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September 24, 1997


Appeal from the Circuit Court of Madison County. No. 90-L-1325. Honorable Phillip J. Kardis, Judge, presiding.

The Honorable Justice Hopkins delivered the opinion of the court. Kuehn, P.j., and Chapman, J., concur.

The opinion of the court was delivered by: Hopkins

The Honorable Justice HOPKINS delivered the opinion of the court:

Defendants, Philip Morris, Inc. (Philip Morris), Edward Giancola, Beverly Brock, and Charles J. Robinson (collectively defendants), appeal the trial court's judgment and award of both compensatory and punitive damages in favor of plaintiff, Randy Gibson, on his complaint for defamation. Defendants contend that, in this bench trial, plaintiff failed to prove the elements of defamation and that the trial court erred in awarding both compensatory and punitive damages. We affirm for the reasons set forth below.


Plaintiff testified that, on January 24, 1983, he was hired by Giancola, a division manager, as a sales representative for Philip Morris. Plaintiff was promoted to division manager in June 1989. As division manager, plaintiff often kept incentive items in his garage for distribution to his sales representatives. In July 1989, plaintiff was demoted for reasons unrelated to this appeal, and Giancola again became plaintiff's immediate supervisor when he resumed plaintiff's former position of division manager. On November 20, 1989, plaintiff was discharged by Giancola for "falsification and selling incentive items." The falsification allegation was based upon plaintiff's alleged failure to report a change in his work schedule on his daily activity report (DAR) on two separate occasions. The allegation of selling incentive items was based upon Brock's, Robinson's, and Jim Lumbattis's written statements to Giancola, wherein they alleged they saw Marlboro belt buckles (a Philip Morris incentive item) offered for sale at a yard sale at plaintiff's home in August 1988. Plaintiff filed a complaint against defendants, claiming wrongful discharge and defamation based upon Brock's and Robinson's written statements.

Plaintiff knew that Philip Morris prohibited the sale of incentive items, i.e., Marlboro belt buckles, lighters, T-shirts, etc., and that selling Philip Morris incentive items would result in discharge. Plaintiff denied that he sold Marlboro belt buckles at a yard sale in August 1988 and explained that he was in an all-day sales meeting that day in the company of Brock, Robinson, and Lumbattis.

Plaintiff worked for Country Companies, DeKalb Genetics, Cargill, and A-Mark after his discharge; however, he was unemployed at the time of trial, due to downsizing at A-Mark. Plaintiff admitted that, to his knowledge, no potential employer was told by Philip Morris that he was discharged or the reasons for his discharge.

Hope Gibson, plaintiff's wife, testified that she knew that selling incentive items, such as Marlboro belt buckles, was grounds for discharge from Philip Morris. Hope denied she sold or offered for sale Marlboro belt buckles at any yard sale she conducted. Helen Ryterski, plaintiff's neighbor who participated in the yard sale with Hope, corroborated Hope's testimony. Hope stated she held her yard sales when plaintiff was gone because plaintiff did not want anything to do with the yard sales.

Giancola testified that he fired plaintiff for selling incentive items and falsifying the DARs, which Giancola considered to be stealing company time and property. Giancola heard about plaintiff's offering Marlboro belt buckles for sale at a yard sale from Brock on October 24, 1989, during a work session. Brock told Giancola that two other sales representatives, Robinson and Lumbattis, witnessed the yard sale. Giancola also learned from Robinson that he knew about the offering for sale of incentive items at plaintiff's yard sale; however, Marlboro belt buckles were not mentioned. Giancola did not discuss the yard sale with Lumbattis until Lumbattis made his written statement.

On November 2, 1989, Giancola asked Brock, Robinson, and Lumbattis to make written statements about what they saw at plaintiff's yard sale and told them that the statements would be confidential. Giancola did not ask plaintiff for an explanation about the yard sale but only asked plaintiff if he had a yard sale, which plaintiff denied. Giancola admitted that none of the sales representatives advised him that plaintiff was in a sales meeting the day of the yard sale or that plaintiff did not participate in the yard sale. Giancola wrote a report on November 2, 1989, to Rosemary Milton, the director of human resources for the southwest region for Philip Morris, about his investigation of plaintiff's infractions, to which he attached Brock's, Robinson's, and Lumbattis's written statements.

In Giancola's report to Milton, he stated that plaintiff had incentive items at his house "priced" and "ready to be sold at a yard sale." Brock's attached written statement stated as follows:

In the late summer of 1988 (August) while at Randy Gibson's home, I noticed a box of Marlboro belt buckles in an open box thatclearly said $1.50 each. The family was having a yard sale and apparently was selling these belt buckles at the above[-]mentioned price. Although I did not witness an actual sale, I can assume that they were sold or for sale."

Robinson's attached written statement stated:

"During the year of 1988-last summer, I[,] Jeff Robinson[,] actually visualized a Philip Morris incentive item being sold at a yard sale. The incentive item was the Marlboro belt buckle-still in the original shipping box which was cut open & clearly marked $1.50 each among other yard sale items on a table in the yard of Mr. & Mrs. Randy Gibson, 409 West Chester Street, Nashville, IL 62263."

Lumbattis's written statement stated that he saw incentive items "near the vicinity" of household goods offered for sale at the yard sale, but he ...

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