Int’l Publ’g Concepts, LLC v. Locatelli, Index No. 654179/2013, 1/15/15 (Bransten, J.)

Defamation; Absolute privilege; Qualified privilege.

By Alexa Lofaro | Staff Writer

Plaintiff and third-party defendant moved to dismiss defendant’s counterclaim and third-party claim for defamation. Plaintiff, a Delaware LLC authorized to do business in New York, publishes books and magazines to be placed in hotels. Defendant is a former advertising sales representative for plaintiff. Third-Party Defendant is president and CEO of plaintiff. Defendant allegedly began competing with plaintiff’s business, using another company name. Plaintiff’s sales where defendant previously focused sharply declined. Plaintiff alleged defendant used similar materials to plaintiff’s to get plaintiff’s former clients to advertise in his publications instead. In December 2013, plaintiff brought an action against defendant for breach of fiduciary duty, fraud, unjust enrichment, tortuous interference, unfair competition and theft of corporate opportunity. Defendant filed an answer with counterclaims against plaintiff for defamation and tortuous interference with business relations. Defendant alleged plaintiff and third-party defendant forwarded emails and letters discussing their claims against defendant to defendant’s clients causing him to lose business and damage his reputation. Under New York law, the elements of a defamation claim are “[1] a false statement, [2] published without privilege or authorization to a third party, [3] constituting fault as judged by, at a minimum, a negligence standard, and [4] it must either cause special harm or constitute defamation per se.” Plaintiff and Third-Party Defendant raised three arguments in favor of dismissal of the defamation claims. First, the statements are protected by absolute privilege and cannot form the basis for a defamation claim. Second, the statements are protected by “qualified privilege.” Finally, “the statements are nonactionable statements of opinion, rather than actionable assertions of fact.” The court held the letters and emails were protected by absolute privilege. Absolute privilege applies to statements regarding pending or contemplated litigation. While no litigation was pending at the time the emails and letters were sent, the litigation was contemplated, and the letters informed the nonparties of likely impending litigation. The court held the letters and emails were protected by qualified privilege. Qualified privilege exists when parties to the communication have interest in the subject matter of the communication. The communication between the third-party defendant and the nonparties discussed the affect injunctive relief would have on defendant’s ability to perform, something in which both parties had an interest. The court found there was nothing to show the emails and letters were sent with malice or ill will; they simply contained legal opinions and accusations of plaintiff and third-party defendant. Finally, the court held a reasonable reader would believe the letters and emails were a statement of opinion. The factors in New York for determining opinion or fact are: (1) whether the specific language has a precise, readily understood meaning; (2) whether the statements can be proven true or false; and (3) if the social context and surrounding circumstances signal what is being read is likely opinion, not fact. The court determined that because the statements were by the attorney for plaintiff and third-party defendant, who are not disinterested observers, their statements would amount to opinions or beliefs. The court dismissed the defamation claim with prejudice. Additionally, plaintiff and third-party defendant requested paragraphs mentioning the parties and their attorneys be stricken from the counterclaims and third-party complaints. Under CPLR 3024(b) a party may move to strike scandalous or prejudicial matter that is unnecessary in a pleading. The court held the paragraphs must be stricken, as plaintiff, third-party defendant, and their attorneys were not parties to the action and including these paragraphs might “instill undue prejudice in the jury.”

Int’l Publ’g Concepts, LLC v. Locatelli, Index No. 654179/2013, 1/15/15 (Bransten, J.).

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