Margoles v. Hubbart , 111 Wash. 2d 195 ( 1988 )

Andersen, J.—

Facts of Case

This defamation case involves a public official plaintiff and news media defendants. At issue is whether the evidence presented at the summary judgment stage of the case raised a triable issue of fact on the element of actual malice.

The plaintiff, Neil Margóles, was port manager of the Port District of Pend Oreille from November 1, 1978 until his resignation on March 31, 1982. On December 17, 1981, December 24, 1981 and April 8,1982, the Newport Miner, a Newport, Washington newspaper, published articles by reporter James Hubbart that were highly critical of the port manager and the financial affairs of the port district. The articles dealt with the results of a port district audit conducted by the State Auditor.

The December articles were based on a preliminary audit report not generally available to the public. The April 8 article was based on the final and public audit report issued April 2, 1982. Among other things, the final report discussed "deficiencies" in the port manager's claims for reimbursement of travel and promotional hosting, and the salary he received for time he had spent working as a consultant for the Port of Beverly-Royal Slope. This audit report had bluntly declared that "[t]he deficiencies noted were the result of the manager failing to comply with State statutes and local regulations."

The port manager sued the reporter and his marital community, as well as the newspaper publisher, Newport Publications, Inc. For convenience, we will collectively refer to these defendants as "the newspaper" and the plaintiff as "the port manager" even though he no longer occupies that position. Although the port manager also named Bettyjane Hillestad, the Pend Oreille County Auditor and the source of some of the information in the articles as a defendant, she is not a party to this appeal.

The port manager takes issue with a rather broad array of statements contained in the three newspaper articles. Those which he apparently considers to be particularly defamatory are those portions of the articles stating or suggesting that he: (1) made unauthorized private use of the port's vehicle; (2) submitted a letter of resignation on condition that he be held blameless for improprieties in the port's internal affairs; (3) received funds "funneled" to him through a company owned by his wife; (4) "misappropriated" $294 in port funds; and (5) charged the port district for time spent working for another port district.

The newspaper moved for summary judgment on the issue of liability. The trial court declined to dismiss the port manager's action outright. The trial court did, however, grant partial summary judgment in favor of the newspaper to the extent that it ruled the port manager was a public official during his tenure as port manager, a ruling which is not here questioned. The newspaper sought discretionary review in the Court of Appeals. That court granted review and in a published opinion affirmed the general denial of a summary judgment.¹ Relying on the alleged hostility between the reporter who wrote the articles and the port manager, and on the articles' use of the words "funneled" and "misappropriated" to describe transactions concerning the port manager, the Court of Appeals held that there was an inference creating a material issue of fact as to whether the statements were published with actual malice.² We granted discretionary review.

One ultimate issue is presented.

Issue

In this defamation suit, did the Court of Appeals err when it upheld the trial court's ruling generally denying the newspaper's motion for summary judgment?

Decision

Conclusion. We conclude that the Court of Appeals did err in ruling that the use of the words "funneled" and "misappropriated", combined with the claimed hostility between the reporter and the public official, created a material issue of fact as to whether the newspaper published the statements in question with knowledge of their falsity, or with reckless disregard of whether they were false or not. Viewing the evidence in the light most favorable to the port manager, as we do, we nevertheless hold that on the record presented no rational trier of fact could find "clear and convincing evidence" that the articles under scrutiny were made with actual malice, as is required in order to establish a prima facie defamation cause of action.

The determinative law is now well settled in this state. In order to establish a prima facie defamation case, a plaintiff must show falsity, an unprivileged communication, fault and damages.³ When the plaintiff is a public official, as here, the fault to be proved is "actual malice1'.⁴ In this context, "actual malice" means that the statement was made with knowledge of its falsity or with reckless disregard of whether it was false or not.⁵ Recently, and subsequent to the decisions of both the trial court and the Court of Appeals in this case, we decided Herron v. Tribune Pub'g Co., 108 Wn.2d 162, 169-70, 736 P.2d 249 (1987), which collects the legal principles pertinent to the case before us:

The standard of review on appeal of a summary judgment order is de novo, with the reviewing court performing the same inquiry as the trial court. See Del Guzzi Constr. Co. v. Global Northwest Ltd., 105 Wn.2d 878, 882, 719 P.2d 120 (1986); Hartley v. State, 103 Wn.2d 768, 774, 698 P.2d 77 (1985).[⁶] Evidence not presented before the trial court is not considered on appeal. See Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381, 390, 715 P.2d 1133 (1986).

