Cianci v. Pettibone Corp.

SIXTH DIVISION
July 31, 1998


Nos. 1-97-4175 & 1-97-4445 Consolidated

ENRICA CIANCI, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. ) No. 95 CH 7732
)
PETTIBONE CORPORATION, Beardsley ) The Honorable
Piper Division, JAMES HALL, and ) Sophia H. Hall,
MARY MENDEZ, ) Judge Presiding.
)
Defendants-Appellees. )
---------------------------------------)-----------------------
RENATE NOWOSAD, )
)
Plaintiff-Appellant, )
)
v. ) No. 95 CH 7657
)
PETTIBONE CORPORATION, Beardsley ) The Honorable
Piper Division, JAMES HALL, and ) Michael Kelly,
MARY MENDEZ, ) Judge Presiding.
)
Defendants-Appellees. )

JUSTICE GREIMAN delivered the opinion of the court:

Plaintiffs, Enrica Cianci and Renate Nowosad, brought suits
against defendants Pettibone Corporation, Beardsley Piper
Division (Pettibone), James Hall, and Mary Mendez alleging
defamation. The circuit court granted defendants' motion for
summary judgment on Cianci's claim and, after trial, the circuit
court entered judgment for defendants on Nowosad's claim. Both
plaintiffs appealed and this court consolidated the cases. For
the reasons that follow, we affirm.
On September 6, 1996, Cianci filed a second amended
complaint alleging defamation.[fn1] According to the complaint,
Cianci was employed by Pettibone with Hall as her supervisor and
Mendez as a member of management. Cianci alleged that on April
15, 1994, Hall falsely stated in the presence of others that
Cianci wrongfully made personal shipments via DHL courier
services at Pettibone, charged the services to the company
without permission from anyone in authority, did so secretly, and
personally profited from the shipments.
Cianci further alleged that on April 19, 1994, Hall
published a letter making "allegations of illegal DHL use by
[Cianci]" and terminating her employment. Cianci alleged that
the statements in the letter and those made by Hall were
published to nonmanagement employees of Pettibone, including but
not limited to John Dreier. Cianci alleged that Hall knew that
the statements were false because it was "a fringe benefit of
[Cianci's] employment with Pettibone" and her "use of DHL gratis
had been approved by Pettibone management."
Cianci also alleged that Mendez falsely testified before an
unemployment compensation hearing officer in regard to Cianci's
claim for benefits, stating that Cianci had been fired for
"taking company money via personal use of DHL at company
expense." Cianci claimed Mendez was aware of other employees
using DHL for personal letters at the company's expense and
Mendez herself used DHL for personal letters at the company's
expense. She also claimed that Mendez was aware of and approved
her use of DHL for personal letters.
In her deposition, Cianci stated that she worked as an
executive secretary for Pettibone and in 1991 she began assuming
customer service duties. On April 15, 1994, Tony Odarczenko, her
supervisor in the customer service department, asked her to
report to the conference room. Hall, Mendez, Renate Nowosad (a
coworker), and another member of the Pettibone staff were already
in the room. Hall had a list of DHL shipments sent from the
company which he presented to Cianci and Nowosad. He stated that
Nowosad and Cianci were going to be suspended for three days
because they used the DHL courier service without reimbursing the
company. It would later be determined whether they were still
employed or terminated. Nowosad stated that she "didn't do it,"
but no one else in the room said anything. Cianci later received
a letter terminating her employment.
Cianci reviewed the list of DHL shipments that had been
given to her during the meeting and admitted using the DHL
courier service to send various personal items without
reimbursing Pettibone for the charges. She admitted using the
service to send her mortgage and credit card payments and to send
a personal check order. She further admitted using DHL service
to send documents to her nephew in Italy. She stated that the
shipment to Italy included company equipment brochures.
Cianci identified Hall's letter terminating her employment,
which stated, in part:
"In the meeting held on April 15, 1994,
the issue of unauthorized personal use of the
DHL courier service was discussed. This
activity was discovered by an audit of the
DHL account where a number of unsigned DHL
shipping documents were discovered and
subsequently traced to employees.
