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STATE OF MINNESOTA IN SUPREME COURT A07-1353

Court of Appeals LeRoy Bahr, Appellant, vs.

Gildea, J.

Filed: June 25, 2009 Office of Appellate Courts

Boise Cascade Corporation a/k/a Boise Paper Cascade Corporation, et al., Respondents. ________________________ Mitchell J. Brunfelt, Colosimo, Patchin, Kearny & Brunfelt, LTD., Virginia, Minnesota, for appellant. John Harper III and Benjamin J. Court, Krass Monroe, P.A., Bloomington, Minnesota, for respondents. ________________________

SYLLABUS 1. The district courts denial of a motion for summary judgment is not within

the scope of review on appeal from a judgment entered after a jury verdict. 2. The district court did not err in denying respondent Rasmussens motion for

judgment as a matter of law because appellant presented sufficient evidence of

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Rasmussens actual malice for a reasonable jury to find for appellant on the issue of whether Rasmussen abused the qualified privilege. 3. The district court erred in denying respondent Boise Cascade Corporations

motion for judgment as a matter of law because appellant did not present sufficient evidence of Boises actual malice for a reasonable jury to find for appellant on the issue of whether Boise abused the qualified privilege. Affirmed in part, reversed in part, and remanded. OPINION GILDEA, Justice. This action arises from a workplace dispute between appellant LeRoy Bahr and respondent Stacy Rasmussen. Bahr and Rasmussen are both employed by respondent Boise Cascade Corporation (Boise). As a result of statements Rasmussen made in the workplace, Bahr filed a defamation action against Rasmussen, Boise, and Eural Dobbs, Bahrs supervisor at Boise. The district court denied respondents motion for summary judgment and the matter proceeded to trial. The jury found in favor of Bahr and against Rasmussen and Boise.1 The district court had denied respondents motions for judgment as a matter of law (JMOL) made at the close of Bahrs case in chief and again at the close of the evidence. Following the jurys verdict, the court also denied respondents renew ed

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The jury found that Dobbs did not make any defamatory statements, and the district court therefore entered judgment in favor of Dobbs as to the claim against him. Bahr did not appeal the judgment in favor of Dobbs. 2

JMOL motion made after trial, and entered judgment for Bahr as to respondents Rasmussen and Boise. Respondents appealed, and the court of appeals reversed, concluding in relevant part that "the jurys finding of malice [was] contrary to the evidence." Bahr v. Boise Cascade Corp., No. A07-1353, 2008 WL 2966433, at *6 (Minn. App. Aug. 5, 2008). We granted Bahrs petition for review. Because we conclude that the evidence of actual malice as to respondent Rasmussen was legally sufficient, but that the evidence of actual malice as to respondent Boise was not legally sufficient, we reverse the court of appeals decision as to Rasmussen and affirm the court of appeals decision as to Boise. The record reflects that Bahr and Rasmussen were employed as stores keepers at the Boise paper mill in International Falls, Minnesota, when the events at issue in this action occurred. Stores keepers are employed to handle stock in the warehouse at the Boise mill. Dobbs, who is Rasmussens uncle, was Bahrs supervisor. This action arises from events that occurred at the Boise mill on September 27, 2001 and on October 18, 2001. Because these events form the basis of this action, we discuss them in some detail. September 27, 2001 On the morning of September 27, 2001, three Boise stores keepers told Rasmussen that they had heard a rumor that Rasmussen had been involved in an extramarital affair with another stores keeper, R.B. The stores keepers did not identify the source of the rumor, but they told Rasmussen that he was scheduled to work with the person who started it. Rasmussen then learned that he was scheduled to work that day in the West Warehouse, where Bahr worked. Rasmussen became agitated and paced up and down 3

