Keenan v. Computer Associates Intern., Inc.

• Decision Date: 21 January 1994
• Docket Number: No. 92-3261,92-3261
• Citation: 13 F.3d 1266
• Parties: 127 Lab.Cas. P 57,601 Brian KEENAN, an individual resident of the State of Minnesota, Appellee, v. COMPUTER ASSOCIATES INTERNATIONAL, INC., a foreign corporation, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1266

13 F.3d 1266

127 Lab.Cas. P 57,601

Brian KEENAN, an individual resident of the State of

Minnesota, Appellee, v. COMPUTER ASSOCIATES INTERNATIONAL, INC., a foreign

corporation, Appellant.

No. 92-3261.

United States Court of Appeals,

Eighth Circuit.

Submitted June 18, 1993.

Decided Jan. 21, 1994.

Thomas P. Kane, St. Paul, MN, argued (Paul W. Iversen, on the brief), for appellant.

Kyle E. Hart, St. Paul, MN, argued, for appellee.

Before McMILLIAN, FAGG, and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

Computer Associates International (CAI) appeals the district court's ¹ denial of CAI's motion for judgment as matter of law or for a new trial, filed after a jury found for Keenan on his defamation and fraudulent misrepresentation claims in this diversity case. CAI asserts that the district court erred in not finding, as a matter of law, that CAI had established a qualified privilege against liability for defamation under Minnesota law. CAI also asserts that the defamation damage award is excessive and that Keenan failed, as a matter of law, to establish his fraudulent misrepresentation claim. We affirm.

I.

In the summer of 1989, Keenan became interested in working as a salesperson for CAI. He filled out an application and met with CAI a number of times during 1989. CAI informed him that there were no jobs available due to a hiring freeze. In the spring of 1990, Derf Manthe, CAI's District Manager, contacted Keenan about a sales position that was opening up on April 1, 1990. Keenan and Manthe met and discussed the prospective position a number of times during March and April of 1990. CAI eventually offered Keenan the job, and Keenan accepted. Keenan quit his job at Heublin Fine Wine Group, a wholly owned subsidiary of Grand Metropolitan, where he made between $40,000 and $50,000 per year. Keenan had been working for Grand Metropolitan or one of its subsidiaries for approximately four years.

On April 26, 1990, Keenan signed an Employment and Confidentiality Agreement with CAI that expressly stated Keenan could be fired by CAI at any time for any reason. Keenan began working for CAI on April 28, 1990. Approximately five weeks later, on June 4, 1990, Keenan was fired by Mary Lynn Yakel on her first day as CAI's new District Manager. Keenan left CAI after signing exit interview papers that stated CAI fired him for "poor performance."

Keenan interviewed for other jobs. He had to disclose at least five times to prospective employers that he was fired at CAI for poor performance. Keenan was unemployed for five months and eventually took a job selling Yellow Pages advertising. He later moved on to a sales job with a frozen yogurt company but was making less at the time of trial than he did when he left his liquor sales job to join CAI.

Keenan filed an eight-count complaint against CAI in July of 1990. The case went to trial on three counts: wrongful termination, defamation, and fraudulent misrepresentation. CAI moved for judgment as a matter of law at the close of Keenan's case and again at the close of all of the evidence. The district court denied both of CAI's motions. The jury found for CAI on the wrongful termination claim and found for Keenan on the defamation and fraudulent misrepresentation claims. The jury awarded Keenan $100,000 on the defamation claim and $57,000 on the fraudulent misrepresentation claim.

CAI filed a post-trial motion for judgment as a matter of law or, alternatively, for a new trial on the defamation and fraudulent misrepresentation claims. Keenan also moved for a new trial on the wrongful termination claim and on the damage award for fraudulent misrepresentation. The court denied the motions and allowed the jury verdict to stand on all counts. CAI appealed. Keenan filed a cross-appeal which was later dismissed.

II.

CAI argues that the district court erred when it denied CAI's motion for judgment as a matter of law or, in the alternative, for a new trial. We review the district court's denial of a motion for judgment as a matter of law de novo using the same standards as the district court. ² Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483, 1505 (8th Cir.1992), cert. denied --- U.S. ----, 113 S.Ct. 1048, 122 L.Ed.2d 356 (1993). A motion for judgment as a matter of law presents a legal question to the district court and this court on review: "whether there is sufficient evidence to support a jury verdict." White v. Pence, 961 F.2d 776, 779 (8th Cir.1992). We view the "evidence in the light most favorable to the prevailing party and must not engage in a weighing or evaluation of the evidence or consider questions of credibility." Id. Judgment as a matter of law is appropriate only when all of the evidence points one way and is "susceptible of no reasonable inference sustaining the position of the nonmoving party." Id. ³

We apply a much more deferential standard in our review of a district court's denial of a motion for a new trial under Fed.R.Civ.P. 59(a). "The [district] court's decision will not be reversed by a court of appeals in the absence of a clear abuse of discretion." Lowe v. E.I. DuPont de Nemours & Co., 802 F.2d 310, 310-11 (8th Cir.1986) (citations omitted); see also 1 Steven Alan Childress & Martha S. Davis, Federal Standards of Review Sec. 5.08, at 5-69 (2nd ed. 1992) ("The trial court's decision generally is committed to its discretion."). Where the basis of the motion for a new trial is that the jury's verdict is against the weight of the evidence, the district court's denial of the motion "is virtually unassailable on appeal." Peterson ex rel. Peterson v. General Motors Corp., 904 F.2d 436, 439-40 (8th Cir.1990); Czajka v. Black, 901 F.2d 1484, 1485 (8th Cir.1990). The key question is whether a new trial should have been granted to avoid a miscarriage of justice. See Beckman v. Mayo Foundation, 804 F.2d 435, 439 (8th Cir.1986) ("The district court can only disturb a jury verdict to prevent a miscarriage of justice.").

CAI contends that the district court should have granted judgment as a matter of law or a new trial for three reasons. CAI asserts that each of these arguments provides grounds for reversal of the district court's ruling on the motion for judgment as a matter of law or for new trial.

III.

CAI first contends that the district court should have found, as a matter of law, that CAI had a qualified privilege against defamation liability under Minnesota law. The parties agree that Minnesota law governs in this diversity case and we review the district court's determinations of Minnesota law de novo. Salve Regina College v. Russell, 499 U.S. 225, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991).

Minnesota law "recognizes a qualified privilege which exempts an employer from liability for defamatory statements about an employee so long as the statements are made in good faith and for a legitimate purpose." Brooks v. Doherty, Rumble & Butler, 481 N.W.2d 120, 124-25 (Minn.Ct.App.1992) (citing Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 257 (Minn.1980)). The communication may be privileged if:

made upon a proper occasion, from a proper motive, and ... based upon reasonable or probable cause. When so made in good faith, the law does not imply malice from the communication itself, as in the ordinary case of libel. Actual malice must be proved, before there can be a recovery, and in the absence of such proof the plaintiff cannot recover.

Id. at 125 (quoting Stuempges, 297 N.W.2d at 256-57). This qualified privilege analysis encompasses a two-step approach to determining whether the privilege applies. First, to establish the existence of the privilege, the defendant bears the burden of proving the communication was: (1) made upon a proper occasion, (2) made from a proper purpose, and (3) based upon reasonable and probable grounds. See id.; see also Lewis v. Equitable Life Assur. Soc'y, 389 N.W.2d 876, 890 (Minn.1986) (citing Stuempges, 297 N.W.2d at 257); Wilson v. Weight Watchers of Upper Midwest, 474 N.W.2d 380, 385 (Minn.Ct.App.1991). Whether the employer had a proper purpose and whether the employer had a proper occasion in making a communication are always questions of law for the court to decide. Brooks, 481 N.W.2d at 125. Whether the employer had reasonable and probable grounds for making the statement is also generally a question of law for the court, "unless the evidence 'permits of more than one conclusion,' when the question becomes one of fact for the jury." Id. (citing Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 380 n. 4 (Minn.1990)).

Once the defendant has established the existence of the qualified privilege, the burden shifts to the plaintiff to prove that the defendant abused that privilege by actual malice. Lewis, 389 N.W.2d at 890; Stuempges, 297 N.W.2d at 257; Brooks, 481 N.W.2d at 126. This question is for the jury. Brooks, 481 N.W.2d at 126 (citing Lewis, 389 N.W.2d at 890). The plaintiff can demonstrate actual malice by showing the defendant's "actual ill will, or a design causelessly and wantonly to injure plaintiff." Id. (quotation omitted). The plaintiff may prove malice "by evidence that leads to an inference that respondents knew the statements were false, by extrinsic evidence of personal ill feeling, or by intrinsic evidence such as exaggerated language, the character of the language used, or the extent of publication." Id. (citing Frankson v. Design Space Int'l, 394 N.W.2d 140, 144 (Minn.1986)).

CAI contends that the district court erred in instructing the jury on qualified privilege. Under the heading "Qualified Privilege--Actual Malice," the district court instructed the jury that:

An employer has a qualified privilege to state reasons for the discipline or discharge of an employee. Such privilege may be lost if it is abused. Plaintiff may overcome this privilege by proving that the statements were made with actual malice toward the plaintiff. A statement is made with actual malice if the statement is made from...