At least 15 unauthorized DHL shipments
went to places where you conduct personal
business. Specifically, several mortgage
companies where you have or used to have
accounts apparently received your mortgage
payments via DHL. Another recipient was a
company that prints personal checks. The
'ship to' address for the checks was your
home address.
Unauthorized use of courier services is
a serious problem. We suspended your
employment for three days to consider further
action. Upon further review of this
situation we have decided to terminate your
employment. Your last day of official
employment will be April 20, 1994. We regret
having to take this action but feel it is in
the best long term interest of Beardsley and
Piper."

Cianci admitted that she did not know if Hall had showed the
letter to anyone else. She stated that she knew that two female
employees called Nowosad after the suspension and indicated that
they knew the reason for the suspension and ultimately the
termination, but Cianci did not know who told them. John Dreier,
another Pettibone employee, called her the day after she was
terminated and indicated that he knew the reason for the
termination, but Cianci did not know who told him. In his
deposition, Dreier stated that he had never seen the letter and
he did not know whether Hall had showed the letter to anyone.
Cianci claimed it was a common practice for employees to use
the DHL service and named several other employees who used DHL
for personal business. She knew of two employees who used DHL
for personal business because they told her, she knew of another
employee who used DHL for personal matters because his secretary
told her and she knew of another employee who used DHL for
personal business because she prepared the slips for him as his
secretary. She also stated that she knew that Mendez used DHL
for personal business because she saw a copy of a DHL ticket on
which she recognized Mendez's handwriting, and the shipment was
to Sicily and Mendez had mentioned that her neighbor was from
Sicily. Cianci stated that she did not know whether anyone from
Pettibone had authorized any of these individuals' use of the
service for personal business and none of the individuals had
told her that they were so authorized. Cianci stated that she
knew these individuals did not reimburse the company because John
Dreier told her they did not reimburse the company. Cianci asked
Dreier to check on this information after she was terminated.
Cianci admitted that she prepared the DHL slips herself when
she used the service for her personal business and that she did
not sign her name. When she used DHL for company business she
signed her name.
Cianci stated that in December of 1993, Mendez asked her if
she had sent something to Italy. Cianci replied affirmatively
and indicated that it was a shipment to her nephew. Mendez said
nothing else. She did not say Cianci was supposed to reimburse
the company.
Cianci submitted the affidavit of Dreier, who stated that
one of his duties as credit manager for Pettibone was "to accept
and record funds from shipments of personal items on DHL, UPS and
other services." He stated "[i]t was the practice of [Pettibone]
to allow such shipments without requiring reimbursement."
Defendants moved for summary judgment on the claim against
Cianci and the circuit court granted the motion. Cianci moved to
reconsider, but the court denied the motion. Cianci appealed,
arguing that the court erred in granting summary judgment.
Summary judgment should be granted only when the pleadings,
depositions, admissions, and affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law. 735 ILCS 5/2--
1005(c) (West 1996). Although a plaintiff need not prove her
case at this stage in the proceedings, she must present some
evidentiary facts to support the elements of her claim. Benamon
v. Soo Line R.R. Co., 294 Ill. App. 3d 85, 87 (1997). This court
reviews a summary judgment ruling de novo. McNamee v. State of
Illinois, 173 Ill. 2d 433, 438 (1996).
To prove a claim of defamation, plaintiff must show that
defendant made a false statement concerning plaintiff, that there
was an unprivileged publication of the defamatory statement to a
third party by defendant, and that plaintiff was damaged. Gibson
v. Philip Morris, Inc., 292 Ill. App. 3d 267, 272 (1997), citing
Krasinski v. United Parcel Service, Inc., 124 Ill. 2d 483 (1988).
