Opinion
DOCKET NO. A-5786-10T1
03-14-2013
JOSEPH SAMOST, Plaintiff-Appellant, v. GREGORY VOORHEES, ESQ., LAW OFFICES OF PAUL LEODORI, P.C., JOHN HARM, GARY LAUK, PEGGY LAUK and LORI DONALD-ROBERTO, Defendants-Respondents.
Thomas J. Hagner argued the cause for appellant (Hagner & Zohlman, LLC, attorneys; Mr. Hagner, on the brief). John L. Slimm argued the cause for respondents Gregory Voorhees, Esq. and Law Offices of Paul Leodori, P.C. (Marshall, Dennehey, Warner, Coleman and Goggin, attorneys; Mr. Slimm, on the brief). Paul A. Leodori argued the cause for respondents John Harm, Gary Lauk, Peggy Lauk and Lori Donald-Roberto (Leodori & Voorhees, P.C., attorneys; Mr. Leodori, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad, Sapp-Peterson and Nugent.
On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-1143-11.
Thomas J. Hagner argued the cause for appellant (Hagner & Zohlman, LLC, attorneys; Mr. Hagner, on the brief).
John L. Slimm argued the cause for respondents Gregory Voorhees, Esq. and Law Offices of Paul Leodori, P.C. (Marshall, Dennehey, Warner, Coleman and Goggin, attorneys; Mr. Slimm, on the brief).
Paul A. Leodori argued the cause for respondents John Harm, Gary Lauk, Peggy Lauk and Lori Donald-Roberto (Leodori & Voorhees, P.C., attorneys; Mr. Leodori, on the brief). PER CURIAM
Plaintiff Joseph Samost appeals from the summary judgment dismissal of his complaint for defamation against an attorney and several of the homeowners the attorney represented in litigation involving Samost. The defamation action related to comments the attorney made to the press after he successfully moved to enforce his clients' rights against Samost. He also appeals from the judgment requiring him to pay counsel fees to the homeowners under the frivolous litigation statute. We affirm.
I.
On January 19, 2011, Samost filed a complaint for defamation in Camden County against defendants Gregory Voorhees, Esquire and his employer, the Law Offices of Paul Leodori, (collectively referred to as Voorhees) for comments made by Voorhees, and against John Harm, Gary Lauk, Peggy Lauk, and Lori Donald-Roberto (collectively referred to as the homeowner defendants) under a theory of respondeat superior. Defendants filed answers. Voorhees successfully moved to transfer venue to Burlington County as all defendants were residents of that county and the alleged defamatory statement was made there.
Defendants moved for summary judgment based upon the absence of a defamatory statement and lack of legal basis to sue the homeowner defendants for a statement uttered by their attorney. Samost filed a cross-motion to compel defendants' depositions.
Following oral argument on July 8, 2011, Judge Karen Suter granted defendants' motions and dismissed the complaint with prejudice. She dismissed Samost's cross-motion as moot. She memorialized her decision in two separate orders of July 11, 2011, accompanied by a written opinion.
On July 28, 2011, the homeowner defendants filed a motion for counsel fees pursuant to Rule 1:4-8 and the Frivolous Litigation Statute, N.J.S.A. 2A:15-59.1. The following day Samost filed a notice of appeal of the July 11, 2011 orders.
By order of September 28, 2011, we temporarily remanded the matter for a hearing on the motion for counsel fees. Following oral argument on October 6, 2011, Judge Suter granted the motion. She signed an order on October 17, 2011, entering judgment in the amount of $14,204.87 in favor of the homeowner defendants, accompanied by a written decision. Samost filed an amended notice of appeal from the counsel fee order.
II.
The underlying action involved a dam in Evesham Township owned by Samost through his company, Pine Acres Associates. After a 2004 storm damaged the dam, the DEP ordered the lake drained because the dam was unstable. In 2006 Samost was ordered by a court to repair the dam. In January 2009, Samost filed an action against lakefront homeowners, four of whom are defendants in this appeal, seeking contribution for the costs of the repairs and refilling the lake.
