Korb v. Kowaleviocz

Cole, J., delivered the opinion of the Court. The sole issue presented by this appeal is whether a party-witness’ statement, made under oath in open court in response to a question posed to him on cross-examination, that the opposing party was a “crook” is absolutely privileged and thus not actionable for defamation. The factual posture of this case is relatively simple. On March 28,1977 George P. Korb Co., Inc. (Korb, Inc.), a home improvement company, of which the appellant, George P. Korb (Korb), is president and sole stockholder, entered into a contract with the appellee, Joseph M. Kowaleviocz, and his ⁷⁰⁰ wife to perform certain work on their home in Baltimore.

When, at a later date, Korb demanded payment, Kowaleviocz refused, apparently because he believed that Korb, Inc. had failed to perform some of the work and that other work had been done improperly. Korb, Inc. then instituted suit for the balance allegedly due on the contract on July 28, 1977 in the District Court for Baltimore City. Trial took place on September 20,1977. After Korb had testified, Kowaleviocz took the stand and presented his defense.

Korb, Inc.’s counsel then cross-examined Kowaleviocz: Q. How old are you sir. A. 32 years old. Q. How far did you go in school. A. Ninth grade.

Q. You can read and write can’t you. A. To a certain extent. I’m no lawyer. Q. Did you and your wife contact Mr. Korb or did he solicit you.

A. We contacted him. We contacted contractors. Q. Now, the contract that you signed is very clear in its language. Isn’t it, sir?

As to what you agreed. A. If you take, if you was a lawyer it would be very clear. Q. Well, why did you sign it, sir? A. Why?

Because I thought he was, the main thing was I thought he was honest which I come to find out he isn’t. And, I will state here that he is a crook. Q. I’m glad you’re doing it under oath, sir____ Judgment was eventually entered in favor of Korb, Inc. in the amount of $1,330.00, which was the amount sought minus credit for a sink which Kowaleviocz had purchased himself. Thereafter, on January 18, 1978, based upon the above testimony elicited on cross-examination, Korb filed a suit for slander against Kowaleviocz in the Superior Court for Baltimore City, alleging that Kowaleviocz’s statement that Korb was a “crook” had injured Korb personally and had ⁷⁰¹ damaged his business, Kowaleviocz demurred, contending that he had an absolute privilege to make such a statement in response to the particular question posed to him on cross-examination.

On August 2, 1978, the Superior Court sustained Kowaleviocz’s demurrer without explanation or leave to amend. Korb entered an appeal from that ruling. We agreed to hear the case while it was pending before the Court of Special Appeals, the issue being whether the Superior Court erred in sustaining Kowaleviocz’s demurrer to Korb’s declaration. Korb contends that the Superior Court should not have sustained the demurrer.

Korb argues that Kowaleviocz’s statement that Korb was a “crook” was not relevant to the contract action and thus not absolutely privileged. Korb maintains that the issue in the contract action was nonpayment for services rendered by Korb, Inc. and that his integrity has nothing to do with this question. Kowaleviocz, on the other hand, asks us to affirm the Superior Court’s ruling. Kowaleviocz insists that Korb’s honesty was relevant because in the contract action he had argued that Korb, Inc. was billing him for materials which were not supplied and for labor which was not performed.

Kowaleviocz further contends that his absolute privilege was not limited to testimony concerning the actual parties to the action, but extended to any relevant matter, including the honesty of Korb. In general, defamatory statements made by a witness while testifying in a judicial proceeding are privileged. See 1 F. Harper & F. James, The Law of Torts, §§ 5.21, 5.22 (1956); Veeder, Absolute Immunity in Defamation: Judicial Proceedings, 9 Colum.L.Rev. 463 (1909); Note, Developments in the Law — Defamation, 69 Harv.L.Rev. 875, 917-24 (1956). There are two versions of this privilege, however.

The “English rule” affords a witness an unconditional privilege regarding his testimony. The “American rule” also extends such protection to a witness provided, however, that the witness’ testimony is relevant or pertinent to a proceeding or is given in response to a proper question by counsel or by the court. The vast majority of jurisdictions in this country follow ⁷⁰² the American rule. Kg., Johnson v. Dover, 201 Ark. 175 , 143 S.W.2d 1112 (1940); Fireman’s Fund Insurance Company v. Riley, 294 So.2d 59 (Fla.

App. 1974); Veazy v. Blair, 86 Ga. App. 721 , 72 S.E.2d 481 (1952); Weil v. Lynds, 105 Kan. 440 , 185 P. 51 (1919); Dunbar v. Greenlaw, 152 Me. 270 , 128 A. 2d 218 (1956); Laing v. Mitten, 185 Mass. 233 , 70 N. E. 128 (1904); Pagoto v. Hancock, 41 Mich. App. 622 , 200 N.W.2d 777 (1972); Greenberg v. Ackerman, 41 N.J. Super. 146 , 124 A. 2d 313 (1956); Kamen v. Pepsi-Cola Company, 228 N.Y.S.2d 637 (1962); Bailey v. McGill, 247 N.C. 286 , 100 S.E.2d 860 (1957); Thompson v. McCready, 194 Pa. 32 , 45 A. 78 (1899); Cooley v. Galyon, 109 Tenn. 1 , 70 S. W. 607 (1902); Viss v. Calligan, 91 Wash. 673 , 158 P. 1012 (1916); Bussewitz v. Wisconsin