Opinion ID: 801506
Heading Depth: 2
Heading Rank: 2

Heading: Overcoming the Conditional Privilege

Text: The conditional privilege can be overcome if American Capital “induced the breach to further [its] personal goals or to injure the other party to the contract, and acted contrary to the best interest of the corporation.” Von der Ruhr v. Immtech Int’l, Inc., 570 F.3d 858, 866-67 (7th Cir. 2009) (quoting George A. Fuller Co. v. Chi. Coll. of Osteopathic No. 11-2102 11 Med., 719 F.2d 1326, 1333 (7th Cir. 1983)); see also HPI Health Care, 545 N.E.2d at 678 (“A defendant who is protected by a privilege, however, is not justified in engaging in conduct which is totally unrelated or even antagonistic to the interest which gave rise to defendant’s privilege.”). It is Nation’s burden to present evidence to overcome the privilege. HPI Health Care, 545 N.E.2d at 677. He has not done so. There is no evidence suggesting that American Capital induced Spring Air’s breach of Nation’s severance agreement for any reason other than to protect its investment and to preserve Spring Air’s value for shareholders. It is undisputed that American Capital injected millions of dollars into Spring Air and that the company faced a severe liquidity crisis. When Spring Air suspended Nation’s severance pay, it also suspended severance payments to three other former executives and took additional measures to halt the company’s cash-flow problems, such as deferring payments to vendors and renegotiating terms with suppliers. Indeed, in his briefs and at oral argument, Nation’s counsel was unable to point to even one decision made by American Capital that was contrary to Spring Air’s financial interests. Furthermore, Nation’s counsel conceded at oral argument that the suspension of Nation’s payments was not contrary to Spring Air’s interests. Any interference with Nation’s severance agreement was amply justified. Nor does Nation have any evidence that American Capital induced the breach of his severance agreement 12 No. 11-2102 to injure him personally. He notes that Spring Air eventually resumed severance payments to the other executives, but that fact alone is insufficient to prove intent to injure him. The resumption of payments to the other executives occurred after Nation began working at Serta, a competitor of Spring Air, which was itself a breach of the severance agreement. In short, the privilege issue here is straightforward. As Spring Air’s majority shareholder with control of a majority of its directors, American Capital was conditionally privileged to interfere with the company’s contracts, including its severance agreement with Nation. There is no evidence that would permit a reasonable jury to conclude that American Capital induced the breach of Nation’s severance agreement to further its own interests or to injure him, or that doing so was contrary to Spring Air’s interests. Summary judgment for American Capital was entirely appropriate. A FFIRMED. 6-4-12