Turf Lawnmower Repair, Inc. v. Bergen Record Corp.

Citation655 A.2d 417,139 N.J. 392
Parties, 63 USLW 2618, 23 Media L. Rep. 1609 TURF LAWNMOWER REPAIR, INC., a New Jersey corporation and John L. Gloria, Plaintiffs-Appellants, v. BERGEN RECORD CORPORATION, Bruce Locklin, Mary Anne De Marco, David Hall, and Byron Campbell, Defendants-Respondents, and Edward Mitchell, d/b/a Eddie's Power Equipment, Mark Winners, Robert Vroeginday, Douglas Livingston, John Doe and Richard Roe, Inc., Defendants.
Decision Date15 March 1995
CourtUnited States State Supreme Court (New Jersey)

Richard E. Brennan argued the cause, for appellants (Shanley & Fisher and Mark P. Denbeaux, attorneys; Mr. Brennan, Mr. Denbeaux, and Joseph M. Cerra, on the briefs).

Peter G. Banta argued the cause, for respondents (Winne, Banta, Rizzi, Hetherington & Basralian, attorneys; Donald A. Klein and Craig L. Levinsohn, on the brief).

Thomas J. Cafferty argued the cause, for amicus curiae, New Jersey Press Ass'n (McGimpsey & Cafferty, attorneys; Mr. Cafferty and Arlene M. Turinchak, on the brief).

The opinion of the Court was delivered by GARIBALDI, J.

This defamation appeal involves two newspaper articles that accused plaintiffs, Turf Lawnmower Repair, Inc., (Turf) and its owner and president, John L. Gloria, of deceptive business practices that "ripped off" customers. In this appeal we determine whether actual malice is the appropriate standard for all businesses, or whether negligence is the more appropriate standard of proof in defamation actions that involve businesses whose activities do not concern matters of public health or safety, do not constitute consumer fraud, or whose businesses are not subject to substantial government regulations.

I

On Sunday, August 21, 1988, The Record published a special report by its Special Investigative News Editor and staff writer, Bruce Locklin, entitled, "A clip joint for lawn mowers, Tests, ex-workers reveal Teaneck shop deceives, overcharges." A sub-article entitled "Looking for honesty with a faulty machine" accompanied the lead article.

The lead article's author was Locklin, who characterized Gloria, the owner of Turf Lawn Mower Repair, as "fiercely ambitious." "[H]e set out to become a millionaire by age 30 and later run for Congress." Locklin also reported that Gloria, then age twenty-nine, had made his first million. Locklin then wrote:

But his success is flawed. Though his shop did about 12,000 repair jobs in the past three years, former employees estimate that 60 percent to 80 percent were rip-offs.

Most customers who paid for tune-ups got little more than an oil change and a new spark plug--for which they typically were overcharged $20 to $30. Some paid for new parts and got used parts from junked mowers. Many were charged for repair work that was never done.

Independent tests conducted by The Record produced similar results. Reporters brought in mowers in need of simple repairs. Each time, Turf recommended or performed unnecessary work.

Locklin continued, quoting former customers, former employees, and a competitor:

There's a pervasive rudeness at Turf, where employees often add insult to injury. One customer, Andrea Daglezt of Bogota, said the man behind the counter talked to her as if she were an idiot. "That guy almost had my fist down his throat," she said. "He was so nasty...."

Winners is a former Turf mechanic who stayed on for about a year after Gloria became boss.

"When he worked for Bob, he was a nice guy. As soon as he took over, everything changed," Winners said. "I ended up quitting because ... I was tired of customers getting ripped off."

Winners said Gloria made bogus tuneups standard procedure. No longer did mechanics routinely install new points and condensers or rebuild carburetors by replacing worn parts.

Instead, the mowers got nothing more than fresh oil, a spark plug, and a quick cleanup. Labor time dropped from 30 or 40 minutes per mower to about 5 minutes.

Three other former mechanics, who each worked at Turf for about two years during the 1980-86 period, said they had the same instructions: Do the fake tuneups--but at full tuneup prices.

Mowers often broke down later in the season, the mechanics said, generating more repair work and opportunities to sell new mowers.

Bob Vroeninday, 27, now an auto mechanic in Ridgefield Park, said that when he was working for Turf in 1982 and 1983, Gloria used parts from junked mowers for repair work--without telling customers.

"On a cracked flywheel, he'd use an old one and charge you for a new one because that stuff you can't see," Vroeninday said.

Winners and Vroeninday said Gloria often lied to customers who brought in mowers that had jammed after hitting something solid. He would say the mower's crankshaft needed to be straightened when, in fact, the machine needed only a small part called a keyway. Its price? About $1.

