Ferguson v. Williams Hunt

2009 UT 49
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Gary B. Ferguson, 	No. 20080273
Plaintiff and Appellant,
v.
Williams & Hunt, Inc.; Elliott J.
Williams; George A. Hunt; and 	F I L E D
Kurt Frankenburg,
Defendants and Appellees. 	July 31, 2009
---
Third District, Salt Lake
The Honorable Tyrone E. Medley
No. 050921677
Attorneys: 	Roy A. Jacobson Jr., Mel C. Orchard III, Jackson, WY,
Charles F. Peterson, Boise, ID, Edwin S. Wall,
Salt Lake City, for plaintiff
M. David Eckersley, Salt Lake City, for defendants
---
DURHAM, Chief Justice:
INTRODUCTION
¶1 	Appellant Gary Ferguson appeals the orders of the trial
court that dismissed his claims against his former law firm,
Williams & Hunt, and former colleagues Elliot Williams, George
Hunt, and Kurt Frankenburg (collectively, Defendants).
Specifically, Mr. Ferguson asks that we reverse the directed
verdict in favor of Defendants on claims of defamation and
intentional interference with prospective economic relations,
summary judgment in favor of Mr. Frankenburg on claims of
defamation and intentional interference, and Defendants’ motion
in limine.
¶2 	The claims stem from statements made by Mr. Ferguson’s
former partners. 	Mr. Williams told the firm’s major client--whom
Mr. Ferguson exclusively represented--that the firm had formed
the belief it could not trust the accuracy of Mr. Ferguson’s
bills. 	The firm then terminated Mr. Ferguson. 	Months later, Mr.
Frankenburg contacted Mr. Ferguson’s new firm to warn that Mr.
Ferguson was conflicted from certain cases. 	Because Mr. Ferguson

No. 20080273 	2	2
failed to show that Defendants made the statement to their client
knowing it was false or with reckless disregard as to its
falsity, Defendants did not abuse their conditional privilege.
Mr. Ferguson also failed to establish the elements for his other
claims. 	We therefore affirm.
BACKGROUND
¶3 	In 1991, Gary Ferguson and his partners founded the law
firm of Williams & Hunt. 	Mr. Ferguson worked there as a trial
attorney for roughly fourteen years, specializing in medical
malpractice defense for the firm’s main client, the Utah Medical
Insurance Association (UMIA).
¶4 	At trial Mr. Williams testified that starting in
January 2005, Mr. Ferguson began to bill more hours than he
normally did. 	Mr. Ferguson informed his partners of his plans to
take upcoming vacations in April and May to spend time with
family. 	Previous to that year, Mr. Ferguson “was pretty steady
most of the time” and never billed more than any other attorneys
at the firm. 	But the partners “noticed a substantial change in
the number of hours Gary was billing, without observing any
change in his work productivity. 	That is, what he seemed to be
doing . . . [was] the same as always, but now the hours were
greater.” 	Looking at the monthly billing summaries, Mr.
Ferguson’s “January numbers were off the chart. 	February
followed, also very high. 	Those two months were definitely
different than [the partners had] . . . ever seen before.” 	By
the end of the first quarter, Mr. Ferguson billed 130 hours more
than his baseline for the two previous years, and he out-billed
all of the firm’s top-billing partners, even the highest billing
partner who “worked about seven days a week, most nights, all
weekends.” 	Yet the partners observed that Mr. Ferguson “never
worked weekends [and] never worked evenings. 	[To them, t]hat was
suspicious . . . .”
¶5 	Also early that year, Mr. Ferguson showed Mr. Williams
an unusually high bill of $22,000 for one month of work on a UMIA
case. 	In response, Mr. Williams criticized Mr. Ferguson for
spending too much time preparing for a deposition. 	Mr. Ferguson
later sent an e-mail to Mr. Williams stating that he had worked
every minute billed in the case and that Mr. Williams should not
criticize the time billed without knowing everything. 	Mr.
Williams never asked Mr. Ferguson to cut the time billed.
¶6 	Because of the high bill and the unusual number of
hours, the other partners of the firm grew concerned that Mr.
Ferguson was overbilling. 	Yet, uncertain of Mr. Ferguson’s
billing practices, they concluded more information was needed.

