Title: DeLong v. Yu Enterprises, Inc.

State: oregon

Issuer: Oregon Supreme Court

Document:

Filed:  May 31, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON

DAVID A. DeLONG,
	Petitioner on Review,
	v.
YU ENTERPRISES, INC.,
	Defendant,
	and
EDWARD S. YU,
	Respondent on Review.
(CC 16-97-03468; CA A103729; SC S48281)

	En Banc
	On review from the Court of Appeals.*
	Argued and submitted January 10, 2002.
	David C. Force, Eugene, argued the cause and filed the
briefs for petitioner on review.
	Joel S. DeVore, of Luvaas Cobb Richards & Fraser, Eugene,
argued the cause and filed the brief for respondent on review.
	Steven C. Berman, Portland, filed a brief on behalf of
amicus curiae Oregon Trial Lawyers Association.
	Robert M. Atkinson, Assistant Attorney General, Hardy Myers,
Attorney General, and Michael D. Reynolds, Solicitor General,
Salem, filed a brief on behalf of amicus curiae State of Oregon.
	Ken Shiroishi, Portland, filed a brief on behalf of amicus
curiae Oregon Association of Defense Counsel.
	Joshua Marquis, Clatsop County District Attorney, Astoria,
filed a brief on behalf of amicus curiae Oregon District
Attorneys Association.
	DE MUNIZ, J.
	The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is affirmed.
	*Appeal from Lane County Circuit Court, David V. Brewer, Judge. 170 Or App 609, 13 P3d 1012 (2000).
		DE MUNIZ, J.
		The issue in this defamation case is whether a report
of an alleged crime to police is subject to a defense of
qualified privilege or absolute privilege.  The trial court held
that the report to the police at issue here enjoyed only a
qualified privilege.  The Court of Appeals disagreed and held
that an absolute privilege applied.  DeLong v. Yu Enterprises,
Inc., 170 Or App 609, 13 P3d 1012 (2000).  We allowed review and
now conclude that only a qualified privilege applies to the kind
of informal report that was made to the police in this case. 
Therefore, we reverse the decision of the Court of Appeals and
affirm the judgment of the trial court.
		We take our statement of facts from the opinion of the
Court of Appeals:
	"Defendant is part owner of a corporation that operates
motels in Springfield.  Plaintiff worked as a manager
in one of those motels.  Plaintiff and defendant became
embroiled in a dispute, the details of which are not
pertinent.  Defendant became upset and fired plaintiff. 
Defendant then went to the Springfield Police
Department and told an officer that, during the time
that plaintiff managed the motel, money and hotel
property had disappeared.  Defendant did not accuse
plaintiff of stealing the money or the property, but he
did ask that the police investigate.
		"The officer investigated and forwarded a report
to the district attorney, as was standard procedure. 
The district attorney told the officer to issue a
citation to plaintiff for theft in the second degree,
and the officer did so.  The district attorney later
filed an information charging plaintiff with theft in
the second degree.  A warrant for plaintiff's arrest
followed.  Some months later, plaintiff turned himself
in to the police.  Ultimately, he was released, and the
charges against him were dismissed.
		"Plaintiff then initiated this action for
defamation and malicious prosecution, based on
defendant's report to the Springfield police that
property and money had been missing during plaintiff's
management of the motel.  Defendant answered, asserting
a defense of absolute privilege.  At trial, following
the close of plaintiff's case, defendant moved for a
directed verdict based on the privilege defense.  The
trial court took the matter under advisement until the
close of the evidence.  At the conclusion of the trial,
the court denied the motion, ruling that defendant's
statements were subject only to a defense of qualified
privilege and that there was a jury question as to the
applicability of that defense to the evidence before
it.  The jury ultimately found for defendant on the
malicious prosecution claim, but for plaintiff on the
defamation claim."
170 Or App at 611-12.
		In the Court of Appeals, defendant argued that the
trial court erred in denying its motion for a directed verdict. 
That court agreed with defendant, holding that a report of an
alleged crime to the police is absolutely privileged and reversed
the judgment of the trial court.  Plaintiff sought review in this
court to address the question whether, for purposes of a
defamation claim, an informal report to the police of an alleged
crime is subject to an absolute privilege or a qualified
privilege.
		Oregon recognizes the defenses of qualified privilege
and absolute privilege to allegations of defamation.  The former
requires a plaintiff to prove that a defendant acted with actual
