## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 07

- 2800 G IANT S CR EE N S PORTS, doi ng business as, G IANT S CR EE N F ILM S LLC , a nd G IANT S CR EE N F ILM S V IKING S LLC , P la intif fs-A pp ella nts, v.
C ANA DI AN I MPERI AL B ANK OF C OMMER CE , D efend a nt-A pp ellee.

A pp eal from the United S t ates Di strictC our t fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 05 C7184

— SamuelD er-Yegh iayan, Judg e.
A RGUED S EP TE MBE R 9, 2008

— D ECIDED J AN UA RY 20, 2009

Befo re B AUER, C UDAH Y, a nd W OO D , C ircu it Judges . B AUER, Cir cu i tJudg e . T hi s i s ana ppea lfrom a g r an t o fs um m ar y j udg m enti n f av o r o fthe de fen dan t i n a su i t cl ai m i ngde f amat i o n per sei n w ri tte n sta tem ents m ade bythe defendant conce rni ng business deal i ngs o f th e plaintiff

.2 N o. 07

- 2800 I n Octobe r 2001 , Gia nt S cre en Sport s ( doi ng business as Giant Scr een F i l m s LLC ) and Sky High ente re d i nt o an agr eem ent which c al l ed f orG i ant S cre en S port s t o dist ribut e two f i l m s pr o duce d by S k y Hi g h e nt i tl ed “Adr en al i ne Rush” and “Ulti m ate Gs. ” A yearl ate r, S ky H i gh enter ed i nto a s i m i l arag re em ent fora subsid i ar y o f Gi a ntS c r e e n S po r t s , Gi a ntS c r e e n Fi l m s V i k i ng s LL C (coll ectively “G iant Screen ”), to distribut e Sky H igh ’s fi l m enti tl ed “Vi ki ngs: J ourne y to N ew W or l ds. ” As part of th i s Vi k i ng s ag r ee m en t ( Di st r ibut i o n Agr ee m en t) , Gi an t S cr ee n a g r ee d t o pa y S k y H i g h a to ta lof$3 mil l i o n dur i ng th e th r ee - y ea r pe riod f o l l o wi ngthe di st r ibut i o n o fthe V i k i n g s fi l m. To fi nance the pro du cti on o f“Vi ki ngs, ” S ky H i gh nego ti at ed a c re ditag re em ent with Canad i an I m peri al Bank ofCom m er ce ( CIBC). A s s ecuri ty f orthe l oan, S ky H i gh w as re quir ed to ass i gn C I BC the $3 m i l l i on e xpected fr o m Gi a ntS c r e e n un de r the Di s t r ib ut i o nA g r e e me n t
. CI BC also requ ired Sky H igh t o ob tain insu ran ce from Ex p ort Dev el o pm en t Can ada ( EDC) , coveringthe pa y m en ts due i fG i an t S cr ee n de f au l te d. EDC woul d no t i ns ur e th e pay m en ts unde r th i s ag r ee m en t. EDC woul d o nl y i ss ue the pol i cy i fse ver alpro vi si ons w er e a l ter ed to r efl ect a new Dist ributi on Agree m ent ( Fal si fi ed Dis tr ibuti on Agree

m en t) , pa r ti cul ar l y t o r equi r e th atGi an t S cr ee n pa y the $3 m i l l i on in $50 0, 000 i nstal l m ents and G i ant S cre en guar antee S ky H i gh’ s fi nanci alo bl i gat i ons. E D C w ou ld iss u e t h e in su ra n c e p olic y on ly if it appr o ve d the Cr edi t Agr eement, a nd the ne w pro vi si o ns re fl ecte d i n the F al si fi ed Dis tr ibuti on Agree m ent, betw eenN o. 07

- 2800 3 CIBC and SkyH i gh. The i nsurance po licy w oul d not co v e r no n- pa y men t s i f Gi a nt S c r e e n’ s no n- pa y men t was th e res ult of fraud on th e pa rt of Sky H igh. G iant Screen ’s si gnatur e was r equi re d on the Fal si fi ed Dis tr ibu tion A gr eem ent s i nce i t was be com i ng a g u ar antorand i ts c on tr ac tu al ob liga tio n s w er e b ei n g alt er ed ; E D C w ou ld not i ssue i ts pol i cy and CIBC w oul d not fund the l oan to S k y Hi g h i fG i a n tS c r e e n ’ s s i g n a t u r e wa s no t pr es e n t
. No party, i ncl ud i ng CI BC , ev erco n tact ed GiantS cre en r egar ding the pr opose d m odi fi cati ons. In a c or re spondence to CI BC a nd S k y Hi g h, EDC ackn o wl edg ed th atthe m o di fi ca ti o ns woul d pr o babl y b e di ffi cul t f o r Gi an t Scr een t o accept, since they accel er ate d the pay m ents du e. On N ove m ber29 , 20 02, S ky H i gh se n t C IBC a contr act, r epr es en tingthe ne w cha ng es r equi r ed to i ssu e the l o an, and seem i ngl y b ear i ng the appropr iat e si gnatur es ofS ky H igh an d G ian t Sc r e e n . G ian t Sc re en m ain ta in s t h at it w as unaw ar e o fthe changes r efl ecte d i n th e Fal si fi ed D ist rib u ti o n A g re em en t a n d th at its sign at u re on th is ag r ee m en t was f o r g ed to o bt ain the l o an . A lso , a s par t o fthe Credi t Agree m ent, wh i ch i ncor pora ted the Fal si fi ed Dist ributi on A gr eem ent, CIBC re quir ed th a tG i a n tS c r e e n ma k e th e $ 3 mi l l i o n i n i n s t a l l m en t paym ents dir ectly t o CIBC und era N oti ce o fS ecuri ty, Dir ecti on o fPaym ent and Di str ibutorA cceptance ( N oti ce o fS ec ur ity). S k y Hi g h s en t CI BC a s i g ne d c o py o fthe N oti ce o fS ecuri ty, ag ai n bear i ng the appropr i ate si gnatu r es o fS k y Hi g h a nd Gi an t S cr ee n. Gi an t S cr ee n mai nt ains tha t i t wa s un a wa r e o f the No t i c e o f S e c ur i t y a nd tha t i ts s i g na t ur e o n thi s do c ume ntwa s a l s o f o r g e d.4 N o. 07

- 2800 On Oc tobe r 6 , 2 00 4, CI BC s en t a l et te r t o Gi an t S cr ee n, to g eth e r wi th a c o p y o f th e No t i c e o f S e c u r i t y, th a t th e paym ents und erthe N oti ce o fS ecuri ty shoul d ther eafter be pai d to CIBC. Gia nt S cre en m ai ntai ns t h at thi s was the fi rs t t i m e i t be cam e a w ar e o fthe N oti ce o fS ecuri ty. A fterthe letter s were re cei ved, Gia nt S cre en r esponded that i t was notfam i l i arw i th the N oti ce o fS ecuri ty and that CIBC shoul d add re ss the i ssue w i th S ky H i gh. A fterse ver al l ate r com m unica ti ons denyi ng f am i l i ar i ty w i th the N oti ce o f S e c u r i t y, Gi a n t S c r e e n s t a t e d t o C I B C th a t i n Gi an t Scr een’ s be l i ef, i t had no obl i gat i on t o CIBC si nce i t was not a par ty to that agr eem ent. OnNo v e mbe r 12 , 2 0 0 4 , Gi a ntS c r e e n i nfo r med CI BC th atthe s i g na tu r e o n the Not i ce o fS ec ur i tywas no t th e sig n at u re o f its p re sid en t, D on ald K em p f. C IB C ac kn ow led ge d th at it ha d n ot re c eiv ed an y d oc u m en ts d i r ec tly fr om G i antS c r e e n, b utr a the r thr o ugh S k y Hi g h. CI BC express ed conce rns re gar ding Sky High’s o fferto ob ta inG i a n t Sc re en ’s s ign at u re , w h ich C IB C init ially expected to ga therdi re ctl y. O n N ov em ber15 , 20 04, CI BC se nt Gi ant S cre en co pie s ofthe Fal si fi ed Dis tribu tio n A gr eem ent, the N oti ce o f Secu rity, an d various p ledge hold er agreem en ts t o d eterm i ne whethe r al l o f Don al d Kem pf’ s si g na tu r es w ere f or ger ies
. The f ol l owing day, Gia nt S cre en i nfo rm ed CIBC that i t would co oper ate with the f or ger y investi gation, bu t nee d e d t he prote ction of l egal proce ss before doi ng so . A l thoug h G ian t S cre en di d not a nsw eras to w hether the si gnatur es w er e f or ger i es, Giant Scr een d id st at e th atCI B C w o ul d no t l i k e th e an swe r s ab o utthe si gnatur es’ authenti ci ty.N o. 07

