McGrath v. Fahey
520 N.E.2d 655, 163 Ill. App.3d 584 (1988)
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Rule of Law:
A pattern of coercive conduct by a party in a position of power, particularly when continued with the knowledge of a plaintiff's particular susceptibility to emotional and physical harm, may constitute 'extreme and outrageous' conduct sufficient to state a cause of action for intentional infliction of emotional distress.
Facts:
- Dr. Harold F. McGrath and his business partner were involved in a real estate contract dispute with James Elliot, the owner of First Security Bank of Glendale Heights.
- On May 18, 1983, McGrath attempted to transfer over $1 million in certificates of deposit (CDs) from the bank but was unsuccessful.
- The next day, bank president Robert P. Fahey told McGrath the CDs, which McGrath stated were held in trust for his children and employees, would not be released due to the unrelated real estate dispute.
- On May 23, McGrath informed the bank's attorney, Robert Glick, of his family history of heart problems and his anxiety over the situation. Glick responded by demanding McGrath assign certain second mortgages to the bank and threatening to financially ruin McGrath and his medical practice if he refused.
- On May 25, McGrath suffered a massive heart attack and underwent open heart surgery.
- Following the surgery, McGrath's attorney informed Glick of the heart attack, but Glick again refused to release the funds, threatening to tie them up for five years unless McGrath assigned the mortgages.
- After the CDs were finally released, the bank dishonored eight drafts from three other accounts belonging to McGrath and his family entities which were unrelated to the real estate dispute.
- In August, while McGrath was recuperating at home, Fahey called him multiple times against his wishes and then sent a letter stating the bank was seizing funds from the other accounts to offset claims from the real estate dispute.
Procedural Posture:
- Dr. Harold F. McGrath filed a complaint against Robert P. Fahey and Du Page County Bank in the circuit court of Cook County (the trial court), alleging intentional infliction of emotional distress.
- The defendants filed a motion to dismiss the complaint for failure to state a cause of action.
- The trial court granted the defendants' motion and dismissed McGrath's complaint.
- McGrath, as appellant, appealed the trial court's dismissal to the appellate court of Illinois (the intermediate appellate court).
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Issue:
Does a bank's course of conduct, which includes refusing to release a customer's funds to coerce him into surrendering unrelated assets, threatening financial ruin, and continuing contact after knowing the customer has suffered a massive heart attack, constitute 'extreme and outrageous' conduct sufficient to state a claim for intentional infliction of emotional distress?
Opinions:
Majority - Justice Murray
Yes. A complaint states a cause of action for intentional infliction of emotional distress where it alleges a pattern of coercive and threatening conduct by a defendant who abused a position of power with knowledge of the plaintiff's particular susceptibility to harm. The court reasoned that while defendants' conduct prior to McGrath's heart attack was arguably not actionable, their conduct after gaining knowledge of his serious health condition was different. An actor who proceeds with conduct in conscious disregard of the knowledge that it is substantially certain to cause severe emotional distress can be held liable. Here, the defendants' continued pressure on McGrath while he was recuperating from open-heart surgery, combined with their abuse of their position of power as a bank to illegally withhold funds to coerce him on an unrelated matter, could be deemed 'extreme and outrageous' by a trier of fact. This pattern of coercion distinguishes the case from permissible, though annoying, debt collection tactics.
Analysis:
This decision clarifies the 'extreme and outrageous' conduct standard for intentional infliction of emotional distress, particularly in a commercial context. It establishes that a defendant's knowledge of a plaintiff's specific vulnerability is a critical factor in assessing the outrageousness of subsequent conduct. The ruling signals that courts will look beyond simple business disputes to scrutinize patterns of coercion, especially where there is a significant power imbalance between the parties, such as a bank and its depositor. This precedent makes it more difficult for defendants in positions of power to dismiss such claims by characterizing their coercive actions as mere 'unavoidable annoyances' of business.
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