N. Coast Cable L.P. v. Hanneman

• Citation: 648 N.E.2d 875,98 Ohio App.3d 434
• Decision Date: 07 November 1994
• Docket Number: No. 66061,66061
• Parties: NORTH COAST CABLE LIMITED PARTNERSHIP et al., Appellants, v. HANNEMAN, Appellee.
• Court: United States Court of Appeals (Ohio)

Page 434

98 Ohio App.3d 434

648 N.E.2d 875

NORTH COAST CABLE LIMITED PARTNERSHIP et al., Appellants, v. HANNEMAN, Appellee.

No. 66061.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Decided Nov. 7, 1994.

Baker & Hostetler, Patrick J. Jordan and Daniel P. Mascaro, Cleveland, for appellants.

Hermann, Cahn & Schneider and Kerry S. Volsky, Cleveland, for appellee.

BLACKMON, Judge.

North Coast Cable Limited Partnership, North Coast Cable Company and Lee Howley, Jr. (collectively "NCCLP"), plaintiffs-appellants, appeal the trial court's decision granting summary judgment to Gerhard J. Hanneman, defendant-appellee, in their defamation action. NCCLP assigns the following three errors for our review:

"I. The trial court erred in finding that an absolute privilege protected appellee from the defamation claims based on statements made during the city council committee meeting.

"II. The trial court erred in granting appellee's motion for summary judgment on the defamation claims based on statements made after the committee meeting.

"III. The trial court's ruling should be reversed because, even if summary judgment was appropriate on appellants' defamation claims, appellants should have been permitted to proceed with their other claims."

Having reviewed the record and the arguments of the parties, we affirm the decision of the trial court in part and reverse it in part. The apposite facts follow.

In 1974, North Coast Cable Limited Partnership was formed for the purpose of applying to the city of Cleveland for development of a cable television franchise. In 1985, NCCLP hired Gerhard Hanneman along with the ELRA Group, Inc. to help NCCLP prepare its proposal. The proposal was submitted in March 1985 and was approved in July 1985. From July 1985 through February 1986, Hanneman helped NCCLP to negotiate its franchise agreement, and agreements with Ohio Bell Telephone Company and Viacom. Hanneman was fired in March 1986. Thereafter, NCCLP obtained the necessary financing and began construction of its cable television system.

In 1988 and 1989, several of NCCLP's early minority investors sold their interests to the general partners of NCCLP. On December 12, 1990, Hanneman appeared before a meeting of the Cleveland City Council's Public Utilities Committee and testified, among other things, that the original minority investors were a "sham." He stated that the minority investors had agreed in advance to sell their interests after the franchise was established. Some of his statements were reported in radio news broadcasts by a local journalist who spoke briefly with Hanneman outside the hearing.

On April 4, 1991, NCCLP filed a complaint against Hanneman for defamation. The complaint also alleged that Hanneman breached his duty of good faith and loyalty as a partner and his duty of good faith and fair dealing. Finally, the complaint alleged that Hanneman tortiously interfered with the franchise agreement between NCCLP and the city of Cleveland. NCCLP sought a total of $300,000 in damages.

In his answer to the complaint, Hanneman claimed that the complaint failed to state a claim for which relief could be granted, that his statements were true, and that his statements were privileged. On May 22, 1992, Hanneman filed a motion for summary judgment. He argued that his statements made during the committee hearing were privileged, since they were made during a legislative or judicial proceeding. He also argued that NCCLP's claims of tortious interference with contract, breach of duty of good faith and fair dealing, and breach of duty of good faith and loyalty as a partner should be dismissed because they were based upon allegedly defamatory statements that were privileged.

In their response to Hanneman's summary judgment motion, NCCLP argued that Hanneman's statements were not absolutely privileged. NCCLP claimed that those who voluntarily appeared before judicial committees were only entitled to a qualified privilege. NCCLP also argued that triable issues of fact remained as to whether Hanneman's statements were made with actual malice. It also argued that any privilege applicable to Hanneman's statements before the committee did not absolve him from liability for the business tort claims made by NCCLP.

On July 27, 1993, the trial court granted Hanneman's motion for summary judgment on all counts. The trial court found that Hanneman's statements during the committee hearing were absolutely privileged. The court also found that the statements allegedly made by Hanneman after the hearing were statements of opinion rather than fact and were not actionable. With respect to NCCLP's business tort claims, the trial court found that these claims were based on the same statements for which absolute privilege was found to apply. The court cited Bio/Basics Internatl. Corp. v. Ortho Pharmaceutical Corp. (S.D.N.Y.1982), 545 F.Supp. 1106, which held that a defendant's immunity for statements made before a legislative committee should also immunize him against a business tort action based on the same statements. This appeal followed.

