No CV IN THE FIFTH COURT OF APPEALS SITTING IN DALLAS RODNEY K. MEISEL, APPELLANT U.S. BANK, N.A., APPELLEE.

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1 No CV ACCEPTED 225EFJ FIFTH COURT OF APPEALS DALLAS, TEXAS 12 March 30 P5:14 Lisa Matz CLERK IN THE FIFTH COURT OF APPEALS SITTING IN DALLAS RODNEY K. MEISEL, APPELLANT v. U.S. BANK, N.A., APPELLEE. On Appeal from the 192nd District Court, Dallas County, Texas BRIEF OF APPELLEE Joseph M. Cox State Bar No Jennifer L. Keefe State Bar No PATTON BOGGS LLP 2000 McKinney Avenue Suite 1700 Dallas, Texas (214) (telephone) (214) (facsimile) ATTORNEYS FOR U.S. BANK, N.A.

2 IDENTITY OF PARTIES AND COUNSEL Party Counsel Rodney K. Meisel Susan Hays (Plaintiff/Appellant) State Bar No LAW OFFICE OF SUSAN HAYS, P.C South Lamar, Suite 357 Dallas, Texas (214) (telephone) (214) (facsimile) Appellate Counsel Charles W. Branham, III State Bar No BRANHAM LAW GROUP, LLP 3900 Elm Street Dallas, Texas (telephone) (facsimile) Trial & Appellate Counsel U.S. Bank, N.A. Joseph M. Cox (Defendant/Appellee) State Bar No Jennifer L. Keefe State Bar No PATTON BOGGS LLP 2000 McKinney Ave., Suite 1700 Dallas, Texas (214) (telephone) (214) (facsimile) Trial & Appellate Counsel ii

3 TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL... ii TABLE OF AUTHORITIES...v STATEMENT OF THE CASE... ix RECORD REFERENCES... ix PARTY REFERENCES... ix STATEMENT ON ORAL ARGUMENT...x ISSUE PRESENTED...x STATEMENT OF FACTS...1 SUMMARY OF THE ARGUMENT...3 ARGUMENT AND AUTHORITIES...6 I. Standard of Review on Appeal...6 II. Jurisdiction and Law Concerning Final and Appealable Judgments...7 A. Meisel amended his petition before the hearing for one cause of action: libel....7 B. U.S. Bank supplemented its Motion and requested that the Trial Court dismiss the live pleading...8 C. The Final Judgment considered the Second Amended Petition....8 D. This Court has proper jurisdiction to consider the judgment on all claims...9 III. The Account Closure Code was not False or Defamatory...11 A. P-OTHER TRANS concerns Meisel s account, not Meisel personally iii

4 B. No ordinary person would find the code designation defamatory C. U.S. Bank s account closure code notification was true IV. U.S. Bank did not Publish any Statement with Malice...16 A. U.S. Bank had no obligation to correct accurate reporting information, therefore rendering a finding of malice impossible B. The FCRA preempts Meisel s libel claims...20 V. U.S. Bank is Protected by a Qualified Privilege VI. Public Policy Warrants Affirmation of the Trial Court s Decision...25 CONCLUSION AND PRAYER...25 iv

5 TABLE OF AUTHORITIES State Cases 9029 Gateway S. Joint Venture v. Eller Media Co., 159 S.W.3d 183 (Tex. App. El Paso 2004, no pet.)... 7, 10 Adams v. First Nat l Bank of Bells/Savoy, 154 S.W.3d 859 (Tex. App. Dallas 2005, no pet.)...20 B.H. Jackson v. Cheatwood, 445 S.W.2d 513 (Tex. 1969) (per curiam)...24 Calhoun v. Chase Manhattan Bank (U.S.A.), N.A., 911 S.W.2d 403 (Tex. App. Houston [1st Dist.] 1995, no writ)... 16, 22, 23, 24 Carr v. Brasher, 776 S.W.2d 567 (Tex. 1989)... 16, 17, 18, 20 Cluett v. Med. Protective Co., 829 S.W.2d 822 (Tex. App. Dallas 1992, writ denied)...10 Cobb v. Garlington, 193 S.W. 463 (Tex. Civ. App. Fort Worth 1917, no writ)...17 Cont l Airlines, Inc. v. Kiefer, 920 S.W.2d 274 (Tex. 1996)... 9, 10 Dallas Cent. Appraisal Dist. v. Cunningham, 161 S.W.3d 293 (Tex. App. Dallas 2005, no pet.)...6 Double Diamond, Inc. v. Van Tyne., 109 S.W.3d 848 (Tex. App. Dallas 2003, no pet.)...13 El Paso Times, Inc. v. Trexler, 447 S.W.2d 403 (Tex. 1969)...18 Freedom Commc ns, Inc. v. Connaughton, 296 S.W.3d 790 (Tex. App. Corpus Christi 2009, no pet.)...14 Fresh Coat, Inc. v. Life Forms, Inc., 125 S.W.3d 765 (Tex. App. Houston [1st Dist.] 2003, no pet.)...9 v

6 Goswami v. Metro. Sav. & Loan Ass n, 751 S.W.2d 487 (Tex. 1988)...10 Hanssen v. Our Redeemer Luthera Church, 938 S.W.2d 85 (Tex. App. Dallas 1996, writ denied)...23 Heimlich v. State, 988 S.W.2d 382 (Tex. App. Houston [14th Dist.] 1999, no pet.)...15 Henriquez v. Cemex Mgmt., Inc., 177 S.W.3d 241 (Tex. App. Houston [1st Dist.] 2005, pet. denied)... 12, 13 Houseman v. Publicaciones Paso Del Norte, S.A., 242 S.W.3d 518 (Tex. App. El Paso 2007, no pet.)...12 In re B.B.B., 124 S.W.3d 417 (Tex. App. Dallas 2004, no pet.)...17 Jarvis v. Rocanville Corp., 298 S.W.3d 305 (Tex. App. Dallas 2009, pet. denied)...6, 7 Leyendecker & Assocs. v. Wechter, 683 S.W.2d 369 (Tex. 1985)...13 Lomas Bank v. Flatow, 880 S.W.2d 52 (Tex. App. San Antonio 1994, writ denied)... 24, 25 Main v. Royall, 348 S.W.3d 381 (Tex. App. Dallas 2011, no pet.)... 11, 12, 13 Marathon Oil Co. v. Salazar, 682 S.W.2d 624 (Tex. App. Houston [1st Dist.] 1984, writ ref d n.r.e)...20 Moore v. Waldrop, 166 S.W.3d 380 (Tex. App. Waco 2005, no pet.)...13 Musser v. Smith Protective Servs., 723 S.W.2d 653 (Tex. 1987)... 14, 16 Natividad v. Alexsis, Inc., 875 S.W.2d 695 (Tex. 1994)...6 vi

