Crump v. PC Food Markets

Annotate this Case
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.
 
 
                                No. 86-354
 
 
Charles Crump, Sr.                           Supreme Court
 
                                             On Appeal From
     v.                                      Windsor Superior Court
 
 
P & C Food Markets, Inc.                     May Term, 1988
 
 
Alan W. Cheever, J.
 
Plante, Richards, Hanley & Gerety, P.C., White River Junction, for
  plaintiff-appellee
 
Robert S. DiPalma of Paul, Frank & Collins, Inc., Burlington, for
  defendant-appellant
 
 
PRESENT:  Allen, C.J., Peck and Dooley, JJ., and Barney, C.J. (Ret.), and
          Keyser, J. (Ret.), Specially Assigned
 
 
     ALLEN, C.J.   Defendant appeals from a jury verdict in favor of
plaintiff on grounds of defamation and intentional infliction of emotional
distress.  We affirm.
     The present action arose after defendant dismissed plaintiff as an
employee in August 1983.  Plaintiff had been employed by defendant for
eighteen years and held the position of head receiver for dry goods at
defendant's Vermont distribution center at the time of his dismissal.
Plaintiff's dismissal followed an incident in which he placed some rejected
merchandise on an outgoing truck, intending to pick it up later for his
personal use.
     One of plaintiff's responsibilities was to reject merchandise delivered
to the facility if it was either damaged or had not been ordered by defend-
ant.  Truckers would at times refuse to take rejected merchandise back onto
their trucks, and would leave it at the distribution center, where it was
either salvaged and placed in inventory, or given to the employees to take
home for their own use.  The incident which triggered plaintiff's dismissal
involved two rejected cases of merchandise, one of breakfast cereal and one
of toaster pastries.  Defendant had no obligation to pay for these rejected
cases. The independent trucker to whom they were returned declined to re-
ceive them back onto her truck and remove them.  Instead, she offered them
to plaintiff, after asking if he had any grandchildren, and he accepted
them.  Plaintiff offered to share them with some fellow employees and then
placed them by his desk to take them home.
     At trial, plaintiff argued that once the merchandise was rejected and
returned to the independent trucker, it became the trucker's property who in
turn could give it to him.  Therefore, plaintiff's later removal of it from
defendant's premises was not theft.  Defendant contended that it did not
allow employees to remove merchandise delivered to its facility in that
manner, or to receive gratuities from customers or distributors, and that
even if defendant never paid for the merchandise, any such removal consti-
tuted theft.
     Defendant's evidence showed, and plaintiff admitted, that he had
failed to follow defendant's prescribed procedures for such rejected
merchandise in two respects.  First, plaintiff did not place the rejected
merchandise in defendant's salvage area for it to be packaged for resale or
distribution among the warehouse employees; second, plaintiff failed to
obtain a gate pass from either of two supervisors, but instead, in their
absence, issued one himself.  Plaintiff did not deny that he violated
company procedures for accepting gifts of unwanted merchandise from
independent truckers.  But the basis of plaintiff's defamation claim was
that defendant wrongly characterized him as a thief.  Plaintiff argued that
because the trucker gave the rejected merchandise to the plaintiff, his
acceptance and removal of it without following the prescribed company
procedures could not have constituted theft.
     Plaintiff's evidence showed that he was called a thief at a meeting
held at the distribution center a few days after the incident, and that in
two written reports prepared subsequent to that meeting, he was character-
ized as a problem employee and his actions were referred to as employee
theft.  Three representatives of defendant participated in that meeting: the
director of transportation and warehousing; a loss prevention specialist;
and the director of loss prevention and safety from defendant's Syracuse
office.  Written reports submitted as exhibits at trial were prepared about
a month and a half after the meeting by the loss prevention specialist who
had attended the meeting, and by another loss prevention specialist who had
originated the investigation and then had gone on vacation.  These reports
were distributed by their authors to the two directors who had attended the
meeting and to three other representatives of defendant: the vice-president
who was the general manager of defendant's New England Division, defendant's
director of employee relations, and the director of store operations in
defendant's New England division.  There was disputed evidence that a report
was also made orally to the security manager for the trucking firm whose
driver had taken the merchandise out of defendant's facility, and that the
