Yesner v. Spinner

• Decision Date: 25 May 1991
• Docket Number: No. CV-90-3547 (ADS).,CV-90-3547 (ADS).
• Citation: 765 F. Supp. 48
• Parties: Michael YESNER and MGM Court Reporting Service, Inc., Plaintiffs, v. Beth J. SPINNER, individually and d/b/a B & T Reporting, Defendant.
• Court: U.S. District Court — Eastern District of New York

765 F. Supp. 48

Michael YESNER and MGM Court Reporting Service, Inc., Plaintiffs, v. Beth J. SPINNER, individually and d/b/a B & T Reporting, Defendant.

No. CV-90-3547 (ADS).

United States District Court, E.D. New York.

May 25, 1991.

Harry R. Dreizen, Huntington, N.Y., for plaintiffs.

Shea & Gould, New York City (William Dunnegan, of counsel), for defendant.

MEMORANDUM DECISION AND ORDER

SPATT, District Judge.

This litigation arises out of a dispute between two court reporters concerning work that one reporter subcontracted with the other to perform. The dispute culminated in a letter being sent by the defendant to the Federation of Shorthand Reporters claiming that the plaintiff has a "practice of modifying transcripts" and that he "refuses to pay for the agreed upon rates". It is these two statements that form the basis of this defamation action.

The defendant moves pursuant to Fed.R. Civ.P. 56(b) for summary judgment to dismiss the complaint as a matter of law, and also pursuant to Fed.R.Civ.P. 11 for sanctions against counsel for plaintiff. For the reasons that follow, both motions are denied.

I. FACTUAL BACKGROUND

The following facts are undisputed, except where indicated otherwise.

Plaintiff Michael Yesner ("Yesner"), is a certified court reporter and the president and sole shareholder of the plaintiff MGM Court Reporting Service, Inc. ("MGM"). Defendant Beth Spinner is also a certified court reporter, doing business as B & T Reporting ("B & T").

On May 16, 1990, Yesner received a request from a regular client of his, the law firm of McCormick Shaw & Moremus, to provide a court reporter for a deposition in connection with a state-court action pending in Richmond County, New York the following day. Due to short notice and Yesner's prior commitments, he was unable to provide a reporter from MGM, but subcontracted with the defendant B & T to cover the deposition.

The deposition took place as scheduled on May 17, 1990. Afterward, Spinner sent Yesner a copy of the transcript and statement for services rendered on June 13, 1990. Upon a review of the transcript, Yesner immediately notified Spinner that it was unacceptable, since it was allegedly replete with errors. He refused to pay Spinner.

On or about June 21, 1990, Spinner contacted the law firm of McCormick Shaw & Moremus directly, and spoke with Edith Alacan, the office manager. At this point, the parties' versions of what transpired in that conversation differ. However, after the conversation, Alacan contacted Yesner, allegedly stating to Yesner that the law firm would no longer utilize the services of Yesner or MGM.

Yesner then sent a letter to Spinner, dated June 22, 1990, advising her that Yesner lost the McCormick Shaw & Moremus account as a result of Spinner's conversation with Alacan. In turn, Spinner wrote a two-page letter dated June 27, 1990 to the Federation of Shorthand Reporters, with copies sent to the State Board of Shorthand Reporting, MGM, McCormick Shaw & Moremus, James Cameron, Esq. and Jerome Balch, Esq. The letter stated, in pertinent part, as follows:

"In addition to this, Mr. Yesner in his letter dated June 22, 1990 has indicated his plans for legal action. Obviously, this situation does concern me, but more importantly, Mr. Yesner's practice of modifying transcripts and secondly, his refusal to pay agreed upon rates concerns me more" (emphasis supplied) ("the June 27 Letter").

Yesner thereafter commenced this action alleging tortious interference with business relations and libel stemming from these two alleged defamatory statements contained in the June 27 Letter.

Defendant Spinner now moves pursuant to Fed.R.Civ.P. 56(b) for summary judgment on the following grounds: (1) the two statements contained in the June 27 Letter are not defamatory as a matter of law; (2) even if the statements are defamatory, the plaintiff has not sustained damages and is therefore entitled only to nominal damages, if any; and (3) actual damages, if any, were not caused by either of the two statements in the June 27 Letter. Spinner also moves pursuant to Rule 11 for sanctions on the ground that the plaintiff states in his complaint that he has lost McCormick Shaw & Moremus as a client, when in fact he has not.¹

II. DISCUSSION

a. Summary Judgment Standard.

Summary judgment shall be granted in favor of a party if it is demonstrated that there are no genuine issues of material fact for trial, and that the movant is entitled to judgment as a matter of law (see Fed.R. Civ.P. 56c; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 1986). The Court must, however, resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion (see Liscio v. Warren, 901 F.2d 274, 276 2d Cir.1990; Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 2d Cir.1986, cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 1987). Once a party moves for summary judgment, in order to avoid the granting of the motion, the nonmovant must come forward with specific facts showing that a genuine issue for trial exists (see National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 2d Cir.1989). However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment (see Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 2d Cir.1990). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable (see Rattner v. Netburn, 930 F.2d 204 2d Cir.1991). Finally, the Court is charged with the function of "issue finding", not "issue resolution" (Eye Assocs., P.C. v. IncomRx Sys. Ltd. Partnership, 912 F.2d 23, 27 2d Cir. 1990).

b. The Defendant's Challenges.

In this diversity action, the Court assumes, since the parties rely on and do not dispute, that New York law governs (see, e.g., Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc., 933 F.2d 131, 137 2d Cir.1991 parties "assumed" New York law governed by relying on New York law to support their respective positions).

(1) The Defamatory Nature of the Statements.

Whether or not particular spoken or written words are reasonably susceptible to a defamatory meaning is a question of law for the Court to determine in the first instance (Kelly v. Schmidberger, 806 F.2d 44, 46 2d Cir.1986 construing New York law; see also Weiner v. Doubleday & Co., 74 N.Y.2d 586, 549 N.E.2d 453, 550 N.Y.S.2d 251 1989; Aronson v. Wiersma, 65 N.Y.2d 592, 483 N.E.2d 1138, 493 N.Y. S.2d 1006 1985; Russo v. Padovano, 84 A.D.2d 925, 446 N.Y.S.2d 645 4th Dep't 1981). In making this determination, the Court must consider the alleged defamatory statements when read in context of the entire letter or article within which they appear (Sharon v. Time, Inc., 575 F.Supp. 1162, 1165 S.D.N.Y.1983, citing James v. Gannett Co., 40 N.Y.2d 415, 419, 353 N.E.2d 834, 837, 386 N.Y.S.2d 871, 874 1976), "and the statements should be construed together and measured by the effect they would have on the average reader" (Russo v. Padovano, supra, 446 N.Y.S.2d at p. 647 citing cases).

Both statements contained in the June 27 Letter viewed as a whole, are ambiguous at best to the "average reader". "Words not actionable in themselves may become so by being spoken of persons engaged in a particular calling or profession. Thus, words are libelous if they affect a person in his profession, trade, or business, by imputing to him any kind of fraud, dishonesty, misconduct, incapacity, unfitness or want of any necessary qualification in the exercise thereof" (Four Star Stage Lighting, Inc. v. Merrick, 56 A.D.2d 767, 392 N.Y.S.2d 297, 298 1st Dep't 1977, citing 34 N.Y.Jur., Libel and Slander § 36, at p. 507).

It is not clear, nor is there any proof on the issue, of whether the "practice of modifying transcripts" is a dishonest practice in the court reporting industry. The reasonable interpretation could be that "modifying" merely refers to "editing", which may not necessarily be a disparaging remark. On the other hand, an equally tenable construction could be that "modifying" connotes an improper or unethical practice of "changing" transcripts, so as to alter the substantive testimony which would be dishonest. In sum, the statement, the "practice of modifying transcripts" presents a classic jury question.

As to the statement "refusal to pay agreed upon rates", this too is reasonably susceptible of a defamatory meaning in the context within which it was written. It is not clear whether the term "practice" refers also to "refusal to pay agreed upon rates", or merely to the "practice of modifying transcripts". Although the Court has doubts as to the defamatory nature of this statement, such a writing directed at the plaintiff's business practices could give rise to the inference that the plaintiff is dishonest and engages in misconduct or even fraud. At this stage of the litigation, the Court declines to find, as a matter of law, that this statement has no defamatory connotation. Accordingly, the Court finds that this is also a question for the jury.

Based on the papers submitted, the Court cannot say that the statements at issue made under these circumstances are not defamatory, as a matter of law. In such a case where the words are susceptible of several meanings, one of which is defamatory, it is for the jury to decide in which sense the words were used (see November v. Time, Inc., 13 N.Y.2d 175, 194 N.E.2d 126, 244 N.Y.S.2d 309 1963). Therefore, the motion of the defendant for summary judgment on the ground that the two statements contained in the June 27 Letter are not defamatory as a matter of law, is denied.

(2) Damages.

The defendant next contends that even if the two statements are reasonably susceptible to a defamatory meaning, the plaintiff has not pleaded or sustained any actual damages caused therefrom and is...