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Sisler v. Gannett Co.

Decided: December 31, 1987.


On appeal from the Superior Court of New Jersey, Law Division, Somerset County.

Petrella, Dreier and Baime. The opinion of the court was delivered by Dreier, J.A.D.


[222 NJSuper Page 155] Plaintiff appeals from a summary judgment granted in the Law Division after a remand by the Supreme Court. This case

has had a protracted history in the courts. In 1983 at the conclusion of a lengthy defamation action, the jury found defendants negligent, awarding $200,000 in general damages and $850,000 in special damages. Plaintiff's claim for punitive damages was dismissed on motion. On appeal, we affirmed the judge's trial rulings, including the determination that plaintiff was a "private figure" requiring a showing of negligence and not actual malice. Sisler v. Courier-News Co., 199 N.J. Super. 307 (App.Div.1985), rev'd sub nom. Sisler v. Gannett Co., Inc., 104 N.J. 256 (1986). After establishing a new standard for review of private figure media defamation claims, the Supreme Court set aside the jury verdict and reversed the judgment below. The matter was remanded for retrial.

On remand, defendants moved for summary judgment. The trial judge to which the matter was then assigned granted the motion and dismissed the case. At the time the summary judgment motion was granted, plaintiff's motion in limine seeking evidentiary rulings was pending before the trial court.

We need only briefly restate the facts which are recounted in detail in earlier opinions of both the Supreme Court and the Appellate Division. Plaintiff Mayo Sisler co-founded the Franklin State Bank in the early 1960's, and until he retired in 1980, plaintiff served as the bank's President or Chairman of the Board. When plaintiff retired in 1980, he began to pursue other projects, including the management of his wholly-owned racehorse breeding corporation and farm, named Apt-to-Acres.

In May 1980 plaintiff secured a $2,250,000 loan from Franklin State Bank with his Monmouth County horse farm and live-stock which was worth approximately $5,250,000. The bank requested side collateral, and plaintiff pledged a Somerset County real estate holding that was appraised at approximately $700,000 (although it was assessed at $400,000).

In August 1981 defendant Sam Meddis wrote and his employer, defendant Courier-News, published a series of three articles about allegedly improper loans that were made by the Franklin

State Bank. In the second article, although the body of the article was accurate, the headline and lead paragraph implied that plaintiff was involved in a federal FBI probe of several million dollars in questionable auto loans. In the third article, published the day after the second article, defendants accused the former president of the bank of posting collateral worth only $400,000 to subsidize a $2,000,000 mortgage loan which was obtained from the Franklin State Bank.

The defendant reporter allegedly misunderstood the concept of side collateral, misled his employer concerning a legal consultation, misrepresented the bank's reliance on appraised rather than assessed values, and never checked the public documents on Apt-to-Acres at the Monmouth County Clerk's office. These documents would have illustrated to the reporter that the farm was the principal collateral for the loan. The Courier-News printed retractions of these two articles.

Plaintiff suffered tremendous financial losses when a leading horse syndicator anonymously received these articles. The syndicator terminated negotiations with plaintiff for the standing at stud of three world-class standardbred horses, because "[t]he articles do raise doubt as to the financial stability of you and the farm as well as the most important item -- 'integrity'!"

At the initial trial, the judge found that because plaintiff was not a public figure, plaintiff had the burden of proving that defendants negligently published the defamatory articles. The judge also denied plaintiff's motion to submit the issue of punitive damages to the jury which would have necessitated a finding of actual malice. The judge commented:

And with respect to the so-called constitutional standard of actual malice, it is our opinion that the evidence would not permit the minds of reasonable persons to differ as to the fact that the articles were not published with a knowing calculated falsehood.

Rather, the evidence indicates that the defendant reporter, as well as the editors of the newspaper, mistakenly believed certain facts and arrived at certain erroneous conclusions as to those facts and their publication in the newspaper reflected those beliefs and conclusions . . .

The misconceptions of the defendant reporter and the editors of the paper are not sufficient to sustain a conclusion that the articles were published with knowledge of the falsity of the information or in reckless disregard of whether they were true or false.

The jury returned a verdict for the plaintiff and awarded $1,050,000 in compensatory damages. Defendants appealed, raising among other issues the trial court's use of the negligence standard. Plaintiff cross-appealed, contesting the judge's punitive damages ruling and requesting that the court increase the compensatory damage claim. We affirmed Judge Gaynor's decision in all respects and specifically stated that "[a]s to punitive damages, there was no testimony in this case in which a reasonable jury could have found the requisite malice or intent to harm." 199 N.J. Super. at 329.

The Supreme Court reversed the judgment and remanded the case for retrial in accordance with its opinion. The Court adopted a new common-law standard, holding that

when a private person with sufficient experience, understanding and knowledge enters into a personal transaction or conducts his personal affairs in a manner that one in his position would reasonably expect implicates a legitimate public interest with an attendant risk of publicity, defamatory speech that focuses upon that public interest will not be actionable unless it has been published with actual malice. [104 N.J. at 279].

The Court explicitly held that plaintiff must prove that defendants acted with "actual malice" by publishing the defamatory articles.

The Court did not address any of plaintiff's cross-claims, noting that because a new standard of proof had been enunciated, the issues raised by plaintiffs may appear differently at the retrial. Id. at 284-285. Plaintiff filed a motion for reconsideration of the issues raised by his petition for certification; however, the Court denied the petition and stated that it expressed "no view in respect of the merits of the issues that are the subject of the within motion."

On remand, defendants moved for summary judgment on two grounds. First, defendants contended that plaintiff cannot prove "actual malice" as a ...

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