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24910 - Swinton Creek Nursery et al. v. Edisto Farm Credit, et al.

Davis Adv. Sh. No. 9
S.E. 2d

THE STATE OF SOUTH CAROLINA

In The Supreme Court



Swinton Creek Nursery

and James M. Futch III, Petitioners

v.

Edisto Farm Credit,

ACA, E, Lawton Huggins

and Jerry S. Bishop, Defendants,

of whom Edisto Farm

Credit, ACA, is Respondent.



ON WRIT OF CERTIORARI



Appeal From Berkeley County

Marc H. Westbrook, Circuit Court Judge



Opinion No. 24910

Heard January 7, 1999 - Filed March 1, 1999



AFFIRMED IN PART; REVERSED IN PART.





G. Thomas Hill, of Hill, Hill, & Hill, of Johns Island, for

petitioners.



Marvin C. Jones and Jennifer E. Duty, of Bogoslow &

Jones, P.A., of Walterboro, for respondent.



TOAL, A.J.: In this case, we granted a petition for a writ of certiorari to

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review the Court of Appeals' opinion in Swinton Creek Nursery v. Edisto

Farm Credit, ACA, 326 S.C. 426, 483 S.E.2d 789 (Ct. App. 1997). We affirm in part,

reverse in part, and remand.





FACTUAL/PROCEDURAL BACKGROUND





In 1980, James M. Futch, III, ("Owner") began a nursery business near

the small town of Hollywood, South Carolina.1 As a result of his efforts, Owner

created the Swinton Creek Nursery ("Swinton Creek"). Swinton Creek was

mainly a wholesale operation that sold azaleas to such stores as Wal-Mart and

K-Mart





In an effort to expand the nursery, Owner borrowed $30,000 from the

South Atlantic Production Credit Association in November 1989. In April of

1991, South Atlantic Production Credit merged with several other credit

associations to become the Edisto Farm Credit ("EFC"). From April 1991

forward, Owner's loan was handled by EFC. Owner obtained his initial loan

from EFC's Summerville branch, which was managed by Jerry Bishop. As a

borrower, Owner also became a stockholder of EFC.2





In July of 1989, Owner became delinquent on his note with EFC. Bishop

requested that Owner pay the interest on the loan.3 Owner subsequently went

to see Bishop at his office in Summerville to discuss the default. EFC

ultimately agreed to renew the $30,000 principal on Owner's note to be due May

1, 1991. However, in May, Owner again went into default. Owner agreed to

make a payment of $8,000 and work on a plan to liquidate the assets of the

nursery to pay off his debt to EFC.





In late May of 1991, Owner encountered Durwood Collins, Sr., in a

convenience store on Edisto Island. Collins owned the pavilion at Edisto Beach


1 Owner's mother was also a partner in the nursery and helped with

operating the business.



2 Owner's rights as a member of EFC included voting for the board of

directors, sharing in the profits and earnings of the association, and applying

for loans.



3 Owner eventually complied, paying $2,404.10 for interest that had

accrued through February 27, 1990.

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and had known Owner since they were children. Owner told Collins that he

was thinking of liquidating or down-sizing some of Swinton Creek. Collins told

Owner that his son, Durwood Collins, Jr., ("Buyer") was graduating from college

and was interested in the nursery business. Collins asked Owner if he was

interested in selling all of Swinton Creek. Owner said no, but he would sell

some of Swinton Creek's assets and equipment to Buyer.







During the summer of 1991, Buyer began working for Owner at Swinton

Creek to learn the nursery business.4 Buyer also began negotiations with

Owner concerning the sale of Swinton Creek's assets. Owner and Buyer agreed

on a price of $97,500.5





In August of 1991, Buyer went with his father to EFC's Walterboro office

seeking a loan for the acquisition of Swinton Creek's assets and equipment. E.

Lawton Huggins was the senior loan officer at the Walterboro branch and

handled Buyer's loan application for EFC. As part of the application process,

Buyer provided Huggins with his financial statement, tax returns, and a

projected income statement of his proposed nursery.





