Selby v. Savard, 15344

• Decision Date: 18 November 1982
• Docket Number: No. 15344,15344
• Citation: 134 Ariz. 222,655 P.2d 342
• Parties: Gordon F. SELBY, Appellee, Cross-Appellant, v. George SAVARD, Appellant, Cross-Appellee.
• Court: Arizona Supreme Court

Page 342

655 P.2d 342

134 Ariz. 222

Gordon F. SELBY, Appellee, Cross-Appellant, v. George SAVARD, Appellant, Cross-Appellee.

No. 15344.

Supreme Court of Arizona In Division.

Nov. 18, 1982.

Goldstein & Kingsley by Philip T. Goldstein, Phoenix, for appellee/cross-appellant.

Piatt & Livoni by William M. Piatt, Phoenix, for appellant/cross-appellee.

HOLOHAN, Chief Justice.

This case is before the court on cross-appeals. Appellant George Savard appeals from the superior court's judgment on a jury verdict of $150,000.00 actual and $350,000.00 punitive damages against him, and from the denial of his motion for new trial. Cross-appellant Gordon Selby appeals from the grant of a directed verdict in favor of the marital community composed of George and Jean Savard.

The events leading up to this action began in 1967, when Selby was serving as assistant superintendent of the liquor enforcement division of the Arizona State Department of Liquor License and Control. Savard owned and operated a resort at Parker Dam, Arizona. In March 1967, Savard telephoned Selby twice to complain about liquor violations and other improprieties allegedly occurring at a rival resort nearby. The last conversation ended on an acrimonious note, with Savard accusing Selby of failing to do his job and Selby hanging up on Savard.

Shortly after these calls, Selby became aware that Savard was making defamatory remarks about him. Eventually Selby sued Savard for defamation and, in 1968, that suit was settled out of court with Savard's insurance company paying Selby the full policy amount, $4,500.00. Savard's attorney in that action, Patrick Eldridge, testified at trial that he had investigated the charges Savard was making, found them to be "completely without merit", and told Savard so. Eldridge advised Savard to settle and warned him "that he should not go around and repeat any of these allegations ... and that he should refrain from any future conduct of that type, otherwise there would be future litigation."

Savard nevertheless continued to make accusations against Selby which included allegations of criminal conduct of the most serious nature.

In 1970, after the enforcement division of the liquor department had been merged into the Department of Public Safety (DPS), Savard contacted a DPS officer, Carl Needham, and made many of the same accusations against Selby, supported by "several large containers of documents." Among these documents was an affidavit by one Wayne Davis, alleging that Davis had investigated Selby on Savard's behalf and had found that Selby had been involved in many illegal activities. Needham conducted a full DPS investigation of the materials provided by Savard and testified that he informed Savard that he had not found any substance to any of the allegations.

Needham also testified that in 1970 he spoke with a special agent of the Federal Bureau of Investigation (FBI). The FBI agent told Needham that Selby had applied for training at the national FBI academy and that the FBI had conducted a comprehensive background investigation on Selby. Because the FBI had become aware of the rumors, Selby was investigated more intensely than the average candidate; still, the agent told Needham that he had never seen a cleaner investigation.

Savard continued to spread accusations against Selby. Finally, in January, 1976, Savard made the publication which is the subject of this action. Savard sent his accountant, Ralph McHenry, to deliver a valise full of documents to Vernon L. Hoy, the new DPS director. These documents contained the same types of accusations against Selby, including the affidavit of Wayne Davis. Mr. Hoy testified that he turned the documents over to a subordinate officer, Lt. Tabor, who investigated most of the allegations therein and found them all to be either "unfounded," i.e., proven untrue, or "not sustained," i.e., unable to be proved or disproved.

Late in 1975 Selby's job performance and health began to deteriorate. He attributed his problems to the strain caused by Savard's accusations, although he presented no medical testimony to that effect. Selby began seeing a psychiatrist in January 1976 and also received treatment for high blood pressure. On April 7, 1976, Selby was demoted from major to captain due to poor job performance. Mr. Hoy explained that, while he had received the report of the Tabor investigation on April 5 or 6, he had decided to demote Selby even before receiving the papers from McHenry. Hoy had merely waited for the report to be completed before deciding what new assignment Selby should receive after his demotion.

