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Zutz v. Kamrowski

August 17, 2010

LOREN J. ZUTZ AND ELDEN J. ELSETH, PLAINTIFFS AND APPELLANTS
v.
DOUGLAS KAMROWSKI AND ROUGHRIDER LEGAL SUPPORT SERVICES, INC., DEFENDANTS AND APPELLEES



Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Joel D. Medd, Judge.

The opinion of the court was delivered by: VandeWalle, Chief Justice.

AFFIRMED.

[¶1] Loren J. Zutz and Elden J. Elseth ("plaintiffs") appealed from a district court order dismissing their defamation action against Douglas Kamrowski and RoughRider Legal Support Services, Inc. We affirm, concluding Kamrowski's statements in a report to the Marshall County Attorney are subject to an absolute privilege.

I.

[¶2] The plaintiffs, residents of Minnesota, were at all times relevant to this action, appointed board members of the Middle-Snake-Tamarac Rivers Watershed District, a Minnesota governmental entity encompassing land located in five counties in Minnesota with headquarters in Marshall County in Warren, Minnesota. The plaintiffs claim they raised legitimate and serious concerns about possible financial improprieties in the operation of the Watershed District and they conducted an independent investigation of the Watershed District's bank and payroll records, which led to changes in financial operations by the Watershed District. The plaintiffs claim their actions were appropriate but resulted in the Marshall County Board of Commissioners asking the Marshall County Attorney "to investigate the situation" and, in turn, the Marshall County Attorney hiring RoughRider, an investigative agency with its office and place of business in Grand Forks, North Dakota, and Kamrowski, an employee of RoughRider and a resident of Grand Forks, to conduct an investigation. The plaintiffs claim that Kamrowski conducted a biased and unfair investigation, which ultimately established the plaintiffs had done nothing wrong, but that Kamrowski issued a November 19, 2007 two-page report to the Marshall County Attorney, which included defamatory statements about the plaintiffs and which Kamrowski knew would be disseminated to the public and others. The plaintiffs claim the investigation was not for the purpose of any criminal prosecution and none of their alleged actions constituted malfeasance or nonfeasance requiring their removal from the Watershed District.

[¶3] Kamrowski's November 19 report was in the form of a letter to the Marshall County Attorney, which stated the letter constituted an "Investigator Summary and Comments" and said "the investigation and interviews . . . were . . . to determine if there was evidence for the Marshall County Attorney to conduct a hearing on any or all of the [Watershed District] Managers for malfeasance, nonfeasance or misfeasance while serving as a public official."

[¶4] The plaintiffs sued RoughRider and Kamrowski in North Dakota state court*fn1 in February 2009, alleging statements in the November 19, 2007 report constituted defamation, negligent defamation, and defamation per se. The plaintiffs' complaint specifically alleged Kamrowski made the following "false statements, or statements with false implications" in the November 19 report:

a. That the litigation by Loren Zutz with [the Watershed District] . . . concerning the PL-566 Project was improper.

b. That it was improper for Zutz to receive copies of employee payroll checks and bank statements from Bremer Bank in Warren without direction from the [Watershed District] Board.

c. Falsely implied that Zutz and Elseth had kept copies of the checks.

d. That it was improper for Elseth to send a letter to the Army Corp of Engineers, asking for a [h]earing on the Aggasiz Valley Water Project without direction from the [Watershed District] Board. The [Watershed District] Board of Managers censored Mr. Elseth for this letter.

e. That it was improper for Elden Elseth to be involved in a dispute by neighbors concerning water line connected to his property.

f. Asserting, without fact, that a certain letter to the Marshall County ...


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