2025 IL App (1st) 250645-U
NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
FIRST DIVISION December 22, 2025 No. 1-25-0645 ______________________________________________________________________________
IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________
MICHAEL EGGUM, ) Appeal from the ) Circuit Court of Plaintiff/Counterdefendant-Appellant, ) Cook County ) v. ) No. 21 L 2849 ) RYAN KOWALIS, ) The Honorable ) Daniel J. Kubasiak, Defendant/Counterplaintiff-Appellee. ) Judge Presiding.
PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of the court. Justices Lavin and Cobbs concurred in the judgment.
ORDER
¶1 Held: The trial court’s order granting a new trial based on inconsistent verdicts is affirmed.
¶2 We granted a petition for leave to appeal in this case to review whether the trial court correctly
ordered a new trial based upon its finding that the jury’s verdicts on the parties’ respective claims
against each another were legally inconsistent.
¶3 The parties to this case are Michael Eggum, the plaintiff and counterdefendant, and Ryan
Kowalis, the defendant and counterplaintiff. Beginning on March 13, 2018, they were co-owners No. 1-25-0645
of a restaurant venture, the corporate name of which was Kerouacs Café, Inc. (Kerouacs). 1 Steven
Tsonis, a former defendant who settled prior to trial, was also a co-owner.
¶4 The case went to verdict on Eggum’s claims against Kowalis for fraud and breach of fiduciary
duty and on Kowalis’s counterclaims against Eggum for defamation per se and false light invasion
of privacy. A jury returned a verdict in favor of Eggum on both of his claims against Kowalis and
in favor of Kowalis on both of his counterclaims against Eggum. The trial court thereafter ruled
that the verdict it returned in favor of Eggum on his fraud claim was legally inconsistent with the
verdict it returned in favor of Kowalis on the defamation and false light counterclaims. In
summary, Eggum’s fraud claim was that Kowalis had made various false statements to
fraudulently induce him to invest his life savings into Kerouacs’s bank account, which Kowalis
subsequently took for himself. By contrast, Kowalis’s counterclaim was that Eggum had defamed
him and placed him in a false light by various actions that Eggum took to publicize his allegations
that Kowalis had defrauded him out of his investment into Kerouacs. The trial court determined
that it was legally inconsistent for the jury to have found both of these matters to have been proven
true, and it ordered a new trial on this basis. We agree that the verdicts are legally inconsistent and
therefore affirm the trial court’s order granting a new trial.
¶5 I. BACKGROUND
¶6 A detailed recitation of the trial evidence heard by the jury over the course of this six-day
trial is not necessary to resolve the legal issue presented in this appeal. The court has reviewed the
trial transcript and recognizes that there were many highly contested issues of fact in this case. We
set forth from our review of the record the following summary of our understanding of the claims
1 Kerouacs Café, Inc., was named as a defendant in this case. However, it is apparently a dissolved corporation, and no appearance was ever filed on its behalf.
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that were presented to the jury that are now argued to be irreconcilable.
¶7 Around the timeframe of late 2017 and early 2018, Kowalis and his friend Tsonis were
looking to open a restaurant together. Tsonis was an experienced professional in the restaurant
industry, and Kowalis’s background was in working at car dealerships owned by father and uncle
in the south suburbs. They ultimately settled on buying Kerouacs, an existing restaurant in Chicago
which they planned to reopen in the summer of 2018 as a taco restaurant to be called “The Gringo.”
The owner of Kerouacs from whom they were purchasing the company was Matthew Lappe.
¶8 Around this same timeframe, Eggum was looking for a venture in which to invest money that
he had saved from an 8-year overseas military career that had ended following an injury. A mutual
acquaintance named Jon Ruiz connected Eggum with Kowalis and Tsonis, and the three men began
discussions that culminated in Eggum initially buying a 15% stake in Kerouacs directly from
Kowalis and Tsonis for $100,000. This transaction was effectuated by the parties’ execution of a
“Stock Purchase Agreement and Shareholder Agreement” on March 13, 2018, at which time
Eggum made a wire transfer of $100,000 into Kerouacs’s corporate bank account.
¶9 At trial, Eggum’s fraud claim centered primarily on allegedly false statements by Kowalis
that led to Eggum’s making this $100,000 wire transfer into Kerouacs’s bank account on March
13, 2018. A second component of the fraud claim also involved allegations that Kowalis made
additional false statements to further induce Eggum to make a second wire transfer of $65,000 into
the company’s bank account on August 27, 2018. These two investments were the bases of
Eggum’s attorney’s request in closing argument for $165,000 in compensatory damages from
Kowalis on his fraud claim.
