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STATE OF MICHIGAN COURT OF APPEALS

DERITH SMITH, Plaintiff-Appellee, V ANONYMOUS JOINT ENTERPRISE, GEORGE PRESTON, MARY BARROWS, VILLAGE OF SUTTONS BAY, CHARLES STEWART, NOEL FLOHE, and JOHN STANEK, Defendants, and DONALD BARROWS, Defendant-Appellant.

UNPUBLISHED March 3, 2011

No. 275297 Leelanau Circuit Court LC No. 05-006952-CZ

DERITH SMITH, Plaintiff-Appellee, V ANONYMOUS JOINT ENTERPRISE, GEORGE PRESTON, DONALD BARROWS, MARY BARROWS, VILLAGE OF SUTTONS BAY, CHARLES STEWART, and NOEL FLOHE, Defendants, and JOHN STANEK, Defendant-Appellant. No. 275316 Leelanau Circuit Court LC No. 05-006952-CZ

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DERITH SMITH, Plaintiff-Appellee, V DONALD BARROWS and JOHN STANEK, Defendants, and NOEL FLOHE, Defendant-Appellant. No. 275463 Leelanau Circuit Court LC No. 05-006952-CZ

ON REMAND Before: SAAD, P.J., and FORT HOOD and BORRELLO, JJ. PER CURIAM. This case concerns whether a cause of action for defamation exists based on the distribution of a report from plaintiff's personnel file and is on remand from our Supreme Court. Smith v Anonymous Joint Enterprise, 487 Mich 102; ___ NW2d ___ (2010). We reverse and remand for entry of judgment in favor of the remaining defendants Donald Barrows and John Stanek.1 This case arises from a dispute between political adversaries. Plaintiff and defendants, Donald Barrows and John Stanek, were involved in local politics. Plaintiff worked for the Village of Suttons Bay. During her employment, the village manager, Charles Stewart, prepared a report to the personnel committee to address various issues regarding plaintiff's employment. She was terminated from her employment with the village, but never saw the report that was placed in her personnel file. After plaintiff was elected as the supervisor of Elmwood Township, defendants obtained a copy of the report. The report was mailed to residents in the local and surrounding communities and distributed at a meeting. Someone added a handwritten caption on the document that stated, "Attention: Suttons Bay Villagers Alledged (sic) Misuse of Taxpayer

The Supreme Court held that there was insufficient evidence of "actual malice" by defendant Noel Flohe, and therefore, we resolve the issues surrounding defendants Barrows and Stanek only. Smith, 487 Mich at 106.

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Funds?" The employee who was the subject of the report was only identified as "Deri." Someone also handwrote "Derrick (sic) Smith" on the report. Ultimately, plaintiff pursued a defamation action against defendants, Barrows and Stanek, and Noel Flohe, the men who acknowledged mailing the personnel report. The jury rendered a monetary award in favor of plaintiff with the additional requirement that defendants publicly apologize to her. We reversed the jury verdict, holding that plaintiff, a public figure, failed to meet her burden of proof with regard to the actual malice requirement. Our Supreme Court reversed and remanded, stating: In this case, we decide whether plaintiff, Derith Smith, presented clear and convincing evidence at trial to support the jury's finding that defendants John Stanek, Donald Barrows, and Noel Flohe defamed plaintiff by mass-mailing copies of a personnel report containing false information about her. After conducting an independent review of the record, we conclude there exists clear and convincing evidence that Stanek and Barrows acted with "actual malice," but that plaintiff has failed to meet her evidentiary burden as to Flohe. Accordingly, we affirm the result reached by the Court of Appeals as to Flohe, but reverse the result it reached as to Stanek and Barrows. We remand this matter to the Court of Appeals for consideration of defendants' other issues, including whether the handwritten caption on the mailed report constitutes a nondefamatory statement of opinion when considered in its context within the report as a whole, whether the caption is provable as false, and whether defendants are entitled to the protection afforded by Michigan's statutory fair reporting privilege. [Smith, 487 Mich at 106.] We allowed the parties to file supplemental briefs to address the remaining issues. After reviewing the briefs and the evidence, we once again reverse the jury verdict and remand for entry of judgment of no cause of action in favor of defendants Barrows and Stanek. I. False and Defamatory Statements Defendants first allege that plaintiff failed to sustain her burden of proving that false and defamatory statements had been published. Plaintiff contends that this issue is not preserved for appellate review because it was not raised in the original brief on appeal to this Court and is outside the scope of the Supreme Court remand. We conclude that the statement of this issue and its resolution are consistent with the Supreme Court directive that we address "whether the handwritten caption on the mailed report constitutes a non-defamatory statement of opinion when considered in its context within the report as a whole ...." "The First and Fourteenth Amendments of the United States Constitution prohibit public figures from recovering damages caused by a defendant's statement unless they prove that the statement was a defamatory falsehood and that it was made with actual malice ...." Lakeshore Community Hosp, Inc v Perry, 212 Mich App 396, 402; 538 NW2d 24 (1995). Libel is a "statement of and concerning the plaintiff which is false in some material respect and is communicated to a third person by written or printed words and has a tendency to harm the plaintiff's reputation." Fisher v Detroit Free Press, Inc, 158 Mich App 409, 413; 404 NW2d 765 (1987). "A libel may consist of a statement of fact or a statement in the form of an opinion, -3-

