-12-

The defendant Widdrington moves to dismiss Count III, again on

the ground that his silence does not provide a basis for liabi

We agree, and will dismiss Count III as to the defendant
Widdrington,

Count IV - Conspiracy to Interfere
with Reasonable Business Expectancy

Defendants move to dismiss this claim on the basis that there

is no independent tort of civil conspiracy, but only an action for

A
a
@
G
se
rs
e

a conspiracy Lo commit an underlying substantive to
P y g

defendants believe Count III fails to state a claim against any

defendant, they argue Lhat Count IV should be dismis
However, since we have held that Count III does state a claim as to
Grainger, we will allow Count IV to stand as to all three
defendants, Grainger, Widdrington and Laidlaw Transit, Ine.’

Count V_- Breach of Implied Contract

Count V of the complaint, brought against lLaidlaw Transit,
Inc. only, is based upon a theory of a contract implied in fact.
he wa

When Hach was discharged by Laidlaw Transit, Ine tendered

a severance agreement which included a 2-stage payment rather than
a payment in one lump sum, and which also included a non-compete
clause. He alleges in Count V that all other executives who left

the employ of Laidlaw were given severance agreements providing Lor

¥ The parties have not briefed the question of whether Widdsington and

Laidlaw Trangit, Inc. can be liable Conspiralors even thougn they are not
iiable on the substantive count, and we will not address the sue at Lhis Lime,



-3-

Laidlaw Education and that Grainger should take said
positions.

mplaint, QF 26). The complaint alleges that Widdrington was
present at the meeting and, “by his silence, affirmed Grainger’ s
false utlkerances to the members of the Board of Directors of
Laidlaw, Inc.” Id. at 7 28.

As a result of these statements by Grainger, the Laidlaw, Inc.
board of directors terminated Hach as president and chief executive
officer of Laidlaw Bducation and replaced him with Grainger.

The complaint alleges specifically why each of Grainger’s

Statements to the board of directors was false, describing in

detail Hach’s outstanding performance throughout his employment
with Laidlaw Education and specifically how Lhe company prospered
under his direction.

The defendants have filed a motion to dismiss the complaint
pursuant to Federal Rule of Civil Procedure 12(b) (6) arguing that
none of the five counts states a claim upon which relief can be
granted.

The Defamation Counts

Count I sets forth the statements made by Grainger at the
October 12 meeting and alleges Lhat because they “falsely imputed
a lack of ability on the part of Hach to perform, manage and engage

in his profession and business, the statements were “detamatory

per se.” Complaint, 9 40.



Statement (ii): “That the operating results of Laidlaw
Education under Hach’s management were dwindling.”

We have no problem with this as a statement that was either

true or false (especially if, as alleged in the complaint, the

profits of Laidlaw Education continually escalated under Hach’s
management). The jury can be given the dictionary definition of
“dwindle”? and can be asked to find whether the statement was true
or false. Cf. Quinn, 658 N.B.2d at 1231 (illustrating use of a
dictionary in a defamation case).

Statement (iii): “That Hach’s management opinions and

estimates as to Laidlaw Education’s future performance
were fragile and weak.”

WheLher this can be regarded as a factual Statement will
depend upon what Hach‘s “management opinions and estimates”
actually were and whether there is a factual basis upon which the
jury could determine whether they were timid or, on the other hand,
realistic or even optimistic in light of Taidlaw’s actual
prospects. This could turn out to be somelhing that is not
factually provable, but that remains to be seen.

Statement iv): “That Hach’s management of his

subordinates caused disruption over the issue of
centralization of operations at Laidlaw Fducation.”

“Disruption” is somewhat vague, but what if the facts DW
there was no problem whatever, which is what we would assume to be

true from the allegations of the complaint? If Hach’s subordinates

uv “To become sleadily less: dimini
SURLNK.” Webster’s Thi New International 1

ho in size, amou

, or quality:

tionary, 706 (1971).



