Anderson et al v. Bigelow et al

Filing 17

ORDER granting in part and denying in part Defendants' 14 Motion to Dismiss. Signed by District Judge Denise Page Hood. (JOwe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NORTH POINT ADVISORS, INC.
and ADRIAN ANDERSON,
Plaintiff,
Case No. 15-13471
HON. DENISE PAGE HOOD

v.
THE DETROIT POLICE AND FIRE
RETIREMENT SYSTEM and
RYAN BIGELOW,

Defendants.
_________________________________________/
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION TO DISMISS [#14]
I.

INTRODUCTION
On July 25, 2016, Defendants filed a Motion to Dismiss [Dkt. No. 14].

Plaintiffs filed a response to the Motion to Dismiss on November 30, 2016, nearly
three months late and on the same day the Court held a hearing on Defendants’
Motion to Dismiss. For the reasons that follow, the Court grants in part and denies
in part Defendants’ Motion.
II.

BACKGROUND
This action arises out of an employment relationship between Plaintiffs and

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Defendant Detroit Police and Fire Retirement System (the “PFRS”). The PFRS is a
defined pension benefit plan and defined contribution plan, and the employer and
municipal plan sponsor for the system is the City of Detroit. The PFRS exists to pay
benefits to its active members, retirees and beneficiaries.
Plaintiffs served as investment managers and due diligence advisors for the
PFRS, managing certain investments including the PFRS’s emerging manager
portfolio. Plaintiffs allege that their investment performance was satisfactory and had
been approved by the PFRS’s Trustees’s investment consultant, Wilshire Associates.
Plaintiffs allege that they provided satisfactory performance and work for the PFRS,
but that:
Defendant PFRS, through Defendant Ryan Bigelow, made and
published false statements in the October 2014 board meetings against
Defendants [sic] which resulted in the PFRS Board of Trustees’
termination of Defendants [sic]. The statements suggested that Plaintiffs
had been involved in illegal conduct and falsely associated Plaintiffs
with recent criminal convictions of City of Detroit public officials[,]
including the former Mayor of the City [of] Detroit, Mayor Kwame
Kilpatrick[.]
[Dkt. No. 12, PgID 48-49 at ¶12] Plaintiffs also allege:
Defendants’ false statements contain numerous false implications
about Plaintiffs, including without limitation:
(1) That Plaintiff Adrian Anderson and/or Plaintiff [North Point
Advisors, LLC (“NPA”)] were charged with crimes relative to the highly
publicized public corruption charges that were brought against some of
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the City of Detroit’s elected and/or appointed officials, agents and/or
affiliates. In fact, neither Plaintiff was ever charged with any criminal
wrongdoing of any kind or nature whatsoever by any law enforcement
or prosecutorial entity.
(2) The implication that Plaintiffs’ services are “tainted” or would
otherwise cast aspersion upon the Defendants or other similar potential
clients is highly offensive to Plaintiff Anderson as it would be to any
reasonable person of ordinary sensibilities in Plaintiff Anderson’s
position and is harmful to the business reputations of both Plaintiffs.
[Dkt. No. 12, PgID 50-51 at ¶ 21]
On October 1, 2015, Plaintiffs filed a three-count Complaint stemming from
the alleged statements by Defendants: (1) Count I - business defamation (libel and
slander)/defamation per se; (2) Count II - false light; and (3) Count III - intentional
infliction of emotional distress. On May 24, 2016, the Court issued Plaintiffs an
Order to Show Cause why this case should not be dismissed for failure to prosecute.
On June 7, 2016, Plaintiffs responded, and on June 8, 2016, the Court vacated the
Order to Show Cause. On June 9, 2016, Plaintiffs filed an Amended Complaint.
Upon agreement of the parties, Plaintiffs filed a Second Amended Complaint on June
27, 2016.
III.

APPLICABLE LAW & ANALYSIS

A.

