UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT ____________________

No. 98-60716 ____________________

UNION NATIONAL LIFE INSURANCE COMPANY,

Plaintiff-Appellee-Cross-Appellant,

versus

LESLIE E. SMITH,

Defendant-Appellant-Cross-Appellee. _______________________________________________________________

Appeal from the United States District Court for the Northern District of Mississippi (3:95-CV-108-B-A) _________________________________________________________________ March 20, 2000

Before JONES, BARKSDALE, and DENNIS, Circuit Judges.

PER CURIAM:1

For this Mississippi diversity action tried to a jury, the

principal issues are sufficiency of the evidence for whether Union

National Life Insurance Company (UN) defamed its former agent,

Leslie E. Smith, and his entitlement vel non to compensatory and

punitive damages, notwithstanding the three co-defendant UN

employees being exonerated. Smith contests FED. R. CIV. P. 50

judgments as a matter of law (JMOL) holding he breached his

contract with UN and setting aside the punitive damages; UN, denial

1 Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. of JMOL on defamation. Regarding the JMOL on the contract claim

and punitive damages, we AFFIRM; for defamation, we REVERSE and

RENDER.

I.

Except for six months in 1981, Smith was employed by UN from

1976 until mid-February 1995; he became its top credit life

salesman in three Mississippi counties (Debit 15). When Smith left

UN, his employment contract contained a covenant not to compete for

one year in 15 counties in Mississippi, including the three in

Debit 15. This notwithstanding, he continued to solicit in that

area for his new employer, Life of Georgia (LG).

In July 1995, UN filed this action against Smith for breach of

contract and injunctive relief. Both UN and LG provided “home

service”, by which, every week or month, agents visit

policyholders, mainly low-income, to collect premiums. UN claimed

that Smith’s actions had resulted in the “wholesale destruction” of

its Debit 15 business. (Prior to trial, Smith agreed to a

preliminary injunction against his soliciting in that area.)

Smith counterclaimed for defamation, contending that, after he

left UN, its employees and agents “planned and implemented a

deliberate campaign” to discredit him, by making defamatory

statements about him to his customers, inducing them to write

and/or sign statements seeking a premium refund from LG, and

sending those statements and other correspondence to LG and the

2 Mississippi Department of Insurance. Named as counterclaim co-

defendants were Ozbolt, a UN regional vice president, and two UN

agents, McDonald and Brown.

The defamation evidence Smith proffered at trial concerned

primarily the co-defendant UN employees’ alleged statements to UN

policyholders (who had subsequently purchased LG insurance from

Smith) that Smith was “stealing from the company” and “going to

jail”.

At the close of all the evidence, the district court granted

JMOL to UN on its breach of contract claim, holding, inter alia,

that the geographic and time limits for the covenant not to compete

were reasonable. The issue of UN’s damages was submitted to the

jury; it returned a $50,000 verdict for UN.

For Smith’s defamation claim, the jury rendered an arguably

inconsistent special verdict. As stated in the verdict form, the

jury found that “agents of [UN]” had defamed Smith. But, it found

also that the three co-defendant UN employees (who, as noted, were

alleged to have made the bulk of the defamatory statements) had not

defamed him. The jury awarded Smith $50,000 in compensatory, and

$500,000 in punitive, damages.

Post-verdict, Smith moved for JMOL on UN’s contract claim and,

alternatively, for a new trial. UN did likewise for Smith’s

defamation claim.

For the several JMOL claims by Smith and UN, the court granted

3 only UN’s regarding punitive damages. Noting it was unknown whether

the jury found the three co-defendant employees did not make the

alleged defamatory statements, or found the statements were not

defamatory, the court held that, without those statements, the

evidence was insufficient for punitive damages. Concluding that

UN’s letters to the Insurance Department “comprised the only other

evidence ... on which a finding of defamation ... could be made”,

and viewing the evidence in the light most favorable to Smith, the

court upheld the defamation compensatory damages. It ruled,

however, that the letters did not evidence the requisite malice for

punitive damages, because they were “of a business nature”, written

to the proper governmental agency about a “legitimate concern”.

In sum, the court upheld the jury’s $50,000 compensatory

damages awards: to UN, for Smith’s breach of contract; to Smith,

for defamation. It also awarded UN $25,000 in attorney’s fees and

$1,500 for expenses.

II.

