In a Jan. 29 motion, the lawyer representing Linda McLaughlin, WTVP’s ex-Director of Finance and Human Resources, is seeking Judge Timothy Cusack to dismiss much of the lawsuit brought by the Cincinnati Insurance Co. to recover the $250,000 the company paid the TV station as part of WTVP’s claim of financial losses between 2019 and 2023.
Peoria attorney Philip O’Donnell’s combined motion to dismiss two counts of the suit says that the insurer’s amended complaint filed Dec. 29 “abandons all prior allegations of theft, unjust enrichment, fraud and conspiracy against [McLaughlin. It] now asserts claims against her solely for ordinary negligence and breach of fiduciary duty.
“Plaintiff [Cincinnati Insurance] now alleges that it was only Lesley Matuszak, WTVP’s Chief Executive Officer, who engaged in fraud and misappropriation of funds,” he says.
Matuszak died shortly after WTVP’s board questioned spending. She’s been accused of having improperly taken station funds for personal use and theft of WTVP funds. McLaughlin resigned the same week, when the board announced “questionable, unauthorized, or improper” spending.
O’Donnell writes that Illinois law doesn’t allow an employer or indemnifier to recover from an employee for mere carelessness or poor decision-making, especially without proof that the employee benefited from the act.
“Inadequate job performance, lapses in oversight and poor judgment do not create civil liability,” O’Donnell says. “Under Illinois law, poor employee performance is addressed through termination.”
Among other criticisms of the insurer’s amended complaint, O’Donnell said the insurer “alleges that a police investigation implicated Lesley Matuszak [but] does not include any similar allegation that Linda was the subject of a criminal investigation or accused of criminal wrongdoing.
However, the Peoria police investigation — which did find probable cause to charge Matuszak (and declined to bring charges since she was dead) — seemed to reference and possibly implicate McLaughlin, but police decided that “probable cause has not been reached for her arrest, unless she is able to be communicated with,” the police report stated.
The insurer claims WTVP’s insurance policy provided coverage for employee theft, fraud and embezzlement, but the amended complaint didn’t attach the actual policy.
In November, Cusack granted O’Donnell’s motion to dismiss the suit because it lacked specificity, but the judge gave Cincinnati Insurance’s counsel time to amend its original complaint.
Matuszak’s estate also is named as a defendant in the suit, but no response has been filed on the estate’s behalf.
The next appearance is a case management conference on March 13.