malice; the latter bars the defamation claim altogether.  See
Wallulis v. Dymowski, 323 Or 337, 348, 918 P2d 755 (1996) (so
stating); Moore v. West Lawn Mem'l Park, 266 Or 244, 249, 512 P2d
1344 (1973) ("[w]hen defamatory matter is absolutely privileged
no cause of action exists").
		A "qualified privilege" requires the plaintiff to prove
that the defendant abused the "privileged occasion."  Wallulis,
323 Or at 348; see Bank of Oregon v. Independent News, 298 Or
434, 437, 693 P2d 35, cert den 474 US 826 (1985) ("Where the
qualified privilege of 'fair comment and criticism' was
applicable, the defendants would not be liable if the publication
was made in good faith and without malice.").  Generally, a
qualified privilege exists to protect three kinds of statements: 
(1) those made to protect the defendant's interests; (2) those
made to protect the plaintiff's employer's interests; or (3)
those made on a subject of mutual concern to the defendant and
the persons to whom the statement was made.  Wallulis, 323 Or at
350 (citing Wattenburg v. United Medical Lab., 269 Or 377, 380,
525 P2d 113 (1974)).
		Historically, this court has recognized the application
of an absolute privilege for defamatory statements in very
limited circumstances.  See Grubb v. Johnson et al, 205 Or 624,
631, 289 P2d 1067 (1955) ("'[t]he class of absolutely privileged
communication is narrow and is practically limited to legislative
and judicial proceedings and other acts of state'").  This court
has stated that the absolute privilege applies when "the public's
interest in the unhampered operation of the government, when
exercising such functions, outweighs an individual's interest in
the preservation of reputation."  Wallulis, 323 Or at 349.  Thus,
statements that are made as part of judicial and quasi-judicial
proceedings are absolutely privileged.  See Binder v. Oregon
Bank, 284 Or 89, 91, 585 P2d 655 (1978) ("Statements made by
parties to judicial proceedings are absolutely privileged."); see
also Chard v. Galton, 277 Or 109, 113, 559 P2d 1280 (1977)
(absolute privilege should apply to lawyer's letter to adverse
party's insurer made before filing of civil complaint, because
"lawyer [should] enjoy the same degree of freedom in settlement
of his client's case as that which he enjoys in its actual
pleading or trial"); Moore, 266 Or at 250-51 (letter written to
State Board of Funeral Directors and Embalmers, when that board
was sitting in its quasi-judicial function as licensing body, was
subject to absolute privilege); Ramstead v. Morgan, 219 Or 383,
401, 347 P2d 594 (1959) (absolute privilege attached to
statements in letter to Oregon State Bar grievance committee
concerning lawyer's alleged misconduct, in light of that
committee's quasi-judicial function).
		Despite having analyzed somewhat related issues in the
foregoing cases, this court has not decided specifically that
defamatory statements made to police before the initiation of
criminal proceedings are subject to an absolute privilege.  This
court did suggest in Ducosin v. Mott, 292 Or 764, 770, 642 P2d
1168 (1982), that an absolute privilege attaches to statements
made in certain proceedings even when the proceedings are in an
early, investigative phase, and no court or administrative action
is yet pending.  In Ducosin, the defendant, who was in a dispute
with the plaintiff over the proceeds of an inheritance, called
the county medical examiner and suggested that the plaintiff
possibly had poisoned his own mother, causing her death.  An
autopsy was performed, and the cause of death was determined to
have been natural.  The plaintiff then brought an action for
defamation against the defendant.  This court deemed the
defendant's statements to be "cloaked with an absolute
privilege," because the communications to a medical examiner
regarding a possible homicide were an initial step in a judicial
proceeding.  Id. at 768.
		From a historical perspective, the conclusion in
Ducosin that the absolute privilege applied in those
circumstances is somewhat surprising, particularly in light of
the prevailing common-law rule that statements accusing others of
crime were accorded a qualified rather than an absolute
privilege.  For example, in Smith v. Kerr, 1 Edm Sel Cas 190 (NY
Com Pl 1845), aff'd on other grounds 1 Barb 155 (NY 1847), the
defendant storekeeper stated to the police his belief that his
employee had robbed the store of fifty dollars.  The court held
that informing the police of a suspicion that plaintiff had
committed a robbery was not actionable if the accusation were
made in good faith and with probable cause.  The court reasoned:
		"In the absence of actual malice, and with