Smith contests the JMOLs regarding insufficiency of the

evidence for punitive damages and his breaching his contract; for

the latter, he also challenges the resulting damages and attorney’s

fees. UN contests the denial of JMOL regarding Smith being defamed.

4 A.

For punitive damages being set aside, Smith maintains the court

excluded improperly the evidence concerning the three co-defendant

UN employees. Alternatively, he claims other evidence sufficiently

supports the award.

1.

In this regard, he asserts that the court improperly reconciled

the verdict. As with any special verdict, pursuant to FED. R. CIV.

P. 49(a), the trial court must “apply[] appropriate legal

principles” to the jury’s findings, and determine “the resulting

legal obligation[s]”. Freeman v. Chicago Park Dist.,

(7th Cir. 1999) (internal quotation marks and citation omitted).

Consistent with the Seventh Amendment, when a jury’s special verdict

is apparently inconsistent, we must “make a concerted effort to

reconcile [it].... before we are free to disregard [it] and remand

the case for new trial”. Alvarez v. J. Ray McDermott & Co.,

(5th Cir. 1982) (internal quotation marks and

citations omitted).

For resolving such conflicts, we must determine whether “the

answers may fairly be said to represent a logical and probable

decision on the relevant issues as submitted”; we will reverse only

if “there is no view of the case which makes the jury’s answers

consistent and ... the inconsistency is such that the special

verdict will support neither the judgment entered below nor any

5 other judgment”. Griffin v. Matherne,

(5th Cir.

1973) (citations omitted). In addition to examining the jury

interrogatories, we must consider its instructions, Alvarez,

(citation omitted), and determine if the reconciliation

“is a reasonable reading of the record”. Bingham v. Zolt,

(2d Cir. 1995).

Smith urges the exclusion of the evidence concerning the three

exonerated employees was improper, because the court ignored the

possibility the jury found the employees had defamed Smith, but

meted “lay justice to release [them] from direct responsibility”.

This verdict-construction, according to Smith, is supported by the

jury instructions that (1) the employees acted within the scope of

their employment “at all times”; and (2) if the jury found the

employees defamed Smith, it “must find in favor of [him] and against

[UN] and/or the agent or agents whom you find ... made the

defamatory statements”, because the “and/or” phrase indicated to the

jurors they could find against UN only, or UN and the three co-

defendants.

Of course, we apply Mississippi law. Erie R.R. Co. v.

Tompkins,

(1938). Smith relies on Mississippi decisions

which permit an employer to be held liable despite exoneration of

its employee, the very person through whom liability is imputed to

the employer. See Capital Transp. Co. v. McDuff,

(Miss. 1975); see also Meena v. Wilburn,

, 872-73

6 (Miss. 1992) (rejecting contention that jury improperly returned

verdict against doctor while exonerating nurse who carried out his

instructions); D.W. Boutwell Butane Co. v. Smith,

, 12-

13 (Miss. 1971) (holding that jury’s finding employer liable, but

exonerating its truck driver for plaintiffs’ injuries from collision

with truck, is permissible under Mississippi law).

UN upholds the propriety of the exclusion of the exonerated

employees’ statements, because the court’s construction of the

verdict is the only “logical and probable” interpretation, and the

jury could have based its defamation finding on other evidence. It

asserts that the cited Mississippi cases are not applicable, because

they did not involve special verdicts, while here, the jury

specifically found the three co-defendants did not defame Smith.

It maintains, furthermore, the Mississippi cases do not hold an

employer may be held liable for an employee’s actions if the jury

finds such actions did not occur.

The court instructed the jury that, for Smith to succeed on his

defamation claim, he had to prove:

One, that an agent of [UN], including ... Ozbolt, ... McDonald, or ... Brown made false and defamatory statements concerning ... Smith to a third party.

Two, the communication was not the subject of a privilege, on which you have been instructed separately.

Third, that ... Ozbolt, ... McDonald, ... Brown, and/or [UN], through one or more of those individuals were negligent, ... reckless

7 or malicious in making the defamatory statements, without regard to whether the statements were true or false.

Fourth, ... Smith was injured or damaged as a result of the defamatory statements, and that such statements were the sole proximate cause or a proximate contributing cause of Smith’s damages, if any. Under those circumstances, ... you must find in favor of ... Smith and against [UN] and/or the agent or agents whom you find from a preponderance of the evidence made the defamatory statements.

