Opinion
No. 2-982 / 01-1711
Filed November 17, 2003
Appeal from the Iowa District Court for Polk County, Robert A. Hutchison, Judge.
Plaintiff appeals from the district court's denial of his motion for new trial following a jury verdict in favor of defendant in a defamation suit. AFFIRMED.
William Graham of The Graham Law Firm, P.C., Des Moines, for appellant.
Roscoe Ries of Whitfield Eddy, P.L.C., Des Moines, for appellee.
Heard by Sackett, C.J., and Zimmer and Vaitheswaran, JJ.
This is a defamation case in which plaintiff, Roger Godfredsen, claims he was slandered by certain oral statements of an agent of the defendant, Lutheran Brotherhood. Godfredsen appeals from an adverse jury verdict. He contends the district court erred by submitting the defendant's affirmative defense of truth to the jury and by denying his motion for new trial based on that submission. We affirm.
I. Background Facts and Proceedings.
Roger Godfredsen was a district representative and insurance agent under contract with Lutheran Brotherhood from 1979 until 1996. The terms of his contract with Lutheran Brotherhood were specified in Godfredsen's district representative agreement and Lutheran Brotherhood's marketing policies. In 1996, Godfredsen began looking to transfer from the Muehling agency in Iowa to another agency. He eventually chose to transfer to an agency in Minnesota.
After making his decision to transfer, Godfredsen forwarded a letter to over two hundred of the clients he was serving through the Muehling agency informing them he had accepted a position in Minnesota. The letter requested the clients to execute a document expressing their desire to remain his clients. Godfredsen sought to keep his client base while moving to a new location. Based on disagreements concerning the terms of Godfredsen's transfer, Lutheran Brotherhood terminated his contract, effective June 15, 1996.
Following his termination, Godfredsen entered into a brokerage contract with Guardian Life Insurance Company and later Prudential. Many of Lutheran Brotherhood's insureds and securities holders, who were formerly assigned to Godfredsen, began transferring assets to his new companies. According to Lutheran Brotherhood, this violated the terms of its contracts with Godfredsen. As a result, Lutheran Brotherhood retained the services of Harry Peterson in November of 1996 to investigate the reasons assets were being transferred and to explain Lutheran Brotherhood's version of the events which led to Godfredsen's departure as a district representative. In December of 1996, Peterson met with approximately nineteen of Godfredsen's clients and reported his findings to Lutheran Brotherhood.
On October 5, 1998, Godfredsen sued Lutheran Brotherhood and its Iowa general agent Dennis Muehling claiming multiple theories of recovery, including the claim for defamation which has become the subject of this appeal. The defamation claim is based on statements Harry Peterson allegedly made to some of plaintiff's clients, which Godfredsen contends were slanderous. According to Godfredsen, Peterson stated Godfredsen was illegally churning the insured's policies to increase commissions and had placed his own interests ahead of his clients'. Lutheran Brotherhood denied that Peterson made slanderous statements about Godfredsen.
The trial which gives rise to this appeal followed an earlier trial and ensuing appeal. Prior to the first trial, the district court granted Lutheran Brotherhood's motion for summary judgment with respect to certain claims including the defamation claim now at issue. Plaintiff's other claims were adjudicated in the earlier trial and appeal. The first trial resulted in an award in favor of Godfredsen for damages for breach of contract. Following trial, the district court sustained Lutheran Brotherhood's motion for judgment notwithstanding the verdict. Godfredsen appealed. On appeal, the court of appeals affirmed the district court's decision to grant judgment notwithstanding the verdict. We also affirmed the district court's entry of summary judgment on plaintiff's claim of intentional interference with prospective business advantage. We reversed the district court's grant of summary judgment regarding Godfredsen's defamation claim as to Lutheran Brotherhood and remanded for a new trial on that issue.
Godfredsen v. Lutheran Bhd., No. 99-1712, 2000 WL 1675869 (Iowa Ct.App. Nov. 8, 2000).
