
      No. 2--00--1363
_________________________________________________________________

      IN THE

      APPELLATE COURT OF ILLINOIS

      SECOND DISTRICT
_________________________________________________________________

LOWE EXCAVATING COMPANY,      ) Appeal from the Circuit Court
) of McHenry County.
     Plaintiff-Appellant and  )
     Cross-Appellee,          )
                                  )
v.                            ) No. 88--CH--034
                              )
INTERNATIONAL UNION OF        )
OPERATING ENGINEERS LOCAL     )
No. 150 and ROBERT DARLING,   )
                              ) Honorable
      Defendants-Appellees and ) Michael J. Sullivan,
      Cross-Appellants.           ) Judge, Presiding.
_________________________________________________________________

      Modified Upon Denial of Rehearing

      JUSTICE McLAREN delivered the opinion of the court:

      The following facts are taken from the record.  Plaintiff, Lowe Excavating Company, is an
Illinois corporation engaged in excavating and site preparation services since 1969.  Marshall Lowe
was the president of Lowe at the time of the incidents at issue.  Defendant International Union of
Operating Engineers Local No. 150 (the Union) is a labor organization doing business in McHenry
County.  Defendant Colin "Robert" Darling was a business agent employed by the Union at the time of
the incidents at issue.
      On February 15, 1988, the Union began picketing at a Lowe project site, known as Ballashire
Hall, with signs stating:
      "NOTICE TO THE PUBLIC
                             LOWE EXCAVATING DOES NOT PAY THE PREVAILING
                                   WAGES AND ECONOMIC BENEFITS FOR
                                    OPERATING ENGINEERS WHICH ARE
                                        STANDARD IN THIS AREA
                                OUR DISPUTE CONCERNS ONLY SUBSTANDARD
                               WAGES AND BENEFITS PAID BY THIS COMPANY
                                              LOCAL 150
                                        International Union of
                                    Operating Engineers, AFL-CIO"
      On February 17, 1988, Lowe filed a complaint  seeking  a  temporary  restraining  order  (TRO),
preliminary and permanent injunctions, and damages.  The following day, the Union  filed  a  petition
for removal to the United States District Court, arguing that  Lowe's  claim  seeking  an  injunctive
relief was preempted by federal law.  On June 10, 1988, the United  States  District  Court  for  the
Northern District of Illinois denied the Union's petition and remanded the case to  the  state  trial
court, stating that "Lowe's complaint does not on its face contain a federal claim."
      On June 30, 1988, the trial court enjoined the Union from  picketing  Lowe  in  McHenry  County
until the court ruled on Lowe's request for a preliminary injunction.  On August 11, 1988, the  trial
court dismissed Lowe's second amended complaint based on the Union's  claim  that  the  court  lacked
subject matter jurisdiction due to federal preemption.  The court granted Lowe leave to file a  third
amended complaint.
      On September 28, 1988, the Union resumed picketing.  The following  day,  Lowe  filed  a  third
amended complaint seeking a temporary restraining order, preliminary and permanent  injunctions,  and
damages.  Lowe also filed a motion for a temporary restraining order,  preliminary  injunctions,  and
the reconsideration of the dismissal of the second amended complaint based on  the  lack  of  subject
matter jurisdiction.  The court again enjoined the  Union  from  picketing  Lowe  until  the  court's
ruling on Lowe's request for a preliminary injunction.  On October 6, 1988, the Union filed a  motion
to dismiss this third amended complaint, again asserting  that,  based  on  federal  preemption,  the
trial court lacked subject matter jurisdiction.
      On October 11, 1988, the court partially granted Lowe's  motion  for  a  temporary  restraining
order enjoining the Union from "picketing or otherwise disseminating  the  fact  that  Lowe  is  non-
union."  The court also denied the Union's motion to  dismiss  Lowe's  third  amended  complaint  and
denied Lowe's "request for preliminary injunctive relief relating  to  area  standards,  in  reckless
disregard for the truth," based on federal preemption grounds.  Lowe filed  an  interlocutory  appeal
of this decision.
      On March 3, 1989, this court reversed the trial court's decision and remanded the  case  for  a
hearing.  Lowe Excavating Co. v. International Union of Operating Engineers Local No. 150,  180  Ill.
App. 3d 39 (1989).
