1 United States Court of Appeals,

Fifth Circuit.

No. 94-60069

Summary Calendar.

Kay J. BURROUGHS, Plaintiff-Appellee,

v.

FFP OPERATING PARTNERS, L.P., Defendant-Appellant.

Aug. 17, 1994.

Appeal from the United States District Court for the Southern

District of Mississippi.

Before GARWOOD, SMITH and DeMOSS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

FFP Operating Partners, L.P. ("FFP"), appea ls the district

court's denial of its m otion for judgment as a matter of law

("j.m.l.") and, in the alternative, motion for new trial on

intentional infliction of emotional distress ("i.i.e.d.") and

slander jury verdicts. Concluding that the district court

erroneously denied FFP's motion for j.m.l. on the i.i.e.d. claim

but correctly denied FFP's motion for j.m.l. on the slander claim,

we affirm in part, reverse in part, and remand for a

redetermination of damages.

I.

A.

Kay Burroughs worked until August 28, 1989, for FFP as manager

of one of its convenience stores in Forest, Mississippi. After a

visual inspection of the store on August 16, 1989, John Rochelle,

FFP's vice-president of operations, and Ed Bradley, supervisor of1 As FFP explained in its brief, the "cup scam" involves a

manager's purchasing and placing into the store's inventory,

without the company's knowledge, non-logo cups. If the non-logo

cups are not logged into the book inventory, the manager may take

the amount of the overage in the physical inventory in the form

of merchandise or cash. To protect against the cup scam, FFP

requires its managers to purchase logo-bearing cups only, and the

inventory value of each cup is then logged into the book

inventory at the retail value of the beverage that the cup holds.

2 the Mississippi stores, believed the store's physical inventory to

be far less than Burroughs's books represented. The discrepancy

was attributed to generic, non-logo beverage cups stored in an

out-building behind the store, and Rochelle and Bradley ordered the

cups destroyed and written off the inventory.

Six days later, an independent auditor made a physical count

of the inventory and found a further deficit in physical inventory

of $16,385. Believing the non-logo cups to be a sign of theft, 1

Bradley investigated the shortage further by contacting CochranSysco, a food service supplier fo r the store's deli section.

Robert Ratliff, a credit manager at Cochran-Sysco, produced copies

of invoices, paid for in cash, for about 32,950 generic cups

purchased between February 1988 and August 1989.

Bradley returned to the store on August 28 to discuss with

Burroughs the Cochran-Sysco invoices. Whether Burroughs was fired

by Bradley at this meeting or quit was contested at trial, but it

was uncontested that Burroughs's employment with FFP ended on

August 28. Later that day, Bradley discovered approximately $3,800

missing from the store safe. The facts at trial did not establish

that Burroughs had taken this money; there remained an unexplained2 In 1986, Burroughs had reported a theft from her car of

$8,400 from the store's account, which she agreed to repay.

3 gap of time between Burroughs's dismissal and the opening of the

safe (during which time Bradley was alone in the store).

Bradley and Rochelle spoke with Officer Croxton of the Forest

Pol ice Department on August 29 regarding possible embezzlement

charges. 2 Croxton then served a warrant on Burroughs, drove her to

the station, and released her a f ter she posted bond. At a

preliminary hearing before a municipal judge on September 19, the

charges against Burroughs were dropped.

FFP later testified to the Mississippi Em ployment Security

Commission ("MESC") and the state welfare department that Burroughs

had quit her job. Based upon this testimony, Burroughs originally

was denied unemployment benefits and food stamps, but her

applications were granted upon further review.

B.

Burroughs filed suit in Mississippi state court on August 24,

1990, alleging malicious prosecution, false imprisonment, false

a rrest, slander, and i.i.e.d., seeking compensatory damages of

$100,000 and punitive damages of $1,000,000. FFP removed the case

to federal court.

