MF Patterson Dental Supply Company v. Wadley

• Citation: 401 F.2d 167
• Decision Date: 04 November 1968
• Docket Number: No. 9672.,9672.
• Parties: M. F. PATTERSON DENTAL SUPPLY COMPANY, Inc. and E. O. Blake, Appellants, v. Cullom S. WADLEY, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

401 F.2d 167 (1968)

M. F. PATTERSON DENTAL SUPPLY COMPANY, Inc. and E. O. Blake, Appellants, v. Cullom S. WADLEY, Appellee.

No. 9672.

United States Court of Appeals Tenth Circuit.

September 18, 1968.

Rehearing Denied November 4, 1968.

Edgar Fenton, of Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, Okl., for appellants.

J. M. Sheehan, of McClelland, Collins, Sheehan, Bailey & Bailey, Oklahoma City, Okl., for appellee.

Before MURRAH, Chief Judge, and LEWIS and BREITENSTEIN, Circuit Judges.

MURRAH, Chief Judge.

This is an appeal from a judgment on a jury verdict awarding plaintiff-appellee Wadley damages on separate claims for libel and slander arising out of his discharge from employment in Oklahoma by defendant-appellant M. F. Patterson Dental Supply, Inc. The libel claim against the corporate employer alone was removed to federal court on admitted diversity of citizenship and requisite amount in controversy. Admittedly, the slander claim against the corporation and its Oklahoma City manager, E. O. Blake, was properly removed under 28 U.S.C. § 1441(c) as a separate and independent claim permissibly joined with the removable libel claim.

The pertinent and undisputed facts are that Wadley was employed by Patterson Dental Supply and its predecessor corporation as an Oklahoma salesman working out of the Oklahoma City store for more than twenty years, during which he rated near the top nationwide in sales among all of the company's supply salesmen. In 1965 Blake was appointed manager of the Oklahoma City store and friction immediately developed between Blake and Wadley. As a result, Blake conferred with Patterson, president of the company, and the two decided Patterson would discharge Wadley from employment. Patterson thereupon caused the following letter to be mailed over his signature to dentists upon whom Wadley called and dentists in the area upon whom he did not call:

"Over the years Mr. Cullom Wadley has contributed a great deal to this firm. He had made many friends in the dental profession, with our laboratory customers, and in our firm.

"Therefore, it is with a great deal of regret that we have reached the conclusion that, for the best interests of both our customers and our firm, we must release him from our employ. Believe me this action has not been taken without a great deal of thought and investigation, for we do not take lightly our responsibilities to not only you, but also our employees.

"Mr. T. E. (Tom) Warwick will take over most of the territory formerly covered by Mr. Wadley. I am sure you will find him reliable, dependable, and easy to do business with. However, actions speak louder than words, so give this young man a chance to prove how he can help you.

"With respect to the part of the territory which Mr. Warwick will not cover, most of which is in Oklahoma City, final arrangements have not been completely made, and an announcement will be forthcoming shortly."

No one seems to dispute the well established law, both generally and in Oklahoma, that in libel and slander actions the trial court must first determine whether a publication is libelous per se. If it is not libelous per se, the court has the further duty to determine as a matter of law whether the writing is susceptible of a defamatory meaning derivable from extrinsic facts and circumstances which must be specifically pleaded and supported by proof of special damages, i. e. libelous per quod.¹ If held legally susceptible, the court must also determine whether the occasion was privileged, and what items of harm, if any suffered by the plaintiff as the result of the publication of the defamatory matter may be considered by the jury. The jury must then determine whether, under all of the existing circumstances, the recipients of the writing attributed to the language used the defamatory imputations set forth in the complaint; whether the defendant did or did not abuse the conditionally privileged occasion; whether such imputations were truthful so as to make them unactionable, and, finally, the factum and amount of special damages. And see Restatement of the Law of Torts, Libel and Slander §§ 558, 559 Comment f, 613, 616, 619; 12 O.S. 1441; Kee v. Armstrong, Byrd and Co., 75 Okl. 84, 182 P. 494, 5 A.L.R. 1349; Phoenix Printing Co. v. Robertson, 80 Okl. 191, 195 P. 487; Toomey v. Jones, 124 Okl. 167, 254 P. 736, 51 A.L.R. 1066; Wimmer v. Oklahoma Publishing Co., 151 Okl. 123, 1 P.2d 671; Atlas Sewing Centers v. Nat'l Ass'n, etc., 10 Cir., 260 F.2d 803; Crozman v. Callahan, D.C., 136 F.Supp. 466; Louisiana Oil Corp. v. Renno, 173 Miss. 609, 157 So. 705; Anno. 98 A.L.R. 1301.

