Connelly v. Northwest Publications, Inc. , 1989 Minn. App. LEXIS 1299 ( 1989 )

OPINION

GARDEBRING, Judge.

The trial court granted respondents’ motion for summary judgment on the issue of actual malice and this appeal followed. We affirm.

FACTS

In late 1969 or early 1970, appellant Ray Connelly obtained an interest in Apple Valley Development Partnership in which Robert Daly was also a partner. Connelly was one of seven partners involved in the Development Partnership. The partnership's purpose was to purchase property and resell it for profit.

In the late 1970’s, Connelly was first appointed as a condemnation commissioner in Dakota County. At no time subsequent to his first appointment was any property which he owned personally or through Apple Valley Development Partnership condemned. While serving as a condemnation commissioner he remained a member of the Apple Valley Development Partnership.

In the spring of 1983, Connelly was appointed as commissioner on property owned in part by Robert Daly. Connelly made disclosure to the State of Minnesota by contacting Lou Robards, the assistant attorney general on the case. He explained his business relationship with Daly. Con-nelly explained he had no business interest in the condemned property and Robards made no objection to Connelly serving as a commissioner.

In the spring of 1984, respondent St. Paul Pioneer Press and Dispatch reporters Allen Short and Lucy Dalglish obtained a copy of an FBI memorandum relating to an investigation of the condemnation process in Dakota County. The FBI memorandum contained names of Dakota County judges and condemnation commissioners. It identified condemned parcels and specified potential conflicts. Connelly’s name was not mentioned in the memorandum.

Respondents’ investigation identified four commissioners who either owned land involved in condemnation proceedings or served in proceedings involving property of relatives or business associates. They learned Connelly had been commissioner in at least two condemnation proceedings involving property in which two of his partners, Robert and Leo Daly, had an interest. Respondents interviewed the four commissioners. When interviewed, Connelly told respondents of his conversation with Ro-bards.

On August 26, 1984, the St. Paul Pioneer Press and Dispatch published the article, “Land Sale Conflicts Uncovered.” The article stated the authors had been informed of an FBI investigation of the condemnation process in Dakota County. It also identified apparent conflicts of interest and discussed the positions of several officials, including Connelly’s, on the alleged conflicts.

Connelly alleged nine statements in the article were defamatory. Respondents moved for summary judgment arguing Connelly could not show the article was defamatory or that actual malice existed. The trial court found an issue of material fact existed as to the claim of defamation; however, the trial court granted respondents’ summary judgment on the issue of actual malice.

ISSUE

Did the trial court err in granting summary judgment on the issue of actual malice?

ANALYSIS

Standard of Review

On appeal from summary judgment, the function of the appellate court is limited to determining whether there are any genuine issues of material fact and whether the trial court erred in its application of the law. Betlach v. Wayzata Condominium, 281 N.W.2d 328, 330 (Minn.1979). The evidence must be viewed in the light most favorable to the nonmoving party. Abdallah, Inc. v. Martin, 242 Minn. 416, 424, 65 N.W.2d 641, 646 (1954).

Actual Malice

The trial court granted summary judgment because Connelly failed to make an adequate showing of actual malice. See New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). The first amendment precludes damages for a defamed public official unless the statement was made with actual malice. Actual malice is defined as “knowledge that [the statement] was false or * * * reckless disregard of whether it was false or not.” Id. at 279-80, 84 S.Ct. at 725-26. This showing must be made with convincing clarity. Id. at 285-86, 84 S.Ct. at 728-29.

Reckless conduct is not measured by whether a reasonably prudent person would have published or would have investigated before publishing. St. Amant v. Thompson, 390 U.S. 727, 731, 88 S.Ct. 1323, 1325, 20 L.Ed.2d 262 (1968). Instead, the defamatory statement must have been published with an awareness of its probable falsity, as demonstrated by “sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.” Hirman v. Rogers, 257 N.W.2d 563, 566 (Minn.1977) (quoting St. Amant, 390 U.S. at 731, 88 S.Ct. at 1325). Moreover, when the factual question concerns actual malice

the appropriate summary judgment question will be whether the evidence in the record could support a reasonable jury finding either that the plaintiff has shown actual malice by clear and convincing evidence or that the plaintiff has not.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-56, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986) (footnote omitted). We acknowledge Anderson interprets the Federal Rules of Civil Procedure; however, its reasoning is persuasive in this case.

As a preliminary matter, it should be noted Connelly argued that summary judgment is inappropriate, when, as in this case, the defendant’s state of mind is at issue. We disagree. We find unconvincing Con-nelly’s assertion that case law interpreting qualified privileges and common law malice guide our decision on this issue. The cases cited by Connelly do not construe actual malice in the constitutional sense. See Frankson v. Design Space International, 394 N.W.2d 140, 144 (Minn.1986); Lewis v. Equitable Life Assurance Society, 389 N.W.2d 876, 890-91 (Minn.1986). Thus, they do not consider the New York Times constitutional guarantees accorded defendants, and are therefore irrelevant to our analysis.

