Frank B. Hall & Co., Inc. v. Buck

• Decision Date: 26 July 1984
• Docket Number: No. C14-82-234CV,C14-82-234CV
• Citation: 678 S.W.2d 612
• Parties: FRANK B. HALL & CO., INC., et al Appellant, v. Larry W. BUCK, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 612

678 S.W.2d 612

FRANK B. HALL & CO., INC., et al Appellant, v. Larry W. BUCK, Appellee.

No. C14-82-234CV.

Court of Appeals of Texas,

Houston (14th Dist.).

July 26, 1984.

Irving C. Stern, Dunn, Stern, Lipstet, Singer & Hirsch, Houston, for appellant.

Franci N. Beck, Susman, Godfrey & McGowan, Houston, for appellee.

Before JUNELL, MURPHY and SEARS, JJ.

OPINION

JUNELL, Justice.

Larry W. Buck (Buck or appellee) sued his former employer, Frank B. Hall & Co. (Hall or appellant), for damages for defamation of character, misrepresentation, and breach of contract. By unamimous verdict, a jury found damages for breach of contract, defamation of character and exemplary damages. The court entered judgment for appellee for $1,905,000.00 in damages, plus interest, attorney's fees and costs of court. For the reasons set forth below, we affirm.

Appellee, an established salesman in the insurance business, was approached in the spring of 1976 by a representative of Hall with a prospective job offer. Appellee was then an executive vice-president of the insurance firm of Alexander & Alexander, and in the previous year he generated approximately $550,000.00 in commissions for the firm. He was the top producer in Alexander's Houston office and was ranked nationally among the top five salesmen for Alexander. After several meetings, Buck accepted Hall's offer of employment and began working for Hall on June 1, 1976. Hall agreed to pay Buck an annual salary of $80,000.00 plus additional compensation equal to seven and one-half percent of net retained commissions for each year to a maximum commission of $600,000.00, plus fringe benefits. The agreement was to be for a three year period. Several Alexander employees followed Buck to Hall's office. During the next several months Buck generated substantial commission income for Hall and succeeded in bringing several major accounts to the firm.

In October, 1976, Mendel Kaliff, then president of Frank B. Hall & Co. of Texas, held a meeting with Buck and Lester Eckert, Hall's office manager and a former Alexander employee. Kaliff informed Buck his salary was being reduced to $65,000.00 and that Hall was eliminating Buck's incentive and profit sharing benefits. Kaliff told Buck these measures were being taken because of Buck's failure to produce sufficient income for Hall. However, Kaliff added that if Buck could generate $400,000.00 net commission income by June 1, 1977, his salary and benefits would be reinstated retroactively.

On March 31, 1977, at another impromptu meeting, Kaliff and Eckert abruptly fired Buck and instructed him not to return to Hall's offices. Buck sought employment with several other insurance firms, but his efforts were fruitless. Distraught at having lost his job and being unable to find suitable employment in the insurance business, Buck hired an investigator, Lloyd Barber, in an attempt to discover Hall's true reasons for firing him. This suit is based upon statements made by Hall employees to Lloyd Barber and to Charles Burton, a prospective employer, and upon a note written by Virginia Hilley, a Hall employee. Appellant brings eighty points of error, which will be grouped in thirteen categories.

In points one through thirteen, appellant challenges the legal and factual sufficiency of the evidence to support the jury's findings that the statements to Barber were published. Hall urges the statements were invited as a matter of law.

Lloyd Barber contacted Mendel Kaliff, Lester Eckert and Virginia Hilley and told them that he was an investigator, Buck was being considered for a position of trust and responsibility, and Barber was seeking information about Buck's employment with Frank B. Hall & Co. Barber testified that he had interviewed Kaliff, Eckert and Hilley on separate occasions in September and October of 1977, and had tape recorded the conversations. Appellee introduced into evidence Barber's properly authenticated investigative reports, which were based on these taped interviews. The report shows Kaliff remarked several times that Buck was untrustworthy, and not always entirely truthful; he said Buck was disruptive, paranoid, hostile and was guilty of padding his expense account. Kaliff said he had locked Buck out of his office and had not trusted him to return. He charged that Buck had promised things he could not deliver.

Eckert told Barber that Buck was horrible in a business sense, irrational, ruthless, and disliked by office personnel. He described Buck as a "classical sociopath," who would verbally abuse and embarrass Hall employees. Eckert said Buck had stolen files and records from Alexander & Alexander. He called Buck "a zero," "a Jekyll and Hyde person" who was "lacking in compucture [sic] or scruples."

