Tuomela v. Waldorf-Astoria Grand Wailea Hotel

• Decision Date: 22 January 2021
• Docket Number: Civ. No. 20-00117 JMS-RT
• Parties: WENDY TUOMELA, Plaintiff, v. WALDORF-ASTORIA GRAND WAILEA HOTEL, Defendant.
• Court: U.S. District Court — District of Hawaii

WENDY TUOMELA, Plaintiff, v. WALDORF-ASTORIA GRAND WAILEA HOTEL, Defendant.

Civ. No. 20-00117 JMS-RT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

January 22, 2021

ORDER DENYING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS AS TO COUNT THREE (DEFAMATION), ECF NO. 38

I. INTRODUCTION

Defendant Waldorf=Astoria Management LLC¹ moves pursuant to Federal Rule of Civil Procedure 12(c) for judgment on the pleadings as to one aspect of Count Three (alleging defamation) of pro se Plaintiff Wendy Tuomela's ("Plaintiff" or "Tuomela") Complaint. ECF No. 38. The court has reviewed the Motion, the Opposition, and the Reply, ECF Nos. 38, 44, and 46; and decides thematter under Local Rule 7.1(c) without a hearing. Based on the following, the Motion is DENIED. Count Three remains as originally pleaded.

II. BACKGROUND

Tuomela's Complaint alleges that she was wrongfully terminated in April 2018 from her 20-year tenure of employment at the Grand Wailea Hotel. ECF No. 1-1 at PageID ## 11, 15-18. She claims she was falsely accused of theft, and was forced to pay the Hotel $900 in cash, which apparently was part of the amount she was accused of stealing. The Complaint alleges that after being accused, she was threatened with incarceration by a security guard (Michael Palazzotto) and Defendant's human resources representative (Carol Kawabata) if she did not pay (or return) the money. Id. at PageID ## 11-13, 15-17. It alleges that on April 17, 2018, Kawabata entered into a contract with Plaintiff to keep the circumstances of her termination confidential. Id. at PageID # 18. Instead, the Complaint alleges that Kawabata told a hotel restaurant manager, Justin Sugarman, that Plaintiff was fired for theft and misconduct, and Sugarman told other staff members. Id. at PageID ## 14, 18. Since that time, Plaintiff was denied comparable employment for similar positions from other employers and was "essentially blackballed from any employment in Wailea[.]" Id. at PageID # 14. She alleges that a "false police report surfaced when she was applying for a jobwhich required a background check [and] [d]ue to the defamatory nature of the police report she did not get the position she was seeking." Id.

Plaintiff filed her Complaint on February 27, 2020 in the Second Circuit Court of the State of Hawaii, ECF No. 1-1, and on March 13, 2020, Defendant removed it to this court based on diversity of citizenship. ECF No. 1. The Complaint alleges counts entitled Extortion, Breach of Fiduciary Duty, Defamation of Character, Wrongful Termination, and Breach of Contract. ECF No. 1-1 at PageID ## 12-18. By Order of June 26, 2020, the court granted a motion for judgment on the pleadings and dismissed Count One alleging extortion. ECF No. 28. Thereafter, Defendant filed two additional motions for judgment on the pleadings—one addressed to Count Two alleging breach of fiduciary duty and one addressed to Count Three alleging defamation. ECF Nos. 36, 38. The instant Order addresses the second motion as to Count Three; a separate order addresses the first motion as to Count Two.

III. DISCUSSION

Count Three alleges "defamation of character" based on two general theories.² First, Tuomela contends that she was defamed when Kawabata toldSugarman "confidential information" that Tuomela was terminated for theft and misconduct, and then Sugarman told others. She alleges that her reputation was damaged as a result. ECF No. 1-1 at PageID # 14. Second, Count Three alleges:

On August 3rd, 2018, in a continuing search for comparable employment, Ms. Tuomela was confronted with a police report (public record) (Exhibit I) that states . . . she is accused of theft. The false police report surfaced when she was applying for a job which required a background check. Due to the defamatory nature of the police report she did not get the position she was seeking. . . . . She has not been able to gain employment equal to the position that she lost as a server at the Humu Room in the Grand Wailea Hotel.

Id. Waldorf's Motion is directed only at the defamation allegations regarding the police report.³ That is, Waldorf does not seek, at least with this Motion, a ruling regarding the allegations about statements Kawabata made to Sugarman that wererelayed to others. Rather, this Motion only argues that statements made to police complaining of a crime are not actionable as defamation, contending that such statements are absolutely privileged. ECF No. 38-1 at PageID ## 329-34.