3 	No. 20080273	3
This information came from a compilation of three sources: 	(1) a
computer program, (2) Mr. Ferguson’s calendar, and (3) the legal
descriptions from Mr. Ferguson’s billing statements.
¶7 	The partners used these three sources to analyze Mr.
Ferguson’s billing practices. 	The computer program tracked when
Mr. Ferguson logged on and off of his desktop computer. 	Although
the new program had never been used to track time before and the
firm did not require attorneys to log on and off computers at the
beginning and end of each day, the attorneys at the firm, as a
practical matter, logged on to their computers in the morning to
get their e-mail and voice mail. 	The program did not track the
time Mr. Ferguson spent working on his laptop or account for
billable work done away from the computer, including depositions,
appearances in court, or other work outside the office. 	To
address these deficiencies, the partners verified that Mr.
Ferguson did not, via laptop, check in or out any documents from
their server, which tracked each time a document was entered or
modified. 	Also, the partners obtained access to Mr. Ferguson’s
calendar to account for his work outside the office. 	Further,
Mr. Ferguson’s own description of the billed work “allowed them
to see if it was the kind of work customarily done in the office
or not.”
¶8 	Using the three sources of information, the partners
began to track Mr. Ferguson’s billing. 	On March 23, 2005, the
day the computer program became active, Mr. Ferguson’s calendar
showed he had a medical procedure that morning. 	The program
indicated that Mr. Ferguson logged on to his desktop around noon
and that he left about five o’clock. 	Mr. Ferguson billed 11.25
hours that day. 	When asked if he worked the 11.25 hours, Mr.
Ferguson testified, “I don’t remember anything I did on this day,
other than the ultrasound; but if I billed it, I did it, and I
did it on that day.” 	He also explained that his medical
procedure that morning took only about thirty minutes to
complete. 	Looking at his description of work, he testified that
the two conferences listed required him to be in the office but
that the other work could have been done away from his office.
Mr. Ferguson also testified that if he anticipated doing work in
the evening, “he would estimate the amount of time and enter it
with that batch before [he] left [for] home.”
¶9 	On May 5, 2005, following six weeks of observation, the
firm’s five main partners, George Hunt, Bruce Jensen, Jody
Burnett, Dennis Ferguson, and Elliott Williams, met to discuss
Mr. Ferguson’s billing practices. 	“[W]ith about 150 years of
combined experience in this kind of work, [the partners] came to
the inescapable conclusion that [Mr. Ferguson] was overbilling
for what he was doing. 	It was very obvious.” 	That same day over

No. 20080273 	4	4
lunch, Mr. Williams informed the president of UMIA, Martin
Oslowski, that “we had formed the belief, after reviewing the
information we’d collected, that we could not trust the accuracy
of [Mr. Ferguson’s] bills. 	That was the decision we had made;
and that was one of the reasons why we had to terminate his
employment.” 	At trial, Mr. Williams confirmed his belief:
Q. 	When you told Mr. Oslowski what you told him,
did you believe it?
A. 	Absolutely.
The firm later credited UMIA $10,000 for the overbilling.
¶10 	On May 5, 2005, Mr. Williams and Mr. Hunt fired Mr.
Ferguson. 	When asked why, they told Mr. Ferguson, “We concluded
that you had over-billed.” 	Mr. Ferguson told them that “[he] had
not over-billed UMIA.” 	When Mr. Ferguson questioned what case or
what day, they could not point to anything specific. 	Mr.
Ferguson requested time to prove he had not over-billed, but they
told him the decision was unanimous. 	When asked what they told
UMIA, Mr. Williams said, “I told Marty that you can no longer
trust Gary’s bills.” 	Mr. Ferguson replied that Mr. Williams had
“poisoned the well at UMIA.”
¶11 	Mr. Ferguson contacted Arthur Glenn, the Vice President
of Claims for UMIA, to learn if they had complained of the
overbilling; they had not. 	Rather, Mr. Glenn, who routinely
referred cases to Mr. Ferguson and reviewed all the monthly
bills, never found any suspicious billing. 	Even after analyzing
the bills a second time and creating a spreadsheet detailing Mr.
Ferguson’s work and time, Mr. Glenn could not “find anything
unusual in the billing that [he] would consider overbilling.”
Mr. Ferguson asked Mr. Glenn if UMIA would ever refer another
case. 	Mr. Glenn said it was up to Mr. Oslowski and to him “it
was an issue of trust.” 	The next day, Mr. Oslowski telephoned
Mr. Glenn to tell him “we weren’t to assign any more work to
Gary.”
¶12 	Mr. Ferguson struggled to find work but finally gained
employment with another law firm. 	He now works as a plaintiffs’
lawyer litigating medical malpractice cases. 	At Williams & Hunt,
Mr. Ferguson earned roughly $250,000 per year; at his current
firm he has earned $1,082, $22,000, and $67,000 for the 2006,
2007, and 2008 years, respectively.
¶13 	At his new firm, Mr. Ferguson was contacted by Kurt
Frankenburg of Williams & Hunt. 	Mr. Frankenburg told Mr.
Ferguson that under the professional rules of conduct, Mr.
Ferguson was conflicted from representing clients in certain

5 	No. 20080273	5
cases. 	One actual conflict existed; the other concerns regarding
conflicts were later withdrawn.
¶14 	Following the above events, Mr. Ferguson and his wife
brought suit against Williams & Hunt and individually against Mr.
Williams, Mr. Hunt, and Mr. Frankenburg seeking to recover
damages for two counts of defamation, the first for Defendats’
statement to UMIA, the second for Mr. Frankenburg’s statement
regarding conflicts; two counts of intentional interference with
economic relations, the first with UMIA, the second with Mr.
Ferguson’s current firm; intentional infliction of emotional
distress; wrongful discharge; and loss of consortium. 	The
parties stipulated to the dismissal of the claim for loss of
consortium.
¶15 	Prior to trial Defendants filed a motion for
reconsideration of a previously denied summary judgment motion.
The trial court granted the motion for reconsideration in part by
dismissing all claims except those against Defendants for
defamation and intentional interference with prospective economic
relations with UMIA. 	For the defamation claim, the court agreed
with Defendants that a conditional privilege existed in making
the statement to the client but stayed judgment to provide Mr.
Ferguson the opportunity to prove abuse of the privilege. 	Also,
the trial court granted Defendants’ motion in limine to exclude
evidence about the partners’ alcohol consumption on the office
premises, alleged affairs between firm employees, Mr. Ferguson’s
surgical procedure scheduled for May 6, 2005, and Mr. Ferguson’s
brother’s suicide.
¶16 	Upon conclusion of Mr. Ferguson’s case in chief at
trial, Defendants moved for a directed verdict. 	The trial court
ruled that to prove abuse of the privilege, Mr. Ferguson had to
present evidence that Defendants made the allegedly defamatory
statement knowing it was false or that they acted in reckless
disregard as to its falsity. 	The trial court examined whether
sufficient evidence existed to give the case to the jury to
determine that Defendants knew the statement was false or that
Defendants entertained serious doubts as to the truth of the
statement or that Defendants had a high degree of awareness of
the probable falsity of the statement. 	The trial court found
that no such evidence had been presented and granted Defendants’
motion for directed verdict. 	Mr. Ferguson appealed. 	We have
jurisdiction pursuant to Utah Code section 78A-3-102(3)(j)
(2008).

