Opinion
Index No. 595644/2014
07-06-2016
REBECCA MATCHETT and CHRISTOPHER MATCHETT, Plaintiffs, v. JESSICA STARK and NATHANIEL WELCH, Defendants.
DECISION AND ORDER Mot. Seq. No. 001 HON. ANIL C. SINGH, J.:
In this action for, inter alia, libel and injurious falsehood, Rebecca Matchett and Christopher Matchett (together, the "plaintiffs") move for a judgment of no less than $5,000,000 against Jessica Stark ("Stark") and Nathan Welch ("Welch") individually and together with Stark ("defendants"), jointly and severally. Defendants move for an order dismissing plaintiffs' amended complaint pursuant to CPLR § 3211(a)(7) based upon failure to state a claim. (Mot. Seq. 001). Plaintiffs oppose the motion.
FACTS
This case arises from negotiations on Stark's alleged involvement in Rebecca & Drew Manufacturing, LLC ("R&D"), co-founded by Rebecca Matchett. The parties' transactions resulted in a lawsuit in this Court, wherein Stark sued the Matchetts for breach of contract. See Stark v. Matchett, et al. (Index No. 651815/2014) ("Related Action"). In an alleged effort to punish the Matchetts for the failed negotiation, in or about October 2014, Christopher Matchett ("Christopher") allegedly called Stark a "loser," at Avenues: The World School ("Avenues"), the school where both defendants' and plaintiffs' (together, the "parties") children attend. Later that day, defendants sent a series of emails to administrators of Avenues, which stated that Stark "felt very 'shaken' up by Chris calling [her] a loser in such an aggressive and threatening manner in front of [her] son," and called Christopher "an adult bully," "scammer and predator," who "should not [be] allow[ed] [] to scam other parents and [use] the school as a platform to dupe people." Am. Compl. ¶30-35, 39. One of the emails claims that "a total of 3-parents [] have issues w [sic] Matchetts. There is a clear pattern, and ... 'Chris' temper is concerning.'" Id. at 45. The administration of Avenues subsequently called plaintiffs to the school and told them to avoid all interactions with defendants. Id. at 49.
In November, Stark anonymously submitted a written regulatory tip to the Financial Industry Regulatory Authority ("FINRA"), accusing Christopher of disclosure violations. The Regulatory Tip Form alleged that "Christopher [] has never reported any of his lawsuits in the past" and called him "a predator as it related to any financial transactions he is involved in." Am. Compl. ¶57.
On December 29, 2014, defendants sent an email to the Chelsea Piers Sports & Entertainment Complex ("Chelsea Piers"), where Christopher has had a longstanding relationship, demanding Christopher be removed as a parent-volunteer in the weekly hockey class, where both defendants' and plaintiffs' children attend. The email claimed to "compile [] 'hard evidence,' including [Christopher]'s police record that I have on file," and called his behavior "'bullying' at its best, but this time with adults; not kids." Am. Compl. ¶84. Despite these allegations, administrators of Chelsea Piers rejected Stark's and Welch's demand to ban Christopher from their activities. They even emailed Stark saying that they "still feel reviewing Mr. Matchett's personal life issues was a waste of [their] time." Id. at ¶86.
Plaintiffs commenced this action seeking money damages for libel, injurious falsehood, and an order for a preliminary and permanent injunction enjoining defendants from making false and/or defamatory statements against plaintiffs. Defendants cross-move for an order dismissing plaintiffs' Amended Complaint pursuant to CPLR § 3211(a)(7).
DISCUSSION
Standard for a motion to dismiss
The standard for a motion to dismiss is well settled. On a motion to dismiss a complaint for failure to state a cause of action pursuant to CPLR 3211(a)(7), all factual allegations must be accepted as true, the complaint must be construed in the light most favorable to plaintiffs, and plaintiffs must be given the benefit of all reasonable inferences. Allianz Underwriters Ins. Co. v. Landmark Ins. Co., 13 A.D.3d 172, 174 (1st Dept 2004). The court determines only whether the facts as alleged fit within any cognizable legal theory. Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). The court must deny a motion to dismiss, "if, from the pleading's four corners, factual allegations are discerned which, taken together, manifest any cause of action cognizable at law." 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152 (2002).