incident was discussed with the driver and another employee of that trucking
firm.  Plaintiff also presented evidence on the effect of the incident on
his social life, his health, his personal and family life, and his reputa-
tion in the community.
     The basis for plaintiff's claim of intentional infliction of emotional
distress was the nature of the meeting and the manner in which he was fired:
that the meeting was called without prior notice to him; that it went on for
three hours without an opportunity for him to have lunch at his normal time;
that he was badgered by repeated requests to sign a statement, and to add
material to the statement he had already signed; that he feared that his
failure to sign a statement would adversely affect the driver of the out-
going truck; that directly after this meeting he was told to "clean out his
desk"; and that he was fired summarily after eighteen years of service.
     Plaintiff brought the present action seeking damages for defamation,
intentional infliction of emotional distress, unlawful employment practices
and breach of contract.  As plaintiff is black and was 57 at the time of his
dismissal, his count for unlawful employment practices included claims of
discrimination on the basis of age and race, as well as termination without
cause.  Before trial, the trial court granted defendant's motion for summary
judgment on the issue of termination without cause and denied the motion
with respect to intentional infliction of emotional distress and employment
discrimination on the basis of age and race.  The trial court partially
granted defendant's summary judgment motion as to the defamation count,
ruling that the testimony given by defendant's employees at plaintiff's
unemployment compensation hearing was absolutely privileged.
     At trial, defendant moved for a directed verdict at the close of the
plaintiff's case, but did not renew the motion until after the charge to the
jury, just before the jury left to deliberate.  The motion was denied at
both times.  The jury returned a verdict for the plaintiff on the defamation
and intentional infliction of emotional distress claims and awarded him
$19,000 in compensatory and $25,000 in punitive damages for each claim.
Defendant moved for judgment notwithstanding the verdict and in the alter-
native, for a new trial. The court denied defendant's motions and the
present appeal followed.
                                 I. Waiver
     Plaintiff argues that defendant should be precluded from raising any of
its points on appeal because defendant failed to renew its motion for dir-
ected verdict at the close of all the evidence, which is a prerequisite for
making a motion for judgment notwithstanding the verdict.  See Lemnah v.
American Breeders Service, Inc., 144 Vt. 568, 571, 482 A.2d 700, 702 (1984).
Defendant moved for a directed verdict at the close of plaintiff's case,
but failed to renew the motion at the close of its own case.  The trial
court allowed defendant to renew the motion after it had charged the jury
and before the jury began deliberation.
     While this procedure is not preferred, it is not error.  A purpose of
the requirement that a movant renew a motion for directed verdict at the
close of all the evidence is to give the non-moving party an opportunity to
cure the defects in proof that might otherwise preclude the case from going
to the jury.  Maynard v. Traveler's Insurance Co., 149 Vt. 158, 162, 540 A.2d 1032, 1034 (1987); McCarty v. Pheasant Run, Inc., 826 F.2d 1554, 1556
(7th Cir. 1987).  Further, the rule is designed to prevent a litigant from
gambling on winning a favorable verdict and yet retaining a challenge to the
sufficiency of the evidence on appeal.  Quinn v. Southwest Wood Products,
Inc., 597 F.2d 1018, 1024-25 (5th Cir. 1979).  The timing here afforded the
trial court the opportunity to properly determine whether sufficient evi-
dence existed for the issues to be decided by the jury and gave the non-
moving party the opportunity to attempt to rectify any deficiencies in
proof.
                              II. Defamation
     Defendant challenges the trial court's denial of its motion for
judgment notwithstanding the verdict on the defamation count, claiming there
was insufficient proof at trial of the elements of the tort.  Defendant
argues that there was insufficient evidence that the defamatory statements
were false, that defendant acted with the malice necessary to overcome the
conditional privilege, that the statements were made in a negligent fashion,
and that the defamatory statements were the proximate cause of plaintiff's
injuries.
     As we have recently noted, Ryan v. Herald Association, Inc., ___ Vt.
___, ___, 566 A.2d 1316, 1317-18 (1989), the elements of a defamation action
in Vermont are:
	(1) a false and defamatory statement concerning another;
         (2) some negligence, or greater fault, in publishing the
         statement; (3) publication to at least one third person;