In its first assignment of error, NCCLP argues that the trial court erred in finding Hanneman's statements before the committee were protected by an absolute privilege. NCCLP argues the absolute privilege applies only to witnesses who were subpoenaed to testify before legislative committees and voluntary witnesses have only qualified immunity. We disagree.

In Costanzo v. Gaul (1980), 62 Ohio St.2d 106, 110, 16 O.O.3d 134, 136, 403 N.E.2d 979, 982, the court held statements made before a legislative committee are absolutely privileged if made during the course of official proceedings by members of local governing bodies when the statements relate to a matter under consideration, discussion, or debate. The rule makes for open and frank discussion of the issues that are the subject of the proceedings. The statements made by Hanneman during the committee hearings were relevant to the committee's evaluation of the franchise agreement with NCCLP. Hanneman's comments pertained to NCCLP's use of minority investors in preparing its franchise proposal. His comments about NCCLP's attitudes toward minorities and women were pertinent to evaluating the legitimacy of the minority investments, especially since many of the minority investors' interests were brought back by NCCLP after the franchise was awarded to NCCLP.

NCCLP argues that the absolute privilege should be limited to cases in which a witness testifies under subpoena. In this case, Hanneman received a letter from the committee asking him to appear and give testimony at the committee hearing. While the letter does not have the same coercive power as a subpoena, it nevertheless reveals that Hanneman's decision to testify before the hearing was not entirely voluntary. In Executone of Northwest Ohio v. Mgt. Communication Consultants, Inc. (July 15, 1993), Lucas App. No. L-83-101, unreported, the court stated that absolute immunity applied to statements made by a witness before a legislative body such as a city council. We find the interests of free exchange and debate, which were highlighted in Executone, are equally important when a committee has requested testimony from a witness who is in a position to provide helpful, pertinent information.

The letter sent to Hanneman by the Public Utilities Committee stated the committee's belief that Hanneman had "information valuable to the committee's review" of the city's franchise agreement with North Coast Cable. The fact that a witness has agreed to testify voluntarily instead of having to be compelled to do so by subpoena does not, in and of itself, make his testimony any less significant or less deserving of the protection afforded by an absolute privilege. Consequently, we agree with the trial court's finding of absolute privilege and find NCCLP's first assignment of error meritless.

NCCLP argues in its second assignment of error the trial court erred in granting summary judgment to Hanneman. The triable issue of fact remaining is the communication made to the radio news reporter Vic Gideon. The communication, NCCLP urges, is false and brands NCCLP a liar. The communication NCCLP refers to is the following:

"Well I think [the committee's] intent is to make North Coast be truthful about its dealings with the City and the flavor I got from the meeting today was that if North Coast doesn't comply, that they would consider stronger action such as revoking the franchise and asking another operator, to, you know, to buy North Coast out."

Hanneman says this communication is not defamatory and is his opinion, which is not actionable. The trial court held the communication to the reporter Vic Gideon was opinion and that it was privileged under the First Amendment. Additionally, it held the communication subject to the rule of innocent construction, which requires the adoption of the innocent meaning when defamatory words are subject to both innocent and defamatory meaning. Yeager v. Local Union 20 (1983), 6 Ohio St.3d 369, 372, 6 OBR 421, 423, 453 N.E.2d 666, 669.

We review the court's granting of summary judgment de novo. Brown v. Scioto Cty. Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711, 622 N.E.2d 1153, 1157 ("We review the judgment independently and without deference to the trial court's determination."). An appellate court reviewing the grant of summary judgment must follow the standards set forth in Civ.R. 56(C): "The reviewing court evaluates the record * * * in a light most favorable to the non-moving party. * * * [T]he motion must be overruled if reasonable minds could find for the party opposing the motion." Saunders v. McFaul (1990), 71 Ohio App.3d 46, 50, 593 N.E.2d 24, 26; Link v. Leadworks Corp. (1992), 79 Ohio App.3d 735, 741, 607 N.E.2d 1140, 1143 Civ.R. 56 provides summary judgment is proper when "(1) no genuine issue as to any material fact remains to be litigated; (2) the...