"[N]evertheless, allegations consisting of bare legal conclusions, as well as factual claims either inherently incredible or contradicted by documentary evidence, are not entitled to such consideration." Quatrochi v. Citibank, N.A., 210 A.D.2d 53, 53 (1st Dept 1994) (internal citation omitted).
First Cause of Action as to Plaintiffs' Claim for Libel Based on Defendants'
Statement to Avenues
Defendants' motion to dismiss plaintiffs' first cause of action for libel based on defendants' statements to Avenues is denied.
An allegedly false written statement published to a third party is libel per se if it tends to "expose the plaintiff to public contempt, ridicule, aversion, or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him or their friendly intercourse in society." Rmaldi v. Holt, Rmehart & Winston, Inc., 42 N.Y.2d 369, 379 (1977), cert. denied 434 U.S. 969 (1977); see Roth v. United Fed'n. of Teachers, 5 Misc. 3d 888, 893 (Kings Cnty. Sup. Ct. 2004); see also Davis v. Boeheim, 24 N.Y.3d 262, 268 (2014); Idema v. Wager, 120 F.Supp.2d 361, 367 (S.D.N.Y. 2000), aff'd 29 F. App'x 676 (2d Cir 2002); Gionlekaj v. Sot, 308 A.D.2d 471, 473-74 (2d Dept 2003). "When statements fall within one of these categories, the law presumes that damages will result, and [special damages] need not be alleged or proven." Liberman v. Gelstein, 80 N.Y.2d 429, 435 (1992); see also Rinaldi, 42 N.Y.2d at 379 (holding same); accord Dillon v. City of New York, 261 A.D.2d 34, 38 (1st Dept 1999); Kamchi v. Weissman, 125 A.D.3d 142, 156 (2d Dept 2014). Libel per se is a statement "capable of being found to be defamatory...without regard to [] extrinsic evidence." See Pontarelli v. Shapero, 231 A.D.2d 407, 411 (1996).
Under New York law, libel applies to written statements whereas slander is defamatory statements communicated orally, and is more narrowly construed than libel. Moore v. Francis, 121 N.Y. 199, 204 (1890), see Penn Warranty Corp. v. DiGiovanni, 10 Misc. 3d 998, 1002 (NY Sup. Ct. 2005); see also Gurtler v. Union Parts Mfg. Co., 1 N.Y.2d 5, 8 (1956); Cavallaro v. Pozzi, 28 A.D.3d 1975, 1078 (4th Dept 2006) (dismissing a slander claim based on plaintiff's meritless reliance on a case concerning a libel claim); accord G.L. v. Markowitz, 101 A.D.3d 821, 827 (2d Dept 2012). "What gives the string to the writing is its permanence." Ostrowe v. Lee, 256 N.Y. 36, 39 (1931).
It is well settled that statements entailing "pure opinion," no matter how offensive, cannot be subject to a libel claim. See generally, Davis, 24 N.Y.3d at 269; see, e.g., Ram v. Moritt, 205 A.D.2d 516 (2d Dept 1994), Segall v. Sanders, 129 A.D.3d 819, 820 (2d Dept 2015); Penn Warranty Corp. v. Giovanni, 10 Misc. 3d 998, 1003 (NY Sup. Ct., Oct, 24, 2005); Roth, 5 Misc. 3d at 897. While a pure opinion is not actionable, an opinion that "implies that it is based upon facts which justify the opinion but are unknown those reading or hearing it ... is a mixed opinion and is actionable." Steinhilber v. Alphonse, 68 N.Y.2d 283, 289-90 (1986) (internal citation omitted). An actionable mixed opinion, unlike a protected pure opinion where "the facts supporting the opinion are set forth," deprives the reader of "the opportunity to assess the basis upon which the opinion was reached in order to draw his own conclusions concerning its validity." Silsdorf v. Levine, 59 N.Y.2d 8, 13-14 (1983); Rinaldi, 42 N.Y.2d at 381.
The question of "[w]hether a particular statement constitutes an opinion or an objective fact" is matter of law, to be resolved by the court. Mann v. Abel, 10 N.Y.3d 271, 276 (2008), cert. denied 555 U.S. 1170 (2009). In making such determination, the court should consider "(1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether [] the context of the communication in which the statement appears... [is] such as to signal ... readers ... that what is being read [] is likely to be opinion, not fact." Brian v. Richardson, 87 N.Y.2d 46, 51 (1995) (internal quotations and citations omitted). A statement is an assertion of fact if it can be proven true or false, and if a reasonable reader could have concluded that the statement was conveying facts about the plaintiff. Gross v. New York Times Co., 82 N.Y.2d 146, 152 (1993); Brian v. Richardson, 87 N.Y.2d 46, 51 (1995); Immuno AG v. Moor-Jankowski, 77 N.Y.2d 235, 254 (1991).
To survive defendants' motion to dismiss and warrant submission of the issue to trier of fact, the statements complained of must be "reasonably susceptible of a defamatory connotation," in their ordinary meaning and in "the over-all context in which the assertions were made." James v. Gannett Co., Inc., 40 N.Y.2d 415, 418 (1976); Davis, 24 N.Y.3d at 270; Aronson, 65 N.Y.2d at 594 (1985). The motion to dismiss a libel claim must be denied unless the court determines that the contested statements are incapable of a defamatory meaning as a matter of law. See Frank v. National Broadcasting Co., Inc., 119 A.D.2d 252, 256 (2d Dept 1986); see also Armstrong v. Simon & Schuster, 85 N.Y.2d 373 (1995) (reversing a motion to dismiss libel claim where defendant suggested that plaintiff suborned perjury since the statement was capable of defamatory meaning); accord Tracy v. Newsday, Inc., 5 N.Y.2d 134, 136 (1959). "[I]f any common-sense construction of what was written ... supports a defamatory meaning, it will be for the jury, not the court on motion, to decide whether the writing was or was not defamatory." Nichols v. Item Publis., 309 N.Y. 596, 601 (1956).
The statements calling Christopher "a scammer and predator" and expressly alleging that he has used, and continues to use, his children's school "as a platform to scam people in business" can hold him up to contempt and aversion in the minds of right-thinking persons and deprive him of his friendly intercourse with the school administration. See Am. Compl. ¶32; see, e.g., Rinaldi, 42 N.Y.2d at 379 ("to falsely state a Judge is incompetent and corrupt ... is to hold him up to disgrace and contempt"). Plaintiffs have made a legally sufficient pleading that "[t]he statements ... are false," and defendants published the email to Avenues, and they "knew the statements were wrong at the time," and "as a result of [these] statements," the reputation of the Matchetts who "had never been the subject of a single complaint" was shattered. See Am. Compl. ¶17, 18, 34, 36, 49; Dillon, 261 A.D.2d at 38. Since some common-sense reading of the statements in their ordinary meaning and in context could support the defamation claim, "we recognize ... plaintiff's right to seek redress, ... where the pleading meets the minimal standard necessary to resist dismissal of the complaint." Davis, 24 N.Y.3d at 268 (internal citations omitted); see also Nichols, 309 N.Y. at 601.
The cases defendants cited where New York courts have held alleged defamatory statements are "personal opinion and rhetorical hyperbole rather than objective fact" are distinguishable. See MTD Point II.B. Defendants' statements calling Chris Matchett "scammer and predator" and suggesting that he behaves "in an aggressive and threatening manner" could be deemed to "constitute personal opinion and rhetorical hyperbole, rather than objective fact" that can be proven true or false. See Stroup v. Nazzaro, 91 A.D.3d 1367, 1368 (4th Dept 2012); Ram, 205 A.D.2d 516 (2d Dept 1994); see Am. Compl. ¶26. However, "the court should look to the over-all context in which the assertions were made and determine on that basis whether the reasonable reader would have believed that the challenged statements were conveying facts about the ... plaintiff." Davis, 24 N.Y.3d at 270. Considering the fact that Stark and Christopher have engaged in a business relationship, the assertion that "the school should not allow [Chris] to scam other parents" may reasonably be understood as if Stark "knows certain facts, which would justify the speaker's defamatory opinion but are unknown to the audience," and thereby it is an actionable "mixed opinion." Steinhilber, 68 N.Y.2d at 289-90 (1986); see Am. Compl. ¶32 (emphasis added).
The allegedly false statements that "Chris is using the school's parent body as a platform to scam people in business," "[Chris]'s business dealings outside of school have bled into the school community," and "3-parents [sic] ... have issues w Matchetts [sic] ... 3-families [sic] need to steer clear of 1-family [sic]" are factual assertions since they are "capable of being objectively characterized as true, or false." Steinhilber, 68 N.Y.2d at 283; see Am. Compl. ¶¶32, 97, 45. The other challenged statements, "Stark 'felt very "shaken" up by Chris calling [her] a "loser," "[Chris] is a bully," "we are also concerned about [Chris]'s temper," cannot be subject to cause of action, as they would be perceived by a reasonable person to be, not an assertion of fact, but merely personal opinion. See Am. Compl. ¶¶26, 32, 39, 45. Unlike the other statements discussed above, these are not "specific enough that a reasonable reader could assume that defendant knew exactly what [she] was talking about and has proof of the specific allegations he made." Torati v. Hodak, 2015 WL 5578264 (NY Sup. Ct. Sept 21, 2015).
The Court denies defendants' motion to dismiss since "factual allegations ... manifest a[] cause of action cognizable at law." 511 West 232nd Owners Corp., 98 N.Y.2d at 152.
Second Cause of Action as to Plaintiffs' Claim for Libel Based on Stark's
Statements to FINRA
Defendants' motion to dismiss plaintiffs' second cause of action for libel based on defendants' statements to FINRA is granted.
Absolute privilege hinges upon the personal position of the speaker and is limited to the speaker's participation in judicial proceedings. Park Knoll Assocs. v. Schmidt, 59 N.Y.3d 713, 209 (1983). Under New York law, statements uttered in the course of a judicial proceeding that "possibly or plausibly be relevant or pertinent" to the litigation are absolutely privileged and cannot serve as a basis for a libel claim. Allan & Allan Art Ltd. v. Rosenblum, 201 A.D.2d 136, 143 (2d Dept 1994); see Toker v. Pollak, 44 N.Y.2d 211 (1978); see also Wiener v. Weintraub, 22 N.Y.2d 330 (1968). This immunity also applies to quasi-judicial proceedings held by administrative agencies if such proceedings have attributes similar to those of courts. Allan & Allan Art, 201 A.D.2d at 139; see Garson v. Hendlin, 141 A.D.2d 55, 59 (2d Dept 1988) (based on special public policy concern to afford litigants and witnesses the ability to participate in quasi-judicial administrative the proceedings); see also Colantonio v. Mercy Medical Ctr., 135 A.D.3d 686, 690 (2d Dept 2016) (quasi-judicial if hearing-like procedures, decision can be appealed, and plaintiff may challenge the claims); see, e.g., Lipton v. Friedman, 2 Misc.2d 165 (NY Sup. Ct. 1956) (Workers' Compensation Board is quasi-judicial since its hearing is adversarial and its decision is subject to appeal), but see Toker, 44 N.Y.2d at 222 (Department of Investigation proceeding is not quasi-judicial since it lacked any hearing at which plaintiff may challenge defendant's allegations and appeal).
Absolute privilege confers immunity from liability without regard to motivation, irrespective of the speaker's motive, even if uttered with malice. See Toker, 44 N.Y.2d at 219; Wiener, 22 N.Y.2d at 331. As a matter of public policy, courts confine absolute privilege to a very few situations, so that those discharging a public function of administration of justice may speak freely in doing so. Park Knoll, 59 N.Y.3d at 209-10. Courts are reluctant to extend the cloak of absolute privilege to cases that would not further these policies, which originally brought the doctrine into being. Stukulus v. State, 42 N.Y.2d 272, 277 (1977); see, e.g., Di Tullio v. Deacy, 16 Misc.2d 565 (Bronx Cnty. Sup. Ct. 1958) (denying absolute privilege to "unsolicited communications made by persons not directly involved in the litigation ... not acceptable as evidence."), Garson v. Hendlin, 141 A.D.2d 55 (2d Dept 1988) (denying absolute privilege to a nonparty's unofficial submission of comments). Otherwise, "[t]o clothe with absolute immunity communications made to a body acting in other than a quasi-judicial capacity ... which ... may often go unheard of, let alone challenged, by their subject would provide an unchecked vehicle for silent but effective character assassination." Toker, 44 N.Y.2d at 222.
