Opinion
No. 3-211 / 02-0757.
Filed July 23, 2003.
Appeal from the Iowa District Court for Linn County, David S. Good, Judge.
Defendants appeal from judgments for compensatory and punitive damages and from dismissal of their counterclaim. Plaintiffs cross appeal the setting aside of some damage awards and the court's refusal to hold the Detroit Province liable. APPEAL AFFIRMED IN PART, VACATED IN PART; CROSS-APPEAL AFFIRMED.
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellants.
Matt Reilly of White Johnson, P.C., Cedar Rapids, for appellees.
Heard by Sackett, C.J., and Huitink and Vogel, JJ.
Defendants David C. Bayne, S.J. and the Detroit Province of the Society of Jesus (Detroit Province) appeal from monetary judgments for compensatory and punitive damages rendered against them in favor of plaintiffs White Johnson, P.C., ("P.C."), Timothy S. White, and J. Richard Johnson, the attorney stockholders, on claims by plaintiffs of extortion and defamation. Defendants also challenge the dismissal of their counterclaim against plaintiffs seeking to recover fees Bayne sought as an expert witness for a client of plaintiffs. Plaintiffs on cross appeal challenge an order of the district court setting aside part of their damage award and refusing to hold the Detroit Province vicariously liable for compensatory damages awarded against Bayne. We affirm the appeal in part, vacate in part, and affirm the cross-appeal.
We first review those facts necessary to resolve the issues advanced on appeal, and in doing so we review them the light most favorable to the verdicts. See DeBurkarte v. Louvar, 393 N.W.2d 131, 139 (Iowa 1986); Ort v. Klinger, 496 N.W.2d 265, 269 (Iowa Ct.App. 1992).
Plaintiffs were representing Russell Knapp in complex securities litigation under an agreement that provided Knapp was required to pay all expert fees and charges. Johnson, who had been a former student of Bayne's, contacted Bayne to be an expert witness for a fee of $250 an hour. Bayne, who is a Jesuit priest and a lawyer, did research and wrote several lengthy letters giving his opinion on the issues in litigation. For the letters and his research he sent a billing of $63,958. Johnson forwarded the bill to Knapp who paid the charges. The money paid went to the Detroit Province. Bayne, having taken a vow of poverty, was required, in keeping with his vows, to pay all fees earned to the Detroit Province. The letters Bayne wrote were presented to the court in Indiana, which ruled on a summary judgment motion in Knapp's securities litigation. The judge there declared the letters were not helpful. Bayne wrote another letter for which he charged $92,762.50. He also billed for deposition testimony of $2,707.50 and for a draft letter at $1,917.50. These billings were sent to Johnson who forwarded the bills to Knapp, telling him to pay the two smaller bills but to call him concerning the larger bill. Knapp's suit was then settled. As a part of the settlement, Knapp received $125,000 for fees and expenses. Knapp paid $100,000 to the P.C. and offered $25,000 to Bayne to settle his account. Bayne refused to accept the $25,000 in full payment of his bill, saying he would file suit to recover his total fees. No suit was immediately filed. Rather, Bayne sent Johnson and others what was captioned a "Pretrial Brief." The document accused Johnson of being unethical, stealing, being a liar, committing malpractice, being dishonest, and being guilty of failing to seek Bayne's fee. Bayne indicated in the brief that, while he referred to Johnson, what he said also referred to White and the P.C The brief also was sent to Knapp, Knapp's son, Knapp's personal attorney Gary Streit, Bayne's attorney, a friend of Bayne's who is an orthodontist, and a former student of Bayne's. The brief obviously was focused on encouraging plaintiffs to pay all of Bayne's charges.
The judge said:
In the opinion letter, Bayne quotes from the minutes of the FRI and FGI board meetings, as well as from depositions of the various players in this saga. However, the space between these quotes is filled with unsupported allegations, innuendo, suspicion, and general distaste for the particular business arrangement. Bayne quotes from The Mikado, invokes the evil taint of Michael Milkin, and crawls inside the heads of those involved in order to tell us what they were thinking.
. . . .
Knapp has designated Bayne as an expert witness presumably because of his legal expertise in the area of corporations law. Yet, his opinion letter is almost completely devoid of law. Furthermore, Bayne's opinion letter does little to assist the Court in understanding any fact in issue. Instead, it blurs the line between fact and fiction. Throughout the ninety-three pages, Bayne admits to lacking personal knowledge of the actions in question, but at the same time he explains the players' emotions and intentions as if he were the puppet master. With a little fleshing out and some more plot development, the opinion letter may prove to be an entertaining novel. However, it is not evidence.
Rather than pay Bayne's charges plaintiffs, understandably upset by some of the allegations in the brief, filed the suit from which this appeal is taken against Bayne and the Detroit Province of the Society of Jesus, his alleged employer. The suit contended that Bayne made or threatened to make false and malicious allegations against plaintiffs regarding the additional fees he claimed they owed him, that Bayne intentionally interfered with plaintiffs' existing contractual relationship and its prospective business advantages, that he made libelous and defamatory statements, and that Bayne and the Detroit Province as his employer were liable to them for actual and punitive damages. Bayne counterclaimed against the plaintiffs for the charges for his services in the amount of $94,680 and claimed actual and punitive damages for plaintiffs' intentional interference with his relationship with Knapp.
The matter was tried to a jury which found: (1) plaintiffs had no contractual obligation to pay Bayne's billing; (2) Bayne failed to prove his claim that plaintiffs interfered with a prospective business relationship with Knapp; (3) Bayne committed extortion; (4) the P.C. was damaged in the amount of $92,762 as a result of the extortion; (5) Bayne committed defamation; (6) the P.C. was damaged in the amount of $100,000 as a result of the defamation; (6) Johnson was damaged in the amount of $250,000 as a result of the defamation; (7) the statements of Bayne were made with ill will or wrongful motive and constituted willful and wanton disregard for the rights of another; (8) the P.C. was entitled to punitive damages in the amount of $200,000 for the defamation; (9) White was entitled to punitive damages in the amount of $100,000 for the defamation; (10) Johnson was entitled to punitive damages of $500,000 for the defamation; (11) the P.C. was entitled to punitive damages of $200,000 for the extortion; (12) White was entitled to $100,000 in punitive damages for the extortion; and (13) the Detroit Province was liable for punitive damages in the amount of $43,583.
In setting the amount the jury inserted the words, "in hopes that this money will be reimbursed to Mr. Russell Knapp as overpayment for services rendered by David C. Bayne."
Post-trial motions were filed by both parties. The court overruled all motions, but vacated the compensatory damages for extortion awarded to the P.C. in the amount of $92,762.50.
Bayne contends on appeal that (1) the district court erred in not admitting evidence of Johnson's bankruptcy; (2) the district court erred in not setting aside the punitive damage awards; (3) the district court erred in submitting defamation to the jury; (4) the clerk's judgment entry for punitive damages against the Detroit Province should be set aside as contrary to the district court's ruling on post-trial motions; (5) the district court erred in limiting discovery; (6) the district court erred in granting partial summary judgment on Bayne's counterclaim without discovery of the P.C.'s billing records; and (7) the district court should have granted a new trial.
Plaintiffs on cross appeal contend (1) the Detroit Province should be vicariously liable for Bayne's actions because Bayne is their agent, and (2) the district court improperly vacated the compensatory damages for extortion awarded to the P.C.
BANKRUPTCY OF JOHNSON.
Johnson and his wife filed personal bankruptcy. Bayne contends he should have been allowed to introduce evidence of this filing. The parties agree error was preserved on this issue. Generally, we review evidentiary rulings concerning relevancy and materiality for an abuse of discretion. Midwest Home Dist., Inc. v. Domco, 585 N.W.2d 735, 738 (Iowa 1998); see also Sanford v. Meadow Gold Dairies, Inc., 534 N.W.2d 410, 412 (Iowa 1995).
Bayne asserts the evidence was admissible under Iowa Rule of Evidence 5.402. He contends it was relevant to the fact Johnson's financial condition showed a motive to direct Knapp not to pay Bayne's bill so the $100,000 fee could remain with the P.C. He further alleges it was relevant to show Johnson was not defamed by Bayne's accusation that, "Johnson breached the contract by protracted evasion, misrepresentation, and eventual non-payment."
