Williams v. Burns

• Decision Date: 07 June 1982
• Docket Number: Civ. A. No. 78-K-260.
• Citation: 540 F. Supp. 1243
• Parties: David G. WILLIAMS, Plaintiff, v. Thomas M. BURNS, Peter J. Wall and the Anschutz Corporation, Defendants.
• Court: U.S. District Court — District of Colorado

540 F. Supp. 1243

David G. WILLIAMS, Plaintiff, v. Thomas M. BURNS, Peter J. Wall and the Anschutz Corporation, Defendants.

Civ. A. No. 78-K-260.

United States District Court, D. Colorado.

June 7, 1982.

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Julius Glickman, Houston, Tex., Bruce Pringle, Baker & Hostetler, Denver, Colo., for plaintiff.

Jay L. Gueck, Englewood, Colo., for defendants.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

This is a diversity action. The plaintiff, David Williams, was president and sole shareholder of the Atchafalaya Workover Contractors Corporation and he wanted to sell certain drilling rigs and barges. The defendant, Thomas Burns, was the attorney for a potential buyer of the rigs and barges, the Anschutz Corporation. The plaintiff alleges that the defendant made false and malicious statements to the Anschutz Corporation's president, Phil Anschutz, indicating that the corporation should not buy the plaintiff's equipment and suggesting that the plaintiff was not conducting business in good faith. As alleged, the defendant's actual statements were:

a. "That these rigs were not owned by Mr. Williams and had been sold at the bankruptcy sale."

b. "The fraud was that Mr. Williams was going to get this $450,000 as a part of this transaction and put it in his own pocket to the detriment of about $400-600,000 worth of unsecured creditors who were going to get nothing."

c. "Good Lord, I have just found out that these drilling barges are subject to the bankruptcy court and that they have been sold by order of the bankruptcy court; and I have also found out there is a whole bunch of unsecured creditors in that bankruptcy."

d. "I don't understand what Williams is trying to do, but my advice as your attorney is to have no more dealings with him."

e. "That is the frosting for the cake."

f. "It looked to me like there was fraud."

g. "Leasco and the First National Bank of Chicago had bought them on February 10, 1977, on the courthouse steps."

In addition, the plaintiff alleges that the defendant made false and malicious statements to the plaintiff's bankruptcy lawyer, Warren Rush, impugning the plaintiff's business reputation and reputation for veracity. These statements, as alleged, were:

a. "He's a crook."

b. "He's trying to defraud the creditors."

c. "He lied to me."

d. "He's trying to screw the creditors."

The plaintiff alleges that both sets of the defendant's statements are actionable under the common law torts of slander, disparagement, tortious interference with contractual relations, tortious interference with a prospective business relation and breach of fiduciary duty.

This case is now before me on the defendant's motion for summary judgment pursuant to Rule 56(b) F.R.Civ.P. The defendant alleges that there are no triable facts on the plaintiff's slander and disparagement claims because: 1) The defendant's statements are absolutely privileged; 2) there is no "malice" by the defendant; 3) the statements are true; 4) the statements to Warren Rush were invited; 5) the statements are not actionable as slander; and 6) the plaintiff has not incurred any damages. The defendant further alleges that the tortious interference with contract claim is defective because there was no contract; the tortious interference with prospective relations claim is inadequate because the defendant was privileged to interfere with such relation; and that the breach of fiduciary duty claim is insufficient because the plaintiff and defendant were not in a confidential trust relationship.

For the reasons expressed in this opinion, the motion for summary judgment is granted in part and denied in part.

I. SLANDER AND DISPARAGEMENT

The defendant draws no distinction between the torts of slander and disparagement for the purpose of his motion for summary judgment. While these torts are similar, their purposes and elements are not identical. Accordingly, where appropriate, I will analyze these torts separately.

It is axiomatic that defamation which is oral is slander and that which is written is libel. Originally enforced to protect personal reputation, the law of defamation was extended several centuries ago to the protection of property through adoption of the doctrine of slander of title. Initially recovery in such an action was limited to falsehoods injurious to the ownership of land. More recently, courts have recognized recovery for injury to personal property and to any interference with the plaintiff's business resulting in some form of customer diversion. The word "disparagement" has been used to describe these various kinds of interference with commercial or economic relations through injurious falsehoods. Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co., 408 F.Supp. 1219, 1234 (D.Colo. 1976) Modf'd on other grounds 561 F.2d 1365 (10th Cir. 1977) cert. dism'd 434 U.S. 1052, 98 S.Ct. 905, 54 L.Ed.2d 805 (1978).

The elements of a cause of action for defamation (slander or libel) are: 1) A defamatory statement concerning another; 2) published to a third party;¹ 3) with fault amounting to at least negligence on the part of the publisher; and 4) either actionability of the statement irrespective of special damages or the existence of special damages to the plaintiff caused by the publication. See Restatement of the Law of Torts 2d section 558 (1979).² The elements of a cause of action for disparagement or injurious falsehood are: 1) a false statement; 2) published to a third party; 3) derogatory to the plaintiff's title to his property or its quality, or to his business in general or to some element of his personal affairs; 4) through which the defendant intended to cause harm to the plaintiff's pecuniary interest or either recognized or should have recognized that it was likely to do so; 5) which the defendant published with "malice;"³ and 6) special damages to the plaintiff resulting from the statement. See Rest.2d at sections 623A, 624; see also Prosser, The Law of Torts section 129. P. 919-922 (4th ed. 1971).

A. PRIVILEGE

The defendant's first argument is that all of his statements are protected by an attorney's absolute privilege to communicate with his clients. While privilege is an affirmative defense to both slander and disparagement actions, see Rest.2d at sections 585-595A, 635-650A, I am unaware of the existence of such an absolute privilege.⁴ Further, as previously mentioned I have already held that the defendant is protected by a qualified privilege for protecting the interests of others. Williams v. Burns, 463 F.Supp. 1278 at 1282-83. However, since such a privilege is qualified, it is defeasible upon a showing of malice. Id.; Walker v. Hunter, 86 Colo. 483, 489, 283 P. 48 (1929).

B. MALICE

The defendant further asserts that his supporting evidentiary materials conclusively establish his absence of malice. The defendant's sworn affidavit indicates that he made certain investigations about the plaintiff and received information from another attorney which suggested that the plaintiff had been making representations regarding the proposed transaction. While the defendant's evidentiary materials are persuasive and the plaintiff has failed to come forward with counter-affidavits and evidence, summary judgment on this point is, nevertheless, improper.

When a moving party's affidavit raises subjective questions such as motive, intent or conscience, there may have to be a trial even where the non-moving party fails to present counter-affidavits since cross-examination is the best means of testing the credibility of this type of evidence. Wright & Miller, Federal Practice & Procedure: Civil, section 2727, P. 534 (1973).

In Somers Construction Co. v. Board of Educ. for the So. Gloucester Country Regional High School District, 198 F.Supp. 732 (D.N.J.1961), the district judge denied the defendants' motion for summary judgment in an action with relevant facts that are virtually identical to those in the instant case. In Somers, the plaintiff was a contractor who sought to recover for tortious interference with a prospective business relation, against architects for their alleged malice in advising the board of education to deprive the plaintiff of a school construction contract. The defendants moved for summary judgment and attached affidavits in which the defendants "categorically denied" such malice and otherwise "effectively negated" the plaintiff's claims of malice. Id. at 739. Notwithstanding the plaintiff's failure to come forward with counter-affidavits, the district judge denied the defendants' motion. He stated:

When the fact sought to be established by an affidavit in support of a motion for summary judgment involves the state of mind or motive of a person ... summary judgment is particularly inappropriate and must be denied.

Id. Accordingly, the defendant's motion for summary judgment on this point is denied.⁵

C. TRUTH

The defendant also claims that all of his statements are true. In determining whether statements are true, the entire conversation or writing must be viewed as a whole. Prosser at section 111, P. 748. The plaintiff may not lift words or statements out of their context and the defamation contained in one statement may be negatived or explained away by what appears elsewhere. Id. Moreover, the defendant need not establish the literal truth of the statement; "it is sufficient to show that the imputation is substantially true, or as is often put, to justify the `gist' or the `sting' or the `substantial truth' of the defamation." Id. at section 116, P. 798.⁶

Further, a statement or statements may be a characterization of a person that expresses the maker's unfavorable judgment upon the conduct of that person. If this unfavorable comment implies the existence of facts that justify the terms in which he has described the person, it is the truth of those facts that must be proven to establish a truth defense. Rest.2d at 581A, Comment c, P. 236.

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