When a defamation claim is brought by a public official regarding statements made about the official's performance of his public duties, the plaintiff must prove that the statements were made with actual malice. New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 11 L. Ed. 2d 686, 84 S. Ct. 710, 95 A.L.R.2d 1412 (1964). The burden of proof for the element of actual malice is "clear and convincing evidence", not the less stringent "preponderance of the evidence" burden ordinarily required in civil suits. New York Times, at 285-86. This heavier burden is imposed at the summary judgment stage as well as at trial; to survive a defendant's summary judgment motion for dismissal, the plaintiff must offer evidence sufficient to permit a reasonable trier of fact to find clear and convincing proof of actual malice. Anderson v. Liberty Lobby, Inc., [477] U.S. [242], 91 L. Ed. 2d 202, 215, 106 S. Ct. 2505 (1986). As with other summary judgment motions, the nonmoving party is entitled to have the evidence viewed in a light most favorable to him and against the moving party. Liberty Lobby, 91 L. Ed. 2d at 216. However, if the plaintiff, as nonmoving party, can only offer a "scintilla" of evidence, evidence that is "merely colorable", or evidence that "is not significantly probative", the plaintiff will not defeat the motion. See Liberty Lobby, 91 L. Ed. 2d at 212; cf. Rye v. Seattle Times Co., 37 Wn. App. 45, 56, 678 P.2d 1282, cert. denied, 469 U.S. 1087 (1984). Moreover, conclusory statements in a plaintiff's affidavit are insufficient; the plaintiff must demonstrate the basis for his assertions. Mansfield v. Holcomb, 5 Wn. App. 881, 886-87, 491 P.2d 672 (1971). The inquiry before this court, then, is whether, in viewing all the evidence in a light most favorable to the [plaintiffs], a reasonable trier of fact could find clear and convincing proof that the defendants published their articles with actual malice.

(Footnote omitted. Italics ours.)

The actual malice standard is subjective in the sense that it focuses on the media defendant's knowledge that the defendant's statement is false or made with reckless disregard of its falsity.⁷ Thus, a public official plaintiff must show that a media defendant "in fact entertained serious doubts as to the truth of his publication." (Italics ours.) St. Amant v. Thompson, 390 U.S. 727, 731, 20 L. Ed. 2d 262, 88 S. Ct. 1323 (1968).⁸ Clear and convincing proof of actual malice cannot be established solely by evidence of personal hostility, vindictiveness or spite.⁹ However, when reviewing the record the court will consider cumulatively such factors as hostility, knowledge that sources are hostile to the plaintiff, failure to investigate, and use of unreliable sources to determine whether a clear and convincing inference of actual malice has been raised.¹⁰

With the foregoing principles in mind, we turn to the evidence in this case. For clarity of analysis, we individually examine the principally disputed statements, keeping also in mind their cumulative effect.

In support of the newspaper's motion for summary judgment, the reporter's affidavit stated that he had "personally ascertained" the facts and that he believed all of the facts in the first two articles to be true, and all of the facts in the third article to be substantially true. Such professions of good faith are unpersuasive if "the publisher's allegations are so inherently improbable that only a reckless man would have put them in circulation."¹¹

Opposing the motion for summitry judgment, the port manager filed his affidavit and two depositions, an affidavit of port commissioner John J. McLaughlin, the State Auditor's final report and other miscellaneous documents.¹²

First, considering the issue of whether the port manager made unauthorized private use of the port district's vehicle, we note that the December 17, 1981 newspaper article said that the preliminary "audit report . . . apparently . . . embraces . . . private use of the port's vehicle ..." (Italics ours.) The December 24, 1981 article then said that "unauthorized use of the port's vehicle ceased to be a problem this week. The 1979 Blazer was in the shop with a blown engine because somebody let it run out of oil."

According to the port manager, the preliminary audit report did not discuss private use of the port's vehicle, and he was fairly certain the reporter had a copy of that report. Since the port manager admits, however, that he was cautioned by the port commissioners after one incident not to make unauthorized use of the port vehicle, we cannot conclude that the statement was published with knowledge of its falsity or with reckless disregard of its truth or falsity. Accordingly, actual malice was not clearly and convincingly established on the basis of statements as to the unauthorized use of the port vehicle.¹³

Turning to the matter of the port manager's letter of resignation, the December 24 article said that "district manager Neil Margóles submitted a letter of resignation, effective March 31, on condition that he be held blameless for any improprieties in the port's internal affairs." The April 8 article contained a similar statement. The actual paragraph from the port manager's letter of resignation so referred to reads as follows:¹⁴

The Board of Commissioners, upon accepting this resignation pursuant to their demands, acknowledge that termination is not based on misconduct or misrepresentation on my part, but is desired to effect a change of direction in Port policy and attitude and for which the Commissioners believe a change of management can better induce.

This same paragraph was also quoted later in the December 24 article. It cannot be said that the article incorrectly characterized the effect of the letter, let alone that there is any indication of actual malice in connection with it. When a defamatory statement is true, no actual malice exists.¹⁵

As to the next controverted item, the use of the word "funneled" in one of the articles, the Court of Appeals concluded that this amounted to significant evidence of actual malice.¹⁶ We disagree. The December 24 article reads: "At least $12,750 was funneled to him through a company called Thomas Contracting, evidently by consent of the port commissioners." The Port of Beverly-Royal Slope paid money for consultant fees to Thomas Contracting, which in turn paid the port manager. Also, according to the article, the port manager's wife was the president of Thomas Contracting. "Funnel" means "to serve as a means for the transmission or direction of".¹⁷ We fail to see anything in the record which establishes that the use of the word "funneled" in this context is even false. In any event, the "sting" of the reporter's story is true.¹⁸

The Court of Appeals also considered the use of the word "misappropriated" particularly significant in this case.¹⁹ As to this, the April article said:

A final report by the state examiners contains a laundry list of irregularities and discrepancies in expense account vouchers and other payments to Margóles. It even states that he owes the port a refund of at least $294 in misappropriated funds.

In the State Auditor's final report, it was recommended that the port manager reimburse $293.94 to the port for 24 hours of time he had been paid by the Port of Pend Oreille and which the auditor questioned. The auditor in effect opined that the hours should have been billed to the Port of Beverly-Royal Slope, for which the port manager also acted as consultant. The Board of Commissioners disagreed with the auditor's recommendation that the port manager reimburse the port and this the article duly noted.

As with "funneled", using the word "misappropriated" in this context appears to be no more than a highly critical way of describing what the auditor's final report said. The First Amendment permits "vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials." New York Times Co. v. Sullivan, 376 U.S. 254, 270, 11 L. Ed. 2d 686, 84 S. Ct. 710, 95 A.L.R.2d 1412 (1964).²⁰ Absent significant probative evidence of actual malice, the use of the word "misappropriated" in this context is not actionable.

The last of the principally disputed statements in the newspaper is the comment that the final audit report "found four instances in which [the port manager] was paid by both port districts for the same work and indicated that there could have been more." The final audit report does in fact question four instances of time charged to the Port of Pend Oreille that the auditor thought, particularly in at least three of those instances, were more properly chargeable to the Port of Beverly-Royal Slope. Then, as the auditor's report concludes:²¹

Additionally, due to the lack of records, we cannot totally identify if any time was double charged by the manager to the Port of Pend Oreille and the Port of Beverly-Royal Slope.

Following his reportorial style, the reporter used the foregoing as a quotation immediately after his own characterization of the auditor's report. The article thus presented the reader with both a completely accurate version, and one perhaps somewhat colored version, of those particular facts. Even assuming some falsity of this statement to have been demonstrated by the final report, again the port manager does not present significantly probative evidence of any actual malice on the newspaper's part. As we recently made clear in the Tacoma News Tribune case,

The public figure's critics have no affirmative duty to search out the truth or to substantiate their statements, nor are they required to corroborate their sources' information. The only limitation on free expression is liability imposed for false and damaging statements made with actual knowledge of or in reckless disregard of their falsity.

Herron v. Tribune Pub'g Co., 108 Wn.2d 162, 171, 736 P.2d 249 (1987), citing Garrison v. Louisiana, 379 U.S. 64, 79, 13 L. Ed. 2d 125, 85 S. Ct. 209 (1964).

Whether viewed separately or cumulatively, neither the foregoing statements nor the others referred to by the port manager in his brief constitute proof of actual malice by the requisite "clear and convincing" standard. The newspaper articles in this case are a far cry from being "so inherently improbable that only a reckless man would have put them in circulation." St. Amant v. Thompson, 390 U.S. 727, 732, 20 L. Ed. 262, 88 S. Ct. 1323 (1968), quoted in Herron v. Tribune Pub'g Co., supra at 172. No rational trier of fact could find by clear and convincing evidence that the articles in question, in whole or part, were published with reckless disregard of their truth or falsity.