In early September of 1991, Huggins received an appraisal of Swinton

Creek's equipment and nursery stock from William West, an EFC appraiser.

Huggins subsequently visited Swinton Creek to look at the equipment and

nursery stock and to re-check the serial numbers on West's appraisal. Huggins

testified he had a "side bar conversation" with Owner while visiting Swinton

Creek. Huggins stated that Owner inquired as to the time table for closing and

indicated that time was of the essence because he had other pressing financial

obligations, including a past due loan. Owner conceded Huggins visited

Swinton Creek, but denied having the "side bar conversation" with him at the

nursery.





On September 10, 1991, Huggins wrote a letter to Buyer concerning

Buyer's loan application. The fourth paragraph of the letter stated:



I would like to address . . . the weaknesses present due to your

limited financial strength and questionable repayment capacity.

Your limited asset base does not provide a tangible secondary


4 Buyer now operates Milton Creek Nursery on Edisto Island.

5 This price included a truck which Owner agreed to sell for $12,500.

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source of repayment should the nursery fail to generate earnings as

projected. In other words, you have no assets which may be

converted in order to satisfy the obligation to my organization.

This is extremely important since the projected income for the

nursery is not supported by a successful earnings trend. In fact, the

operation you are purchasing has been under financial duress.

Your forecast for generating adequate earnings may materialize,

however, there is adequate risk for concern on my part.





Huggins testified that, in the letter, the "earning trend" comment was in

reference to Buyer's projected income for the nursery. Huggins claimed he had

no knowledge of Swinton Creek's earning trend and was only referring to

Buyer's trend. However, Huggins admitted the "financial duress" comment was

in reference to Swinton Creek. Huggins testified his comment was based solely

on his observations during his visit at Swinton Creek and his conversation with

Owner. Huggins further testified the letter was sent first class mail to Buyer

and was not copied to anyone else.





After receiving the letter, Buyer went to see Owner and explained that he

would be unable to purchase the assets of the nursery for the amount they had

originally agreed on. Buyer showed Owner the letter from Huggins and told

Owner that he did not believe he would be able to come up with the money.

Buyer eventually obtained a loan from EFC's Summerville branch6 and

purchased the Swinton Creek assets for $77,500 -- $20,000 less than originally

agreed on.7





Owner sued EFC, Huggins, and Bishop, alleging libel, slander, invasion

of privacy, interference with contract, interference with prospective economic

advantage, intentional infliction of emotional distress, breach of implied

covenant of good faith and fair dealing, and civil conspiracy. Before trial, the

trial court granted EFC's motion for summary judgment on the intentional

infliction of emotional distress claim. The other claims were preserved for trial.


6 Buyer's loan application was transferred from EFC's Walterboro branch

to the Summerville branch where it was handled by Lynn Danzler. The loan

application was approved after Buyer's father co-signed the loan.



7 The closing date for the purchase was October 17, 199 1. Owner testified

he felt pressure to close the deal because he needed to buy insurance before

November.

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At the close of plaintiff s case, the trial court directed a verdict for EFC on

the theories of civil conspiracy, slander, and breach of implied covenant of good

faith and fair dealing. In addition, the trial court, finding no evidence of

tortious action by Bishop, dismissed Bishop as a defendant in the case. At the

close of all the evidence, the trial court directed a verdict in favor of the

remaining defendants on the libel claim. Thus, only the claims of invasion of

privacy, interference with contract, and interference with prospective economic

advantage went to the jury.





The jury returned a verdict for defendants EFC and Huggins as to the

claims of interference with contract and interference with prospective economic

advantage, and for defendant Huggins on the claim of invasion of privacy, but

found that EFC was liable to Owner for invasion of privacy in the amount of

$55,000. Both Owner and EFC appealed. EFC argued the trial court erred by

not granting its directed verdict motion on the invasion of privacy claim.

