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Full Opinion
delivered the opinion of the court:
Plaintiff, Dowd & Dowd, Ltd. (Dowd), filed suit against Nancy J. Gleason and Douglas G. Shreffler (defendants), after they resigned as shareholders (partners) of Dowd and opened a new law firm, Gleason, McGuire and Shreffler (GMS). While working at Dowd, Nancy Gleason managed the Allstate Insurance Company (Allstate) account. When the new firm was formed, Allstate moved its business to the new law firm. Dowd filed suit against defendants, alleging breach of fiduciary duty, breach of employment contract, tortious interference with prospective economic advantage and civil conspiracy.
The case was heard in a bench trial. In February 2001, the court entered a judgment in favor of Dowd and denied defendantsâ mistrial motion. In March 2001, the court found that there was no reason to delay enforcement or appeal. Defendants now appeal.
The following issues are presented for review by defendants:
(1) whether the decision below misinterpreted the law as to attorneys and client retention;
(2) whether the decision below improperly used a finding of credibility to supercede failure of proof;
(3) whether the court erred in denying defendantsâ motion for a mistrial after receiving and considering inadmissible âbad actsâ testimony and accusing defendants of fraud and professional misconduct, and delaying issuing its decision for 18 months; and
(4) whether the trial courtâs determination of damages was in error.
BACKGROUND 1
Dowd & Dowd is a law firm. In 1975 or 1976, Northbrook Excess and Surplus Insurance Company, a subsidiary of Allstate, retained Dowd for advice on insurance coverage of claims that were being made against Allstateâs policyholders for injuries arising from exposure to asbestos products. Nancy Gleason, one of the defendants here, joined Dowd in 1977 as an attorney and for the next 13 years became the primary person handling the Allstate account. Lynn Crim was the head of Allstateâs claims department and supervisor to George Riley, a manager in the claims department. Between 1987 and December 1990, Crim spoke with Nancy Gleason on a daily basis and spoke with Mike Dowd, the senior partner, â[r]arely.â
On August 7, 1990, Dowd paralegal Leslie Henkels met with Judy Gleason (an attorney at Dowd and wife of Douglas Shreffler), Nancy Gleason (an attorney and niece of principal partner Mike Dowd), and Maureen Henegan (a Dowd secretary). During that meeting, Judith Gleason indicated that Patrick Dowd (son of Mike Dowd 2 ) was being promoted to partnership status and that she and the others were leaving the firm. On or about September 25, there was a partners meeting and Patrickâs appointment was announced. Following the appointment of Patrick Dowd to partner, Nancy Gleason, Douglas Shreffler and Judith Gleason began investigating the possibility of establishing a new, separate law firm. They decided to take preliminary steps to form that firm and by December 1990, GMS had located office space, ordered furniture and equipment and initiated a banking relationship with the Harris Bank.
On December 31, 1990, Nancy Gleason and Shreffler resigned from Dowd and, with Philip McGuire and Judith Gleason, started the GMS law firm. On December 31, 1990, Nancy Gleason and Shreffler went to Mike Dowdâs home âin the late morningâ to inform him of their resignations as officers and directors of Dowd. Crim of Allstate gave Gleason the charge of moving Allstateâs cases that were currently with Dowd to the new firm. Crim testified that he learned of Gleasonâs new firm on December 31, 1990, âfirst thing in the morning.â
PROCEDURAL HISTORY
Dowd brought this action against Gleason, Shreffler and GMS, seeking imposition of a constructive trust on the new firmâs fee income, an accounting, compensatory and punitive damages for breach of fiduciary duty, breach of contract, and other theories of recovery. Gleason and Shreffler filed a counterclaim, seeking amounts due under a stock repurchase agreement and sanctions. The parties submitted cross-motions for summary judgment. The trial judge denied the defendantsâ motion for sanctions and denied their motion for summary judgment as to Dowdâs breach of a fiduciary duty count, which it certified as a question of law. The trial judge otherwise ruled in favor of the defendants on the issues.