- 2800 5 On N ove m ber24, 20 04, CI BC se nt S ky H i gh a l ett er re questi ng an expla nati on o fGia nt S cre en’ s for ged si gnat ur e o n the No t i ce o fS e c ur i t y . S k y Hi g h di d n o tr e s po nd

. CI B C d e c l a r e d S k y Hi g h i n d e f a u l t a n d s u e d u n der t he C r e d it A gr ee m en t. In a n affid av it, C IB C st at ed th at it feared t he N oti ce o fS ecuri ty w as f al se and the di sburs em en t o fthe l o anpr o vi ded by th e Cr edi t Agr ee m en t w as base d on f al se re prese ntati ons. I n Apr i l2 00 5, C I BC s et tl ed i ts c l ai m wi thS k y Hi g h, p ro vid in g t h at Sky H igh w ou ld co op er at e w i t h C IB C in re q uir i ng Gi ant S cre en to abi de by the Noti ce o fS ecuri ty. Giant Scr een and ED C re cei ved a l ett erfr om C I BC i nd i cati ng tha t the m att erwas set tl ed and that the Credi t Agree

men tb e t we e n S k y Hi g h a nd CI BC ha d b e e n r e i ns t a t e d. On J une 7, 2005 , CIBC fi l ed an i nsurance cl aim w ith ED C. The cl ai m st ate d that CI BC had susta i ned a l oss as a r es ul t o fGi an t S cr ee n’ s f ai l ur e o r r efus alt o pa y the fi r sti ns ta l l m en t o f$ 50 0, 00 0 unde r the F al si fi ed Di st r ibuti on Agree m ent. EDC i nqui r e d int o the i ns ur a nc e c l a i m bya s k i ngCI BC ab o utGi ant S cr ee n’ s def au l t an d whethe r the r e wer e an y disputes with S ky H i gh tha t w ou l d i m pede paym ent o f the fi rs t instal l m ent. CIB C s tated that, to i ts knowle dge, G iant Screen w as stilli n d e fa ult an d that i t w as u na w are ofany disputes thatwould i m pede pa ym ent a nd di d not k no w o fa nyr e a s o n whyGi a ntS c r e e n ha d n o tp a i d. Giant Scr een th en filed a di ver si ty acti on a gainst S ky H i gh and i ts presi dent Sa m son, and lat er a dd ed CIBC as a defendant. Gia nt S cre en as ser ted thati t was per se def amed b y CI B C in CI BC’ s l et te r s to EDC abo utGi an t6 N o. 07

- 2800 S c r e e n ’ s l a c k o f p a y me n t
. C I B C fi l e d c r o s s - c l a i ms ag ains t S k y Hi g h a nd c o unt er cla i m s ag ains t Gi an t Sc re en . Th e d i s t ric t c ou rtgra n te d in p ar t a n d d en ied in part both GiantS cre en’ s a nd CI BC ’ s m oti ons f orsa ncti o ns a g ains t S k y Hi g h fo r the f o r g ery ; g r an te d s um m ary j ud gm ent in f av or o f both Gia nt S cre en and CI BC ag ai nst Sky H igh ; a nd gr anted sum m ar y j ud gm ent in f avo r of G iant Screen on C I B C ’s coun terclaim s. T he d is trict court g r an te d s um m ar y j udg m en t i n f av o r o fCI BC o n Gi an t S cr ee n’ s def amat i o n per se c l a i m, fi nd i n gth a tth e c o mm unica ti ons w ere n ot def am ato rysince they were subj ect i ve o pi ni o ns , s ubj ec t to i nno ce ntc o ns truct i o ns , a nd m ade f ora l eg itim ate busi ness pu rpos e. Gia nt S cre en fi l ed th i s ti m ely appea lo nl y a s to i ts de f amat i o n per se c l a i m.

DI S C US S I ON Gi an t S cr ee n c l ai m s th atthe s ta te m en ts made ab o ut i ts contr act u al fail ures to pay a l ega ldebt and i ts “default” statu s w ere so serious that i ts rep ut atio n a l inj ury m ayb e pr es um ed as def amat i o n per se . Gia nt S cre en al so ar gues that CIBC abused i ts q u alified pri vi l ege to m ak e su chs ta te m en ts s in ce CI BC e i th erkne w ofthe f or ger y o r displ ayed a r eckl ess di sr ega rd f orthe tr uth orf al si ty ofthe sta tem ents bef or e fi lin g the i nsurance c l a i m. W e r ev i e w deno vo the dist ri ct c ourt ’ s deci si on t o g r an ts u mma r y j u d g me n t, c o n s t r u i n ga l lth e f a c t s a nd i nfer en ce s i n f av o r ofGia ntS cr ee n. Se eRepub l i c Tobac co Co. v. N
. At l
. Tr adi ng Co. , 381 F.3d 717, 726 (7th C ir. 2004).N o. 07

- 2800 7 Sum m ar y j ud gm ent i s a pp rop ria te w hen the ple ading s, depo si ti o ns , a ns wer s to i nt er r o g at o r i es , a nd a dm i ss i o ns o n fi l e, t o g ethe r wi tha ny a ffi dav i ts, show tha t th er e i s no genui ne i ssue ofm ate ri alf act and the m ova nt i s e nti tl ed to j u d g me n t a s a ma t t e r o f l a w. F e d

. R
. C i v . P
. 5 6( c)
. “ The i n iti alburden i s o n the m oving par ty
. . . to dem onst ra te that ther e i s no m ate ri alquesti on o ff act w i th r espectto an es senti alel em ent ofthe non- m oving par ty’ s ca se. ” Cody v. Harris , 4 09 F
. 3d 85 3, 8 60 ( 7th Ci r . 2 005)
. I fthe moving partym eet s thi s bur den, the non- m oving par ty m ust s ub mi te v i de nc e tha t the r e i s a g e nu i ne i s s ue f o r t r i a l

. F e d. R . C iv. P . 56(e ); Ptas znik v. St
. Jos eph Hos p. , 46 4 F
. 3d 691, 69 4 ( 7th Ci r. 20 06)
. The exi ste nce o fm er el y a s c in til l a o f evi dence i n supp or t o fthe non- m ovin g party ’ s pos i ti on is ins uffici en t; th ere m us t be evid en ce on w hich the j ury c ou ld rea so n ab ly fin d fo r t h e n on -m ov in g p ar ty
. Id

. We apply the substa nti ve l aw o fI l l i noi s, the sta te i n w hi ch th is di ve r si tyc as e was fi l ed, t o e ac h o fGi an t S cr een ’s c laim s. Se eGl ob al Re l i e f Fo und
. , Inc . v. Ne w Yo rk Ti m e s Co. , 390 F.3d 973, 981 (7th Cir. 2004).