Owner, on the other hand, argued the trial court should not have granted

directed verdicts on his claims for libel, civil conspiracy, and breach of implied

covenant of good faith and fair dealing. The Court of Appeals ruled in favor of

EFC on all arguments; the court reversed the trial court's failure to direct a

verdict on the invasion of privacy claim and affirmed the directed verdicts on

the other claims. Swinton Creek Nursery v. Edisto Farm Credit, ACA, 326 S.C.

426, 483 S.E.2d 789.





We granted Owner's petition for a writ of certiorari to consider the

following issues:



(1) Did the Court of Appeals err in reversing the trial court's denial

of EFC's motion for directed verdict on the invasion of privacy claim?





(2) Did the Court of Appeals err in affirming the trial court's grant of

EFC's motion for directed verdict on the libel claim?



(3) Did the Court of Appeals err in affirming the trial court's grant of

EFC's motion for directed verdict on the breach of implied covenant

of good faith and fair dealing claim?





LAW/ANALYSIS



In ruling on a motion for directed verdict, a court must view the evidence

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and all reasonable inferences in the light most favorable to the non-moving

party. Quesinberry v. Rouppasong, 331 S.C. 589,503 S.E.2d 717 (1998); Gamble

v. International Paper Realty Corp., 323 S.C. 367, 474 S.E.2d 438 (1996). When

the evidence yields only one inference, a directed verdict in favor of the moving

party is proper. Id. The trial court can only be reversed by this Court when

there is not evidence to support the ruling below. Creech v. Wildlife & Marine

Resources Dep't, 328 S.C. 241 491 S.E.2d 571 (1997).





A. INVASION OF PRIVACY



Owner argues that the Court of Appeals erred in reversing the trial

court's denial of EFC's directed verdict motion on his invasion of privacy claim.

We disagree.





The origins of the tort of invasion of privacy are found in the famous law

review article written in 1890 by Samuel D. Warren and Louis D. Brandeis. See

Warren & Brandeis, The Right to Privacy, 4 Harv. L. Rev. 193 (1890).8 In their

article, Warren and Brandeis advocated an extension of common law privacy

rights to protect individuals from what they saw as the advancing threat of a

gossip-consumed, technological society. See Jonathan P. Graham, Note,

Privacy, Computers, and the Commercial Dissemination of Personal

Information, 65 Tex. L. Rev. 1395, 1405 (1987)("Warren and Brandeis found the

legal basis for the right to privacy by coupling common-law doctrines with the

notion that technological advances and social changes had made it necessary

to recognize the new right."). Warren and Brandeis warned of new mechanical

devices which "threaten[ed] to make good the prediction that 'what is whispered

in the closet shall be proclaimed from the house-tops.'" Warren & Brandeis, 4

Harv. L. Rev. at 195. They therefore called for securing to the individual the

right "to be let alone."9 Id.







In Holloman v. Life Insurance Co. of Virginia, 192 S.C. 454, 7 S.E.2d 169


8 For a critical discussion of the Warren-Brandeis formulation see Diane

L. Zimmerman, Requiem For A Heavyweight: A Farewell to Warren and

Brandeis's Privacy Tort, 68 Cornell L. Rev. 291 (1983).



9 In 1960, Dean Prosser expanded upon the Warren-Brandeis discourse

by classifying invasion of privacy into four distinct causes of action. See

Prosser, Privacy, 48 Cal. L. Rev. 383 (1960). Prosser's classifications were

incorporated into and elaborated upon in the Restatement.

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(1940), this Court for the-first time recognized the tort of invasion of privacy,

stating, "the right to privacy is correctly defined ... as the right to be let alone;

the right of a person to be free from unwarranted publicity." Holloman, 192

S.C. at 458, 7 S.E.2d at 171 (citation omitted). Later, in Meetze v. Associated

Press, 230 S.C. 330, 95 S.E.2d 606 (1957), this Court specified three distinct

causes of action for invasion of privacy:





[1] The unwarranted appropriation or exploitation of one's

personality, [21 the publicizing of one's private affairs with which

the public has no legitimate concern, or [31 the wrongful intrusion

into one's private activities, in such manner as to outrage or cause

mental suffering, shame, or humiliation to a person of ordinary

sensibilities.



