Case Title: Reece v. Finch

Citation: 562 So. 2d 195

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1990-02-23T00:00:00Z

Document:
562 So. 2d 195 (1990)
John W. REECE
v.
Richard A. FINCH, et al.
88-1400.

Supreme Court of Alabama.
February 23, 1990.
Rehearing Denied May 4, 1990.
*196 Dieter Schrader, Huntsville, for appellant.
Gary C. Huckaby and Stuart M. Maples, of Bradley, Arant, Rose & White, and Patrick M. Lamar of Lanier, Ford, Shaver & Payne, Huntsville, for appellees.
Wendell R. Morgan, Gen. Counsel, for amicus curiae The Medical Ass'n of the State of Alabama.
JONES, Justice.
This is an appeal by the plaintiff, John W. Reece, M.D., from a summary judgment for the defendants, Drs. Finch, Warren, Smith, Wheeler, and Cameron. Dr. Reece's complaint alleged negligence, defamation, intentional infliction of emotional distress, intentional interference with a business or contractual relationship, and deceptive trade practices, arising from statements made to Mutual Assurance Society of Alabama ("MASA") in connection with three separate applications for medical liability insurance made by Dr. Reece.
Because we hold that the alleged defamatory statements, which were made only to MASA's employee, as Dr. Reece's duly constituted agent for the limited purpose of searching for information, were not published, within the legal definition of "publication," we affirm the judgment as it relates to the claim for defamation. Because we hold that the release violates established public policy with respect to prospective intentional torts, we reverse the judgment as it relates to those claims.
Dr. Reece practiced obstetrics and gynecology in Huntsville from 1964 to 1983. In 1983, he moved to Florida, where he practiced medicine until the middle of 1984. In 1984, Dr. Reece relocated in Huntsville and again established his practice of medicine, specializing in gynecology. To maintain privileges in any or all of Huntsville's three hospitals, Dr. Reece, as a gynecological surgeon, was required by the hospitals to retain $1,000,000 in medical malpractice liability insurance coverage. Dr. Reece applied for such liability coverage with MASA on three separate occasions soon after his return to Huntsville. It was MASA's routine procedure to investigate all applications through several methods, including a peer-review evaluation process. MASA, in the course of its investigation, randomly contacted area physicians for the purpose of obtaining information relating to the insurable risk of Dr. Reece. The information received from the defendants with regard to Dr. Reece's applications for insurance forms the basis of this controversy. During MASA's investigation of Dr. Reece's three applications for insurance, MASA solicited evaluations and received, in response, the following statements from the defendants, as evidenced by these internal memoranda summarizing those statements:
The defendants based their joint motion for summary judgment on the ground that three documents entitled "Authorization to Release Information," one signed by Dr. Reece at the time of each of his three applications with MASA, absolved them of any and all liability related to their supplying information to MASA. The release reads, in part, as follows:
The ultimate issue on appeal is whether the general release and hold-harmless agreement contained in the "Authorization to Release Information," which is prospective in nature, absolves the defendants from any and all liability relating to the information disclosed, as a matter of law.[1] With respect to Dr. Reece's claim based on defamation, however, the propriety of the summary judgment against him depends for its resolution upon the underlying issue whether Dr. Reece has met the threshold burden of proving the requisite element of publication.
Dr. Reece contends that the release is void and of no effect insofar as intentional torts are concerned. He avers that the defendants sought to disparage his professionalism as retribution for his 1979 testimony against a Huntsville physician in a medical malpractice case. Dr. Reece construes the release as being specifically limited to "errors, omissions, or mistakes"; thus, he argues, the release can be valid only to the extent that it waived liability resulting from "negligent" acts of the defendants.
Conversely, the defendants argue that Dr. Reece's authorization to release information unequivocally released them from any liability connected with their evaluation of Dr. Reece.
The legal effect of Dr. Reece's execution of the general release, coupled with his applications for insurance coverage, was to appoint MASA's employee as his agent for the limited purpose of seeking information from other physicians concerning such coverage. Not only did Dr. Reece contemplate contact between MASA's employee and other members of the medical profession, but he expressly authorized the solicitation of information from his fellow doctors pertinent to his application for malpractice insurance.
Our cases have held that statements made to one's agent, which are both authorized and invited by the principal, are not deemed to have been "published"; and without "publication" there can be no defamation. McDaniel v. Crescent Motors, Inc., 249 Ala. 330, 31 So. 2d 343 (1947); see also Dixon v. Economy Co., 477 So. 2d 353 (Ala.1985); and Mims v. Metropolitan Life Ins. Co., 200 F.2d 800 (5th Cir.1952).
