Opinion
18-P-334
12-23-2019
Gregg A. DONOVAN & others v. Brian R. MAHONEY & others.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
After a jury trial on count one of the plaintiffs' complaint, which pleaded defamation, judgment entered against the defendants, Brian R. Mahoney, John Ciccone, and Brian P. Wallace. Ciccone and Wallace appeal, arguing that (1) the judge erred in denying their motion for judgment notwithstanding the verdict; (2) the damages awards were excessive and punitive; (3) it was error to admit prejudicial character evidence against one of the defendants which, they allege, detrimentally affected all of the defendants; and (4) the judge erred in ruling that the plaintiffs were not limited purpose public figures. We reverse the portions of the judgment awarding damages to plaintiffs G.A. Donovan Management Consulting Corporation and 401 Norcross, LLC, and otherwise affirm.
Count two was a claim under G. L. c. 93A. The judge decided that count in favor of the defendants. The plaintiffs do not appeal from that determination.
A suggestion of death on the record revealed that defendant Brian R. Mahoney died shortly after the judgment entered. After the close of the trial evidence, the judge, sua sponte, directed a verdict on all claims against Today Publications Series, LLC. Neither of those two parties is involved in this appeal.
Background. We summarize the facts from the evidence presented at trial. Essentially, this case revolves around a real estate development in the South Boston neighborhood of Boston, and various articles about the development published in the local newspaper. Gregg A. Donovan is the owner and president of G.A. Donovan Management Consulting Corporation (Donovan Consulting). At the time of trial, Donovan had been a real estate developer in South Boston for more than twenty-four years; he was a longtime resident of South Boston where he then lived with his family.
In July 2012, Donovan bought the approximately 30,000 square foot property at 401 First Street in South Boston (First Street project, or property). At the time of the purchase, a building permit, issued by the city of Boston in 2006, authorized the construction of forty-five residential units, sixty-eight parking spaces, storage, and office space on the property. Donovan later transferred ownership of the property to 401 Norcross, LLC (Norcross), and Donovan Consulting served as the development agent for the First Street project. In late January 2013, Donovan amended the building permit to incorporate changes suggested by the Boston Redevelopment Authority (BRA), and began construction on the project.
John Ciccone and Brian P. Wallace were newspaper reporters and writers for the publication South Boston Today (SBT), a free weekly newspaper delivered on Thursday mornings to every household in South Boston, and accessible on SBT's website; Ciccone (publisher) and Wallace (managing editor) owned and operated SBT along with the defendant Brian R. Mahoney (editor-in-chief). Between December 2012, and January 2013, SBT published three articles authored by Mahoney; each referenced the First Street project.
First, on December 6, 2012, an editorial titled "Cause for Concern," focused on Boston Mayor Thomas Menino's prolonged absence from City Hall due to illness. The editorial identified the First Street Project as a concern, although the article did not explicitly name Donovan or the other plaintiffs; in the editorial, Mahoney described various events in South Boston presumably occurring due to the mayor's absence. One particular "concern" was the "bulldozers and backhoes ... doing construction at Dorchester and First St. [the location of the First Street project]. Sunday work is never permitted. Yet this project, with no permit to build anything, goes on unimpeded. Despite efforts by our city officials to do their jobs, this seems to be a case of aggressive developers acting as if we have a ‘substitute teacher’ at the front of the classroom, and they are seeing what they can get away with."
Mahoney testified at trial that he authored the "editorial."
The day that the article appeared in the SBT, "a lot" of people called Donovan to tell him about the article. Donovan found particularly objectionable certain false statements in the editorial, including, specifically, the allegation that the project was not permitted, and that work was being done on Sundays without the city's approval. In fact, Donovan testified that he had a "weekend work permit" ("which include[s] Saturdays and Sundays") for the First Street project at the time the article was published, and that the city routinely allowed permission for Sunday work.
According to Donovan, the article "created a storm of problems" for him relating to the First Street project. For example, the city called the project back for review, which required Donovan to meet again with the city building and zoning commissioners, and plan reviewers -- and also resulted in a delay of the project. The day SBT published the article, Donovan called Ciccone about the false statements contained in his "partner" Mahoney's December 6 editorial, and Ciccone assured Donovan that he would "take care of it."
