Delmonico v. Traynor

• Decision Date: 17 June 2013
• Docket Number: No. SC10–1397.,SC10–1397.
• Citation: 116 So.3d 1205
• Parties: Daniel DELMONICO, et al., Petitioners, v. Arthur Rodgers TRAYNOR, Jr., et al., Respondents.
• Court: Florida Supreme Court

116 So.3d 1205

Daniel DELMONICO, et al., Petitioners,

v.Arthur Rodgers TRAYNOR, Jr., et al., Respondents.

No. SC10–1397.

Supreme Court of Florida.

Feb. 14, 2013.

Rehearing Denied June 17, 2013.

Holiday Hunt Russell of Holiday Hunt Russell, P.A., Hollywood, FL, and Bruce S. Rogow and Cynthia E. Gunther of Bruce S. Rogow, P.A., Fort Lauderdale, FL, for Petitioners.

Jane Kreusler–Walsh and Rebecca Mercier Vargas of Kreusler–Walsh, Compiani & Bargas, P.A., West Palm Beach, FL, and William M. Martin of Peterson Bernard, Fort Lauderdale, FL, for Respondents.

PARIENTE, J.

The issue before this Court is whether Florida's absolute privilege, which shields judges, counsel, parties, and witnesses from liability for alleged defamatory statements made in the course of a judicial proceeding, extends to statements made by an attorney during ex-parte, out-of-court questioning of a potential, nonparty witness while investigating matters connected to a pending lawsuit. In DelMonico v. Traynor, 50 So.3d 4 (Fla. 4th DCA 2010), the Fourth District Court of Appeal relied on this Court's decision in Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. United States Fire Insurance Co., 639 So.2d 606 (Fla.1994), to hold that regardless of the circumstances under which an attorney interviews a potential witness in preparation for pending litigation, statements made during that interview are absolutely privileged if the statements bear some relation to or connection with the pending matter. We have jurisdiction because the Fourth District misapplied this Court's long established precedent, of which Levin is a part, regarding the proper scope of Florida's absolute privilege. Seeart. V, § 3(b)(3), Fla. Const.; see also Wallace v. Dean, 3 So.3d 1035, 1040 (Fla.2009) (recognizing misapplication of decisions as a basis for express and direct conflict under article V, section 3(b)(3), of the Florida Constitution).

We hold that Florida's absolute privilege, as this Court has developed the common law doctrine, was never intended to sweep so broadly as to provide absolute immunity from liability to an attorney for alleged defamatory statements the attorney makes during ex-parte, out-of-court questioning of a potential, nonparty witness in the course of investigating a pending lawsuit. In this narrow scenario, we conclude that a qualified privilege instead should apply to ex-parte, out-of-court statements, so long as the alleged defamatory statements bear some relation to or connection with the subject of inquiry in the underlying lawsuit. A qualified privilege requires the plaintiff to establish express malice. However, where the statements do not bear some relation to or connection with the subject of inquiry in the underlying lawsuit, the defendant is not entitled to the benefit of any privilege—either absolute or qualified.

Providing a qualified privilege under the circumstances of this case, which involves an attorney's ex-parte, out-of-court questioning of several nonparty witnesses, is sufficiently protective of the competing policies underpinning the privilege: “[T]he right of an individual to enjoy a reputation unimpaired by defamatory attacks versus the right of the public interest to a free and full disclosure of facts in the conduct of judicial proceedings.” Levin, 639 So.2d at 608. We adopt the reasoning of Judge Warner's scholarly dissent in the decision below that the purpose of absolute immunity is not “advanced by protecting a lawyer who is defaming a party to a witness outside of a proceeding at a time when both parties are not present and do not have an opportunity to be heard.” DelMonico, 50 So.3d at 12 (Warner, J., dissenting). We therefore quash the Fourth District's decision in DelMonico.

FACTS AND PROCEDURAL HISTORY

The present case arises out of actions that an attorney, Arthur Rodgers Traynor, Jr., allegedly took in the course of investigating an underlying defamation action he was hired to defend. The legal issue is whether absolute immunity applies to Traynor's alleged defamatory statements allegedly made in the course of his investigation.

Specifically, in the underlying defamation action (the Crespo defamation action), Daniel DelMonico, the president of MYD Marine Distributor, Inc. (MYD), sued business competitors Donovan Marine, Inc. (Donovan) and Tony Crespo, the latter of whom was a sales representative at Donovan. In that action, DelMonico asserted that Crespo had defamed DelMonico by telling a number of DelMonico's clients that DelMonico, in a successful attempt to lure customers away from Donovan, had supplied prostitutes to the owner of a company doing business with Donovan.

