Outlet Co. v. International Sec. Group, Inc., 04-83-00602-CV

• Decision Date: 24 April 1985
• Docket Number: No. 04-83-00602-CV,04-83-00602-CV
• Citation: 693 S.W.2d 621
• Parties: The OUTLET COMPANY and Baxter Gentry, Appellants, v. International Sec. Group., Inc.
• Court: Texas Court of Appeals

Page 621

693 S.W.2d 621

The OUTLET COMPANY and Baxter Gentry, Appellants, v. International Sec. Group., Inc.

No. 04-83-00602-CV.

Court of Appeals of Texas San Antonio.

April 24, 1985.

Rehearing Denied June 12, 1985.

Paul M. Green, Mark J. Cannan, Lang, Cross & Ladon Firm, San Antonio, for appellants.

James L. Branton, Susan Combs, San Antonio, for appellees.

Before BUTTS, TIJERINA and STOREY ^*, JJ. (Assigned).

OPINION

STOREY, Justice (Assigned).

Richard C. Medlin sued The Outlet Company, the operator of television station KSAT, for libel arising out of a television news broadcast which alleged that Medlin was engaged in a multi-million dollar gun smuggling scheme. The trial court's judgment awarded Medlin general, special and exemplary damages totaling $1,600,000.00 based upon jury findings of falsity and malice. Among its several points of error the broadcaster urges that Medlin could not sustain a cause of action for libel because he had before trial waived any right to recover for injury to his reputation. Additionally, the broadcaster complains that the broadcast was not proved to be directed to Medlin, that it was not proved to be false, and that the evidence was legally and factually insufficient to support the finding of malice and the various elements of damage. We conclude that no reversible error is shown in the points of error presented for review. We conclude further, however, that the damages awarded are excessive and that this case must be reversed and remanded unless appropriate remittitur is filed.

The threshold question presented is whether an action for libel may be maintained in the face of an affirmative waiver of damages for injury to reputation as an element of actual damages. The broadcaster seems to contend that, while other compensable injuries may result from a defamation, they must be predicated upon an injury to reputation and that claims not predicated upon such injury are by definition not actions for defamation. On the other hand, Medlin points to the disjunctive language of the Texas libel statute, TEX.REV.CIV.STAT.ANN. art. 5430 (Vernon 1958) as setting forth at least four distinct ways, including injury to reputation, by which an individual may suffer injury from defamation. Alternatively, Medlin contends that he did not waive his cause of action for injury to reputation, but only waived the injury to reputation as an element to be considered in determining his actual damages.

We look to the nature of the waiver presented to the trial court. At or near the time of trial Medlin presented a motion in limine requesting the court to exclude "any testimony as to plaintiff's character or reputation in the community, as plaintiff hereby waives damages to reputation as an issue." The parties consider this motion to be in the nature of a stipulation. Taken with the further colloquy among the court and lawyers as shown in the record we understand this stipulation to be a "waiver" not of the injury to reputation but instead as a waiver of one element to be considered by the jury in assessing general or actual damage. This was obviously the interpretation of the trial court because it defined actual damages to "include mental anguish and suffering, humiliation and embarrassment" while omitting any reference to damage to reputation in its definition.

Furthermore, a false statement which charges a person with the commission of a crime, as is the case here, is libelous per se and "the law presumes a statement which is libelous per se defames a person and injures his reputation." Leyendecker & Associates, Inc. v. Wechter, 683 S.W.2d 369 (1984) (on rehearing). Because of this presumption, Medlin was entitled to recover his actual damages for mental anguish without offering proof of injury to his reputation. Id. at 374. We observe in this connection that neither party offered evidence concerning reputation and that no complaint is made on appeal of the admission or exclusion of such evidence. Additionally, no attempt was made by bill of exception or otherwise to demonstrate an attack upon reputation in mitigation of damages. Having concluded that Medlin did not waive his cause of action for libel by waiving injury to reputation as an element of damages we proceed to the broadcaster's remaining points of error.

The broadcaster contends that there was no evidence or insufficient evidence to show that the broadcasts were "of and concerning" Medlin. The jury found that the broadcasts would lead ordinary persons to believe that Medlin was involved in "gun smuggling." The texts of the two broadcasts were as follows:

BROADCASTS

PRE-BROADCAST

MICHELLE MARSH: A multi-million dollar gun smuggling scheme, some controversial decisions by the U.S. Supreme Court, and a dollar that looks like a quarter, but it's still worth 100 pennies. Those stories and much more, coming up.

