Hammer v. Slater

• Decision Date: 18 May 1994
• Docket Number: No. 93-8917,93-8917
• Citation: 20 F.3d 1137
• Parties: 22 Media L. Rep. 2233 Jack T. HAMMER, Plaintiff-Appellant, v. Edward L. SLATER, Loretta Slater, Defendants, Herbert Jaffess, Renee Jaffess, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1137

20 F.3d 1137

22 Media L. Rep. 2233

Jack T. HAMMER, Plaintiff-Appellant, v. Edward L. SLATER, Loretta Slater, Defendants Herbert Jaffess, Renee Jaffess, Defendants-Appellees.

No. 93-8917.

United States Court of Appeals Eleventh Circuit.

May 18, 1994.

David H. Flint, James Christopher Desmond, Schreeder, Wheeler & Flint, Atlanta, GA, for plaintiff-appellant.

Joseph William Watkins, Debra Egger LeVorse, Long, Weinberg, Ansley & Wheeler, Atlanta, GA, for defendants-appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before ANDERSON and BIRCH, Circuit Judges, and ATKINS, ^* Senior District Judge.

BIRCH, Circuit Judge:

The plaintiff-appellant, Jack Hammer, appeals the district court's grant of summary judgment to the defendant-appellees, Herbert and Renee Jaffess, in this diversity action for libel and intentional infliction of emotional distress. Because we find that there was a genuine issue of material fact as to the Jaffesses' actual malice with respect to the libel claim, we reverse in part and remand for further proceedings. We affirm the court's grant of summary judgment on the claim for intentional infliction of emotional distress.

I. BACKGROUND

Many of the basic facts underlying this action are not disputed by the parties. ¹ During the 1980s, the Jaffesses invested in several limited partnerships, including oil and gas interests and real estate ventures, many of which were related to companies owned by or affiliated with Ira Levenshon. Most of the Jaffesses' investments were made through Robert Chalnick, a securities salesman employed by Levenshon & Company, a registered broker/dealer. Among the Jaffesses' investments were interests in two limited partnerships that owned and operated apartment complexes in metropolitan Atlanta, Ansley/Atlanta, Ltd. ("Ansley/Atlanta") and the Baytree Apartments ("Baytree"). According to the program description, the general partners of Ansley/Atlanta were two corporations, Levenshon Properties Corporation and Housing Systems, Inc. ("HSI"). Hammer was the president, chairman, and chief executive officer of HSI. Hammer had no connection to Baytree.

Eventually, the Jaffesses became dissatisfied with their investments. They believed they had received false or misleading oral advice from Chalnick when purchasing the Levenshon-related investments. Along with their friends and fellow investors, Edward and Loretta Slater, the Jaffesses decided to attempt to recoup some of their losses. Mr. Slater had been president of The Levenshon Companies, Inc., but had resigned in May 1989 for reasons disputed by the parties in the instant case. ²

In the late 1980s, Randolph Coleman, a Florida attorney and a former investor in a Levenshon-related limited partnership, began representing other disgruntled investors in cases against Levenshon and his companies. After meeting with Coleman in the summer of 1990 to discuss their potential claims, the Jaffesses and Slaters entered into representation agreements with Coleman. Pursuant to these agreements, Coleman drafted a proposed RICO ³ complaint naming as defendants Levenshon, Hammer, HSI, and various other individuals and entities related to the disputed investments. After the Jaffesses and Slaters reviewed the complaint and made corrections, it was sent with a demand letter to the various defendants, including Hammer and HSI. ⁴ The RICO complaint specifically identifies Hammer as a general partner in Ansley/Atlanta and implicates him generally, along with the other named defendants, in various fraudulent practices including mail and wire fraud, securities violations, and racketeering. The demand letter directed to Hammer gave him ten days to pay $75,000, plus accrued interest, or else the complaint would be filed.

Hammer refused to accede to the plaintiff's demands. He contends, and the plaintiffs now concede, that many of the allegations against him contained in the RICO complaint are false or misleading. He has never had any association with Baytree, and he was not a general partner of Ansley/Atlanta. Moreover, Hammer never personally sold the plaintiffs any investments. Hammer denies that he committed any of the fraudulent acts set forth in the complaint.

Hammer filed the present action in United States District Court for the Northern District of Georgia, alleging libel and intentional infliction of emotional distress. Jurisdiction is based on diversity of citizenship. Hammer originally named as defendants both the Jaffesses and the Slaters, although he subsequently settled with the Slaters.

On November 19, 1991, the Jaffesses moved for summary judgment. On June 25, 1992, the district court granted summary judgment on the intentional infliction claim, but reserved ruling on the libel claim. Because the parties had failed to properly address the issue of actual malice, the court dismissed without prejudice the portion of the motion dealing with libel and directed the defendants to renew that part of the motion later.

On September 1, 1992, the Jaffesses resubmitted their motion for summary judgment as to the libel claim, contending that there was no genuine issue of material fact as to actual malice. The district court agreed with the Jaffesses and granted summary judgment as to the remaining libel claim. The court held that the Jaffesses had carried their initial burden by showing that there was no genuine issue as to actual malice. The burden then shifted to Hammer to rebut this evidence, and, according to the court, Hammer failed to present sufficient evidence of actual malice to create a genuine issue of material fact. Hammer timely filed this appeal.

II. DISCUSSION

A. Summary Judgment Standard

Although the substantive aspects of this diversity case are controlled by the law of Georgia, federal law controls the procedural aspects. Ford v. Citizens & Southern Nat'l Bank, 928 F.2d 1118, 1121 (11th Cir.1991); Lundgren v. McDaniel, 814 F.2d 600, 605 (11th Cir.1987); National Distillers & Chem. Corp. v. Brad's Mach. Prods., Inc., 666 F.2d 492, 494-95 (11th Cir.1982). The grant of summary judgment is therefore controlled by Federal Rule of Civil Procedure 56. We review the grant or denial of a motion for summary judgment de novo, applying the same legal standards employed by the district court. Browning v. Peyton, 918 F.2d 1516, 1520 (11th Cir.1990).

Rule 56(c) provides that summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). Where, as here, the non-moving party bears the burden of proof on an issue at trial, the moving party, in order to prevail, must do one of two things: show that the non-moving party has no evidence to support its case, or present "affirmative evidence demonstrating that the nonmoving party will be unable to prove its case at trial." United States v. Four Parcels of Real Property, 941 F.2d 1428, 1437-38 (11th Cir.1991) (en banc). Once the moving party has met its initial burden by negating an essential element of the non-moving party's case, the burden on summary judgment shifts to the non-moving party to show the existence of a genuine issue of material fact. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th Cir.1993). For issues on which the non-moving party will bear the burden of proof at trial, the non-moving party must either point to evidence in the record or present additional evidence "sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary deficiency." Id. at 1116-17.

B. Libel Claim

Hammer claims that the Jaffesses committed libel by publishing the proposed complaint, which wrongfully accuses him of various criminal activities. For purposes of this appeal, the Jaffesses do not dispute the publication of the document nor the defamatory nature of the published matter. Furthermore, both parties concede that the statements, unless made maliciously under O.C.G.A. Sec. 51-5-9, were conditionally privileged under O.C.G.A. Sec. 51-5-7. Georgia's conditional privilege statute provides limited protection for "[s]tatements made with a good faith intent on the part of the speaker to protect his interest in a matter in which it is concerned." O.C.G.A. Sec. 51-5-7(3). ⁵ Georgia cases have held that in order to come within the purview of section 51-5-7, the defendant must show, among other things, " 'good faith, an interest to be upheld, a statement properly limited in its scope, a proper occasion, and publication to proper persons.' " Camp v. Maddox, 93 Ga.App. 646, 649, 92 S.E.2d 581, 584 (1956) (quoting Sheftall v. Central of Ga. R. Co., 123 Ga. 589, 593, 51 S.E. 646, 648 (1905)). Section 51-5-9, however, provides a right of action for the malicious use of the conditional privilege. That section provides in full: "In every case of privileged communications, if the privilege is used merely as a cloak for venting private malice and not bona fide in promotion of the object for which the privilege is granted, the party defamed shall have a right of action." O.C.G.A. Sec. 51-5-9. The issue in this appeal is whether or not there is a genuine issue of material fact as to whether the Jaffesses' conduct falls within the provisions of section 51-5-9.

Georgia courts have been less than clear as to what this provision contemplates. In several cases, the courts have employed a subjective interpretation in which the phrase "private malice" denotes hostility or ill will on the part of the speaker. See Van Geter v. Housing Auth., 167 Ga.App. 432, 432, 306 S.E.2d 707, 708 (1983) (privilege is lost when speaker acts "willfully, corruptly, or maliciously"); Land v. Delta Airlines, Inc., 147 Ga.App. 738, 739, 250 S.E.2d 188, 190 (1978) ("Malice to avoid qualified privilege must be...