Hodgins v. Times Herald Co.

Decision Date18 July 1988
Docket Number99213,Docket Nos. 98932
Citation169 Mich.App. 245,425 N.W.2d 522
PartiesFred HODGINS and Jan Hodgins doing business as Hodgins Kennels, Plaintiffs-Appellees/Cross-Appellants, v. TIMES HERALD COMPANY, a Michigan corporation, Defendant-Appellant/Cross-Appellee. and George Burgess, Defendant. 169 Mich.App. 245, 425 N.W.2d 522, 15 Media L. Rep. 1777
CourtCourt of Appeal of Michigan — District of US

[169 MICHAPP 247] Levin, Levin, Garvett & Dill by Nancy L. Kahn, Southfield, for plaintiffs-appellees/cross-appellants.

[169 MICHAPP 248] O'Sullivan, Beauchamp, Kelly & Whipple by Charles G. Kelly, Port Huron, and Nixon, Hargrave, Devans & Doyle by Robb M. Jones and Patricia A. Ayers, Washington, D.C., for The Times Herald Co.

Before KELLY, P.J., and HOOD and WARSHAWSKY, * JJ.

HOOD, Judge.

Defendant Times Herald Company (hereinafter defendant) appeals as of right from a jury verdict of $130,000 in favor of plaintiffs in plaintiffs' libel action against defendant. Plaintiffs appeal separately from the denial of their motion to amend the judgment to hold defendant liable for an additional $70,000 in exemplary damages.

Plaintiffs, Fred and Jan Hodgins, husband and wife, are joint owners of Hodgins Kennels in St. Clair County. Plaintiffs incorporated Hodgins Kennels in 1982, with each plaintiff owning fifty percent of the stock; prior to 1982 plaintiffs operated the kennel as a partnership. Jan Hodgins was active in the kennel business for twenty-two years and was a partner in the business in 1981.

Plaintiffs are state and federally licensed animal dealers who supply animals for medical research. Plaintiffs obtain unwanted animals from county and city dog pounds and resell them to government-registered facilities for use in research. Plaintiffs are regularly inspected by the Michigan and federal departments of agriculture. Plaintiffs' kennel business is regulated by both federal and Michigan statutes.

Plaintiffs contracted with St. Clair County to dispose of unwanted animals from the St. Clair County dog pound between 1971 and 1979. This contract was interrupted in 1979 when the county demolished its old dog pound to build a new pound [169 MICHAPP 249] on the same site. The county then contracted with the St. Clair Humane Society to temporarily house stray animals while the new pound was being built. The Humane Society opposed animal research and does not allow animals to be released for use in research. After the new pound was built, the county resumed its original contract with plaintiffs and terminated the contract with the Humane Society. However, the Humane Society made a concerted effort to regain the county contract and made an issue over the use of the pound animals in research. There was continuing controversy in St. Clair County over the use of the new county dog pound instead of the Humane Society shelter.

Defendant's publisher and president, Phil Abrell, was a supporter of the St. Clair Humane Society and favored having the Humane Society run the county animal shelter. The Port Huron Times Herald ran an extensive fund-raising campaign for the Humane Society, which included frequent newspaper articles covering the Humane Society and its fund-raising efforts. Defendant's paper also featured editorials in favor of a county contract with the Humane Society.

On August 30, 1981, defendant published a letter from George Burgess, vice president of the Humane Society, on the editorial page of the Port Huron Times Herald. Burgess' letter was a reply to a previous letter to the editor by Dr. Raymond Kahn which had been published by defendant on August 18, 1981. Dr. Kahn's letter commended plaintiff Fred Hodgins for his conscientiousness in dealing with pound animals. Burgess' letter implied that plaintiffs sold animals to be used to train dogs for dog fights, stating:

"Dog Pound animals are sold not only to hospitals[169 MICHAPP 250] (which are not necessarily humane) but to anyone with Mr. Hodgins' asking price."

And:

"Some of the more frail dogs and some of the kittens and cats end up as 'training animals' to be killed by dogs being trained for the many dog fights staged weekly in the state."

Burgess' letter also referred to several types of inhumane experiments to which research animals were supposedly subject. 1

On September 9, 1981, the St. Clair County [169 MICHAPP 251] Board of Commissioners decided to terminate plaintiffs' contract with the county and to reinstate the Humane Society's animal shelter contract. St. Clair County terminated the Humane Society's contract and resumed housing stray animals in the county dog pound in 1984, but has refused to resume the previous county contract with plaintiffs. Plaintiffs lost approximately 1,200 dogs per year because of the loss of the St. Clair County contract and have been unable to supply their full demand for research animals due to the loss of the contract. Upon request by plaintiffs' attorney, defendant published a retraction letter written by George Burgess in November, 1981.