A. Def a ma t i o n Per Se Giant Scr een c l ai m s that CI BC ’ s s tat em ents m ade to ED C im pu ted an inabi l i ty to perf or m o r a want of i ntegr i ty; thatth e s tat em ents, ta ken a s a wh ol e, expre ss a f ai l ure ofGia nt S cre en to uphol d contr actualo bl i gat i ons, an d tha t th es e st at ements p rej udi ce i ts r epu ta ti o n in the i nd ustr y. W e a gr ee. Defa m ati on a cti ons prov i de re dress f orf al se sta tem en ts of fac t t h at h ar m a p lain tiff’s rep u ta tio n . Bre nna n8 N o. 07

- 2800 v. Ka dn er, 814 N .E .2d 95 1, 9 5 6 ( Il l. A p p . C t. 20 04 ). A sta tem ent is d ef am ato ryi fi ts pu bl i cati on “ tends to cause su ch harm to the r e p u tation of anoth er that i t low ers th at p erson i n th e e y e s o f th e com m un ity or d eters th ird p er so n s fro m as so c iat in g w ith [th e p lain tiff].” Kol egas v. He f t el B r oad. Corp. , 6 07N. E. 2d 20 1, 2 06 ( I l l

. 1 99 2)
. To prove a d efam ati on cl ai m , the evi dence m ust s how th ata de fen dan t m ade a f al se s ta te m en t co nc erni ngthe pla i nti ff, thatther e was an unpri vi l ege d pu bl i cati on o f th e def amat ory s ta te m en t to a thi r d pa r tyb y the defe n d an t, and that the pl ai nti ffsuffer ed dam age s a s a re su lt. Sei th v. Ch icago Sun-Tim es, Inc. , 86 1 N
. E.2 d 1117, 1126 ( I l l

. A pp . Ct. 20 07 ). I l l i noi s r eco gni zes two ty pes o fdef amat i o n: de f amat i o n per se an d de f amat i o n pe rq uod

. K na fel v. C hic ago Su n-Tim es , Inc ., 413 F.3d 637, 639 (7th C ir. 20 05 )
. Thi s ca se i s ba se d o n a c l ai m o fde f amat i o n per se . So m e s tat em en ts a re co nsi dered def am ato ry per se because theyar e “ so obvi ousl y a nd m ate ri al l y har m ful” to a p l a i nt i fftha th i s i nj ur y ma y b e p r e s ume d a nd h e does no t ne ed to pr o ve a ctua lda m ag es t o r ec o ve r, a s th e defa m ato rychar acte r i s a pp ar en t on i ts f ace. Tui t ev. C orbi tt, 8 66 N
. E.2 d 114, 12 1 ( I l l

. 20 06)
. I l l i noi s r eco gni zes fi ve c at eg o r i es o fs ta te m en ts whi cha r e co ns i der ed ac ti o nabl e per se ; t wo a r e pe r t i ne n tt o th i s c a s e : ( 1 ) th o s e i mput i nga n inabi l i tyt o pe r f o r m or w an t o fi nt eg r i tyi n the di sc ha r g e o fo ne ’ s dut i es o f offi ce o r e m pl o y m en t; a nd (2) th os e th at p rej u d ice a p ar ty , or im p u te lac k of a b ility , in h is or h e r t r a d e, p ro fes sio n or b u sin es s. Brys on v . Ne ws A m er ica Public ations, Inc. , 6 72 N
. E
. 2d 1 207, 12 14 (I ll

. 1996). A l though a st ate m ent m ay fi t into one ofthes e cate gor i es, thi s f act, st anding al one, “has no bea rin g onN o. 07

- 2800 9

w h et h er th e a lleg ed d efa m at or y s ta t e m en t is ac tio n ab le,” because cer tain f acto rs m ay re nd erdef am ato rystat eme n t s no n - a c t i o n ab l e a s a ma t t e r o fl a w. Hopew el l v. Vitull o , 701 N
. E.2 d 99, 10 2 ( I l l

. A pp . Ct. 19 98)
. Fo r exam ple , as C I BC ar gues, i fa defe nd ant’ s s tat em ents ar e r eas onab ly c ap ab le of a n inn oc en t, n on d efa m at o ry co n st ru c tio n, a pl aint i ff ca nno t m aint ain ac ti o n f o r de f amat i o n per se . Brys on , 67 2 N
. E.2 d at 1 215. The in nocent const ructi on rul e “r equi re s cour ts to consi der a w ri tte n orora l state

m ent in conte xt, gi vi ng the words, and thei r i m pli cati ons, thei r natura land obviou s m eani ng. ” Id

. I fth e “ c o mp lai ne d -of statem en t m ay reason ably be inn ocen tly int erprete d, i t cannot b e a cti onabl e per se . ” Har r i s on v. Chi cago Su n -Tim es, Inc. , 793 N
. E
. 2d 760, 772 (I ll

. A p p . Ct
. 2003). I l l i nois cour ts em phasi ze that the inter preta ti on m ust be re asonable

. Brys on , 67 2 N
. E .2d at12 15. I l l i noi s co urts an d ou r c ou r t h av e h eld th at w h et h er a st at em en t is re aso nabl y c apabl e o fan innocent const ructi on i s a questio n of law for th e c ou rtto d ec id e. Se eM uzikows kiv. P a ram o un t P ictu res Co rp., 32 2 F .3 d 918, 924 (7th Cir. 2003); See a lso A nd erson v. V a nd en D o rpel , 66 7 N
. E.2 d 1296, 13 02 ( I l l

. 19 96)
. The Fi rs t Am endm ent a l so aff or ds prot ecti on fro m l i abi l i ty to a sp ea kerexpre ssing an opi ni on that does not m i sst ate actual f acts
. Se e M il kov ich v. Lorain Jour nal Co. , 497U .S . 1, 20 (1 99 0); s e eal s o M or i ar ty v . Gre e ne, 732 N
. E
. 2d 730, 739 (I ll

. A p p . Ct
. 2000). There ar e three d i sputed sta tem ents i n thi s case: ( 1) that G iant Screen ’s f ail ure or r e fu s a l to p ay resu lted in C I B C ’s l oss ; ( 2) thatGia nt S cre en was sti l li n defa ulto fi ts paym ent obl i gat i ons; and ( 3) thatCI BC was unaw ar e o f an y Sky H igh d ispu tes th at w o u ld i m p ed e G iant Screen ’s10 N o. 07

- 2800 p aym en t. C I B C princ ipally argu es th a t th e d istri ct cou rt w as cor re ct in fi nd in g that these sta tem ents ar e no t per se defa m ato ry because they ar e capabl e ofreasonabl e, i nnocent const ructi ons. I n consi deri ng al l eg ed l y def am ato ryst ate m ents und er th e i n n o c e n tc o n s t r u c t i o n r u l e , c o u r t s mu s ti n t e r p r e tthe wor ds “a s th eya ppea r ed to ha ve b ee n us ed an d ac co r di ngt o the i dea the yi nt en ded to c o nv eyt o the re as on able re ader. ” Brys on , 672 N .E .2d at12 17 . Th e ru le “does not re quir e co urts to st ra i n to fi nd an unnatura l inn ocen t m ean ing for a s tatem en t w he n a d efam atory m ea n in g is fa r m or e re as on ab le.” Tu it e, 86 6 N
. E.2 d at 1 23 ( quoti ng Brys on , 672 N
. E.2 d at 1 217)
. I t a l so does not re quir e co urts “t o espouse a naïve té unw ar ra nted und er the c i rcum sta nces. ” Id

