Facebook Posts Not Hearsay Where Offered To Show How Ex-Wife Presented Relationship To Others – Illinois Case Note

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Reversing a family law judge’s decision to terminate ex-spousal maintenance, the Second District appeals court in In re Marriage of Miller, 2015 IL App(2d) 140530 delves into the foundation requirements for getting Facebook pages into evidence and again highlights the crucial role social media plays in litigation in this digitally saturated culture.

The trial court granted the ex-husband (“Husband”) motion to terminate maintenance payments to his ex-wife (“Wife”) based on her multiple Facebook posts that she was in a relationship and (presumably) living with another man.  Illinois divorce law posits that maintenance payments must cease when the recipient remarries or cohabitates with another on a continuing basis.

Since the Facebook posts revealed the Wife frequently trumpeting her new relationship, the court found that the policies behind maintenance payments would be compromised by allowing the Wife to continue receiving payments from Husband.

The Wife appealed, arguing that the trial court shouldn’t have allowed her Facebook posts into evidence.

Held: Reversed (but on other grounds).  Wife’s social media posts were properly authenticated, not hearsay and any prejudice to her didn’t substantially outweigh the posts’ probative value.

Rules/reasoning:

– To enter a document into evidence at trial or on summary judgment, the offering party must lay a foundation for it;

– The party offering the document into evidence – including a document to impeach (contradict) a witness on the stand – must authenticate the document through the testimony of a witness who has personal knowledge sufficient to satisfy the court that the document is what the proponent claim it is;

– To lay a foundation for an out-of-court statement (including a document), the party attempting to get the statement into evidence must direct the witness to the time, place, circumstances and substance of the statement;

– Hearsay is a statement, other than made by the declarant while testifying at trial or hearing, offered in evidence to prove the truth of the matter asserted;

– When the making of statement is the significant fact, hearsay isn’t involved (ex: the mere fact that a conversation took place isn’t hearsay);

Here, the court found that the Facebook posts weren’t offered for their truth.  Instead, they were offered to illustrate the way the Wife was portraying her current relationship to others.  The court deemed the posts relevant to the issue of how “public” or “out in the open” the Wife was about the relationship. 

And since the Husband didn’t offer the posts for the truth of their contents (that Wife was in fact living with someone and so disqualified from further maintenance payments) but instead to show the court the manner in which the Wife presented the relationship to others, the court properly allowed the posts into evidence.

The Second District also agreed with the trial court that the posts didn’t unfairly prejudice the Wife.  Indeed, the court characterized the posts as “bland”, “cumulative” and less effective than the parties’ live testimony.

(¶¶ 33-38)

The Wife still won though as the appeals court reversed the trial court’s decision to terminate Husband’s maintenance obligations.  The court found that more evidence was needed on the specifics of the Wife’s existing relationship including whether it was continuing and conjugal enough to constitute a “de facto marriage” (as opposed to a “dating” relationship only) and thus exclude the Wife from further maintenance payments from Husband.

Take-aways:

Hearsay doesn’t apply where out-of-court statement has independent legal significance;

Facebook posts authored by a party to lawsuit will likely get into evidence unless their prejudice outweighs their probative value;

Where social media posts are authored by third parties, it injects another layer of hearsay into the evidence equation and makes it harder to get the posts admitted at trial.

Fraud, Economic Loss and Contractual Integration Clauses (And More): Illinois Fed Court Provides Primer

Plaintiff purchased the defendant’s nation-wide network of auto collision centers as part of a complicated $32.5M asset purchase agreement (APA).   A dispute arose when the plaintiff paid $9.5M to a paint supply company and creditor of the defendant in order to consummate the APA.  The plaintiff argued that the defendant breached the APA by not satisfying the paint supply debt and securing a release from the paint supplier before the APA’s closing date.  Plaintiff sued on various tort and contract theories.  Defendant countersued for reformation, rescission and breach of contract.  Both parties moved to dismiss.

In granting the bulk of the defendant’s motion to dismiss, the court in Boyd Group, Inc. v. D’Orazio, 2015 WL 3463625 (N.D.Ill. 2015) examines the interplay among several recurring commercial litigation issues including the economic loss doctrine as it applies to negligent misrepresentation claims, the impact of a contractual integration clause, and the pleading requirements for fraud in Illinois.

The court dismissed the breach of contract claim based on the APA’s integration clause.  Where parties insert an integration clause into their contract, they are manifesting their intent to guard against conflicting interpretations that could result from extrinsic evidence.  If a contract has a clear integration clause, the court cannot consider anything beyond the “four corners” of the contract and may not address evidence that relates to the parties’ understanding before or at the time the contract was signed.1

Here, the plaintiff’s breach of contract claim was based in part on e-mails authored by the defendant the same day the APA was signed.  Since the APA integration clause clearly provided that the APA was constituted the entire agreement between the parties, the court found that the defendant’s e-mails couldn’t be considered to vary the plain language of the APA.2.

The plaintiff’s negligent misrepresentation claim was defeated by the economic loss doctrine, which posits that where a written contract governs the parties’ relationship, a plaintiff’s remedy is one for breach of contract, not one sounding in tort.  An exception to this rule is where the defendant is in the business of providing information for the guidance of others in their business transactions.

Case law examples of businesses that the law deems information suppliers (for purposes of the negligent misrepresentation/economic loss rule) include stockbrokers, real estate brokers and terminate inspectors.  Conversely, businesses whose main product is not information include property developers, builders and manufacturers.

