Marcus v. Swanson

539 P.3d 605

Elysia A. MARCUS, Appellee,

v.Eric SWANSON, M.D., Appellant,

v.Elysia A. Marcus, Appellee.

No. 122,400

Supreme Court of Kansas.

Oral Argument Held March 29, 2023.

Opinion Filed December 8, 2023.

Quentin M. Templeton, of Forbes Law Group, LLC, of Overland Park, argued the cause, and Frankie J. Forbes and Russell J. Keller, of the same firm, and William J. Skepnek, of The Skepnek Law Firm, P.A., of Lawrence, were with him on the briefs for appellant.

Matthew V. Bartle, of Bartle & Marcus LLC, of Kansas City, Missouri, argued the cause and was on the briefs for appellee.

Wilson, J.:

This is a defamation claim by a cosmetic surgeon against a former patient. The patient, Elysia A. Marcus, posted negative and false Yelp reviews after Dr. Eric Swanson performed a laser resurfacing procedure on her face. Finding in Swanson's favor, a jury determined the reviews harmed Swanson's reputation. The district court set aside the defamation judgment holding Swanson failed to show any actual damage to his reputation. A Court of Appeals panel majority affirmed the district court. We agree and affirm the panel majority and the district court.

FACTS AND PROCEDURAL BACKGROUND

Dr. Eric Swanson is a plastic surgeon specializing in cosmetic surgery. In April 2015, Elysia Marcus met with Swanson on the advice of a friend. In 2016, Swanson performed a cosmetic procedure on many areas of Marcus' face, at a cost of $2,500. Marcus was not satisfied with the results.

In May 2017, Marcus' husband, an attorney, reached out to another attorney who focused on medical negligence. This attorney sent Swanson a demand letter. After negotiations, the parties signed a written release with these provisions: Swanson would refund the $2,500 fee, the Marcuses would give up any legal claims against Swanson or his practice related to the procedure, and the Marcuses would not discuss the issue in the media.

In November 2017, Marcus posted two Yelp reviews, one on Swanson's personal page and one on the page of his business, the Swanson Center. The business review included a one-star rating out of a possible five stars. The parties agree the reviews contained false and defamatory statements.

Swanson learned about the posts in March 2018. Due to the nature of his business, he relies on online advertising and word-of-mouth recommendations from previous clients. Swanson routinely tracks his online reviews. Though signed under a false name, Swanson suspected Marcus authored the defamatory reviews. He hired an attorney and sent a demand letter to the Marcuses. The letter demanded that Marcus (1) pay Swanson $25,000; (2) acknowledge that she wrote the reviews; (3) apologize; and (4) take down the reviews. The letter said Swanson would sue if Marcus failed to meet these demands.

Shortly after, Marcus petitioned for declaratory judgment in the District Court of Johnson County. She asked the district court to determine the parties' rights and obligations under the release. Swanson filed an answer and raised three counterclaims: (1) breach of contract, (2) libel, and particularly libel per se, and (3) tortious interference with a prospective business advantage. The third claim was later dismissed.

Three witnesses testified at trial: Marcus, Swanson, and Nicole Hart Neufeld, one of Swanson's former patients. Swanson explained that he believed the posts hurt his reputation, but that he did not lose any business or professional opportunities following the Yelp reviews and that he could not quantify how many potential clients were affected. Similarly, Neufeld testified that she saw the reviews and was concerned they might cause potential clients to avoid Swanson. She was a satisfied client and posted a review to offset Marcus'. She continued to recommend Swanson's services to her friends after reading the reviews.

Following the close of evidence, Marcus moved for judgment as a matter of law on both claims. As for defamation, Marcus' counsel argued "there's been literally zero evidence of any damages whatsoever." The court denied the motion as to the breach of contract claim but took the motion concerning the defamation claim under advisement and said Marcus could renew the motion after the verdict.

The jury found that Marcus breached the release agreement and awarded Swanson $2,500 in damages. Next, the jury concluded Marcus' Yelp reviews were defamatory, the reviews damaged Swanson's reputation, and Swanson should be awarded $15,000 in damages. The jury also found that punitive damages should be awarded after finding "Marcus acted in a willful or malicious manner."

Marcus filed a renewed motion for judgment as a matter of law. She argued there was no evidence the Yelp reviews injured Swanson's reputation. In December 2019, the court granted the motion and set aside the jury's verdict on the defamation claim. Swanson filed a notice of appeal and Marcus cross-appealed.

A panel of the Kansas Court of Appeals issued a split opinion in August 2022. Marcus v. Swanson , No. 122,400, 2022 WL 3570349 (Kan. App. 2022) (unpublished opinion). The majority affirmed on both counts.

