This case, Tronfeld v. Nationwide Mutual Insurance Co., (November 3, 2006), just about made me drop my red Yellowstone National Park mug of decaf with the white moose silhouette on it. Insurance agents, insurance companies and insurance company employees should take note of this.
In Tronfeld, a Nationwide adjuster, Schmitt, met with Spellman about an injury Spellman received in a car accident with a Nationwide insured. The two discussed whether the claim could be settled without an attorney. Here’s the way the court describes what happened next:
During the meeting, they discussed the possible selection of an attorney to serve as counsel for Spellman in his claim against Nationwide. In response to Spellman selecting Tronfeld as his counsel, Schmitt made these statements . . . .
(1) That Jay Tronfeld just takes peoples’ money.
(2) That clients of Jay Tronfeld would receive more money [for their claims] if they had not hired Jay and had dealt with the adjuster [directly].
When I read these, it crossed my mind that these could be taken as statements of opinion and expressions of the speaker’s disdain for personal injury attorneys and their involvement in low-dollar cases, not as specific representations about a particular attorney’s qualifications, fitness or honesty. Tronfeld, when he heard of these statements, took a less charitable view, and filed suit for the tort of defamation per se, alleging the statements impute "Tronfeld as unfit to perform the duties of his employment" and that he "lacks integrity and is dishonest in performing the duties of his employment." Under Virginia law, a person maligned by defamation per se may recover compensatory damages for injury to reputation, and for humiliation and embarrassment, without demonstrating any financial loss.
Speech that does not contain a provably false factual connotation, or statements that cannot reasonably be interpreted as stating actual facts, are not defamatory. The trial court found that the statements were opinion only and dismissed the case. The state supreme court disagreed, however, and said the statements contain implications capable of being proven true or false. Here’s the court again:
The statement "[t]hat Jay Tronfeld just takes people’s (sic) money" is capable of disproof by evidence, if adduced, that Tronfeld’s clients received monetary or other relief as a result of his services. It would not be a matter of opinion that Tronfeld takes a client’s money without rendering a service of value in return if Tronfeld, for example, produced evidence of a settlement or judgment he obtained for that client. (My emphasis).
Did I read that right? Someone can turn a statement of opinion into one of fact, and disprove a statement that an injured claimant would come out ahead without a lawyer’s services, merely by showing that the lawyer once obtained a settlement or judgment? Or does he need to prove it by getting a judgment or settlement on behalf of this current client? Do we really want to go down the road of holding these kind of statements actionable? What about what lawyers say about insurance companies: is that judged by the same standard? Read the case and decide for yourself. (Remember, the court was only allowing the claim to go forward, not addressing the merits of whether the claim will succeed).
Hat tip: Steve Brostoff at Insurance Week.