      The trial on Lowe's third amended complaint began in April 2000. The four claims proceeding  to
trial against the Union and Colin Darling,  as  an  individual,  were  count  II,  alleging  tortious
interference  with  contractual  relationship;  count  IV,  alleging   tortious   interference   with
prospective economic advantage; count V, alleging trade  libel;  and  count  VI,  alleging  negligent
interference with contract.
      At the trial, Darling testified that late in the summer or early in the fall of 1987  he  spoke
with two Lowe employees, Hartzell Zimmerman and Pasqual Gebbia.  Zimmerman and  Gebbia  told  Darling
what they were making at the time and what benefits they  received.   Darling  stated  that  the  men
showed him their pay stubs and that these were the only pay stubs Darling  saw.   However,  during  a
deposition in 1994, Darling stated that he had not seen pay stubs.  Darling explained at  trial  that
his memory was better at trial in April 2000 than it was when he gave his deposition.
      Darling also testified that in February 1988 the class one (top wage) under the Union's  master
collective bargaining agreement was $19.40 an hour to be increased to  $20.10  an  hour  on  June  1,
1988, and the class two wage was $18.85 an hour.  These were the wages that were appropriate for  the
Ballashire Hall project.  The contribution to various fringe benefit funds was $2.20 an hour.   Also,
the master agreement provided that no more than 1 apprentice was permitted on a job with less than  7
journeymen, 2 apprentices for between 7 and 13 journeymen, and 3 apprentices for between  13  and  22
journeymen.
      In October 1987 the Union initiated  efforts  to  unionize  Lowe’s  employees.   Marshall  Lowe
arranged for representatives of the Union to met with Lowe employees.  At  the  meetings,  the  Union
and Lowe presented the employees with comparisons of their respective wages and benefits.
      Darling testified that, during a meeting with Marshall Lowe in December 1987 or  January  1988,
Marshall provided several documents, including Lowe’s 401(k) pension plan, profit-sharing  plan,  and
payroll information.   Darling  gave  these  documents  to  the  Union’s  fund  administrator,  Larry
Bushmaker.  Darling talked to Union president Bill Dugan about Zimmerman's and Gebbia's  claims  that
they were not getting area standard wages.  Darling never asked anyone to  investigate  Lowe's  wages
and benefits paid after the summer of 1987.  Early in 1988 Dugan and his  assistant,  Bill  Anderson,
and Darling decided that the Union should picket  Lowe.   Darling  stated  that,  after  the  initial
pickets began, Marshall told Darling that Lowe had a federally funded  project  but  would  not  tell
Darling where the project was.
      Marshall Lowe testified that on February 12, 1988, he  sent  the  Union’s  fund  administrator,
Bushmaker, a letter notifying Bushmaker that another employee meeting was  scheduled  for  March  12,
1988, so that Bushmaker could explain the Union’s fringe  benefits  to  Lowe’s  employees.   However,
Bushmaker never responded to this letter, and the meeting did not take place.
      On February 12, 1988, Lowe was read a mailgram from the Union over the phone, which  stated  in
part:
            "Local 150, International Union of Operating Engineers is informed that your  company  is
      currently performing construction work at Canterbury Place Retirement Community.  Local 150 has
      attempted to make careful investigation of your company’s policies  regarding  the  payment  of
      area standards to individuals performing construction work at this project.  We have determined
      that the area standards for the operating engineers are not being met at this project.  If  our
      information regarding this fact is incorrect, please advise us immediately."
      Darling testified that after the Union sends notice that it  intends  to  picket  it  waits  48
hours so that the contractor can prove that it pays prevailing wages.  However, Darling  stated  that
this requires "solid evidence" like "an audit" before it will decide not to picket.
      In response to the Union's mailgram, Marshall Lowe sent the Union a mailgram  on  February  15,
1988, stating that "we are paying the area standards and in fact are paying higher wages and  fringes
to our men."  Marshall Lowe was shocked by the Union's mailgram because Marshall had  been  congenial
to the Union, providing it access to his employees and their telephone  numbers.   Further,  Marshall
had told Darling what he was paying his employees.
      Nevertheless, at 6 a.m. on February 15, 1988, the Union began picketing at  Lowe's  project  at
Ballashire Hall.  The Ballashire Hall project involved the construction of a nursing home as part  of
a larger retirement community project called Canterbury.  FAMCO was the general contractor  for  both
projects.
