Benassi v. Georgia-Pacific, GEORGIA-PACIFIC

• Decision Date: 27 April 1983
• Docket Number: GEORGIA-PACIFIC,No. A7910-04736,A7910-04736
• Citation: 62 Or.App. 698,662 P.2d 760
• Parties: William BENASSI, Respondent, v., a Georgia corporation, Appellant. ; CA A21694.
• Court: Oregon Court of Appeals

Page 760

662 P.2d 760

62 Or.App. 698

William BENASSI, Respondent, v. GEORGIA-PACIFIC, a Georgia corporation, Appellant.

No. A7910-04736; CA A21694.

Court of Appeals of Oregon.

Argued and Submitted July 19, 1982.

Decided April 27, 1983.

Clifford N. Carlsen, Jr., Portland, argued the cause for appellant. With him on the briefs were James N. Westwood and Miller, Nash, Yerke, Wiener & Hager, Portland.

William K. Shepherd, Portland, argued the cause for respondent. With him on the brief were David W. Heynderickx, and Shepherd & Heynderickx, Portland.

Before BUTTLER, P.J., and WARREN and ROSSMAN, JJ.

BUTTLER, Presiding Judge.

Defendant appeals from a judgment awarding plaintiff, a former employe, damages for defamatory statements made by defendant to other of its employes regarding the circumstances of plaintiff's discharge. Defendant contends that there was insufficient evidence to overcome its qualified privilege, that plaintiff did not prove the requisite causation between the defamatory statements and his alleged damages, and that an erroneous jury instruction was given.

We view the facts in the light most favorable to plaintiff, the prevailing party. See Green v. Uncle Don's Mobile City, 279 Or. 425, 568 P.2d 1375 (1977). Defendant is a large forest products company with headquarters in Portland at the time here involved. Its operation is organized into divisions, one of which is the machinery construction division, headed by M. Fred Wall, who was also defendant's Director of Purchasing. Plaintiff was hired by Wall as general manager of the division in August, 1977.

Defendant planned to expand its machinery construction division into the southeastern United States, and a business trip was undertaken to Hattiesburg, Mississippi, in July, 1978, by plaintiff, Elmer Arndt, who had been hired as an independent consultant, Richard Galligher and others. While in Hattiesburg an incident occurred at the group's motel in which plaintiff confronted Arndt regarding a telephone call Arndt had made earlier in the evening to Wall. There was testimony, which plaintiff does not dispute, that he used a loud voice and considerable profanity. Plaintiff, Galligher and Arndt had been drinking prior to the incident, although plaintiff states he was "in control of all [his] faculties."

The incident was reported to Wall after the group returned to Oregon, and he called plaintiff into his office, reprimanded him and informed him that he would be terminated immediately if a similar incident occurred again. Plaintiff informed Wall that the incident would not have occurred if liquor had not been involved.

The following May, plaintiff took another business trip to Hattiesburg with a group of defendant's employes. On May 16, following a dinner at which plaintiff consumed wine, he and Galligher went to a cocktail lounge for a "nightcap." While there plaintiff and Galligher discussed a wage dispute brewing at the plant with Richard Miller, an employe of the plant, who was seated farther down the bar; the discussion became heated. Miller was not plaintiff's direct subordinate, but during the argument plaintiff told him that he was fired; his voice was loud and his language was profane. The next morning plaintiff and Miller's plant supervisor agreed that Miller was not fired, and plaintiff and Miller agreed that the incident would not have occurred if liquor had not been involved. Galligher was described by plaintiff as "quite intoxicated." Miller admitted to drinking too much. Plaintiff testified that he was not drunk and was "certainly the most sober" of the participants.

About May 25, Wall received an anonymous letter from Hattiesburg describing that incident. The letter stated that the men were "drunk," that there was an argument between plaintiff and Miller in which plaintiff used profane, loud and nasty language, and that plaintiff made a lot of "nasty" remarks about Wall. Wall phoned Miller and Galligher (and two others who informed him that they did not observe the incident) for confirmation, asking specifically what names he was called. Miller informed Wall that he (Miller) had been drinking, that plaintiff had not called Wall any names and that Galligher was in the worst condition of the three. Neither Miller nor Galligher characterized plaintiff as being drunk. Based on those conversations, and without talking to plaintiff, Wall decided to fire him; he had been "90% sure" he would do so after reading the anonymous letter. Plaintiff sought reinstatement, but admitted that Wall had the right to discharge him.

News of plaintiff's termination began circulating among machinery construction division employes the following weekend, and rumors, including one that the division was going to close, were circulating as well. Morris Rivers, who succeeded plaintiff as general manager of the division, called a general meeting of the employes on June 1 to explain plaintiff's termination, to reassure them and to acquaint them with him. The meeting was attended by most of the 120 employes of the division. Rivers introduced himself, gave some background information on himself and said that he believed it was important to have a candid relationship with division employes. He then made the following statement, which is the subject of plaintiff's defamation claim:

"I gathered you all here to tell you why Mr. Benassi is no longer with the company. The man was drunk and misbehaving in a bar. The man had a drinking problem. Georgia-Pacific looks unkindly on this kind of conduct. It was not the first time. He had been warned."

Following his discharge, plaintiff began looking for another job, but had difficulty securing employment. Two job recruiters assisted him, and he contacted some prospective employers himself in response to advertisements, but he received no job offers for approximately five months. Finally, he was hired by an employer referred by the second job recruiter for a position paying approximately $32,000 per year. He had been earning approximately $37,500 per year from defendant at the time of his discharge. He contends that his inability to secure a position that paid as well as his former job with defendant was caused by the defamatory statement.

In response to the defamation claim, defendant raised two affirmative defenses: truth and privilege. The trial court ruled that defendant had a qualified privilege to make the statement, but left to the jury whether the statement was true or whether the privilege was lost through abuse. The jury returned a general verdict awarding plaintiff $350,000 damages.

In its first assignment, defendant contends that the trial court erred in denying its motion for a directed verdict on the ground that there was insufficient evidence that defendant abused its qualified privilege. Defendant concedes here that whether the statement was true was a jury question.

A qualified, or conditional, privilege to make a defamatory statement arises, among other occasions, when it is made to protect the interests of the plaintiff's employer or it is on a subject of mutual concern to the defendant and those to whom it is made. Wattenburg v. United Medical Lab., 269 Or. 377, 380, 525 P.2d 113 (1974). The trial court ruled that defendant had established a qualified privilege, and that ruling is not challenged. The privilege is lost, however, and the publisher is liable, if he abuses the occasion which gave rise to the privilege. Schafroth v. Baker, 276 Or. 39, 45, 553 P.2d 1046 (1976); Restatement (Second) Torts, § 599 (1965). In Schafroth, the court stated that an occasion may be abused in the following four ways:

" ' * * * The occasion may be abused because of the publisher's lack of belief or reasonable grounds for belief in the truth of the defamatory matter (see §§ 600-602); because the defamatory matter is published for some purpose other than that for which the particular privilege is given (see § 603); because the publication is made to some person not reasonably believed to be necessary for the accomplishment of the purpose of the particular privilege (see § 604); or because the publication includes defamatory matter not reasonably believed to be necessary to accomplish the purpose for which the occasion is privileged (see § 605).' " 276 Or. at 45, 553 P.2d 1046 quoting Restatement of Torts, § 599, comment a at 264 (1938).

Plaintiff contends that there was evidence from which a jury could find that defendant lacked reasonable grounds for belief in the truth of the defamatory matter. We agree. The only "evidence" that plaintiff was drunk at the second incident came from an anonymous letter, but Wall made no attempt to determine who was its author. The employes with whom Wall checked, whom the evidence indicates he trusted, directly contradicted the allegation in the letter that plaintiff said unpleasant things about Wall. A jury could reasonably infer that, given the falsity of that information a reasonable person would have questioned the accuracy of other statements in the letter. Neither Miller nor Galligher characterized plaintiff as drunk. Moreover, other evidence indicates that Wall had little or no interest in hearing plaintiff's explanation of the incident. In short, in informing its employes that plaintiff was discharged because he was drunk in a bar, defendant chose to rely on an anonymous letter in believing the most unfavorable characterization of plaintiff's condition and conduct, despite contrary evidence from its own officers. A jury could determine that it was unreasonable to do so.

Moreover, we think that a jury could determine that it was unnecessary for Rivers to tell essentially every employe in the machinery construction division that plaintiff was "drunk and misbehaving," that he had a "drinking problem" and that any belief that Rivers may have had as to the necessity of doing so was unreasonable. Although, as the trial court ruled, an employer is privileged to...