Dowd appealed, and the appellate court affirmed in part and reversed in part. Dowd & Dowd, Ltd. v. Gleason, 284 Ill. App. 3d 915, 672 N.E.2d 854 (1996). The appellate court held that: the trial court had authority to consider defendantsâ motions for summary judgment; the trial court failed to make proper findings of fact; the trial courtâs error in weighing the credibility of witnesses in ruling on the motion for summary judgment was harmless error; the complaint stated a cause of action for breach of fiduciary duty; the trial court properly dismissed the civil conspiracy claim as duplicative; the trial court properly dismissed allegations of wilful and wanton conduct as duplicative; there existed a sufficient business expectancy to support the claim for tortious interference with prospective economic advantage; defendants were not required to give 90 daysâ notice prior to resignation; the employment contract provision prohibiting the solicitation of firm clients was void; defendantsâ right to have the firm buy their partnership shares upon termination was not subject to offset; and the trial court properly denied defendantsâ motion for sanctions.
The defendants were granted leave to appeal by the Illinois Supreme Court. The supreme court held that: there remained unresolved factual issues on the breach of fiduciary duty count; factual questions remained as to the tortious interference with prospective economic advantage count; defendants did not breach their employment contract; noncompetition covenants in the employment agreements were unenforceable as violations of Rule 5.6 of the Rules of Professional Conduct (134 Ill. 2d R. 5.6); the civil conspiracy claim was improperly dismissed as duplicative and Dowd may plead and attempt to prove the separate elements of civil conspiracy; and no sanctions would be imposed upon Dowd for violations of the pleadings rules.
A bench trial was had on the matters remaining. After the close of evidence, Dowd moved to reopen its case to submit more evidence. Over defendantsâ objection, the court granted the motion and heard additional evidence alleging illegal tax document alterations and bank fraud. Defendants moved for a mistrial in November 2000.
On February 26, 2001, the trial court entered a judgment order, finding in favor of Dowd on the following counts: count I, breach of fiduciary duty; and count III, tortious interference with prospective economic advantage. The trial court found that Dowd failed in its burden of proof as to count VII, wilful and wanton conduct. Further, the trial court stated â[a]s the Supreme Court held that [the] Conspiracy count simply represented an alternative theory of liability, 3 the Court enters no judgment nor awards any damages on this Count VI.â
The trial courtâs amended order, dated March 12, 2001, noted that the wilful and wanton conduct count was âmooted by the Appellate Courtâs ruling.â There was consequently no ruling on that count and the court allowed Rule 304(a) (134 Ill. 2d R. 304(a)) language to be included in its order. On March 13, 2001, defendants filed a notice of appeal. On April 10, 2001, Dowd filed a notice of cross-appeal requesting that this court reverse certain portions of the amended order dated March 12, 2001, by entering judgment in favor of plaintiff on the civil conspiracy count or granting a new trial on that count.
ANALYSIS
I. STATUS OF CLIENTS
Defendantsâ initial contention is that the trial courtâs reasoning in the breach of fiduciary duty section of its order essentially reduces the status of clients to chattel and the decision deprives clients of their choice of counsel by prohibiting the mobility of lawyers. A full reading of the courtâs written order shows that defendantsâ assertion is an overstatement of the courtâs findings and an exaggeration of the impact of those findings.
In its written order, the trial court discussed the broad guidelines regarding the standards and obligations used to determine whether a departing partnerâs actions prior to leaving a firm constitute a breach of fiduciary duty. In citing an article from the Michigan Bar Journal (A. Goetz, Break Away Lawyers, 77 Mich. B.J. 1078 (1998)), the trial court noted that when attorneys leave a law firm to establish their own firm, it is appropriate to consider the clients as property of the firm and not property of the individual members of the firm. The trial court went on to explain that, accordingly, the lawyers may not solicit the firmâs clients on company time nor may they use the firmâs resources to establish their own, competing firm, particularly until proper notice has been given. While defendants were free to set up a new law firm, the question became whether any of the steps taken in connection with such action breached the fiduciary duty that the defendants owed to Dowd. On the other hand, the current firm has a duty not to interfere with the departing attorneysâ continued right to practice law. The trial court noted that it is not improper for the lawyer to notify the client of his impending departure provided that he makes it clear that legal representation is the clientâs choice. In our view, the courtâs discussion encourages departing attorneys to give clients an informed choice as to who will manage their business in light of changes in employment or business structure. The courtâs order also reminds current firms to allow attorneys to move freely without hindrance from them.