Id. at 1302. The Anderson opinion discusses several other cases
which had construed critical comment concerning a plaintiff's job
performance as imputing simply a failure to perform satisfactorily
in that particular job setting, not an inability to perform that
kind of job regardless of the setting. We are persuaded by the
Anderson discussion that Count 2 of Hach’s complaint does not
allege defamation per se. Each of the statements allegedly made by
Grainger is context-specific, and none of them imputes a general
inability to perform comparable work in some other setting.

AReceordingly, Count I will be dismissed for failure to stale a
claim for per se defamation.

Count IIT - Defamation Per Quod

A different Latin name is used to describe a defamation action

in which “the defamatory character of the statement is not apparent

on its face, and extrinsic facts are reguired to explain the
defamatory meaning.” Anderson at 1303, citing Kolegas v. Heftel
Broad., 607 N.E.2d 201 (Ill. 1992). Such an action is one for
defamation per quod. In that kind of action, damages are not

presumed but must be specially pleaded and proved. Id. Count II

of Hach’s complaint purports to allege defamation per quod, setting

aa

orth the statements made by Grainger, explaining why Lhe

statemenLs were false and alleging that as a result of the

defamatory statements plaintiff was discharged from his employment



-4-

Certain categories of defamatory statements are considered to

be so injurious to reputation that no proof of special damage is

required, Damage is presumed. One of these categories of “per

defamation is “words that prejudice a party, or impute lack of

ability, in his or her trade, profession or business.” Bryson v.

News America Publications, Inc., 672 N.&.2d 1207, 1215 (Ill. 1996).

The per se rule is subject to the companion rule that a statement
“will not be found actionable per se if it is reasonably capable of
an innocent construction.” Id. Importantly, “([w]jhether a

statement is reasonably susceptible to an innocent interpretation

a question of law for the court to decide.” Bryson dealt

with a different category of per sé defamation, imputa

n oof
fornication or adultery, and so is factually inapposite here, 4

more useful on the facts is Anderson v. Vanden Dorpel, 667

N.E.2d 1296 (I11, 1996), which applied the innocent constuction
rule in an employment context. Plaintiff in that case brought suit
against a former employer, alleging that defendant had defamed her
by informing a prospective employer that she “did not follow up on

assignments,” Id. at 1298. The Illinois Supreme Court stated:

We believe that Vanden Dorpel’s alleged comment rding
the plaintiff's failure to follow up on assignments may
be innocently construed and hence may nol form the basis
for a per se action. We agree with the defendants that
the remark, construed in context, may be understood to
mean Simply that the plaintiff did not fit in with the

organization of the employer making the assessment and
failed to perform well in that particular job setting,
and not as a comment on her ability to perform in other
future positions.



-7-

Quinn v. Jewel Food Stores, Inc., 658 N.E.2d 1225, 1229-30 (Ill.

App. Ct. 1995).

Nefendants argue t all of Grainger’s
opinions; plaintiff counters that none of them were, We think some
were and some were not. The assessment must be made in Light of
what the complaint alleges about Hach’s accomplishments at Laidlaw
Education and the alleged lack of any factual basis for finding
fault with his performance, For purposes of this motion, we must
assume the truth of these allegations.

Taking Grainger’s alleged statements one at a time, our

conclusions are as follows:

Statement (i): “That Hach’s management posture and
attitude was that of a victim and not that of a winner.”

We think the words used in this statement are too vague to

permit proof that the statement was true or false. What

“posture?” An “attitude?” A “victim?” A “winner?” What did
Grainger mean by these words, and what did each of the members of

the board of directors understand each of the words to mean? It is

difficult to imagine what kinds of evidence the parties would

submit at trial, and in any event we doubt that a manageable issue

could be framed for the jury.



Minune Order Farm (06/97)

United States District Court, Northern District of Dlinois

Name of Assigned Judy Sitting Judge if Other
a Mapistrate Judge John F. Grady than Assigned Judge
CASE NUMBER 02 C 996 DATE November 5, 2002
CASE Hach v. Laidlaw Inc., et al.
TITLE

[In the following tox (a) indivate the party filing the motion, c.g., plaintiff, detendanc, 3rd party plaintiff, and (b) state briefly she
nature of the motion heing presented.)