At trial, FFP presented expert witnesses who testified that

the non-logo cups, coupled with cash register rece ipts, pointed

toward Burroughs as the party responsible for the theft, which

Burroughs den ied. Burroughs's witnesses also testified that

Bradl e y and Rochelle discussed Burroughs's alleged theft with4

numerous other parties in the Forest community.

Follo w ing a four-day trial, Burroughs withdrew her false

imprisonment and false arrest claims, and FFP moved for j.m.l. on

the remaining issues. The court denied the motion, and the jury

returned a ve rdict for Burroughs on the i.i.e.d. and slander

charges, awarding $250,000 in compensatory damages. The jury found

for FFP on the malicious prosecution and punitive damages issues.

FFP renewed its motion for j.m.l. or, in the alternative, for

a new trial or remittitur. The district court denied these

motions, and FFP appeals.

II.

A.

We review the denial of j.m.l. de novo, Omnitech Int'l v.

Clorox Co., 11 F.3d 1316, 1322 (5th Cir.1994), petition for cert.

filed (U.S. May 25, 1994) (No. 93-1927), viewing all evidence in

the light most favorable to the non-moving party, Becker v.

PaineWebber, Inc., 962 F.2d 524, 526 (5th Cir.1992). We will grant

the motion where "the evidence at trial points so strongly and

overwhelmingly in the movant's favor that reasonable jurors could

not reach a contrary conclusion." O mnitech, 11 F.3d at 1323.

Because this is a diversity case, we apply the substantive law of

Mississippi. E rie R.R. v. Tompkins, 304 U.S. 64, 80, 58 S.Ct. 817,

823, 82 L.Ed. 1188 (1938).

B.

In Mississippi, in order to recover for i.i.e.d., a plaintiff

must prove that defendant's conduct is "extreme and outrageous."5

It has not been enough that the defendant h as acted with an

intent which is tortious or even criminal, or that he has

intended to inflict emotional distress, or even that his

condu ct has been characterized by "malice," or a degree of

aggravation wh ich would entitle the plaintiff to punitive

damages for another tort. Liability has been found only where

the conduct has been so outrageous in character, and so

extreme in degree, as to go beyond all possible bounds of

decency, and to b e regarded as atrocious, and utterly

intolerable in a civilized community.

White v. Walker, 950 F.2d 972, 978 (5th Cir.1991) (discussing the

court's citation with approval in Lyons v. Zale Jewelry Co., 246

Miss. 139, 150 So.2d 154, 158 (1963), of comment d to § 46 of the

R ESTATEMENT (F IRST ) OF T ORTS ).

Though plaintiff need not prove cognizable physical injuries,

Sears, Roebuck & Co. v. Devers, 405 So.2d 898, 902 (Miss.1981), the

emotional stres s must be genuine and severe, R E STATEMENT (S ECOND ) OF

T ORTS § 46, cmt. k (1965). Absent physical manifestation of the

injury, plaintiff may recover where the nature of the act is so

egregious as to evoke "outrage or revulsion." S ears, 405 So.2d at

902.

Burroughs proffers four arguments in support of the

outrageous nature of FFP's actions. She first asserts that

Rochelle's failure to contact her prior to initiating the original

criminal proceedings is evidence of outrageous behavior. FFP

concedes that Rochelle did not contact Burroughs between the time

of her firing (August 28) and his filing of embezzlement charges

(August 29). Nevertheless, uncontroverted evidence supports FFP's

contention that Rochelle contacted Burroughs as early as August 16

seeking an explanation for the inventory shortages. Bradley also

returned to the store on August 28 to discuss w ith Burroughs the3 While the question of whether Burroughs was fired or quit

is disputed, all of the witnesses to the August 28 meeting

between Bradley and Burroughs testified to the contentious nature

of the meeting.

6 Cochran-Sysco cash invoices.

In light of the circumstances, we are unpersuaded that

Rochelle's actions are sufficiently improper so a s to be

outrageous. First, as mentioned above, Rochelle and Bradley

personally inspected the store on August 16, at which time they

became aware of the presence of non-logo cups. Second, Rochelle's

and Bradley's personal knowledge of the prevalence of criminality

in convenience stores associate d with non-logo cups provided a

reasonable suspicion of foul play.

Third, Rochelle commissioned an internal auditor who made a

physical count of the inventory on August 22, revealing more than

a $16,000 discrepancy betwee n the book and the physical

invent ories. Fourth, all of the investigations occurred on the

backdrop of the 1986 reported theft of $8,400 from Burroughs's car,

monies she was repaying in installments at the ti me. Fifth, the

circumstances surrounding Burroughs's firing, 3 make more reasonable

Rochelle's decision to file embezzlement charges on August 29

without contacting Burroughs further. Finally, leaving aside the

question of whether Burroughs was responsible for the money missing

from the safe on August 28, the fact that the money was missing

supports Rochelle's decision to proceed with legal action.

We do not believe that the municipal judge's decision to quash

the embezzlement charges at the September 19 preliminary hearing7

undermines the non-outrageous nature of FFP's behavior. Even if we

were to construe the quash order as such, FFP's decision to bring

charges does not rise to the level of "atrocious" and "utterly

intolerable in a civilized society." To find otherwise would be to

suggest that all decisions not to prosecute would give rise to

intentional tort claims; a finding of inadequate probable cause to

proceed with criminal charges doe s not connote malicious and

outrageous behavior. Furthermore, this conclusion is supported by

the jury verdict in favor of FFP on the malicious prosecution

charge.

Next, Burroughs contends that FFP's sta tements to both the

MESC and the welfare department that Burroughs had quit her job are

suffic ient to support a finding of i.i.e.d. We begin by noting

that, absen t contractual language to the contrary, Mississippi

confers at-will employment status on employees. Perry v. Sears,

Roebuck & Co., 508 So.2d 1086, 1088 (Miss.1987). As such, a worker

may be terminated for good reason, wrong reason, or no reason at

all. K elly v. Mississippi Valley Gas Co., 397 So.2d 874, 875

(Miss.1981). Although Mississippi has just recently adopted a

narrow "public policy" exception to at-will termination, McArn v.

Allied Bruce-Terminix Co., 62 6 So.2d 603, 607 (Miss.1993), the

Mississippi Supreme Court has refused to extend further an implied

covenant of good faith and fair dealing to employment terminations.

Perry, 508 So.2d at 1089. Hence, even though Burroughs appears to

base her i.i.e.d. claims solely upon FFP's alleged accusations of

her stealing and not on a wrongful termination charge, we note that4 In fact, FFP was subpoenaed by the MESC to testify.

8 Mississippi law does not recognize a wrongful termination action

for Burroughs in tort.

We conclude that FFP's statements to these organizations are

not sufficiently outrageous to support the i.i.e.d. claim. First,

qualified privilege attaches to statement s made by an employer

against an employee that affect the latter's employment. B enson v.

Hall, 339 So.2d 570, 572 (Miss.1976). Absent spite, ill will,

malicious purpose, or wanton disregard for the veracity of the

statements, and where the communications are limited to those

persons who have a legitimate and direct interest in the subject

matter, the communications are privileged, and a presumpti on of

good faith attaches. I d. (citing Killebrew v. Jackson City Lines,

225 Miss. 84, 82 So.2d 648 (1955)).

Since both the MESC and state welfare department have a

legitimate and direct interest in the subject matter of the

statements made by FF P, 4 FFP's utterances to these organizations

are subject to qualified privilege. The question then remains

whether FFP's statements exhibited bad faith and malice.

We believe that the evide nce presented at trial does not

support such allegations. First, FFP's belief as to Burroughs's

criminal activity was sufficiently reasonable to d efeat any bad

faith and malice claims. We agree with FFP that, in light of the

circumstances, it had a right to present its side of the story to

these agencies, assuming no ill wil l or spite toward Burroughs.

