Collins v. Red Roof Inns, Inc.

566 S.E.2d 595, 211 W. Va. 458, 2002 W. Va. LEXIS 66
CourtWest Virginia Supreme Court
DecidedJune 7, 2002
Docket30112
StatusPublished
Cited by16 cases

This text of 566 S.E.2d 595 (Collins v. Red Roof Inns, Inc.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Collins v. Red Roof Inns, Inc., 566 S.E.2d 595, 211 W. Va. 458, 2002 W. Va. LEXIS 66 (W. Va. 2002).

Opinion

DAVIS, Chief Justice:

The question herein certified by the United States District Court for the Southern District of West Virginia asks whether defamatory matter published preliminary to the filing of a judicial action, and involving a person who is not a party to the dispute, is absolutely privileged. We conclude that an absolute privilege applies to defamatory statements uttered prior to the commencement of a judicial action, even when the subject of the defamatory comments is a third person, but only within the specific *459 limitations set forth in the body of this opinion.

I.

FACTUAL AND PROCEDURAL HISTORY

In 1999, Red Roof Inns, Inc., 1 the defendant (hereinafter “Red Roof’), underwent a restructuring. As a part of the restructuring, various employees either voluntarily or involuntarily terminated their employment. Also in connection with this restructuring, Red Roof implemented a “Change in Control Severance Plan” (hereinafter “Severance Plan”). 2

Plaintiffs John Collins 3 and Debbie South-worth 4 are former employees of Red Roof. Prior to October, 1999, each was employed as a vice president of operations (hereinafter VPO). On October 5, 1999, Debbie South-worth and Red Roof entered into a mutual severance pay agreement pursuant to Red Roofs Severance Plan. John Collins entered into a similar agreement with Red Roof on October 8, 1999. According to Red Roof, as a result of these agreements, Ms. South-worth’s and Mr. Collins’ employment was terminated by Red Roof in exchange for a lump-sum payment and certain additional benefits as provided for in the severance plan. On the contrary, Ms. Southworth and Mr. Collins contend that their employment was not terminated. Rather, they insist that they each voluntarily resigned.

Thereafter, on October 11, 1999, Andrew D. Bensabat, who is not a party to the instant litigation, resigned from his position of VPO with Red Roof and claimed his entitlement to benefits under the severance plan. 5 Upon being informed that he would not receive severance plan benefits from Red Roof, Mr. Bensabat retained a lawyer who corresponded with Red Roof demanding such benefits for his client and stating:

You are advised that should the company fail to pay Mr. Bensabat the benefits due him under the severance plan within five (5) business days from the date appearing above, it is my intention to exhaust the appeals remedy provided for in the severance plan and, if necessary, to pursue an action in the United States District Court to recover the benefits, as well as prejudgment interest and attorney’s fees....

Mr. Emmett J. Gossen, Jr., who at all times relevant to this case was the executive vice president of Red Roof, 6 replied by correspondence dated October 27, 1999. Mr. Gos-sen denied that Mr. Bensabat was entitled to any benefits under the severance plan, and referred Mr. Bensabat’s lawyer to the appeal process designated in the plan. Mr. Bensa-bat, then utilized the Severance Plan’s procedures to appeal the decision denying him severance benefits. In connection -with his appeal, Mr. Bensabat made the following assertions:

we note that the Plan Administrator has approved the payment of benefits to similarly-situated VPOs who have resigned from their employment with Red Roof Inns. It is our understanding that former VPO John Collins [chose] to pursue other business opportunities and was given the full measure of benefits available under the Plan. Likewise, we understand that Debbie *460 Southworth, another former VPO, resigned from her employment, citing her discomfort with the changes initiated by the new management group. She likewise received benefits under the Plan. We further understand that other present and former employees have either been promised benefits under the Plan or have actually [ ] received such benefits despite the fact that they were not made “redundant” as a result of the change in control. The conduct of the Plan Administrator in granting benefits to others who are similarly situated to Mr. Bensabat and denying Mr. Bensabat’s valid application for benefits constitutes arbitrary and capricious conduct on the part of the Administrator....

With respect to its appeal process, Red Roofs severance plan expressly states that

[wjithin thirty (30) days after receipt of a written appeal ..., the Plan Administrator shall notify the Employee of the final decision. The final decision shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, and specific references to the pertinent Plan provisions on which the decision is based.

(Emphasis added). Mr. Gossen, by written correspondence dated December 1, 1999, notified Mr. Bensabat that his appeal had been denied and stated, in relevant part:

Your assertion that the Plan Administrator acted in an “arbitrary and capricious” manner with regard to benefits afforded to John Collins and Debbie Southworth is simply wrong on the facts. Collins and Southworth were terminated, of them employer’s own motion, based on factors relating to evaluation of their performance and potential future contribution. The fact that either may have wished to be fired, for whatever personal reason of them own, is simply irrelevant. The Change of Status form for each reflects “Discharge”, which is what occurred. Facts leading to that discharge did not, in oui' judgement, rise to the level of “Cause” as defined in Sec. 1.3(a) of the Plan, and accordingly we treated these terminations as redundancies ....

The parties to the instant suit have stipulated that Red Roof did not publish or cause to be published the above-quoted statements other than to forward the letter containing the statements to Mr. Bensabat’s lawyer. Either Mr. Bensabat’s lawyer, or Mr. Bensa-bat himself, subsequently notified John Collins and Debbie Southworth of the comments noted above.

In December 1999, Mr. Bensabat filed suit against Red Roof alleging, inter alia, that Red Roof had improperly failed to provide him benefits under the severance plan. By order entered April 19, 2001, the United States District Court for the Middle District of Florida, Tampa Division, found in favor of Red Roof.

After learning of Red Roofs assertion that they were terminated, John Collins and Debbie Southworth filed the instant law suit against Red Roof in the Circuit Court of Kanawha County alleging defamation of character. Mr. Collins and Ms. Southworth contend that they voluntarily resigned from their employment with Red Roof and were not terminated as Red Roof declared to Mi*. Bensabat. Red Roof removed the case to the United States District Court for the Southern District of West Virginia (hereinafter District Court) on diversity of citizenship grounds. Among its defenses to this action, Red Roof asserts that it was absolutely privileged to publish its statements about John Collins and Debbie Southworth.

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Cite This Page — Counsel Stack

Bluebook (online)
566 S.E.2d 595, 211 W. Va. 458, 2002 W. Va. LEXIS 66, Counsel Stack Legal Research, https://law.counselstack.com/opinion/collins-v-red-roof-inns-inc-wva-2002.