Capital Ideas, LLC v. Springboard Adver. LLC

967 N.W.2d 371 (Table)

CAPITAL IDEAS, LLC, Plaintiff-Appellant/Cross-Appellee,

v.SPRINGBOARD ADVERTISING LLC and Christina Amys, Defendants-Appellees/Cross-Appellants.

Springboard Advertising LLC and Christina Amys, Counterclaim Plaintiffs,

v.Capital Ideas, LLC and Michael Woody, Counterclaim Defendants-Appellants/Cross-Appellees.

No. 20-0296

Court of Appeals of Iowa.

Filed October 6, 2021

Jeffrey R. Kappelman, Erik P. Bergeland, and Andrew T. Patton of The Finley Law Firm, P.C., Des Moines, for appellant.

Brenda L. Myers-Maas of Myers Mass Law, PLC, West Des Moines, for appellees.

Heard by Mullins, P.J., and May and Ahlers, JJ.

MAY, Judge.

A jury awarded $220,000 in damages to Springboard Advertising LLC (Springboard) and Christina Amys on their claim¹ of defamation per se against Capital Ideas, LLC (Capital) and Michael Woody. Capital and Woody appeal from the resulting judgment. Springboard and Amys cross-appeal. They argue the district court erred in rejecting some other defamation claims.

We conclude Capital and Woody were entitled to judgment notwithstanding the verdict (JNOV) on the claim of defamation per se. As to that claim, we reverse and remand for dismissal. As to all other issues, we affirm.

I. Factual Background

Amys and Woody are advertising professionals. Amys's business is called Springboard Advertising, LLC. Woody's business is called Capital Ideas, LLC.

In 2010, Woody and Amys decided their companies should cooperate. Each company brought its clients to the joint effort. They worked together under Capital Ideas's flag.

For years, this arrangement worked well. But in early 2017, the story started to arc. Woody allegedly fired a major client without obtaining Amys's consent. Amys felt there were other problems, too, like Woody "micromanaging" her.

In June, Amys told Woody it was time for her to leave. Amys later testified about what she said:

I told him that I needed a more flexible schedule. I told him that I didn't want 30-plus accounts, which is what he wanted. We were spinning our wheels with 30-plus accounts. I was working all the time.

Clients were firing us. He was firing clients. It was madness. I did not—I said, We can't even handle the accounts we have. Why would we have 30-plus more accounts? I did say that we are in different stages of our lives and, because of all these hours that I'm working trying to juggle all of accounts, I am missing out on my kids’ lives and didn't want to do it anymore. So I said it is time for me to go back to Springboard Advertising.

So Amys and Woody began working on the terms of their dissolution. There has been some dispute about what they agreed on. For example, while Woody has claimed they agreed that Amys would not solicit certain clients, Amys vehemently denies that claim.

But it seems undisputed they agreed Woody would (as he ultimately did) email this message to all of their clients:

After six and a half great years, [Amys] and I have decided to end our partnership. Effective mid-July, [Amys] will go back to focusing on her original advertising agency, Springboard Advertising, and I will continue supporting clients for Capital Ideas.

The split has been very amicable and we will remain good friends and maybe even collaborate on a few customer projects down the road. [Amys] has retained the clients that she brought to our agency from Springboard Advertising, plus a few others. I will very much miss working directly with those clients but I know they are in great hands and I am certain that they will continue to see huge results and grow under [Amys's] direct supervision.

Please join me in wishing [Amys] well as she heads back into the world of sole agency ownership!

Capital Ideas will continue to operate as usual and we are already on our way to arranging for a new bookkeeper to help pick up a portion of [Amys's] duties. I will be in touch with all of you in the next few weeks as Capital Ideas will continue to offer the service and experience you've come to expect.

In private, though, Woody also told clients some other information about Amys's reasons for leaving. He said so in this interrogatory answer:

Interrogatory No. 20 : Set forth all communications, whether verbal, written, or electronic, you have had with any third party (other than privileged attorney client communications) regarding your separation from Christina Amys/Springboard Advertising.

Answer: I sent an email to the Des Moines Register to see if my representative was going to honor the agency/media client confidentiality agreement. I suspected she was not. I was correct. Any other information I shared about Chris is that she did not want to work this hard, wanted less accounts and stress and was planning to spend much more time with her kids. All of those items she told me were her reasons for leaving and shared many times with reps and clients in my presence. In conversations with clients and reps, I told them how happy I was for her to be able to take this time to spend with her family.

(Emphasis added.)