Second, the jury findings in favor of FFP on the malicious9

prosecution and punitive damages interrogatories support the

non-malicious nature of FFP's statements. The jury's failure to

award punitives suggests that it co uld not find bad faith

sufficient to justify punishing FFP. Jones, 617 F.Supp. at 1547.

Finally, even assuming that FFP's communications to the MESC

and welfare department were malicious and thus not privileged, they

do not rise to the level of outrageousness sufficient to support an

i.i.e.d. c laim. As discussed previously, FFP made a reasonable

investigation in light of the circumstances as they appeared to FFP

at the time.

Burroughs's third statement in support of the i.i.e.d. verdict

is that she was refused employme nt at another convenience store

because the owner had heard of the theft allegations promulgated by

FFP. Kenneth Warren, the owner of a local convenience store,

testified that he refused to hire Burroughs as a result of having

heard "rumors" of Burroughs's alleged theft. Warren could not

identify from whom he had he ard such rumors, testifying instead

that small towns such as Forest lend themselves to the spreading of

rumors through "just talk."

Warren's decision not to employ Burroughs is insufficient to

support the i.i.e.d. verdict. First, Warren was unable to testify

on direct examination as to the source of the rumor. If the rumors

stemmed from the statements made by FFP to the municipal court, the

MESC, or the welfare department, we would extend to them the same

privilege as discussed previously. If the rumors stemmed from the

missing $8,400 from 1986, the veracity of such rumors is5 The testimony of Sandra Walker, an employee at the

convenience store, supports the contention that the rumors were

based upon the original charges made to the municipal court:

"Kay Burroughs got arrested for stealing, you know, stealing from

the store, because she was arrested they automatically assume

guilt."

10 unquestioned. If the rumors were promulgated by the two witnesses

to the August 28 meeting between Bradley and Burroughs, the

spreading of the rumors to Warren are not the fault of FFP.

It is important to note that in her supporting brief,

Burroughs expressly separates the rumors relied upon by Warren from

those allegedly made by Bradley to other Forest residents. We

discern from this separation that Burroughs does not allege that

these latter representations were the basis for the rumors heard by

Warren. Rather, the source must be any of the former categories

discussed above, which so urces would not implicate FFP for

misconduct. 5

Notwithstanding the so urce of the rumors, FFP's actions are

not sufficiently outrageous as a matter of law so as to be utterly

intolerable in a civilized community. Based upon Bradley's and

Rochelle's personal investigations, the demonstrated inventory

shortages, and the $8,400 reported stolen by Burroughs , FFP had

sufficient suspicion of illegal a ctivity to support its

allegations.

Burroughs's final argument to sustain the i.i.e.d. verdict is

that FFP made repeated false accusations against Burroughs in the

presence of other customers, vendors, and store em ployees. For

purposes of this analysis, we distinguish the testimony of Dorothy6 See White, 950 F.2d at 978 (applying Mississippi tort law

to find that a police officer's statements to an underage driver

were not outrageous, in part owing to the fact that the

statements were made in the context of "a legitimate police

function"); see also Davidson v. State Farm Fire & Cas. Co., 641

F.Supp. 503, 511 (N.D.Miss.1986) (concluding that where the

insurance company had made an independent investigation of the

cause of the fire, its decision to deny benefits was not

outrageous); cf. Lyons, 246 Mass. 139, 150 So.2d at 162 (holding

that where defendant verbally abused and threatened mother for

purposes of enforcing a debt owed by her son to defendant, the

conversation was entirely inflammatory and non-investigative).

11 Goolsby, another employee of the FFP store, from that of Jimmy

Putnam, the owner of a competing store, and Sandra Walker, also an

employee of the FFP store.