Truth is a defense to a defamation action and, to establish this
defense, defendant need only show the truth of the "gist" or
"sting" of the defamatory material. Lemons v. Chronicle
Publishing Co., 253 Ill. App. 3d 888, 890 (1993). Only
"substantial truth" is required for this defense. Lemons. 253
Ill. App. 3d at 890. While substantial truth is normally a
question for the jury, where no reasonable jury could find that
substantial truth had not been established, the question is one
of law. Gist v. Macon County Sheriff's Department, 284 Ill. App.
3d 367, 371 (1996).
Defendants first assert that summary judgment was proper
because the statements were true. In her deposition, Cianci
admitted using the DHL service for personal business without
reimbursing the company. She stated, "I thought that it was okay
for employees to use. There was never anything said that we
could not use it." She claimed it was a common practice because
she knew that other employees used the service for personal use,
but she admitted that none of these employees had told her they
were so authorized and she did not know if they reimbursed the
company until she asked Dreier after she was terminated. She
also admitted that she did not sign her name when she used the
service for her personal business.
Cianci claimed Mendez authorized her use of the DHL service
for personal business by approving her shipment to her nephew in
Italy. Cianci's deposition indicates that Mendez asked Cianci in
December of 1993 if she had sent something to Italy and Cianci
replied affirmatively and said it was to her nephew. Cianci in
essence contends that because Mendez did not say she was supposed
to reimburse the company, she gave her approval. However, there
was no statement to that effect and the shipment to Italy
included company brochures. Thus, any authorization for that
shipment implied from the circumstances could not have presented
authorization for Cianci's numerous personal shipments.
In light of Cianci's own deposition, the undisputed facts
indicate that the statements made during the meeting, in the
letter, and at the hearing were substantially true. Cianci used
the company's courier service for personal use, without
authorization from anyone in authority at Pettibone and without
reimbursement.
Cianci argues that the circuit court erred in granting
summary judgment because Hall's and Mendez's statements were
defamatory per se. Under our common law, four categories of
statements are considered defamatory per se: (1) words that
impute the commission of a criminal offense; (2) words that
impute infection with a loathsome communicable disease; (3) words
that impute an inability to perform or want of integrity in the
discharge of duties of office or employment; and (4) words that
prejudice a party, or impute a lack of ability, in his or her
trade, profession, or business. Bryson v. News America
Publications, Inc., 174 Ill. 2d 77, 88 (1996). Cianci contends
the statements imputed the commission of a crime, that is,
stealing money from the company, and they imputed a want of
integrity in the discharge of her duties.
Even if we found the statements defamatory per se, Cianci's
claim must still fail because of the doctrine of qualified
privilege. A qualified privilege exists where a communication
that might be defamatory is not actionable because of the
occasion on which or the circumstances under which it was made.
Gibson, 292 Ill. App. 3d at 275. To determine whether the
privilege exists, the court must look to the occasion itself for
the communication and determine as a matter of law and general
policy whether the occasion created some recognized duty or
interest to make the communication so as to make it privileged.
Kuwik v. Starmark Star Marketing & Administration, Inc., 156 Ill. 2d 16, 27 (1993). Three conditionally privileged occasions are
recognized: (1) situations that involve some interest of the
person who publishes the defamatory matter; (2) situations that
involve some interest of the person to whom the matter is
published or of some third person; and (3) situations that
involve a recognized interest of the public. Kuwik, 156 Ill. 2d
at 29.
The statements made by Hall during the meeting and the
statements contained in the letter occurred in situations in
which the interests of a third person, the employer, was
involved. See Gibson, 292 Ill. App. 3d at 276 (employer had
sufficient interest to know and correct situation where there was
suspicion of sale of its property by employees). The statements
made by Mendez at the hearing were made in a situation in which
the employer, Cianci, and the hearing officer had an interest.
See Barakat v. Matz, 271 Ill. App. 3d 662, 669 (1995) (statements
made in reports to worker's compensation insurers protected by
qualified privilege because insurers "clearly have an interest in
determining the validity of worker's compensation claims");
Kuwik, 156 Ill. 2d at 29-30 (letters found to be sent on
privileged occasions where they involved the interests of
defendant, plaintiff, and third party).
Defendant also points out that section 1900.1 of the
Unemployment Insurance Act (820 ILCS 405/1900.1 (West 1996))
provides that all communications from an employer made in
connection with the administration of the Unemployment Insurance
Act "shall be absolutely privileged and shall not be the basis of
any slander or libel suit *** unless they are false in fact and
malicious in intent."
A plaintiff can show that the qualified privilege was abused
by demonstrating a direct intent to injure another or a reckless
disregard of the defamed party's rights and of the consequences
that may result to her. Kuwik, 156 Ill. 2d at 30. An abuse of
the privilege may consist of "any reckless act which shows a
disregard for the defamed party's rights, including the failure
to properly investigate the truth of the matter, limit the scope
of the material, or send the material to only the proper
parties." Kuwik, 156 Ill. 2d at 30; Barakat, 271 Ill. App. 3d
at 669-70.
The record fails to present facts to indicate that the
defendants acted with an intent to injure Cianci or in reckless
disregard for her rights. As discussed above, Cianci's
deposition indicates that the statements were essentially true.
She has not presented anything to indicate that Hall in fact knew
that the statements were false or acted in reckless disregard as
to the matter's falsity. Even if other employees used the
service for personal use and Cianci believed she could do so
without reimbursement, there is nothing to indicate that Hall
knew of any company authorization for such activity. Further,
Cianci's deposition indicates that Hall made the statements in a
meeting among a small group of employees involved in the
situation.
In addition, Cianci failed to present facts to show that
Hall's alleged statements to other employees were actually
published. See Gibson, 292 Ill. App. 3d at 275 (publication is
essential element of cause of action for defamation). While
Cianci stated that other employees knew about her suspension and
dismissal, she did not know how they knew the information and
offered nothing to further prove that Hall published the
information to those individuals.
With regard to the statements made by Mendez during the
hearing on the worker's compensation claim, Cianci has failed to
present facts to show an intent to injure, a reckless disregard
for her rights, or a malicious intent. As discussed, the
statements were substantially true. While Cianci alleged that
Mendez knew the information was false because she had approved
the conduct, her deposition states only that Mendez did not
object to Cianci's shipment of brochures to her nephew in Italy
and that Mendez may have used the service herself for personal
use. The facts do not support her claim that Mendez approved the
shipment without reimbursement or authorized Cianci's numerous
other personal shipments without reimbursement.
Because Cianci failed to present facts supporting her claims
for defamation, we hold that the circuit court properly granted
defendants' motion for summary judgment.
On September 27, 1995, Nowosad filed her first amended
complaint against defendants alleging defamation.[fn2]
According to the complaint, on April 15, 1994, Hall falsely
stated in the presence of others that Nowosad made personal
shipments via DHL courier services, charged the services to
Pettibone without permission from anyone in authority at the
company, did so secretly, and personally profited from the
shipments. Nowosad further alleged that on April 19, 1994, Hall
published a letter making "allegations of illegal DHL use by
[Nowosad]" and terminating her employment. Nowosad alleged that
the letter was published to other employees of Pettibone.
Nowosad alleged that Hall knew that the statements were false
because it was "a common practice among [Pettibone] employees to
use DHL as a fringe benefit of employment, which for several
prior years [had] been approved by [Pettibone] management."
Nowosad also alleged that Mendez falsely testified before an
unemployment compensation hearing officer in regard to Nowosad's
claim for benefits, stating that Nowosad "had been fired for ***
taking company money via personal use of DHL at company expense."
Nowosad claimed Mendez was aware of other employees using DHL for
personal letters at company expense and Mendez herself used DHL
for personal letters at company expense.
During a bench trial, Nowosad testified that on April 15,
1994, she was called into a meeting attended by Hall, Mendez, Bob
Mitchell, Tony Odarczenko, and Cianci. At the meeting she and
Cianci were accused of using DHL services without reimbursing the
company. She and Cianci were presented with a list of instances
of unreimbursed personal use of courier services. She later
received a letter from Hall terminating her employment. She did
not offer this letter into evidence.
