Walker v. Wanner Engineering, Inc.
Filing
36
MEMORANDUM OPINION AND ORDER denying 24 Defendant's Motion for Partial Summary Judgment (Written Opinion). Signed by Judge Ann D. Montgomery on 06/12/2012. (TLU)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Benjamin Walker,
Plaintiff,
MEMORANDUM OPINION
AND ORDER
Civil No. 11-671 ADM/TNL
v.
Wanner Engineering, Inc.,
Defendant.
______________________________________________________________________________
Bonnie M. Smith, Esq., James H. Kaster, Esq., and Sarah W. Steenhoek, Esq., Nichols Kaster,
PLLP, Minneapolis, MN, on behalf of Plaintiff.
Antone M. Melton-Meaux, Esq., and David J. Duddleston, Esq., Jackson Lewis LLP,
Minneapolis, MN, on behalf of Defendant.
______________________________________________________________________________
I. INTRODUCTION
On May 23, 2012, the undersigned United States District Judge heard oral argument on
Defendant’s Motion for Partial Summary Judgment [Docket No. 24] (“Motion”). For the
reasons stated below, Defendant’s Motion is denied.
II. BACKGROUND1
Defendant Wanner Engineering, Inc. (“Wanner”) is a Minnesota corporation engaged in
the manufacture of specialty pumps and employing ninety-seven employees. Hancock Decl.
[Docket No. 27] ¶¶ 3, 5. Plaintiff Benjamin Walker (“Walker”) worked at Wanner for over
eleven years, from 1997 until July 14, 2010. Compl. [Docket No. 1] ¶¶ 7, 27. Until 2005,
1
On a motion for summary judgment, the Court views the evidence in the light most
favorable to the nonmoving party. Ludwig v. Anderson, 54 F.3d 465, 470 (8th Cir. 1995). Only
the factual background pertinent to the partial summary judgment motion on the defamation
claim will be discussed here.
Walker worked under the supervision of Daryl People. Id. ¶¶ 8–9. Then beginning in 2005,
Walker’s supervisor was Todd Bellin (“Bellin”). Id.
On July 9, 2010, Walker’s co-worker Eldred Heinen (“Heinen”) saw Walker walk toward
his car carrying scrap metal. Compl. ¶ 20; Smith Decl. [Docket No. 30] Ex. E (“Heinen Dep.”)
68:5-69:13. Prior to this date, Walker had received express permission from his supervisor
Bellin to retrieve a piece of scrap metal on at least one occasion and perhaps on multiple
occasions over a six-year period. Compare Smith Decl. Ex. A (“Bellin Dep.”) 21:13-23:23 with
Smith Decl. Ex. H (“Walker Dep.”) 145:6-156:17. The parties also present conflicting evidence
as to whether Walker took scrap metal from inside Wanner’s facilities or gathered only the
disposed metal in the scrap bin outside. Walker Dep. 154:24-155:2; Melton-Meaux Decl.
[Docket No. 26] Exs. F, H.
After observing Walker take metal parts to his car and drive away, Heinen told a coworker about it and together they drove to the nearest scrap dealer, Realliance Steel. Heinen
Dep. 70:18-72:18. At the scrapyard, Heinen determined that someone of Walker’s description
had recycled scrap metal. Heinen Dep. 73:19-77:2. Heinen then relayed what he had seen and
learned to a manager, Ronald Murray (“Murray”). Heinen Dep. 77:23-78:3.
On July 12, 2010, Murray went to Realliance Steel and obtained a Purchase Ticket
Profile which detailed the scraps Walker had exchanged at the scrapyard from March 11, 2010 to
July 9, 2010. Smith Decl. Ex. N (“Purchase Ticket Profile”); Smith Decl. Ex. D (“Hancock
Dep.”) 95:10-96:9. These exchanges totaled more than $2,300. See Purchase Ticket Profile.
Bellin returned to the office on July 13, 2010, and that same day Murray, Bellin, Joe Grewe
(“Grewe”), and Don Hancock (“Hancock”), Wanner’s controller and human resources
representative, met to discuss the issue. Bellin Dep. 144:22-146:12. Bellin recommended that it
2
was appropriate to terminate Walker and have him removed from the facilities; Grewe agreed.
Bellin Dep. 145:6-17. Bellin called the police, informing them that an employee had stolen from
the company and would need to be removed from the building. Bellin Dep. 146:12-17.
Two police officers came to Wanner within a few minutes, and Bellin and Hancock met
with them for twenty minutes to discuss Walker. Bellin Dep. 148:3-20. A few hours after the
meeting, three officers returned, having determined that the evidence supported probable cause.
Bellin Dep. 157:3-9; Melton-Meaux Decl. Ex. K (“Minneapolis Police Dep’t Case Report”).
Bellin and the officers found Walker in the restroom, and Walker was arrested and removed from
the facility without incident. Bellin Dep. 157:21-160:10. Sometime on July 15, 2010, Grewe
allegedly called a general assembly of Wanner employees and told them that Walker was
terminated and arrested because he had “been stealing from Wanner for years.” Walker Dep.
198:3-199:13.
On March 18, 2011, Walker filed his Complaint alleging various claims of race
discrimination and defamation. Defendant moves for summary judgment solely on the
defamation claim.
III. DISCUSSION
A. Standard of Review
Federal Rule of Civil Procedure 56(a) provides that summary judgment shall be granted
if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986). On a motion for summary judgment, the court views the evidence in the
light most favorable to the nonmoving party and grants all reasonable inferences in the
nonmovant’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The
3
nonmoving party may not “rest on mere allegations or denials, but must demonstrate on the
record the existence of specific facts which create a genuine issue for trial.” Krenik v. Cnty. of
Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995) (quotation omitted).
B. Walker’s Defamation Claim
Wanner does not contest any of the factual elements of defamation claim, but rather
argues that Walker’s defamation claim fails because the alleged statements are protected by
qualified privilege. Wanner also posits that the defamation claim has not been pleaded with
specificity, that the statements are inadmissible hearsay, and that the defamation claim is
preempted by the Minnesota Human Rights Act’s (“MHRA”) exclusivity provision. In response,
Walker defends his defamation claim, stating that qualified privilege either does not apply here
or has been defeated through a showing of actual malice. Walker also contends that he has
pleaded his claim with the required specificity, that the statements are not hearsay, and that the
MHRA exclusivity provision does not preempt his defamation claim because the facts and
obligations are different. These arguments are treated individually below.
1. Qualified Privilege
To prove defamation, a plaintiff must establish the following elements: (1) a false
statement; (2) communicated to someone other than plaintiff; (3) which tends to harm plaintiff’s
reputation or lower his esteem in the community. Stuempges v. Parke, Davis & Co., 297
N.W.2d 252, 255 (Minn. 1980). The plaintiff bears the burden of establishing each element.
Benson v. Nw. Airlines, Inc., 561 N.W.2d 530, 537 (Minn. Ct. App. 1997).
One who makes a defamatory statement is not liable if the statement was communicated
under circumstances that make it qualifiedly privileged, as long as that privileged is not abused.
Bol v. Cole, 561 N.W.2d 143, 149 (Minn. 1997) (citations omitted). A defamatory statement is
4
covered by qualified privilege if made in good faith and “upon a proper occasion, from a proper
motive, and . . . based upon reasonable or probable cause.” Stuempges, 297 N.W.2d at 256–67
(quoting Hebner v. Great N. Ry. Co., 80 N.W. 1128, 1129 (Minn. 1899)). An employer’s goodfaith report to a law enforcement officer of suspected criminal activity is protected by qualified
privilege, because the public interest outweighs the risk that the reports might be defamatory.
Smits v. Wal-Mart Stores, Inc., 525 N.W.2d 554, 557 (Minn. Ct. App. 1994). “[C]ommunication
to employees about the reasons for another employee’s discharge are also qualifiedly
privileged.” Ewald v. Wal-Mart Stores, Inc., 139 F.3d 619, 623 (8th Cir. 1998). An employer
lacks probable or reasonable grounds for making a defamatory statement if that employer has
failed to investigate and instead relied only on other potentially biased employees’ statements or
hearsay from unidentified sources. Wirig v. Kinney Shoe Corp., 461 N.W.2d 374, 380 (Minn.
1990). The determination of whether qualified privilege exists is a matter of law for the court to
decide. Lewis v. Equitable Life Assurance Soc’y of the U.S., 389 N.W.2d 876, 889 (Minn.
1986).
