Stephani Martinsen, Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1397

Stephani Martinsen,
Appellant,

vs.

Kara Engleka,
Respondent.

Filed April 30, 2018
Affirmed
Reilly, Judge

Hennepin County District Court
File No. 27-CV-16-9582

Dennis Pelowski, Law Office of Dennis Pa ul Pelowski, Minneapolis, Minnesota (for
appellant)

Kathryn Mrkonich Wilson, Em ily A. McNee, Littler Mend elson, P.C., Minneapolis,
Minnesota (for respondent)

Considered and decided by Connolly, Presiding Judge; Halb rooks, Judge; and
Reilly, Judge.
U N P U B L I S H E D O P I N I O N
REILLY, Judge
Appellant challenges the district court’s grant of summary judgment for respondent
on appellant’s defamation claim, arguing that there are genuine issues of material fact
regarding whether respondent’s statement was false and whether it was privileged.

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Appellant also challenges the grant of summar y judgment in favor of respondent on her
tortious-interference-with-contract claim. We conclude that there are no genuine issues of
material fact precluding summary judgment and that respondent is entitled to judgment as
a matter of law. Accordingly, we affirm.
FACTS
While working for CVS as a pharmacist, appellant Stephani Martinsen founded her
own pharmacy, Heartfelt Holis tic Pharmacy (HHP), that mainly created compounded
pharmaceuticals that CVS did not dispense. Although HHP’s products were distinct from
CVS products, they treated the same or sim ilar conditions. HHP al so sold compounded
versions of fish oil and vita min D. Respondent Kara Engl eka, appellant’s supervisor,
discovered appellant’s side-business and recommended appellant’s discharge because
appellant’s conduct violated the company’s conflict-of-interest policy. CVS followed
respondent’s recommendation and terminated appellant’s employment.
Appellant commenced this action, alle ging that respondent made defamatory
statements in her report to other CVS managers and lawyers about the justifications for
appellant’s firing and tortiously interfere d with appellant’s employment contract.
Respondent filed a motion for su mmary judgment, which the dist rict court granted. The
district court determined that there are no genuine issues of material fact and that
respondent’s statements were true and, altern atively, that the statements were privileged
because they were made as part of an employment inves tigation and there was no actual
malice. Additionally, the district court dete rmined that respondent did not tortiously

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interfere with appellant’s employment contract because she was acting within the scope of
her employment and did not act with actual malice.
This appeal followed.
D E C I S I O N
We review the grant of summary judgment de novo. Riverview Muir Doran, LLC
v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 170 (Minn. 2010) (citation omitted). On appeal
from summary judgment, we review the record to determine whether there is any genuine
issue of material fact and whether the district court erred in its application of the law.
Dahlin v. Kroening , 796 N.W.2d 503, 504-05 (Minn. 201 1). A party must create more
than just a “metaphysical doubt” as to a fact question in order to raise a genuine issue of
material fact for trial. DLH, Inc. v. Russ , 566 N.W.2d 60, 71 (Mi nn. 1997). To create a
fact issue, evidence must be “sufficiently probative with respect to an essential element of
the nonmoving party’s case to permit reasonable persons to draw different conclusions.”
Id.
I. Appellant’s defamation claim fails as a matter of law.
Appellant’s defamation claim has four elemen ts: (1) a statement of fact; (2) that is
false; (3) that was communicated to someone other than appe llant without privilege; and
(4) that harmed appellant’s reputation or lowered her estimation in the community.
Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980). Even if defamatory,
a statement may be privileged if made on a proper occasion, for a proper purpose, and with
probable cause, and if the privilege is not abused. Id. at 256-57. We review in turn the

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district court’s alternative holdings that res pondent’s statement was not false and that it
was privileged.
A. There is no genuine issue of mat erial fact regarding the truth of
respondent’s statement.

Truth is a complete defense against defamation. Stuempges, 297 N.W.2d at 255.
“[T]rue statements, however disparaging, are not actionable.” Id. “If the statement is true
in substance, minor inaccuracies of ex pression or detail are immaterial.” McKee v.
Laurion, 825 N.W.2d 725, 730 (Minn. 2013) (citing Masson v. New Yorker Magazine, Inc.,
501 U.S. 496, 516 (19 91)). “A statement is substantially true if it would have the same
effect on the mind of the reader or listener as that which the plea ded truth would have
produced.” Id. Generally, the truth or falsity of a statement is a question for the jury, Lewis
v. Equitable Life Assur. Soc. of the U.S., 389 N.W.2d 876, 889 (Minn. 1986), but the burden
remains on appellant to establish a successful defamation claim, McKee, 825 N.W.2d at
730. On summary judgment, that means she mu st raise a genuine issue of material fact
concerning the falsity of respondent’s statements. Minn. R. Civ. P. 56.05.
Appellant asserts that respondent’s st atement that appellant’s business “clearly
competes with CVS Pharmacy for patients” was false.1 Appellant argues here, as she did
in district court, that HHP did not compete with CVS because HHP sold different products
than those available at CVS. The district court was not co nvinced, and noted that, even

1 Before the district court, appellant plead ed two defamatory statements, but she has
preserved argument as to only one of those statements on appeal. See Melina v. Chaplin,
327 N.W.2d 19, 20 (Minn. 1982) (holding that issues not briefed are waived).

