Oscar Vaadeland, Appellant, vs. Independent School District No. 309, Respondent, Forum Communications Company, Respondent.

STATE OF MINNESOTA
 IN COURT OF APPEALS
 C3-99-152

Oscar Vaadeland,
Appellant,

vs.

Independent School District No. 309,
Respondent,

Forum Communications Company,
Respondent.

 Filed August 3, 1999
 Affirmed
Schultz, Judge[*]
 Concurring specially, Anderson, Judge

Hubbard County District Court
File No. CX97590

John E. Valen, P.O. Box 1105, Walker, MN 56484 (for appellant)

Michael T. Rengel, Pemberton, Sorlie, Rufer & Kershner, P.L.L.P., P.O. Box 866, Fergus Falls, MN 56538-0866 (for respondent ISD No. 309)

Steven A. Johnson, Vogel, Weir, Bye, Hunke & McCormick, Ltd., P.O. Box 1389, Fargo, ND 58107 (for respondent Forum Communications Company)

Considered and decided by Anderson, Presiding Judge, Kalitowski, Judge, and Schultz, Judge.

 U N P U B L I S H E D   O P I N I O N

 SCHULTZ, Judge

Appellant challenges the district court's order of summary judgment in favor of both respondents on appellant's action for defamation. Appellant argues that neither respondent was entitled to the qualified privilege that justified summary judgment. We affirm.

 FACTS

On January 21, 1997, respondent Independent School District No. 309 (school district) held a school board meeting. As part of that public meeting, respondent school district's then business manager, James Thorne, reported on the status of steps being taken following an audit adjustment of the school district's financial records.

Thorne prepared a written report for the meeting, which the school superintendent distributed to Lu Ann Hurd-Lof, a newspaper reporter who attended the public meeting. Thorne's written report listed appellant Oscar Vaadeland's name and the number $7,721 under the heading "amounts to be collected." The written report indicated that this reflected an overpayment of appellant's health insurance premiums by respondent school district. Thorne completed the report shortly before the January school board meeting, after the audit adjustment of the school district's financial records.

Thorne, in his deposition, characterized the report as a "working document" that only reflected the state of Thorne's investigation at that time. This is supported by Thorne's statements at the school board meeting that the "$7,000.00, * * * that's going to be a questionable one." And, when asked about "this last one" (appellant's name was last on the list of amounts to be collected), Thorne responded, "That's, that's going to be open to some negotiation." At another point, Thorne mentioned that appellant's purported debt is "questionable."

At the meeting, Thorne also stated that "in the one case we'll take it to small claims court," but he did not identify which debt was "the one." Later, Thorne, in his deposition, identified a debt owed by another former employee as "the one case" to which he had referred.

It is undisputed that, upon further investigation, appellant did not owe respondent school district any money.

Hurd-Lof, having heard what transpired at the meeting and seen the written report, wrote the following paragraph, which was printed by respondent Forum Communications Company (publisher) in the Park Rapids Enterprise:

The district will most likely have to take two former employees to court in an effort to collect money they owe the district, Thorne said. Jerry Pohl, former maintenance supervisor, owes $5,495; Oscar Vaadeland, former elementary teacher, owes $7,721, according to Thorne's report.

Appellant filed suit against respondents for defamation because he did not owe respondent school district any money and he felt the article made him look like a "deadbeat." The district court granted respondents' motions for summary judgment on the basis that each had a qualified privilege. Judgment was entered and this appeal followed.

D E C I S I O N

In reviewing summary judgment, this court must consider whether there was a genuine issue of material fact and whether the movant was entitled to judgment as a matter of law when all of the evidence is viewed in the light most favorable to the party against whom judgment was entered. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

A defamatory statement is not actionable if conditionally privileged. Hunt v. University of Minn., 465 N.W.2d 88, 92 (Minn. App. 1991). There is a qualified privilege for statements made by a public employee in the course of his duties. Peterson v. Steenerson, 113 Minn. 87, 89-90, 129 N.W. 147, 148 (1910). Similarly, "[n]ewspapers have a qualified privilege when making a fair and accurate report of public records." Jadwin v. Minneapolis Star & Trib. Co., 390 N.W.2d 437, 441 (Minn. App. 1986) (citing Time, Inc. v. Firestone, 424 U.S. 448, 455-57, 96 S. Ct. 958, 965-66 (1976); Nixon v. Dispatch Printing Co., 101 Minn. 309, 112 N.W. 258 (1907)).