In fact, the supreme court noted in its review of this matter that the case law supports the view that while lawyers who are planning to leave a firm may take preliminary, logical steps of obtaining office space and supplies, they may not solicit clients for their new venture. Dowd, 181 Ill. 2d at 475, citing Graubard Mollen Dannett & Horowitz v. Moskovitz, 86 N.Y.2d 112, 119-20, 653 N.E.2d 1179, 1183, 629 N.Y.S.2d 1009, 1013 (1995). The Graubard court noted:
â â[A]s a matter of principle, preresignation.surreptitious âsolicitationâ of firm clients for a partnerâs personal gain *** is actionable. Such conduct exceeds what is necessary to protect the important value of client freedom of choice in legal representation, and thoroughly undermines another important value â the loyalty owed partners (including law partners), which distinguishes partnerships (including law partnerships) from bazaars.â â Dowd, 181 Ill. 2d at 475, quoting Graubard, 86 N.Y.2d at 119-20, 653 N.E.2d at 1183, 629 N.YS.2d at 1013.
Defendants here rely on Corti v. Fleisher, 93 Ill. App. 3d 517, 471 N.E.2d 764 (1981), an inapposite case, for the proposition that clients may not be reduced to chattel. The appellate court in Corti held that the employment agreement there, which provided for the transfer of client files from defendants to plaintiff without permission from clients, was void and contrary to public policy in that it deprived clients of the right to be represented by counsel of their own choice. Corti, 93 Ill. App. 3d at 522. The Corti case is inapposite because that case dealt with a written agreement to transfer clientsâ files without permission from clients. In the instant case, there is no such agreement, oral or written. Here, we are dealing with the allegedly improper solicitation of Dowdâs largest client and the duty defendants owed to their former firm.
We are by no means asserting that clients of a law firm are the property of the firm in terms of âchattel,â but we are reaffirming the tenet that preresignation solicitation of firm clients for a partnerâs personal gain is a breach of the partnerâs fiduciary duty to the firm.
II. BREACH OF FIDUCIARY DUTY
The supreme court opinion in this caseâs procedural history noted that â[t]his is a fact-intensive inquiry, and on remand the finder of fact will have to resolve a number of factual disputes before determining whether the defendants breached their fiduciary duty.â Dowd, 181 Ill. 2d at 477.
On remand, the trial court made several findings of fact as to defendantsâ breach of fiduciary duty to Dowd. Some of those findings included: failing to disclose certain facts that threatened the economic existence of Dowd, such as obtaining a $400,000 line of credit and $100,000 checking account from Harris Bank using Dowdâs confidential information; paying down more than $186,000 of Dowdâs line of credit to American National Bank without authorization, in order to present a better financial statement for themselves when obtaining a line of credit for GMS; soliciting Allstateâs business prior to resigning from Dowd; arranging for a mass exodus of firm employees prior to December 31, 1990; downloading Allstate case service lists and mailing labels for substitution of counsel; and using confidential information.
Our standard of review is whether the trial courtâs findings of breach of fiduciary duty are against the manifest weight of the evidence. See Howard v. Zack Co., 264 Ill. App. 3d 1012, 1024, 637 N.E.3d 1183 (1994) (factual determinations will not be overturned unless they are against the manifest weight of the evidence). âManifest weightâ means a level of proof that leads to a result that is âclearly evident, clear, plain and indisputable.â Laroia v. Reuben, 137 Ill. App. 3d 942, 946, 485 N.E.2d 496 (1985). A judgeâs findings of fact are ânot against the manifest weight of the evidence merely because the record might support a contrary decision.â Graham v. Mimms, 111 Ill. App. 3d 751, 767, 444 N.E.2d 549 (1982). Because defendants vehemently contest the finding as to pretermination solicitation, we will address that issue first.