MOTION:

DOCKFT ENTRY:

Q) u Filed motion of { use listing in “Motion” box above.]

(2) n Brief in support of motion duc

(3) o Answer brief to motion due: Reply to answer brief due.

(4) oO Ruling/Hearing on setfor_ at

(5) Oo Status hearing{held/continucd to] [set for/re-set for]on |... set for __ at

(6) o Pretrial conference[held/continued to] [set for/re-set for]}on__ set for at

(7) gq ‘Trialfset for/re-set for] on at

(8) 0 [Bench/Jury trial} [Hearing] held/continued to___at

(9) Oo ‘This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to)
UFRCP4(m) =O General Rule 21 O FRCP41(a)(1) OO FRCP41(a)(2).

(10) a [Other docket entry]

The defendants’ motion to dismiss the complaint [] is granted in part and denied in part. See reverse/atlached for
details.

The case is set for status on December 11, 2002 at 10:30 a.m.
Plaintiff's motion to strike an exhibit attached to defendants’ reply memorandum [ ] is granted. (Whe court did not rely
on this exhibit in ruling on the motion to dismiss, and the court grants the motion to strike not on the merits but as 4

means of avoiding an unnecessary issuc.)

(1) x |For further detail see order (on reverse side of/attached to) the original minute order.)

Document
Number

No notices required, advised in open court

No notices required
yumber of nays

7 athe

X_ | Notices MAILED by judge's statf

Notified counsel by telephone. dave dovyena

L¥NDD L3IYLS10 Ss"
wYTTD sn

Docketing 10 mail notices,

Mail AO 450 form, zh: Wd 9- AON ZO
aw OT d3-09714

socketing depury initials

fare maiies novice

Tourigoomt
KAM deputy's
initials



- 10 -
that this is not enough for liability, and we agree. Plaintiff has
cited no authority for an affirmative duty to contradicl a
defamatory statement made by another. Count IIT alleges that
Grainger and Widdrington had a “plan” to get rid of Hach, but it
does not specifically allege that the plan contemplated that

Grainger would make the specific defamatory statements he allegedly

Made to Lhe Board. ven if it did, it would be necessary to a ge
facts that would support some kind of aiding and abetting Lheory

some assistance that Widdrington rendered that made Grainger’s

defamation more likely to be acted on by the Board, for instan
The only authority plaintiff cites in support of Widdrington’s
liability is Van Horne v. Muller, 705 N.E.2d 898 (I11. 1998). The

ca

is clearly distinguishable because the accomplice there,
unlike Widdrington, actually joined the principal defendant in
making the defamatory statements. Id. at 718, 720.

Count II will be dismissed as to the defendant Widdrington for
failure to state a claim,

Count III - Intentional Interference
With Hach’s Reasonable Business Expect

ney.

Count III alleges that the defendants, by means of the
defamation alleged in the previous counts, caused Hach to lose what
he reasonably expected would be continued employment with Laidlaw
Educetion. All three defendants, including Laidlaw Transit, Inc.,

are named as defendants in the count, and, by reason of the

incorporation of allegations from earlier portions of the



~9-
can be shown to have been content with the centralization of
operations, and there was no commotion over the issue, this

statement could be found to have been factually untrue.

Statement (v): “That Hach’s management destroyed the
previously healthy working relationship between Laidlaw
Education and the Company personnel located in

Burlington, Ontario.”
The word “destroyed” is specific enough to be capable of proof

or disproof.

Statement vi): “That because of Hach's failing
management, Hach should be terminated as President and
Chief Executive Officer of Laidlaw Education and that
Grainger should take said positions.”

Everything here is an opinion except the introductory phrase

“that because of Hach’s failing management “Management” is
a broad term, and its meaning in this specific context is
problematic. And what is “failing” management? Apparently it
would not need to be totally failing, but only sufficiently failing
to justify Hach’s replacement. How failing would that be? In sum,
we think this is a statement that could not be shown in a trial to
have been either true or false.

