Embrey v. Holly

• Decision Date: 23 March 1982
• Docket Number: No. 71,71
• Citation: 293 Md. 128,442 A.2d 966
• Parties: , 8 Media L. Rep. 1409 James EMBREY, Jr. et al. v. Dennis P. HOLLY
• Court: Maryland Court of Appeals

Page 128

293 Md. 128

442 A.2d 966, 8 Media L. Rep. 1409

James EMBREY, Jr. et al. v. Dennis P. HOLLY

No. 71.

Court of Appeals of Maryland.

March 23, 1982.

Theodore Sherbow, Baltimore (Stephen M. Hearne and Sherbow, Shea & Tatelbaum, P. A., Baltimore, on the brief), for appellants.

Marvin Ellin and Donald F. Oakley, Baltimore (Ellin & Baker, Baltimore, on the brief), for appellee.

Argued before MURPHY, C. J., and SMITH, DIGGES, ^* ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.

DIGGES, Judge.

Ever since the United States Supreme Court in the case of New York Times v. Sullivan ¹ declared in 1964 that laws of libel and slander are incompatible with the concepts underlying the first amendment of the federal constitution, courts have struggled to strike a proper balance between the interest of an individual in guarding his reputation ² and the federally protected free speech values that in many ways represent the essence of our democratic society. With this case, we shall join the fray and determine whether an employer may be held liable for punitive damages imposed for the defamatory utterances of an employee. We shall also decide whether it was appropriate for the trial court to have permitted the jury in this case to award separate and varying amounts of punitive damages against multiple defendants. But first, we introduce the parties and set forth the factual background of this litigation.

Respondent Dennis Holly, a television news commentator in Baltimore, instituted this defamation action against petitioners James Embrey, Jr., a local radio show host known professionally as Johnny Walker, and Walker's employer, Baltimore Radio Show, Incorporated, the operator of radio station WFBR. By the suit, Holly seeks recompense for damage to his reputation resulting from a purported joke about the newsman which Walker related during his morning radio program in February, 1979. It seems that Walker specializes in what one listener and witness characterized as "a zany, whacky, crazy, fanciful morning disc jockey show with some added features, such as the Little News in the Morning where Johnny writes crazy and wild things about current events and makes up a whole lot of things that haven't happened, but sound like they are news items...." As another regular part of Walker's show, Ron Matz, a WFBR newsman, would call Walker from another telephone in the station and impersonate the character of "Harry Horni," a gossip columnist calling from a phone booth in Hollywood, California, with "tidbits" of information concerning Hollywood, national, and on occasion, local personalities. Testimony indicates that the "tidbits" represented a mix of fact with fiction, and that Walker and Matz would engage in an ad lib dialogue in which Walker would attempt to fashion humorous responses to "Horni's" revelations. The "Horni Report," like all of Walker's material, was punctuated with various sounds of laughter, cheering, applause, and the like which the broadcaster actuated by playing numerous pre-recorded cartridges. ³

Walker's comment which spawned this defamation litigation occurred during the "Harry Horni" segment of his show on the morning of February 28, 1979, about a week after Baltimore had been paralyzed by a blizzard which left the city buried under two feet of snow. During the "Horni Report" taped at 6:15 a. m., the fictitious columnist truthfully related that Dennis Holly was about to undergo knee surgery. Apparently believing that the "Horni" section of his show, which was re-broadcast at 8:15 a. m., lacked sufficient "humor," Walker, as the subsequent airing of the "tidbits" was ending, added an additional comment about Holly: "Too bad about Dennis Holly, though. Hope that comes out okay. Wonder how he hurt his knee? Probably fell down carrying that TV during the blizzard last week, right?" ⁴ It was the unique context of Walker's comment that transformed this seemingly innocuous statement into one the jury determined to be libelous, for during the blizzard, groups of so-called looters, taking advantage of immobilized police vehicles, broke into scores of commercial establishments in the Pennsylvania Avenue area of Baltimore and virtually stripped them of all merchandise. ⁵ Certain of Walker's listeners did not recognize the "humor" in the radio host's words about Holly, for the switchboard operator at WMAR-TV, where Holly was employed, told the jury that she received numerous inquiries concerning the truth of Walker's remark. Similarly, Holly, who is black, began receiving anonymous, harassing phone calls. One caller is quoted by the newscaster as having said: "You pushed George Rogers out of his job and now you have stolen a television set and you are getting what you deserve.... All you niggers are thieves." Thus, failing to appreciate Walker's "humorous" aside, Holly sued the radio host and his employer for defamation. A jury in the Baltimore City Court found that the disc jockey's comments were libelous and awarded Holly $25,000 in compensatory damages against both defendants; in addition, the jury awarded punitive damages of $5,000 against Walker and $35,000 against his employer, Baltimore Radio Show, Inc. The Court of Special Appeals, while affirming the judgment, vacated it as to the punitive award and ordered a new trial on the issue of exemplary damages after determining on its own motion that it was improper to permit the jury to grant such damages in differing amounts against the two defendants.