Woody also made some other statements to Kelly Brown, the local sales manager for KCCI television. According to Brown's testimony, Woody told her that Amys had failed to honor their agreement about "whose clients would be whose," and that "his trust of [Amys] was broken." After this conversation, Woody sent Brown an email entitled "sorry to unload on you ..." In its body, the email stated: "It has been a really bad two weeks as I find that the person I trusted with the finances of my company has no ethics. I am so disappointed in her." Brown knew the email was about Amys.

In January 2018, Capital began this litigation against Springboard and Amys. Capital pled claims for breach of contract and interference with business relationships. The gist of the suit was that Amys was wrongfully soliciting Capital's clients.

Springboard and Amys answered and raised affirmative defenses. They also brought counterclaims for interference with business relationships, unfair competition, and defamation.

As trial approached, the issues narrowed. At summary judgment, the court dismissed all of the interference-with-business-relationship claims. The court also provided pre-trial rulings on whether certain statements by Woody were actionable as defamation per se, defamation per quod, or not at all. Two of those rulings are important here. First, the court ruled that one of Woody's statements was defamation per se. The statement was this: "[Amys] does not want to work this hard, wanted less accounts and stress and was planning to spend much more time with her kids."

The court also ruled on Woody's statement to Brown that "I find the person I trusted with the finances of my company has no ethics." The court concluded this statement was not actionable because "[t]he assertion that someone has ‘no ethics’ is a subjective opinion rather than a verifiable statement of fact."²

Jurors heard evidence over four days. Ultimately, the jury rejected most of the parties’ claims. Important to this appeal, though, the jury found for Amys and Springboard on their defamation per se claim. On this claim, the jury awarded $110,000 in actual damages plus $110,000 in punitive damages.

Post-trial motions followed. The district court declined to grant a new trial or otherwise disturb the defamation-per-se verdict. Instead, the court entered judgment for $220,000. Capital and Woody appealed. Springboard and Amys cross-appealed.

II. Analysis

A. The JNOV ruling

As noted, the jury awarded $220,000 on Springboard and Amys's claim of defamation per se. One of the central issues in this appeal is whether—notwithstanding the verdict—Capital and Woody were entitled to dismissal of this claim. We conclude they were. See Van Sickle Const. Co. v. Wachovia Com. Mortg., Inc. , 783 N.W.2d 684, 687 (Iowa 2010) ("We review the denial of a motion for judgment notwithstanding the verdict for correction of errors at law.").

"Defamation is an invasion of the interest in reputation and good name." Johnson v. Nickerson , 542 N.W.2d 506, 510 (Iowa 1996). Ordinarily, defamation requires proof of "the following elements: (1) publication, (2) of a defamatory statement, (3) which was false and (4) malicious, (5) made of and concerning the plaintiff, (6) which caused injury." Bierman v. Weier , 826 N.W.2d 436, 443 (Iowa 2013). But if a statement is classified as defamation per se, "the elements of falsity, malice, and injury are legally presumed and the statement is actionable without proof of the same." Bandstra v. Covenant Reformed Church , 913 N.W.2d 19, 46–47 (Iowa 2018). So defamation per se only requires proof of "three elements: (1) publication, (2) a defamatory per se statement, and (3) the statement was of or about" the plaintiff. Duyvejonck v. Clydesdale , No. 19-1408, 2020 WL 3265024, at *3 (Iowa Ct. App. June 17, 2020).

But not every troubling statement is defamation per se. To qualify, a statement must have "a ‘natural tendency to provoke the plaintiff to wrath or expose him to public hatred, contempt, or ridicule, or to deprive him of the benefit of public confidence or social intercourse.’ " Bandstra , 913 N.W.2d at 46 (citation omitted). The words used must be "of such a nature, whether true or not, that the court can presume as a matter of law that their publication will have" a defamatory effect. Vinson v. Linn-Mar Cmty. Sch. Dist. , 360 N.W.2d 108, 116 (Iowa 1984) (emphasis added).

By way of example, our supreme court has "found defamation per se in statements accusing an individual of being a liar, accusing an individual of an indictable crime of moral turpitude or that carries a jail sentence, and accusing an individual of falsifying information." Bandstra , 913 N.W.2d at 47 (internal citations omitted). Derogatory statements "with reference to another in regard to [their] competency or fitness for his trade or profession" can also qualify as defamation per se. Vial v. Larson , 109 N.W. 1007, 1007 (Iowa 1906). Here, the district court concluded Woody's...