Rice v. Hodapp

• Decision Date: 26 March 1996
• Docket Number: No. 78422,78422
• Citation: 919 S.W.2d 240
• Parties: Richard B. RICE, Appellant, v. Virginia HODAPP, et al., Respondents.
• Court: Missouri Supreme Court

Page 240

919 S.W.2d 240

Richard B. RICE, Appellant, v. Virginia HODAPP, et al., Respondents.

No. 78422.

Supreme Court of Missouri En Banc.

March 26, 1996.

Rehearing Denied April 23, 1996.

Appeal from the Circuit Court of St. Louis County; Honorable James R. Hartenbach, Judge.

Margaret M. Mooney, Rick A. Courtney, St. Louis, for appellant.

Sally E. Barker, State Farm, St. Louis, Cheryl A. Callis, Hodapp, Odland & Teeple, St. Louis, for respondents.

BENTON, Judge.

In an action for defamation and related torts, the circuit court granted summary judgment against Richard B. Rice and for State Farm Insurance Company and three of its supervisors. Rice appeals claiming material issues of disputed fact as to the defamation count, in addition to other points. After opinion by the court of appeals, this Court accepted transfer. Mo. Const.Art. V, § 10. Affirmed.

I.

In December 1988, Virginia Hodapp, a State Farm supervisor, investigated complaints of sexual harassment in the office where Richard Rice, an at-will employee, worked. Interviews with 32 of the 45 female employees revealed that Rice frequently "hip-checked" coworkers, offensively touched female coworkers, kissed a coworker and used profanity. Hodapp and Mark Odland, another State Farm supervisor, met with Rice and told him that they had determined he committed sexual harassment. They placed Rice on a three-day unpaid leave of absence. Upon his return, Hodapp and Odland relayed State Farm's decision to transfer him to another office and not recommend a salary increase.

Two days later, Hodapp called an office-wide meeting (attended by 50 to 80 employees) where she defined sexual harassment and gave examples. Hodapp also stated that the investigation was complete and that two employees were transferred to another office.

At his new office, Rice discovered that James Teeple, office supervisor, had informed Rice's new supervisor of some facts about the transfer. Rice immediately became ill, left the office and spent two weeks in a hospital stress unit. He remained on paid sick leave until October 1989, when his benefits ran out and he was terminated, ending 20 years of employment with State Farm.

Rice sued State Farm, Hodapp, Odland and Teeple for defamation, intentional infliction of emotional distress, intentional interference with a business relationship, civil conspiracy and prima facie tort. The circuit court granted summary judgment to all four defendants. Rice appeals as to State Farm, Hodapp and Odland.

II.

Rice contends that the trial court erred in granting summary judgment on his defamation claim because genuine issues of material fact exist. "When considering appeals from summary judgments, the Court will review the record in the light most favorable to the party against whom judgment was entered." ITT Commercial Finance v. Mid-America Marine, 854 S.W.2d 371, 376 (Mo. banc 1993). Appellate review is essentially de novo. "The criteria on appeal for testing the propriety of summary judgment are no different from those which should be employed by the trial court to determine the propriety of sustaining the motion initially." Id. Summary judgment is appropriate where there are no genuine issues of material fact. " 'Genuine' implies that the issue, or dispute, must be a real and substantial one--one consisting not merely of conjecture, theory and possibilities." Id. at 378.

Rice initially alleges a factual dispute as to publication of the alleged defamatory statements. "A publication is simply the communication of defamatory matter to a third person." Nazeri v. Missouri Valley College, 860 S.W.2d 303, 313 (Mo. banc 1993). However, "communications between officers of the same corporation in the due and regular course of the corporate business, or between different offices of the same corporation, are not publications to third persons." Hellesen v. Knaus Truck Lines, 370 S.W.2d 341, 344 (Mo.1963). Clearly, the communications between State Farm's supervisors were not defamatory publications.

Rice correctly asserts, however, that the communications to non-supervisory employees were a publication. Defamatory statements made by company officers or supervisors to non-supervisory employees constitute a publication for purposes of a defamation action. See Lovelace v. Long John Silvers, Inc., 841 S.W.2d 682, 685 (Mo.App.1992). See also Staples v. Bangor Hydro-Electric Co., 629 A.2d 601, 603 (Me.1993); Bratt v. International Business Machines Corp., 392 Mass. 508, 467 N.E.2d 126, 134 (1984); Larson v. Decatur Memorial Hospital, 236 Ill.App.3d 796, 176 Ill.Dec. 918, 921, 602 N.E.2d 864, 867 (1992). But see Nelson v. Lapeyrouse Grain Corp., 534 So.2d 1085, 1093 (Ala.1988).

