Summary
holding that where an employee was fired for "ethical concerns and disregard for company policies and procedures" there was not an actionable claim for defamation because the statement was there was no provably false statement of fact
Summary of this case from Chambers v. the Travelers Companies, Inc.Opinion
Civ. No. 03-6000 (RHK/AJB).
September 22, 2004
Stephen L. Madsen, Madsen Law Office, St. Paul, Minnesota, for Plaintiff.
Kathryn Mrkonich Wilson, Andrew J. Voss, and Jeffrey G. Vigil, Littler Mendelson, Minneapolis, Minnesota, for Defendant.
MEMORANDUM OPINION AND ORDER
Introduction
Plaintiff Robert Osterberg had been employed by Defendant Sears, Roebuck and Company ("Sears") as a carpet salesman from 1985 until he was terminated in 2001. He brings the present action against Sears for "Wrongful Termination of Employment" and "Defamation of Business Character." Sears has moved for summary judgment on both claims. At oral argument, Osterberg voluntarily dismissed his wrongful termination claim. For the reasons set forth below, the Court will grant Sears's Motion and dismiss the remaining defamation claim.
Background
Osterberg was a Sears carpet salesman from July 1985 until Sears terminated his employment in October 2001. (See Osterberg Dep. Tr. at 223-24, Ex. 24; Olson Aff. ¶ 6.) At the time of his termination, he sold carpet at Sears's Maplewood, Minnesota, store.In the fall of 2001, co-worker Mary Whitbeck attempted to sell carpet and other floor coverings to customer Mary Ziebol. (Ziebol Dep. Tr. at 7-9; Osterberg Dep. Ex. 4.) Over time, Ziebol became dissatisfied with Whitbeck's services. In particular, she was troubled that Whitbeck provided her with several estimates in varying amounts. (Ziebol Dep. Tr. at 8.) On August 28, 2001, Ziebol left a voice mail message at Sears's Maplewood store stating that she "wanted someone else to figure things out, either look at [Whitbeck's] measurements and figure it out and give me an estimate, or [she] was going to cancel the sale and that would be it." (Id.; see Osterberg Dep. Tr. at 68.)
On that same day, Osterberg returned Ziebol's message and set up an appointment to re-measure her home for a new estimate. (Osterberg Dep. Tr. at 67-68, Ex. 4; see Ziebol Dep. at 9.) After talking to Ziebol, Osterberg informed Whitbeck about the call and played her the message. (Osterberg Dep. Tr. at 59-60.) When Osterberg asked if he could look at her measurements and try to remedy the situation, Whitbeck "stomped off frustrated and did not cooperate." (Id. at 60.)
On August 31, 2001, Osterberg re-measured Ziebol's house. (Id. at 68.) Later, he cancelled part of Whitbeck's sale, completed a sale of his own, and kept the entire commission for himself. (Id. at 25, 109.) He did not notify management about his actions. (Id. at 109-10.) At some point thereafter, Whitbeck complained to Michael Pietrzak, Sears's Sales Manager, that Osterberg had cancelled her sale and had taken her commission. (Id. at 121, Ex. 8.)
On September 24, 2001, Sears's National Ethics and Business Policy office processed an internal complaint that Osterberg had accepted a customer's check as a cash payment without having cleared it with Equifax, Sears's check verification vendor. (Id. at 25, Exs. 8, 9.) This violated Sears's standard procedure for verifying customer checks. (Olson Aff. ¶ 4; Osterberg Dep. Ex. 2.)
Having received these two complaints about Osterberg, Sears began an investigation. Pietrzak interviewed both Ziebol and the carpet installer. On October 15, 2001, Pietrzak sent a lengthy e-mail regarding these discussions to Debbie Olson, Sears's Store Manager, and Michael Bradshaw, Sears's Asset Protection Manager (the "Pietrzak Memo"). Among other things, Pietrzak reported that Ziebol was "somewhat frustrated" with Whitbeck's changing estimates, that Osterberg had re-measured Ziebol's house and had given her an estimate, and that the carpet installer said that part of Whitbeck's carpet order had been cancelled. (See Osterberg Dep. Ex. 5.)
