Trial Briefs (a newsletter of the Civil Practice and Procedures Section of the Illinois State Bar Association) 6/1999
By Kimberly A. Frost and Michael J. Frost, McArdle, Frost & Klapacz
Statements or expressions of opinion or comments appearing herein are those of the editors or contributors, and not necessarily those of the association or section.
I. Introduction: A review of the standards for bringing a malicious prosecution claim in Illinois
Actions for malicious prosecution have historically been regarded as inhibiting free access to the courts. The Illinois Supreme Court reiterates in Cult Awareness Network v. Church of Scientology International, 177 Ill.2d 267, 685 N.E.2d 1347, 226 Ill.Dec. 604 (1997), that actions for malicious prosecution have long been disfavored at law. Thus, the requirements for bringing this cause of action remain strict. The malicious prosecution plaintiff must show: 1) that the underlying suit was commenced maliciously and without probable cause; 2) that the action complained of has been terminated in his or her favor; and 3) proof of some "special" injury or damage beyond the usual expense, time or annoyance in defending a lawsuit. Cult Awareness Network, 685 N.E.2d at 1350, 226 Ill.Dec. at 607 citing Bank of Lyons v. Schultz, 78 Ill.2d 235, 399 N.E.2d 1286, 35 Ill.Dec. 758 (1980).
This article addresses how the court decided whether the plaintiff satisfactorily pled the favorable termination and special injury damages requirements which serve to limit causes of action for malicious prosecution.
Initially, the circuit court dismissed this case, ruling that the plaintiff had not adequately pled the second and third requirements necessary to establish a cause of action. The appellate court affirmed. However, in the September 1997 term, the Illinois Supreme Court reversed the judgments of the appellate and circuit courts and held that the "plaintiff has sufficiently alleged the elements of the tort of malicious prosecution." Cult Awareness Network, 685 N.E.2d at 1357, 226 Ill.Dec. at 614. Although the supreme court stressed that it was not abandoning the special injury requirements set forth in earlier opinions and not doing away with the favorable termination requirement, it noted that malicious prosecutions under the guise of rightful litigation should not be protected.
In Cult Awareness Network, the plaintiff was a not-for-profit corporation whose mission was to educate the public about religious rights, freedoms, and responsibilities. The defendants were two religious corporations, specifically the Church of Scientology International and the Church of Scientology of Illinois as well as their attorneys. The plaintiff claimed that the defendants conspired with each other to carry on a campaign of malicious prosecution in order to bankrupt the corporation and force it out of existence. In a 17-month period, the plaintiff was sued 21 times in several jurisdictions across the country by various members of the Church of Scientology. Almost all of the underlying suits filed against the plaintiff alleged that it had violated various state and federal rights laws by denying each complainant membership in its organization and/or access to its meetings.
Cult Awareness Network fought back and alleged that the defendants had engaged in a conspiracy to maliciously prosecute it by filing so many civil actions against it. Moreover, the malicious prosecution plaintiff pleaded that the underlying suits were filed without probable cause and were terminated in plaintiff's favor either by summary judgments or voluntary and involuntary dismissals. The circuit court dismissed the suit for failure to state a cause of action. The appellate court affirmed the order of dismissal ruling that the plaintiff had first failed to allege a favorable termination of the underlying actions and secondly failed to satisfy the special injury requirement. The appellate court agreed with defendant's arguments that the complaint did not satisfactorily plead that the underlying action was terminated favorably because there were no allegations that the suits had been decided on the factual issues and moreover special damages had not been sufficiently alleged because the injury consisted of nothing more than the usual costs and anxiety associated with defending an ordinary civil case.
II. Life after Cult Awareness Network--How have the requirements changed in Illinois?
The supreme court's contrary analysis had reiterated and explained the correct standard for asserting the challenged elements of the malicious prosecution claim.
A. Satisfying the favorable termination requirement
Favorable termination requires that the former proceeding must have been legally determined in favor of the malicious prosecution plaintiff in order to have a cause of action. This is longstanding principle in Illinois law that goes back as far as 1832. Feazle v. Simpson, 2 Ill. 30 (1832). The Illinois Supreme Court has consistently acknowledged the favorable termination requirement over the years, but until recently had not specifically identified the types of judicial decisions that constitute a favorable termination.
The contours of the requirement were shaped by the appellate court. In Siegel v. City of Chicago, 127 Ill.App.2d 84, 261 N.E.2d 802 (1st Dist. 1970), the First District stated that the favorable termination requirement could be satisfied only by "a judgment which deals with the factual issue of the case, whether the judgment be rendered after a trial or upon motion for summary judgment." Cult Awareness Network, 685 N.E.2d at 1351, 226 Ill.Dec. at 608 citing Siegel, 127 Ill.App.2d at 108, 261 N.E.2d at 814. For almost 30 years this holding has been relied upon in numerous appellate court decisions without any detailed analysis.
The issue then became which judicial determinations constitute a "favorable termination" for the purpose of malicious prosecution suits. Since Siegel, some appellate court opinions have held that voluntary dismissals do not satisfy the favorable termination requirement. Those courts cite Booney v. King, 201 Ill.47, 66 N.E.377 (1903), as authority for that proposition. Cult Awareness Network, 685 N.E.2d at 1352, 226 Ill.Dec. at 609. However, in Cult Awareness Network, the Illinois Supreme Court said that it never implied in Booney that voluntary dismissals did not satisfy the favorable termination requirement and appellate court decisions which hold so are incorrect. Id.
The malicious prosecution plaintiff in Cult Awareness Network argued that the appellate court's rule announced in Siegel regarding favorable termination was overly restrictive and basically eradicated the malicious prosecution cause of action in Illinois. Id. The plaintiff also noted that the holding in Siegel is not in line with the views of other courts and most modern commentators. Id. The plaintiff claimed that a favorable termination requirement which necessitates that terminations be adjudications on the merits of the underlying case makes the cause of action very difficult to sustain. The defendants in Cult Awareness Network, however, claimed that the appellate court's interpretation of the favorable termination requirement was a reasonable means of limiting the malicious prosecution cause of action. Id. The defendants argued that a more expansive view of the favorable termination requirement would make litigants fearful of subsequent prosecution simply for calling on the courts to determine their rights. Id.
The supreme court agreed with the malicious prosecution plaintiff and announced that "the Appellate Court's interpretation of the favorable termination requirement is at odds with the modern tort law." Cult Awareness Network, 685 N.E.2d at 1352, 226 Ill.Dec. at 609. The court adopted the Restatement (Second) of Torts approach when determining favorable termination. Unlike Siegel, this approach looks beyond the type of disposition that was obtained in the previous action and "allows dispositions which do not reach the merits of the underlying case to satisfy the favorable termination requirement in certain circumstances." Cult Awareness Network, 685 N.E.2d at 1352, 226 Ill.Dec. at 609. Under this approach, compliance with the requirement turns on the circumstances under which that disposition is obtained. Cult Awareness Network, 685 N.E.2d at 1353, 226 Ill.Dec. at 610. It goes beyond simply asking what form or title was given to the disposition of the prior proceeding, Id. at 1352-53, 609-10, to require an analysis which is "more balanced than our Appellate Court's interpretation as set forth in Siegel." Id.
Favorable termination is limited to those legal dispositions that can give rise to an inference of lack of probable cause. The restatement approach allows certain dispositions under certain circumstances to give rise to such an inference even if it was not obtained on the merits of the underlying facts. Id. Under the Siegel rule, a person could not bring a suit in malice if they had obtained only a nonfactual disposition of the action. This approach allowed a person to nonsuit a frivolous lawsuit in order to guard against a future malicious prosecution action. Id. The new reasoning set forth in Cult Awareness Network provides that "the existence of favorable termination turns upon the circumstances under which the disposition is obtained." Cult Awareness Network, 685 N.E.2d at 1352, 226 Ill.Dec. at 609. "In our view" said the supreme court, "the Restatement's position best balances the right of citizens to have free access to our courts and the right of the individual to be free from being haled into court without reason, thereby better serving the interests of justice." Id. at 610.
