Opinion
No. 05-04-01722-CV
Opinion Filed January 30, 2006.
On Appeal from the County Court at Law Number 1, Dallas County, Texas, Trial Court Cause No. Cc-02-08215-A.
Reverse and Render.
Before Justices MORRIS, WRIGHT, and RICHTER.
MEMORANDUM OPINION
This case concerns a libel claim based on a letter prepared and published by employees of appellant Southwestern Bell Yellow Pages, Inc. ("SWBYP") as part of a work place investigation of appellee Deborah Thomas. In addition to SWBYP, Thomas originally sued David Totah and John Garza, two SWBYP employees who were involved in the publication of the letter. After a jury trial, the trial court entered its judgment (1) ordering that Thomas take nothing on her claims against Totah and Garza and (2) ordering that Thomas recover from SWBYP the sum of $75,000 for damage to reputation and the sum of $150,000 in punitive damages. SWBYP now challenges that judgment against it. We reverse the trial court judgment with respect to SWBYP and render judgment that Thomas take nothing on her libel claim against SWBYP.
Thomas brought several causes of action against SWBYP, Totah, and Garza, but she prevailed only on her libel claim against SWBYP.
I. RELEVANT FACTS
Thomas was originally employed by SWBYP as a telephone sales representative. She was promoted to internet sales manager, but she was demoted to outside sales pursuant to her own request. While Thomas was working in this capacity, another SWBTP representative complained to management that Thomas had taken the Nic-Nacks Nails account away from her by promising two ads for the price of one.
As part of management's investigation of the complaint, Lee Fedornak contacted manicurist Amy Jones, who had negotiated the disputed advertising contract with Thomas. Based on his telephone conversations with Jones, Fedornak composed a letter to describe the negotiations that resulted in the contract with Thomas. This letter, drafted for Jones's signature, stated in relevant part that (1) Thomas "told me that if I handled my advertising with her this year, that she would sell me 2 ads, the same size as I already had in the book, for less money than we were paying this year" and that (2) Thomas "informed me that when the representative called on me to handle my existing account to simply tell them to cancel the advertising."
John Garza, one of Thomas's supervisors, eventually took the letter to Nic-Nacks Nails to obtain Jones's signature. In addition to Jones, he encountered another manicurist, Tressa Dunn, and the owner of the business, Susan Trew. Each of the three women viewed at least part of the letter, and Jones refused to sign. David Totah, another supervisor, next visited Nic-Nacks Nails with the letter. Totah also left the salon without the letter signed.
SWBYP subsequently conducted a union grievance hearing to review allegations that Thomas had mishandled five accounts, including the Nic-Nacks Nails account. At the conclusion of this hearing, SWBYP demoted Thomas to her original position as telephone sales representative. The contract that Thomas had negotiated with Jones was ultimately transferred to the complaining representative. About three months after her demotion, Thomas ceased work due to disability.
Shortly thereafter, Thomas filed her petition in the underlying lawsuit. At trial, Garza recalled that the three women told him that the letter was inaccurate. At the conclusion of the trial, the jury found that the statements in the letter presented in the course of SWBYP's investigation were untrue at the time they were made and that Totah and SWBYP had acted with actual malice. However, the jury found that only SWBYP was liable for damages resulting from Thomas's loss of reputation following its presentment of the letter. The trial court entered judgment pursuant to the verdict of the jury.
SWBYP raises seven issues on appeal: (1) the trial court erred when it determined that the letter constituted libel as a matter of law; (2) there is insufficient evidence to support the jury's finding that statements in the letter were untrue; (3) there is insufficient evidence to support the jury's finding that SWBYP acted with malice; (4) the trial court erred in awarding loss of reputation damages; (5) the trial court erred in awarding punitive damages; (6) the loss of reputation damage award was excessive; and (7) the punitive damage award was excessive.
II. THE LAW
Libel is a defamation expressed in a written or other graphic form that, among other things, (1) tends to injure a living person's reputation, exposing the person to public hatred, contempt, ridicule, or financial injury or (2) tends to impeach any person's honesty, integrity, virtue, or reputation. Tex. Civ. Prac. Rem. Code Ann. § 73.001 (Vernon 2005). To recover on a claim for libel, a plaintiff must prove that the defendant (1) published (2) a false defamatory statement in written or printed material (3) to a third party. Chang v. Nguyen, 81 S.W.3d 314, 318 (Tex.App.-Houston [14th Dist.] 2001, no pet.).