The rationale for this rule is this: Because the requisite element of publication is not met if the allegedly defamatory words (whether written or oral) are made only to the complaining party, such words are not published when made to one who stands in an agency relationship with the complaining party, if the agent represents the principal in the matter discussed and invited by the principal. Stated otherwise, statements made to an agent, under these circumstances, are the legal equivalent of statements made directly to the principal; thus, there is no publication, and without publication there can be no actionable claim for defamation.
The summary judgment is affirmed as to the claim alleging defamation.
This Court in Barnes v. Birmingham International Raceway, Inc., 551 So. 2d 929 (Ala.1989), has recently held a general *199 release that purported to discharge Birmingham International Raceway ("BIR") from any and all liability to be valid only as to claims based on negligence. In that case, the plaintiff (Barnes), before entering a stock car race, signed a document purporting to release BIR from any and all liability for injuries he might receive during the race. The plaintiff was injured in an accident during the race and subsequently sued BIR and others on claims alleging negligence and wantonness. The trial court, relying on the release, granted the defendants' motions for summary judgment. This Court affirmed the summary judgment as to the negligence claim but reversed as to the wantonness claim.
Justice Houston, writing for the Court, stated:
551 So. 2d  at 932-33.
Applying the BIR analysis to the facts of this case, we are clear to the conclusion that, if public policy prohibits releases as to future wanton conduct in the context of an automobile race, releases as to future intentional tortious conduct in the instant context would likewise be prohibited.
Because the trial court, in entering summary judgment with respect to the claims alleging intentional torts, based its decision solely on the existence of the document that purported to release the defendants from any and all liability, the summary judgment must be reversed insofar as it favored the defendants on those claims alleging intentional non-defamation torts.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
HORNSBY, C.J., and ALMON, SHORES, HOUSTON and KENNEDY, JJ., concur.
MADDOX and STEAGALL, JJ., concur in the result as to the defamation claim and dissent as to the other claims.
MADDOX, Justice (concurring in the result as to the defamation claim; dissenting as to the other claims).
A doctor, in order to get medical malpractice insurance, authorized MASA to contact the defendants and inquire about his reputation, for purposes of determining his insurability. When the defendants furnished information to an agent of MASA that the doctor considered to be tortious, he sued. The majority permits him to do so. Why?
If ever there was a case in which a signed release should be enforced, it is this case. The world of jobs, credit, security clearances, and even federal judgeships[2] and lawyer competence[3] depend, to some degree, upon information obtained from references. To allow a lawsuit under these circumstances, where the information obtained forms the basis for the tort action, can only have a chilling effect upon the obtaining of information in a variety of settings. Why would anyone give information concerning another, whether favorable or unfavorable, if he or she might be faced later with a lawsuit based on a claim of intentional misconduct. Because of these policy considerations, I must dissent from the reversal of the summary judgment on the intentional non-defamation torts.
The legal basis for my dissent is essentially the same as the one I set out in Barnes v. Birmingham Int'l Raceway, 551 So. 2d 929 (Ala.1989), that a person should be bound by his written release.
Because I am of the opinion that the information obtained was obtained as the result of an authorization given by the plaintiff himself, I would not permit his tort suit.
STEAGALL, Justice (concurring in the result as to the defamation claim; dissenting as to the other claims).
Here, these defendants were not engaged in any business relationship with this plaintiff. They did not seek to make statements regarding him and were not volunteers in doing so. To the contrary, they were sought out by the plaintiff's agent for the purpose of securing statements regarding the plaintiff. They gave these statements upon the plaintiff's own assurance that they were free to speak without fear of having to defend a lawsuit for having spoken openly and freely. To allow this plaintiff, under these facts, to sue these defendants goes too far, in my opinion. I consider this to be an unwarranted extension of the holding in Barnes v. Birmingham Int'l Raceway, 551 So. 2d 929 (Ala.1989). Therefore, I concur in the result as to the majority's ruling in the *201 defamation claim, and I dissent as to its ruling regarding the other claims.
[1]  The validity of the release is the only issue affirmatively raised by the defendants' motion, and the plaintiff concedes its validity with respect to his claims for unintentional torts.
[2]  I received a telephone inquiry recently about an attorney who is being considered for a federal judgeship.
[3]  The Martindale-Hubbell Directory is dependent almost entirely on information furnished in writing by references.