      Ballashire Hall was a federally funded  construction  project  of  the  federal  Department  of
Housing and Urban Development (HUD). Employers on HUD projects are required by  federal  law  to  pay
their employees the prevailing area wage and benefits established by the United States  Secretary  of
Labor.  40 U.S.C.A. §267a (West 1982) (the Davis-Bacon Act).
      Darling testified that he knew that the failure to pay prevailing wages on  a  federal  project
was a crime.  Darling also knew that Lowe was working on other projects at the time, but he chose  to
picket the Ballashire Hall site because it was a large one, he was familiar  with  it,  and  he  knew
that Lowe was working on a foundation there.  Darling used  the  Union's  preprinted  area  standards
picketing signs and simply added the  name  "Lowe  Excavating."   Darling  received  Lowe's  mailgram
response on February 15, 1988, at his home but did not respond because he was "not supposed  to  talk
to anybody" because it was not part of his job to do so.  Darling stated that  the  only  information
he had about Lowe's wages came from Zimmerman and Gebbia.
      Bradley Brei, president of FAMCO, the  general  contractor  of  the  Ballashire  Hall  project,
testified that he approached Darling on February 15, 1988, while Darling was picketing at  the  site.
Brei told Darling that Brei had "already filed certified payrolls  with  HUD  that  Lowe  was  paying
prevailing wage rates and [he] could not understand on what the basis was that he was  there  or  why
the pickets were there [sic]."  Brei asked Darling, "[H]ow can you picket on a basis  that  he's  not
paying prevailing wage rates when they've been certified?"  Brei stated that if he  turned  in  false
payroll records he would be subject to a federal penalty.
      Darling testified that  he  responded  to  questions  by  Brei  and  Al  Woods,  another  FAMCO
representative, by telling them to read the picket sign.  Darling also told Brei that  the  only  way
the picket signs would be removed was if Lowe was removed from the Ballashire Hall job.
      Brei testified that, after speaking  with  Darling  on  the  picket  line,  Brei  went  to  his
construction trailer and called Marshall Lowe and asked Marshall to remove his people from the  site.
 Lowe's employees left the Ballashire Hall project site an hour or two later.  However,  the  pickets
did not come down.  Darling told Brei that Lowe's equipment also had to  be  removed.    Brei  stated
that even after the equipment was removed the picketing continued "[f]or a period of time."
      Marshall Lowe testified that both Lowe's employees and equipment were off the  Ballashire  Hall
project site by 11 a.m. on February 15,  1988.   Marshall  testified  that  he  knew  that  Lowe  was
required to pay prevailing wages at the  Ballashire  Hall  project  under  the  penalty  of  perjury.
Further, Lowe sent certified payrolls for January 1988 to HUD. Marshall stated that  Ballashire  Hall
was the first project for which Lowe paid prevailing wages.  Prevailing wages for that  project  were
an hourly rate of $18.60 for class one equipment and $5.55 for benefits.  Marshall stated that  there
was a tremendous amount of work left to be  done  at  the  Ballashire  Hall  project  when  Lowe  was
removed, including the sewer work, digging and excavating the foundation, putting fill on the  inside
of the slab, grading around the building, the parking lot, and gravel and finish  grading.   Marshall
testified that Lowe's removal from the Ballashire Hall project resulted in  $4,680  in  lost  profits
(Lowe's profit margin was 18%).
      Lowe employee Michael Dobler testified that he worked  at  the  Ballashire  Hall  project  site
during the picketing.  Dobler stated that all of Lowe's equipment had been removed from the  site  on
the first day of picketing, February 15,  1988.   Dobler  stated  that  the  picketing  continued  on
February 16 and 17, 1988.  On his way to  work  at  6:30  a.m.  on  February  17,  1988,  Dobler  saw
picketers at the site carrying the same signs they carried on the prior two  days.   Dobler  did  not
see the picketers later that day at 3:30 p.m. when he drove past the site.
