Opinion
No. 5-510 / 04-0434
Filed October 12, 2005
Appeal from the Iowa District Court for Pottawattamie County, Jeffrey Larson (summary judgment) and Timothy O'Grady (trial), Judges.
Defendants appeal jury verdicts for plaintiffs on claims of negligence and slander. REVERSED AND REMANDED.
Thomas M. Locher, Donald J. Pavekla Jr., and Thomas M. Braddy of Locher, Cellilli, Pavelka Dostal, L.L.C., Omaha, Nebraska, for appellant.
Jim Quilty and Jerry Crawford of Crawford Law Firm, Des Moines, for appellee.
Heard by Sackett, C.J., and Mahan and Miller, JJ.
I. Background Facts Proceedings
Iowa West Racing Association and Harvey's Bluffs Run Management Company, Inc. operate Bluffs Run Casino in Council Bluffs, Iowa. One of the attractions at Bluffs Run is greyhound racing. Arthur Yates and Beverly Yates own Yates Kennel, Inc. Beginning in 1998, Yates Kennel obtained a booking contract at Bluffs Run. Kennels which have a booking contract can receive a greater amount of the purses from greyhound races.
In 1999 and into 2000, an increased number of dogs became injured while racing at Bluffs Run, including those from Yates Kennel. Kennel owners expressed concerns that some areas of the track might be too hard, while other areas might be too soft. Rory DeSantiago, the director of racing for Bluffs Run, sought the advice of others and tried different methods to improve the track surface. Injuries increased for a period of time. DeSantiago returned to his original track maintenance procedures, and injuries eventually decreased.
Late in 2000, Yates Kennel became concerned about rumors that it would not receive a booking contract for 2001. Beverly Yates was a director of the Iowa Greyhound Association (IGA). During a November 16, 2000, meeting of the Iowa Racing and Gaming Commission, Jerry Crawford, attorney for IGA, asked the Commission to take action to monitor the selection of kennels for booking contracts. Lyle Ditmars, attorney for Bluffs Run, was also present at the meeting. The minutes of the meeting provide:
Mr. Ditmars stated that BRC [Bluffs Run Casino] does not discuss who will or will not get a kennel contract with other kennel operators. Mr. Ditmars confirmed that Yates Kennel was not offered a contract for 2001, and will not be offered one. In 1999, the kennel was in the bottom two or three kennels in terms of performance. They were given a six-month contract. At the end of that contract, even though they remained in the bottom five, they were given an additional six-month contract to give them an opportunity to correct the situation. At this time, the Yates Kennel is second from last in terms of wins and third from the bottom in terms of win percentage for the year.
. . . .
Mr. Ditmars reiterated that the Yates Kennel is second from last in the kennel standings. The kennel in last place did not receive a six-month contract in the previous year, as did the Yates Kennel due to poor performance in 1999.
The Commission took no action on Crawford's request. Reporters were present during the Commission meeting, and some of Ditmars's statements were published in the newspaper.
Arthur and Beverly Yates and Yates Kennel (together referred to as Yates Kennel) filed suit against Bluffs Run on two separate theories. Yates Kennel claimed that Bluffs Run's negligence in maintaining the racetrack caused injuries to its dogs. Yates Kennel also claimed that Ditmars's statements before the Commission constituted slander.
The petition actually raised several different theories, but these two theories were the only ones which were submitted to the jury.
Bluffs Run filed a motion for partial summary judgment, claiming that Ditmars's statements were made before a quasi-judicial body and therefore, should be subject to an absolute privilege. The district court determined the Commission meeting was not a judicial proceeding and that an absolute privilege did not exist. The court concluded the statements were protected by a qualified privilege, which could be rebutted if the statements were made with actual malice.
During the trial Lori Fortune, the daughter of Arthur and Beverly Yates, testified that she was an assistant dog trainer for her parents during 1999 and 2000. She gave the opinion that the majority of the injuries to the Yates Kennel dogs came from poor track conditions. James Lovely, a trainer, testified there was "something the matter" with the Bluffs Run racetrack that caused too many injuries for a period of time, but he was not sure what the problem was. Randy Schaben, a greyhound owner, testified he definitely had concerns about the hard and soft track discrepancies as it related to the health of his dogs. Beverly Yates testified to the general value of the dogs.
Bluffs Run filed a motion for directed verdict, claiming plaintiffs failed to present any evidence of an industry standard for the maintenance of racetracks. It also claimed plaintiffs failed to produce sufficient evidence to show the track surface was a proximate cause of the injuries to the greyhounds. Furthermore, Bluffs Run asserted there was insufficient evidence of the difference in value of the dogs before and after the injuries. The district court denied the motion for directed verdict.
On the motion for directed verdict, the district court determined there was insufficient evidence to submit the issue of punitive damages on the negligence claim to the jury.