The motion to dismiss will be denied as to statements (ii),

(iii), (iv) and (v) and granted as to statements (i) and (vi)

The Defamation Claim Against the Defendant Widdrington
Widdrington is not alleged to have made the delamatory
statements but simply to have been present when they were made, to

have known they were false, and Lo have remained silent. Ile arg



with Laidlaw Education, suffering a loss of ineome and other
financial benefits.

Defendants move to dismiss Count II on several grounds.
First, they argue that special damages are not sufficiently
pleaded. It is true that plaintiff cannot recover under Count TT

for nis claimed “lo of his professional standing in the

community,” but the claimed “loss of his annual lucrative
compensations, plus retirement and other benefits that, bul for
Grainger’s, Widdrington’s, and Laidlaw Transit, Inc.’s slanders, he
would have received for many years,” is clearly a sufficient
allegation of special damage.?

Another ground asserted by defendants for dismissal of Count

{I is thal the statements made by Grainger were simply opinions,

not statements of fact that can be shown to have been cither Lrue

or false. Proof of defamation requires a showing of falsity (truth

ig a complete defense, see Haynes v. Alfred A, Knopf, Inc., § F.3d

1222, 1228 (7 Cir. 1993)), and it is in the nature of an opinion

thal it is not demonstrably true or false.

Moreover, opinions, as opposed to skakements of fuct, ljoy

First Amendment protection and are not actionable as defamation.

vy

The defamation counts are brought against all
alleging that Grainger and Widdrington acted as
ing the defamatory atements We are not clear 3 Ot Laidiaw,
were advanced by the discharge of Hach from the employ of Laidlaw Education,
we would question whether this “agency” can be proved. However, Lhat factual
ue is not before us at this time,

ree defendants,
idlaw, Inc. in



-?2-

The defendant John R. Grainger served in various executive

positions with Laidlaw, Inc. and served on its board of directors
as well as the board of Laidlaw Transit, Inc. The defendant Peter
Widdrington served as chairman of the boards of directors of both
Laidlaw, Inc. and Laidiaw Transit, Inc.

The complaint alleges that when Laidlaw, Inc. went bankrupt,
Grainger and Widdrington conspired with each other to oust
plaintiff from his position as president and chief executive
officer of Laidlaw Education and to obtain the position for
Grainger. This was allegedly accomplished by a series of
defamatory statements that Grainger made about plaintiff at the

October 12, 2001 meeting of the Laidlaw, Inc. board of directors.

The complaint eges that Grainger told the directors on Lhat

occasion:

(i) that Hach’s management posture and attitude was that of
a victim and not that of a winner;

(ii) that the operating results of Laidlaw EducaLion under
Hach’s management were dwindling:

(iii) that Hach’s management opinions and estimates as Lo
Laidlaw Education’s future performance were fragile d
weak;

(iv) that Hach’s management of his subordinales caused
disruption over the issue of centralization of operations
at Laidlaw Education;

(v) that Hach’s management destroyed the previously healthy
working relationship between Laidlaw Education and the
Company personnel located in Burlington, Ontario; and

(vi) that because of Hach’s failing management Hach should he
termin

das President and Chief Executive Officer of



-13-
one lump-sum payment and containing no non-compete provisions. He

alleges that this “policy” of Laidlaw Transit, Inc. amounted to a

promise implied in fact by Laidlaw that, i Hach’s turn
came, he would be tendered the same kind of severance agreement.

We agree with Laidlaw that Lhe allegations of Count v fail Lo
State a claim. Hach may have had reason to hope that he would be
treated the same as the other executives, but we find no factual
allegations which, if proved, would establish that laidiaw Transit,
Tnc. had impliedly promised to do that.‘

Count V will be dismissed for failure to state a claim upon
which relief can be granted.

Conclusion

In summary, the court’s rulings on the defendanls’ motion to

dismiss the complaint are as follows:

he motion is granted as to Count I, and Count I is dismis

as to all defendants,

The motion to dismiss Count II is granted in part and denied

in part as to the defendants Laidlaw Transit, Ine. and John R.