Plaintiffs respond that the filing of the bankruptcy petition in May 1998 was of no relevance to any issue, and to the extent it had any probative value, the probative value was outweighed by the risk of prejudice. They contend the bankruptcy was not relevant to Johnson's reputation or motive to direct Knapp not to pay Bayne's bill. They argue Johnson was not defamed by Bayne's statements he did not pay his bill, but he was defamed by an allegation he had engaged in protracted evasion and misrepresentation. Plaintiffs further allege it had no bearing on Bayne's accusations of misfeasance, nonfeasance, negligence, common law deceit, ethical violations, and malpractice.
The district court did not abuse its discretion in refusing to allow evidence of Johnson's bankruptcy. We affirm on this issue.
DEFAMATION.
Bayne contends the district court erred in submitting the issue of defamation to the jury. He does not deny he made statements that defamed the plaintiffs. Rather Bayne contends the statements he made were connected with litigation and thus were privileged.
Iowa recognizes an absolute privilege (or immunity) from liability for defamation which takes place in a judicial proceeding. Spencer v. Spencer, 479 N.W.2d 293, 295 (Iowa 1991); Robinson v. Home Fire Marine Ins. Co., 242 Iowa 1120, 1125-26, 49 N.W.2d 521, 524-27 (1951). An attorney or party is absolutely privileged to publish false and defamatory statements in judicial proceedings if (1) the statements are made preliminary to, or in the institution of, or during the course and as a part of a judicial proceeding, and (2) the content of the statement is reasonably pertinent or has some relation to the judicial proceeding. Spencer, 479 N.W.2d at 295 (citing Restatement (Second) of Torts §§ 586-88, at 247-51 (1977)). The purpose of the absolute privilege is to encourage the open resolution of disputes by removing the cloud of later civil suits from statements made in judicial proceedings. Spencer, 479 N.W.2d at 295; Beeck v. Kapalis, 302 N.W.2d 90, 97 (Iowa 1981). A statement is only privileged if made by one who has an interest in the subject matter to one who also has an interest in it or stands in such a relation that it is proper or reasonable for the maker to give the information. Spencer, 479 N.W.2d at 295. However, the statement must have some relation to the issues in the judicial proceeding. Id. This policy which allows freedom of communication in judicial proceedings does not permit dissemination of defamatory statements outside of the judicial proceeding. Id. at 296.
While a defamatory pleading is privileged, that pleading cannot be a basis for dissemination of defamatory statements to the public or third parties not connected with the judicial proceeding. Id. Otherwise, "to cause great harm and mischief a person need only file false and defamatory statements in a judicial pleading and then proceed to republish the defamation at will under the cloak of immunity." Asay v. Hallmark Cards, Inc., 594 F.2d 692, 698 (8th Cir. 1979); Spencer, 479 N.W.2d at 296. The privilege is an affirmative defense which must be pled and proved . Vinson v. Linn-Mar Cmty. Sch. Dist., 360 N.W.2d 108, 116 (Iowa 1984).
At the time the brief was disseminated, litigation had been threatened but no case was filed. Even if one can conclude that the alleged brief was preliminary to the institution of such a suit, at the time the brief was mailed the document was not a pleading. See Spencer, 479 N.W.2d at 296-97 (noting the fact the statements made were in a letter rather than in a pleading was considered in determining there was no privilege). Furthermore, the brief was not something requested to be filed by a court, nor was it disseminated in support of an issue being advanced after litigation was commenced. While the brief had some of the markings of a privileged document, namely (1) the brief was pertinent to the dispute between Bayne and the plaintiffs, that dispute being the responsibility for the payment of Bayne's bill, and (2) the brief was sent to parties who would be connected with the judicial proceedings, namely the plaintiffs. However, the brief was also sent to Knapp and his attorney, and while they may have had knowledge of the dispute there was no showing that Bayne intended to make Knapp a party to the litigation. Additionally, the brief was sent to a former law student of Bayne, a friend who is an orthodontist, and Knapp's son. Bayne has failed to show these persons had any connection to the litigation. Rather, he contends the brief was only sent to these people for editorial comment. We agree with the district court's refusal to dismiss the defamation claim on the basis that the "Trial Brief" was a privileged document. We affirm on this issue. There is substantial evidence to support the jury's finding that the defamatory statements went beyond the judicial proceeding.
Bayne further contends there was not sufficient evidence of reputation. There was evidence from Cedar Rapids attorney Gary Streit that the plaintiff firm had a reputation of being capable attorneys. Knapp testified Johnson was a man of integrity. White testified his admissions pro hac vice in a number of jurisdictions required that he be currently in good ethical standing, and referrals the firm received from other places in the country were a result of the firm's good reputation. White testified his reputation had been tarnished. Plaintiffs contend that the brief was libel per se; consequently, it was actionable without proof of damages, and the plaintiffs did not need to prove damages. Certain statements are held to be libelous per se, which means they are actionable in and of themselves without proof of malice, falsity, or damage. Spencer, 479 N.W.2d at 296. In actions based on language not libelous per se, all of these elements must be proved by a plaintiff before recovery can be had; but when a statement is libelous per se, they are presumed from the nature of the language used. Among statements which are libelous per se are those which charge business incompetence or lack of skill in the trade, occupation, profession, or office by which one earns his living. Vojak v. Jensen, 161 N.W.2d 100, 104 (Iowa 1968); see also, Burghardt v. Scioto Sign Co., 191 Iowa 384, 392, 179 N.W. 77, 80 (1920); Children v. Shinn, 168 Iowa 531, 544, 150 N.W. 864, 868 (1915); Vial v. Larson, 132 Iowa 208, 209, 109 N.W. 1007, 1007-08 (1906); Morse v Times-Republican Printing Co., 124 Iowa 706, 713, 100 N.W. 867, 869 (1904). The defamatory statement in the "Trial Brief" challenged plaintiffs' skill in their profession and the occupation by which they earn a living. There was evidence the statements were not true. There is no basis to defendants' argument on this issue. We affirm the district court on this issue.
PUNITIVE DAMAGES.
Bayne contends the district court erred in failing to set aside the punitive damage awards. He contends the issue was preserved by making a motion for directed verdict, filing a motion for judgment notwithstanding the verdict, and by raising it on appeal. Plaintiffs agree with the defendants' statement as to preservation of error.
"Current Iowa law holds that an award of punitive damages does not depend on an award of compensatory damages, but rather depends on a showing of actual damages." Podraza v. City of Carter Lake, 524 N.W.2d 198, 203 (Iowa 1994) (citing Suss v. Schammel, 375 N.W.2d 252, 255 (Iowa 1985)).
Bayne argues of the six punitive damage awards four are premised on claims where no actual damages were awarded. While Bayne acknowledges actual damages are not required to recover punitive damages, he says there must be a showing of actual damage. He contends there was no such showing.
The jury found Bayne committed extortion and awarded the P.C. $92,762.50 in compensatory damages, which amount the district court took away from plaintiffs in ruling on the post-trial motions. No compensatory damages were awarded for extortion to either Johnson or White. The jury then awarded punitive damages as a result of the extortion of $200,000 to the P.C., $100,000 to White, and $500,000 to Johnson.
Bayne contends the awards were not justified because there was no evidence of actual damages for White and Johnson on the claim of extortion. The jury found Bayne committed extortion. Bayne does not contend this issue should not have been submitted or there was not substantial evidence supporting this finding.
The district court vacated the $92,762.50 that was awarded to the P.C. and in doing so said,
The court vacates the damages awarded in the amount of $92,762.50 which was the amount of the alleged contract. The amount was never paid by White Johnson, P.C. or Timothy S. White or J. Richard Johnson and is, therefore vacated.
Plaintiffs contend on cross-appeal this award should not have been vacated because plaintiffs showed actual damages of lost wages from time spent in this litigation. They argue the attorneys in the P.C. lost the opportunity to work on other cases while working on this case.
As a part of this argument Bayne also claims there is no evidence of acts to support a finding of legal malice. He fails to tell us where this issue was preserved for appellate review and we do not address it. He also argues:
Iowa R.App.P. 6.14(1)( f) ("Each division of the argument . . . shall state how the issue was preserved for review, with references to the places in the record where the issue was raised and decided.").
Even if that dissemination [of the brief] might provide a basis to support defamation or extortion actual damages, the acts of Father Bayne's attorneys in sending the trial brief without his authorization, let alone his direction, is not a basis for a finding of legal malice necessary to support punitive damages.
Bayne makes no reference to where in the record this claim was preserved and we do not address it.
Punitive damages for extortion. The district court vacated the compensatory damage award to the P.C. for extortion. As noted below in our resolution of the claim in Plaintiffs' cross-appeal, the district court correctly vacated the award for compensatory damages for extortion. With no damage award and no actual damage for extortion, we conclude the district court erred in not vacating the $800,000 in punitive damages awarded the P.C., White, and Johnson for extortion. We vacate the punitive damage awards for extortion in the amount of $200,000 to the P.C., $100,000 to White, and $500,000 to Johnson.
Punitive damages for defamation. Having upheld the compensatory damage awards for defamation, we consider the attendant punitive damage awards. Concerning the P.C. and Johnson, the punitive damages awarded are only twice the compensatory damages. Considering the circumstances before us, we cannot say the punitive damages awarded to the P.C. and Johnson are excessive.
Defendants argue the punitive damage award to White is without evidentiary support. White was not awarded any compensatory damages for defamation. Plaintiffs argue the lack of a damage award does not mean White did not prove damage so as to support a punitive award. See Podraza, 524 N.W.2d at 203. However, lack of a damage award can be evidence of a lack of actual damages. SeeSchlegel v. Ottumwa Courier, 585 N.W.2d 217, 221-26 (Iowa 1998). We conclude the punitive damage award to White lacks evidentiary support and vacate the $100,000 award to him.
CLERK ENTRY.
The Detroit Province contends the clerk of court should have stricken the $43,583 judgment against it for punitive damages. The Detroit Province contends this judgment was taken away from plaintiffs in the district court's ruling on post trial-motions.
The plaintiffs filed a motion to have the total judgment against Bayne taxed also against the Detroit Province either by a finding or an order nunc pro tunc. In ruling on that motion the district court said:
Plaintiff's motion to modify the award to include the Detroit Province or in the alternative to enter an order nunc pro tunc is considered by the Court and the motions are denied. The Court concludes that Defendant Detroit Province is liable only for actual damages assessed against the Detroit Province. (emphasis added)
The court also as a part of the ruling vacated the actual damage award of $92,762.50, finding the plaintiffs never paid out that money.
After the briefs were filed and just before scheduled oral argument, the Detroit Province filed a motion contending this issue, while on appeal to us, had been resolved in a proceeding in the Michigan state courts where plaintiffs sought to levy on their judgment against the Detroit Province in Michigan. Defendants claim this court is bound by that resolution under the doctrine of issue preclusion, and contend the Michigan court's decision should decide the issue before us on appeal.
The Detroit Province cites Dettmann v. Kruckenberg, 613 N.W.2d 238, 244 (Iowa 2000) in support of its position. We agree with the Detroit Province that issue preclusion applies if the following four requirements are met:
"(1) the issue determined in the prior action is identical to the present issue; (2) the issue was raised and litigated in the prior action; (3) the issue was material and relevant to the disposition in the prior action; and (4) the determination made of the issue in the prior action was necessary and essential to that resulting judgment."Dettman, 613 N.W.2d at 244; American Family Mut. Ins. Co. v. Allied Mut. Ins. Co., 562 N.W.2d 159, 163-64 (Iowa 1997).
Unlike Dettman where the issue had been resolved in the prior action, the issue presented to the Michigan court here had not yet been resolved by the Iowa courts as the issue was yet awaiting resolution in an appeal from the district court decision. See Dettman, 613 N.W.2d at 244. The Detroit Province has not cited, nor do we find any authority to support its position that we are bound by the Michigan court's ruling.
We conclude the clerk of court was correct in not striking the award of punitive damages against the Detroit Province. The district court did not strike it. The italicized language was included in the order refusing the plaintiffs' request to assess compensatory damages found against Bayne against the Detroit Province. There is no specific language striking the punitive damage award against the Detroit Province. The only conclusion that can be drawn from the language is that the district court did not strike the judgment against the Detroit Province. This being the only challenge raised on appeal to the award against the Detroit Province, it remains liable for those damages the jury actually assessed against it. We deny defendants' request to order the clerk to strike the entry.
The Province on appeal does not question whether the issue should have been submitted.
DISCOVERY.
Bayne contends plaintiffs should have been required to produce their billing records. The court denied the motion, contending the records were privileged. Plaintiffs contend their billing records were not relevant to any issue in the case. Whether the production of such fee statements should be compelled, however, is a decision customarily left to the informed discretion of the court. Murray v. Stuckey's, Inc., 153 F.R.D. 151, 153 (N.D.Iowa 1993); Gabelmann v. NFO, Inc., 606 N.W.2d 339, 343 (Iowa 2000). That decision will logically turn on the nature of the objections posed by defendant to the request. Gabelmann, 606 N.W.2d at 343. We find no reason to reverse the district court on this issue.
MOTION FOR NEW TRIAL AND JUDGMENT NOTWITHSTANDING THE VERDICT.
Bayne contends his motion for new trial and judgment notwithstanding the verdict should have been sustained. The parties agree error was preserved on this issue. We review a denial of a motion for new trial for abuse of discretion. Bredberg v. Pepsico, Inc., 551 N.W.2d 321, 326 (Iowa 1996). We review the district court's grant or denial of a motion for judgment notwithstanding the verdict for the correction of errors at law. Id. In ruling on a motion for new trial the district court has broad but not unlimited discretion in determining whether the verdict effectuates substantial justice between the parties. Iowa R.App.P. 6.14(6)( c). A new trial or judgment notwithstanding the verdict may be ordered when sufficient evidence does not support the jury verdict and the verdict fails to effectuate substantial justice. Midwest Home Dist., Inc. v. Domco, 585 N.W.2d 735, 738 (Iowa 1998); Magnusson Agency v. Public Entity Nat'l Co. — Midwest, 560 N.W.2d 20, 30 (Iowa 1997).
Bayne contends the verdict of $2,086,345.50 including punitive damages of $1,643,583 was excessive. He contends an award of that amount in punitive damages establishes passion and prejudice. He advances that he is a Jesuit priest who has taken a vow of poverty, all the earnings he generates are turned over to the Detroit Province, and he lives on an allowance the Detroit Province provides to him. He further claims the amounts awarded substantially exceed the damages requested in the answers to interrogatories. He contends prejudice is further shown by the fact that White was awarded punitive damages for defamation even though he was not awarded actual damages. He contends the jury's verdict is not supported by the evidence and exceeds the amounts specified as damages in plaintiffs' interrogatories.
Iowa Rule of Civil Procedure 1.1004(4) provides for a new trial when a verdict is excessive and appears to have been influenced by passion or prejudice. Id. We allow punitive damages to punish a party and to deter that party and like-minded persons from committing similar acts. See Economy Roofing Insulating v. Zumaris, 538 N.W.2d 641, 654 (Iowa 1995). When we review a punitive damage award for excessiveness, we look to the relationship between the punitive damages award and the wrongful conduct of the offending party. Midwest Home, 585 N.W.2d at 743; Economy Roofing, 538 N.W.2d at 652. We also consider whether the case was an isolated instance and the financial condition of the defendant. Midwest Home, 585 N.W.2d at 743; Wilson v. IBP, Inc., 558 N.W.2d 132, 148 (Iowa 1996).
Plaintiffs respond that the verdict is reasonable. They contend Bayne over-billed Knapp, who was an elderly man, $161,345.50 for $25,000 worth of work. They contend the pretrial brief showed if Bayne did not collect $92,762.50 and $1,917.50 he would sue them. They further contend they were not bound by the damages asked in the interrogatories, as it was their best estimate at the time, and that punitive damages on the defamation claim for White were proper because, even though he was not awarded compensatory damages, he suffered actual damage.
So far as we have vacated part of the award we agree with plaintiffs' argument. Having done so, we find no reason to order a new trial or enter a judgment notwithstanding the verdict.
SUMMARY JUDGMENT ON COUNTERCLAIM.