7 Newspapers, Inc. v. Matthews, 339 S.W.2d 890 (Tex. 1960)...11 Ortiz v. San Antonio City Emps. Fed. Credit Union, 974 S.W.2d 833 (Tex. App. San Antonio 1998, no pet.)... 22, 23, 24 Ramos v. Henry C. Beck Co., 711 S.W.2d 331 (Tex. App. Dallas 1985, no writ)...13 Schauer v. Mem. Care Sys., 856 S.W.2d 437 (Tex. App. Houston [1st Dist.] 1993, overruled on other grounds, Huckabee v. Time Warner Co., 19 S.W.3d 43 (Tex. 2000))..23 Wells Fargo Bank, N.A. v. Citizens Bank of Tex., N.A., 183 S.W.3d 790 (Tex. App. Waco 2005, pet. denied)...15 Wheeler v. New Times, Inc., 49 S.W.3d 471 (Tex. App. Dallas 2001, no pet.)...14 Federal Cases Brawley v. U.S. Bank, N.A., No JPG, 2007 U.S. Dist. LEXIS 6801 (S.D. Ill. Jan. 31, 2007)... 21, 22, 24 Harte-Hank Commc ns v. Connaughton, 491 U.S. 657 (1989)...16 Morris v. Equifax Info. Servs., LLC, 457 F.3d 460 (5th Cir. 2006)... 16, 17 Statutes 15 U.S.C. 1681a U.S.C. 1681h... 20, U.S.C. 1681g U.S.C. 1681m...21 Rules Tex. R. Civ. P. 166a...10 vii

8 Tex. R. App. P Tex. R. App. P viii

9 STATEMENT OF THE CASE Nature of the Case: Trial Court Judge: Trial Court s Disposition: Libel, both per se and per quod. Hon. Craig Smith, 192nd District Court, Dallas County. Granted traditional summary judgment for the Defendant, U.S. Bank, N.A. RECORD REFERENCES The clerk s record will be cited by the abbreviation R. followed by the page number (e.g., R. 1). The supplemental clerk s record filed with the Court on November 30, 2011 will be cited SR1. followed by the page number (e.g., SR1. 1). The supplemental clerk s record filed with the Court on January 18, 2012 will be cited by SR2. followed by the page number (e.g., SR2. 1). The supplemental clerk s record filed with the Court on February 21, 2012 will be cited by SR3. followed by the page number (e.g., SR3. 1). The sealed supplemental clerk s record filed with the Court on March 28, 2012 will be cited by SR4. Followed by the page number (e.g., SR4. 1). Appellant s Brief will be cited as Appellant s Br. followed by the page number (e.g., Appellant s Br. 1 ). There is no reporter s record. PARTY REFERENCES Appellant Rodney Meisel is referred to as Meisel. Appellee U.S. Bank, N.A. is referred to as U.S. Bank. USA Shade and Fabric Structures, Inc., Meisel s former employer, is referred to as USA Shade. ix

10 STATEMENT ON ORAL ARGUMENT This case presents the simple issue of whether the account closure code P- OTHER TRANS constitutes libel per se or per quod. The Trial Court correctly held that this code is not libelous and granted U.S. Bank s Motion for Summary Judgment ( the Motion ). The record is short and clear, and no complex or novel legal issues are raised by either party. Accordingly, U.S. Bank does not believe that this Court would benefit from oral argument. Tex. R. App. P If the Court believes oral argument would be helpful and should be granted, however, U.S. Bank stands ready, and requests the opportunity, to participate. ISSUE PRESENTED Whether the Trial Court properly granted summary judgment against Meisel on Meisel s libel per se and per quod claims where the account closure code over which Meisel sued is not libelous as a matter of law and U.S. Bank s affirmative defenses of preemption and qualified privilege apply. x

11 STATEMENT OF FACTS Summary judgment should be affirmed based on the following facts. On May 19, 2009, while working for his former employer, USA Shade, Meisel s paycheck, numbered and drawn on Bank of Texas (the Check ), was first processed for payment. See SR On February 1, 2010, after leaving his position as comptroller at USA Shade and moving from Dallas, Texas to California, Meisel presented the exact same Check to U.S. Bank for a second payment. See SR2. 18, 24. After Meisel presented the Check to U.S. Bank, USA Shade, as the drawer of the Check, reviewed the request for payment in its Positive Pay computer system. See SR Because the Check had already been paid, USA Shade designated the Check as counterfeit in Positive Pay and did not pay the Check. SR U.S. Bank received an EARNS notification 1 from Bank of Texas advising U.S. Bank that the Check was being returned to U.S. Bank as counterfeit. See SR A day later, Bank of Texas sent a letter to U.S. Bank retracting its characterization of the Check as counterfeit but confirming that the Check had already been paid and was properly returned to U.S. Bank unpaid. See R Because the Check was returned against a new account, U.S. Bank followed its policies and closed Meisel s checking and savings accounts with U.S. Bank. 1 EARNS, or the Electronic Advance Return Notification System, is standard banking software used by banks to notify fellow banks of nonpayment. See Appellant s Br. 2 n. 1.

