby GSS would distribute three Sky High films. GSS agreed to pay Sky High $3 million dollars over three years, after distribution. Sky High financed the production of one of the films through Canadian Imperial Bank of Commerce (“CIBC”). Although Sky High assigned its rights to the $3 million to CIBC, CIBC also required Sky High to obtain insurance from Export Development Canada (“EDC”) in the event of GSS’ default. EDC insisted on modifications to the distribution agreement between GSS and Sky High, including an accelerated payment schedule and a guarantee of Sky High’s obligation. In late 2002, Sky High provided contract documents to CIBC evidencing the changes and purportedly signed by GSS. GSS maintains that it did not sign and had no knowledge of the new agreements. In 2004, CIBC attempted to trigger the protections in the agreements. GSS notified CIBC that the signature was not that of the GSS officer. When presented by CIBC with the group of agreements, all purportedly bearing a GSS signature, GSS advised CIBC that it would cooperate with its investigation of forgery but only through legal process. CIBC did not tell CIBC that the signatures were forged but stated that CIBC “would not like” the answers to the questions of legitimacy. CIBC then filed an insurance claim with EDC, alleging a loss as a result of GSS’ failure to make the first payment under the agreements. In response to inquiries from EDC, CIBC stated that: a) GSS was in default, b) CIBC was unaware of any disputes that would impede payment, and c) CIBC knew of no reason why GSS did not pay. GSS brought an action against Sky High and CIBC. Against CIBC, GSS alleged that CIBC’s statements to EDC concerning GSS were defamatory per se. The district court granted summary judgment to CIBC on the ground that the statements were susceptible of an innocent construction. GSS appeals.