Following remand, the case proceeded to trial on plaintiff's claim of defamation against Lutheran Brotherhood. At the close of evidence, Godfredsen moved for a directed verdict with respect to defendant's affirmative defenses of truth and qualified privilege on the ground there was insufficient evidence to submit those defenses to the jury. The trial court granted the motion regarding the qualified privilege defense but denied it with respect to the truth defense. As part of its jury instructions, the district court asked the jury to answer the following question with respect to liability: "Did defendant Lutheran Brotherhood slander plaintiff Roger Godfredsen?" The jury returned a verdict in favor of Lutheran Brotherhood by unanimously answering the question "No."
Following the jury's verdict, Godfredsen moved for a new trial claiming the court erred in submitting a truth instruction as an affirmative defense. The district court overruled his motion after concluding there was sufficient evidence in the record to support submission of the challenged instruction. Godfredsen appealed and this case is before an appellate court for the second time.
II. Scope of Review.
Our standard of review on examination of claims that the trial court erred in submitting a jury instruction is for correction of legal errors. Greenwood v. Mitchell, 621 N.W.2d 200, 204 (Iowa 2001). We review jury instructions to decide if they are a correct statement of the law and are substantially supported by the evidence. Bride v. Heckart, 556 N.W.2d 449, 452 (Iowa 1996). The evidence substantially supports a requested jury instruction when a reasonable mind would accept it as adequate to reach a conclusion. Id. "Requested instructions that are not related to the factual issues to be decided by the jury should not be submitted even though they may set out a correct statement of law." Vachon v. Broadlawns Med. Found., 490 N.W.2d 820, 822 (Iowa 1992). In weighing the sufficiency of the evidence to submit a proposed instruction, we give the most favorable construction allowed in favor of the party seeking submission. Bride, 556 N.W.2d at 452. Error in giving or refusing to give a particular instruction does not warrant reversal unless the error is prejudicial to the party. Sonnek v. Warren, 522 N.W.2d 45, 47 (Iowa 1994).
III. Sufficiency of the Evidence for the Truth Instruction.
Godfredsen contends the evidence was insufficient to support the submission of a truth instruction. He does not claim the court's instructions do not correctly state the law. Jury Instructions 11 and 12 are pertinent to plaintiff's appellate claims. In order to recover on his claim of slander, Instruction 11 required the plaintiff to prove, in pertinent part, the following:
1.The defendant made statements that:
a.Plaintiff had engaged in illegal and/or unethical conduct; and/or
b.Plaintiff put his personal interests ahead of his clients.
2.The defendant communicated the statements to someone other than the plaintiff or employees of the defendant.
3.The statements would reasonably be understood to be an expression which would attack a person's integrity or moral character or injure the plaintiff in the maintenance of his business. The form of the language used is not the deciding factor. Such statements can be made either directly or indirectly.
If the plaintiff has failed to prove any of these propositions, the plaintiff is not entitled to damages. If the plaintiff has proven all of these propositions, then the plaintiff is entitled to damages in some amount, unless you determine that defendant has established the defense of truth or substantial truth as explained to you in Instruction 12.
Jury Instruction number 12 stated:
The Defendant claims the statements complained about are true. The fact the statements are true or substantially true is a complete defense, regardless of bad faith or malicious purpose.
The Defendant must prove the truth of the statements. To do so, the Defendant must establish the truth of the entire language of the statements, and establish it in the sense attributed to it by the Plaintiff. Slight inaccuracies of expression are not important so long as the statements are substantially true.
If the Defendant has proven the truth of the statements, then the Plaintiff cannot recover.
At trial, Godfredsen objected to the truth instruction which the court submitted to the jury. He did not object to Instruction 11, the marshalling instruction, which set out the elements of his claim of slander. Lutheran Brotherhood objected to the language of the marshalling instruction.
