Gus A. Chafoulias, Appellant, vs. Lori C. Peterson, Respondent, American Broadcasting Companies, Inc., a Delaware corp., Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C2-01-1617

 

 

Gus A. Chafoulias,

Appellant,

 

vs.

 

Lori C. Peterson,

Respondent,

American Broadcasting Companies, Inc., a Delaware corp.,

Respondent.

 

 

Filed December 30, 2003

Affirmed

Anderson, Judge

 

Olmstead County District Court

File No. C9982564

 

Michael Berens, Erin K. Fogarty Lisle, Kelly & Berens, P.A., 3720 IDS Center, 80 South Eighth Street, Minneapolis, MN  55402 (for appellant)

 

Kay Nord Hunt, Phillip A. Cole, Laura L. Enga, Lommen, Nelson, Cole & Stageberg, P.A., 1800 IDS Center, 80 South Eighth Street, Minneapolis, MN  55402 (for respondent Lori C. Peterson); and

 

Thomas W. Tinkham, Dean C. Eyler, Dorsey & Whitney LLP, Suite 1300, 220 South Sixth Street, Minneapolis, MN  55402-1498 (for respondent American Broadcasting Companies, Inc.)

 

            Considered and decided by Anderson, Presiding Judge; Schumacher, Judge; and Harten, Judge.

 

U N P U B L I S H E D  O P I N I O N

G. BARRY ANDERSON, Judge

Appellant Gus Chafoulias brought a defamation action against respondent Lori Peterson and respondent American Broadcasting Companies, Inc. (ABC).  The district court granted summary judgment to Peterson and ABC, this court affirmed, and the supreme court affirmed as to ABC but concluded that genuine issues of material fact precluded granting summary judgment to Peterson.  The supreme court ordered the matter remanded to the district court for resolution of those issues.  Peterson filed a motion for rehearing seeking a remand to this court to determine immunity issues presented to this court by notice of review but not reached in this court's opinion.  The supreme court granted Peterson's motion for rehearing and remanded the matter to this court.  We now hold, on the record before this court, that Peterson's statements were not privileged under any of the doctrines asserted in Peterson's notice of review.

FACTS

Attorney Lori Peterson brought a federal sexual harassment lawsuit on behalf of five women against appellant Gus A. Chafoulias, a hotel owner and the former employer of the women.  The suit alleged Chafoulias failed to prevent known sexual harassment of his female employees by hotel guests.  Chafoulias brought a defamation action against Peterson and respondent American Broadcasting Companies, Inc. (ABC), following ABC's broadcast of Peterson's statements alleging Chafoulias knew about acts of sexual abuse and harassment perpetrated against Chafoulias's female hotel employees by male guests.  The district court granted motions for summary judgment brought by Peterson and ABC on the grounds that Chafoulias was a limited-purpose public figure who had failed to make the requisite showing that Peterson made, and ABC broadcast, the statements with actual malice.  Chafoulias appealed.

By notice of review, Peterson argued that in addition to enjoying the protection of the limited-purpose public figure privilege, her statements concerning Chafoulias were shielded by the judicial action privilege, the public official privilege, and a qualified privilege.  We affirmed, reasoning that Chafoulias was a limited-purpose public figure and that he had failed to meet his burden of showing clear and convincing evidence that Peterson and ABC acted with actual malice.  Chafoulias v. Peterson, 642 N.W.2d 764, 779 (Minn. App. 2002), affd in part, rev'd in part, and remanded,668 N.W.2d 642 (Minn. 2003).  Because this court affirmed the grant of summary judgment in favor of Peterson based on the limited-purpose public figure privilege, it did not address her alternative grounds for summary judgment raised by notice of review.

On review, the supreme court affirmed the grant of summary judgment to ABC but determined that genuine issues of material fact existed concerning whether Chafoulias's conduct was sufficient to consider him a limited-purpose public figure as to Peterson.  Chafoulias, 668 N.W.2d at 659.  The court remanded that aspect of the case to the district court.  Id. 