12 See R. 438; SR U.S. Bank reported the involuntary closures to ChexSystems, a consumer reporting agency used by banks, using only the code P- OTHER TRANS, which means transactions involving items or checks belonging to another party, and never using the word counterfeit in connection with Meisel or his accounts. See R. 130, 302; SR2. 22, Meisel admits that the Check belonged to USA Shade at the time of the second presentment and that the statement transactions involving items or checks belonging to another party was true. See R As a courtesy, U.S. Bank removed P-OTHER TRANS from Meisel s ChexSystems reports, even though the statement was accurate. See R Despite the fact that U.S. Bank properly closed Meisel s accounts and made a statement Meisel admitted was true, Meisel sued U.S. Bank for refusing to accommodate him as quickly as he wanted, see R. 9 13, claiming that the code P- OTHER TRANS kept him from opening accounts at different banks and from receiving a promotion at his California-based former employer for which Meisel never applied. See Appellant s Br. 6; R. 298, 368. After the case was remanded 2 Q. You understand that US Bank reported to ChexSystems that this was a transaction involving items or checks belonging to another party? A. Exactly. Q. Wasn t the check that you tried to cash a check that belonged to USA Shade? A. It did belong to USA Shade. Q. Because USA Shade had already cashed it, right? A. That is true. Q. Okay. So is it false that the check you submitted was a transaction involving items or checks belonging to another party? A. That s true. Q. So that s a true statement, right? You just said it s true. I m just confirming it. A. It s true in the fact that, yes, it was an honest mistake. Q.... And US Bank simply reported to ChexSystems that this was a transaction involving items or checks belonging to another party, right? A. Correct. Q. That in of itself, you ll agree with me, is not a false statement, right? A. Right. 2

13 from federal court, 3 U.S. Bank moved for a no-evidence and traditional summary judgment, which the Trial Court heard on August 16 and 25, See SR On July 22 and August 13, 2011, U.S. Bank filed a supplemental motion for summary judgment and a reply addressing Meisel s libel per quod claim that was introduced in his Second Amended Petition. Cf. R ; SR On September 9, 2011, the Trial Court granted U.S. Bank s traditional motion for summary judgment, and entered a final judgment on November 11, R. 577; SR1. 4. SUMMARY OF THE ARGUMENT The Trial Court properly granted U.S. Bank s Motion because the bank did not publish a false, defamatory statement. Meisel s entire case against U.S. Bank is that the account closure code P-OTHER TRANS constitutes libel per se or, alternatively, per quod. Meisel s argument is based on incorrect contentions. First, Meisel contends that U.S. Bank closed his accounts and reported to ChexSystems on the basis that a check he deposited was counterfeit. Second, Meisel contends that U.S. Bank acted with malice because it reported P-OTHER 3 Contrary to Meisel s assertions, Judge Fish of the United States District Court for the Northern District of Texas did not decide that there was malice in this case. Judge Fish did not consider evidence, and was not briefed, on the issue of whether Meisel could actually prove malice. The Trial Court, on the other hand, did consider evidence, was briefed on the issue, found no malice, and granted summary judgment. Any dicta regarding malice in the federal court s opinion should not be considered and is certainly not controlling here. 3

14 TRANS to ChexSystems and did not delete this report after it understood the check was not counterfeit. No one disputes that Meisel attempted to deposit a $3, paycheck on February 1, 2010 after Meisel had already been paid that exact amount on that same check number for the same work in See R Also, there is no dispute that U.S. Bank received notice that the check was not counterfeit from Bank of Texas (the drawee) before U.S. Bank reported the account closures to ChexSystems. See Appellant s Br. 17. Regardless, this notice did not change the fact that Meisel s check was legitimately returned to U.S. Bank because it had already been paid. U.S. Bank followed its policies and closed Meisel s accounts based on the returned check against a new account. See R Whether Meisel s former employer, USA Shade, mistakenly or purposefully characterized the check as counterfeit is inconsequential to U.S. Bank s involvement in this case because no one disputes that the check would have been rejected anyway for being presented for payment twice. See R ; SR , 24. Because Meisel s accounts with U.S. Bank were new, overdrawn, and a check was returned against Meisel s checking account, see R. 148, 438, , U.S. Bank closed his accounts per bank policy. See SR Separately, and in the alternative, the Trial Court did not err in granting U.S. Bank s Motion because, even if U.S. Bank published a defamatory statement 4

15 (which it did not) U.S. Bank cannot be liable for libel per se or per quod as a matter of law. Meisel is barred from bringing a common-law libel claim against U.S. Bank pursuant to Section 1681h(e) of the federal Fair Credit Reporting Act ( FCRA ), and U.S. Bank s statement, if it rises to that level, is protected by a qualified privilege. The only exception to U.S. Bank s FCRA and qualified privilege defenses would be if there were malice, which Meisel cannot prove in this case. Meisel improperly attempted to deposit a check twice and the check was therefore logically returned to U.S. Bank unpaid. U.S. Bank then legitimately closed Meisel s new accounts and properly reported the closures to ChexSystems, all according to standard bank policy. Everything else Meisel introduced into this case (the allegations that U.S. Bank accused Meisel of a crime, for which there is no support in the record; that Meisel failed to obtain a job he did not apply for; that Meisel could not open accounts at different banks, which could have easily been the result of his two bankruptcies; that Meisel was in possession of the check so he owned it, etc.) is presented to confuse matters and to fabricate a malicious scenario that simply does not, and never did, exist. See, e.g., Appellant s Br. 6, 8. The Trial Court s Final Judgment should be affirmed. 5

16 ARGUMENT AND AUTHORITIES I. Standard of Review on Appeal U.S. Bank moved for summary judgment on the following grounds: Meisel has no evidence to support any of his claims against U.S. Bank; The meaning of the alleged statement is not defamatory; FRCA Section 1681h(e) preempts Meisel s claims; U.S. Bank s account closure code is protected by qualified privilege; and U.S. Bank did not act with actual malice. Meisel challenges the summary judgment, arguing that (1) U.S. Bank did not move for summary judgment on his per quod claim and (2) evidence of malice existed to support his libel per se claim. Because the propriety of summary judgment is a question of law, the Court of Appeals reviews the Trial Court s decision de novo, applying the same standards. See Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994); Dallas Cent. Appraisal Dist. v. Cunningham, 161 S.W.3d 293, 295 (Tex. App. Dallas 2005, no pet.). Meisel must negate all possible grounds upon which summary judgment could have been granted. Jarvis v. Rocanville Corp., 298 S.W.3d 305, 313 (Tex. App. Dallas 2009, pet. denied) (stating that a general issue challenging summary judgment must be supported by argument negating all possible grounds upon 6

