Opinion ID: 1852391
Heading Depth: 1
Heading Rank: 5

Heading: Brackin's Defamation Claim Against Rutledge and the ACUL

Text: At the close of Brackin's case-in-chief, the trial court granted the ACUL and Rutledge a judgment as a matter of law on Brackin's defamation claim against them; the trial court held that any communications made by Rutledge were subject to a conditional privilege and that Brackin had not produced substantial evidence of actual malice necessary to overcome that privilege. Brackin appeals from this judgment, arguing that the trial court erred in not submitting her defamation claim against Rutledge and the ACUL to the jury. Brackin argues that she presented substantial evidence indicating that, during Rutledge's September 10, 1999, telephone conversation with Lloyd Moore, and again at the December 14, 1999, hearing before the ACUA, Rutledge published false and defamatory statements regarding Brackin. Brackin also asserts that she produced substantial evidence tending to establish that Rutledge acted with common-law malice. We agree with the trial court on this issue; no publication occurred. As already discussed, Rutledge was acting as FSCU's agent at the time of her communications with Moore and the ACUA. [29] Brackin's counsel admitted as much at trial. However, Brackin's counsel contended that when Rutledge contacted Moore and relayed the information she had learned during her investigation, she exceeded the scope of her agency and that, therefore, Rutledge's communication with Moore was a publication to a third party. We disagree. The DOR specifically directed FSCU to engage an outside firm to confirm the entries in the supplemental facts section of the report showing apparent improprieties and any other related activities discovered during the review; to investigate, among other things, credit union official and employee loan, deposit, and withdrawal activities (this includes relative accounts) and any suspicious activities discovered by any of the credit union's employees, past and present; and to perform an internal control review of the credit union's operations. FSCU retained the Trimmier Law Firm to oversee this investigation. The Trimmier Law Firm, in turn, retained Rutledge to perform the hands-on investigation at FSCU. In the course of performing this investigation, Rutledge discovered several loans for which Smith was responsible and on which the due dates had been advanced with no explanation; Rutledge's investigation of those loans led her to the employees' allegations of wrongdoing against Brackin. Rutledge's questions regarding Brackin's activities fell within the scope of her agency with the Trimmier Law Firm and with FSCU. We also find that Rutledge's communication to Moore, the senior examiner with the ACUA, was protected by a conditional privilege. Alabama law has long recognized that certain communications, even some that tend to defame or disparage a person, are protected by a qualified privilege: `Where a party makes a communication, and such communication is prompted by duty owed either to the public or to a third party, or the communication is one in which the party has an interest, and it is made to another having a corresponding interest, the communication is privileged.... The duty under which the party is privileged to make the communication need not be one having the force of legal obligation, but it is sufficient if it is ... moral in its nature....' Berry v. City of New York Ins. Co., 210 Ala. 369, 371, 98 So. 290, 292 (1923). The only variety of defamation not subject to the defense of qualified privilege is defamation committed with actual malice (as distinguished from implied malice). A plaintiff cannot prevail against an established defense of qualified [or conditional] privilege unless he has pleaded and proved defamation committed with actual malice. Ex parte Blue Cross & Blue Shield of Alabama, 773 So.2d 475, 479 (Ala.2000) (citation omitted). The ACUA directed FSCU to perform the investigation as outlined in the DOR; that DOR instructed FSCU to communicate the results of the investigation to the ACUA. Additionally, the ACUA presided over the December 1999 hearing. It cannot be disputed that the ACUA had an interest in receiving the information Rutledge learned during her September 1999 investigation, which we have already concluded was within the scope of her agency, and that the ACUA had an interest in the testimony provided by Rutledge at the December 1999 hearing. Therefore, Rutledge's communications to Moore in September 1999 and Rutledge's testimony at the ACUA hearing in December 1999 were protected by a conditional privilege. In order to overcome that conditional privilege, Brackin was required to establish by substantial evidence that Rutledge made those defamatory communications with common-law or actual malice. We acknowledge that the question whether a communication was made with actual malice in a defamation case is generally within the province of the jury. However, there must be substantial evidence of actual malice to justify submitting the question to the jury. Actual malice may be shown by evidence of previous ill will, hostility, threats, rivalry, other actions, former libels or slanders, and the like, emanating from the defendant, or by the violence of the defendant's language, the mode and extent of publication, and the like. Kenney v. Gurley, 208 Ala. 623, 626, 95 So. 34, 37 (1923). In this case, Brackin did not present substantial evidence showing that Rutledge acted with actual malice in publishing these communications. Brackin did not claim or establish that Rutledge had previously libeled or slandered her. There was no evidence indicating that Rutledge fabricated the employees' statements tending to implicate Brackin. Rutledge did not fabricate the existence of unsigned loan documents or the missing loan files. She did not fabricate the information regarding improper loans made to Brackin's family members. However, Brackin argues that Rutledge made no effort to verify any of the information provided to her by the other FSCU employees, that Rutledge did not attempt to interview or contact any of FSCU's borrowers to determine the accuracy of the employees' statements, and that Rutledge did not attempt to question Brackin. Brackin asserts that this failure to investigate the accuracy of the employees' statements is evidence of actual malice, which, she argues, includes defamatory statements `made with reckless disregard of whether they are false.' Barnett v. Mobile County Personnel Bd., 536 So.2d 46, 54 (Ala.1988) (quoting Prudential Ins. Co. of America v. Watts, 451 So.2d 310, 313 (Ala.Civ.App.1984)). The testimony at trial revealed that, at the time of Rutledge's alleged defamatory communications, Rutledge had already viewed the file-maintenance report, which revealed loans the due dates of which had been advanced, but that some of the relevant loan files were missing. Additionally, in reporting statements such as those of the employees, Rutledge could not have determined the validity of the employees' statements concerning Brackin because of the nature of those statements. [30] Rutledge was not a trier of fact over allegations of wrongdoing at FSCU; she was merely investigating loan transactions. Her role as an investigator required her to report her findings from that investigation to the appropriate entities and/or persons. She did so. Based on this testimony, we find no evidence to indicate that Rutledge knew that any of the statements made in her report were false or that she acted with reckless disregard of their falsity. The only allegations raised at trial that could possibly amount to evidence tending to show that Rutledge acted with malice was Brackin's allegation that Rutledge was embarrassed because, in her previous audits, she had failed to detect Smith's wrongdoing and that Rutledge was determined to catch someone. [31] Brackin described this as a rivalry between Rutledge and Brackin. However, this allegation, standing alone, does not rise to the level of substantial evidence of actual malice on Rutledge's part, under the facts of this case. According to the record, Rutledge properly performed her obligations as an agent of the Trimmier Law Firm and as an agent of FSCU. Rutledge published the allegedly defamatory statements only to those persons who had a legitimate business interest in the communications and then only to the extent necessary. We agree with the trial court that Brackin did not produce substantial evidence of actual malice; therefore, we agree that Brackin failed to overcome the conditional privilege protecting Rutledge's statements. The trial court properly granted the ACUL and Rutledge a judgment as a matter of law on Brackin's defamation claim.