Nowosad indicated that a practice existed at Pettibone by
which employees used courier services for personal business at
the company's expense. She admitted on cross-examination that no
one from Pettibone had ever told her that she was authorized to
use the courier at the company's expense for her own personal
business. She also admitted giving Cianci an order for personal
checks and then later learning that Cianci had used DHL at the
company's expense to send the order. She never reimbursed the
company for the charges.
Cianci testified that she also was accused at the meeting of
misusing the courier service without reimbursing the company.
She stated that it was common practice for Pettibone employees to
use the courier services. She knew of several employees who also
used the service for personal business. She named several
individuals, including Mendez. Cianci stated that a year prior
to the termination she had sent something to her nephew in Italy
and Mendez yelled out when she received the DHL receipt, "Enrica,
is this your shipment to Italy, to your nephew?" Cianci replied
affirmatively and Mendez never requested reimbursement. Cianci
admitted on cross-examination that she had in fact sent the
packages listed on the company's document and in each instance
she failed to sign her name as would otherwise be the custom when
doing company business.
John Dreier, credit manager for Pettibone, testified that he
thought that the employees' use of the courier at company expense
was a "perk" of their employment. However, he had no knowledge
of any official policy in that regard. He stated that part of
his job was to receive payments from employees for the use of
courier services. He never received any such payments prior to
the time Nowosad and Cianci were terminated.
Dreier further stated that Odarczenko told him that Nowosad
and Cianci "were fired for stealing from the company by using DHL
services." He also stated that he indirectly heard Mendez state
at a hearing "of some type" that Nowosad and Cianci were "fired
for stealing for [sic] DHL Services." While these allegations
were not pled in her complaint, Nowosad sought to amend during
closing argument to include these statements.
The circuit court determined that "each unpled, allegedly
defamatory statement constitutes an additional cause of action,
albeit under the same rubric of defamation, of which the
defendant had no notice and for which it had no opportunity to
prepare a defense." The court denied Nowosad's motion to amend.
The circuit court then determined that Hall's statements
were subject to qualified privilege and, therefore, even if
defamatory, they were not actionable. The court found the
communication motivated by a legitimate business interest, that
is, seeking to reduce employee theft. The court also stated that
it did not
"find credible or plausible the evidence
seeking to establish that the unauthorized
use of courier services by employees at their
employer's expense was an authorized
practice. At best, [Nowosad] has established
that many employees did it with impunity.
Her logic fails in the apparent conclusion
that that made the behavior acceptable."

The court further ruled:
"With respect to the letter of April 19,
1994, in which [Nowosad] was notified of her
termination and the reasons for it, the
evidence does not establish that the contents
of the letter were ever published to non-
management employees of the Pettibone
Corporation or to anyone else for that
matter. Thus, the unpublished letter cannot
support an action for defamation."

With regard to the statements made by Mendez at the
unemployment compensation hearing, the court determined that
those statements would enjoy an absolute privilege under section
1900.1 of the Unemployment Insurance Act (820 ILCS 405/1900.1
(West 1996)) unless they are false and malicious. The court
found the evidence to indicate that the statements were not false
or malicious. It stated:
"Mendez's statement that plaintiff
misappropriated courier services for personal
gain at her employer's expense, or words to
that effect, was not false. In fact, the
audit conducted by the defendant revealed
plaintiff's complicity in Ms. Cianci's misuse
of the courier services. She admitted that
in fact she did give Ms. Cianci an order for
personal checks and that she did receive
those checks sometime thereafter at her
residence. The fact that she denied
knowledge of Ms. Cianci's misuse of the
courier service and that in any event it was
common practice for employees to use the
services, merely supplies a defense to the
allegations. It does not establish their
falsity."

The circuit court ruled that the evidence did not support a
finding of reckless disregard for the truth or falsity and it
entered judgement for defendants. Nowosad moved to reconsider,
but the court denied the motion. Nowosad now appeals, arguing
that the circuit court erred in denying her request to conform
the pleadings to the trial proof and it erred in ruling that
defendants did not abuse the qualified privilege.