Meetze, 230 S.C. at 335, 95 S.E.2d at 608 (quoting 41 Am. Jur. Privacy § 2); see

Todd v. South Carolina-Farm Bureau Mut. Ins., 276 S.C. 284) 278 S.E.2d 607

(1981). The Court in Meetze further noted that truth is not a defense to an

action for invasion of privacy. Id.





Owner concedes his claim falls under the second cause of action specified

in Meetze. The elements of this tort include (1) publicizing, (2) absent any

waiver or privilege, (3) private matters in which the public has no legitimate

concern, (4) so as to bring shame or humiliation to a person of ordinary

sensibilities. See Meetze, supra; Tureen v. Equifax, Inc., 571 F.2d 411 (8th Cir.

1978). The Court of Appeals concluded the trial court should have granted

EFC's directed verdict motion because Owner's private affairs had not been

"publicized." Swinton Creek, 326 S.C. at 435, 483 S.E.2d at 795.





With regard to Owner's right of privacy claim, the two issues raised by

this appeal are: (a) whether the publicity element of this cause of action can be

satisfied by mere publication; and (b) whether publicity must be shown if there

is also a breach of confidential relationship.





1. Publicity



Though never directly addressed by this Court, our Court of Appeals has

consistently held that publicity, as opposed to mere publication, is what is

required to give rise to a cause of action for this branch of invasion of privacy;

communication to a single individual or to a small group of people will not give

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rise to an invasion of privacy claim.10 See McCormick v. England, 328 S.C. 627,

494 S.E.2d 431 (Ct. App. 1997); Swinton Creek, supra; Snakenburg v. Hartford

Cas. Ins. Co., Inc., 299 S.C. 164, 383 S.E.2d 2 (Ct. App. 1989); Wright v.

Sparrow, 298 S.C. 469, 381 S.E.2d 503 (Ct. App. 1989); Rycroft v. Gaddy, 281

S.C. 119, 314 S.E.2d 39 (Ct. App. 1984).11 By defining "publicity" in this

manner, our Court of Appeals is in line with the majority of other jurisdictions."12


10 One commentator has suggested that this requirement ensures that

public communications comply with minimum standards of civility, while

liberating private communications from the threat of legal enforcement of such

restraints. Robert C. Post, The Social Foundations of Privacy: Community and

Self In The Common Law Tort, 77 Cal. L. Rev. 957 (1989).



11 In Rycroft, supra, the Court of Appeals borrowed this interpretation

directly from the federal district court decision in Harrison v. Humble Oil, 264

F. Supp. 89 (D.S.C. 1967). In Harrison, the plaintiff alleged that defendant's

communication to plaintiffs employer regarding a debt owed to defendant

constituted an invasion of privacy. The court, in finding no invasion of privacy,

stated:



It is an invasion of his rights to publish in a newspaper that the

plaintiff does not pay his debts, or to post a notice to that effect in

a window on the public street, or to cry it aloud in the highway, but

not to communicate the fact to the plaintiffs employer or to any

other individual, or even a small group . . . .



Harrison, 264 F. Supp. at 92 (emphasis added)(quoting Prosser, Law of Torts,

Right of Privacy § 112 at 835 (3d ed. 1963)).



12 E.g., Tureen v. Equifax, Inc., 571 F.2d 411, 418 (8th Cir. 1978)("Except

in cases of physical intrusion, it has been held that the tort must be founded

upon publicity, in the sense of communication to the public in general or to a

large number of persons, as distinguished from one individual or a few.");

Satterfield v. Lockheed Missiles and Space Co., Inc., 617 F. Supp. 1359, 1370

(D.S.C. 1985)("The disclosure of private facts must be a public disclosure, and

not a private one; there must be, in other words, publicity."); Beard v. Akzona,

Inc., 517 F. Supp. 128, 133 (E.D. Tenn. 1981)( "'Publicity' . . . means that the

matter is made public, by communicating it to the public at large, or to so many

persons that the matter must be regarded as substantially certain to become

one of public knowledge."); Werner v. Kliewer, 710 P.2d 1250, 1256 (Kan.

