Ray v. Connell

April 26 2016
DA 15-0543
Case Number: DA 15-0543
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 95
JERRY T. RAY,
Plaintiff and Appellant,
v.
MARTIN R. CONNELL,
Defendant and Appellee.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV-14-0765
Honorable Rod Souza, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Jack R. Stone, Attorney at Law, Lewistown, Montana
For Appellee:
Brian L. Taylor, Jaclyn S. Laferriere, Hall & Evans, LLC,
Billings, Montana
Submitted on Briefs: March 9, 2016
Decided: April 26, 2016
Filed:
__________________________________________
Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Jerry Ray (Ray) appeals from an order and memorandum entered by the Thirteenth
Judicial District Court, Yellowstone County, granting Martin Connell’s (Connell) two
motions for partial summary judgment and renewed motion for summary judgment. We
affirm.
¶2 Ray presents the following dispositive issues for review:
1. Did the District Court err in granting Connell summary judgment on
Ray’s defamation claim based on a conversation between Connell and
Jim Ronquillo (Ronquillo)?
2. Did the District Court err in granting Connell summary judgment on
Ray’s defamation claim based on comments Connell made at two
Billings City Council meetings?
3. Did the District Court err in granting Connell summary judgment on
Ray’s claims of tortious interference with business interests and general
damages for mental anguish and suffering based on Connell’s alleged
defamation of Ray’s character?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Ray and Connell are both real estate agents. Ray and Connell each own land in
the East Billings Urban Revitalization District (EBURD). EBURD is a zoning district in
the industrial area of Billings, which has adopted a master plan and code (EBURD Code)
to regulate development and renewal in the area. Property owners within EBURD also
make up a non-profit organization called the Billings Industrial Revitalization District
(BIRD). BIRD advocates for development within EBURD. Connell is president of
BIRD. In May 2013, Ray requested two variances from the EBURD Code in order to
develop property he owns located within the district. The Board of Adjustments denied
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one variance request and granted the other. BIRD and several landowners appealed the
granted variance. Ray appealed the denied variance. The EBURD Code and the outcome
of Ray’s two variance requests generated contention between Ray and Connell. Connell
is a proponent of the EBURD Code and Ray is a vocal opponent.
¶4 Ray wrote a letter to the Billings City Council asking the Council to rescind or
modify the EBURD Code. The Billings City Council held a meeting on October 7, 2013,
and discussed the EBURD Code. According to that meeting’s transcript, Connell
addressed the Council and commented on Ray’s petition to rescind or modify the
EBURD Code. Connell said, “I sent [the City Council] a letter last week kind of
outlining the Jerry T. Ray situation.” Connell continued, “[T]he simplest way to
summarize Jerry T. Ray is he’s like a broken watch. He’s right twice a day, and he
in-fills a lot of stuff. So there’s a lot of things that you’ve been told that are not factual.”
¶5 At another Billings City Council meeting, held on January 6, 2014, the minutes
reflect that Ray addressed the Council and said he wanted to talk about the first two
phases of EBURD in which he owned property. He advocated for rezoning the EBURD
back to “Controlled Industrial” because the EBURD Code is too stringent, complying
with it is too expensive, and its provisions discourage development. The minutes show
that Connell later spoke and called himself “public enemy #1 [to Ray’s] petition.”
Connell accused Ray of making misrepresentations and invited Ray to follow city
procedures and buy the required permits. Connell said Ray’s criticisms of the EBURD
Code were “just simply not true.” The minutes show Connell said “if they held a hearing
with sworn testimony, it would be found that what Mr. Ray had told Council was not
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true.” Finally, the minutes indicate Connell accused Ray of having ex-parte
communication with all of the Board of Adjustments members prior to their ruling on his
variance requests and giving them factually incorrect information to influence their
decision. Connell admitted he was not at the Board of Adjustments meeting when Ray’s
requests were considered because Ray “had turned his name into the Board of Realty for
malpractice.” As a result, Connell “had to go before the Board of Realty, who dismissed
the complaint with prejudice.” Connell concluded, “The bottom line was there were
seven criteria to grant a variance, and Mr. Ray only qualified for one—a parking lot; but
the board granted it.”
