Condo President’s SLAPP Defense Against Developer Not Moot

John Walsh was the president of his condominium association. Certain members of the association felt the developer committed fraud in connection with the conversion of the apartment building to a condominium. So the association sued the developer.

Two companies and two individuals were involved in the condo conversion – Sixty Thirty LLC; Wright Management LLC; W. Andrew Wright; and James Wright. Andrew and James were members of Sixty Thirty and Wright Management, and another related company, Wright Development Group LLC. The condo association did not sue Wright Development.

About two months after the association filed its fraud lawsuit, the local alderman held a meeting to give the residents “a public forum to communicate the problems they had experienced with developers and contractors building and renovating condominium buildings in the ward.” Walsh attended the meeting, and spoke about problems at the condo and the fraud lawsuit.

During a “mingling” session after the meeting, Walsh was interviewed by a newspaper reporter about the problems at Walsh’s condo . Walsh referred to the developer as Wright Development Group” or “The Wright Group,” “Because that’s what it is. It’s the Wright Group. It’s the Wrights … [W]henever I think of the developer, I think of the Wrights because to me that’s the developer … I think of Andrew and Jamie.”

After Walsh’s interview was published in a local newspaper, Wright Development sued Walsh for defamation, alleging he knew the real identity of the developer was Sixty Thirty LLC, not Wright Development. Walsh asked the trial court to dismiss Wright’s complaint under the Illinois Code of Civil Procedure. Before the trial court ruled on that request, Walsh also asked the court to dismiss the case under the Illinois Citizen Participation Act. That Act prohibits SLAPP lawsuits (Strategic Lawsuits Against Public Participation) – cases against citizens who are sued for their actions in exercising their political rights. Walsh claimed his statements to the reporter were an exercise of his political rights.

The trial court denied Walsh’s request to dismiss under the Citizen Participation Act, but later granted Walsh’s request to dismiss under the Code of Civil Procedure. Walsh appealed the denial of his request under the Act. Even though the case had been dismissed, Walsh complained he was denied statutory immunity and mandatory attorney fees under the Act.

The appellate court ruled Walsh’s appeal was moot, and dismissed it. The appeal was moot, the appellate court stated, because Walsh got his dismissal, “albeit on a different basis” than the Act, so “any action by this [appellate] court would constitute an advisory opinion.”

Walsh then appealed the mootness ruling to the Illinois Supreme Court. The supreme court ruled the appeal was not moot because the Act gave Walsh rights that were not considered by the appellate court. This is how the supreme court explained it:

The instant appellate court’s failure to undertake the question of whether the plaintiff’s [Wright Development] lawsuit could be identified as a SLAPP directly contradicts the legislature’s explicit expression of public policy regarding the efficient process to identify and adjudicate SLAPPs … The mootness finding also contradicted the legislature’s express finding of public policy in favor of an award of attorney fees and costs to prevailing movants [who successfully defend a case under the Act].

Further, there was, in fact, a potential injury to Walsh. Walsh was denied the relief requested in his Act motion to identify Wright Development’s lawsuit as a SLAPP and for a statutory award of attorney fees and costs – an entitlement not available with the mere [Code of Civil Procedure]section 2-615 dismissal.

Ultimately the supreme court ruled Walsh had immunity from Wright’s defamation lawsuit under the Citizen Participation Act, and the case was sent back to the trial court for an award of Walsh’s attorney fees. Read the whole case, Wright Development Group v. Walsh, No, 109463 (10/21/10), by clicking here.