Schlegel v. Ottumwa Courier, a Div. of Lee Enterprises, Inc., s. 96-1040

• Decision Date: 21 October 1998
• Docket Number: Nos. 96-1040,s. 96-1040
• Parties: 27 Media L. Rep. 1178 Richard R. SCHLEGEL, II and Jeri Schlegel, Appellants, v. The OTTUMWA COURIER, A DIVISION OF LEE ENTERPRISES INCORPORATED, and Russell R. Cunningham, Jr., Appellees.
• Court: Iowa Supreme Court

Page 217

585 N.W.2d 217

27 Media L. Rep. 1178

Richard R. SCHLEGEL, II and Jeri Schlegel, Appellants, v. The OTTUMWA COURIER, A DIVISION OF LEE ENTERPRISES INCORPORATED, and Russell R. Cunningham, Jr., Appellees.

Nos. 96-1040.

Supreme Court of Iowa.

Oct. 21, 1998.

Stephen D. Lombardi, of Lombardi Law Firm, Des Moines, for appellants.

Kasey W. Kincaid and Terri L. Combs of Faegre & Benson LLP, Des Moines, for appellees.

Considered by HARRIS, P.J., and LARSON, LAVORATO, NEUMAN, and ANDREASEN, ^* JJ.

LAVORATO, Justice.

A lawyer and his wife won substantial verdicts for compensatory damages against a newspaper publisher and editor-in-chief for incorrectly reporting that the lawyer had declared bankruptcy. In addition, the jury assessed punitive damages against the two defendants. The district court set aside the compensatory damage award as excessive and granted the defendants' motion for new trial. The court also granted the defendants' motion for judgment notwithstanding the verdict (JNOV) on the punitive damage award. The plaintiffs appeal from these rulings. They also challenge the district court's order barring certain evidence on retrial.

The defendants cross-appeal, contending that the district court should have granted their JNOV motion on the compensatory damage claim. The cross-appeal raises a number of issues. One of those issues is dispositive of this case: whether the plaintiffs produced sufficient evidence of "actual injury." We conclude the plaintiffs failed to produce such evidence and for that reason the district court should have sustained the defendants' motion for directed verdict and granted their motion for JNOV. We therefore affirm in part, reverse in part, and remand with directions.

I. Facts.

Richard R. Schlegel, II is a successful attorney in Ottumwa, Iowa. He was the Wapello County Attorney from 1983 through 1986. He also is a leader in the American Heart Association and is otherwise active in community affairs.

The Ottumwa Courier is a newspaper of general circulation in the Ottumwa area with 19,494 subscribed readers. Lee Enterprises owns the Courier. The Courier's staff includes, among others, editor-in-chief Russell Cunningham; regional editor, Mike Augspurger; and a clerk, Heather Guiter. (For convenience we refer to the Courier and Cunningham collectively as the Courier unless we state otherwise.)

On April 19, 1993, the Courier incorrectly reported that Richard had declared bankruptcy. The incorrect report appeared in the Courier's courthouse records section on an interior page. In fact, Richard represented the debtor. The Courier printed a correction on the front page of the next day's edition, apologizing for the error.

The error sprang from a misreading of an official declaration of bankruptcy. According to the Courier, Guiter typed the error. Although she could not recall typing Richard's name specifically, she was the only one on duty the night the information arrived.

II. Proceedings.

Richard and his wife, Jeri, sued the Courier and its editor-in-chief, Russell Cunningham. Richard claimed the paper defamed him causing him humiliation and damage to his reputation. Jeri claimed loss of consortium. Both sought punitive damages for willful and wanton misconduct.

At trial, several witnesses testified that they saw the incorrect bankruptcy notice, wondered as to its truthfulness, and never saw the front-page correction. All, however, acknowledged that they learned Richard had not filed for bankruptcy.

Richard testified about how the incorrect report affected him. Jeri testified she and Richard are not as socially active as they once were. "He has totally lost his sense of humor. He is ... a very, very angry man" and "he's not as easy to be with." According to her, "it's very difficult."

In addition to this testimony on compensatory damages, the Schlegels attempted to show punitive damages were appropriate. Among other things, the Schlegels introduced--over the Courier's strong objections--evidence of Regional Editor Mike Augspurger's substance abuse. In particular, Augspurger admitted to several operating while intoxicating convictions, which occurred before and after Richard's term as county attorney, and to a conviction for mailing a controlled substance. Through this testimony, the Schlegels were apparently attempting to suggest that Augspurger intentionally placed this incorrect entry in the paper because of his malice toward Richard as a former county attorney with a "tough-on-drugs" stance. There was no evidence that Augspurger related these convictions to Richard's tenure as county attorney. In its posttrial ruling, the district court ruled this evidence inadmissible on retrial because it was irrelevant and prejudicial and should have been rejected at trial.

