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Lutz v. Royal Insurance Co.

Decided: January 23, 1991.


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

O'Brien, Scalera and Keefe. The opinion of the court was delivered by Keefe, J.A.D.


Plaintiff Franklin D. Lutz appeals from the entry of summary judgment dismissing his complaint for defamation and tortious interference resulting from the Law Division judge's determination that the communications of which plaintiff complained were non-actionable "pure" opinions and that plaintiff failed to present sufficient evidence of defendants' malice with respect to his claim of interference with contractual relations. We affirm in part and reverse in part for the following reasons.

The parties are essentially in agreement as to many of the facts in this matter. They dispute, however, the content and context of certain statements alleged to have been made by plaintiff, and the motivation of defendants Linda E. Cary, W.P. Buckleman and Donna Poe, employees of defendant Royal Insurance Company of America, for disclosing plaintiff's alleged statements to his employer, Clarence Lofberg, Inc. (Lofberg, Inc.), who terminated plaintiff's employment because of plaintiff's alleged conduct.*fn1

Lofberg, Inc. is an insurance agency. Richard Lofberg serves as chief executive officer, and Paul Lofberg, his brother, serves as president. Plaintiff was hired by Lofberg, Inc. in May 1969 and was ultimately promoted to executive vice president and supervisor of the personal lines department, a position he held at the time of the events which form the basis for his complaint. He was also responsible for maintaining proper relationships with the insurance companies with whom Lofberg, Inc. placed its personal lines and for soliciting and obtaining new personal lines business.

Royal Insurance Company of America (Royal) is an insurance company with whom Lofberg, Inc. placed much of its insurance business. Lofberg, Inc. had been an agent for Royal for over 40 years. In 1984, Royal designated Lofberg, Inc. a "Royalty Agent," which meant that Lofberg, Inc. was given the special

privilege of acting as its own underwriter with respect to certain kinds of policies. The designation of Royalty Agent was a great honor, and it represented a high degree of trust which Royal had in an agent receiving the designation. In return for having been granted Royalty Agent status, Lofberg, Inc. was expected to meet higher sales quotas. As the supervisor of the personal lines department at Lofberg, Inc., plaintiff was given underwriting authority under the Royalty Agent agreement on behalf of Royal.

In July, 1986 Royal instituted a new program on its computers entitled "PULSE," which was being installed by Royal for inputting data directly from agencies to Royal. Defendant Donna Poe, employed at the Royal office in Virginia, was the Royal employee who was sent to Lofberg, Inc. to train its personnel over a three-day period on the use of the new system.

Poe arrived at the Lofberg office on July 14, 1986 and was introduced to plaintiff and Marie Lendino. She spent some time with them in going over the "PULSE" manual. When it came time to access the computer, however, she encountered many problems with the Royal computer system. Poe's account of what transpired thereafter, placed in a written report to her superior, defendant Buckleman, follows.

During the period when Poe was attempting to solve the computer problems, plaintiff, according to Poe, "constantly complained of Royal's inadequate service." He told Poe that he did not plan on writing any more business through Royal than was necessary to meet the requirements for maintaining Royalty Agent status and that he preferred placing his business with Great American Insurance Company, stating that "Royal sucks" and "Great American is my baby."

During Poe's second day at Lofberg, Inc., the problems with the computer system continued, and she was never able to access the system. In the morning hours, plaintiff "constantly made sexist remarks" and "spoke of women from tennis camp," from which he had just returned after being on vacation.

Plaintiff continued to complain about Royal, and at one point, when he noticed that the Lofberg agency name had been spelled incorrectly on the training manual, stated that "stupidity must be a qualification for working at Royal."

Plaintiff's remarks and "smart comments" upset Poe and had her "in tears." At some point during that morning, Lendino told Poe "not to let [plaintiff] get to [her]," and that plaintiff "was always that way. You just have to ignore him, just tune him out."

On July 16, the third day of the training session, plaintiff and Lendino met Poe at Royal's East Hanover office to use that office's computers in connection with Poe's continued training of plaintiff and Lendino. The "entire time" that Poe was attempting to teach Lendino the system, plaintiff told Poe to "shut up," apparently because plaintiff wanted Lendino to learn the system by herself without Poe's help since Poe would not be available to answer questions when Lendino was actually doing work at Lofberg, Inc. Further, whenever Poe tried to show or tell Lendino how to proceed, plaintiff told Poe that Lendino "didn't need to know that," and, at one point, even Lendino asked plaintiff to be quiet so she could learn what Poe had to teach.

Thereafter, plaintiff, Lendino and Poe went to lunch. During lunch, plaintiff "got on the subject of women [and] sex," and at one point said: "Women have it made during sex. All they have to do is lie on their back [ sic ] and enjoy themselves." At this point Lendino responded by "rolling her eyes," and Poe responded that plaintiff "had obviously been with immature women." Plaintiff then asked Poe "are you saying that you are a mature woman?" Poe did not respond. When the three returned to the East Hanover office after lunch, plaintiff "used the word F__ a couple of times in general conversation." Thereafter, plaintiff unfavorably "compared" Royal to Great American numerous times.

When Poe returned to her Richmond office, she met with her supervisor, and defendant Buckleman, the processing center manager of the Richmond office. After hearing Poe describe her experiences with plaintiff, Buckleman asked Poe to submit a written statement of the events. The preceding quotes were taken from Poe's handwritten statement.

After receiving Poe's written statement, Buckleman wrote to A.R. Accorti, the territorial vice president of Royal in the Philadelphia area, and informed him of Poe's experiences with plaintiff. In his letter, Buckleman quoted portions of Poe's written statement regarding the comments plaintiff made to Poe. Buckleman stated that while Poe was in the company of plaintiff he was "abusive, vulgar and offensive." Buckleman also stated that Poe did not want to return to Lofberg, Inc. if plaintiff was going to be there and questioned Accorti as to how "[plaintiff could] get off with his behavior?" Buckleman also stated that plaintiff's behavior appeared to be "routine" given the advice Poe received from "women in the Lofberg office." He closed by saying that although he did not "know what can be done about [plaintiff's] behavior," he thought Accorti "should be aware of this problem."

When Accorti received Buckleman's letter, he forwarded it to defendant Cary, the Royal regional manager, who determined that the appropriate response under the circumstances would be to terminate Lofberg, Inc.'s underwriting responsibilities for both personal and commercial lines, thereby revoking Lofberg, Inc.'s Royalty Agent status. As a result, on August 7, 1986 Cary wrote to Richard Lofberg and terminated the Royalty Agent agreement. Cary enclosed a copy of Buckleman's letter to Accorti with her letter, saying that the "behavioral situation which is described in the attached letter is beyond anything which I would ever comprehend occurring in my region and especially as respects a Royalty Agency relationship." She concurred with Buckleman's description of plaintiff's behavior as "abusive, vulgar and offensive," and stated that the situation required that Lofberg, Inc. apologize to Poe, Buckleman

and Accorti. After discussing the significance of the Royalty Agent relationship and noting that "normally acceptable business practices and personal manners were so flagrantly abused," Cary stated that "the behavior of [plaintiff] not only does not epitomize the position of a Royalty Agent, it does not epitomize civilized human behavior." Accordingly, Cary told Lofberg that as of September 1, 1986 the Royalty Agent agreement was no longer in effect, and while Royal would "continue to service [Lofberg, Inc.'s] business with the utmost of professionalism," it wanted to deal with someone besides plaintiff in connection with "all future personal lines matters."

Immediately after receiving the Cary letter, Richard and Paul Lofberg decided to terminate plaintiff. Although the Lofbergs made no investigation as to the truth of the allegations in Cary's letter, they believed that the allegations were true. The Lofbergs had previously noted that plaintiff "was beginning more and more frequently to talk with various female employees on the staff in a manner that indicated some sexual overtones or sexual crudity." Plaintiff had been using "four letter words" around the office, other Lofberg employees had complained about plaintiff's "vulgar and crude" comments. Plaintiff had become "overbearing" and "arrogant" and was not performing his work.

Moreover, several years before, the Lofbergs had discussed with plaintiff what they viewed as a "drinking problem." Thereafter, for a short time, plaintiff controlled his drinking, but after approximately three months, the Lofbergs noticed that plaintiff's drinking had begun to affect his work again. The Lofbergs planned to once again talk with plaintiff about his drinking when they were contacted by Cary, who complained that Royal was having trouble working with plaintiff because of his drinking problem. Cary and Richard Lofberg agreed that plaintiff could not continue acting as a Royalty Agent in that state. Cary suggested that Lofberg allow her to discuss the matter with plaintiff because a close relative had been an alcoholic, and she believed she could help plaintiff.

Plaintiff met Cary at a rest area on the New Jersey Turnpike sometime during the spring of 1985. She told plaintiff about her father's drinking problem and how Alcoholics Anonymous had helped him. Cary also related information to plaintiff which she had received from people in the Royal office in Philadelphia who had previously spent several days training plaintiff, to the effect that they had observed him with "liquor on his breath" throughout the course of the training. During this meeting, Cary told plaintiff that if he did not "try Alcoholics Anonymous and [ ] take care of his drinking problem," she "had no alternative but to go to the Lofbergs and tell them that this was a problem, [that] this is what transpired in Philadelphia and it didn't seem that we could continue to have this [Royalty Agent] responsibility with [plaintiff]."

Having experienced all of these problems with plaintiff's drinking and poor performance prior to receiving the Cary letter in August 1986, the Lofbergs believed the circumstances described in the Buckleman and Cary letters, and they felt that plaintiff had damaged their reputation. Richard Lofberg did not interpret Cary's letter as Cary's wanting Lofberg, Inc. to fire plaintiff, but that Cary did not want plaintiff handling Royal matters in the future. However, Lofberg stated that had it not been for Cary's letter, he would not have terminated plaintiff when he did in August 1986.

Plaintiff's version of the events leading up to his termination is substantially different. When Poe arrived at Lofberg, Inc. on July 14, 1986 plaintiff informed her that they had experienced problems with the computer interface between Lofberg, Inc. and Royal and that the computer line had not been working for approximately six weeks. At one point on July 14, while Poe was at Lofberg, Inc., plaintiff noticed that a number of Lofberg employees not involved in the training were "congregating near where [Poe] and [Lendino] were trying to conduct the training," and he "jokingly ...

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