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No. 1-01-2050 

First Division

November 27, 2002

JUSTICE COHEN delivered the opinion of the court:

Plaintiff Phoebe Medow filed a three-count complaint against defendant Daniel D. Flavinaccusing Flavin of slander (count I), libel (count II), and conversion (count III). The trial courtgranted summary judgment in favor of Flavin on counts I and II of Medow's complaint. Followinga trial on count III, a jury found Flavin liable for conversion and awarded Medow $1,500 incompensatory damages and $37,500 in punitive damages. The trial court, however, enteredjudgment notwithstanding the verdict (JNOV) in favor of Flavin as to punitive damages. On appeal,Medow argues that the trial court erred in: (1) granting summary judgment in favor of Flavin oncounts I and II of her complaint; and (2) entering JNOV in favor of Flavin as to punitive damages. For the following reasons, we reverse and remand..

BACKGROUND

Medow sold her travel agency, Way to Go Travel, to Creative Travel and Tours, Inc.(Creative Travel) for $40,000. In his capacity as vice president of Creative Travel, Flavin enteredinto an Asset Purchase Agreement (APA) with Medow, which outlined the terms of the sale. Pursuant to the APA, Medow continued working for Way to Go Travel as an independent contractorfollowing the sale. On August 25, 1988, Flavin terminated Medow's association with Way to GoTravel. In 1989, Flavin filed a lawsuit against Medow.⁽¹⁾ Medow filed a counterclaim accusingFlavin of slander, libel and conversion. Medow's counterclaim was subsequently dismissed for wantof prosecution on January 7, 1997. On December 22, 1997 (within one year of the dismissal for wantof prosecution), Medow filed the instant complaint pursuant to section 13-217 of the Code of CivilProcedure. 735 ILCS 5/13-217 (West 1996).

In count I of her complaint, Medow alleged that Flavin had committed slander per se onAugust 26, 1988, when he told a representative of Della Femina McNamee WCRF (Della Femina),a Chicago advertising firm, that Medow's association with Way to Go travel was terminated "fortheft." As evidence of Flavin's alleged August 26 oral statement, Medow attached a November 22,1988, letter written by Flavin to Della Femina's vice chairman John Wiegand. In the letter, Flavininformed Wiegand that Medow's "association with Way to Go Travel was terminated on August 25,1988[,] for theft and your office was advised on the 26th." Medow's allegation of libel in count IIis predicated on Flavin's written statement in the November 22 letter.

In count III of her complaint, Medow alleged that Flavin converted numerous items ofMedow's personal property. Specifically, Medow alleged that when Flavin terminated heremployment, he did not permit her an opportunity to remove her personal belongings from theCreative Travel office. Medow further alleged that, through her attorney, she sent letters to Flavinboth on September 23, 1988, and October 6, 1988, demanding the return of her personal belongings. Medow alleged that Flavin failed to return a number of items.

On July 27, 1998, Flavin moved for summary judgment on counts I and II of Medow'scomplaint. Flavin argued that summary judgment was appropriate as to count I because Medowcould not present sufficient evidence to prove that Flavin had made an oral statement accusingMedow of theft. In support, Flavin attached a transcript of Medow's deposition. During herdeposition, Medow testified that she had never personally heard Flavin accuse her of theft and noone had told her that Flavin accused her of theft. Flavin also attached his own affidavit in supportof the summary judgment motion. In his affidavit, Flavin averred that on August 26, 1988, he toldan employee of Della Femina that Medow had been terminated but did not tell the employee thatMedow had committed theft.

Flavin argued that summary judgment was appropriate as to count II because the November22 letter containing the allegedly libelous statement was absolutely privileged as a communicationpertinent to a legal proceeding. In his affidavit, Flavin admitted that he wrote the November 22 letterand that the letter stated that Medow's "association with Way to Go Travel, Inc., was terminated onAugust 25, 1988[,] for theft and [Della Femina's] office was advised on August 26." Flavin averredthat the quoted language "meant that Della Femina's office was advised on August 26 that PhoebeMedow had been terminated, *** and not that the termination was for theft." Flavin further averredthat his purpose in writing the letter was to settle a small claims action, which he had filed in hiscapacity as managing officer of Creative Travel against Della Femina In support of his summaryjudgment motion, Flavin attached a copy of the November 22 letter, a December 2, 1988, letter fromDella Femina agreeing to settle the small claims suit, and a copy of the single paragraph small claimscomplaint.⁽²⁾

Medow filed a response to the motion for summary judgment arguing that Flavin's motionand supporting evidence demonstrated the existence of a question of material fact as to whetherFlavin orally informed a Della Femina employee that Medow committed theft, thereby precludingsummary judgment on count I. As to count II, Medow argued that because section 586 of theRestatement (Second) of Torts (Restatement) (Restatement (Second) of Torts,