Virginia Hilley told Barber that Buck could have been charged with theft for materials he brought with him to Hall from Alexander & Alexander.

Any act wherein the defamatory matter is intentionally or negligently communicated to a third person is a publication. In the case of slander, the act is usually the speaking of the words. RESTATEMENT (SECOND) OF TORTS § 577 comment a (1977). There is ample support in the record to show that these individuals intentionally communicated disparaging remarks to a third person. The jury was instructed that "Publication means to communicate defamatory words to some third person in such a way that he understands the words to be defamatory. A statement is not published if it was authorized, invited or procured by Buck and if Buck knew in advance the contents of the invited communication." In response to special issues, the jury found that the slanderous statements were made and published to Barber.

Hall argues that Buck could and should have expected Hall's employees to give their opinion of Buck when requested to do so.

Hall is correct in stating that a plaintiff may not recover for a publication to which he has consented, or which he has authorized, procured or invited, Lyle v. Waddle, 144 Tex. 90, 188 S.W.2d 770 (1945); and it may be true that Buck could assume that Hall's employees would give their opinion when asked to do so. However, there is nothing in the record to indicate that Buck knew Hall's employees would defame him when Barber made the inquiries. The accusations made by Kaliff, Eckert and Hilley were not mere expressions of opinion but were false and derogatory statements of fact. There is sufficient evidence that Buck had no knowledge of what Kaliff, Eckert and Hilley would say to Barber. Buck testified that he was fired abruptly and unexpectedly on March 31, 1977. Buck had generated $308,000.00 in commissions for Hall at the time of his termination on March 31; he testified he easily could have reached or exceeded his goal of $400,000.00 had he been allowed to work until June 1. Buck testified that Kaliff's reason for firing him was untenable, "He said that I was being fired because I had not fulfilled my commitment and I had not written a sufficient amount of business to justify keeping me on. It was economically unsound for them to do so." Barber stated that he was hired for the specific purpose of ascertaining the reasons for Buck's termination, and that he was not aware of any lawsuits when he spoke to Kaliff, Eckert and Hilley. The evidence is sufficient to support the jury's finding that the statements were not invited, and the jury was entitled to believe that appellee did not know why Hall had fired him and did not set up the Barber interviews to create a cause of action for defamation.

Hall also argues that the evidence shows conclusively that Barber was acting as Buck's agent and that he tricked the Hall employees into making derogatory remarks.

A defamer cannot escape liability by showing that, although he desired to defame the plaintiff, he did not desire to defame him to the person to whom he in fact intentionally published the defamatory communication. The publication is complete although the publisher is mistaken as to the identity of the person to whom the publication is made. RESTATEMENT (SECOND) OF TORTS § 577 comment l (1977). Likewise, communication to an agent of the person defamed is a publication, unless the communication is invited by the person defamed or his agent. RESTATEMENT § 577 comment e. We have already determined that the evidence is sufficient to show that Buck did not know what Kaliff, Eckert or Hilley would say and that he did not procure the defamatory statements to create a lawsuit. Thus, the fact that Barber may have been acting at Buck's request is not fatal to Buck's cause of action. There is absolutely no proof that Barber induced Kaliff, Eckert or Hilley to make any of the defamatory comments. Points of error one through thirteen are overruled.

Hall's points of error fourteen through twenty-five focus on statements made by Lester Eckert to Charles Burton, then president of another large insurance brokerage firm, Carroon & Black. Burton testified that Buck contacted him in the summer of 1977 to discuss employment possibilities with Carroon & Black. When asked why he was no longer with Frank B. Hall & Co., Buck told Burton that he "really [didn't] know." Because he was seriously interested in hiring Buck, Burton telephoned Eckert to find out the circumstances surrounding Buck's termination. Eckert told Burton, "Larry didn't reach his production goals." Burton, who was very familiar with Buck's exceptional record as a good producer in the insurance business, was surprised at Eckert's response. When pressed for more information, Eckert declined to comment, stating, "I can't go into it." Burton then asked if Eckert would rehire Buck, to which Eckert answered, "No."

Hall urges the evidence is legally and factually insufficient to prove the statements were made and published, that the statements were invited as a matter of law, and that there is no evidence to support the jury's finding that the statement was calculated to convey...