Morlan v. Qwest Dex, Inc.

332 F. Supp. 2d 1356, 2004 U.S. Dist. LEXIS 17325, 2004 WL 1900368
CourtDistrict Court, D. Oregon
DecidedAugust 25, 2004
DocketCivil 03-1406-MO
StatusPublished

This text of 332 F. Supp. 2d 1356 (Morlan v. Qwest Dex, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morlan v. Qwest Dex, Inc., 332 F. Supp. 2d 1356, 2004 U.S. Dist. LEXIS 17325, 2004 WL 1900368 (D. Or. 2004).

Opinion

ORDER and OPINION

MOSMAN, District Judge.

In this diversity action, the issue is whether statements by company officials about plaintiff, a former employee of the company, supports a claim for defamation. Because the company’s defense of privilege carries the day, the court grants summary judgment in the company’s favor. (Doc. # 17).

I. BACKGROUND

The facts, construed in favor of the non-movant plaintiff, are as follows. Defendant Qwest Dex, Inc. (“Dex”) employed plaintiff Susan Morían as a Portland-based *1358 director of advertising sales and general manager for Dex’s “yellow pages” phone directories. Plaintiff managed the sales organization responsible for selling advertisements to customers located in Oregon and southwest Washington.

In November 2002, Dex CEO George Burnett received an anonymous phone call, purportedly from a former employee, complaining about plaintiffs management of the Portland sales organization. The caller specifically mentioned plaintiffs refusal to allow employees to remove advertisements from the Portland-area directory. The caller also complained about plaintiffs management style and alleged drinking problem. The caller further told Burnett that Dex would begin losing sales personnel unless he fired plaintiff. In response, Burnett ordered a formal investigation of plaintiffs management of the sales team.

Jill Groves, a member of Dex’s security department, conducted the investigation. Groves had no personal knowledge or experience with Dex’s credit policies and procedures. Therefore, she sought guidance from Jim Dodson, manager of Dex’s credit management organization (“CMO”). CMO’s function is to review credit applications to ensure the sales team sells advertising only to creditworthy customers and that the directory includes no “bad debt” advertisements (ie., advertisements for customers delinquent on their bills). Generally, when an account is delinquent, CMO sends a “notifier” informing the responsible sales team about the account.

Based on information provided by Dodson, Groves discovered about $1.5 million worth of bad-debt advertisements published in the 2002 Portland-area directory. The total number of delinquent accounts was 245, which included 141 accounts worth $500,000 that had been referred to collection agencies.

From July 23 to July 26, 2002, in anticipation of the 2002 directory to be published in September, CMO sent a “blitz” of about 500 email notifiers reminding Portland sales representatives about various bad-debt accounts and instructing them either to make proper payment arrangements or remove the accounts from the upcoming directory. CMO did another “blitz” in September, days before the new directory was to be sent to the printer.

Dodson testified at his deposition he commonly used blitzes of notifiers as a way to inform sales personnel about problematic accounts, although Portland-area sales personnel found the July blitz unusual for the volume of notifiers involved. Dodson further testified he expected sales personnel to remove advertisements upon receipt of the notifiers. But he could not cite any policy supporting that expectation.

At some point before publication of the 2002 directory, Dodson or his boss, Tony Basile, expressed frustration to Gary Gibson, Dex’s director of sales operations, about a specific account handled by plaintiffs sales team. The account at issue was a $10,000 per month account for a company called “Action Locksmith.” Dex argues Action Locksmith’s credit application was certain to fail but plaintiff nevertheless told her sales team to keep the company’s advertisements in the directory. Art Townsend, the Action Locksmith account manager, testified that plaintiff instructed him to ignore calls from CMO regarding the account. Plaintiff herself also ignored repeated calls and emails regarding that account. Eventually, Gibson himself had to remove the Action Locksmith advertisement days before the directory was to go to the printer.

Groves’s report described this incident involving Action Locksmith. The report also recounted other incidents employees had described to Groves. For example, a sales manager told Groves that plaintiff instructed the manager to leave a Vancou *1359 ver, Washington customer’s advertisements in the 2002 directory even though plaintiff knew CMO had denied a credit application submitted by the customer. Another sales manager asked- plaintiff about removing advertisements for a customer who owed overdue payments; plaintiff told the manager not to remove the advertisements because the customer planned to sell his boat to pay the overdue balance. Other Dex employees testified regarding plaintiffs decisions to keep advertisements in -the directory for delinquent customers. See, e.g., Depo. of O’Connor at 16 (testifying plaintiff told personnel not to remove bad-debt advertisements); Depo. of Mitchell at 9 (testifying plaintiff instructed managers -to “leave the advertising in,” despite CMO notifiers, because otherwise there was not “a lot of negotiating power with CMO”). Based on the employee interviews, Groves discovered that plaintiffs sales team felt “between a rock and a hard place” in that CMO told the team one thing, while plaintiffs “wrath” awaited team members who listened to CMO.

David Quinn, a Dex sales-staff manager, testified that plaintiffs approach to bad-debt advertisements reflected her desire to circumvent Dex’s credit policy. Pursuant to that company policy, for new advertisers whose accounts would exceed a certain dollar amount, CMO had to approve their credit applications before their advertisements were placed in a directory. In contrast to that policy, Quinn testified plaintiff wanted sales personnel to put the advertisements in the directory first so CMO would be less likely to take action.

Pursuant to the practice followed by sales personnel, as described by plaintiff, upon receipt of a CMO notifier, the account’s sales representative would first attempt to collect the outstanding account. Then, if that failed, the account’s sales manager would attempt collection. If the sales manager was unsuccessful, sales personnel would hire independent-contractor collection agencies to pursue the account. Finally, if those efforts failed, the responsible sales -representative generally was expected to pull the delinquent customer’s advertisements from the directory. Consistent with this sales-department policy, plaintiff told sales personnel they should not remove advertisements unless all collection efforts first had been exhausted.

The record shows there generally was an -ongoing conflict between CMO and sales personnel including plaintiff. As one witness put it, CMO and sales were “rowing the boat in different directions.” Dodson, for instance, testified that the Portland sales department’s practice of hiring independent contractors to collect bad debts had “been kind of a thorn in [his] side for some time.” According to Dodson: “the problem with the contractors [is] they often confuse the issue; they would interfere with payment arrangements or demands that [his CMO] team had already had in place.” Thus, Dodson agreed, CMO personnel sometimes felt that the independent contractors effectively “undercut” CMO’s authority.

Dodson told his boss at CMO, Mr.

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Bluebook (online)
332 F. Supp. 2d 1356, 2004 U.S. Dist. LEXIS 17325, 2004 WL 1900368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morlan-v-qwest-dex-inc-ord-2004.