                       IN THE COURT OF APPEALS OF TENNESSEE
                                    AT JACKSON
                                 APRIL 2000 SESSION

              GLENDA R. TATE v. BAPTIST MEMORIAL HOSPITAL

                     A Direct Appeal from the Circuit Court for Shelby County
                        No. 85694     The Honorable Kay S. Robilio, Judge




                       No. W1999-00553-COA-R3-CV - Decided July 28, 2000


        Hospital employee was accused of negotiating payroll checks of other employees and was
discharged. Employee filed defamation suit, and trial court granted summary judgment because the
pleadings and affidavits established that there was no publication of the alleged defamatory words
since all communication thereof was to hospital employees.

Tenn. R. App. P. 3, Appeal as of Right; Judgment of the Circuit Court is Affirmed.

C RAWFORD , P.J., W.S., delivered the opinion of the court, in which HIGHERS, J., and FARMER , J., joined.

Joanne M. Jenkins, Memphis, For Appellant

Paul E. Prather, Robert D. Meyers, Jason G. Wolfkill, Memphis, For Appellee

                                                      OPINION

         This is a defamation case. Plaintiff, Glenda R. Tate, appeals from the order of the trial court
granting summary judgment to defendant, Baptist Memorial Hospital (hereinafter Hospital). The sole
issue is wh ether the trial co urt erred in gran ting summ ary judgment.

        Plaintiff filed this action after she was terminated from her position as a supply technician
in the Materials Management Department (hereinafter MMD) at Hospital. The complaint avers that
she was accused of negotiating ano ther employee’s payroll check, or, in other words, “was accused
of having obtained and cashed several checks which did not belong to her.” She alleges that the
accusation was false and was published to other employees of the hosp ital.

       A review of the affidavits and p leadings in the case indicates that there is no real dispute of
material facts.

       On June 22, 1996, eight payroll checks for Hospital’s Central Supply Department (hereinafter
CSD), a subgroup of MMD, were reported missing. Dorothy Watts Crossman, Director of the MMD,
confirmed with the payroll department that the checks had been issued and were missing. She
requested replacemen t checks an d turned th e matter ove r to payroll and security to inve stigate.
        Hospital security, led by Lieutenant W.E. Richardson, investigated the missing checks.
Richardson interviewed Celia Easley, Crossman’s manager, regarding procedures followed for
distributing payroll checks. He also met with C armen Patterson in Hospital payroll who showed him
copies of four checks that had not b een recovered and four checks that stop paymen t orders were
issued on after they were negotiated by persons other than the payee/employee.

        Lieutenant Richardson also spoke with the owner of New Asian Food Store on 414 N.
Cleveland in Memphis, Tennessee, where several of the missing checks had been cashed. He then
obtained a list of names and photo identification of all CSD employees and showed the photos to the
owner of Person’s Big Star, Walter Person on 4001 C helsea Extended in Memph is, Tennessee, where
someone attempted to negotiate the checks . Person and Diane Marcum, a store employee, identified
plaintiff as one of the individuals who had attempted to negotiate two of the missing checks.

        On Augus t 7, 199 6, Rich ardson intervie wed p laintiff concerning her involvement with the
missing payroll checks. Plaintiff denied cashing any checks at either location. Based on the
information gathered thorou gh the in vestigat ion, Ri chards on con cluded that plai ntiff had attempted
to cash one of the missing payroll checks and one of the replacement checks at Person’s Big Star.

        Crossman notified plaintiff by letter dated August 5, 1997, that she was suspended pending
investigation of the missing checks. After hospi tal conc luded its inves tigation , it disch arged pla intiff
on Septem ber 5, 199 7, for “wrongfu lly attempting to n egotiate anot her emplo yee’s pay check.”

       Plaintiff then pursued Hospital’s problem s olving proc edure, a three step internal grievance
process. During the fina l step, a hearing was held before a hospital panel including employees and
managem ent person nel. On No vember 1 , 1996, the p anel uph eld plaintiff’s term ination.