On March 31, 2010, the court ordered Samost to deposit $250,000 into court and appointed a receiver to monitor his compliance with various court orders. Samost failed to deposit the money, claiming in a certification that he had insufficient funds. Voorhees, who represented the homeowners, moved to enforce their rights, arguing, in part, that Samost was moving his assets out of the reach of his creditors by liquidating or hiding them in violation of the Fraudulent Transfer Act, N.J.S.A. 25:2-20 to -34.
After completing discovery concerning Samost's assets, on December l7, 2010, oral argument was conducted on the motion to enforce litigant's rights. At the conclusion, Judge Michael Hogan found Samost had the wherewithal to deposit the $250,000 but had been manipulating his assets through interlocking entities of which he was the "true" owner to avoid depositing the funds. The judge explained:
In his certification, [Samost] has not demonstrated at all any attempt to comply with the Court order that required him to deposit $250,000 . . . other than to basically say . . . I don't have the money.The judge ordered that Samost's interest in his interrelated entities be "frozen immediately" and he promptly pay the receiver $250,000 or accrue a $1,000 per day sanction. The judge also awarded counsel fees to the defendants, which he later set at approximately $25,500.
In his certification, [Samost] admits that he owns substantial interest in numerous entities, and the best I can describe those interests is that they're interlocking.
. . . .
On the bottom line, [] the substantial income is tax-sheltered . . . through the use of these entities, which is fine. It's perfectly a legitimate process. But the fact is, it was income that was received, and that the losses are basically tax losses.
. . . .
[B]ased upon the exhibits that have been provided . . . , the various real estate that backs up a lot of these entities is worth literally millions of dollars. . . . [I]'s certainly well above $250,000, his interest would be worth.
Mr. Samost gave testimony in a prior case . . . where he quoted that he places some of his assets in family members' names. And the quote is, from his testimony: "Despite the fact the property is put in the names of family members, I remain the true and equitable owner."
[W]hen you tie it into the testimony of his son at trial, that . . . he moved properties around, it shows . . . a pattern. . . . [I]t's his way he does business, and . . . it's a free country. But, on the other hand, . . . while these mechanisms may be good tax shelters, they aren't shelters from your responsibilities under Court orders.
In my view, he has not presented any evidence that supports his contention that he cannot afford and cannot pay the $250,000. Given his income history, his
lack of explanation as to why his income . . . has essentially dropped to nil, . . . and his history of manipulating his assets for, perhaps, legitimate reasons . . . I'm not satisfied he's met that burden.
. . . .
In summary, I think Mr. Samost has failed to demonstrate his diminished means. He's avoided complying . . . with a Court order. . . . [T]he Court had to appoint a receiver because of his refusal to move forward after the judgment was entered.
Immediately afterwards in the courthouse in Mt. Holly, Voorhees spoke to a Courier Post reporter. Voorhees was quoted in the ensuing article as stating:
We're elated. We believe the court has seen through the actions of Joseph Samost . . . and chased down assets of a man who tried to hide them from the court and the homeowners[.]
Samost then filed the subject defamation complaint in Camden County. He subsequently moved for reconsideration before Judge Hogan, which was argued on April 18, 2011. In denying the motion, the judge commented that getting information from Samost was "like pulling teeth," and that "[t]his had been from almost the first day I've been involved in this case, this has been a shell game with Mr. Samost and it's got to stop[.]"
In granting summary judgment to defendants on the defamation claim, Judge Suter found the statements as attributed to Voorhees were "opinion or interpretation or fair comment" based on the December l7, 2010 transcript, and thus "do not then as a legal matter rise to the level of defamation." With regard to the homeowner defendants, Judge Suter "question[ed] greatly whether there's a respondeat superior relationship between attorneys and clients" but did not need to reach that issue.
In her supplemental written opinion, Judge Suter elaborated:
Upon examining the content, verifiability, and context of Mr. Voorhees's statement, the Court concludes that the statement is not capable of a defamatory meaning as a matter of law. The Court finds Mr. Voorhees's statement to be a reflection of his and his clients' opinion about Judge Hogan's decision and their interpretation of what it means. It is not a statement of verifiable fact that can be proven true or false. The Court determines that the fair and natural meaning that will be given to the statement by reasonable persons of ordinary intelligence is that it was Mr. Voorhees's and his clients' opinion of Judge Hogan's decision.
