Hoffman v. Bailey
| Decision Date | 20 June 2017 |
| Docket Number | CIVIL ACTION CASE NO. 13-5153 SECTION: "G"(5) |
| Parties | PETER HOFFMAN, et al. v. DAVID BAILEY |
| Court | U.S. District Court — Eastern District of Louisiana |
In this litigation, Plaintiffs Peter and Susan Hoffman (collectively "the Hoffmans") allege that Defendant David Bailey ("Bailey") sent an email to the Louisiana State Historic Preservation Office in which Bailey allegedly made defamatory statements against the Hoffmans by, according to the Hoffmans, accusing them of fraudulently participating in a Louisiana tax incentive program.1 Pending before the Court is Plaintiff Peter Hoffman's "Motion for Partial Summary Judgment (FRCP 56)."2 Having considered the motion, the memoranda in support and in opposition, the record, and the applicable law, the Court hereby grants in part and denies in part the motion.
In their complaint, the Hoffmans state that Susan Hoffman is owner of Seven Arts Pictures Louisiana, LLC ("SAPLA"), which owns real property located at 807 Esplanade Avenue in New Orleans, Louisiana ("the Property").3 The Hoffmans aver that SAPLA engaged in substantial rehabilitation of the Property in order to restore its historic character and to convert the Property so that it could be used as a motion picture post-production facility.4 The Hoffmans contend that SAPLA obtained a letter from the Louisiana Department of Economic Development certifying that the Property was eligible for Louisiana film infrastructure tax credits and received certification from the United States Department of the Interior that the Property qualified for United States historical rehabilitation tax credits.5 The Hoffmans also allege that SAPLA has requested, but has not yet received, certification from the Louisiana State Historic Preservation Office ("SHPO") that the Property qualifies for Louisiana historic rehabilitation tax credits.6
According to the Hoffmans, Peter Hoffman was the Chief Executive Officer of Seven Arts Pictures Plc ("SAP Plc"), an English public limited company, until November 9, 2011.7 Bailey worked as the company's Finance Director from August 2009 until he left in December 2009.8 Subsequently, on November 29, 2012, Bailey allegedly sent an e-mail to SHPO stating:
The Hoffmans claim that Bailey's statements in the November 2012 e-mail were "untrue and [were] made maliciously without any basis in fact and with an intent to damage plaintiffs' reputations, successes, and good will," and were intended "to embarrass plaintiffs and to damage plaintiffs' business relationships."10 The Hoffmans contend that Bailey had never seen the relevant reports summarizing the rehabilitation expenditures and had no responsibility for those expenses during his time as SAP Plc's Finance Director.11 The Hoffmans argue that Bailey's conduct constitutes defamation and defamation per se.12
In response, Bailey contends that the Hoffmans' lawsuit is without merit and "part of their scheme of harassment, threats, intimidation, and retaliation" against Bailey for providing assistance to the government in its investigation of the Hoffmans.13 According to Bailey, while he was employed as Finance Director of SAP Plc in 2009, he had access to accounting records and other financial documents related to the Hoffmans' "plans and schemes" to receive tax credits on the 807 Esplanade Property.14 Bailey asserts that he became aware of inconsistencies and misstatements in SAP Plc's records and of efforts by the Hoffmans to "apply for and obtain and then resell for cash millions of dollars of tax credits with respect to the 807 Esplanade Property."15 Bailey further alleges that a series of articles published in 2012 informed him that the Hoffmans were seeking millions of dollars in tax credits with respect to the 807 Esplanade Property to help finance "$13.5 million" in redevelopment costs, which Bailey asserts he knew was a false and inflated number.16 Thus, Bailey alleges that he sent his November 24, 2012 email that is the subject of this defamation action to Louisiana governmental employee Jessica Richardson.17
The Hoffmans filed a complaint in this matter on July 23, 2013.18 On July 24, 2013, the matter was assigned to Section "A" of the Eastern District of Louisiana.19 On August 26, 2013, Bailey filed a motion to dismiss for lack of personal jurisdiction, for improper service of process, and for improper venue, and in the alternative, a special motion to strike pursuant to Louisiana Code of Civil Procedure article 971.20 On January 14, 2014, Judge Zainey stayed discovery proceedings in this matter pursuant to Louisiana Code of Civil Procedure article 971(D) until the Court issued a ruling on the motion to strike.21 On January 27, 2014, Judge Zainey denied both the motion to dismiss and the special motion to strike.22
