State of Minnesota, Respondent, vs. Juan Alfonso Rios, Appellant.

may not be cited except as provided by

Minn. Stat. sec. 480 A. 08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C4-97-1726

Stan G. Trana,

Respondent,

vs.

W.W. Holes Mfg. Co.,

d/b/a Bud Grant's,

Appellant.

Filed April 21, 1998

Affirmed in part, reversed in part

Harten, Judge

Chisago County District Court

File No. C3-96-965

Brian L. Williams, Frank J. Rajkowski, Rajkowski, Hansmeier, Ltd., 11 Seventh Avenue North, P.O. Box 1433, St. Cloud, MN 55302-1433 (for appellant)

Steven A. Sicheneder, Tennis, Sicheneder & Collins, P.A., 202 Town Square, 20 North Lake Street, Forest Lake, MN 55025 (for respondent)

Considered and decided by Harten, Presiding Judge, Short, Judge, and Amundson, Judge.

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

HARTEN, Judge

Appellant W.W. Holes Manufacturing, Inc. (Holes) challenges the district court's denial of its alternative motions for judgment notwithstanding the verdict (JNOV) or a new trial on grounds of insufficient evidence of publication of defamatory statements, absolute privilege, and erroneous jury instructions. Respondent Stan Trana filed a notice of review challenging the district court's denial of his motions for prejudgment interest, costs and disbursements, and attorney fees. We affirm in part and reverse in part.

FACTS

In December 1995, Trana began employment with Holes, a watercraft retailer. On May 20, 1996, Trana quit or was terminated because he refused to sign a required bonding application form. On May 29, 1996, Trana's attorney sent a letter to Holes, demanding payment of unpaid commissions pursuant to Minn. Stat. § 181.145 (1996). On May 30, 1996, James Marmas, Holes' president, sent a reply letter. The letter denied that Holes owed Trana any commissions. The letter further stated:

We stopped our investigation of his missing accessories and cash shortage being satisfied just that he had quit. If he persists with false claims, we will continue our calls to his customers and collect the draws he was paid but must pay back. In this case, we feel positive he will owe us several thousand dollars.

[H]is quick departure with only a request to fill out a simple form is evidence of a very guilty conscience and his guilt. In any event, after attorney's fees neither of us will win unless we can get the county attorney to prosecute him for theft. It's probably not worth either of our time.

Trana read the letter in his attorney's office. Because he thought that he may need help if he was charged criminally, Trana showed the letter to Holes employees. Also, at later job interviews in connection with his applications for sales positions with several boat dealerships, Trana informed the potential employers that he had been accused of theft at his prior job. He testified that he relayed the accusations because of his "integrity" and "self pride" and because he wanted to "put the cards on the table."

In June 1996, Trana filed a complaint against Holes in conciliation court seeking unpaid commissions and penalties. The conciliation court awarded Trana $3,737.69. Holes removed the case to the district court. In October 1996, Trana filed an amended complaint, adding a claim of defamation. Prior to trial, the parties settled the claim of unpaid commissions and penalties for $3,737.64. In May 1997, the defamation claim was tried to a jury. The jury found in favor of Trana and awarded damages in the amount of $40,167. The district court entered judgment for $40,167 on the defamation claim and $3,737.64 (the amount stipulated by the parties) for commissions and penalties.

Holes filed post-judgment motions for JNOV and a new trial. Trana filed cross-motions seeking prejudgment interest, costs and disbursements, and attorney's fees on the judgment for unpaid commissions and penalties. The district court denied all of the motions. Holes appealed, and Trana filed a notice of review.

D E C I S I O N

1. Compelled Self-Publication

A ruling on JNOV is a question of law, subject to de novo review. Haarstad v. Graff, 506 N.W.2d 341, 344 (Minn. App. 1993). In reviewing a JNOV, we ask whether any competent evidence exists that reasonably tends to sustain the verdict. Canada by Landy v. McCarthy, 567 N.W.2d 496, 503-04 (Minn. 1997). We view the evidence in the light most favorable to the verdict and must affirm denial of JNOV unless the evidence is practically conclusive against the verdict, or reasonable minds could reach but one conclusion that is against the verdict. Id. at 504.

The elements of a defamation claim are (1) that the alleged statements were made, (2) that the statements were communicated to someone other than the plaintiff, (3) that the statements were false, and (4) that the statements harmed the plaintiff's reputation. Ferrell v. Cross, 557 N.W.2d 560, 565 (Minn. 1997). This appeal deals only with the communication (publication) element.

