Granger v. Time, Inc.

• Decision Date: 30 August 1977
• Docket Number: No. 13579,13579
• Citation: 34 St.Rep. 983,174 Mont. 42,568 P.2d 535
• Parties: , 3 Media L. Rep. 1021 Jeffrey GRANGER and David Granger, Plaintiffs and Appellants, v. TIME, INC., a corporation, Defendant and Respondent. Phoebe Ann GOLD, Dr. Allan J. Gold, Ernest P. Cohen, Jesse M. Cohen, Oliver R. Levy, J. M. Sherick and Diane M. Sherick, husband and wife, and Jodi, Inc., Plaintiffs and Appellants, v. TIME, INC., a corporation, Defendant and Respondent.
• Court: Montana Supreme Court

Page 535

568 P.2d 535

174 Mont. 42, 3 Media L. Rep. 1021

Jeffrey GRANGER and David Granger, Plaintiffs and Appellants, v. TIME, INC., a corporation, Defendant and Respondent.

Phoebe Ann GOLD, Dr. Allan J. Gold, Ernest P. Cohen, Jesse

M. Cohen, Oliver R. Levy, J. M. Sherick and Diane

M. Sherick, husband and wife, and Jodi, Inc., Plaintiffs and Appellants, v. TIME, INC., a corporation, Defendant and Respondent.

No. 13579.

Supreme Court of Montana.

Submitted May 19, 1977.

Decided Aug. 30, 1977.

Henningsen, Purcell & Genzberger, Rex F. Henningsen (appeared), Corette, Smith & Dean, Kendrick Smith (argued), Butte, for plaintiffs and appellants.

Crowley, Haughey, Hanson, Gallagher & Toole, Bruce R. Toole (argued), Billings, Harold R. Medina, Jr. (argued), New York City, for defendant and respondent.

HATFIELD, Chief Justice.

Plaintiffs appeal from the district court's ruling in this libel action granting defendant's motions for summary judgment.

Defendant, Time, Inc., publishes a national weekly news magazine. The subject of this lawsuit concerns an article which defendant published in its September 22, 1975 issue, entitled "Into the Pit". The article described how the City of Butte, which owed its birth and former prosperity to first gold, and then copper mining was being relentlessly swallowed by Anaconda Company's ever expanding open pit copper mining operation. Defendant in the article noted the economic deterioration in "the once-stylish uptown district", observed that virtually no major construction had taken place in Butte since 1962, and asserted that "Arson has become common as people who are unable to sell their devalued buildings burn them for the insurance."

Each of the plaintiffs had ownership interests in either the Penney Building or the Pennsylvania Building. Fire destroyed the Penney Building on February 28, 1972, and destroyed the Pennsylvania Building on August 20, 1975. Plaintiffs, in a letter dated October 29, 1975, informed defendant that they believed the statement in the article concerning arson referred particularly to them and was false and libelous. Plaintiffs informed defendant of its opportunity under section 64-207.1, R.C.M.1947, to correct the allegedly libelous matter. Defendant failed to retract its statement concerning arson in the manner prescribed by the statute, and plaintiffs, on December 19, 1975, filed a complaint in district court, Silver Bow County, alleging that defendant had libeled them by the statements concerning arson in the article, "In the Pit".

Defendant filed a motion to dismiss plaintiffs' complaints for failure to state a claim upon which relief could be granted. The district judge denied defendant's motion to dismiss. Defendant subsequently filed its answer, denying the assertions in plaintiffs' complaints that the arson statement was made of and concerning plaintiffs and that the article was prepared with a reckless disregard of the truth, and asserting that the statements contained in the article were protected by the freedom of speech and press guarantees of the First Amendment.

Plaintiffs and defendant thereafter filed the following four exhibits:

(1) An "Editorial Reference File", containing the reference material upon which defendant based its article and the successive drafts of the article;

(2) a "Memorandum for Counsel", containing interviews with the persons involved in the investigation, writing, and publishing of the article;

(3) "The Butte Fire Memorandum", containing copies of the fire incident statistical reports of the State Fire Marshall Bureau of the State of Montana, Department of Justice, for the years ending 1974 and 1975 and an analysis of fires during 1965-1975 in an arbitrarily selected 58 square block area in the central business district of Butte; and,

(4) a "Memorandum of Testimony" on behalf of plaintiffs, containing interviews with each of the plaintiffs and with their attorney. Plaintiffs and defendants stipulated that the statements of the Time, Inc., employees and statements of plaintiffs and their attorney as contained in the exhibits, were what " * * * in substance and effect" they would testify to "for the purpose of any motion or for the purpose of trial * * * ."

Defendants, on May 6, 1976, filed a motion for summary judgment and a memorandum in support of their motion. Plaintiffs, on May 17, 1976, filed a cross-motion for summary judgment, solely on the issue of liability, and likewise supported their motion with a legal memorandum. On May 19, 1976, defendant moved to disqualify the district judges of the second judicial district, Silver Bow County. The Honorable Robert J. Boyd, judge of the third judicial district, was thereupon appointed to hear all further matters in the cause.

Plaintiffs and defendant argued the merits of their respective motions for summary judgments before Judge Boyd on July 9, 1976. The district judge entered summary judgments for defendant because:

"Viewing the matter as a stranger and with no special knowledge possessed of the parties, the Court is unable to ascertain any language in the article which refers to some ascertainable or ascertained person * * * ."

Plaintiffs raise the following issues in their appeal from the district court ruling:

1. Did the district judge, by granting defendant's motions for summary judgment, reverse the previously disqualified district judge's denial of defendant's motion to dismiss and thereby improperly exercise appellate jurisdiction?

2. Did the evidence support the district court's granting of defendant's motions for summary judgment?

Plaintiffs contend that Judge Boyd was without jurisdiction to grant defendant's motions for summary judgment. District Judge James Freebourn had earlier denied defendant's motions to dismiss plaintiffs' complaints for failure to state a claim. After Judge Freebourn was disqualified and Judge Boyd was assigned to the case, Judge Boyd granted defendant's motions for summary judgments. Plaintiffs assert that Judge Boyd's granting of defendant's motion for summary judgments was the equivalent of a reversal of Judge Freebourn's denial of defendant's motions to dismiss, and an improper exercise of appellate jurisdiction by a trial judge.

The obvious flaw in plaintiffs' argument is that motions to dismiss for failure to state a claim and motions for summary judgment are distinct motions involving different questions of law, and having different legal effects. Rule 12(b)(6), M.R.Civ.P., motion to dismiss is based solely on the allegations that a plaintiff has made in his complaint. The denial of defendant's motions to dismiss by Judge Freebourn was the law of the case solely as to the sufficiency of the complaint. The denial of the motions to dismiss meant that, in light of the complaint alone, the trial court could not state " * * * for certain that plaintiff is entitled to no relief under any state of facts which might be proved in support of the claim." Kielmann v. Mogan, 156 Mont. 230, 233, 478 P.2d 275, 276.

Judge Boyd's granting of defendant's Rule 56, M.R.Civ.P., motions for summary judgment, however, was a decision on the merits of the case, and not merely a determination of the sufficiency of the allegations in the complaint. In granting defendant's motions for summary judgment, Judge Boyd considered matters outside the complaint, including briefs and oral arguments of counsel, written statements of witnesses, and various statistical data concerning fires in Butte. The granting of the motions for summary judgment signified that, in light of the complaint and the evidence before the court, there remained no disputed material issue of fact which plaintiffs could prove to entitle them to recover. Judge Boyd properly exercised his trial court jurisdiction in ruling on the motions for summary judgment. See Amann v. Northern Pacific Railway Co., 130 Mont. 11, 18, 292 P.2d 753 (1955), for an expression of this rationale in a pre-rules case.

Plaintiffs next contend that the trial judge erred in granting defendant's motions for summary judgments. The trial judge held, as a matter of law, that the statement that "Arson has become common as people who are unable to sell their devalued buildings burn them for the insurance" does not point to any ascertainable person. The judge further noted that nothing in the record indicated that the buildings owned by plaintiffs were "devalued". Finally, the trial judge recognized that, based on the information contained in the "Butte Fire Memorandum" exhibit, the group of "people who are unable to sell their devalued buildings" could include from 204 to 481 persons. Because plaintiffs had not, in the trial court's view, presented evidence sufficient to raise a factual question as to whether they were the specific people in the group referred to, the court held that the common law group libel rule precluded their recovery.

Plaintiffs agree that there is no material issue of fact as to liability, but assert that, as a matter of law, they should be granted summary judgment as to liability, with damages to be determined at trial. Plaintiffs assert that defendant is clearly liable for libel under section 64-203, R.C.M.1947, because the article was printed by defendant, distributed in Montana and nationwide, falsely accused plaintiffs of a crime (arson) and was written "of and concerning the Plaintiffs."

The crucial issue in this case, as to defendant's liability for defamation under Montana law, is whether the article was published "of and concerning" plaintiffs. See Rowan v. Gazette Printing Co., 74 Mont. 326, 331, 239 P. 1035; Schaffroth v. The Tribune, 61 Mont. 14, 17, 201 P. 271. Where a plaintiff is not named in the allegedly libelous statement, he may present evidence of the surrounding circumstances and facts to meet his burden of proving that he was the person to whom the statement referred. Nolan v. Standard Publishing Co., 67 Mont. 212, 216 P. 571. If the arson...