No. 90-268 IN THE SUPREME COURT OF THE STATE OF MONTANA 1990

SIDNEY P. KURTH, Plaintiff and Appellant,

GREAT FALLS TRIBUNE COMPANY and COWLES MEDIA COMPANY, its parent company, Defendants and Respondents

APPEAL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable R.D. McPhillips, Judge presiding.

COUNSEL OF RECORD: For Appellant: James Graves; Stephens & Graves; Billings, Montana For Respondents: Peter Michael Meloy, Helena, Montana

Filed: Submitted on Briefs: November 15, 1990 Decided: January 10, 1991Justice Fred J. Weber delivered the Opinion of the Court.

Theplaintiff,Sidney P. Kurth (Kurth)brought this action for defamation intheEighthJudicial District,Cascade County,seeking damages suffered as a result of an article published by the defendant, Great Falls Tribune (Tribune). The District Court granted summary judgment in favor of the Tribune. We reverse and remand for further proceedings consistentwith this opinion. The issuespresented are: 1. Did the District Court err when it determined that Kurth is a public figure as a matter of law? 2. If Kurth is a public figure, did the Tribune act with actual malice? Kurth brought this action against the Tribune for defamation arising out of a newspaper article which appeared in the Tribune on February 3, 1984. The article reported that Kurth was sought for at least nine llcriminalwcharges. The falsity of the publication was acknowledged by retraction on December 14, 1985. The article was one of a series of news stories arising out of the activities of Multi-Management Corporation (MMI) and its principles, including an MMI corporate officer, Karl Herrman, and MMI1slegal counsel, Sidney Kurth. In early February of 1984, a local Great Falls television station reported that Herrman and Kurth had been evicted from their London apartment where they were purportedly staying while attempting to negotiate a $350 million loan in behalf of MMI to build a large grain processing plant in Great Falls. 

### A reporter for theTribunewas assigned to watch thetelevision news report and write a story for the next morning's paper. The reporter watched the television report and wrote the story which is the subjectof this lawsuit. The story reported the eviction of Herman and Kurth. In deposition, the reporter testifiedhewas certainthatthe television reportmentioned other Kurth I'charge~~~ but was unable to remember whether the story characterized them as wcriminal.ll As background for the story, the reporter read a number of previous storieson theMMI activities and the troublesassociated with the principles of MMI. Because the reporter was close to deadline,he failed toverify that Kurth was sought for "criminal" charges. Kurth seeks special damages for loss of income, impairment of employability,and loss ofprofessional standing as an attorney in

a sum to be determined at time of trial. He also seeks general compensatory damages and punitive damages.

Did the District Court err when it determined that Kurth was

a public figure as a matter of law? A summary of the history of defamation law in the United States, and in particular in Montana, is in order. There are two status categories that have emerged in United States Supreme Court decisions that determine the amount of fault that plaintiff must prove in order to recover in a defamation suit. If the plaintiff was a public figure at the time of the alleged libel, then he cannot recover unless he can show theI i 

# . statementwasmade with actualmalice. New York Timesv. ~ullivan (1964), 376U.S. 254, 279-280. public figures are subdivided into two subcategories, public figures for all purposes and public figures for a limited purpose. All purpose public figures have achieved suchpervasive fame and notoriety that they become public figures for all purposes and in all contexts. Limited purpose public figures have voluntarily injected themselves or were drawn into a particular public controversy and thereby become public figures for that limited range of issues. Gertz v. Robert Welsh, Inc. (1974), 418 U.S. 323. In either case, public figure plaintiffs must show the statement was made with actual malice which means it was published "with knowledge that it was false or with recklessdisregard of whether it was false or not." New York Times, 376 U.S. at 280. The second status category is that of private figures. This categoryhas also been divided into two subcategoriesby theunited States Supreme Court. A private figure is usually not involved in any matter of public concern. However, a private figure may be involved in amatter ofpublic concernand remainaprivate figure. Milkovich v. Lorain Journal Co., (1990), 110 S.Ct. 2695, 2704, 2707, 111 L.Ed.2d 1, 15, 19. 