Generally, where a defendant communicates a statement to a plaintiff, who then communicates it to a third party, there is no publication. Lewis v. Equitable Life Assur. Soc'y of the U.S., 389 N.W.2d 876, 886 (Minn. 1986). The publication element can be met, however, if the plaintiff was compelled to publish the defamatory statement to a third person, and if it was foreseeable to the defendant that the plaintiff would be so compelled. Id. at 888. In recognizing the doctrine of compelled self-publication, the supreme court stated:

We acknowledge that recognition of this doctrine provides a significant new basis for maintaining a cause of action for defamation and, as such, it should be cautiously applied. However, when properly applied, it need not substantially broaden the scope of liability for defamation. The concept of compelled self-publication does no more than hold the originator of the defamatory statement liable for damages caused by the statement where the originator knows, or should know, of circumstances whereby the defamed person has no reasonable means of avoiding publication of the statement or avoiding the resulting damages; in other words, in cases where the defamed person was compelled to publish the statement.

Id. (emphasis added).

Holes communicated the alleged defamatory statements only to Trana's attorney. Trana himself communicated the statements to his former co-workers and potential employers.

Trana testified that he showed the letter to former co-workers because he "felt like [he] should try to cover [his] back side." He thought criminal charges may be brought against him in which case he would need help from his co-workers. But Trana's desire to protect himself does not meet the narrow standard for compelled self-publication required by Lewis. He admits that he had not been charged with theft and that he showed the letter to co-workers willingly. Trana could have avoided showing the letter; he was not operating under any compulsion.

Minnesota courts have found compelled self-publication to potential employers only when the defamatory statements were related to the employee's termination. For example, in Lewis, the plaintiffs were told that they were terminated from employment for reasons of "gross insubordination." 389 N.W.2d at 881. The supreme court held that the plaintiffs were compelled to answer truthfully when potential employers asked them the reason for their termination. Id. at 888.

Trana testified that he informed potential employers of the theft allegation because

of [his] own integrity, [his] own self pride. [He] didn't want them to find out six months down the road that [he] had been accused of theft and have to answer [those] allegations. [He] just strictly felt that [he] owed it to them and [himself] to just put the cards on the table and that's what [he did].

Trana has failed to provide any evidence of a compulsion to disclose the contents of the letter to potential employers. Holes did not terminate him for theft. Rather, all parties concede that his termination arose from his refusal to sign a required document. Moreover, the record contains no indication that Trana was compelled by employment interview questions to offer the information in the May 30 letter. Even a discussion about his former position with Holes would not compel Trana to disclose the allegations of theft. Trana identifies no legal duty that forced him to reveal the contents of the letter. Trana voluntarily chose to inform the employers of the theft allegations.

We conclude that no competent evidence supports the finding of compelled publication to either the co-workers or the potential employers. Trana voluntarily published contents of the letter. Because publication was not compelled, we need not reach the requirement that the compelled self-publication be foreseeable. We reverse the district court's denial of JNOV.

In light of our decision that there is insufficient evidence to show compelled self-publication, we need not address Holes' alternative arguments for JNOV or a new trial based on erroneous jury instructions and absolute privilege.

2. Interest, Costs and Disbursements, and Attorney Fees

Trana seeks prejudgment interest, costs and disbursements, and attorney fees on his claim for unpaid commissions and penalties. The standard of review for costs and attorney fees is whether the district court abused its discretion. Radloff v. First American Nat'l Bank, 470 N.W.2d 154, 156 (Minn. App. 1991), review denied (Minn. July 24, 1991).

Prejudgment interest is available "when a judgment or award is for the recovery of money." Minn. Stat. § 549.09, subd. 1 (1996). Here the parties settled the issue of commissions and penalties. It is clear under our case law that prejudgment interest is inappropriate when an issue was settled prior to trial. Warrick v. Graffiti, Inc., 550 N.W.2d 303, 309-10 (Minn. App. 1996), review denied (Minn. Sept. 20, 1996); Great West Cas. Co. v. Barnick, 542 N.W.2d 400, 401-02 (Minn. App. 1996). Here the district court entered a stipulated judgment on the issue of commissions and penalties. Trana is not entitled to prejudgment interest, however, because the amount of the judgment was settled.

Similarly, costs and disbursements are not available to Trana. A party is entitled to costs if that party "prevails" in district court after a case is removed from conciliation court. Minn. R. Gen. Pract. 524(b). Neither Trana nor Holes has "prevailed" at district court on the issue of commissions, because the issue was settled before trial.

Finally, Minnesota law allows for attorney fees in cases involving unpaid commissions after the case has been "adjudicated." Minn. Stat. § 181.145, subd. 4(b) (1996). There was no "adjudication" of the commissions issue, and therefore, attorney fees are not available to Trana. The district court did not abuse its discretion in denying Trana's motions for interest, costs, and attorney fees.

Affirmed in part and reversed in part.