17 which summary judgment could have been granted ). A defendant who conclusively negates at least one essential element of each theory pled by the plaintiff is entitled to summary judgment Gateway S. Joint Venture v. Eller Media Co., 159 S.W.3d 183, 186 (Tex. App. El Paso 2004, no pet.). A defendant also can prevail by pleading and conclusively establishing every element of an affirmative defense. Id.; see also Jarvis, 298 S.W.3d at 313. II. Jurisdiction and Law Concerning Final and Appealable Judgments A. Meisel amended his petition before the hearing for one cause of action: libel. As noted above, on July 22, 2011, within 30 days of the summary judgment hearing, Meisel filed a Second Amended Petition, adding a sentence stating that the actions allegedly taken by U.S. Bank constitute libel per quod for which Plaintiff is entitled to recover damages. SR The rest of the pleading was virtually identical to the First Amended Petition. Cf. R ; SR Meisel already had pled causes of action for the same set of facts for libel per se, defamation and slander per se. 4 Meisel s claim, that U.S. Bank never amended or supplemented its motion for summary judgment to address this new claim, Appellant s Br. 7, is false and not supported by any authority cited by Meisel. See R Meisel s Second Amended Petition dropped the defamation and slander causes of action and only listed a cause of action for libel. See SR

18 B. U.S. Bank supplemented its Motion and requested that the Trial Court dismiss the live pleading. On the same day that Meisel filed his Second Amended Petition, U.S. Bank filed a Supplemental Motion for Summary Judgment (the Supplement ) and moved for judgment on all claims in Plaintiff s Second Amended Petition. The only cause of action in the Second Amended Petition was libel. Specifically, in the Supplement, U.S. Bank argued that no defamation or like actions are allowed under the [federal Fair Credit Reporting Act ( FCRA )] unless malice is alleged and that, as a matter of law, the statement made by U.S. Bank was true and cannot be considered malicious. R. 56 (emphasis added). U.S. Bank then requested summary judgment of the entire proceeding as a matter of law and that the Court grant such further relief to which U.S. Bank may be entitled. R. 56. In addition, in U.S. Bank s Reply filed on August 13, 2011, U.S. Bank requested that the Trial Court grant U.S. Bank s Traditional Motion for Summary Judgment and dismiss Plaintiff s Second Amended Petition in its entirety with prejudice. R. 534 (emphasis added). U.S. Bank did not object to the filing of the Second Amended Petition and certainly was not surprised to see a refined libel claim. C. The Final Judgment considered the Second Amended Petition. The parties motions for summary judgment were heard by the Trial Court on August 16 and 25, The Trial Court properly granted U.S. Bank s Motion on September 2, 2011 and entered a Final Judgment on November 11, The 8

19 Final Judgment included a statement that the Trial Court considered the pleadings, motion, response, reply, evidence on file, and arguments of counsel. SR1. 4. The Final Judgment did not state that the Second Amended Petition was carved out from the Judgment. See SR1. 4. Meisel filed a Notice of Appeal on October 3, 2011, prematurely. R This Court requested briefing from Meisel on jurisdiction and he accordingly filed the requested brief on December 2, 2011 stating, in part, that the Final Judgment references the granting of traditional summary judgment in favor of Appellee and is final, disposes of all claims and all parties, and is appealable, as of October 17, 2011, [a]ccordingly, this Court has jurisdiction over this matter. Appellant s Br. in Support of Appellate Ct. Juris D. This Court has proper jurisdiction to consider the judgment on all claims. An appeal may generally be taken only from a final judgment that disposes of all pending parties and claims. Fresh Coat, Inc. v. Life Forms, Inc., 125 S.W.3d 765, 767 (Tex. App. Houston [1st Dist.] 2003, no pet.). Finality must be resolved by a determination of the intention of the court as gathered from the language of the decree and the record as a whole, aided on occasion by the conduct of the parties. Cont l Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 277 (Tex. 1996). In the circumstances described above, the Trial Court intended to render a final, appealable judgment. Even Meisel himself argued that the judgment was final and 9

20 disposed of all claims and parties. Appellant s Br. in Support of Appellate Ct. Juris Accordingly, this Court has proper jurisdiction to consider this appeal. Amended petitions filed before summary judgment hearings are permitted and considered by trial courts, even when filed within seven days of the hearing. [L]eave of court is presumed when a summary judgment states that all pleadings were considered, and when, as here, the record does not indicate that an amended pleading was not considered, and the opposing party does not show surprise. Cont l Airlines, Inc., 920 S.W.2d at 276; Goswami v. Metro. Sav. & Loan Ass n, 751 S.W.2d 487, (Tex. 1988) ( [T]he trial court s judgment states that all pleadings on file were considered by the court. Since the record is silent of any basis to conclude that the amended petition was not considered by the trial court, and inasmuch as Metropolitan has not shown surprise or prejudice, leave of court is presumed.... [The amended claim] was properly before the trial court. ); 9029 Gateway S. Joint Venture, 159 S.W.3d at 186 (party may file an amended pleading after it files motion or response); Cluett v. Med. Protective Co., 829 S.W.2d 822, 826 (Tex. App. Dallas 1992, writ denied) (amended petition filed after response and motion is the live pleading for purposes of the summary judgment hearing); Tex. R. Civ. P. 166a(c) (trial court shall render summary judgment if the pleadings and summary judgment evidence on file at the time of the hearing, or filed 10

21 thereafter and before judgment with permission of the court show the movant is entitled to judgment as a matter of law). III. The Account Closure Code was not False or Defamatory. A. P-OTHER TRANS concerns Meisel s account, not Meisel personally. To maintain a libel or defamation action, a plaintiff must prove that the defendant published a statement of fact that was defamatory concerning the plaintiff. Main v. Royall, 348 S.W.3d 381, 389 (Tex. App. Dallas 2011, no pet.) (citing WFAA-TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998)). U.S. Bank s use of the code P-OTHER TRANS to report involuntary account closures to ChexSystems cannot be considered a defamatory publication because it refers to Meisel s account, not him individually. For this additional reason, this Court should uphold the summary judgment granted to U.S. Bank. See Newspapers, Inc. v. Matthews, 339 S.W.2d 890, 893 (Tex. 1960) (statement can only defame a person if it is about that person). B. No ordinary person would find the code designation defamatory. Alternatively, if the Court believes that a written statement was made to third parties about Meisel individually and not his account, the statement cannot be considered defamatory. A written defamatory statement is libel per se if the words in and of themselves are so obviously hurtful to the person aggrieved by 11