A.

"The common law provides the defamation defendant with three general types of defenses. First, truth may always be asserted as an absolute defense. Mo. Const. art. I, § 8. Second, certain statements are absolutely privileged.... Third, other statements receive a conditional or qualified privilege." Henry v. Halliburton, 690 S.W.2d 775, 780 (Mo. banc 1985).

On appeal, Rice cites two allegedly defamatory statements that his supervisor made at the employee meeting. First, Rice asserts that his supervisor stated that "there had been an investigation of charges of sexual harassment of female State Farm employees by [Rice] and that as a result of said investigation [Rice] was being transferred." All parties agree that there was indeed an investigation and Rice was transferred. Truth is an absolute defense to the first statement alleged.

Second, Rice points to one employee's affidavit stating that the supervisor told the employees at the meeting that "a sexual harassment investigation had been concluded and two individuals were found guilty of such conduct." Rice asserts that he was not guilty and thus, was defamed by the statement. Clearly, the statement was true in the sense that State Farm management, after an investigation, believed Rice had committed sexual harassment.

Rice vehemently contends that the underlying facts do not support the conclusion that he committed sexual harassment. Even if not absolutely privileged as the truth, the statement is qualifiedly privileged as an intra-corporate communication. "A communication is held to be qualifiedly privileged when it is made in good faith upon any subject-matter in which the person making the communication has an interest or in reference to which he has a duty, and to a person having a corresponding interest or duty, although it contains matter which, without such privilege, would be actionable." Carter v. Willert Home Products, Inc., 714 S.W.2d 506, 513 (Mo. banc 1986). "The applicability of the defense of qualified privilege is a matter of law to be decided by the trial court." Id.

Here, the statements to non-supervisory personnel were intra-corporate communications within this qualified privilege. The supervisor making the statements had an interest in the subject-matter discussed. "Communications between the corporation and its personnel are the only means whereby a corporation can inform itself concerning the performances and conduct of employees in the due and regular course of the corporate business. A corporation has an interest to see that business runs efficiently. The sexual harassment of an employee ... not only affects the efficiency of the employee and hence of the business but also may incur legal obligation of the employer to take steps against the practice." Lovelace, 841 S.W.2d at 685. See also § 213.010 RSMo 1986; 42 U.S.C. §§ 2000e to 2000e-17; 29 C.F.R. § 1604.11(f) (1995). Likewise, the State Farm employees receiving the publication had an interest in the subject matter communicated. Employees have a legitimate interest in their employer's guidelines for appropriate behavior.

B.

Rice contends that if the qualified privilege applies, it is defeated by exceptions to the privilege. Under the intra-corporate qualified privilege, publication of an allegedly defamatory statement is not actionable unless made with malice. Hellesen, 370 S.W.2d at 345. In order to prove malice, a plaintiff must show "the statements were made with knowledge that they were false or with reckless disregard for whether they were true or false at a time when defendant had serious doubts as to whether they were true." Carter, 714 S.W.2d at 512. Statements made without any factual basis satisfy the recklessness standard. Id. "[T]he law will not infer malice, but the existence thereof must be shown by some evidence beyond the falsity of the statements communicated." Hellesen, 370 S.W.2d at 345.

Although the record has no less than nine depositions and four affidavits, Rice fails to set forth specific facts showing a genuine issue of material fact. Although he had received a satisfactory work evaluation one month before the investigation, Rice speculates that his supervisors considered him a "malcontent," accusing him of sexual harassment to get him out of the office. In his own deposition, Rice failed to give specific facts supporting his speculation, though asked directly to do so. No other evidence fills this gap. Mere opinion fails to raise any issue of material fact that precludes summary judgment. St. Charles County v. Dardenne Realty Company, 771 S.W.2d 828, 831 (Mo. banc 1989).

Additionally, Rice asserts a disputed issue of fact whether his supervisors were reckless in their statements because they lacked sufficient factual basis. However, there is no real and substantial dispute because the supervisor's statements were based on an investigation that found sufficient facts to justify the statements.

Finally, Rice claims that excessive dissemination is another exception to the qualified privilege. Such an exception to the privilege might exist if "the statements made exceed the exigencies of the situation so as to constitute an abuse of the privilege." Hellesen, 370 S.W.2d at 345. However, the supervisor's statements did not...