The Supreme Court presented certain examples of conduct that might constitute actual malice:

Professions of good faith [on the part of the publisher] will be unlikely to prove persuasive, for example, where a story is fabricated by the defendant, is the product of his imagination, or is based wholly on an unverified anonymous telephone call. Nor will they be likely to prevail when the publisher’s allegations are so inherently improbable that only a reckless man would have put them in circulation.

St. Amant, 390 U.S. at 732, 88 S.Ct. at 1326. Actual malice is not fully encompassed in one infallible definition. Id. at 730, 88 S.Ct. at 1325. These examples of actual malice, however, show Connelly must overcome a substantial burden of proof to prevail in his claim.

Respondents neither fabricated this article nor imagined Connelly’s alleged conflict. In fact, the record shows the reporters conducted an extended investigation prior to its preparation. After being informed of the FBI investigation into the condemnation process in Dakota County, respondents reviewed hundreds of Department of Transportation files on condemned property, spoke to county and state officials, and interviewed Connelly and other condemnation commissioners. Nonetheless, respondents’ preparation is not dis-positive of the issue of actual malice.

To show respondents in fact entertained serious doubts as to the truth of their publication, Connelly presented circumstantial evidence. See Harte-Hanks Communications, Inc. v. Connaughton, — U.S. —, 109 S.Ct. 2678, 2686, 105 L.Ed.2d 562 (1989). Connelly relies upon a large number of factors, including failure to investigate prior to publication, lack of a deadline, doubt as to veracity of a source, inherent improbability of the article, selecting the most damaging inferences, suppressing evidence most favorable to Connelly, motive or intent behind the story, failure to retract, and respondents’ knowledge of likely harm following publication.

The record reveals most of the factors examined by Connelly fail to provide evidence of actual malice. Four factors, while not rising to the requisite level of clear and convincing evidence, are more persuasive and are discussed below.

First, Connelly. argues respondents failed to adequately investigate the article. Mere failure to investigate an article before publication can never, standing alone, establish actual malice. See Speer v. Ottaway Newspapers, Inc., 828 F.2d 475, 478 (8th Cir.1987), cert. denied, 485 U.S. 970, 108 S.Ct. 1247, 99 L.Ed.2d 445 (1988). Failure to investigate may provide evidence of negligence. It does not establish knowledge of falsity or serious doubt about the truth of the story. See Fitzgerald v. Minnesota Chiropractic Association, Inc., 294 N.W.2d 269, 270 (Minn.1980) (citing Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974)).

Connelly asserts that had respondents followed up on Connelly’s discussion with Robards, they would have discovered Robards waived Connelly’s conflict with his business partner. Failure to do so, according to Connelly, creates an issue of fact as to respondents’ reckless disregard for the truth. We disagree. The discovery of Ro-bards’ waiver would not have significantly changed the nature of the article. Serving as a condemnation commissioner, Connelly was still in a position, waiver or no waiver, to benefit his business partner by determining the value of property. Moreover, during respondents’ research they discovered Connelly served as commissioner in at least one other proceeding in which his partner had an interest. On this occasion he did not contact Robards. While possibly negligent in not discussing the alleged waiver of conflict with Robards, respondents’ failure to contact him does not show respondents entertained serious doubts as to the truth of their assertions.

Second, Connelly argues the article’s inherent improbability constitutes sufficient evidence to preclude summary judgment. A defendant is not likely to prevail when its “allegations are so inherently improbable that only a reckless man would have put them in circulation.” St. Amant, 390 U.S. at 782, 88 S.Ct. at 1326. Connelly’s argument is without merit. Documents from the Department of Transportation and an FBI investigation and report indicated conflicts of interest existed in Dakota County. Moreover, Connelly served as commissioner on two condemnation cases involving property in which his partners had ownership interests. Connelly’s involvement in possible conflicts of interest was therefore not inherently improbable.

Connelly also asserts respondents’ use of unreliable sources and their failure to retract the article are probative of actual malice. “[Rjecklessness may be found where there are obvious reasons to doubt the veracity of the informant or the accuracy of his reports.” Id. (footnote omitted). In this case, however, respondents used an FBI report, corroborated by research of Department of Transportation documents, the records of the Dakota County recorder and auditor, and interviews with Dakota county officials and condemnation commissioners to support their article. The record does not indicate that obvious reasons existed for respondents to doubt the accuracy or trustworthiness of their sources.

Furthermore, respondents’ failure to retract the article is not probative of actual malice. Indeed, in this case respondent’s decision not to retract after discussing Connelly’s retraction demand provides some evidence they reasonably believed Connelly had not been defamed. See New York Times, 376 U.S. at 286-87, 84 S.Ct. at 729.

Summary judgment was properly granted. There is insufficient evidence to show that respondents had actual knowledge that any information in the article was false, or that respondents entertained serious doubts as to the truth of the information published. While respondents were perhaps negligent in failing to interview Robards, that alone is insufficient evidence to show actual malice.

DECISION

The trial court correctly granted summary judgment for respondents.

Affirmed.