James L. Mandel v. Multiband Corporation ( 2016 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1133
James L. Mandel,
Appellant,
vs.
Multiband Corporation, et al.,
Respondents.
Filed March 28, 2016
Affirmed
Randall, Judge *
Hennepin County District Court
File No. 27-CV-14-12877
Mark J. Briol, William G. Carpenter, Briol & Associates, PLLC, Minneapolis, Minnesota
(for appellant)
Thomas C. Mahlum, Seth A. Nielsen, Robins Kaplan LLP, Minneapolis, Minnesota (for
respondents)
Considered and decided by Ross, Presiding Judge; Reyes, Judge; and Randall,
Judge.
*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
RANDALL, Judge
Appellant James L. Mandel seeks reversal of the district court’s grant of summary
judgment to respondents Multiband Corporation and Ron B. Hill, CEO of Goodman
Networks Incorporated (Goodman). We conclude that no genuine issues of material fact
exist on Mandel’s claims. The district court did not err in applying the law. Affirmed.
FACTS
Multiband is a home service provider for DirecTV. In that capacity, Multiband
performs installations, upgrades and service work for DirecTV’s residential customers. The
DirecTV relationship is Multiband’s primary source of revenue. Mandel began working as
Multiband’s CEO in 1998 and continued to work as its CEO after Goodman acquired
Multiband as a subsidiary in August 2013. As part of the acquisition, Mandel and
Multiband executed a new employment contract, effective on August 30, 2013, the closing
date of Goodman’s acquisition of Multiband.
Mandel’s new employment agreement provided that, among other things, Mandel
could be terminated “for [c]ause at any time.” The agreement defined “cause,” in relevant
part, as:
Commission by the Employee of [a] material act of
dishonesty or fraud upon, or willful misconduct toward, the
Company or any of its Affiliates or misappropriation of
material Company property or corporate opportunities; as
reasonably determined by the Board of Directors of the
Company.
2
For purposes of Mandel’s employment agreement, “the Company” was defined as
Multiband. The for-cause provision was important because a termination for cause reduced
Multiband’s financial obligations to Mandel. For example, if Mandel was terminated for
a reason other than for cause, Mandel would be entitled to a $1.4 million severance
payment.
In June 2014, John Goodman (Goodman’s Executive Chairman) and Hill were
contacted by an investment banking firm about a potential sale of Multiband. Mandel’s
name was not mentioned by the investment banking firm, but Hill communicated to John
Goodman that Mandel was probably behind the inquiry. After this initial communication,
Hill received another inquiry from a different investment banking firm, again without
mention of Mandel. Hill and Goodman considered the opportunities but ultimately decided
not to pursue them.
Hill then initiated an investigation using Goodman’s legal team and an outside
consultant. The investigation team searched Mandel’s e-mails and prepared a report based
on those e-mails. After reviewing the report, Hill decided that he needed to take the matter
to Goodman’s board of directors. Before the board meeting, Hill and John Goodman spoke
to Dave Baker of DirecTV and learned that Baker had recently met with one of the firms
that had contacted Hill about Multiband. Baker indicated to Hill and John Goodman that
Mandel was likely behind the meeting.
Late in the day on June 30, 2014, Hill sent the investigative report to Goodman’s
board, along with 35 pages of Mandel’s e-mails. The Goodman board of directors met
telephonically the following morning, July 1, 2014, and discussed the investigation. The
3
investigation report stated that Mandel had engaged in multiple infractions that warranted
termination for cause. The e-mails that formed the report’s basis included the following:
1. On May 30, 2014, Mandel e-mailed Robin Engelson of
Sapphire Financial Group Multiband’s current pro forma and
future expense reductions under the name “Project Phoenix”;
2. On June 3, 2014, Mandel e-mailed Engelson a teaser
titled “More Then a Service Company”, and the teaser
contained Multiband’s confidential financial information,
including historical and predicted revenue;
3. On June 3, 2014, after e-mailing Engelson the teaser,
Mandel wrote to her that this was a ‘“hail Mary’” but that “I’m
willing to go after it quickly, if possible”;
4. On June 11, 2014, Mandel e-mailed Anthony Guagliano
of The Gores Group (an investment firm) Dave Baker’s contact
information and stated, “I believe [Baker] will be the
appropriate resource for your line of questioning”; and
5. On June 12, 2014, Mandel e-mailed Scott Dunfrund of
Houlihan Lokey (an investment firm) the same teaser he had
previously sent to Engelson.