One week later, on December 13, 2012, SBT published Mahoney's second article on the front page of the paper. Titled "Questions Abound On First Street Project," the article carried Mahoney's byline, and began by acknowledging that Sunday construction was, in fact, permitted by the city -- "although no one contacted seems to know exactly when this procedure began." The article further reported that the area where the First Street project was located had been rezoned in the ten years since the project was originally permitted, and that any previously approved plans would be invalidated if those plans had been substantially changed.
According to Mahoney's "investigation," "this developer rejected the original or ‘grandfathered-in’ plans and hired a new architect ... to design a new plan" which, Mahoney asserted, "should be subject to a new zoning process." Mahoney reported that "[a]pparently this developer, who received the previously unheard of Sunday work permit, is apparently now being allowed to build without a public meeting, a zoning board hearing, no community input into his new plans and without abiding by the new zoning. This situation has developers, architects and real estate agents, spoken to, wondering why they must abide by the rules this developer seemingly bypasses." Mahoney assured readers that he would keep them "informed as either this controversy continues or the community process is respected and reinstated according to public policy."
Donovan testified that he obtained an amendment to the original permit in order to make changes to the look of the building as suggested by the BRA, but that the project remained essentially the same.
After this article appeared, Donovan again called Ciccone to object to the false statements in Mahoney's article. According to Donovan, this time Ciccone stated that he could do nothing to stop Mahoney from continuing to write articles about Donovan and the First Street project because it was an agreement of their "partnership" that they would not censor each other.
Donovan was upset about Mahoney's continued assertion that the project was not properly permitted. He also was "extremely concerned" about the portion of the article reporting that Donovan was allowed to build without public meetings or community input, and without abiding by the new zoning rules. Donovan contacted his attorney and on December 31, 2012, a "cease and desist" letter was sent to Mahoney instructing him to stop "writing false statements and articles" about Donovan and telling "everyone that [his] project was not permitted."
On January 3, 2013, SBT published Mahoney's third article on the front page of the paper. The article was titled "Residents' Concerns Plague First Street Development Project" and, again, carried Mahoney's byline. That article stated that the "new developer" of the First Street project "refused offers for community meetings, claiming there were no plans to go forward" on construction. Donovan disputed these allegations; he testified at trial that he freely offered to meet with Mahoney's community group in early January regarding the First Street project, well before construction began on the project at the end of January.
The article stated that since the previous December 13 article, "the developer admits construction has begun, going so far as to visit Patrick and Romeo, two Dresser Street residents directly abutting the project site, and stating he was there ‘to inform them what was going to be built, not answer questions or listen to opinions.’ " According to the article, SBT had obtained plans from the BRA showing "significant changes" to the project which required "normal community process"; this was confirmed, the article stated, by documents obtained from the Inspectional Services Department Planning and Zoning Division indicating that the new plans submitted for the First Street project were "entirely different from what was previously approved," and included a note made by the BRA asking whether the project required action by the city's zoning board of appeals (ZBA) -- "to which the answer is, obviously, yes."
Donovan further denied the statement that Mahoney claimed Donovan had made to abutters Patrick Hoole and Romeo Mirzac; he agreed that Hoole and Mirzac did indeed contact him at his office, and that he went to their home to meet with them and another abutter to discuss the project. At that meeting, Hoole and Mirzac "pulled out the two articles they had read" in SBT and "explained that they had met with Brian Mahoney and that [Donovan] did not have permits and that they were going to do everything within their power to stop [his] project from going forward." Mirzac testified at trial that Mahoney's articles were a "springboard" for his decision to file an action with the city's zoning board of appeals (ZBA).
In April 2013, Donovan learned that Hoole and Mirzac had appealed the issuance of the permit for the First Street project; the appeal caused a six-month construction delay. Donovan was required in August 2013 to attend a permit "interpretation" hearing at the ZBA before construction could resume; he hired legal counsel to assist with this process.
Ultimately, the ZBA determined that the permit for the First Street project was valid, that the project plans were essentially the same as the original (despite the BRA changes), and that no new zoning variances were required as the building height and square footage remained the same. During the six-month period when the project was stalled, Donovan continued to pay the project's monthly loan payment of $17,000, tax and insurance costs, and legal fees relating to the ZBA hearing. He testified that, over the years that he had worked developing real estate, he had worked hard to complete his projects within a maximum of two weeks from the projected completion dates. He estimated that he lost five or six buyers due to the delay in construction on the First Street project. He also estimated that the abutters' ZBA appeal, prompted by Mahoney's articles, caused the delay in the First Street project that cost him "easily" $125,000.