Peterson petitioned for rehearing, arguing that the matter should first be remanded to this court to consider the alternative grounds for summary judgment identified in Peterson's notice of review to this court.  The supreme court agreed and remanded the case to this court for consideration of the privileges raised by Peterson in her notice of review. 

D E C I S I O N

The fundamental basis of a defamation claim is that "one is liable for an unprivileged communication or publication of false and defamatory matter, which injures the reputation of another."  Matthis v. Kennedy, 243 Minn. 219, 222- 23, 67 N.W.2d 413, 416 (1954).  A communication can enjoy either an absolute or a qualified privilege;  "[a]bsolute privilege means that immunity is given even for intentionally false statements, coupled with malice, while a qualified or conditional privilege grants immunity only if the privilege is not abused and defamatory statements are publicized in good faith and without malice."  Id.  Whether to recognize a privilege is a question of law for the court to determine.  Lewis v. Equitable Life Assurance Soc'y of the U. S., 389 N.W.2d 876, 889 (Minn. 1986). 

Peterson argues that even if she published defamatory statements on the ABC broadcast, the statements were protected by either (1) the judicial-action privilege as applied to attorneys; (2) the public-official privilege; or (3) a qualified privilege.

With respect to the judicial action privilege as enjoyed by attorneys, Matthis,243 Minn. at 228,67 N.W.2d at 419, expressly adopted the position of the Restatement of Torts § 586 (1938), as the law of Minnesota:

[a]n attorney at law is absolutely privileged to publish false and defamatory matter of another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of a judicial proceeding in which he participates as counsel, if it has some relation thereto.

 

Although Matthis relied on the first Restatement of Torts, we note that the subsequent volume did not alter the substance of its predecessor.  See Restatement (Second) of Torts § 586 (1977).  The privilege protects defamatory publications made "in the conduct of litigation before a judicial tribunal [including] the examination and cross-examination of witnesses, comments upon the evidence and arguments both oral and written upon the evidence, whether made to court or jury."  Restatement (Second) of Torts § 586, cmt. a (1977).  "The institution of a judicial proceeding includes all pleadings and affidavits necessary to set the judicial machinery in motion."  Id.  An attorney's communication has "some relation" to a judicial proceeding if it is made "while [the attorney] is performing his function as such."  Id., cmt. c. 

The application of the privilege is narrowly limited to "situations in which the public service or the administration of justice requires complete immunity from being called to account for language used."  Matthis, 243 Minn. at 223, 67 N.W.2d at 417.  The "ultimate questions to be examined in the light of these principles are: (1) was the published notice given in the course of a proceeding to which the protection extended by the rule of absolute privilege is applicable (2) if so, were the statements complained of pertinent and material?"  Id. at 227, 67 N.W.2d at 419.

Peterson argues that application of judicial immunity to her statement regarding Chafoulias is "easily justified" because the statement "simply reiterat[ed]" the content of the pleadings in the federal harassment suit against Chafoulias.  Peterson cites to Kittler v. Eckberg, Lammers, Briggs, Wolff & Vierling,535 N.W.2d 653 (Minn. App. 1995), review denied (Minn. Oct. 10, 1995), for the proposition that the privilege applies to pleadings repeated "far beyond the threshold of the courtroom door."  Peterson's reliance on Kittler is misplaced.  In Kittler,we held that an absolute judicial action privilege applied to attorneys' letters of solicitation mailed preliminary to proposed litigation contemplated in good faith.  Id. at 656-58.  We reasoned that the same public interest served by recognizing as privileged statements submitted to the court favored protecting attorneys faced with "actions brought by potential defendants who alleged harm from an initial step in the litigation process contacting all potential plaintiffs."  Id. at 657.

It is undisputed here that ABC was not an actual or potential party to the harassment suit brought by Peterson against Chafoulias; that Peterson's televised statement, while made during the pendancy of a judicial proceeding, was not made in the course of a judicial proceeding; and that the statement was not an integral part of the harassment proceeding or necessary to preserve Peterson's clients' rights in that proceeding.  Peterson's statement was not an out-of-court communication between partiesor potential partiesto a judicial proceeding or their attorneys.  Peterson argues that her statement was related to a judicial proceeding because it repeated her clients' position in existing litigation.  But mere relation cannot trigger the privilege if the communication is not made in the conduct ofand is not integral tothe judicial process.  Matthis,243 Minn. at 227, 67 N.W.2d at 419.  We conclude that the policy justifying the judicial action privilege as applied to attorneys does not favor extending the privilege to Peterson's statement.