¶6 Ray filed suit against Connell alleging Connell’s comments during these two
meetings constituted defamation of his character. Additionally, Ray accused Connell of
telling Ronquillo, a Billings City Councilman, that Ray had stolen gates from Connell’s
business, Pierce Packing, and was keeping them at his residence. This accusation, Ray
argued, also constituted defamation and Ray accused Ronquillo of spreading the rumor.
On April 24, 2014, Ronquillo signed an affidavit in which he attested Connell told him
that Ray stole gates from Connell’s business and had them at his home. In the affidavit,
Ronquillo attested Connell’s statement about Ray stealing gates was “defamation of Jerry
T. Ray’s character” and “this untrue statement could cause Jerry T. Ray financial harm as
Jerry is a Realtor and the truth is paramount in the real estate profession.” Later, during a
deposition taken on March 12, 2015, Ronquillo testified that he did not read the affidavit
fully before signing it, saying, “I probably didn’t read the whole doggone thing, which is
my fault,” and did not recognize the document until his signature was pointed out.
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During his deposition, Ronquillo contradicted many of the statements in his affidavit. He
testified he believed that Connell’s statement about Ray stealing gates was a joke, not
defamation. Ronquillo testified that he conveyed Connell’s story only to Ray and that he
did not believe the accusation could cause Ray financial harm because he had not told
anyone else.
¶7 Ray claimed punitive damages, general damages based on a lost real estate
commission, costs, attorney fees and expenses for defamation. Ray claimed that he lost a
real estate commission because Donald Janich, a ranch-owner, heard Connell’s comments
while watching a Billings City Council meeting on television and, afterwards, decided
not to allow Ray to list his ranch. Donald Janich’s ranch later sold, which, according to
Ray’s third amended complaint, resulted in damages totaling “$82,500.00 in lost
commission from a real estate transaction less any costs of split commission with Donald
R. Janich.” Ray included an additional claim in his second amended complaint: Ray
claimed that Connell’s same allegedly-defamatory conduct entitled him to an unidentified
amount of damages for tortious interference with business interests. Ray included an
additional claim in his third amended complaint for $400,000 in general damages for
mental anguish and suffering.
¶8 On August 10, 2015, after considering the briefs, pleadings, and papers on file
and arguments of counsel, the District Court granted Connell’s two motions for partial
summary judgment and renewed motion for summary judgment. The District Court held
that: 1) the absolute privilege of § 27-1-804(2), MCA, applied to the statements Connell
made at the Billings City Council meetings and protected them from constituting
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defamation; 2) Connell’s statement to Ronquillo was not defamation because, according
to Ronquillo’s deposition, which is controlling, it was a joke; and 3) Connell was entitled
to summary judgment on Ray’s claims of tortious interference and mental anguish
damages because the underlying conduct for those claims was the same conduct that the
Court determined was not defamatory and entitled Connell to summary judgment. Ray
appeals.
STANDARD OF REVIEW
¶9 We review summary judgment orders de novo, performing the same analysis as
the district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d
186 (citation omitted). Summary judgment is appropriate where “the pleadings, the
discovery and disclosure materials on file, and any affidavits show that there is no
genuine issue as to any material fact and that the movant is entitled to judgment as a
matter of law.” M. R. Civ. P. 56(c)(3).
DISCUSSION
¶10 1. Did the District Court err in granting Connell summary judgment on Ray’s
defamation claim based on a conversation between Connell and Ronquillo?
¶11 Ray claims Connell defamed him by communicating an accusation of theft to
Ronquillo. Defamation is effected by libel or slander. Section 27-1-801, MCA. “Libel
is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed
representation that exposes any person to hatred, contempt, ridicule, or obloquy or causes
a person to be shunned or avoided or that has a tendency to injure a person in the person’s
occupation.” Section 27-1-802, MCA. “Slander is a false and unprivileged publication
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other than libel that: 1) charges any person with crime . . .” or “3) tends directly to injure
a person in respect to the person’s . . . business, either by imputing to the person general
disqualification in those respects that the office or other occupation peculiarly requires or
by imputing something with reference to the person’s office, profession, trade, or
business that has a natural tendency to lessen its profit . . . .” Section 27-1-803, MCA.
For defamatory words to be actionable, they “must be of such nature that the court can
presume as a matter of law that they will tend to disgrace and degrade [the plaintiff] or
cause him to be shunned and avoided. It is not sufficient, standing alone, that the
language is unpleasant and annoys or irks him, and subjects him to jests or banter, so as
to affect his feelings.” McConkey v. Flathead Elec. Coop., 2005 MT 334, ¶ 45, 330
Mont. 48, 125 P.3d 1121 (citing Wainman v. Bowler, 176 Mont. 91, 96, 576 P.2d 268,
271 (1978)).
¶12 Here, Connell’s statement to Ronquillo accused Ray of a crime of stealing gates.
Ronquillo’s affidavit attested Connell’s statement was defamatory. However, Ronquillo
contradicted his affidavit statements during his deposition and said he thought Connell’s
accusation that Ray stole gates was a joke. A joke is not defamatory and, therefore, not
actionable. Although it may have been unpleasant, annoying, or irksome, the joke about
Ray stealing gates did not disgrace or degrade Ray or cause him to be shunned or avoided
and is not sufficient.
¶13 Ray argues that the discrepancy between Ronquillo’s affidavit and deposition
testimony raised a genuine issue of material fact—whether Connell’s accusation was a
joke or sincere—which precluded the District Court from granting summary judgment.
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However, “[w]hen statements in an affidavit submitted pursuant to Rule 56(e),
M.R.Civ.P., are repudiated in a later deposition, the affidavit statements do not raise a
genuine issue of material fact.” Meadow Lake Estates Homeowners Ass’n v. Shoemaker,
2008 MT 41, ¶ 46, 341 Mont. 345, 178 P.3d 81 (quoting Herron v. Columbus Hosp., 284
Mont. 190, 195, 943 P.2d 1272, 1275 (1997) (In Herron, Herron sued Columbus Hospital
after being injured by an automatic door entering a building Columbus Hospital owned.
To oppose Columbus Hospital’s motion for summary judgment, Herron submitted an
affidavit of Lyle Skinner, a Columbus Hospital maintenance employee. Lyle Skinner
was later deposed and contradicted several of the statements he attested to in his affidavit.
In Meadow Lake Estates, we applied the same principle outlined in Herron—a witness’s
later deposition controls where it, at least in part, repudiates statements made in the
witness’s earlier affidavit—to a party to the litigation where the party’s later deposition
contradicted an earlier attested affidavit.).
¶14 Ronquillo signed his affidavit on April 24, 2014, and repudiated those statements
in a deposition taken on March 12, 2015. Ronquillo’s later deposition testimony—that he
believed Connell was joking when he told Ronquillo that Ray stole gates—controls.
Ronquillo’s deposition testimony clearly contradicts his earlier affidavit, which he
admitted he signed without thoroughly reviewing and did not initially recognize; thus the
contradictory statements do not raise a genuine issue of material fact. Connell was
entitled to judgment as a matter of law.
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¶15 2. Did the District Court err in granting Connell summary judgment on Ray’s
defamation claim based on comments Connell made at two Billings City Council
meetings?
¶16 A privileged publication is one made in any “official proceeding authorized by
law.” Section 27-1-804(2), MCA. The City of Billings Charter creates “a City council of
the City of Billings composed of ten (10) Councilmembers.” Section 3.02. The Billings
Municipal Code provides that “[t]he city council shall hold a regular meeting for the
transaction of city business on the second and fourth Mondays in each month” and that
“[t]he mayor or any three (3) councilmembers may request” a special meeting. Section
2-211. A “regular meeting of the Great Falls city commission” constitutes an official
proceeding authorized by law. Skinner v. Pistoria, 194 Mont. 257, 264, 633 P.2d 672,
676 (1981). Here, applying the City of Billings Charter, its Municipal Code, and Skinner
the District Court held “a meeting or special meeting of the Billings City Council is also
such an official proceeding.” The District Court was correct in concluding that Billings
City Council meetings, both regularly scheduled and specially called, constitute official
proceedings authorized by law as contemplated in § 27-1-804(2), MCA, and
communications during those meetings are privileged.