No. 20080273 	6	6
ANALYSIS
¶17 	On appeal, Mr. Ferguson presents four main issues:
whether the trial court erroneously granted (1) the directed
verdict as to the defamation claim; (2) the directed verdict as
to the claim for intentional interference; (3) summary judgment
on the claims of defamation and intentional interference in favor
of Mr. Frankenburg; and (4) Defendants’ motion in limine. 	We
address each issue in turn.
I. 	THE TRIAL COURT PROPERLY GRANTED THE MOTION FOR DIRECTED
VERDICT ON THE DEFAMATION CLAIM
¶18 	Mr. Ferguson argues that the trial court erred in
granting the directed verdict by misapplying Utah law to require
evidence that Defendants knew the statement was false or that
they acted in reckless disregard as to the falsity of the
statement rather than applying the lesser standard of lack of
reasonable grounds.
¶19 	The question of what standard applies to determine an
abuse of privilege presents a question of law, which we review
for correctness. 	See O’Connor v. Burningham, 2007 UT 58, ¶ 38,
65 P.3d 1214. 	“We review a trial court’s grant of directed
verdict for correctness.” 	Goebel v. Salt Lake City S. R.R. Co.,
2004 UT 80, ¶ 10, 104 P.3d 1185. 	“We will sustain a directed
verdict if after ‘examining all evidence in a light most
favorable to the non-moving party, there is no competent evidence
that would support a verdict in the non-moving party’s favor.’”
Daines v. Vincent, 2008 UT 51, ¶ 20, 190 P.3d 1269 (quoting
Merino v. Albertsons, Inc., 1999 UT 14, ¶ 3, 975 P.2d 467).
A. 	A Conditional Privilege is Abused by Knowledge of
Falsity or Reckless Disregard as to Falsity
¶20 	The trial court determined that Defendants, as Mr.
Ferguson’s employer, had a conditional or qualified privilege in
making the defamatory statement to UMIA, an interested party,
concerning Mr. Ferguson. 	Mr. Ferguson does not contest the
existence of this conditional privilege. 	Rather, the burden
having shifted from defendant to plaintiff, see Brehany v.
Nordstrom, Inc., 812 P.2d 49, 58 (Utah 1991), Mr. Ferguson argues
that Defendants abused and therefore lost the conditional
privilege.
¶21 	We have previously noted that a plaintiff can show
abuse of a conditional privilege where a statement is made with
knowledge of its falsity or with reckless disregard as to its
falsity. 	See O’Connor, 2007 UT 58, ¶ 37. 	This court also noted,

1 A conditional privilege may also be abused by a showing
that “the defendant acted with malice or that the publication of
the defamatory material extended beyond those who had a legally
justified reason for receiving it.” 	Brehany v. Nordstrom, Inc.,
812 P.2d 49, 58 (Utah 1991). 	This common law malice, which shows
an improper motive of spite or ill will, is distinct from the
actual malice standard of New York Times Co. v. Sullivan, 376
U.S. 254 (1964). 	See Cox v. Hatch, 761 P.2d 556, 559 n.3 (Utah
1988). 	Our analysis does not address common law malice or
excessive publication, and we thus leave them as means by which a
plaintiff can prove abuse of a conditional privilege.
7 	No. 20080273	7
“‘The publisher’s lack of belief in the truth of the defamatory
matter published, or his lack of reasonable grounds for so
believing . . . is important as constituting an abuse of the
occasion which deprives him of the protection which it would
otherwise afford.’” 	Hales v. Comm’l Bank of Spanish Fork, 197
P.2d 910, 913 (Utah 1948)(quoting Restatement of Torts § 594 cmt.
b (1938))(emphasis added). 1 	Mr. Ferguson asks that we abide by
our dicta in Hales and allow him to show Defendants lacked
reasonable grounds for their statement, and as a result abused
their conditional privilege. 	Given the changes in defamation law
since the 1938 publication of the Restatement of Torts, which we
relied on in Hales and from which the lack of reasonable grounds
standard is derived, 197 P.2d at 913, we can no longer abide by
prior pronouncements.
¶22 	The Supreme Court of the United States altered the
landscape of defamation law with New York Times Co. v. Sullivan,
376 U.S. 254 (1964). 	There, the Court determined that the free
speech rights of the First Amendment prohibited a public official
from recovering on a defamation claim under state law unless the
official proved the statement was made with actual malice, that
is, knowing it was false or with reckless disregard as to its
falsity. 	Id. at 279-80. 	A decade later, the Supreme Court
further altered state defamation law. 	In Gertz v. Robert Welch,
Inc., the Court held that “so long as they do not impose
liability without fault, the States may define for themselves the
appropriate standard of liability for a publisher or broadcaster
of defamatory falsehood injurious to a private individual.” 	418
U.S. 323, 347 (1974). 	The Court further held that “the States
may not permit recovery of presumed or punitive damages, at least
when liability is not based on a showing of knowledge of falsity
or reckless disregard for the truth.” 	Id. at 349.
¶23 	The Restatement (Second) of Torts recognizes the impact
of Gertz on state defamation law and, in particular, conditional
privileges. 	The Restatement explains that because of Gertz,
“strict liability in defamation is unconstitutional and that a

