Kraemer v. Harding

Rule of Law:

While a specific defamation claim may be time-barred due to a statute of limitations, the underlying false and defamatory statements can still constitute 'improper means' for a claim of intentional interference with economic relations and can form the basis for intentional infliction of emotional distress, particularly when made without a reasonable belief in their truth and with the intent to cause harm, and such conduct may warrant punitive damages.

Facts:

• Plaintiff James Kraemer was employed as a bus driver for the Lebanon school district, serving defendants Janet Lundberg, Jonathan Lundberg, Patricia Harding, and Jeffrey Harding's children's route during the 1992-93 school year.
• Defendants' children complained about plaintiff almost daily, and Mrs. Lundberg learned from other mothers that plaintiff allegedly kept a fifth-grade daughter on the bus after arriving at school 'to say hi' or 'to get to know her better.'
• On February 8, 1993, defendants met with plaintiff and school officials, where Dr. Harding disclosed the 'report' about the fifth-grade girl, which officials inferred implied inappropriate or sexual contact.
• School officials investigated the initial complaints, including contacting the fifth-grade girl's mother, but did not remove plaintiff from the bus route.
• On June 3, 1993, Mr. Harding filed a written complaint with the district regarding plaintiff's judgment and discipline, and Dr. Harding subsequently sent a letter threatening to 'actively get parental complaints, hold group meetings, etc.' until plaintiff was removed from the route.
• On September 13, 1993, Mr. Harding resubmitted his complaint, and Dr. Harding wrote a note to district officials expressing concern about her daughter riding alone with plaintiff, after which further investigation by the superintendent found 'no proof or indication that [plaintiff had] done anything inappropriate.'
• In October 1993, at a school board executive session, Dr. Harding again stated plaintiff 'accosted two girls,' which a board member recalled as an accusation of 'sexual molesting children,' despite Dr. Harding's testimony that she did not believe she had enough evidence to report sexual molestation to authorities.
• On October 25, 1993, Mr. Harding sent a letter to the superintendent, continuing to allege plaintiff had inappropriately held a girl on the bus and misrepresented facts to the board; plaintiff was permanently reassigned to a different bus route on November 5, 1993.
• Beginning in November 1993, plaintiff consulted his physician and a psychiatrist, who diagnosed him with acute adjustment reaction with anxiety and depression due to the stress from defendants' accusations, leading to time off work and ongoing medical treatment.

Procedural Posture:

• Plaintiff James Kraemer filed a complaint for damages in circuit court against defendants Janet Lundberg, Jonathan Lundberg, Patricia Harding, and Jeffrey Harding for defamation, intentional interference with economic relations, and intentional infliction of emotional distress (October 1994).
• Defendants moved to dismiss the defamation claim on the ground that it was barred by the one-year statute of limitations, which the circuit court initially granted.
• The court subsequently allowed the filing of a second amended complaint, which reiterated the defamation claim.
• Defendants filed their answer, denying specific allegations, raising truth as a defense, claiming privilege, and asserting statute of limitations arguments for defamation and intentional interference.
• At the close of plaintiff's case-in-chief and again at the close of all evidence, defendants moved for a directed verdict on each claim, arguing insufficiency of evidence, privilege, and statute of limitations.
• The trial court denied all of defendants' motions for directed verdicts and submitted plaintiff's claims to the jury.
• The jury returned a verdict against each defendant and in favor of plaintiff, awarding $5,387.27 in economic damages, $127,500 in noneconomic damages, and $75,000 in punitive damages.
• Defendants appealed from the resulting judgment to the Court of Appeals of Oregon, assigning error to the denial of their directed verdict motions, the submission of the punitive damages issue, jury instructions, and the failure to reduce the punitive damage award.