Finally, there are two prior opinions of this court that require comment though both are distinguishable from the present case.

In Chase v. Daily Record, Inc., 83 Wn.2d 37, 515 P.2d 154 (1973), this court found sufficient evidence of actual malice to defeat the defendant's motion for summary judgment. That case is distinguishable on the facts.

In Chase, a commissioner for the Kittitas County Port District sued a newspaper concerning an article which, as it happens, was also written about a port district audit. The audit recommended that the commissioner repay money to the port district because it said he had been reimbursed for a trip he never took. In point of fact, the commissioner had received no such reimbursement. Instead, legal counsel had advised him that paying the money would be less expensive than fighting it in court, so the commissioner paid it. Before publishing its story on the repayment, however, the newspaper had known the true facts, yet published the story anyway and without mentioning the commissioner's denial that he had ever received the funds in question. This court held that since the newspaper knew this from the commissioner's statement to the managing editor, the article created a false impression of his defalcation of public moneys. Accordingly, it was held that the commissioner had made out a case of actual malice with convincing clarity and that his case against the newspaper should have been allowed to go to the jury.²²

The evidence of actual malice is far less clear here than it was in Chase. The most questionable of the published statements complained of in this case is probably the reference to the four instances in which the port manager double charged the port districts, and which the reporter attributed to the final audit report. While the story somewhat colored the language of the final report, the report's actual language, which was quoted later in the same article, is such that it does sustain an interpretation that some double charging may have occurred.

The case before us is also distinguishable from our recent decision in Herron v. KING Broadcasting Co., 109 Wn.2d 514, 746 P.2d 295 (1987), reh'g granted July 12, 1988. There, a majority of this court concluded that under the facts of that case a county prosecuting attorney had presented "abundant"²³ circumstantial evidence of actual malice in his action against a television news reporter and television broadcast company, and that it was sufficient to get past a defense motion for summary judgment. That case and the case before us have as a common denominator allegations of hostility between the reporter and public official, including a claimed threat "to get" the public official. But for a public official to claim, as here, that a reporter said "I'll get you" or words to that effect, is not by itself a safe conduct pass past a defense motion for summary judgment in a defamation action. A reporter can "get" somebody, to use the vernacular, by telling the truth as well as by resorting to defamation.

As recently explained by the full District of Columbia Circuit Court of Appeals in Tavoulareas v. Piro, 817 F.2d 762, 795 (D.C. Cir.), cert. denied, U.S. —, 98 L. Ed. 2d 151, 108 S. Ct. 200 (1987), in affirming the trial court's dismissal of a plaintiff's libel action wherein the reporter had threatened "to get" the plaintiff:

These statements, not unknown to the vernacular of litigators, seem to us well within the everyday parlance of an investigative reporter. They may reasonably be interpreted as revealing that [the reporter] had adopted an adversarial stance toward [the plaintiff]. But, as in other professions, an adversarial stance is fully consistent with professional, investigative reporting. It would be sadly ironic for judges in our adversarial system to conclude, . . . that the mere taking of an adversarial stance is antithetical to the truthful presentation of facts. We decline to take such a remarkable step in First Amendment jurisprudence.

Tavoulareas, at 795. As Tavoulareas also explained,

It is settled that ill will toward the plaintiff or bad motives are not elements of actual malice and that such evidence is insufficient by itself to support a finding of actual malice. . . . The appropriateness of such evidence must be determined on a case-by-case basis, bearing in mind that evidence of ill will or bad motives will support a finding of actual malice only when combined with other, more substantial evidence of a defendant's bad faith.

(Footnote and citations omitted.) Tavoulareas, at 795. We hold here, as the court held in Tavoulareas, that " [t]he ill-will or bad-motive evidence in this record ... is lacking in probative value." Tavoulareas, at 795. See Herron v. Tribune Pub'g Co., supra at 169-70.

In Herron v. KING Broadcasting Co., supra, it was the majority's opinion that the evidence in that case indicated that there were factual issues as to whether the media defendants disregarded information in official reports that had been read, relied on questionable sources and destroyed evidence. That is not present in the case before us.

Viewing the evidence herein in the light most favorable to the plaintiff port manager, we hold that a reasonable trier of fact could not find clear and convincing proof that the newspaper published the articles in question with actual malice.

The remaining matters argued in the briefs have been considered but are deemed nonmeritorious. For example, as to the allegedly defamatory statements concerning so-called "secret" files of the port district, the port manager presents evidence of falsity, but no evidence whatsoever of actual malice, much less the required evidence of convincing clarity.

The order of the trial court denying the motions for summary judgment of dismissal by the defendants Hubbart and Newport Publications, Inc., and the decision of the Court of Appeals, are hereby reversed.

Pearson, C.J., and Utter, Brachtenbach, Dolliver, Callow, and Durham, JJ., concur.

1 Margoles v. Hubbart, 46 Wn. App. 832, 733 P.2d 554 (1987).

2 Margoles, at 835.

3 Mark v. Seattle Times, 96 Wn.2d 473, 486, 635 P.2d 1081 (1981), cert. denied, 457 U.S. 1124 (1982).

4 New York Times Co. v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710, 95 A.L.R.2d 1412 (1964).

5 New York Times, at 280. See also Tilton v. Cowles Pub'g Co., 76 Wn.2d 707, 722-25, 459 P.2d 8 (1969), cert. denied, 399 U.S. 927 (1970).

6 See also Bose Corp. v. Consumers Union of United States, Inc., 466 U.S. 485, 80 L. Ed. 2d 502, 104 S. Ct. 1949, reh'g denied, 467 U.S. 1267 (1984), which emphasized the need for independent review in defamation cases.

7 Herron v. Tribune Pub'g Co., 108 Wn.2d 162, 170, 736 P.2d 249 (1987); Herron v. KING Broadcasting Co., 109 Wn.2d 514, 523, 746 P.2d 295 (1987), reh'g granted July 12, 1988. See also R. Smolla, Defamation § 3.14[1] (1986).

8 Quoted in Herron v. Tribune Pub'g Co., supra at 171; Herron v. KING Broadcasting Co., supra at 523.

9 Herron v. KING Broadcasting Co., supra at 523-24; McDonald v. Murray, 83 Wn.2d 17, 19, 515 P.2d 151 (1973); see also R. Smolla § 3.16.

10 Herron v. Tribune Pub'g Co., supra at 172; Herron v. KING Broadcasting Co., supra at 524-25; see also Rye v. Seattle Times Co., 37 Wn. App. 45, 54, 678 P.2d 1282, review denied, 102 Wn.2d 1004, cert. denied, 469 U.S. 1087 (1984).

11 Herron v. Tribune Pub’g Co., supra at 172, quoting St. Amant v. Thompson, 390 U.S. 727, 732, 20 L. Ed. 2d 262, 88 S. Ct. 1323 (1968).

12 Although the preliminary audit report and the depositions of the reporter and the State Auditor have now been filed, those materials were not considered by the trial court and, therefore, may not be considered on appeal. Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381, 390, 715 P.2d 1133 (1986); Herron v. Tribune Pub'g Co., supra at 169.

13 See New York Times, at 279-80.

14 Exhibit 4, First Deposition of Margóles.

15 Driscoll v. Block, 3 Ohio App. 2d 351, 366, 210 N.E.2d 899 (1965); Bell v. Courier-Journal & Louisville Times Co., 402 S.W.2d 84, 87 (Ky. 1966); Fendler v. Phoenix Newspapers Inc., 130 Ariz. 475, 480, 636 P.2d 1257 (Ct. App. 1981). See generally R. Smolla § 5.08.

16 Margoles v. Hubbart, 46 Wn. App. 832, 835, 733 P.2d 554 (1987).

17 Webster's Third New International Dictionary 922 (1971).

18 See Mark v. Seattle Times, 96 Wn.2d 473, 494, 635 P.2d 1081 (1981), cert. denied, 457 U.S. 1124 (1982); Herron v. KING Broadcasting Co., supra at 522.

19 Margoles, at 835.

20 See also Tavoulareas v. Piro, 817 F.2d 762, 795 (D.C. Cir.) ("an adversarial stance is fully consistent with professional, investigative reporting."), cert. denied, _U.S__, 98 L. Ed. 2d 151, 108 S. Ct. 200 (1987).

21 Exhibit 9, First Deposition of Margoles, at 3.

22 Chase v. Daily Record, Inc., 83 Wn.2d 37, 38-39, 44-45, 515 P.2d 154 (1973).

23 Herron v. KING Broadcasting Co., 109 Wn.2d 514, 525, 746 P.2d 295 (1987), reh'g granted July 12,1988.