2 Rather than referring to knowledge of falsity and reckless
disregard as to falsity in terms of actual malice, the
Restatement divides this concept in the two distinct standards
for abuse of a conditional privilege. 	We do the same to avoid
the confusion sometimes created by use of the terms actual malice
and common law malice.
3 See Lyons v. Nat’l Car Rental Sys., Inc., 30 F.3d 240, 244
(1st Cir. 1994); Esmark Apparel, Inc. v. James, 10 F.3d 1156,
1163 (5th Cir. 1994); Green Acres Trust v. London, 688 P.2d 617,
624 (Ariz. 1984); Dominguez v. Babcock, 727 P.2d 362, 366 (Colo.
1986); Dobbyn v. Nelson, 579 P.2d 721, 725 (Kan. Ct. App. 1978);
Kennedy v. Sheriff of E. Baton Rouge, 935 So.2d 669, 684-86 (La.
2006); Gallo v. Princeton Univ., 656 A.2d 1267, 1274 (N.J. Super.
Ct. App. Div. 1995); Bender v. City of Seattle, 664 P.2d 492, 505
(Wash. 1983).
4 See, e.g., Debry v. Godbe, 1999 UT 111, ¶ 8, 992 P.2d 979
(listing publication “with the requisite degree of fault” as an
element in establishing a claim for defamation in a purely
private context); Oman v. Davis Sch. Dist., 2008 UT 70, ¶¶ 68-70,
194 P.3d 956 (noting fault as an element in a purely private
(continued...)
No. 20080273 	8	8
publisher can be held liable only if he was at least negligent
regarding the falsity of the statement.” 	Restatement (Second) of
Torts § 600 cmt. a (1977). 	Thus, “mere negligence as to falsity,
being required for all actions of defamation, is no longer
treated as sufficient to amount to abuse of a conditional
privilege.” 	Id. cmt. b. 	Accordingly, the Restatement no longer
recognizes the once majority rule of lack of reasonable grounds;
instead, “one who upon an occasion giving rise to a conditional
privilege publishes false and defamatory matter concerning
another abuses the privilege if he (a) knows the matter to be
false, or (b) acts in reckless disregard as to its truth or
falsity.” 2 	Id. § 600. 	Since the publication of the Restatement
(Second) of Torts, several courts have followed suit. 3
¶24 	We agree with the rationale set forth by section 600 of
the Restatement (Second) of Torts. 	If Gertz requires a private
plaintiff to prove that a defendant negligently published a
defamatory statement regarding a private concern, then lack of
reasonable grounds--or in other words, negligence--loses its
significance in the conditional privilege setting. 	The lack-of-
reasonable-grounds standard would offer no more protection to a
privileged statement than exists in a purely private defamation
action. 	We recognize that our cases have indicated, in dicta,
that in a purely private defamation action the requisite degree
of fault is negligence. 4 	However, while these cases accord with

4 (...continued)
context and remarking that a school district maintenance
coordinator had not demonstrated negligence in his defamation
action against the employer school district).
5 For example, in support of its proposition, Debry, 1999 UT
111, ¶ 8, cited to West v. Thomson Newspapers, 872 P.2d 999,
1007-08 (Utah 1994), which involved the mayor of a small,
southern Utah town about whom a local newspaper allegedly
published defamatory statements. 	See West, 872 P.2d at 1000.
Similarly, Oman, 2008 UT 70, ¶ 69, cited to Wayment v. Clear
Channel Broad., Inc., 2005 UT 25, ¶ 32 n.13, 116 P.3d 271, for
the proposition that “a defamation plaintiff who is not a public
figure must . . . [still] establish negligence on the part of the
defendant,” which proposition Wayment attributes to Seegmiller v.
KSL, Inc., 626 P.2d 968 (Utah 1981), a case involving a private
plaintiff and a media defendant. 	See Seegmiller, 626 P.2d at
973.
9 	No. 20080273	9
the rationale of the Restatement (Second) of Torts, this
proposition of negligence stems from those cases involving a
private plaintiff and a public concern, in which negligence is
clearly required to establish a claim for defamation. 5
Consequently, we have not directly decided the degree of fault
necessary, if any, in a purely private defamation action. 	We
expressly so note because we recognize that the rationale of the
Restatement may be based on an overbroad reading of Gertz.
¶25 	Since the publication of the Restatement (Second) of
Torts in 1977, some uncertainty has arisen as to the
applicability of Gertz for defamation actions brought in a purely
private context. 	Roughly a decade after Gertz, the Supreme Court
in Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc. ruled by
plurality opinion that a private plaintiff’s recovery of
“presumed and punitive damages in defamation cases absent a
showing of ‘actual malice’ does not violate the First Amendment
when the defamatory statements do not involve matters of public
concern.” 	472 U.S. 749, 763 (1985); id. at 763-64 (Burger, C.J.,
concurring); id. at 774 (White, J., concurring). 	A four-justice
dissent criticized the plurality for failing to attribute any
free speech interests to the statement, and it would have applied
Gertz to require the private plaintiff to show negligence to
establish the defamatory claim and actual malice to receive
presumed or punitive damages. 	Id. at 775-76 (Brennan, J.,
dissenting). 	In Cox v. Hatch, this court noted the impact of
this plurality decision: 	“If the defamatory falsehood does not
relate to a matter of ‘public concern,’ state law could
constitutionally continue to apply the common law doctrine of
strict liability in a defamation action.” 	761 P.2d 556, 559-60