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See Robert C. Post, The Social Foundations of Privacy: Community and Self In

The Common Law Tort, 77 Cal. L. Rev. 957 (1989). Many of these courts have

borrowed directly from the Restatement (Second) of Torts, which contains the

following discussion of "publicity:"



The form of invasion of the right of privacy covered in this Section

depends upon publicity given to the private life of the individual.

"Publicity," as it is used in this Section, differs from "publication,"

as that term is used in sec. 577 in connection with liability for

defamation. "Publication," in that sense, is a word of art, which

includes any communication by the defendant to a third person.

"Publicity," on the other hand, means that the matter is made

public, by communicating it to the public at large, or to so many

persons that the matter must be regarded as substantially certain

to become one of public knowledge. The difference is not one of the

means of communication, which may be oral, written or by any

other means. It is one of a communication that reaches, or is sure

to reach, the public.



Thus it is not an invasion of the right of privacy, within the

rule stated in this Section, to communicate a fact concerning the

plaintiffs private life to a single person or even to a small group of

persons. On the other hand, any publication in a newspaper or a

magazine, even of small circulation, or in a handbill distributed to

a large number of persons, or any broadcast over the radio, or

statement made in an address to a large audience, is sufficient to

give publicity within the meaning of the term as it is used in this

Section. The distinction, in other words, is one between private and

public communication.



The Restatement (Second) of Torts, § 652D cmt. a, at 383 (1977).





In the instant case, the trial court, in denying EFC's motion for a directed

verdict, stated: "The plaintiff testified that various people had confronted him

about it, and again, obviously, there is a -- I grant you, there is a strong

question as to how it got out to anybody . . . but there is enough there, I think,

that it would be a jury issue." At trial, William Geraty testified that the word

on the street was that Owner was having problems with a bank. Owner also


1985)("it is not an invasion of the right of privacy . . . to communicate a [private

fact] to a single person or even to a small group of persons.").

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testified that numerous people had questioned him about the letter. As an

example, Owner stated that Nat Sanders, Bishop's cousin, asked him about it

once. Sanders did not testify at trial.





In their article, The Right to Privacy, Warren and Brandeis were

primarily concerned with new mechanical devices that would catapult once

private gossip into the public domain. See Warren & Brandeis, 4 Harv. L. Rev.

at 196 ("When personal gossip attains the dignity of print, and crowds the space

available for matters of real interest to the community, what wonder that the

ignorant and thoughtless mistake its relative importance."). They clearly did

not advocate abolishing entirely personal correspondences, whether written or

oral. As originally conceived by Warren and Brandeis, public disclosure of

private facts requires disclosure akin to publications in mass-media. In the

instant case, there is no-evidence that EFC published the contents of the letter

to anyone other than Buyer. The letter was sent only to Buyer in an attempt

to address his loan application. We find no evidence to support a claim for

public disclosure of private facts.





Owner nevertheless argues that EFC should be liable for "sparking the

flame" of publicity. In other words, even if EFC published the statement to only

one person, if the information eventually became public, EFC should be held

accountable. However, such an approach would effectively eviscerate the

requirement that the defendant be the one to have publicized the private

information. If this approach were adopted, almost any form of gossip would be

actionable, regardless of the discretion taken in its initial communication. We

therefore affirm the Court of Appeals on this issue.





2. Confidential Relationship



In Rycroft v. Gaddy, 281 S.C. 119, 314 S.E.2d 39 (Ct. App. 1984), the

Court of Appeals held, "Communication to a single individual or to a small

group of people, absent a breach of contract, trust or other confidential

relationship, will not give rise to liability." Rycroft, 281 S.C. at 124, 314 S.E.2d

at 43 (emphasis added)., Based on this language, Owner argues that a plaintiff

need not prove publicity in an invasion of privacy claim if there is a breach of

contract, trust, or other confidential relationship. We disagree.





