Thurston v. Ballinger, WD
| Decision Date | 12 July 1994 |
| Docket Number | No. WD,WD |
| Citation | 884 S.W.2d 22 |
| Parties | Virgil THURSTON and Bonnie Thurston, Appellants, v. J.W. BALLINGER and Bank of Cairo and Moberly, Respondents. 48069. |
| Court | Missouri Court of Appeals |
Charles W. Armbruster, III, Edwardsville, IL, for appellants.
Gregory J. Bien, Topeka, KS, for respondent Ballinger.
John H. Marshall, Clayton, for respondents Bank of Cairo and Moberly.
Before BERREY, P.J., and KENNEDY and ELLIS, JJ.
Virgil and Bonnie Thurston appeal from summary judgments and dismissals suffered in a damage suit they filed against J.W. Ballinger, III and the Bank of Cairo and Moberly. The Thurstons claimed in their amended petition that Ballinger had slandered Virgil Thurston in a statement given by Ballinger to an FBI agent in the course of a criminal investigation, as a result of which the Thurstons were damaged. Bonnie joins Virgil as a plaintiff because she was a co-owner with Virgil of a restaurant business, whose profits are alleged to have suffered as a result of Ballinger's slander.
The amended petition was in 11 counts. Ten of the counts were against Ballinger and against the Bank as Ballinger's principal. They sounded in tort, each of them alleging Ballinger's slander as its basis. An eleventh count was against the Bank only, and sought damages for breach of commitment to lend the Thurstons $600,000.
In a summary judgment appeal, we determine whether there was any genuine issue of material fact left unresolved by the record before the trial court, and if the party to whom judgment was granted was entitled to judgment as a matter of law. Rule 74.04(c). Cooper v. Missouri Bd. of Probation and Parole, 866 S.W.2d 135, 137 (Mo. banc 1993). In this case, the trial court had before it only the pleadings in the case, and the deposition of Virgil Thurston. No affidavits were filed by either party, except by the Bank in connection with Thurston's breach of contract count (Count 11). See Rule 74.04(e). For purposes of review, we take as true the evidence favorable to the party against whom summary judgment was granted. We do not consider whether any fact is true or not, but only whether there is an issue as to a fact which is material. Id.
The background facts are as follows:
Ballinger was president and chief executive officer of the Bank of Cairo and Moberly. Thurston, who was in the restaurant business, was a director of the Bank. The Bank had committed to lend Thurston $600,000 to be used in the construction of a new restaurant. This sum, when added to an existing indebtedness of $60,000-65,000, exceeded the Bank's lending limit to Thurston by approximately $250,000. The First National Bank of St. Joseph agreed to participate in the loan with the Bank of Cairo and Moberly to the extent of $250,000. When construction of the restaurant was in its final stages, Ballinger on one Saturday told Thurston that the St. Joseph bank had reneged on $75,000 of its agreed participation. Thurston was therefore $75,000 short of urgently needed cash with which to complete construction.
Ballinger asked Thurston if he had a friend who could lend him the needed funds. Thurston replied he would not ask a friend for a loan of this kind. Ballinger asked Thurston if there was anybody to whom the Bank would be willing to lend the money. Thurston mentioned his daughter, who was 20 or 21 years old, but added: "J.W., you know and I know she does not have the collateral to borrow that kind of money." Ballinger agreed.
Thurston then mentioned his half-brother, whose name was Carl Campbell. Thurston explained in his deposition that he normally referred to Campbell as his brother, but, in explanation of his different last name, he told Ballinger Campbell was his half-brother. Ballinger asked what type of collateral Campbell had. Thurston said Campbell had a farm.
Ballinger seems tentatively to have approved the loan to Campbell, for Thurston contacted Campbell and asked him and his wife, Kathryn, who lived near Columbia, to come talk with him. Campbell and his wife agreed to borrow $80,000 and lend it to Thurston. On Sunday afternoon, the Campbells and Thurston and his wife met Ballinger at the Bank. Ballinger prepared all the loan papers representing an $80,000 loan from the Bank to the Campbells. It was a demand note, and was not secured by a deed of trust on the farm. Ballinger also prepared a promissory note from the Thurstons to the Campbells in the same amount.
The proceeds of the Bank's loan to Campbell were mailed to Campbell in the form of a check. Campbell endorsed the check and returned it to the bank. It was deposited to Thurston's credit.