After discussing this information, the Goodman board voted unanimously to terminate
Mandel for cause. The Goodman board was comprised of John Goodman, Hill, and three
independent directors.
The Multiband board subsequently ratified the Goodman board’s action by
unanimous written action. Two of the three members of Multiband’s board (John
Goodman and Hill) were also members of Goodman’s board, and the third was Goodman’s
COO. That same day, Hill hand-delivered a termination letter to Mandel. The letter
outlined the various reasons for Mandel’s termination and was supplemented by the same
documents that were reviewed by the Goodman board.
4
Mandel later sued Multiband and Hill, alleging claims for (1) breach of contract;
(2) breach of the implied covenant of good faith and fair dealing; (3) defamation;
(4) unpaid wages, severance, a bonus from 2013, and stock options under Minn. Stat.
§ 181.13 (2014); and (5) a declaratory judgment that Mandel is not bound by restrictive
covenants and is owed severance, the 2013 bonus, and a pro-rated amount of his 2014
performance bonus.
After considerable discovery, Multiband and Hill moved for summary judgment on
all of Mandel’s claims. Mandel made numerous submissions in opposition to summary
judgment, including two expert affidavits and reports. Multiband and Hill then moved to
exclude the expert affidavits from consideration, arguing that they were inadmissible for
several reasons under Minnesota Rules of Evidence 402, 403, and 702.
The district court granted Multiband and Hill’s motion for summary judgment on
all of Mandel’s claims and dismissed the case with prejudice. In its order, the district court
also determined that Multiband and Hill’s motion to exclude Mandel’s experts was moot. 1
This appeal follows.
DECISION
A district court shall grant summary judgment when “the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that either party is entitled to a
1
The district court did not consider Mandel’s expert materials in its decision. For purposes
of this appeal, we assume that Mandel’s expert submissions were admissible but conclude
that, even when they are considered, summary judgment is appropriate.
5
judgment as a matter of law.” Minn. R. Civ. P. 56.03. On appeal from summary judgment,
we review de novo the existence of genuine issues of material fact and whether the district
court erred in applying the law. STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d
72, 76-77 (Minn. 2002). “We view the evidence in the light most favorable to the party
against whom summary judgment was granted.” Id.A genuine issue of material fact does not exist if the “nonmoving party presents
evidence . . . which is not sufficiently probative with respect to an essential element of the
nonmoving party’s case to permit reasonable persons to draw different conclusions.” DLH,
Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997). The nonmoving party “must do more than
rest on mere averments.” Id. When, as here, the defendant moves for summary judgment,
the motion must be granted when the record lacks proof of “an essential element of the
plaintiff’s claim.” Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn. 1995).
I.
To withstand summary judgment on his breach-of-contract claim, Mandel was
required to demonstrate a genuine issue of material fact on the following elements: (1) the
existence of a contract; (2) the performance of conditions precedent; and (3) the breach of
the contract. See Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co., 848 N.W.2d 539, 543
(Minn. 2014). “A breach of contract claim fails as a matter of law if the plaintiff cannot
establish that he or she has been damaged by the alleged breach.” Jensen v. Duluth Area
YMCA, 688 N.W.2d 574, 578-79 (Minn. App. 2004). We review matters of contract
interpretation de novo. Kvidera v. Rotation Eng’g & Mfg. Co., 705 N.W.2d 416, 420
(Minn. App. 2005). “[W]hen a contractual provision is clear and unambiguous, courts
6
should not rewrite, modify, or limit its effect by a strained construction.” Travertine Corp.
v. Lexington-Silverwood, 683 N.W.2d 267, 271 (Minn. 2004). Language in a contract “is
to be given its plain and ordinary meaning.” Kvidera, 705 N.W.2d at 420 (quotation
omitted).