### A private figure must show some degree of fault to recover from apublisher orbroadcasterbut does not have to prove actual malice except to recover presumed or punitive damages. Gertz v. Welch, 418 U.S. 323, 347, 349. In the case at bar, the controversy is a matter of public

concernasevidenced by thenewsmedia coverage ofMMItsactivitiesover a period of several years. The issue iswhether Kurth became

a public figure through his involvement with MMI or whether he remained a private figure throughout. An attorney does not become

a public figure merely because he represents a client who is of

concern to the public. Gertz, 418 U.S. 323; 

### adi is on v. Yunker (1978), 180 Mont. 54, 66, 589 P.2d 126, 133. The District Court determined that Kurth was involved with MMI as more than an attorney and had become a public figure as a matter of law. Private figures become public figureswhen they "thrustthemselves to the forefront of particular public controversies in order to influence the resolution of the issues involved." Gertz, 418U.S.

InMontana, questions of law, as well as questions of fact,

are questions for the jury in libel and slander cases. In Gertz v. Robert Welch, Inc.! supra, it was held that a lawyer was not apublic 

### official, althoughhehad taken on a prominent case and was by virtue of his profession an officer of the court. Likewise, it may be contended in the retrial that Madison is a "public figure.I1 Whatever his status, it is a question for the jury to determine, because of the constitutional provision that the juryunder the instructionsof the court is the judge of both law and fact. Article 11, Section 7, 1972 MontanaConstitution. With appropriate instructions,the jury can determine thesematters and their status in any trial,unless otherwisestipulated. (Emphasissupplied.) Madison 

### v. Yunker (1978), 180 Mont. 54, 66, 589 P.2d 126, 133. Article 11, Section 7 of the 1972 Montana Constitution states: Section 7. Freedom of speech, expression, and press. No law shall be passed impairing the freedom of speech or expression. Every person shall be free to speak or publish whatever he will on any subject,being responsible forall abuse of that liberty. In all suits and 

### rosec cut ions for libel or slander the truth thereof may be given in evidence; and the jury, under thedirection of the court. shall determine the law and the facts. (Emphasis supplied.) Fora jury todetermine the law is unique to libel and slander cases, and hasbeen a part ofMontana constitutional law since the Constitution was first adopted in 1889. In Griffin v. Opinion Publishing Co. (1943), 114 Mont. 502, 512, 138 P.2d 580, 586, this Court interpreted the provision by stating: While our Constitution like that of Missouri, Colorado, South DakotaandWyoming provides that in libel suits "the jury,under thedirection of the court, shall determine the law and the factsftl yet the decisions clearly show that the function of the court and jury is not greatly different in the trial of libel fromwhat it is in other cases. Inotherwords, it is for the court and not the jury to pass upon demurrers to the complaint; upon the admissibility of the evidence;upon motions for nonsuit; upon motions for a directed verdict; upon motions for a new trial and upon motions to set aside verdicts or vacate judgments

# . InWilliamsv. Pasma (1982), 202 Mont. 66, 656 P.2d 212,this Court held that it is also appropriate for the court to grant summary judgment in libel and slander cases when there are no material issues of fact and the evidence supports the judgment as

a matter of law. That is not the situation with the case at bar. In its Opinion and Order dated March 30, 1990, the District Court listed the following factors on which it based its finding that Kurth is

a public figure as a matter of law: This Court bases its findings upon the following:

(1) Mr. Kurth was the registered agent, assistant secretary, director and incorporator in 1979 of InternationalFood and Fuel Manufacturing Co., Inc. This corporationwas consolidatedwithMulti-Management, Inc. (Exhibit.5toDefendant'smotion forsummary judgmentandSidney Kurth Deposition p. 9). Sidney Kurth was representing I.F.F. at a presentation to raisemoney for a grain processing plant. This process was taken over by Multi-Management when the consolidation with I.F.F. occurred. In theprocess of consolidation, Sidney Kurth became an attorney for Multi-Management together with Karl Herrman, Sr. Plaintiff Kurth became a shareholder in Multi-Management, Inc. and served on committees for Multi-Management. Hewas unsurewhetherhe had everbeen an officer in MMI. (KurthDepositionp. 9-10)