Walker alleges that Wanner made two defamatory statements, the first being Grewe’s
statements to Walker’s co-workers that he was terminated for stealing and the second being
Bellin’s statement to police that Walker had stolen from the company. Compl. ¶¶ 25, 28, 49.
Both statements are covered by qualified privilege. Grewe’s statements to Wanner employees
about Walker’s termination, as well as Bellin’s statements to the police, were both made upon a
proper occasion. See Ewald, 139 F.3d at 623; Smits, 525 N.W.2d at 557. Additionally, the
statements were properly motivated. Reporting suspected theft to the police and informing
employees of the reason for another employee’s termination are proper motives and fall under
5
the qualified privilege to defamation.
Walker attacks the reasonableness of Wanner’s investigation underlying both these
statements, claiming that the investigation did not give Wanner reasonable or probable cause
because Wanner failed to interview Walker and because some of the evidence was volunteered
by individuals Walker accuses of being racially discriminatory to him. Walker focuses on a
single sentence from Wirig, which states that, “In all cases where we have determined that
probable cause existed, the evidence showed that investigative steps had been taken, including
personal questioning of the affected employee, in an effort to ascertain the accuracy of
statements made about the employee's conduct.” Wirig, 461 N.W.2d at 381. Walker cites
numerous cases which have parroted this language, but Wanner responds that each of these cases
rejected qualified privilege for a lack of investigation, not because an investigation without an
interview of the suspected employee is per se an unreasonable investigation. See id. at 380
(“The facts here indicate that no investigation occurred to substantiate the charges that Wirig had
stolen merchandise.”) (emphasis added); Cox v. Crown CoCo, Inc., 544 N.W.2d 490, 498 (Minn.
Ct. App. 1996) (finding no qualified privilege where the employer “did not investigate [its]
suspicions or confront Cox with [its] accusations before [it] made the defamatory statements to
the other employees”); Keuchle v. Life’s Companion P.C.A., Inc., 653 N.W.2d 214, 220 (Minn.
Ct. App. 2002) (determining employer lacked privilege where it “did not conduct a thorough
investigation, [and] failed to interview respondent, and ignored the supervisor’s statement that
she made a request, rather than gave a direct order”). An investigation is not unreasonable solely
because it lacks an interview of the affected employee. Desmonde v. Nystrom & Assocs., Ltd.,
No. A09-0221, 2009 WL 2596059, at *5 (Minn. Ct. App. Aug. 25, 2009) (finding an
6
investigation reasonable despite the employer’s failure to interview relevant employees).
Here, the alleged defamatory statements were made on the basis of a reasonable
investigation which included an eyewitness statement, investigation conducted by three different
employees, and the Purchase Ticket Profile verifying that Walker had repeatedly taken scraps to
Realliance Steel. Although an investigation where Walker was confronted in person about the
allegations would have been more thorough, the investigation here was sufficiently thorough and
gave reasonable or probable cause for the statements at issue.
Qualified privilege may be lost, however, if abused. Lewis, 389 N.W.2d at 890. Abuse
is established if the plaintiff demonstrates the defendant acted with actual malice. Ewald, 139
F.3d at 623. Actual malice exists when the statements were made out of “ill will and improper
motives, or causelessly and wantonly for the purpose of injuring the plaintiff.” Stuempges, 297
N.W.2d at 257 (quotation omitted). “A qualified privilege can be lost if statements are not made
in furtherance of the purpose that the privilege protects.” Bahr v. Boise Cascade Corp., 766
N.W.2d 910, 926 (Minn. 2009) (citation omitted). Malice can be established through evidence
extrinsic to the statement itself or intrinsic evidence such as “the exaggerated language of the
[statement], the character of the language used, the mode and extent of publication, and other
matters in excess of the privilege.” Bol, 561 N.W.2d at 150 (quotation and citations omitted).
Walker claims that Bellin and Heinen racially discriminated against him, and the
undisputed record supports that at least Heinen had a history of making racially discriminatory
statements. See, e.g., Bellin Dep. 37:24-54:4; Smith Decl. Ex. K. Whether Bellin had been
racially discriminatory toward Walker in the past is disputed. Compare Compl. ¶¶ 11–13;
Walker Dep. 85-113 with Bellin Dep. 38:3-43:23. Walker has not alleged or offered any
7
evidence to suggest that Grewe had a bias against him. Therefore, the extrinsic evidence fails to
support that Grewe acted out of actual malice, but a factual dispute remains concerning whether
Bellin bore malice toward Walker.