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though the two businesses’ products might be different, they treated the same conditions,
which showed that HHP clearly competed with CVS for customers.
In determining that there was no genuine i ssue of material fact regarding truth, the
district court highlighted a specific drug sold by HHP, sublingual sild enafil. The drug is
used to treat erectile dysfunc tion, but is distinct from Vi agra, which is sold by CVS,
because it is not administered in pill form. Ra ther, it is administered by placing a tablet
under the tongue. The district court determined that, because the two drugs treat the same
condition, HHP clearly competes with CVS for patients.
Appellant argues that pharmacies do not tr eat patients; doctors treat patients, and
pharmacies simply fill prescriptions created by doctors. Appellant seems to argue that
HHP does not compete with CVS because th e doctor decides what prescriptions to
prescribe, not the pharmacist. Under this reasoning, if a doctor prescribes medications that
are fillable at HHP and not CVS, HHP has d one nothing to detract from CVS’s business,
because it was the doctor’s deci sion to prescribe the medication. Appellant also argues
that HHP was not competing with CVS because Minnesota law limits the types of products
HHP and CVS can legally sell. CVS is li censed under Minnesota law as a synthetic
pharmacy, and HHP is licensed as a compounding ph armacy. Synthetic pharmacies sell
pills that are mass marketed and are legally distinct from customiz ed powders sold by
compounding pharmacies.
Notwithstanding these distinctions, both HHP and CVS offer drugs that treat the
same conditions. And although a patient can not receive prescription drugs from either
HHP or CVS without a doctor writing a prescrip tion, a patient might ask their doctor to

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change their prescription such that their prescriptions could be transferred from a
conventional pharmacy like CVS to a compo unding pharmacy like HHP. HHP’s sale of
compounded pharmaceuticals constitutes competition because those pharmaceuticals serve
to treat substantially the sa me conditions in a pharmaceutical patient as the synthetic
pharmaceuticals sold by CVS. Additionally, HHP sells non prescription products like
vitamin D supplements and fish oil that CVS also sells. Accordingly, we reject the
argument that HHP did not compete with CVS because its products are distinct and, absent
a genuine issue of material fact regarding truth, conclude that respondent’s statement was
true as a matter of law.
B. Respondent’s statement is privileged as a matter of law.
A statement is subject to a conditional privilege and thus immune from a defamation
claim if it is “made upon a proper occasion, from a proper motive, [and] based upon
reasonable or probable cause.” Stuempges, 297 N.W.2d at 256- 57 (citation omitted).
“Whether an occasion is a proper one upon which to recognize a privilege is a question of
law.” Wilson v. Weight Watchers of Upper Midwest, Inc. , 474 N.W.2d 380, 383 (Minn.
App. 1991), pet. for rev. denied (Minn. Oct. 16, 1991). To determine whether reasonable
grounds existed for a statement, this cour t examines the facts supporting the alleged
defamatory statement. Wirig v. Kinney Shoe Corp. , 461 N.W.2d 374, 380 (Minn. 1990).
Public policy is also a factor in establishing conditional privilege. Wilson, 474 N.W.2d at
384. The initial determination of whether a statement is pr ivileged is a que stion of law
subject to de novo review. Kuelbs v. Williams , 609 N.W.2d 10, 16 (Minn. App. 2000),
review denied (Minn. June 27, 2000).

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“[O]nce a defendant has demo nstrated the existence of a conditional privilege, the
burden shifts to plaintiff to prove that the privilege has been abused . . . .” Stuempges, 297
N.W.2d at 257. The privilege is abused when statements are made with actual malice.
Bahr v. Boise Cascade Corp. , 766 N.W.2d 910, 920 (Minn. 2009). “Although malice is
generally a question of fact, summary judgment is appropriate if the plaintiff fails to raise
a genuine issue of material fact regarding malice.” Kuelbs, 609 N.W.2d at 16 (citation
omitted).
Appellant asserts that respondent’s statement was not privileged because it was not
based on reasonable cause and th ere is a genuine issue of ma terial fact as to whether
respondent acted with actual malice. We address each argument in turn.
1. Respondent’s statement was based on reasonable cause.
Appellant asserts that respondent lacked reasonable cause for her statement because
of alleged inadequacies in CV S’s investigation into HHP. The record indicates that
respondent started an inves tigation into HHP based on stat ements in appellant’s 2015
performance review describing how appellant was running an independent pharmacy.
Respondent interviewed appellant and visited HHP’s website as pa rt of her investigation.
During the investigation, respondent discovered evidence suggesting that appellant had a
conflict of interest with CVS because she had competed with CVS through HHP.
Appellant claims that the investigation was insufficient to provide reasonable cause for
respondent’s statement because respondent was biased, acte d in a retaliatory fashion,
controlled the entire investigation, and because the investigation was incomplete.

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a. Prior disciplinary investigat ions did not indicate bias.
In 2013, respondent investigated appella nt for bringing her child to the pharmacy
against company policy. Appellant admitted bringing her child to the pharmacy, and
appellant did not take issue with respondent’s investigation. In 2015, CVS investigated
appellant for being unavailable to customer s. The investigation was prompted by a
customer’s complaint to a stor e employee that appellant was unavailable to help them.
CVS’s loss prevention department (LP) then investigated the comp laint. Evidence
gathered by LP showed that appellant was unavailable to customers for long periods of
time, and, supported by evidence gathered by LP, respondent deliv ered a final written
warning on the issue. Respond ent’s history of giving appellant written warnings for her
conduct at work was in accordance with CVS policies.
b . T h e r e i s n o e v i d e n c e t h a t r e s p o n d e n t i n t e n d e d t o p u n i s h
appellant for informing against CVS to the government.

Appellant expresses suspicions that CVS targeted her for disciplinary action due to
her informing against CVS to the government. Appellant claims that respondent personally
punished her in response to the report. But appellant o ffers no evidence that respondent
knew about the lawsuit or that she acted in re taliation to it. The only evidence appellant
offers to show that responden t acted with an improper purpose are her own suspicions.
These constitute a mere “metaphysical doubt” and are not enough to raise a genuine issue
of material fact. DLH, 566 N.W.2d at 71.

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c. Respondent did not control the entire investigation.
Appellant argues that respondent’s inves tigation cannot support the application of
privilege because she controlle d all corners of the inves tigation—supervisor, accuser,
investigator, and decision-make r. Appellant cites no authority for this assertion.
Nonetheless, a brief review of the record shows respondent was not in charge of the entire
investigation as appellant claims. Respondent began the investigation, but she was not the
only participant in the investig ation. At one point, appella nt was interviewed by a group
of CVS employees. Respondent was not the final decision-maker for appellant’s
termination. HR recommended appellant’s discharge based on respondent’s investigation,
and the decision was reviewed by nine members of CVS management.
d. Respondent’s investigation was sufficient.
Appellant claims that respondent’s inve stigation was insufficient, and therefore
lacking reasonable cause, because she could ha ve interviewed appellant’s managers, but
chose not to. Respondent interviewed appe llant and looked at HHP’s website. During
respondent’s conversation with appellant, appellant admitted to selling products that treat
the same conditions as produc ts sold by CVS and dietary su pplements. Respondent’s
investigation was sufficient, because respondent gathered relevant evidence from appellant
herself, and that evidence was incriminating. Respondent had no need to corroborate the
information, as it was offered by appellant herself.
“The party resisting summary judgment mu st do more than rest on mere averments.”
DLH, 566 N.W.2d at 71. Here, appellant re sts on mere averments, as she provides no

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support for her claims of bias beyond he r own personal suspicions. Respondent’s
statements are conditionally privileged and possessed a proper motive.
2. There is no genuine issue of material fact regarding malice.

“Actual malice requires a showing that the defamatory statements are made . . . from
ill will and improper motives, or causelessly and wantonly for the purpose of injuring the
plaintiff.” Bahr, 766 N.W.2d at 920 (citation and q uotations omitted). Malice may be
proved by extrinsic evidence like personal ill feeling. Friedell v. Blakely Printing Co., 163
Minn. 226, 231, 203 N.W. 974, 976 (1925). Malice may also be proved by intrinsic
evidence like exaggerated language and the extent of publication of the statements. Id.
Appellant offers four examples of how she claims that respondent’s disciplinary
actions show how respondent acted with actual malice in relation to appellant’s discharge.
See Bahr, 766 N.W.2d at 922 (relying on evidence of past conduct to show malice). First,
appellant argues that the customer complaints used to justify the investigations did not exist
and attacks the credibility of fellow employees who provided information to LP. Appellant
does not provide evidence to support these assertions, and we are unable to independently
identify competent evidence in the record. Accordingly, appellant’s argument fails.
Second, appellant argues that respondent act ed with actual malice because CVS no
longer possesses records and video footage s upporting past disciplinary investigations.
Appellant claims that the absence of such evidence shows that the investigation leading to
appellant’s discharge also lacked suppo rting evidence and was supported only by
respondent’s malice. Nothing in the record suggests that the prior investigations lacked
evidentiary support, the record simply shows that CVS is una ble to present the evidence

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now. And CVS’s failure to retain loss preven tion reports and security videos related to
previous disciplinary investig ations is not probative of wh ether respondent acted with
actual malice.
Third, appellant claims the past investiga tion into appellant’s use of a space heater
and a blanket in the pharmacy was a pretext for CVS to investigate her for drug diversion.
While there was some evidence that CVS sought to limit personal property in the pharmacy
in order to prevent employee drug diversion generally, there is no evidence that respondent
used that initiative to improperly target appellant.
Fourth, appellant argues that respondent in tentionally omitted the fact that appellant
had previously informed CVS managers abou t HHP. Appellant argues that the omission
was specifically designed to make appellant look more secretive and untrustworthy.
Contrary to appellant’s argument, respondent did document appellant’s disclosures. First,
respondent documented appellant’s request that respondent check with various managers
about their tacit approval of HHP as part of her investigation report to CVS. Second, each
manager appellant reportedly told about HHP has since been disciplined for failing to
disclose the existence of HHP to respondent and others. The facts indicate that respondent
did not fail to consider appellant’s prior disclosures of HHP.
The evidence shows that each of respon dent’s investigations into appellant’s
workplace conduct was triggered by complaints from customers or other employees. That
the instigating event for each investigation came from an outside source, and not
respondent’s own supposed ve ndetta, indicates a proper purpo se and a lack of malice.

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Appellant has failed to allege facts that rise above “a metaphysical doubt” that respondent
acted with actual malice. DLH, 566 N.W.2d at 71.
Appellant also claims that malice is dem onstrated by respondent’s knowledge that
her statements were false. Knowledge of fa lsity is not an elemen t but may be probative
under the common-law standard. Bahr, 766 N.W.2d at 922. Appellant claims that
respondent must have known her statements were false be cause she was an experienced
pharmacist and was intimately aware of the difference between a compounding pharmacy
like HHP and a synthetic pharmacy like CVS. Appellant’s argument assumes that
compounding pharmacies and commercial pha rmacies could never compete with one
another, because they are prohibited by law from selling the same products, an argument
we’ve already rejected. We likewise reject the assertion that respondent’s experience as a
pharmacist indicates that she knew her statement to be false.2
II. Appellant’s tortious-interference claim fails as a matter of law.

A claim for tortious interference requires proof of: (1) the existence of a contract;
(2) the alleged wrongdoer’s knowledge of the contract; (3) intentional procurement of its
breach; (4) without justification; and (5) damages. Kjesbo v. Ricks, 517 N.W.2d 585, 588
(Minn. 1994) (citation and quotations omitted). In Minnesota, a discharged employee may

2 Appellant also argues that respondent knew her statement to be false when she described
how appellant “can compound almost any me dication including ma king a sublingual
Viagra tablet.” Appellant argues that HHP could not synthesize Vi agra, because Viagra
can only be synthesized by a synthetic pharmacy like CVS. The statement appellant quotes
above was not alleged to be defamatory, so whether respondent had knowledge of that
statement’s falsity is not relevant to the actual-malice analysis.

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not sue the supervisor who fired her, because, if acting in good faith, the supervisor simply
acts in furtherance of their employer’s best interests. Nordling v. N. States Power Co., 478
N.W.2d 498, 505 (Minn. 1991); Furlev Sales & Assoc., Inc. v. N. Am. Auto. Warehouse ,
Inc., 325 N.W.2d 20, 26 (Minn. 1982). “The gene ral rule is that a party cannot interfere
with its own contract.” Nordling, 478 N.W.2d at 505. In the employment context, a
supervisor is immune from liability for tortious interference if they acted within the scope
of their employment, because they are essentially party to the contract. Id. An employer
acts outside of the scope of their employment if they act with ba d faith or malice. Id. at
506-07.
Respondent was acting with in the scope of her employment at CVS: she was
investigating appellant’s alle ged violation of company polic y. Appellant argues that
respondent acted with actual malice and cites the same facts to support her argument as she
cited in support of her arguments regarding falsity. To briefly summarize those arguments,
appellant claims: respondent pers isted in investigating her for disciplinary actions in the
face of exculpatory evidence; respondent falsely accused he r of drug diversion without
justification; and respondent targeted appellant as retaliation for appellant’s lawsuit against
CVS. As discussed above, each of respo ndent’s actions fell within her duties as an
employee of CVS. Appellant fails to identify specific evidence to the contrary. Because
respondent was acting within the scope of her employment to CVS, appellant’s tortious-
interference claim fails as a matter of law.
Affirmed.