. T hu s, “w he n a d efam atory m ea n in g w as c lea rly in te n d ed an d c on ve ye d , [ Illin ois c o u r ts] w il l not strain to i nt erp ret all eged ly d efam atory w or d s in th eir m ild es t a n d m os t in offe n s i v e s en se in o r dert o hol d the m no nl ibe l l o us unde r the i nno ce nt const ructi on r ule

. ” Brys on , 67 2 N
. E.2 d at 1 217. Ou r i nquir y, th en , i s whether ther e i s a r eas onabl e, in n ocent co nstr ucti on o fCI BC ’ s words: an inter preta ti on othe r than thatof G i ant S cre en’ s purpose ful del i nquency i n i ts fi nanci alo bl i gat i ons. In m aking thi s dete rm i natio n , t h e cont ex t of th e statem en ts is cri tical in d eterm in in g t h eir m ea n in g. Se eBrys on , 67 2 N
. E.2 d at 1 215. C IB C arg u es th at th e t h re e s ta te m en ts d o n otim p ly that Giant Scr een del iber ate l y di sr ega rded i ts obl i gat i on to p ay a lawfulde btf o r a n i m pr o perr ea so n. Ra th er, the re fusalo r f ai lu re to pay coul d have r esul ted fro m a m i s-N o. 07

- 2800 11 tak e, a bre ach byS ky H igh, a g oo d fa i th di spute o ver li abili ty, or oth er inn ocen t con stru ctions , to sup p ort su m m ar y jud gm en t in C IB C ’s fa v o r. Se eM uzikows kiv. P a ram o un t P ictu res , 477 F.3d 899 , 904 (7th C ir. 20 07) (“I f a st at ementi s ca pab l e o ft wo r ea so nabl e co ns tr i ct i ons , o ne d efa m at or y a n d on e in n oc en t, t h e in n oc en t o n e w ill pr ev ai l

. ”)
. W e di sa g r ee . T he r e i s no reasonableco nstr ucti on of the s tat em ents othe r than thatGia nt S cre en was unabl e t o perf or m o r w i l l fully r efused to m eeti ts fi nanci alo bl i gat i ons. C IB C di spara ged Gi ant S cre en’ s abi l i ty and i ntegr i ty as a bu siness by tell in g ED C that, i n ess en ce, Gian t Screen ’s contr actualword to m eetan obl i gat i on i s m eani ngl ess . T he natur ala nd o bv i o us r es po ns e o fa ny o ne c o ntem pl at i nge nt er i nga n a g r ee m en t wi thGi an t S cr ee n, up on be i ng to l d that Gi ant S cre en had either re fused or f a i l e d t o p a y a l e g a lo b l i g a t i o n, i s t o n o tt r a ns a c twith G ian t Sc re en , b u t t a ke h is b u sin es s e lse w h er e. Se eAct i on R epa ir v. A m erica n B roa dc a sting C o m pa nies , 77 6 F
. 2d 143, 14 8 ( 7th Ci r. 1 98 5). M or e i m port antly, CI BC ’ s s eco nd l ett er ex p re ss ly st at ed th at G ia n t S c re en w as “s till ind efa u lt.” Such an express st ate m ent about Giant Scre en ’s l ack of fi nanci ali ntegr i ty is not i ntended to pu t EDC o n noti ce ofa future cl ai m , but to i n for m E DC thatGia nt S cre en h ad p u r p os ely d isr eg ar d ed p ay m en ts it w as lega lly o b l i g a t e d t o ma k e . Wi th s uc h a n i nt e nt i o na l b r e a c h, CI BC ar gued i t was ent i tl ed to the i nsurance proce eds. I t was the di st r i ctc o ur t’ s j o b to de ci de whethe r, i n l i g ht ofthe sum m ar y j ud gm ent re cor d, the s tat em ents m ade to E D C c ou ld reason ably, w ithou t un d ue strain, be inter-12 N o. 07

- 2800 prete d i nnocentl y. H owever, the dist ri ct c ou rt ’ s deci si on p ut s an u nd ue str a in on th e m ean ing beh ind CIB C ’s st at ement s. CI BC i nt en ded to con vey, a nd i nde ed ex p ressly stated , that Gian t Screen w as in d e fa ult of a paym ent l ega l l y due. CI BC r ei nfo rce d thi s negat ive port ra yalo fGia nt S cre en by sta ti ng that Giant Scr een was “st i l l i n defa ult, ” s ugges ti ng tha t Gi ant S cre en co uldn’ t o r wo ul dn ’ tma k e p a y men t s tha twe r e du e . Mo r e o v e r, CI BC com m unica ted to ED C that i t knew o fn o dispute w i th Sky H i gh that w oul d i m pede Giant Scr een’s p aym ent. T his state m en t stren gth en ed CIB C ’s m essag e t h at th ere w as no j usti fi cati on f or Giant Scr een’s non- paym ent, i m ply i ng o nl y that Gi ant S cre en purpose l y f ai l ed or wi l l ful l y r efus ed to upho l d i ts e nd o fthe b ar g ain. I l l i noi s l aw rej ects att em pts to i m agine i nnocent expla natio n s o f p lain ly d efa m at or y s ta te m en ts
. Tuite, 866 N
. E.2 d at 12 3. U p on re ad in g th es e s ta te m en ts , E D C ’s re ac tio n w ou ld n otbe th at “fa ilu re or re fu sa l to p ay ” o r “s till be in g in d efa u lt” w er e in n oc en t s t a te m en ts
. SeeAction Repair, 77 6 F. 2d at 148. “Def aul t, ” w hen used to describe the st atus of a t ra nsacting business, i s the wil l fu lr efusalto pay an obl i gat i on. T h e w or d al one tr i gge rs not i ons ofco l l ecti on an d ban krup tcy p roceed ings. A lthou gh the d istri ct cou rt deci ded thatthe l ett er s’ p urpose w as to put ED C on not i ce of a p oten tial claim , w e con clud e tha t both l ette r s w ere actual l y a cla i m on the insurance com pany f orthe re specti ve proce eds. In additi on t o st ating tha t Gi ant S cre en bre ached i ts contr actualduty, the A ugust 2 6, 2 00 5 l ett er concl ud es w i th CI BC advi si ng EDC thatany potenti al i nv e s t i g a t i o n i nt o the cl a i m s ho ul d n o tp r e c l ud e “ pr o mpt paym ent” ofthe i nsurance p ro ceeds. CI BC ’ s intent w asN o. 07

- 2800 13 to c o l l ec t th e pr o ce eds unde r the i ns ur an ce po l i cy, a nd to d o so, C I B C ex p ressly state d th at G iant Scr e e n pu rposel y wel shed o n its fi nanci alo bl i gat i ons. To the r easonab l e r eader, the sta tem ents, t ak en as a w hol e, co nvey th e unt r ue i m put at ion t hat Gi an t S cr ee n i s ani nt en tio n all y d ish on es t b u sin es s e n tit y, w h ich p u rp os ely disr ega rds i ts fi nanci alco ntra cts. The dis tr i ct c ourtal so deci ded thatthe sta tem ents c an n otbe rea so n ab ly in te rp re te d a s a c tu al fa c ts , bu t o n ly as subj ecti ve opi ni ons, ther eby prot ecting the st ate m ents as n on -ac tio n ab l e o p in ion s. St at em en ts of op in ion, although def am atory, do notgi ve ri se to a def am ati on c laim

