Opinion
No. 2-90-126-CV.
October 22, 1991. Rehearing Denied December 18, 1991.
Appeal from the 16th District Court, Denton County, John Narsutis, J.
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
Terry W. Lewis appeals from a take-nothing 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. McIlvain v. Jacobs, 794 S.W.2d 14, 15 (Tex. 1990). We have concluded from McIlvain 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 Flow got more cash than was collected collected 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 Substantially more than $567,000 was $567,000 in past-due bills for collected between 1979 and June 1985. Memorial Hospital from 1979 through June 1985. . ."
"But he paid less than $6,000 to Much more than $6,000 was paid to the the financially troubled public hospital as a result of my collection hospital." 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 I furnished status reports to the by attorney Terry Lewis had hospital that reported the sum of the reached $689,575, according collections by my office and those paid to a report he filed with the directly to the hospital. As of the hospital." date of the audit, the total collections would have been around 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 Collections by the end of 1985 had not were more than $850,000." reached $850,000.
"Lewis has paid Flow $96,571.52 Flow gained well over one-half million so far in recovered delinquent dollars as a result of my collection bills, hospital officials said efforts, and is continuing to benefit Thursday. Most of that was from my efforts on files that I have paid after a professional still pending. management team was hired in mid-1986 to manage the hospital."
"Lewis collected delinquent bills The agrement was formal, and had been for the hospital under and formalized by writing and by course of informal agreement that dealings through the years. apparently had exited since 1979."
"Under the agreement, Lewis was I did not deduct court costs. The first to deduct court costs from hospital got the court costs as they the amount he collects, then 60 were recovered. percent of the balance was to go to Flow and 40 percent to Lewis."
"As far a my relationship with The statement "I don't recall now all the hospital, I am not authorized the details" was in respons to another to discuss whatever my fee question asked in regard to how the arrangement. . . I don't recall agreement was entered into, not now all the details," Lewis said whether I recalled the details of the agreement.
"In 1985, board members questioned To my knowledge, no board member ever the small amount the hospital was raised any questions about the amount receiving an ordered an special the hospital was receiving from me. audit of Lewis' accounts for Flow."
"The special audit covered the The auditors did not fin the letters. period from January 1979 through The letters were pulled from a file June 1985. Auditors found two and furnished on request. letters from Lewis to the board in which he outlined two options on how to divided the money collected."
"The option accepted was that The audit does not say that. I did not Lewis would pay court costs of agree to pay the court cost, and I did filing lawsuits on the delinquent not recover the court costs. The accounts, recovering the cost, hospital received the benefit of the turn over 60 percent of the court costs. collections to Flow and keep 40 percent, the audit said."
"The audit stated that Flow's This comment is made nowhere in the small share of the collections report. The comment made is "This resulted from the procedure used small percentage results from the by Lewis to determine the procedure used to determine when hospital's share." payments are made of Flow." There is no reference in the report to my procedure for determining the hospital's share.
"Flow's portion (60 percent) of The report states that "Flow's portion the recovery on any particular of the recovery on any particular attorney's accounts to cover account remains in the trust account to court costs cover court expended on other accounts, the costs expended on other accounts." audit said."
"Due to the number of accounts, The audit actually states, "as a court cost are commonly more than result, the money stays in the trust Flow's portion at any particular account to cover the court costs rather point in time. . . . Undeer than be remitted to Flow. The situation current circumstances, then, it will change only when the majority of appears unlikely that Flow will court costs have already been spent on received any significant payments, all the accounts and Flow's portion of the audit stated." 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 unlikey that Flow will recieve any significant payments.")
"The auditors recommended in The report actually presents specific 1985 that the board get legal examples of the changes about which the assistance to 'determine what auditors were speaking, stating, options for change are "examples of possible changes would be available,' including monthly to limit the amount of court costs spent accounting for Lewis and on any particular account or to request a formal contact, if possible." that no futher 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 McIlvain, 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