Mandelblatt v. Perelman
Decision Date | 05 April 1988 |
Docket Number | No. 86 Civ. 7829 (RLC).,86 Civ. 7829 (RLC). |
Citation | 683 F. Supp. 379 |
Parties | Michael MANDELBLATT, Plaintiff, v. Ronald O. PERELMAN, Howard Gittis, Bruce Slovin, Fred L. Tepperman and Frederick W. McNabb, Jr., Defendants. |
Court | U.S. District Court — Southern District of New York |
Rhoades and Rhoades, P.C., Brewster, N.Y., for plaintiff; Daniel Rhoades, of counsel.
Skadden, Arps, Slate, Meagher & Flom, New York City, for defendants; Vaughn C. Williams, of counsel.
This is one of a growing number of suits seeking to redress adverse employment action on a theory of defamation.1 Plaintiff Michael Mandelblatt brought suit in diversity against four directors of the Revlon Group, Inc. (Revlon) and its General Counsel, alleging that they defamed him in connection with the termination of his consulting arrangement with Revlon. Defendants move for summary judgment on the ground that plaintiff consented to the publication of their allegedly defamatory statements.
Revlon (formerly known as Pantry Pride, Inc.) came under the control of the MacAndrews & Forbes Group, Inc., on June 11, 1985. Shortly thereafter, plaintiff entered into a consulting agreement ("the Agreement") with Pantry Pride. Under the terms of the Agreement, plaintiff resigned his positions as officer and director of Pantry Pride, and of its subsidiary, Devon Stores, Inc., and, effective August 1, 1985, took on consulting responsibilities "in connection with the management, operation and possible disposition of the business of ... Devon." Williams Aff't, Ex. A, at 3.
Agreement, ¶ 7(d). As a matter of procedure, the Agreement stipulated that a discharge for cause should not be effective unless plaintiff first received (1) reasonable notice, (2) an opportunity to be heard, together with counsel, before the Board of Directors, and (3) a Notice of Termination, stating that "in the good faith opinion of the Board of Directors plaintiff was guilty of conduct set forth in clause (A), (B) or (C)," quoted above. Id. The Notice of Termination was required to "indicate the specific termination provision ... relied upon and ... set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination ... under the provision so indicated." Id., ¶ 7(f).
At a March 5, 1986, meeting of Pantry Pride's Board of Directors, defendant Perelman, Chairman of the Board, "requested defendant McNabb to report to the Board with respect to certain developments relating to plaintiff's performance...." Williams Aff't, Ex. B (Minutes of March 5 Meeting). The Board then unanimously resolved to authorize the appropriate corporate officers "to advise plaintiff that there is a reasonable basis for the Board to consider terminating him for cause as that term is defined in the Agreement ..., and to offer him the opportunity to be heard before the Board...." Id. By letter dated March 6, 1986, defendant Gittis notified plaintiff of the Board's intention to consider terminating him, and gave him a week in which to advise Pantry Pride of his desire to be heard by the Board. Defendant Gittis wrote:
management has submitted and will submit to the Board of Directors substantiation of its view that your conduct with respect to discouragement of prospective purchasers of Devon and otherwise establishes that you have willfully engaged in gross misconduct materially injurious to Pantry Pride constituting cause for your discharge pursuant to the provisions of Section 7(d)(B) of the Agreement.
Williams Aff't, Ex. C.
Slovin Aff't, ¶ 8. Defendant Slovin went on to report two occasions on which plaintiff had allegedly discouraged potential purchasers of Devon, id., ¶¶ 9-11, and concluded by stating that "I am convinced that plaintiff acted in bad faith and with the avowed purpose of sabotaging the sale of Devon." Id., ¶ 13.
At the conclusion of the May 20 Board meeting, it was resolved as follows:
Williams Aff't, Ex. M at 10 (Minutes of May 20 Meeting). This language was repeated essentially verbatim in the Notice of Termination sent to plaintiff on May 20 over the signature of defendant McNabb.
DISCUSSION
Complaint, ¶¶ 14-15. He seeks to recover for injury to "his reputation, his income, and his ability to obtain the kind of employment he had previously." Id., ¶ 19. While plaintiff's language is far from precise, the court must construe it "so ... as to do substantial justice." Rule 8(f), F.R.Civ.P. See FRA S.p.A. v. Surg-O-Flex of America, Inc., 415 F.Supp. 421, 424 (S.D.N.Y. 1976) (Tenney, J.) ().
A strict reading of the complaint might lead one to suppose that its scope is limited to claims based on defamatory statements made subsequent to plaintiff's termination, but it admits of a more generous construction: namely that "each defendant ... sought to terminate plaintiff's services" by publishing defamatory statements about him to the Board of Directors prior to his discharge. The court must hesitate to read between the lines of a plaintiff's pleading where to do so would result in prejudice to the defendant. Here, however, defendants had full notice of the extent of plaintiff's claims at least as early as plaintiff's deposition, when plaintiff explained that he was relying on defendants' pre-discharge statements to...
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