Schafroth v. Baker

• Decision Date: 03 September 1976
• Parties: Arthur L. SCHAFROTH, Appellant, v. Karl BAKER, Respondent, Cross-Appellant.
• Court: Oregon Supreme Court

Page 1046

553 P.2d 1046

276 Or. 39

Arthur L. SCHAFROTH, Appellant, v. Karl BAKER, Respondent, Cross-Appellant.

Supreme Court of Oregon.

Argued and Submitted April 8, 1976.

Decided Sept. 3, 1976.

Michael F. McClain, Corvallis, argued the cause for appellant. On the briefs were McClain, Brown, Evashevski & Marek.

Mark D. Donahue, Corvallis, argued the cause for respondent, cross-appellant. With him on the brief was Jack L. Joyce, Philomath.

Before McALLISTER, P.J., and DENECKE, HOLMAN, TONGUE, HOWELL and BRYSON, JJ.

McALLISTER, Presiding Justice.

This action for slander was brought by the plaintiff Arthur L. Schafroth against the defendant Karl Baker. The jury found in favor of Schafroth and awarded him $5,000 general damages and $12,500 punitive damages. A judgment was entered on the verdict and defendant thereafter filed a motion for a judgment notwithstanding the verdict and in the alternative for a new trial.

The trial court denied the motion for judgment notwithstanding the verdict, but allowed the motion for a new trial. Plaintiff appeals from the order granting a new trial.

The order granting a new trial recited that it was granted because it appeared to the court 'that the jury was not properly instructed regarding the question of qualified privilege'. ¹

The sole issue before us is whether the trial court erred in granting a new trial.

The only part of the record designated by the appellant is the trial court file and the instructions given to the jury and the exceptions thereto.

It is alleged in plaintiff's amended complaint that plaintiff was employed by Oregon State University and that 'on or about May 5, 1974, the Defendant did maliciously with the intention of injuring the good name and character of the Plaintiff call the President of Oregon State University, Robert MacVicar, and did tell him that the Plaintiff had misapplied O.S.U. property for his own personal use and that the Plaintiff had a life raft located on his boat at Newport with O.S.U. labels on it.'

It is further alleged that 'the statements made by the Defendant were false and at the time Defendant uttered them he knew that they were false and were published wrongfully and maliciously by the Defendant.'

It is also alleged that 'the statements were made and published maliciously, wilfully, and recklessly and Plaintiff is entitled to recover punitive damages in the sum of $25,000.00.'

Plaintiff prayed for $5,000 general damages and the further sum of $25,000 punitive damages.

Defendant's amended answer contained a general denial and two affirmative defenses. The first alleged truth as a defense and the second alleged that defendant's 'statement was made in good faith, without malice, as an expression of his opinion on a matter of vital public interest and concern.'

Defendant, in his brief, does not rely on truth as a defense and we need not concern ourselves any further with that alleged defense.

Plaintiff contends that the trial court was wrong in granting a new trial because (a) the defendant was not entitled to have instructions on qualified privilege submitted to the jury; and (b) because the instructions of the trial court were 'adequate when read with the court's total charge to the jury and upon the jury returning a verdict for the plaintiff on the issue of punitive damages.' In other words, the plaintiff argues that any error in the instructions regarding qualified privilege became harmless when the jury found actual malice on which to return a verdict of punitive damages.

Plaintiff argues two propositions in support of his contention that the court erred in granting a new trial. Plaintiff first argues that defendant's statement to President MacVicar charged plaintiff with the commission of the crime of misapplication of entrusted property, ORS 165.095, and that the doctrine of qualified privilege is not available as a defense to an accusation of criminal conduct.

We will first consider plaintiff's contention that qualified privilege is not a defense to allegations of criminal conduct. The authorities are to the contrary. Prosser discusses the 'public interest' privilege as follows:

'The interest of the general public, as distinguished from that of any individual, has given rise to two qualified privileges, which often have been confused. One is broad as to what may be said, but narrow as to those to whom it may be communicated; the other is more restricted as to content, but broader as to publication. The first, sometimes called the 'public interest' privilege, involves communications made to those who may be expected to take official action of some kind for the protection of some interest of the public. * * *' Prosser, Torts 791 (4th ed. 1971).

Defendant's statements charged the misappropriation of property of Oregon State University, which was obviously a matter of public concern. Such statements are qualifiedly privileged if they are made to a person authorized to act if the statements be true. Restatement of Torts, § 598, comment c. The rule at common law is stated thus in 50 Am.Jur.2d 703, Libel and Slander § 198:

'In the absence of malice, and if there has been no abuse of a privileged occasion, the defense of conditional or qualified privilege may extend to a communication that is false, even though it charges a crime. * * *'

See Annotation, Defamation: Actionability of Accusation or Imputation of Shoplifting, 29 A.L.R.3d 961, 977 et seq, § 4.

We conclude that qualified privilege may be a defense to an accusation of criminal conduct.

We turn to the dual question of whether the trial court's instructions regarding qualified privilege were erroneous and, if so, whether the error was rendered harmless by the jury finding of actual malice as evidenced by its award of punitive damages.

The trial court's instructions regarding privilege were as follows:

'You are also instructed that in the plaintiff's complaint he alleges these statements were made maliciously, so it is necessary to instruct you as to what is meant by malicious. We are talking here about what is known as actual malice. Now, actual malice may be proved directly or indirectly, meaning it is not something which someone can see, so it is not the kind of thing that some one witness could come in here and say I saw malice, so the only way it can be proved here is by some form of direct evidence or indirectly. That is the direct evidence would concern itself with an evil motive or intent, that is, that there being proof from which it could be concluded that there was an evil motive or intent on the part of the person making the statement or it may be proved by legitimate inference or inferences which may be drawn from all the facts and circumstances in the case. It is for you, the jurors, to say whether under all the facts and circumstances as shown by the evidence in this case that actual malice on the part of the defendant toward the plaintiff has been proved. You are to judge from all the evidence whether actual malice existed or not.

'I further instruct you that some statements that are made which would otherwise be slanderous are privileged. That is, the law recognizes these as privileged because they concern a matter of public interest and they were made to a person with a duty regarding that public interest.

'If you find that the defendant's statements were privileged, that privilege then is a complete defense just as truth would be.'

Plaintiff does not contend that these instructions are an accurate statement of the law. The trial court concluded, and we agree, that 'the jury was not properly instructed regarding the question of qualified privilege'. The instructions were inadequate in their treatment of 'malice.' The jury was told that malice was an 'evil motive or intent,' but the instructions did not explain, as discussed below, any of the various manifestations of an 'evil motive or intent' which may result in the loss of a qualified privilege. Moreover, although the jury was told to consider malice in connection with punitive damages, it was not instructed on the relationship of malice to the question of privilege.

Plaintiff contends that any errors in the instructions would not justify a new trial, as the verdict, which includes an award of punitive damages, indicates that the jury found...