Stuempges v. Parke, Davis & Co.

• Decision Date: 03 July 1980
• Docket Number: No. 49951.,49951.
• Citation: 297 NW 2d 252
• Court: Minnesota Supreme Court
• Parties: Neil STUEMPGES, Respondent, v. PARKE, DAVIS & COMPANY, Appellant.

297 N.W.2d 252 (1980)

Neil STUEMPGES, Respondent, v. PARKE, DAVIS & COMPANY, Appellant.

No. 49951.

Supreme Court of Minnesota.

July 3, 1980.

Faegre & Benson, James M. Samples, and John P. Borger, Minneapolis, for appellant; Edward J. Gall, Morris Plains, N. J., of counsel.

Chestnut & Brooks, Karl L. Cambronne, and Thomas H. Graham, Minneapolis, for respondent.

Heard, considered and decided by the court en banc.

SHERAN, Chief Justice.

This is an appeal by Parke, Davis & Company challenging a jury verdict that plaintiff-respondent Neil Stuempges had been defamed by Parke Davis employees and its award of $17,250 for actual pecuniary loss, $10,500 in compensatory damages and $10,000 in punitive damages. We affirm.

Viewing the facts in the light most favorable to the prevailing party, as we must do on appeal, Blasing v. P. R. L. Hardenbergh Co., 303 Minn. 41, 47, 226 N.W.2d 110, 114 (1975), they can be stated as follows: Parke Davis, a pharmaceutical manufacturer, employed Neil Stuempges as one of its Minneapolis sales representatives for sixteen years from 1958 until February 25, 1974, when it asked him to resign or be fired. During the first fifteen years of his employment, Stuempges had never been disparaged for his lack of ability as a salesperson and had even received commendations over the years for his outstanding behavior. In the period from 1969 through 1973, for example, Stuempges won awards for his sales performance in promoting specific drugs. One of the awards he received in 1973 was presented by the president of the company and involved as a prize a free trip to the Bahamas. He was also often asked to train new salespersons in how to call on physicians and retailers.

In July, 1973, Robert Jones became the new district manager of the Minneapolis area in which Stuempges' sales territory was located. From the beginning, they clashed in their approaches to a number of issues. Jones felt that Stuempges incorrectly "sold on the basis of friendship" rather than using planned presentations, which Stuempges rejected as "canned." Stuempges refused to conduct a drug survey instituted by Jones because he believed that reviewing prescription records on file with pharmacies was an unethical invasion of patients' privacy. There was also friction between them regarding the change in Stuempges' sales territory and Stuempges' refusal to set what Jones considered to be sufficiently high goals for his sales performance.

On February 25, 1974, at Jones' request, Stuempges met with him and Donald Burgett, Jones' immediate supervisor. At this meeting Stuempges was asked to resign and was promised a good recommendation if he did so. If he refused to resign, however, Jones told him that he would be "blackballed" in the industry. Shortly thereafter, Stuempges submitted his resignation.

On March 5, 1974, Stuempges sought assistance in finding another job through Sales Consultants, Inc., an employment agency specializing in sales personnel. He was interviewed by Robert Hammer, at which time he listed Parke Davis as his most recent employer and Jones as his most recent supervisor and gave permission for Sales Consultants to check his references at Parke Davis. At this meeting Hammer told him that he "was a terrific piece of flesh to sell, had a terrific sales record, and there would be no problems whatsoever in placing him in a similar position."

Shortly after Stuempges left, Hammer called Jones for a reference. Jones told Hammer that Stuempges was a poor salesperson and was not industrious and that he was fired because he sold on friendship, would not get products out, was hard to motivate and could not sell. He concluded their conversation by telling Hammer that Stuempges did not belong in sales. As a result of what Hammer characterized to Stuempges as the worst recommendation he had ever received, he told Stuempges that he would not try to place him.

When Jones' superiors at Parke Davis heard about his conversation with Hammer, they attempted to rectify the situation. A few weeks after the fateful conversation Hammer received a call from Robert Luchsinger, the Parke Davis regional manager who told him to discard Jones' reference check and promised that, if further references were needed for Stuempges, Luchsinger would provide excellent ones. Another former supervisor of Stuempges also called Hammer and volunteered a good reference. Nevertheless, Hammer continued to refuse to find potential employment for Stuempges.

In July, 1974, Stuempges took a franchise dealership for American LaFrance fire equipment. He was paid on straight commission and did not begin to derive "net income" from this job until July, 1975.

In June, 1974, Stuempges initiated this defamation action. The jury trial took place between January 8 and January 16, 1979, when the issues of fact were submitted to the jury upon special verdict. The jury returned a verdict for plaintiff, and the court awarded him judgment in the amount of $37,750. Defendant sought a judgment notwithstanding the verdict or a new trial, and it is from the order denying these motions that it appeals.

The following issues are presented by this appeal:

1. Were appellant's statements non-defamatory because they were true?

2. Were the statements qualifiedly privileged and thus not actionable?

3. Did the trial court correctly instruct the jury on the definition of malice?

4. Were the damage awards proper?

1. The elements of a common law defamation action are well settled. In order for a statement to be considered defamatory it must be communicated to someone other than the plaintiff, it must be false, and it must tend to harm the plaintiff's reputation and to lower him in the estimation of the community. Restatement (Second) of Torts §§ 558-559 (1977); W. Prosser, Handbook of the Law of Torts § 111 at 739 (4th ed. 1971). Slanders affecting the plaintiff in his business, trade, profession, office or calling are slanders per se and thus actionable without any proof of actual damages. Anderson v. Kammeier, 262 N.W.2d 366, 372 (Minn.1977); W. Prosser, supra, § 112 at 754. Truth, however, is a complete defense, and true statements, however disparaging, are not actionable.

Although Jones' words to Hammer clearly related to Stuempges' reputation in his profession, Parke Davis contends that they were not slanderous because substantially true.¹ It points to evidence in the record that Stuempges sold on the basis of friendship, that he had poor sales results, that his sales record was poor or average as compared to others', that he was not industrious and was hard to motivate, and that he should not be in sales. Stuempges' version of the story, however, suggested that he was, in fact, a good salesperson and that Jones' characterization of his performance was false. Stuempges introduced evidence that during his sixteen years of employment at Parke Davis he had received various commendations for his competence as a salesperson² and that he had never been disparaged for lack of sales ability prior to the arrival of Jones. Stuempges further testified that at the meeting held on February 25, 1974, both Jones and Burgett told him that he would be given a good recommendation to potential employers if he resigned as requested. Evidence was also introduced that, subsequent to the damaging telephone conversation between Jones and Hammer, Luchsinger and possibly Burgett told Hammer that they would provide a favorable recommendation for Stuempges and that he should disregard what Jones had said. Finally, there are indications in the record that Jones himself acknowledged the falsity or at least distortion of his statements to Hammer. The jury accepted Stuempges' version and found the statements made by Jones to Hammer to be false.

In reviewing jury verdicts, we permit ourselves only a limited role. All testimony must be considered in the light most favorable to the prevailing party, Blasing v. P. R. L. Hardenbergh Co., 303 Minn. 41, 47, 226 N.W.2d 110, 114 (1975): Krengel v. Midwest Automatic Photo, Inc., 295 Minn. 200, 204, 203 N.W.2d 841, 844 (1973), and a verdict will only be disturbed if it is "manifestly and palpably contrary to the evidence." Carpenter v. Mattison, 300 Minn. 273, 276, 219 N.W.2d 625, 629 (1974); Young v. Hansen, 296 Minn. 430, 433, 209 N.W.2d 392, 395 (1973). Review is even more limited when the jury verdict must consider the demeanor of the witnesses. Gibeau v. Mayo, 280 Minn. 170, 175, 158 N.W.2d 589, 592 (1968).

Guided by these principles, we have no choice but to uphold the jury's verdict. There was certainly sufficient evidence to justify its conclusion that, when Jones and Burgett told Stuempges they would give him a good recommendation, they did so because they felt he deserved one. Similarly, the jury was entitled to believe that Luchsinger and Burgett told Hammer to ignore Jones' assessment because it was incorrect.

2. Parke Davis also argues that Jones' statements to Hammer are not defamatory because they were conditionally privileged. Thus, even if the statements were slanders per se, by pleading and proving the existence of a conditional privilege, it has rebutted the presumption of common law malice. McBride v. Sears, Roebuck & Co., 306 Minn. 93, 96-97, 235 N.W.2d 371, 374 (1975).

Ever since Hebner v. Great N. Ry., 78 Minn. 289, 292, 80 N.W. 1128, 1129 (1899), the following have been the elements and effects of conditional privilege in Minnesota:

The law is that a communication, to be privileged, must be made upon a proper occasion, from a proper motive, and must be based upon reasonable or probable cause. When so made in good faith, the law does not imply malice from the communication itself, as in the ordinary case of libel. Actual malice must be proved, before there can be a recovery, and in the absence of such proof the plaintiff cannot recover.

Other jurisdictions take a similar position. See W. Prosser, supra, § 15 at 786. See also Houston...