As far as intrinsic evidence, the mode and extent of the communications and the character
of the language used do not suggest actual malice. However, both Grewe and Bellin made
somewhat exaggerated statements. Grewe allegedly said that Walker had been stealing for years,
when Wanner only had documentary evidence of the four-month period contained in the
Purchase Ticket Profile. Walker Dep. 198-99; see also Purchase Ticket Profile. Also, Bellin
may have told police that Walker had taken the scraps from “inside the business,” a fact issue
which remains in dispute. Compare Minneapolis Police Dep’t Case Report (“[E]mployee . . .
stole scrap items from inside the business.”) with Bellin Dep. 146:14-17 (“I told them . . . we
had an employee that had stole from the company.”).
Given the totality of the evidence, the issue of whether Bellin’s statements were
motivated by actual malice remains a factual dispute. Both the intrinsic and extrinsic evidence
are divided as to whether Bellin acted out of actual malice or merely for the proper purpose of
reporting a suspected thief. It is thus premature to decide this issue at summary judgment.
However, neither the extrinsic nor the intrinsic evidence suggest that Grewe’s statements
to Wanner employees at an all-staff meeting were motivated by actual malice. Wanner did not
have a written policy covering scrap material disposal, Heinen Dep. 52:5-9, and it is disputed
whether the unwritten policy was clearly communicated to employees. Heinen Dep. 52:10-53:7;
Bellin Dep. 243:23-244:21. Given the absence of any evidence suggesting Grewe harbored ill
will against Walker, the record supports that Grewe’s statements to Wanner employees about
8
Walker’s termination were not a product of malice but were used to disseminate Walker’s
unwritten scrap material policy and elucidate the reasons for a co-worker’s termination.
Therefore, Grewe’s statements are covered by qualified privilege.
2. Pleading’s Specificity
Wanner also moves for summary judgment on Walker’s defamation claim, arguing that
the defamation claim has not been pleaded with specificity. In Minnesota, defamation claims
must be pleaded with specificity, including who made the defamatory statements, to whom were
they made, and where. Pinto v. Internationale Set, Inc., 650 F.Supp. 306, 309 (D. Minn. 1986)
(citing Asay v. Hallmark Cards, 594 F.2d 692, 698–99 (8th Cir. 1979)); Schibursky v. Int’l Bus.
Mach. Corp., 820 F.Supp. 1169, 1181 (D. Minn. 1993). “The fact that [plaintiff] failed to recite
the exact language spoken is not fatal to her defamation claim.” Id. The purpose of the
specificity requirement for a claim of defamation is to provide sufficient specificity in order to
evaluate whether a privilege applies, Asay, 594 F.2d at 699, as well as to put defendants on
notice of the scope of the defamation claim. Schibursky, 820 F.Supp. at 1181.
The allegations in Walker’s Complaint satisfy the pleading specificity requirements. The
Complaint clearly states that Bellin “called the police.” Compl. ¶¶ 25, 49. Additionally, the
Complaint specifies that Joe Grewe (misspelled as “Joe Gurry” in the Complaint) told Walker’s
co-workers of his termination. Id. ¶¶ 28, 49. Although the “where” is not expressly stated for
either defamation claim, the context of both allegations put Wanner on notice that the
defamatory statements were both made within Wanner’s facility; this has been explicated by
deposition testimony. See Bellin Dep. 146:4-7 (indicating that Bellin called the police from
Wanner); Walker Dep. 198:4-200:9 (stating that Joe Grewe made the statement at an
9
“assembly”). Walker’s defamation claims have been pleaded with sufficient specificity.
3. Hearsay
Wanner next contends that Walker’s only evidence substantiating Grewe’s allegedly
defamatory statements at an employee meeting is inadmissible hearsay. Hearsay is “a statement
. . . offered in evidence to prove the truth of the matter asserted.” Fed. R. Evid. 801(c). When
the significance of a statement lies in the fact that it was made, not in the truth of what was said,
the statement is not hearsay. See Fed. R. Evid. 801 Advisory Committee Note (1972); Luster v.
Retail Credit Co., 575 F.2d 609, 615 (8th Cir. 1978). Statements which are inadmissible hearsay
must be disregarded by a court deciding summary judgment. In re Trusts A & B of Divine, 672
N.W.2d 912, 921 (Minn. Ct. App. 2004).
The statements establishing that Grewe made defamatory statements at an employee
assembly are not hearsay because they are not being offered for their truth. Walker states that
Darrick Granison, another Wanner employee, told him that Grewe informed the employees
Walker had been terminated because he had been stealing from Wanner for years. Walker Dep.
198:4-200:9. These statements are not being offered for their truth; in fact, Walker ardently
contests the veracity of Grewe’s statement, denying that he stole anything from Wanner. Rather,
the statements are being offered to show that Grewe made the statements to the employees.
Accordingly, this statement is nonhearsay and is admissible.
4. MHRA Exclusivity Preemption
Wanner also asserts that Walker’s defamation claim is barred by the MHRA’s exclusivity
provision. Under the MHRA,
The provisions of [the MHRA] shall be construed liberally for the
accomplishment of the purposes thereof. Nothing contained in [the MHRA] shall
10
be deemed to repeal any of the provisions of the civil rights law or of any other
law of this state relating to discrimination because of race, creed, color, religion,
sex, age, disability, marital status, status with regard to public assistance, national
origin, sexual orientation, or familial status; but, as to acts declared unfair by
sections 363A.08 to 363A.19, and 363A.28, subdivision 10, the procedure herein
provided shall, while pending, be exclusive.
Minn. Stat. § 363A.04. Minnesota courts have determined that the MHRA’s exclusivity
provision preempts a common law cause of action if the factual basis and injuries of the common
law claim would support an MHRA violation, and if the obligations owed the plaintiff by the
defendant are practically the same under both the MHRA and the common law claim. Pierce v.
Rainbow Foods Group, Inc., 158 F. Supp. 2d 969, 975–76 (D. Minn. 2001). The purposes of the
MHRA, one of which is to “foster the employment of all individuals in this state in accordance
with their fullest capacities, regardless of their race . . . ” Act of April 19, 1955, ch. 516, § 1,
1955 Minn. Laws 803, do not support and are not effectuated by the preemption of an unrelated
common law claim, see Wirig, 461 N.W.2d at 378–79.
As stated before, the elements of defamation are a false statement communicated by
defendant to a third party that tends to harm the plaintiff’s reputation or lower his esteem in the
community. Stuempges, 297 N.W.2d at 255. Walker’s MHRA claim alleges an unfair
employment practice in violation of Minn. Stat. § 363A.08. This requires showing that because
of the plaintiff’s race, an employer “discriminat[ed] against a person . . . with respect to hiring,
apprenticeship, tenure, compensation, terms, upgrading, conditions, facilities, or privileges of
employment.” Minn. Stat. § 363A.08, subd. 2. Specifically, Walker alleges that Wanner created
a hostile work environment, which requires establishing that (1) plaintiff is a member of a
protected class, (2) plaintiff was subjected to unwelcome harassment, (3) the conduct was
because of plaintiff’s membership in the protected class, and (4) the conduct affected the term,
11
condition, or privilege of plaintiff’s employment. Carpenter v. Con-Way Cent. Express, Inc.,
481 F.3d 611, 617–18 (8th Cir. 2007).
Neither the factual basis and injuries nor defendant’s obligations to plaintiff are the same
in a claim for defamation and a claim for unfair employment practice under the MHRA. The
MHRA does not require a false statement of any kind, and a defamatory statement may be
defamatory regardless of the plaintiff’s race or whether the defendant’s actions were motivated
by race. Additionally, Walker’s defamation claim in Count IV is based on Grewe’s statements at
an employee assembly and Bellin’s statements to police, whereas his MHRA claim in Count II is
premised on a hostile work environment. Further, an employer’s duty not to defame its
employees is distinct from its duty not to create a hostile work environment or discriminate on
the basis of race. Given the discrete bases and employer obligations under these two claims, the
MHRA’s exclusivity provision does not preempt his defamation claim.
IV. CONCLUSION
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED: Defendant’s Motion for Partial Summary Judgment [Docket No. 24] is
DENIED.
BY THE COURT:
s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: June 12, 2012.
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?