the loading ramp, apparently upset both by the rumor and by a special work assignment he received that day. Two of Rasmussens co-workers heard him say, "I have to work with that lazy, fat f***er." The two co-workers understood the comment as a reference to Bahr. comment. Later that morning, Rasmussen went to R.B.s office to talk about the rumor. R.B. had already learned of it from the same stores keepers, who had told her that Bahr started the rumor. With Rasmussen in her office, R.B. telephoned the storeroom area where Bahr was working. Bahr answered the phone and denied starting the rumor, then passed the phone to another stores keeper, who also denied starting the rumor. That stores keeper passed the phone to a third stores keeper, J.P., who admitted to R.B. that he started the rumor. Rasmussen remained in R.B.s office during the phone call and stayed several minutes afterward. Rasmussen testified that he did not know with whom R.B. spoke on the phone and that he did not learn the source of the rumor that day. According to Rasmussen, he learned that J.P. started the rumor "within a few weeks" of September 27, 2001. Rasmussen testified that, later that morning, Bahr, J.P., and a third stores keeper confronted Rasmussen about the phone call. Rasmussen testified that he "felt threatened and harassed" by them, and said that he would be setting up a meeting with Jack Strongman, the Director of the Human Resources Department, about it. Rasmussen also said that he immediately reported the incident within the company to the Boise Rasmussen testified that he did not mean for his co-workers to hear the

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Controller, although he would have reported it to Dobbs if Dobbs had not been on vacation. At trial, Bahr and J.P. testified about individual efforts to discuss the rumor incident with Rasmussen. Bahr testified that he tried to find out why Rasmussen was upset with him, but that Rasmussen would not talk to him, saying only that there was going to be a meeting with Human Resources. Bahr said that he asked Rasmussen about the Human Resources meeting twice in the following weeks, but both times Rasmussen said that a meeting had not been set up and that he could not talk about it. J.P. testified that he tried to "patch things up" with Rasmussen the same day he told R.B. he was the source of the rumor, but that Rasmussen would not talk to him. Bahr described to the jury that he saw J.P. trying to talk to Rasmussen and that, while he could not hear what they were saying, he saw Rasmussen "hollering" and waving his arms during the exchange. Another stores keeper described seeing the exchange between J.P. and Rasmussen, and she said that Rasmussen was "hollering," but she could not hear about what. October 18, 2001 On October 18, 2001, Bahr asked Rasmussen about the Human Resources meeting a third time, but Rasmussen said he had not heard back about it. Bahr told Rasmussen that Bahr had contacted Jack Strongman and knew that Rasmussen had not set up the meeting. According to Rasmussen, Bahr was seated on a forklift truck when he

questioned Rasmussen about the Human Resources meeting, and Rasmussen stood on a

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ramp at least five feet away, at eye-level with Bahr. Rasmussen testified that Bahr told him that Bahr had caught Rasmussen in a lie and that Rasmussen could lose his job. Bahr testified, however, that he told Rasmussen that he had seen Jack Strongman, who said there was no meeting set up. Bahr said that he told Rasmussen he believed that Rasmussen was calling Strongman a liar in saying that Rasmussen was waiting to hear back from Strongman about a meeting. Bahr explained at trial that Rasmussen responded by throwing up his arms, hollering, and screaming as he turned to go down the ramp. Bahr testified that during this encounter he spoke to Rasmussen in a "normal, everyday voice." Another stores keeper, G.U., who stood 20 to 30 feet from Rasmussen and Bahr at the time, reported that he did not hear any voices raised during the Bahr/Rasmussen exchange. Rasmussen telephoned Dobbs at approximately 10 a.m. that morning, October 18, 2001, to discuss the encounter he had with Bahr. Rasmussen told Dobbs that everywhere he went in the mill he was being confronted by Bahr. Dobbs notes of the telephone call indicate that Rasmussen said that Bahr "had approached him . . . in a threatening manner," and that as a result of the encounter, Rasmussen "thought he could no longer do his job without constantly being intimidated and harassed." Dobbs told Rasmussen to stay where he was and that Dobbs would get back to Rasmussen. Dobbs immediately called Barb Johnson, a Boise Human Resources Coordinator. Johnson instructed Dobbs to speak with Rasmussen again, to write down Rasmussens information, and to report back to her with that information. Johnson did not instruct Dobbs to get information from Bahr about the incident. Dobbs then met with Rasmussen 6