      Darling contradicted Marshall's testimony, saying that Lowe's equipment was not  removed  until
the following day, February 16, 1988.  Darling also contradicted Dobler, stating that  the  picketing
stopped on February 16, 1988.  Darling stated that he returned to the site on February 17, 1988,  but
he denied that the pickets were up on that day.  Darling stated that  after  the  February  picketing
Darling met Marshall at a restaurant and Marshall told Darling  that  Lowe  had  a  federally  funded
project but Marshall would not reveal where it was.
      Frank Stampler, a certified public accountant (CPA), testified that in April 1988  he  and  two
other CPAs audited Lowe's wages and benefits for the period of January  13,  1988,  to  February  16,
1988.  Stampler compared Lowe's wages and benefits to those required by the United States  Department
of Labor.  Stampler stated that for the period of January 13, 1988,  to  February  16,  1988,  Lowe's
employees at the Ballashire Hall project were paid over the federal prevailing wage  rate,  including
any apprentices on the site.  Stampler stated that the prevailing rate  is  composed  of  the  hourly
individual wage and benefits added together.  The allocation  to  the  profit-sharing  plan  of  each
Lowe's employee was made at the end of  each  year  and  was  based  on  certain  factors.   However,
Stampler concluded that Lowe's operators were  paid  "in  excess  of  the  prevailing  rate"  at  the
Ballashire Hall project in 1988.
      John P. O'Hagan, president of Human Resources Planning Associates,  testified  that,  early  in
the spring or summer of 1987, and again early in 1988, at  Marshall's  request,  he  compared  Lowe's
benefits to the  Union's.   O'Hagan  concluded  that  Lowe's  health  insurance  plan  provided  more
comprehensive and broader coverage than the Union's.  Regarding disability benefits,  O'Hagan  opined
that the two plans were different, but O'Hagan did not say that one plan was better than  the  other.
Lowe's life insurance benefits were superior to the Union's.
      In March 1988, the Congress of Independent Unions (CIU) was certified as the representative  of
Lowe's employees.  On August 15, 1988,  the  CIU  and  Lowe  entered  into  a  collective  bargaining
agreement that provided that Lowe would pay prevailing wages, retroactive  to  April  15,  1988.   R.
Richard Davis, vice-president of the CIU, testified that, at all relevant  times,  the  CIU  contract
base rate was higher than the prevailing wage. However, Davis acknowledged that the  Union  employees
received a wage increase every June, while under the CIU contract, Lowe  employees  did  not  receive
their wage increase until April of the following year, 10 months  later  than  the  Union  employees.
Thus, from June 1988 to April 1989, Lowe employees would earn $.70 less than the Union employees.
      Darling and the Union began picketing again at the Ballashire Hall project  site  in  September
1988, where Lowe was once again working.  Darling knew that Lowe was working on the federal  part  of
the Canterbury project at that time.  The picketers used the same signs that were used  in  February.
By the summer of 1988, Darling knew the Ballashire Hall project was  federally  funded.   Before  the
September picketing, Marshall Lowe told Darling that Lowe was paying prevailing wages.  On  September
28, 1988, Darling received  a  mailgram  from  Lowe  stating  that  Lowe  was  withdrawing  from  the
Ballashire Hall project.  The same day, Darling received a second mailgram from Lowe stating that  it
was paying area standards and that it was setting up a second gate  to  allow  union  contractors  to
enter the site without crossing the picket line.
      Marshall testified that, after Lowe was removed from the FAMCO job in September 1988, Lowe  did
not work with FAMCO again for five or six years.  The trial  court  did  not  permit  Lowe  to  admit
evidence that it lost $125,000 of work at an 18% profit ($18,750 lost profit) caused by  its  removal
from the Ballashire Hall project in September 1988.
      Brei testified that he was frustrated with Marshall "that he didn't get his  house  in  order."
Brei again removed Lowe from the project and replaced Lowe with another  contractor  to  put  in  the
parking lot and perform the grading.  However, the Canterbury project  was  never  completed  because
the developers did not obtain full occupancy.
      At the close of Lowe's case, the trial court granted a  directed  finding  in  favor  of  Colin
"Robert" Darling, as an individual, as to all counts of Lowe's third amended  complaint.   The  court
also granted a directed finding in favor of the Union as to  the  claim  for  negligent  interference
with contractual relationship and on all counts as to the damage issue.
      The trial court granted Lowe's motion to conform its pleadings to  the  evidence  presented  at
trial.
