Docket No. 78-4776.
Decided March 3, 1981. Leave to appeal applied for.
Balfour Peisner, in propria persona and for plaintiff Nora S. Peisner.
Brownson Murray, for defendants.
H.E. DEMING, J.
Plaintiff Balfour Peisner, a Detroit attorney, filed a complaint against defendants Detroit Free Press and Free Press reporter Louis Heldman on December 10, 1973, seeking damages for libel. His wife, Nora S. Peisner, joined in the complaint with a derivative claim. The basis for the action was an article written by Heldman which appeared in the Free Press on November 20, 1973. The article charged plaintiff Balfour Peisner with inadequate representation of an indigent criminal defendant in appellate proceedings and with unethical conduct. Plaintiffs claimed that the libel was repeated in a December 1, 1973, Free Press editorial.
On January 11, 1974, defendants filed a counterclaim alleging abuse of process by plaintiffs. Plaintiffs filed a motion to dismiss the counterclaim which was denied by the trial court. Plaintiffs prevailed in an interlocutory appeal to this Court and the counterclaim was dismissed. Peisner v Detroit Free Press, Inc, 68 Mich. App. 360; 242 N.W.2d 775 (1976), lv den 399 Mich. 825 (1977).
On June 14, 1977, defendants filed a motion for summary judgment claiming that the complaint failed to state a cause of action and that there was no genuine issue of fact because the matters reported in the article and editorial were true and their publication was privileged. The trial court granted the motion and plaintiffs appealed to this Court which reversed and remanded the case for trial. In its opinion, the panel stated that defendants had a qualified privilege to publish the article in question which could be overcome by a showing of actual malice and that summary judgment was improper because plaintiffs' pleadings raised an issue of fact as to the existence of malice. Peisner v Detroit Free Press, Inc, 82 Mich. App. 153; 266 N.W.2d 693 (1978).
The case finally proceeded to trial, and, on September 15, 1978, the jury returned a verdict against defendants. Plaintiff Balfour Peisner was awarded $52,000 actual damages and $100,000 "additional" damages. His wife was awarded $5,000 actual damages. Defendants were held jointly and severally liable for the actual damages while only defendant Free Press was held liable for the additional damages. Defendants' post-trial motion for a new trial and/or remittitur was denied. Defendants now appeal as of right.
Defendants first argue that the trial court erred in refusing to instruct the jury that, in order to show malice, plaintiffs were required to establish that defendants acted with ill will and intended to injure plaintiff by means of a falsehood. We disagree. The jury was instructed that actual malice would be shown by proof that defendants wrote or published the article in question with knowledge that it was false or with reckless disregard for whether it was false or not. This instruction conforms to the definition of actual malice set forth by the United States Supreme Court in New York Times v Sullivan, 376 U.S. 254; 84 S.Ct. 710; 11 L.Ed.2d 686 (1964). While the type of definition advocated by defendants finds some support in Michigan law, see, e.g., Powers v Vaughan, 312 Mich. 297; 20 N.W.2d 196 (1945), we believe that the disputed instruction was properly rejected because it would have eliminated the "reckless disregard" segment of the New York Times definition. The New York Times standard has been accepted by the Michigan Supreme Court. Arber v Stahlin, 382 Mich. 300; 170 N.W.2d 45 (1969), Wynn v Cole, 91 Mich. App. 517; 284 N.W.2d 144 (1979).
Next, defendants claim that the trial court erred in allowing the jury to consider a letter in which plaintiffs demanded retraction of the charges and the December 1, 1973, editorial as evidence of malice. The malice must exist at the time of the original libelous publication, and the jury in the present case was so instructed. New York Times, supra. Statements or publications of a libel which a defendant has made subsequent to the one complained of have been held admissible as evidence tending to show the existence of malice at the time of the original publication. Thibault v Sessions, 101 Mich. 279; 59 N.W. 624 (1894), Smith v Hubbell, 142 Mich. 637; 106 N.W. 547 (1906). We find that the retraction demand and editorial were relevant and admissible on the question as to whether the defendants acted with malice in publishing the original article.
Defendants also claim that the jury was improperly allowed to consider the editorial as actionable in itself. The trial judge, outside the presence of the jury, interpreted this Court's decision in Peisner, supra, 82 Mich. App. 153, as holding that the editorial could not itself be the basis of a cause of action. The jury, however, was never specifically instructed that the editorial was not actionable. The trial court's instructions did indicate that the only publication in question was the original article:
"Now, I charge you, Members of the jury, that in this case in publishing this article in question on November 20th, 1973, the Defendants enjoyed what we call a qualified privilege, since under the law the press does enjoy a qualified privilege which precludes recovery for a claimed libel which is based upon the reports of matters of public interests, unless the Plaintiff establishes that the Defendants published an untruth [sic] report with knowledge of its falsity or with a reckless disregard of the truth. Now, I hold and I am charging you, Members of the jury, that the article complained of in this case is defamatory." (Emphasis added.)