On February 6, 2014, Judge Zainey held a status conference at which Bailey expressed his intention to seek certification for an interlocutory appeal of Judge Zainey's order denying Bailey's special motion to strike.23 On that same day, Judge Zainey administratively stayed this matter "pending resolution of that appeal."24 However, no appeal was filed at that time.25 Rather, on February 21, 2014, Bailey filed a motion for reconsideration of Judge Zainey's January 27, 2014 Order on the new grounds that Peter Hoffman was indicted in the Eastern District of Louisiana on February 6, 2014, on six counts of conspiracy and wire fraud relating to his submission of false applications for more than $1.1 million of tax credits with respect to the property at issue in this case.26 On February 25, 2014, Bailey also filed a motion to lift the administrative stay so his motion for reconsideration could be considered.27
On February 25, 2014, Judge Zainey recused himself "[i]n light of the indictment recently filed against one of the plaintiffs," and the case was randomly realloted to this Court, Section "G."28 On December 23, 2015, this Court lifted the stay imposed by Judge Zainey, as Bailey was not pursuing an interlocutory appeal of Judge Zainey's Order denying Bailey's special motion to strike.29 The same day, the Court denied Bailey's motion for reconsideration, as Bailey had not previously raised the Rule12(b)(6) arguments that he made in his motion for reconsideration and had not moved for reconsideration of the denial of his special motion to strike.30 The Court further noted that "if Bailey wishes to file a motion to dismiss or a motion for summary judgment, the Court will consider such a motion at that time."31
On December 30, 2015, Bailey filed a new motion to dismiss pursuant to Rule 12(b)(6), in which he requested that the Court take judicial notice of several filings in the criminal actions against the Hoffmans and argued that the Hoffmans failed to state a claim upon which relief could be granted in light of those criminal convictions.32 On February 3, 2016, the Court denied the motion.33 The Court determined that, on a motion to dismiss, it could only take judicial notice of the fact that the Hoffmans were convicted of mail fraud, wire fraud, and conspiracy to commit mail or wire fraud generally, but not of the facts underlying the convictions that Bailey pointed to in support of his motion to dismiss.34 The Court further concluded that the Hoffmans had sufficiently alleged that Bailey's email constitutes defamation per se, and thus the Court denied Bailey's motion to dismiss under Rule 12(b)(6).35 On February 10, 2016, Bailey filed a notice of appeal to the Fifth Circuit on the grounds that he was entitled to immunity from the defamation claims,36 which the Fifth Circuit dismissed for lack of jurisdiction.37
Since this action was filed, the Hoffmans have been convicted on multiple counts of wire fraud, mail fraud, and conspiracy in connection with tax credit applications regarding the 807 Esplanade Property.38 On September 14, 2016, Bailey filed counterclaims against the Hoffmans to recover damages caused by the Hoffmans' allegedly "threatening, harassing, intimidating, and retaliatory litigation" against Bailey under 18 U.S.C. § 1514A and Louisiana state law for malicious prosecution.39 On April 26, 2017, the Court granted the Hoffmans' motion to dismiss pursuant to Rule 12(b)(6) and dismissed Bailey's counterclaims for failure to state a claim upon which relief could be granted.40 The Court determined that: (1) Bailey had failed to allege that he complied with the statutory prerequisites necessary to file an action under 18 U.S.C. § 1514A, and thus dismissed his claim under Section 1514A; and (2) Bailey failed to allege that there had been a "bona fide termination" of this proceeding in his favor as required to assert a malicious prosecution claim under Louisiana state law.41 The Court dismissed Bailey's premature malicious prosecution claim without prejudice.42 On April 26, 2017, the Court denied the Hoffmans' motion for sanctions against Bailey's counsel for filing Bailey's counterclaims.43
On March 2, 2017, Peter Hoffman ("Hoffman") filed the instant motion for partial summary judgment.44 On March 15, 2017, the Court...
To continue reading
Request your trial