Recently, in McCormick v. England, 328 S.C. 627, 494 S.E.2d 431 (Ct.

App. 1997), our Court of Appeals held: "'A confidential relationship is breached

if unauthorized disclosure is made to only one person not a party to the

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confidence, but the right of privacy does not cover such a case.'" McCormick, 328

S.C. at 641,494 S.E.2d at 438 (emphasis added) (quoting Alan B. Vickery, Note,

Breach of Confidence: An Emerging Tort, 82 Colum. L. Rev. 1426, 1442 (1982)).

Under this view, breach of contract or confidentiality does not give rise to an

exception to the "publicity" requirement for the tort of invasion of privacy.





In the instant case, the Court of Appeals observed that the language in

Rycroft, supra, derived from the federal district court case of Harrison v.

Humble Oil, 264 F. Supp. 89 (D.S.C. 1967). Harrison, in turn, quoted from

Prosser's third edition of the Law of Torts. See Prosser, Law of Torts, Right of

Privacy § 112 at 835 (3d ed. 1963). The court emphasized that Harrison and

Prosser described "breach of contract, trust or other confidential relationship"

as an "independent basis" of relief. In other words, though the facts of a case

may give rise to a breach of contract or confidentiality claim, that does not

excuse the requirement that the private information be "publicized" in order to

maintain an invasion of privacy claim.





We agree with the Court of Appeals' interpretation on this point. In their

article, Warren and Brandeis characterized the relationship between breach of

contract or confidentiality and invasion of privacy in the following manner:



This process of implying a term in a contract, or of implying a trust

(particularly where the contract is written, and where there is no

established usage or custom), is nothing more nor less than a

judicial declaration that public morality, private justice, and

general convenience demand the recognition of such a rule, and

that the publication under similar circumstances would be

considered an intolerable abuse. . . . But the court can hardly stop

there. The narrower doctrine may have satisfied the demands of

society at a time when the abuse to be guarded against could rarely

have arisen without violating a contract or a special confidence; but

now that modern devices afford abundant opportunities for the

preparation of such wrongs without any participation by the

injured party, the protection granted by law must be placed upon

a broader foundation [of invasion of privacy].





Warren & Brandeis, 4 Harv. L. Rev. at 210-11.





Although related in policy, breach of confidentiality and invasion of

privacy are not so closely connected in law that the presence of the former

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obviates proof of "publicity" in the latter.13 Warren and Brandeis envisaged a

privacy right that would occupy ground not already covered by contract and

confidentiality theories. In this sense, if a plaintiff has a claim for breach of

contract or confidentiality, there is no justification for reviving an otherwise

invalid invasion of privacy claim.14 We therefore affirm the Court of Appeals on

this issue.





B. DEFAMATION



Owner argues the trial court erred in granting EFC's motion for a directed

verdict concerning his defamation claim. We agree.





At trial, EFC moved for a directed verdict on Owner's defamation claim,

arguing it was protected by a qualified privilege. The trial court granted the

motion. The Court of Appeals affirmed the trial court's ruling.





The tort of defamation allows a plaintiff to recover for injury to his or her

reputation as the result of the defendant's communications to others of a false

message about the plaintiff. Holtzscheiter v. Thompson Newspapers, Inc., 332

S.C. 502, 506 S.E.2d 497 (1998). Defamatory communications take two forms:




13 See Joseph Glenn White, Note, Physician's Liability for Breach of

Confidentiality: Beyond The Limitations of The Privacy Tort, 49 S.C. L. Rev.

1271 (1998)(distinguishing between breach of confidentiality and invasion of

privacy and ' arguing the former is better equipped to protect patients from the

disclosure of personal facts by their doctors).



