The Seventh Circuit federal appeals court recently determined that a Wisconsin newspaper did not commit defamation when it published a 2018 story concerning a local financial adviser. In affirming the district court’s finding in favor of the newspaper, the Seventh Circuit found that the allegedly defamatory article was largely accurate and protected under what is known under Wisconsin law as the judicial-action privilege, which protect publishers who report on court activity.
In August 2018, the Wausa Daily Herald published an article by reporter Sam Wisneski titled Wisconsin financial advisor accused of violating a dead man’s trust, mishandling $3 million. In the article Wisneski chronicled the allegedly bad-faith handling of the $3 million trust of deceased Wisconsin man Joe Geisler by his financial advisor, Thomas Batterman.
The story recounted the life of Geisler who, upon his death at the age of 88, left his more than $3 million estate to charity with detailed instructions to divide the money equally among four specific charities: the Superior Diocese of the Catholic Church, Bruce High School in northwestern Wisconsin, the Alzheimer’s Association and the American Cancer Society for local events.
A local wealth management firm, Vigil Asset Management, which was operated by Batterman, was made trustee and tasked with administrating the trust holding Geisler’s money. Batterman administered the trust but nearly a year after Geisler died, Batterman had allegedly only distributed $80,000 of the trust’s assets. This led the American Cancer Society to file suit in a Wisconsin state court to seek the removal of Vigil and Batterman as administrator of the trust.
The article detailed the judicial proceedings of the suit against Batterman and recounted the state court’s ultimate decision to remove Batterman and install a successor trustee, who disbursed the trust’s assets immediately. The article also mentioned how the court in that suit concluded that Batterman violated his fiduciary duties owed to the trust. The article went on to recount that the court ordered Batterman to pay the beneficiaries’ litigation expenses because his conduct “amounted to something of bad faith, fraud or deliberate dishonesty.”
Batterman initially demanded that the Daily Herald retract the article. Instead, the newspaper updated the article the following month by including a new paragraph clarifying that “[a]lthough a judge later found that Batterman had not committed fraud, theft or embezzlement, he ruled that the financial adviser had engaged in multiple acts of ‘bad faith’ and ordered him to be removed from handling the Geisler trust and to pay part of the charities’ legal fees.” The updated article also added the modifier “criminal” before the noun “wrongdoing” so that the sentence read: “Neither Batterman nor Richards has been charged with any criminal wrongdoing in the Geisler case.”
In October 2019, Batterman sued the Daily Herald alleging that the 2018 article was defamatory. The paper moved to dismiss the complaint for failure to state a claim. The District Court judge dismissed the majority of the case after finding that the article was substantially true and would not imply any new criminal misconduct on Batterman’s part to an ordinary reader. The paper then moved for summary judgment on the surviving claim of defamation that had not been dismissed. The District Court granted summary judgment finding that the paper had established that the article’s portrayal of Batterman as a bad faith financial actor was true, and, thus, by definition could not be defamatory. Batterman appealed. Continue reading ›