Aegis Sciences Corporation v. Lou Ann Zelenik - Dissent

Court of Appeals of Tennessee·Decided January 16, 2013·No. M2012-00898-COA-R3-CV·Published

Opinion

IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE November 14, 2012 Session

AEGIS SCIENCES CORPORATION v. LOU ANN ZELENIK, ET AL.

Direct Appeal from the Circuit Court for Davidson County No. 10C2913 Joseph P. Binkley, Jr., Judge

No. M2012-00898-COA-R3-CV - Filed January 16, 2013

J. STEVEN STAFFORD, J., DISSENTING:

I respectfully dissent from the majority opinion in this case. The majority affirms summary judgment on the basis that Aegis is unable to show that a reasonable person of ordinary intelligence could find that the advertisement was capable of a defamatory meaning. Instead, I would hold that summary judgment is inappropriate in this case, reverse the trial court, and remand for further proceedings.

When a motion for summary judgment is made, the moving party has the burden of showing that “there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Tenn. R. Civ. P. 56.04. The moving party may accomplish this by either: (1) affirmatively negating an essential element of the non-moving party’s claim; or (2) showing that the non-moving party will not be able to prove an essential element at trial. Hannan v. Alltel Publ’g Co., 270 S.W.3d 1, 8–9 (Tenn. 2008). However, “[i]t is not enough for the moving party to challenge the nonmoving party to ‘put up or shut up’ or even to cast doubt on a party’s ability to prove an element at trial.” Id. at 8. Accordingly, it is the Defendant’s burden to show that they are entitled to summary judgment. The Defendants argue that they have accomplished this goal by negating the essential element that the statement was, in fact, defamatory to Aegis. As stated by the majority, the trial court may determine that, as a matter of law, a statement is not defamatory only when “the statement is not reasonably capable of any defamatory meaning and cannot be reasonably understood in any defamatory sense.” Biltcliffe v. Hailey’s Harbor, Inc., No. M2003-02408-COA-R3-CV, 2005 WL 2860164, at *4 (Tenn. Ct. App. Oct. 27, 2005) (citing White v. Fraternal Order of Police, 909 F.2d 512, 518 (D.C. Cir. 1990)).

The advertisement in this case clearly shows Senator Black giving Mr. Black a check, for a considerable sum of money, made payable to Aegis. The advertisement states that the

check was funded by Tennessee taxpayers. The majority concludes, however, that the advertisement “states nothing with respect to Aegis other than it received one million dollars from the State of Tennessee.” Respectfully, the issue before this Court is not governed solely by what is expressly stated in the advertisement, but by what the advertisement is “capable” of conveying in the eyes of a reasonable person. Biltcliffe, 2005 WL 2860164, at *4 (citing White v. Fraternal Order of Police, 909 F.2d 512, 518 (D.C. Cir. 1990)). Indeed, the Tennessee Supreme Court has held that an action for defamation may lie even when the defamatory message is not expressly stated, but when the defamation is conveyed by implication. See Memphis Pub. Co. v. Nichols, 569 S.W.2d 412, 420 (Tenn. 1978). In addition, on a motion for summary judgment, courts are directed to review the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in the nonmoving party’s favor. Stovall v. Clarke, 113 S.W.3d 715, 721 (Tenn. 2003). The advertisement at issue, while directed at Senator Black, is reasonably capable of conveying the message that Aegis accepted improper benefits through state-funded contracts due to its president’s personal relationship with Senator Black.

Thus, the question becomes whether an allegation that Aegis accepted improper benefits is defamatory to Aegis. As stated by the majority, a statement is defamatory “if it tends so to harm the reputation of another as to lower him [or her] in the estimation of the community or to deter third persons from associating or dealing with him [or her].” Biltcliffe, 2005 WL 2860164, at *4 (quoting Restatement (Second) of Torts § 559 (1977)). While the majority is correct that the law of defamation applies generally to protect a person's reputation within the community, the law is especially concerned about defamatory statements that tend to prejudice a party in his business, trade, office or profession. See, e.g., Smith v. Fielden, 326 S.W.2d 476, 479 (Tenn. 1959); McWhorter v. Barre, 132 S.W.3d 354, 364–365 (Tenn. Ct. App. 2003); W. Page Keeton, et al., Prosser and Keeton on the Law of Torts § 112 at 790 (5th ed. 1984) (“The law has always been very tender of the reputation of tradesmen, and therefore words spoken of them in the way of their trade will bear an action that will not be actionable in the case of another person.”). “[A] corporation may maintain an action for a libel or a slander respecting its business or credit, or if it has been defamed by a false imputation about its financial soundness or business ethics.” 50 Am. Jur. 2d Libel and Slander § 334 (footnote omitted). Additionally, “[a] statement reflecting adversely on the business capacity or methods of a corporation, or on its credit or solvency, or on its ethical conduct, may be actionable . . . .” 53 C.J.S. Libel and Slander; Injurious Falsehood § 60 (footnote omitted) (emphasis added). Thus, an allegation that goes to the ethical conduct of a corporation may constitute defamation:

Defamatory statements . . . include words that impute a want of integrity in the discharge of the duties of office or employment. . . .

Where a statement impugns the basic integrity of a business, an action for defamation lies . . . . Aspersions which undercut a corporation's reputation for discharging its duties with integrity and have the likely effect of harming the business fall within the ambit of defamation per se. A corporation has been libeled if its reputation for adhering to the moral standards of the community in which it sells its products is attacked in a fashion likely to harm the corporation. A corporation may be defamed per se by statements which cast aspersions on its honesty.

50 Am. Jur. 2d Libel and Slander § 209 (footnotes omitted).

Drawing all reasonable inferences in favor of Aegis, I must conclude that the statements in the advertisement call into question Aegis’ “basic integrity” and reputation in the community. As such, there exists a genuine issue as to whether a reasonable person could legitimately conclude that the statements in the advertisement defame Aegis’ business reputation. Indeed, I am unable to conclude, as a matter of law, that the allegation that Aegis procured contracts with the State through an improper personal relationship with a Senator is incapable of harming the business reputation of Aegis. The Tennessee Supreme Court has held that “where . . . doubts arise” as to whether a statement is defamatory, the determination is the “province of the jury.” Magee v. Stark, 20 Tenn. 506, 1840 WL 1510, *3 (Tenn.1840); see also Rapid Circuits, Inc. v. Sun Nat. Bank, 2011 WL 1666919, *12 (E.D. Pa. May 3, 2011) (“Where there is any doubt that the communication disparages or harms the complainant in his business or profession, that doubt must be resolved in favor of the complainant; even where a plausible innocent interpretation of the communication exists, if there is an alternative defamatory interpretation, it is for the jury to determine if the defamatory meaning was understood by the recipient.”). Because “a reasonable jury could legitimately resolve the fact in favor of one side or the other,” a genuine issue exists precluding summary judgment. Byrd v. Hall, 847 S.W.2d 208, 215 (Tenn. 1993) “Summary [j]udgment is only appropriate when the facts and the legal conclusions drawn from the facts reasonably permit only one conclusion.” Landry v. South Cumberland Amoco, et al, No. E2009-01354-COA-R3-CV, 2010 WL 845390, at *3 (Tenn. Ct. App. March 10, 2010) (citing Carvell v. Bottoms, 900 S.W.2d 23 (Tenn. 1995)).

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