In awarding the non-attorney defendants counsel fees under the frivolous litigation statute, N.J.S.A. 2A:15-59.l, Judge Suter determined that Samost's defamation claims against the homeowner defendants were frivolous and brought in bad faith, and that the litigation was not withdrawn after Samost's receipt of Voorhees' Rule 1:4-8 letter. She based this, among other reasons, on Samost's selection of a forum inconvenient to defendant homeowners and Samost's failure to fully set forth the defamatory statement in his complaint. As to the Camden County forum, Judge Suter explained:
The selection of the forum required the defendants either to litigate in a county that was not familiar with the context of the litigation or required defendants, as they did, to incur counsel fees to request that the matter be transferred. Plaintiff did not explain the basis for [his] selection of forum in [his] opposition papers. The Defendants all live in Burlington County. . . . At oral argument, the court learned that Mr. Samost's business is located in . . . Camden County and that there may have been some thought of including the Courier Post of Cherry Hill in this lawsuit. However, the underlying lawsuit against Mr. Samost regarding the Kennilworth dam is in Burlington County and has been for years. The selection of the forum in Camden County on the heels of Judge Hogan's December 2010 decision where he required Mr. Samost to pay $250,000 in connection with the Kenilworth dam certainly put this case in a forum that was unfamiliar with the context of the underlying litigation. Because context is relevant in a defamation case, the court gives little credence to the assertion that venue was selected because of the location of Mr. Samost's business. Here, venue selection evidences bad faith; it required affirmative action by the defendants to return it to the
county that was most familiar with the underlying litigation.
As to the misleading nature of Samost's complaint, Judge Suter stated:
Plaintiff's complaint omitted the words "We believe" preceding [] Voorhees' statement to the Courier Post. However, the "We believe" portion of [] Voorhees' quote tended to support the argument [that] this was an opinion and not a statement of fact. This omission was raised to Plaintiff in [Voorhees' Rule 1:4-8] letter and no amendment was made by Plaintiff. Whether Plaintiff believed that the "We believe" clause was connected to the rest of the quote or not, it was misleading not to include the full quote when filing his Complaint or to correct it once given notice.
The judge further noted the lengthy administrative and legal proceedings during which the homeowner defendants opposed Samost with respect to Kenilworth Dam decommissioning, maintenance, and repair and defense counsel's reference at oral argument to Harm's statement, disputed by Samost, that Samost intended to "bury" them in legal fees. She also emphasized Samost's counsel's comments at the two oral arguments before her that the homeowner defendants were sued because at the hearing before Judge Hogan they were "vocal, in the back of the courtroom" and were standing with Voorhees when he made the comment to the reporter. Judge Suter thus concluded that the selection of the homeowner defendants "was not based on what was said, but rather their proximity to [] Voorhees or their vocal opposition."
Judge Suter concluded:
The question is whether the defamation action was filed because of a belief that the statement made was defamatory or whether it just was an excuse to put these defendants to the expense of this litigation. There is only circumstantial evidence of bad faith, but in considering these comments, the edited nature of the defamation allegation, the venue selection, and the context of the litigation involving the Kenilworth Dam, the Court finds adequate evidence of bad faith . . . especially after [Voorhees' Rule 1:4-8] warning letter. Instead of a meritorious claim, this litigation was filed in bad faith.She found the homeowner defendants were entitled to $14,204.87 in counsel fees and costs. This appeal ensued.
On appeal, Samost challenges as erroneous the court's conclusion that Voorhees's statement was not facially susceptible of a defamatory meaning as a matter of law and the award of counsel fees to the homeowner defendants under the Frivolous Litigation Statute. Samost does not challenge the amount of the award. Based on our review of the record and applicable law, with all favorable inferences to Samost, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), we are not persuaded by either argument. We affirm substantially for the reasons stated by Judge Suter in her comprehensive opinions. We add the following comments.