¶ 10 We distinguish the above two transactions that formed the bases of Eggum’s fraud claims
from his related allegations seeking recovery from Kowalis under the theory of breach of fiduciary
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duty. Under this latter legal theory (which is not at issue in this appeal), Eggum requested
compensatory damages comprising (1) $100,000 for the value of stock in a different company that
Eggum swapped to buy out the shares of Kerouacs owned by a co-investor named Janet Ruiz,
proximately caused by Kowalis’s misleading statements about the reason why Janet Ruiz had filed
a lawsuit against Kerouacs; plus (2) $75,124 owed as monthly “incentive payments” to be paid to
Eggum totaling 5% of the corporation’s monthly gross revenues, which were unpaid to him
because of Kowalis’s double-pledging the same kind of payment to Janet Ruiz.
¶ 11 Focusing on Eggum’s claim of fraud surrounding his wire transfer on March 13, 2018, of
$100,000 to Kerouacs’s corporate bank account, the allegedly false statement by Kowalis upon
which Eggum’s claim was primarily based was that he and Tsonis owned the entirety of Kerouacs
by that date, with no other person having an interest in its stock or assets. This fact was represented
as part of the parties’ stock purchase and shareholder agreement. However, Eggum produced
evidence at trial showing that as of March 13, 2018, Kowalis and Tsonis had paid Lappe only half
($37,500) of the total purchase price of $75,000 and that the remaining $37,500 was not due until
60 days after the restaurant opened to the public (i.e., around August 2018). Until that second
payment was paid, the purchase agreement between Kowalis/Tsonis and Lappe gave Lappe the
right to a confession of judgment to take back the stock and equipment from Kowalis and Tsonis.
Eggum was unaware when he made his initial investment that Kowalis and Tsonis were not the
sole and exclusive owners of the company’s stock and assets as of that date. The evidence at trial
showed that the second payment was never made to Lappe until 2020, after The Gringo had ceased
operations. Kowalis only paid this as part of a settlement to avoid a lawsuit by Lappe.
¶ 12 A second allegedly false statement surrounding Eggum’s March 13, 2018, wire transfer of
$100,000 was an oral representation by Kowalis on the same date that both he and Tsonis had
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deposited investments of $100,000 apiece into the same corporate bank account into which Eggum
was transferring his money. The evidence at trial indicated that no such deposits occurred.
¶ 13 A third allegedly false statement by Kowalis surrounding the March 13, 2018, wire transfer
was a representation in the stock purchase and shareholder agreement that, beginning the third
month after the restaurant opened, Eggum would be repaid a total of $100,000 through monthly
“incentive payments” to him of 5% of the corporation’s gross revenues. Eggum’s allegation was
that Kowalis made this statement without intending to perform this promise, and there was
evidence that Eggum was not in fact paid these monthly incentive payments. 2
¶ 14 A fourth allegedly false statement by Kowalis surrounding the March 13, 2018, wire transfer
was his representation in the stock purchase and shareholder agreement that, with certain
exceptions, “the Corporation shall not make any payment or transfer of money or property to the
[sic] Tsonis or Kowalis, regardless of whether such payment or transfer is characterized as salary,
wages, compensation, bonuses, or otherwise.” The evidence at trial showed that on March 14,
2018, which was one day after Eggum wired his $100,000 investment to Kerouacs’s corporate
bank account, Tsonis and Kowalis respectively transferred $45,000 (for a total of $90,000) out of
that account and into their personal bank accounts. Eggum testified that he was unaware that this
money had been transferred out of the company’s bank account and never gave his consent for this
withdrawal. Kowalis’s position was that he was allowed to make this transfer because Eggum was
buying Kowalis’s shares of stock directly from him, and the wire transfer of money into the
company’s bank account had been a matter of convenience to enable Eggum to make only one
2 The court’s understanding is that recovery for the actual failure to make these monthly incentive payments was sought under the count for breach of fiduciary duty, but Eggum was permitted at trial to argue that Kowalis’s false representation on March 13, 2018, that the incentive payments would be made (when he had no intent to do so) was part of the fraud that led Eggum to make the $100,000 wire transfer.
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wire transfer instead of two.
¶ 15 As referenced above, on August 27, 2018, Eggum made a second wire transfer of $65,000
into Kerouacs’s corporate bank account for the purported purpose of financing an enclosed patio.
Instead of being used for a patio, that $65,000 was transferred out of Kerouacs’s corporate bank
account the following day, and Eggum’s claim was that Kowalis was responsible for this. In
exchange for the money, Eggum received 100 additional shares of stock in Kerouacs out of the
425 shares owned by Tsonis, along with the right to an additional incentive payment of $5,000
bimonthly from September 1, 2018, through March 1, 2019. Part of Eggum’s fraud claim was that
Kowalis represented in the written agreement executed as part of this transaction, which Kowalis
signed both personally and on behalf of the corporation, that Eggum would receive these additional
bimonthly incentive payments without any intent to pay them.
¶ 16 The facts above, which formed the bases of Eggum’s fraud claims, are to be distinguished
from two related events that formed the bases of Eggum’s counts for breach of fiduciary duty.
Those events both involved Janet Ruiz, a fourth co-investor in Kerouacs during part of the relevant
timeframe of this case. (She was also the mother of Jon Ruiz, who introduced the parties and
worked at The Gringo for a time.)
¶ 17 The first event occurred on April 11, 2018, when Kowalis and Tsonis entered into a separate
stock purchase and shareholder agreement with Janet Ruiz without informing Eggum that they had
done this. Janet Ruiz thereby acquired 12% of Kerouacs from them in exchange for $100,000 that
she wired into Kerouacs’s corporate bank account the following day. A few weeks later, on April
23, 2018, both Kowalis and Tsonis transferred $40,000 ($80,000 total) out of Kerouacs’s corporate
bank account and into their personal bank accounts. Kowalis then made an additional transfer of
$9,000 into his personal bank account on April 24, 2018. Eggum was not informed of this transfer
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of money out of the corporate bank account, although this was not claimed as part of the damages
in this case. Instead, the claim was that Kowalis’s alleged double-pledging of the same monthly
incentive payments to Janet Ruiz that he had pledged to Eggum was a proximate cause of the fact
that Eggum did not receive these payments.
¶ 18 The second event arose when Janet Ruiz filed a lawsuit against Kerouacs, Kowalis, and
Tsonis, based on their failure to pay her the monthly incentive payments to which she was entitled
under her stock purchase and shareholder agreement (just as they were required to do under
Eggum’s stock purchase and shareholder agreement). The alleged breach of fiduciary duty
occurred when Kowalis, between December 2018 and the fall of 2019, allegedly misled Eggum
about the true basis of Janet Ruiz’s lawsuit. Eggum alleged that Kowalis made statements that led
him to believe that Janet Ruiz was trying to create problems for the restaurant because her son Jon
had been fired. Based upon Kowalis’s allegedly misleading statements about the reasons for Janet
Ruiz’s lawsuit, Eggum agreed to a transaction with her whereby he swapped 200 shares that he
owned of a different company (which he valued at $100,000) to Janet Ruiz to buy out all of her
shares of stock in Kerouacs. The value of this stock-swap transaction was claimed as part of the
compensatory damages on the breach of fiduciary duty claim.
¶ 19 The evidence at trial showed that, prior to March 20, 2020, Eggum had access only to a
limited amount of Kerouacs’s financial information. However, that day, Eggum’s access within
the company’s bookkeeping software was changed such that he discovered many withdrawals
from Kerouacs’s bank accounts of which he was previously unaware. Most pertinently, that was
when he first became aware that Kowalis and Tsonis had transferred the majority of his March 13,
2018, investment of $100,000 out of the corporate account and into their personal bank accounts
the day after it occurred; that they had transferred the majority of Janet Ruiz’s $100,000 investment
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out of the corporate account within a few weeks of its deposit; and that his August 27, 2018,
investment of $65,000 had been transferred out of the corporate account the day that it occurred.
¶ 20 The evidence showed that, after first learning of these financial discrepancies, Eggum did not
confront Tsonis or Kowalis for at least five months. Instead, in April or May 2020, he took the
information he had discovered to the Federal Bureau of Investigation (FBI), which opened an
investigation into whether Tsonis or Kowalis had engaged in criminal conduct. The FBI ultimately
closed its investigation in November 2021 without filing charges. In the meantime, however,
Eggum undertook several actions to publicize his belief that Kowalis had defrauded him out of his
investment in Kerouacs and to the fact that Kowalis was under criminal investigation by the FBI
for this conduct. It is this conduct by Eggum that formed the bases of Kowalis’s counterclaims for
defamation per se and false light invasion of privacy.
¶ 21 In February 2021, Eggum hired a freelance journalist and public relations professional named
Richard Dolan to help him publicize his story that Kowalis had defrauded him. In the course of
developing a story that would draw the interest of media outlets, Eggum directed Dolan to contact
various individuals and organizations associated with Kowalis’s family’s car dealerships to solicit
comments from them for a news story about the allegations against Kowalis. There were various
instances of this, but the chief example put into evidence at trial was that, on February 27, 2021, a
message was sent from Dolan’s e-mail address to one of those dealerships, Lexus of Merrillville.
That message, which Eggum acknowledged that Dolan had sent at his direction, stated as follows:
“I’m reaching [sic] in reference to a press release I’ve come into possession of detailing
a lawsuit where your Director of Marketing (Ryan Kowalis) is named. Ryan Kowalis is
alleged to have committed fraud and misrepresented himself in order to solicit for investment
a service-disabled veteran’s life savings of $265,000 which he earned over 10 deployments
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to the Middle East.
My concern is that Mr. Kowalis is defrauding potential investors under the guise of
being a director in the Toyota and Lexus family and maybe buying some legitimacy with the
title. It seems a bit predatory and I’m trying to add some color to this allegation. There are
already a few local Chicago journalists who are chasing this down as well.
I’m curious if your company policy addresses any of this type of action on behalf of
employees. Thank you for any comment you can provide on this.”
