Elia v. Erie Ins. Exchange

• Decision Date: 01 December 1993
• Citation: 634 A.2d 657,430 Pa.Super. 384
• Parties: James V. ELIA and Patricia May Elia, His Wife, Appellants, v. ERIE INSURANCE EXCHANGE and Paul L. Richter, M.D.
• Court: Pennsylvania Superior Court

Page 657

634 A.2d 657

430 Pa.Super. 384

James V. ELIA and Patricia May Elia, His Wife, Appellants, v. ERIE INSURANCE EXCHANGE and Paul L. Richter, M.D.

Superior Court of Pennsylvania.

Argued Oct. 19, 1993.

Filed Dec. 1, 1993.

Kenneth W. Behrend, Pittsburgh, for appellants.

Lynn E. Bell, Pittsburgh, for Paul L. Richter, M.D., appellees.

Before CIRILLO, FORD ELLIOTT and CERCONE, JJ.

CIRILLO, Judge:

This is an appeal from an order of the Court of Common Pleas of Allegheny County granting summary judgment in favor of appellee Paul L. Richter, M.D. (Dr. Richter) and against appellants James V. Elia and Patricia May Elia. We affirm.

The facts of this case, as found by the trial court, are largely undisputed. On April 16, 1987, Mr. Elia was involved in a motor vehicle collision. Insured by Erie Insurance Exchange (Erie), Mr. Elia filed a claim for first party medical and wage loss benefits. Erie requested that Mr. Elia undergo an independent medical examination; the examination was performed by Dr. Richter.

Dr. Richter's report, dated January 26, 1988, was sent to William Stevens, claims adjuster for Erie. The report indicates that Dr. Richter performed a complete neurological examination of Mr. Elia. Dr. Richter's report concludes as follows:

My diagnosis is exaggerated disability. I find no convincing evidence in the medical records that the patient was ever significantly injured. It's my recommendation that he return to work as a bricklayer at this time.

The report states that the physical examination of Mr. Elia, including the straight leg raising test, revealed that Mr. Elia "was not genuine." In addition, Dr. Richter summarizes the results of the sensory examination as "typical of malingering." In fact, the section of the report detailing the sensory examination reads: "At this point [of the examination] I was curious how much faking I would find." A review of the record indicates that the report was viewed by Erie's adjuster; Dr. Richter's secretary, who typed the report; and Mr. Elia.

Mr. Elia filed a complaint in defamation, alleging that the medical report prepared by Dr. Richter was widely circulated among employees of Erie bringing Mr. Elia "into public scandal and reproach," and causing Erie to refuse payment of medicals and lost wages. The Honorable Eunice Ross granted Dr. Richter's motion for summary judgment. This appeal followed. Mr. Elia's "Summary of the Argument" portion of his brief best articulates the issue raised on appeal:

Does a doctor performing a medical review of an insured, on behalf of the insurance company, [who] makes defamatory statements without an adequate factual basis, inferring the insured committed insurance fraud, and which causes the insurance company to stop the first party benefit payments, have immunity from a claim for defamation? ¹

Initially, we note our standard of review in this case. We will uphold a grant of summary judgment only in those cases in which the pleadings, depositions, interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pa.R.C.P. 1035(b); Rosen v. Tesoro Petroleum Corporation, 399 Pa.Super. 226, 228-29, 582 A.2d 27, 28-29 (1990). We must accept as true all well-pleaded facts in the non-moving party's pleadings and give the non-moving party the benefit of all reasonable inferences to be drawn therefrom. Lookenbill v. Garrett, 340 Pa.Super. 435, 490 A.2d 857 (1985).

In an action for defamation, the plaintiff must prove:

(1) the defamatory character of the communication;

(2) its publication by the defendant;

(3) its application to the plaintiff;

(4) the understanding by the recipient of its defamatory meaning;

(5) the understanding by the recipient of it as intended to be applied to the plaintiff;

(6) special harm resulting to the plaintiff from its publication; and

(7) abuse of a conditionally privileged occasion.

42 Pa.C.S.A. § 8343(a) (emphasis added); see also Smith v. Wagner, 403 Pa.Super. 316, 588 A.2d 1308 (1991); Thomas Merton Center v. Rockwell International Corp., 497 Pa. 460, 442 A.2d 213 (1981); Kryeski v. Schott Glass Technologies, 426 Pa.Super. 105, 626 A.2d 595 (1993). The defendant has the burden of proving, when relevant to the defense:

(1) the truth of the defamatory communication;

(2) the privileged character of the occasion on which it was published; and

(3) the character of the subject matter of defamatory comment as of public concern.