Based on the information provided by Pietrzak, Olson concluded that Osterberg had improperly canceled Whitbeck's sale and had taken the commission without notifying management or otherwise obtaining approval. (Olson Aff. ¶ 3.) Olson also determined that Osterberg's bypass of the check verification system violated Sears's established procedures. (Id. ¶ 4.) Based on the investigation, Olson decided to terminate Osterberg's employment. (Id. ¶ 6.)
On October 16, 2001, Olson and Bradshaw interviewed Osterberg about both complaints. (Osterberg Dep. Tr. at 108, Ex. 8; Olson Aff. ¶ 6.) Osterberg admitted not putting the check though Equifax, but said that he believed it was common practice not to do so when necessary to satisfy the customer. (Osterberg Dep. Tr. at 25-26; see Osterberg Dep. Ex. 8.) He also admitted cancelling part of Whitbeck's sale and taking the commission. (Osterberg Dep. Tr. at 109; see Osterberg Dep. Ex. 8.) At the conclusion of the meeting, Olson informed Osterberg that his employment was terminated. (Olson Aff. ¶ 6; see Osterberg Dep. Ex. 8.)
Bradshaw then prepared an Internal Investigative Report summarizing the investigation and the resulting decision to terminate Osterberg. Among other things, Bradshaw noted that Sears had received complaints from Whitbeck about Osterberg's handling of the Ziebol sale and from Sears's National Ethics and Business Policy office about Osterberg's bypass of the check verification system. (Osterberg Dep. Ex. 8.) He also noted that when questioned about these complaints, Osterberg admitted cancelling Whitbeck's sale and taking the commission, and he admitted that he "probably" used a declined check as a cash sale. (Id.) In conclusion, Bradshaw wrote:
Because of these ethical concerns and his disregard for company policies and procedures, Robert Osterberg was told that his employment with Sears would be terminated.
(Id.)
In October 2003, nearly two years after his discharge, Osterberg filed the present suit in state court, which Sears has removed to this Court. Sears's summary judgment motion followed.
Standard of Review
Summary judgment is proper if, drawing all reasonable inferences favorable to the nonmoving party, there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). The moving party bears the burden of showing that the material facts in the case are undisputed. See Celotex, 477 U.S. at 322; Mems v. City of St. Paul, Dep't of Fire Safety Servs., 224 F.3d 735, 738 (8th Cir. 2000). The court must view the evidence, and the inferences that may be reasonably drawn from it, in the light most favorable to the nonmoving party. See Graves v. Arkansas Dep't of Fin. Admin., 229 F.3d 721, 723 (8th Cir. 2000);Calvit v. Minneapolis Pub. Schs., 122 F.3d 1112, 1116 (8th Cir. 1997). The nonmoving party may not rest on mere allegations or denials, but must show through the presentation of admissible evidence that specific facts exist creating a genuine issue for trial. See Anderson, 477 U.S. at 256; Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).
Analysis
Osterberg alleges that Sears defamed him. (Pl.'s Mem. in Resp. at 10.) When pressed at oral argument to identify what statement or statements were defamatory, Osterberg's counsel pointed to the following solitary sentence of Bradshaw's Internal Investigative Report:
Because of these ethical concerns and his disregard for company policies and procedures, Robert Osterberg was told his employment with Sears would be terminated.
(Osterberg Dep. Ex. 8.) For a statement to be defamatory, it must be false, it must be communicated to another, and it must tend to harm the plaintiff's reputation and to lower him in the estimation of the community. Bol v. Cole, 561 N.W.2d 143, 146 (Minn. 1997); Stuempges v. Parke, Davis Co., 297 N.W.2d 252, 255 (Minn. 1980).
In resisting Sears's Motion, Osterberg "has an affirmative burden to designate specific facts creating a triable controversy." Crossley v. Georgia-Pacific Corp., 355 F.3d 1112, 1113 (8th Cir. 2004) (citation and internal quotations omitted); see Fed.R.Civ.P. 56(e). As this is the only defamatory statement Osterberg has designated, it will be the only one the Court considers. See White v. McDonnell Douglas Corp., 904 F.2d 456, 458 (8th Cir. 1990) ("A district court is not required to speculate on which portion of the record the nonmoving party relies, nor is it obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim.").
Sears first argues that its statement is not defamatory because it is true. (Def.'s Mem. in Supp. at 11; Def.'s Reply Mem. in Supp. at 6.) "Truth . . . is a complete defense" to a defamation suit and "true statements, however disparaging, are not actionable." Stuempges, 297 N.W.2d at 255. "It is well-recognized in Minnesota that the First Amendment absolutely protects opinion that lacks `a provably false statement of fact.'" McClure v. American Fam. Mut. Ins. Co., 223 F.3d 845, 853 (8th Cir. 2000) (quoting Hunter v. Hartman, 545 N.W.2d 699, 706 (Minn.Ct.App. 1996)). "Whether a statement can be interpreted as stating facts or can be proven false is a question of law." Id. (quoting Geraci v. Eckankar, 526 N.W.2d 391, 397 (Minn.Ct.App. 1995)). In addressing this question, courts consider four factors: (1) the specificity and precision of the statement; (2) the statement's verifiability; (3) the social and literary context of the statement; and (4) the public context in which the statement was made. Id.; see Metge v. Central Neighborhood Improvement Ass'n, 649 N.W.2d 488, 498 (Minn.Ct.App. 2002).
Osterberg's defamation claim fails because he cannot show a provably false statement of fact. It is indisputable that Osterberg's employment was terminated because of "ethical concerns and his disregard for company policies and procedures." Osterberg admitted cancelling part of Whitbeck's sale and taking the commission. (Osterberg Dep. Tr. at 109.) He also admitted not processing a check through the verification system (id. at 25), which is a violation of Sears's policies and procedures (Olson Aff. ¶ 4; Osterberg Dep. Ex. 2). Furthermore, Sears's characterization of his actions as raising "ethical concerns" is not sufficiently precise to sustain a defamation claim:
Osterberg's argument that Ziebol's testimony "totally contradicts Sears'[s] version of the circumstances of her purchase" is unsupported. (Pl.'s Mem. in Resp. at 10-11.) Osterberg does not designate any specific facts upon which he relies; rather he cites Ziebol's entire deposition. See Crossley, 355 F.3d at 114 (stating that citing six depositions without designating which specific facts created a genuine issue of material fact "did not meet the Rule 56 specificity requirement"). Nevertheless, Sears has pointed to the portion of Ziebol's testimony where she was asked whether anything in the Pietrzak Memo was false. (See Ziebol Dep. Tr. at 18-22.) In response, Ziebol testified that she found a few discrepancies between her recollection of events and Pietrzak's recitation, but none is material and her testimony falls short of "totally contradict[ing]" Sears's version.
Osterberg's basic argument is that he did not violate store procedure because it was common practice not to run checks through the verification system. (Pl.'s Mem. in Resp. at 10;see Osterberg Dep. Tr. at 25.) However, his argument does not demonstrate that Sears's statement that he had violated store procedure is a provably false statement of fact. Additionally, his reliance on the testimony of Warren LeVasseur, a Sears carpet salesman who never worked in the Maplewood store, is misplaced. (See Pl.'s Mem. in Resp. at 10-11; LeVasseur Dep. Tr. at 6, 16-17.) LeVasseur testified that it was Sears's policy to run checks through Equifax, but that it was common practice at the stores he worked at to bypass the system. (LeVasseur Dep. Tr. at 14-15.) LeVasseur did not know, however, whether Sears management was aware of the practice, nor did he know the policy of the Maplewood store. (Id. at 17-21.)
A commentator who advocates one of several feasible interpretations of some event is not liable in defamation simply because other interpretations exist. Consequently, remarks on a subject lending itself to multiple interpretations cannot be the basis of a successful defamation action because as a matter of law no threshold showing of "falsity" is possible in such circumstances.McClure, 223 F.3d at 853 (quoting Hunter, 545 N.W.2d at 707). This result is consistent with the holdings in similar cases under Minnesota law. See, e.g, id. (finding statements that plaintiffs had engaged in "disloyal and disruptive activity" and "conduct unacceptable by any business standard," that they did not understand the "value of loyalty and keeping promises," and were "acting against the best interests of the insurance buying public" were not provably false statements of fact); Geraci, 526 N.W.2d at 397 (finding statements that plaintiff had "poisoned the board," was "a bad influence," was "emotional," and "not a team player" could not be interpreted as stating facts).
Sears also argues that even if its statement is defamatory it is protected by a qualified privilege. (Def.'s Mem. in Supp. at 12-14; Def.'s Reply Mem. in Supp. at 6-9.) "One who makes a defamatory statement will not be held liable if the statement is published under circumstances that make it qualifiedly privileged and if the privilege is not abused." Bol, 561 N.W.2d at 149 (citation omitted). "For a defamatory statement to be protected by a qualified privilege, the statement must be made in good faith and must be made upon a proper occasion, from a proper motive, and must be based upon reasonable or probable cause."Bol, 561 N.W.2d at 149 (citation and internal quotations omitted); see McBride v. Sears, Roebuck Co., 235 N.W.2d 371, 374 (Minn. 1975). Whether a qualified privilege exists is a question of law for the court. Bol, 561 N.W.2d at 149;McClure, 223 F.3d at 854.
Sears's statement is protected by a qualified privilege. First, it was made upon a proper occasion and for a proper purpose. InMcBride, the Minnesota Supreme Court held as a matter of law that "[c]ommunications between an employer's agents made in the course of investigating or punishing employee misconduct are made upon a proper occasion and for a proper purpose." 235 N.W.2d at 374; see Ferrell v. Cross, 557 N.W.2d 560, 566 (Minn. 1997) (quoting McBride). In the present case, the statement was between Sears's agents made in the course of investigating or dealing with Osterberg's misconduct.
Second, Sears's statement was made upon reasonable or probable cause. In determining whether statements are supported by reasonable or probable cause, Minnesota courts examine whether the employer took investigatory steps. Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 380 (Minn. 1990); Rudebeck v. Paulson, 612 N.W.2d 450, 454 (Minn.Ct.App. 2000). The Minnesota Supreme Court has observed:
In all cases where we have determined that probable cause existed, the evidence showed that investigative steps had been taken, including personal questioning of the affected employee, in an effort to ascertain the accuracy of statements made about the employee's conduct. In each case the results of the investigations provided sufficient evidence of probable cause.Wirig, 461 N.W.2d at 380 (footnote omitted). Elaborating on this point, the Minnesota Court of Appeals has stated:
We do not interpret this to mean that a mere assertion that the employer conducted an investigation will suffice; instead, the court will examine the precise nature and extent of the investigation to assess the facts supporting the defamatory allegations and the efforts the employer made to ascertain their accuracy.Rudebeck, 612 N.W.2d at 454.
