*1 et al. MANAGEMENT CORPORATION LE MARC’S Francisco VALENTIN. Term, 129, Sept. 1996.
No. Maryland. Appeals Court 19,May 1998. *2 Columbia, DeGeorge,
Michael P. for appellant. Sutter, brief), (Hopkins Washington, Charles M. Tobin & on DC, for appellee. BELL, C.J., ELDRIDGE, RODOWSKY,
Argued before CHASANOW, JJ., WILNER, RAKER and and ROBERT L. KARWACKI, (retired), Judge Specially Assigned.
ELDRIDGE, Judge. standard, appropriate Mary- This case concerns the under law, punitive damages land common for the allowance of defamation actions. Valentin,
In late 1987 Francisco having lived all but the first Rico, of life in to year City his Puerto moved New York hopes improving mastery English his limited lan job He immedi guage opportunities. search better to as a room clerk at Fifth ately went work stock Le Marc’s Cards, Inc., a Hallmark card Le Avenue store owned Management May In and other Corp.1 Marc’s Valentin- corporations collectively 1. Hereafter we refer to both as “Le shall Marc’s.” given polygraph at the tests employees store were Hispanic or knew of any employees stealing of the were determine reported The examiner occurring. polygraph thefts were administrator, Sauer, that he corporate Le Marc’s to Robert information,” but it holding “was back believed that Valentin polygraph results because interpret was difficult to “language barrier.” 6,1988, he submitted a letter testified that on June
Valentin from to and received a letter of recommendation resignation resignation letter of manager, original his John Cefai. His and, apparently, not introduced into evidence has never been found. Sauer testified that it was not Valentin’s file, and testified that he did not make a personnel Valentin for his copy the letter records. Valentin further testified leaving that the letter stated that he was Le Marc’s because planning Maryland pursue college he was to move to education.
Once relocated to Maryland, employed Valentin he was as July sales trainee at a furniture store until 1989 when he for applied and was hired as a teller-trainee for Sovran Bank. permission, With Valentin’s the Bank mailed reference re- quests employers. Upon receipt to his former Le Marc’s request, computer Sauer consulted his and re- database turned the reference form Bank stating that Valentin was “terminated due to pilferage.” placed The Bank then Valentin on him suspension days and told that he had four to clear his permanently job. record or he would lose his immediately telephoned explained
Valentin Sauer and his dilemma. promised investigate Sauer to the matter and to call immediately the Bank if he discovered that was an there in following day, error the reference. The Valentin traveled to New York order to meet with Sauer in person. Upon him, learning that was to waiting Valentin see Sauer testified that he employment read Valentin’s file and determined that Valentin had not for pilfering been terminated and that the original reference in error. that explained
Sauer then met with Valentin there was not a of his letter in his and asked him if copy resignation file ques- he had a Sauer also testified that Valentin was copy. not, Marc’s, Le during tioned about whether or his tenure with knowledge employees stealing. he had actual that other were employee Sauer was concerned about Valentin’s file were notes that personnel thefts because Valentin’s indeed, had, that he some of his suspected Valentin told Cefai employees stealing fellow were merchandise. Sauer then left document, room, drafted a and when he returned he him sign it to asked to it. The document presented Valentin that, language indicating per- included while Valentin never merchandise, other sonally employees stole he later discovered say anything my and that he “did not want to stealing were ... manager signed about Valentin [this] situation[ ].” document, would then call and write a believing Sauer clearing letter to the Bank his name. telephoned spoke
Sauer testified that he the Bank and in the Bank’s he also Balog personnel department; Sheila correcting original sent the Bank a letter testified he erroneous reference to which he attached the above described sent, to correct purporting document. The letter Sauer reference, “Thus Francisco’s pertinent part: the first stated to human incorrectly reason for termination was stated due file on Francisco does not reflect a physical error. Our pilferage directly situation with him. Please strike from the record this reason termination.” Balog any testified that she had no recollection of conversa- Sauer, specific tion with nor did she remember Valentin’s however, did that the statements testify, situation. She letter and the attached document did not clear Valentin’s Rather, testified, the attached name. she the letter and *4 “credibility,” on indicated that document cast doubt Valentin’s told the Bank a “covering [something] up,” he was and had “half truth.” for September