(Emphasis added.)

The jurors could have been misled by some of the language in

the instruction, if taken in isolation. But, in the context of the

entire instruction, as well as the instructions as a whole, the

court’s guidance was not misleading.

Concerning the Mississippi cases permitting employer liability

despite employee exoneration, the case at hand is distinguishable,

in the light of the jury’s specific finding that the three co-

defendants did not defame Smith. We agree with UN that, even under

Mississippi’s unusual precedent, it is essential for there to be a

finding that the injury-causing action was by a co-defendant

employee; “[o]therwise, the verdict could not be explained”.

Capital Transp.,

. Therefore, the court properly

excluded the evidence relative to the three co-defendant employees.

2.

Pursuant to FED. R. CIV. P. 50(a)(1), the district court may

grant a JMOL against a party who has not presented a “legally

8 sufficient evidentiary basis for a reasonable jury to find for that

party” on an issue necessary to his claim.

Smith maintains that, even without the co-defendant employees’

statements, there is a “legally sufficient evidentiary basis” for

punitive damages. For our review of the JMOL granted UN, we utilize

the standard applied by district court. All the evidence is viewed

in the light most favorable to Smith; and, if “reasonable and fair-

minded jurors” might disagree, the court should have denied UN’s

motion. See London v. MAC Corp. of Am.,

(5th Cir.

1995) (internal quotation marks and citation omitted). First,

Smith contends that the 14 March 1995 letter from UN’s Senior Vice-

President McCullough to the Insurance Department contained

defamatory statements about him. McCullough wrote that Smith

has gone back into our houses, replaced our business with [LG] policies without regard to the contestable clause and has apparently taken advantage of many of the policyholders on his route. Having worked this area for over ten years, you could understand these policyholders have come to trust Mr. Smith and they will do what he asks them to do.... I don’t know if the ... department can do anything about this, but I think you will agree what he is doing is totally unethical.

Smith points also to a 26 April 1995 letter from McCullough to the

Department’s chief investigator, stating that Smith had induced his

former customers to send in “cash surrender values” on their UN

policies. Smith claims this statement was false, and that there was

no evidence at trial to support it. He asserts also that UN

9 attempted to ruin his reputation at LG, by falsely communicating to

it that UN had problems with Smith’s “audit” (reconciliation of his

accounts), and that he was “replacing [UN’s] business [with LG

insurance]”.

Smith contends further there was sufficient proof that UN

agents, other than the three exonerated co-defendants, gathered

defamatory written statements from policyholders, including: (1) one

“retraction letter”, in which a policyholder specifically mentioned

Floyd as having drafted a statement (there were several letters in

the record, in which policyholders stated they had been misled by

UN agents and did not wish to cancel their LG insurance); (2) former

UN agent Tinnerello’s admission that he gathered statements; and (3)

co-defendant Ozbolt’s admission that he and other UN agents gathered

and sent policyholder statements to UN’s home office, which

forwarded them to the Insurance Department.2

According to Smith, all of the written statements were

defamatory per se, because they falsely accused him of practices

incompatible with his trade or business, citing Taylor v. Standard

Oil Co.,

(Miss. 1939), with damages and malicious

2 In addition, one policyholder testified that a “representative”, or “representatives” of UN (other than the three co-defendant employees), whom she did not identify, “would say things like, ‘you know, Les [Smith] is in jail, he has been in jail over the weekend,’ and, you know, things like that”. But, as noted, Smith’s focus is on written statements. In any event, this testimony, concerning an unidentified person, is not sufficient evidence of defamation, much less for punitive damages.

10 intent being presumed, citing, e.g., Brewer v. Memphis Publ’g Co.,

(5th Cir. 1980), and Natchez Times Publ’g Co.

v. Dunigan,

(Miss. 1954). He contends the

court ignored this presumption, and therefore erred in finding

insufficient proof of malice.