14 Additionally, breach of confidentiality and invasion of privacy are torts

that encompass different doctrinal limitations. See Vickery, 82 Colum. L. Rev.

at 1440 ("Privacy's doctrinal limits are . . . unnecessary in breach-of-confidence

situations, and should not bar recovery to plaintiffs deserving of a remedy.").

For instance, "[d]isclosure in breach of confidence or other duty may cover

greater ground than a pure privacy case, since the duty of confidence . . . may

include facts that are not 'private' in the ordinary sense and the disclosure may

not be 'public.'" Prosser & Keeton, Law of Torts, Right of Privacy § 117, at 121,

n.6.5 (Supp. 1988). Moreover, unlike breach of confidentiality, the privacy

standard focuses on the content of the publication, rather than its source. See

McCormick, 328 S.C. 627, 494 S.E.2d 431. Thus, it is irrelevant in a breach of

confidentiality claim whether the disclosure of the information would bring

shame to a person of ordinary sensibilities.

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libel and slander. Slander is a spoken defamation while libel is a written

defamation or one accomplished by actions or conduct. Id. If a communication

is libelous, then the law presumes the defendant acted with common law malice.

Id.





In a defamation action, the defendant may assert the affirmative defense

of conditional or qualified privilege. Under this defense, one who publishes

defamatory matter concerning, another is not liable for the publication if (1) the

matter is published upon an occasion that makes it conditionally privileged, and

(2) the privilege is not abused. Restatement (Second) of Torts, § 593 (1977); see

Bell v. Bank of Abbeville, 208 S.C. 490) 38 S.E.2d 641 (1946). In Bell, this Court

held:



In determining whether or not the communication was qualifiedly

privileged, regard must be had to the occasion and to the

relationship of the parties. When one has an interest in the subject

matter of a communication, and the person (or persons) to whom it

is made has a corresponding interest, every communication

honestly made, in order to protect such common interest, is

privileged by reason of the occasion. The statement, however, must

be such as the occasion warrants, and must be made in good faith

to protect the interests of the one who makes it and the persons to

whom it is addressed.



Bell, 208 S.C. at 493-94, 38 S.E.2d at 643. Where the occasion gives rise to a

qualified privilege, there is a prima facie presumption to rebut the inference of

malice, and the burden is on the plaintiff to show actual malice or that the scope

of the privilege has been exceeded. Fulton v. Atlantic Coast Line R. Co., 220

S.C. 287, 67 S.E.2d 425 (1951); 53 C.J.S. Libel and Slander § 79 (1987).





To prove actual malice, the plaintiff must show that the defendant was

activated by ill will in what he did, with the design to causelessly and wantonly

injure the plaintiff; or that the statements were published with such

recklessness as to show a conscious disregard for plaintiffs rights.

Holtzscheiter, supra. In addition, "the person making [the defamatory

statement] must be careful to go no further than his interests or his duties

require.... And the fact that a duty, a common interest, or a confidential

relation existed to a limited degree, is not a defense, even though the publisher

acted in good faith." Fulton, 220 S.C. at 297,67 S.E.2d at 429; accord Woodward

v. South Carolina Farm Bureau Ins. Co., 277 S.C. 29, 282 S.E.2d 599 (1981).

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In general, the question whether an occasion gives rise to a qualified or

conditional privilege is one of law for the court. 50 Am. Jur. 2d Libel and

Slander § 276 (1995). However, the question whether the privilege has been

abused is one for the jury. Id. Factual inquiries, such as whether the

defendants acted in good faith in making the statement, whether the scope of

the statement was properly limited in its scope, and whether the statement was

sent only to the proper parties, are generally left in the hands of the jury to

determine whether the privilege was abused. Id.; see also Restatement (Second)

of Torts §§ 599-610. In Fulton, this Court held that it was a question for the

jury to determine if the publication went beyond what the occasion required and

was unnecessarily defamatory. Fulton, 220 S.C. at 297, 67 S.E.2d at 429; cf

Woodward, 277 S.C. at 32-33, 282 S.E.2d at 601 ("While abuse of privilege is

ordinarily an issue for the jury. . . . in the absence of a controversy as to the

facts . . . it is for the court to say in a given instance whether or not the privilege

has been abused or exceeded.").