       Plaintiff’s complaint alleges that the Hospital negligently and maliciously investigated the
missing checks and that as a result a false communication harming her reputation was published to
other hospital employees.1

       The trial court granted s umma ry judgme nt in pa rt stating th at plain tiff failed to establish that
Hospital or its employees published any defa matory remarks about plain tiff or that Hospital or its
employees made any statement that was knowingly false or in reckless disregard of the truth.2



        1
         The complaint also alleges that she was forced to self publish the defamation in attempting
to find other employment.
        2
         The trial court reserved judgment on the issue of self publication pending the issuance of
an opinion on this issue in a case before the Tennessee Supreme Court. After the Supreme Court
denied the viability of compelled self publication in Sullivan v. Baptist Memorial Hospital, 995
S.W.2d 569, 571 (Tenn. 1999), the trial court followed suit and dismissed plaintiff’s claim on this
issue, making the order granting summary judgment a final judgment.

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       Plaintiff has appealed, and the only issue for our review is whether the trial court co rrectly
granted the Hospital’s mo tion for summary judgment.

        A motion for summary judgment should be granted when the movant demo nstrates that there
are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter
of law. Tenn. R. C iv. P. 56.03. The party moving for summary judgment bears the burden of
demonstrating that no genuine issu e of material fact ex ists. Bain v. Wells , 936 S.W.2d 618, 622
(Tenn. 1997). On a mo tion for summary judgment, the court must take the strongest legitimate view
of the evidence in favor of the nonmoving party, allow all reasonable inferences in favor of that
party, and discard all countervailing evidence . Id. In Byrd v. Hall, 847 S.W.2d 208 (Tenn. 199 3),
our Supreme Court stated:

                Once it is shown by the mo ving party that there is no genuine issue of
                material fact, the nonmoving party must then demonstrate, by
                affidavits or discovery materials, that there is a genuine, material fact
                dispute to warr ant a trial. In this regard, Rule 56.05 provides that the
                nonmoving party cannot simply rely upon his pleadings but must set
                forth specific facts show ing that th ere is a gen uine iss ue of material
                fact for trial.

Id. at 210-11 (citations om itted) (emphasis in original).

         Summary judgment is only appropriate when the facts and the legal conclusions drawn from
the facts reasonab ly permit only on e conclus ion. Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn.
1995). Since only questions of law are involved, there is no presumption of correctness regarding
a trial court's grant of su mmary judgm ent. Bain, 936 S.W.2d at 622. Therefore, our review of the
trial court’s grant of summary judgment is de novo on the record before this Co urt. Warren v. Es tate
of Kirk, 954 S.W.2d 7 22, 723 (Tenn. 19 97).

        To establish a prima facie case of defamation, the p laintiff must establish that: (1) a party
published a statement; (2) with knowledge that the statement is false and defaming to the other; or
(3) with reckless disregard for the truth of the statement or with negligence in failing to ascertain the
truth of the statemen t. Sullivan v. Baptist Memorial Hosp., 995 S.W.2d 5 69, 571 (Tenn. 19 99).

        Hospital first asserts that the trial court correctly granted its motion because plaintiff failed
to prove there was a publication to anyone. Publication is an essential element of a defamation
action without which a complaint must be dismissed . Applewhite v. M emphis Sta te University, 495
S.W.2d 190, 192-93 (Te nn. 1973); Freeman v. Dayton Scale Co., 159 Tenn. 413, 19 S.W.2d 255,
256 (Tenn. 192 9); Woods v. Helmi, 758 S.W.2d 2 19, 222-23 (Ten n. Ct. App. 1988 ).

       In Freeman, the plaintiff brought suit for libel based on the content of a letter sent by an
agent of defendant. The plaintiff contended that the libel was published b y dictation to a secretary
and transcribed. The Sup reme Court held that a co mmunication o f a defamatory matter to a co-


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employee of a corporation is not a publication beca use the co-employee has no distinct third party
entity. Freeman, 19 S.W.2d at 258. The court, in addressing the issue of communications between
employees, quoted w ith approval from 18 A .L.R. 772, 778:

                The more liberal rule, and the one which seem ingly has the support
                of the weight of modern authority, is that, where the communication
                is made to a servant or bu siness associate in the ordinary and natural
                course of business, there is no actionable libel.

Freeman, 19 S.W.2d at 257.

        In Woods v. Helmi, 758 S.W.2d 219 (Tenn. Ct. App. 1988), the plaintiff, a certified registered
nurse anesthetist, brought suit against her immediate supervisor and others seeking damages for
alleged defamation and wrongful interference w ith employm ent. Id. at 220. The plaintiff and her
supervisor were both employed by the Regional Medical Center in Mem phis (The Med). Id. The
Med had a uniq ue arrangem ent for the op eration of its an esthesiolo gy department in that it had its
own paid employees and also had physicians provided by the University of Tennessee employed as
part of the staff of The Med. Id. at 220-21. The plaintiff's supervisor issued a memo concerning
operating room behavior of the plaintiff that was sent to persons who "had managerial, supervisory
or administrative responsib ilities and oversight for [the] internal affairs of The Me d's anesthesi ology
department and were immediately interested in the information transmitted." Id. at 222. The Court
noted that communication of defamatory matters between the agents and officers of the corporation
in the ordinary course of business is not a publication. Id. (citing Freeman v. Dayton Scale Co.,
159 Tenn. 413, 19 S.W.2d 255 (Tenn.1929)). In this vein, the Court said:

                We interpret Freeman and its progeny to mean that communication
                among agents of the same corporation made within the scope and
                course of their employment relative to duties performed for that
                corporation are not to be considered as statements communicated or
                publicized to third persons.

Id. at 223.

        In Perry v. Fox, No. 01A01-9407-CV-00337, 1994 WL 715740, (Tenn. Ct. App. December
21, 1994), plaintiff was fired from his job at South Cen tral Bell Telephone Co mpany ("SCB") after
being accused of work related misconduct including malicious destruction of prop erty, impersonation
of another SCB employee, incorrectly documenting time, and making unauthorized representations
to a SCB customer. Plaintiff filed a defamation suit against Fox, an employee of SCB, and SCB
based upon a memo randum Fox prepared and distributed which stated that plaintiff had been
terminated for malicious destruction of property and that in the future plaintiff would not be welcome
on company property. Plaintiff further alleged that SCB failed to make a reasonable investigation
into the allegations against him before terminating his em ployment. In uph oldi ng th e tria l cou rt's
grant of summary judgment in favor of the defendants, the court stated:


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               It is an elementary rule in this state that publication is an essential
               element of a libel action without which a complaint must be
               dismissed. Applewhite v. M emphis Sta te University, 495 S.W .2d 190
               (Tenn.1973); Woods v. Helmi, 758 S.W.2d 219 (Tenn. C t.
               App.1988 ). Taken in the light most favorable to the plaintiff, the
               memorandum was disseminated to certain fellow employees of the
               plaintiff. This action falls short of publication w ithin the ambit of the
               rule. As stated in Freema n v. Dayton Scale Co., 159 Tenn. 413, 19
               S.W.2d 255 (Tenn. 192 9), "where communication is made to a
               servant or business associate in the ordinary or natural course of
               business there is no act ionable lib el." See also, Woods, supra.

Perry, 1994 WL 715740, at * 2.

        In the present case, plaintiff claims she was defamed by communications to others which
resulted in the firing being common knowledge in the hospital. However, plaintiff fails to establish
who made the communications which she believes to be defamatory. It appears that the
communications in the present case were made by the emplo yees in the scope and cou rse of their
employment relative to duties performed for that corporation. The stateme nts made by security
personnel while questioning plain tiff and other hospital employees we re made during the course of
an investigation. Therefore, the required p ublication is not present.

        The plaintiff argues that statements made by unidentified employees to other employees
regarding plaintiff’s termination constitute defamation for which Hospital should be liable.
However, plaintiff has not shown that H ospital authorized the statements. In Southern Ice Co. v.
Black, the Court held that a corporation is not held liable for the slanderous words spoken by an
employee unless the plaintiff shows that either the employer authorized the speaking of the
slanderous words, or that it would be necessary for an employee to speak them in the performance
of the duty assigned to the employee, or that the statem ents had b een ratified by the e mployer. Id.
at 398.

         Furthermore, even if the statements made by Hospital are defamatory, we believe Hospital
is entitled to summary judgment because its statements are conditionally privileged under a common
interest privilege.
         In Pate v. Service Merchandise Co., Inc., 959 S.W.2d 5 69 (Tenn. Ct. App. 1996) this co urt
discussed conditional privileges:

                       A conditional privilege is recognized w here the interest which
               the defendant is seeking to v indicate or furth er is regarded as
               sufficiently important to justify some latitude for making mistakes.
               W. Page Keeton e t al., Prosser and Keeton on the Law of Tort s, §
               115, at 825 (5 th ed. 1988). The Tennessee Supreme Court authorized
               conditional privileges in Southern Ice. Co. v. Black, 136 Tenn. 391,


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189 S.W. 86 1 (1916):

       Qualified privilege extends to all communications
       made in good faith upon any subject-matter in which
       the party communicating has an interest, or in
       reference to which he has a duty to a p erson hav ing a
       corresponding interest or duty; and the privilege
       embraces cases where the duty is not a legal one, but
       where it is of a moral or social character of imperfect
       obligation . . . The rule announced is nece ssary in
       order that full and unrestricted communication
       concerning a matter in which the parties have an
       interest may be had. It is grounded in public policy as
       well as reason.

Id. at 401, 189 S.W . 861 (citations omitted); see also Price v. Sale,
8 Tenn. C .C.A. 382 , 392-3 (19 18).

        Conditional privileges may cover many different types of
interests including a c ommon interest and a public intere st. Keeton
et al, supra, at 826-31. The common interest privilege has been
recognized in Tennessee to cover communications between
employees or agents of the same business or corporatio ns. See Woods
v. Helmi, 758 S.W.2d 219 (Tenn. Ct. App. 198 8); Southern Ice Co.,
136 Tenn. 391, 189 S.W.2d 861.

               *               *               *

        The privilege can be lost, however, if the defendant does not
act with good faith or acts with actual malice. W hen a statement is
conditionally privileged, it is not actionable unless actual or express
malice is sho wn by the pla intiff. Woods v. Helmi, 758 S.W.2d 219,
224 (Tenn. Ct. App. 1988); Southern Ice Co., 136 Tenn. at 401, 189
S.W.2d 861. Once privileged, the statement is presumed to have been
made without malice, and the burden is on the plaintiff to prove
express malice. Langford v. Vanderbilt University , 44 Tenn. App.
694, 318 S.W.2d 568, 576 (195 8). To prove actual malice, there must
be sufficient evidence to permit the conclusion that the defendant in
fact entertained serious doub ts as to the truth of his publication, and
that publishing, with such doub t, shows reckless disregard for truth
or falsity and demo nstrates actu al malice. Moore v. Bailey, 628
S.W.2d 431 , 433-4 (Tenn. Ct. Ap p. 1981).



                                   -6-
Id. at 575-576, 577-578.

        In Dickson v. Nissan Motor Mfg. Corp., No. 87-28 9-11, 198 8 WL 980 5, (Tenn. C t. App.
Feb. 10, 1988), an employee, Dickson, filed suit against his employer for alleged slanderous
statements made by his superiors. Dickson was fired from the Defendant corp oration for
insubordination and for sp eaki ng to his s upe rior i n an obs cene and threaten ing m ann er. In holding
that the Defendants' statements were protected under a qualified privilege, this Court stated:

                One is entitled to learn from his associates what is being done in a
                matter in which h e has an inte rest in comm on with th em. This
                interest in their common affairs entitles him to information as to how
                they are conducted, or to information that affects their common
                interest, even though he is not personally concerned with the
                information. Restatement of Torts 2d.1977--596, comment c.

***

                This Court agrees with the argument of defendants that, where a plant
                employee is discharged, the employer has a privileged right to state
                and the other employees have a privileged right to hear that the
                discharge has taken place and the groun ds therefor, stated in general
                terms.

Id. at *7-8.

        The record does not show actual malice on the part of the Hospital, nor does the record
indicate that hospital acted negligently in investigating the missing checks. The statements by
Hospital to its employees regarding the reason for plaintiff’s termination are p rivileged under a
commo n interest priv ilege and, there fore, are not actio nable.

       Acco rding ly, for the reasons set out abov e, the order of the trial court granting summary
judgment to defendan t is affirmed. Costs of this appeal are assessed against the appellant, Glenda
R. Tate.

                                                         ____________________________________
                                                         W. FRANK CRAWFORD, PRESIDING
                                                         JUDGE, W.S.




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