According to Donovan, that was not the only damage he suffered as a result of Mahoney's articles; he also suffered injury to his reputation as a developer and resident in the South Boston community, and, in his view, the BRA began holding him to a standard higher than other developers. The "elected officials" that Mahoney had inferred (in his articles) were not doing their jobs, were now "overly" scrutinizing each of Donovan's projects when he was seeking city approval and permits; agency officials with whom he regularly dealt commented to him that "we don't want a reoccurrence of what happened last time, we're just being extra cautious." Donovan testified that, up to the time of trial, unlike any time before the publication of Mahoney's articles, any project Donovan presented to community groups or civic associations was "completely challenged," and the false statements contained in the articles were brought up continuously. The articles "definitely caused a major problem" for Donovan moving forward.
At trial, Joyce Lebedew (the listing agent for the First Street project, and life-long resident of South Boston), and Russell Castagna (Donovan's neighbor and also a life-long South Boston resident) both testified. Lebedew was also an abutter to the property and knew that the First Street project was permitted; she testified that other abutters and any prospective buyers of the property would have known it was a permitted project, as the property was so advertised. She also knew, even though his name was not mentioned in any of the three articles SBT published, that the articles were written about Donovan and shed a negative light on him and his work.
Lebedew also testified about a community group run by Mahoney -- St. Vinny's Lower End Neighborhood Association (St. Vincent's). St. Vincent's was a group of South Boston residents who met for the purpose of discussing projects being built around the neighborhood; Mahoney was most often the "moderator" for the group meetings. In a conversation that Lebedew had with Mahoney during an impromptu meeting, Lebedew told Mahoney that he was unfairly bullying Donovan to which Mahoney replied, "[H]e's treated no different ... than the others. He can pay, or he can pay." Lebedow did testify that there was a "perception" among developers in South Boston that they were required to meet with Mahoney's St. Vincent's group before the developer could move forward with a project in the neighborhood.
Contrary to the defendants' argument, this testimony was not stricken; however, Lebedow's response to the question, "What did that [statement] mean to you?" was stricken.
Lebedew testified that, as the listing agent, she had no difficulty selling units during the preconstruction phase of the First Street project. In her view, she was successful because she could easily "sell the developer" as Donovan had ample experience building in South Boston, and his craftsmanship and reputation were held in high regard; she considered Donovan one of the top three developers in South Boston. However, after the articles were published, when she mentioned Donovan's name to potential buyers (who asked if he was the developer who was the subject of Mahoney's articles), instead of "selling him," she was "defending him a little bit." Lebedew believed that the statements published in the articles and delays in the project caused some potential buyers to "walk away" because they questioned Donovan's reputation, and his ability to deliver the units on time due to the delays. At the time of trial, Lebedew was still experiencing difficulty selling units in the completed First Street project.
Castagna testified that, when he read Mahoney's published articles, he knew that the articles were about Donovan because he knew that Donovan was the developer on the First Street project. Contrary to the information in the December 6 article, Castagna frequently had seen Sunday work on construction projects in and around South Boston neighborhoods. He was aware of the First Street project, and thought the articles implied that something "shady" was going on with the project, and that Donovan was not running the project properly. Castagna assumed that Mahoney had researched the information contained in the articles, and that the statements included were based on fact. After the articles were published, neighborhood people who came into Castagna's neighborhood store were talking about the articles and the First Street project; he also attended subsequent community meetings that were held regarding other projects by Donovan and he testified that the meetings "tend[ed] to degenerate into yelling." In Castagna's opinion, what happened on the First Street project "taint[ed] every project" that Donovan was involved in thereafter.
The jury returned a special verdict form, finding in favor of the plaintiffs, and awarding actual damages in the amount of $162,500, allocated among the three named plaintiffs; after the judge added the accrued statutory interest, the damages award totaled more than $231,000. Shortly after entry of the judgment, the defendants moved for a judgment notwithstanding the verdict; the plaintiffs opposed the motion and it was denied after hearing. Ciccone and Wallace appealed.
Donovan and Donovan Consulting each were awarded $50,000; Norcross was awarded $62,500.