A. Pretermination Solicitation
One of the major questions in this case was whether defendants solicited Allstate as a client for their new firm before they left Dowd, thereby breaching their fiduciary duty to the firm. Defendants assert that Dowdâs proof of solicitation was based on allegations of obtaining office space, credit, and equipment and using Dowd resources, all of which the Illinois Supreme Court has already deemed proper.
The trial court in the instant case observed that in Illinois, the breach of fiduciary duty among law partners has often been examined in connection with business partners. For instance, in Dowell v. Bitner, 273 Ill. App. 3d 681, 691, 652 N.E.2d 1372 (1995), the appellate court there noted that âemployees may plan, form, and outfit a competing corporation while still working for the employer, but they may not commence competition.â (Emphasis omitted.) Further, former employees may compete with their former corporate employer and solicit former customers as long as there was no business activity prior to termination of employment. Dowell, 273 Ill. App. 3d at 691. Although the Illinois Supreme Court pointed out that lawyers are not bound by the same fiduciary duties as those of nonlawyer corporate officers and directors (Dowd, 181 Ill. 2d at 471), the principles are similar. In its review of this case, the supreme court found the following comments from Graubard, a New York Court of Appeals case, relevant: secretly attempting to lure firm clients to the new association, lying to partners about plans to leave, and abandoning the firm on short notice and taking clients and files would not be consistent with a partnerâs fiduciary duties. Dowd, 181 Ill. 2d at 476, quoting Graubard, 86 N.Y.2d at 120-21, 653 N.E.2d at 1183-84, 629 N.Y.S.2d at 1013-14.
One item of evidence that supports a finding of breach of fiduciary duty based on pretermination solicitation in this case is Leslie Henkelsâ testimony. Henkels, a former legal assistant/paralegal at Dowd, testified that she was told in mid-December 1990 by Nancy Gleason that GMS had secured the Allstate business for the new firm. The trial court found her testimony to be credible. Ultimately, it is for the trial judge to determine the credibility of the witnesses, to weigh the evidence and draw reasonable inferences therefrom, and to resolve any conflicts in the evidentiary record. Williams v. Cahill, 258 Ill. App. 3d 822, 825, 629 N.E.2d 1175 (1994).
The trial court also relied on the testimony of Leslie Henkels regarding the events of December 31, 1990. Henkels testified that on December 31, 1990, shortly before noon, Nancy Gleason called her and told her that she was faxing a letter to her to be put on the desks of the partners at Dowd. Henkels recalled that the letter was on Allstate letterhead and signed by George Riley. Nancy Gleason called back shortly thereafter and told Henkels to retrieve the faxes and destroy them, on the advice of âtheir counsel.â Nancy then called a third time, indicating that she was on her way to Mike Dowdâs house to resign. The time between the first call and the third call was approximately 30 to 45 minutes. When shown Nancy Gleasonâs resignation letter at trial, Henkels stated that the letter was not the document she received via fax from Nancy and had not seen it before.
In contrast, Nancy Gleason testified that she told Henkels that she was sending a fax, but testified that it was not a fax from Allstate. She stated that it was her letter of resignation. Nancy testified that after speaking with Mike Dowd on December 31, 1990, she proceeded to the Allstate offices. Nancy Gleason recalled telling Crim and Riley that a new firm was being formed and certain associates would be extended offers.
The trial court expressly believed Henkelsâ version of the December 31 events, including the content of the letter, and we will not disturb such a finding of credibility. See Williams, 258 Ill. App. 3d at 825.
Timothy Nolan, an attorney that began working for GMS in July or August 1991, testified that Virginia Vermillion, an associate at Dowd prior to December 31 who joined GMS in January 1991, told him that Nancy Gleason had George Rileyâs commitment long before defendants left Dowd and that âthey had a lock on the business long before they left.â Nolan further testified that Vermillion told him that they were able to transfer the files so easily because â[w]e knew which files were coming. We knew which attorneys were coming. We knew who was coming.â
At trial, Virginia Vermillion denied telling Timothy Nolan that she knew about the new firm before January 1, 1991, or that defendants solicited the Allstate business prior to December 31. She also testified that she did not tell William Kreese, a candidate for an associate position at Dowd, that he was actually interviewing for the new law firm.
Another item of evidence that supports the finding of pretermination solicitation is the November 1990 credit memorandum created by David J. Varnerin, a relationship manager in the private banking group at Harris Bank. The November 28, 1990, memorandum that Varnerin prepared for his supervisors indicated that â[djiscussions have been held with their principal client â Allstate. The firm has been assured that their invoices will be paid promptly within 30 days. And, since the firm will have the prior firmâs office administrator, we can reasonably assume that bills will be generated and sent in a very prompt manner.â Also in the memorandum, business reference D. Paterson Gloor told Varnerin that âNancy Gleasonâs group has a real lock on the Allstate business and he believes this client relationship will last for years.â The reasonable inference from Varnerinâs memorandum is that defendants made contact with and solicited Allstateâs business prior to resigning from Dowd. Circumstantial evidence will suffice whenever an inference may reasonably be drawn therefrom. Grewe v. West Washington County Unit District No. 10, 303 Ill. App. 3d 299, 303, 707 N.E.2d 739 (1999).
We note that the supreme court stated in its prior opinion in this case that departing lawyers are permitted to prepare lists of clients expected to leave the firm and obtain financing based on the lists. Dowd, 181 Ill. 2d at 470-71. That expectation is distinctly different from what happened in this case, where the evidence leads to the reasonable inference that the partners actually solicited the Allstate business, secured a commitment from Allstate for future business and obtained financing based on that commitment, not a mere expectation.
In contrast, Lynn Crim and George Riley both testified that they had not been solicited by defendant to move their business to the new firm prior to Nancy Gleasonâs resignation. As stated earlier, it is for the trial judge to determine the credibility of the witnesses, to weigh the evidence and draw reasonable inferences therefrom, and to resolve any conflicts in the evidentiary record. Williams, 258 Ill. App. 3d at 825. Thus, we affirm the courtâs finding that Dowd met its burden of showing that defendants breached their fiduciary duty to Dowd by soliciting Allstate prior to the termination of their employment contracts.
B. Manner of Leaving Dowd
Although we have found that the trial court did not abuse its discretion in holding that defendants breached their fiduciary duty by committing pretermination solicitation, the evidence in the instant case also supports a finding that defendants breached their fiduciary duty in the manner in which they left Dowd.
The court held that âvoting and accepting large bonuses for themselves and their friends and family without disclosure that they would be leaving and again stripping D&D of cash reservesâ was a breach of defendantsâ fiduciary duty to Dowd. This was evidenced by Nancy Gleasonâs testimony that she received a $62,500 bonus in October 1990 based on August 1990 discussions with the other shareholders/partners to issue bonuses and a $100,000 bonus on or about December 21, 1990, despite her plans to leave Dowd on December 31, 1990. The evidence also demonstrated that defendantsâ discussions of forming the new firm also began in August 1990. Therefore, the courtâs decision to include bonuses in its award to Dowd is not an abuse of discretion. Even though we may have held differently in light of the testimony that bonuses were based, in part, on past performance and service to the firm, a reviewing court will not overturn a circuit courtâs findings merely because it does not agree with the lower court or because it might have reached a different conclusion had it been the trier of fact. In re Application of the County Treasurer, 131 Ill. 2d 541, 549, 546 N.E.2d 506 (1989).
The trial court here also held that defendants breached their fiduciary duty by arranging for the mass exodus of firm employees before December 31, 1990. See Veco Corp. v. Babcock, 243 Ill. App. 3d 153, 163-64, 611 N.E.2d 1054 (1993) (held that actions constituted breach of fiduciary duty where defendants secretly solicited Veco employees for new company and orchestrated a mass exodus following defendantsâ resignation). This was evidenced by the matching of Dowd associates who eventually joined GMS and the furniture invoice providing the names of the persons using the new furniture created prior to defendantsâ resignations. The evidence regarding the premade furniture labels leads to the reasonable inference that defendants went so far as to solicit many Dowd attorneys who worked on the Allstate files to leave Dowd prior to their resignation. Additionally, paralegal Leslie Henkels testified that on the evening of December 31, she received a call from Judy Gleason asking her to join the firmâ though it was âbasically a formality since I had already been asked to join the firm months before.â The circuit courtâs determination is not against the manifest weight of the evidence.
The trial court here heard ample amounts of testimony as to defendantsâ actions prior to their resignation and based on that testimony and its credibility assessments, the court determined that the manner in which defendants left Dowd was improper and a breach of their fiduciary duty. We will not disturb those determinations. A reviewing court may not overturn a trial courtâs findings merely because it does not agree with the lower court or because it might have reached a different conclusion. Howard, 264 Ill. App. 3d at 1024.
Defendants here also contend that the trial courtâs finding that defendants were competing with Dowd âin their own mindsâ before resignation has no support in the record. Defendants are referring to the portion of the trial courtâs written order that stated:
âThe evidence shows that in their own minds, the firm of GMS was in business prior to the date of resignation as shown from the employer identification number application (11 â 1â90) (Pl.âs Ex. 2) and the Professional Liability Insurance Policy Declarations effective 12/1/90, which listed 14 D & D employees for GMS (Pl.âs Ex. 108 a.k.a. Def.âs Ex. 90), as well as the revenue projections to Harris Bank.â (Emphasis added.)
The December 1, 1990, start date for GMSâs professional liability insurance, compared to defendantsâ December 31, 1990, actual resignation date, supports the trial courtâs finding. Even if this finding was not supported by the record, as a reviewing court, we can sustain the decision of a lower court on any grounds that are called for by the record, regardless of whether the lower court relied on those grounds and regardless of whether the lower courtâs reasoning was correct. Leonardi v. Loyola University of Chicago, 168 Ill. 2d 83, 97, 658 N.E.2d 450 (1995). Here, we have already affirmed the trial courtâs finding that defendants breached their fiduciary duty to Dowd by soliciting Allstateâs business prior to their resignation and the trial courtâs breach of fiduciary duty decision may stand on that finding alone.
C. Use of Confidential Information
Defendants also assert that the courtâs finding as to the use of confidential information is âflatly contradictedâ by the record and the court never identifies what was considered âconfidential information.â The trial court, however, specifically states that it was a breach of fiduciary duty when âNancy Gleason and Douglas Shreffler breached the agreement not to use confidential information, time and billing information and information from the financial statements of D&D for their own personal gain.â In its order, the trial court cites the testimony of Maureen Gleason as evidence of defendantsâ use of confidential information. In Illinois, the law is well established that the trial judge, sitting without a jury, has the obligation of weighing the evidence and making findings of fact. Chicago Investment Corp. v. Dolins, 107 Ill. 2d 120, 124, 481 N.E.2d 712 (1985). An appellate court will defer to the findings of the trial court unless they are against the manifest weight of the evidence. Dolins, 107 Ill. 2d at 124.
Maureen Gleason testified, as an adverse witness, that in late October 1990 she and her husband prepared a projected profit and loss statement 4 for the new firm, with a start date of November 1990. It was prepared for submission to three banks, including Harris Bank. Maureen said that the unspecified associates listed therein were based on a projection of the number of associates GMS needed âto handle the business that [they] hoped to get,â but no specific associates were in mind. She stated that the estimated 2,250 billable hours per associate was based on the average expectancy at law firms. She explained that the experience level and billable hours expectancy descriptions of the unspecified associates were based on who they âhope[d] to bring with [them] if [they] left.â Though she had access to confidential information like this, Maureen denied using Dowdâs confidential information to obtain GMSâs projected figures. Maureen testified that the figures were based upon numerous publications that indicated what was the accepted amount of billable hours for associates.
The trial court believed that confidential information was in fact used to defendantsâ benefit in creating this projection. However, the Illinois Supreme Court stated in its prior opinion in this case that departing lawyers are permitted to prepare lists of clients expected to leave the firm and obtain financing based on the lists. Dowd, 181 Ill. 2d at 471. Therefore, the trial courtâs finding is in error. Nonetheless, the finding of breach of fiduciary duty is supported on other grounds and does not change the outcome of this case.
The court also found that it was an improper use of confidential information for defendants to make payments to Dowdâs line of credit with American National Bank to secure their own line of credit without authorization to do so. Defendants assert that David Varnerin, Dowdâs witness, obviated such a claim and, thus, the courtâs decision is unfounded. Varnerin testified that in considering the application for a line of credit with Harris Bank, he did not inquire as to whether Dowdâs line of credit obligation had been paid off and affirmed that the decision to approve defendantsâ line of credit was independent of that obligation. However, Kenneth Gurber, a nondeparting partner at Dowd, testified that under normal circumstances, he would have been consulted about the American National Bank payoff, but he was not, and Maureen Gleason did not have the authority to write a check for $187,000 without approval from the board of directors. Because credibility and conflicts in testimony are for the fact finder to determine (Gordon v. Dolin, 105 Ill. App. 3d 319, 326, 434 N.E.2d 3411 (1982)), we leave the credibility assessment at the discretion of the trial court. The court was in the best position to determine whether it believed that Varnerin used the payoff information in his evaluation. Regardless of whether the court considered the payoff, the evidence demonstrates that defendants used confidential information and covert action to pay off this line of credit. As guarantors of Dowdâs line of credit, paying the sum off would make them more attractive to Harris Bank officials in the position to extend a line of credit to them for the new firm.
There was also ample evidence of defendantsâ use of Dowd confidential records in preparation for taking Allstate with them to the new firm. Leslie Henkels testified that between August 1990 and December 31, 1990, she was directed by either Judy Gleason, Maureen Gleason or Maureen Heneghan to update the service lists in order to move the Allstate business to GMS. On December 28, 1990, Henkels made sure that the service lists were up to date and the mailings lists were with them so that they could notify counsel of substitution of attorney. On December 31, 1990, between 2 p.m. and 3 p.m., Henkels took the service list binders to GMSâs offices, at the instruction of Doug Shreffler.
Mary Judson, a former Dowd legal secretary, testified that on December 28, 1990, prior to defendantsâ resignations, she was instructed by Leslie Henkels and Maureen Heneghan to update and download the Allstate service lists and mailing labels to disks. She was told that the project had to be completed that day.
In contrast, Maureen Heneghan (Nancy Gleasonâs secretary at Dowd and GMS) testified that she did not instruct anyone at Dowd to update service lists so that they may be taken to the new firm. In light of the conflicting testimony, we will not disturb the fact finderâs decision as to the credibility of these witnesses. Kalata v. Anheuser-Busch Co., 144 Ill. 2d 425, 433, 581 N.E.2d 656 (1991). Moreover, the courtâs finding of use of confidential information is well supported by the record.
III. TORTIOUS INTERFERENCE
In focusing on the conduct of the defendants, the trial court here determined that Dowd proved defendantsâ actions constituted tortious interference with a prospective economic advantage. We agree, as shown below in our discussion of each element. Defendants, however, assert that the trial courtâs personal assertions of business expectations prejudiced their case and, further, that the trial court had no evidence that Dowd had a valid business expectation that it would be the recipient of Allstateâs business after Nancy Gleasonâs departure.
To establish a cause of action for the tort of intentional interference with a prospective economic advantage, Illinois law requires that the following four elements must be proven: (1) the existence of a valid business relationship or expectancy; (2) the defendantsâ knowledge of plaintiffâs relationship or expectancy; (3) purposeful interference by the defendants that prevents the plaintiffs legitimate expectancy from ripening into a valid business relationship or termination of the relationship; and (4) damages to plaintiff resulting from such interference. Fellhauer v. City of Geneva, 142 Ill. 2d 495, 511, 568 N.E.2d 870 (1991).