Finally, Smith asserts that the jury reasonably could have

concluded, especially from the Insurance Department’s investigation

file (which included the policyholders’ requests for refunds from

LG, their “retraction” letters, and McCullough’s letters), that UN’s

employees’ actions were caused by UN’s intentional and malicious

practice of obtaining false statements and delivering them to LG and

the Insurance Department, in an effort to discredit him and cost him

his livelihood.3

UN contends that punitive damages cannot stand on this “other”

evidence alone. In this regard, it notes that: neither the

McCullough letters nor the alleged statements to LG demonstrate

malice justifying such damages; at a minimum, UN believed, in good

faith, the statements were true; testimony regarding its statements

to LG should not be considered, because UN’s hearsay objection was

sustained; and Smith failed to show Tinnerello and Floyd had

malicious intent. It notes also the jury was instructed, pursuant

to Smith’s own instruction:

3 As a result of UN’s correspondence, the Department decided Smith was in violation of regulations requiring him having authorization to sell insurance for LG; it and Smith were fined.

11 Smith can recover punitive damages from [UN] for the actions of ... Ozbolt, ... McDonald, ... Brown or ... [non counter-defendant] Floyd, and from each individual Counter-Defendant only if he proves to you by a preponderance of the evidence as to those respective Counter- Defendants, that defamatory words were published by that particular Counter-Defendant, or its representative in the case of [UN], with knowledge of the words being false or with reckless disregard for the truth or falsity of the words.

The Court further instructs you that you may award punitive damages if ... Smith has proven by a preponderance of the evidence that the defamation of Smith, if any, by [UN] agents was willfully or intentionally committed. You may consider all events that occurred both individually and as a whole in making this decision.

(Emphasis added.)

We agree with the district court that, without the properly

excluded evidence regarding the three exonerated co-defendant UN

employees, the remaining evidence is insufficient to support

punitive damages, as discussed infra regarding qualified privilege.

B.

By cross-appeal, UN claims the evidence fails to support

defamation, because its communications to the Insurance Department

were substantially true (and therefore not defamatory), and/or

qualifiedly privileged.4 Because we find privilege, we need not

address truthfulness vel non.

4 As noted supra, the district court sustained UN’s objection to the testimony regarding UN’s alleged statements to LG.

12 Under Mississippi law, a communication, which might otherwise

be defamatory, is qualifiedly privileged when it concerns a matter

“‘in which the person making it has an interest, or in reference to

which he has a duty ... if made to a person or persons having a

corresponding interest or duty’”, as long as the statement “‘is made

without malice and in good faith’”. Garziano v. E.I. Du Pont De

Nemours & Co.,

(5th Cir. 1987) (quoting Louisiana

Oil Corp. v. Renno,

(Miss. 1934)); see also

Burroughs v. FFP Operating Partners, L.P.,

(5th

Cir. 1994) (noting that “statements made by an employer against an

employee, that affect the latter’s employment”, are so privileged)

(citing Benson v. Hall,

(Miss. 1976)).

Such a communication, if “limited to those persons who have a

legitimate and direct interest in the subject matter”, carries a

“presumption of good faith”. Benson,

(citation

omitted). Where qualified privilege may be relevant, Mississippi

courts determine whether the privilege arose in the context of the

communication, and, if so, whether the scope of the privilege was

exceeded. Garziano,

.

When the relevant facts are undisputed, the trial court must

make the initial decision whether a qualified privilege applies: if

it does apply, the court “should instruct the jury accordingly; if

not the jury should be given a special interrogatory on this issue”.

. If the statements were made on an occasion of qualified

13 privilege, then “[a]ctual or express malice”, demonstrating “a

design to willfully or wantonly injure another”, must be clearly

proved to overcome the good faith presumption. Hayden v. Foryt,

(Miss. 1982) (internal quotation marks and citation

omitted). Malice is not implied, even where a statement could be

considered defamatory per se; the one claiming to have been defamed

must demonstrate “bad faith, actual malice, or abuse of the

privilege through excess publication”. Garziano,

.

According to UN, the jury should have been instructed that UN’s

communications with the Department were qualifiedly privileged. At

any rate, it maintains that: there was insufficient evidence to

support finding it abused the privilege, citing Goforth v. Avemco

Life Ins. Co.,

(4th Cir. 1966) (finding no inference

of bad faith in complaint letters to insurance department); as the

district court observed in its memorandum opinion, UN had a

legitimate interest in protecting its business, and arguably had a

duty to report what it perceived to be questionable conduct to the

state agency charged with general oversight; and Smith did not

present sufficient evidence of malice, bad faith, or excessive

publication in connection with those letters, or the policyholder

letters.

Smith claims sufficient evidence for UN not being entitled to

a qualified privilege, and that UN waived any objection to the

instruction on this issue by failing to object.

14 On qualified privilege, the court instructed:

If you find that the alleged defamatory statements were made by [UN] and its agents and were made to persons who have an interest in knowing the information which was conveyed, then [UN] and its agents enjoy what is known as a qualified privilege. Where a qualified privilege exists, the statements, if made, are presumed to be made in good faith.... Smith then bears the burden of overcoming this presumption of good faith.... Smith may overcome this qualified privilege by establishing by a preponderance of the evidence that [UN] or its agents either published the defamatory statements in bad faith or actual malice, or abused that privilege through excess publication, or where the scope of the statements exceeded what was necessary to protect the interests of [UN], ... then [UN] loses the qualified privilege even as to the individuals ... to whom it applied.

(Emphasis added).

This instruction is consistent with Mississippi law on

qualified privilege. It acts “as a shield against defamation claims

as a matter of public policy”. Garziano,

.

For the evidence relied on by Smith, we agree with the district

court that McCullough’s letters are the most significant evidence

remaining in Smith’s favor. This is because there is little

evidence that agents, other than the exonerated co-defendants,

drafted any defamatory statements subsequently sent to the Insurance

Department, or induced policyholders to do so.

15 Utilizing Mississippi’s two-part test, we find, first, as a

matter of law, that McCullough’s letters to the Department were

qualifiedly privileged. (While such an instruction would have been

proper, UN apparently did not object in district court to the given

qualified privilege instruction.) For the test’s second prong,

there is insufficient evidence of the requisite malice or excess

publication to overcome the privilege. See Tipps Tool Co. v.

Hollifield,

(Miss. 1953).

While the court found that McCullough’s letters did not

evidence such malice, it concluded erroneously, perhaps in its

effort to reconcile the verdict, that the letters could support

compensatory damages. Because the evidence remaining after the

court reconciled the verdict is legally insufficient for a

reasonable jury to find for Smith, UN is entitled to a JMOL on his

defamation claim. See Weisgram v. Marley Co., __ S. Ct. __,

, at *3 (22 Feb. 2000). (In the light of this holding, we

need not address Smith’s contentions regarding the district court’s

conditionally granting UN a new trial on punitive damages, and

denying Smith attorney’s fees.)

C.

Smith contests the breach of contract JMOL, as well as the

resulting damages and attorney’s fees. (In his contract, Smith

“agree[d] ... [to] reimburse [UN] for reasonable attorneys’ fees and

costs incurred by [UN] in enforcing this covenant not to compete”.)

16 He maintains neither enforceability of the non-compete covenant nor

proximate cause of damages was proved.

1.

Whether a covenant not to compete is valid and enforceable “is

largely predicated upon the reasonableness and specificity of its

terms, primarily, the duration of the restriction and its geographic

scope”; and “[t]he burden of proving the reasonableness of these

terms is on the employer”. Empiregas, Inc. v. Bain,

(Miss. 1992) (citations omitted). We must also examine the

covenant’s effect on “the rights of the employer, the rights of the

employee, and the rights of the public”, and balance these

respective interests. Texas Rd. Boring Co. v. Parker,

(Miss. 1967).

Mississippi courts recognize an employer has a right to protect

itself “from loss of customers by the activities of the former

employees who have peculiar knowledge of and relationships with the

employer’s customers”. Redd Pest Control Co. v. Heatherly,

(Miss. 1963). On the other hand, the ex-employer must

overcome a presumption against such restraints by showing that it

is economically justified. Thames v. Davis & Goulet Ins., Inc.,

(Miss. 1982).

Smith contends that, because UN only presented evidence that

the covenant existed and that he competed with UN after he left its

employ, UN failed to prove the economic justification or

17 reasonableness, rendering the covenant unenforceable as a matter of

law.