To defend against DelMonico's Crespo defamation action, Donovan and Crespo together retained the services of attorney Arthur Rodgers Traynor, Jr., and Traynor's law firm. While the underlying Crespo defamation action was pending, DelMonico and MYD (collectively Plaintiffs), filed a separate action against Traynor and his law firm (collectively Defendants), asserting claims of defamation and tortious interference with a business relationship. In this separate action, the Plaintiffs alleged that Traynor had made numerous false statements about DelMonico to various individuals Traynor had contacted as potential witnesses in the Crespo defamation action. The complaint against Traynor set forth the following allegations:

Traynor contacted one of DelMonico's ex-wives and told her that DelMonico had wrongfully taken a customer from Traynor's client by enticing the customer's purchasing agent with prostitutes;

Traynor contacted a former employee of MYD and told him that DelMonico's method of taking a client away from Donovan was to supply a prostitute to the owner of the business. Traynor then stated that, with the employee's former proximity to DelMonico, he would surely be able to give additional examples of DelMonico's unethical business practices;

Traynor contacted Jack Norrie, who is the past owner of a company called New Nautical Coatings, Inc. (New Nautical), and the father of the current owner of New Nautical. New Nautical manufactures Sea Hawk brand marine paint, and MYD was the exclusive worldwide distributor of Sea Hawk products under contract with New Nautical. Traynor told Norrie that DelMonico was being “prosecuted for prostitution”;

Traynor contacted another of DelMonico's ex-wives and told her that DelMonico was “being prosecuted for using prostitution to get some business”;

Traynor contacted an employee of Bradford Marine, Inc. (Bradford), a company that was a substantial consumer of Sea Hawk brand marine paint through MYD, and advised him that DelMonico was being prosecuted for prostitution. Bradford's purchasing agent, Enrique Pietri, subsequently contacted New Nautical and advised that he had been instructed by his superiors to locate a supplier other than MYD for Sea Hawk brand products, and if Bradford was forced to purchase Sea Hawk products exclusively from MYD, then Bradford would no longer buy Sea Hawk products at all;

New Nautical was contacted by other companies that were consumers of Sea Hawk brand products through MYD. Representatives from these companies stated that rather than purchasing the products through MYD, they wished to buy the products directly from New Nautical or another distributor because they were told that MYD's principal, DelMonico, was being prosecuted for prostitution or procuring prostitutes for purchasing agents.

The Plaintiffs' complaint alleged that as a result of Traynor's actions in making false and malicious statements, MYD lost its exclusive distributorship of Sea Hawk brand products, which led to the loss of income, profits, business, and investment opportunities. The Plaintiffs also filed affidavits in support of their allegations and estimated that the loss of their exclusive distributorship of Sea Hawk paint alone cost MYD between seven and nine million dollars.¹

Pietri, Bradford's purchasing agent, signed an affidavit stating that Traynor told Pietri that Traynor was “involved in the prosecution of Dan DelMonico for prostitution.” DelMonico's ex-wife signed an affidavit in which she swore, “Mr. Traynor stated that Mr. DelMonico was being prosecuted for prostitution, and that he was part of the team of people going after him really hard because Mr. DelMonico had done some embarrassing and illegal things.” According to the affidavit, “Traynor stated that if they found evidence that showed [the ex-wife] knew about Mr. DelMonico's criminal activities and did not tell them ... [she] could have a legal problem.” Traynor later acknowledged during a deposition and in an affidavit to having interviewed prospective witnesses in connection with the Crespo defamation action, but he denied stating to anyone that DelMonico was being prosecuted for prostitution.

The Defendants moved for summary final judgment, asserting in pertinent part that the Plaintiffs' claims were barred because Traynor's alleged statements were absolutely privileged under Florida law. Relying on precedent from this Court, the Defendants asserted that even if the allegations were true, no such action could be brought because the alleged defamatory statements occurred during witness interviews conducted for the purpose of defending their clients, Donovan and Crespo, in pending litigation and were clearly made in the course of a judicial proceeding. According to the Defendants, these facts supported application of an absolute privilege to shield them from suit.

At a hearing on the summary judgment motion, the trial court expressed concern as to the competing policies implicated by the absolute privilege. The trial court questioned “whether or not developing a witness for litigation [was] in the course of a judicial proceeding ... contemplated by Levin” and opined that “a strong argument for a qualified privilege” existed. The trial court nevertheless entered a summary final judgment in favor of the...