but a statement of opinion is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion." Id. Plaintiff has the burden of proving the elements of an alleged libel. Id. "The elements of a defamation claim are: (1) a false and defamatory statement concerning the plaintiff, (2) an unprivileged communication to a third party, (3) fault amounting at least to negligence on the part of the publisher, and (4) either actionability of the statement irrespective of special harm (defamation per se) or the existence of special harm caused by publication." Mitan v Campbell, 474 Mich 21, 24; 706 NW2d 420 (2005). However, when a defamation case involves a public figure, there is an additional requirement that there be clear and convincing evidence of actual malice. Faxon v Michigan Republican State Central Comm, 244 Mich App 468, 474; 624 NW2d 509 (2001). When addressing a defamation action, the appellate court must conduct an independent examination of the record to prevent forbidden intrusions into the field of free expression. Id. at 473. A libel case challenging the constitutionality of public discourse must be carefully examined with regard to falsity to ensure that precious liberties established and ordained by the Constitution are followed. Rouch v Enquirer & News of Battle Creek (After Remand), 440 Mich 238, 253; 487 NW2d 205 (1992). Thus, an independent examination of the whole record is designed to ensure that the judgment does not constitute a forbidden intrusion into the field of free expression. Id. at 254 (further citation omitted). This independent review is premised on the fear that juries might give "short shrift to important First Amendment rights," and reflects the inherent doubt that juries will recognize the line between unconditionally guaranteed speech and legitimately regulated speech. Id. at 253-254, 258. In the present case, a review of the Stewart report as a whole with the handwritten caption reveals that it does not contain false and defamatory statements that are actionable. The report was a summary of events surrounding plaintiff's employment that needed to be resolved. After the appointment of a new clerk, plaintiff was allowed to remain employed with the village, but her duties and salary were not definitively resolved. Stewart wrote a report to address the problems, but acknowledged that his report was based on his understanding, assumptions, and hearsay. Indeed, Stewart was not involved with plaintiff's initial employment with the village. The report did contain information that was not correct when it improperly identified plaintiff as an independent contractor and reported that she did not receive a W-2. Statements concerning an individual's employment status and entitlement to benefits are not defamatory. The report delineated Stewart's opinion that plaintiff obtained a higher rate of pay for her bookkeeper position by waiting until he worked from home to take the issue up with the treasurer. This opinion was subjective and premised on the timing of the event. The report clearly reflects that it was Stewart's subjective opinion. Moreover, the report acknowledged that plaintiff sought and received approval for the higher rate of pay. The handwritten caption reflects a question premised on the content of the report. Under the circumstances, the report and handwritten caption are not actionable, but rather constitute non-defamatory statements of opinion. Mitan, 474 Mich at 24; Fisher, 158 Mich App at 413. II. Provable as False Next, our Supreme Court has directed us to address whether the handwritten caption is provable as false. All statements are not actionable; rather, to be actionable, a statement must be provable as false. Ireland v Edwards, 230 Mich App 607, 616; 584 NW2d 632 (1998) (citing Milkovich v Lorain Journal Co, 497 US 1, 17-20; 110 S Ct 2695; 111 L Ed 2d 1 (1990)). A -4-

statement is provable as false if it is an objectively verifiable event, but a statement is not actionable if it is a subjective assertion. Ireland, 230 Mich App at 616. The handwritten caption questions whether plaintiff misused taxpayer funds and is not provable as false. Again, it is premised on the report that addressed the subjective timing of plaintiff's questioning of her pay rate and to whom the question was directed. The caption reflects a commentary on the content of the Stewart report. We conclude that the caption on the Stewart report is not provable as false. Therefore, plaintiff cannot meet her burden of proving the elements of defamation. Fisher, 158 Mich App at 413. III. MCL 600.2911(3)

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Michigan Law