The petitioners in this Court, Walker and Baltimore Radio Show, Inc., being limited by the terms of our grant of certiorari to the punitive damages aspect of this case, present two issues. They claim first that allowing such damages against the radio station's corporate owner on the sole basis of respondeat superior violates the first amendment, as interpreted by recent United States Supreme Court decisions, by impermissibly imposing a form of liability without fault in a defamation case. Next, the petitioners assert that the trial court correctly permitted the jury to apportion punitive damages between Walker and his employer, and therefore the intermediate appellate court erred when it reversed the trial judge in this regard. As we find no infirmity with the punitive award against the employer, and we determine that it is proper for a trial court to allow the jury to apportion punitive damages between multiple wrongdoers, the judgment of the Court of Special Appeals will be partially reversed. We first address the respondeat superior issue.

Following a lengthy analysis of federal first amendment free speech values, in contradistinction to the states' interest in protecting their citizens from defamatory utterances, the United States Supreme Court in Gertz v. Robert Welch, Inc., 418 U.S. 323, 347, 94 S.Ct. 2997, 3010, 41 L.Ed.2d 789 (1974), held that "so long as they do not impose liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual." Seizing upon this language, the petitioners assert that "(v)icarious liability of a principal for punitive damages in a defamation case based solely on the existence of an employer-employee relationship is a form of strict liability that violates the constitutional principles established in Gertz. " Alternatively, in the absence of constitutional mandate but in light of the policy of free expression inherent in the first amendment, we are urged to require some degree of active employer complicity in the defamatory acts of its employee before liability for punitive damages can attach to the master in a defamation case. In order to discuss properly petitioners' intertwined claims in this regard, we must examine the basis of an employer's responsibility for its employee's torts and the nature of punitive damages in this context.

We begin by noting that it is hornbook law that an employer is ordinarily responsible for the tortious conduct of his employee committed while the servant was acting within the scope of the employment relationship. This rule of respondeat superior arises from the relation of principal and subordinate, "and rests upon the power of control and direction which the superior has over the subordinate...." Hooper v. Brawner, 148 Md. 417, 421, 129 A. 672, 674 (1925). Although the master's liability for compensatory damages in the usual case is beyond question, it is far from universally accepted that the master can, on similar principles, be held responsible in punitive damages for its employee's tortious acts. A majority of courts have adopted the rule that if the servant has committed a tort within the scope of his employment so as to render the employer liable for compensatory damages, then the master may likewise be liable for punitive damages if the servant's act is such as to properly occasion such liability; ⁶ and this is equally true where the employer is a corporation. ⁷ However, a substantial minority of courts declare that an employer may not be held vicariously liable for punitive damages unless it either authorizes, participates in, or ratifies the employee conduct giving rise to such damages. ⁸ This century old controversy over punishment of the master or other principal by levying punitive damages on him for the acts of the agent rests ultimately upon philosophical grounds. Some cases represent the position that an arguably "non-culpable" employer should not be punished for acts which it did not to some degree "commit"; others view the imposition of exemplary damages on the master as merely injecting an additional factor into the cost-benefit calculations of companies who might otherwise find it economically prudent to disregard the threat of liability or to fail to exercise closer control over their employees. The decisions of this Court, while not discussing the question in light of the first amendment...