No. 20080273 	10	10
(Utah 1988). 	But Cox left open the question of Gertz’s
applicability in the purely private context. 	See id. at 560-61
(finding a public concern and resolving the case where plaintiff
failed to state a claim).
¶26 	Again, we leave open this question regarding strict
liability in a purely private defamation action. 	Although this
issue could be implied from the assumption in the Restatement
(Second) of Torts that Gertz eliminated strict liability in all
defamation actions, that question is not before us and we need
not rely solely on that reasoning. 	Rather, we are faced with a
question regarding the abuse of a conditional privilege. 	Though
this privilege may not present the panoply of First Amendment
interests of a constitutional privilege, it is a privilege that
affords its publisher a level of protection in making certain
statements to certain individuals.
¶27 	A conditional privilege arises to protect a legitimate
interest of the publisher, the recipient, or a third person. 	See
Brehany, 812 P.2d at 58. 	“The privilege also extends to
statements made to advance a legitimate common interest between
the publisher and the recipient of the publication.” 	Id. 	Thus,
“[t]his qualified privilege protects an employer’s communication
. . . to other interested parties concerning the reasons for an
employee’s discharge.” 	Id. 	Were statements not so privileged, a
chilling effect would harm legitimate interests, including those
at stake here, in candor, lawyer representation, and fiduciary
duties or responsibilities. 	The conditional privilege also
permits mistakes to be made; otherwise, there would be no need
for the privilege. 	See, e.g., id. (noting that a conditional
privilege is “regarded as being sufficiently important to justify
some latitude for making mistakes” (internal quotation marks
omitted)). 	And while we recognize that, “[a]t its core, an
action for defamation is intended to protect an individual’s
interest in maintaining a good reputation,” West v. Thomson
Newspapers, 872 P.2d 999, 1008 (Utah 1994), the reality of the
privilege means defamatory statements will be made for which an
injured plaintiff will not be able to recover damages. 	Thus, in
balancing the justification for the privilege against the
individual’s interests in reputation, the necessity of deeming
certain statements privileged requires some room for honest
error, but not for known falsity or recklessness.
¶28 	Accordingly, we abandon the lack-of-reasonable-grounds
standard. 	We now clarify that in addition to other common law
means, such as excessive publication or common law malice, a
plaintiff can show abuse of a conditional privilege where the
defendant (1) made a defamatory statement knowing it to be false
or (2) acted in reckless disregard as to its falsity. 	With the

6 Mr. Ferguson does not argue excessive publication as a
ground for abuse, but he does argue common law malice in that
Defendants acted with common law malice by terminating him the
day before a scheduled surgery to remove a suspected cancerous
thyroid. 	Even if this act of termination, done separately from
the publication of the defamatory statement, demonstrated ill
will, the trial court excluded this evidence by granting
Defendants’ motion in limine. 	Thus this evidence was never
introduced at trial. 	See infra Part IV. 	Therefore, as the trial
court found and as we agree, Mr. Ferguson presented no evidence
of ill will at trial.
11 	No. 20080273	11
standards for abuse clarified, we turn to the evidence presented
at trial.
B. 	Mr. Ferguson Failed to Present Evidence Showing that
Defendants Knew the Statement Was False or Acted
in Reckless Disregard as to Its Falsity
¶29 	To prove abuse of the privilege, the trial court
correctly required Mr. Ferguson to present sufficient evidence
that Defendants knew the statement to UMIA was false or acted
with reckless disregard as to its falsity. 	This Mr. Ferguson did
not do. 6
¶30 	A publisher’s knowledge of the falsity of a statement
is inherently subjective. 	To prove knowledge of falsity, a
plaintiff must present evidence that shows the defendant knows
the defamatory statement is untrue. 	Likewise, acting with
reckless disregard as to the statement’s falsity involves a
showing of subjective intent or state of mind. 	The Restatement
explains that reckless disregard as to falsity “exists when there
is a high degree of awareness of probable falsity or serious
doubt as to the truth of the statement.” 	Restatement (Second) of
Torts § 600 cmt. b (1977); see also St. Amant v. Thompson, 390
U.S. 727, 731 (1968) (“There must be sufficient evidence to
permit the conclusion that the defendant in fact entertained
serious doubts as to the truth of his publication.”). 	But while
reckless disregard is substantially subjective, certain facts may
show, regardless of the publisher’s bald assertions of belief,
that “the publisher’s allegations are so inherently improbable
that only a reckless man would have put them in circulation” or
that “there are obvious reasons to doubt the veracity of the
informant or the accuracy of his reports.” 	St. Amant, 390 U.S.
at 732. 	Therefore, reckless disregard as to the falsity of
statement that a defendant honestly believed to be true is
determined by a subjective inquiry as to the defendant’s belief

