Kinda v. Carpenter

• Decision Date: 06 June 2016
• Docket Number: H040316
• Citation: 247 Cal.App.4th 1268,203 Cal.Rptr.3d 183
• Court: California Court of Appeals Court of Appeals
• Parties: Margaret L. KINDA et al., Plaintiffs and Appellants, v. Scott CARPENTER, Defendant and Respondent.

247 Cal.App.4th 1268

203 Cal.Rptr.3d 183

Margaret L. KINDA et al., Plaintiffs and Appellants

v.Scott CARPENTER, Defendant and Respondent.

H040316

Court of Appeal, Sixth District, California.

Filed June 6, 2016

Certified for Partial Publication.^*

John Alan Schlaff, Los Angeles, The Law Offices of John A. Schlaff, Counsel for Plaintiffs/Appellants Margaret L. Kinda, Aaron Kinda, Artisan Fine Oriental Rug Care, Inc.

Edmund Gerard Farrell, Los Angeles, Murchison and Cumming, LLP, Counsel for Defendant/Respondent Scott Carpenter.

Grover

, J.

Commercial tenants Artisan Fine Oriental Rug Care, Inc. (Artisan) and its owners Margaret L. Kinda and Aaron Kinda (plaintiffs) sought a temporary restraining order and preliminary injunction against their landlord Scott Carpenter (defendant). The dispute centered on plaintiffs' tenancy and defendant's alleged disruption of their business. Plaintiffs alleged several contract related causes of action based on their lease. After plaintiffs obtained a temporary restraining order, three consumer reviews criticizing Artisan and Margaret Kinda appeared on the Internet site Yelp.com (Yelp) posted from different online aliases. Plaintiffs suspected defendant was responsible for the reviews and they amended the complaint to allege defamation of Artisan and Ms. Kinda. Plaintiffs also obtained via subpoena information purporting to identify the Internet subscriber accounts linked to the Yelp reviews.

Defendant moved in limine to exclude the evidence related to the Yelp reviews on hearsay and authenticity grounds. The trial court granted defendant's motion and later granted a directed verdict for defendant on the defamation cause of action. A jury returned a unanimous defense verdict on the contract causes of action, which included a special verdict that although defendant had breached the lease agreement no damages resulted. The trial court deemed defendant the prevailing party and granted his request for attorney's fees.

Plaintiffs contend on appeal that the trial court erred in excluding the Yelp evidence and eliminating their defamation cause of action. Plaintiffs also contend that had the Yelp evidence been admitted, they would have established presumed damages, which would have altered both the jury's special verdict on the contract-based causes of action and the court's prevailing party determination for the attorney's fees award.

As we explain in the published portion of this opinion, the exclusion of the Yelp evidence and the resulting disposition of the defamation cause of action was error.¹ In the unpublished portion of this opinion, we conclude that in light of the erroneous exclusion of plaintiffs' evidence supporting the defamation cause of action, the determination of the prevailing party and award of attorney's fees likewise must be reversed. Although we do not agree with plaintiff that a finding of defamation per se would have necessarily furnished damages for the breach of contract cause of action, neither can we conclude that the outcome on the contract-based causes of action would have remained unaffected by the presentation of evidence on the alleged defamation. Accordingly, the judgment must be reversed.

I. BACKGROUND

A. Landlord–Tenant Dispute

After defendant and his company, Monterey Bay Spice Company, Inc.,² bought the commercial building housing plaintiffs' rug cleaning business, a series of disputes developed in which plaintiffs complained that defendant's behavior interfered with their business operations and amounted to a campaign of harassment and retaliation. Plaintiffs claimed that defendant's conduct, which included construction and demolition on an adjoining section of the building, requests to enter and inspect the premises, service of multiple “pay rent or quit” and similar notices, and obstructing a designated parking space, interfered with plaintiffs' business and breached the implied and express covenants of their lease. Based on defendant's alleged failure to abate the noisy construction work, on June 1, 2011, Ms. Kinda sought and received a temporary restraining order enjoining defendant's construction activities exceeding a stated decibel level during business hours. Ms. Kinda later obtained a preliminary injunction related to the noise, and a second preliminary injunction related to defendant's requests to enter and inspect plaintiffs' business premises.

B. Postings on Yelp

Yelp is an Internet website that collects and publishes online consumer reviews of businesses. (Bently Reserve LP v. Papaliolios (2013) 218 Cal.App.4th 418, 423, 160 Cal.Rptr.3d 423

.) On the day the temporary restraining order issued against defendant, a negative review of Artisan appeared on Yelp, followed by two more negative reviews on the following two days. Each review was attributed to a different online alias.

The first review, posted on June 1, 2011 by “thomas j” stated that Artisan provided the “[w]orst service I have ever experienced” and described in detail purported delays, a price increase, and a stain that appeared on his carpets after leaving them with Artisan. The next day, a review of Artisan by “Sandy Z” warned, “watch out for the angry Lady that works there” and stated “I am lucky in that I had a taste of this cantankerous rug hut BEFORE I actually brought my carpet in for cleaning.” The third review by “chris s” criticized Artisan's service as “unfriendly” and shared that a purported rip in his carpet was “actually made [ ] worse” by Artisan's attempted repair. Ms. Kinda compared the reviews to Artisan's service records and did not find any jobs or customers that corresponded to the work described in the reviews. Ms. Kinda became suspicious that they were not legitimate after noting the three reviews were posted in the days immediately following issuance of the temporary restraining order.

Plaintiffs amended their complaint to add a cause of action for defamation as to Ms. Kinda and Artisan. They alleged that defendant, his company, and Does 1–10 “commenced a campaign of defamation” on or about June 1, 2011 against Ms. Kinda and Artisan “whereby they pretended to be customers of [p]laintiffs and published false statements online summarizing a fictional and disappointing experience with [p]laintiff's business.” Citing Civil Code section 45a

, Ms. Kinda and Artisan alleged that the statements were false and libelous on their face because the reviews subjected them to “ridicule and obloquy” and sought to injure their reputation in the fine rug cleaning and care industry by imputing a lack of integrity, professionalism, and competence. Defendant denied the allegations against him and specifically denied any responsibility for the Yelp reviews.

Plaintiffs tried to discover the identity of the person or persons responsible for the Yelp reviews. Plaintiffs subpoenaed Yelp! Inc. for business records and obtained the email addresses and IP addresses³ associated with the three reviews at issue. The “thomas j” and “Sandy Z” posts shared the same IP address, which was associated with an Internet account registered to Comcast Corporation (Comcast). The “chris s” post came from a different IP address associated with an AT & T Internet Services (AT & T) account.

Plaintiffs requested from Comcast and AT & T the subscriber information associated with the IP addresses at the time of the June 2011 Yelp posts. AT & T responded with the “IP Assignment Details” for the relevant time frame and IP address, as well as “Customer Account Details” for an inactive account that had been registered to “Scott D. Carpenter” and billed to an address in Santa Cruz, California. The address was the location of defendant's business offices at the time. Comcast eventually responded that due to its record retention system, it could not verify the IP address information for any date before July 27, 2011, but Comcast provided the subscriber information for the IP addresses as of that date. The subscriber listed was Scott Carpenter. The service address for the subscriber account was defendant's home address.

In connection with this information and possible punitive damages on their defamation claim, plaintiffs sought an order to allow pretrial discovery on defendant's financial condition.⁴ The judge who heard the motion found the IP address evidence to be circumstantial yet compelling. The court referred to the evidence as a “series of coincidences” whereby “the negative reviews on Yelp were traced to the defendant's internet protocol addresses.” The court explained: “[A]lthough the defendant makes an interesting argument that it's not conclusively shown that Mr. Carpenter himself provided these reviews ..., the circumstantial evidence in this case and the only reasonable interpretation that this Court comes to is that it is highly likely that the defendant is the one that is responsible for these reviews and it's not just a coincidence.” The court granted the discovery motion but cautioned that any findings were “only for this motion for discovery” and were not to be viewed as binding on any trier of fact.

C. Motions In Limine and Trial

A different judge presided over pretrial motions and trial. Defendant moved in limine to exclude evidence of and reference to the Yelp posts on the grounds that the posts were inadmissible hearsay and unauthenticated. After hearing from counsel, the court dispensed with the hearsay argument and focused on what was termed authentication: “[Y]ou have to put on some sort of evidence that ties [the Yelp posts] to the defendant and authenticates it. [¶] ... [¶] How are you going to tie it to the defendant, please?” Plaintiffs' counsel responded that the Yelp posts, memorialized as printouts of the online reviews, were “self-authenticating” under Evidence Code section 1552

. To tie those reviews to defendant, plaintiffs would offer the subpoenaed records from AT & T and Comcast, authenticated by the respective custodians of records. Plaintiffs' counsel argued that by using the...