A qualified privilege will be lost if the plaintiff can prove that a defamatory statement was made with malice. Bol v. Cole, 561 N.W.2d 143, 150 (Minn. 1997). Malice in the defamation context is shown where a defamatory statement was made "from ill will and improper motives, or causelessly and wantonly for the purpose of injuring the plaintiff." McKenzie v. William J. Burns Int'l Detective Agency, 149 Minn. 311, 312, 183 N.W. 516, 517 (1921). Appellant concedes that neither Thorne nor Hurd-Lof made their statements with any ill will towards him. Thus, respondents did not abuse any privilege to which they may be entitled. See Otto v. Charles T. Miller Hosp., 262 Minn. 408, 413, 115 N.W.2d 36, 39 (1962) (plaintiff must prove actual malice to defeat qualified privilege).

 I.

  To be protected from defamation claims by a qualified privilege, respondent school district had to have spoken at a proper occasion, with a proper motive, and had legitimate grounds for making the statement. Bauer v. State, 511 N.W.2d 447, 449 (Minn. 1994); Elstrom v. Independent Sch. Dist. No. 270, 533 N.W.2d 51, 55 (Minn. App. 1995), review denied (Minn. July 27, 1995). Appellant concedes that Thorne spoke at a proper occasion and with a proper motive but argues that respondent school district is not entitled to a qualified privilege because it lacked reasonable grounds on which to believe that the statements made were true.

There are legitimate grounds for making a statement if the declarant reasonably believes its statement is true. Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 380 (Minn. 1990). Whether undisputed facts give grounds for a reasonable belief in the truth of a statement is a question of law subject to de novo review unless the evidence permits multiple conclusions. Brooks v. Doherty, Rumble & Butler, 481 N.W.2d 120, 125 (Minn. App. 1992), review denied (Minn. Apr. 29, 1992). Appellant argues that respondent school district lacked reasonable grounds to believe its statement because it had not contacted appellant.

In his deposition, Thorne stated that, at the time of the meeting, he believed appellant owed the school district money, based on an audit adjustment. He acknowledged that he had not yet contacted appellant but stated in his deposition that his written report was "intended to be a working document" that was subject to being "changed as we investigated each [item of debt]." Thorne only intended, by his statements and report, to communicate that

we knew that we had paid the premium. We knew we hadn't received it from [Vaadeland]. We had to investigate to find out why that was.

In Wirig v. Kinney Shoe Corp., a store manager, in front of a group of employees, accused an employee of stealing. 461 N.W.2d at 377. The supreme court found that the manager lacked a reasonable belief in the truth of his statement because he relied on questionable sources and had not investigated the allegations or talked to the accused. Id. at 380-81. Here, Thorne relied on an official audit of the school district and, although he had not talked to appellant, he repeatedly acknowledged that there would need to be further investigation. Saying that a debt exists based on early investigations, which were to be continued, is distinct from the outright accusations made in Wirig, where no further investigation was intended to be made.

Respondent school district, by Thorne, had a reasonable belief in the truth of Thorne's statement that appellant owed the school district money, but that it would need to investigate further.

 II.

  A newspaper has a qualified privilege to report on matters of public record. Jadwin, 390 N.W.2d at 441. But respondent is only entitled to this privilege if it was fair and accurate in its reporting. Id. The account need not be verbatim to be accurate, but it must convey the "gist" of the truth such that the audience has the same impression it would have had were it privy to the "precise truth." Id.

