Walder v. Lobel

• Decision Date: 15 February 1985
• Citation: 488 A.2d 622,339 Pa.Super. 203
• Parties: , 23 Ed. Law Rep. 585 Robert J. WALDER, individually and jointly, and Joseph Walder, individually and jointly, and McCarrie Schools, Inc., Appellants, v. William LOBEL, individually and t/a National School of Health Technology and National School of Health Technology. Robert J. WALDER and Joseph Walder, individually and jointly, and McCarrie Schools, Inc. v. William LOBEL, individually and t/a National School of Health Technology and National School of Health Technology, Appellants.
• Court: Pennsylvania Superior Court

Page 622

488 A.2d 622

339 Pa.Super. 203, 23 Ed. Law Rep. 585

Robert J. WALDER, individually and jointly, and Joseph

Walder, individually and jointly, and McCarrie

Schools, Inc., Appellants, v. William LOBEL, individually and t/a National School of

Health Technology and National School of Health

Technology.

Robert J. WALDER and Joseph Walder, individually and jointly, and McCarrie Schools, Inc. v. William LOBEL, individually and t/a National School of

Health Technology and National School of Health

Technology, Appellants.

Superior Court of Pennsylvania.

Argued Aug. 22, 1984.

Filed Feb. 15, 1985.

Keith S. Erbstein, Philadelphia, for appellants (at 1108) and appellees (at 1114).

Jeremy T. Ross, Philadelphia, for appellants (at 1114) and appellees (at 1108).

Before McEWEN, OLSZEWSKI and HOFFMAN, JJ.

HOFFMAN, Judge:

Both parties have appealed from the lower court's April 7, 1983 order which granted defendants a new trial, but denied their motions for judgment n.o.v. and in arrest of judgment. For the reasons stated herein, we modify in part and affirm in part.

Plaintiffs, Robert J. Walder and Joseph Walder, are the owners and operators of plaintiff McCarrie Schools, Inc. (McCarrie School), a private dental technology school. Defendant William Lobel is the owner and operator of defendant National School of Health Technology (National School), a competing dental technology school. On August 30, 1973, plaintiffs filed a defamation action against defendants. After defendants filed preliminary objections to the complaint, plaintiffs filed an amended complaint. Defendants' preliminary objections to the amended complaint were sustained and, on July 15, 1977, plaintiffs filed a second amended complaint. On November 14, 1977, the lower court, per Judge Smith, dismissed defendants' preliminary objections to the first and second causes of action of the second amended complaint. ¹ Subsequently, defendants filed a motion for summary judgment based upon the legal insufficiency of the second amended complaint. The lower court, per Judge Chalfin, considered this motion a motion for judgment on the pleadings and denied it on June 10, 1982. Following a June 10-22 trial, the jury found defendants liable and awarded plaintiffs $500,000 in compensatory damages and $450,000 in punitive damages. On July 15, 1982, defendants filed motions for a new trial, judgment n.o.v., and arrest of judgment. The lower court, in an April 7, 1983 order and opinion, granted the motion for a new trial based upon an erroneous jury charge and an excessive verdict; the remaining motions were denied. These appeals followed.

Before turning to the parties' contentions, we must first examine the defamatory communications in question, namely several letters purportedly sent by students but actually sent by defendant Lobel to discredit plaintiffs. The "West" letter, dated January 22, 1973, was sent to the Veterans Administration (VA) in Philadelphia and ostensibly signed by Robert A. West, a veteran and graduate of McCarrie School. In the letter, West allegedly complained about the poor quality of the education which he had received at McCarrie School, his rejections by various dental labs based upon his schooling, and his inability to obtain employment. He also requested VA approval to take a course at National School "so that I may become employable." The "Wheeler" letters, dated January 5, 1973, were typed on National School stationery and ostensibly signed by Brenda Wheeler, a student at National School. The signatures on the two letters are different. In these letters, Wheeler allegedly claimed that McCarrie School representatives repeatedly called her to try to convince her to transfer to McCarrie School and told her that McCarrie School had more teachers, better equipment, and guaranteed job placement while National School had "lousy teachers." According to the letters, McCarrie representatives also told Wheeler that National School had been disqualified by the Board of Health. The "Jones" letters, dated December 13, 1972, were also typed on National School stationery and were ostensibly from Sandra Jones, a student at National School. One letter was signed; the other was unsigned. These letters described Jones' visit to McCarrie School, during which plaintiff Walder allegedly slandered rival schools, suggested to Jones a "dishonest" method of getting into the school free, called Lobel "a crook" and National School a "fly-by-night school" and a "little hole-in-the-ground," and bragged about McCarrie School. Jones also allegedly wrote that, when she next visited National School, "my faith in private schools was reaffirmed" because defendant Lobel only told her about the advantages and opportunities offered at National School and did not discuss any other school.

The "West" letter was received by the VA on January 24, 1973. (N.T. June 15, 1982 at 3.127). On March 2, 1973, the VA forwarded the letter to Dr. Joseph Gavenonis of the VA section of the Pennsylvania Department of Education in Harrisburg, which maintains an approved list of veterans' programs. (Id. at 3.130-3.131). Without state approval, private trade schools cannot enroll veterans. (Id. at 3.166, 3.173). Dr. Gavenonis then sent the letter to James Kiernan, an employee of the Department in Philadelphia, who investigated the charges by visiting McCarrie School and speaking with plaintiff Walder. Kiernan concluded that the complaint was groundless, and no further action was taken by the Department on the matter. (Id. at 3.166-3.172).

At trial, Robert West testified that he had neither prepared nor dictated the "West" letter, and that he had never seen the letter until his deposition was taken for this case. (Id. at 3.18, 3.23). He also testified that, after graduating from McCarrie, he immediately obtained a position at a dental lab which he held for four years and that he has been continuously employed thereafter. (Id. at 3.8-3.9). He stated that he visited National School subsequent to his graduation to explore the possibility of advanced training, picked National for that purpose solely because of its location, and signed some VA forms during that visit. (Id. at 3.9-3.12). Defendant Lobel testified at trial that West gave him the information contained in the letter when he met with West to discuss a course at National School. (N.T. June 11, 1982 at 2.43, 2.68-2.73). However, at his deposition, Lobel had stated that he first became aware of the "West" letter only after it became a part of this case and that he did not have any recollection of ever speaking to West. (Id. at 2.49, 2.53, 2.76). At trial, plaintiff Joseph Walder testified that, as a result of the "West" letter, he was compelled to appear before the VA Board of Inquiry sometime in 1973 to defend McCarrie School and that this was a "frightening experience." (N.T. June 16, 1982 at 4.84). He also testified that, if he had lost state approval, he would have lost 34% of his students and been effectively put out of business. (Id. at 4.73-4.77).

The "Wheeler-Jones" letters were sent to the Pennsylvania Association of Private School Administrators (PAPSA), a trade association of private schools to which both parties belong. PAPSA also provides auxiliary services to the National Trade and Technical School Association, which has the power to grant accreditation to such schools on a national level. Without accreditation, these schools could not get financial aid for their students. (Id. at 4.92). Plaintiff Joseph Walder was confronted with the "Wheeler-Jones" letters at a meeting of the PAPSA Board. Defendant Lobel was also present and used these letters to substantiate his charges of unethical practices on the part of plaintiffs. (Id. at 4.89-4.97). The Board questioned Walder for approximately one-and-a-half-to-two hours and then dismissed the case. (Id. at 4.97). At trial, defendant Lobel testified that these letters had been typed by one of his secretaries after Wheeler and Jones came to him and requested that they be written. (N.T. June 11, 1982 at 2.104-2.115, 2.146-2.147). Plaintiff Walder testified that all of the allegations contained in the letters were false. (N.T. June 16, 1982 at 4.98). Walder also testified that, as a result of the "Wheeler-Jones" letters, he became upset, frustrated, worried and could not function, N.T. June 16, 1982 at 4.98-4.99; he felt ridiculed and that his honesty had been unfairly questioned, N.T. June 17, 1982 at 5.47; and the income of McCarrie School substantially decreased and it lost its accreditation in 1975, N.T. June 17, 1982 at 5.46-5.47.

Also at trial, Bernard Bernstein, a National School employee in advertising and public relations, N.T. June 15, 1982 at 3.62, identified the letters in dispute as similar in "language" and "tone" to other letters he had been given by defendant Lobel to edit. (N.T. June 15, 1982 at 3.64-3.79). He also testified that, at Lobel's request, he had edited the "West" letter although he had never met West himself. (Id. at 3.66-3.67).

Plaintiffs challenge the order granting a new trial, arguing that the lower court erred in finding that (1) the jury charge in question was erroneous and (2) the damages award was excessive. On June 22, 1982, the court charged the jury regarding the burden of proof on the issue of the truth or falsity of the communications in dispute, as follows:

Also, the defendants have the burden of establishing the truth of the communications which are claimed to be defamatory or libelous.

The defendant has the burden of proving the truth. If the defendant proves that they are true, they are not libelous.

* * *

* * *

The defendant, Mr. Lobel and the National School have the burden of proving that these allegations in those statements were true.

(N.T. June 22, 1982 at 8.26-8.27). In considering defendants' post-trial motions, the court below determined that these instructions were incorrect, relying upon Dunlap v....