¶ 22 Eggum’s complaint in the case at bar was filed on March 15, 2021. Two days after that,
Eggum and his attorney gave an interview about the case to a television news reporter from
Chicago’s CBS affiliate. In that interview, Eggum’s attorney stated that Kowalis and Tsonis had
“made a bunch of false statements to [Eggum] in order to convince him to invest money.” Eggum
then stated, “When I put my money in, they hadn’t even owned the restaurant.” Eggum also stated,
“I just sat there, figured all of the data points out, and then I brought all of that to the FBI.”
¶ 23 That same day, Eggum made a post to Facebook with a link to an Internet article including
the local CBS news broadcast. The headline of the article linked was, “Army Vet Sues Former
Restaurant Business Partners, Claiming They Defrauded Him Out Of Hundreds Of Thousands In
Failed West Town Venture.” Eggum also wrote as part of the Facebook post, “In case you were
wondering what kind of people Steve Tsonis and Ryan Kowalis are, read this article and watch the
news story. Luckily, the law is on my side and they will be brought to justice.”
¶ 24 On March 18, 2021, Dolan sent a press release to various other news outlets attaching a link
to the local CBS news broadcast and including the following message:
“Please consider taking a look at how a Chicago-based restaurateur and local car
dealership director of marketing allegedly defrauded a disabled military veteran out of his
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life savings. The project—The Gringo restaurant in Chicago’s West Town—eventually
failed and investment money was spent on personal luxury purchases. An FBI investigation
is ongoing, others were hurt and the trail of fraud is long and complex. The story was recently
covered by CBS2 Chicago. Thank you for your consideration in furthering this story.”
The press release also attributed to Eggum the following quote: “I wish I didn’t have to bring it to
this point, but I want to make sure these guys can’t defraud anyone again like they did to me.”
¶ 25 That same day, Dolan sent a copy of the same press release to a representative of the corporate
communications department of Toyota Motor North America with the following message:
“I am following up with you based on the story I shared with you earlier this month.
There have been two updates to the story. The story was aired on CBS2 Chicago and the
lawsuit was officially filed naming Mr. Kowalis of the Kowalis Auto Group. An updated
press release is attached. I acknowledge from our last email exchange that TMNA does not
hire, fire or direct the day-to-day activities of the dealership’s personnel, and it is not involved
in matters concerning employees. However, the defendant named is more than an
employee—his family holds the dealer licenses. Does TMNA have criteria by which they
judge dealership owners? From your previous email, you mention that the allegations are not
in line with TMNA’s core values, which raises concern when a member of the family who
directly owns and runs the dealership representing Toyota is involved in public cases like
this.”
Text messages in evidence between Eggum and Dolan indicated that Eggum had specifically
directed Dolan to inquire about the dealership licenses issued to Kowalis’s family and essentially
to ask, “Is this who you want representing Lexus or Toyota?”
¶ 26 Finally, Kowalis introduced evidence that around this same timeframe, Eggum had created a
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fundraising page on the website GoFundMe.com, captioned “Veteran Defrauded out of Life
Savings.” Among the statements by Eggum on that page were that, after finding out that Kowalis
and Tsonis were transferring investment money into their personal bank accounts and using the
corporate account for personal expenses, Eggum “brought the Federal Bureau of Investigation in
to open a criminal investigation,” which was at that point ongoing. Eggum also stated that Kowalis,
“instead of doing the right thing, has hired two law firms to try and get out of paying Eggum back.”
His page described one of those law firms as “a prominent federal criminal defense firm” that
advertised on its website that it serves clients “ ‘charged with the most serious federal crimes.’ ”
¶ 27 Eggum’s testimony on adverse examination concerning the above statements culminated in
the following exchange:
“Q. You wanted them to know that Mr. Kowalis had retained counsel, right?
A. Yeah.
Q. Specifically criminal defense counsel, right?
Q. In response to your criminal complaint, right?
A. I suppose.
Q. Because you were accusing him of a crime, right?
A. I believe he had defrauded me.
Q. That was my question. You accused him of a crime, right?
A. I believe so.
Q. You don’t know?
A. Yeah. He stole my money.
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Q. Right. You went to the F.B.I. and accused him of a crime, right?
A. Yes.
***
Q. And then you told everybody you had gone to the F.B.I. and filed a criminal
complaint?
Q. Because you wanted everyone to know that you thought Ryan committed a crime?
A. Yes.”
¶ 28 The jury instruction given in this case on defamation per se informed the jury in pertinent
part that Kowalis had the burden of proving that Eggum made an unprivileged publication of a
false statement imputing that Kowalis (1) has committed a crime, or (2) is unable to perform or
lacks integrity in performing his employment duties, or (3) lacks ability or otherwise prejudices
him in his profession. However, in discussing this instruction during closing argument, Kowalis’s
attorney made argument only that Eggum had made a false statement imputing that Kowalis had
committed a crime. He stated, “We have a plethora of evidence of him on CBS, in his Go Fund
Me page, in his press releases, in the e-mails that he had sent to Toyota that he is alleging [Kowalis]
defrauded him. That is a crime.”
¶ 29 As to the counterclaim for false light, Kowalis’s attorney argued in closing that placing
someone in a false light meant “whether [Eggum’s] publicized statements were false.” He argued
that it required proof of actual malice, which meant that “[Eggum] acted with knowledge that the
statements were false or recklessly disregarded whether they were true or not.” Counsel argued
that actual malice was shown, among other things, by how Eggum (acting through his agent Dolan)
ensured that his allegations were spread to Kowalis’s family’s car dealerships and to Toyota, even
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though Kowalis’s employer and family members had nothing to do with Kerouacs or with
Eggum’s claims.
¶ 30 At the conclusion of the trial, the jury returned a verdict in favor of Eggum and against
Kowalis on the claims for both fraud and breach of fiduciary duty. The jury awarded Eggum
compensatory damages of $99,000 on the count for fraud and $14,837 on the count for breach of
fiduciary duty, and it awarded punitive damages of $283,000, for a total damages award of
$396,837. Simultaneously, the jury returned a verdict in favor of Kowalis and against Eggum on
the counterclaims for both defamation and false light. It awarded Kowalis compensatory damages
of $1 on the count for defamation and $1 on the count for false light invasion of privacy, and it
awarded punitive damages of $1, for a total damages award of $3.
¶ 31 As indicated above, the trial court thereafter ruled that the jury’s verdict in favor of Eggum
on the fraud claim was legally inconsistent with its verdict in favor of Kowalis on the counterclaims
for defamation and false light. In its written ruling, the trial court stated that, although it was
possible that the jury had found that both parties made false statements, that argument would not
resolve the inconsistency: “If the jury concluded that Eggum proved Kowalis’ false statement and
the jury concluded that Eggum’s false statement about Kowalis were proven defamatory, it is not
possible to reconcile the verdicts.” The trial court also found it “untenable” that the jury could have
distinguished between criminal fraud and civil fraud, as it had not been given any instructions as
to the legal standards applicable to a claim involving criminal fraud. Accordingly, the trial court
granted the motion to set aside the verdict and ordered a new trial.
¶ 32 By that same order, the trial court denied a petition by Eggum seeking attorney fees, and it
conditionally ruled (pending the new trial) that Kowalis was entitled to a setoff in the amount of
the settlement that Eggum had previously reached with Tsonis. Kowalis’s posttrial motion had
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also raised an argument that, in the alternative to granting a new trial, the verdicts in favor of
Eggum should be set aside and judgment notwithstanding the verdict (JNOV) entered in favor of
Kowalis on the basis that Eggum did not prove all of the elements of his claims. Kowalis also filed
a supplement to his posttrial motion raising additional arguments for JNOV on Eggum’s breach of
fiduciary duty claim. Having granted Kowalis’s request for a new trial, the trial court expressly
declined to consider this alternative argument for JNOV raised by Kowalis.
¶ 33 This court thereafter allowed Eggum’s petition for leave to appeal the order granting a new
trial. Eggum also appeals the trial court’s rulings on the issues of attorney fees and setoff that were
contained in that order.
¶ 34 II. ANALYSIS
¶ 35 A. Kowalis’s Motion to Dismiss Appeal
¶ 36 Preliminarily, Kowalis urges this court to dismiss this appeal. He argues that the appeal is
unripe for decision or that we improvidently granted the petition for leave to appeal because the
trial court did not fully rule on his arguments for JNOV in his posttrial motion. In the order under
review, the trial court specifically wrote, “Having concluded that a new trial is required the Court
will not further consider Kowalis’ motion for judgment notwithstanding the verdict.”
¶ 37 This argument by Kowalis has an extensive procedural history. After the trial court entered
the order at issue, Eggum’s petition for leave to appeal it was timely filed within 30 days. See Ill.
S. Ct. R. 306(c)(1) (eff. 1, 2020). Although Kowalis had apparently raised this issue in the trial
court by the time he filed his answer to the petition for leave to appeal, that answer made no
argument that we should decline or defer acceptance of the appeal because it was unripe or
otherwise because the trial court had not fully ruled on all requested relief. This court granted the
petition for leave to appeal 10 days after the answer was filed, which had the effect of automatically
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staying all proceedings in the trial court. See Ill. S. Ct. R. 306(c)(6) (eff. Oct. 1, 2020).
¶ 38 Six days after we granted the petition for leave to appeal, Kowalis filed a motion in this court
seeking to partially lift the stay of proceedings in the trial court to allow it to consider his pending
motion to renew that aspect of his posttrial motion for JNOV on Eggum’s breach of fiduciary duty
claim only. Eggum filed an objection to the motion to lift the stay, arguing that a stay may not be
lifted for the purpose of allowing the trial court to modify an order that is the subject of the appeal.