probable cause, so strong as very much to alarm and
agitate the plaintiff at the time, it presents the
simple question whether the communication made to the
officer was privileged.
		"So far as it was essential or even material, to
the purposes for which it was made, viz., the detection
of the robber, it was privileged, for full scope should
be extended to all concerned in the bona fide
administration of the criminal law.
		"The words spoken were uttered by the defendant in
the prosecution of his inquiries for the robber to an
officer authorized to search into and make arrests for
the offense.
		"The purpose was an honest one, and the words were
necessary to that purpose.  They were uttered in good
faith, under a belief of their truth, and with probable
cause.  They were therefore privileged."
Id. (citations omitted).  Other cases from that period were in
accord, e.g., Grimes v. Coyle, 6 B Mon 301 (Ky Ct App 1845);
Gassett v. Gilbert, 72 Mass (6 Gray) 94, 97 (1856), as was the
first treatise written in the United States on the subject of
torts, 1 Francis Hilliard, The Law of Torts, 345-46 (3d ed 1866).
		The distinction at common law between statements made
in court, which carried an absolute privilege, and statements
made to the police, which carried a qualified privilege, was
based on practical considerations.  In court, parties, lawyers,
judges, jurors, and witnesses must be free to risk impugning the
reputations of others, in order to discharge public duties and
protect individual rights.  One authority defends the absolute
privilege for statements made in court as rooted in sound
judicial policy:
		"Absolute privilege has been conceded on obvious
grounds of public policy to insure freedom of speech
where it is essential that freedom of speech should
exist.  It is essential to the ends of justice that all
persons participating in judicial proceedings (to take
a typical class for illustration) should enjoy freedom
of speech in the discharge of their public duties or in
pursuing their rights, without fear of consequences. 
The purpose of the law is, not to protect malice and
malevolence, but to guard persons acting honestly in
the discharge of a public function, or in the defense
of their rights, from being harassed by action imputing
to them dishonesty and malice."
Van Vechten Veeder, Absolute Immunity in Defamation, 9 Colum L
Rev 463, 469 (1909) (footnotes omitted).  
	By contrast, a citizen making an informal statement to
police should not enjoy blanket immunity from an action; instead,
such statements should receive protection only if they were made
in good faith, to discourage an abuse of the privilege.  See id.
at 480 (informal communication or rumors or suspicions of
criminal action only conditionally protected).  One case has
explained that the public interest justified a qualified
privilege for reports of criminal activity, because
	"when such communications are made in good faith and
confidence, and with an honest view and purpose, to the
object and end intimated, and is not made as a pretext
to cover over secret malevolence or ill will towards
the party spoken of, it is proper that they should be
made, and the honest portion of the community should be
encouraged rather than restrained from making them, by
the terror of legal responsibility."
Grimes, 6 B Mon 305.  Recognizing a qualified privilege for
informal statements made to the police remains the prevailing
common-law rule, although some jurisdictions more recently have
adopted an absolute privilege.  See Fridovich v. Fridovich, 598
So 2d 65, 67-68 & n 4 (Fla 1992) (surveying case law of various
states).  
		Because Ducosin did not involve informal statements to
police officers, we need not decide whether the precise holding
in Ducosin is one with which this court would agree today. 
However, to the extent that the dictum in Ducosin can be read to
suggest that such statements are absolutely privileged, it is
disavowed.  We are satisfied that the prevailing common-law rule
-- that informal statements to police made before the initiation
of criminal proceedings enjoy only a qualified privilege -- is
the appropriate one.
		Consistent with the foregoing analysis, the trial court
instructed the jury that plaintiff's defamation claim was subject
to a qualified privilege.  Defendant did not object to the form
of that instruction.  We presume that the jury, following that
instruction, found that defendant had abused the privilege.  See
State v. Thompson, 328 Or 248, 271, 971 P2d 879 (1999) (jurors
are presumed to follow trial court's instructions).  Accordingly,
there was no error.  The Court of Appeals erred in reaching a
contrary conclusion.
		The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is affirmed.