United States Court of Appeals,
Fifth Circuit.
No. 94-60069
Summary Calendar.
Kay J. BURROUGHS, Plaintiff-Appellee,
v.
FFP OPERATING PARTNERS, L.P., Defendant-Appellant.
Aug. 17, 1994.
Appeal from the United States District Court for the Southern
District of Mississippi.
Before GARWOOD, SMITH and DeMOSS, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
FFP Operating Partners, L.P. ("FFP"), appeals the district
court's denial of its motion for judgment as a matter of law
("j.m.l.") and, in the alternative, motion for new trial on
intentional infliction of emotional distress ("i.i.e.d.") and
slander jury verdicts. Concluding that the district court
erroneously denied FFP's motion for j.m.l. on the i.i.e.d. claim
but correctly denied FFP's motion for j.m.l. on the slander claim,
we affirm in part, reverse in part, and remand for a
redetermination of damages.
I.
A.
Kay Burroughs worked until August 28, 1989, for FFP as manager
of one of its convenience stores in Forest, Mississippi. After a
visual inspection of the store on August 16, 1989, John Rochelle,
FFP's vice-president of operations, and Ed Bradley, supervisor of
1
the Mississippi stores, believed the store's physical inventory to
be far less than Burroughs's books represented. The discrepancy
was attributed to generic, non-logo beverage cups stored in an
out-building behind the store, and Rochelle and Bradley ordered the
cups destroyed and written off the inventory.
Six days later, an independent auditor made a physical count
of the inventory and found a further deficit in physical inventory
of $16,385. Believing the non-logo cups to be a sign of theft,1
Bradley investigated the shortage further by contacting Cochran-
Sysco, a food service supplier for the store's deli section.
Robert Ratliff, a credit manager at Cochran-Sysco, produced copies
of invoices, paid for in cash, for about 32,950 generic cups
purchased between February 1988 and August 1989.
Bradley returned to the store on August 28 to discuss with
Burroughs the Cochran-Sysco invoices. Whether Burroughs was fired
by Bradley at this meeting or quit was contested at trial, but it
was uncontested that Burroughs's employment with FFP ended on
August 28. Later that day, Bradley discovered approximately $3,800
missing from the store safe. The facts at trial did not establish
that Burroughs had taken this money; there remained an unexplained
1
As FFP explained in its brief, the "cup scam" involves a
manager's purchasing and placing into the store's inventory,
without the company's knowledge, non-logo cups. If the non-logo
cups are not logged into the book inventory, the manager may take
the amount of the overage in the physical inventory in the form
of merchandise or cash. To protect against the cup scam, FFP
requires its managers to purchase logo-bearing cups only, and the
inventory value of each cup is then logged into the book
inventory at the retail value of the beverage that the cup holds.
2
gap of time between Burroughs's dismissal and the opening of the
safe (during which time Bradley was alone in the store).
Bradley and Rochelle spoke with Officer Croxton of the Forest
Police Department on August 29 regarding possible embezzlement
charges.2 Croxton then served a warrant on Burroughs, drove her to
the station, and released her after she posted bond. At a
preliminary hearing before a municipal judge on September 19, the
charges against Burroughs were dropped.
FFP later testified to the Mississippi Employment Security
Commission ("MESC") and the state welfare department that Burroughs
had quit her job. Based upon this testimony, Burroughs originally
was denied unemployment benefits and food stamps, but her
applications were granted upon further review.
B.
Burroughs filed suit in Mississippi state court on August 24,
1990, alleging malicious prosecution, false imprisonment, false
arrest, slander, and i.i.e.d., seeking compensatory damages of
$100,000 and punitive damages of $1,000,000. FFP removed the case
to federal court.
At trial, FFP presented expert witnesses who testified that
the non-logo cups, coupled with cash register receipts, pointed
toward Burroughs as the party responsible for the theft, which
Burroughs denied. Burroughs's witnesses also testified that
Bradley and Rochelle discussed Burroughs's alleged theft with
2
In 1986, Burroughs had reported a theft from her car of
$8,400 from the store's account, which she agreed to repay.
3
numerous other parties in the Forest community.
Following a four-day trial, Burroughs withdrew her false
imprisonment and false arrest claims, and FFP moved for j.m.l. on
the remaining issues. The court denied the motion, and the jury
returned a verdict for Burroughs on the i.i.e.d. and slander
charges, awarding $250,000 in compensatory damages. The jury found
for FFP on the malicious prosecution and punitive damages issues.
FFP renewed its motion for j.m.l. or, in the alternative, for
a new trial or remittitur. The district court denied these
motions, and FFP appeals.
II.
A.
We review the denial of j.m.l. de novo, Omnitech Int'l v.
Clorox Co., 11 F.3d 1316, 1322 (5th Cir.1994), petition for cert.
filed (U.S. May 25, 1994) (No. 93-1927), viewing all evidence in
the light most favorable to the non-moving party, Becker v.
PaineWebber, Inc., 962 F.2d 524, 526 (5th Cir.1992). We will grant
the motion where "the evidence at trial points so strongly and
overwhelmingly in the movant's favor that reasonable jurors could
not reach a contrary conclusion." Omnitech, 11 F.3d at 1323.
Because this is a diversity case, we apply the substantive law of
Mississippi. Erie R.R. v. Tompkins, 304 U.S. 64, 80, 58 S.Ct. 817,
823, 82 L.Ed. 1188 (1938).
B.
In Mississippi, in order to recover for i.i.e.d., a plaintiff
must prove that defendant's conduct is "extreme and outrageous."
4
It has not been enough that the defendant has acted with an
intent which is tortious or even criminal, or that he has
intended to inflict emotional distress, or even that his
conduct has been characterized by "malice," or a degree of
aggravation which would entitle the plaintiff to punitive
damages for another tort. Liability has been found only where
the conduct has been so outrageous in character, and so
extreme in degree, as to go beyond all possible bounds of
decency, and to be regarded as atrocious, and utterly
intolerable in a civilized community.
White v. Walker, 950 F.2d 972, 978 (5th Cir.1991) (discussing the
court's citation with approval in Lyons v. Zale Jewelry Co., 246
Miss. 139, 150 So.2d 154, 158 (1963), of comment d to § 46 of the
RESTATEMENT (FIRST) OF TORTS).
Though plaintiff need not prove cognizable physical injuries,
Sears, Roebuck & Co. v. Devers, 405 So.2d 898, 902 (Miss.1981), the
emotional stress must be genuine and severe, RESTATEMENT (SECOND) OF
TORTS § 46, cmt. k (1965). Absent physical manifestation of the
injury, plaintiff may recover where the nature of the act is so
egregious as to evoke "outrage or revulsion." Sears, 405 So.2d at
902.
Burroughs proffers four arguments in support of the
outrageous nature of FFP's actions. She first asserts that
Rochelle's failure to contact her prior to initiating the original
criminal proceedings is evidence of outrageous behavior. FFP
concedes that Rochelle did not contact Burroughs between the time
of her firing (August 28) and his filing of embezzlement charges
(August 29). Nevertheless, uncontroverted evidence supports FFP's
contention that Rochelle contacted Burroughs as early as August 16
seeking an explanation for the inventory shortages. Bradley also
returned to the store on August 28 to discuss with Burroughs the
5
Cochran-Sysco cash invoices.
In light of the circumstances, we are unpersuaded that
Rochelle's actions are sufficiently improper so as to be
outrageous. First, as mentioned above, Rochelle and Bradley
personally inspected the store on August 16, at which time they
became aware of the presence of non-logo cups. Second, Rochelle's
and Bradley's personal knowledge of the prevalence of criminality
in convenience stores associated with non-logo cups provided a
reasonable suspicion of foul play.
Third, Rochelle commissioned an internal auditor who made a
physical count of the inventory on August 22, revealing more than
a $16,000 discrepancy between the book and the physical
inventories. Fourth, all of the investigations occurred on the
backdrop of the 1986 reported theft of $8,400 from Burroughs's car,
monies she was repaying in installments at the time. Fifth, the
circumstances surrounding Burroughs's firing,3 make more reasonable
Rochelle's decision to file embezzlement charges on August 29
without contacting Burroughs further. Finally, leaving aside the
question of whether Burroughs was responsible for the money missing
from the safe on August 28, the fact that the money was missing
supports Rochelle's decision to proceed with legal action.
We do not believe that the municipal judge's decision to quash
the embezzlement charges at the September 19 preliminary hearing
3
While the question of whether Burroughs was fired or quit
is disputed, all of the witnesses to the August 28 meeting
between Bradley and Burroughs testified to the contentious nature
of the meeting.
6
undermines the non-outrageous nature of FFP's behavior. Even if we
were to construe the quash order as such, FFP's decision to bring
charges does not rise to the level of "atrocious" and "utterly
intolerable in a civilized society." To find otherwise would be to
suggest that all decisions not to prosecute would give rise to
intentional tort claims; a finding of inadequate probable cause to
proceed with criminal charges does not connote malicious and
outrageous behavior. Furthermore, this conclusion is supported by
the jury verdict in favor of FFP on the malicious prosecution
charge.