7 Insofar as a defendant makes a defamatory statement that
it “reasonably believed” or “did not reasonably believe” to be
true, see Wayment v. Clear Channel Broad., Inc., 2005 UT 25,
¶¶ 53-54, 116 P.3d 271, that belief is likewise measured against
the standard of reckless disregard for these subjective and
objective inquiries, and not, as we discussed above, the grounds
that would make a belief reasonable.
No. 20080273 	12	12
and an objective inquiry as the inherent improbability of or
obvious doubt created by the facts. 7
¶31 	Here, Mr. Ferguson presented no evidence to meet the
standard. 	Rather, the evidence presented in his case in chief
revealed that Defendants believed the truth of their statement
concerning Mr. Ferguson’s billing. 	Defendants’ suspicions arose
when, early in the year, Mr. Ferguson began to bill more hours
than he ever had before; he outbilled the firm’s traditional
highest-billing attorneys and did so with out any apparent change
in his work habits. 	Had Defendants made the statement to UMIA at
this point, the conclusion might be that despite their
suspicions, Defendants entertained serious doubts given that they
knew of Mr. Ferguson’s upcoming vacations. 	But Defendants did
not do this; instead, to determine the validity of Mr. Ferguson’s
billing practices, Defendants used three sources of information:
the computer tracking program, Mr. Ferguson’s calendar, and the
legal descriptions from his billing statements. 	Together, these
sources revealed what Defendants believed to be improper billing
practices by Mr. Ferguson. 	With this belief, Defendants, acting
pursuant to their conditional privilege, made the statement to
UMIA.
¶32 	In response to this evidence, Mr. Ferguson offered his
own testimony that when he was terminated and told of the reason
why, he informed Defendants that he did not overbill. 	Mr.
Ferguson also attacked the reasonableness of Defendants’
investigation, pointing out that: 	the computer program failed to
take into account legitimate billable work done away from the
desktop computer; the investigating partners failed to confront
Mr. Ferguson about the overbilling until after they made the
statement to UMIA; Defendants could not point to any specific
incident of overbilling; and UMIA’s claim manager, Mr. Glenn,
never found anything unusual about the billing.
¶33 	While there may be questions about the adequacy of
Defendants’ investigation and what, in hindsight, may appear to
have been a premature and possibly even erroneous conclusion, the
evidence does not satisfy the standard of abuse required for the
conditional privilege. 	Neither Mr. Ferguson’s own testimony nor
his evidence of an inadequate investigation show that Defendants

13 	No. 20080273	13
made the statement to UMIA knowing it was false or that they
acted with reckless disregard as to its falsity. 	The evidence
does not show that Defendants entertained serious doubts of the
statement’s falsity or that they had a high degree of awareness
of its falsity; rather, based on the three sources of
information, Defendants made the statement believing it to be
true. 	The fact that Defendants refunded $10,000 in fees to UMIA
bolsters this conclusion. 	Nor does the evidence present facts
that show the statement was inherently improbable or that an
obvious reason existed to doubt the veracity of the statement.
We therefore hold that the trial court properly granted
Defendants’ motion for directed verdict as to the defamation
claim.
II. 	THE TRIAL COURT PROPERLY GRANTED THE MOTION FOR DIRECTED
VERDICT ON THE INTENTIONAL INTERFERENCE CLAIM
¶34 	Mr. Ferguson also argues that the trial court erred in
granting the directed verdict as to the claim of intentional
interference with prospective relations in regards to UMIA. 	We
disagree.
¶35 	Utah law recognizes a common law cause of action for
intentional interference with prospective economic relations.
Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 304 (Utah
1982). 	“‘[I]n order to recover damages, the plaintiff must prove
(1) that the defendant intentionally interfered with the
plaintiff’s existing or potential economic relations, (2) for an
improper purpose or by improper means, (3) causing injury to the
plaintiff.’” 	Overstock.com, Inc. v. SmartBargains, Inc., 2008 UT
55, ¶ 18, 192 P.3d 858 (alteration in original) (quoting St.
Benedict’s Dev. Co. v. St. Benedict’s Hosp., 811 P.2d 194, 201
(Utah 1991)). 	The second element offers two alternatives. 	To
establish the first alternative, improper purpose, the plaintiff
must prove more than a defendant’s motivation of ill will toward
the plaintiff; “[r]ather, the plaintiff must show that the
defendant’s ‘predominant purpose was to injure the plaintiff.’”
Anderson Dev. Co. v. Tobias, 2005 UT 36, ¶ 20, 116 P.3d 323
(quoting Leigh Furniture & Carpet Co., 657 P.2d at 307). 	“To
establish the second alternative, improper means, a plaintiff
must show ‘that the defendant’s means of interference were
contrary to statutory, regulatory, or common law or violated an
established standard of a trade or profession.’” 	Id. (quoting
Pratt v. Prodata, Inc., 885 P.2d 786, 787 (Utah 1994)).
¶36 	At trial, Mr. Ferguson failed to establish the second
element. 	Mr. Ferguson predicated his intentional interference
claim on the alleged defamation in this case--that Defendants
used an improper means by defaming Mr. Ferguson’s professional

