Case Title: BENEFICIAL MANAGEMENT CORP., ETC. v. Evans

Citation: 421 So. 2d 92

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1982-08-27T00:00:00Z

Document:
421 So. 2d 92 (1982)
BENEFICIAL MANAGEMENT CORPORATION OF AMERICA, a Delaware Corp.; Beneficial Finance Co. of Alabama, an Alabama Corporation; and W. James Murphy, an individual
v.
Raymond E. EVANS.
Raymond E. EVANS
v.
BENEFICIAL MANAGEMENT CORPORATION OF AMERICA, a Delaware Corp.; Beneficial Finance Co. of Alabama, an Alabama Corporation; and W. James Murphy, an individual.
Nos. 80-478, 80-478A.

Supreme Court of Alabama.
August 27, 1982.
Rehearing Denied October 22, 1982.
*93 Crawford S. McGivaren, Jr., William A. Robinson, and Tony G. Miller of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham, for appellants/cross-appellees.
Eddie Leitman, Andrew P. Campbell and Christopher R. Murvin of Leitman, Siegal & Payne, Birmingham, for appellees/cross-appellants.
MADDOX, Justice.
Of the numerous issues presented to this Court for our review in these cases, we find the trial court's oral jury charge that damages are presumed where there is slander per se to be determinative; therefore, we do not find it necessary to consider all of the issues raised by the appellants because we have determined that the cases must be reversed.
On January 8, 1978, Raymond Evans (plaintiff below and appellee/cross-appellant in this proceeding), instituted an action against Beneficial Management Corporation (hereinafter "BMC"), Beneficial Finance Company of Alabama (hereinafter "BFC") and W. James Murphy, an officer of both BMC and BFC, all defendants below and appellants before this Court, in the circuit court of Jefferson County. Evans alleged that the appellants had maliciously slandered him by making false statements to third parties accusing him of accepting "kickbacks." Evans made other allegations as well.
In response, BFC, BMC and Murphy filed answers denying Evans's claims. In their answers, BMC and BFC asserted counterclaims against Evans for breach of his fiduciary duty and violation of his employment contract.
The trial was long and involved, lasting approximately seven weeks. Thirty or more witnesses appeared on behalf of the appellants and appellee and over seventy exhibits were admitted into evidence for the jury's review. The record totaled more than 3,800 pages.
Prior to submitting the case to the jury, the trial court granted directed verdicts in favor of BMC and BFC on the breach of privacy and infliction of emotional distress counts, leaving Murphy as the sole defendant on these two counts. The court then instructed the jury on the law and the verdict forms to be submitted on Evans's claims and BMC's and BFC's counterclaim. Although no objection was raised by BMC, BFC or Murphy as to verdict forms, timely exception was made to the trial court's instruction on applicable law, including the law concerning slander per se and slander per quod.
The day after the case was submitted to the jury for consideration, the jury sought additional instructions from the trial court by sending the following question to the trial judge: "Can we find for Mr. Evans in one suit and find for Beneficial in the counterclaim without being contradictory"? The trial judge replied: "Such results such findings would not be contradictory." BMC, BFC and Murphy made exception to the court's response. After nearly two days of consideration, the jury rendered the following verdicts:
The trial court accepted each verdict as to the validity, but after deliberations with counsel, decided to submit a second verdict form for the limited purpose of ensuring that the jury had not allowed a double recovery for the same injuries. The court's reasoning was that since the damages claimed for the acts of slander and other counts were similar, there existed a possibility that the jury permitted a double recovery. To this end, the trial court admonished the jury against a double recovery and resubmitted one verdict form for slander against BMC, BFC and Murphy together, asking the jury to total the damages suffered by Evans. The jury returned a verdict against BMC, BFC and Murphy for compensatory damages in the amount of $5,400 and $80,000 punitive damages. This represented a sum of punitive damages equal to the total awarded by the jury against the appellants initially and $5,500 less in compensatory damages than the amount awarded against all three appellants separately.
The trial court also resubmitted the infliction of distress and invasion of privacy claims on one verdict form and requested the jury to indicate the total damages suffered. The jury awarded $5,500 in compensatory damages and $23,000 in punitive damages, the identical amount of damages rendered on these counts through separate verdicts.
BMC, BFC and Murphy filed separate written motions for judgment notwithstanding the verdicts, or in the alternative, for new trial. The trial court overruled these motions. The defendants appeal from the judgments entered and from the trial court's order denying their motions for J.N. O.V. or, in the alternative, for new trial. Evans cross-appeals from the judgment entered against him.
In defamation actions, the traditional rule concerning the publication of matters either libelous or actionable per se has been that the law infers some damage. Berryman, Sutherland's A Treatise on Damages, § 10 at 37 (4th ed. 1916). As for verbal accusations that were considered actionable per se, the widely accepted notion was:
Id. § 1024 at 4501.
This Court adopted this conclusion early, stating that "injury is presumed to ensue [from false and nonprivileged publication] as the direct product of the publication, and affords ground for the allowance of at least nominal damages." Advertiser Company v. Jones, 169 Ala. 196, 205, 53 So. 759 (1910). We have frequently reiterated the doctrine of presumed damages in defamation cases that were actionable per se. Starks v. Comer, 190 Ala. 245, 254, 67 So. 440 (1914); Comer v. Advertiser Co., 201 Ala. 159, 160, 77 So. 685 (1918); Johnson Publishing Co. v. Davis, 271 Ala. 474, 487, 124 So. 2d 441 (1960); General Electric Credit Corp. v. Alford & Assoc., 374 So. 2d 1316, 1321 (Ala. *95 1979)[1]. A distinction was made between per se actions, where damages were presumed, and per quod actions, where special damages must be proved, in Marion v. Davis, 217 Ala. 16, 114 So. 357 (1927). The Court elaborated:
217 Ala. at 18, 114 So. 357.
Thus, if a person was slandered by another and the statements constituted slander per se, that person was entitled by law to collect at least nominal damages without proof of damage to reputation.
The case of Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974), recast the law of defamation relating to libel actions brought by private individuals against publishers. The United States Supreme Court, desirous that the states retain "substantial latitude in their efforts to enforce a real remedy for defamatory falsehood injurious to the reputation of a private individual," ruled that application of the "actual malice" test, as defined in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S. Ct. 710, 11 L. Ed. 2d 686 (1964), and proposed in Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S. Ct. 1811, 29 L. Ed. 2d 296 (1971), "would abridge this legitimate state interest to a degree we find unacceptable." Gertz, supra, 418 U.S.  at 346, 94 S. Ct.  at 3010. In granting the states this latitude in formulating an appropriate standard to protect the reputation of private individuals, the United States Supreme Court has made clear the extent of this latitude and this Court is so bound. The appropriate portion of the Gertz decision reads:
418 U.S.  at 349-350, 94 S. Ct.  at 3011-12.
We adhere to the so-called "Gertz rule" and have extended its application to those suits involving private individuals exclusively. Bryan v. Brown, 339 So. 2d 577 (Ala. 1976). In Bryan, this Court held:
339 So. 2d  at 583-584.
This Court has decided that the Gertz rule shall apply to non-media defendants; therefore, since Gertz abolishes the notion of "presumed damages" and limits compensation in defamation cases which are actionable per se to recovery for actual injuries only, we hereby recognize this to be the law of Alabama. Although in Gertz the Court does not define the concept of "actual injury," deferring instead to the experience of the trial courts in "framing appropriate jury instructions" in this kind of tort action, Gertz, supra, 418 U.S.  at 350, 94 S. Ct.  at 3012, the Court nonetheless makes unmistakably clear that in defamation cases, the "juries must be limited by appropriate instructions." [Emphasis added.] This is the fatal flaw which necessitates our ordering a new trial in the present case.
The appellants in this case made a motion for J.N.O.V. or, in the alternative, new trial, which was overruled by the trial court. A strong presumption of correctness attaches to a trial court's ruling on a motion for new trial. Shiloh Construction Company, Inc. v. Mercury Construction Corporation, 392 So. 2d 809, 814 (Ala.1981). But, where it appears from the record that an erroneous charge is given the jury, a new trial is required. J.F. Holley Const. Co. v. Brown Service Funeral Homes Co., 277 Ala. 251, 254, 168 So. 2d 621 (1964). The oral charge given by the trial judge in this case appears in the record as follows:
The legal principle stated in this paragraph, though a single paragraph of a 25-page oral charge,[2] is patently unconstitutional *97 in view of the explicit directions of Gertz; therefore, we must overrule the trial court in this instance. While appellee Evans contends that these instructions were cured by the trial court's charges to the jury following the jury's return of the initial verdicts and the reinstruction of the trial court to avoid the possibility of any double recovery, see Alabama Power Company v. Smith, 273 Ala. 509, 524, 142 So. 2d 228 (1962), the trial court's original charge was such a gross misstatement of the Gertz standard of defamation as to constitute reversible error.
Rule 51 of the Alabama Rules of Civil Procedure reads in part:
A party waives any possible error as to a trial court's oral charge by failing to specifically object and to state grounds for the objection. See Great Atl. & Pac. Tea Co., Inc. v. Sealy, 374 So. 2d 877, 882-883 (Ala. 1979). Appellants made the following exception to the trial judge's charge of slander per se and presumed damages:
Appellant properly preserved this portion of the trial court's oral charge for our review by specifically objecting to the "presumption of damage" language in the slander per se charge by stating as grounds for the objection this Court's decision in Bryan and the United States Supreme Court case of Gertz requiring actual injury.
Rule 59(a)(1) of the Alabama Rules of Civil Procedure permits a trial court to grant a new trial as to all or any of the parties on all of the issues in an action in which there has been a trial by jury. A trial court, however, may not separate claims within a cause that has been tried before a jury. Therefore, when a trial court grants a motion for new trial, it must, under the mandate of Rule 59, grant a new trial on the entire cause. Nina Development Corp. v. Jefferson Co., 387 So. 2d 180, 182 (Ala.1980). This Court is not bound by such limits. In Zemczonek v. McElroy, 264 Ala. 258, 86 So. 2d 824 (1956), this Court explained its authority to order a new trial.
264 Ala. at 263, 86 So. 2d 824; Park Supply Company, Inc. v. Sunki, 386 So. 2d 462, 465 (Ala.Civ.App.1980).
The Court does not take pleasure in sending this case back for a new trial, especially considering the duration of the original trial; however, since we feel that the issues in this case are interrelated, thereby complicating our separation of them, we believe justice will be best served by a reversal and retrial of the case in its entirety.
REVERSED AND REMANDED.
TORBERT, C.J., and JONES, SHORES and BEATTY, JJ., concur.
[1]  Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974), and Bryan v. Brown, 339 So. 2d 577 (Ala. 1976), were not applicable in this case because GECC failed to defend the libel count on the theory of these case.
[2]  This charge appears in the volume, Alabama Pattern Jury Instructions-Civil, which was sent to the publisher prior to the Supreme Court's delivery of the Gertz decision in 1974, and this Court adopted the Gertz holding in Bryan in 1976. Also, we point out the following admonition which prefaces the order of the Supreme Court of Alabama approving use of Alabama Pattern Jury Instructions: "While these instructions appear to be accurate and appropriate to the subjects to which they relate, they are to be considered as patterns only and should be altered or changed as circumstances indicate." Alabama Pattern Jury Instructions Civil, at X.