A. Pretext
Mandel argues that summary judgment should not have been granted on his breach-
of-contract claim because material fact issues exist as to whether his termination for cause
was a pretext for Goodman’s cost-saving initiative. The district court reasoned that the
majority of the Goodman board was unaware of any restructuring or cost-reduction efforts
and there was no genuine issue of material fact on this point. We agree.
Mandel contends that the desire to cut costs at Goodman was the true reason for his
dismissal. Mandel does not deny his actions but cites to preinvestigation e-mails and
documents from Hill and John Goodman that discuss his potential termination, the potential
termination of other Multiband executives, and the cost of effectuating those maneuvers.
Mandel’s argument on this point is not persuasive.
Mandel needed to go beyond “mere averments” and put “facts in the record giving
rise to a genuine issue for trial.” See DLH, 566 N.W.2d at 71 (quotation omitted). Mandel
has not met his burden. Instead, he has relied on his characterizations of e-mails sent
between John Goodman and Hill and the fact that he was the only executive listed on the
restructuring plan as being terminated for cause. As the district court noted, Mandel
provided no evidence that the three outside directors (the majority of the Goodman board)
knew of restructuring discussions or that such matters were discussed at the termination
7
meeting. Both outside directors who were deposed by Mandel testified that, at the time of
the July 1, 2014 meeting, they were unaware of any restructuring efforts at Goodman and
restructuring did not factor into their decision to terminate Mandel for cause. Even
considering the evidence in the light most favorable to Mandel, it does not transform
legitimate restructuring discussions into a genuine issue of material fact on the existence
of a scheme to terminate Mandel for cause. See id.
Mandel also argues that Minnesota law demands that “a jury must be permitted to
determine whether the cause asserted for termination was the actual reason.” 2 We disagree.
None of the cases cited by Mandel make the broad statement of law that Mandel advocates.
See Hilligoss v. Cargill, Inc., 649 N.W.2d 142, 147-48 (Minn. 2002) (affirming use of
CIVJIG 55.05, which defined cause and allowed jury to determine if employee was
terminated for cause where employment contract did not define cause); Pine River State
Bank v. Mettille, 333 N.W.2d 622, 630-31 (Minn. 1983) (affirming jury finding of lack of
good cause where employee handbook changed at-will employment to one requiring good
cause for dismissal and factual dispute existed on good-cause issue); Kvidera, 705 N.W.2d
at 420 (for-cause determination set for trial after district court denied employer’s motion
for summary judgment); Bolander v. Bolander, 703 N.W.2d 529, 545-47 (Minn. App.
2005) (affirming denial of judgment notwithstanding the verdict where jury was instructed
2
Mandel also requests that this court apply the approach announced in Toussaint v. Blue
Cross & Blue Shield of Mich., 292 N.W.2d 880, 895 (Mich. 1980). Under the Toussaint
approach, the “question of whether ‘cause’ for termination actually exist[s] [is] for the fact-
finder to decide.” Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 659 (Iowa 2008).
Toussaint has not been adopted in Minnesota, and we are not inclined to do so on these
facts.
8
on what constituted cause under the employment agreement and evidence supported jury’s
determination that employee was not terminated for cause); Harvet v. Unity Med. Ctr., Inc.,
428 N.W.2d 574, 578 (Minn. App. 1988) (finding summary judgment inappropriate where
fact issues existed as to whether terminated employee actually engaged in the behavior
cited as the basis for her termination).
Although some of these cases allowed the jury to reexamine whether an employee’s
acts constituted cause, they do not abrogate contract-law principles or the obligation of the
party opposing summary judgment to show a genuine issue of material fact for trial.
Mandel’s contract unambiguously provides that the board of directors is the proper
decision-making body. See Travertine Corp., 683 N.W.2d at 271. Further, nothing that
Mandel has cited in the record, even when viewed in the light most favorable to him, creates
more than a “metaphysical doubt” that the board’s decision was a pretext for Goodman’s
cost-saving initiative. See DLH, 566 N.W.2d at 71. The district court properly granted
summary judgment on this point.
B. Procedurally Reasonable
Mandel next raises several arguments with respect to the board’s termination
process.