A. An Absolute Privilege is the Minority Rule

Waldorf cites several cases holding that an absolute privilege protects statements made to police, and thus encourages persons to report criminal activity to authorities without fear of retaliation. Id. at PageID # 332. The interest is "encouraging the free and unhindered communications to law enforcement authorities necessary to facilitate the investigation and prosecution of crimes." Ledvina v. Cerasini, 146 P.3d 70, 75 (Ariz. Ct. App. 2006); see also, e.g., Eddington v. Torrez, 874 N.W.2d 394, 397 (Mich. Ct. App. 2015) ("[P]ersons who make statements to the police when reporting crimes or assisting the police in investigating crimes enjoy a privilege in those statements against the police divulging them for any purpose other than law enforcement. Accordingly, those statements may not be used to sustain a defamation claim."). In Hagberg v. California Federal Bank FSB, 81 P.3d 244 (Cal. 2004), for example, the California Supreme Court held that, under California Civil Code § 47(b),⁴ statements made tolaw enforcement personnel reporting suspected criminal activity are "absolutely" privileged "and can be the basis for tort liability only if the plaintiff can establish the elements of the tort of malicious prosecution." Id. at 245. "[T]he absolute privilege established by section 47(b) serves the important public policy of assuring free access to the courts and other official proceedings. It is intended to 'assure utmost freedom of communication between citizens and public authorities whose responsibility is to investigate and remedy wrongdoing.'" Id. at 249 (quoting Silberg v. Anderson, 786 P.3d 365, 369 (Cal. 1990) (emphasis omitted)).⁵

But Waldorf relies on a minority rule. Rather, as the Idaho Supreme Court recently reiterated, "the majority rule is that statements made to law enforcement enjoy [only] a qualified privilege from defamation actions, which canbe lost through abuse, such as when statements are made with malice or in bad faith." Siercke v. Siercke, 476 P.3d 376, 381 (Idaho 2020) (citing Berian v. Berberian, ___ P.3d ___, 2020 WL 6387153, at *8 (Idaho Nov. 2, 2020)). "[A] qualified privilege [strikes] the appropriate balance between protecting those who seek to report criminal conduct to law enforcement and the countervailing interest in remedying the 'potentially disastrous consequences that may befall the victim of a false accusation of criminal wrongdoing.'" Id. (quoting Gallo v. Barile, 935 A.2d 103, 111 (Conn. 2007)).

In analyzing case law from various jurisdictions, the Connecticut Supreme Court followed "a majority of states that have addressed this issue[,]" Gallo, 935 A.2d at 111, and agreed with the Florida Supreme Court that "a qualified privilege is sufficiently protective of [those] wishing to report events concerning crime. . . . There is no benefit to society or the administration of justice in protecting those who make intentionally false and malicious defamatory statements to the police." Id. (quoting Fridovich v. Fridovich, 598 So. 2d 65, 69 (Fla. 1992)). In turn, Fridovich broadly surveyed state case law and other authorities, 598 So. 2d at 67-68 & n.4, and followed "a majority of the other states [that] have held in this context, that defamatory statements voluntarily made by private individuals to the police . . . prior to the institution of criminal charges arepresumptively qualifiedly privileged." Id. at 69. Many of these opinions distinguish between statements made as part of existing judicial or quasi-judicial proceedings (such as trial testimony)—for which an absolute privilege from defamation exists—and statements to police before the initiation of proceedings—which are subject to a qualified privilege. See, e.g., DeLong v. Yu Enters., Inc. 47 P.3d 8, 10-12 (Or. 2002); Pope v. Motel 6, 114 P.3d 277, 282-83 (Nev. 2005).

B. The Court Applies the Majority Rule—A Qualified Privilege

Under the Erie doctrine, the court applies substantive Hawaii law in the present case, which is based on diversity of citizenship. See Erie R. Co. v. Tompkins, 304 U.S. 64 (1938). Hawaii has not adopted either the majority or minority rule as to the degree of privilege from defamation given to statements made to police before criminal proceedings are initiated.⁶ Thus, absent certifying aquestion to the Hawaii Supreme Court, this "court, sitting in diversity, must use its best judgment to predict how the Hawaii Supreme Court would decide the issue." Burlington Ins. Co. v. Oceanic Design & Constr., Inc., 383 F.3d 940, 944 (9th Cir. 2004) (citation and editorial marks omitted). "In so doing, a federal court may be aided by looking to well-reasoned decisions from other jurisdictions." Id. (quoting Takahashi v. Loomis Armored Car Serv., 625 F.2d 314, 316 (9th Cir. 1980)). And—using its best judgment and analyzing those well-reasoned decisions—this court applies the majority rule here. That is, a qualified (not absolute) privilege applies under Hawaii law.

The court begins with the proposition that, under Hawaii law, statements that "impute to a person the commission of a crime" are defamatory per se. Isaac v. Daniels, 2018 WL 1903606, at *6 (D. Haw. Mar. 20, 2018) (quoting Partington v. Bugliosi, 825 F. Supp. 906, 915 (D. Haw. 1993)).⁷ As such, Hawaiicourts would likely conclude that "the law should provide a remedy" against "those who make intentionally false and malicious defamatory statements to the police." Fridovich, 598 So. 2d at 69. Although the law should...