CASTRO v. GOGGINS

Filing 21

MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE JOE L. WEBSTER, signed on 12/12/2016, RECOMMENDING that the Plaintiff's motion to dismiss Defendant's counterclaim 14 be DENIED. (Coyne, Michelle)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
P,\ULJ. CASTRO,
Plaintiff,

v

DAVID GOGGINS,
Defendant.

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1:16CV10

MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This mattet is before the Court upon Plaintiff Paul J, Castro's motion to dismiss
Defendant David Goggins'counterclâim for defamation. Q)ocket Entry 14.) Defendant has

filed a response in opposition to Plaintiffs motion. (Docket Entry 19.) Plaintiff theteafter
filed

a

reply. (Docket Entry 20). This mattet is now ripe for disposition. For the reasons that

follow, the Court will recommend that Plaintiffs motion to dismiss Defendant's counterclaim
be denied.

I. BACKGROUND
This action arises from a putpoted contractual agreement between Plaintiff and
Defendant regarding the portrayal of Defendant's life story for purposes of a scteenplay and
a

book.

(Sæ generalþ

Complaint, Docket E.ttty 1.) Plaintiff, a professional writer, alleges that

Defendant, a former Nury Seal, gave Plaintiff exclusive dghts to Defendants' petsonal story.

(Id.) As

a

result of the agreement between parties,l Plaintiff wtote a script about Defendant's

Iife and upon reassutance, aggtessively continued to ptepare the script for movie ptoduction.
(1d.ffi110,12-1,3,) Defendant subsequently sought some changes which Plaintiff agreed to do.
Qd.n1,4.) Defendant then attempted to terminate the agreement, but the parties latet mended
their relationship and Piaintiff continued to revise and refine the movie sctipt. (Id.nn 1,5-17 .)

Defendant finally approved the final script, and Plaintiff continued other work, including

recruiting â top ptoducer and obtaining a twelve million dollar funding commitment to
produce the movie. (Id ffrl17-18.) In

a

written document, Defendant againteassuted Plaintiff

that he would have exclusive dghts to write a book and film about Defendant's

life.

(1d.1118.)

Despite such aggressive efforts by Plaintiff, Defendant subsequently refused to move forward

with the patties' agreement. (Id. ffi 21,27

.)

Plaintiff asserts that the bteach of the parties' agreement was primadly the result of
Defendant's telationship with a New York-based entrepteneur, Jesse ltzler ("Itzler"). Qd.n

10.) Itzlet developed

a

telationship with Defendant after Plaintiff and Defendant enteted the

agreement. Qd.ll[l10-11.) Itzler and Defendantintended to do business together. (Id.) ItzIer

t

In an order on a motion by Defendant to dismiss this action for failure to state a clalm, the Court
referenced the "confusing natute of Plaintiffs allegations" and specifically sought to understand the
contrâctin dispute. Cøstro u. Goggins, No. 1:16CV1.0,2076WL4508349,at+1.-2 (À{.D.N.C. Aug.26,
201,6). The Court noted what appeared to be two sepalâte contract references, one in 2008 and one
ln201.5. Qd. at x1.) The Court concluded that
þ]ecause, specifically under the claim for relief, the contract being sued upon is one
in which Defendant granted Plaintiff exclusìue rights to wtite and ptoduce a film about
the Defendant's life, this court consûues the Complaint as alleging a bteach of a
contract ganting exclusiae rtghts to Defendant's life story, âs descdbed in the February
78,201,5

writing[]

(Id. at *2) (emphasis

in original).

t

was awaÍe of the

scipt written by Plaintiff, and was given a copy of it. (Id.) Itzlet applied for

trademarks in connection v¡ith a concept in the movie sctþt known as

"evil." (Id.I1,1,.) He

eventually published a book entitled "Living with a SEAL," whereby he puports to recount a
31,-day

live-in with Defendant in ltzler's home. (Id. n %.) Defendant a¡d Itzler. have made

ioint âppeârances to promote the book. (Id.)

Plaintiffs complaint details numerous othet allegations about factual inconsistencies
about Itzler's book. (1d.n25.) ,A.dditionalty, Plaintiff alleges that he aggtessively continued to

fulfill his obligations, even though he discoveted that:

^.

Many of the slogans and exptessions employed by fDefendant] and with
which fDefendant had] become most known by the public wete in fact
appropriâted by [Defendant] from others, without proper atttibution;

b.

Despite fDefendant's] attempt to cultivate a public persona of honor and
integdty, fDefendant had] for years resisted attempts to support his minor
child, tesulting just last month in an order against him fot unpaid child
support in a proceeding in Lake County, Illinois;

c.

[Defendant had] repeatedly misreptesented certain facts in his history and
that of his family, including certain alleged health related incidents; and

d.

fDefendant had] repeatedly mistepresented the extent to which charities
were in fact teceiving the funds he claimed to be raising for them.

Qd.nn22@)

- (d).) Plaintiffs complaint alleges one cause of action, abteach of contract claim,

whereby Plaintiff seeks actual and consequential damages in excess of $75,000.00. (Iù.IT 2832.)

After the fi.ling of the complaint, Defendant filed a motion to dismiss for failure to
state a

IfL

claim. pocket E.rtry 6.) The Coutt enteted an otder denying the motion. Castm,201.6

45083 49, at

x9. Defendant thereafter filed an arÌswer and asserted a counterclaim against

Plaintiff for defamation. (Docket Entry 13.) Specifically, Defendant's defamation claim
J

targets the allegations made

tn

pangraph 22

of Plaintiffs complaint as stated above.

Defendant asserts that the allegations are false and serve to damage his character. (1d.n1|32,

34.) Defendant also asserts that such statements ate notentitled to

^îy

privilege "as they are

irelevant and impertinent to the subject mattff of the action[.]" (1d.1[44.) Plaintiff has filed
a

motion to dismiss Defendant's counterclaim, assetting the affirmative defense of litigation

privilege for statements made dudng the course of judicial ptoceedings.

II.

pocketBntry

14.)

DISCUSSION
Plaintiff argues that dismissal of Defendant's counterclaim is appropriate pursuant to

Federal Rule of Civil Procedure 12þ)(6). A motion to dismiss pursuant to Rule 12þ)(6) tests

the sufficiency of the complaint. Edwarù u. Ciry of Goldsboro, 178 F.3d 231,,243 (1999). A
complaint that does not "contain sufficientfactual matter, accepted as true,.to'state a claim

to relief that is plausible on its f^ce"'must be dismissed. Ashcroft

u.

Iqbal,556 U.S. 662,678

Q009) (quoting Bell Atlantic u. Tworzbþ,550 U.S. 544, 570 Q007)).

"A claim has facial

plausibiJity when the plaintiff pleads factual content that allows the court

to dtaw

the

reasonable inference that the defendant is liable for the misconduct." Id.; ¡ee aho Simrzons dv
United

Mortg dy

l-.oan Inuest., 634 F .3d 7 54,7

68 (4th Cir. 201,1)

("Or a Rule 12(bX6) motion, a

complaint must be dismissed if it does not allege enough facts to state a claim to relief that is
plausible on

its face.")

(emphasis

in original) (internal citation and quotation matks omitted).

The "court accepts all well-pled facts as true and construes these facts in the light most
favor.able

to the ptaintiff in weighing the legal sufficiency of the compla)nt," but does not

consider "legal conclusions, elements of a cause of action, . . . bare assertions devoid

of factual

enhancementlJ . . . :uÍlwartanted infereflces, uffeasonable conclusions, or arguments." Nemet

4

Cheurolet,Ltd. u. Consamerafain.cum,Inc.,591 F.3d 250,255 (4th

Cir.2009) (citations omitted).

In other words, the standatd requires a plaintiff to atticulate facts, that, when accepted

as true,

demonstrate the plaintiff has stated a claimthat makes it plausible he is entitled to relief. Francis
u. Giacomelli,5SS

550 U.S.

^t

F.3d 786, 1,93 (4th Cir. 2009) (quoting lqbal,556 U.S. at 678, and Twombþ,

557).

In his supponing brief, Plaintiff assetts that the Court should analyze his motion based
upon Tennessee state

law. "[]n

an action based upon diversity

of citizenship,

as hete, the

district court must 'apply the substantive law of the state in which it sits, including the state's
choice of lawrules."' Mendenhall

a.

Hanetbrand¡Inc.,356 F. Supp. 2d717,723 (X{.D.N.C.201,2)

(citing Voluo Consîr. Equtþ. N. An., Inc. u. CLIUI Equtþ. Co., 386 F.3d 581, 599-600 (4th Cit.
2004)). North Carohna courts have "consistendy adhered to the lex loci rule in tort actions."
Boudreau u. Baaghman, 322

N.C. 331, 335,368 S.E.2d 849, 854 (1988). Applyt"g the lex loci

rule, the Court must look at the law of the place where the wrong occutred fot the applicable
substantive

law.

Boadreaa, 322

Clafion u. Burnett, 135 N.C. App. 746,748, 522 S.E.2d 785,786 (1,999);

N.C. at 335, 368 S.E.2d

^t

854.

In regard to defamation claims, "the place of the harmhas uaditionally been considered

to be the place where the defamatory statement was published, i.e., seen or heatd by nonparties,"

IYells u.

UddJ,186 F.3d 505, 527-22 (4th Ctt. 7999); ¡ee al¡o Verona u. U.S.