A. Existence of a Valid Business Relationship or Expectancy
Defendants contend that Dowd did not offer any evidence that it had an expectancy to keep Allstateâs business after the departure of Gleason and reminds this court that the relationship between an attorney and his client is terminable at will. See Grund v. Donegan, 298 Ill. App. 3d 1034, 1038, 700 N.E.2d 157 (1998). While this is true, until terminated, the relationship created by an at-will contract will presumptively continue in effect so long as the parties are satisfied, and, therefore, such a relationship is sufficient to support an action for tortious interference. Grand, 298 Ill. App. 3d at 1038.
The fact that the relationship between an attorney and her client is terminable at will does not of itself defeat an action for tortious interference because the action is not dependent upon an enforceable contract but, rather, upon an existing relationship. La Rocco v. Bakwin, 108 Ill. App. 3d 723, 731, 439 N.E.2d 537 (1982). Until terminated, the relationship created by a contract terminable at will is subsisting and will presumptively continue in effect so long as the parties are satisfied. Anderson v. Anchor Organization for Health Maintenance, 274 Ill. App. 3d 1001, 1013, 654 N.E.2d 675 (1995). Such a relationship is sufficient to support an action for tortious interference. See Kemper v. Worcester, 106 Ill. App. 3d 121, 125, 435 N.E.2d 827 (1982).
The focus here is not on the conduct of the client in terminating the relationship, but on the conduct of the party inducing the breach or interfering with the expectancy. Dowd, 181 Ill. 2d at 484. Moreover, to prevail on the claim, a plaintiff must show not merely that the defendant has succeeded in ending the relationship or interfering with the expectancy, but â âpurposeful interference,â â meaning the defendant has committed some impropriety in doing so. Dowd, 181 Ill. 2d at 485, quoting Restatement (Second) of Torts § 766B, Comment a (1979) (â âIn order for the actor to be held liable, this Section requires that his interference be improperâ â).
Defendants assert that the trial court had no evidence that Dowd had a valid business expectation that it would be the recipient of Allstateâs business after Nancy Gleasonâs departure. They complain that following Dowdâs objection during trial, George Riley from Allstate was not allowed to testify that the 200 files handled by Nancy Gleason at Dowd would have gone with her had she been fired by Dowd. We first note that a trial courtâs ruling on an objection to evidence will not be reversed absent an abuse of discretion. Progress Printing Corp. v. Jane Byrne Political Committee, 235 Ill. App. 3d 292, 304, 601 N.E.2d 1055 (1992).
The question posed to Riley during trial was: âIf Mike Dowd had fired Nancy Gleason in 1990, would you have left the files that she was working on for you with Mike Dowd?â Following an objection, the court stated that the answer would call for speculation. Defense counsel argued that it spoke to the âmissing gapâ in Dowdâs reasonable expectation issue. The court then allowed counsel to ask a series of questions of Riley as an offer of proof. Riley was asked what effect Nancy Gleasonâs termination would have had on the handling of Allstateâs files. Riley responded, âDisaster,â because âNancy was an integral part of this operation.â Riley was also asked if he would have allowed the 200 Allstate files to remain at Dowd absent Nancy Gleason, to which he answered, âNo.â
Rileyâs answers, in defendantsâ view, would support the conclusion that Dowd did not have a legitimate expectancy of continued business in the event that Gleason left Dowd. We find it important that there was no evidence that Dowd had any indication from Riley prior to December 31, 1990, that its continued business relationship was dependent upon Nancy Gleasonâs continued employment with Dowd. Even if Dowd had that understanding, Dowd was unaware of Nancy Gleasonâs intention to leave the firm. There was also no indication that Allstate was in any way dissatisfied with the services received from Dowd. More importantly, as we have already affirmed the finding that defendants succeeded in ending the relationship, their âpurposeful interferenceâ was committed in an unseemly manner