Opinion
Civil No. 00-727-KI
January 19, 2001
Richard C. Busse, Jennifer L. Lanfranco, BUSSE HUNT, 521 American Bank Building, 621 S.W. Morrison Street, Portland, Oregon 97205, Attorneys for Plaintiff
Patrick H. Hicks, Veronica Arechederra Hall, LITTLER MENDELSON, P.C., 3930 Howard Hughes Parkway, Suite 200, Las Vegas, Nevada 89109-0944, Attorneys for Defendants
OPINION AND ORDER
Before the court is the motion for summary judgment (#11) by defendants Alamo Rent-A-Car, Inc. ("Alamo") and Fred Giahi. For the reasons set forth below, I deny the motion.
FACTS
Plaintiff Sharon Beldon is a former employee of defendant Alamo. She alleges that Alamo and its Portland manager, defendant Giahi, published false and defamatory statements about her in reports that documented the reasons for her suspension and termination.
Beldon began her employment with Alamo on June 24, 1996 as a rental agent. As of her termination on June 1, 1999, she was Shift Manager.
Beldon was aware of Alamo's Human Resources Policy regarding Work Rules and Standards of Conduct, which identified acts of deception or theft as unacceptable conduct and grounds for termination. Likewise, Beldon was aware of Alamo's policy that defined "theft" to include an employee issuing customer credits to Alamo associates, relatives, or friends when they are not entitled to receive them. The same policy defined "deception" to include unauthorized backdating of contracts, or the backdating of contracts to benefit employees, relatives, or fiends. Defendants' Exhibit F, p. 4.
On May 10, 1999, Giahi became the City Manager for Alamo in Portland. As City Manager, Giahi is responsible for all operations at his location, including supervisory authority over Shift Managers and other personnel. A few days after Giahi commenced his position as City Manager, he learned about a problematic rental transaction. Initially, he noticed that a customer had rented two vehicles and was delinquent approximately two days. Upon further inquiry, Giahi learned that Beldon had rented both vehicles and had closed the account as delayed returns. He further learned that several discounts were applied to the account, including the following: a free upgrade on both vehicles, waiver of the second driver fee, application of invalid coupons, and two days backdating on a delinquent account. As a result, the customer had received the rental of two brand new Toyota Camrys for six days, at a total rate of $48.40 each. This was three times less than the customer should have paid. There was no explanation on the contract as to why the customer had received such extraordinary discounts. Consequently, Giahi discussed the situation with his supervisor, Paul Norum, the Market Manager in Portland. Giahi explained to Norum what he had discovered and conveyed that he needed to investigate further to determine whether any misconduct had occurred. Norum contacted Anthony Holbrook, Regional Human Resources Manager, and the decision was made to suspend Beldon pending investigation. Giahi and Norum did suspend Beldon. The form that documents Beldon's suspension, dated May 20, 1999, indicates that she was suspended for "violation of policy" and "deception/theft." In response to the accusations, Beldon claimed that she had no prior knowledge of the customer.
Defendants allege that, pursuant to Giahi's investigation, he learned that the customer had requested Beldon at the inception of the rental, the rental had been processed in Beldon's office, there was no proof of a valid coupon, and a driver of one of the vehicles acknowledged that he asked for Beldon upon his return of the vehicle and that she was an acquaintance of his brother. Defendants further allege that, on that basis, Giahi concluded that Beldon had failed to follow proper company procedures and that her explanation was not credible. Beldon denies these assertions. However, it is undisputed that Beldon's actions resulted in a loss of revenue and profits to Alamo.
Based on his conclusions, Giahi further concluded that Beldon had engaged in deception or theft, as those terms are defined in Alamo's policies. Giahi consulted with Norum and Holbrook regarding the results of his investigation and the decision was made to terminate Beldon. Norum and Giahi terminated Beldon that same day (June 1, 1999). The reasons for the termination were memorialized by Giahi in three documents, filed as Defendants' Exhibits, H, I, and J. Notwithstanding what Giahi wrote in those documents, defendants now state that Beldon was terminated because (1) it is a violation of policy to issue illegitimate discounts to relatives, friends, or acquaintances; and (2) it is a violation of policy to backdate contracts without authorization. Defendants' Concise Statement, ¶ 16.
LEGAL STANDARD
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). The initial burden is on the moving party to point out the absence of any genuine issue of material fact. Once the initial burden is satisfied, the burden shifts to the opponent to demonstrate through the production of probative evidence that there remains an issue of fact to be tried. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On a motion for summary judgment, the evidence is viewed in the light most favorable to the nonmoving party. Robi v. Reed, 173 F.3d 736, 739 (9th Cir.), cert. denied, 120 S.Ct. 375 (1999).
DISCUSSION
In order to prevail on her claim, Beldon must establish that defendants published false and defamatory material concerning her to a third person.Wallulis v. Dymowski, 323 Or. 337, 342-43, 918 P.2d 755 (1996). Given that her claim is based upon statements made among Alamo's own employees, defendants had a qualified privilege to exchange information regarding the reasons for Beldon's suspension and termination. See Wattenburg v. United Medical Lab., 269 Or. 377, 380, 525 P.2d 113 (1974) ("A statement is conditionally privileged if: (1) it was made to protect the interests of defendants; (2) it was made to protect the interests of plaintiff's employer; or (3) it was on a subject of mutual concern to defendants and the person to whom the statement was made."). Beldon does not dispute that defendants had such a qualified privilege.
In order to overcome the qualified privilege, a plaintiff must produce evidence "of some kind of improper motive on defendant's part." Id. at 380. One way in which a plaintiff can satisfy this requirement is to demonstrate the publisher's lack of belief or reasonable grounds for belief in the truth of the derogatory statement. Cooper v. PGE, 110 Or. App. 581, 590, 824 P.2d 1152, rev. denied, 313 Or. 209 (1992). Beldon argues that defendants cannot rely on their qualified privilege because they did not have reasonable grounds to believe the truth of the derogatory statements. Plaintiff's Opposition, p. 20.
On one hand, it appears that there is sufficient evidence to find that defendants had a reasonable basis, at the time Beldon was suspended and terminated, to conclude that Beldon had engaged in "deception." As noted above, the definition of that term includes unauthorized backdating of contracts, which Beldon admits she did. I note, however, that in the "Report of Termination of Employment" for Beldon, defendant Giahi also wrote that Beldon "was mishandled company fund," which I take to mean "mishandling company funds." At oral argument, defendants' counsel argued that such phrasing was just Giahi's way of expressing that Beldon's actions had caused Alamo to lose money or to not maximize its profits. I believe a jury could find that "mishandling company funds" has a derogatory meaning not supported by the conduct that defendants believed Beldon had engaged in. As such, summary judgment is inappropriate.
Given this conclusion, it is unnecessary to address the many other questions of material fact that Beldon alleges exist. If this case proceeds to trial, those issues can be presented to the jury. I stress, however, that the relevant facts relate to what Giahi and his superiors actually knew at the time they made the allegedly defamatory statements, rather than what we can determine in hindsight. See Bickford v. Tektronix, Inc., 116 Or. App. 547, 551, 842 P.2d 432 (1992) ("The privilege maybe abused if the speaker does not believe that the statement is true or lacks reasonable grounds to believe that it is true. [citation omitted]. To prove an abuse of the privilege, plaintiff had to offer evidence creating a question of fact about the mental states of [the employees who made the statements] at the time they made their statements to plaintiff's coworkers." (emphasis added)). As such, I suggest that some of the facts that Beldon alleges are material may not be and need not be part of a jury's decision in this case. If necessary, this issue can be further addressed through motions in limine and a pretrial conference.
CONCLUSION
The motion for summary judgment (#11) by defendants Alamo Rent-A-Car, Inc. and Fred Giahi is DENIED.
IT IS SO ORDERED.