See Ill. S. Ct. R. 306, Committee Comment (May 29, 2014). While this motion was pending, the
trial court, apparently unaware that the stay had taken effect, entered an order purporting to grant
JNOV in favor of Kowalis on Eggum’s breach of fiduciary duty claim. This court, which was by
then fully aware of the trial court’s purported ruling, denied the motion to lift the stay.
¶ 39 Kowalis thereafter filed a motion in this court to reconsider its order denying his motion to
lift the stay. Kowalis argued that there was “a fundamental and insurmountable problem with any
review” of the order granting a new trial because the trial court had expressed “its intention to
supersede and modify” the order of which we had allowed review. Eggum filed a response in
opposition, and this court thereafter denied Kowalis’s motion to reconsider.
¶ 40 Kowalis then filed a motion in the Illinois Supreme Court seeking a supervisory order to
compel this court either to dismiss the present appeal as improvidently granted or alternatively to
lift the stay so that the trial court could formally decide Kowalis’s pending motion for JNOV. The
Illinois Supreme Court thereafter denied the motion for supervisory order.
¶ 41 Kowalis now seeks to raise this issue again in his appellee’s brief, urging us to dismiss this
appeal on the basis that the order granting a new trial is “clearly incomplete as it failed to address
all of the issues raised” in Kowalis’s posttrial motion. Kowalis argues that “no matter what [the
appellate court] decides, this case will go back to the trial court and will ultimately find its way
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back” to this court because the trial court has “indicated that it intends to rule in Kowalis’ favor”
on the motion for JNOV.
¶ 42 Given the above procedural history, we decline now to dismiss this appeal. In our view, this
is a problem of Kowalis’s own making due to the fact that the primary relief he requested in his
posttrial motion to set aside the verdicts was a new trial, which he received. Whatever the reason,
it is clear from his posttrial motion and reply brief that JNOV was requested only as alternative
relief. While it is arguable that the trial court should have proceeded to make a conditional ruling
on the merits of this issue (see 735 ILCS 5/2-1202(f) (West 2024)), under these circumstances, its
express decision not to consider the alternative request for JNOV does not cause us to view this
Rule 306(a)(1) appeal as unripe or to believe that we allowed it improvidently. This is not an
instance in which an appellant is improperly seeking to appeal in a piecemeal fashion. Instead, we
have before us a fully briefed interlocutory appeal concerning an order as to which we have
appellate jurisdiction to review. Judicial economy demands that we proceed to decide the issue
presented, notwithstanding the possibility that the case might come back to us later as an appeal
after final judgment.
¶ 43 B. Inconsistent Verdicts
¶ 44 On the merits, Eggum argues that the trial court erred by ordering a new trial on the basis of
its conclusion that the jury’s verdict in favor of Eggum on his fraud claim was legally inconsistent
with its verdict in favor of Kowalis on his counterclaims for defamation per se and false light
invasion of privacy. Eggum argues that these verdicts are not legally inconsistent because the trial
evidence was sufficient to allow reconcilable findings both that Kowalis was liable for fraud and
that Eggum was liable for defamation and false light. Eggum also argues that Kowalis introduced
the alleged error that he now claims exists and failed to object to the jury instruction that permitted
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this outcome.
¶ 45 The general rule is that if that a single jury, considering the same set of facts and
circumstances, reaches two different factual conclusions as expressed by their verdicts, such
verdicts will not support a valid judgment unless they are reconcilable under an applicable rule of
law. Redmond v. Socha, 216 Ill. 2d 622, 642 (2005). Thus, where in the same action verdicts are
returned that are legally inconsistent with each other, those verdicts should be set aside and a new
trial ordered. Wottowa Insurance Agency, Inc. v. Bock, 104 Ill. 2d 311, 316 (1984). Whether two
verdicts are legally inconsistent is a question of law. Redmond, 216 Ill. 2d at 642. Accordingly, a
trial court’s order granting a new trial based upon a claim of legally inconsistent verdicts is a matter
that we review de novo. Id. In considering whether verdicts are legally inconsistent, a court will
exercise all reasonable presumptions in favor of the verdicts, and they will not be found legally
inconsistent unless they are “absolutely irreconcilable.” Id. at 643. Further, verdicts will not be
considered irreconcilably inconsistent if they are supported by any reasonable hypothesis. Id. at
644. We are also mindful that, although the complaint and counterclaim were consolidated for
trial, they remain distinct causes of action. Id. Only when a judgment rests on some particular
finding for its validity and support will inconsistencies between two findings’ treatment of the
same essential matter necessitate a new trial. Id.
¶ 46 We also set forth the various factual elements that the parties were required to prove to sustain
their respective causes of action. Eggum’s claim was for fraudulent inducement, which is a form
of common-law fraud. See Lagen v. Balcor Co., 274 Ill. App. 3d 11, 17 (1995). In an action for
common-law fraud, a plaintiff must establish that (1) the defendant made a false statement of a
material fact, (2) the defendant knew or believed the statement to be false, (3) the defendant
intended that the plaintiff rely on the statement, (4) the plaintiff acted in justifiable reliance on the
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statement, and (5) the plaintiff suffered damages resulting from his reliance. Weber v. DeKalb
Corp., 265 Ill. App. 3d 512, 516 (1994). The jury here was instructed in accordance with these
elements. It was also instructed that the first two elements must be proved by clear and convincing
evidence and that the last three must be proved more probably true than not true.
¶ 47 Kowalis’s counterclaims were for defamation per se and false light invasion of privacy. We
note that these are overlapping but distinct causes of action. Our supreme court has observed that
all defamation cases can be analyzed as false-light cases, but not all false-light cases are for
defamation. See Lovgren v. Citizens First National Bank of Princeton, 126 Ill. 2d 411, 421 (1989).
A defamation claim requires proof that the defendant made a false statement about the plaintiff,
that the defendant made an unprivileged publication of that statement to a third party, and that this
publication caused damages. Green v. Rogers, 234 Ill. 2d 478, 491 (2009). A plaintiff does not
need to prove actual damages to his reputation in cases where the defendant’s published statement
falls within one of the categories of defamation per se, which are those considered to be so
obviously and materially harmful to the plaintiff that injury to his reputation may be presumed.
See Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 87 (1996). Illinois recognizes five
categories of statements considered defamatory per se, of which three are relevant here: (1) words
imputing a person has committed a crime, (2) words imputing a person is unable to perform or
lacks integrity in performing his or her employment duties, and (3) words that impute a person
lacks ability or otherwise prejudices that person in his or her profession. Green, 234 Ill. 2d at 491-
92. In accordance with the above, the jury in this case was instructed that to prove defamation
per se, Kowalis had the burden of proving: (1) that Eggum made a statement imputing Kowalis
has committed a crime, or imputing that Kowalis is unable to perform or lacks integrity in
performing his employment duties, or imputing that Kowalis lacks ability or otherwise prejudices
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Kowalis in his profession, (2) that the statement was false, and (3) that there was an unprivileged
publication of that false statement to a third party by Eggum.
¶ 48 A claim for false light invasion of privacy requires proof that (1) the plaintiff was placed in
a false light before the public as a result of the defendant’s actions, (2) the false light in which the
plaintiff was placed would be highly offensive to a reasonable person, and (3) the defendant acted
with actual malice, that is, with knowledge that the statements were false or with reckless disregard
for whether the statements were true or false. Kolegas v. Heftel Broadcasting Corp., 154 Ill. 2d 1,
17-18 (1992) (citing Lovgren, 126 Ill. 2d at 419-23). The jury here was instructed in accordance
with these elements on Kowalis’s false-light counterclaim also.
¶ 49 In arguing that the jury’s verdicts on the claims at issue were not legally inconsistent, Eggum
first assets that there is no overlap between the above elements required to be proven to establish
the parties’ respective claims or within the jury instructions as to those claims. Accordingly, he
argues, it can be reasonably hypothesized that the jury found that some statements made by
Kowalis to induce Eggum to invest in Kerouacs were false (thus supporting his fraud claim) while
simultaneously finding that some of Eggum’s statements about Kowalis were also false (thus
supporting Kowalis’s defamation and false light claims). Eggum highlights the fact that Kowalis’s
counterclaims were premised on numerous allegedly false statements by Eggum (e.g., his
GoFundMe page, his Facebook post, the CBS interview, and e-mails to Kowalis’s employers and
related parties), any part of which could have been found false by the jury but not irreconcilable
with a finding that Kowalis committed fraud. He offers as an example that the jury could have
found that Kowalis falsely represented that he and Tsonis owned 100% of Kerouacs and that
Eggum relied on this statement in investing his money. Simultaneously, it could have found that
Eggum made a false statement imputing that Kowalis lacked integrity in performing his
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employment duties when Eggum’s agent sent an e-mail to Lexus of Merrillville stating that
Kowalis was “defrauding potential investors under the guise of being a director in the Toyota and
Lexus family and maybe buying some legitimacy with the title.”
¶ 50 We reject Eggum’s arguments and agree with the trial court that the jury’s verdicts in this
case were legally inconsistent. We find from our review of the evidence that, at their core, all three
claims at issue turn upon whether Eggum was defrauded out of his investment into Kerouacs by
Kowalis’s statements. The jury could either find by its verdict that Kowalis did this, or it could
find that Eggum’s public statements accusing Kowalis of doing this were false. It cannot do both.
In other words, it could either find that Kowalis’s conduct amounted to fraud inducing Eggum to
transfer his investment into Kerouacs, or it could find that Eggum’s public statements—all of
which were essentially that Kowalis had defrauded him into investing his money into Kerouacs—
were false. But we find it inconsistent for the jury to reach verdicts that depend on both of these
opposing facts being established as proven at least more probably true than not true.