"A job that should have cost $20 would cost about $90," Vroeninday said.

If a customer spotted a rip-off and complained, Gloria blamed his workers.

Doug Livingston, a Turf mechanic from 1984 to 1986, recalled how Gloria tried to make him the scapegoat to appease an angry customer. "He immediately turned around and pointed at me and said, 'This is the guy who worked on it. It's not my fault he didn't do his job.' "

Livingston, who now works at a Fair Lawn shop, said Gloria sometimes got vindictive if a customer became impatient. "He would get mad at him and just kick the machine in the back and say, 'Don't touch that for a week.' "

One customer got sick of being told "we're working on it" for more than a month. Ron Broking, who owns Ronnie's Restaurant in Palisades Park, went around back and found his mower untouched.

"It never, never got looked at," Broking said. "That's what burned me up because it was a lie." Broking packed his mower in his car and took it to another shop.

Mel Clansky of New Milford had a tougher time of it. He paid Turf $54 to fix his electric mower. But when he took it home, it still didn't work. Clansky took it back to Turf and, while waiting, bought a new machine for $150. Turf called and wanted $200 to repair the old machine.

Clansky just wanted the mower returned, but Turf couldn't find it. He gave up in disgust.

"I wasn't going to bother taking the time off to go to small claims court," Clansky said. "It was unbelievable."

After these lengthy assertions, Locklin commented on The Record 's tests:

[T]ests conducted by The Record produced evidence of systematic rip-offs at Turf. Reporters took mowers there three times. Turf employees misdiagnosed problems, recommended work that wasn't needed and charged for work that wasn't done....

The Record's tests at Turf started in June with a Lawnboy machine that needed carburetor repair. Turf kept the machine three weeks, charged a $20 diagnostic fee, and said it couldn't be fixed.

A Turf salesman offered to take the $20 off the price of a new mower, saying that even the manufacturer couldn't fix the Lawnboy. He pointed to Turf's standard tuneup price and said, "We could have got you for $50 or $60."

A reporter took the mower to a Lawnboy dealer in Nanuet, N.Y., where it was repaired and tuned up. Later, a second reporter took the same machine back to Turf. This time the spark plug clamp had been disconnected, and the reporter said she couldn't get the machine started.

Turf kept the machine another three weeks, charged a $20 diagnostic fee, and recommended an unnecessary $60 tuneup.

In the third test, a reporter took a Bobcat mower in good working condition to Turf. Again, the spark plug clamp was pulled loose so the machine wouldn't start.

Turf kept the machine four weeks and charged $63 for a tuneup. A Turf mechanic said he rebuilt the carburetor and installed new points. But the mower has a solid-state ignition: It has no points.

Earlier in the article, Locklin described Gloria's response when Gloria agreed to an interview with him and his investigative researcher, Mary DeMarco. When Gloria was told about the results of The Record tests, Locklin wrote Gloria confessed that "his quality controls slipped this year because he was heavily involved in other investments and politics." Locklin quoted Gloria as saying: " 'I had my fingers in so many pots that they were getting burned.' " Locklin had referred to Gloria's potential involvement in "revolutionizing" the lawn mower repair industry earlier in the article.

In addition to detailing Gloria's political work for then-presidential candidate Jack Kemp, Locklin also highlighted earlier in the article some inspirational elements of Gloria's success story.

His father is a postman, and his mother is a waitress. He grew up in New Milford, a few blocks from the [Turf] mower shop. He got a job there when he was 14. By the time he graduated from Ramapo College at age 20, he was managing the place. Gloria had planned to go to law school, but Bob Engel, the mower shop owner, offered to sell the business. Gloria went for it.

At the beginning of the article, Locklin emphasized the Small Business Administration's selection of Gloria as New Jersey's young entrepreneur of 1986.

In a sub-article, Locklin explained his method, logic, and results of the loose-spark-plug test conducted at Turf and at eleven other shops on one occasion. Of the twelve, six shops identified the rigged problem, Turf and five other shops did not. Locklin characterized the test as "Bozo-with-a-mower." In that sub-article Locklin concluded:

A reporter took the same machine to Turf Lawn Mower Repair in Teaneck and told the same story. Turf said the mower probably needed a tuneup. The reporter left the mower. Four weeks later, the mower was ready, its spark plug cap in place. The bill was $63.

II

On January 10, 1989, on his own behalf and on behalf of Turf, Gloria, acting as president and sole stockholder of Turf, filed a three-count complaint against The Bergen Record Corporation, which publishes The Record and The Sunday Record newspapers; David Hall, editor; Byron Campbell, publisher; ...

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