# FILED

June 5, 1997 Cecil Crowso n, Jr. Ap pellate Co urt C lerk IN THE COU RT OF APPEA LS OF TENN ESSEE EASTERN SECTION AT KNOXVILLE

DEBORAH HE NDRIX, ) UNICOI CI RCUIT ) Plaintiff/Appe llant ) NO. 03A01-9701- CV-00032 ) v. ) HON. G. RICHARD JOHNSON, ) JUDGE FIRST TEN NESSEE NATION AL ) CORPORATION d/b/a FIRST ) TENNESSEE BAN K, ) ) ) Defendant/Appelle e ) AFFIRMED

James S. Pate, Erwin, for Appellant. Steven C. Ros e, West & Ros e, Kingsport, for Appellee.

O P I N I O N INMAN, Seni or Judge This action for damages for defamation and out rageous conduct was dismissed on motion for summary j udgment. The pl aintiff pres ents the propri ety of the dismissal for appellate review, which is de novo on the record with no presumption of

correctness

. Johnson v. EMPE, Inc. , 837 S.W.2d 62, 68 (Tenn. App. 1992). The plaintiff

alleged that the defendant bank held a purchase money mortgage on his

residence w hich required a concomitan t escrow ac count, the funds from whic h, inter alia , were used to pay insurance premiums. Her effort s to discover the identity of

the insurance carrier were unfruitful for several weeks, but sh e was advised in February 1994 of the name of the company. In May 1994 th e insurance company notifi ed her that its policy was

canceled for non-payment of p remiums. Whereupon, the pl aintiff requested an accounting of her escrowed funds. She was given a compute r-generated doc ument on whic h appeared, “Thi s woman is crazy. Please refer to supervisor if she call s.” The plaintiff

alleged that thi s statement was defamatory and constituted1 The plaintiff showed the state ment to other bank employees. 2 outrageous conduct

. The defendant filed its answe r admitting that the plaintiff had rece ived a notice of cancellati on of the policy , but that the noti ce was inadver tent because directed to the wrong poli cy. It admi tted the crit icized notati on but denied the requisite publication, a lleging that t he communication was pri vileged and li mited to its employees. The defendant then m oved for summ ary judgment, alleging that “the communicati on of which the plaintiff co mplained was an internal an d privilege d communication” and “if a dissemination of the p rivileged communication was made, it was made only

by the plainti ff herself.” The trial j udge, in granti ng the motion, f ound there was no publication of the alleged defamatory words. The notation was

made by Lisa Vanderwerf, a supervisor at the bank. It was motivated by the admittedly persistent, screaming de mands of the pl aintiff rel ating to the insurance p olicy; when emotions cool ed, the notation “this woman i s crazy” was removed. Other than Ms. Vanderwerf, the only person s who had acces s to the comput er record were the servic ing personnel i n the mortgage di vision of the defendant. The record reve als that only Ms. Vanderwer f and Becky Bar rett, who was manager of the Insurance and Tax Department , saw the stat ement. 1 An essential element of any def amation claim is that the allegedly defamat ory statement be “published.” See Applewhite v . Memphis S tate Univers ity , 495 S.W.2d 190 (Tenn. 1973). In the defamati on context, publi cation is the “communication of libelous matter to a third person.” Applewhite , 495 S.W.2d at 1 92-93; Quality Auto Parts, Inc. v. Bluff City Buick, 876 S.W.2d 818, 821 (Tenn . 1994). Intra-corpor

ate communication among empl oyees of the cor poration does not constitute “p ublication”to third per sons for defam ation purposes. In Freeman v. Dayton Scale C

ompany , 19 S.W.2d 255 (Tenn. 1929), an agen t of the defendant3

corporation included an allege dly defamatory statement in a letter to th e plaintiff’s attorney whic h had been dictated to a stenographer . Plaintiff alleged that the communication to the stenogra pher constituted a “publication ” of the defamatory statement. The court disagreed : “The more liberal rule, and the one which seemingly has

the support of t he weight of m odern authority , is that, w here the communicati on is made to a servant or business assoc iate in the or dinary and natural course of business, the re is no actionable libel.” Freeman, 19 S.W.2d at 257 (citation omitted). This princ iple was reaffirmed i n Woods v. Helmi, 758 S.W.2d 219 (Tenn. App. 1988). In that ca se, a certif ied registered nurse anestheti st sued the empl oyer hospital for libel in connection with certain int ernal memor anda written by

hospital administrators as a re sult of an apparently problem atic operatio n which took p lace at the hospital. The memoranda concerned plai ntiff’s job performance a nd was circulated only among the administration officials, some of whom were responsible for the anesthesiology de partment and others were administrato rs of the hospital’s employee rel ations departm ent. Relyin g on the Freeman decision, the trial court granted summa ry judgment in favor of t he defendant. Woods, 758 S.W.2d at 221- 22. This Court

affirmed. We held: “We interpret Freeman and its progeny

to mean that comm unication among agents of the sam e corporation made within the scope and cours e of their em ployment rel ative to duties performed fo r that corporation ar

e not to be consi dered as statem ents communi cated or publi cized to third persons.” Id. at 223. The undisputed record in this case brings the circum stances surr ounding the allegedly defam atory statem ent within the Freeman-W oods principle regarding int racorporate com munications. The statement was not “publ ished” to any third person outside appellee ’s business. The only per sons who had acc ess to the notati on or could conceivably have read it were ser vicing pers onnel in the bank’ s mortgage department. Appellant argues

that the intra -corporate communicati ons privil ege applies2 Dicta, becaus e not pleaded or ar gued, but mentioned lest it be as sumed otherwise. 4 only where the employees to whom an alleg edly defamatory statement is made are in a “need to k now” positi on. This argument is gener ated by dicta i n Woods : While many of the cases denying the existe nce of a publication speak in terms of corporati ons communicating to or w ith itself, it seems t o this Court that more essenti al to the iss ue is the concep t of “need to know” with t he communication flowing through the proper chain of command, particularly in employee perfo rmance revi ews or disc iplinary ac tion. It coul d readily be argued that the con cept of intra- corporate com munications would not apply if, in the case of a

review by corporate super iors of the al leged miscond uct of a branch manager, the circumstances surrou nding the misconduct were communicated also to the corporatio n’s truck driver or janitor, who obviously would not be in the “need to know” pipeline. Woods, 758 S.W

.2d at 223. While we t hink the “need t o know” argum ent has meri t and is an exc eption to the intra-co rporate rul e, there is no evidence that the statement was disseminat ed to or read by any corporate employee who h ad no “need to know.” At a maximum, it was seen by only four employees, non e of whom, as far as the record reveals, lacked a need to know. In light of our holding with respect to the non-publication of the allege dly defamatory st atement, the is sue of whether the bank was gui lty of outrageo us conduct is ess entially m oot. The point n eed not be labored, because the state ment authored by Ms . Vanderwerf when she vented th e frustrati on occasioned by the plaintiff’s screaming, persistent d emands does not r ise to the level of outrageous conduct. Asidefrom the fac t that the statem ent is not, prima facie , defamatory, 2 it obviously cannot to characte rized as “not tolerated in civilized society.” See Dunn v. Moto Photo, Inc. , 828 S.W.2d 747, 753 (Tenn . App. 1991). The judgment i s affirmed at the costs of the appellant.

__________________________________ William H. Inman, Seni or Judge5

CONCUR:

_______________________________ Don T. McM urray, Judge

_______________________________ Charles D. Susano, Jr., Judge