Normally, alleged defamatory statements made before the commencement of a proceedings are not subject to absolute privilege. See Kenny v. Cleary, 47 A.D.2d 531, 532 (2d Dept 1975); Uni-Service Risk Mgmt, Inc. v. NYS Ass'n of School Business Officials, 62 A.D.2d 1093, 1094 (3d Dept 1978) (holding same). However, the Court of Appeals extended the absolute privilege to preliminary stages of quasi-judicial processes, but only where compelling public interests are at stake, such as maintaining the high standard of lawyers. See Weiner, 22 N.Y.2d at 332. Finding "a comparable public purpose by the NASD's regulatory regime for the securities industry," the Court applied absolute privilege. Rosenberg v. MetLife, Inc., 8 N.Y.3d 359, 366-68 (2007); cf. id. at 371 (Pigott, J., dissenting) ("a qualified, rather than absolute, privilege would provide ... the same protections"); see also Able Energy, Inc. v. Marcum & Kliegman LLP, 69 A.D.3d 443, 444 (1st Dept 2010) (extending the privilege to submission of evidence to the SEC, irrelevant whether or not the SEC ultimately chooses to commence proceedings); cf. Moreland v. Perkins, Smart & Boyd, 44 Kan.App.2d 628, 637 (2010) (holding that employers' FINRA filings indicating the reasons for employee's termination were entitled to qualified, rather than absolute, privilege).
In this case, plaintiffs allege that Stark communicated to the FINRA in a Regulatory Tip Form that Christopher has never reported any of his lawsuits, and that Stark attached multiple filings from lawsuits in which Christopher was allegedly involved. See Am. Compl. ¶57, 106, Exhibit C. Plaintiffs argue that these statements do not enjoy absolute privilege because, unlike the cases defendants cited, "Stark's defamatory remarks were not solicited." See PMOL II.A; see also MTD, Point II.A. Plaintiffs did not, and cannot, cite to a single case that support this proposition because, on the contrary, "statements are protected by absolute privilege, notwithstanding the plaintiff's claim that ... testimony was voluntary." Allan & Allan, 201 A.D.2d at 143; accord Wiener, 22 N.Y.2d at 332; see DRM Point II.A. Accordingly, the Court finds that applying absolute privilege to formal submission of evidence would give the quasi-judicial agency "the opportunity to assess the basis upon which the opinion was reached in order to draw [its] own conclusions concerning its validity," and would also further the policies, which originally created the doctrine, such as "to afford witnesses the ability to participate without fear or favor in the furtherance of a vigorous and independent administration of justice." Garson, 141 A.D.2d at 59 (internal citation omitted); see Silsdorf, 59 N.Y.2d at 13-14; see also Fahnestock & Co. v. Waltman, 935 F.2d 512, 516 (2d Cir 1991). Defendants' allegations that Christopher failed to report lawsuits concerning his financial transactions are pertinent to the FINRA's regulatory functions for the securities industry. Thus, these statements are absolutely privileged and cannot form the basis of a libel claim. Therefore, the Court grants defendants' motion to dismiss on grounds of failure to state a cause of action.
Third Cause of Action as to Plaintiffs' Claim for Libel Based on Defendants'
Statements to Chelsea Piers
Defendants' motion to dismiss plaintiffs' third cause of action for libel based on defendants' statements to Chelsea Piers is denied.
As discussed above, a false writing is libelous per se if it tends to "expose the plaintiff to public contempt, ridicule, aversion, or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society." Rinaldi, 42 N.Y.2d at 379. While a pure opinion is not actionable, an opinion that "implies that it is based upon facts which justify the opinion but are unknown those reading or hearing it ... is a mixed opinion and is actionable." Steinhilber, 68 N.Y.2d at 289-90 (internal citation omitted); see also Davis, 24 N.Y.3d at 269. An actionable mixed opinion, unlike a protected pure opinion where "the facts supporting the opinion are set forth," deprives the reader of "the opportunity to assess the basis upon which the opinion was reached in order to draw his own conclusions concerning its validity." Silsdorf, 59 N.Y.2d at 13-14; Rinaldi, 42 N.Y.2d at 381.