42 Pa.C.S.A. § 8343(b) (emphasis added).

Defamation is a communication which tends to harm an individual's reputation so as to lower him or her in the estimation of the community or deter third persons from associating or dealing with him or her. Zartman v. Lehigh County Humane Soc., 333 Pa.Super. 245, 482 A.2d 266 (1984). Under Pennsylvania defamation law, only statements of fact can support an action for libel or slander, not merely expressions of opinion. 42 Pa.C.S.A. § 8343(a); Baker v. Lafayette College, 350 Pa.Super. 68, 504 A.2d 247 (1986), aff'd, 516 Pa. 291, 532 A.2d 399 (1987). Further, whether a particular statement or writing constitutes fact or opinion is a question of law for the court to determine in the first instance. Braig v. Field Communications, 310 Pa.Super. 569, 456 A.2d 1366 (1983). Additionally, it is within the trial court's province to determine whether the challenged statements are capable of having defamatory meaning. Cashdollar v. Mercy Hosp. of Pittsburgh, 406 Pa.Super. 606, 616, 595 A.2d 70, 75 (1991); Zartman, 333 Pa.Super. at 250, 482 A.2d at 268.

Next, in order for defamation to occur in the form of either libel or slander, the defamatory statement must be published or communicated to a third person. Gaetano v. Sharon Herald Co., 426 Pa. 179, 182, 231 A.2d 753, 755 (1967); see also Sobel v. Wingard, 366 Pa.Super. 482, 531 A.2d 520 (1987); Agriss v. Roadway Express, Inc., 334 Pa.Super. 295, 483 A.2d 456 (1984). Here, we find that Dr. Richter's medical report was adequately published to Erie--via Erie's claims adjuster. See Chicarella v. Passant, 343 Pa.Super. 330, 494 A.2d 1109 (1985) (investigator's report regarding plaintiff's character communicated allegedly defamatory matter to insurance company which hired investigator to prepare report and, thus, publication requirement of defamation action was satisfied).

Notwithstanding the above, a publisher of defamatory matter is not liable if the publication was made subject to a privilege, and the privilege was not abused. Chicarella, 343 Pa.Super. at 337, 494 A.2d at 1112-13. "Communications made on a proper occasion, from a proper motive, in a proper manner, and based upon reasonable cause are privileged." Id. at 337, 494 A.2d at 1113 (quoting Beckman v. Dunn, 276 Pa.Super. 527, 536, 419 A.2d 583, 587 (1980)); see also Baird v. Dun & Bradstreet, Inc., 446 Pa. 266, 285 A.2d 166 (1971). Examples of such occasions giving rise to conditional privileges are:

(1) when some interest of the publisher of the defamatory matter is involved;

(2) when some interest of the recipient of the matter, or a third party is involved; or

(3) when a recognized interest of the public is involved.

Beckman, 276 Pa.Super. at 536, 419 A.2d at 587. Depending upon the importance of the publisher's actions to society, the privilege may be absolute or conditional/qualified. See Baird, supra (finding credit reports conditionally privileged since credit reporting agency is in the business of reporting financial information to subscribers who request such service); Beckman, supra (holding letter from university professor to university ombudsperson regarding former doctoral student's participation in program conditionally privileged because both professor and ombudsperson have interest in qualifications of those to be granted graduate degree from the university); and Forman v. Cheltenham Nat. Bank, 348 Pa.Super. 559, 502 A.2d 686 (1985) (disparaging another's land, chattels or intangible things by asserting inconsistent legally protected interest in oneself is conditionally privileged).

In Chicarella, the plaintiff brought a defamation suit against an investigation firm, its employees, and an insurance company. 343 Pa.Super. at 337, 494 A.2d at 1112. The facts in Chicarella are similar to those in the instant case. There, the plaintiff filed a claim with the insurer alleging that he had been in an accident with one of the insurer's policyholders. To determine the validity of the claim, the insurer hired an agency to investigate plaintiff's work history, physical condition, and community standing. Id. The report was completed by the investigator and submitted to the insurance company. This court upheld the trial court's grant of demurrer in favor of defendants, holding that the publication of information at the request of a party with an interest in the information should be privileged. Id. at 337, 494 A.2d at 1113. More specifically, this court identified the insurance company's interest in paying only legitimate claims and society's interest in distinguishing valid from fabricated claims. Id.

In this case, Dr. Richter examined Mr. Elia at the request of Erie and with the consent of Mr. Elia. Like the investigator in Chicarella, Erie had an interest in Dr. Richter's diagnosis of "exaggerated disability" so that Erie could properly assess the validity of Mr. Elia's claim. Moreover, the Commonwealth, insurance carriers, and insureds all have an interest in precluding payments on illegitimate or...