Harry Peterson interviewed nineteen of Lutheran Brotherhood's clients and reported his findings in writing. Defendant contended the handwritten notes of Peterson's contact with Lutheran Brotherhood's customers did not contain accusations that Godfredsen engaged in illegal or unethical conduct, but merely set forth Lutheran Brotherhood's obligation to investigate potential churning by its agents and former agents. A typed copy of Peterson's handwritten notes with Lutheran Brotherhood customers was received in evidence as Exhibit 1. Exhibit 1 is not a verbatim transcript of the interviews Peterson conducted. The record reveals the Exhibit was not provided to anyone outside Lutheran Brotherhood.
Plaintiff based his slander claims on his assertions that defendant accused him of churning and putting his personal interests ahead of those of his clients. Godfredsen argues submission of a truth instruction was reversible error because no evidence was presented at trial upon which a reasonable jury could have concluded the slanderous statements complained of were true. In support of this argument he notes that Lutheran Brotherhood does not contend that he engaged in illegal churning of customer accounts.
Upon review of the record, we conclude the district court was correct in determining that there was sufficient evidence in the record to support the submission of the defense of truth to the jury. Under Instruction 11, Godfredsen was required to prove that an agent of the defendant made statements that Godfredsen engaged in illegal and/or unethical conduct, and/or that he put his personal interests ahead of his clients'. The marshalling instruction submitted to the jury was not tailored to specific allegations that Godfredsen engaged in the illegal practice of churning. It was much broader. The instruction arguably allowed the jury to consider a much larger universe of possibilities than just accusations that Godfredsen had engaged in churning or had put his interests ahead of his clients'.
It is undisputed that Godfredsen sought to maintain his Iowa clientele while living and working in Minnesota. The jury heard evidence which supports the assertion that in doing so he breached his contract with Lutheran Brotherhood because he failed to follow Lutheran Brotherhood's policies regarding transfer. The jury also heard evidence that would support the assertion that Godfredsen violated restrictive covenants contained in his contracts with Lutheran Brotherhood and Lutheran Brotherhood Securities Corp. after his contracts were terminated. Given the broad language of the marshalling instruction, we conclude this evidence supports the district court's decision to instruct the jury regarding the affirmative defense of truth.
The marshalling instruction also informed the jury that defendant could be liable for damages if the defendant made statements that the plaintiff "put his personal interests ahead of his clients." Godfredsen contends there is no evidence in the record upon which a jury could base a finding that he put his own interests ahead of his clients. In his written memorandum to Lutheran Brotherhood, Peterson did not say that Godfredsen put his personal interests ahead of his clients'. He did say that Godfredsen wanted Lutheran Brotherhood to change its standard of operation to serve himself rather than serving Lutheran Brotherhood's mission to serve clients with a high level of service. Peterson testified that Lutheran Brotherhood agents are not allowed to operate out of more than one agency. He testified the purpose of this policy is to provide an appropriate level of client service and to fulfill the fraternal activities of Lutheran Brotherhood within the agency to which a district representative is assigned. Defendant contends any statements Peterson made regarding Godfredsen wanting Lutheran Brotherhood "to change their standard of operation to serve Roger Godfredsen" were true. We conclude the evidence supports submission of the defendant's affirmative defense of truth on this issue.
Plaintiff argues that the contract violations mentioned above are not pertinent to his claims of defamation. He claims the reference to "illegal and/or unethical conduct" in the marshalling instruction refers only to Peterson's alleged statements that he was in violation of NASD churning rules. This argument is not without appeal, however, our standard of review requires us to give the most favorable construction allowed to the party seeking submission of an instruction. Here, the language of the defamation instruction, to which plaintiff did not object, did not limit the jury's consideration to statements that Godfredsen was in violation of churning rules. We affirm the district court's decisions overruling Godfredsen's motion for directed verdict regarding Lutheran Brotherhood's defense of truth and his motion for a new trial.