The district court entered summary judgment for White on Bayne's counterclaim. Bayne contends his failure to have the billing records of the firm precluded him from fully resisting the summary judgment. Plaintiffs contend the breach of contract claim is moot, as the jury found all plaintiffs proved they had no contractual obligation to pay the billings claimed by Bayne. We agree that the issue is moot for this reason. Plaintiffs contend there was no evidence supporting the claim that White interfered with the Bayne-Knapp contract. We agree and affirm the district court on this issue.
PLAINTIFFS' CROSS APPEAL.
Plaintiffs contend the district court should have held the Detroit Province vicariously liable for the compensatory damages awarded against Bayne. They contend Bayne was an agent of the Detroit Province, and his attempt to collect funds to be given to the Detroit Province was within the agency relationship. They further contend Bayne's vow of poverty is in itself a basis to hold the Detroit Province liable. They contend to do otherwise would preclude their being compensated.
VICARIOUS LIABILITY FOR COMPENSATORY DAMAGES AWARDED AGAINST BAYNE.
There is little dispute that Bayne as a Jesuit priest took a vow of poverty and was authorized by the Detroit Province to teach, publish, serve as an attorney, and work as an expert, with the expectation that any remuneration he received for any of these jobs was to be turned over to the Detroit Province. He was using the "Trial Brief" in an attempt to collect fees which would be turned over to the Detroit Province.
Plaintiffs argue that, because Bayne was authorized to collect money for the Detroit Province, and because the extortion and defamation were used by him to collect money for the Detroit Province, the Detroit Province should be liable. They also claim it is disingenuous for the Detroit Province to allow Bayne to do this work and then preclude any recovery for torts Bayne may have committed in collecting by accepting all of the earnings, thus leaving Bayne with no funds. They contend Bayne's vow of poverty is in itself a basis to hold the Detroit Province variously liable.
There appears to be little authority addressing this issue. Plaintiffs support their position with Mullen v. Horten, 700 A.2d 1377 (Conn.Ct.App. 1997). In Mullen, a priest who had taken a vow of poverty counseled for money which went to the religious order. Id. at 1378-79. He had sexual relations with a client who then sought to hold the order responsible for the priest's behavior. Id. A divided appellate court reversed a summary judgment for the order, determining that the priest was counseling for the order and one could find that the sexual encounters were a misguided attempt to counsel the woman. Id. at 1383. Mullen has been limited to its facts.
To impose vicarious liability, Plaintiffs must demonstrate (1) an agency relationship existed between Bayne and the Detroit Province, and (2) the injurious action occurred within the scope of the agency relationship. Godar v. Edwards, 588 N.W.2d 701, 705 (Iowa 1999). Father Bayne admitted he is an employee of the Detroit Province, satisfying the first element. However, nothing in the record suggests extortion or defamation to be acts "commonly done" by such employees, that the Detroit Province had "reason to expect" such actions, or that such actions were not a significant "departure from the normal method of accomplishing an authorized result." See Restatement (Second) of Agency § 229, at 506 (1958). There is no evidence the Detroit Province authorized Bayne to utilize the methods he did in collecting the fees. We affirm the district court's refusal to hold the Detroit Province vicariously liable for compensatory damages awarded against Bayne.
COMPENSATORY DAMAGES FOR EXTORTION.
Plaintiffs contend the district court should not have taken away the compensatory damages for extortion, as the jury was well aware of the time the attorneys put in on the case. They contend they do not seek attorney fees but rather earnings lost because the attorneys had to work on this case. We find no reason to disagree with the district court's ruling on this issue.
CONCLUSION.
We affirm the district court's denial of the motion for new trial and affirm in part the denial of judgment notwithstanding the verdict. We affirm the compensatory and punitive damage awards to the P.C. and Johnson against Bayne for defamation. We affirm the district court's decision to vacate the compensatory damage award for extortion. We vacate the punitive damage awards against Bayne for extortion and the punitive damages for defamation awarded to White. We conclude the district court did not abuse its discretion in the discovery and evidentiary rulings appealed from. We conclude the clerk of court acted correctly in not striking the award of punitive damages against the Detroit Province. We affirm the district court's ruling on White's motion for summary judgment. We affirm the district court on all issues raised in the plaintiffs' cross-appeal.