. Se eBrys on , 67 2 N
. E.2 d at 1 220 ( quoti ng M il k o v ich , 497 U
. S. at20 ) ( a def am ato ryst ate m ent i s pro tect ed und er th e F irs t A m en d m en t a n d ren d er ed n on -ac tio n ab le on ly i fthe re m ar k “ c an not be r eas onabl y inter prete d as st ating actual f acts
. ”)
. I f i t i s pla i n that the speake r is express i ng a subj ecti ve vi ew , an int er preta ti on, a theo ry, c onj ec tu re , o r s u rm ise , rat h er th an cla im in g t o b e in p o ss es sio n of ob j ec tiv ely ve rifia b le fa c ts , th e s ta te m en t is n otac tio n ab le. Wilk o w v. Fo rbes , 24 1 F
. 3d 552, 55 5 ( 7th C ir. 2001). T o be actiona ble, the a ll eged ly d efam atory sta tem ent m ust co ntai n an o bj ecti vel y v er i fi abl e f actual as se r ti o n. Se eLi

f t on v. Bd. of Educ. of t he City of Chi cago , 41 6 F. 3 d 5 7 1 , 5 7 9 ( 7 th Ci r . 2 0 0 5 )
. Al tho ugh “ i n o ne se nse al lo pini ons i m plyf acts , the q uesti on o fwh ethera sta tem ent o fo pini on i s a cti onabl e a s def am ation i s o ne o f deg r ee ; the v ague r a nd mor e g en er al i ze d the o p ini o n, the m or e l ike l y the o pini on i s no n-a cti onabl e a s a m att ero f law .” W ynn ev. Lo yol a Univ. , 74 1 N. E. 2 d 6 6 9 , 6 7 6 ( I l l

. App
. C t. 2000 ).14 N o. 07

- 2800 The sta tem ents at i ssue ar e no t no n-a cti onabl e s tat em en ts of op in ion ; th ey co n ta inob j ec tiv ely ve r ifiab le f actualas ser ti ons. A sp eak er ’ s rem ar ks cannot be di vor ced fr o m the c o nt ex t inwhi chthe y o cc ur . Al th o ug h the ci rcum sta nces und erwh i ch a re m ar k was m ade m ay “nega te the i m press i on that the s ta te m ent had f actual conte nt, ” the st ate m ents here wer e m ad e to an i nsurance com pany to co l l ect proce eds, gi vi ng the greates t i m pressi on that e ach st ate m ent had f actualco ntent and w as not m er el y a ge nera l i zed, vague st ate m ent. Hopew el l , 70 1 N. E. 2 d a t1 0 3
. CI BC c o ul d n o tc o l l e c t, and cer t a i nly ED C w oul d not pay, unl ess it had been f actual l y s tat ed, not subj ecti vel y o pined, thatGia nt S cre en was i n def aul t. A l though the di str i ct c ourtdeci ded thatthe sta tem ents w er e m er e sup posi ti ons, char acte ri zati ons such as “f ai l ure orr efusal ” t o pay and “sti l li n defa ult ” co nvey th at G ian t Sc re en , as a m at te r of fa c t, in te n tio n a lly d id n otp ay w h at it w as lega lly ob liga te d to . Th e re as on ab le read er would und er sta nd CI BC to be i nfo rm i ng hi m o f ev en ts tha t al r ea dy ha ve o cc urred, na m ely tha t Gi an t Scr een inexcusably di d not pay w hat i t s houl d have. Ex press i ng tha t a party del in quentl y f ai l ed to m eeta contr actualo bl i gat i on, part i cul ar l y that i t “ did notpay” or “r efu se d to p ay ” or rem ain s “ ind efa u lt,” is an ob j ec tiv ely fac tual ass er ti on, cl ear l y capabl e of bei ng ver i fi ed as a sta tem en t o ff act, and does not f al lwithi n the prot ecti ve a m bi t o fthe Co ns ti tu ti o n. Furtherm or e, CI BC ’ s pe rsede fam atory stat em en ts are n otsa ve d from be in g a c tio n ab le a s n on -ac tio n ab le op in ion by th e p re fat or y t er m , “[t]o C IB C ’s k n ow led ge ,”N o. 07

- 2800 15

w hen st ating tha t Gi ant Scr een r em ai ned i n defa ult

. Pr ef at o r y l an g ua g e do es no t co nt r o lwhethe r the s ta te m en t is d efa m at or y. See M i l k o vic h, 497 U
. S. at17

- 21; see a lso Wi l kow , 24 1 F
. 3d at 555. Thi s co urt has hel d that s tat em ents of f act ar e not shi el ded fro m an acti on f ord efam atio n ev en if p re fac ed w ith th e w or d s “ inm y op in ion .” Ha yn es v. A lfred A
. K n o p f, Inc., 8 F. 3d 1222, 1227 (7th C ir. 1993 ). A s p reviously d iscus sed , C I B C ’s statem en ts are n o te x p r e s s i n ga s u bj e c t i v e v i e w. Ag a i n, c o nt e xt i s k e y, a nd he r e , CI BC wa s mak i ng a cl ai m f ori nsurance proce eds byf actual l y s tat i ng tha t Gi a ntS c r e e n b r e a c he d i t s o b l i g a t i o n. T o h o l d tha tCI BC was makinga c lai m f o r i ns ur an ce pr o ce eds b y e xpress i ng i ts subj ecti ve opi ni on i s unre aso nabl e. As no te d, c o ur ts wi l lno t st r ain t o fi nd a n inno ce nt m ea n in g for w or d s w h en a d efa m at or y c on st ru c tio n is f a r m or e re as on ab le. Brys on , 672 N
. E
. 2d at 1217. CIBC ’s st at em en ts ab ou t G ian t Sc re en a re n otrea so n ab ly su sc ep tibl e to a n inno ce ntc o ns tr uct i o n. The y a r e no t no n- ac ti o nab l e st at ement s o f opini o n; the y a r e so ha r m fult o Gi an t S cr ee n tha t th ey con st i tu te de f amat i o n per se . Sum m ary j udg m en t o n Gi an t S cr ee n’ s def amat i o n per secla im wa s i mpr o pe r l y g r a nt e d.

B. Q uali f i ed Pri vi l ege The dis tr i ct cour t al so deci ded that ther e was a quali fi ed pri vi l ege in CI BC ’ s co m m unica ti on t o ED C. A l th ou gh Gi an t S cr ee n do es no t que st i o n the e xi st en ce o fs ucha pri vi l ege , Gia nt S cre en ar gues and w e co ncl ud e that16 N o. 07

- 2800 ther e a re tr i abl e i ssues o fm at er i alf act as to w hether the p r i v i l e g e h a d b e e n ab us e d. Even i f a quali fi ed pri vi l ege exi sts , the com m unica ti on can st i l lbe defa m ato ryand a c tionabl e i fthe pri vi l ege ha s be enabus ed. “ I n g en er alt er m s, o ve r co m i ngthe qua l i fi e d p r i v i l e g e r e q u i r e s a s h o wi n gth a tth e d e fe n dan t eit h er inte nti onal l y publish ed th e m at er ial w h ile knowing the m att erwas f al se, o r displ aye d a r eckl ess disr ega rd as to the m att er ’ s f al senes s. ” Sm oc k v. Nol an , 36 1 F. 3d 367, 37 2 ( 7th Ci r. 20 04) ( ci ting Kuwik v. St ar m ark S t ar M ktg. a n d Admi n . , In c. , 6 19 N
. E
. 2d 129, 133 (I ll

. 1993)). To prove such abuse, a pla i nti ff m ust show “a d irect i ntenti on t o i nj ure anothe r, o r a r eckless dis re gar d of [ the defa m ed party ’ s] ri ghts and o f the con se quences that m ay re sul t t o hi m . ” K uw ik, 619 N
. E
. 2d at 135. I m p ortantly, a defe nd ant a cts w i th r eckl ess di sr ega rd wh en i t m ake s a st ate m ent “ despit e a hi gh degr ee ofawarenes s ofpro babl e f al si ty orente rt ai ni ng se ri ous doubts as to its tru th .” Id. at 133 (citation om itt e d ). Reckless d isregard o fa p l a i nt i ff’ s r i g ht s c a n a l s o i nc l ud e the fai l ur e t o p r o per l y invest i gat e the truth ofthe m att er . Id

