No. 90-268
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
SIDNEY P. KURTH,
Plaintiff and Appellant,
GREAT FALLS TRIBUNE COMPANY and
COWLES MEDIA COMPANY, its parent
company,
Defendants and Respondents
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable R.D. McPhillips, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
James Graves; Stephens & Graves; Billings, Montana
For Respondents:
Peter Michael Meloy, Helena, Montana
Submitted on Briefs: November 15, 1990
Decided: January 10, 1991
Filed:
Justice Fred J. Weber delivered the Opinion of the Court.
The plaintiff, Sidney P. Kurth (Kurth) brought this action for
defamation in the Eighth Judicial District, Cascade County, seeking
damages suffered as a result of an article published by the
defendant, Great Falls Tribune (Tribune). The District Court
granted summary judgment in favor of the Tribune. We reverse and
remand for further proceedings consistent with this opinion.
The issues presented are:
1. Did the District Court err when it determined that Kurth
is a public figure as a matter of law?
2. If Kurth is a public figure, did the Tribune act with
actual malice?
Kurth brought this action against the Tribune for defamation
arising out of a newspaper article which appeared in the Tribune
on February 3, 1984. The article reported that Kurth was sought
for at least nine llcriminalwcharges. The falsity of the
publication was acknowledged by retraction on December 14, 1985.
The article was one of a series of news stories arising out
of the activities of Multi-Management Corporation (MMI) and its
principles, including an MMI corporate officer, Karl Herrman, and
MMI1s legal counsel, Sidney Kurth. In early February of 1984, a
local Great Falls television station reported that Herrman and
Kurth had been evicted from their London apartment where they were
purportedly staying while attempting to negotiate a $350 million
loan in behalf of MMI to build a large grain processing plant in
Great Falls. A reporter for the Tribune was assigned to watch the
television news report and write a story for the next morning's
paper. The reporter watched the television report and wrote the
story which is the subject of this lawsuit. The story reported the
eviction of Herman and Kurth. In deposition, the reporter
testified he was certain that the television report mentioned other
Kurth I'charge~~~
but was unable to remember whether the story
characterized them as wcriminal.ll
As background for the story, the reporter read a number of
previous stories on the MMI activities and the troubles associated
with the principles of MMI. Because the reporter was close to
deadline, he failed to verify that Kurth was sought for "criminal"
charges.
Kurth seeks special damages for loss of income, impairment of
employability, and loss of professional standing as an attorney in
a sum to be determined at time of trial. He also seeks general
compensatory damages and punitive damages.
Did the District Court err when it determined that Kurth was
a public figure as a matter of law?
A summary of the history of defamation law in the United
States, and in particular in Montana, is in order.
There are two status categories that have emerged in United
States Supreme Court decisions that determine the amount of fault
that plaintiff must prove in order to recover in a defamation
suit. If the plaintiff was a public figure at the time of the
alleged libel, then he cannot recover unless he can show the
I
i
.
statement was made with actual malice. New York Times v. ~ullivan
(1964), 376 U.S. 254, 279-280. public figures are subdivided into
two subcategories, public figures for all purposes and public
figures for a limited purpose. All purpose public figures have
achieved such pervasive fame and notoriety that they become public
figures for all purposes and in all contexts. Limited purpose
public figures have voluntarily injected themselves or were drawn
into a particular public controversy and thereby become public
figures for that limited range of issues. Gertz v. Robert Welsh,
Inc. (1974), 418 U.S. 323. In either case, public figure
plaintiffs must show the statement was made with actual malice
which means it was published "with knowledge that it was false or
with reckless disregard of whether it was false or not." New York
Times, 376 U.S. at 280.
The second status category is that of private figures. This
category has also been divided into two subcategories by the united
States Supreme Court. A private figure is usually not involved in
any matter of public concern. However, a private figure may be
involved in a matter of public concern and remain a private figure.
Milkovich v. Lorain Journal Co., (1990), 110 S.Ct. 2695, 2704,
2707, 111 L.Ed.2d 1, 15, 19. A private figure must show some
degree of fault to recover from a publisher or broadcaster but does
not have to prove actual malice except to recover presumed or
punitive damages. Gertz v. Welch, 418 U.S. 323, 347, 349.