Discussion. 1. Judgment notwithstanding the verdict. The defendants first argue that the judge erred in denying their motion for a judgment notwithstanding the verdict (judgment n.o.v.). They claim that the evidence clearly showed that delay in construction at the First Street project was due only to the abutters' ZBA appeal, and not SBT's publication of Mahoney's three articles. As a result, the defendants contend, Donovan failed to meet his burden of proving an element of defamation, that is, a show of economic harm by statements contained in the articles.
"When considering a motion for judgment n.o.v., the judge's task, taking into account all the evidence in its aspect most favorable to the plaintiff, [is] to determine whether, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, the jury reasonably could return a verdict for the plaintiff" (quotations and citations omitted). Phelan v. May Dep't Stores Co., 443 Mass. 52, 55 (2004). "When reviewing a judgment n.o.v., [we] appl[y] the same standard as the motion judge." Id.
"To establish a claim for defamation, a plaintiff must prove four elements: (1) the defendant made a false statement to a third party, (2) of or concerning the plaintiff, (3) that was capable of damaging the plaintiff's reputation in the community and that caused the plaintiff economic loss or is actionable without proof of economic loss, and (4) the defendant was at fault." Butcher v. University of Mass., 94 Mass. App. Ct. 33, 37-38 (2018), further appellate review granted, 481 Mass. 1105 (2019). The plaintiffs' defamation claim rests on Mahoney's three published articles. Based on the evidence, the jury reasonably could have found that several of the statements contained in the articles were false; people in the South Boston community knew that Donovan was the developer described in the articles; and the articles damaged his reputation in the neighborhood and cost him money due to delays, both from potential buyers "walking away" and from "over scrutiny" by the city. Mahoney testified that he was the author of each of the three articles that SBT published. Although the defendants argue that the delays resulted from the abutters' appeal, and not from the articles, the jury could have credited Mirzac's testimony that the articles were the "springboard" for his decision to file the appeal. As a result, we see no error, and certainly no abuse of discretion, in denying the defendants' motion for a judgment n.o.v.
2. Damages awards. The defendants next argue that the jury's awards of damages to Norcross and Donovan Consulting were excessive because those entities failed to provide proof of damages; in the defendants' view, those entities should have brought an action based on commercial disparagement, rather than defamation. They also argue that the award to Donovan was duplicative and, therefore, also excessive. Finally, the defendants contend that the awarded damages were punitive, which is prohibited in defamation actions. See Stone v. Essex County Newspapers, Inc., 367 Mass. 849, 861 (1975). These arguments fail.
"[A] reviewing court should not disturb a jury's award of damages unless it is clearly excessive in relation to what the plaintiff's evidence has demonstrated damages to be." Ayash v. Dana-Farber Cancer Inst., 443 Mass. 367, 404 (2005). "A plaintiff in a successful defamation case is entitled only to fair compensation for actual damages, including emotional distress and harm to reputation (and any special damages that have been pleaded and proved)." Id. at 404-405.
In light of the evidence at trial, the damages award was not excessive, at least as to Donovan himself. Donovan testified that the construction delays cost him "easily" $125,000. He also testified that heightened scrutiny by city agencies, more than for other developers, had damaged his reputation in the community. Lebedew testified that buyers had "walk[ed] away" from purchasing units in the First Street project due to their lack of confidence that Donovan would be able promptly to deliver the units on the closing date; in her view, this loss was based on the statements in the published articles. Castagna testified as to the volatility at community meetings where Donovan later sought approval for prospective projects in South Boston neighborhoods. Taken together, this evidence was sufficient for the jury to find that Donovan had suffered damages as a result of Mahoney's articles. See Ayash, 443 Mass. at 404 ("a reviewing court should not disturb a jury's award of damages unless it is clearly excessive in relation to what the plaintiff's evidence has demonstrated damages to be").
The awards to Norcross and Donovan Consulting stand on a different footing. Donovan's testimony provided the only evidence of monetary damages -- that he personally incurred damages of at least $125,000 and that he was required to pay $17,000 per month on the loan that he had personally guaranteed. Although he testified that there were other losses, there was no evidence about who paid those expenses. Nor was there evidence that the reputation of either company was damaged.
In view of this result, we need not consider the defendants' argument that the plaintiffs improperly pleaded their claim of defamation as it relates to Donovan Consulting and Norcross.