Grainger. The motion is granted as to the defendant Peter

Widdrington, and Count II is dismissed as to Widdrington.

¥ Laidlaw fransit, Inc. argues that in
different as to each of these other executives, but,
woe will a

ime Lhere were no material differences.



02-996.001 November 5, 2002

IN THE UNITED STATES DISTRICT COURT |
FOR THE NORTHERN DISTRICT OF ILLINOTS*
EASTERN DIVISION

ROBERT E. HACH,
Plaintiff,
Vv. No. 02 C 496:

LAIDLAW URANSIT, INC., D/B/A

LALDLAW EDUCATION SERVICES, PETER
WIDDRINGTON and JOHN R. GRAINGER,

Defendants.

MEMORANDUM OPINION

Robert =. Hach, the plaintiff in this diversity case, su
former employer, Laidlaw Transit, Inc., and two individuals, Peter
Widdrington and John R. Grainger, alleging defamation, intentional
interference with reasonable business expectancy, and breach of
implied contract.

The defendant Laidlaw Transit, Inc. is a wholly owned
subsidiary of Laidlaw, Inc., a Canadian Corporation that is
presently in bankruptcy.

Beginning in the early 1990s, Hach was employed in a series of
executive positions with Laidlaw kHducation Services (“Laidlaw
Education”), a division of Laidlaw Transit, Inc. Laidlaw Education

is the largest provider of school business transportation services

in North America. Neither Laidlaw Transit, Ine. nor Laidlaw

a

Education is in bankruptcy



ORDER

The defendants’ motion to dismiss the complaint [ ] is granted in part and denied in part, as follows: The motion
is granted as to Count I, and Count | is dismissed to all defendants, the motion lo dismiss Count II is denied as
to the defendants Laidlaw Transit, Inc, and John R. Grainger; the motion is allowed as to the defendant Peter
Widdrington, and Count II is dismissed as to Widdrington; the motion to dismiss Counts IIT and IV is denied;
and the motion to dismiss Count V is granted; the defendant Laidlaw Transit, Inc., is dropped from Count Ill.

This case is set for status on December 11, 2002 at 10:30 a.m.
Plaintiff's motion to strike an exhibit attached to defendants’ reply memorandum [ ] is granted. (The court did

not rely on this exhibit in ruling on the motion to dismiss, and the motion to strike is granted not on the merits
but as a means of avoiding an unnecessary issue.)



-ll-
complaint, Grainger and Widdrington are alleged to have acted as
agents of Laidlaw Transit, Inc. Because of this, defendants have
moved to dismiss, arguing that as a matter of law an employer
cannot interfere with its own business relationship wilh its
employees. Moreover, since the count alleges that Grainger and
Widdrington were acting within the scope of their authority as
agents of Laidlaw Transit, Inc,, plaintiff cannot show that they
were acting contrary to the interests of the corporation, a4
necessary allegation of an intentional interference claim.

In response, plaintiff states that the inclusion of Laidlaw

Transit, Inc. in Count III was inadvertent and, in effect,

that the corporation be dropped from Count III. It is clear from

the allegations of Count III that plaintiff intends to allege that
Grainger and Widdrington were not acting in the interest of Laidlaw
Transit, Inc., but, rather, in the interest of Grainger: “[B]oth
Widdrington and Grainger knew that the sole reason for getting rid

of Hach and replacing Hach with Grainger as President and Chief

Executive Officer of [Laidlaw Education was not to benefit or

further the corporation, nor for any reasonable and legilimat

business reason, but solely to personally benefit Grainger
Complaint, J 64.
Laidlaw Transit, Inc, will be dropped from Count III, ancl the

motion of the defendant Grainger to dismiss Count III will be

denied.



- 414 -

The motion to dismiss Count III is denied as to the defendant
Grainger and granted as lo the defendant Widdrington. The
defendant Laidlaw Transit, Inc., is dropped from Count III.

The motion to dismiss Count IV is denied as to all defendants.

The motion to dismiss Count V is granted.

Date: November 5, 2002

ENTER: ef MO i)

rady, United States Distr udge