We find that Goolsby's testimony is insufficient to uphold the

i.i.e.d. verdict. On both direct and cross-examination, Goolsby

gave uncontroverted testimony that the statements made by FFP

representatives regarding Burroughs were part of their

investigation of the alleged criminal activity. Goolsby testified

that FFP asked her whether she thought Burroughs had been stealing

from the store; FFP did not accuse Burroughs, in Goolsby's

presence, of stealing monies.

The investigative nature of the conversations are bolstered by

the time frame in which the statements were made. Goolsby

established on cross-examination that she was asked about Burroughs

only during the two weeks i mmediately following Burroughs's

dismissal and only in her capacity as an employee of t he store.

Hence, given our previous discussion of the reasonableness of FFP's

su spicion, the conversations with Goolsby were investigative in

nature and thus not outrageous. 612

FFP's statements to Putnam and Walker, however, were not

investigative in nature. The conversation with Putnam occurred

independently of FFP's investigation of Burroughs—Putnam had

stopped at the store to purchase gas, and Burroughs's name was

mentioned first by Putnam. Most telling about the conversation is

Putnam's uncontroverted testimony that Rochelle said, "I'm going to

see [Burroughs's] not going to work around here anymore."

Walker's testimony is similarly on point. He stated that

Bradley, Rochelle , and John Bernard, another FFP executive,

appeared at the store on numerous occasions and accused Burroughs

of embezzling from FFP. The conversations were reported to have

occurred in the presence of othe r customers and employees, were

repeated over a large span of time, and were accusatory, not

investigative, in nature.

To determine whether these statements are sufficient to

sustain the i.i.e.d. verdict, we would need to decide whether a

reasonable jury could have found them sufficiently outrageous under

Mississippi law. We need not reach this issue, however, for, as we

e xplain in the next section, Burroughs's emotional injuries were

not severe enough to meet the standard for i.i.e.d.

C.

Mississippi courts allow damages for intentional torts even

where they ar e not accompanied by physical or bodily injury.

Devers, 405 So.2d at 902. "In such instances, it is the nature of

the act itself—as oppose d to the seriousness of the

consequences—which gives impetus to legal redress." I d. "The law13

intervenes only where the distress inflicted is so severe that no

reasonable man could be expected to endure it." R E STATEMENT (S ECOND )

OF T ORTS § 46, cmt. j.

Burroughs did not allege physical injuries. The words used to

describe her emotional injuries include: jittery, upset, unnerved,

depressed, crying, emotional, mortified, terribly upset, bothered

tremendously, a nd very badly hurt. Others testified as to

Burroughs's poor church attenda nce in the period following the

incidents of this case and to her overall lower level of

participation in community affairs. She did not offer medical

testimony describing any clinical manifestations of depression or

other mental infirmities. Such emotional injuries are insufficient

to sustain damages for i.i.e.d. C ompare Lyons, 246 Mass. 139, 150

So.2d at 155 (holding plainti ff's allegations of extreme

nervousness and severe headaches, such that she was physically and

emotionally unable to work and earn her livelihood, sufficient to

withstand a demurrer) with Jones, 617 F.Supp. at 1545 (holding

plaintiff's testimony that he suffered nightmares, could not sleep,

and required medical attention for his hypertension insufficient,

in the absence of corroborative medical testimony, to sustain jury

verdict for i.i.e.d.).

As a matter of law, Burroughs's emotional injuries were not

severe enough to meet the standard for i.i.e.d. We therefore

reverse the jury verdict on the i.i.e.d. claim and grant FFP's

motion for j.m.l. on that claim.

III.14

FFP next asks this court to reverse the judgment in favor of

Burroughs on the slander count. FFP challenges on appeal the

falsity element only. We begin by referencing our previous

discussion regarding privileged communications and note that we

restrict our discussion of slander to non-privileged communications

only.

A claim of slander includes the following elements:

1. a false and defamatory unprivile ged statement concerning

Burroughs made to a third party;

2. that FFP was at least negligent when it made these statements;

3. either actionability irrespective of special h arm or the

existence of special harm.