In resolving "[w]hether a particular statement constitutes an opinion or an objective fact" as a matter of law, the court should consider "(1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether [] the context of the communication in which the statement appears... [is] such as to signal ... readers ... that what is being read [] is likely to be opinion, not fact." Brian, 87 N.Y.2d at 51 (1995) (internal quotations and citations omitted). An assertion of fact is a statement that can be proven true or false. See id.; Gross, 82 N.Y.2d at 152.
A libel claim will not survive defendants' motion to dismiss unless it is "reasonably susceptible of a defamatory connotation," in its ordinary meaning and in "the over-all context in which the assertions were made." James, 40 N.Y.2d at 418 (1976); Davis, 24 N.Y.3d at 270; Aronson, 65 N.Y.2d at 594 (1985).
Defendants' statements that "Chris' temper is a concern and needs to be addressed," and "[t]his is 'bullying' at its best, but this time with adults; not kids" are personal opinion, since they cannot be objectively characterized as true or false. Am. Compl. ¶¶82, 84; see Brian, 87 N.Y.2d at 51. The statement that "OTHER parents at [the] school that Mr. Matchett has a concerning temper" is not actionable because it is confirmed by an email as filed in evidence, and "falsity is a necessary element of libel." Davis, 24 N.Y.3d at 269; see Exhibit B.
Defendants argue that Welch's statement "I will compile my 'hard evidence,' including Mr. Matchett's police record that I have on file..." is not actionable because it is an expression of future intent, not facts. See MTD Point IV, see also Am. Compl. ¶84. However, it is an actionable "mixed opinion" because it implies that Welch knows certain facts on Matchett's police record, which would justify Welch's defamatory opinion of Matchett but are unknown to Chelsea Piers. See Steinhilber, 68 N.Y.2d at 289-90. The statement "'bullying' ... this time...not [with] kids," in the context of the entire communication implying that Welch has Christopher's police record on file, is specific enough that a reasonable reader could assume that Welch knew exactly what he was taking about and has certain proof, unknown to Chelsea Piers, which would justify his defamatory opinion that Chris may be dangerous to kids. See Gross, 82 N.Y.2d at 152; see Torati, 2015 WL 5578264. Because "the facts supporting [defendants'] opinion are [not] set forth," Chelsea Piers is deprived of "the opportunity to assess the basis upon which the opinion was reached in order to draw [its] own conclusions concerning its validity." Silsdorf, 59 N. Y.2d at 13-14. Therefore, such mixed opinion is likely to expose Chris to public contempt and aversion, and induce unsavory opinion of him in the minds of Chelsea Piers members. Rinaldi, 42 N.Y.2d at 381.
Plaintiff made a legally sufficient pleading that the statements are "utterly false and baseless," and defendants published the email to Brody, and "as part of their continuing efforts to antagonize and harass the Matchetts," and "defamatory emails has...permanently compromised" the personal and professional reputation of Christopher who "was not the subject of even a single complaint or negative comment by anyone ... at Chelsea Piers" was shattered. See Am. Compl. ¶75, 79, 82, 90, 92; Dillon, 261 A.D.2d at 38.
Defendants' argue that plaintiff failed to show injury beyond bare legal conclusions based on the fact that Chelsea Piers rejected defendants' demand to ban Christopher from its activities, and Mike Braito, collocutor of Stark's emails, pointed out that he "still feels reviewing Mr. Matchett's personal life issues was a waste of [his] time." Am. Comp. ¶¶80, 86, 92; see Defendants' Reply Memorandum ("DRM") Point III.
