Florida Body Shop's Slander Suit Against State Farm Dismissed; Judge Rules State Farm's Statements to Insureds are Privileged, Express Malice Not Proven
April 6, 2010

A U.S. District Court in Florida has dismissed a slander suit brought by a Florida auto body suit against State Farm in a summary judgment. The ruling was issued last week by Judge Steven D. Merryday in Tampa, Fla.

Gunder's Auto Center, based in Lakeland, Fla., brought the suit against State Farm last March, and alleged that State Farm tortiously interfered with at least three customers and made "slanderous and/or tortious statements to those identified prospective customers." Gunder's claimed these false statements included State Farm advising that the shop was overcharging its customers; that it doesn't repair its customers' vehicles in a timely and efficient way; and that Gunder's repair equipment does not pass State Farm's inspection and is lacking in quality. (CLICK HERE for related story.)

State Farm argued in the case that "even if State Farm agents uttered false statements about the plaintiff, the statements are privileged." Florida law defines privileged statements as "a communication made in good faith on any subject matter by one having an interest therein, or in reference to which he has a duty … if made to a person having a corresponding interest or duty, even though it contains matter which would otherwise be actionable, and though the duty is not a legal one but only a moral or social obligation."

Based on this idea, the company argued that "because it was acting as an insurer and was communicating with a party seeking benefits under the insurance contract about an issue in which they have a common interest-the prompt and full payment of the repairs," any statements made to insureds were "privileged."

The judge confirmed this argument, but explained in his opinion, that, even privileged statements, if made with "express malice" (defined as "ill will, hostility, [or] evil intention to defame and injure"), can be considered slander.

"Although State Farm's statements (if false) might be defamatory, the plaintiff offers no evidence (other than the alleged falsity of the statements) from which a juror could infer malice," writes the judge in his March 29 opinion. "The statements 'do not inherently demonstrate express malice.'"

He goes on to write, "State Farm neither attacked the plaintiff's moral character nor accused the plaintiff nor its proprietors of violent crime; each allegedly slanderous statement concerns only the matter of common interest between State Farm and the insured-the quality and value of the plaintiff's work."

Gunder's was represented by Alan Brent Geohagan of Geohagan Law, who advised glassBYTEs.com™/AGRR magazine this afternoon that he is planning to appeal the ruling.

CLICK HERE for full text of opinion.

Need more info and analysis about the issues?
CLICK HERE to subscribe to AGRR magazine.