Here, the in-the-business exception (to the economic loss rule) didn’t apply since defendant operated car collision repair businesses.  He did not supply information for others’ business guidance.  The court found the defendant more akin to a manufacturer of a product and that any information he furnished was ancillary to his main collision repair business.3

The one claim that did survive the motion to dismiss was plaintiff’s fraud claim.  To plead common law fraud under Illinois law, the plaintiff must establish (1) a false statement of material fact, (2) defendant’s knowledge the statement was false, (3) defendant’s intent to induce action by the plaintiff, (4) plaintiff’s reliance on the truth of the statement, and (5) damages resulting from reliance on the statement.  Fraud requires heightened pleading specificity and it must be more than a simple breach of contract.  A fraud claim must also involve present or past facts; statements of future intent or promises aren’t actionable. 4

The plaintiff’s complaint allegations that the defendant factually represented to the plaintiff that he was in the process of securing the release of the paint supply contract as an inducement for plaintiff to enter into the APA were sufficiently factual to state a fraud claim under Federal pleading rules.

Afterwords:

  • The economic loss rule bars negligent misrepresentation claim where the defendant’s main business is providing a tangible product rather than information;
  • A clearly drafted integration clause will prevent a party to a written contract from introducing evidence (here, emails) that alters a contract’s plain meaning;
  • The failure of a condition precedent won’t equate to a breach of contract where the party being sued isn’t responsible for the condition precedent;
  • A plaintiff successfully can plead fraud where it involves a statement concerning a present or past fact, not a future one.

References:
1.  2015 WL 3463625, * 7

2. Id.

3. Id. at * 11

4. Id. at **8-9

 

 

Illegality Defense Doesn’t Defeat HVAC Subcontractor’s Damage Claim Versus General Contractor on Chicago Transit Authority Project (N.D. 2015)

I’ve written before on the illegality defense to breach of contract suits.  It’s bedrock contract law that an agreement to do something criminal (example – murder, arson, selling drugs, etc.) is unenforceable against the person who doesn’t perform (example: if I fail to pay a hit man, he can’t sue me for the $). 

The illegality defense also applies in the civil context where it can defeat an agreement that runs afoul of a State or Federal statute.  The policy underpinning for the illegality rule is that it would make a mockery of the justice system if you could sue to enforce an agreement to commit a crime.

Energy Labs, Inc. v. Edwards Engineering, 2015 WL 3504974 (N.D.Ill. 2015) examines contractual illegality in the context of a high-dollar subcontract to supply HVAC equipment to the Chicago Transit Authority (CTA).

The plaintiff air conditioning parts subcontractor was hired by the defendant to provide parts in connection with the defendant’s contract with the CTA.  When the defendant found out that plaintiff was procuring its parts in a foreign country, it cancelled the contract since the Buy America Act, 49 U.S.C. s. 5323 (“BAA”) required the parts used in the CTA project to be made in the U.S.

Plaintiff sued to recover damages resulting from the defendant’s contract cancellation since plaintiff had already designed and started making the HVAC parts.  Defendant moved to dismiss on the basis that the contract was illegal since it violated the BAA.

The court denied the motion to dismiss.  While the general rule is that a contract that violates a Federal statute is normally unenforceable, the court said the rule isn’t automatic.  Instead, the court considers the “pros and cons” of enforcing the putative illegal contract taking into account the benefits of upholding the contract against the drawbacks of doing so.

Even if a contract isn’t illegal, a Federal court can still refuse to enforce it when doing so would violated a clear congressional goal or policy. 

Illegality also applies where a contract isn’t illegal on its face but requires a contracting party to commit an illegal act carrying out its obligations. 

To determine whether a contract violates a Federal statute, the court compares the four-corners of the contract to the statutory text and any interpreting case law.(*3).

Here, the court found that the contract wasn’t explicitly illegal.  The purchase orders submitted by the general contractor defendant didn’t require it to pay for plaintiff’s services with Federal funds.  The defendant was free to pay the plaintiff with its own funds; not the government’s. 

In addition, the BAA doesn’t outlaw the sale of all foreign-made air conditioning units to government agencies like the CTA.  It instead only applies to projects that are paid for at least in part with Federal funds.  As a consequence, the contract wasn’t illegal on its face.

Next, the court rejected the defendant’s argument that allowing plaintiff to enforce the contract violated public policy.  In the procurement contract context, where there is a mandatory contract term that is based on a strong Federal policy, this policy is read into the contract by operation of law. 

However, this so-called Christian doctrine1 only applies to parties that contract directly with the government; not to subcontractors like the plaintiff.  This is because subcontractors contract with general contractors, not with the government. 

To impose a Federal procurement edict on a subcontractor who often doesn’t even know he is contracting for government work is plainly unfair. (*5).

Afterword:

An interesting discussion of the illegality defense in somewhat arcane context of Federal procurement rules.  The court gave a constricted reading to the illegality rule and looked at the underlying fairness if the contract was defeated. 

The fact that the plaintiff performed extensive work before termination figured heavily in the court’s analysis.  Another key ruling is that only general contractors, not subcontractors like the plaintiff here, have the duty to inquire into applicable procurement requirements.

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1.  G.L. Christian and Associates v. United States, 312 F.2d 418 (1963).