Standard of Review
A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the plaintiff’s

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complaint. Accepting all factual allegations as true, the court will review the
complaint in the light most favorable to the plaintiff. Eidson v. Tennessee Dep’t of
Children’s Servs., 510 F.3d 631, 634 (6th Cir. 2007). As a general rule, to survive
a motion to dismiss, the complaint must state sufficient “facts to state a claim to relief
that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007). The complaint must demonstrate more than a sheer possibility that the
defendant’s conduct was unlawful. Id. at 556. Claims comprised of “labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not
do.” Id. at 555. Rather, “[a] claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
B.

Analysis
1.

PFRS Entitled to Qualified Immunity

Pursuant to the Governmental Tort Liability Act (“GTLA”), M.C.L.A. §
691.1401, et seq., a governmental agency is entitled to absolute tort immunity for
conduct undertaken by the agency in the exercise of a government function. The
GTLA provides:
[A] governmental agency is immune from tort liability if the
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governmental agency is engaged in the exercise or discharge of a
governmental function. Except as otherwise provided in this act, this act
does not modify or restrict the immunity of the state from tort liability
as it existed before July 1, 1965, which immunity is affirmed.
M.C.L.A. § 691.1407(1). A “governmental function” is an activity expressly or
impliedly authorized by constitution, statute, local charter or ordinance, or other law.
See, e.g., EBI-Detroit, Inc. v. City of Detroit, 279 F. App’x 340, 351 (6th Cir. 2008);
M.C.L.A. § 691.1401(b). Governmental immunity applies in the context of both
intentional and negligent torts, as “there is no intentional tort exception to the
governmental immunity statute.” EBI-Detroit, 279 F. App’x at 349 (quoting Smith v.
State Dep’t of Public Health, 428 Mich. 540 (1987)).
The Court finds that Plaintiffs’ tort claims in Counts I-III are not viable as a
matter of law. The law is well-established that a plaintiff may not assert claims for
defamation, false light, or intentional infliction of emotional distress against a
governmental agency performing a governmental function. See, e.g., EBI-Detroit, 279
F. App’x at 349-351 (finding the Detroit Water and Sewer Department and City of
Detroit immune from suit for defamation); McCarthy v. Scofield, 2009 Mich. App.
LEXIS 2100, at *21 (Mich. Ct. App. Oct. 8, 2009) (finding the Michigan Department
of Human Services immune from suit for false-light invasion of privacy); V.R. Entm’t
v. City of Ann Arbor, 2012 U.S. Dist. LEXIS 87091, at **17-18 (E.D. Mich. June 22,

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2012) (finding the City of Ann Arbor and Ann Arbor Police Department immune
from suit for intentional infliction of emotional distress).
In this case, it is undisputed that PFRS is a governmental agency. Likewise, the
alleged conduct by the PFRS occurred at its October 2014 board meetings. It is
undisputed, and the Court holds, that board meetings involve the exercise or
discharge of the duties of the PFRS and constitute a governmental function. See Estes
v. Anderson, 2012 Mich.App. LEXIS 2236, at *13 (Mich. Ct. App. Nov. 15, 2012)
(after stating that “the focus is on the general activity, not the specific conduct
involved at the time of the alleged tort,” the court held that the conduct of PFRS
related to its investment decisions was, as a matter of law, a “governmental function”
(citation omitted)).
The Court grants Defendants’ Motion to Dismiss as it relates to PFRS.
Defendant Bigelow is not entitled immunity with respect to any of Plaintiffs’ claims.
The Court now turns to assess the viability of each of Plaintiffs’ claims as they relate
to Bigelow to determine whether any of them survives Defendant’s Motion.
2.

Defamation Claim

In order to prevail on a defamation claim, a plaintiff must prove:
1.
2.
3.

A false and defamatory statement concerning plaintiff;
An unprivileged publication to a third party;
Fault amounting to at least negligence on the part of the publisher; and
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4.

Either actionability per se or the existence of special harm.