Finally, the damages award was not punitive. As stated, the award was proportionate to the damages suffered at least by Donovan. In addition, in his charge to the jury, the judge specifically instructed that punitive damages could not be awarded in a defamation case. "We presume that the jury followed the judge's instructions." Kelly v. Foxboro Realty Assocs., LLC, 454 Mass. 306, 314 (2009), quoting Commonwealth v. Pillai, 445 Mass. 175, 190 (2005).
In sum, we are satisfied that the amount of the award is not disproportionate to the damages Donovan suffered, and we therefore decline to disturb the jury's award of damages to him. See Reckis v. Johnson & Johnson, 471 Mass. 272, 302-303 (2015). The remaining awards, to Donovan Consulting and to Norcross, are reversed.
3. Admission of prejudicial evidence. The defendants next argue that evidence was admitted that portrayed Mahoney as "some sort of criminal," which irreversibly and unfairly prejudiced all of the defendants. This argument also fails.
The defendants failed to object at trial to some of the statements they now claim were prohibited character evidence. In addition, Donovan permissibly testified over objection as to his personal experience of Mahoney's fundraising activities with developers seeking to build in South Boston. Donovan also testified that Mahoney had asked him directly when he was going to appear before the St. Vincent's community group to discuss the First Street project. The defendants argue that this was improper character evidence. However, Mahoney himself testified at great length about the donations he received from various developers who appeared before the St. Vincent's group to discuss their prospective projects. As stated, supra, the conversation Lebedew had with Mahoney when Mahoney stated that Donovan had to "pay, or he can pay" was not stricken from the evidence. All of this evidence was relevant and admissible. As a result, we see no error. "[I]t is within the purview of the [fact finder] to weigh the evidence, [and] assess the credibility of witnesses." Adoption of Querida, 94 Mass. App. Ct. 771, 777 (2019).
4. Limited purpose public figure. The defendants finally argue that, because Donovan was so well known in the South Boston community, the judge erred in declining to find the plaintiffs were limited purpose public figures. We disagree.
We note that the issue of whether a fair reporting privilege applies is sometimes raised in similar factual circumstances. See Howell v. Enterprise Publ. Co., 455 Mass. 641 (2010). This issue was not raised at trial or on appeal.
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"In the absence of disputed material facts, the question whether a person is a public official is one of law, which we review de novo." Lane v. Mpg Newspapers, 438 Mass. 476, 479 (2003). "A plaintiff's burden of proof will ... be enhanced if he is deemed a public figure for purposes of the defamation claim." LaChance v. Boston Herald, 78 Mass. App. Ct. 910, 911 (2011). A two-pronged analysis is used to "decid[e] whether a plaintiff is a limited purpose public figure. First, a ‘public controversy’ must exist, and second, ‘the nature and extent of the individual's participation in the particular controversy’ must be determined" (citations omitted). Id.
The plaintiffs here are not limited public figures. First, there was no public controversy, as the First Street project was not a matter of public concern; it was a validly permitted project located on privately-owned property, constructed by a private development company, and had limited impact on the community. Compare Astra USA, Inc. v. Bildman, 455 Mass. 116, 145 (2009) ("the issue of widespread sexual harassment at a publicly traded company employing 1,000 people" is considered a public controversy). Second, the record does not support classifying the plaintiffs themselves as public figures, as each was a "victim [or] an unwitting participant" in Mahoney's efforts to cast Donovan (and the entities) in a bad light in South Boston. Contrast Astra USA, Inc., supra. As a result of Mahoney's published articles, third parties initiated both a challenge to a valid building permit and a ZBA appeal, forcing Donovan's (and the entities') participation. Compare LaChance, 78 Mass. App. Ct. at 912, quoting Gertz v. Robert Welch, Inc., 418 U.S. 323, 351 (1974) (plaintiff deemed limited purpose public figure where he "voluntarily inject[ed] himself ... into a particular public controversy"). In addition, neither Donovan, nor any of the plaintiffs, made any deceptive or deliberately misleading statements about the First Street project or the status of the permit issued by the city which could have caused the situation to become a concern for the public. Id. Based on the evidence presented at trial, we are satisfied that the judge correctly concluded that the plaintiffs were not limited purpose public figures.
Conclusion. The portion of the judgment awarding damages and prejudgment interest to plaintiff Gregg A. Donovan in the amount of $71,319.20, is affirmed. The remaining portions of the judgment are reversed.
So ordered.
Affirmed in part; reversed in part.