In his pre-trial order Judge Eubanks ruled that the communication was not libelous per se. But, the case was submitted to the jury under statutory definitive instructions, the necessary effect of which was to rule that while the writing is not of itself defamatory, it is "reasonably susceptible of a defamatory as well as an innocent meaning". Kee v. Armstrong Byrd and Co., supra, 182 P. 498.

The salient contention here is that the trial court erred in submitting the case to the jury on the theory that the letter was susceptible of a defamatory meaning because no such meaning was properly pleaded and proved, nor were requisite special damages shown. We cannot agree.

The complaint averred that the language of the letter was intended to mean that Wadley "was unfit to further represent the company, or to any longer enjoy a relationship of trust with his dentist customers, and further, by innuendo indicated that he was guilty of some unprecedented and unpardonable public or personal misconduct or activity * * * that he would be replaced by someone that was `reliable, dependable and easy to do business with', further imputing that Wadley wasn't reliable, dependable and easy to do business with." It was further averred that the letter was so understood by the recipients and was intended to be "false, misleading, defamatory, malicious, libelous * * * and did and does injure Wadley in his good name, reputation, and ability to earn a livelihood and * * * made it impossible for him to seek or gain employment with another dental supply house * * * and has completely alienated his relationship with all of his customers upon whom he has called and established good-will during the past 25 years * * *." As we read the letter in the context in which it was written, we readily agree with Judge Eubanks that it is susceptible of the defamatory imputations set forth in the complaint. A claim on which relief can be granted is thus stated.

It is further contended, however, that even if the letter is susceptible of a defamatory meaning, it is qualifiedly privileged since the company had a right to terminate Wadley's employment and to communicate that fact to its customers and prospective customers so long as such communication was not malicious.

The jury was instructed without objection to the effect that "A qualified `privileged communication' is one made in good faith upon any subject matter in which the party communicating has an interest, or in reference to which he has, or honestly believes he has, a duty, and which contains matter which without the occasion upon which it is made would be defamatory and actionable. The privilege thus claimed by defendants is not absolute, but qualified, and must be made in good faith on the part of defendants. * * *" The court commendably instructed the jury in terms of this case to the effect that this was a privileged occasion since "* * * an employer has a right to terminate the employment of one employed as a salesman and to notify his customers and prospective customers of the change and identity of the salesman who is to succeed the one whose employment is terminated and to inform customers * * * of the reason for terminating the employment of such salesman, even though that reason may be injurious or damaging to the one discharged in his business or profession, provided the same is done without malice or evil intent to injure or damage such a person, and for the purpose of protecting or promoting the employer's business." The jury was then comprehensively instructed as to the definition and proof of malice, leaving them with the admonition that "It is for you to say whether, under all the facts and circumstances in evidence in this case, actual malice on the part of the defendant, M. F. Patterson Dental Supply Company, Inc., toward Wadley has been shown. You are to judge from all the evidence whether such malice existed or not." We think this is an eminently correct and fair statement of the applicable rule of privilege, and the trial court properly submitted to the jury the issue of malice, the presence of which obviates the issue of privilege. See Nicholas v. Oklahoma City Mailer's Union, Okl., 285 P.2d 399; Bland v. Lawyer-Cuff Co., 72 Okl. 128, 178 P. 885; Atlas Sewing Centers v. Nat'l Ass'n, Etc., supra; Iverson v. Frandsen, 10 Cir., 237 F.2d 898; Restatement of the Law of Torts, Libel and Slander §§ 595, 599.

We think the issue of libel was properly submitted to the jury under correct instructions reading on the applicable law of the case.

This brings us to Wadley's slander claim. The slander claim restated all the essential averments of the libel claim, and went on to state, by way of slander, that Blake, as manager and agent of Patterson Dental Supply, advised one or more customers that "Wadley is more trouble than he is worth. He even caused our last manager to commit suicide". In support of such averment one witness, a former employee of the company, testified that while he was employed by Patterson Dental Supply, Blake told him that "Mr. Wadley run him the last manager crazy and caused him to commit suicide". He was permitted to testify over a hearsay objection that "In the office and around the different dental offices * * *" he heard that Blake had made the same...