      The trial court refused to allow Lowe to present evidence of its attorney fees as a measure  of
punitive damages, but it allowed Lowe to submit an affidavit  as  an  offer  of  proof  that  it  had
incurred more than $100,000 in fees.
      After hearing the evidence and arguments, the trial court found in favor of the  Union  on  all
counts.  The court found that count V, the trade libel count, was not proved  by  Lowe  because  Lowe
failed to prove by clear and convincing evidence that the Union’s statements  were  false,  that  the
Union made these statements knowing them to be false  or  with  reckless  disregard  of  whether  the
statements were true or false, or that the Union was given information  before  it  began  to  picket
that the Ballashire Hall and Canterbury projects were federally funded.  The trial court  also  ruled
in the Union’s favor on the  remaining  counts,  reasoning  that  there  was  insufficient  proof  to
establish the remaining counts  for  interference  torts  because  the  Union’s  qualified  privilege
defeated these other claims.
      Lowe filed a timely notice of appeal, and the Union and Darling filed a timely notice of cross-
appeal.
      We first address Lowe's motion to strike the Union's  entire  brief.  Lowe  contends  that  the
Union attempted to improperly supplement the record on appeal by including documents and matters  not
before the trial court in the appendix to the Union's response brief and in  the  argument  contained
in the Union's response brief.  The Union filed a motion to supplement the record with this  material
consisting of transcripts from the federal court proceedings.  The Union argues  that  this  material
was presented to the trial court.  Having carefully reviewed the record on  appeal,  this  court  now
denies both motions.  Supreme Court Rule 329 provides in part that "[a]ny controversy as  to  whether
the record accurately discloses what occurred in the trial court shall be submitted  to  and  settled
by that court and the record made to conform to the truth."  134 Ill. 2d R.  329.   Here,  the  Union
asks this court to settle this controversy.  We are not in a position to know what  occurred  in  the
trial court absent support in the record before us.  The record before us  does  not  establish  that
the material at issue was before the trial court.   Therefore,  we  deny  the  Union's  motion.   See
Anderson v. Financial Matters, Inc.,  285 Ill. App. 3d 123, 130 (1996).  Thus, we will disregard  any
material contained in, or attached to, the  Union's  brief  that  is  not  contained  in  the  record
prepared for appeal, but we deny Lowe's motion to strike the Union's brief and appendix.
      Lowe argues on appeal that the trial court erred by  shifting  the  burden  of  proof  to  Lowe
regarding the falsity of the Union’s statements and the Union’s  knowledge  of  the  falsity  of  the
statements or reckless disregard of whether the statements were true  or  false.   Lowe  also  argues
that the trial court erred by finding in the Union’s favor on the trade libel count.
      In reviewing a bench trial, we defer to the trial court's  factual  findings  unless  they  are
against the manifest weight of the evidence. Wildman, Harrold, Allen & Dixon  v.  Gaylord,  317  Ill.
App. 3d 590, 599 (2000).  We will not substitute our judgment for that of the trial judge as  to  the
credibility of the witnesses and conflicts in the testimony.  Wildman,  317  Ill.  App.  3d  at  599.
However, we review a question of law de novo.  Hendricks v. Riverway Harbor Service St. Louis,  Inc.,
314 Ill. App. 3d 800 (2000).
      In the first appeal in this case, Lowe Excavating  Co.  v.  International  Union  of  Operating
Engineers Local No. 150, 180 Ill. App. 3d 39 (1989)  (hereinafter  Lowe  I),  this  court  held  that
Lowe’s trade libel claim must be evaluated under the New York Times Co. v. Sullivan,  376  U.S.  254,
11 L. Ed. 2d 686, 84 S. Ct. 710 (1964), standards applied in Linn v. United Plant  Guard  Workers  of
America, Local 114, 383 U.S. 53, 65, 15 L. Ed. 2d 582, 591, 86 S. Ct. 657, 664 (1966),  and  followed
by Krasinski v. United Parcel Service, Inc., 124 Ill. 2d 483 (1988).  Lowe I, 180  Ill.  App.  3d  at
48.  Under this standard, a  plaintiff  must  prove  actual  malice,  that  is,  that  the  defendant
published defamatory statements "with knowledge of  their  falsity  or  with  reckless  disregard  of
whether they were true or false."  Linn, 383 U.S. at 65, 15 L. Ed. 2d at  591,  86  S.  Ct.  at  664.