Accordingly, defendants argue that statements did not expose Christopher to public contempt and aversion, and did not induce an unsavory opinion of him in the minds of Chelsea Piers community. Tracy, 5 N.Y.2d at 135-136; Gjonlekay, 308 A.D.2d at 473-74. However, "proof of lack of injury furnishes no ground for dismissing a libel action," based on the view that the publication of the libel itself entails at least some nominal damage. Julian v. Am. Bus. Consultants, Inc., 2 N.Y.2d 1, 30 (1956); see, e.g., Abell v. Cornwall Indus. Corp., 241 N.Y. 327, 335 (1925); Moore, 121 N.Y. at 204; cf. Acheson v. Schumacher, 31 Misc.3d 1204(A), (Westchester City Ct. 2011) ("no proof that any person other than plaintiff ever read the blog ... and find it offensive."). Since the statements are "reasonably susceptible of a defamatory connotation," in their ordinary meaning and in "the over-all context in which the assertions were made," the Court denies defendants' motion to dismiss. James v. Gannett Co., Inc., 40 N.Y.2d 415, 418 (1976); Davis, 24 N.Y.3d at 270; Aronson, 65 N.Y.2d at 594 (1985).
Fourth Cause of Action as to Plaintiffs' Claim for Injurious Falsehood as Against
Defendants
Defendants' motion to dismiss plaintiffs' fourth cause of action for injurious falsehood based on defendants' statements is granted.
"Injurious falsehood" is a false statement that a defendant maliciously uttered with an intent to harm the plaintiff, or recklessly and without regard to their consequences, with resulting special damages in the form of lost dealings. N. State Autobahn, Inc. v. Progressive Ins. Grp. Co., 102 A.D.3d 5, 20 (2d Dept 2012); Waste Distillation Tech. Inc. v. Blasland & Bouck Engineers, P.C., 136 A.D.2d 633, 633 (2d Dept 1988). In pleading special damages, actual losses must be identified and causally related to the alleged act. See Waste Distillation Tech. Inc., 136 A.D.2d at 633. A principal distinction between an injurious falsehood claim and a defamation claim is that the former requires a showing of special damages, whereas the latter does not. See Henneberry v. Sumitomo Corp. of Am., 415 F.Supp.2d 423, 470-71 (S.D.N.Y. 2006). Although plaintiffs never alleged special damages, defendants' motions to dismiss the first and third libel claims were denied based on the well-settled principle that plaintiff need not allege special damages when the alleged defamatory statement is libelous per se. See Rinaldi, 42 N.Y.2d at 379.
Plaintiffs' assertion that "[a]s a result of Stark's and Welch's false statements, Christopher has, in fact, suffered harm to his professional reputation" does not meet the burden of identifying actual losses, and causally relating to the libel claims. Am. Compl. ¶ 140; see Quatrochi, 210 A.D.2d at 53. The Court, therefore, grants defendants' motion to dismiss.
Fifth Cause of Action as to Plaintiffs' Claim for Preliminary and Permanent
Injunction Enjoining Defendants
Defendants' motion to dismiss plaintiffs' third cause of action for a preliminary and permanent injunction enjoining defendants from making false and/or defamatory statements against the Matchetts is granted.
Injunctive relief to prevent future defamation is strongly disfavored. Ramos v. Madison Square Garden Corp., 257 A.D.2d 492, 492 (1st Dept 1999); Rosenberg Diamond Dev't Corp. v. Appel, 290 A.D.2d 239, 239 (1st Dept 2002) ("Prior restraints are not permissible ... merely to enjoin the publication of libel"), see U.S. Const. amend. I. "[P]rior restraints on speech and publication are the most serious and the least tolerable infringement on First Amendment rights." Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 559 (1976). An injunction is improper in the absence of exceptional circumstances, such as protecting property rights, or when carried "as part and parcel of a course of conduct carried on to further a fraudulent or unlawful purpose." Trojan Elec. & Mach. Co. v. Heusinger, 162 A.D.2d 859, 860 (3d Dept 1990); see also Home v. Radiological Health Servs., P.C., 83 Misc.2d 446, 457 (Suffolk Cnty. Sup. Ct. 1975) (holding same); see, e.g., Nann v. Raimist, 255 N.Y. 307 (1931) (holding that injunction is proper when words are "merely an instrument and incident" in threatening the preservation of property interests by unlawful acts), W. Willow Realty Corp. v. Taylor, 23 Misc. 867, 869 (Rockland Cnty. Sup. Ct. 1960), appeal dismissed, 10 A.D.2d 1002 (2d Dept) (granting injunction to prevent irreparable injury by conduct "deliberately carried on to further fraudulent or other unlawful purpose").
Plaintiffs argue that "Defendants have deliberately set out a malicious campaign to defame [p]laintiffs ... and destroy their livelihoods" See PMOL Point V. However, they failed to allege that the requisite standard of a "fraudulent or unlawful purpose." Trojan Elec. & Mach. Co., 162 A.D.2d at 860s.
Plaintiffs' reliance on Trojan is without merit as the instant facts differ fundamentally. The Third Department in Trojan held that the "Supreme Court has appropriately balanced defendants' right of free expression and the rights of plaintiffs to operate their lawful business without unjust ... coercion unrelated to any legitimate resolution of defendants' disputes" when the defendant "intrude[d] upon [plaintiff's] private residences ... inva[ded] [] their privacy and quiet enjoyment of their homes" Id. at 860-61. (internal citations omitted). The First Department previously declined to extend Trojan to a defendant who allegedly disseminated defamatory statements "in conjunction with previously enjoined acts of vandalism or trespassing at [] [plaintiff's] buildings." Rosenberg, 29 A.D.29 at 239-40. Plaintiffs did allege "malicious acts ... in an effort to exert pressure on the Matchetts in the Related Action" brought by Stark. See Am. Compl. ¶ 145. However, such acts were never shown to be "unjust ... coercion unrelated to any legitimate resolution of defendants' disputes" or in conjunction with illegal acts, such as intrusion and vandalism. Trojan, 162 A.D.2d at 860-61.
In support of their demand for a preliminary and permanent injunction, plaintiffs also rely on a case where the Supreme Court granted temporary injunction when the defendant's conduct is to "to coerc[e] a settlement of the claims". W. Willow Realty Corp., 23 Misc.2d at 867. The defendant there was enjoined from picketing the entrance to the plaintiffs' development since "plaintiffs allege[d] that defendant's conduct has result, and if continued, will result in irreparable damage to them in that there has been and will be thereby occasioned a serious loss in the sale of homes by the plaintiff." Id. at 868. However, here plaintiffs distinguishably did not allege any special harm, let alone irreparable harm, and therefore have failed to meet the "heavy burden of showing justification for the imposition of such a constraint." Nebraska Press Ass'n, 427 U.S. at 558. The Court grants defendants' motion to dismiss plaintiff's demand for a preliminary and permanent injunction.
In their opposition brief plaintiffs' request a leave to replead in the event the motion is granted. Motions for leave to amend pleadings pursuant to CPLR 3025(b) should be freely granted "absent prejudice or surprise resulting therefore, unless the proposed amendment is palpably insufficient or patently devoid of merit." MBIA Ins. Corp. v. Greystone & Co., 74 A.D.3d 499, 499 (1st Dept 2010) (citations omitted). Here, the Court is not convinced "how any defects would have been addressed if [plaintiff] [is to] be[] given leave to amend the complaint." Cusack v. Greenberg Traurig, 109 A.D.3d 747, 749 (1st Dept 2013). "The requirements for obtaining leave to amend ... include an evidentiary demonstration ... that the party has 'good ground to support his cause of action.'" Wattson v. TMC Holdings Corp., 135 A.D.2d 375, 377 (1st Dept 1987) (citations omitted). Since plaintiffs' do not proffer any new facts in support of the claims, but merely reiterate the same facts and arguments that have been asserted in the original memoranda, any further amendments of the complaint would be futile. See Peterson v. City of New York, 120 A.D.3d 1328, 1329 (2d Dept 2014). Therefore, plaintiffs' request to replead is denied. Accordingly it is,
ORDERED that defendants' motion to dismiss on Count One Libel is denied; and it is further
ORDERED that defendants' motion to dismiss on Count Two Libel is granted without leave to replead; and it is further
ORDERED that defendants' motion to dismiss on Count Three Libel is denied; and it is further
ORDERED that defendants' motion to dismiss on Count Four Injurious Falsehood is granted without leave to replead; and it is further
ORDERED that defendants' motion to dismiss on Count Five Preliminary and Permanent Injunction is granted without leave to replead. Date: July 6, 2016
New York, New York
/s/_________
Anil C. Singh