Lewis v. A.H. Belo Corp.

818 S.W.2d 856 (1991)

Terry W. LEWIS, Appellant,
v.
A.H. BELO CORPORATION and the Dallas Morning News Company, Appellees.

No. 2-90-126-CV.

Court of Appeals of Texas, Fort Worth.

October 22, 1991. Rehearing Denied December 18, 1991.

Hickey & Wood, P.C. and J. Jeffrey Springer, Denton, for appellant.

Jenkins & Gilchrist, P.C. and Paul C. Watler, Dallas, for appellees.

Before WEAVER, C.J., and HILL and MEYERS, JJ.

OPINION

HILL, Justice.

Terry W. Lewis appeals from a takenothing summary judgment in favor of A.H. Belo Corporation and The Dallas Morning News Company, the appellees. Lewis had brought a libel suit against the appellees arising out of a newspaper article published in the Dallas Morning News in connection with Lewis's work as a debt collection attorney on behalf of Flow Hospital, formerly Denton's city/county hospital.

In his sole point of error, Lewis urges that the trial court erred by granting the appellees' motion for summary judgment because the summary judgment evidence establishes genuine issues of material fact. He argues that there are fact issues as to the truth of the article; his status as either a private individual, a public official, or a public figure; malice on the part of the appellees; the status of the article as fair comment or criticism; the defamatory nature of the article; whether the article is neutral reporting; and whether Belo is the publisher.

We affirm because we hold that, considering the "gist" of the publication in question the publication is substantially true.

We will affirm the appellees' summary judgment only if the record establishes that the movant has conclusively proved all essential elements of its cause of action or defense as a matter of law. City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex.1979). Texas applies this standard to summary judgments in defamation cases. Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989).

The appellees contended in their amended motion for summary judgment that they were entitled to summary judgment because: (1) the article is true; (2) the article was not published with actual malice because they did not publish it with any knowledge of any alleged falsity, nor with any reckless disregard for its truth or falsity; (3) the article is privileged as fair comment about the official acts of a public officer or other matter of public concern published for general information; (4) many of the statements in the article complained about are not actionable because they are statements of opinion as is the alleged defamatory meaning given to the article by plaintiff; (5) the article is privileged as the neutral reporting of an audit by a responsible certified public accounting firm on a matter of legitimate public interest about a public official or public figure that was accurately and disinterestedly reported. Additionally, the A.H. Belo Corporation claimed that it was entitled to summary judgment because it is undisputed that it does not publish the Dallas Morning News.

We will first consider whether the News established that the statements complained of were true as a matter of law. "The truth of the statement in the publication on which an action for libel is based is a defense to the action." TEX.CIV.PRAC. & REM.CODE ANN. sec. 73.005 (Vernon 1986). A media defendant is entitled to summary judgment upon showing the substantial truth of its publication. Mcllvain v. Jacobs, 794 S.W.2d 14, 15 (Tex.1990). We have concluded from Mcllvain that the test used in deciding whether a publication is substantially true involves consideration of whether the alleged defamatory statement was more damaging to the plaintiff's reputation, in the mind of the average reader or listener, than a truthful statement would have been. Id. at 16. As noted by the Supreme Court, the evaluation involves looking to the "gist" of the publication. Id. If the underlying facts as to the gist of the defamatory charge are undisputed, then we can disregard any variance with respect to items of secondary importance and determine substantial truth as a matter of law. Id. We are including a copy of the article in question as an appendix to this opinion.

The News published the article just after the hospital filed for bankruptcy. The financial condition of the hospital was therefore a matter of great public interest in Denton at the time of publication. Lewis claims that the article raised questions as to his proper accounting to the hospital of funds that he collected.

Nita Thurman, the reporter who wrote the article, swore in her affidavit in support of the News' motion for summary judgment that all of the article is true. Lewis swore in his affidavit in response to the motion that there were several false statements in the article. His claims are set out below:

THE ARTICLE                                       LEWIS'S CLAIM
Headline, "Flow got fraction of collected         Flow got more cash than was collected by
cash.                                             "Lewis's office, including money paid directly
to the hospital, as well as court costs
paid on behalf of the hospital.
"A Denton lawyer collected $567,000 in            Substantially more than $567,000 was collected
past-due bills for Flow Memorial Hospital         between 1979 and June 1985.
from 1979 through June 1985 ..."
"But he paid less than $6,000 to the financially  Much more than $6,000 was paid to the
troubled public hospital."                        hospital as a result of my collection efforts.
I paid court costs out of the money I collected,
all of which was paid on behalf of
the hospital, and I also did work on the
hospital's accounts for which the hospital
was paid direct by the debtor.
"Two months later, collections by attorney        I furnished status reports to the hospital
Terry Lewis had reached $689,575, according       that reported the sum of the collections by
to a report he filed with the hospital."          my office and those paid directly to the
hospital. As of the date of the audit, the
total collections would have been around
$150,000 in excess of the amount reported
by the audit report to have been collected
by my office. Therefore, the collections

did not suddenly reach $689,575 two
months after the audit.
"By the end of 1985, collections were more        Collections by the end of 1985 had not
than $850,000."reached $850,000.
"Lewis has paid Flow $96,571.52 so far in         Flow was paid far more than the figure
recovered delinquent bills, hospital officials    reported in the article. Some of the payments
said Thursday. Most of that was paid after        were directly made to the hospital.
a professional management team was
hired in mid-1986 to manage the hospital."
Title, "Flow gained little in lawyer's work       Flow gained well over one-half million dollars
on past-due bills."                               as a result of my collection efforts,
and is continuing to benefit from my efforts
on files that I have still pending.
"Lewis collected delinquent bills for the         The agreement was formal, and had been
hospital under an informal agreement that         formalized by writings and by course of
apparently had existed since 1979."               dealings through the years.
"Under the agreement, Lewis was first to          I did not deduct court costs. The hospital
deduct court costs from the amount he             got the court costs as they were recovered.
collects, then 60 percent of the balance was
to go to Flow and 40 percent to Lewis."
"As far as my relationship with the hospital,     The statement "I don't recall now all the
I am not authorized to discuss whateverdetails"   was in response to another question
my fee arrangement ... I don't recall             asked in regard to how the agreement
now all the details," Lewis said.                 was entered into, not whether I recalled the
details of the agreement.
"In 1985, board members questioned the            To my knowledge, no board member ever
small amount the hospital was receiving           raised any questions about the amount the
and ordered a special audit of Lewis' accounts    hospital was receiving from me.
for Flow."
"The special audit covered the period from        The auditors did not find the letters. The
January 1979 through June 1985. Auditors          letters were pulled from a file and furnished
found two letters from Lewis to the board         on request.
in which he outlined two options on how to
divide the money collected."
"The option accepted was that Lewis would         The audit does not say that. I did not
pay court costs of filing lawsuits on the         agree to pay the court costs, and I did not
delinquent accounts, recovering the cost,         recover the court costs. The hospital received
turn over 60 percent of the collections to        the benefit of the court costs.
Flow and keep 40 percent, the audit said."
"The audit stated that Flow's small share         This comment is made nowhere in the report.
of the collections resulted from the procedure    The comment made is "This small
used by Lewis to determine the hospital's         percentage results from the procedure
share."                                           used to determine when payments are
made to Flow." There is no reference in
the report to my procedure for determining
the hospital's share.
"Flow's portion (60 percent) of the recovery      The report states that "Flow's portion of
on any particular account remained in the         the recovery on any particular account remains
attorney's accounts to cover court costs          in the trust account to cover court

expended on other accounts, the audit             costs expended on other accounts."
said."
"Due to the number of accounts, court             The audit actually states, "as a result, the
costs are commonly more than Flow's portion       money stays in the trust account to cover
at any particular point in time....               the court costs rather than be remitted to
Under current circumstances, then, it appears     Flow. The situation will change only when
unlikely that Flow will receive any               the majority of court costs have already
significant payments, the audit stated."          been spent on all the accounts and Flow's
portion of the recoveries are no longer
needed to finance additional court costs. It
is unlikely this point will be reached in the
foreseeable future due to the large volume
of accounts." (We note that the audit goes
on to say that, "Under current circumstance,
then, it appears unlikely that Flow
will receive any significant payments.")
"The auditors recommended in 1985 that            The report actually presents specific examples
the board get legal assistance to `determine      of the changes about which the auditors
what options for change are available,' including were speaking, stating, "examples of
monthly accounting for Lewis and                  possible changes would be to limit the
a formal contract, if possible."                  amount of court costs spent on any particular
account or to request that no further
work be done for accounts under a certain
amount where no court costs have yet been
spent." The audit also states, under a
section of the report titled "Reporting"
that "the periodic reports (Court Cost Reconciliations)
prepared by Terry Lewis provide
an over-all picture of the collection
efforts being made. These reports also
provide the basis for determining when
payment should be made to Flow. We
recommend that Flow request an accounting
of collections and court costs on a
monthly basis. Such an accounting would
give Flow management a basis for determining
the effectiveness of the collection
effort."

The gist of the article is that Flow Hospital's poor financial condition caused some people to look back three years to an audit that was done because of dissatisfaction with the amount of money that the hospital was receiving from Lewis in his collection efforts; that there were no pending or contemplated criminal or grievance proceedings against Lewis in connection with the small amount of cash that the hospital was receiving from him; that, according to the audit, the cause of Lewis receiving a substantially larger share of the money collected than the hospital was the fact that the majority of the money collected was going toward covering court costs in other cases due to the large volume of cases that Lewis was handling for the hospital; and that in 1986 the hospital had turned its collections over to a collection agency. We hold that the summary judgment evidence shows that the gist of the article is undisputed.

We have set forth in detail Lewis's assertions as to portions of the article he believes to be untrue. We have reviewed those assertions and find that to the extent there is any variance between the truth as asserted by Lewis and the article itself, that such are variances as to items of secondary importance and we may disregard these variances. See Mcllvain, 794 S.W.2d at 16. Disregarding such variances, therefore, we hold that the article is substantially true as a matter of law. Consequently, the trial court did not err in granting summary judgment as to the News and Belo.

Lewis contends that the gist of the article is that he kept money that should have been given to the hospital under the terms of the agreement, that he owed money to the hospital under the terms of the agreement, and that he committed embezzlement or some other crime. We disagree. Even though the early portion of the article might raise such inferences, the rest of the article shows that no criminal or grievance procedures were pending or contemplated against Lewis, and that, in fact, the audit report showed that the real problem was caused by the procedure of plowing back the money recovered into court costs in other cases. In view of our determination as to this basis for summary judgment, we need not determine the other bases for summary judgment urged by the News and Belo. We overrule Lewis's sole point of error.

The judgment is affirmed.

APPENDIX