and took notes about Rasmussens account of what happened that morning. During this meeting, Rasmussen repeated that Bahr approached him in a "threatening manner," and Rasmussen said that Bahr told him that "things were going to change" at the mill. Dobbs testified at trial that Rasmussen was "clearly agitated" and "upset" during the meeting. Dobbs then telephoned Johnson and related Rasmussens account. Johnson instructed Dobbs to have Bahr escorted from the building and placed on "investigatory suspension." Johnson again did not instruct Dobbs to seek information from Bahr as to his side of the events, and Dobbs did not do so. Dobbs followed up by escorting Bahr off the premises at approximately 11 a.m. on October 18, 2001. Bahr testified that when he asked Dobbs for a reason why he had to leave, Dobbs replied that he could not talk to Bahr. Dobbs testified that he told Bahr that the company received a complaint against him and he needed to send Bahr home. 2 After being escorted from the Boise premises, Bahr visited his union representative to initiate a grievance against Boise. The union representative contacted Dobbs, who responded that he could not discuss why Bahr was escorted from the building.3

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Strongman testified that Boises company policy dictated that an employee excused from the premises should be told why the employee is being asked to leave.
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Ultimately, Boise suspended Bahr for three days without pay for the time he was on investigatory suspension, but as a result of the parties settlement after Bahr filed a union grievance, the salary was repaid to him.

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Boise Investigation That afternoon, at 2 p.m., Rasmussen and R.B. met with Betty Leen, another Boise Human Resources Coordinator, to file an informal harassment complaint against Bahr. According to Leens notes, Rasmussen and R.B. made three allegations of misconduct: (1) Bahr started the rumor about Rasmussen having an affair with R.B.; (2) Bahr "yells and shouts and he is almost to the point of physical violence"; and (3) Bahr "will do as little as possible because he is mad at Boise." Because Rasmussen was "worried" that Bahr would "put something in it," Rasmussen told Leen that he checks his "lunch bucket" and his "garage at home."4 Based on the complaint, Boise began an investigation of the allegations against Bahr. On October 19, 2001, Betty Leen met with Bahr and the union representative as part of the investigation. According to Leens notes, Bahr "denie[d] everything," and said that Rasmussen has been angry because he had to "do stock in the West Warehouse" (where Bahr works). Bahr also said that Dobbs harasses Bahr.5

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At trial, R.B. said that she attended this meeting only as moral support for Rasmussen and did not intend to file a complaint against Bahr. R.B. denied making any of the specific complaints that were attributed to her in the meeting notes recorded by Betty Leen. R.B. also testified that she has never observed Bahr yelling or near physical violence and that Bahr is a good worker. Rasmussen, however, testified that he and R.B. filed the complaint together, that they were both vocal in the meeting, and that he cannot now recall whether specific allegations were made by him or by R.B.
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The notes Leen took from this interview with Bahr do not reflect a specific discussion with Bahr about the October 18 incident. 8

In addition to interviewing Bahr, Leen spoke with two other stores keepers that day as part of the investigation. After she completed these interviews, Betty Leen gave her notes to Barb Johnson, who continued the investigation. On October 22, 2001, Johnson met with Rasmussen. The union representative was also present. Rasmussen described the October 18 encounter with Bahr, stating that Bahr was "yelling" and "threaten[ed] saying [youre] in deep shit!" and " ,,youre going to get your day! " About the affair rumor, Rasmussen stated that both J.P. and Bahr were the source. He also said that he was "afraid of [Bahr] planting something" in his lunch or garage "now that [Rasmussen has] stepped up for [himself]." Rasmussen also said that Bahr does not want other employees to work faster than Bahr does and that Bahr "has said to slow down work." Johnson also interviewed three other stores keepers who worked with Rasmussen and Bahr. She interviewed J.P. via telephone on October 22, 2001, and he confirmed that he was the source of the affair rumor. She also interviewed J.S., a Boise stores keeper who voluntarily went to Johnson to support Rasmussen. J.S. said that he believed Rasmussen, that he also had had difficult encounters with Bahr, and that Bahr had said "not to work so fast." On October 23, 2001, Johnson interviewed the third stores keeper, and she said that Bahr had never said anything to her about slowing down the work. On October 25, 2001, Barb Johnson interviewed Bahr. Dobbs and the union representative were also present. Bahr described the October 18 encounter with