On the Bank terminated Valentin and that he falsifying employment application his indicated ineligible employment. was for future in filed this defamation action Valentín August On Le Montgomery County against Marc’s for the Circuit Court Cards, Inc. Fifth Avenue Corp. and Le Marc’s Management May jury in 1993. The found jury before a The case was tried $25,000 him in com- and awarded was defamed that Valentin $130,000 damages. Le damages punitive and pensatory verdict, notwithstanding a judgment motions for Marc’s filed trial, filed a motion for a new and remittitur. Valentin new except The trial court denied all the motions trial. remittitur, for judgment entered Valentine’s favor and $75,000 $25,000 damages. compensatory damages punitive and unreported opinion Both an the Court parties appealed, compensatory damages, affirmed the but Special Appeals award. The basis of the rever- punitive damages vacated the trial court to instruct the properly sal was the failure of the proof any punitive damages the standard of jury filed convincing parties is clear and evidence. Both award certiorari, for a writ of which we denied. petitions punitive dam- solely The case was retried on the issue the standard of jury properly The informed that ages. is clear and allowability punitive damages for the proof alia, received, The inter convincing jury evidence. also following instruction: exists, one, making when the the statement person
“Malice deliberately lies makes the statement truth or disregard that it is false or with reckless as its or, two, had person making when the the statement accuracy an obvious reason to distrust either the person or the source from which the learned statement or, three, finally, item when the statement is the statement inherently improb- it or is so person making invented write, print person say, able that a reckless would it.” an award of for Valentin jury
The returned $700,000.2 amount of The trial court denied Le Marc’s given jury 2. The verdict sheet stated as follows: *5 650 verdict, notwithstanding a a new trial judgment
motions for timely appeal. Le Marc’s filed a notice of and remittitur. by Special Prior to consideration of the case the Court of Appeals, we issued a writ of certiorari. trial court’s argues jury
Le Marc’s that the instruction under a no permitted punitive damages the award of standard law. it asserts longer Maryland Specifically, consistent with does not meet the standard above-quoted that the instruction Owens- set forth in allowability punitive damages for the Zenobia, (1992), Illinois v. and its 633 argues proper that the progeny. surprisingly, Not Valentin maintains that the trial court’s in- standard was used. He struction consistent with the standard set forth our prior opinions in defamation cases. Sullivan,
In New
Times
York
Co.
84
U.S.
S.Ct.
and Curtis
Co. v.
(1964),
Publishing
L.Ed.2d 686
Butts,
(1967),
In a series of cases law, alia, that, in inter Maryland a common held as matter of action, party’s status or regardless of a defamation any if the matter, allowable damages are subject punitive made with statement was proves defamatory plaintiff for the disregard or knowledge of its with reckless ill-will, spite, malice in the sense We held that actual truth. support an hatred, injure, not suffice to to would intent action. See any in defamation punitive award (1978); Franchino, 131, A.2d 283 387 1129 v. Md. Marchesi 165, Piskor, 175, A.2d 352 v. 277 Md. Corp. Motors General 580, Sindorf, 276 Md. 350 810, (1976); Sales Co. v. 817 Jacron Matusevitch, (1976).3 347 Md. also A.2d 688 See Telnikoff (1997), 591-595, 230, the above- 561, A.2d 244-247 where 702 cases detail. cited are reviewed Zenobia, Md. 325 supra, in Owens-Illinois v. Subsequently, 652, on liability action based products 601 at at A.2d (Second) § 402A of Restatement liability and strict only be Torts, damages may generally punitive we held that defendant’s has established plaintiff awarded “the motive, ill- injure, intent by evil to conduct was characterized ” i.e., Furthermore, held will, fraud, we ‘actual malice.’ that, product in a punitive damages be recoverable clear and action, prove, by liability required evidence, had that the actual convincing defendant that, “armed this actual product defect in the Piskor, Marchesi, opinions, light it is clear In and Jacron 3. on the sheet in Question not have included verdict Three should been the case at bar. knowledge, the defendant consciously or deliberately disre- garded the potential harm to consumers.” 325 Md. at A.2d at 654. Zenobia,
Following this Court has consistently required that punitive damages only be awarded based on the defendant’s Thus, conscious wrongdoing. Wilson, Montgomery Ward v. (1995), Md. 664 A.2d involving punitive damages malicious prosecution and imprisonment false ac- tions, we stated that
“in a number of recent decisions this Court has clarified and
modified the standards for the allowability
dam
ages
tort cases. With respect
to both intentional and
torts,
non-intentional
we have held that an award of punitive
damages generally must
upon
malice,
be based
actual
in the
sense of conscious and deliberate wrongdoing, evil or wrong
motive,
ful
will,
intent
to injure,
See,
ill
or fraud.
e.g.,
Ellerin v.
337 Md.
Savings,
While none of the above-cited cases specifically involved
defamation, we have repeatedly stated
actions,
that in all tort
“
an
punitive
award of
damages must be based upon ‘conscious
and deliberate wrongdoing, evil or wrongful motive, intent to
”
will,
injure,
fraud,’
ill
Jenkins,
Scott v.
supra,
Consequently, by clear plaintiff proves, if the may only be awarded damages requisite evidence, had the that the defendant convincing and i.e., an rea, support to such award. knowledge, mens actual opinions the to defamation recent Applying principle the damages are punitive to conclusion that leads the actions plaintiff the establishes in such actions when allowable defamatory that the had actual that the defendant statement was false.4 pertinent which is most opinion
The Court’s recent
337 Md.
Savings, supra,
present case is Ellerin
Fairfax
for the
involving
appropriate
the
standard
damages in actions
fraud
deceit.
allowance
the
in Ellerin with an examination of
analysis
our
began
We
action,
to determine
of a fraud or deceit
order
elements
was, indeed,
the tort. The
malice
an element of
requisite
(337
1123, quoting
at
652 A.2d at
Nails
opinion stated
Md.
(1994)):
v. S & R,
398, 415-416,
A.2d
668-669
“
in an action for fraud or
‘In order to recover
(1)
deceit,
made a
plaintiff
prove
must
that
defendant
(2)
plaintiff,
its
representation to the
false
representation
either known
the defendant or
(3)
truth,
as to
was made with reckless indifference
its
for the
of defraud-
misrepresentation
purpose
was made
(4)
ing
misrepre-
that the
relied on the
plaintiff,
plaintiff
(5)
it,
right
rely
on
and
that the
sentation
had
injury resulting from the
compensable
suffered
”
misrepresentation.’
*8
note,
cases,
4.
as we have in several
that "actual
... does
We
Zenobia,
wilful
to know.”
v.
325 Md.
include the
refusal
Owens-Illinois
633,
(1992).
explanation
an
462 n.
A.2d
n. 23
For
McCallum,
451, 458-461,
concept,
very
this
limited
see State
J.,
(1991) (Chasanow,
concurring).
253-255
Focusing our attention
element,
on the
that,
second
we held
although a defendant may be liable for compensatory damages
if the above elements
proven,
are
the defendant will not per se
subject
be
punitive
damages. Specifically, the Court held
that punitive
damages
a deceit action may only be awarded
proves that the defendant had actual knowledge
falsity.
pointed
We
out Ellerin that a representation
made with “reckless indifference” as to the truth “does not
mean actual knowledge of the falsity.”
337 Md. at
Rather,
A.2d at 1126.
“reckless indifference” in the context of
a deceit action means the defendant’s making a statement with
the knowledge that he or she does not know whether it is true
words,
false.
In other
the defendant has actual knowledge
that he or she did not know whether the statement was true
false, but,
with reckless
truth,
indifference to the
made the
statement with the intent of deceiving the
Therefore,
listener.
while “reckless indifference” does encompass a level of actual
knowledge, it is not a level sufficient to satisfy the actual
knowledge of falsity required
damages. The
“
Court concluded in Ellerin that
‘reckless disregard’ or ‘reck-
less indifference’ concerning the truth of the representation
falls short of the mens rea which
required
is
to support an
award of punitive damages.”
It is clear that holding supports Ellerin actual knowledge of the falsity as the sole standard for the award of punitive damages in defamation cases as well. Like fraud or actions, deceit the tort of defamation requires the plaintiff to prove that the defendant’s statement was false. But alternate standard heretofore applied for punitive cases, defamation namely disregard” truth, “reckless for the greater no than the level of required scienter by the “reckless indifference” rejected standard in Ellerin.