Mandel argues that the district court erred as a matter of law when it applied the
business-judgment rule to its analysis of procedural reasonableness. We agree with the
district court that Mandel’s contract required procedural reasonableness. The district court
erred in its application of the “business judgment rule” because Minn. Stat. § 302A.251
(2014) “sets forth the business judgment rule as a defense against director liability,” and
9
this is not a case where director liability is at issue. See In re UnitedHealth Grp. Inc.
S’holder Derivative Litig., 754 N.W.2d 544, 553 (Minn. 2008); Janssen v. Best &
Flanagan, 662 N.W.2d 876, 882 (Minn. 2003) (noting that the “business judgment rule
was developed by state and federal courts to protect boards of directors against shareholder
claims that the board made unprofitable business decisions”). That error does not preclude
this court from affirming the district court. See Doe v. Archdiocese of St. Paul, 817 N.W.2d
150, 163 (Minn. 2012) (stating that “we may affirm a grant of summary judgment if it can
be sustained on any grounds”).
Mandel also argues that the board’s determination was unreasonable, and therefore
a breach of contract, because the investigation was too short, the board did not deliberate
long enough, and he was not allowed to respond to the allegations. We disagree.
Pursuant to Mandel’s contract, Multiband could terminate Mandel for cause, so long
as the grounds for cause were “reasonably determined by the Board of Directors.” The
contract contained no requirement that the board conduct an investigation of a certain
length or that Mandel be allowed to respond. See Pine River State Bank, 333 N.W.2d at
631 (“Had the procedural disciplinary steps been honored, [the employee] might have
corrected his deficiencies . . . and have kept his job.”). The board members considered an
investigative report prepared by counsel and substantiated by Mandel’s e-mails before
meeting by phone and unanimously terminating Mandel for cause, as it was allowed to do
under the contract. There is no genuine issue of material fact as to the reasonableness of
this process.
10
Mandel has not pointed to facts in the record that demonstrate that he was damaged
by any alleged failure to conduct a lengthier investigation. A lengthier investigation would
have done nothing more than uncover what the parties’ extensive discovery revealed—
more evidence of Mandel’s questionable conduct in the form of dozens of text messages
and additional e-mails. As a matter of law, summary judgment was warranted on this point.
See Jensen, 688 N.W.2d at 578-79.
Mandel also cites to the two expert affidavits and reports he provided to the district
court on the issue of the reasonableness of the board’s investigation. We find the affidavits
and reports do not create a genuine issue of material fact on the procedural reasonableness
of the board’s decision. Mandel’s contract did not provide for a particular procedure or a
procedure of a certain length, only that the procedure be reasonable. Mandel’s experts do
not change the fact that, as a matter of law, Mandel is not entitled to anything more than
what was bargained for. See Travertine Corp., 683 N.W.2d at 271.
Mandel also argues that his contract was breached because the Goodman board,
instead of the Multiband board, made the initial for-cause determination. We acknowledge
that, in contrast to what Mandel’s contract demanded, the Goodman board made the initial
for-cause determination. But we agree with the district court that Mandel cannot show
damages flowing from the fact that the Goodman board as opposed to the Multiband board
made the initial determination.
Two of the three members of Multiband’s board sat on the Goodman board, and the
third worked for Goodman. Mandel received more than he bargained for by having three
independent board members, who constituted the majority of the Goodman board, involved
11
in the decision-making process. The uncontroverted evidence shows that Mandel was not
damaged by any procedural discrepancies. See Jensen, 688 N.W.2d at 578-79. 3
Viewing the evidence in the light most favorable to Mandel, we find that Mandel’s
procedural-reasonableness arguments rest on averments and assertions that do not create
real doubt. Summary judgment for Multiband and Hill was proper. See DLH, 566 N.W.2d
at 71.
C. Substantively Reasonable
Mandel also argues that a genuine issue of material fact exists on the issue of
whether his conduct constituted cause as defined in his employment agreement. Mandel’s
employment agreement defined cause, in relevant part, as:
Commission by the Employee of [a] material act of
dishonesty or fraud upon, or willful misconduct toward, the
Company or any of its Affiliates or misappropriation of
material Company property or corporate opportunities; as
reasonably determined by the Board of Directors of the
Company.
To terminate Mandel for cause, the board needed to reasonably determine that Mandel had
committed a “material act of dishonesty or fraud,” “willful misconduct,” or
“misappropriation of material Company property or corporate opportunities.”
3
The district court reasoned that as the sole shareholder of Multiband, Goodman was
entitled to act on the company’s behalf under Minn. Stat. § 302A.201, subd. 2(c) (2014).
We agree with Mandel that the district court erred because Goodman did not act in its
capacity as shareholder. But as with the business-judgment-rule discussion above, this
error does not preclude affirming the district court’s summary-judgment order. See Doe,
817 N.W.2d at 163.
12
The undisputed facts show the following. Goodman purchased Multiband in August
2013. Within months, Mandel began his efforts to find a buyer for Goodman’s recently-
acquired subsidiary. Mandel did not consult with anybody at Goodman before he began
this process and, importantly, secured no nondisclosure agreements from the parties with
whom he was communicating. Mandel also directed one of his investment-bank contacts
to speak with Baker of DirecTV, thus putting in peril Multiband’s relationship with its top
customer. When Hill began to understand the nature of Mandel’s activities, he acted
swiftly in launching an investigation and bringing the matter to Goodman’s board. Based
on the information presented to it, the board determined that Mandel’s actions constituted
cause and terminated him accordingly. As the district court aptly concluded, “it would
have been unreasonable for a corporate board to conclude otherwise.”
There is no genuine issue of material fact concerning whether the board reasonably
determined that Mandel’s actions constituted cause. The investigative report and
supporting materials, the authenticity of which Mandel has not challenged, support the
determination that Mandel engaged in material dishonest acts when he contacted outside
parties about acquiring Multiband without consulting with anybody at Goodman,
misappropriated material company property when he provided outside parties with
confidential financial information, and engaged in misconduct through a combination of
these actions. 4
4
Like the district court, we do not consider information obtained through discovery, but
not before the Goodman board, when considering the substantive for-cause issue.
13
Mandel counters by citing to his own deposition and his expert affidavits. We are
not persuaded. Mandel’s deposition testimony is unsupported by any competent evidence
that supports his assertion that he did not reach out to investment bankers and that he did
not proceed without conferring with Goodman. “[M]ere averments” are insufficient for a
party to withstand summary judgment. DLH, 566 N.W.2d at 71.
Importantly, Mandel’s experts do not controvert the authenticity of the materials
obtained in the investigation and do not dispute the confidentiality of the financial
information that Mandel disclosed. Rather, Mandel’s experts generally explain that it was
within Mandel’s duties as CEO and comported with his fiduciary responsibilities to express
concern about Multiband’s financial performance and its future existence. These assertions
are immaterial to the issue of cause, as contractually defined, and thus are not sufficiently
probative to allow reasonable minds to draw different conclusions. See DLH, 566 N.W.2d
at 71; O’Malley v. Ulland Bros., 549 N.W.2d 889, 892 (Minn. 1996) (noting that a fact is
material only “if its resolution will affect the outcome of a case”). To the extent that
Mandel’s experts conclude that the investigative report does not identify any actions that
meet the contractual definition of cause, such conclusory statements do not create a fact
issue precluding summary judgment. See Potter v. Pohlad, 560 N.W.2d 389, 395 (Minn.
App. 1997) (affirming summary judgment and stating that “the conclusory statements of
an expert cannot sustain [appellant’s] claim”), review denied (Minn. June 11, 1997).
Mandel’s contract unambiguously provided that he could be terminated for cause as
“reasonably determined” by the board. We discern no genuine issue of material fact on the
reasonableness of the board’s determination.
14
D. Good Faith and Fair Dealing
Mandel also argues that the district court erred as a matter of law when it determined
that the implied covenant of good faith and fair dealing has not been read into employment
contracts in Minnesota. We disagree.
Mandel cites Hunt. v. IBM Mid Am. Emps. Fed. Credit Union, 384 N.W.2d 853,
858-59 (Minn. 1986), for the proposition that the implied covenant of good faith has been
held inapplicable only in the context of at-will agreements. As Mandel notes, the Hunt
court emphasized that, in the context of at-will agreements, “permanent employment” does
not mean that the employer is obligated to “discharge only in good faith.” Hunt, 384
N.W.2d. at 858. But the Hunt court went on to make a much broader statement of the law
in Minnesota: “Moreover, we have not read an implied covenant of good faith and fair
dealing into employment contracts.” Id.Minnesota courts have consistently declined to read the implied covenant into
employment contracts. See Nordling v. N. States Power Co., 478 N.W.2d 498, 503 (Minn.
1991) (noting that the Minnesota Supreme Court “has not made clear” whether the implied
covenant of good faith and fair dealing exists in employment contracts); Lewis v. Equitable
Life Assurance Soc’y of the U.S., 389 N.W.2d 876, 885 (Minn. 1986) (“We have never
decided whether such a condition of good faith is read into employment contracts.”);
Guercio v. Prod. Automation Corp., 664 N.W.2d 379, 387 (Minn. App. 2003) (“Minnesota
law has not read an implied covenant of good faith and fair dealing into employment
contracts when considering a termination.” (citing Hunt, 384 N.W.2d at 858); Bradley v.
Hubbard Broad., Inc., 471 N.W.2d 670, 675 (Minn. App. 1991) (“Minnesota courts have
15
consistently declined to read a good faith and fair dealing covenant into employment
contracts.”), review denied (Minn. Aug. 2, 1991); Bratton v. Menard, Inc., 438 N.W.2d
116, 119 (Minn. App. 1989) (recognizing that “under Minnesota law there is no implied
covenant of good faith and fair dealing in employment contracts” but remanding on the
issue of whether the “employment handbook has modified the parties’ employment
contract to require good faith in discharge”), review denied (Minn. June 9, 1989).
Mandel did not cite Minnesota authority holding that the implied covenant of good
faith and fair dealing applies to termination provisions in employment contracts. Summary
judgment on this issue was warranted.
We find no genuine issue of material fact on Mandel’s breach-of-contract and
related implied-covenant claims and no material error in the district court’s application of
the law.
II.
Mandel also disputes the district court’s grant of summary judgment on his claims
for unpaid bonuses, stock options, and wages, and his request for a declaratory judgment.
Mandel agrees that these claims all “stand or fall with his contract claims.” Because we
conclude that the district court properly granted summary judgment to Multiband and Hill
on Mandel’s breach-of-contract claim, we do not consider Mandel’s arguments on these
claims.
III.
Mandel next argues that the district court erred in granting summary judgment to
Multiband and Hill on his defamation claim. Defamation plaintiffs in Minnesota must
16
establish four elements: “(1) the defamatory statement was communicated to someone
other than the plaintiff; (2) the statement is false; (3) the statement tends to harm the
plaintiff’s reputation and to lower the plaintiff in the estimation of the community; and
(4) the recipient of the false statement reasonably understands it to refer to [the plaintiff].”
McKee v. Laurion, 825 N.W.2d 725, 729-30 (Minn. 2013) (quotations and citation
omitted).
Mandel’s defamation claim is based on communications between Hill and John
Goodman, the contents of the investigative report, the contents of the termination letter,
and communications from Hill and Goodman to representatives at DirecTV. We agree
with the district court’s conclusion that none of the statements are actionable because they
are either protected by the qualified privilege or are true.
A statement falls within the qualified privilege if it is “made upon a proper occasion,
from a proper motive, and . . . based upon reasonable or probable cause.” Lewis, 389
N.W.2d at 889 (quotation omitted). “[S]tatements made in the course of an employer’s
investigation into employee misconduct are protected by the qualified privilege.” Bahr v.
Boise Cascade Corp., 766 N.W.2d 910, 923 (Minn. 2009). The qualified privilege extends
to an employer’s communication to an employee of the reason(s) for discharge. Lewis, 389
N.W.2d at 890. The question of whether the qualified privilege applies is a question of
law. Id. at 889.
We conclude that the statements communicated among the Goodman board
members, the investigative report, and in Mandel’s termination letter are privileged. The
intra-Goodman statements and investigative report were made upon a proper occasion and
17
with a proper motive because they occurred either immediately before, during, or after the
official investigation into Mandel’s activities. See Bahr, 766 N.W.2d at 923. After
thoroughly reviewing the record, we find that these statements were made with a
reasonable basis. See Lewis, 389 N.W.2d at 889. Additionally, the termination letter,
which was provided to Mandel after the investigation and subsequent board action, falls
squarely within the privilege. See id. at 890. Even though there may have been minor
inaccuracies in certain communications, the presence of such inaccuracies does not defeat
the application of the privilege in this context. See id. at 889. In sum, “the employer has
an important interest in protecting itself and the public against dishonest or otherwise
harmful employees,” and these communications were made in furtherance of that interest.
See Bahr, 766 N.W.2d at 923 (quotation omitted).
To overcome the existence and application of the qualified privilege, Mandel
needed to establish a genuine issue of material fact that the statements were made with
malice. See id. at 920. “Actual malice requires a showing that the defamatory statements
are made . . . from ill will and improper motives, or causelessly and wantonly for the
purpose of injuring the plaintiff.” Id. (quotations omitted). The statement itself or its
alleged falsity cannot establish malice; rather, malice may be shown by “extrinsic evidence
of personal spite, as well as by intrinsic evidence such as the exaggerated language . . ., the
character of the language used, [and] the mode and extent of publication . . . .” Bol v. Cole,
561 N.W.2d 143, 150 (Minn. 1997). Summary judgment is appropriate when a defamation
plaintiff fails to present evidence that raises a genuine issue of material fact as to the
existence of malice. Id. at 150-51.
18
Mandel failed to raise a genuine issue of material fact with regard to the existence
of malice. Mandel argues that the alleged scheme to terminate him for cause is sufficient
evidence of actual malice and cites Bradley, 471 N.W.2d at 675, in support of his assertion.
In Bradley, this court reviewed a jury’s finding that the employer made certain statements
with malice. 471 N.W.2d at 674-75. We held there that the evidence supported the jury’s
conclusion for two reasons. First, we noted the supervisor’s memo that explicitly discussed
“building the appropriate file” to effectuate the employee’s termination for reasons other
than the gross misconduct cited. Id. at 675. Second, we noted that the supervisor conducted
no investigation before she “accused [the employee] of retrieving the memo from her
wastebasket and caused the allegation of gross misconduct to circulate as office gossip.”
Id.Bradley is inapposite. Unlike the plaintiff in Bradley, Mandel has shown no
evidence of discussions about “building the appropriate file” to terminate him for any
reason other than the reasons outlined in the investigative report and termination letter. See
id. There were no preinvestigation rumors circulated about Mandel’s activities; rather,
information was sent only to board members and only after an investigation had been
conducted. See id.Although Mandel has cited to e-mails and other documents that discuss his possible
termination, those matter-of-fact business discussions are not sufficiently probative of
malice to create a genuine issue of material fact. See DLH, 566 N.W.2d at 70 (stating that
reviewing courts are “not required to ignore [the] conclusion that a particular piece of
evidence may have no probative value”). There is no genuine issue of material fact that
19
these statements are privileged. Summary judgment was appropriate. See Bol, 561 N.W.2d
at 150-51.
Mandel next argues that the district court erred when it concluded that certain
statements made to DirecTV were true and therefore not actionable. “Truth is a complete
defense to a defamation action and true statements, however disparaging, are not
actionable.” McKee, 825 N.W.2d at 730 (quotation omitted). “The plaintiff has the burden
of proving falsity in order to establish a successful defamation claim.” Id. “Minor
inaccuracies do not amount to falsity so long as the substance, the gist, the sting, of the
libelous charge is justified.” Id. (quotations omitted). After thoroughly reviewing the
record, we conclude that there is no genuine issue of material fact as to the truth of the
allegedly defamatory statements made by John Goodman and Hill to DirecTV
representatives.
Mandel failed to demonstrate the existence of a genuine issue of material fact, and
the district court did not err in applying the law. Summary judgment on the defamation
claim was appropriate. See STAR Ctrs., Inc., 644 N.W.2d at 76-77.
Affirmed.
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