In the instant case, the defamatory communication took the form of libel.

Thus, malice was presumed, and it was defendant's burden to establish that a

privilege existed in order to rebut this presumption. When Huggins was asked

why he made the "financial duress" comment, he stated: "I felt like it was part

of my responsibility to an inexperienced applicant, who obviously could not see

the risk associated with enterprise in which he was beginning." In granting the

directed verdict as to conditional privilege, the trial court made the following

conclusions: first, there was no evidence that Huggins wrote the letter in bad

faith; second, EFC was trying to protect its own interest in the letter; third, the

letter was written for the limited purpose of assisting Buyer with obtaining a

loan; and fourth, the comments were made on the proper occasion and in the

proper manner. The Court of Appeals affirmed the trial court's determination

that, as a matter of law, the occasion gave rise to a conditional privilege and the

privilege was not abused.







Assuming the occasion did give rise to a conditional privilege, we believe

a question existed for the jury as to whether the privilege was exceeded or

abused. First, the scope of the privilege extended only as far as EFC's interests

and duties required. See Fulton, supra. It is questionable whether a specific

comment about Swinton Creek's financial status was required to protect any

interest or duty covered by the privilege. EFC contends it wrote the letter for

the sole purpose of guiding Buyer into a successful loan application. Yet, Buyer

was only seeking to buy some of Owner's assets, not the entire Swinton Creek

operation. Moreover, if EFC wanted to convey to Buyer the difficulties of

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SWINTON CREEK NURSERY, et al v. EDISTO FARM CREDIT et al.





running a nursery in a small town, it could have simply made a general

statement without specifically referring to Owner. Thus, even if EFC acted in

good faith to assist Buyer, the jury might conclude that the "financial duress"

comment was unnecessarily defamatory under these circumstances.





Additionally, there was evidence suggesting EFC acted in reckless

disregard of Owner's rights so as to constitute actual malice. See Holtzscheiter,

supra. Huggins testified that the financial duress comment was based solely

on his observations of Swinton Creek and his "side bar conversation" with

Owner. However, Owner denied having any conversation with Huggins at the

nursery. Further, even if a conversation did take place, EFC had a banking

relationship with Owner at the time Huggins visited Swinton Creek. These are

all factors relevant in determining whether there was actual malice.





We conclude the directed verdict should not have been granted and

reverse the Court of Appeals on this issue.





C. IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING



Owner argues the trial court erred in granting EFC's motion for directed

verdict regarding the claim of breach of implied covenant of good faith and fair

dealing. We disagree.





The Court of Appeals affirmed the trial court's determination that Owner

could not proceed on his implied covenant of good faith and fair dealing claim

because he was in default on the contract. See Parks v. Lyons, 219 S.C. 40, 48,

64 S.E.2d 123, 126 (1951)("one who seeks to recover damages for breach of a

contract, to which he was a party, must show that the contract has been

performed on his part, or at least that he was, at the appropriate time, able,

ready, and willing to perform it."). It is uncontested that in May of 1991, Owner

went into default on his note with EFC. We conclude the Court of Appeals is

correct on this point.





Owner nevertheless argues that he still has a claim under his contractual

relationship with the bank as a stockholder. This argument is without merit

because Owner's status as a stockholder is based upon his relationship with

EFC as a borrower. And as a borrower, Owner clearly failed to fulfill his

obligations under the contract. We therefore affirm the Court of Appeals on this

issue.

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SWINTON CREEK NURSERY, et al v. EDISTO FARM CREDIT, et al.





CONCLUSION



Based on the foregoing, we AFFIRM the Court of Appeals on the issues

of invasion of privacy and implied covenant of good faith and fair dealing, but

REVERSE on the libel issue



FINNEY, C.J., MOORE, WALLER, and BURNETT, JJ., concur.

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