Next, Burroughs contends that FFP's statements to both the
MESC and the welfare department that Burroughs had quit her job are
sufficient to support a finding of i.i.e.d. We begin by noting
that, absent contractual language to the contrary, Mississippi
confers at-will employment status on employees. Perry v. Sears,
Roebuck & Co., 508 So.2d 1086, 1088 (Miss.1987). As such, a worker
may be terminated for good reason, wrong reason, or no reason at
all. Kelly v. Mississippi Valley Gas Co., 397 So.2d 874, 875
(Miss.1981). Although Mississippi has just recently adopted a
narrow "public policy" exception to at-will termination, McArn v.
Allied Bruce-Terminix Co., 626 So.2d 603, 607 (Miss.1993), the
Mississippi Supreme Court has refused to extend further an implied
covenant of good faith and fair dealing to employment terminations.
Perry, 508 So.2d at 1089. Hence, even though Burroughs appears to
base her i.i.e.d. claims solely upon FFP's alleged accusations of
her stealing and not on a wrongful termination charge, we note that
7
Mississippi law does not recognize a wrongful termination action
for Burroughs in tort.
We conclude that FFP's statements to these organizations are
not sufficiently outrageous to support the i.i.e.d. claim. First,
qualified privilege attaches to statements made by an employer
against an employee that affect the latter's employment. Benson v.
Hall, 339 So.2d 570, 572 (Miss.1976). Absent spite, ill will,
malicious purpose, or wanton disregard for the veracity of the
statements, and where the communications are limited to those
persons who have a legitimate and direct interest in the subject
matter, the communications are privileged, and a presumption of
good faith attaches. Id. (citing Killebrew v. Jackson City Lines,
225 Miss. 84, 82 So.2d 648 (1955)).
Since both the MESC and state welfare department have a
legitimate and direct interest in the subject matter of the
statements made by FFP,4 FFP's utterances to these organizations
are subject to qualified privilege. The question then remains
whether FFP's statements exhibited bad faith and malice.
We believe that the evidence presented at trial does not
support such allegations. First, FFP's belief as to Burroughs's
criminal activity was sufficiently reasonable to defeat any bad
faith and malice claims. We agree with FFP that, in light of the
circumstances, it had a right to present its side of the story to
these agencies, assuming no ill will or spite toward Burroughs.
Second, the jury findings in favor of FFP on the malicious
4
In fact, FFP was subpoenaed by the MESC to testify.
8
prosecution and punitive damages interrogatories support the
non-malicious nature of FFP's statements. The jury's failure to
award punitives suggests that it could not find bad faith
sufficient to justify punishing FFP. Jones, 617 F.Supp. at 1547.
Finally, even assuming that FFP's communications to the MESC
and welfare department were malicious and thus not privileged, they
do not rise to the level of outrageousness sufficient to support an
i.i.e.d. claim. As discussed previously, FFP made a reasonable
investigation in light of the circumstances as they appeared to FFP
at the time.
Burroughs's third statement in support of the i.i.e.d. verdict
is that she was refused employment at another convenience store
because the owner had heard of the theft allegations promulgated by
FFP. Kenneth Warren, the owner of a local convenience store,
testified that he refused to hire Burroughs as a result of having
heard "rumors" of Burroughs's alleged theft. Warren could not
identify from whom he had heard such rumors, testifying instead
that small towns such as Forest lend themselves to the spreading of
rumors through "just talk."
Warren's decision not to employ Burroughs is insufficient to
support the i.i.e.d. verdict. First, Warren was unable to testify
on direct examination as to the source of the rumor. If the rumors
stemmed from the statements made by FFP to the municipal court, the
MESC, or the welfare department, we would extend to them the same
privilege as discussed previously. If the rumors stemmed from the
missing $8,400 from 1986, the veracity of such rumors is
9
unquestioned. If the rumors were promulgated by the two witnesses
to the August 28 meeting between Bradley and Burroughs, the
spreading of the rumors to Warren are not the fault of FFP.
It is important to note that in her supporting brief,
Burroughs expressly separates the rumors relied upon by Warren from
those allegedly made by Bradley to other Forest residents. We
discern from this separation that Burroughs does not allege that
these latter representations were the basis for the rumors heard by
Warren. Rather, the source must be any of the former categories
discussed above, which sources would not implicate FFP for
misconduct.5
Notwithstanding the source of the rumors, FFP's actions are
not sufficiently outrageous as a matter of law so as to be utterly
intolerable in a civilized community. Based upon Bradley's and
Rochelle's personal investigations, the demonstrated inventory
shortages, and the $8,400 reported stolen by Burroughs, FFP had
sufficient suspicion of illegal activity to support its
allegations.
Burroughs's final argument to sustain the i.i.e.d. verdict is
that FFP made repeated false accusations against Burroughs in the
presence of other customers, vendors, and store employees. For
purposes of this analysis, we distinguish the testimony of Dorothy
5
The testimony of Sandra Walker, an employee at the
convenience store, supports the contention that the rumors were
based upon the original charges made to the municipal court:
"Kay Burroughs got arrested for stealing, you know, stealing from
the store, because she was arrested they automatically assume
guilt."
10
Goolsby, another employee of the FFP store, from that of Jimmy
Putnam, the owner of a competing store, and Sandra Walker, also an
employee of the FFP store.
We find that Goolsby's testimony is insufficient to uphold the
i.i.e.d. verdict. On both direct and cross-examination, Goolsby
gave uncontroverted testimony that the statements made by FFP
representatives regarding Burroughs were part of their
investigation of the alleged criminal activity. Goolsby testified
that FFP asked her whether she thought Burroughs had been stealing
from the store; FFP did not accuse Burroughs, in Goolsby's
presence, of stealing monies.
The investigative nature of the conversations are bolstered by
the time frame in which the statements were made. Goolsby
established on cross-examination that she was asked about Burroughs
only during the two weeks immediately following Burroughs's
dismissal and only in her capacity as an employee of the store.
Hence, given our previous discussion of the reasonableness of FFP's
suspicion, the conversations with Goolsby were investigative in
nature and thus not outrageous.6
6
See White, 950 F.2d at 978 (applying Mississippi tort law
to find that a police officer's statements to an underage driver
were not outrageous, in part owing to the fact that the
statements were made in the context of "a legitimate police
function"); see also Davidson v. State Farm Fire & Cas. Co., 641
F.Supp. 503, 511 (N.D.Miss.1986) (concluding that where the
insurance company had made an independent investigation of the
cause of the fire, its decision to deny benefits was not
outrageous); cf. Lyons, 246 Mass. 139, 150 So.2d at 162 (holding
that where defendant verbally abused and threatened mother for
purposes of enforcing a debt owed by her son to defendant, the
conversation was entirely inflammatory and non-investigative).
11
FFP's statements to Putnam and Walker, however, were not
investigative in nature. The conversation with Putnam occurred
independently of FFP's investigation of Burroughs—Putnam had
stopped at the store to purchase gas, and Burroughs's name was
mentioned first by Putnam. Most telling about the conversation is
Putnam's uncontroverted testimony that Rochelle said, "I'm going to
see [Burroughs's] not going to work around here anymore."
Walker's testimony is similarly on point. He stated that
Bradley, Rochelle, and John Bernard, another FFP executive,
appeared at the store on numerous occasions and accused Burroughs
of embezzling from FFP. The conversations were reported to have
occurred in the presence of other customers and employees, were
repeated over a large span of time, and were accusatory, not
investigative, in nature.
To determine whether these statements are sufficient to
sustain the i.i.e.d. verdict, we would need to decide whether a
reasonable jury could have found them sufficiently outrageous under
Mississippi law. We need not reach this issue, however, for, as we
explain in the next section, Burroughs's emotional injuries were
not severe enough to meet the standard for i.i.e.d.
C.
Mississippi courts allow damages for intentional torts even
where they are not accompanied by physical or bodily injury.
Devers, 405 So.2d at 902. "In such instances, it is the nature of
the act itself—as opposed to the seriousness of the
consequences—which gives impetus to legal redress." Id. "The law
12
intervenes only where the distress inflicted is so severe that no
reasonable man could be expected to endure it." RESTATEMENT (SECOND)
OF TORTS § 46, cmt. j.
Burroughs did not allege physical injuries. The words used to
describe her emotional injuries include: jittery, upset, unnerved,
depressed, crying, emotional, mortified, terribly upset, bothered
tremendously, and very badly hurt. Others testified as to
Burroughs's poor church attendance in the period following the
incidents of this case and to her overall lower level of
participation in community affairs. She did not offer medical
testimony describing any clinical manifestations of depression or
other mental infirmities. Such emotional injuries are insufficient
to sustain damages for i.i.e.d. Compare Lyons, 246 Mass. 139, 150
So.2d at 155 (holding plaintiff's allegations of extreme
nervousness and severe headaches, such that she was physically and
emotionally unable to work and earn her livelihood, sufficient to
withstand a demurrer) with Jones, 617 F.Supp. at 1545 (holding
plaintiff's testimony that he suffered nightmares, could not sleep,
and required medical attention for his hypertension insufficient,
in the absence of corroborative medical testimony, to sustain jury
verdict for i.i.e.d.).
