Mills v. Crawford County
| Decision Date | 26 September 1989 |
| Docket Number | No. 89-0022,89-0022 |
| Parties | NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. Roger L. MILLS, and Diane J. Mills, Plaintiffs-Appellants, v. CRAWFORD COUNTY, Elisabeth E. Atwell, Village of Gays Mills, and Regent Insurance Company, Defendants-Respondents, William C. Fillbach, Terrence R. Zinkle, and Mark A. Lester, Defendants. |
| Court | Wisconsin Court of Appeals |
Circuit Court, Dane County.
AFFIRMED IN PART, REVERSED IN PART AND CAUSE REMANDED.
APPEAL from judgments of the circuit court for Dane county: MICHAEL N. NOWAKOWSKI, Judge.
Before MOSER, P.J., and SULLIVAN and FINE, JJ.
This appeal has its genesis in a fire at a bar and restaurant owned by Roger L. and Diane Mills in the village of Gays Mills, Wisconsin. Regent Insurance Company was the Mills' insurance carrier, and it refused to pay on the fire claim. Elisabeth Atwell, as Crawford County district attorney, William Fillbach, as Crawford County sheriff, Terrence Zinkle, as a Crawford County deputy sheriff, and Mark Lester, as Gays Mills police chief, were all involved in the investigation and prosecution of the Mills for arson in connection with the fire. The Mills were acquitted.
The Mills' amended complaint asserts three causes of action. First, the Mills allege that they were defamed by all of the defendants. Second, the Mills allege that all of the defendants but Regent were guilty of conspiring with Regent in order to prevent the Mills from recovering on their insurance policy and to destroy their business. Third, the Mills seek recovery from all of the defendants but Atwell, alleging malicious prosecution and abuse of process. All of the defendants moved for summary judgment, which the trial court granted in part and denied in part.
The Mills appeal from the entirety of the judgment dismissing their claims against Regent, from the entirety of the judgment dismissing their claims against Crawford County and the Village of Gays Mills, and from the entirety of the judgment dismissing their claims against Atwell. They do not appeal from the trial court's dismissal of claims against Fillbach, Lester, and Zinkle.
The Mills raise six issues on appeal. First, they argue that the trial court erroneously determined that their defamation claim against Regent was barred by res judicata. Second, they contend that the trial court erroneously determined that Regent was not liable for the acts of its employees and agents in connection with the Mills' defamation and abuse of process claims. Third, they assert that the trial court erroneously determined that the actions by the governmental defendants and their employees were protected by conditional privilege that was not abused. Fourth, they contend that the trial court erroneously dismissed the abuse of process and malicious prosecution claims. Fifth, they argue that the trial court erroneously dismissed all of the claims asserted against Crawford County and the Village of Gays Mills. Finally, they submit that the trial court erroneously dismissed all of the claims asserted by Mrs. Mills. We affirm in part and reverse in part.
On an appeal from a grant or denial of a motion for summary judgment, we, like the trial court, must determine whether the complaint states a claim for relief. Green Spring Farms v. Kersten, 136 Wis.2d 304, 314-315, 401 N.W.2d 816, 820 (1987). If a claim for relief has been stated, we, like the trial court, must determine whether there are any genuine issues of material fact that require a trial. Ibid.; see Rule 802.08(2), (6), Stats. The trial court analyzed the issues presented to it with care and scholarship in a lengthy decision. Nevertheless, we must decide the issues presented by this appeal de novo. See Green Spring Farms, 136 Wis.2d at 316, 401 N.W.2d at 820.
The trial court held that the Mills' defamation claims against Regent were barred by res judicata because those claims were not asserted in their earlier lawsuit against Regent, which alleged Regent's bad faith in not paying on the fire policy. We disagree.
The doctrine of res judicata is designed "to prevent repetitive litigation." DePratt v. West Bend Mut. Ins. Co., 113 Wis.2d 306, 311, 334 N.W.2d 883, 885 (1983). A judgment in one case will bar a subsequent proceeding when there is "an identity of parties and an identity of causes of action in the two cases." Barbian v. Lindner Bros. Trucking Co., 106 Wis.2d 291, 296, 316 N.W.2d 371, 374 (1982). If the doctrine applies, res judicata precludes all matters that either were litigated or could have been litigated in the earlier action. Ibid. As articulated in the American Law Institute formulation adopted by DePratt, 113 Wis.2d at 311, 334 N.W.2d at 886:
When a valid and final judgment rendered in an action extinguishes the plaintiff's claim ..., the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.
