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Thursday, 14 April 2011 18:31

Gunder’s Loses Appeal to State Farm—Court Rules ‘Even if False,’ Claims are Priviledged

On April 7th, 2011 the United States Court of Appeals for the Eleventh Circuit upheld a lower court’s order granting summary judgment in favor of State Farm Insurance in Gunder’s Auto Center’s claim against the nation’s largest personal auto insurer for slander and tortious interference with a business relationship. (See for background.)

To recover for slander in Florida, the claimant must show (1) publication of a false statement; (2) about the plaintiff; (3) to a third party; and (4) damage resulting to plaintiff from the publication.

To state a claim for tortious interference in Florida, the claimant must show (1) the existence of a business relationship; (2) knowledge of the relationship on the part of the defendant; (3) an intentional and unjustified interference by the defendant; and (4) damage from the breach of the relationship.

The court found that,  “although denied by State Farm, we assume the statements allegedly made by State Farm disparaging Gunter’s were made and are untrue. Nonetheless, we agree with the district court that State Farm’s statements were privileged:

Under Florida law a privileged statement is one in which “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, is privileged if made to a person having a corresponding interest or duty, even though it contains matter which would otherwise be actionable.

The court continued: “Because all statements were made to State Farm insureds in the context of a claim under a State Farm insurance policy, and because all statements concerned a matter of mutual interest to the insureds andState Farm—the quality, timeliness and costs of vehicles repairs—the statements were privileged.

The privilege raises a presumption of good faith on the part of the speaker, but the privilege is not absolute. The privilege is forfeited if the statements are made with express malice: [w]here a person speaks upon a privileged occasion, but the speaker is motivated more by a desire to harm the person defamed than by a purpose to protect the personal or social interest giving rise to the privilege, then it can be said that there was express malice and the privilege is destroyed.

Gunder’s failed to proffer sufficient evidence of express malice to raise a material issue of fact for a jury. The statements of which Gunter’s complains—even assuming their falsity—supports no inference of malice, and Gunter’s failed to proffer extrinsic evidence of express malice. Summary judgment was due on Gunder’s slander claim.

On the tortious interference claim by Gunder, the court ruled  “Gunder’s makes no allegation that State Farm interfered with customers or prospective customers of Gunder’s who were not State Farm insureds. As a matter of law, “[t]here can be no claim [for tortious interference with a business relationship] where the action complained of is undertaken to safeguard or promote one’s financial or economic interest.”

The court continued, ““[u]nder Florida law, a defendant is not a stranger to a business relationship, and thus cannot be held liable for tortious interference, when it has a supervisory interest in how the relationship is conducted or a potential financial interest in how a contract is performed.”

Gunder had argued in court that State Farm had lost the priviledge because it used improper means, but was unable to prevail because the testimony detailing the improper means had earlier been stricken from the court’s records.

The court continued, “ On appeal, Gunder’s cites—for the first time— [a paragraph in the] amended complaint to claim it pleaded improper means. Even if Gunder’s has preserved this argument, the only arguably improper means Gunder’s alleged are the statements Gunder’s claims State Farm made to its insureds about the costs, quality, and timeliness of Gunder’s repairs. These statements are the same statements upon which Gunder’s grounds its slander claims. Even assuming the falsity of those statements, as earlier discussed, those statements were privileged; they fail to show the improper means needed to defeat State Farm’s privilege against a tortious-interference claim.”

Ray Gunder, the founder of Polk County’s Gunder’s Auto Center, a 43 year-old auto collision repair and mechanical shop, made the following statement after the judgment was delivered:

“Last night, after getting the court’s decision, I re-read it and just sat in disbelief just staring at it for hours. Is it really possible in this country for a huge conglomerate like State Farm to attack my small business with what are known to be outrageous lies and be considered legally privileged?

“As I understand it, the legal rule is that the so-called ‘privilege’ is forfeited if derogatory and defamatory comments re made with ‘Express Malice.’

“To be considered ‘Express Malice’ one would need to reach the level of calling me and/or my family murderers and rapists.

“State Farm came after us in 2004 in an attempt to silence my voice by attacking our company’s reputation in our community and their attempt to financially destroy our business by steering customers away with totally untrue and outrageous lies… and that, according to the court, at least in my case… is legal!? This ruling is justice?

“It’s important to understand that if this ruling stays; every honest and ethical shop owner in the industry is in jeopardy of similar efforts against them if they don’t fall in line and do as they’re told by this megalith insurer and other insurers who may chose to follow suit!

Continued Gunder, “This ruling is scary for all of us. Although this is but one ‘leg’ of my legal journey to correct the harmful and predatory practices of some insurers, it’s a very bitter pill to swallow!

“Know this; I’ve been knocked down but I’m not knocked out. I’m going to continue to “pound that rock” and find the justice that I believe exists in our legal system!

While I’m not a poker player, the term ‘I’m all in’ is indeed applicable as I’m too far invested in time and finances to quit now and I’ve never been one to see a wrong and not try to make it right and with the best legal representation one could hope for, we will continue to move on.

“What one doesn’t find in this decision is one of the most important parts; State Farm speaking improperly and slandering Gunder’s “once” is privileged in the courts opinion, but speaking lies “over” and “over” again knowing they are lies is indeed “Express Malice”!

“We will prove that State Farm has continuously committed Slander with Express Malice and have done so regularly with an evil intent.

“I believe with right there’s might and Gunder’s will press on and we will begin by giving serious consideration to submitting a request for a review and appeal with the United State’s Supreme Court.”

A copy of the court’s ruling may be found at:

In another lawsuit the shop has pending against the insurer in Polk County Court, a judge has granted the shop's request to compel State Farm to make documents and a number of witnesses available to the shop's attorney as part of the discovery process. Among those that shop attorney A. Brent Geohagan seeks to depose in the case are representatives of at least eight repair shops that serve State Farm insureds in Polk County.

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