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HomeMy WebLinkAbout00-7652 CIVILGREGORY A. MYERS, IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. AFC, NWA AUTOMOTIVE FINANCE CORPORATION AND THOMAS K. REYNOLDS, DEFENDANTS 00-6885 CIVIL TERM ROBERT MYERS, IN THE COURT OF COMMON PLEAS OF PLAINTIFF CUMBERLAND COUNTY, PENNSYLVANIA V. THOMAS K. REYNOLDS, DEFENDANT AND AFC, A/K/A AUTOMOTIVE FINANCE CORPORATION, DEFENDANT 00-7652 CIVIL TERM IN RE: PRELIMINARY OBJECTIONS OF THE DEFENDANTS TO THE FIRST AMENDED COMPLAINTS OF THE PLAINTIFF BEFORE BAYLEY, J. AND GUIDO, J. OPINION AND ORDER OF COURT Bayley, J., March 6, 2002:-- In these separate suits by plaintiff, Gregory A. Myers, and plaintiff Robert Myers, they have filed amended complaints against AFC a/k/a Automotive Finance 00-6885 CIVIL TERM 00-7652 CIVIL TERM Corporation, and Thomas K. Reynolds. Each suit contains a count of conversion and a count of intentional interference with contracts against AFC, and counts of defamation against all defendants. The defendants in both suits have filed a preliminary objection in the nature of a demurrer to the counts of defamation. The preliminary objections were briefed and argued on February 13, 2002. In The County of Allegheny v. Commonwealth of Pennsylvania, 507 Pa. 360 (1985), the Supreme Court of Pennsylvania stated: A demurrer can only be sustained where the complaint is clearly insufficient to establish the pleader's right to relief. For the purpose of testing the legal sufficiency of the challenged pleading a preliminary objection in the nature of a demurrer admits as true all well-pleaded, material, relevant facts, and every inference fairly deducible from those facts. Plaintiffs allege in their amended complaints that they were defamed by two letters and a "pattern of verbal defamation." The first letter is dated October 12, 1999: Gregory A. Myers Myers Auto Sales 1203 Ritner Highway Shippensburg, PA 17257 RE: Sales Out of Trust You have sold numerous vehicles "out of trust" without paying or accounting to AFC for the proceeds of the sale or other disposition; you are in violation of the security agreement you executed. You have fifteen (15) days from the date of this notice to submit a full accounting and make payment of the full amount due as a result of the sale of the vehicles out of trust. If you fail to tender payment of $256,995, you will be compelled to pay the -2- 00-6885 CIVIL TERM 00-7652 CIVIL TERM maximum amount to which AFC is entitled. Pursuant to your contract, AFC is entitled to triple damages plus costs plus attorney's fees for a total of at least $770,985. AFC has also been advised that your actions may be criminal in nature and may subject you to criminal prosecution. Enclosed is a pre-paid, pre-addressed envelope. Send a money order, cashier's check or a certified check. If you wish to pay in cash, contact Doug Maronic, AFC's Harrisburg Branch Manager at (717) 691-9710. Be advised that by sending you this notice of out of trust sales, AFC is NOT waiving any of AFC's contractual, legal, or equitable rights. (Emphasis added.) Sincerely, Joel G. Garcia Attorney at Law Defendant, AFC, maintains that as a matter of law this letter from its agent is not actionable in defamation. The Judicial Code at 42 Pa.C.S. Section 8343 provides: (a) Burden of plaintiff.--In an action for defamation, the plaintiff has the burden of proving, when the issue is properly raised: (1) The defamatory character of the communication. (2) Its publication by the defendant. (3) Its application to the plaintiff. (4) The understanding by the recipient of its defamatory meaning. (5) The understanding by the recipient of it as intended to be applied to the plaintiff. (6) Special harm resulting to the plaintiff from its publication. (7) Abuse of a conditionally privileged occasion. (b) Burden of defendant.--In an action for defamation, the defendant has the burden of proving, when the issue is properly raised: (1) The truth of the defamatory communication. (2) The privileged character of the occasion on which it was published. (3) The character of the subject matter of defamatory -3- 00-6885 CIVIL TERM 00-7652 CIVIL TERM comment as of public concern. In Green v. Mizner, 692 A.2d 169 (Pa. Super. 1997), the Superior Court stated: [s]tatements of opinion, without more, are not actionable. Mathias v. Carpenter, 402 Pa. Super. 358,, 587 A.2d 1, 2-3 (1991), alloc. den., 529 Pa. 650, 602 A.2d 860 (1992). Communicated opinions are actionable, however, when they can be reasonably understood to imply the existence of undisclosed defamatory facts. Mathias, 587 A.2d at 3. Whether a particular statement is opinion or fact is a question of law for the trial court. Id. However, in cases where a plausible innocent interpretation of the communication coexists with an alternative defamatory interpretation, the issue must proceed to a jury. Livingston, supra, 612 A.2d at 446. To aid the court in its determination of whether something is strictly an opinion, Pennsylvania has adopted the Restatement (Second) of Torts. Section 566 states: A defamatory communication may consist of a statement in the form of an opinion but a statement of this nature is actionable only if it implies the allegation of undisclosed defamatory facts as the basis for the opinion. Restatement (Second) of Torts § 566. Comment (c) of section 566 clarifies the distinction between a non- actionable "pure" opinion, and a potentially actionable "mixed" opinion. It states: A simple expression of opinion based on disclosure or assumed nondefamatory facts is not itself sufficient for an action of defamation, no matter how unjustified and unreasonable the opinion may be or how derogatory it is. But an expression of opinion that is not based on disclosed or assumed facts and therefore implies that there are undisclosed facts on which the opinion is based, is treated differently. The difference lies in the effect upon the recipient of the communication. In the first case, the communication itself indicates to him that there is no defamatory factual statement. In the second, it does not, and if the recipient draws the reasonable conclusion that the derogatory opinion expressed in the comment must have been based on undisclosed defamatory facts, the defendant is subject to liability. (Emphasis added.) In the case sub judice, the letter of October 12, 1999, sent to Gregory A. Myers -4- 00-6885 CIVIL TERM 00-7652 CIVIL TERM and Myers Auto Sales, tells them that "You have sold numerous vehicles 'out of trust' without paying or accounting to AFC for the proceeds of the sale or other disposition; you are in violation of the security agreement you executed," and "AFC has also been advised that your action may be criminal in nature and may subject you to criminal prosecution." There is no implication of undisclosed facts. The letter tells Myers and Myers Auto Sales what it is believed they have done, and that such conduct "may be criminal in nature and may subject you to criminal prosecution." That is a statement of opinion and is not actionable in defamation. The second letter in their amended complaints by which plaintiffs allege they were defamed by defendants is dated October 28, 1999: M.L. Ebert Sergeant Scott Financial Fraud Division Financial Fraud Division Cumberland County District Attorney Pennsylvania State Police Cumberland County Courthouse 1501 Commerce Dr. 1 Courthouse Square Rm. 202 Carlisle, PA 17013 Carlisle, PA 17013 RE: Robert F. Myers; Gregory A. Myers; Myers Auto Sales To Whom it May Concern: The purpose of this letter is to inform you of transactions that have taken place in Shippensburg, PA over the past few weeks. As per my conversation with Sargent [sic] Scott, we believe that by these transactions Robert F. Myers and Gregory A. Myers doing business as Myers Auto Sales (hereinafter referred to as "Dealer") have committed a crime or series of crimes in which we are the victim. It is our hope that this letter provides you with sufficient information and documentation to initiate an investigation and bring charges against Dealer. -5- 00-6885 CIVIL TERM 00-7652 CIVIL TERM Dealer executed several Promissory Notes and Security Agreements with AFC and obtained a revolving line of credit (see attached contracts). Over the next two years, we made cash advances to Dealer. These advances were based upon Dealer's representations that they had purchased a motor vehicle with our advances, and that within 48 hours of the sale of such vehicle to a customer they would repay the advances on that particular vehicle with interest. Until that particular vehicle was sold by Dealer, we took a security interest in the vehicle and held the title to the vehicle. After the vehicle was sold we would take a security interest in the proceeds of that sale. By legal definition these security interests are interests in property. The title for the vehicle was held until Dealer paid us for that particular vehicle. We believe that Dealer knowingly defrauded or stole from us. Because of various problems we had with Dealer, we went out to Dealer's car lot. When we arrived nineteen of our vehicles which Dealer had made us believe were at this location were gone. The total value of these vehicles is over $245,000. Since that time Dealer has refused to account for these vehicles, or pay us any of our portion of the proceeds of these vehicles if they were sold to customers. We believe that Dealer has either