Generally, "[t]he law of defamation exists to achieve the proper balance between protecting reputation and protecting free speech." Ward v. Zelikovsky, 136 N.J. 516, 528 (1994). "Whether the statement is susceptible of a defamatory meaning is a question of law for the court." DeAngelis v. Hill, 180 N.J. 1, 14 (2004) (quoting Ward, supra, 136 N.J. at 529). "[S]ummary judgment is particularly appropriate for disposing of non-meritorious defamation suits" because of the First Amendment values at risk. Rocci v. Ecole Secondaire, 165 N.J. 149, 158 (2000).
The first element of a defamation claim is "the assertion of a false and defamatory statement concerning another[.]" DeAngelis, supra, 180 N.J. at 12-13. "Generally, words that subject a person to ridicule or contempt, or that clearly sound to the disreputation of an individual, are defamatory on their face." Id. at 13-14 (quotation marks omitted). As noted by Judge Suter, in determining whether comments are defamatory, the court must consider "(1) the content, (2) the verifiability, and (3) the context of the challenged statement." Id. at 14.
In analyzing the content, courts should "consider the fair and natural meaning that will be given [to the statement] by reasonable persons of ordinary intelligence." Ibid. (alteration in original) (quotation marks omitted). Verifiability requires the determination of "whether the statement is one of fact or opinion." Ibid. While a statement of opinion generally enjoys absolute immunity, a factual statement is defamatory "[o]nly if the statement suggested specific factual assertions that could be proven true or false[.]" Ibid. (quoting Ward, supra, 136 N.J. at 531). A plaintiff has a cause of action for harm from a defamatory opinion statement "when the statement implies underlying objective facts that are false." Ward, supra, 136 N.J. at 531 (citing Milkovich v. Lorain Journal Co., 497 U.S. 1, 18-20, 110 S. Ct. 2695, 2705-2706, 111 L. Ed. 2d 1, 17-18 (1990)).
Where the statement contains "[l]oose, figurative or hyperbolic language," it is more likely to be non-actionable. DeAngelis, supra, 180 N.J. at 15 (quoting Ward, supra, 136 N.J. at 532) (alteration in original). With regard to context, courts must consider, in addition to the language used, "[t]he listener's reasonable interpretation . . . [within] the context in which the statement appears[.]" DeAngelis, supra, 180 N.J. at 15 (quoting Ward, supra, 136 N.J. at 532) (alteration in original).
Samost argues that Judge Suter erred in failing to give Voorhees' statement its fair and ordinary meaning and in finding that the statement was an opinion as a matter of law. He also claims that Voorhees implied underlying facts that were false. Samost urges that a person of ordinary intelligence would have perceived Voorhees' statement that Samost's assets had to be "chased down" and that Samost had "tried to hide" his assets from the court and the homeowner defendants to be an assertion of fact that Samost had engaged in deception, and not an opinion.
We disagree. The statement was prefaced by the qualifier, "[w]e believe[,]" which a reasonable person would have recognized as Voorhees' opinion. We also find unpersuasive Samost's argument that the ellipses in the statement created an ambiguity as to what the "[w]e believe" portion of the sentence was referring. The language and structure of the sentence makes it clear that this was all one sentence. Voorhees certified that he could not recall any statement that was replaced by the ellipsis. However, even if the article omitted something additionally stated by Voorhees, it is facially apparent that the "[w]e believe" referred to the "chased down" and "tried to hide" language as well.
Moreover, the truth of a statement is a complete defense in a defamation action. McLaughlin v. Rosanio, Bailets & Talamo, 331 N.J. Super. 303, 312 (App. Div.), certif. denied, 166 N.J. 606 (2000). In determining whether the statement contains false and defamatory statements of fact, or whether it simply expressed protected statements of opinion, the focus is on whether the facts were disclosed or whether the defendant implied the existence of undisclosed defamatory facts. Kotlikoff v. The Community News, 89 N.J. 62, 70-71 (1982). "Where an opinion is accompanied by its underlying nondefamatory factual basis, a defamation action premised upon that opinion will fail, no matter how unjustified, unreasonable or derogatory the opinion might be." Id. at 72-73 (internal citation omitted).