Reckless disregard for the truth includes publishing statements while  defendant  entertains  serious
doubts as to the truth of the statements.  Pease v. International Union of Operating Engineers  Local
150, 208 Ill. App. 3d 863, 872  (1991).   The  plaintiff  must  prove  actual  malice  by  clear  and
convincing evidence.  Kessler v. Zekman, 250 Ill. App. 3d 172, 188 (1993).  To recover  damages,  the
plaintiff must also prove harm resulting from the defamatory statements.  Linn, 383 U.S.  at  66,  15
L. Ed. 2d at 591, 86 S. Ct. at 664.  In addition, despite plaintiff's contention to the  contrary,  a
plaintiff also must prove that the statements at issue were false.  Krasinski, 124 Ill.  2d  at  490.
Lowe's citation to Lowe I to support its argument that it does not need to prove the falsity  of  the
statements is misplaced.  In Lowe I, this court's statement, "[t]he underlying issue in this case  is
not whether plaintiff paid wages sufficient to meet area standards"  (Lowe I, 180 Ill. App. 3d at 47-
48), was made to establish that the issue was not preempted by federal law.  This statement does  not
relieve Lowe from its obligation to prove that the statements were, in  fact,  false.   Lowe  ignores
the following declaration of this court: "While truth or falsity is an important element in the  tort
of trade libel, it is certainly not the only issue to be considered."  Lowe I, 180 Ill.  App.  3d  at
48.
      Accordingly, in this case, we must  first  determine  whether  the  statements  at  issue  were
defamatory.  There are two types of defamatory statements,  defamation  per  se  and  defamation  per
quod.  Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 88, 103 (1996).   Ordinarily,  when
a statement is defamatory per se, damages are presumed, and when a statement is defamatory per  quod,
the plaintiff must prove special damages.  Bryson, 174 Ill. 2d at 88, 103.  However,  in  this  case,
Lowe must prove damages regardless of which category applies to the Union's  statements.   See  Linn,
383 U.S. at 66, 15 L. Ed. 2d at 591, 86 S. Ct. at 664.  A statement  is  defamatory  per  se  if  the
words used are obviously harmful to the plaintiff's reputation because they impute to  the  plaintiff
the commission of a criminal act, the lack of ability in a person's performance of his profession  or
business, or a want of integrity in the discharge of his office or employment.  See Wynne  v.  Loyola
University of Chicago, 318 Ill. App. 3d 443, 451 (2000).  Here, the harmful  nature  of  the  Union's
statements was not obvious but required knowledge of an extrinsic fact, that is, that the  Ballashire
Hall project was federally  funded.   Therefore,  the  Union's  statements  do  not  fall  under  the
defamation per se classification.
      However, we do believe that the statements fall under the  defamation per quod  classification.
 A per quod claim applies when a statement is innocent on its  face  but  extrinsic  facts  make  the
statement defamatory or where a statement is defamatory on its face but does not  fall  into  one  of
the per se categories. Bryson, 174 Ill. 2d at 103.  The  statements  the  Union  published  declared,
"Lowe Excavating does not pay the prevailing wages and  economic  benefits  for  operating  engineers
which are standard in this area."  Certainly, if one knew, as FAMCO's Brei did,  that  the  federally
funded Ballashire Hall project required Lowe, by law, to  pay  prevailing  wages  and  benefits,  the
Union's statements would  be  harmful  to  Lowe's  reputation.   Therefore,  we  determine  that  the
statements at issue here were defamatory.
      We must now address whether the trial court erred by finding that the  statement  made  by  the
Union, that "Lowe does not pay prevailing wages and economic  benefits,"  was  true.   The  following
facts were uncontroverted.  The Ballashire Hall project was a federally  funded  job.   Employers  of
workers at federally funded jobs were required by federal law  to  pay  prevailing  wages.   Marshall
Lowe, John O'Hagan, and Bradley Brei testified that Lowe paid its employees prevailing wages  on  the
Ballashire Hall project.  Further, Lowe's payroll was certified.   The  Union’s  only  evidence  that
arguably challenged this testimony established only that Lowe’s benefits did not  match  the  Union’s
point by point and that its wage raises became effective  10  months  after  the  Union’s.   Although
there were differences in the benefits packages, the Union presented no evidence that  Lowe  did  not
pay prevailing wages as a  whole  as  required  by  federal  law  to  its  employees,  including  any
apprentices, at the Ballashire  Hall  project.   Therefore,  we  determine  that  the  trial  court’s
finding, that Lowe did not prove the Union’s statements were false, is against  the  manifest  weight
of the evidence.
      Lowe also argues that the trial court erred by finding that it did not  prove  that  the  Union
published the defamatory statements with actual malice.   Lowe was required to  prove  by  clear  and
convincing evidence that the Union published defamatory statements "with knowledge of  their  falsity
or with reckless disregard of whether they were true or false."  Linn, 383 U.S. at 65, 15 L.  Ed.  2d
at 591, 86 S. Ct. at 664.  Reckless disregard for the truth means that the  defendant  published  the
statements while entertaining serious doubts as to the truth of  the  statements.   Pease,  208  Ill.
App. 3d at 872.  The following facts were uncontroverted.  On the first day of picketing,  Brei  told
Darling that the Ballashire Hall project was a federally funded  project,  that  Lowe's  payroll  had
been certified and sent to the Department of Labor, and that Lowe was  paying  prevailing  wages  for
that project.  Therefore, at that time, Darling at least should have entertained  serious  doubts  as
to the truth of the statements  contained  on  the  picket  signs.   Yet,  the  Union  did  not  stop
picketing, at the earliest, until Lowe  removed  its  employees  and  equipment  from  the  site  the
following day and its contractual  relationship  was  terminated.   Further,  it  picketed  again  in
September 1988.  Thus, the undisputed facts establish that the  trial  court's  finding  of  lack  of
proof of actual malice is against the manifest weight of the evidence.
      The Union argues that the defamation claim is preempted by federal law.  In Lowe I, this  court
rejected this argument, deciding that  the  defamation  claim  was  not  preempted  by  federal  law,
regardless of whether Lowe "paid wages sufficient to meet area standards."  Lowe I, 180 Ill. App.  3d
at 47-48.  Nothing in the Union's brief persuades us to revisit this issue or to  alter  the  law  of
the case.
      The Union also argues that Lowe's remaining claims for  tortious  interference  with  contract,
tortious interference with prospective business advantage, and negligent interference  with  contract
are preempted by federal law.  Again, in Lowe I this court held that "the merits of the case  are  of
only peripheral concern to the NLRB [National Labor Relations Board]."  Lowe I, 180 Ill. App.  3d  at
47.  Although we discussed cases involving claims of trade libel, we did not  limit  our  holding  to
Lowe's trade libel claim.  Instead, we discussed the broader issue of  "whether  the  National  Labor
Relations Act (NLRA) deprives a State court of jurisdiction to enjoin a  union  from  picketing  with
placards that contain knowingly false statements, or statements made with reckless disregard for  the
truth."  Lowe I, 180 Ill. App. 3d at 43.  Thus, our holding encompassed all of Lowe's  claims,  since
all of the claims were grounded in the same conduct.  Accordingly, we need not revisit this issue  or
alter the law of the case.
       We note that, in Lowe's notice of appeal to this court, it indicated that it  was  challenging
the trial court's memorandum of opinion and "partial directed  verdict  [sic]."   However,  the  only
claim Lowe discusses in its brief is the claim for trade libel.  In its reply brief, Lowe makes  only
passing reference to the other claims of tortious interference with contract,  tortious  interference
with prospective economic advantage, and negligent interference with contract.   However,  Lowe  made
no argument citing authority with respect to these claims.  Lowe's passing reference to  these  other
claims without argument or citation to authority is insufficient to preserve this  issue  on  appeal.
177 Ill. 2d R. 341(e)(7) (argument portion of brief "shall contain the contentions of  the  appellant
and the reasons therefor, with citation of the authorities and the pages of  the  record  relied  on"
and "[p]oints not argued are waived").  Accordingly, we express  no  opinion  on  the  trial  court's
rulings on these claims.  See Miller v. Rosenberg, 196 Ill. 2d 50, 56 (2001).
