Heyward v. Credit Union Times

• Decision Date: 17 December 2012
• Docket Number: No. CIV 12–0258 JB/LFG.,CIV 12–0258 JB/LFG.
• Citation: 913 F.Supp.2d 1165
• Parties: Ben HEYWARD, Plaintiff, v. The CREDIT UNION TIMES, Defendant.
• Court: U.S. District Court — District of New Mexico

913 F.Supp.2d 1165

Ben HEYWARD, Plaintiff,

v.The CREDIT UNION TIMES, Defendant.

No. CIV 12–0258 JB/LFG.

United States District Court,

D. New Mexico.

Dec. 17, 2012.

Michael L. Danoff, Ryan Danoff, Michael Danoff & Associates, P.C., Albuquerque, NM, for the Plaintiff.

Christopher P. Beall, Levine Sullivan Koch & Schulz, LLP, Denver, CO and Elizabeth Koch, Levine Sullivan Koch & Schulz, LLP, Washington, D.C., for the Defendant.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Defendant's Motion to Dismiss Complaint (Incorporating Authorities), filed April 27, 2012 (Doc. 7)(“Motion to Dismiss”). The Court held a hearing on July 27, 2012. The primary issues are: (i) whether the Motion to Dismiss is premature as Plaintiff Ben Heyward has not been provided the identity of his critics in discovery; and (ii) whether the statements on which Heyward bases his defamation allegations fail to state a prima facie claim for defamation as a matter of law, because each statement: (i) is an unambiguous assertion of opinion; (ii) does not concern Heyward; (iii) is not a false assertion of fact; or (iv) is not defamatory. The Court will grant in part and deny in part the Motion to Dismiss. The Motion to Dismiss is not premature, because the Defendant Credit Union Times asserts that even if Heyward's allegations are taken as true, his allegations are not legally sufficient to state a prima facie claim for defamation. While the majority of the statements are not actionable for defamation, construing Heyward's allegations in the light most favorable to him, and drawing all reasonable inferences in his favor, the Court concludes that some of the statements Heyward alleges as defamatory could be actionable as defamatory, because they are not unambiguously opinion.

FACTUAL BACKGROUND

The Credit Union Times, an unincorporated publication owned by The National Underwriting Company, published an article entitled “Historic Development Stains CU's Balance Sheet” on April 6, 2011. See Complaint for Defamation ¶ 11, at 2, filed Mar. 13, 2012 (Doc. 1)(“Complaint”); Historic Development Stains CU's Balance Sheet, 22 Credit Union Times No. 13, at 2, filed Mar. 13, 2012 (Doc. 1–1)(“Article”).¹ The Article reports about controversy surroundinga loan that First Financial Credit Union of Albuquerque, New Mexico, made to Vincent Garcia and two other developers to finance the redevelopment of a building in downtown Albuquerque, at Copper Square. See Complaint ¶ 11, at 2; Article at 1. The Article notes that Garcia and the two other developers had been indicted with bank fraud, and that First Financial was forced to foreclose on the property. See Article at 2. Heyward, First Financial's Chief Executive Officer, was the subject of the Article. See Complaint ¶ 11, at 2. The Article “was based upon statements of anonymous persons and alleged ‘critics[,]’ which were untrue, false and inaccurate....” Complaint ¶ 12 at 2.

PROCEDURAL BACKGROUND

On March 13, 2012, Heyward filed this lawsuit, alleging that the following twelve statements in the Article are false and defamatory. See Complaint ¶ 15, at 2–9.

STATEMENT 1:

But critics lay the responsibility for making the Copper Avenue loan at the feet of CEO Robert Heyward, alleging that the loan merely represented, the largest example of a ‘cowboy style’ of leadership that, they charged depended more on Heyward's desire to show off and make a big splash than on due diligence and responsibility that should characterize a safely run credit union.

Complaint ¶ 15a, at 3.

Heyward alleges that “[t]his statement is false and inaccurate as well as defames the reputation of Mr. Heyward.” Complaint ¶ 15a, at 3.

STATEMENT 2: “Heyward's inclination to fire executives who have disagreed with him.” Complaint ¶ 15b, at 3.

In his Complaint, Heyward does not contend that this statement is defamatory, but alleges only that “[t]his statement is inaccurate and untrue.” Complaint ¶ 15b, at 3.

STATEMENT 3: “But all charged that Heyward's determination to make unilateral decisions and a lack of attention to detail led to the Copper Square loan and a significant number of poor loans.” Complaint ¶ 15c, at 3.

Heyward alleges that this statement “is untrue and inaccurate.” Complaint ¶ 15c, at 3. Heyward states that “had CU Times performed due diligence and a reasonable investigation rather than relying on the unsubstantiated opinions of the anonymous critics ... it would have determined the allegations to be false and inaccurate.” Complaint ¶ 15c, at 3.

STATEMENT 4: “The U.S. Attorney has indicted developers for fraud but critics blame CU CEO.” Complaint ¶ 15d, at 4.