sold these vehicles, and has used the proceeds for their own benefit, or hidden these vehicles in order to interfere with our property rights. We believe that since we have a property interest in these vehicles and any proceeds from the sale of these vehicles, Dealer has directly violated both 18 Pa.C.S. § 4110 Defrauding Secured Creditors and 18 Pa.C.S. § 3927 Theft by failure to make required disposition of funds received (see attached statutes). Prior to these events, we had what we thought was a good and trusting relationship with Dealer. We sent some of our vehicles to Dealer for Dealer to sell for us. These were vehicles which Dealer had no property interest. When we did our audit of the lot, these vehicles were gone as well. This is a violation of 18 Pa.C.S § 3921 Theft by unlawful taking or disposition (see attached statute). As stated above we believe that Dealer has clearly committed a crime or series of crimes. We are prepared to provide you with any additional documentation or information in our possession that you require to investigate this matter and file charges. Our branch manager Doug Maronic will be scheduling a meeting with you within the next two weeks -6- 00-6885 CIVIL TERM 00-7652 CIVIL TERM to go over these documents. You can reach him at 717-691-9710 or me at 317-813-9751 ext. 2179 if you have any questions. Sincerely, Thomas K. Reynolds Legal Counsel for AFC In their amended complaints, plaintiffs allege that they were wrongly accused of criminal conduct by defendants' agent, that the state police investigated their activities and then closed the investigation, that the state police then instituted a criminal investigation against defendants, but recommended that criminal charges be filed against defendants, and that the District Attorney chose not to institute such charges. Robert Myers in his amended complaint alleges: The Defendants' accusations of and about the Plaintiff and their requests for investigation and arrest were not done in good faith or for any legitimate purpose, but rather were done in order to misdirect official attention and suspicion away from the crimes which Defendants and their agents committed or may have committed. Gregory Myers in his amended complaint alleges: Any privilege which would have otherwise attached to the Defendants and the publication of all defamatory publications referred to or described in this Complaint did not attached by virtue of the actual malice and/or abuse, recklessness, reckless disregard of the falsity of the publication, or negligence by the Defendants .... Defendants maintain that as a matter of law the letter of October 28, 1999, is not actionable in defamation because it was sent to the District Attorney of Cumberland County, and the Pennsylvania State Police, and thus was absolutely privileged. In Wecht v. PG Publishing Company, 353 Pa. Super 493 (1986), the Superior Court of -7- 00-6885 CIVIL TERM 00-7652 CIVIL TERM Pennsylvania stated that, "It is accepted that absolute privileges may be raised at the preliminary objection stage .... "In Pawlowski v. Smorto, 403 Pa. Super. 71 (1991), the Superior Court of Pennsylvania affirmed an order granting a preliminary objection in the nature of a demurrer, to a count of defamation, based on absolute privilege. In Pawlowski, counsel for defendants in a civil suit, following a hearing in which the plaintiff testified, went to the District Attorney and State Police and alleged that the plaintiff had perjured himself at the hearing. The plaintiff in the civil suit then filed another civil suit against the defendants that included a count of defamation. In a preliminary objection, defendants raised the defense of absolute privilege. The Superior Court held that: [a]n absolute privilege does not depend upon the motive of the defendant in making the alleged defamatory statement. The privilege is absolute and cannot be destroyed by abuse. The Court, affirming the order of the trial court, held that the communications to the District Attorney and State Police were "[a]bsolutely privileged as statements preliminary to a judicial proceeding." The Court stated: The issue presented in this case is whether statements made solely to law enforcement officials in which an accusation of a crime, i.e. perjury, is made, and which are made for the purpose of inducing those officials to bring criminal charges against the accused, are absolutely privileged. The Court cited Section 587 of the Restatement (Second) of Torts: A party to a private litigation or a private prosecutor or defendant in a criminal prosecution is absolutely privileged to -8- 00-6885 CIVIL TERM 00-7652 CIVIL TERM publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of or during the course and as a part of, a judicial proceeding in which he participates, if the matter has some relation to the proceeding. The Comment to this Restatement section goes on to explain: b. The rule stated in this Section is applicable to protect parties to any action before a judicial tribunal. It is immaterial whether the action is criminal or civil in character. Thus the rule applies to a litigant in a civil action, a defendant in a criminal prosecution, or one who, as private prosecutor, formally initiates a criminal action or applies for a search warrant by a written complaint under oath, made to the proper officer, charging another with crime. It applies to communications made by a client to his attorney with respect to proposed litigation as weft as to information given and informal complaints made to a prosecuting attorney or other proper officer preliminary to a proposed criminal prosecution whether or not the information is followed by a formal complaint or affidavit. Restatement (Second) Torts § 587, comment b. The Court then stated: We completely concur in this statement of the scope of the absolute judicial privilege as it applies to private parties involved in providing information to the proper authorities in connection with the suspected commission of a crime. As stated above, according absolute privilege to statements made in or preliminary to judicial proceedings aims at ensuring free and uninhibited access to the judicial system. This policy is obviously served by application of the privilege to statements made solely to law enforcement officials for the purpose of initiating criminal charges. Although such statements may ultimately prove to be false or maliciously motivated, the same may be said of statements made by a party who consults with his or her attorney preliminary to instituting a civil action, or of statements made by counsel in preliminary conferences or negotiations on their client's behalf. Nevertheless, such statements are deemed to be absolutely privileged because the policy concerns stated above outweigh the right of the defamation plaintiff to seek redress for harm caused by the statements. (Emphasis added.) -9- 00-6885 CIVIL TERM 00-7652 CIVIL TERM In the instant case, the statements in question were made solely to law enforcement officials and there is no allegation that they were republished to any other audience. The content of the statements as alleged by appellant in the complaint was limited to the accusation of perjury--no extraneous defamatory content is alleged. Moreover, the complaint concedes that the statements were made at least in part for the purpose of convincing the proper authorities to institute criminal proceedings against appellant. Clearly such statements fit squarely within the absolute privilege as described above. The only allegations by plaintiffs in the cases sub judice, that are different than those that were alleged by the plaintiff in Pawlowski, are that rather than conceding that the letter sent to the District Attorney and the state police was sent at least in part for the purpose of convincing them to institute criminal proceedings against them, they allege that the letter was not sent in good faith for any legitimate purpose, but rather was sent in order to misdirect official attention and suspicion away from crimes which AFC committed. No matter how plaintiffs wish to categorize it, the letter of October 28, 1999, to the District Attorney and state police, clearly makes accusations of criminal conduct against plaintiffs and seeks a criminal investigation. Even if the letter was maliciously motivated, which would mean that it was in bad faith, and even if it defamed plaintiffs, it is absolutely privileged. Therefore, it is not actionable in defamation. Lastly, plaintiffs in their amended complaints allege that they believe and therefore aver "[t]hat on other occasions within the statute of limitations, the Defendants have engaged in a pattern of verbal defamation of Plaintiff.. ." Plaintiffs acknowledge -10- 00-6885 CIVIL TERM 00-7652 CIVIL TERM in their pleadings that they have no specific facts to plead in support of this general allegation. Accordingly, they have not set forth a cause of action for verbal defamation. For the foregoing reasons, the following order is entered. ORDER OF COURT AND NOW, this day of March, 2002, IT IS ORDERED: (1) Summary judgment, IS GRANTED on the allegations of defamation by Gregory A. Myers in 00-6885. (2) Summary judgment, IS GRANTED on the allegations of defamation by Robert Myers in 00-7652. By the Court, Edgar B. Bayley, J. Robert O'Brien, Esquire For Gregory A. Myers Spero Lappas, Esquire For Robert Myers Christopher Knight, Esquire For Defendants :sss -11-