Restatement (Second) of Judgments sec. 24(1) (1982). Thus, a second action is barred even though recovery is predicated upon "evidence or grounds or theories of the case not presented in the first action" or the second action seeks "remedies or forms of relief not demanded in the first action." DePratt, 113 Wis.2d at 312, 334 N.W.2d at 886; see Restatement (Second) of Judgments sec. 25. A subsequent action is not barred, however, unless the claim it asserts "arises from the same transaction" as the claim asserted in the earlier litigation. Ibid.
The Mills' "bad faith" claim against Regent was predicated on Regent's failure to pay on its fire policy. See Anderson v. Continental Ins. Co., 85 Wis.2d 675, 271 N.W.2d 368 (1978) (). Their defamation claims are predicated upon statements allegedly made by Regent's agents. The transaction underlying the "bad faith" action (Regent's refusal to pay) is thus different than the transactions underlying the defamation action (the alleged defamatory statements), even though both actions relate to the fire. An analogous Restatement illustration makes this clear:
B owes A $500 on an obligation that matured on February 1. A visits B on June 1 and requests payment, whereupon B commits an unprovoked assault upon A. A sues B on the debt and recovers. A may maintain a second action against B based on the assault.
Restatement (Second) of Judgments sec. 24 comment d, illustration 7. Just as A's action for assault was not an alternative theory to recover on the debt or a way to seek more damages allegedly sustained as a result of B's nonpayment, the Mills' action for defamation is not an alternative theory to recover on the fire policy or a way to seek additional damages allegedly sustained as a result of Regent's failure to pay on the policy. The defamation claims against Regent are not barred by res judicata.
As set forth in their amended complaint, the Mills' defamation claims against Regent are predicated upon the following:
--Statements by "Frank Griswold and/or John Jensen" to Loren Lynch "and perhaps others, that there had been fires in other establishments operated by Mr. Mills in the past." Lynch, who the complaint identifies as "an agent of Regent," is alleged to have "republished that information to law enforcement officers investigating the alleged arson." Griswold and Jensen are identified in the amended complaint as "claims managers for Regent and General Casualty." The complaint identifies Regent as an "affiliate" of General Casualty.
--Statements by Lynch to Lester, "and perhaps others," to the effect "that Roger Mills had attempted, prior to the fire, to insure [the restaurant] for a substantially higher amount of insurance ($175,000) but that the insurance company wouldn't agree to it."
--A cover memo from David Solie, identified in the complaint as "an adjuster for Regent" to Lester. The memo accompanied statements Roger Mills had given and noted, as described in the amended complaint, that Mills "seemed innocent enough!" [Emphasis and exclamation in original document and the complaint.]
The trial court held that Regent's affidavits made out a prima facie case for summary judgment on the ground that Regent was not "vicariously liable for the defamatory statements of Loren Lynch and David Solie or their participating in a conspiracy to defame" because Lynch and Solie were independent contractors. 1
Although this issue was not decided by the trial court, Regent argues here, as it did before the trial court, that the statements attributable to Lynch and Solie are not defamatory or, if they are, the statements are true. 2 We must therefore determine whether the allegations state claims for defamation and, if they do, whether there are any material issues of fact for trial. See Green Spring Farms, 136 Wis.2d at 314-315, 401 N.W.2d at 820.
A statement alleged to be defamatory is actionable if it is capable of a defamatory meaning, even if it may also be capable of a non-defamatory meaning. Westby v. Madison Newspapers, Inc., 81 Wis.2d 1, 5-7, 259 N.W.2d 691, 693 (1977). A defamatory communication is one that " 'tends to injure 'reputation' in the popular sense; to diminish the esteem, respect, goodwill or confidence in which the plaintiff is held, or to excite adverse, derogatory or unpleasant feelings or opinions against him.' " Lathan v. Journal Co., 30 Wis.2d 146, 152-153, 140 N.W.2d 417, 420-421 (1966) (quoting W. Prosser, Law of Torts sec. 106, at 756 [3d ed. 1964] ). Giving the complaint the required "liberal construction," Westby, 81 Wis.2d at 5, 259 N.W.2d at 693, and recognizing "any reasonable and favorable inferences...
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