Section 2--616(c) of the Code of Civil Procedure provides
that a pleading may be amended "at any time, before or after
judgment, to conform the pleadings to the proofs." 735 ILCS 5/2-
-616(c) (West 1996). The decision to allow an amendment to a
complaint lies within the sound discretion of the circuit court,
and its decision will not be disturbed absent an abuse of
discretion. Luther v. Norfolk & Western Ry. Co., 272 Ill. App.
3d 16, 26 (1995). Among the factors to be considered in
determining whether to permit an amendment to the pleadings are
whether the amendment would cure a defect in the pleading,
whether the amendment would cause the defendant prejudice or
surprise, the timeliness of the proposed amendment, and whether
there were previous opportunities to amend. Lee v. Chicago
Transit Authority, 152 Ill. 2d 432, 467-68 (1992).
In denying the motion to amend the complaint, the circuit
court determined that each unpled allegedly defamatory statement
constituted an additional cause of action of which defendants had
no notice and no opportunity to prepare a defense. Nowosad
failed to plead any facts regarding statements made by Odarczenko
to Dreier or statements overheard by Dreier at the unemployment
compensation hearing. She made three allegations of defamation:
(1) that Hall made defamatory remarks during the April 15
conference; (2) that Hall published a letter to other employees;
and (3) that Mendez falsely testified to the hearing officer.
There was nothing indicating that defendants would have to
dispute the claims proposed in the amendment as related to
Dreier.[fn3] It was not until closing statements that Nowosad
first indicated that she intended to pursue claims based on
Odarczenko's statements to Dreier. At this point in the
proceeding it was too late for defendants to present evidence to
dispute these additional claims. We see no abuse of discretion
in denying the motion to amend. See Arroyo v. Chicago Transit
Authority, 268 Ill. App. 3d 317, 323-24 (1994) (affirming denial
of motion to amend complaint immediately prior to trial and
denial of motion to conform pleadings to proofs).
Nowosad also argues that the circuit court erred in ruling
that Hall's statements enjoyed a qualified privilege. As
discussed with regard to Cianci's claims, even if we found Hall's
statements defamatory per se, Nowosad's claim must still fail
because of the privilege. Hall's statements at the April 15
meeting were made during a situation in which an interest of a
third party, the employer, was involved. Further, as a
supervisor Hall had an interest in confronting the employees.
Nowosad also argues that even if the statements of Hall and
Mendez were privileged, the privilege was lost because they knew
of the company policy of free use of DHL when they published the
statements. The circuit court did not find the evidence
asserting an authorized practice of using the company's courier
services at the employer's expense to be "credible or plausible."
None of the witnesses testified that they knew of actual
authorization for the practice. The record does not establish
that when Hall and Mendez made their statements they acted with
an intent to injure Nowosad or in reckless disregard for her
right to be free from slander.
The circuit court noted that Mendez's statement that Nowosad
misappropriated courier services for personal gain at her
employer's expense, or words to that effect, was not false.
Nowosad admitted that she gave Cianci the order for personal
checks and that she received those checks sometime thereafter at
her residence. She did not reimburse the company after she
learned that Cianci used the courier service at the company's
expense to send the order. The fact that she denied knowledge of
Cianci's misuse of the service and that it was common practice
for employees to use the services, does not establish that
Mendez's statements were false or malicious. Nowosad has failed
to demonstrate any reversible error. We therefore affirm the
judgment for defendants.
For the aforementioned reasons, we affirm the rulings of the
circuit court.
Affirmed.
ZWICK and QUINN, JJ., concur.
[fn1]Cianci also brought claims for breach of contract and
intentional infliction of emotional distress, but those counts
were dismissed.
[fn2]Nowosad also brought claims for wrongful termination
and intentional infliction of emotional distress, but those
claims were dismissed prior to trial.
[fn3]Dreier's testimony with regard to Mendez only related
to statements he heard indirectly at the hearing. We note that
the complaint included and the court addressed the issue as to
Mendez's testimony at the hearing as discussed below.