As a matter of law, Burroughs's emotional injuries were not
severe enough to meet the standard for i.i.e.d. We therefore
reverse the jury verdict on the i.i.e.d. claim and grant FFP's
motion for j.m.l. on that claim.
III.
13
FFP next asks this court to reverse the judgment in favor of
Burroughs on the slander count. FFP challenges on appeal the
falsity element only. We begin by referencing our previous
discussion regarding privileged communications and note that we
restrict our discussion of slander to non-privileged communications
only.
A claim of slander includes the following elements:
1. a false and defamatory unprivileged statement concerning
Burroughs made to a third party;
2. that FFP was at least negligent when it made these statements;
3. either actionability irrespective of special harm or the
existence of special harm.
See Blake v. Gannett Co., 529 So.2d 595, 602 (Miss.1988) (citing
Chatham v. Gulf Pub. Co., 502 So.2d 647, 649 (Miss.1987)).
The plaintiff has the burden of proof as to the element of
falsity. Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767,
776, 106 S.Ct. 1558, 1563, 89 L.Ed.2d 783 (1986). Truth is a
complete defense to an action for slander. Fulton v. Mississippi
Publishers Corp., 498 So.2d 1215, 1217 (Miss.1986).
Burroughs offers several pieces of evidence in support of the
jury verdict in her favor. On the element of falsity, Burroughs
points out that (1) the original charges of embezzlement were
dismissed by the municipal judge; (2) FFP presented no witnesses
to the theft; (3) there was no evidence of Burroughs's improved
finances during the time in which she was alleged to have stolen;
(4) cash overages were found while Burroughs was managing the
store, and cash shortages were reported after her having left
14
management of the store; and (5) Burroughs alleged that Bradley
attempted to frame her for theft.
We agree with FFP that the municipal judge's decision to drop
the embezzlement charges does not evidence the falsity of FFP's
allegations. On its face, the ruling amounted to a finding of
insufficient evidence, at the time of the hearing, to hold
Burroughs over for a grand jury hearing. Second, FFP's failure to
produce witnesses to the alleged crime does not support the slander
claim. In order to defend against slander, FFP has no burden to
produce witnesses to the crime.
FFP did, however, present the testimony of two experts who
opined that Burroughs was responsible for the theft at the store.
Although Burroughs's counsel attempted to discredit the experts by
exposing their financial relationships to FFP, much of their direct
testimony went unchallenged.
"The general rule is that opinion testimony of expert
witnesses is not of controlling effect, and a jury is not
absolutely required to accept opinions of experts in place of its
own judgment." New York Life Ins. Co. v. Johnston, 256 F.2d 115,
118 (5th Cir.1958). We are unable to say that a reasonable juror
could not have exercised his independent judgment against the
opinion of the experts. The jury heard Burroughs's testimony in
which she unequivocally denied having stolen money from the store,
and Burroughs presented circumstantial evidence suggesting that
Bradley was attempting to frame Burroughs for the theft.
Furthermore, the jury's decisions in favor of FFP on the malicious
15
prosecution and punitive damages charges are insufficient to
overturn the verdict.
In light of the evidence presented at trial, therefore, we
affirm the denial of FFP's motion for j.m.l. as to the slander
claim. We are unable to say that no reasonable juror could have
found for Burroughs and are thus bound, by the standard of review,
to affirm.
IV.
We review the district court's denial of FFP's motion for new
trial under an abuse of discretion standard. Pagan v. Shoney's,
Inc., 931 F.2d 334, 337 (5th Cir.1991). We must affirm the verdict
unless the evidence points "so strongly and overwhelmingly in favor
of one party that the court believes that reasonable men could not
arrive at a contrary [conclusion]." Jones v. Wal-Mart Stores, 870
F.2d 982, 987 (5th Cir.1989). The district court abuses its
discretion only where "there is an "absolute absence' of evidence
to support the jury's verdict." Pagan, 931 F.2d at 337.
The jury verdict in favor of Burroughs on the slander claim is
not against the great weight of evidence and, a fortiori, we must
affirm the district court's denial of FFP's motion for new trial.
Since we have previously reversed the jury verdict in favor of
Burroughs on the i.i.e.d. claim, we do not address that claim
further.
V.
The judgment is REVERSED on the i.i.e.d. claim, and j.m.l. is
hereby granted in favor of FFP. The judgment is AFFIRMED on the
16
slander claim, and the case is REMANDED for determination of the
apportionment of the $250,000 jury verdict.
17