The majority pointed out that Kansas law requires a "tangible basis for inferring a real (rather than merely a presumed) diminution in reputation." Marcus , 2022 WL 3570349, at *6. After reviewing the trial testimony, the majority concluded there was no evidence to suggest reputational harm. Instead, any such harm was merely speculative. It concluded "[t]he fundamental problem for Dr. Swanson rests in the requirement he offer evidence of some actual damage to his reputation to establish a legally submissible claim for defamation." 2022 WL 3570349, at *8.

In her concurring and dissenting opinion, Judge Warner outlined various pieces of testimony from Swanson and Neufeld. She found the testimony sufficient to support a jury's finding of reputational damage, but noted the "evidence, without more, may have danced on the razor's edge of speculation." Yet Judge Warner argued that Marcus affected "Swanson's reputation in a real, measurable sense: It reduced Dr. Swanson's Yelp star-rating from 5 to 3.5 stars ." 2022 WL 3570349, at *15. Accordingly, Judge Warner concluded the district court erred in determining no evidence supported the jury's conclusion that the Yelp posts injured Swanson's reputation.

We granted Swanson's petition for review.

ANALYSIS

Swanson raises two issues in his petition for review. First, Swanson argues that the district court and panel majority erred in finding there was insufficient evidence to establish reputational harm. Second, Swanson argues that he need not establish reputational harm because the jury found Marcus acted with malice and the common law doctrine of defamation per se means damages are presumed.

Defamation in Kansas

The law of defamation developed as part of the common law. "The elements of defamation include false and defamatory words, communicated to a third person, which result in harm to the reputation of the person defamed." Hall v. Kansas Farm Bureau , 274 Kan. 263, 276, 50 P.3d 495 (2002). Traditionally, defamation has two variants: libel, a written defamatory statement, and slander, an oral defamatory statement. Gobin v. Globe Pub. Co. , 232 Kan. 1, 5, 649 P.2d 1239 (1982) ( Gobin III ). Rather than viewing these as distinct causes of action, in Kansas " ‘[t]he tort of defamation includes both libel and slander.’ " Dominguez v. Davidson , 266 Kan. 926, 930, 974 P.2d 112 (1999) (quoting Lindemuth v. Goodyear Tire & Rubber Co. , 19 Kan. App. 2d 95, 102, 864 P.2d 744 [1993] ).

Beyond the slander/libel distinction, the tort of defamation also traditionally included a distinction between defamation per se and defamation per quod. In Karrigan v. Valentine , 184 Kan. 783, 787, 339 P.2d 52 (1959), we explained:

"Words libelous per se are words which are defamatory in themselves and which intrinsically, by their very use, without innuendo and the aid of extrinsic proof, import injury and damage to the person concerning whom they were written. They are words from which, by the consent of mankind generally, damage follows as a natural consequence and from which malice is implied and damage is conclusively presumed to result. ...

"Words libelous per quod , on the other hand, are words ordinarily not defamatory but which become actionable only when special damages are shown, that is, they are words the injurious character of which appears only in consequence of extrinsic facts. Thus, words not defamatory per se , may become actionable per quod , depending upon the facts and circumstances of the particular case, and this gives rise to the rule that in order to recover for a libel per quod special damage and injury must be alleged and proved."

In Kansas, defamation per se arose based on these statements: "(1) Imputation of a crime; (2) imputation of a loathsome disease (usually venereal); (3) imputation of a person's unfitness for his trade or profession; or (4) imputation that a woman is unchaste." Kraisinger v. Liggett , 3 Kan. App. 2d 235, 237, 592 P.2d 477 (1979).

Moreover, damages in defamation come in several forms.

"Defamation damages traditionally involve five subparts: (1) nominal damages (‘a trivial sum of money awarded’ when a plaintiff ‘has not established that he is entitled to compensatory damages’), (2) general damages for harm to reputation (called ‘general,’ because they are generally anticipated, and hence do not need to be alleged), (3) damages for special harm (the ‘loss of something having economic or pecuniary value,’ such as loss of business), (4) damages for emotional distress (and bodily harm resulting therefrom), and (5) punitive damages (to punish a defendant's outrageous conduct)." Sipe, "Old Stinking, Old Nasty, Old Itchy Old Toad": Defamation Law, Warts and All (a Call for Reform) , 41 Ind. L. Rev. 137, 152 (2008).

But the right of an individual to seek and obtain redress for defamation is not without limits. See, e.g., New York Times v. Sullivan , 376...