The judge read each side's theory of the case to the jury. Included in plaintiffs' theory was the claim that the editorial was libelous and caused injury to plaintiffs. Defendants now claim that the reading of this theory, coupled with the failure of the judge to instruct the jury that the editorial was not actionable, resulted in a damage award based in part on the publication of the editorial. Defendants did not object to the reading of plaintiffs' theory and never requested an instruction that the editorial was not actionable. Under these circumstances, any error was preserved for appeal only if it resulted in manifest injustice. Earle v Colonial Theater Co, 82 Mich. App. 54; 266 N.W.2d 466 (1978), lv den 403 Mich. 816 (1978). We do not believe manifest injustice occurred in the present case. The editorial did not repeat the specific allegations of professional misconduct contained in the article, although it called for a Bar Association review of plaintiff Balfour Peisner's conduct to determine if an ethical violation occurred. It is unlikely that the jury based its finding of liability on the editorial. Furthermore, the trial court had planned to give an instruction requested by plaintiffs which contained the statement that the editorial was not actionable. However, the proposed instruction was withdrawn following a defense objection to the failure of the instruction to state that the requisite malice had to exist at the time of the original publication.
During closing argument, plaintiffs' attorney read aloud a portion of defendants' pleadings in which the defense of truth was claimed. Defense counsel's objection was overruled and his request for a jury instruction that the pleadings could not be considered as evidence of malice was denied. In the post-trial motion, defendants argued that the pleadings were privileged and thus inadmissible. Defendants now argue that the pleadings were privileged and that the assertion of truth therein was improperly used as evidence of malice. Cases relied on by defendants include Hartung v Shaw, 130 Mich. 177; 89 N.W. 701 (1902), and Bennett v Attorney General, 65 Mich. App. 203; 237 N.W.2d 250 (1975), which held that statements made in pleadings are privileged and cannot form the basis for a libel action. In Sanders v Leeson Air Conditioning Corp, 362 Mich. 692; 108 N.W.2d 761 (1961), the Court held that statements made in pleadings, if relevant to the issues of a case, are absolutely privileged. Based on these cases, we hold that the trial judge erred by allowing plaintiffs' counsel to make the argument based on defendants' claim of truth and by failing to give the requested instruction. However, we find that this error was harmless under GCR 1963, 529.1 due to the evidence of malice which had been presented to the jury before the disputed argument was made. This included the publication of the editorial by defendant Free Press and its refusal to retract anything in the original article, although plaintiffs had demanded retraction in a letter which pointed out specific allegations in the article which plaintiffs claimed were false.
Defendants raise two issues concerning the propriety of the damage award. First, they argue that the trial court's instructions improperly authorized the jury to award multiple damages for the same injury to plaintiff Balfour Peisner's "feelings". The instructions were based in part on MCL 600.2911(2); MSA 27A.2911(2), which provides:
"(a) Except as provided in (b), in actions based on libel or slander the plaintiff is entitled to recover only for the actual damages which he has suffered in respect to his property, business, trade, profession, occupation, or feelings.
"(b) Exemplary and punitive damages shall not be recovered in actions for libel unless the plaintiff, before instituting his action, gives notice to the defendant to publish a retraction and allows a reasonable time to do so, and proof of the publication or correction shall be admissible in evidence under a denial on the question of the good faith of the defendant, and in mitigation and reduction of exemplary or punitive damages. The retraction shall be published in the same size type, in the same editions and as far as practicable, in substantially the same position as the original libel."
In Michigan, exemplary or punitive damages are recoverable as compensation to the plaintiff, not as punishment of the defendant. Kewin v Massachusetts Mutual Life Ins Co, 409 Mich. 401, 419; 295 N.W.2d 50 (1980). The Supreme Court stated:
"Our review of the precedent indicates that those cases which permit recovery of exemplary damages as an element of damages involve tortious conduct on the part of the defendant. * * * An award of exemplary damages is considered proper if it compensates a plaintiff for the `humiliation, sense of outrage, and indignity' resulting from injuries `maliciously, willfully and wantonly' inflicted by the defendant. * * * The theory of these cases is that the reprehensibility of the defendant's conduct both intensifies the injury and justifies the award of exemplary damages as compensation for the harm done the plaintiff's feelings." Id., 419.
Part (b) of the statute quoted above does not alter the common law rules governing exemplary or punitive damages, it merely states when such damages can be awarded in libel actions.
The trial court in the present case gave the following instructions on exemplary or punitive damages:
"Now, Members of the jury, the Michigan statute which I have just quoted mentions punitive damages. Now, under our law — and I want to correct any possible misimpressions — under our law the purpose of these `punitive damages' is not to punish the Defendant [sic] for their misdeeds. The purpose of these damages, which I prefer to refer to as additional damages rather than punitive damages, is to compensate the plaintiffs for injuries suffered by them because of the Defendants' actions.
"I charge you, that although the focus is upon the Plaintiff's injuries, in measuring these additional and exemplary damages, the focus is on the Defendant's actions in determining if these additional damages should be awarded.