¶ 51 We acknowledge Eggum’s point that Kowalis’s counterclaims involved multiple
publications that were potentially broad enough to encompass a variety of statements containing
untruths. As a result, this court has endeavored to carefully review the trial transcript to understand
whether any of the counterclaims were presented to the jury in such a way that the gravamen of
the alleged false statement by Eggum involved something other than a statement that Kowalis had
defrauded him out of his investment money. In our view, that did not occur. All of the alleged
defamatory statements or statements placing Kowalis in a false light involved some statement by
or on behalf of Eggum asserting that Kowalis had defrauded him out of his investment into
Kerouacs. This is illustrated in the example Eggum provides that we set forth above. While that
statement references Kowalis’s employment, its defamatory gist is not an imputation that he lacks
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integrity in performing his employment duties as director of marketing for a car dealership. Its
defamatory gist is that he was “defrauding potential investors,” which in the context of the e-mail
referred to Eggum and his investment into Kerouacs. Accordingly, we do not find this to be a basis
upon which the verdicts at issue can be reconciled.
¶ 52 Eggum also argues that the verdicts can be reconciled by hypothesizing that the jury could
have found the false statement by Eggum to be that Kowalis committed criminal fraud, not civil
fraud. Eggum points out that these involve different burdens of proof, and the jury could have
found the elements of civil fraud to have been proved by clear and convincing evidence while also
concluding that it was false when Eggum stated publicly that Kowalis had committed criminal
fraud for which he was being investigated by the FBI. Eggum argues that these are reasonable
hypotheses that must support the legal consistency of the jury’s verdicts.
¶ 53 We reject this argument also as a basis by which the verdicts can be reconciled. We find that
it requires too much speculation to hypothesize that the jury applied a criminal burden of proof to
an aspect of the defamation and false light claims when it had not been given any instruction to do
so by the trial court. We thus agree with the trial court that it is “untenable” to assume the jury
may have applied criminal legal standards as to which had not been instructed. But even if the jury
had in mind a layperson’s understanding of criminal fraud, it was instructed only that Eggum’s
false statement had to be one “imputing” that Kowalis committed a crime. It is not reasonable to
hypothesize that the jury understood this to mean that Eggum’s statements were false because it
was not shown that Kowalis was actually guilty of a crime involving fraud. Accepting this as a
hypothesis for reconciling the verdicts here would be tantamount to presuming that the jury
misunderstood or failed to follow the trial court’s instructions, which we will not do. See Babikian
v. Mruz, 2011 IL App (1st) 102579, ¶ 20.
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¶ 54 Finally, Eggum argues that we should find that Kowalis waived any argument that the
verdicts in this case were legally inconsistent because Kowalis proffered a jury instruction that led
to this outcome. Eggum relatedly argues that Kowalis invited the present error by proposing this
jury instruction and never raising any objection to it. Under this argument, the alleged legal
inconsistency in the verdicts was invited by paragraph 6 of the following jury instruction that
Kowalis proffered in this case:
“[1] In this suit, there is not only the complaint of Plaintiff Michael Eggum but also a
counterclaim by Defendant Ryan Kowalis.
[2] Because there is a counterclaim in this case you shall reach one of four results.
[3] First, you may find for Plaintiff Michael Eggum on his complaint and against
Defendant Ryan Kowalis on his counterclaim.
[4] Second, you may find for Defendant Ryan Kowalis on his counterclaim and against
Plaintiff Michael Eggum on his complaint.
[5] Third, you may find against both, Plaintiff Michael Eggum on his complaint and
[6] Fourth, you may find for both, Plaintiff Michael Eggum on his complaint and
Defendant Ryan Kowalis on his counterclaim.” See Illinois Pattern Jury Instructions, Civil,
No. B21.04 (2011).
¶ 55 We find no merit to Eggum’s arguments that paragraph 6 of the above instruction invited or
permitted the jury to reach legally inconsistent verdicts in this case. The above instruction, which
is an Illinois pattern jury instruction that is applicable to this case because both a complaint and a
counterclaim were before the jury, speaks to the four broad results that the jury could reach on the
plaintiff’s “complaint” and the defendant’s “counterclaim.” Beyond this, it simply does not purport
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further to instruct the jury as to the results it can permissibly reach on the various counts or causes
of action raised in those pleadings for its verdicts to be legally consistent. We see no reason why
parties could not seek a modified version of this instruction that is more explicit in cases that
present a risk of inconsistent verdicts due to the specific claims raised. But Kowalis’s mere
proffering of this applicable pattern jury instruction did not invite error, nor does it cause us to
conclude that he waived the argument that the verdicts reached were legally inconsistent.
¶ 56 In conclusion, we affirm the order granting a new trial on the grounds that the jury verdicts
were legally inconsistent. Because we believe that the issues of attorney fees and the right to setoff
could be affected by the retrial, we decline to address Eggum’s arguments on these issues in this
interlocutory appeal.
¶ 57 III. CONCLUSION
¶ 58 For the foregoing reasons, the trial court’s order setting aside the verdicts and ordering a new
trial is affirmed.
¶ 59 Affirmed.
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