No. 20080273 	14	14
reputation with UMIA. 	Defamation would be a means contrary to
the common law. 	However, our holding above, which affirms the
trial court’s grant of the directed verdict, dictates that no
defamation existed, and thus Defendants employed no improper
means. 	And besides Mr. Ferguson’s conclusory assertion that the
statement to UMIA was motivated out of spite and ill will, we are
not directed to and cannot find any evidence to that effect, let
alone evidence that injury to Mr. Ferguson was Defendants’
predominant purpose. 	We therefore affirm the trial court’s grant
of the directed verdict.
III. 	THE TRIAL COURT PROPERLY ENTERED SUMMARY JUDGMENT
IN FAVOR OF DEFENDANT FRANKENBURG
¶37 	Prior to trial, the lower court granted, in part,
Defendants’ motion for reconsideration. 	In granting the motion,
the trial court entered summary judgment in favor of defendant
Mr. Frankenburg by dismissing the claims of defamation and
intentional interference with economic relations. 	Mr. Ferguson
argues that the entry of summary judgment was procedurally and
substantively incorrect. 	Again, we disagree.
¶38 	In reviewing a district court’s grant of summary
judgment, we review the lower court’s legal conclusion for
correctness, granting no deference therein, and “review the facts
and all reasonable inferences in the light most favorable to the
nonmoving party.” 	S. Utah Wilderness Alliance v. Automated
Geographic Reference Ctr., 2008 UT 88, ¶ 12, 200 P.3d 643. 	We
will affirm the granting of summary judgment “only in the absence
of any genuine issue of material fact and where the moving party
is entitled to judgment as a matter of law.” 	Id.; see Utah R.
Civ. P. 56(c).
¶39 	Mr. Ferguson contends first that the trial court lacked
authority to consider the motion for summary judgment because it
was brought as part of a motion for reconsideration of summary
judgment outside the scheduling order of the case. 	Implicit in
this contention is the pretrial nature of the motion.
¶40 	A district court has the discretionary power to
reconsider or decline to reconsider its decisions within a case
before entering final judgment. 	IHC Health Servs., Inc. v. D & K
Mgmt., Inc., 2008 UT 73, ¶ 27, 196 P.3d 588; see also Gillett v.
Price, 2006 UT 24, ¶ 10, 135 P.3d 861 (recognizing a district
court’s discretion to reconsider its decisions prior to final
judgment). 	As rule 54(b) of the Utah Rules of Civil Procedure
provides, where multiple claims and multiple parties are
involved, any order of the court, in the absence of a final
judgment, “is subject to revision at any time before the entry of

15 	No. 20080273	15
judgment adjudicating all the claims and the rights and
liabilities of all the parties.” 	Because of the multiple claims
and parties at issue here and the lack of a final judgment, the
trial court could reconsider its earlier summary judgment ruling.
¶41 	Mr. Ferguson next contends that genuine issues of
material fact precluded summary judgment. 	However, Mr. Ferguson
points to no contested facts. 	The factual basis underlying these
defamation and intentional interference claims stems from UMIA
turning Mr. Ferguson’s caseload over to Mr. Frankenburg after the
termination and from Mr. Frankenburg contacting Mr. Ferguson’s
new law firm to inform them of potential conflicts Mr. Ferguson
might have. 	Defendants did not dispute these facts; rather, they
showed that Mr. Ferguson acknowledged in his deposition that the
statements regarding potential ethical conflicts were not
defamatory. 	Mr. Ferguson also admitted in his deposition that at
least one express conflict existed and the questions regarding
the other potential conflicts were legitimate.
¶42 	The legitimacy of these concerns precluded Mr. Ferguson
from proving either claim. 	Mr. Ferguson cannot prove defamation
because the concerns regarding ethical conflicts were either true
or legitimately raised. 	“In this state, truth is an absolute
defense to an action for defamation.” 	Brehany v. Nordstrom,
Inc., 812 P.2d 49, 57 (Utah 1991). 	Neither can Mr. Ferguson
prove intentional interference as he, again, cannot establish the
element of improper means or improper purpose. 	See
Overstock.com, Inc. v. SmartBargains, Inc., 2008 UT 55, ¶ 18, 192
P.3d 858. 	A legitimate inquiry regarding ethical conflicts is
not improper means. 	Protecting the legitimate interests of a
firm’s client, without evidence of predominating ill will, is not
an improper purpose. 	The trial court thus did not err
procedurally or substantively in granting Defendants’ motion for
reconsideration and entering summary judgment in favor of
defendant Frankenburg.
IV. 	THE TRIAL COURT DID NOT ABUSE ITS DISCRETION
IN GRANTING DEFENDANTS’ MOTION IN LIMINE
¶43 	The final issue is whether the trial court abused its
discretion in granting Defendants’ motion in limine. 	By granting
the motion, the trial court excluded evidence on four matters:
the drinking practices at the firm’s office, allegations of
affairs within the firm, Mr. Ferguson’s medical procedure, and
the suicide of Mr. Ferguson’s brother. 	In reviewing “the
exclusion of evidence, we grant a trial court broad discretion to
admit or exclude evidence and will disturb its ruling only for
abuse of discretion” and will thus “not reverse a trial court’s
ruling on evidence unless the ruling ‘was beyond the limits of