In the case at bar, the controversy is a matter of public
concern as evidenced by the news media coverage of MMItsactivities
over a period of several years. The issue is whether Kurth became
a public figure through his involvement with M M I or whether he
remained a private figure throughout. An attorney does not become
a public figure merely because he represents a client who is of
concern to the public. Gertz, 418 U.S. 323; adi is on v. Yunker
(1978), 180 Mont. 54, 66, 589 P.2d 126, 133. The District Court
determined that Kurth was involved with M M I as more than an
attorney and had become a public figure as a matter of law.
Private figures become public figures when they "thrust themselves
to the forefront of particular public controversies in order to
influence the resolution of the issues involved." Gertz, 418 U.S.
In Montana, questions of law, as well as questions of fact,
are questions for the jury in libel and slander cases.
In Gertz v. Robert Welch, Inc.! supra, it was held that
a lawyer was not a public official, although he had taken
on a prominent case and was by virtue of his profession
an officer of the court. Likewise, it may be contended
in the retrial that Madison is a "public figure.I1
Whatever his status, it is a question for the jury to
determine, because of the constitutional provision that
the jury under the instructions of the court is the judge
of both law and fact. Article 11, Section 7, 1972
Montana Constitution. With appropriate instructions, the
jury can determine these matters and their status in any
trial, unless otherwise stipulated. (Emphasis supplied.)
Madison v. Yunker (1978), 180 Mont. 54, 66, 589 P.2d 126, 133.
Article 11, Section 7 of the 1972 Montana Constitution states:
Section 7. Freedom of speech, expression, and
press. No law shall be passed impairing the freedom of
speech or expression. Every person shall be free to
speak or publish whatever he will on any subject, being
responsible for all abuse of that liberty. In all suits
and rosec cut ions for libel or slander the truth thereof
may be given in evidence; and the jury, under the
direction of the court. shall determine the law and the
facts. (Emphasis supplied.)
For a jury to determine the law is unique to libel and slander
cases, and has been a part of Montana constitutional law since the
Constitution was first adopted in 1889. In Griffin v. Opinion
Publishing Co. (1943), 114 Mont. 502, 512, 138 P.2d 580, 586, this
Court interpreted the provision by stating:
While our Constitution like that of Missouri,
Colorado, South Dakota and Wyoming provides that in libel
suits "the jury, under the direction of the court, shall
determine the law and the factsftl yet the decisions
clearly show that the function of the court and jury is
not greatly different in the trial of libel from what it
is in other cases.
In other words, it is for the court and not the jury
to pass upon demurrers to the complaint; upon the
admissibility of the evidence; upon motions for nonsuit;
upon motions for a directed verdict; upon motions for
a new trial and upon motions to set aside verdicts or
vacate judgments.
In Williams v. Pasma (1982), 202 Mont. 66, 656 P.2d 212, this
Court held that it is also appropriate for the court to grant
summary judgment in libel and slander cases when there are no
material issues of fact and the evidence supports the judgment as
a matter of law.
That is not the situation with the case at bar. In its
Opinion and Order dated March 30, 1990, the District Court listed
the following factors on which it based its finding that Kurth is
a public figure as a matter of law:
This Court bases its findings upon the following:
(1) Mr. Kurth was the registered agent, assistant
secretary, director and incorporator in 1979 of
International Food and Fuel Manufacturing Co., Inc. This
corporation was consolidated with Multi-Management, Inc.
(Exhibit . 5 to Defendant's motion for summary judgment and
Sidney Kurth Deposition p. 9). Sidney Kurth was
representing I.F. F. at a presentation to raise money for
a grain processing plant. This process was taken over
by Multi-Management when the consolidation with I.F.F.
