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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