Liberty Nat. Life Ins. Co. v. Daugherty
| Decision Date | 12 July 2002 |
| Citation | 840 So.2d 152 |
| Parties | LIBERTY NATIONAL LIFE INSURANCE COMPANY and Perry Hartley v. Dean DAUGHERTY. |
| Court | Alabama Supreme Court |
D. Brent Baker and Kathryn T. Hamilton of Frazer, Greene, Upchurch & Baker, L.L.C., Mobile, for appellants.
Joseph C. McCorquodale III of McCorquodale & McCorquodale, Jackson; and Wyman O. Gilmore, Jr., Grove Hill, for appellee.
Dean Daugherty sued Liberty National Life Insurance Company ("Liberty National") and Perry Hartley, alleging defamation, intentional infliction of emotional distress, and interference with business relationships. Daugherty voluntary dismissed his claims of intentional infliction of emotional distress and interference with business relationships. The jury returned a verdict in favor of Daugherty on his defamation claim, awarding him $300,000 in compensatory damages, and the trial court entered a judgment on that verdict. Liberty National and Hartley appeal the denial of their motions for a judgment as a matter of law, motions for a remittitur of the compensatory-damages award, and motions for a new trial. We affirm the judgment of the trial court.
Dean Daugherty was employed by Liberty National as an insurance agent from September 7, 1981, until November 1, 1993. Daugherty serviced the insurance needs of the community of Citronelle from 1986 until he left Liberty National in 1993. Daugherty was one of Liberty National's top insurance agents, and he formed close relationships with his customers in Citronelle. During his employment with Liberty National, Daugherty signed a noncompetition agreement, pursuant to which he agreed that if his employment with Liberty National terminated, he would not sell life insurance to Liberty National customers for a full year after the termination of his employment.
On November 1, 1993, Daugherty resigned from Liberty National and started the Daugherty-Bailey Insurance Co., Inc. Before Daugherty's resignation, Perry Hartley, then a Liberty National district manager, had evaluated Daugherty's job performance. Hartley indicated on the evaluation form that the reason for Daugherty's departure from Liberty National was that Daugherty had purchased an independent insurance agency. Hartley also indicated on the evaluation form that Daugherty had handled Liberty National accounts satisfactorily, that Daugherty had good sales ability, and that Hartley would reemploy Daugherty if he decided to reapply for employment with Liberty National.
Liberty National did not immediately hire an insurance agent to replace Daugherty, and after his departure, several of Daugherty's former customers began to contact him regarding the status of their life insurance policies. Daugherty told his former customers to contact Liberty National, and he provided them with a customer-service telephone number. When Liberty National failed to satisfy these customers, they again contacted Daugherty and requested that he provide them with life insurance. Daugherty sold several life insurance policies, issued by an insurance company other than Liberty National, to his former Liberty National customers. Those customers then either canceled their Liberty National life insurance policies or allowed those policies to lapse. An agent who replaces an existing insurance policy with another company with his or her company's policy is required by state insurance regulations to file a replacement form with the insurance company whose policy is being replaced so that that company may contact the customer to determine if the customer intended to lose his or her former insurance.
When the premiums on several Liberty National insurance policies held by customers in Citronelle became past due, Liberty National instructed its insurance agents to contact the holders of those policies in order to preserve its business. Liberty National had a company policy requiring its insurance agents to collect affidavits from former customers indicating whether a former Liberty National insurance agent had replaced their Liberty National insurance policy with a policy issued by another company. If an insurance policy had been replaced by a former Liberty National insurance agent within the period prohibited by the noncompetition agreement, Liberty National would sue the former insurance agent in accordance with that noncompetition agreement.
Perry Hartley contacted several of the Citronelle policyholders whose policies had lapsed. Hartley learned that many of those policyholders had purchased new life insurance policies through Daugherty. One such policyholder was Ouida Landrum. Hartley visited Landrum sometime in 1994 or 1995. Lois Ott, Ouida Landrum's niece, was visiting her aunt on the occasion of Hartley's visit. Ott was also a former Liberty National life insurance policyholder who had purchased a new life insurance policy through Daugherty.
According to Ott, Hartley told Landrum that Daugherty was one of the "sorriest" insurance agents Liberty National had ever had; that Daugherty was selling insurance policies he knew were no good; that Daugherty was "pocketing" the money from the sale of those policies; that Daugherty had sold one person seven cancer policies, knowing the policies were not any good; and that Daugherty had been fired from Liberty National because he was stealing the company's money. Hartley also asked Landrum to sign an affidavit stating that Daugherty had replaced her Liberty National life insurance policy with a policy issued by another company.
After Hartley left Landrum's home, Ott telephoned Daugherty and told him what Hartley had said. Ott did not tell anyone other than Daugherty about the statements; however, she heard other people in the Citronelle community talking about similar remarks Hartley had made about Daugherty. Ott testified that the statements she heard Hartley make about Daugherty did not prevent her from doing business with Daugherty because she did not believe the statements were true. Several other former Liberty National life insurance policyholders telephoned Daugherty and informed him that Hartley had made similar comments to them and that Hartley had encouraged them to sign an affidavit stating that Daugherty had replaced their Liberty National life insurance policies.
On March 18, 1996, Daugherty sued Liberty National and Perry Hartley (hereinafter referred to collectively as "the Liberty National defendants"), alleging: 1) that Hartley, while acting within the line and scope of his employment with Liberty National, published false and defamatory statements about Daugherty; 2) that the Liberty National defendants intentionally or recklessly caused him to suffer emotional distress by making false and defamatory statements about him to his customers; and 3) that the Liberty National defendants intentionally interfered with the business relationships between Daugherty and his customers. Count one of Daugherty's complaint alleged that Hartley told Daugherty's customers that:
Count two of Daugherty's complaint alleged that Hartley told Daugherty's customers that: "Dean Daugherty is engaging in illegal insurance practices."
On or around July 18, 2001, Liberty National moved for a summary judgment; on July 30, 2001, Perry Hartley moved for a summary judgment. The trial court denied the Liberty National defendants' motions for a summary judgment as to counts one, two, and four of Daugherty's complaint. Daugherty withdrew count three of his complaint, which alleged that the Liberty National defendants had intentionally or recklessly caused him to suffer emotional distress by making false and defamatory statements about him.
On August 3, 2001, Daugherty filed a motion for leave to amend his complaint to add additional facts, to allege that the defamatory statements constituted slander per se, and to add a claim that Daugherty had suffered personal humiliation and lost income as a result of the defamatory statements. On August 10, 2001, the trial court denied that motion. At trial Daugherty agreed to withdraw his slander claim with regard to the statement alleged in count two of his complaint, i.e., that he had engaged in illegal insurance practices.
At the close of Daugherty's case, the Liberty National defendants moved for judgments as a matter of law, arguing that Daugherty had not specifically pleaded slander per se, that only the statement regarding Daugherty "pocketing the premium from the sale of [insurance] policies" could constitute slander per se and that the other statements alleged in count one could have supported only a finding of slander per quod, which would have required Daugherty to plead and prove special damages. At the close of their case, the Liberty National defendants renewed their motions for a judgment as a matter of law. The trial court denied those motions. The case went to the jury on only the first count of Daugherty's complaint. The jury returned a verdict in favor of Daugherty and awarded him $300,000 in compensatory damages.
On September 13, 2001, Liberty National renewed its motion for a judgment as a matter of law and filed a motion for a remittitur of the compensatory-damages award and a motion for a new trial. On September 14, 2001, Hartley renewed his motion for judgment as a matter of law and filed a motion for a remittitur of the compensatory-damages award and a motion for a new trial. On December 13, 2001, the trial court denied the Liberty National defendants' motions for a judgment as a matter of law, motions for a remittitur of the...
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