ATTORNEY V. ATTORNEY

R.W.H. v. J.R.L., Date filed: 2022-02-17, Court: Supreme Court, Richmond, Judge: Justice Ralph Porzio,  Case Number: 151726/2021:

"PROCEDURAL HISTORY

Plaintiff R.W.H. (hereinafter “Plaintiff”) and Defendant J.R.L. (hereinafter “Defendant”) are attorneys located in Staten Island, New York. The Defendant represented Plaintiff’s former client, “R.V.,” in her fee arbitration dispute against the Plaintiff in the Richmond County Fee Arbitration Program.

On February 24, 2021, Defendant sent a letter to the Fee Arbitration Program Chairman regarding his theory of the case. On May 4, 2021, the Plaintiff responded to that letter, however, Defendant was not copied on same. During the fee arbitration hearing on August 23, 2021, the fee arbitrator provided a copy of the May 4, 2021 letter to the Defendant and asked Defendant to respond, which he did in writing on the same date. Plaintiff claims that Defendant’s response letter of August 23, 2021 contained a defamatory statement, specifically, “this is not a ‘disgorgement’ of fees properly earned, but an effort to reclaim money embezzled, or stolen, by R.W.H.” See Defendant’s August 23, 2021 letter to the fee arbitrator, Motion Exhibit C.

Plaintiff brought this action for defamation by the filing of a Summons and Complaint on September 14, 2021. The instant motion to dismiss was filed on October 15, 2021. After a full briefing of the motion and oral arguments on December 3, 2021 and January 5, 2022, the Court orally granted the Defendant’s motion to dismiss.

DECISION

“Upon a motion to dismiss a complaint pursuant to CPLR 3211, a court must take the allegations in the complaint as true and resolve all inferences in favor of the plaintiff.” Morris v. Gianelli, 71 AD3df 965. 967 [2d Dept 2010]. A motion to dismiss should be granted where the Complaint fails to “contain allegations concerning each of the material elements necessary to sustain recovery under a viable legal theory.” Matlin Patterson ATA Holdings LLC v. Fed. Express Corp., 87 AD3d 836, 839 (1st Dept. 2011).

There is no dispute between the parties that the Defendant made the following statement by letter on August 23, 2021, “this is not a ‘disgorgement’ of fees properly earned, but an effort to reclaim money embezzled, or stolen, by R.W.H.” The question for this Court is first, whether the pleading contains a cognizable cause of action and second, whether Defendant has put forward documentary evidence sufficient to dispose of the claim.

CPLR 3211(a)(7) provides that “A party may move for judgment dismissing one or more causes of action asserted against him on the ground that…the pleading fails to state a cause of action.” The Court will consider “whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail.” Guggenheimer v. Ginzburg, 43 NY2d 268, 275 (1977). Dismissal pursuant to CPLR 3211(a)(7) is warranted if the evidentiary proof disproves an essential allegation of the complaint, even if the allegations of the complaint, standing alone, could withstand a motion to dismiss for failure to state a cause of action. Korinsky v. Rose, 120 AD3d 1307, 1308 (2d Dept. 2014). Courts have repeatedly granted motions to dismiss where the factual allegations in the claim were merely conclusory and speculative in nature and not supported by any specific facts.” See Residents for a More Beautiful Port Washington, Inc. v. Town of North Hempstead, 153 AD2d 727 [2d Dept. 1989]; Stoianoff v. Gahona, 248 AD2d 525 [2d Dept. 1998].

To succeed on a motion to dismiss pursuant to CPLR 3211(1), the documentary evidence submitted that forms the basis of the defense must resolve all factual issues and definitively dispose of the plaintiff’s claims. 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144 (2002). A motion to dismiss pursuant to CPLR 3211(1) may be appropriately granted only where the documentary evidence utterly refutes plaintiff’s factual allegations, conclusively establishing a defense as a matter of law. McCully v. Jersey Partners, Inc., 60 AD3d 562 [1st Dept. 2009].