Selby's job performance continued to decline. His supervisor, William Arthur, testified that he had discussed the problems with Selby, who had indicated that he was preoccupied with the problems with Savard, causing him to lose his ability to concentrate and lose interest in his duties. On the advice of John B. Miller, M.D., D.P.S. Medical Advisor, Selby began taking periods of sick leave to alleviate the mental and physical symptoms of stress that he was suffering. Selby's last day of work was October 11, 1977, and he officially retired in December of that year. Selby filed the complaint in this action on February 20, 1976, but the case did not go to trial until January, 1979. After the close of plaintiff Selby's evidence, the trial judge granted Savard's motion for directed verdict in favor of the marital community of George and Jean Savard. After all the evidence was presented, the trial judge directed a verdict for plaintiff Selby. The jury awarded Selby $150,000.00 in general damages and $350,000.00 in punitive damages.

PROPRIETY OF DIRECTED VERDICT ON LIABILITY

Savard attacks the directed verdict against him on three grounds. First, he correctly states that because Selby was a law enforcement official at the time the publication was made, Selby was a "public official." Rosenblatt v. Baer, 383 U.S. 75, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966); Rosales v. City of Eloy, 122 Ariz. 134, 593 P.2d 688 (App.1979). Thus, for Selby to recover for defamation, he must prove by clear and convincing evidence that Savard published false statements with " 'actual malice'--that is, with knowledge that it was false or with reckless disregard of whether it was false or not." New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 726, 11 L.Ed.2d 686, 706 (1964); Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). In St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323, 1325, 20 L.Ed.2d 262, 267 (1968), the Court stated that the "reckless" standard is not measured by a "reasonableness" test: "There must be sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication." Since the defendant's subjective state of mind is at issue, Savard contends that "[t]he finder of fact must determine whether the publication was indeed made in good faith." Id. 390 U.S. at 732, 88 S.Ct. at 1326, 20 L.Ed.2d at 267. Savard concludes that the trial judge exceeded her discretion in taking the question of whether he acted in good faith or with actual malice from the jury's consideration.

Second, Savard argues that a communication to a law enforcement official, concerning the commission of a criminal offense or otherwise affecting an important public interest, is conditionally privileged. Restatement (Second) of Torts § 598 (1977); S.H. Kress and Co. v. Self, 22 Ariz.App. 230, 526 P.2d 754 (1974). Once the defendant shows that a privilege may apply, the burden shifts to the plaintiff to show that the privilege was abused by publication with "actual malice." Restatement (Second) of Torts § 600 (1977); Phoenix Newspapers, Inc. v. Choisser, 82 Ariz. 271, 312 P.2d 150 (1957); Ross v. Duke, 116 Ariz. 298, 569 P.2d 240 (App.1977). Savard contends that he presented sufficient evidence to raise the presumption that the publication was conditionally privileged and that the court erred in directing the verdict when the question of malice should have been left to the jury.

Third, Savard states that a directed verdict for the plaintiff is justified only if there is no evidence which would justify the jury in finding in the defendant's favor, viewing the evidence in the light most favorable to the defendant and drawing all reasonable inferences from the evidence in defendant's favor. Weber v. Roosevelt Water Conservation Dist., Maricopa County, 126 Ariz. 509, 617 P.2d 17 (1980), Byrns v. Riddell, Inc., 113 Ariz. 264, 550 P.2d 1065 (1976); Whitly v. Moore, 5 Ariz.App. 369, 427 P.2d 350 (1967). Savard argues that his allegations of his belief in the truth of the publication precluded the court from directing a verdict against him.

We find that because Selby is a "public official" under the New York Times standard, the issue of privilege does not raise any issue different from that raised by the New York Times decision itself, namely, had Selby established by clear and convincing evidence that the publication was made with "actual malice"? If so, the privilege was overcome and Selby met his burden of proving defamation. This same requirement of showing of actual malice applies to Savard's claim of conditional privilege for information furnished to law enforcement officers. We have considered the evidence before the trial court when the motion was granted, and it supports the action taken. It is true that "[t]he proof of 'actual malice' calls a defendant's state of mind into question, [citation omitted] and does not readily lend itself to summary disposition." Hutchinson v. Proxmire, 443 U.S. 111, 120 n. 9, 99 S.Ct. 2675, 2680 n. 9, 61 L.Ed.2d 411, 421 n. 9 (1979). But it is equally true that a defamation defendant cannot escape liability merely by alleging subjective belief in the truth of the matter published. "[P]roof of the necessary state of mind could be in the form of objective circumstances...