Plaintiffs filed suit against defendant and George Burgess for libel in two separate actions which were consolidated and transferred to St. Clair Circuit Court on September 4, 1983. The court granted plaintiffs a default judgment against Burgess on January 6, 1986.

[169 MICHAPP 252] Defendant moved for summary judgment on the basis that the letter was not actionable because it was an expression of opinion and because the letter was protected by the "public interest" privilege, which requires that the plaintiff show actual malice to impose liability on the defendant. The trial court denied the motion, finding that the Burgess letter was not protected opinion as a matter of law, whether readers interpreted the letter's language in a defamatory sense was a fact question for the jury, and whether defendant acted with actual malice was also a fact question for the jury.

The jury returned a verdict in favor of plaintiffs. The jury answered specific questions on a special verdict form. Specifically, the jury found that the statements were of and concerning both plaintiffs, the Burgess letter was false in a material respect which tended to harm plaintiffs' reputation, and defendant published the letter knowing that it was false or with reckless disregard as to falsity, i.e., with actual malice. The jury found that plaintiffs sustained actual damages of $130,000 and exemplary damages of $70,000. The jury found that defendant did not act with bad faith or ill will, but that George Burgess did. Thus, the jury found that Burgess was liable to plaintiffs for $70,000 in exemplary damages. The court entered a judgment holding defendant jointly and severally liable with George Burgess to plaintiffs for $130,000 in actual damages.

Defendant moved for judgment notwithstanding the verdict or for a new trial, which the court denied.

On January 8, 1987, plaintiffs moved to correct the court's judgment pursuant to MCR 2.612(C)(1)(f) to add exemplary damages in favor of plaintiffs against defendant Times Herald Company. [169 MICHAPP 253] Plaintiffs argued that the standard for exemplary damages was actual malice instead of bad faith or ill will, so plaintiffs were entitled to exemplary damages because defendant was found to have acted with actual malice. The court denied plaintiffs' motion to correct the judgment.

Defendant raises a number of issues, which we will discuss in order.

I. Did the trial court err in denying defendant's motion

for summary judgment on the ground that the

Burgess letter was constitutionally

protected expression of

opinion?

A motion brought under MCR 2.116(C)(10) tests whether there is factual support for plaintiff's claim. A court, in deciding such a motion, must consider the pleadings, affidavits, depositions, admissions, and documentary evidence available to it and give the nonmoving party the benefit of every reasonable doubt. The motion must not be granted unless the court is satisfied that it would be impossible to support the claim at trial because of some deficiency which cannot be overcome. Dzierwa v. Michigan Oil Co., 152 Mich.App. 281, 284, 393 N.W.2d 610 (1986).

The United States Supreme Court has held that expressions of opinion are protected from defamation actions. Gertz v. Robert Welch, Inc., 418 U.S. 323, 339, 94 S.Ct. 2997, 3006, 41 L.Ed.2d 789 (1974). However, there is no constitutional protection given to false statements of fact, so false statements of fact are not protected from libel suits. Gertz, 418 U.S. at 340, 94 S.Ct. at 3007.

Direct accusations or inferences of criminal conduct or wrongdoing are not protected as opinion. Church of Scientology of California v. Flynn, 744 F.2d 694, 698 (CA 9, 1984); Cianci v. New Times Publishing Co., 639 F.2d 54, 65 (CA 2, 1980); Buckley[169 MICHAPP 254] v. Littell, 539 F.2d 882, 896 (CA 2, 1976), cert. den. 429 U.S. 1062, 97 S.Ct. 785, 50 L.Ed.2d 777 (1977). There is no First Amendment protection for "a charge which could reasonably be understood as imputing specific criminal conduct or other wrongful acts." Cianci, 639 F.2d at 64.

Defendant contends that the wording of the Burgess letter was merely strongly worded opinion and did not accuse plaintiffs of any crimes. Exaggerated language used to express opinion, such as "blackmailer," "traitor" or "crook," does not become actionable merely because it could be taken out of context as accusing someone of a crime. Greenbelt Cooperative Publishing Ass'n v. Bresler, 398 U.S. 6, 14, 90 S.Ct. 1537, 1542, 26 L.Ed.2d 6 (1970).

However, here defendant published a letter which implied that plaintiffs sell dogs to persons who use them for dog fights, a state crime under M.C.L. Sec. 750.49; M.S.A. Sec. 28.244. It is also a federal crime to sell or transport animals for use in dog fights. 7 U.S.C. Sec. 2156(b). Sale of animals for dog fighting is grounds for revocation of plaintiffs' federal and state licenses. 7...

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