The supreme court's decision to follow the restatement view on this issue is also reflected in the court's earlier opinion in Swick v. Liautaud, 169 Ill.2d 504, 662 N.E.2d 1238, 215 Ill.Dec. 98 (1996). The issue in Swick was whether a nolle prosequi (a formal entry on the record by the prosecuting officer by which he declares that he will not prosecute the case further) was a favorable termination in the context of malicious prosecution of an underlying criminal action. Cult Awareness Network, 685 N.E.2d at 1354, 226 Ill.Dec. at 611. "This court, without dissent, adopted the restatement's approach to the question and held that a nolle prosequi may serve as a favorable termination unless the prosecution was abandoned for reasons not indicative of the innocence of the accused." Cult Awareness Network, 685 N.E.2d at 1354, 226 Ill.Dec. at 611, citing Swick, 169 Ill.2d at 513, 662 N.E.2d at 1238, 215 Ill.Dec. at 98. The court looked at the circumstances surrounding the entry of the nolle prosequi instead of just the mere form or title of the disposition. Id. For malicious prosecution suits which are predicated on prior civil proceedings, the court will follow a similar approach to the one seen in Swick when evaluating the favorable termination requirement. In Cult Awareness Network the court found that the requirement was satisfied after using the restatement approach. Although the underlying actions were terminated in plaintiff's favor either by the entry of summary judgment or by dismissal (voluntary and involuntary), this was enough to defeat the defendants' motion for summary judgment.
B. Satisfying the special injury requirement
In Cult Awareness Network, the Illinois Supreme Court reversed the circuit and appellate courts and found that the plaintiff had adequately pled the special damage or injury requirement. The necessity of pleading special injury of damage is also a longstanding legal requirement in Illinois. More than 100 years ago, the [Image]court decided that damages could not be recovered for malicious prosecution "without the arrest of the person or the seizure of the [person's] property or some other special injury." Smith v. Michigan Buggy Co., 175 Ill. 619, 627, 51 N.E. 569, 571 (1898). The rationale behind the Smith decision was that "such ordinary trouble and expense as arise from ordinary forms of legal controversy should be endured by the law-abiding citizen as one of the inevitable burdens which men must sustain under civil government." Smith, 175 Ill. at 629, 51 N.E. 572. In Cult Awareness Network, the plaintiff claimed that the multiplicity of the suits brought by the Church of Scientology caused it to suffer damages which included substantial attorney fees and increased costs for liability insurance. The defendants argued that the damages alleged by the plaintiff constituted nothing more than the usual costs and anxiety associated with defending against an ordinary civil action.
In Shedd v. Patterson, 302 Ill. 355, 134 N.E. 705 (1922), the court said that "after a party has had his day in court and his right has been conclusively determined, he may not return to court to harass the same opponent about the same issues." Cult Awareness Network, 685 N.E.2d at 1355, 226 Ill.Dec. at 612 citing Shedd, 302 Ill. at 360, 134 N.E. at 707. Although the suits were filed concurrently rather than consecutively (as in Shedd), the plaintiff argued that it should still be allowed a remedy for the harm. Thus, the filing of multiple suits without probable cause alone could constitute harassment and satisfy the requirement.
"A common theme with respect to the special injury rule . . . is the Court's recognition of its responsibility to maintain a proper balance between the societal interest in preventing harassing suits and in permitting the honest assertion of rights in our courtrooms." Cult Awareness Network, 685 N.E.2d at 1356, 226 Ill.Dec. 613 citing Shedd, 302 Ill. at 360, 134 N.E. at 710. In Cult Awareness Network, the defendants were accused of inducing their members to engage in a national campaign of simultaneous, rather than consecutive, malicious prosecution. The simultaneous litigation could not be considered "ordinary" if they were brought without probable cause and with malice. The malicious prosecution plaintiff argued that the suits were brought to keep it from engaging in its business of disseminating information regarding religious freedom. Cult Awareness Network, 685 N.E.2d at 1356, 226 Ill.Dec. at 613. The court agreed that the filing of simultaneous suits alone could constitute harassment and satisfy the requirement. "The Constitution affords protection to the honest litigator in search of resolutions to true legal disputes; however, it does not provide the right to any individual to assist another, with money or otherwise, in the prosecution of a suit which has been filed with malice and without probable cause." Cult Awareness Network, 685 N.E.2d at 1357-58, 226 Ill.Dec. at 613-14.
In order to have a cause of action for malicious prosecution, the plaintiff must show that: 1) the defendant brought the underlying suit maliciously and without probable cause; 2) the former action was terminated in his or her favor; and 3) proof of some "special" injury or special damage beyond the usual expense, time or annoyance in defending a lawsuit. Before Cult Awareness Network, the favorable termination requirement was met only after trial or summary judgment deciding the case on the merits. Now, voluntary dismissals and other dispositions which do not reach the merits of the underlying case can satisfy the favorable termination requirement if they support the absence of probable cause. Also, in order to satisfy the special injury rule, it is not necessary to have an arrest of a person or the seizure of property. After Cult Awareness Network, it is clear that successive or simultaneous suits can constitute harassment and satisfy the special injury requirement.