22 them that they require no proof of injury. Housman v. Publicaciones Paso Del Norte S.A., 242 S.W.3d 518, 524 (Tex. App. El Paso 2007, no pet.). 5 These include statements that (1) unambiguously charge a crime, dishonesty, fraud, rascality, or general depravity, or (2) are falsehoods that injure one in his office, business, profession or occupation. Main, 348 S.W.3d at 381. If the court must resort to innuendo or extrinsic evidence to determine that the statement was defamatory, then it is libel per quod. Libel per quod requires proof of injury and damages. Id. This Court construes an allegedly defamatory publication as a whole in light of the surrounding circumstances and based upon how a person of ordinary intelligence would perceive it. Id. (citing Turner v. KTRK Television, Inc., 38 S.W.3d 103, 114 (Tex. 2000)). A person of ordinary intelligence is one who exercises care and prudence, but not omniscience, when evaluating the allegedly defamatory communications. Id. (citing New Times, Inc. v. Isaacks, 146 S.W.3d 144, 157 (Tex. 2004)). Here, the alleged defamatory statement is not libel per se because the code P-OTHER TRANS is nowhere close to being obviously hurtful to Meisel. Nonspecific statements are not capable of defamatory meaning. See, e.g., Henriquez v. 5 Housman, relied upon by Meisel, actually supports U.S. Bank s argument. In Housman, the court of appeals affirmed the trial court s decision granting summary judgment for the defendant because the statement that may be considered defamatory was not made directly about the plaintiff. See Housman, 242 S.W.3d at

23 Cemex Mgmt., Inc., 177 S.W.3d 241, 252 (Tex App. Houston [1st Dist] 2005, pet. denied); Double Diamond, Inc. v. Van Tyne, 109 S.W.3d 848, 854 (Tex. App. Dallas 2003, no pet.) (no statement identified plaintiff personally). Meisel contorts transactions or checks belonging to another party into an accusation of theft or fraud viewed in the light of the freezing and closing Meisel s bank accounts. Appellant s Br. 10. This is a leap with no support in the record. See Appellant s Br. 10; 13. When viewed in light of U.S. Bank s policies for returned checks on new accounts, it does not relate to an accusation of theft or fraud. Meisel cites Leyendecker & Assocs. v. Wechter, 683 S.W.2d 369 (Tex. 1985), Main v. Royall, 348 S.W.3d 381 (Tex. App. Dallas 2011, no pet.), Moore v. Waldrop, 166 S.W.3d 380 (Tex. App. Waco 2005, no pet.) and Ramos v. Henry C. Beck Co., 711 S.W.2d 331 (Tex. App. Dallas 1985, no writ) to support his argument that a report of theft or statements that charge a crime, fraud or dishonesty may support a libel per se claim. None of these cases are even close to the facts in the case at hand and are not persuasive authority other than for their general, inapplicable holding. 6 6 In Leyendecker, the libelous statement was a letter falsely accusing the plaintiff of conspiring to file fraudulent insurance claims. Leyendecker, 683 S.W.2d at 374. In Main, the statements about stealing land for eminent domain or wanting to take Pappy Gore s property did not accuse the plaintiff of theft, as he contended. Main, 348 S.W.3d at In Moore, the defendant called the plaintiff a crook, but the court of appeals upheld the trial court s judgment that the statement was not slanderous per se. Moore, 166 S.W.3d at Finally, in Ramos, the statement was an accusation of theft of a power tool, which clearly imputed criminal conduct to the plaintiff. Ramos, 711 S.W.3d at

24 Finally, the alleged defamatory written statement is not libel per quod. Meisel never presented any evidence of damages in the record and does not mention any per quod elements in his brief. Because the alleged statement P-OTHER TRANS is not capable of a defamatory meaning, this Court does not need to consider whether the complained of statement is false or not substantially true. Wheeler v. New Times, Inc., 49 S.W.3d 471, 474 (Tex. App. Dallas 2001, no pet.); Musser v. Smith Protective Servs., Inc., 723 S.W.2d 653, (Tex. 1987) (whether statement is capable of defamatory meaning is an issue of law). C. U.S. Bank s account closure code notification was true. Alternatively, even if the Court believes the statement could be construed as defamatory by an ordinary person, the code designation was, in fact, true. As long as a statement is substantially true, it is not defamatory. See, e.g., Freedom Commc ns, Inc. v. Cotvnado, 296 S.W.3d 790, (Tex. App. Corpus Christi 2009, no pet). Meisel argues that because U.S. Bank knew that the check was not counterfeit, U.S. Bank knew that its report to ChexSystems was false. Appellant s Br. 18. This is simply incorrect. U.S. Bank s report to ChexSystems was not that the check was counterfeit but rather that Meisel s accounts were closed for transactions involving items or checks belonging to another party. This was the 14

25 correct code to select for this situation out of the 23 reason codes provided by ChexSystems. See SR , SR It is true that Meisel deposited the check twice. See R ; SR , 24. It is true that Bank of Texas returned the check to U.S. Bank. R It is true that U.S. Bank closed Meisel s accounts for a returned check against a new account. R. 438, It is true that there is no ChexSystems closure code for same check deposited twice. See SR It is true that U.S. Bank selected the proper ChexSystems reporting code for the situation because the check was not written on a closed account, did not have the same payor and maker, and was not stolen. See SR Nothing that U.S. Bank did was false or based on something false. U.S. Bank s report to ChexSystems was not false and for this reason this Court should affirm the Trial Court s summary judgment in U.S. Bank s favor. 7 7 Meisel argues that, Meisel owned the check at the time that he deposited it regardless of whether he was a holder-in-due-course. Appellant s Br. 15. However, the check could not have belonged to Meisel at the time of the second deposit because the check had already gone through its full lifecycle and Meisel had already been paid on the check in Meisel cites Heimlich v. State, 988 S.W.2d 382 (Tex. App. Houston [14th Dist.] 1999, no pet.) and Wells Fargo Bank, N.A. v. Citizens Bank of Tex., N.A., 181 S.W.3d 790 (Tex. App. Waco 2005, pet. denied) for this proposition. Both cases are inapplicable. Heimlich was a criminal case where the bank had placed a hold on the funds prior to their dispersal. Wells Fargo involved a check kiting scheme between numerous parties where the original funds from a check had not yet been collected. Specifically, Meisel omitted the full holding in Wells Fargo which provided: regardless of whether a bank permits the immediate withdrawal of funds for a check which has not yet been collected, ownership of the check remains with the depositor... Id. at 802 (emphasis added). Meisel s citations show that the UCC and cases interpreting the UCC do not address a negotiable instrument that has already been fully negotiated and is then presented a second time. Appellant s Br. 15. Meisel s UCC argument is therefore unavailing. In any event, Meisel himself agreed that the report regarding the reason for closing his account was true. See R

26 IV. U.S. Bank did not Publish any Statement with Malice. A. U.S. Bank had no obligation to correct accurate reporting information, therefore rendering a finding of malice impossible. Whether the evidence in the record in a libel or defamation case is sufficient to support a finding of actual malice is a question of law. See Harte-Hanks Commc ns, Inc. v. Connaughton, 491 U.S. 657, 685 (1989). No defamation action or like actions are allowed under the FCRA unless malice or willful intent is shown. See Morris v. Equifax Info. Servs., LLC, 457 F.3d 460, 471 (5th Cir. 2006); Carr v. Brasher, 776 S.W.2d 567, 571 (Tex. 1989). Actual malice means that the allegedly defamatory statement was published with knowledge or reckless disregard of the statement s falsity. See Morris, 457 F.3d at 471; Carr, 776 S.W.2d at 571. Contrary to Meisel s contention that the defendant bears the burden to prove absence of malice, it is Meisel who has the burden to prove malice. Appellant s Br. 10; Calhoun v. Chase Manhattan Bank (U.S.A.) N.A., 911 S.W.2d 403, 408 (Tex. App. Houston [1st Dist.] 1995, no writ). 8 Meisel argues that [r]ecord evidence shows that U.S. Bank reported to ChexSystems, with knowledge of its falsity or reckless disregarding for the truth, 8 The vast majority of the cases cited by Meisel, including Carr and Calhoun, support U.S. Bank s position in this matter. In Carr, the Supreme Court affirmed the trial court s summary judgment for the defendant finding no malice. In Calhoun, Chase Manhattan Bank was entitled to qualified privilege for its statements to a credit agency. Calhoun, 911 S.W.2d at 408. Also, in Musser, cited by Meisel on pages of Appellant s Brief, U.S. Bank s position is supported, as the Supreme Court upheld a summary judgment finding the words relieve us of certain accounts were not capable of defamatory meaning when read with the letter as a whole. See Musser, 723 S.W.2d at

27 that Meisel engaged in transactions involving items or checks belonging to another party... despite Meisel s... pleas.... Appellant s Br. 13, 19 (emphasis added). Reckless disregard means that the defendant in fact entertained serious doubts as to the truth of his publication. See Morris, 457 F.3d at 471 (emphasis added); Carr, 776 S.W.2d at 571. Meisel fails to actually support this argument with any citations to the record, as required by Texas Rule of Appellate Procedure ( TRAP ) 38.1(i). See In re B.B.B., 124 S.W.3d 417, 420 (Tex. App. Dallas 2004, no pet.) ( The failure to adequately brief an issue, either by failing to specifically argue and analyze one s position or provide authorities and record citations, waives any error on appeal. ). Absent from the Appellant s Brief and the record is any evidence that a U.S. Bank employee entertained serious doubts as to the truth of the code designation entered regarding Meisel s closed accounts. Instead, the Trial Court had before it affidavits and depositions of U.S. Bank employees who testified that their actions were made in good faith, truthful, and in connection with their investigation of the Check. See, e.g., SR2. 23; Cobb v. Garlington, 193 S.W. 463, 468 (Tex. Civ. App. Fort Worth 1917, no writ). 9 These affidavits establish the 9 Meisel cites Cobb for the proposition that [m]alice may be inferred from the reckless publication of libelous matter. Appellant Br. 16. However, the case actually bolster s U.S. Bank s argument that the statement made to ChexSystems was the natural result of an investigation made in good faith, therefore making the imposition of exemplary damages erroneous in that case. In addition, Cobb is distinguishable from the case at hand because it involved untrue statements made by a third party to a bank, not from a bank about the plaintiff from the defendant s insane son. Cobb, 192 S.W. at

28 presumption of good faith and the absence of malice. Meisel has no evidence to negate their veracity. Also, mere negligence or failure to act as a reasonably prudent person is insufficient to find malice. El Paso Times, Inc. v. Trexler, 447 S.W.2d 403, 406 (Tex. 1969). Errors in judgment, failure to investigate the truth or falsity of a statement before it is published, and negligence are all insufficient to find actual malice. See id.; Carr, 776 S.W.2d at 571. Meisel s malice argument boils down to the allegation that U.S. Bank knew that the check was not counterfeit when it made the ChexSystems report, but made the report anyway and then refused to delete the accounts from the report after U.S. Bank was told the Check was not counterfeit. Appellant s Br. 18. Selecting the proper code from a short and finite list of ChexSystems-provided codes to report a legitimately closed account is simply not actual malice. U.S. Bank did not know, and still does not know, that the report to ChexSystems was false (because it was not), nor did U.S. Bank entertain serious doubts that the ChexSystems report was true (it still maintains that the report was true). See R. 23, 473, Based on its legitimate actions in response to Meisel s irregular checking activity, U.S. Bank would have been justified in not deleting Meisel s accounts from ChexSystems. See R Nevertheless, in an effort to appease Mr. Meisel, U.S. Bank responded to the communications to the bank and deleted Meisel s 18

29 checking account from the ChexSystems report on June 1, 2010 four days after receiving a letter from Meisel s attorney requesting the deletion regarding the checking account. See R. 541, , 442. Meisel also claims that there was malice because U.S. Bank did not delete the related savings account from the ChexSystems report until October 6, See Appellant s Br. 18. Again, U.S. Bank would have been justified in leaving that account on the ChexSystems report. Unfortunately, nowhere in any of the communications to U.S. Bank did anyone bring the related savings account to U.S. Bank s attention. See R , 284. Only the checking account was identified. R , 284. While related accounts are closely tied together in U.S. Bank s account closure process, deletion of accounts from ChexSystems is conducted in an entirely different process on non-bank software. Cf. SR4. 60; R When U.S. Bank deleted the checking account from the ChexSystems report, it was responding to specific communications, which referenced either a singular account, or specifically referenced Meisel s checking account. See R There is simply no legally sufficient evidence in the record to raise a genuine issue of material fact that U.S. Bank acted with actual malice concerning its report to ChexSystems. Even if the Court believes that U.S. Bank s report to ChexSystems was false, the evidence shows that U.S. Bank did not know that the report was false and did not entertain serious doubts that the report was true when 19

30 it made the report to ChexSystems (whether that be any time between February 9, 2010 and October 6, 2010). The law presumes good faith and want of malice in these types of circumstances. See Marathon Oil Co. v. Salazar, 682 S.W.2d 624, 630 (Tex. App. Houston [1st Dist.] 1984 writ ref d n.r.e.). As such, the trial court s summary judgment decision on libel should be affirmed. See Carr, 776 S.W.2d at 571 (affidavits and deposition testimony showed no malice and Supreme Court upheld trial court s grant of summary judgment for the defendant); Adams v. First Nat l Bank of Bells/Savoy, 154 S.W.3d 859, 875 (Tex. App. Dallas 2005, no pet.) ( [A] reviewing court will affirm the summary judgment as to a particular claim if an appellant does not present argument challenging all grounds on which the summary judgment could have been granted. ). B. The FCRA preempts Meisel s libel claims. In the alternative, even if the account closure code could be construed as libelous, the Trial Court did not err in granting summary judgment for U.S. Bank because it established two different defensive privileges as a matter of law. Meisel does not dispute that his libel claim against U.S. Bank falls under the scope of Section 1681h(e) of the FCRA. Meisel argues that his libel claim falls under the statute s carve-out for false information furnished with malice or willful intent to injure.... See Appellant s Br

31 Under Section 1681h(e) of the FCRA:... no consumer may bring any action or proceeding in the nature of defamation... with respect to the reporting of information against any... person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title... except as to false information furnished with malice or willful intent to injure such consumer. 15 U.S.C. 1681h(e). There is no genuine dispute that, absent the falsity-plusmalice exception, the FCRA preempts Meisel s per se libel claim against U.S. Bank. Each of the elements is met. First, Meisel brings this libel action against U.S. Bank solely for U.S. Bank s reporting information through ChexSystems. See SR Second, taking Meisel s allegations as true, the information U.S. Bank reported to ChexSystems was then disclosed to Meisel. See SR Third, ChexSystems disclosures were pursuant to Section 1681g because it was information that was disclosed by a consumer reporting agency to Meisel. The disclosures were also pursuant to Section 1681m because, taking Meisel s allegations as true, the disclosures allegedly led to adverse action against the consumer. See SR3. 12; see also Brawley v. U.S. Bank, N.A., No JPG, 2007 U.S. Dist. LEXIS 6801, at *7 (S.D. Ill. Jan. 31, 2007); 15 U.S.C. 1681a(k)(1)(iv) (defining adverse action ). 21

32 Finally, ChexSystems is a consumer reporting agency under the FCRA. See Brawley, 2007 U.S. Dist. LEXIS 6801 at *2, *6 ( Defendant also reported plaintiff s deposit of a counterfeit check to a consumer reporting agency called ChexSystems.... [P]laintiff is disputing defendant s practice of reporting an irregular transaction to a credit reporting agency, (i.e., ChexSystems). ) (emphasis added). In fact, at least one court has specifically considered a defamation claim against U.S. Bank brought for making a report of irregular checking activity to ChexSystems, and the court concluded that the appellant s libel claim is preempted by the Fair Credit Reporting Act. Brawley, 2007 U.S. Dist. LEXIS 6801 at *6, *8. V. U.S. Bank is Protected by a Qualified Privilege. Similarly, and also in the alternative, U.S. Bank has established it is entitled to the qualified privilege defense for the reporting to ChexSystems. Whether a certain type of communication has a qualified privilege is a question of law for the court. Calhoun, 911 S.W.2d at 408; see also Ortiz v. San Antonio City Emps. Fed. Credit Union, 974 S.W.2d 833, 837 (Tex. App. San Antonio 1998, no pet.). When a plaintiff alleges the defendant published a defamatory statement and the defendant raises the issue of qualified privilege, the plaintiff has the burden to prove the defendant made the statement to those outside the interest group or with 22

33 malice. Calhoun, 911 S.W.2d at 408. The law presumes good faith and want of malice where a party has a qualified privilege. Id. at 409. U.S. Bank s reports to ChexSystems regarding Meisel s financial activity are protected by a Texas common-law qualified privilege because U.S. Bank s report to ChexSystems was made under circumstances wherein any one of several persons having a common interest in a particular subject matter may reasonably believe that facts exist that another, sharing that common interest, is entitled to know. Hanssen v. Our Redeemer Lutheran Church, 938 S.W.2d 85, 92 (Tex. App. Dallas 1996, writ denied). The privilege remains as long as the publisher can establish that he or she believed in the truth of the communication. Schauer v. Mem. Care Sys., 856 S.W.2d 437, 449 (Tex. App. Houston [1st Dist.] 1993, overruled on other grounds, Huckabee v. Time Warner Co., 19 S.W.3d 413 (Tex. 2000)). Substantial truth is sufficient. Id. More specifically, Texas courts have held that financial institutions in the banking industry share a common interest and that, accordingly, communications from furnishers of financial information to reporting agencies are protected by a qualified privilege. See Ortiz, 974 S.W.2d at 837 ( The financial institutions comprising the banking industry have an interest in avoiding losses occasioned by check kiting schemes.... ); Calhoun, 911 S.W.2d at 408 (applying a qualified privilege to credit card companies filing reports with credit reporting agencies); 23

34 Lomas Bank v. Flatow, 880 S.W.2d 52, (Tex. App. San Antonio 1994, writ denied) (applying a qualified privilege to credit card companies filing reports with credit reporting agencies). Indeed, in an almost identical situation involving U.S. Bank and ChexSystems, the United States District Court for the Southern District of Illinois specifically found that a statement from U.S. Bank to ChexSystems reporting irregular checking activity was protected by a qualified privilege under the Restatement definition. See Brawley, 2007 U.S. Dist. LEXIS 6801 at *8 9. The court in Brawley found that the appellant s libel claim fails because defendant s statement to ChexSystems was protected by conditional privilege. Id. Here, U.S. Bank electronically coded that it involuntarily closed a customer s accounts under P-OTHER TRANS to a consumer reporting agency, ChexSystems. See SR Considering the reasoning in Calhoun, Flatow, and Ortiz, and the specific application of a qualified privilege to a U.S. Bank-to- ChexSystems statement concerning irregular checking activity in Brawley, it is evident that a qualified privilege attached to U.S. Bank s account closure report to ChexSystems. Summary judgment should be affirmed because U.S. Bank has established the absence of malice in the summary judgment record. See B.H. Jackson v. Cheatwood, 445 S.W.2d 513, 514 (Tex. 1969) (per curiam) (conditional privilege appropriate if defendant established absence of malice in summary 24

35 judgment record); Flatow, 880 S.W.2d at (Tex. App. San Antonio 1994, writ denied) (plaintiff had the burden to prove actual malice, which was not proven when credit card company reported information to credit bureaus). VI. Public Policy Warrants Affirmation of the Trial Court s Decision. Finally, the San Antonio Court of Appeals has reasoned that applying a qualified privilege under Texas common law or the FCRA is appropriate under these circumstances so that such providers would [not] be discouraged from reporting information to credit reporting agencies. Flatow, 880 S.W.2d at 53. This Court should affirm the Trial Court s summary judgment so as not to deter proper reporting by banks to credit reporting agencies regarding customer account closings. CONCLUSION AND PRAYER U.S. Bank closed Meisel s bank accounts because he had a returned check on a new account. U.S. Bank did not close Meisel s account because of a counterfeit check. U.S. Bank reports involuntary account closures to ChexSystems. U.S. Bank selected the proper ChexSystems code for the situation. U.S. Bank did not report to ChexSystems that Meisel deposited a counterfeit or stolen check. U.S. Bank reported the closed accounts to ChexSystems based on the undisputed fact that Bank of Texas returned Meisel s check. These facts do not amount to actual malice and do not prove libel per se or libel per quod. Further, 25

36 Meisel s libel claim is preempted and barred by the FCRA and is barred by U.S. Bank s qualified privilege in its reports to ChexSystems. Accordingly, U.S. Bank requests that this Court affirm the Trial Court s Final Judgment in its entirety. Respectfully submitted, /s/ Jennifer L. Keefe Joseph M. Cox State Bar No Jennifer L. Keefe State Bar No PATTON BOGGS LLP 2000 McKinney Avenue Suite 1700 Dallas, Texas (214) (telephone) (214) (facsimile) jcox@pattonboggs.com jkeefe@pattonboggs.com ATTORNEYS FOR U.S. BANK, N.A. CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above Appellee s Brief was served upon all counsel of record via e-service and a courtesy on March 30, 2012, pursuant to TRAP 9.5. /s/ Jennifer L. Keefe Jennifer L. Keefe 26

37 APPENDIX 27

38 Page 1 JOE R. BRAWLEY, Plaintiff, v. U.S. BANK, N.A., Defendant. Case No JPG UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS 2007 U.S. Dist. LEXIS 6801 January 31, 2007, Decided January 31, 2007, Entered COUNSEL: [*1] Joe R. Brawley, Plaintiff, Pro se, Belleville, IL. For U.S. Bank, NA, Defendant: Jan Paul Miller, LEAD ATTORNEY, Karen L. Brooks, Thompson Coburn - St. Louis, MO, Generally Admitted, St. Louis, MO. JUDGES: J. Phil Gilbert, DISTRICT JUDGE. OPINION BY: J. Phil Gilbert OPINION MEMORANDUM AND ORDER GILBERT, District Judge: Before the Court is Plaintiff's amended complaint (Doc. 59). Upon review, plaintiff's amended complaint would be futile. As with the original complaint, as shown below, defendant is entitled to summary judgment on plaintiff's claims. Accordingly, plaintiff's amended complaint (Doc. 59) is STRICKEN. See Figgie International, Inc. v. Miller, 966 F.2d 1178, (7th Cir. 1992) (district court may deny leave to amend when amendment of complaint would be futile). Also before the Court is defendant's motion for summary judgment (Doc. 37). Plaintiff has filed a response (Doc. 43). This motion is discussed below. I. Background. The following facts are undisputed. On November 24, 2004, plaintiff was the payee on a counterfeit check for $ 60,800 and he deposited into a bank account that he had with defendant. (Doc. 38, Exh. [*2] A, pp ). Plaintiff had received the $ 60,800 check as a result of his communications with "Barrister Williams," and "John King, PhD," two individuals whom plaintiff suspected were involved in internet crime. (Doc. 38, Exh. A, pp ). Prior to depositing the check, plaintiff suspected that the check was counterfeit. (Doc. 38, Exh. A, pp ). As a result of plaintiff's deposit of the check, the check was indeed discovered to be counterfeit. Defendant closed the three bank accounts that plaintiff had with defendant, and remitted plaintiff his account balances. (Doc. 38, Exh. A, pp ). Defendant also reported plaintiff's deposit of a counterfeit check to a consumer reporting agency called ChexSystems. (Doc. 38, Exh. C, P 1). Specifically, defendant reported plaintiff's deposit of a counterfeit check as a transaction involving "items with irregular signature/endorsement." (Doc. 38, Exh. E, P 9). After defendant closed plaintiff's bank accounts, plaintiff attempted to open an account with Union Planters Bank. Plaintiff attempted to deposit an $ 80,000