occurred. In the process of consolidation, Sidney Kurth
became an attorney for Multi-Management together with
Karl Herrman, Sr. Plaintiff Kurth became a shareholder
in Multi-Management, Inc. and served on committees for
Multi-Management. He was unsure whether he had ever been
an officer in MMI. (Kurth Deposition p. 9-10)
(2) The Multi-Management story was a newsworthy item in
the Great Falls area from the beginning. (Exhibits 7,
8, 9, 10, 12, 13, 14) (Sweeny Deposition p. 19)
(3) On February 19, 1982, the State Auditor's office
filed suit in district court in Great Falls charging MMI
and its various agents and representatives with
violations of the State's securities laws. The
violations charged included both registration violations
and fraudulent practices. A temporary restraining order
was issued on February 19, 1982 prohibiting further sales
of securities by Multi-Management, Inc. and its agents
and representatives and prohibiting Multi-Management and
its agents and representatives from attempting to raise
money. On August 25, 1982, Judge McCarvel ordered M M I
officials to show cause why they should not be held in
contempt for violation of the restraining order (CDV-
82-171).
(4) Among the violations charged by the State Auditor was
the issuance, on May 12, 1982, of stock certificates to
Sidney Kurth. The State Auditor further alleged that on
May 12, 1982, Karl Herrman had, in Sidney Kurthlsoffices
in Billings, Montana, issued stock to various other
persons. (CDV-82-171)
(5) On October 13, 1982, Judge Roth entered his Findings
of Fact and Conclusions of Law finding Karl Herrman, Jr.
in contempt of Court. (CDV-82-171)
(6) Sidney Kurth and Karl Herrman, Jr., were in Europe
at this time attempting to secure financing for Multi-
Management, Inc. Sidney Kurth and Karl Herrman, Jr.
remained in Europe for a period of two (2) years meeting
with various European and Arab sources attempting to
secure loans. (Kurth Deposition p. 10-40) While there,
Sidney Kurth ran up a bill of $66,000.00 on his personal
credit card for expenses. (Kurth Deposition, p. 39)
(7) In February of 1983, Sidney Kurthts law firm in
~illingswas closed due to Mr. Kurthls Multi-Management
activities. Mr. Kurth was no longer named as a partner
or associate.
(8) In June of 1983, Kurth was sued by a client for
malpractice. He was also the subject of a number of
actions for debt collection.
(9) In 1983, Multi-Management, Inc. and Multi-Management
officers Karl Herman, Jr., Warren Hill, and Robert
Montforten were indicted by a federal grand jury.
(United States ~istrict Court for the District of
Montana, Great Falls Division CR-83-42-GF)
In determining whether Kurth became a public figure or
remained a private figure, the factfinder must look to the nature
and extent of his participation in the particular controversy
giving rise to the defamation. Gertz, 418 U.S. at 352. Factors
1-6 and 9, as listed by the District Court, may be evidence that
the MMI story was a matter of public concern but the trier of fact
must establish if and how Kurth was involved to the degree required
to make him a public figure and not merely a private figure who was
representing his client. Factors 7 and 8 and the last sentence of
factor 6 are irrelevant because no facts were presented showing
these factors were ever a matter of public knowledge.
Rule 52(a), M.R.Civ.P., in relevant part states:
. . . Findings of fact and conclusions of law are
unnecessary on decisions of motions under Rules 12 or 56
or any other motion except as provided in Rule 41(b).
However, any order of the court granting a motion under
Rules 12 or 56 which is appealable to an appellate court
shall specify the srounds therefor with sufficient
particularity as to apprise the parties and the appellate
court of the rationale underlvins the rulinq and this may
be done in the body of the order or in an attached
opinion. The court may require any party to submit
proposed findings of fact and conclusions of law for the
court's consideration and the court may adopt any such
proposed findings or conclusions so long as they are
supported by the evidence and law of the case. (Emphasis
added. )
The ~istrictCourt's factors do not specify with sufficient
particularity the rationale underlying its ruling that Kurth is a
public figure as a matter of law to support a summary judgment.
In addition, our review of the record convinces this Court that a
genuine issue of material fact does exist as to whether Kurth
became a public figure for a limited purpose or remained a private
figure involved in a matter of public concern. We conclude that
under both Rule 52 (a) and Article 11, Section 7 of the Montana
Constitution there remain issues of material fact for determination
by a jury.
We hold that the District Court erred when it determined that
Kurth was a public figure as a matter of law. Since our holding
disposes of the appeal there is no need to address whether the
Tribune acted with actual malice.
We reverse and remand for further proceedings consistent with
this opinion.
We Concur: