Larry W. Buck (Buck or appellee) sued his former employer, Frank B. Hall & Co. (Hall or

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Larry W. Buck (Buck or appellee) sued his former employer, Frank B. Hall & Co. (Hall or appellant), for damages for defamation of character, * * *. By unanimous verdict, a jury found damages for * * * defamation of character and exemplary damages. The court entered judgment for appellee for $1,905,000.00 in damages, plus interest, attorney’s fees and costs of court. For the reasons set forth below we affirm.

   Appellee, an established salesman in the insurance business, was approached in the spring of 1976 by a representative of Hall with a prospective job offer. Appellee was then an executive vice-president of the insurance firm of Alexander & Alexander, and in the previous year he generated approximately $550,000.00 in commissions for the firm. He was the top producer in Alexander’s Houston office and was ranked nationally among the top five salesmen for Alexander. After several meetings, Buck accepted Hall’s offer of employment and began working for Hall on June 1, 1976. Hall agreed to pay Buck an annual salary and one-half percent of net retained commissions for each year to a maximum commission of $600,000.00, plus fringe benefits. The agreement was to be for a three year period. Several Alexander employees followed Buck to Hall’s office. During the next several months Buck generated substantial commission income for Hall and succeeded in bringing several major accounts to the firm.

   In October, 1976, Mendel Kaliff, then president of Frank B. Hall & Co. of Texas, held a meeting with Buck and Lester Eckert, Hall’s office manager and a former Alexander employee. Kaliff informed Buck his salary was being reduced to $65,000.00 and that Hall was eliminating Buck’s incentive and profit sharing benefits. Kaliff told Buck these measures were being taken because of Buck’s failure to produce sufficient income for Hall. However, Kaliff added that if Buck could generate $400,000.00 net commission income by June 1, 1977, his salary and benefits would be reinstated retroactively.

   On March 31, 1977, at another impromptu meeting, Kaliff and Eckert abruptly fired Buck and instructed him not to return to Hall’s offices. Buck sought employment with several other insurance firms, but his efforts were fruitless. Distraught at having lost his job and being unable to find suitable employment in the insurance business, Buck hired an investigator, Lloyd Barber, in an attempt to discover Hall’s true reasons for firing him. This suit is based upon statements made by Hall employees to Lloyd Barber and to Charles Burton, a prospective employer, and upon a note written by Virginia Hilley, a Hall employee. Appellant brings eighty points of error, which will be grouped in thirteen categories.

* * *

   Lloyd Barber contacted Mendel Kaliff, Lester Eckert and Virginia Hilley and told them that he was an investigator, Buck was being considered for a position of trust and responsibility, and Barber was seeking information about Buck’s employment with Frank B. Hall & Co. Barber testified that he had interviewed Kaliff, Eckert and Hilley on separate occasions in September and October of 1977, and had tape-recorded the conversations. Appellee introduced into evidence Barber’s properly authenticated investigative reports, which were based on these taped interviews. The report shows Kaliff remarked several times that Buck was untrustworthy, and not always entirely truthful; he said Buck was disruptive, paranoid, hostile and was guilty of padding his expense account. Kaliff said he had locked Buck out of his office and had not trusted him to return. He charged that Buck had promised things he could not deliver. Eckert told Barber that Buck was horrible in a business sense, irrational, ruthless, and disliked by office personnel. He described Buck as a ‘‘classical sociopath,’’ who would verbally abuse and embarrass Hall employees. Eckert said Buck had stolen files and records from Alexander & Alexander. He called Buck ‘‘a zero,’’ ‘‘a Jekyll and Hydeperson’’

   Virginia Hilley told Barber that Buck could have been charged with theft for materials he brought with him to Hall from Alexander & Alexander.

   Any act wherein the defamatory matter is intentionally or negligently communicated to a third person is a publication.In the case of slander, the act is usually the speaking of the words. Restatement (Second) Torts §577 comment a (1977). There is ample support in the record to show that these individuals intentionally communicated disparaging remarks to a third person. The jury was instructed that ‘‘Publication means to communicate defamatory words to some third person in such a way that he understands the words to be defamatory. A statement is not published if it was authorized, invited or procured by Buck and if Buck knew in advance the contents of the invited communication.’’ In response to special issues, the jury found that the slanderous statements were made and published to Barber.

   Hall argues that Buck could and should have expected Hall’s employees to give their opinion of Buck when requested to do so. Hall is correct in stating that a plaintiff may not recover for a publication to which he has consented, or which he has authorized, procured or invited, [citation]; and it may be true that Buck could assume that Hall’s employees would give their opinion when asked they do so. However, there is nothing in the record to indicate that Buck knew Hall’s employees would defame him when Barber made the inquiries. The accusations made by Kaliff, Eckert and Hilley were not mere expressions of opinion but were false and derogatory statements of fact.

* * *

   A defamer cannot escape liability by showing that, although he desired to defame the plaintiff, he did not desire to defame him to the person to whom he in fact intentionally published the defamatory communication. The publication is complete although the publisher is mistaken as to the identity of the person to whom the publication is made. Restatement (Second) of Torts §577 comment 1 (1977). Likewise, communication to an agent of the person defamed is a publication, unless the communication is invited by the person defamed or his agent. Restatement §577 comment e. We have already determined that the evidence is sufficient to show that Buck did not know what Kaliff, Eckert or Hilley would say and that he did not procure the defamatory statements to create a lawsuit. Thus, the fact that Barber may have been acting at Buck’s request is not fatal to Buck’s cause of action. There is absolutely no proof that Barber induced Kaliff, Eckert or Hilley to make any of the defamatory comments.

* * *

   When an ambiguity exists, a fact issue is presented. The court, by submission of proper fact issues, should let the jury render its verdict on whether the statements were fairly susceptible to the construction placed thereon by the plaintiff. [Citation.] Here, the jury found (1) Eckert made a statement calculated to convey that Buck had been terminated because of serious misconduct; (2) the statement was slanderous or libelous; (3) the statement was made with malice; (4) the statement was published; and (5) damage directly resulted from the statement. The jury also found the statements were not substantially true. The jury thus determined that these statements, which were capable of a defamatory meaning, were understood as such by Burton.

* * *

   We hold that the evidence supports the award of actual damages and the amount awarded is not manifestly unjust. Furthermore, in responding to the issue on exemplary damages, the jury was instructed that exemplary damages must be based on a finding that Hall ‘‘acted with ill will, bad intent, malice or gross disregard to the rights of Buck.’’ Although there is no fixed ratio between exemplary and actual damages, exemplary damages must be reasonably apportioned to the actual damages sustained. [Citation.] Because of the actual damages [$605,000] and the abundant evidence of malice, we hold that the award of punitive damages [$1,300,000] was not unreasonable. * * *

 The judgment of the trial court is affirmed.

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Smith and Roberson Business Law

ISBN: 978-0538473637

15th Edition

Authors: Richard A. Mann, Barry S. Roberts

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