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Rasmussen and denied threatening him in any way.6 Johnson asked Bahr about the specific allegations Rasmussen had made, and Bahr denied any misconduct. At the end of the interview, Johnson and Dobbs conferred privately and a decision was made that Bahr would be suspended for three days and asked to sign a "last-chance agreement." Bahr testified that Johnson and Dobbs were gone for only a short time, and that when they returned to the room, they told him about the discipline. Bahrs theory at trial was that Boise had decided to discipline him even before Boise sought his side of the story. Boise denied this and Johnson testified that a preliminary decision was made to discipline Bahr but that it was dependent on what Boise learned from him. The "last-chance agreement" required Bahrs signature as an indication that he accepted the discipline. Under the "last-chance agreement," Bahr would have had to acknowledge Rasmussens allegations of harassment and agree that, if he committed one more violation of company policy, he could be terminated. Bahr told the company representatives that he would not sign the "last-chance agreement," and Boise subsequently withdrew it, but the three-day suspension remained in place. On November 14, 2001, Bahr filed a grievance concerning the three-day suspension that was settled on May 27, 2003. The settlement included that all incidents

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Bahr also said that another employee, G.U., was standing about "8-10" feet away during his exchange with Rasmussen and that he was not sure if G.U. heard anything. The record reflects that Johnson interviewed G.U. on October 25, 2001, but it is not clear whether this happened before or after her interview with Bahr. G.U. said that he did not hear any raised voices.

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and reports were erased from Bahrs record and Bahr was refunded his lost pay from the suspension. Defamation Action Bahr filed the present defamation lawsuit in September 2003. In his complaint, Bahr alleged that, on October 18, 2001, Rasmussen "communicated to Dobbs a false and defamatory statement." Bahr further alleged that both Dobbs and other "management level employees of Bosie" communicated these statements to "additional parties." Respondents moved for summary judgment, which the district court denied. During trial, respondents moved under Minn. R. Civ. P. 50.01 for JMOL at the close of Bahrs case in chief, arguing that a qualified privilege applied to the statements at issue and that Bahr had not shown malice sufficient to defeat the privilege.7 The district court denied this motion. At the close of the evidence, respondents again moved under Minn. R. Civ. P. 50.01 for JMOL on the same grounds. The court again denied the motion and found sufficient evidence to create a fact question for the jury as to the existence of actual malice. The jury found in favor of Bahr against Boise and Rasmussen, but determined that Dobbs had not made any defamatory statements. After trial, respondents renewed their motion for JMOL under Minn. R. Civ. P. 50.02 on the same grounds as the earlier

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Under Minn. R. Civ. P. 50.01(a), "[i]f during a trial by jury a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue, the court may decide the issue against that party and may grant a motion for judgment as a matter of law against that party."

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motions.8 After a hearing, the district court denied the motion. Respondents appealed, and the court of appeals reversed. Bahr, 2008 WL 2966433, at *6. The court of appeals held that the district court erred in submitting to the jury the question of actual malice as to both respondents, Rasmussen and Boise. Id. We granted Bahrs petition for review. I. We turn first to our scope of review. See generally 3 Eric J. Magnuson & David F. Herr, Minnesota Practice-Appellate Rules Ann.

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