. at13 6
. A l though w hethera quali fi ed pri vi l ege exi sts i s a questi on o fl aw f orthe co u rt, the i ssue ofwh etherthe pri vi l ege was ab u se d is a q u es tio n of fac t fo r th e jur y. Id. at 133. T h e q u es t i on of w h et h er C IB C ab u se d its p riv ileg e in m ak in g a n y of t h e d efa m at or y s ta te m en ts inv olv es on ly one f actuald i spute: w hetherC I BC knew of the f or ger y o r ha d reason to know of th e forgery w he n i t m ad e its ins urance c l ai m . W e c on c lude that genui ne i ssues o fm ate ri al f act exi st as to w hetherCI BC knew ofo r had re ason toN o. 07

- 2800 17 suspect the for ger y, wh i ch i nd i cate thatCI BC ’ s be havi or inse n d in g t h e le tt er s t o E D C m ay h av e b ee n in re ckl ess di sr ega rd o fGia nt S cre en’ s r i ghts. A lthou gh CIB C ackn ow ledge d the N otice of Secu rity’ s f or ger y, CI BC ar gues that it n eit h er kn ew n or sh ou ld ha ve kno wn th atGi an t S cr ee n’ s si g na tu r e o n the Fal si fi ed Dis tr ibuti on Agree m ent was f or ged. Because ofthi s, CI BC ar gues th at a r eas onabl e j ury coul d not co nc l ude tha t CI BC di r ec tly i nt en ded to i nj ur e Gi an t Scr een or re ckl ess l y disr ega rded Giant Scr een’ s right s w hen m aking i ts i nsurance cl ai m . S peci fi cal l y, CIBC a s s e r ts th ati n Nov embe r 2 00 4, i t se nt G iant S cr ee n a c o py o fthe Fals i fi ed Dis tr ibuti on Agree m ent t o exam i ne the si gnatu re ’s a u th en tic ity . In res p on se , G ian t Sc re en d id n otte ll C I B C th a t the doc um en t w as forged , l ead ing to C I B C ’s bel i efthatn ot h i ng was w ro ng with the docum ent. A l so, CI BC ar gues that i t was unaw ar e o fany dispute i nvol vi ng S ky H i gh, since i t had se tt led its sui t with Sky H igh p ri orto m aking i ts cl ai m with EDC

. W i th the se und i sputed f acts , CI BC ar gues i t was ent i tl ed to sum m ar y j udg m en t sinc e no j ur y c o ul d r ea so nabl y c o ncl ud e that i t had a dir ect i ntenti on to i nj ure Giant Scre en orthati t r eckl ess l y di sr ega rded Gia nt S cre en’ s r i ghts. W e are not sat is fi ed , esp ecially i n view ing the record i n G ian t Sc re en ’s fa vo r, th at n ot h in g in th is re c or d co u ld have jus tifie d a j ury fi nd i ng tha t the pri vi l ege had bee n abused. There ar e disp u te s ofm ate ri alf act as to w hether CIBC m ade the sta tem ents to ED C know i n g ei therthey w er e f al se or h igh l y l i kel y t o be f al se. W hen Sky High defa ult ed on the C IB C lo an, CI BC so ught paym ent fro m18 N o. 07

- 2800 Gi an t S cr ee n, a tt ac hi ng the Not i ce o fS ec ur i tyt o the p ay m en t re q u es t. In re sp on se , G ian t Sc re en rep e at ed ly denie d fa m i l i ar ity w i th the docum ent. On N ove m ber12 , 2004, Gia nt Scre en exp re ssl y stat ed to CIBC that i t had not sig n ed th e N ot ice of Sec u rit y. A t th is po in t, C IB C w o u ld ha ve h ad reason to su s p ect th at G iant Screen ’s si gnatur es m i ght no t hav e be en authent i c. CIBC a rg u es thatthe N oti ce o fS ecuri ty’ s for ger y doe s no t r a i s e a g e n u i n e i s s u e o f ma t e r i a l f a c t r e g a r d i n gt he F a l sifie d D ist rib u tio n A gr ee m en t. W e d isa gr ee ; th e F als ifi ed Dis tr ibuti on Agree m ent e ncom passed the N oti ce o f Se curi ty and nei thero fthe f or ged docum ents coul d be v i e we d in i s o l a t i o n. In the fi r s tde f a mat o r y l e t t e r t o ED C, CI BC s ta te d tha t i t su ffer ed a l o ss a s a r es ul t o fGi an t Scr een’ s f ai l ure or r efu salto pay und erthe Dist ributi on A gr eem ent, “a s d efi ned by the pol i cy. ” The pol i cy defines the agr eem ent “as bei ng am ended by the N otic e” o f Se curity. E DC ther ef or e i ssued the pol i cy re fl ecting bo th the Noti ce of S ecuri ty and the F al si fi ed Dis tr ibuti on A gr eem ent. M or eov er, S ecti on Tw o ofth e N oti ce o f Se curi ty ob li gat es Giant Scr een t o m ake the guar antee d paym ents du e under the F alsifi ed Dis tr ibuti on Agree

m en t dir ectly t o CIBC. Thus, the Fal si fi ed Dis tr ibuti on Ag r e e me n ti n c o r po r a t e d th e N o t i c e o fS e c u r i t y . We r ej e c tCI BC’ s a r g ume nt tha t the do c ume nt s a r e i nd e pe nd

en t o f eac h o th era nd tha t k no wl edg e o fa f o r g ery o n the N oti ce o fS ecuri ty does not giv e ris e t o knowle dge, o r r ea son to kno w, o ff o r g ery o n the F al si fi ed Di st r ibution A greem en t. I f one w as ackn ow ledge d as for ged , there ar e g enui ne i ss ue s o fmate r i alf ac t as t o whethe r the othe r’ s a uthenti ci ty shoul d at l eas t hav e be en i n doubt.N o. 07

- 2800 19 I m port antl y, thr ee days afte r Giant Scr een s tat ed that th e N ot ice of Se c u rit y h ad be en forg ed , C IB C a c k n o w ledg ed th e f o r g ery, a nd i nqui red whethe r o th erdo cum ents, such a s the Fa l si fi ed D ist ributi on Agree m ent, had als o b een for ged. A j ury coul d concl ud e that CI BC knew or, ata m i ni m u m , h ad re aso n to kno w thatthe Fal si fi ed Di st r ibut i o n Agr ee m en t had b ee n fo r g ed. By a sk i ng w hetherthe Fal si fi ed Distr ibuti on Agree m ent had be en f or ged, ther e a re ge nuine i ssues pre sent as to w hether CI BC e nt e r t a i ne d s e r i o us do ub t s a s t o the a uthe nt i c i ty ofits s i g na t ur e . T he r e qu e s ta l o ne e s t ab l i s he s f a c t ua l dispu t e s r e g a r di ngthe s us pi c i o n r a i s e d a s t o the s i g nat ur e ’ s g e nu i ne ne s s . F ur the r, Gi a ntS cre e n i nfo r med CI BC t h a t i t w ou ld n ot“like th e a n sw er s,” ce m en tin g t ria b le i ssues o ff act concerning whether Giant Scr een pr ovi ded no t i c e t o CI BC tha tthe do c ume nth a d b e e n f o r g e d. For ger i es ofGia nt S cre en’ s s i gnatur e prom pted CIBC to send a l ett erto S ky H igh request i ng an expla nati on f or the Noti ce o fS ecuri ty’ s l ack ofauth en ti ci ty. W hen Sky H i g h f ai l ed to r es po nd, CI BC fi l ed su it agai ns t S k y Hi g h, sta ti ng in an a ffi davi t that i t “ fear ed” the N oti ce o f Se curi ty w as f al se and based on fa lse re prese ntati ons. C IB C th en filed it s in su ra n c e c laim w ith E D C . A rea so n ab le j ury coul d concl ud e th at CIBC “fear ed” the f or ger y b ec au se , as C IB C ’s in te rn al c om m u n ica tio n s re flec t, a f or ger y would pre cl ud e re c ei pt ofthe i nsurance proce eds

. The f ac tu aldi spu te s, t ak enfavor ab l y o n Gi an t S c r e e n’ s b e ha l f, s ug g e s ttha tCI BC’ s f a i l ur e t o i nv e s t i g a te the t ruth pr i orto i ts cl ai m m ay have been re ckl ess . A l lo fthes e ev en ts l ead to tr i abl e i ssues o fm ate ri alf act as t o whethe r CI BC k ne w orha d r ea so n t o kn ow ofthe20 N o. 07

- 2800 Fa lsifie d D ist rib u tio n A gr ee m en t’s forg ed sign at u re . A tr iab le i s s u e of fac t e x ist s a s t o w h et h er C IB C rec kle ss ly d isr eg ar d ed G ian t Sc re en ’s rig h ts by failin g t o p ro p er ly invest igate the tru th beh ind the signa tu re before ma k i n gth e i n s u r a n c e c l a i m.

C ONC L US I ON Th e di s t r i c tc o urt hel d tha tCI BC’ s s t a t e men t s t o ED C w er e no t per s e defa m ato ryand that CIBC’s quali fi ed pri vi l ege r endered them non- acti onable

. W e co ncl ud e, how eve r, thatthe sta tem ents am ounted to def am ati on per seand ge nuine i ssues o fm ate ria lf act exi st as to CIBC’s abu se ofi ts pri vi l ege . There f or e, we R EV ERSE a nd R EMA ND f orfurtherpro ceedi ngs. Rule 36 i s t o apply.

C UDAH Y, Cir cu i tJudge, di sse nti ng. Afte r Giant Scr een an d SkyH i gh exe cuted an a gr eem ent t o co- produce an I M A X fi lm about Vi ki ngs, S ky H i gh so ught and ob tained addi ti o na l fi na nc i ng by per pet r at i nga fr au d o n the de fen dant CIBC: i t for ged si gnatur es on a se ri es ofdocum ents th roug h w hich Gian t Screen ap p eared to guaran tee C I B C ’s l oan to Sky H i gh. N ot surpri si ngl y gi ven these rather i nauspici ous b eginn in gs, thi ngs di d not e nd well

. S ky H i g h f ai l ed to de l i ve r the fi l m o n t i m e, CI BC s en t Gi an tN o. 07

- 2800 21 Scr een a l ett erdem andin g repaym ent a nd Gia nt S cre en d isc l ai m ed knowle dge o fthe fra ud ule nt docum ents by m eans ofwh i ch Gia nt S cre en appear ed to have gu ar an te ed th e loa n . C IB C m ad e so m e p re lim in ar y in q u ir i es i nt o Gi an t S cr ee n’ s al l eg at i o ns o ffr au d, b utg av e up when Gi an t S cr ee n s ai d i t woul d ans werCI BC’ s que st i o ns o nl y i f o r der ed to do so by a co ur t. W i th o ut i nqui r i ng further, CI BC m ade a ser i es ofst ate m ents to it s insurer th at lie atth e c en te r of th is d isp u te . M os t p er tin en tly , i t sta ted tha t Gi a nt S c r e e n wa s “ s t i l l i n de f a ul t o f i t s paym en t o b liga tio n s.” A s Ir ead this st ate m ent, and the othe r sta tem ents that ar e a t i ssue here , Ifi nd m yse l fi ncapabl e o f t h e so rt of i ndi g na ti o n tha t se ems t o a ni m at e th e m aj o r i tyo pi ni o n. A ccor ding to the m aj or i ty, CI BC ’ s s tat em ent s ugges ts that “Gia nt S cre en’ s co ntra ctualword to m eetan obl i gation is m ean ingless” (M aj
. Op
. at 11), and “triggers n o t io n s ofc o lle c t io n a n d b a n k r u p t c y p r o c e e d in g s .” (M aj. Op
. at12
. ) To m y e ar, the sta tem ent doe s no such thi ng. CIBC has notsa i d that Gi an t Sc re en i s incapabl e o f payi ng; i t has n ot e ve n sta ted thatGia nt S cre en l acke d an exc use f orn on p ay m ent. I t has sa i d onl y that Gi ant S cre en sim p l y has notpai d, and that pay m ent was due. W hat, then, has l ed m y c ol l eagues t o concl ud e that thi s i s def am atory? I t seem s s afe t o saythatm y c ol l eagues hav e no t ba sed the i r de c i s i o n o n s pe c i fi c I l l i no i s p r e c e de nt
. Ind e e d, g i ve n tha t we a r e si tt i ngi n di ve r si ty, o ne c an ’the l p b ut be s t r uc k b y the maj o r i t y ’ s i nd i ffe r e nc e t o the f a c t t hat I l l i noi s co urts have st at ed that “[ a] l l ega ti ons ofo ut-22 N o. 07

- 2800 stan d ing d ebts and the fail ure of a b u s in ess ven tu re are nei thernece ssa ri l y inj uri ous to a per son’ s business re pu tatio n n or ind ica tiv e o f a lac k of in te g r i t y in bu sin es s d ea li ngs. ” M aki s v. Are a Pub l ’ ns Corp. , 3 95 N .E .2d 11 85 , 118 9 (Ill. App. Ct
. 1 s tDi s t
. 1 9 7 9 )
. I ta pp e a r s t o b e wi de l y a ccep t e d, both i n I l l i noi s and els ew here , that the m er e s tat em ent that som eo n e has f ai l ed to per f or m under an agr eem ent doe s not, w i thout m or e, i m pli cate o ne’ s abi l i ty, busi ness i ntegrit y or so lve n c y. See, e. g., Springe r v . Harwig, 41 8 N
. E.2 d 87 0, 8 72 ( I l l

. App. Ct
. 1 stDi st
. 1 98 1) ( l aws ui t ch ar g i ng a per so n wi thf ai l ur e to pe r f o r m unde r a n a greem en t “does not, i n i tse l f, char ge hi m with l ack ofabi l i ty or i ntegr i ty i n hi s business. ”); A m . Ne e dl e& Nove l ty, Inc . v. D rew P ears on M ktg., Inc. , 8 2 0 F
. S u p p . 1 0 7 2 , 1 0 7 5

- 7 6 ( N. D. Ill. 19 93 ) (st at em en t t h at p lain tiff h as kn ow in gly bre ached an a gr eem ent a nd i s d elinquent i n paym ents “whi l e di sc o ur te o us . . . do [ es ] no t, i n obv iousl y a nd natura l l y har m ful w or ds, co nsti tute a s er i ous c harg e o f in c ap ac ity o r m i s c on d u c t.” ); U ni on Pac. R. R. Co. v. Vi l l
. of S. Bar r i ngt on , 958 F. S upp . 12 85, 13 00 ( N
. D. I l l

. 19 97) ( al l ega ti on that plainti ffbr eached co ntra ct i s no t a se riou s c h ar ge of in c ap ac ity or m isc on d u c t t h at w ou ld su p p or t an ac tio n for d efa m at ion p er se ); s e eal s o M akof s ky v. Cunn i ngh am , 576 F. 2d 1223 , 1236 ( 5th Ci r. 19 78) ( ass er ti on that buyerw as “ in def aul t” ofpurchase ag re em ent i s no t defa m ato ryperse , “e speci al l y when , a s here, [ the words] ar e e m plo yed m er el y t o cl ai m a deposi t m ade as a secur i ty for c on tr ac tu al p e rfo rm an c e.” ); Willia m s v. G ulf C o a st Coll e ct i on Age ncy Co. , 4 9 3 S. W
. 2d 3 6 7, 3 6 9 ( M o . Ct
. App
. 1973 ) ( the g ener alr ule i s that i t is n ot def am ato ryp erse to st at e th ata pe r so n o wes a d ebt w hich i s l o ngpa stdueN o. 07