Bluffs Run presented the testimony of a veterinarian, Dr. Michael Herron, who specialized in greyhounds. Dr. Herron testified that injuries are caused by many factors, including age, genetics, general health care, workload, disposition of the dog, as well as the level of competition and the track surface. He stated, "[t]he majority of the injuries that you see listed are fairly typical when a dog is doing what he is supposed to be doing; that is, racing." He testified that about ten percent of injuries are caused by the track surface. Jerry Cottrill, a track maintenance superintendent, testified he believed most injuries were caused by contact between dogs during races.
The issues of negligence and slander were submitted to the jury. The jury found Bluffs Run was negligent and that its negligence was the proximate cause of the damages to the dogs. The jury awarded plaintiffs damages of $235,282 and assessed sixty-seven percent of the fault to Bluffs Run.
On the slander issue, the jury initially answered "yes" to the question, "Were the statements made by defendants true or substantially true?" The jury form improperly stated, "If your answer to Question No. 10 is `no' do not answer any further questions." Because the jury answered "yes," it continued, finding no general damages on the slander claim, but awarding $50,000 in punitive damages against Iowa West Racing Association and $200,000 in punitive damages against Harvey's Bluffs Run Management Company. When the jury returned its verdict, the district court caught the error, and without consulting with counsel, corrected the statement to provide, "If your answer to Question No. 10 is `yes' do not answer any further questions," and sent the jury back to reconsider. The jury then changed its answer to this question to "no," and did not change the punitive damages awards.
Bluffs Run filed motions for a mistrial, a new trial, and a judgment notwithstanding the verdict. Bluffs Run also filed a motion for a remittitur, claiming that the punitive damages awards were improper because no general damages on slander had been awarded. Plaintiffs filed a motion for additur, claiming that general damages on the slander claim should be awarded. The district court denied the post-trial motions, except that it granted the motion for additur and awarded Arthur and Beverly Yates an unconditional additur of $12,500 in general damages on the slander claim and $12,500 in damages for loss of reputation. Bluffs Run now appeals.
II. Slander
Bluffs Run first claims that the district court should have granted its motion for summary judgment on the slander issue. It asserts that the Commission meeting was quasi-judicial in nature, and that there should be an absolute privilege for an attorney's statements before the Commission.
Our review of a summary judgment motion is for the correction of errors of law. Iowa Tel. Ass'n v. City of Hawarden, 589 N.W.2d 245, 250 (Iowa 1999). Summary judgment will be upheld when the moving party shows there are no genuine issues of material fact and the party is entitled to judgment as a matter of law. See Iowa R. Civ. P. 1.981(3). In reviewing a motion for summary judgment, we consider the evidence in a light most favorable to the party opposing the motion. Smith v. Shagnasty's, 688 N.W.2d 67, 71 (Iowa 2004).
A court has the initial responsibility of determining whether statements are privileged. Robinson v. Home Fire Marine Ins. Co., 242 Iowa 1120, 1126, 49 N.W.2d 521, 524 (1951). An attorney has an absolute privilege concerning statements made as a part of a judicial proceeding, if the statements have some relation to the proceeding. Kennedy v. Zimmerman, 601 N.W.2d 61, 64 (Iowa 1999) ( citing Restatement (Second) of Torts § 586, at 247 (1977)). "The judicial proceedings privilege is based upon a public policy of giving attorneys, as officers of the court, the utmost freedom in their efforts to secure justice for their clients." Id. "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 v. Spencer, 479 N.W.2d 293, 295 (Iowa 1991).
"Although the privilege is an absolute bar to liability, its scope is limited to communications made in connection with a judicial proceeding." Kennedy, 601 N.W.2d at 64. Judicial proceedings are those "carried on in a court of justice established or recognized by law, wherein the rights of parties which are recognized and protected by law are involved and may be determined." Mills v. Denny, 245 Iowa 584, 590, 63 N.W.2d 222, 226 (1954). Statements made at a city council meeting are not entitled to an absolute privilege because a city council "does not exercise the legislative or judicial functions intended to merit the privilege of absolute immunity." Id.; see also Cowman v. LaVine, 243 N.W.2d 114, 124 (Iowa 1975) (finding there is no absolute privilege for statements made at city council meetings).
On the other hand, a workers' compensation proceeding is considered a judicial proceeding, and statements made by an attorney at such a proceeding are entitled to an absolute privilege. Tallman v. Hanssen, 427 N.W.2d 868, 870 (Iowa 1988). The supreme court noted that the workers' compensation statutes, "in conjunction with Iowa Code chapter 17A, the Iowa Administrative Procedure Act, provide a tribunal in which the rights of injured employees are recognized and protected." Id. Such proceedings are "confrontational and judicial in nature." Id.
"An executive or legislative body may exercise a judicial function, in which case the members while so acting are judicial officers within the rule. . . ." Restatement (Second) of Torts § 584 cmt. c., at 245 (1977). We further note:
[T]he term "judicial proceeding" normally is employed in a flexible fashion to embrace any governmental proceeding involving the exercise of a judicial or quasi-judicial function, including a wide variety of administrative boards, commissions, or other tribunals which may engage in judicial or quasi-judicial action, even though not part of the court system.