¶17 “One requisite of a defamation action is that the communication must be
unprivileged. A privileged communication is one which, except for the circumstances
under which it is made, may be defamatory and actionable.” Skinner, 194 Mont. at 261,
633 P.2d at 675 (citation omitted). The privilege created by § 27-1-804(2), MCA, is an
absolute privilege against liability for defamation and is therefore unaffected by the
presence of malice. Skinner, 194 Mont. at 263, 633 P.2d at 675-76 (citations omitted).
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The privilege covers critical expressions made at official meetings authorized by law that
are responsible for the interest being expressed. Skinner, 194 Mont. at 263, 633 P.2d at
676.
¶18 Ray claims Connell defamed him during two Billings City Council meetings by
maliciously accusing Ray of not telling the truth. This, he argues, slandered him and
negatively impacted Ray’s business as a real estate agent. The meeting on October 7,
2013, was a Billings City Council Work Session and the meeting on January 6, 2014, was
a Billings City Council Special Meeting. We agree with the District Court’s conclusion
that both meetings constituted official proceedings authorized by law. The Billings City
Council is responsible for transacting city business and the City of Billings adopted the
EBURD Code, which was a topic at both meetings. We agree with the District Court’s
conclusion that the Billings City Council is responsible for interests related to the
EBURD Code.
¶19 At both meetings, Connell accused Ray of criticizing the EBURD Code provisions
he disliked by conveying information to the Council that was “not factual,” “not true,” or
“simply not true.” He accused Ray of having inappropriate, ex-parte communications
with the Board of Adjustments members and having “turned him in” to the Board of
Realty for malpractice. Connell also referred to himself as public enemy number one to
Ray’s petition. These comments constitute critical expressions about Ray and his petition
to rescind or modify the EBURD code and may have been arguably defamatory and
actionable. However, because they were communicated to the body responsible for the
interest being expressed at an official proceeding authorized by law, they were absolutely
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privileged under § 27-1-804(2), MCA. Whether the comments were malicious is
irrelevant because the privilege covers both malicious critical expressions and
non-malicious critical expressions. Additionally, Ray seems to contend that Connell’s
status, as either a public figure or private figure, has bearing on his claim. However, we
conclude that the absolute privilege of § 27-1-804(2), MCA, draws no distinction based
upon the speaker’s status, and, therefore, Connell’s status is irrelevant. The District
Court properly granted Connell summary judgment on Ray’s defamation claim based on
Connell’s comments made at two Billings City Council meetings because the comments
were absolutely privileged under § 27-1-804(2), MCA. Connell was entitled to judgment
as a matter of law.
¶20 3. Did the District Court err in granting Connell summary judgment on Ray’s
claims of tortious interference with business interests and general damages for
mental anguish and suffering based on Connell’s alleged defamation of Ray’s
character?
¶21 Ray argues Connell’s statements to Ronquillo and comments at the Billings City
Council meetings hurt his business as a real estate agent and will continue to do so. Ray
argues Connell’s statements also impacted his reputation, life, and livelihood, causing
him mental anguish and suffering. Ray inserted these additional claims in his second and
third amended complaints. As support for these additional claims, Ray incorporated by
reference all earlier paragraphs of the complaints. The District Court concluded Connell
was entitled to summary judgment on these additional claims because it had already
granted summary judgment on Ray’s defamation claims and the additional claims failed
to allege “any additional conduct of Connell upon which to impose liability under
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Montana law.” We conclude, likewise, that Ray’s additional claims rely on the same
underlying conduct that we have already concluded is not actionable. Therefore, no
genuine issue of material fact existed and the District Court properly concluded Connell
was entitled to judgment as a matter of law.
CONCLUSION
¶22 The District Court’s order granting Connell’s two motions for partial summary
judgment and renewed motion for summary judgment is affirmed.
/S/ LAURIE McKINNON
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ MICHAEL E WHEAT
/S/ BETH BAKER
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