Although Minnesota courts have yet to address whether an attorney's extra-judicial communications to the press concerning an ongoing action are absolutely privileged, other courts have held that unless a media outlet is a party to an action, publication to that outlet is not ordinarily sufficiently related to a judicial proceeding to constitute a privileged occasion.  See Scott Fetzer Co. v. Williamson,101 F.3d 549, 554 (8th Cir. 1996) (applying Minnesota law and holding that "[a]n attorney is not absolutely privileged to make defamatory statements to the news media when the news media is unconnected with a proposed judicial proceeding"); Asay v. Hallmark Cards, Inc.,594 F.2d 692, 697-98 (8th Cir. 1979) (reaching the same result after applying Iowa law based on Restatement (Second) of Torts § 586); W. Page Keeton et al., Prosser and Keeton on Torts § 14, at 820 (5th ed. 1984) (stating, "[i]t is clear, however, that statements given to the newspapers concerning the case are no part of a judicial proceeding, and are not absolutely privileged" (citation omitted)).

Where the media outlet is a potential party to the litigation, the absolute privilege applies.  See Johnston v. Cartwright,355 F .2d 32 (8th Cir. 1966) (holding that an attorney who made a statement to a newspaper concerning impending litigation was protected by an absolute privilege because the impending litigation was a potential libel suit regarding an advertisement that had been run in the newspaper, which was a potential party to the litigation).

Peterson cites to Green Acres Trust v. London, 688 P .2d 617, 623 (Ariz. 1984), to acknowledge the fact that other courts have held that lawyer defendants are not absolutely privileged to publish oral and written communications to a newspaper reporter during a press conference.  Peterson attempts to distinguish Green Acres Trust and analogous cases on the grounds that her statement was not made in the context of a press conference and that her statement was not the focus of the PrimeTime Live report.  But Peterson does not explain how these circumstantial distinctions sufficiently enhance ABC's relation to the pending judicial proceeding or confer party-like status on ABC.  See id.  (holding absolute privilege not triggered by press conference because "the reporter lacked a sufficient connection to the proposed proceedings . . . [t]he press conference simply did not enhance the judicial function and no privileged occasion arose").  Peterson did not make the statement about Chafoulias in furtherance of the litigation or to promote the interest of justice; nor was the recipient of the statementABCrelated to the suit brought by Peterson's clients against Chafoulias.  We therefore conclude that the absolute judicial action privilege did not apply to the communications Peterson made about Chafoulias to ABC and that Peterson is not entitled to summary judgment on this issue.

Peterson also argues that her statement enjoyed an absolute privilege under the public-official privilege announced in Carradine v. State,511 N.W.2d 733 (Minn. 1994).  We disagree.  Carradine held, in relevant part, that a police officer's allegedly defamatory statements to the press may be absolutely privileged if the statements "merely amounted to an exact repetition or a substantial repetition, without amplification or comment, of the statements made in the arrest report, which is a matter of public record available press."  Id. at 737.

Peterson cites to Carradine for the proposition that a substantial repetition of statements made in a document that is a matter of public record is privileged.  Id.  But Carradine explicitly and exclusively discusses the privilege in the context of public officials.  See id. at 736 (stating that "[w]hether an executive officer is absolutely immune from defamation liability depends on many factors, including the nature of the function assigned to the officer and the relationship of the statements to the performance of that function").  Carradine's progeny similarly limits the privilege to public officials.  See Buchanan v. Minnesota State Dept. of Health,573 N. W .2d 733, 738 (Minn. App. 1998) (holding that a state Department of Health employee had an absolute privilege with respect to a statement made in furtherance of her job duties and in the public interest), review denied (Minn. Apr. 30, 1998); Redwood County Tel. Co. v. Luttman,567 N.W.2d 717, 720 (Minn. App. 1997) (holding that "[i]t is the relationship of the statement to a job-related function of the government official that determines the absolute privilege"), review denied (Minn. Oct. 21, 1997).  It is undisputed here that Peterson is not a public official performing a governmental function.

