Yeldell v. Tutt

913 F.2d 533, 1990 WL 127375
CourtCourt of Appeals for the Eighth Circuit
DecidedSeptember 7, 1990
DocketNos. 89-2458, 89-2459 and 89-2530
StatusPublished
Cited by157 cases

This text of 913 F.2d 533 (Yeldell v. Tutt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yeldell v. Tutt, 913 F.2d 533, 1990 WL 127375 (8th Cir. 1990).

Opinion

JOHN R. GIBSON, Circuit Judge.

Donald E. and Rita F. Yeldell, previously employed by David and Gloria Tutt and Southern Capitol Enterprises, were awarded damages for a contract claim based upon insurance renewal commissions, and for a defamation claim based upon the Tutts’ statements following the Yeldells’ resignations from Southern Capitol.- The Yeldells also recovered a judgment against Capitol American Life Insurance Company on these claims; the district court,1 however, held that Capitol American was entitled to indemnification by the Tutts and Southern Capitol. On appeal, the Tutts and Southern Capitol argue that the district court: (1) lacked subject-matter and personal jurisdiction over the Tutts and Southern Capitol; (2) erred in failing to grant either a judgment notwithstanding [536]*536the verdict or a new trial because there was no evidence to support the jury’s conclusion that the Tutts acted with actual malice, and because the Tutts’ communications were protected by qualified privilege; and (3) erred in failing to grant either a judgment notwithstanding the verdict or a new trial because there was no evidence that the Yeldells had sustained compensatory damages. Capitol American argues on appeal that the court erred: (1) in submitting the issue of whether the Tutts and Southern Capitol were independent contractors for or employees of Capitol American to the jury; and (2) in holding that the contractual provision pertaining to diversion of renewal commissions was void under Ohio law. On cross-appeal, the Yel-dells urge that the court erred in determining the amount of damages awarded on their defamation claim. We affirm the judgment of the district court in all respects.

David and Gloria Tutt were the sole owners of Southern Capitol Enterprises, a Louisiana insurance agency. Donald and Rita Yeldell had been employed by Southern Capitol during three different time periods in the past and had a close personal relationship with the Tutts. Southern Capitol was under contract with Capitol American Life Insurance Company to market Capitol American’s insurance policies. When the Tutts returned from vacation in March 1987, they found that the Yeldells and another Southern Capitol employee, David Henry, had resigned from employment. Later that summer, a representative of Equifax Services contacted the Tutts for information about the Yeldells’ employment with Southern Capitol. Based upon the information shared by the Tutts, Equi-fax issued a report on the Yeldells which stated that when the Tutts returned from vacation, they found that the Yeldells had signed unauthorized checks and expense approvals, had removed property from the Southern Capitol premises without authorization, had interfered with other employees’ job duties, and had held unauthorized meetings with other personnel. The report described the Yeldells as dishonest and unreliable.

After this Equifax report was submitted to Appalachian National Life Company, a company with which the Yeldells were seeking employment, David Tutt called Bob Collier, an Appalachian representative, and told him that the Yeldells had disrupted the Tutts’ office the week before their resignations, had persuaded David Henry to resign, and had intended to leave the office vacant when the Tutts returned from vacation. Tutt further stated that the Yeldells had signed unauthorized checks and had taken confidential information from the office. In addition, Tutt informed Thomas Fullerman, his contact at Capitol American, that the Yeldells had written unauthorized expense checks, had taken materials from the office, had interfered with other employees’ job duties, had held unauthorized meetings, and had defamed the character of Southern Capitol.

The Yeldells brought this diversity action against the Tutts, Southern Capitol, Equi-fax, and Capitol American. They alleged that the statements were false and caused them reputational and emotional injury. They also brought a breach of contract claim against Capitol American asserting that a contractual provision pertaining to diverting renewal commissions from the Yeldells’ account to the Tutts’ and Southern Capitol’s accounts was void. During trial, Equifax and the Yeldells reached a settlement agreement. After a jury trial, Donald Yeldell was awarded past-due expenses from Southern Capitol in the amount of $84.69; vested renewal commissions from Capitol American in the amounts of $10,371, with Capitol American entitled to indemnification from Southern Capitol; and compensatory damages of $75,000 and punitive damages of $91,200 from the Tutts, Southern Capitol, and Capitol American, with Capitol American entitled to indemnification from Southern Capitol and the Tutts. Rita Yeldell was awarded vested renewal commissions from Capitol American in the amount of $6,819, with Capitol American entitled to indemnification from Southern Capitol; and compensatory damages of $50,000 and punitive damages of $60,800 from the Tutts, Southern [537]*537Capitol, and Capitol American, with Capitol American entitled to indemnification from Southern Capitol and the Tutts.

The court denied the defendants’ post-trial motions requesting a judgment notwithstanding the verdict or, alternatively, a new trial or remittitur. The court ruled that the jury verdict necessarily included a finding that the Tutts had made false and defamatory statements about the Yeldells, that the statements were made with knowledge of their falsity or with reckless disregard as to their falsity, and that they were made with ill will and the desire to injure the Yeldells. The court observed that the parties had presented conflicting evidence but that the jury had apparently believed the Yeldells’ version of the facts. After discussing the relevant evidence, the court concluded that the jury’s findings were supported by a permissible view of the evidence. This appeal followed.

I.

The Tutts and Southern Capitol first argue that the district court lacked both subject-matter and personal jurisdiction to hear this suit.

A.

They argue that the court lacked subject-matter jurisdiction because there was not complete diversity of citizenship between the plaintiffs and the defendants. The parties agree that the Tutts and Southern Capitol are Louisiana citizens; it is the citizenship of the Yeldells that is disputed. The Tutts assert that the Yeldells were citizens of Louisiana, not Arkansas, when suit was filed on March 2, 1988. The Yeldells admit that they were Louisiana citizens when the cause of action arose and that they moved back to Louisiana for a brief time before filing suit. They insist, however, that they were citizens of Arkansas at the time of filing suit and at the time of trial.

We are somewhat disadvantaged because subject-matter jurisdiction was not challenged in the district court, and the court made no findings on this issue. Questions of subject-matter jurisdiction, of course, may be raised at any time and may not be waived. Insurance Corp. of Ireland v. Compagnie Des Bauxites De Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 2104, 72 L.Ed.2d 492 (1982). A court, including an appellate court, may raise the issue sua sponte and, indeed, the court has the duty to do so if the record suggests jurisdiction is lacking. Id.

Well-established principles guide our consideration of this jurisdictional issue. The Yeldells, as the parties seeking a federal forum, have the burden of establishing jurisdiction by a preponderance of the evidence.

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Bluebook (online)
913 F.2d 533, 1990 WL 127375, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yeldell-v-tutt-ca8-1990.