      Next, Lowe argues that the trial court erred by excluding evidence regarding damages caused  by
the Union's September 1988 picketing.  The Union claims that the trial court's  decision  to  exclude
this evidence was not an abuse of discretion.  We agree with the Union.  Supreme  Court  Rule  219(c)
authorizes a trial court to impose a sanction on a party who unreasonably fails to  comply  with  the
court's discovery rules or orders.  166 Ill. 2d R. 219(c).  We  will  not  disturb  a  trial  court's
decision to exclude evidence as a sanction absent an abuse of discretion.   See  In  re  Marriage  of
Booher, 313 Ill. App. 3d 356, 359 (2000).  To determine if a trial court  abused  its  discretion  by
issuing a sanction, we must consider the following factors: (1) the surprise to  the  adverse  party,
(2) the prejudicial effect of the proffered evidence,  (3)  the  nature  of  the  evidence,  (4)  the
diligence of the adverse party in seeking discovery,  (5)  the  timeliness  of  the  adverse  party's
objection to the evidence, and (6) the good faith of the party  offering  the  evidence.   No  single
factor is determinative.  Booher, 313 Ill. App. 3d at 359-60.
      Here, Lowe waited until the beginning of the trial to inform the Union that it was claiming  an
additional $18,750 in damages caused by the September 1988 picketing.  Lowe now explains that  Brei's
lack of cooperation caused its delay in disclosing the amount of  damages.   Yet,  Lowe  acknowledges
that its counsel forgot to ask Marshall Lowe about the damages  at  issue,  used  figures  that  were
available 12 years earlier to calculate these  damages,  failed  to  subpoena  Brei,  and  failed  to
disclose the amount of the  claimed  damages  despite  the  Union's  prior  requests.   Further,  the
admission of the proffered evidence during the trial did not leave the  Union  with  time  to  verify
Lowe's claim, causing unfair prejudice to the Union.  Therefore, we determine that  the  trial  court
did not abuse its discretion by excluding the evidence regarding  damages  caused  by  the  September
1988 picketing.
      Next, Lowe argues that the trial court erred by excluding evidence of its attorney  fees  as  a
measure of punitive damages.  Although punitive damages are generally  disfavored  because  of  their
penal nature, punitive damages may be awarded where, as here, the defendant  committed  a  tort  with
actual malice.  See E.J. McKernan Co. v. Gregory, 252 Ill. App. 3d 514, 535-36 (1993).  In  addition,
this court has previously stated that a plaintiff's attorney fees may be included in  the  amount  of
the award of punitive damages.  See E.J. McKernan Co., 252 Ill. App. 3d  at  536.   However,  in  the
absence of a statutory provision authorizing an award of  attorney  fees,  attorney  fees  cannot  be
awarded as a separate entity distinct from punitive damages.   E.J. McKernan Co., 252  Ill.  App.  3d
at 546.  Accordingly, the trial court abused its discretion by excluding evidence of Lowe's  attorney
fees in support of its punitive damages claim.  On remand,  the  trial  court  should  consider  this
evidence if it decides to award punitive damages.
      Finally, we address the Union's argument on cross-appeal.  The  Union  argues  that  the  trial
court erred in denying its petition for costs under section 5--118 of the Code  of  Civil  Procedure.
735 ILCS 5/5--118 (West 1998).  Section 5--118 provides for an  award  of  costs  to  the  prevailing
party in a civil case. 735 ILCS 5/5--118 (West 1998).  However, with the determinations made in  this
disposition, the Union is no longer the prevailing party.  Therefore, the  trial  court's  denial  of
the Union's petition for costs is affirmed.
      For the foregoing reasons, we reverse the trial court's ruling in  the  Union's  favor  on  the
trade libel count and its exclusion of evidence of Lowe's attorney fees for purposes  of  determining
punitive damages.  We affirm the trial court's ruling  in  the  Union's  favor  on  Lowe's  remaining
claims for tortious interference with  contract,  tortious  interference  with  prospective  business
advantage, and negligent interference with contract.  We further affirm the trial  court's  exclusion
of the evidence of damages related to the September 1988 picketing and  its  denial  of  the  Union's
petition for fees, and we remand this cause for further proceedings regarding damages.
      The judgment of the circuit court of McHenry County is affirmed in part and reversed  in  part,
and the cause is remanded.
       Affirmed in part and reversed in part; cause remanded.
      GROMETER and CALLUM, JJ., concur.