Heyward does not dispute either that the United States Attorney indicted the developers for fraud or that critics blamed him for approving the loan. Rather, he contends that “[t]his accusation ... implies Mr. Heyward committed fraud by approving this loan ... [which] maliciously defames Mr. Heyward's reputation in the industry as well as is simply not true.” Complaint ¶ 15d, at 4.

STATEMENT 5: “Critics charge loan as the latest in a pattern of reckless lending.” Complaint ¶ 15e, at 4.

Heyward alleges that “[t]his is inaccurate and untrue and defames [Heyward's] reputation....” Complaint ¶ 15e, at 4.

STATEMENT 6: “For his part, Heyward did not answer detailed questions about the Copper Avenue loan, but reported that the credit union relied on the borrower's representations.” Complaint ¶ 16f, at 5.

Heyward alleges that “[t]his statement implies that CU Times gave Mr. Heyward the opportunity to respond or comment on the allegations of [the] anonymous critics that CU Times relied upon as fact. This is not the case.” Complaint ¶ 16f, at 5. Additionally, Heyward states that “the purported quoted statement by Mr. Heyward was inaccurate, taken out of context and incomplete .... [demonstrating] the bias and lack of due diligence on ... the CU Times[' part].” Complaint ¶ 16f, at 5.

STATEMENT 7: “Heyward was the only one at First Financial with authority to sign off on the Copper Square Avenue loan, the critics said, and he knew what the credit union knew and went on to approve it anyway.” Complaint ¶ 15g, at 5.

Heyward does not dispute that he “was the only person at First Financial who could approve the Copper Square loan due to its size, [but alleges that] the approval was based upon the representations and presentations of the business loan department at First Financial....” Complaint ¶ 15g, at 5–6. He alleges that “the statement that he had the same information as his staff and despite this approved the loan is false and inaccurate.” Complaint ¶ 15g, at 6.

STATEMENT 8: “Six of the credit union's executive team in place in February 2008 when First Financial made the loan have since left.” Complaint ¶ 15h, at 6.

Heyward alleges that this statement is false, as “[t]here were never six members of the executive team,” and defamatory, because this statement “falsely implies that there was a hostile work environment....” Complaint ¶ 15h, at 6.

STATEMENT 9: “The critics argued their concern flowed from their observations that the Copper Avenue loan was only the largest in a systematic lending pattern without regard to due diligence, including the purchase business loan participations.” ² Complaint ¶ 15i, at 6.

In his Complaint, Heyward alleges that “[t]his quote [sic] is false, untrue, inaccurate [,] ... misleading and defamatory....” Complaint ¶ 15i, at 6.

STATEMENT 10: “Critics reported that Heyward had bought these loan participations with little or no due diligence from a credit union where he had worked previously....” Complaint ¶ 15j, at 7.

Heyward states that this statement is defamatory to him and false. See Complaint ¶ 15j, at 7. Heyward alleges: “The false allegation of lack of due diligence coupled with the allegation that Mr. Heyward purchased the participation loans from a previous employer clearly implies that Mr. Heyward was guilty of some sort of wrong doing.” Complaint ¶ 15i, at 8.

STATEMENT 11:

In further support of their allegations, the critics pointed out that the credit union's net worth has dropped steadily since Heyward took the helm in early 2005. NCUA ³ records show that CU's net worth ratio at the end of 2005 stood at 12.32%, took a brief uptick to 12.37% in 2006 before falling steadily to 9.36% at the end of 2010.

Complaint ¶ 15k, at 8.

In his Complaint, Heyward alleges that the statement is false: “To imply that a decline is bad or otherwise abnormal merely because Mr. Heyward is the CEO is without any factual support, ignores outside economic factors and is defamatory.” Complaint ¶ 15k, at 8.

STATEMENT 12: “Critics acknowledge that CU's with all sorts of management have lost money in the poor economy since 2008 but maintained that Heyward's management has led First Financial into a significantly deeper hole than it would have been if Heyward was not CEO.” Complaint ¶ 15l, at 9.

Heyward alleges that this quotation is not true and that, “to sustain this statement, CU Times would have to objectively prove that First Financial is worse off as a direct result of Mr. Heyward being CEO. There are no facts to support this.” Complaint ¶ 15l, at 9.

Heyward alleges that these “defamatory statements made about Ben Heyward in the article caused irreparable damage to Mr. Heyward's reputation, specifically in the credit industry .... [from which he] continues to suffer damage....” Complaint at ¶ 17, at 9.

On April 27, 2012, the Credit Union Times filed its Motion to Dismiss, arguing: “Because each of the challenged statements either reports the constitutionally protected, unverifiable views of Heyward's critics or is otherwise not defamatory, Heyward's complaint states no claim for defamation and should be dismissed.” Motion to Dismiss at 3. The Credit Union Times asserts that: “None of the statements challenged ... [are] actionable as defamation, because they are either incapable of being proven true or...