Petersen v. Dacy

• Decision Date: 24 April 1996
• Docket Number: No. 19388,19388
• Parties: 132 Lab.Cas. P 58,155, 11 IER Cases 1532, 1996 SD 72 Sharon PETERSEN, Plaintiff and Appellant, v. Mike DACY, Diane Dacy, Scott Anshutz, and Julie Anshutz, dba Mr. G's, D & A Properties, Daschutz, A and D Properties, and Dacy/Anshutz, and Cheryl Cerny, as Manager of Mr. G's and Individually, All Jointly and Severally, Defendants and Appellees. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 91

550 N.W.2d 91

132 Lab.Cas. P 58,155, 11 IER Cases 1532,

1996 SD 72

Sharon PETERSEN, Plaintiff and Appellant, v. Mike DACY, Diane Dacy, Scott Anshutz, and Julie Anshutz, dba

Mr. G's, D & A Properties, Daschutz, A and D Properties, and

Dacy/Anshutz, and Cheryl Cerny, as Manager of Mr. G's and

Individually, All Jointly and Severally, Defendants and Appellees.

No. 19388.

Supreme Court of South Dakota.

Considered on Briefs April 24, 1996.

Decided June 19, 1996.

Gwendolyn LaPrath, Gregory, for plaintiff and appellant.

Robert B. Anderson of May, Adam, Gerdes, & Thompson, Pierre, for defendants and appellees.

GILBERTSON, Justice.

¶1 Sharon Petersen appeals the partial summary judgment granted to Defendants in a defamation and slander action brought by Petersen. We affirm.

FACTS AND PROCEDURE

¶2 Sharon Petersen worked as a clerk at Mr. G's, a convenience store/gas station, from October 1991 to May 17, 1994. Petersen's duties at Mr. G's required her to sell scratch lottery tickets to the store's customers. On May 17, 1994, Petersen was terminated from her job at Mr. G's by Cheryl Cerny, the store manager. Cerny discharged Petersen in Cerny's office, alone and with the door closed, after Petersen failed to satisfactorily explain why lottery tickets were missing during Petersen's work shifts at Mr. G's. It was later determined Cerny believed Petersen had failed to properly account for over $300 and possibly as much as $1500 in scratch lottery tickets between May 12 and May 15, 1994. Petersen has consistently claimed, and the Department of Labor's Unemployment Division has concluded, that Petersen did not steal scratch lottery tickets from Mr. G's. ¹

¶3 Cerny discussed Petersen's termination with three of Mr. G's store clerks. She also discussed it with Petersen's husband, a part-time employee of Mr. G's, when the subject was initiated by Petersen's husband. No third parties were present during these discussions.

¶4 Petersen brought an action against the owners of Mr. G's and Cerny claiming defamation and wrongful termination. Defendants moved for summary judgment which Petersen resisted by motion and supporting documents. The circuit court granted Defendants' motion for partial summary judgment on counts one through eight, inclusive, all defamation claims. The court's order was declared to be a final judgment pursuant to SDCL 15-6-54(b). The circuit court did not dismiss count nine, the wrongful termination claim. The circuit court based its judgment on its determination that all of the alleged defamatory communications were subject to the conditional privilege established in SDCL 20-11-5(3), that no genuine issue of material fact existed, and that Defendants were entitled to judgment as a matter of law. Petersen appeals.

STANDARD OF REVIEW

¶5 Our standard of review on a motion for summary judgment is well established. In reviewing a grant or denial of summary judgment,

'we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the non-moving party and reasonable doubts should be resolved against the moving party. The non-moving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.'

Trippet Special Trust v. Blevins, 1996 SD 29 p 6, 545 N.W.2d 216, 221 (quoting BankWest, N.A. v. Groseclose, 535 N.W.2d 860, 863 (S.D.1995)).

ANALYSIS AND DECISION

¶6 Defamation is either libel or slander. SDCL 20-11-2. Both are statutorily defined as unprivileged communications. SDCL 20-11-3, 20-11-4. If a communication is privileged, it cannot constitute defamation and is not actionable. Peterson v. City of Mitchell, 499 N.W.2d 911, 915 (S.D.1993). SDCL 20-11-5 provides the statutory definition of privileged communication. SDCL 20-11-5(3) provides:

A privileged communication is one made: [i]n a communication, without malice, to a person interested therein, by one who is also interested, or by one who stands in such relation to the person interested as to afford a reasonable ground for supposing the motive for the communication innocent, or who is requested by the person interested to give the information[.]

The statute further provides that, under the subsection quoted above, "malice is not inferred from the communication or publication."

¶7 In reviewing appeals brought under SDCL 20-11-5(3), we have stated our first line of inquiry is to determine whether the communication involved was between interested individuals. Peterson, 499 N.W.2d at 915 (quoting Uken v. Sloat, 296 N.W.2d 540, 542-43 (S.D.1980)). " 'An infallible test in determining whether a communication ... is or is not privileged is to ask whether, if true, it is a matter of proper public interest in relation to that with which it is sought to associate it.' " Id. (quoting McLean v. Merriman, 42 S.D. 394, 399, 175 N.W. 878, 880 (1920)). We have also cited the Restatement (Second) of Torts with approval in determining whether the communication was made to an interested person:

An occasion makes a publication conditionally privileged if the circumstances lead any one of several persons having a common interest in a particular subject matter correctly or reasonably to believe that there is information that another sharing the common interest is entitled to know.

Sparagon v. Native American Publishers, Inc., 1996 SD 3, p 27, 542 N.W.2d 125, 132 (quoting Tibke v. McDougall, 479 N.W.2d 898, 905 (S.D.1992) (quoting Restatement (Second) of Torts § 596)).

¶8 We next must determine whether the communication was made with malice, which would negate the privilege. Peterson, 499 N.W.2d at 916 (citing Tibke, 479 N.W.2d 898 and Mackintosh v. Carter, 451 N.W.2d 285 (S.D.1990)). Because malice may not be inferred under the statute, there must be a specific showing of malice which requires proof of reckless disregard for the truth or actual malice. " 'The real test of whether a defendant's conduct is reckless so as to constitute actual malice is whether he in fact entertained serious doubts as to the truth of his publications.' " Tibke, 479 N.W.2d at 906 (quoting Uken, 296 N.W.2d at 543). " 'Reckless conduct is not measured by whether a reasonably prudent man would have published, or would have investigated before publishing.' " Janklow v. Viking Press, 459 N.W.2d 415, 419 (S.D.1990) (quoting St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323, 1325, 20 L.Ed.2d 262, 267 (1968)). This Court has long held that the plaintiff has the burden of proving actual malice that destroys the privilege. Sparagon, 1996 SD 3 at p 25, 542 N.W.2d at 132; Parr v. Warren-Lamb Lumber Co., 58 S.D. 389, 393, 236 N.W. 291, 293 (1931).

¶9 In the present case, the evidence shows the communication was made by Cerny to four employees of Mr. G's, including Petersen's husband. Three of these employees were told by Cerny of Petersen's dismissal immediately after it had occurred, either as they checked the work schedule and found Petersen was not scheduled to work, or to generally inform them of Petersen's dismissal. One of these employees was working the same shift at the time Petersen was dismissed. Cerny informed this employee immediately during that shift. Petersen's husband, a part-time employee of Mr. G's, was informed of the basis for Petersen's termination when he directly confronted Cerny about it the following day.

¶10 In Uken, 296 N.W.2d at 543, we addressed the question of who is an "interested individual" for purposes of SDCL 20-11-5(3). In that case, we determined that parents of school children enrolled in the school district in which Uken was the superintendent were "interested individuals" as regards Uken's effect on that district. We also found that teachers and administrators had a legitimate right to be concerned with the operations of the school and, therefore, were "interested individuals." We did not base our analysis in Uken on a "need to know" urged by Petersen on appeal.

¶11 In Parr, 58 S.D. 389, 236 N.W. 291, under facts similar to those now before us, we reversed judgment for a plaintiff who was employed by defendant lumber company and accused by the defendant of theft in the workplace. In reversing the judgment, we found defendant employer's communication was protected by the qualified privilege pursuant to the precursor statute to SDCL 20-11-5(3). In that case, the communication was made in the presence of a co-worker of the accused employee and later, to the accused employee's supervisor. We found that "[t]he alleged slanderous statements ... were communications upon a matter in which both plaintiff and defendants were interested, and made only in the immediate presence of interested parties." Id. at 293. The evidence further showed the employer believed the items were stolen, he believed plaintiff to be the person who stole them, and that "the charge was made in good faith." Id.

¶12 We find in the present case that Petersen's co-workers were "interested individuals" for purposes of SDCL 20-11-5(3) in that they were naturally concerned with the operation of the store and the effect of Petersen's departure. For one, the departure of any employee acting as a store clerk would create a gap in the work schedule that the co-workers would be called upon to fill. For another, the perceived reason for Petersen's dismissal, shortages of lottery tickets on her shift, would serve as a warning to other workers charged with selling lottery tickets as part of their duties to honestly and carefully keep track of these sales. We also note Petersen acknowledged in deposition testimony that had a co-worker of hers disappeared from Mr....