In St. Amant v. Thompson, 390 U.S. 88 S.Ct. (1968), L.Ed.2d 262 the Supreme held, alia, Court inter certain statements made public about a official were not made with a “reckless disregard” for the truth. While the Court made clear that “reckless disregard” must be determined on a
655
regarding the defini
basis,
give
did
guidance
case
it
by
case
the defendant
It stated
disregard.”
tion of “reckless
“
‘high degree
with a
the false statement
must have made
... entertained serious
falsity’ [or]
of ... probable
awareness
at
88
publication.
the
390 U.S.
to
truth” of
doubts as
the
v. Louisi
at
Garrison
quoting
L.Ed.2d
at
S.Ct.
209, 216,
64, 74,
13 L.Ed.2d
ana,
85 S.Ct.
379 U.S.
Inc., 501
(1964).
Magazine,
v. New Yorker
See also Masson
(1991);
2419, 2430,
Because the
allowability
punitive damages
for
defamation
basis
the
cases,
and
judgment
punitive damages
the
for
we shall vacate
punitive damages
on the
issue.
remand
a new trial
Marc’s
was insufficient evidence
Le
also contends
there
evidence,
knowing
convincing
the
support, by
clear
also
the amount
falsity standard.
It
contends
was erroneous-
award was
and that certain evidence
excessive
have
we
vacated
ly permitted to be introduced. Since
award,
necessary it
not
reach
punitive damages
evidentiary
At
new trial
excessiveness or
issues.
below, nor
presented
are
parties
not limited
evidence
rulings.
Middle
they
by previous evidentiary
are
limited
See
Thomas,
699, 703-704, 668
7-8
A.2d
States
(1995);
Zenobia,
Owens-Illinois v.
supra,
469-473,
JUDGMENT FOR PUNITIVE DAMAGES THE OF CIR- CUIT COURT FOR MONTGOMERY COUNTY RE- VERSED, AND CASE REMANDED TO THAT COURT A FOR TRIAL NEW ON PUNITIVE DAMAGES. COSTS BE TO PAID BY THE PLAINTIFF-APPELLEE.
BELL, C.J., dissents.
BELL, Judge, Chief dissenting.
The majority opinion today continues the inexorable cam paign that 1992, this Court began in in Owens-Illinois v. Zenobia, 420, 325 Md. 601 (1992), A.2d 633 to eliminate punitive damages and thereby insulate reprehensible, certain conduct from proper punishment. intent, Its the majority will protest, is not the elimination punitive of damages, but the assurance that damages such are awarded they when serve a function; however, real the elimination punitive damages is the effect when the standard for the punitive allowance of damages is raised to a level virtually impossible to By meet.1 requiring, in addition to clear and convincing proof, on, about, My 1. views raising and concern respect the bar with proof of punitive' damages entitlement length were set forth at Owens-Illinois, Zenobia, 633, Inc. v. 325 Md. 601 A.2d 662 J., (1992)(Bell, concurring dissenting). I continue to believe the
657
were
actions
the defendant’s
prove
652, 709 A.2d
349 Md.
wrongdoing,”
of “conscious
product
”
“
id. at
wrongdoing,’
deliberate
(1998)
‘knowing and
1226
Savings,
337
v.
Ellerin
(quoting
1226
652,
at
709 A.2d
Fairfax
(1995)),
1117,
this Court has
1123
216, 229, 652 A.2d
Md.
has been
which
damages,
proof
the bar
raised
the bar
raising
Zenobia.
practice
And that
since
the drill
eliminating punitive
virtually
the effect
has had
Zenobia,
has reversed
fact,
this Court
In
since
Maryland.
reversal
or affirmed
damages,
awarding punitive
judgment
court,
nearly
appellate
intermediate
by the
awards
of such
v.
See Scott
was raised.
the issue
in which
every case
Asner,
v.
ACandS
(1997);
Jenkins,
21,
1000
690 A.2d
Md.
345
Garrett,
(1996); Owens-Coming v.
155,
250
686 A.2d
344 Md.
Thomas,
v.
(1996); Middle States
1143
682 A.2d
Md.
343
Godwin, 340 Md.
v.
ACandS
(1995);
A.2d 5
Md.
668
340
Wilson,
v.
339
(1995); Montgomery Ward
116
667 A.2d
Savings,
(1995); Ellerin v.
664 A.2d
Md.
Fairfax
Evander,
Md.
(1995); Alexander v.
652 A.2d
Md.
Baltimore, v.
Gypsum
U.S.