"Publication" of defamatory words means to communicate the words to a third party capable of understanding their defamatory import and in such a way that the third person would understand. Double Diamond, Inc. v. Van Tyne, 109 S.W.3d 848, 854 (Tex.App.-Dallas 2003, no pet.). An allegedly defamatory publication should be construed as a whole in light of the surrounding circumstances based upon how a person of ordinary intelligence would perceive it. Turner v. KTRK Television, Inc., 38 S.W.3d 103, 114 (Tex. 2000). A statement may be false, abusive, unpleasant, or objectionable to the plaintiff and still not be defamatory in light of the surrounding circumstances. Double Diamond, 109 S.W.3d at 854. The threshold question, then, is whether the complained-of statements are reasonably capable of a defamatory meaning. Id.
There are two types of defamatory statements: (1) defamation per quod, and (2) defamation per se. Alaniz v. Hoyt, 105 S.W.3d 330, 345 (Tex.App.-Corpus Christi 2003, no pet.). If a defamatory statement constitutes libel per quod, the statement is actionable only upon allegation and proof of damages. Id. If a defamatory statement constitutes libel per se, the written or printed words in and of themselves are so obviously hurtful to the person aggrieved by them that they require no proof of injury. Id.;Columbia Valley Regional Medical Center v. Bannert, 112 S.W.3d 193, 199 (Tex.App.-Corpus Christi 2003, no pet.). Written or printed statements that are actionable per se include those (1) that unambiguously charge a crime, dishonesty, fraud, rascality, or general depravity or (2) that are falsehoods that injure one in his office, business, profession or occupation. See, e.g., Id.; State Medical Ass'n of Tx. V. Committee for Chiropractic Educ., 236 S.W.2d 632, 634 (Tex.Civ.App.-Galveston 1951, no writ); Finklea v. The Jacksonville Daily Progress, 742 S.W.2d 512, 516 (Tex.App.-Tyler 1987, no writ).
III. ANALYSIS
Because SWBYP's fourth issue is dispositive, we begin our analysis with it. SWBYP claims that the trial court erred in awarding loss of reputation damages. After a careful review of the record, we agree.
The allegedly libelous letter, presented to Jones as part of a work place investigation, purported to represent Jones's version of what transpired in her meeting with Thomas without any other implication or accusation. It was presented to Jones for her review and for her signature upon her approval. The letter was not signed because, according to the three women at Nic-Nacks Nails, it did not accurately describe what happened. And, the letter was not actually used in the subsequent proceedings resulting in Thomas's demotion.
While the proposed letter may have misstated the facts as Jones related them to Fedornak, the letter's simple statement that Thomas had offered a two-for-one deal in exchange for cancellation of the existing account does not constitute libel per se. See Columbia Valley Regional Medical Center, 112 S.W.3d at 199. Simply, the words of the letter, in and of themselves, are not so obviously hurtful to Thomas as to relieve her of the burden of proving injury. See id. Therefore, Thomas was required to prove damages as a result of the letter's publication to the three women at Nic-Nacks Nails. See Alaniz, 105 S.W.3d at 345. There is no evidence that the letter was published to anyone besides the three women at Nic-Nacks Nails.
Assuming without deciding that the statements in the letter were untrue and reasonably capable of a defamatory meaning, we nevertheless conclude that the trial court erred in awarding Thomas loss of reputation damages in the amount of $75,000. We can find no evidence in the record before us to demonstrate that Thomas was damaged in any way by publication of the letter to the women at Nic-Nacks Nails. Indeed, all three women at Nic-Nacks Nails testified that the letter had not affected their opinions of Thomas. Accordingly, we sustain SWBYP's fourth issue.
In its fifth issue, SWBYP contends that the trial court erred in awarding punitive damages. Punitive damages are not recoverable in the absence of a recovery of actual damages. See Nabours v. Longview Sav. Loan Asso., 700 S.W.2d 901, 903 (Tex. 1985). Because we have concluded that the award of actual damages was erroneous, we likewise sustain SWBYP's fifth issue.
IV. CONCLUSION
Our disposition of SWBYP's fourth and fifth issues obviates the need to review the remainder of the issues. We reverse the trial court judgment with respect to SWBYP and render judgment that Thomas take nothing on her libel claim against SWBYP.