Rouch v. Enquirer & News (After Remand), 440 Mich. 238, 251 (1992); Thomas M.
Cooley Law Sch. v. Kurzon Strauss, LLP, 759 F.3d 522, 527 (6th Cir. 2014). A
plaintiff must specifically plead the defamatory statements on which the complaint
is based; he cannot rely on general and conclusory statements. Royal Palace Homes,
Inc. v. Channel 7 of Detroit, Inc., 197 Mich.App. 84, 115-16 (1992); Williams v.
Detroit Bd. of Educ., 523 F. Supp. 2d 602, 606 (E.D. Mich. 2007) (a plaintiff “must
specifically identify the statements alleged to be defamatory”). “The essentials of a
cause of action for libel or slander must be stated in the complaint, including
allegations as to the particular defamatory words complained of, the connection of
the defamatory words with the plaintiff where such words are not clear or are
ambiguous, and the publication of the alleged defamatory words.” Ledl v. Quik Pik
Food Stores, Inc., 133 Mich.App. 583, 589 (1984) (internal quotation marks and
citation omitted) (emphasis added).
Defendants contend, and the Second Amended Complaint reveals, that
Plaintiffs have not identified the words uttered or published by PFRS through
Bigelow that they contend were defamatory. Taking the pleadings in a light most
favorable to Plaintiffs, they have alleged that:
Defendant PFRS, through Defendant Ryan Bigelow, made and
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published false statements in the October 2014 board meetings against
Defendants [sic] which resulted in the PFRS Board of Trustees’
termination of Defendants [sic]. The statements suggested that Plaintiffs
had been involved in illegal conduct and falsely associated Plaintiffs
with recent criminal convictions of City of Detroit public officials[,]
including the former Mayor of the City [of] Detroit, Mayor Kwame
Kilpatrick[.]
[Dkt. No. 12, PgID 48-49 at ¶12] The Court concludes that the Second Amended
Complaint does not set forth “the particular defamatory words complained of;” rather,
Plaintiffs have asserted only general and conclusory statements that are inadequate
to sustain a cause of action for defamation. See Royal Palace, 197 Mich.App. at 11516.
As Plaintiffs have failed to adequately plead a necessary element of their
defamation claim, the Court holds that dismissal of Plaintiffs’ defamation claim is
warranted and appropriate. Boladian v. UMG Recordings, Inc., 123 F. App’x 165,
169 (6th Cir. 2005).
3.

False Light

To state a claim for false light (invasion of privacy) in Michigan, a plaintiff
must allege: (1) publication of a false statement harmful to another’s interest; (2) the
intention that the publication cause harm, recognition of likely harm, or negligence
to likely harm; and (3) knowledge that the statement is false or reckless disregard to
its veracity. See Kollenberg v. Ramirez, 127 Mich.App. 345, 352 (1983). These
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elements must be “specifically pleaded, including the allegations with respect to the
defamatory words and the publication of the defamatory words.” Gonyea v. Motor
Parts Federal Credit Union, 192 Mich.App. 74, 77 (1991) (citing Ledl, 133 Mich.
App. at 589.
Plaintiffs allege that:
Defendants’ false statements contain numerous false implications about
Plaintiffs, including without limitation:
(1) That Plaintiff Adrian Anderson and/or Plaintiff NPA were
charged with crimes relative to the highly publicized public corruption
charges that were brought against some of the City of Detroit’s elected
and/or appointed officials, agents and/or affiliates. In fact, neither
Plaintiff was ever charged with any criminal wrongdoing of any kind or
nature whatsoever by any law enforcement or prosecutorial entity.
(2) The implication that Plaintiffs’ services are “tainted” or would
otherwise cast aspersion upon the Defendants or other similar potential
clients is highly offensive to Plaintiff Anderson as it would be to any
reasonable person of ordinary sensibilities in Plaintiff Anderson’s
position and is harmful to the business reputations of both Plaintiffs.
[Dkt. No. 12, PgID 50-51at ¶ 21] As with the defamation claim, Plaintiffs do not
identify the alleged derogatory or false statements, nor do they offer any facts which
would show that such statements were false or misleading. As the above allegation
states, “Defendants’ false statements contain numerous false implications . . .” [Id.
(emphasis added)] Implications, which require the reader or listener to arrive at a
conclusion, are not “specifically pleaded, [and do not include] allegations with
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respect to the defamatory words and the publication of the defamatory words,”
Gonyea, 192 Mich. App. at 77. The Court holds that Plaintiffs’ false light claim fails
as a matter of law and grants Defendants’ Motion as it relates to that claim.
4.

Intentional Infliction of Emotional Distress

To prevail on a claim for intentional infliction of emotional distress, “a plaintiff
must prove the following elements: (1) extreme and outrageous conduct, (2) intent
or recklessness, (3) causation, and (4) severe emotional distress.” Hilden v. Hurley
Med. Ctr., 831 F.Supp.2d 1024, 1046 (E.D. Mich. 2011) (citing Hayley v. Allstate Ins.
Co., 262 Mich.App. 571, 577 (2004) (internal citation and quotations omitted)).
“Liability for the intentional infliction of emotional distress has been found only
where the conduct complained of has been so outrageous in character, and so extreme
in degree, as to go beyond all possible bounds of decency, and to be regarded as
atrocious and utterly intolerable in a civilized community.” Graham v. Ford, 237
Mich. App. 670, 674 (1999). It is not sufficient to show that the defendant acted
tortiously, intentionally, or even criminally. Id. The test has been described as
whether “the recitation of the facts to an average member of the community would
arouse his resentment against the actor, and lead him to exclaim, ‘Outrageous!’”
Roberts v. Auto-Owners Ins. Co., 422 Mich. 594, 603 (1985).
The Court finds that Plaintiffs have alleged conduct of Defendant that could
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rise to the level of being “atrocious and utterly intolerable in a civilized community”
or that would make an average member of the community exclaim, “Outrageous!”
The Court notes that Plaintiffs still fail to allege the specific statements made by
Defendants that caused Anderson harm, but such failure is not fatal to the claim for
intentional infliction of emotional distress. Plaintiffs allege that “Defendants chose
to disseminate the false statements falsely telling the world that they are corrupt
crooks worthy only of shunning and avoidance. Defendants’ choice to vilify and
publicly attack Plaintiffs was extreme and outrageous conduct that no reasonable
person in a civilized society should be expected to endure.” [Dkt. No. 12, PgID 52 at
¶ ¶ 30-31]
The Court finds that a claim based on someone falsely stating that a person (or
his company) is associated with well-known public officials convicted of public
corruption, and that the person is a “corrupt crook[] worthy only of shunning and
avoidance,” sufficiently alleges extreme and outrageous conduct for purposes of
stating an intentional infliction of emotional distress under Michigan law. See, e.g.,
Mroz v. Lee, 5 F.3d 1016, 1019-1020 (6th Cir. 1993) (intentional infliction of
emotional distress claim lies where “defendant deliberately misinformed plaintiff’s
business associates that plaintiff engaged in criminal behavior, deliberately used this
misinformation to manipulate the legal and financial system to plaintiff’s great
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detriment, and personally threatened the safety of plaintiff and plaintiff’s family”);
Miller v. Currie, 50 F.3d 373, 378 (6th Cir. 1995) (“While the circumstances
surrounding the events . . . are, naturally, not all laid out in the complaint, we do not
agree with the district court that Miller could not conceivably prove any set of facts
in support of her allegations that would entitle her to relief.”). The Court finds that
Plaintiffs have adequately pled a claim for intentional infliction of emotional distress.
The Court concludes that Defendants’ Motion must be denied as it relates to
Plaintiffs’ claim of intentional infliction of emotional distress against Anderson (NPA
is a business entity and cannot suffer emotional distress).
IV.

CONCLUSION
For the reasons stated above,
IT IS ORDERED that Defendants’ Motion to Dismiss [Dkt. No. 14] is

GRANTED IN PART and DENIED IN PART.
IT IS SO ORDERED.

Dated: March 22, 2017 S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court

I hereby certify that a copy of the foregoing document was served upon counsel of
record on March 22, 2017, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager
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