In this case, Sears conducted a sufficient investigation of the complaints against Osterberg. First, Pietrzak spoke with both Ziebol and the carpet installer and prepared a lengthy memo regarding those interviews. (See Osterberg Dep. Ex. 5.) The Pietrzak Memo was forwarded to Olson, Sears's Store Manager, and Bradshaw, Sears's Asset Protection Manager. (Id.) Second, Olson and Bradshaw questioned Osterberg about the complaints. (Osterberg Dep. Tr. at 108, Ex. 8; Olson Aff. ¶ 6.) When questioned, Osterberg admitted cancelling part of Whitbeck's sale and admitted not processing a check through the verification system. (Osterberg Dep. Tr. at 25, 109, Ex. 8.) Based upon this information, Bradshaw prepared the Internal Investigative Report, which included the statement at issue. (Osterberg Dep. Ex. 8.) Given the nature and extent of the investigation, combined with Osterberg's admissions, the Court concludes that Sears had reasonable or probable cause to support its statement. See McBride, 235 N.W.2d at 374 (finding probable cause when, inter alia, employee admitted violating employer's procedures when questioned); Otto v. Charles T. Miller Hosp., 115 N.W.2d 36, 37, 39-40 (Minn. 1962) (finding probable cause when employer questioned the plaintiff and other employees); Hebner v. Great N. Ry., 80 N.W. 1128, 1129-30 (Minn. 1899) (finding probable cause when plaintiff "practically admitted" accusations when questioned); Rudebeck, 612 N.W.2d at 454 (finding probable cause when employer interviewed and took statements from witnesses and plaintiff); see also Wirig, 461 N.W.2d at 380-81 (finding no probable cause when employer took "no steps to investigate but relies entirely on accusations either made by employees who may be biased or on secondhand hearsay with no identification of sources").
Although Osterberg evidently disputes whether his termination was justified, the Court cannot say that Sears did not have reasonable grounds for its statement. See Brooks v. Doherty, Rumble Butler, 481 N.W.2d 120, 126 (Minn.Ct.App. 1992).
Sears's qualified privilege can be lost if Osterberg can show that the statement was made with malice. McClure, 223 F.3d at 854 (citing Bol, 561 N.W.2d at 150). "Malice is defined as actual ill-will or a design causelessly and wantonly to injure plaintiff." Id. (citation and internal quotations omitted). "Malice can be proven either by extrinsic evidence showing personal spite on the part of the person making the statement, or intrinsic evidence, such as the exaggerated language of the libel, the character of the language used, the mode and extent of publication, and other matters in excess of the privilege." Id. (citation and internal quotations omitted). Whether a qualified privilege has been lost "is a question of fact, and is reviewed on summary judgment to determine whether the evidence submitted raises a genuine issue of material fact." Id. (citation and footnote omitted).
Osterberg has not generated a genuine issue of material fact regarding malice. Sears's statement was not so intemperate as to present a jury question as to whether Sears "causelessly or wantonly" attempted to injure Osterberg's reputation or whether there was any "actual ill-will" involved. See id. Osterberg argues that "the existence of malice is apparent in the purely perfunctory investigation into [his] alleged unethical acts, the failure to ascertain the true extent of informal bypassing of the Equifax procedure and the twisting of Mary Ziebol's story." (Pl.'s Mem. in Resp. at 13.) But these arguments say little about malice; they have more to do with Osterberg's gnawing frustration over what he considers to be a wrongful termination. As noted above, however, Sears's investigation was sufficient under Minnesota precedent to provide it with probable or reasonable cause for its statement. In addition, and of more importance to the issue of malice, Osterberg fails to provide any evidence of personal spite on Bradshaw's part, and he has not shown that the statement contained exaggerated language or was published in excess of the privilege. See McClure, 223 F.3d at 854; see also McBride, 235 N.W.2d at 375 ("The existence of probable cause is inconsistent with the claim that defendant acted causelessly and wantonly to injure plaintiff, and plaintiff did not attempt to establish actual ill will.").
Osterberg voluntarily dismissed his wrongful termination claim at oral argument.
Conclusion
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS ORDERED that Defendant Sears, Roebuck and Company's Motion for Summary Judgment (Doc. No. 16) is GRANTED. Plaintiff Robert Osterberg's Complaint (Doc. No. 1) is DISMISSED WITH PREJUDICE.