(2) The Multi-Management story was a newsworthy item in the Great Falls area from the beginning. (Exhibits 7, 8, 9, 10, 12, 13, 14) (SweenyDeposition p. 19) (3) On February 19, 1982, the State Auditor's office filed suit in district court in Great Falls chargingMMI and its various agents and representatives with violations of the State's securities laws. The violations charged includedboth registration violations and fraudulentpractices. A temporary restraining order was issuedon February 19,1982 prohibiting further sales of securities by Multi-Management, Inc. and its agents and representativesandprohibitingMulti-Managementand its agents and representatives from attempting to raise money. On August 25, 1982, Judge McCarvel ordered MMI officials to show cause why they should not be held in contempt for violation of the restraining order (CDV82-171). (4)Among theviolationschargedby the StateAuditor was the issuance, on May 12, 1982, of stock certificates to Sidney Kurth. The StateAuditor further alleged that on May 12, 1982,Karl Herrmanhad, in SidneyKurthlsoffices in Billings, Montana, issued stock to various other persons. (CDV-82-171)

(5)On October 13, 1982, JudgeRoth enteredhis Findings of Fact and Conclusions of Law finding Karl Herrman,Jr. in contempt of Court. (CDV-82-171) (6) Sidney Kurth and Karl Herrman, Jr., were in Europe at this time attempting to secure financing for MultiManagement, Inc. Sidney Kurth and Karl Herrman, Jr. remained in Europe for a period of two (2)yearsmeeting with various European and Arab sources attempting to secure loans. (Kurth Depositionp. 10-40) While there, Sidney Kurth ran up a bill of $66,000.00 on his personal credit card for expenses. (KurthDeposition,p. 39)

(7) In February of 1983, Sidney Kurthtslaw firm in ~illings was closed due to Mr. KurthlsMulti-Managementactivities. Mr. Kurthwas no longernamed as a partner or associate.

(8) In June of 1983, Kurth was sued by a client for malpractice. He was also the subject of a number of actions for debt collection.

(9) In 1983, Multi-Management, Inc. and Multi-Management officers Karl Herman, Jr., Warren Hill, and Robert Montforten were indicted by a federal grand jury.

(United States ~istrictCourt for the District of Montana, Great Falls Division CR-83-42-GF) In determining whether Kurth became a public figure or remained a private figure, the factfindermust look to the nature and extent of his participation in the particular controversy giving rise to the defamation. Gertz, 418 U.S. at 352. Factors 1-6 and 9, as listed by the District Court, may be evidence that theMMI storywas amatter of public concern but the trier of fact must establish if andhow Kurth was involved to the degree required tomake him apublic figure and not merely a private figure who was representing his client. Factors 7 and 8 and the last sentence of factor 6 are irrelevant because no facts were presented showing these factorswere ever a matter of public knowledge. Rule 52(a), M.R.Civ.P., in relevant part states:



# . . . Findings of fact and conclusions of law are unnecessary on decisions of motions under Rules 12 or 56 or any other motion except as provided in Rule 41(b). However, any order of the court granting a motion under Rules 12 or 56 which is appealable to an appellate court shall specify the srounds therefor with sufficient particularityastoapprisetheparties and theappellate court of therationaleunderlvinsthe rulinqand thismay be done in the body of the order or in an attached opinion. The court may require any party to submit proposed findings of fact and conclusions of law for the court's consideration and the court may adopt any such proposed findings or conclusions so long as they are supportedby the evidenceand lawof the case. (Emphasis added.)The ~istrict Court's factors do not specify with sufficient particularity the rationale underlying its ruling that Kurth is a public figure as a matter of law to support a summary judgment. In addition, our review of the record convinces this Court that a genuine issue of material fact does exist as to whether Kurth became a public figure for a limitedpurpose or remained a private figure involved in a matter of public concern. We conclude that under both Rule 52(a) and Article 11, Section 7 of the Montana Constitutionthereremain issuesofmaterial fact fordetermination by a jury. We hold that the District Court erred when it determined that Kurth was a public figure as a matter of law. Since our holding disposes of the appeal there is no need to address whether the Tribune acted with actual malice. We reverse and remand for furtherproceedings consistent with this opinion.

We Concur: