E. Menkowitz, M.D., Aplt. v. Peerless Publications
E. Menkowitz, M.D., Aplt. v. Peerless Publications
Opinion
OPINION
JUSTICE DONOHUE
A jury awarded Appellant, Elliot Menkowitz, M.D. ("Dr. Menkowitz"), $1,000,000 in compensatory damages in his defamation suit against Appellees, Peerless Publications, Inc. ("Peerless") and Eric Engquist ("Engquist"). The Superior Court found that the trial court erred in failing to enter judgment
non obstante verdicto
("JNOV") in Appellees' favor and vacated the award of compensatory damages. We granted allocatur to consider whether in so doing, the Superior Court failed to exercise appropriate deference to the fact-finder when reviewing a JNOV ruling, as explained in this Court's ruling in
Joseph v. Scranton Times, L.P.
,
Dr. Menkowitz began his employment as an orthopedic surgeon at Pottstown Memorial Medical Center ("PMMC") in the early 1970s. At PMMC, Dr. Menkowitz was accused of verbally abusing colleagues and staff and engaging in other inappropriate *799 behavior in front of patients. In April 1996, Dr. Menkowitz was informed that due to his inappropriate conduct, PMMC's Medical Executive Committee and the Medical Committee of the Board had voted to suspend him or allow him to take a voluntary leave to address his behavioral problems. Dr. Menkowitz then disclosed that he had recently been diagnosed with ADHD and suggested that he might be protected under the Americans with Disabilities Act. 1 In light of this information, PMMC did not suspend Dr. Menkowitz or require him to take a leave of absence, but issued a written warning explaining that should Dr. Menkowitz's misbehavior continue, PMMC would summarily suspend all of his clinical privileges. Less than a year later, on March 25, 1997, based upon continuing behavioral issues, PMMC suspended Dr. Menkowitz for six months. The suspension did not last for the full six months, however, as PMMC lifted it approximately one month later when Dr. Menkowitz filed suit against PMMC in federal court for violation of the Americans with Disabilities Act and section 504 of the Rehabilitation Act. 2
On April 18, 1997, the Mercury, a local Pottstown newspaper, ran a front-page article about Dr. Menkowitz (hereinafter "the Article"). The Mercury is published by Peerless and the Article was written by Engquist. Under the headline "PMMC Suspends Physician," the Article reported that Dr. Menkowitz had been suspended from PMMC. Of particular relevance to this appeal, the Article further stated, that "[Dr. Menkowitz's] sudden absence from the hospital has spawned rampant rumors of professional misconduct regarding his treatment of an older female patient." This statement (hereinafter, "the Statement") forms the heart of this litigation. On April 26, 1997, the Mercury ran an editorial feature called "Cheers and Jeers," which mentioned Dr. Menkowitz's clash with PMMC and "jeered" the manner in which the parties handled the incident, noting the suspension, the federal civil action filed by Dr. Menkowitz, and PMMC's subsequent decision to lift the suspension. 3
Upon opening his newspaper on April 18, 1997, Dr. Menkowitz discovered the Article. He quickly fell into a severe depression. Dr. Menkowitz's treatment for this depression included multiple medications that caused fasciculations (tremors) in his arms and hands, impairing Dr. Menkowitz's ability to perform surgery.
In April 1998, Dr. Menkowitz filed the underlying action in Montgomery County, raising claims of defamation, invasion of privacy - false light, intentional interference with existing and prospective relationships, and intentional infliction of emotional distress related to these publications.
4
In particular, Dr. Menkowitz alleged that the Statement, which referenced misconduct in connection with an
*800
elderly female patient, gave rise to defamatory implications or innuendo. Complaint, 4/14/1998, ¶ 19. Dr. Menkowitz sought punitive damages, which required him to prove that Appellees acted with malice in publishing the Article.
See
New York Times Co. v. Sullivan
,
Trial did not commence until 2014. In an attempt to prove malice in connection with his claim for punitive damages, Dr. Menkowitz presented testimony from an expert witness to establish that Appellees published the Article with a high awareness of its probable falsity or serious doubts as to its truthfulness. Appellees defended against this accusation with testimony from Engquist regarding his sources for the Article and his belief as to the truth of its representations. Appellees also called an expert witness, who opined that publication of the Article did not violate journalistic standards.
With regard to compensatory damages, Dr. Menkowitz testified to the depression he suffered following the publication of the Article and the physical consequences of the medicines used to alleviate the depression. He also testified that after publication of the Article, additional hospitals terminated his privileges and attorneys ceased using him as an expert witness. Dr. Menkowitz's wife and son testified regarding the effect that reading the Article had on him. Dr. Menkowitz's treating psychologist, who testified as to the depth and severity of Dr. Menkowitz's depression, opined that it was triggered by the publication of the Article. Dr. Menkowitz also presented the testimony of a practicing attorney, Jeffrey A. Krawitz, Esquire ("Attorney Krawitz"), who indicated that he had written a letter to opposing counsel who was planning to use Dr. Menkowitz as an expert in a particular case. In this letter, Attorney Krawitz informed opposing counsel that he had learned that Dr. Menkowitz had been indicted on charges relating to improper sexual conduct with patients.
The jury returned a verdict in Dr. Menkowitz's favor, awarding both compensatory and punitive damages. In compensatory damages, the jury awarded $200,000 for harm to reputation and $800,000 for past wage loss and future earning capacity. Appellees filed post-trial motions, seeking, *801 among other relief, JNOV, and a remittitur or vacation of the punitive damage award. After entertaining argument, the trial court vacated the punitive damage award, concluding that Dr. Menkowitz had failed to establish that Appellees acted with malice. The trial court denied all other relief, including Appellees' request for entry of JNOV.
Both parties appealed. Appellees raised eight issues of trial court error, asserting claims that the trial court erred in denying their post-trial request for JNOV; denying their post-trial request for remittitur of the compensatory damage award; failing to issue particular jury instructions; and making certain evidentiary rulings.
See
Trial Court Opinion, 9/19/2014, at 5-6. Dr. Menkowitz challenged only the trial court's decision to vacate the punitive damage award.
Id.
at 5. The trial court issued a lengthy opinion pursuant to Rule 1925(a) of the Pennsylvania Rules of Appellate Procedure. With regard to Appellees' challenge to the denial of their motion for JNOV, the trial court rejected Appellees' contention that Dr. Menkowitz had failed to prove that the Article contained a material falsity. The trial court noted that the Superior Court has recognized the tort of defamation by implication, pursuant to which the "literal accuracy of separate statements will not render a communication 'true' where ... the implication of the communication as a whole was false."
Id.
at 13 (quoting
Dunlap v. Philadelphia Newspapers, Inc
.,
Next, the trial court supported its decision to vacate the jury's award of punitive damages, concluding that Dr. Menkowitz had failed to produce sufficient evidence that Appellees either knew that the Article was false or had a "high degree of awareness of ... probable falsity."
Id.
at 12 (quoting
Harte-Hanks Commc'ns, Inc. v. Connaughton
,
On appeal, the Superior Court acknowledged that in cases such as this, with a private figure as plaintiff, a media defendant, and an issue of public concern, the plaintiff must prove falsity of the communication at issue, negligence in its publication, and actual damage to the plaintiff's reputation caused by the defamatory communication for an award of compensatory damages.
Menkowitz v. Peerless Publ'ns, Inc.
,
The Superior Court found that Dr. Menkowitz adequately established that the Statement is capable of defamation by implication. In reaching this conclusion, the Superior Court parsed the Statement's phrases and discussed their plausible implications at length. See id. at 983-87. For instance, it reasoned that a jury could find that the phrase "professional misconduct" suggests an array of misconduct to lay persons, including sexual impropriety. Id. at 984. The Superior Court found the inclusion of the patient's gender supportive of the innuendo of sexual impropriety, as there would be no reason to identify the patient as female "if nothing sexual is to be inferred." Id. at 984. It further noted that the sexual innuendo from "professional misconduct" is plausible because the State Board of Medicine's regulations provide that sexual behavior with a patient is "unprofessional conduct." Id. The Court also focused on the use of the phrase "sudden absence," which, in its view, could reasonably suggest that Dr. Menkowitz had to act with urgency and was fleeing PMMC. Id.
The Superior Court then turned its attention to whether Dr. Menkowitz met the threshold requirements to be entitled to either punitive or compensatory damages. It first considered the trial court's conclusion that Dr. Menkowitz failed to establish malice in connection with the punitive damage award. The Superior Court found that the evidence of record supported the trial court's conclusion, citing to Engquist's testimony and Appellees' expert's opinion that there was no deviation from journalistic standards so as to permit a finding of malice. Id. at 988.
Turning to the propriety of the compensatory damage award, the Superior Court considered whether Dr. Menkowitz established that he suffered damage to his reputation attributable to the Statement's defamatory innuendo, as opposed to his suspension from PMMC. It concluded that Dr. Menkowitz had presented no evidence to confirm that the alleged injury to reputation was caused by the contents of the Article as opposed to his suspension. The Superior Court explained that
[n]ot one witness testified that his or her view of the physician changed as a result of this communication. Furthermore, even [Dr. Menkowitz] conceded that the harshness of suspension alone after twenty-five years would lead one to believe that he had done something horrible. N.T.[ ], 3/17/[20]14, at 260. He recounted a conversation with an elderly gentleman who recognized his name "because he remembered I was the doctor who was 'kicked out of the hospital.' " Id. at 262. [Dr. Menkowitz's] expert also acknowledged that the public disclosure of the suspension alone was damaging to the physician's reputation. Mr. Eveslage conceded, "If I am reading that a surgeon in a hospital in my town has been banned from seeing patients at the hospital, *803 that clearly is going to be damaging to his reputation." N.T.[ ], 3/18/[20]14, at 440.
[Dr. Menkowitz's] testimony that other hospitals with which he was associated read the article and stopped using him is similarly deficient as it failed to distinguish whether the alleged injury to reputation was caused by the suspension or the article. Absent is the causal connection required by Joseph between the alleged defamatory innuendos and the harm to reputation, as distinguished from the suspension itself. All of the foregoing proof tends to confirm that any damage to [Dr. Menkowitz's] reputation flowed from the suspension itself, not any implication of sexual or physical abuse. Thus, even if we were to find a basis for liability, the record contained insufficient proof that the defamatory statement or innuendos, rather than the fact of suspension, caused damage to reputation that would have supported a compensatory damage award. [Dr. Menkowitz's] failure to prove damages to his reputation resulting from the defamatory innuendo is fatal to his claim.
Id. at 989. The Superior Court vacated the award of compensatory damages and remanded for the entry of JNOV in Appellee's favor without reaching the other issues raised. Id. 7
On appeal to this Court, we granted allocatur with respect to a single issue:
Did the Superior Court disregard this Court's holding in Joseph III by failing to apply the appropriate standards of causation and deference in vacating the judgment entered by the trial court awarding substantial compensatory and consequential damages to Elliot Menkowitz, M.D. for harm to reputation and loss of past and future earnings?
Menkowitz v. Peerless Publ'ns., Inc.
,
Appellees disagree. To the contrary, they argue that the Superior Court performed the proper review, and in so doing found that Dr. Menkowitz offered no evidence (as opposed to incredible evidence) that he suffered reputational harm because of the Statement's alleged false innuendo. Appellees' Brief at 26. Appellees suggest that Joseph III is distinguishable on this basis, arguing that while in Joseph III this Court found error when the Superior Court ignored or minimized certain evidence to arrive at contrary factual conclusions, in the present case, the Superior Court did not make factual findings but rather merely discerned that the record was entirely devoid of evidence that would *804 support a finding that Dr. Menkowitz suffered reputational harm due to innuendo arising from the Statement. Id. at 28. 8
We review the Superior Court's legal conclusions de novo and our scope of review is plenary.
Reott v. Asia Trend, Inc.
,
A court may enter JNOV on one of two bases. The first is where a movant is entitled to judgment as a matter of law because, upon reviewing the record and deciding all factual inferences adverse to the movant, the law nonetheless requires a verdict in his favor.
Moure v. Raeuchis,
Thus, in the present case we may conclude that the trial court's denial of JNOV was inappropriate only if there is insufficient, competent evidence to sustain the verdict.
Wenrick v. Schloemann-Siemag Aktiengesellschaft
,
*805
With this background, we turn to
Joseph III
. In 2002, Thomas Joseph, Sr., his son and his two businesses, Acumark, Inc., and Airport Limousine and Taxi Service, Inc., filed suit against a Scranton-area newspaper and two of its journalists, alleging, inter alia, defamation. They based their claims on eight articles, published between June and October 2001, concerning alleged ties between Joseph and organized crime activities, including an association with the purported head of a Northeastern Pennsylvania crime family, William D'Elia. Among other information, the articles reported on the execution of federal and state search warrants at Acumark, Inc., Joseph's home, D'Elia's home, and the homes of two other individuals. The now-former Judge Mark Ciavarella of Luzerne County Court of Common Pleas presided over a bench trial, at the conclusion of which he returned a verdict in Joseph's favor and awarded $2,000,000 in compensatory damages. The Superior Court affirmed.
Joseph v. Scranton Times L.P.
,
The Honorable Joseph Van Jura presided over a second bench trial. While Judge Van Jura found that the articles contained false statements, he concluded that Joseph was not entitled to recover damages because he failed to establish that he suffered any impairment of reputation or standing in the community.
The Superior Court reversed, disagreeing with the conclusion that Joseph had failed to establish that he had suffered harm as a result of the articles. Although recognizing that the trial court did not believe Joseph's (or his daughter's) testimony regarding harm to his reputation, the Superior Court explained that the injuries from defamatory statements include not only reputational harm, but also personal humiliation and mental anguish.
In
Joseph III
, this Court reversed. We began by reviewing specific principles imposed by the First Amendment to the
*806
United States Constitution
9
that govern the analysis of causation in private figure defamation cases. A state's legitimate interest in compensating private individuals for injury to reputation "extends no further than compensation for actual injury," and that injury must flow from "the publication of a false fact.' "
Joseph III
,
Given the requirement of proof of actual injury to reputation, in
Joseph III
we held that the Superior Court had erred in ruling that Joseph could recover for mental and emotional injury without establishing reputational harm.
Id.
at 433. Of particular importance to the issues presented here, this Court also rejected the Superior Court's determination that the trial court had ignored the testimony of Joseph, his son and daughter-in-law.
Id.
We pointed out that, to the contrary, it was within the trial court's discretion, as the factfinder, to reject this testimony, citing the well-established standard that questions of credibility and conflicts in evidence are for trial courts to resolve, not appellate courts.
Id.
(citing
Dept. of Trans., Bureau of Traffic Safety v. O'Connell
,
In reversing the trial court's refusal to grant JNOV on compensatory damages, the Superior Court framed the issue as whether Dr. Menkowitz proved that the injury to his reputation was caused by the "allegedly false statements or innuendos" in the Statement, as opposed to the "truthful reporting of the suspension" in the Article.
Menkowitz
,
In support of the Superior Court's reasoning, Appellees insist that
Joseph III
has no application because here, unlike in
Joseph III,
the Superior Court did not weigh any evidence or hold that the causation evidence presented was unpersuasive.
10
Appellees' Brief at 26. Instead, Appellees contend that the Superior Court merely held that Dr. Menkowitz had presented no evidence linking his reputational injuries to the false implications of improprieties in the Statement.
We disagree with Appellees' contentions, as we conclude that the Superior Court erred when reviewing the trial court's denial of JNOV relief. First, in reversing the trial court's denial of Appellees' motion for JNOV, the Superior Court did not reach a finding that the trial court had abused its discretion or committed an error of law. To the contrary, the intermediate appellate court did not mention the evidence cited by the trial court in its Rule 1925(a) opinion in support of its denial of JNOV. In *808 particular, the Superior Court overlooked the testimony of Dr. Menkowitz's principal causation witness, Attorney Krawitz, who testified that after reading the Article, he wrote a letter to another attorney who was using Dr. Menkowitz as an expert witness and informed him that Dr. Menkowitz had been accused of committing "improper sexual advances on his patients." Trial Court Opinion, 9/19/2014, at 25.
Second, contrary to Appellees' contention, the Superior Court here did in fact "scour the record" to identify evidence that supported its outcome. The trial court made no mention of the testimony of Dr. Menkowitz
11
or his expert witness regarding the potential damage to reputation that may result from a hospital suspension. The trial court also did not include in its ruling any reference to Dr. Menkowitz's recollection of an elderly man who remembered his name because he had been "kicked out of the hospital." As indicated hereinabove, when reviewing a denial of JNOV, the reviewing court should limit its inquiry as to whether there is sufficient competent evidence to support the factfinder's verdict, and in this regard the court must reject all unfavorable testimony and inferences.
See
Justice,
Third, and perhaps most importantly, the Superior Court, unlike the trial court, did not give Menkowitz, as the verdict winner, the benefit of every reasonable inference arising from the evidence while resolving any doubts in his favor. Contrary to the Superior Court's contention that "not one witness testified that his or her view of the physician changed as a result of this communication,"
Counsel: Did you read an Article that accused him of professional misconduct with respect to his treatment of an elderly, female patient?
Krawitz: I did.
Trial Court Opinion, 9/19/2014, at 26 (quoting N.T., 4/15/2014, at 361). Attorney Krawitz further testified that he had read the Article in the Mercury. N.T., 4/15/2014, at 363 ("I saw that Article and I had that Article based upon my research."). Based upon this testimony, the trial court, drawing all inferences in favor of Dr. Menkowitz as the verdict winner, concluded that he had presented sufficient evidence to establish a causal link between the Statement in *809 the Article and Dr. Menkowitz's reputational harm - such that a reasonable juror could have concluded that Attorney Krawitz's reading of the Statement in the Article had damaged Dr. Menkowitz's reputation in Attorney Krawitz's eyes. Trial Court Opinion, 9/19/2014, at 25-26.
Dr. Menkowitz's own testimony also established the necessary causal link between the Statement and the harm to his reputation. Dr. Menkowitz testified as follows:
Menkowitz: Well, you know, as a physician, when someone says something about "professional misconduct," I am thinking I gave you the wrong medication, I operated on the wrong leg; you know, what in the world did I do wrong from a medical standpoint.
* * *
All the other Hospitals I was associated with read the article and asked me to resign my appointments. Lawyers that used me to evaluate patients stopped using me and most importantly patients stopped coming to see me. Those who read the article drew negative inferences, and those who only heard the rumor drew worse conclusions. The rumors spread as far as Hawaii and the incident became sensationalized with negative connotations.
Trial Court Opinion, 9/19/2014, at 26 (quoting N.T., 4/15/2014, at 250, 262) (emphasis added). Dr. Menkowitz's references to "rumors" in this testimony permits a reasonable inference in his favor that the alleged damage to his reputation was the result not of the Article's report of his suspension, but rather more specifically to the Statement, as the Statement referenced "rampant
rumors
of professional misconduct regarding his treatment of an older female patient."
Menkowitz
,
In this case, the Superior Court's standard of review in connection with the trial court's denial of JNOV was to determine whether the trial court had abused its discretion when it determined that sufficient, competent evidence existed in the trial record to sustain the jury's verdict. For the reasons set forth herein, we conclude that the Superior Court failed to do so. 12 Instead, the Superior Court cited to other evidence that could support a contrary conclusion and, in so doing, did not review the record in the light most favorable to the verdict winner and afford him the benefit of all reasonable inferences. As a result, the Superior Court disregarded *810 this Court's holding in Joseph III by failing to apply the appropriate standards of causation and deference.
Accordingly, we reverse the Superior Court's order in the present case granting JNOV in favor of Appellees. Because the intermediate appellate court did not rule on the other issues the parties raised before it, we remand to that court for further proceedings.
Chief Justice Saylor and Justices Baer, Todd, Dougherty, Wecht and Mundy join the opinion.
The Mercury published two other articles related to Dr. Menkowitz's suspension and his federal lawsuit, neither of which are relevant to the present litigation. These articles were published on April 19 and 23, 1997. The April 19 article reported on the suit Dr. Menkowitz filed against PMMC alleging various federal and state civil rights violations and that his suspension violated the Americans with Disabilities Act. The April 23 article reported that PMMC had lifted the suspension, but indicated that the terms of the settlement that led to the lifting of the suspension were confidential.
Presently, we are concerned only with Dr. Menkowitz's defamation claim related to the Article containing the Statement, published on April 18, 1997. Although Dr. Menkowitz also alleged defamation in his complaint related to the April 26 editorial, he did not pursue this claim at trial.
Malice in the context of defamation requires a showing that "the defendant must have made the false publication with a 'high degree of awareness ... of probable falsity,' or must have 'entertained serious doubts as to the truth of his publication.' "
Joseph III
,
Pursuant to Pennsylvania statute, in an action for defamation, the plaintiff has the burden of proving, when the issue is properly raised:
(1) The defamatory character of the communication.
(2) Its publication by the defendant.
(3) Its application to the plaintiff.
(4) The understanding by the recipient of its defamatory meaning.
(5) The understanding by the recipient of it as intended to be applied to the plaintiff.
(6) Special harm resulting to the plaintiff from its publication.
(7) Abuse of a conditionally privileged occasion.
42 Pa.C.S. § 8343(a).
In a concurring opinion joined by three judges, the Honorable Mary Jane Bowes explained her view that the Statement was not reasonably capable of defamatory innuendo such that the claim should not have been submitted to the jury.
See
Menkowitz
,
Pennsylvania NewsMedia Association has filed a brief for amicus curiae in support of Appellees. It advocates for a standard that requires an analysis of each statement and alleged innuendo individually in defamation claims by a private citizens against a media defendant "to strike the proper balance between the competing interests of protecting speech and protecting reputation." See Brief for Amicus Curiae at 4-7. It argues that the Superior Court engaged in this type review when it reached it decision and vacated the judgment adverse to Appellees. Id. at 8-9.
In
Joseph III
, this Court acknowledged that in light of landmark U.S. Supreme Court defamation decisions, we may not interpret our state's Constitution as providing broader free expression rights than does its counterpart.
Joseph III
,
Appellees attempt to distinguish Joseph III on two additional grounds. First, Appellees contend that the two cases involve different types of claims, since Joseph III involved claims of direct defamatory statements while this case involves a claim of defamation by implication. Appellees' Brief at 27. We cannot agree with this argument, since both cases raise the same foundational issue as to whether the plaintiff presented sufficient competent evidence to tie the defamatory statements in question to the plaintiff's claims for damages.
Second, Appellees claim that Joseph III' s deference requirement attaches only when an appellate court wrongly second-guesses a trial court's finding that the plaintiff failed to support its damage claim with sufficient competent evidence, but does not apply with the same force when the appellate court second-guesses a trial court's finding that the plaintiff did introduce the necessary support for its claim. Appellees' Brief at 28. We do not agree that Joseph III 's deference requirement is to be limited in this respect, as an appellate court's standard of review over a trial court's ruling on a request for JNOV is fundamentally the same in all cases.
In other testimony, Dr. Menkowitz testified that he suffered no harmful effects (e.g., depression) as a result of the Article's report of his suspension. N.T., 4/15/2014, at 252 ("I was pretty confident that I had good legal counsel, and they were going to resolve the issue, and I would be back doing what I loved to do.").
In their brief filed with this Court, Appellees raise two additional issues: (1) because the First Amendment requires that a private figure establish that his/her injury was caused by a false statement, a trial court's denial of JNOV should be subject to an independent appellate review (rather than an abuse of discretion analysis); and (2) the Superior Court erred in its determination that the Statement was capable of defamatory implication. This Court did not grant allocatur to consider these issues, however, and thus they are beyond the scope of our present review.
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