In the course of a later bank examination by regulatory authorities, the examiners came upon the foregoing transaction. Thinking it had the characteristics of an illegal "nominee loan," they turned it over to the FBI for investigation. In the course of that investigation, Ballinger made the statements to FBI Special Agent Clapp which Thurston alleges were defamatory. Those statements were the following, as set forth in Thurston's petition:
A. "Thurston was not seeking a loan from [the Bank of Cairo and Moberly] as he knew what the legal lending limit of the bank was and he knew he could not borrow any additional money as he had reached that legal lending limit;"
B. "[O]n February 13, 1984, Virgil Thurston ... asked Ballinger to consider giving an $80,000.00 loan to Campbell ... [and] that Thurston did not tell [me] nor did [I] know that Campbell was related to Thurston ... and [I] knew nothing about [Campbell];"
C. "Thurston ... told [me] that the money was needed for Campbell's farming operation ... [and] the loan had ... been recommended by Thurston;"
D. "Thurston told [me] about September 1984, ... that the loan would be his responsibility ... as Campbell had loaned him the $80,000...."
The true facts, according to Thurston's deposition testimony, were as stated above, i.e., that Thurston had told Ballinger that Carl Campbell was his half-brother; that he had not represented to Ballinger that the proceeds of the loan to Campbell were needed for Campbell's farming operations, but that Ballinger knew that the proceeds were to be immediately re-lent by the Campbells to Thurston; and that Thurston had not recommended to Ballinger that he make the Campbell loan.
The nominee loan device to evade the loan ceiling was in violation of banking laws and regulations. On February 1, 1989, Ballinger and Thurston were jointly indicted in a four-count indictment in Federal Court.
After Thurston was indicted, Thurston learned for the first time of Ballinger's statements to the FBI, which are now claimed to have been false and defamatory. The fact of the indictment was publicized in and around Moberly, and Thurston says his restaurant business, which had theretofore been increasing or staying the same, began to fall off markedly. Thurston attributes the loss of business to Ballinger's defamation. He claims people of Moberly, in their selection of a place to dine, are influenced by the good or bad reputation of the proprietor, and are inclined not to patronize a person of bad reputation. He claims also to have suffered emotional distress as a result of the defamation.
Thurston later pleaded guilty to a misdemeanor and the felony charges were dropped. Ballinger was tried and convicted on three felony counts.
The eleven counts of plaintiffs' amended petition charged Ballinger and the Bank, as Ballinger's principal, with: slander per se, slander per quod, tortious interference with contractual relations, outrageous conduct, fraud, and abuse of process. The trial court dismissed or granted summary judgment against plaintiffs in favor of defendants on all counts.
An additional count of the petition (Count 11) charged the Bank with breach of contract, in failing to honor its commitment to make a $600,000 loan to Thurston. The trial court granted summary judgment on this claim, also.
Plaintiffs have appealed from the summary judgment or judgment of dismissal as to all counts except Count 9, denominated "Fraud."
Ballinger and the Bank put forward the following five points, each of which, they say, is fatal to Thurston's case:
1. That the Thurston claim is barred by the two-year statute of limitations, section 516.140, RSMo 1986.
2. That Ballinger's statements, if not true in all particulars, were substantially true.
3. That Ballinger's statements, because they did not impute criminal conduct to Thurston, were not slanderous per se;
4. That Thurston's petition does not charge slander per quod because it does not sufficiently allege special damages;
5. That Ballinger's statements to the FBI agent were qualifiedly privileged, and were therefore not actionable unless made with malice.
Ballinger goes ahead to say that his false statements were made without malice.
At the threshold, we take up the question whether to apply to this case the slander per se/slander per quod analysis invited by numbers 3 and 4 above.
The distinctions between slander per se and slander per quod have been abolished by Nazeri v. Missouri Valley College, 860 S.W.2d 303, 313 (Mo. banc 1993). Nazeri was handed down after the summary judgment in this case, and while the appeal was pending here. Ballinger argues that Nazeri should not be given retrospective application, but that we should apply the former slander per se and slander pro quod distinctions and rules in our decision in the present case.
Sumners v. Sumners, 701 S.W.2d 720 (Mo. banc 1985), gives the test by which to determine whether an overruling decision is to have retrospective effect. At the threshold, however, before the retrospective application of the decision becomes an issue, it must be determined that it "establish[es] a new principle...
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