No. 20080273 	16	16
reasonability.’” 	Daines v. Vincent, 2008 UT 51, ¶ 21, 190 P.3d
1269 (quoting Jensen v. IHC Hosps., Inc., 2003 UT 51, ¶ 57, 82
P.3d 1076). 	Because the trial court did not abuse its discretion
in determining such evidence was irrelevant and unduly
prejudicial, we uphold its ruling.
¶44 	Evidence is relevant if it has “any tendency to make
the existence of any fact that is of consequence to the
determination of the action more probable or less probable than
it would be without the evidence.” 	Utah R. Evid. 401. 	Relevant
evidence is admissible; irrelevant evidence is not admissible.
Id. 402.
¶45 	The relevance of Mr. Ferguson’s evidence to show
Defendants’ ill will or spite is questionable. 	Mr. Ferguson
argues that Defendants showed their ill will by firing him
despite knowing that he was very apprehensive about a surgery
scheduled for the next day. 	Mr. Ferguson also claims that
Defendants fired him knowing that his brother had committed
suicide after being terminated from his job as a nurse
anesthetist. 	This evidence regarding the timing and act of the
termination does not go to the issue of whether Defendants acted
with common law malice in making the allegedly defamatory
statement to UMIA--an act done apart from and before Mr.
Ferguson’s termination. 	This evidence is therefore irrelevant
under rule 401 and inadmissible under rule 402.
¶46 	Similarly, the evidence of Mr. Ferguson’s discussions
with the firm regarding members’ alcohol use and extramarital
affairs raise questions of relevancy. 	Mr. Ferguson argues that
his requests that the partners stop consuming “so much alcohol
during work hours” and that the firm implement a sexual
harassment policy due to an extra-marital affair between a
partner and a subordinate were the reasons for his termination.
Mr. Ferguson again fails to link this evidence to the act of
defamation, especially considering that Mr. Ferguson admitted in
his deposition that he never voiced opposition to the firm’s
drinking practices and that the extra-marital affair did not
involve the partner who made the statement to UMIA. 	Even
assuming the evidence bears some minor probative value, however,
the issue is resolved by the trial court’s exclusion of the
evidence under rule 403.
¶47 	Relevant evidence “may be excluded if its probative
value is substantially outweighed by the danger of unfair
prejudice, confusion of the issues, or misleading the jury.” 	Id.
403. 	In undertaking this rule 403 weighing, a trial court must
be mindful that “almost all evidence is [prejudicial].” 	Robinson
v. All-Star Delivery, Inc., 1999 UT 109, ¶ 28, 992 P.2d 969.

17 	No. 20080273	17
This is particularly true in regards to evidence of common law
malice necessary to prove abuse of a conditional privilege. 	Ill
will or spite always places a defendant in a bad light. 	And
although prejudicial, this result may not be unfair. 	A trial
court should thus take this context into consideration in
weighing probative value against unfair prejudice, otherwise
“hardly any evidence of [ill will or spite] would be admissible.”
Id.
¶48 	Here, given the nominal, if any, probative value of the
evidence, the trial court did not abuse its discretion in
excluding the evidence under rule 403. 	Doubting the probative
value of this evidence, the trial court weighed it and found that
it “could easily lead this jury to be wrongfully prejudiced or
biased against the defendants because they consume alcohol at
their place of work, or because there may be alleged affairs at
their place of work.” 	The trial court also concluded that
“[p]laintiff’s medical procedure [and] plaintiff’s brother’s
suicide, clearly . . . can mislead the jury, and may very well
wrongfully inflame the jury’s sympathy in favor of the
plaintiff[] and against the defendants in this case.” 	Therefore,
we uphold the trial court’s grant of Defendants’ motion in
limine.
CONCLUSION
¶49 	We hold that the trial court properly granted the
directed verdict as to the defamation claim where Mr. Ferguson
failed to present sufficient evidence that Defendants abused
their conditional privilege by making the defamatory statement
knowing of its falsity or acting with reckless disregard as to
its falsity. 	We also hold the trial court properly granted the
directed verdict as to the intentional interference claim because
no defamation and thus no improper means existed in light of the
conditional privilege, and there was no evidence of an improper
purpose. Similarly, the trial court properly granted summary
judgment in favor of defendant Frankenburg where legitimate
concerns of ethical conflicts prevented the showing of defamation
or intentional interference. 	Lastly, we hold that the trial
court did not abuse its discretion in granting Defendants’ motion
in limine where it excluded the evidence on the grounds of
relevancy and undue prejudice. 	Accordingly, we affirm the orders
of the trial court.
---
¶50 	Associate Chief Justice Durrant, Justice Wilkins,
Justice Parrish, and Justice Nehring concur in Chief Justice
Durham’s opinion.