Condo Owner Alleges Defamation/Interference with Sale: Did Managing Agent & Broker Cross the Line?

This was originally posted on the SGR Blog.

It is easy for a plaintiff to plead the elements of causes of action for defamation and tortious interference with economic advantage. But, as a recent case—involving a condo unit owner, the managing agent, and a real estate broker—demonstrates, it is far more difficult to assert and sustain a plausible claim that can survive a motion to dismiss.

Cheryl Keeling sued the property manager of her condominium and a real estate broker for defamation and tortious interference with economic advantage in what was, in essence, a dispute between Keeling, a unit owner, and the building as to the amount of common charges she owed. Keeling owns a unit at 3614 Johnson Avenue, Bronx, New York. Silvina Salvo also owns a unit in the building. Chintan Trivedi was a property manager for the condo. And Trivedi operated Remax/ITC Realty Company.

Keeling alleged in her complaint that in August 2015, defendants made certain comments about her that constituted defamation. Specifically, Keeling alleged that in August 2015, defendants held a special meeting in which more than 30% of owners were not given notice and Salvo made the statement “[t]hat Keeling should be removed from the Board because she has not paid her common charges since 2008” and that Keeling failed to “turn over the books and records”.

Keeling further alleged that these false statements resulted in Keeling being removed from the Board. With respect to Trivedi, Keeling alleged that he operated Remax and “published and continues to publish that Keeling owes $83,000 in common charges as a result of failing to pay common charges … since 2008. The first publication was June 2015, the most recent 2016 … Defendant has published these remarks to owners in both board and regular meetings, and to members of the community.” Regarding Remax, Keeling alleged that “[Trivedi] while conducting business from this location did publish false and defamatory statements to employees and vendors” and “while in the course of conducting business did publish the false and defamatory statements to all owners stating that `people do not pay their maintenance, that is why we cannot pay our bills’ referring to Keeling with Keeling present.”

In her complaint, Keeling alleged that the defamation and tortious interference occurred in August 2015. In her bill of particulars, Keeling alleged that the acts occurred on August 28, 2015. In her affidavit in opposition to the motion, Keeling claimed that the conduct occurred on August 29, 2015. The board meeting minutes for August 27, 2015, reflected that the meeting was called to vote for the removal of Keeling as a board of manager, and Salvo “explained that Cheryl Shelley Keeling has not paid her common charges since 2009. She also has not showed documents to the board since she was the manager of the building, even though this has been requested several times.” Thus, it appeared from the documentary evidence, i.e., the minutes of the board meeting that the acts occurred on August 27, 2015.

Defamation arises from the making of a false statement which tends to expose a person 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. The elements of defamation are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and, it must either cause special harm or constitute defamation per se. The complaint also must allege the time, place, and manner of the false statement and specify to whom it was made.

In evaluating whether a cause of action for defamation is successfully pleaded, words must be construed in the context of the entire statement or publication as a whole, tested against the understanding of the average reader, and if not reasonably susceptible of a defamatory meaning, they are not actionable and cannot be made so by a strained or artificial construction. Loose, figurative, or hyperbolic statements, even if deprecating are not actionable. If the words are conclusory rather than accusatory, fail to specify the time, place, and manner of the communication, then there can be no cause of action for defamation.

An action for defamation must be commenced within one year. A defamation cause of action generally accrues on the date of the first publication. Salvo and Remax argued that Keeling’s cause of action for defamation was barred by the one-year statute of limitations. Keeling’s contended that the defamatory conduct occurred on August 29, 2015, that she learned of the defamation on August 30, 2015, and that the statute began to run from the date the defamed party Keeling states in her complaint that “[d]efendant [Trevedi] while conducting business from this location did publish false and defamatory statements to employees and vendors… stating that “people do not pay their maintenance, that is why we cannot pay our bills” referring to Keeling with Keeling present”. Keeling’s allegations pertaining to the defamation cause of action were provided in general terms and not in the verbatim language as required. Those allegations merely provided conclusory information and failed to identify the “employees and vendors” to whom the alleged statements were made, as well as the date and time it was made.

A claim for tortious interference with prospective economic advantage is subject to a three-year statute of limitations and to prevail on such a claim, a plaintiff must prove 1) that it had a business relationship with a third party; 2) that the defendant knew of that relationship and intentionally interfered with it; 3) that the defendant acted solely out of malice or used improper or illegal means that amounted to a crime or independent tort, and 4) that the defendant’s interference caused injury to the relationship with the third party. Defamation may be a predicate wrongful act for a tortious interference claim.

Where a statement impugns the basic integrity or creditworthiness of a business, an action lies and injury is conclusively presumed. The tortious interference cause of action must be supported by facts that would establish an independent tort. Conduct constituting tortious interference with business relations is, by definition, conduct directed not at a plaintiff herself, but at the party with which a plaintiff has or seeks to have a relationship.

Keeling’s complaint alleged that she attempted to sell her condominium and that Trivedi and Remax tortiously interfered in that with their false and defamatory statements regarding Keeling’s failure to pay her common charges. Keeling alleged that the statements were published to brokers, attorneys for buyers and that Trivedi and Remax refused to complete necessary documents for the sale to proceed. Keeling claimed that as a result, she was caused to incur charges from both brokers and the attorney. But the prospective buyers, brokers, and attorneys were not identified. The alleged contract of sale for Keeling’s condominium was not identified. No dates were provided. And the complaint did not allege that any tortious activity was directed at the alleged prospective buyers. Instead, the complaint alleged it alleges actions directly against Keeling that caused her to allegedly sustain damages in losing unidentified prospective buyers and having to pay brokers and attorneys’ fees. The claim also failed as Keeling did not demonstrate that the defendants acted solely for the purpose of harming her. Thus, with respect to Trivedi and Remax, the claims were dismissed.

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