Peterson also cites to Moreno v. Crookston Times Printing Co.,610 N.W.2d 321, 332 (Minn. 2000) for the propositions that (1) an absolute "derivative judicial immunity" emanates from a complaint and privileges any repetition thereof by a "participant" in the judicial proceedings and (2) that an absolute privilege attaches to any statement, made by any person, that is simply a repetition of a public document.  These arguments are not supported by Moreno,which holds only that the fair and accurate reporting privilege enjoyed by the media extends to protect an accurate and complete report of events that are part of regular government business.  Id. at 332-33.

We hold that the public-official privilege did not immunize Peterson from liability for her statements about Chafoulias.

Finally, Peterson argues that her statement was protected by a qualified privilege.  For a qualified privilege to apply, a statement "‘must be made upon a proper occasion, from a proper motive, and must be based upon reasonable or probable cause.'" Stuempges v. Parke, Davis & Co.,297 N. W .2d 252, 256-57 (Minn. 1980) (quoting Hebner v. Great N. Ry. Co.,78 Minn. 289, 292, 80 N.W. 1128, 1129 (1899)).  The statement must be made in good faith.  Ferrell v. Cross,557 N.W.2d 560, 566 (Minn. 1997).  Qualified privileges are recognized because statements made in particular contexts or on certain occasions should be encouraged despite the risk the statement might be defamatory.  Stuempges,297 N.W.2d at 256-57.  Whether an occasion is a proper one upon which to recognize a privilege is a question of law for the court.  Lewis,389 N.W.2d at 889. 

Peterson argues that her statement was made upon a proper occasion and from a proper motive because she had a duty to refute Chafoulias's denial of the harassment charges, but cites to no case holding that a televised report of a legal action provides a proper occasion for the purposes of the qualified privilege.  Cf. Bol v. Cole, 561 N.W.2d 143, 149 (Minn. 1997) (holding that psychologist who sent child abuse reports identifying alleged abuser to child's mother, who had requested a summary of the child's statements to the psychologist, acted on a proper occasion for the purposes of the qualified privilege); Ferrell,557 N.W.2d at 566 (holding that an employer's investigation of employee conduct provides a proper occasion for the purposes of the qualified privilege); Wirig v. Kinney Shoe Corp.,461 N.W.2d 374, 379 (Minn. 1990) (holding that a proper occasion was created by an employee meeting called to reveal and discuss employee theft); Lewis,389 N.W.2d at 890 (holding that an employer's communication to an employee concerning the reason for the employee's discharge is a proper occasion for the purposes of the qualified privilege because of public interest that reasons be available to both discharged employee and prospective employers); McBride v. Sears, Roebuck & Co.,306 Minn. 93, 97, 235 N.W.2d 371, 374 (Minn. 1975) (holding that communications between an employer's agents made in the course of investigating or punishing employee misconduct are made upon a proper occasion); Strauss v. Thorne,490 N. W .2d 908, 912 (Minn. App. 1992) (holding that a physician who placed a notation on a patient's medical charts acted on a proper occasion for the purposes of the qualified privilege). 

The circumstances of Peterson's statements to ABC appear to bear little resemblance to those that have generally been held to constitute a proper occasion for the purposes of the qualified privilege: the statements were not part of an official or quasi-official investigation or necessary to fulfill a legal obligation or serve the public interest.  Although Peterson argues with some merit that she was obligated to represent her clients' interests by publicly stating their position with respect to Chafoulias, we note that Peterson made no effort to articulate her disputed statement as a legal positionby, for example, qualifying her statement as limited by the evidence, and instead aggressively made bald accusations of wrongdoing.  On the record before us, we conclude that Peterson did not make the statement on a proper occasion, as that term is defined by our case law, and that the statement therefore did not enjoy a qualified privilege.

Affirmed.