The Schlegels also successfully introduced financial records of the Courier's owner, Lee Enterprises.

The jury awarded Richard a total of $230,000 in compensatory damages broken down as follows: impairment of reputation ($30,000), personal humiliation ($100,000), past mental anguish and suffering ($70,000), and future mental anguish and suffering ($30,000). The jury also awarded Jeri $150,000 compensatory damages for loss of consortium.

In addition, the jury found that the Courier's actions amounted to "willful and wanton disregard for the rights of another" and assessed punitive damages in the amount of $2,000,000. However, the jury concluded that the Courier's actions were not specifically directed at Richard. See Iowa Code § 668A.1 (providing that if defendant's conduct is not specifically directed at the plaintiff, seventy-five percent of the award is to be paid to the state).

III. Scope of Review.

A JNOV must stand or fall on the grounds asserted in the motion for directed verdict. On appeal, we limit our review to those grounds. Johnson v. Dodgen, 451 N.W.2d 168, 171 (Iowa 1990).

When the district court considers a motion for JNOV, it must view the evidence in the light most favorable to the party against whom the motion is made. Id. The district court follows these same principles on a motion for directed verdict. Id. On our review, we consider the evidence in the same way, asking whether there was sufficient evidence to generate a jury question. Id.

Viewing the evidence in this manner, the district court must deny the motion for directed verdict or motion for JNOV if there is substantial evidence to support the claim or defense. Id. Without such evidence, a directed verdict or JNOV is appropriate. Id. Evidence is substantial if reasonable minds would accept it as adequate to reach a conclusion. Id.

IV. Sufficiency of the Evidence to Prove Actual Injury.

A. The parties' contentions. The Courier argues for JNOV on the compensatory damage issues on the ground that there was no substantial evidence of damage to reputation. Without such a showing, the Courier insists that a plaintiff in a defamation suit against a news media defendant cannot recover for hurt feelings alone. In support of this argument on its motion for directed verdict and again on its motion for JNOV, the Courier cited and relied heavily on Johnson v. Nickerson, 542 N.W.2d 506 (Iowa 1996), a case it relies on here.

In resistance to the motion for directed verdict, the Schlegels argued that libel per se was the standard to apply, meaning that damages were presumed. On appeal, the Schlegels take a different approach, arguing that they did prove damage to reputation.

B. Applicable law.

1. The law of defamation generally. The law of defamation includes the twin torts of libel and slander. Lara v. Thomas, 512 N.W.2d 777, 785 (1994); W. Page Keeton, Prosser & Keeton on the Law of Torts § 111, at 771 (5th ed.1984) [hereinafter Prosser & Keeton]. Libel is generally a written publication of defamatory matter, and slander is generally an oral publication of such matter. Prosser & Keeton § 111, at 771. Authorities agree that

[t]he law of defamation embodies the public policy that individuals should be free to enjoy their reputation unimpaired by false and defamatory attacks. An action for defamation or slander is based upon a violation of this right.

The gravamen or gist of an action for defamation is damage to the plaintiff's reputation. It is reputation which is defamed, reputation which is injured, and reputation which is protected by the law of defamation.

Defamation is an impariment of a relational interest; it denigrates the opinion which others in the community have of the plaintiff and invades the plaintiff's interest in the reputation and good name. A cause of action for defamation is based on the transmission of derogatory statements, not on any physical or emotional distress to plaintiff which may result. Defamation law protects interests of personality, not of property.

50 Am.Jur.2d Libel and Slander § 2, at 338-39 (1995).

Our own cases are consistent with this theme that defamation is based upon damage to the plaintiff's reputation. For example, in Johnson, we said that "[t]o recover in an action for defamation, a plaintiff must ordinarily prove some sort of cognizable injury, such as injury to reputation." 542 N.W.2d at 513; see also Lara, 512 N.W.2d at 785 (noting that "the gist of an action for libel or slander is the publication of written or oral statements which tend to injure a person's reputation and good name" ); Prosser & Keeton § 111, at 773.

Narrowing our discussion to libel, we note there are two types of libel: libel per se and libel per quod. Johnson, 542 N.W.2d at 510. Libel per se includes statements that have "a natural tendency to provoke the plaintiff to wrath or expose him to public hatred, contempt, or ridicule, or to deprive him of the benefit of public confidence or social intercourse." Id. (quoting Prewitt v. Wilson, 128 Iowa 198, 202, 103 N.W. 365, 367 (1905)). Some examples of libel per se statements include an attack on the integrity and moral character of a party or an...