The elements for a cause of action for defamation are a false statement that tends to expose a person to public contempt, hatred, ridicule, aversion or disgrace; published without privileges or authorization to a third party; amounting to fault as judged by, at a minimum a negligence standard; and either causing special harm or constituting defamation per se. Greenberg v. Spitzer, 155 AD3d 27 (2d Dept. 2017). Defamation claims are subject to the heightened pleading requirement of CPLR 3016(a) which requires that “the particular words complained of shall be set forth in the complaint…” New York favors the dismissal of defamation claims where the Plaintiff has failed to allege specific facts and has made only conclusory allegations of malice. See Harm v. Lawson, 70 AD3d 640 (2d Dept. 2010).

A statement is defamatory per se if it (1) charges the plaintiff with a serious crime; (2) tends to injure the plaintiff in his or her trade, business or profession; (3) imputes to the plaintiff a loathsome disease; or (4) imputes unchastity to a woman. Lieberman v. Gelstein, 80 NY2d 429 (1992). Defamation per se requires that the defendant’s statements have hurt plaintiff’s trade, business, or profession and further prove that the defamation is of a kind incompatible with his business, trade or profession. The words alleged to constitute the defamation must be construed in the context of the entire statement “and if not reasonably susceptible of a defamatory meaning, they are not actionable and cannot be made so by a strained or artificial construction.” Dillon v. City of NY 261 AD3d 34, 38 [1st Dept. 1999].

The letter written by the Defendant charged the Plaintiff with a serious crime, specifically the crimes of theft and/or embezzlement. The Defendant claims as defenses that the statement was not false, that it was his opinion, and that did not expose the Plaintiff to any contempt or harm. He further claimed that the statement was made during an adversarial quasi-judicial proceeding, which is privileged and therefore immune from suit.

The Court finds that there is a potential cognizable cause of action for defamation per se, based upon the Defendant’s charge that the Plaintiff committed a serious crime. This Court will not address the Defendant’s defenses of truth, opinion or whether the Plaintiff suffered harm, however, will address the relevant issue of privilege.

Here, the Complaint concedes, “In New York State, legal fee arbitration is a quasi-judicial proceeding process and is an alternative to litigation.” It is well-established that “statements made by parties, attorneys, and witnesses in the course of a judicial or quasi-judicial proceeding are absolutely privileged, notwithstanding the motive with which they are made, so long as they are material and pertinent to the issue to be resolved in the proceeding.” Kilkenny v. Law Off. Of Cushner & Garvey, LLP, 76 AD3d 512 [2d Dept. 2010]. The Court of Appeals has stated, that “the absolute privilege against defamation applied to communications in certain administrative proceedings is not a license to destroy a person’s character by means of false, defamatory statements.” Stega v. New York Downtown, 31 NY3d 661 (2018).

The Plaintiff states in his Complaint that 22 NYCRR §137 “excludes the consideration of claims in legal fee arbitration involving substantial legal questions, including attorney malpractice or misconduct, which would obviously include alleged attorney criminal misconduct.” The letter itself, as well as the Complaint, is documentary evidence in this case and there is no question of fact that the letter was submitted at the request of the arbitrator during the course of the fee arbitration. Pursuant to 22 NYCRR 137.7(d), “The client may then present his or her account of the services rendered and time expended.” It was the position of the client, by counsel, that the Plaintiff in this matter retained a fee that he was not entitled to and speculated as to what happened to that fee. Though the Court finds the accusation made by the Defendant in the letter dated August 23, 2021 to be inappropriate, the Court does not find the statement to be actionable, as it is absolutely privileged because it was material to the issue of fees to be resolved in the quasi-judicial arbitration proceeding. See Wiener v. Weintraub, 22 NY2d 330 [1968].

CONCLUSION

Statements made during judicial and quasi-judicial proceedings, including a fee arbitration, are privileged. This Court finds the Defendant’s allegations of embezzlement or theft, though inappropriate, were material to the fee dispute and exhibited a zealous advocacy by the Defendant on behalf of his client in an adversarial proceeding.

As a result of the foregoing, the Defendant’s motion to dismiss is hereby granted pursuant to CPLR 3211(a)(1). This constitutes the Decision and Order of this Court."