matchett v stark - nycourts.gov
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Matchett v Stark2016 NY Slip Op 31302(U)
July 6, 2016Supreme Court, New York County
Docket Number: 595644/2014Judge: Anil C. Singh
Cases posted with a "30000" identifier, i.e., 2013 NY SlipOp 30001(U), are republished from various state and
local government websites. These include the New YorkState Unified Court System's E-Courts Service, and the
Bronx County Clerk's office.This opinion is uncorrected and not selected for official
publication.
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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 45 -----------~------------------------------------------------------)( REBECCA MATCHETT and CHRISTOPHER MATCHETT,
Plaintiffs, -against-
JESSICA STARK and NATHANIEL WELCH,
Defendants.
------------------------------------------------------------------)( HON. ANIL C. SINGH, J.:
DECISION AND ORDER
Index No. 595644/2014
Mot. Seq. No. 001
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 § 321 l(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
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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. i!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 [J 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. i!57.
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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. iJ84. 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 iJ86.
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 § 321 l(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
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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 232nct 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 of their friendly intercourse in society." Rinaldi v. Holt, Rinehart & Winston,
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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), affd 29 F. App'x 676 (2d Cir 2002); Gjonlekaj 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 Dill_on 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, 231A.D.2d407, 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 plaintiffs meritless reliance on a
case concerning a libel claim); accord G.L. v. Markowitz, 101A.D.3d821, 827 (2d
Dept 2012). "What gives the string to the writing is its permanence." Ostrowe v.
Lee, 256 N.Y. 36, 39 (1931).
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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." Silsdorfv. 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 oflaw, 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
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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,
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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. if32; 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 A venues, 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. ifl 7, 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 ... plaintiffs 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
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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, 91A.D.3d1367, 1368 (4th Dept 2012); Ram, 205
A.D.2d 516 (2d Dept 1994); see Am. Compl. i126. 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. i132 (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."
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Steinhilber, 68 N.Y.2d at 283; see Am. Compl. ifif32, 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. ifif26, 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
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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 ~roc6edings 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
5 5, 5 9 (2d Dept 198 8) (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,~' 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
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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 198 8) (denying absolute privilege to a non party'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." Taker, 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 oflawyers. 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
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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. i-!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 plaintiffs 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
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upon which the opm10n 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 dLsmiss
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
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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 oflaw, the court should consider "(l) 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," ill 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).
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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. ili182, 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 oflibel." 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. i184. 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,"
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· 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. if75, 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] ti?1e." Am. Comp. ifif80, 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
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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
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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. if 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.
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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 Horne 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 i~junction 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
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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
[plaintiffs] 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 [] [plaintiffs] 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. if 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.
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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 justific·ation for the imposition of such a
constraint." Nebraska Press Ass'n, 427 U.S. at 558. The Court grants defendants'
motion to dismiss plaintiffs demand for a preliminary and permanent injunction.
In their opposition brief plaintiffs' request a leave to rep lead in thG 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 j
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
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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 1s
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
Pen;nanent Injunction is granted without leave to replead.
-------~~-S-i~n~gh~------Date: July 6, 2016
New York, New York
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