DEBRA CHRISTENSEN v. WEICHERT INSURANCE AGENCY INC.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4953-11T2

DEBRA CHRISTENSEN,

Plaintiff-Appellant,

v.

WEICHERT INSURANCE AGENCY,

INC., MARIANNE ROSSI, JACQUELINE

VILA, and CHRISTOPHER OEHRLE,

Defendants-Respondents.

______________________________________

Argued telephonically October 8, 2013 Decided November 22, 2013

Before Judges Ashrafi and St. John.

On appeal from Superior Court of New Jersey,

Law Division, Morris County, Docket No.

L-0286-10.

Noel C. Crowley argued the cause for

appellant (Crowley & Crowley, attorneys;

Mr. Crowley, on the brief).

Sharon P. Margello argued the cause for

respondents (Ogletree, Deakins, Nash,

Smoak & Stewart, P.C., attorneys; Ms. Margello and Jocelyn A. Merced, on the brief).

PER CURIAM

Plaintiff Debra Christensen appeals from summary judgment dismissing her claims of defamation against her former employer, Weichert Insurance Agency, and three individual defendants also employed by Weichert. We affirm.

In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governs the trial court. Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524 (2012). We must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Viewed most favorably to plaintiff, the summary judgment record reveals the following facts and procedural history.

Plaintiff began employment with Weichert in 1998. She was an assistant vice-president when she was fired in July 2009. Her immediate supervisor was defendant Jacqueline Vila, a vice-president of the agency. Defendant Christopher Oehrle was a senior vice-president with supervisory authority over both plaintiff and Vila. Defendant Marianne Rossi was an employee who had previously been supervised by plaintiff.

According to plaintiff, her working relationship with Oehrle and Vila soured in the spring of 2009 because she told Oehrle that employees thought he had "a special relationship" with Vila. Oehrle and Vila interpreted plaintiff's remark as suggesting an illicit romantic relationship between them, which they denied and which plaintiff asserts was not her meaning. Plaintiff contends the two supervisors became cold and hostile toward her. Separately, plaintiff alleges that Rossi also harbored resentment toward her because plaintiff had rebuked her about a work-related matter when plaintiff was her supervisor.

In July 2009, Rossi and another employee, Barbara Sproules, made allegations against plaintiff that were the impetus of her being fired. Plaintiff had learned that certain commissions on sales of insurance policies had been miscalculated and overpaid to sales employees, including herself. Plaintiff arranged a meeting with Rossi and Sproules on July 6, 2009, to review and reconcile commissions noted in a "book of business." Their review confirmed that certain auto insurance policies were incorrectly entered as having six-month terms instead of one-year terms, thus doubling the commissions paid to the salespersons who had procured those policies. The pivotal factual dispute in this case springs from the specifics of what plaintiff said to Rossi and Sproules about her own overpayments.

Two days after the July 6 meeting, Rossi and Sproules had a regular meeting with their supervisor, and they reported to him that they felt uncomfortable about plaintiff's alleged instruction to them not to correct plaintiff's own miscalculated commissions and not to disclose those overpayments. The supervisor passed that information on to Oehrle. Oehrle instructed Rossi and Sproules to write statements independently about what had occurred at the July 6 meeting. Rossi and Sproules each wrote a statement on July 14.

In Rossi's statement, the relevant allegation against plaintiff was:

We came upon a Hanover Auto policy that was entered as a 6 month policy that should have been for 1 yr, and [plaintiff] stated, well this is mine, let s keep this between us & these three walls.

The relevant allegation in Sproules's statement was:

There was also a problem for the Hanover Auto term being 6 months (it should be one year).

[Rossi] said she would fix them and send an email to the [account associates] reminding them of the correct [percentage] and term period for auto. [Plaintiff] told her to leave her's as it is. Then told us that it stays in this room between us.

After receiving the written statements of Rossi and Sproules, Oehrle reviewed commission payments and found an instance that plaintiff had been overpaid a commission by either $35 or $40.

On July 14, Oehrle summoned plaintiff to a meeting, also attended by a human resources employee named Kathy Stevenson. Oehrle confronted plaintiff with the allegations made by Rossi and Sproules and accused plaintiff of stealing from the company. Plaintiff responded that she told Rossi and Sproules they did not need to correct her commissions because she had already corrected them herself. Oehrle then showed plaintiff the one overpaid commission he had found. Plaintiff tried to explain that the overpaid commission was either posted after she had gone on a vacation or she had simply missed that one. She asked to review the written statements of Rossi and Sproules and to have access to other financial records so that she might prove she had not been overpaid. Oehrle refused her requests. He said he had already discussed the matter with a higher-level officer of the company, and he fired her on the spot.

On July 17, 2009, Oehrle and Vila signed an "Employee Termination Form" in which they stated that the reason for plaintiff's termination was "[f]alsification of financial records and intimidation of subordinates to cover it up." The termination form was distributed to several company departments, including payroll and human resources. According to plaintiff, at least six Weichert employees received the form and it was placed in plaintiff's personnel file.

In January 2010, plaintiff filed a three-count complaint against Weichert and the three individual defendants. In count one of the complaint, she alleged defamation; in count two, tortious interference with employment relations; and in count three, respondeat superior liability of Weichert. Defendants successfully moved to dismiss the second count for failure to state a claim upon which relief can be granted. R. 4:6-2(e). Plaintiff does not appeal from that ruling.

After completion of discovery, defendants moved for summary judgment on the defamation and vicarious liability counts. The trial court heard argument and ruled from the bench in favor of defendants. The court entered an order on March 2, 2012, dismissing plaintiff's complaint. Subsequently, the court denied plaintiff's motion for reconsideration, entering an order and written decision on May 24, 2012. Plaintiff appeals from the orders of March 2 and May 24, 2012.

A cause of action for defamation of a non-public figure, such as plaintiff, requires that she show: "(1) the assertion of a false and defamatory statement concerning [her]; (2) the unprivileged publication of that statement to a third party; and (3) fault amounting at least to negligence by the publisher." Leang v. Jersey City Bd. of Educ., 198 N.J. 557, 585 (2009) (quoting DeAngelis v. Hill, 180 N.J. 1, 13 (2004) (internal quotation marks omitted)).

Generally, a statement is defamatory if it "subjects an individual to contempt or ridicule . . . one that harms a person's reputation by lowering the community's estimation of [her] or by deterring others from wanting to associate or deal with [her]." G.D. v. Kenny, 205 N.J. 275, 293 (2011) (citations omitted). Some statements are defamatory as a matter of law, such as those alleging theft or criminality. See Murphy v. Johns-Manville Prods. Corp., 45 N.J. Super. 478, 488-89 (App. Div.) (express and implied allegations of theft have defamatory meaning), certif. denied, 25 N.J. 55 (1957).

Truth is an absolute defense to a cause of action for defamation. G.D., supra, 205 N.J. at 293. Furthermore, "[t]ruth may be asserted as a defense even when a statement is not perfectly accurate." Ibid.; accord Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 516, 111 S. Ct. 2419, 2432-33, 115 L. Ed. 2d 447, 472 (1991); Salzano v. N. Jersey Media Grp. Inc., 201 N.J. 500, 523 (2010), cert. denied, ___ U.S. ___, 131 S. Ct. 1045, 178 L. Ed. 2d 864 (2011). "Minor inaccuracies do not amount to falsity so long as the substance, the gist, the sting, of the [defamatory] charge [is] justified." G.D., supra, 205 N.J. at 294 (quoting Masson, supra, 501 U.S. at 517, 111 S. Ct. at 2433, 115 L. Ed. 2d at 472 (internal quotation marks omitted)).

Here, plaintiff alleges the following false and defamatory statements made by the three individual defendants:

1. Rossi told her supervisor, and put in writing for Oehrle and others, that plaintiff said the following about an overpayment of a commission listed in the company's book of business: "well this is mine, let's keep this between us and these three walls";

2. Oehrle said to plaintiff in the presence of human resources staff member Stevenson, and also told a higher-level officer of the company, that plaintiff "stole" from Weichert; and

3. Oehrle and Vila signed and distributed the employment termination form stating that plaintiff was fired for "falsification of financial records and intimidation of subordinates."

Oehrle's accusation of stealing may be considered defamatory as a matter of law because it alleged that plaintiff had committed theft, which is a crime. Rossi's statement was not so explicit an accusation of criminal conduct. Plaintiff herself describes Rossi's allegation as "veiled innuendo." As to the statement in the termination form circulated by Oehrle and Vila, plaintiff contends it is a false and defamatory overstatement of Rossi's allegation since plaintiff had no responsibility for creating the inaccurate financial records of the company and there was no evidence that she had intimidated any subordinates. Although the trial court found that none of the three statements satisfied the first element of a defamation claim, false and defamatory statements, we will assume for purposes of this appeal that they were all false and defamatory, or that a jury could find that they were. That is to say, we will not rely on the trial court's determination that the statements were either true or "fairly accurate."

In addition to proving false and defamatory statements, plaintiff must prove that their publication was not protected by a privilege and that the defendant who uttered or published the statement was at fault in failing to determine the truth or falsity of the statement. Where publication is protected by a privilege, negligence in publishing a false and defamatory statement is not sufficient to prove a compensable claim for defamation. Rather, plaintiff must show that the publisher either knew the statement was false or acted in reckless disregard of its truth or falsity. Dairy Stores, Inc. v. Sentinel Pub. Co., 104 N.J. 125, 151 (1986); Govito v. W. Jersey Health Sys., Inc., 332 N.J. Super. 293, 317 (App. Div. 2000).

"The question of whether a defamatory statement is privileged is a threshold determination to be made by a judge rather than a jury." Govito, supra, 332 N.J. Super. at 310 (citing Lawrence v. Bauer Publ'g & Printing Ltd., 89 N.J. 451, 462, cert. denied, 459 U.S. 999, 103 S. Ct. 358, 74 L. Ed. 2d 395 (1982)); accord Bainhauer v. Manoukian, 215 N.J. Super. 9, 40 (App. Div. 1987).

Here, the statements were all made within the confines of plaintiff's employment with Weichert and not published to any third parties outside the company. A statement "made bona fide upon any subject-matter in which the party communicating has an interest, or in reference to which he has a duty, is privileged if made to a person having a corresponding interest or duty, although it contains criminatory matter which, without this privilege, would be slanderous and actionable." Lutz v. Royal Ins. Co. of Am., 245 N.J. Super. 480, 496 (App. Div. 1991) (quoting Bainhauer, supra, 215 N.J. Super. at 36).

The "common interest" privilege protects a communication "made bona fide upon any subject in which the party communicating has an interest, or in reference to which he has a duty . . . if [the communication is] made to a person having a corresponding interest or duty." Williams v. Bell Tel. Labs., Inc., 132 N.J. 109, 121 (1993) (quoting Coleman v. Newark Morning Ledger Co., 29 N.J. 357, 375-76 (1959) (internal quotation marks omitted)); accord Patel v. Soriano, 369 N.J. Super. 192, 250 (App. Div.), certif. denied, 182 N.J. 141 (2004).

In determining whether the "common interest" privilege applies, the court must focus on whether "the circumstances of the communication, including the apparent interest justifying it and the identity of the recipient, entitle the communication to a privileged status." Bainhauer, supra, 215 N.J. Super. at 40. The threshold determination of whether a privilege exists does not require that the court also conclude the statement was made in good faith. Ibid. Nor is the court concerned with whether the communication was true or false. Feggans v. Billington, 291 N.J. Super. 382, 392-93 (App. Div. 1996). In fact, the common interest privilege is only needed as a defense to a cause of action for defamation if the communication was false, because truth is a full defense whether the privilege applies or not.

Defendants' statements were made in an appropriate forum, were based on legitimate interests of the employer, and were made to others with similar interest in the statements. See Bainhauer, supra, 215 N.J Super. at 36-37. We conclude all three statements were subject to a qualified or conditional "common interest" privilege of the employer and its personnel in addressing employment matters, namely, alleged overpayment of commissions and correcting of inaccurate records.

We disagree with plaintiff's argument that Rossi did not have a duty or interest in the matter of overpaid commissions to plaintiff. See Lutz, supra, 245 N.J. Super. at 497-98 (privilege applied to communication of co-worker's behavior to supervisor); see also Fees v. Trow, 105 N.J. 330, 337-39 (1987) (qualified or conditional privilege applied to report of misconduct by employee of mental health facility, even if the report was not true). At the very least, Rossi had an interest in revealing her own role in an incident that might reflect poorly upon her standing with her employer.

Where the common interest privilege applies, plaintiff may still prevail on a cause of action for defamation by proving that the privilege was abused. Abuse of the privilege can be shown by proving that "(1) the publisher knows the statement is false or the publisher acts in reckless disregard of its truth or falsity; (2) the publication serves a purpose contrary to the interests of the qualified privilege; or (3) the statement is excessively published." Williams, supra, 132 N.J. at 121 (citations omitted). Proof of an abuse of the privilege requires a higher showing of fault than defendant's simple negligence in failing to determine that the statement was false. See Bainhauer, supra, 215 N.J. Super. at 42. Plaintiff must prove either actual knowledge of its falsity or a reckless disregard for whether the statement was true or false. Furthermore, plaintiff has the burden of proving an abuse of the privilege by "clear and convincing evidence." Williams, supra, 132 N.J. at 121; Feggans, supra, 291 N.J. Super. at 395.

Here, plaintiff's evidence was not sufficient to show clearly and convincingly either knowledge of falsity or reckless disregard of the truth or falsity of any statement upon which plaintiff's claim of defamation is based, and it also failed to show a purpose contrary to the interests of the company or excessive publication.

We begin with the most incriminatory statement, Oehrle's direct accusation that plaintiff stole from the company. Plaintiff has not shown that Oehrle knew his accusation was false or that he acted with reckless disregard of its falsity. Oehrle had formally taken two statements from co-employees who claimed that plaintiff told them to disregard her own overpayments, and he had corroborated the accusation with one instance of an overpaid commission to plaintiff, albeit for a small amount. Plaintiff contends that Oehrle did not conduct an adequate investigation of the accusation made by Rossi and Sproules. But she can point to no legal authority that requires a thorough investigation, or equates its absence with reckless disregard for the truth or falsity of the defamatory statement.

"Reckless disregard as to truth or falsity exists when there is a high degree of awareness of probable falsity or serious doubt as to the truth of the statement." Govito, supra, 332 N.J. Super. at 317 (quoting Restatement (Second) of Torts 600, comment b (1977)); see also Garrison v. Louisiana, 379 U.S. 64, 74, 85 S. Ct. 209, 216, 13 L. Ed. 2d 125, 133 (1964) ("only those false statements made with the high degree of awareness of their probable falsity demanded by New York Times [Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964)] may be the subject of either civil or criminal sanctions.").

Oehrle's accusation of theft was potent and perhaps unfair, but it was grounded in the allegations made by Rossi and Sproules. His rejection of plaintiff's denial and explanations is not proof that Oehrle had a high degree of awareness that the allegations were false. Furthermore, Oehrle made his accusation for the purposes of the company's business and only in the presence of a human resources employee and a superior officer of the company. Both third-parties to whom Oehrle made the statement had a common interest with Oehrle in communicating about the allegations against plaintiff. Clearly, there was no excessive publication of Oehrle's accusation that plaintiff had stolen from the company.

Nor do plaintiff's detailed allegations of a poor working relationship with Oehrle prove he had an improper purpose in communicating his accusation to appropriate company personnel. A supervisor with proven personal animus toward an employee nevertheless has a privilege to communicate his belief of wrongdoing by the employee for legitimate purposes of the employer. See Fees, supra, 105 N.J. at 342 (citing Sokolay v. Edlin, 65 N.J. Super. 112, 127 (App. Div. 1961) ("The primary motive or purpose is dispositive. Thus the existence of ill will, etc., will not defeat the privilege unless it is the primary motivating force.")).

In sum, plaintiff cannot maintain a claim for defamation based on the July 14 meeting in which Oehrle accused her of stealing from the company, or on the basis of his making the same accusation to a higher-level supervisor in the company.

Next, with respect to the employment termination form signed and distributed by Oehrle and Vila, the purpose of the form was to implement internal company procedures upon the termination of plaintiff's employment and also to make a record of the reason for plaintiff's termination. Even if the accusations contained in the termination form were not true, which we have assumed for purpose of this appeal, company personnel had a common interest in making such a record of Oehrle's reason for firing plaintiff and in maintaining a record in plaintiff's personnel file. Plaintiff has not shown by clear and convincing evidence that the distibution of the form to company departments and approximately six persons within the company was excessive publication or done for improper purposes. The termination form cannot support plaintiff's claim of defamation.

With respect to Rossi's allegations and written statement, clearly, Rossi did not excessively publish the allegation. She revealed it to her immediate supervisor and subsequently to Oehrle at his direction. Plaintiff attempts to prove Rossi's ill will and bad faith by theorizing that Rossi was offended by an earlier rebuke of her by plaintiff. But plaintiff's speculation does not prove that Rossi was primarily motivated by an improper purpose outside the interests of the employer, or her own interest in protecting her position in the company.

The only issue for purposes of proving abuse of the privilege by Rossi is whether the summary judgment record demonstrated a genuine disputed issue of fact as to Rossi's actual knowledge or reckless disregard of the falsity of her allegation. In that regard, we must keep in mind that plaintiff was required to prove by the clear and convincing standard of proof, Williams, supra, 132 N.J. at 121, Rossi's actual knowledge that her allegation was false, or her reckless disregard of its truth or falsity. See Brill, supra, 142 N.J. at 533-34 (on a motion for summary judgment, the "weighing process requires the court to be guided by the same evidentiary standard of proof by a preponderance of the evidence or clear and convincing evidence that would apply at the trial on the merits when deciding whether there exists a 'genuine' issue of material fact.")

Plaintiff claimed in opposition to defendants' motion for summary judgment that she did not say the things that Rossi and Sproules accused her of saying at the July 6 meeting. In her certification in opposition to summary judgment, plaintiff stated:

I absolutely deny telling them not to make corrections on my own records. . . . What I did tell them was that it was not necessary to correct records for my personal sales because I had already corrected them myself. I absolutely did not tell them that our correction "was between us and that it should stay in the room . . . .

This denial refuted Rossi's allegation and created a disputed issue of fact as to what plaintiff actually said at the meeting. However, plaintiff's denial did not refute that she told Rossi and Sproules not to correct her recorded overpayments in the same manner as those of other employees. Both Rossi and Sproules interpreted what was said by plaintiff as directing that her own overpayments should not be corrected and that the information should not be disclosed to others. "Neither 'errors of interpretation . . .' nor 'misconceptions' are sufficient to create a jury issue" as to reckless disregard for the truth or falsity of a defamatory statement." Govito, supra, 332 N.J. Super. at 317 (quoting Lawrence, supra, 89 N.J. at 468).

Whether Rossi's allegation was a misunderstanding of plaintiff's instructions or an accurate report of what plaintiff said at the meeting, the other undisputed circumstances of the incident undercut plaintiff's claim that Rossi knowingly or with reckless disregard lied about plaintiff's alleged wrongdoing. Rossi and Sproules promptly reported their discomfort with a superior's instructions to their own supervisor. They were subsequently directed to write out independently what had occurred at the July 6 meeting. Sproules's statement corroborated Rossi's understanding of what plaintiff had said, and it undermined plaintiff's contention that Rossi spoke with knowledge of the falsity of her allegation or with reckless disregard for its truth or falsity. Plaintiff's contention that Sproules's statement was subject to impeachment based on the proposed testimony of a co-worker, Finnamore, is a secondary evidentiary issue that does not affect our analysis for purposes of summary judgment. Plaintiff has not produced evidence that would permit a rational jury to conclude, by the clear and convincing standard of proof, that Rossi lied about or recklessly disregarded the truth or falsity of plaintiff's instruction at the meeting.

Lastly, even if the case against Rossi could survive summary judgment because of a factual dispute about whether she falsely accused plaintiff of wrongdoing, her false accusation could not be attributed to the employer, Weichert. False accusations of wrongdoing made by one employee against another employee would not ordinarily be within the scope of employment such that Weichert could be held vicariously liable for Rossi's alleged defamation of plaintiff.