Here, Voorhees' statement was an opinion, as well as a fair characterization of Judge Hogan's ruling and fair comment on his decision. That Voorhees may have embellished those findings or used hyperbole by saying the court had to "chase down" Samost's assets does not mean that the statement was defamatory. See DeAngelis, supra, 180 N.J. at 15. The judge did find that Samost had failed to demonstrate any attempt to comply with the order to deposit the $250,000, and that he had a pattern of manipulating his assets and moving properties around to evade the court order. The judge additionally awarded counsel fees against Samost in connection with the enforcement proceeding.
We turn now to Samost's challenge to the frivolous litigation counsel fee award. Samost contends he possessed a good faith belief in the merits of his claim, namely, that the homeowner defendants were complicit in Voorhees's statement either by authorizing or by ratifying the statement. Thus, he maintains that he did not bring the action solely for the purpose of harassment or malice. Samost additionally argues that the evidence as to bad faith was insufficient because it was merely circumstantial.
A trial court's determination on the availability and amount of fees and costs for frivolous litigation is reviewed for abuse of discretion. Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005). Reversal is warranted when the "discretionary act was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment." Ibid.
N.J.S.A. 2A:15-59.1 permits a court to award reasonable counsel fees and litigation costs to a prevailing party in a civil action if the court determines that the pleading is frivolous, i.e., "was commenced, used or continued in bad faith, solely for the purpose of harassment, delay or malicious injury" or "[t]he nonprevailing party knew, or should have known, that the [pleading] was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law." Ibid.
A claim is considered frivolous "when no rational argument can be advanced in its support, when it is not supported by any credible evidence, when a reasonable person could not have expected its success, or when it is completely untenable." Belfer v. Merling, 322 N.J. Super. 124, 144 (App. Div.), certif. denied, 162 N.J. 196 (1999). "[A]n honest attempt to [pursue] a perceived, [though] ill-founded, claim" is not considered to be frivolous. McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 563 (1993). The burden of proving bad faith is on the party who seeks the fees and costs. Id. at 559.
We disagree that Judge Suter abused her discretion in considering Samost's selection of a forum inconvenient to the homeowner defendants. This action does not involve a nonresident defendant, R. 4:3-2(a)(3), the act that gave rise to the defamation took place in Burlington County, and none of the parties resided in Camden County. Moreover, the litigation involving the parties had been ongoing in Burlington County for several years. It is of no moment that the Courier Post was located in Camden County and the dam straddles both counties.
In addition, the record patently demonstrates that Samost's defamation claim against the homeowner defendants was utterly without basis in law or fact. Contrary to Samost's assertion, Judge Suter did, in fact, reject Samost's respondeat superior claim on the merits, noting in her written opinion of October 17, 2011 that "[t]he attorney client relationship does not give rise to a claim under respondeat superior[,]" citing Baldasarre v. Butler, 132 N.J. 278 (1999).
"Under respondeat superior, an employer can be found liable for the negligence of an employee causing injuries to third parties, if, at the time of the occurrence, the employee was acting within the scope of his or her employment." Carter v. Reynolds, 175 N.J. 402, 408-09 (2003). Respondeat superior may apply in defamation actions where an employee is acting within the scope of his or her employment if the employees are found to have defamed the plaintiff. Printing Mart-Morristown v. Sharp Elec. Corp., 116 N.J. 739, 771 (1989). However, it is clear that the homeowner defendants were merely clients of Voorhees.
Furthermore, Samost presented no evidence that the homeowner defendants authorized or ratified the statement, or that had they done so, he could have made out a prima facie case of defamation as a matter of law. See Baldassare, supra, 132 N.J. at 292 ("An innocent client should not be held vicariously liable for the wrongful conduct of his or her attorney . . . if the client does not direct, advise, consent to or participate in the attorney's improper conduct."). Samost's attorney conceded at oral argument before Judge Suter and again before us that these homeowners were named solely because they were present at the December 2010 argument and "flanked" Voorhees when he made the statement, and Harm, for example, had previously made statements to reporters, which statements Samost did not allege were defamatory.
Thus Judge Suter was well within her discretion in concluding that the homeowners were sued to get back at them for their participation and success in the Kenilworth dam litigation. It is clear as a matter of law that Samost's respondeat superior claim was groundless, and deterrence of such claims is the purpose of the frivolous litigation statute. Matter of K.L.F., 275 N.J. Super. 507, 516 (Ch. Div. 1993).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION