AMERICAN TRANS., INC. v. Channel 7 of Detroit, Inc.

• Decision Date: 04 May 2000
• Docket Number: Docket No. 210925.
• Citation: 239 Mich. App. 695,609 N.W.2d 607
• Parties: AMERICAN TRANSMISSION, INC., and American Transmissions of Troy, Plaintiffs-Appellants, v. CHANNEL 7 OF DETROIT, INC., and Joe Ducey, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

609 N.W.2d 607

239 Mich. App. 695

AMERICAN TRANSMISSION, INC., and American Transmissions of Troy, Plaintiffs-Appellants, v. CHANNEL 7 OF DETROIT, INC., and Joe Ducey, Defendants-Appellees.

Docket No. 210925.

Court of Appeals of Michigan.

Submitted October 7, 1999, at Detroit.

Decided February 22, 2000, at 9:10 a.m.

Released for Publication May 4, 2000.

Martin E. Crandall & Associates, P.C. (by Martin E. Crandall), Dearborn, for the plaintiffs.

Butzel Long (by James E. Stewart, Eugene H. Boyle, Jr., and Laurie J. Michelson), Detroit, (Baker & Hostetler, by

Bruce W. Sanford and David M. Giles, of Counsel), Washington, D.C., for the defendants.

Before: WILDER, P.J., and BANDSTRA and MARK J. CAVANAGH, JJ.

MARK J. CAVANAGH, J.

Plaintiffs American Transmission, Inc., and American Transmissions of Troy appeal as of right from the trial court order granting defendants' motion for summary disposition pursuant to MCR 2.116(C)(10) with regard to plaintiffs' claims of defamation, fraud, trespass, and intentional interference with prospective business relationships. We affirm.

In 1996, Call for Action, a consumer advocacy group, informed defendant Joe Ducey, the consumer reporter for defendant Channel 7 of Detroit, Inc., that it had been receiving a disproportionately high number of consumer complaints about transmission repair shops. Ducey decided to do a story on a consumer's experiences at transmission repair facilities. Defendants rented a 1986 Buick LaSabre, which Ducey took to a certified mechanic, Morrie Schwartz. Schwartz performed a road test and a visual inspection under the hood and concluded that the vehicle was operating properly and that there were no transmission problems. For the purpose of defendants' investigation, Schwartz suggested disconnecting the vehicle's vacuum hose from the transmission. When Schwartz did so, the car became much more difficult to shift and made a "clunking noise" when it stopped. Schwartz explained that, given these problems, the vacuum line was one of the first things that should be checked.

Over the course of two days, Evelyn Stern, a volunteer at Call for Action, took the vehicle to eight randomly chosen transmission repair facilities. Ducey followed in a van. After a particular transmission shop was selected, they would stop approximately a block away, and Ducey would disconnect the vacuum hose. Stern then drove to the shop, where she would pose as a customer. Before they proceeded to the next establishment, Ducey would reattach the hose because the vehicle was too difficult to drive when the hose was not connected.

At each facility, Stern, who was equipped with a hidden camera, would explain that she was having difficulty with her transmission. Four of the shops that Stern visited found the detached vacuum hose and reconnected it for no charge. The other four shops did not diagnose the problem with the vacuum hose and recommended taking apart the transmission for a minimum cost of several hundred dollars.

Stern visited American Transmissions of Troy (hereafter plaintiff) on December 11, 1996. After performing a road test and hoist inspection, plaintiff's manager told Stern that there were "a lot of different things here," and the problems could "not [be] solved with a minor adjustment." Plaintiff's manager stated that he needed to do an internal inspection, which would involve disassembling the transmission to "see what parts are failing, cut the cancer out basically before it spreads even further." The cost of the internal inspection would be $249; there would be additional charges for parts and labor for any items that needed to be replaced. Stern said that she would have to discuss the situation with her husband and left the shop.

On January 2, 1997, Ducey and a camera operator went to plaintiff's shop. Ducey introduced himself to Barry Bryan, the owner of the shop, and showed him the videotape of Stern's earlier visit. Ducey noted that, although a hoist inspection had been performed, the "vacuum" box was not checked on the inspection form that plaintiff's manager had given Stern. Bryan was unable to account for this omission or for his shop's failure to find the disconnected hose.

Channel 7 aired its broadcast of the transmission shop investigation on February 15, 1997, and again on February 16, 1997. The piece began with an introduction by news anchor Mike Holfeld:

They are words you don't want to hear, your car has serious problems. It's the transmission. It could cost more than $1,000, but a Newshawk investigation shows some people they might be paying for repairs they don't even need. Channel 7 Newshawk Joe Ducey here now with more.

The segment included interviews with consumers who believed that they had been duped into paying for unnecessary work on their vehicles' transmissions. Ducey then explained that Stern had visited various transmission shops, and portions of her encounters with the four shops that had recommended expensive repairs, including American Transmissions of Troy, were shown. The segment also showed part of Ducey's interview with Bryan, and Ducey noted that Bryan stood by his shop's diagnosis. Ducey further reported, "American on Rochester Road in Troy says if the vacuum hose was pulled they would have found it." At the end of the segment, after Ducey listed the four shops that had detected the problem with the hose and reattached it without charge, Holfeld noted that there are "[s]ome honest guys still out there."

Following the broadcast, American Transmissions of Troy demanded a retraction. Counsel for Channel 7 requested that it identify which statements in the broadcast were false. Instead of responding, plaintiffs¹ filed the instant lawsuit on March 19,1997, alleging defamation, fraud, trespass, and intentional interference with prospective business relationships. Specifically, plaintiffs claimed that (1) defendants defamed plaintiffs by wilfully and maliciously publishing false statements, (2) defendants made false statements and misrepresentations regarding the condition of the vehicle, (3) Stern, under defendants' direction, materially misrepresented her relationship to the vehicle and to defendants, (4) defendants were trespassers on American Transmissions of Troy's premises because they gained entry by concealing their true identity and misrepresenting their agent's relationship to them, and (5) defendants' intentional conduct interfered with plaintiffs' valid business expectancies and caused a loss of customers, business, and profits.

On November 5, 1997, defendants moved for summary disposition pursuant to MCR 2.116(C)(10). To its brief in opposition to defendants' motion, plaintiffs attached a videotape of an inspection of the Buick's transmission by mechanic Joe Dunn on February 2, 1997. In addition, plaintiffs attached a report by Wayne Bullen describing his observation of Dunn's examination. According to the report, Dunn noted "chattering and clattering" when the transmission was placed in reverse and discovered multiple defects in the transmission.

The trial court advised the parties that it would not entertain oral argument regarding defendants' motion for summary disposition. On January 29, 1998, plaintiffs filed a motion requesting oral argument. Plaintiffs argued that, because of the complexity and technical nature of the case, oral argument would assist the court in ruling on defendants' motion. The record does not contain an order addressing plaintiffs' motion; however, on February 23, 1998, the trial court issued an opinion and order granting defendants' motion for summary disposition and noting that the motion had been decided without oral argument.

In its opinion, the trial court stated that the Dunn videotape failed to satisfy MCR 2.116(G)(4), which provides that when a motion is brought pursuant to MCR 2.116(C)(10) and supported, an adverse party may not rest on mere allegations but must by affidavits or otherwise set forth specific facts showing that there is a genuine issue for trial. The court noted that Dunn had not been duly sworn and did not state that if called to testify, he would do so in accordance with his findings.² Likewise, Bullen's report was deficient because it was premised on hearsay and was not in the form of an affidavit or deposition testimony. Plaintiffs subsequently moved for reconsideration; they attached to their motion both the March 9, 1998, affidavit of Dunn and additional pages from the transcript of Schwartz' deposition.³ The trial court denied the motion.

I

Plaintiffs argue that the trial court erred in granting defendants' motion for summary disposition. On appeal, an order granting or denying summary disposition is reviewed de novo. In reviewing a motion for summary disposition brought under MCR 2.116(C)(10), a trial court considers affidavits, admissions, and documentary evidence filed in the action or submitted by the parties in the light most favorable to the party opposing the motion. A trial court may grant a motion for summary disposition under MCR 2.116(C)(10) if the evidence shows that there is no genuine issue in respect to any material fact, and the moving party is entitled to judgment as a matter of law. Smith v. Globe Life Ins. Co., 460 Mich. 446, 454-455, 597 N.W.2d 28 (1999).

A. Defamation Claim

A defamatory communication is one that tends to harm the reputation of a person so as to lower him in the estimation of the community or deter others from associating or dealing with him. Hawkins v. Mercy Health Services, Inc., 230 Mich.App. 315, 324, 583 N.W.2d 725 (1998). The elements of a cause of action for defamation are (1) a false and defamatory statement concerning the plaintiff, (2) an unprivileged publication to a third party, (3) fault amounting at least to negligence on the part of the publisher, and (4) either actionability of the statement irrespective of special harm (defamation per se) or the existence of special harm caused by the...