Opinion
C.A. 02C-11-225 PLA.
Submitted: September 27, 2004.
Decided: September 27, 2004.
Upon Defendants' Motion for Summary Judgment Granted
James F. Kipp, Trzuskowski, Kipp Kelleher, P.A., Wilmington, Delaware, Attorney for Plaintiff.
Colleen D. Shields, Elzufon, Austin, Reardon, Tarlov Mondell, P.A., Wilmington, DE, Attorney for Defendants.
Plaintiff, the former president of the Local 152 Chapter of the American Postal Workers' Union ("Local"), has sued Local's former accountant and her firm for defamation. Plaintiff complains that the accountant revealed to the board of the National American Postal Workers' Union ("National") that substantial funds were missing from Local's accounts. This led National to investigate Plaintiff for embezzlement, and ultimately to fire her. Because this Court has already adjudicated all the relevant issues in a prior defamation action by another Local officer against the same defendants, this action is barred by the doctrine of collateral estoppel. Summary judgment is therefore GRANTED.
Facts
Plaintiff Anna Christine Simmons was Local's president from the late 1990's until 2001. During her stewardship, Local plunged into dire financial difficulties and missed several income tax filings. Local's board hired Defendant Jefferson, Urian, Doane and Sterner, P.A. ("JUDS" or "the Firm"), to repair its books and file its late taxes. The Firm sent Defendant Penelope Howe, a certified public accountant, to do so.While ordering Local's finances, Howe discovered a series of irregularities and missing funds. Simmons had apparently used Local's credit card as overdraft protection for her personal checking account. When she bounced several checks for thousands of dollars, Local's credit card paid the bills. Simmons also suspiciously arranged several certified checks from Local's account, for several thousand dollars each. Simmons told Howe that these checks went to various parties, but Howe confirmed that, on each occasion, the parties that Simmons named did not receive the checks.
Howe attempted to reconcile Simmons' stories with records kept by Local's treasurer, John Melnick. She discovered, however, that Melnick was shockingly lax with Local's money and did not keep documentation to show from where each deposit had come and by whom each withdrawal was received. Melnick told Howe that Simmons had drawn from Local's credit account on numerous occasions, but that she had always repaid Local in cash. Because Melnick did not document the individual sources of Local's cash, however, there was no way to confirm this explanation.
Howe's investigation seems to have irked Simmons, who wrote her a letter on February 20, 2001, saying that she was "overstepping her bounds." Simmons also demanded that Howe henceforth direct all questioning to herself and Melnick, rather than involve the rest of Local's board. Unable to do the job for which Local had hired her and not wanting to be part of a cover-up, Howe immediately resigned as Local's accountant.
By September 2001, Local had still not paid the bill for JUDS's services. Knowing Local's dire financial condition, Howe wrote to National on September 7, 2001 demanding payment ("Letter"). Howe explained her leaving the Local job as follows:
I have terminated all services to this Local based on concrete evidence of misappropriation of funds. As you are probably aware, due to severe mismanagement, this Local is in serious financial difficulty.
National began an immediate investigation into Local's financial status. On October 9, 2001, National placed Local in trusteeship and suspended its entire board. National also called Howe to testify before the Department of Labor about the improprieties she had discovered. Howe reiterated her findings at this hearing on November 2, 2001. The hearing ultimately resulted in charges being filed against Local, the sacking of Local's entire board, and an order barring Simmons and others from serving as a paid officer for any union. Simmons filed this lawsuit on November 26, 2002, alleging that Howe's Letter and testimony before the Department of Labor had defamed her. Simmons also believes that JUDS is vicariously liable for Howe's supposed defamation.
Details about this hearing are extremely sketchy, and I hesitate to base any of this opinion on the vague information that the Plaintiff attached to her response. Ex. A to Pl. Resp. to Def. Mot. For Summ. J. ( hereinafter, "Response") is pages 32-56 of a transcript from the hearing referenced in the Complaint. There is no title page, nor any captions to indicate where, when and before whom the hearing took place. Complaint ¶ 7 states that National conducted the hearing, but that seems to be only half-right. If the hearing was only an independent body investigating itself, I do not see why Howe would have been under oath, represented by counsel, and compelled to be present, all of which the Transcript indicate. Defendants' Answer admits that Howe testified at "a hearing," but provides no details. Pl. Req. for Produc. of Docs. demands inter alia "any personal file or records maintained by . . . Howe relating to this engagement, including notes of testimony at the hearing in November 2001 and any other documents or memos relating to said hearing, and including correspondence with state, federal and local tax collectors and Department of Labor officials." The Response at 2 does not mention tax officials, but does say that Howe wrote another letter, not discussed in the Complaint, to the Department of Labor. This mystery letter apparently gave rise to the hearing. The Court therefore draws the rational inference that some Department of Labor body, perhaps the National Labor Relations Board, conducted the hearing. This would explain the circumstances of Howe's testimony to which the Transcript alludes (compelled, under oath, etc.).
The Related Action
On May 3, 2004, this Court granted summary judgment to defendants in the case Williams v. Howe, et. al. ("Related Action"). Williams was another Local board member who also sued Howe and JUDS for defamation. Williams claimed that the Letter defamed Local's board by suggesting embezzlement, and that she had lost her job as a consequence.
Del. Super., C.A. No. 03C-10-054, Ableman, P. (May 3, 2004) (Mem. Op.).
The Court granted summary judgment to defendants on three grounds: (1) the statute of limitations had run, (2) the letter could not reasonably be seen as directed at Williams, because only Simmons and Melnick had any ability to embezzle funds, and (3) Howe was protected by a qualified privilege.
Only the third ground is relevant in this case. The Court found that an accountant is privileged to inform a national union that a local chapter's officers are pillaging its accounts. This is especially true when the accountant is trying to get paid for services legitimately rendered, and the officers' misconduct has left the local chapter so cash-strapped that no payment is likely.
Simmons filed this action on November 26, 2002, fourteen months after Howe had written the letter and well within the two-year statute of limitations. Also, Howe testified before the Department of Labor that she meant the Letter to implicate Simmons and Melnick because they were the only Local officers with the authority to withdraw funds.
Discussion
Simmons' claim regarding the Letter is barred by the doctrine of collateral estoppel. The parties agree that this doctrine prevents a litigant from raising (1) a question essential to the judgment (2) that has already been litigated and (3) disposed with (4) by a valid final judgment. Howe's privilege to write the Letter informing National of Local's financial irregularities was unequivocally established in the Related Action. This issue is res judicata and thus not open for Simmons to argue.
Response at ¶ 4; Def. Mot. for Summ. Judg. at ¶ 13; M.G. Bancorporation, Inc. v. LeBeau, et. al., 737 A.2d 513 (Del.Super. 1999).
Simmons' other claim regarding Howe's testimony before the Department of Labor is absurd. If Howe was privileged to write the Letter in an attempt to get National to pay Local's bill, which the Related Action firmly establishes, she certainly was privileged to testify about the Letter under oath before a federal agency. If the plaintiff believes that this Court will construct a rule of law permitting witnesses to be sued for truthfully testifying in judicial proceedings, she is gravely mistaken.
Plaintiff seeks to circumvent this obvious conclusion by concocting an illusory factual issue, whether Howe wrote the Letter and testified before Department of Labor out of malice. Not a scintilla of evidence supports such a charge. Moreover, even if I took a leap of faith to find that Howe personally disliked Simmons — Howe denied this in her Department of Labor testimony — behavior such as Simmons' would logically elicit a measure of reproach from any law-abiding citizen. The fact remains that there is absolutely no indication whatsoever of ire or ill intent in the transcript that Simmons submits as evidence, and therefore no genuine issue of fact requiring a trial.
The Court invokes the familiar standard established in Celotex Corp. v. Catrett, 477 U.S. 317 (1986): summary judgment is appropriate if the record, viewed in a light most favorable to the non-moving party, provides no genuine issue of material fact.