JULY 2nd

MICHELLE MARSH: Newswatch has learned that a federal investigation is underway into a multi-million dollar business in San Antonio. A business, allegedly dealing with gun smuggling. Baxter Gentry reports.

BAXTER GENTRY: This is an investigation looking into the alleged flow of weapons from San Antonio into Central America. It's pointed at an elite security business here in San Antonio.

This is the International Security Group, a San Antonio based firm in a warehouse district on the city's northeast side. ISG provides protection for businessmen and high government officials against terrorism attacks. Most of the clients are from Latin America. Building highly sophisticated bullet proof cars and training bodyguards are two aspects of this business that has grossed 6 million dollars so far this year. One former employee of ISG is afraid of appearing on camera, but he talked with us about how the company was allegedly involved in smuggling weapons.

QUESTION: How were you involved?

ANSWER: I loaded shotguns and ammo into secret compartments in the cars.

QUESTION: Where were they going?

ANSWER: To Guatemala I think.

QUESTION: Did you know it was illegal to do that?

ANSWER: I asked, but never got an answer.

Ron Wolters, the agent in charge of the Federal Firearms Office does not [sic] have an answer. It is illegal. Wolters says his investigators are looking into the alleged scheme but would not comment on any specific questions.

We were allowed inside the plant to talk with ISG President Richard Medlin. Medlin says the charges are unfounded and that the man in our report is simply a disgruntled employee trying to make his company look bad. Medlin, who refused to appear on camera for security reasons, says that neither he or [sic] his company have ever been involved in smuggling guns.

JULY 3rd

MICHELLE MARSH: Last night we stated during this newscast that authorities were investigating a multi-million dollar gun smuggling scheme. We'd like to clarify that statement. The possibility that the people at the International Security Group based here in San Antonio are or have been involved in gun smuggling is under investigation. The extent of such an operation or the amount of money involved is not known. The management at International Security Group denies any knowledge of such a gun smuggling operation and today asked that all employees with knowledge of such an operation to take that information to proper authorities.

It has been held that, with respect to identity, the asserted libel must refer to some ascertained or ascertainable person. The individual need not be named if those who knew him understand from the publication that it referred to him. Newspapers, Inc. v. Matthews, 161 Tex. 284, 339 S.W.2d 890, 894 (1960). We believe the rule in Texas with respect to identity to be that set forth in W. PROSSER, HANDBOOK OF THE LAW OF TORTS 583 (2d ed. 1955):

A publication may clearly be defamatory as to somebody, and yet on its face make no reference to the individual plaintiff ... He need not, of course, be named and the reference may be an indirect one; and it is not necessary that every listener understand it, so long as there are some who reasonably do.

Id. at 543, cited with approval in Poe v. San Antonio Express News Corp., 590 S.W.2d 537, 542 (Tex.Civ.App.--San Antonio 1979, writ ref'd n.r.e.) and Gibler v. Houston Post Co., 310 S.W.2d 377, 385 (Tex.Civ.App.--Houston 1958, writ ref'd n.r.e.). Here, Medlin was known to be the president of International Security Group, Inc. and its sole stockholder. Hence, he was identified by name as well as by the phrase "the management." There was no evidence offered tending to prove the broadcast was not directed to Medlin. We are persuaded that the texts themselves point directly to Medlin and taken with the testimony of witnesses who so understood the broadcast, the jury finding in this respect is amply supported.

Nor can we agree with the broadcaster's contention that Medlin was shown to be a public figure. There is no evidence that he assumed any role of special prominence in society or that he had thrust himself to the forefront of any particular public controversy in order to influence its resolution, the tests laid down in Gertz v. Robert Welch, Inc., 418 U.S. 323, 345, 94 S.Ct. 2997, 3009, 41 L.Ed.2d 789, 808 (1974). Of course, the broadcasts themselves could not serve to make Medlin a public figure. Hutchinson v. Proxmire, 443 U.S. 111, 135, 99 S.Ct. 2675, 2688, 61 L.Ed.2d 411, 431 (1979). While it is generally conceded that the question of whether a defamation plaintiff is a public figure is one for decision by the court, we conclude that no harm resulted in submitting the question to the jury in this case.

The broadcaster next complains that there was no evidence or, alternatively, insufficient evidence to support certain of the jury findings. The jury found that the broadcast taken as a whole had the effect of causing ordinary persons to believe that Medlin was involved in the criminal activity of gun smuggling. It found further that the published...