"It has long been the position of the Courts of Michigan that the sting of libel will be much greater when the Defendants have acted with either knowledge of the falsity of the material, or with a reckless disregard for the truth. Since the injury is greater because [sic] the Defendant's actions, the Plaintiffs are entitled to recover greater damages than the actual damages. And this is what this punitive damages, which I referred to as additional damages means.
* * *
"If you also decide that the Plaintiff, Mr. Peisner, is entitled to what I have labeled additional damages because the publishers of the — I'm sorry. Because the publisher knew that the facts were false or because the article was published with a reckless disregard for the truth, then you may award additional damages to the Plaintiff Peisner, and these additional damages are allowed to compensate him because the sting of libel is much greater — it's made much greater when the Defendants have acted with knowledge of the falsity.
"You may estimate such additional damages in order to fairly compensate the Plaintiff for the purposes of such additional damages. As I said, although they're called punitive, it's not to punish the Defendants."
These instructions were basically correct; however, the jury was not informed of specific types of damages to consider in awarding the additional damages. The omission is significant in view of the following instructions given on actual damages:
"Now, if you decide that the Plaintiff husband is entitled to damages, it is your duty to determine the amount of money which reasonably, fairly and adequately compensates him for each of the elements of damage which you decide has resulted from the publication by the Defendant. You should include each of the following items of damage which you decide have been sustained by the Plaintiff to the present time, and they include:
"The actual damages which the Plaintiff has suffered in respect to his property or business, trade, occupation or feelings, his mental anguish, his denial of social pleasures and enjoyment, his embarrassment, ridicule, humilation, mortification or fear. You may also include any of those elements of damage which you determine that the Plaintiff is reasonably certain to sustain in the future.
"Now, which, if any, of those elements of damage has been proved is for you to decide. But you have to decide that based upon evidence and not upon speculation, not upon guess and not upon conjecture. The amount of money to be awarded for certain of these elements of damage — such as: mental anguish, denial of social pleasures, embarrassment, mortification and ridicule and things like that — the amount of money awarded for those elements can't be proved in a precise dollar amount. The law leaves both amounts to your sound judgment. But your verdict must be solely to compensate the Plaintiff for his damages and not to punish the Defendants." (Emphasis added.)
These instructions on actual damages, standing alone, were not improper. The types of injury emphasized in the quoted portion of the instructions are compensable as actual damages in defamation cases, Long v Tribune Printing Co, 107 Mich. 207; 65 N.W. 108 (1895), Pettengill v Booth Newspapers, Inc, 88 Mich. App. 587; 278 N.W.2d 682 (1979), and may fall under the term "feelings" in part (a) of the libel-damages statute.
The error we perceive in the instant cases results from the combined effect of the instructions on actual and exemplary damages. Compensation for the types of injury normally part of exemplary damages, including "humiliation, sense of outrage and indignity", was authorized by the instruction on actual damages. If the actual-damages instruction was correctly followed, the exemplary damages awarded were a form of punishment which is not permitted in this state.
Defendants also claim that the damages awarded were excessive and not supported by the evidence. The trial judge denied a defense motion for remittitur, although he acknowledged that the judgment was possibly the largest libel judgment in Michigan history. While we are of the opinion that the damage award was excessive, we do not base our reversal on that ground.
Plaintiff Balfour Peisner's claim that he is entitled to costs because the defendants failed to file a proper statement of facts is denied.
The jury's finding of liability is affirmed, but the damage award is set aside and the case remanded for a new trial on the issue of damages only.
No costs, neither side having prevailed in full.
BRONSON, J., concurs in the result only.
I concur in the above opinion and only write separately to express my concern with the recurring confusion that arises over instructions on "punitive" and "exemplary" damages. While it often appears that the two terms are used interchangeably, there is a real, legal significance which goes beyond mere semantics. Legally, the focus of the two damages is different. Punitive damages are awarded solely to punish or to make an example of a defendant because of the malice or recklessness with which he acted. Exemplary damages are awarded for injury to feelings and for the sense of indignity and humiliation suffered by a plaintiff because of injury maliciously and wantonly inflicted. In other words, "punitive" damages focus upon "punishing" a defendant and "exemplary" damages focus upon "compensating" a plaintiff. American Central Corp v Stevens Van Lines, 103 Mich. App. 507; 303 N.W.2d 234 (1980), Wronski v Sun Oil Co, 89 Mich. App. 11, 27; 279 N.W.2d 564 (1979), lv den 407 Mich. 863 (1979), Ray v Detroit, 67 Mich. App. 702, 704; 242 N.W.2d 494 (1976), lv den 397 Mich. 828 (1976).
As the Michigan Supreme Court most recently reaffirmed, only exemplary damages which are compensatory in nature are allowed. Damages cannot be recovered for the purpose of punishing a defendant. Kewin v Massachusetts Mutual Life Ins Co, 409 Mich. 401, 419; 295 N.W.2d 50 (1980), Ray, supra.
Since Michigan does not permit punitive damages, the term should be eliminated from our legal parlance. Jury instructions, such as those given in the instant case, which use the term "punitive damages", while at the same time disclaiming that damages can be given to "punish" the defendant, will inevitably lead to jury confusion and invite appellate review.