CHICAGO ― The United States Court of Appeals for the Seventh Circuit has reversed a federal district judge's grant of summary judgment and revived a defamation lawsuit brought by an Illinois large-screen-format film production and distribution company against a Canada-based bank. The film company was represented on the appeal by Joel D. Bertocchi, a Partner in the firm’s Chicago office and a member of Hinshaw's Appellate Specialty Group.
The suit centers on letters from the bank to its insurer in which the bank claimed that the film company had "defaulted" and "failed to pay" on an alleged guarantee of a loan made by the bank. Evidence noted by the appellate court supported the argument that, based on discussions between the bank and the film company, the bank knew, or had reason to know, that the guarantees had actually been forged when it made those claims to its insurer. The Seventh Circuit wrote in its opinion that “[a] triable issue of fact exists as to whether [the bank] recklessly disregarded [the film company’s] rights by failing to properly investigate the truth behind the signature before making the insurance claim,” and ruled that accusations of default or failure to pay money when due were defamatory as a matter of law, especially in a business context. The court also concluded that there was enough evidence to go to trial on the issue of whether the bank had abused any privilege it had to make the statements by acting intentionally or recklessly in attempting to obtain a payment on their insurance claim based on the claimed "default." The court of appeals reversed the trial judge's ruling and returned the case to the district court for trial.
News of the appellate court’s decision was published in the January 21, 2008 edition of the Chicago Daily Law Bulletin in an article entitled, “Divided 7th Circuit Panel Resurrects Defamation Case.”
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