Shallenberger v. Scoggins-Tomlinson, Inc.

• Decision Date: 09 September 1982
• Docket Number: INC,SCOGGINS-TOMLINSO,No. 2-581-A-156,2-581-A-156
• Citation: 439 N.E.2d 699
• Parties: Melvin R. SHALLENBERGER, d/b/a Century 21 Shallenberger Realtors, Appellant (Plaintiff Below), v., Ronald L. Tomlinson, Leroy Colter, Robert Roler, Carl Ellis, and James Slane, Appellees (Defendants Below).
• Court: Indiana Appellate Court

Page 699

439 N.E.2d 699

Melvin R. SHALLENBERGER, d/b/a Century 21 Shallenberger Realtors, Appellant (Plaintiff Below), v. SCOGGINS-TOMLINSON, INC., Ronald L. Tomlinson, Leroy Colter Robert Roler, Carl Ellis, and James Slane Appellees (Defendants Below).

No. 2-581-A-156.

Court of Appeals of Indiana,

Second District.

Sept. 9, 1982.

James W. Rozzi, Marion, for appellant.

Thomas J. Simmons, Kokomo, for appellees.

SULLIVAN, Judge.

Melvin R. Shallenberger d/b/a Century 21 Shallenberger Realtors (hereinafter, "Shallenberger") appeals the summary judgment in favor of the Appellees (Defendants below) on his amended complaint for defamation, Paragraph I, and "wrongful civil proceedings", Paragraph II. Shallenberger has raised the following issues for review:

I. Whether he was required to exhaust the remedies provided by the By-Laws of the Kokomo Board of Realtors before commencing litigation; and

II. Whether the Appellees were protected by a qualified privilege and if so, whether they abused the privilege so as to lose the benefit of its protection.

We affirm the summary judgment in favor of Appellees Colter, Roler, Ellis and Slane, and in favor of Appellees Scoggins-Tomlinson, Inc. and Ronald Tomlinson (hereinafter, "Tomlinson") on Paragraph II, and reverse the summary judgment on Paragraph I as to Tomlinson.

I.

All of the parties were members of the Kokomo Board of Realtors (hereinafter, "the Board") at the time of the events which led to the present appeal. On August 23, 1978, Tomlinson filed a written grievance with Kenneth Wooley, Chairman of the Board's Grievance Committee. The essence of Tomlinson's letter to Wooley was that Shallenberger, while representing the sellers of a parcel of real estate, disregarded a statement allegedly signed by potential purchasers represented by Scoggins-Tomlinson, and accepted another offer to purchase. Tomlinson's clients had earlier signed an agreement to purchase the property, contingent upon obtaining the necessary financing, and the statement which Shallenberger allegedly received and disregarded stated that the contingency had been removed, and asked that the abstract be ordered. Tomlinson's letter also accused Shallenberger of back-dating the acceptance of the other purchase agreement.

In his letter to Wooley, Tomlinson contended that Shallenberger had engaged in "gross unethical conduct," violated the Realtors' Code of Ethics and Standards of Practice, and his agency contract with the sellers, and committed fraud by back-dating the acceptance of a purchase agreement. Tomlinson urged the Board to investigate the charges and take immediate disciplinary action against Shallenberger.

Subsequently, Appellees Colter, Roler, Ellis and Slane, constituting the Professional Standards Committee of the Board (hereinafter, "the Committee") held hearings on the grievance and issued a ruling, placing Shallenberger on probation for one year. The Committee set forth its conclusions in a letter to Shallenberger dated November 22, 1978.

On April 9, 1979, Shallenberger filed a Complaint for Defamation and Wrongful Civil Proceedings against the Committee members, Ronald Tomlinson, and Gallery of Homes, Inc. Scoggins-Tomlinson, Inc. replaced Gallery of Homes as a defendant, and after his Amended Complaint was dismissed as to the Committee members, Shallenberger filed a second Amended Complaint on February 26, 1980. In Paragraph I, Shallenberger alleged that Tomlinson had written and caused to be published Exhibit A, the letter to Wooley, which contained the allegedly false and defamatory statements that:

"a. July 20, 1978 we delivered this statement to Shallenberger that had been signed by the purchasers,

b. and [Shallenberger] even committed a fraud by back-dating the acceptance of a purchase agreement." (Record at 87-88) (emphasis supplied). ¹

The first paragraph further alleged that the Committee had issued a secondary publication of the matters contained in Tomlinson's grievance by delivering to each director and executive board member of the Kokomo Board of Realtors a copy of Exhibit B (the Committee's letter to Shallenberger notifying him of its decision) "which reads in pertinent part as follows: ' .... That eliminating contingencies in this fashion is acceptable procedure in The Real Estate industry ....' " (Record at 88).

A second paragraph against Tomlinson for "wrongful civil proceedings" alleged that in initiating the grievance, Tomlinson had known that the accusations made against Shallenberger were false and that "said defamatory statements and the grievance leading to the civil proceedings before the Kokomo Board of Realtors, Inc., were wrongful ..." (Record at 89).

In his answer, Tomlinson denied all of the allegations of the complaint, and contended that he was acting under a qualified privilege when he filed the grievance against Shallenberger.

The Committee filed a Motion for Summary Judgment pursuant to Ind. Rules of Procedure, Trial Rule 56, with supporting affidavits by Elizabeth Lumbirt, Executive Officer of the Board, Glenn Shelton, Acting Secretary of the Board, and each Committee member. In her affidavit, Lumbirt stated that she had typed Exhibit B, the Committee's letter to Shallenberger, and was responsible for mailing copies of it to the parties to the grievance, Wooley, and members of the Committee, and that the Committee had never distributed any copies of the original grievance. Shelton's affidavit stated that no appeal of the Committee's decision had been filed with the Board. Affidavits of the Committee members established that neither the grievance nor the notice of the Committee's decision was distributed to any person other than the parties to the proceedings. Counter-affidavits were filed by Shallenberger and his wife, and Appellees' depositions were taken, published, and spread of record.

In its Memorandum in Support of Motion for Summary Judgment, the Committee contended that while it was unclear whether the secondary publication it had allegedly made was of the grievance or of its written decision, under either theory, the Committee had made no publication of a defamatory statement in that (1) Lumbirt's affidavit established that the Committee had made no publication of Tomlinson's grievance, and (2) its written decision was in no way defamatory. Furthermore, the Committee contended, even if it had distributed defamatory matter, it had a qualified privilege to do so. Summary judgment was entered against Shallenberger on both Paragraphs of the Complaint as to all defendants on November 20, 1980.

The standard of review on appeal from a summary judgment is whether the pleadings, affidavits, answers to interrogatories, responses to requests for admission, and depositions, when read in the light most favorable to the non-moving party, reveal any genuine issues of material fact, Henderlong Lumber Co., Inc. v. Zinn (4th Dist. 1980) Ind.App., 406 N.E.2d 310, and if not, whether the trial court correctly applied the law. State ex rel. Van Buskirk v. Wayne Township (4th Dist. 1981) Ind.App., 418 N.E.2d 234.

There is no requirement in T.R. 56 that the trial court specifically state the legal basis for granting summary judgment. Meier v. Pearlman (1st Dist. 1980) Ind.App., 401 N.E.2d 31, cert. denied 449 U.S. 1128, 101 S.Ct. 948, 67 L.Ed.2d 115; Ahnert v. Wildman (2d Dist. 1978) Ind.App., 376 N.E.2d 1182. However, as we noted in Ahnert, it would be an aid to appellate review if such procedure were followed, and if review is frustrated by the lack of a statement of reasons because the legal basis for summary judgment is not apparent from the record, we may remand to the trial court for such a statement. 376 N.E.2d at 1189.

While the trial court here did not specifically state the legal bases for granting summary judgment, the following "Findings of Fact" from the Judgment indicate the court's reasoning:

"H. Article VII, Section 4 of the By-Laws of the Kokomo Board of Realtors, Inc. issued November 11, 1977, provides, inter alia, 'In matters involving a charge of unethical conduct, ... (s)uch matters shall be initiated by the filing of written charges ... and shall not subject any person to liability therefore.' [sic]

I. Pursuant to the By-Laws of the Kokomo Board of Realtors, Inc. such written grievances were heard by the Professional Standards Committee, which consisted of defendants Leroy Colter, Robert Roler, Carl Ellis, and James Slane.

J. On November 22, 1978, the Professional Standards Committee issued to plaintiff its findings and conclusions with respect to the complaint made by defendant, Ronald L. Tomlinson.

K. That Section 5 of Article VII of the By-Laws, revised November 11, 1977, provides inter alia, that "The parties to the proceedings shall be given a copy of the opinion and decision."

L. The written findings and conclusions of the Professional Standards Committee of the Kokomo Board of Realtors, Inc. were mailed to plaintiff, Kenneth Wooley, Chairman of the Grievance Committee of the Kokomo Board of Realtors, Inc., Scroggins-Tomlinson, [sic] Inc., Dorothy Edwards Realtors, Inc., Robert Roler, James Slane, Joseph Penceek and Carl Ellis, all of whom were parties to the grievance proceedings and were not mailed to any other person.

M. That such opinion and decision of the Professional Standard Committee was physically mailed to the parties to the proceedings by Elizabeth Lumbirt, Executive Officer of the Kokomo Board of Realtors, Inc., at the direction of defendant, Leroy Colter, acting chairman of the Professional Standards Committee of the Kokomo Board of Realtors, Inc." (Record at 290-91).

These findings indicate that the trial court, in granting summary judgment as to Tomlinson, relied to some degree upon the provision in the Board's By-Laws shielding from liability those persons who file written charges of unethical conduct, and found summary judgment proper as to the Committee members because the Committee...