53 C.J.S. Libel Slander; Injurious Falsehood § 119, at 178 (2005).
We note that, as in judicial proceedings, attorneys for clients with two differing views appeared before the Iowa Racing and Gaming Commission and presented their arguments as to why the Commission should or should not take action. The fact that the Commission ultimately did not take action does not change the nature of the proceeding. Like the decisions of the workers' compensation commissioner, Iowa Code § 86.26 (2001), decisions of the Racing and Gaming Commission are final agency actions pursuant to chapter 17A. Iowa Code § 99D.7(8). This means the disappointed party could have filed a petition for judicial review under section 17A.19.
We conclude that under the facts of the present case, the Commission was acting in a judicial capacity at the time Ditmars's statements were made. As noted above, the court has the responsibility to determine whether a privilege applies. See Robinson, 242 Iowa at 1126, 49 N.W.2d at 524. We determine Ditmars's statements were protected by an absolute privilege because they were made by an attorney during a judicial proceeding. We conclude the district court erred by denying the motion for partial summary judgment on this issue. We reverse the jury verdicts, including the punitive damages awards, on the issue of slander.
The slander claim was also based on a statement made by Verne Welch, a member of Bluffs Run management, to David Ungs, a member of the board of the IGA. Welch told Ungs that kennels would have to be competitive to be given a booking contract. This statement does not identify Arthur or Beverly Yates, or the Yates Kennel, and we conclude it cannot constitute slander. One element of slander is that the statement concern the plaintiff. Taggart v. Drake Univ., 549 N.W.2d 796, 802 (Iowa 1996). In addition, there is no evidence that this statement was untrue. See id. (noting slander is the publication of an untrue statement).
III. Negligence
Because we believe it is dispositive, we will first address the issue of proximate cause. In its motion for directed verdict, Bluffs Run asserted that the plaintiffs failed to present sufficient evidence that track conditions proximately caused injuries to the greyhounds.
"The law does not impose liability for negligence unless the breach of a duty of care is also the actual and legal cause of the injury." Rieger v. Jacque, 584 N.W.2d 247, 251 (Iowa 1998). We consider (1) whether the harm would not have occurred but for the defendant's negligence and (2) whether the defendant's negligence was a substantial factor in bringing about the harm. Scoggins v. Wal-Mart Stores, Inc., 560 N.W.2d 564, 567 (Iowa 1997). Generally, the issue of proximate cause is for the trier of fact, but it may be decided as a matter of law in an exceptional case. Rieger, 584 N.W.2d at 250-51.
Plaintiffs rely upon Bushman v. Cuckler Building Systems, 421 N.W.2d 145, 148 (Iowa Ct.App. 1988), a case in which the plaintiff testified that defendant's defective structure "resulted in moisture problems; that moisture problems lead to pneumonia and other diseases; and that such diseases occurred in this case and resulted in extensive loss of hogs." The plaintiff, Bushman, who had been raising hogs for twenty-six years, was acknowledged by the district court as an expert. Bushman, 421 N.W.2d at 147. Bushman's testimony was determined to be sufficient to raise a jury question on the issue of proximate cause. Id. at 148. We stated:
Our cases generally hold the probability standard to be met either by expert testimony to the effect that causation is probable or by expert testimony that causation is possible coupled with other testimony that the condition of which complaint is made did not exist before the alleged causative facts.
Id.
In the present case, Fortune only gave the general statement, "In my opinion, the majority of my injuries came from track, poor track conditions." Lovely specifically testified that he was not a track expert, but stated that something was not quite right on the track surface so there were more injuries than there should have been. Schaben testified he was definitely concerned about the track surface as it related to the health of his greyhounds.
Leaving aside the fact that none these witnesses were acknowledged as experts, there was no evidence specifically linking the track conditions to the dogs' injuries. In Bushman, the plaintiff testified that defendant's defectively designed building resulted in moisture problems, moisture caused specific diseases, and that his hogs contracted those diseases. See id. In the present case, plaintiffs presented no evidence that the track surface caused specific injuries and that the plaintiffs' dogs suffered those injuries. A statement that "a majority" of injuries were caused by the track does not state how many injuries were caused by the track, or how the track caused those injuries. Plaintiffs' witnesses admitted that not all injuries are caused by track conditions.
We conclude plaintiffs failed to present substantial evidence to show that the proximate cause of the injuries to their greyhounds was defendant's negligence in maintaining the racetrack. Yates Kennel did not show that but for Bluffs Run's negligence the dogs would not have been injured, and it did not show that Bluffs Run's negligence was a substantial factor in bringing about the harm. See Scoggins, 560 N.W.2d at 567. We determine the district court should have granted defendants' motion for directed verdict on the negligence issue.
Based on our conclusions on the two issues addressed, we do not need to address the other issues raised by Bluffs Run. In a cross-appeal, Yates Kennel asserts that the district court should have submitted the issue of punitive damages on the negligence claim to the jury. Because we have reversed the jury verdict on negligence, we need not address this issue.
We reverse the decision of the district court and remand for entry of a judgment in favor of defendants. Costs of this appeal are assessed to plaintiffs.