- 2800 23

I n Q ual i ty G ra ni t e C onst r. C o. , Inc. v. Hu rs t

- R os che En g’ rs, Inc. , 1 632 N
. E.2d 1139 ( Il l. Ap p. Ct . 5th D is t. 1994) , an Il li nois court refu sed to overturn a j ury’ s finding thata l ett er s tat ing that the pl ai nt i ff“m ay be c ons i dere d i n de f aul t ” was def am at or y. Id
. at 1143. H ow eve r, in t hat c ase , the def endan t al so ac cuse d the p lain tiff of f ailing “to com p lete the p ro ject i n a tim ely m an ne r, s u b stan d ard w or k m an ship , relu ctan ce to co m p lete p u nc h li s ti t em s an d i nabi l i ty t o i nt er pre tthe c ont ra c tdoc um ents , p lans and speci fic ati ons as bid.” Id
. at 11 41
. It is p ro b ab ly n o tir r e l e v a n tth a tt h e ju r y a l so fo u n d th a tth e d e fe n d a n t ’s s t at em en twas m ade to p res s ur e the pl ai nt i ffi nt o f or fei t i ng its cla im s fo r a d d iti o n a l co m p en sa tio n . Id. w h er e t h is c h ar ge d oe s n otaffe c t t h e p er so n i n h is b u sin es s); P atton v. Jacobs , 78 N
. E.2 d 789, 790- 91 ( Ind

. A pp . Ct. 19 48 ) ( st at ementtha t a per so n who i s no t a m er ch an t ow es a d ebt an d refuses to p ay is n ot d efam atory p er se); D em m el v. Trium ph of Eu rope, Inc. , 20 8 N
. Y. S
. 2d 463 ( N
. Y. Sup
. C t . 1 9 60) (assertion tha t plaintifff ail ed to perform h is c on tr ac ts w ou ld n o t t en d to h old p lain tiff t o rid icu le or av er sio n an d w a s n otca lcu lat ed to p rej u d ice h im in seeking a l ivelihood ). 1 The maj o r i ty ’ s d eci si o n i s no mor e co m pel l ed bythe ge n er al p rin c ip les o ft h e la w of d efa m at ion th an it is re quir ed by speci fi c I l l i noi s pre cedent. The l aw o fdef am ati on in I l l i noi s i s unre m ar kabl e: d efa m ati on t ends to c au se su c h h ar m to th e re p u ta tio n of an ot h er th at it low ers tha t pe rson i n th e eyes of the com m un ity or det ers th ird p er so n s fro m as so c iat in g w ith h im
. See Tuit ev. C orbi tt, 866 N
. E
. 2d 114, 121 (Ill. 2006). Statem en ts are defa m ato ryperse wh en the y i m pu te i nabi l i ty orwant of24 N o. 07

- 2800 i ntegr i ty i n busi ness, o r i n one’ s per f or m an ce o fem plo ym en t d u tie s. Id. The mer e r ec i ta ti o n o fthi s defi ni ti o n, how eve r, does notse ttl e m uch. A t m ost, CIBC’s sta tem ents ar e a g no st i c wi thre spe ctto Gia ntSc r ee n’ s “ i nt eg r i ty ” an d i ts “b us i ne ss ab i l i ty
. ” Thus , i t se ems to m e th at w e are re quir ed und erI l l i noi s’ “innocent const ructi on r ule ” t o hol d the s tat em ent t o be no n-def am atory
. S ee Tuite, 86 6 N
. E.2 d at 1 21 ( a s tat em ent i s n ot d efam ato ryi fi t i s “ re ason ably cap able of an i nn ocen t con stru ction.”). The m aj or i ty pays l i p ser vi ce t o th e in nocent const ructi o n r ul e, b utdi smi ss es a s “u nr ea so nabl e” a ny i nno ce nt in te rp re ta tio n of C IB C ’s s ta te m en ts . (M aj. O p . at 1 1.) Idisagree

. I t seem s to m e tha t C I B C ’s statem en ts are obviously( and rea sonab l y) capable of i nnocent const ructio n . Th e in n oc en t c o n st ru c tio n of its st at em en ts w ou ld b e as follow s: Gian tSc r e e n d i d n otpe r f or m an ac t i on r e q ui r e d b y c ont r ac t; i tm ay s ubj e ct i ve l y b e l i e vethat perfo rm a nc e w a sn’t du e, a nd this belief m a y ev en be reaso na ble, orat any r at e, exc us ab l e; howe ve r, i t s no npe r f or m anc ehas resul te d in a loss t o C IBC forwhich C IBC is e ntit le d to i nsurance com pe ns at i on . A gain, o ne does n’thave to st ra i n to se e this i nter preta ti on

— th is is m or e o r les s w h at C IB C ac t u ally s a i d. The i nno ce ntcons tr uct i o n r ul e se ems t o e m bo dy th e pri nci ple t h at cour ts shoul d, w here r eas onabl e, st ri ve to m i ni m i ze the se t o fs ta te m en ts tha t ca n g i ve r i se t o po te ntia l tor t liab ility . Th is m ak es a g r e at d ea l of ec on om ic se n se . The r i sk ofta ki ng unavai l i ng br each o fco ntra ct claim s to be d efam a t o r y i s tha t w e w il l m ake it hard er, ra therthan eas i er, f orpeopl e in busi ness to inte ra ct. EvenN o. 07

- 2800 25

w h en th e p ro sp ec t o f u ltim at e l y b ein g fou n d liab le se em s re m ote , as se em s t o be the cas e her e, o ur l aw un ne cess aril y inc reases the cos t of bu siness i f ord inary busi ness com m unica ti ons have the po tenti alto f oi st on speake rs the cos t of sta nd i ng tr i al to prove that th eir st at em e n t s w er e t ru e, or w er e n otrec kle ss in t h eir possibl e f al si ty. Inth e ligh t o fa ll th is, I th in k ou r d ec isio n to d ay is illa dv i s e d. I ts e e ms t o me v e ry li ke l y tha th a r s he r wo r ds than the o nes a t i ssue here have passe d between b u s i n e s s a s s o c i a t e s wi th o u tth e p a r t i e s c o mi n gt o b l o ws or cont actin g the ir law yers. A gain, bec au se p arties ap p arentl y ra re l y see the need to l i ti gat e ove r suc h tr i vi al i ti es, i t i s har dlycl ear l y e stab l i shed as a m att ero fl aw that the words l i ke “de fau l t” gi ve ri se to tor t l i abi l i ty w hen th ey are em b ed d ed in s en te n c es th at m igh t c on c e i va b ly be f al se. In spi te ofthi s, the m aj or i ty today hol ds w hat, to m y kno wl edg e, no c o ur t ha s ev erhe l d: na m ely, tha t o ne def ames a b us i ne ss a ssociate as a matt ero fl aw b y s ay i ng th atthi s as so ci at e i s “in de f au l t. ” I n as si g ni ngs ucht r ea ch

er ous c ons eq uences to the use o fthi s r atherbl oo dle ss an d a t an y r at e unr emar k ab l e wor d, the m aj o r i tyha s dug a ne w and hi ddenp itf al lf o r c i vi ldi sc o ur se a m o ng bus i ne ss peo pl e. Thi s r es ul t, i n o th erwor ds, i s bo thi m pr udent and unn eces sar y. Ir espect fully di sse nt.

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