Defamation defendant avoids ‘stacked’ awards

Listen to this article

A Barron County administrator who found himself on the losing end of a defamation suit managed to convince the District III Wisconsin Appellate Court that the trial court improperly stacked multiple judgments in the lawsuit.

In Gene Anderson v. Duane Hebert, 2012 AP 1313, three jury verdicts totaling $175,000 were slashed to a single $50,000 judgment under Wis. Stat. 897.03. However, the court did confirm that executive and legislative privilege did not absolutely protect defamatory statements Hebert made to the press and his own county board.

“Although absolute privilege is accorded to principal federal or state executive officers in the exercise of their duty,” said the appellate court, “it is not this court’s place to extend any absolute privilege to a position for which one has not been recognized by the state Supreme Court.”

In 2007, Anderson was patrol superintendent for the Barron County Highway Department. Barron County had contracted with Wisconsin to remove snow and maintain certain state roads in the area.

That year, two highway department employees spoke confidentially to a high-level Barron County supervisory employee, alleging that they were being directed by Anderson to falsify documents and drive smaller trucks during their road surveys for the state.

The falsified documentation suggested that larger trucks were used for the road surveys, which would generate a higher reimbursement rate, thus inflating billing invoices to the state.

A preliminary investigation conducted by the highway department showed irregularities between actual fuel allocation and the use of certain trucks.

On Dec. 4, 2007, Hebert confronted Anderson with allegations of equipment misuse and overbilling. Less than two weeks later, Anderson resigned.

A later internal audit and investigation by Barron County found repeated instances where one truck was fueled, yet a different larger truck was reported to have completed the field survey work. Later referral to and investigation by the state’s Department of Transportation also showed “numerous improprieties” with the billing system.

During his routine job as county administrator, Hebert made several statements to the Barron County Board of Supervisors about Anderson’s alleged reimbursement scheme, and later talked to a local media outlet about the improprieties.

During one Barron County Board of Supervisors meeting in early 2008, after allegedly vetting his statement with the county attorney, Hebert openly said the investigation “proves not only the failure of management responsibilities, but also the unethical and irresponsible direction of falsification of official documents hundreds of times in the past year.”

Anderson sued Hebert for breach of contract, conversion, and other counts. Additionally, there was single count of defamation, where Anderson claimed that Hebert twice used defamatory language before the Barron County Board of Supervisors, and once to a local news outlet.

All counts except the single defamation claim were dismissed through summary judgment and a trip to the Court of Appeals. The case then went to trial in January 2012.

A Barron County jury found Hebert had defamed Anderson, finding in favor of the ex-patrol superintendent for $50,000, $75,000 for defamatory comments made to the County Board of Supervisors and $50,000 for defamatory comments made to local news outlet, for a total judgment of $175,000.00.

The trial court reduced the second jury verdict damage award to $50,000 in alleged conformity with Wis. Stat. 897.03. However, Judge Eugene D. Harrington left the other two $50,000 jury verdict awards intact.

Hebert appealed, asserting that, as county administrator, he was protected by executive or legislative privilege, thus barring any recovery for defamation. Additionally, Wis. Stat. 897.03 did not allow judgment stacking, said Hebert, so any damage award should be limited to $50,000.

A defendant may be protected from allegations of defamation by executive privilege, said the appellate court, but the protection only extends to a limited group of individuals.

Quoting the 1966 Wisconsin Supreme Court case of Ranous v. Hughes, 30 Wis.2d 452, the court noted that “absolute privilege is accorded to principal federal or state executive officers in the exercise of their duty.”

However, the majority in Hughes further stated that within executive privilege protection, the “lower strata of executive officers such as (a director or chairperson of the board of education) are entitled to only conditional privilege.”

Although an important administrator within Barron County, the appellate court could not find that Hebert’s position as county administrator categorized him as “principal federal or state executive officer.”

The appellate also denied that legislative privilege should have been available to Herbert. Referencing Vultaggio v. Yasko, the court explained that Hebert’s statements to the Barron County Board of Supervisors were not entitled to absolute protection because Hebert had not been subpoenaed, not been placed under oath, and questions eliciting his responses were not controlled by board members.

Hebert was just “reporting to the county board as required by his employment,” noted the court, and not speaking as a witness during a regular legislative meeting.

However, Hebert did obtain relief from the appellate court in his efforts to reduce the final judgment to $50,000.

The court first looked to the language of Wis. Stat. 893.80(3), which states: “the amount recoverable by any person for any damages, injuries or death in any action founded in tort against any … governmental subdivision or … their officers … or employees … shall not exceed $50,000.”

Hebert contended that the word “action” was synonymous with “civil action” or lawsuit; Anderson suggests that “action” refers to a “cause of action, saying that the word “suit” is used in other sections of 893.80 to designate a lawsuit or legal proceeding.

The court agreed with Hebert, saying that Wisconsin legislature had already defined “action” as a judicial proceeding in several statutory sections, said the court, pointing to Wis. Stat. 801.01(1) (proceedings in the courts are divided into actions and special proceedings), and Wis. Stat. 801 01.02 (an action is commenced when a summons and complaint is filed).

Also, Black’s Law Dictionary defines action as “a civil or criminal judicial proceeding,” and the other references to the word “suit” in 893.80 were “unrelated,” said the court, and did not reference Subsection 3.

Additionally, there was no sign that the Wisconsin legislature intended the claims to be stackable. “If the legislature intended (893.80(3) damages cap to be stackable based upon individual separate claims or causes within a single proceeding,” the court reasoned, “it would have so stated.”

The court affirmed in part and reversed in part, remanding with directions for the lower court to reduce the judgment to $50,000.

Anderson and another Barron County employee were later charged with 20 counts of felony fraud.