See Blake v. Gannett Co., 529 So.2d 595, 602 (Miss.1988) (citing

Chatham v. Gulf Pub. Co., 502 So.2d 647, 649 (Miss.1987)).

The plaintiff has the burden of proof as to the element of

falsity. P hilade lphia Newspapers, Inc. v. Hepps, 475 U.S. 767,

776, 106 S.Ct. 1558, 1563, 89 L.Ed.2d 783 (1986). Truth is a

complete defense to an action for slander. Fulton v. Mississippi

Publishers Corp., 498 So.2d 1215, 1217 (Miss.1986).

Burroughs offers several pieces of evidence in support of the

jury verdict in her favor. On the element of falsity, Burroughs

points out that (1) the original charges of embezzlement were

dismissed by the municipal judge; (2) FFP presented no witnesses

to the theft; (3) there was no evidence of Burroughs's improved

finances during the time in which she was alleged to have stolen;

(4) cash overages were found while Burroughs was managing the

store, and cash shorta ges were reported after her having left15

management of the store; and (5) Burroughs alleged that Bradley

attempted to frame her for theft.

We agree with FFP that the municipal judge's decision to drop

the embezzlement charges does not evidence the fals ity of FFP's

allegations. On its face, the ruling amounted to a finding of

insufficient evidence, at the t ime of the hearing, to hold

Burroughs over for a grand jury hearing. Second, FFP's failure to

produce witnesses to the alleged crime does not support the slander

claim. In order to defend against slander, FFP has no burden to

produce witnesses to the crime.

FFP did, however, present the testimony of two experts who

opined that Burroughs was responsible for the theft at the store.

Although Burroughs's counsel attempted to discredit the experts by

exposing their financial relationships to FFP, much of their direct

testimony went unchallenged.

"The general rule is that opinion testimony of expert

witnesses is not of controlling effect, and a jury is not

absolutely required to accept opinions of experts in place of its

own judgment." New York Life Ins. Co. v. Johnston, 256 F.2d 115,

118 (5th Cir.1958). We are unable to say that a reasonable juror

could not have exercised his independent judgment against the

opinion of the experts. The jury heard Burroughs's testimony in

which she unequivocally denied having stolen money from the store,

and Burroughs presented circumstantial evidence suggesting that

Bradley w as attempting to frame Burroughs for the theft.

Furthermore, the jury's decisions in favor of FFP on the malicious16

prosecution and punitive damages charges are insufficient to

overturn the verdict.

In light of the evide nce presented at trial, therefore, we

aff irm the denial of FFP's motion for j.m.l. as to the slander

claim. We are unable to say that no reasonable juror could have

found for Burroughs and are thus bound, by the standard of review,

to affirm.

IV.

We review the district court's denial of FFP's motion for new

trial under an abuse of discretion standard. P agan v. Shoney's,

Inc., 931 F.2d 334, 337 (5th Cir.1991). We must affirm the verdict

unless the evidence points "so strongly and overwhelmingly in favor

of one party that the court believes that reasonable men could not

arrive at a contrary [conclusion]." J ones v. Wal-Mart Stores, 870

F.2d 982, 987 (5th Cir.1989). The district court abuses its

discretion only where "there is an "absolute absence' of evidence

to support the jury's verdict." Pagan, 931 F.2d at 337.

The jury verdict in favor of Burroughs on the slander claim is

not against the great weight of evidence and, a fortiori, we must

affirm the district court's denial of FFP's motion for new trial.

Since we have previously reversed the jury verdict in favor of

Burroughs on the i.i.e.d. claim, we do not address that claim

further.

V.

The judgment is REVERSED on the i.i.e.d. claim, and j.m.l. is

hereby granted in favor of FFP. The judgment is AFFIRMED on the17

slander claim, and the case is REMANDED for determination of the

apportionment of the $250,000 jury verdict.