UN counters that it produced ample evidence concerning scope

and duration reasonableness, and economic justification. Regarding

its interest, UN asserts it proved Smith was “the vital link between

[UN] and its policyholders” in Debit 15, and this relationship was

a protectable economic interest sufficient to justify enforcement

of a narrowly tailored non-compete. It points to the testimony of

Smith’s own witnesses that they were fond of, and trusted, him, and

that they subsequently bought LG, and later Texas Life, insurance

from him. As to Smith’s interest, UN contends the evidence shows

that he would not be unreasonably burdened by the covenant’s

enforcement, as evidenced by Ozbolt’s testimony that, under the

covenant’s terms, Smith would only be restricted from soliciting in

Debit 15 (a smaller area than the 15 counties listed in the

contract), and only for one year, and its implication that Smith

would not be prohibited from soliciting new customers elsewhere in

Mississippi. Finally, UN asserts that enforcement would not

disserve the public, because the evidence established that Smith

often represented multiple companies, demonstrating that

“competition in the life insurance industry abounds”.

After concluding, as a matter of law, there was “no question”

Smith breached his contract, the district court held reasonable the

covenant’s geographic and time limits. As UN admits, the covenant

18 would only prohibit Smith from competing in Debit 15. Therefore,

we agree that it made the requisite showing for enforceability.

Concomitantly, in the light of this ruling, we reject Smith’s

contention that UN is not entitled to attorney’s fees, as allowed

by his contract. (Smith does not challenge the amount awarded, only

failure to prove entitlement.)

2.

Smith asserts also that UN failed to prove its damages were

proximately caused by his breach. (Again, he does not challenge the

amount awarded.) He maintains that, instead, UN relied only on its

assumption that, if a UN policy lapsed, it was due to Smith’s

conduct; and that it did not provide a sufficient basis for its lost

profits calculation. He contends that UN’s calculations rested

solely on a list, compiled by UN’s attorney, of names of former UN

policyholders, which “matched” with names on LG’s policyholder list;

and that, based on it, a UN employee created a computer-generated

“lost policy” list, used by UN’s damages expert to calculate

damages. Smith maintains that: neither list-maker visited Debit

15 to verify why the policies lapsed; the testimony established they

may have lapsed for a number of reasons; and many lapsed prior to

his leaving UN or after expiration of the one-year limitation.

Noting that there is “nothing wrong” with policyholders owning

multiple policies, he asserts further that the fact that he sold

many of the LG policies on the list, by itself, is insufficient to

19 prove he caused the lapses.

UN notes that, per Smith’s own jury instruction, it had only

to demonstrate his breach was the “reasonably probable” cause of its

injuries, and that, of course, “mathematical precision” was not

required. It asserts it did prove the cause of its damages: namely,

that Smith contacted UN policyholders to sell them LG insurance, in

violation of his covenant; at least 285 UN policyholders in Smith’s

former service area appeared on LG’s policyholder list or on one of

its policy applications; and many of Smith’s witnesses testified

that they bought a LG policy from him. Additionally, UN contends

that its damages expert made adjustments for UN’s “historical lapse

and mortality experience” in calculating UN’s damages, and

“utiliz[ed] a profitability analysis used in the ordinary course of

[UN’s] business to price new products and determine profitability

of old products”.

Under Mississippi law, “reasonable certainty” is the standard

of proof for recovering profits lost from a breach of contract;

while “[t]here are no guidelines set in stone specifying the degree

of certainty”, and the necessary proof “usually depends on the

particular facts of the case”, the calculation must be based, of

course, on more than “speculation or conjecture”. Lovett v. E.L.

Garner, Inc.,

(Miss. 1987) (internal quotation

marks and citation omitted); see also Ammons v. Wilson & Co.,

(Miss. 1936) (stating that damages must be “trace[d]

20 ... directly to the breach of the contract”).

Of course, the burden of proof lies with the party seeking

damages. The proof will be sufficient if it provides “a reasonable

basis for [its] computation and the best evidence which is

obtainable under the circumstances”, to allow the factfinder “to

arrive at a fair approximate estimate of [the] loss”. City of New

Albany v. Barkley,

(Miss. 1987) (internal

quotation marks and citation omitted).

UN did not unequivocally link each of its lapsed policies to

Smith’s breach; but, Mississippi law does not require that.

Instead, UN, to a “reasonable certainty”, presented evidence

sufficient for the jury to find Smith’s conduct caused its loss.

III.

For the foregoing reasons, those parts of the judgment

concerning punitive damages, UN’s contract claim, and its damages

and attorney’s fees and expenses are AFFIRMED; those parts as to

Smith’s defamation claim and corresponding compensatory damages are

REVERSED and judgment is RENDERED for UN on those matters.

AFFIRMED IN PART; REVERSED AND RENDERED IN PART

21