         (4) lack of privilege in the publication; (5) special
         damages, unless actionable per se; and (6) some actual
         harm so as to warrant compensatory damages.
(quoting Lent v. Huntoon, 143 Vt. 539, 546-47, 470 A.2d 1162, 1168 (1983)
(footnote omitted)); see Stone v. Banner Publishing Corp., 677 F. Supp. 242,
245 (D. Vt. 1988).
     Because the common-law privileges have not necessarily been adequate to
protect First Amendment values, federal constitutional jurisprudence has
modified the elements of defamation, at least in cases in which the plain-
tiff is in some way a "public figure," see, e.g., New York Times v.
Sullivan, 376 U.S. 254 (1964), or the material published is "of public
concern," Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974); Ryan v. Herald
Association, Inc., ___ Vt. at ___ n.2, 566 A.2d  at 1319 n.2; or, possibly,
if the defendant is engaged in the dissemination of information to subscri-
bers or the general public, Dun & Bradstreet, Inc. v. Greenmoss Builders,
Inc., 472 U.S. 749 (1985).  Gertz struck one balance between the competing
concerns of protecting First Amendment values and compensating defamed in-
dividuals.  But as we noted in Ryan v. Herald Association, Inc., ___ Vt. at
___ n.1, 566 A.2d  at 1317 n.1, where the defamatory statements are made by
private individuals to private individuals, "the First Amendment interest
in protecting the defendant's speech is arguably less pressing, and the
resulting accommodation might be different."  Unlike Ryan, which involved a
matter of public concern and a defendant belonging to the "institutional
media," the case at hand involves statements made privately in the employ-
ment context about an employee to agents of the employer and several other
persons.  However, we need not establish whether plaintiff must prove
merely "some negligence" or a greater degree of fault in a "private" defa-
mation case after Greenmoss Builders, Inc., 422 U.S.  at 757-61, because
here, defendant concededly enjoys a conditional privilege for intracorporate
communications to protect its legitimate business interests.  To prevail,
plaintiff must show malice or abuse of the privilege sufficient to defeat
it.  Lent v. Huntoon, 143 Vt. at 549, 420 A.2d  at 1169 (malice); Restatement
(Second) of Torts {{ 599-605A (1977) (abuse of privilege).
     In reviewing the denial of motions for judgment notwithstanding the
verdict, we must assess the elements of defamation by viewing the evidence
in the light most favorable to the prevailing party, excluding the effect of
any modifying evidence.  Westchester Fire Insurance Co. v. Deuso, 146 Vt.
424, 426, 505 A.2d 666, 667 (1985).  A judgment notwithstanding the verdict
is improper if the record contains any evidence that fairly and reasonably
supports the verdict.  Kinzer v. Degler Corp., 145 Vt. 410, 413, 491 A.2d 1017, 1019 (1985).  Viewed in that light, we discuss in turn each element of
defamation put in issue by the parties.
     With regard to the first element, plaintiff presented evidence
sufficient to support the jury verdict that the statements were false and
defamatory.  A review of the record shows evidence that plaintiff's actions,
while violating defendant's procedures, could fairly and reasonably be
interpreted by the jury as not constituting theft, and that plaintiff's past
employment record did not warrant his being called a "problem employee."
     With respect to the second, third, and fourth elements, the trial court
found as a matter of law that defendant enjoyed a conditional privilege for
the protection of its legitimate business interests.  See, e.g., Lent v.
Huntoon, 143 Vt. at 548-49, 470 A.2d  at 1169 (holding conditional privilege
applicable in Vermont).  Plaintiff presented evidence that defendant acted
with malice or abused its conditional privilege sufficient for the jury to
find that the privilege had been overcome.  The jury was properly instructed
that plaintiff had to prove malice to defeat the privilege by clear and
convincing evidence.
     Under Vermont law, a plaintiff must show one of two types of malice in
order to overcome the conditional privilege protecting legitimate business
interests.  Lent v. Huntoon, 143 Vt. at 549, 470 A.2d  at 1169.   For the
purposes of clarity in this discussion, (FN1) we will use the following full-
phrase definitions for each type:  "knowledge of the statement's falsity or
with reckless disregard of its truth," id., or "conduct manifesting personal
ill will, reckless or wanton disregard of plaintiff's rights, or carried out
under circumstances evidencing insult or oppression," id. at 550, 470 A.2d 
at 1170.  The first type of malice may be inferred.
     Plaintiff presented evidence showing both types of malice.  The jury
could have found that the merchandise did not belong to defendant and
therefore that defendant's characterization of the incident as theft evi-
denced a reckless disregard both for the truth and for plaintiff's rights.
See, e.g., Litman v. Massachusetts Mutual Life Ins. Co., 739 F.2d 1549, 1561
(11th Cir. 1984) (defendant employer's statements to former colleagues of
discharged employee were not privileged where evidence supported jury
finding that statements were made wilfully, maliciously, and with reckless
disregard of plaintiff's rights); Loughry v. Lincoln First Bank, N.A., 67 N.Y.2d 369, 376, 502 N.Y.S.2d 965, 968, 494 N.E.2d 70, 72-73 (1986); Worley
v. Oregon Physicians Service, 69 Or. App. 241, 245, 686 P.2d 404, 407-08
(1984) (en banc); Great Coastal Express, Inc. v. Ellington, 230 Va. 142,
152, 334 S.E.2d 846, 853 (1985).  The jury could also have interpreted the
circumstances of the meeting as "conduct evidencing oppression."  Moreover,
plaintiff's showing that the statements went to people in the trucking
company, outside defendant's organization, who were therefore not proper
persons to receive the communications, is evidence from which the jury could
have found abuse of the privilege.  See, e.g., Gibby v. Murphy, 73 N.C. App.
128, 132-33, 325 S.E.2d 673, 676 (1985); Restatement (Second) of Torts { 604
(excessive publication).
     Defendant next argues that plaintiff did not present sufficient evi-
dence on the fifth and sixth elements to warrant compensatory damages by
failing to show actual harm proximately caused by the defamatory statements.
We agree that plaintiff failed to prove that the defamation, rather than his
discharge from employment, caused his inability to obtain new employment, or
caused the changed attitudes shown towards him by his former friends,
associates and members of the community.  Plaintiff counters both that false
accusation of theft is actionable per se, and that he presented sufficient
evidence of injury caused by the defamation.
     False accusation of theft is actionable per se.  As the Court noted in
Lent v. Huntoon, the law of defamation in Vermont, with a few exceptions, (FN2)
"must be gleaned from nineteenth century case law."  143 Vt. at 545, 470 A.2d  at 1167.  The plurality decision in Greenmoss Builders, Inc., 472 U.S. 
at 749 has been characterized as "restor[ing] the common law of defamation
where the defamatory statement concerns a private issue, at least as far as
presumed and punitive damages are concerned."  Comment, American Defamation
Law:  From Sullivan, Through Greenmoss, and Beyond, 48 Ohio St. L. J. 513,
532 (1987); see 5 Minzer, Nates, Kimball and Axelrod, Damages in Tort
Actions { 45.21[2][i], at 45-50 (1986).
     Lent v. Huntoon confirmed the continuing validity of "slander per se"
in Vermont.  Under this doctrine, certain types of false statements, inclu-
ding false accusation of theft, see Sabin v. Angell, 46 Vt. 740, 745 (1874);
Redway v. Gray, 31 Vt. 292, 297-98 (1858), constitute slander without re-
quiring proof of special damages.  Plaintiff bore the burden of introducing
evidence of actual harm resulting from being called a thief, Lent v.
Huntoon, 143 Vt. at 549, and he did put forth sufficient evidence of actual
harm to himself for the case to go to the jury on the issue of damages for
defamation.  In addition to the emotional harm he suffered during the inci-
dent, plaintiff showed that he had problems sleeping, experienced a loss of
appetite, developed a temporary drinking problem, and that his relationship
with his wife and his children deteriorated.  Such cases may go to the jury,
as did this case, on broad jury instructions.  See R.D. Sack, Libel,
Slander, and Related Problems { VII.2.4, at 348-49 (1980).
     We conclude that plaintiff produced sufficient evidence at trial to go
to the jury on each element of defamation, and that the trial court did not
abuse its discretion by denying defendant's motion for judgment notwith-
standing the verdict.
             III. Intentional Infliction of Emotional Distress
     Defendant next challenges the trial court's denial of its motion for
judgment notwithstanding the verdict on the intentional infliction of
emotional distress claim because there was insufficient proof that
defendant's conduct was extreme and outrageous, that plaintiff's emotional
distress was severe, and that defendant's actions were the proximate cause
of injuries received.
     Vermont recognizes the tort of intentional infliction of emotional
distress.  To prevail, plaintiff must demonstrate "'outrageous conduct, done
intentionally or with reckless disregard of the probability of causing emo-
tional distress, resulting in the suffering of extreme emotional distress,
actually or proximately caused by the outrageous conduct.'"  Birkenhead v.
Coombs, 143 Vt. 167, 174, 465 A.2d 244, 247 (1983) (quoting Sheltra v.
Smith, 136 Vt. 472, 476, 392 A.2d 431, 433 (1978)).  We address these
elements again excluding modifying evidence presented by defendant.
     We agree with defendant that the mere termination of employment will
not support a claim for intentional infliction of emotional distress.  How-
ever,  if the manner of termination evinces circumstances of oppressive
conduct and abuse of a position of authority vis-a-vis plaintiff, it may
provide grounds for the tort action.  See, e.g., Gordon v. Matthew Bender &
Co., Inc., 562 F. Supp. 1286, 1299 (N.D. Ill. 1983) (employer's motion to
dismiss denied where employee alleged that employer maliciously terminated
him for failure to meet sales goals); Smithson v. Nordstrom, Inc., 63 Or.
App. 423, 664 P.2d 1119, 1120-21 (1983) (plaintiff produced sufficient
evidence for case to go to jury where employer did not reasonably believe
there was sufficient evidence to charge employee with theft but nevertheless
interrogated her for three hours and threatened her with criminal
prosecution if she did not sign confession).  Plaintiff's evidence showed
that defendant's representative summoned plaintiff to a lengthy meeting
without notice, continued the meeting without a break for rest or food,
repeatedly badgered him to amend and sign a statement, and that plaintiff
did not feel free to leave the meeting.  Immediately after the meeting,
defendant's represenative directed plaintiff to clean out his desk, a
summary dismissal after eighteen years of service.
     We conclude that plaintiff produced sufficient evidence at trial for
the case to go to the jury on the elements of intentional infliction of
emotional distress, and that the trial court did not abuse its discretion by
denying defendant's motion for judgment notwithstanding the verdict.
                           IV. Punitive Damages
     Defendant argues that the trial court erred by failing to grant its
motion for judgment notwithstanding the verdict on the jury's award of
punitive damages claiming that there was insufficient proof that defendant's
conduct manifested personal ill will, evidenced insult or oppression, or
showed a reckless or wanton disregard of plaintiff's rights.  Plaintiff
argues that defendant waived this issue on appeal by not raising it below,
but our review of the transcript reveals that defendant raised it in both
its motion for directed verdict and its motion for judgment notwithstanding
the verdict, and therefore, preserved the issue.
     The same evidence of malice -- i.e., conduct manifesting personal ill
will, evidencing insult or oppression, or showing a reckless or wanton
disregard of plaintiff's rights -- which supported the jury verdicts on both
counts was also sufficient to allow the jury to impose punitive or exemplary
damages on both counts.  Coty v. Ramsey, 149 Vt. 451, 464, 546 A.2d 196, 205
(1988); cf. Wheeler v. Central Vt. Medical Center, Inc., No. 88-050, slip
op. at 12-13 (Vt. Oct. 27, 1989).  The jury could have fairly and reasonably
concluded that the conduct of defendant's representatives manifested per-
sonal ill will, was carried out under circumstances of insult or oppression,
or manifested a reckless and wanton disregard for plaintiff's rights.
Phillips v. Aetna Life Ins. Co., 473 F. Supp. 984, 990 (D. Vt. 1979); Crabbe
v. Veve Associates, 150 Vt. 53, 58, 549 A.2d 1045, 1049 (1988); Appropriate
Technology Corp. v. Palma, 146 Vt. 643, 647, 508 A.2d 724, 726-27 (1986).
Once evidence was presented which could support that finding by the jury,
the imposition of punitive damages was within the discretion of the jury.
Pezzano v. Bonneau, 133 Vt. 88, 91, 329 A.2d 659, 661 (1974); Woodhouse v.
Woodhouse, 99 Vt. 91, 155, 130 A. 758, 788 (1925).
                         V.  Motion for New Trial
     Defendant argues that the trial court erred in failing to grant its
motion for a new trial, claiming that the jury disregarded the reasonable
and substantial evidence, that the evidence does not support the verdict,
and that the damages awarded were excessive and bore no relation to any
harm established by plaintiff.  When reviewing a trial court's denial of a
motion for new trial, we consider whether the denial amounted to an abuse of
discretion.  Costa v. Volkswagen of America, 150 Vt. 213, 217, 551 A.2d 1196, 1200 (1988); Lent v. Huntoon, 143 Vt. at 552, 470 A.2d  at 1171.  Based
on our review of the record as explained above in our discussion of the
motions for judgment notwithstanding the verdict, we conclude that the jury
had before it sufficient evidence to reach the verdict it reached. There-
fore, we cannot find the trial court's decision to decline to overturn the
jury's award of compensatory damages to be an abuse of discretion.
     Moreover, the amount of the punitive damages need bear no particular
relationship to the amount of compensatory damages.  Appropriate Technology
Corp. v. Palma, 146 Vt. at 648, 508 A.2d  at 727.  An award of punitive
damages may stand as long as the evidence supports the showing of malice.
Ryan v. Herald Association, Inc., ___ Vt. at ___, 566 A.2d  at 1319.  Since
we conclude that the jury had evidence from which it could conclude that
defendant acted with malice, we affirm the punitive damages award.  We do
not find the punitive damages awarded in this case to be "manifestly and
grossly excessive."  Coty v. Ramsey Assoc., Inc., 149 Vt. at 466-67, 546 A.2d  at 206 (1988); see Glidden v. Skinner, 142 Vt. 644, 648, 458 A.2d 1142,
1145 (1983).
     Affirmed.
 
 
 
                                        FOR THE COURT:
 
 
 
                                        Chief Justice



FN1.      We note that much confusion has arisen over the terminology applied
to the malice requirement in its various contexts:  courts have used the
term "actual malice" in reference to both types of malice.  Compare New York
Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964) ("'actual malice'DD that
is, with knowledge that it was false or with reckless disregard of whether
it was false or not") with Lent v. Huntoon, 143 Vt. at 550, 470 A.2d  at 1770
("punitive damages may be awarded on a showing of actual malice . . . .
shown by conduct manifesting personal ill will or circumstances evidencing
insult or oppression, or even by conduct showing a reckless or wanton
disregard of one's rights"); see also Ryan v. Herald Assoc., ___ Vt. at ___
n.5, 566 A.2d  at 1320 n.5.
     Courts have also termed the first type of malice as "constitutional"
malice.  See Gertz v. Robert Welch, Inc., 418 U.S. 323, 342 (1974); Ryan v.
Herald Assoc., ___ Vt. at ___, 566 A.2d  at 1319.  Moreover, the terms
"simple malice" and "common-law malice," Ryan v. Herald Assoc., ___ Vt. at
___, 566 A.2d  at 1319-20, as well as "express malice," Calero v. Del
Chemical Corp., 68 Wis. 2d 487, 499-500, 228 N.W.2d 737, 748 (1975), are
used interchangeably in reference to the second type of malice.

FN2.     Two limited constitutional areas, one involving public figures, Lent
v. Huntoon, 143 Vt. 539, 545, 470 A.2d 1162, 1167 (1983), and another
regarding matters of public concern disseminated to subscribers or the
general public, Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 762 (1974), have developed more recently.

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