(1994);
Sparks,
*11
331 Md.
Komomik
(1994);
145,
647
405
A.2d
Coates,
1,
I once write way puni- by punishment from being insulated conduct ble decisions, Indeed, events and correct. expressed therein are views years, buttressed today, last six have over the including the one belief. 658 case,
tive damages. In this the majority has changed the standard for award of punitive defamation cases. today, Before this Court had held that the proof required the award of punitive damages that the defam- atory statement was false or that it was made with reckless Franchino, truth. See Marchesi v. disregard for the 283 Md. 131, 139, (1978); 387 A.2d General Motors Corp. v. 1133 Piskor, 165, 174, 352 A.2d Jacron (1976); Sales Co. v. Sindorf, 580, 601, Md.
(1976). Although consistent with pronouncements of the Supreme subject Court on the see New York standard, of the Sullivan, Times Co. 254, 286, U.S. 84 S.Ct. Welch, (1964); Inc., Gertz v.
L.Ed.2d 686
Robert
418 U.S.
94 S.Ct.
(1974),
The majority reasons from Ellerin’s analysis of the distinc-
tion between “reckless indifference” and “actual knowledge.”
analysis
That
indifference,”
concluded that “reckless
although
one of the elements of fraud or deceit and although sufficient
to support an award for compensatory damages, was not in
fact, the equivalent of “actual knowledge.” While acknowl-
edging that acting with “reckless indifference” indicates that
the defendant has “actual knowledge” of his or her lack of
knowledge as to the veracity or falsity
statement,
majority asserts that
is not enough; what must be shown is
knew,
fact,
the defendant
that the statement was false.
Applying that
rationale to the requirement
in defamation
cases that the statement be made disregard”
“reckless
*12
truth,
the majority reaches the identical
result
in this
Ellerin,
defamation
case as it reached in
a deceit case.
Ellerin,
I
in
dissented
taking issue with the
change
law and noting
the conduct
reflected
proceeding
that
with
than the
reprehensible
was no less
“reckless indifference”
knowledge:
actual
engaged
conduct
with
thus,
and,
Maryland
well
long
has
been the law
“It
defendant,
to mislead the
settled,
intending
that a
he or she does not know whether the
fully
aware that
false,
is true or
commits the
representation he or she makes
Parks,
E.g.,
tort of
or deceit.
Robertson
fraud
(1892).
underlying
24 A.
The rationale
fact,
of a
with
making
representation
the rule is that
a
knowledge
speaker
and actual
that
intent
deceive
not,
not know
it is fact or
is as much a
does
whether
knowledge
one made
actual
misrepresentation as
-
as
knowledge
repre
and that actual
of the former is
Fully recogniz-
hensible as actual
of the latter.
law,
‘Maryland
...
that
cases
ing
noting
the state
but
concerning
typically
fraud or deceit have
involved the form
deliber-
the tort which is characterized
the defendant’s
deception
plaintiff by
representation
ate
of the
means
false,’
he
majority
which
knows to be
nevertheless
tort, to
knowledge prong
‘refines’ the actual
of the
include
so,
that,
fully cognizant
situation....
And it does
understood,
traditionally
as
the tort countenanced no
negligence,
amount of
however
is
gross....
There
abso-
lutely
majority’s change
no basis for the
of the law.”
(citations omitted).
An additional damage observation is order. The defamed person actually is the same whether the defamer knows that saying simply what he she is is false or knows he she does not know the statement is true or false. more and distressing today, What is most to me is after it simply will not be important to ensure that what is communi cated about I person interpret majori another true. As ty opinion, long as as there is no evidence that the defamer and, actually knew the information I suppose, was false did obvious, not shut his or her eyes what must have been it does not matter that a brief investigation would have made *13 statement; may falsity publish clear the defamer impunity, any false statement about the without records, and, beyond yet, his or her own remain investigation damages.2 you from the risk of And can bet insulated happen that is what will today’s opinion precisely that after frequency. more with more and dissent, I respectfully. most
Parris N. et al. GLENDENING 10, Sept. Term,
No. 1997. Maryland. Appeals Court May 1998. instructed, jury
2. The after all: exists, one, malong deliberately person "Malice when a statement lies or makes the statement with it is false or with or, two, person disregard when the reckless as to the truth or making the had an obvious reason to distrust either the statement accuracy person of the statement or the source from which the or, three, finally item when the statement learned of the statement person making inherently improbable that invented it or is so write, person say, print it.” a reckless would