Respondent publisher's article correctly states that Thorne's written report showed that appellant owed $7,721. That Thorne's report ended up being false is immaterial because the court looks to whether the article accurately reflects its source, Thorne's report. See id. at 441-42 (analyzing whether article accurately reported contents of source documents); see also MIGI, Inc. v. Gannett Mass. Broadcasters, Inc., 519 N.E.2d. 283, 285 (Mass. App. Ct. 1988) (news account is privileged even though information on which it relied may be false).

Appellant notes that the article incorrectly states that Thorne told the board that two cases would likely be brought to court. Thorne only said that one case might end up in court. Respondent argues that the account gave the reader the gist of the truth: respondent school district considered resorting to legal recourse to recover some perceived debt. But appellant argues that the article is not substantially accurate because it depicts appellant as a "deadbeat" by saying he would likely be sued by the school district, which was not true. On undisputed facts, whether an article is substantially accurate is a question of law. Jadwin, 390 N.W.2d at 441.

Although the article did not get the details of appellant's situation exactly right, it was substantially accurate. Thorne's report and comments indicated that respondent school district was contemplating legal means to satisfy debts owed by former employees, and appellant was thought to be among those owing money.

Such laxity in reporting the details of people's lives should be discouraged. Such inaccuracies do little to serve anyone's interests. But we find the article substantially, though not completely, accurate. Therefore, respondent publisher was entitled to summary judgment based on a qualified privilege.

Affirmed.

 ANDERSON, Judge (concurring specially)

I concur in the result reached in this case, in part because it is clear that the report of the school district is protected by a qualified privilege, and, while less clear, I believe the majority opinion correctly opines that the newspaper article is protected by a qualified privilege. More specifically, in order to forfeit the qualified privilege, the plaintiff must establish that the statements were made with malice and thus the privilege was abused. Bol v. Cole, 561 N.W.2d 143, 150 (Minn. 1997). The record is devoid of any proof of malice on the part of respondent Forum Communications Company.

I reach this conclusion reluctantly because the actions of Forum in this case were appalling.

Although respondent ducks, feints, and dissembles on its way to arguing that "the gist or sting of the overall article" was still accurate, the plain unvarnished truth is that Forum, through its newspaper, accused an innocent party of refusing to pay his debts such that the residents of the school district would need to sue him to get their tax dollars back. Appellant correctly notes that, in the eyes of the general public, Oscar Vaadeland was declared a "deadbeat."

Forum never even bothered to retract what it now admits was an error. The follow-up article, which ran months after the initial piece, did nothing to correct the error. Forum's brief sets out the relevant parts of the follow-up article:

In other action this week the School Board:

Heard an update from Thorne on the status of questions regarding employee insurance. Following the annual audit, Thorne had reported the District might be able to collect approximately $40,000 from employees and through adjustments with the District's insurance carrier for expenses back to 1992-93. Among them were premiums paid on health insurance for Oscar Vaadeland, a retired teacher, and Jerry Pohl, retired maintenance supervisor.

Thorne reported Blue Cross/Blue Shield has denied the District's request for a refund on the unused policies. A memorandum dated April 24 from the insurance provider explains the District has received the credit due through the reduction of all other employees' premiums. "Even if we were able to return some premium for those years in question," the memorandum states, "the rates for all the other employees would need to increase to make up that deficit."

In Vaadeland's case, Thorne explained, Vaadeland himself as a retired employee was entitled to stay on the District policy. Since it can be demonstrated that by taking out a family policy with another carrier, the intent was to drop coverage by the District for the rest of the family, Thorne said no action will be taken to recover the premiums paid on the unused policy.

The follow-up article fails to make clear that it was a school district error that caused retired employee Vaadeland to show up in the report in the first place. The article fails to note that the newspaper had earlier incorrectly identified Vaadeland as a potential subject of litigation in connection with these claims. In fact, this curious piece of journalism never quite states that Vaadeland himself had made the election to take out a family policy with another carrier and therefore never should have been identified in the article in the first place.

While Forum's actions in this case may be protected by a qualified privilege, its failure to retract, correct, or effectively clarify its original erroneous report is hardly an advertisement for the responsible use of the rights and privileges granted to the newspaper.

[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.