Bancorp,

No. 7:09-CV-057-BR , 201,1, WL 1,252935, at *10 n.6 (E.D.N.C. Mar. 29,201,1) ("A.lthough the
court could not locate
claims is the place

a

Noth

Carolina case directly on point, the general tule for defamation

of harm is the place of publication."). Flowevet, "[n]either the North

Carolina Supreme Court nor the Court of Appeals has had the opportunity to apply lex loci

5

to multi-state publication of an allegedly defamatory statement." Noble¡

u. Bo1d,

No.7:14-CV-

21.4-FL,201,5WL21.65962,at *4 (E.D.N.C. May 8,2015), appealdismiwd QuIy 31,,201,5). Thus,
sitting in diversity, this Court must determine how the Notth Catolina Supreme Coutt would
rule on this issue. IYells,186 F.3d at 527-28. The Foutth Circuit Court of Appeals has futthet
noted:

In predicting a decision of the state's highest court we can futther considet,
among other things, canons of consttuction, restatements of the law and
treatises that arc regulady applied by the courts of the state and whose use fot
recent
a parttcular prupose is apptoved by the state's highest court
pronouncements of general rules or policies by the state's highest court . . . ot
even that court's well considered dicta[.]
Uberfl Mat Ins. Co. u. Triangle Indus., Inc.,95J F.2d 1,1,53, 1,1,56 (4th Ctt. 1,992) (internal citations

omitted).

Noth

Carolina courts maintain "strong adhetence to the traditional application

of

the lex loci deliciti doctrine when choice of law issues arise[.]" Mosqøeda u. Mosqaeda, 2L8 N.C.

App. 742, 150, 721. S.E.2d 755, 761, Q012) (internal quotâtions and citations omitted).
Considering such, at least one sister court has found the place of tesidency to be the place
harm where multi-state publication

of

defamatorT statements has occutted.

See

of

Nobles,201.5

WL21,65962,atx5 (concluding that the state of California was the place whete the defamation
was communicated and where plaintiffls reputation was injured as a result

of his residency and

his ptofessional connections in the state); Ascend Heahh Corp. u.Il/e//s, No. 4:12-CV-00083-BR,
201,3

WL 1010589, àt *2 @.D.N.C. Mar

multistate clefanratit-rn, wlúle still aclherirrg

1,4, 2013)("The

tu

Lhc

court ptedicts that in a case of

lcx luci tlel-icti rule, lhe North Car',rlina

Supreme Court would apply Texas law because the alleged injury to plaintiffs . . . is centeted

in Texas, as that state is where fthe plaintiffs] ate located . . . .").

6

Consistent with out sister jurisdiction, the Coutt hete concludes that Tennessee law

should apply

to Defendant's defamation claim. Defendant is a

cíttzen and tesident

of

Tennessee, thus any form of reputational injury would most likely be centeted thete. Undet
Tennessee

law, to set forth a,púma facie

case

of defamation, "the plaintiff must establish that:

1) a party published â stâtement; 2) with knowledge that the statement is false and defaming

to the other; or 3) with reckless disregard for the truth of the statement or with negligence in
failing to ascertain the

tuth of the statement."

Sølliuan u. Baptist Mem'l Hosp.,995 S.V/.2d 569,

571 (Ienn. 1,999). "The basis for an action for defamation, whethet

it be slandet ot libel, is

that the defamation has resulted in an i"i"ry to the person's character and teputatlon." paali4t
Aato Parts Co. u. Bluf Ciry Buick C0.,876 S.Iø.2d 818, 820 (fenn. 1,994).
Tennessee has long recognized the litigation privilege which allows protection

of

stâtements made in the course of judicial proceedings. Jones u. Trice,210 Tenn. 535, 538, 360
S.W.2d 48, 50 (1,962). In l¡sa u. Bennn, the Tennessee Coutt of Appeals explained:

ffennessee] further recognizes that statements made in the course of judicial
proceedings which are relevant and pertinent to the issues ate absolutely
privileged and therefore cannot be used as a basis for a libel action fot damages.
This is true even if the stâtements are known to be false or even malicious. The
policy underþing this de is that access to the judicial process, freedom to
institute an action, or defend, or participate thetein without fear. of the burden
of being sued fot defamation is so vital and necess^ry to the integtity of our
judicial system thatit must be made paramount to the dght of an individual to
alegal remedy where he [ot she] has been wtonged thereby.
420 S.nø.3d 23,28 (fenn.

Cl App. 201,3) (intetnal

quotations and citations omitted).2 As to

the questions of relevancy, "[i]t is clear from the authorities that the wotds 'pertinent or

2 Both parties note, and the Court agrees, that apphcation of North Catolina law would not alter the
outcome of this analysis. Both states have similar rules. Undet North Carolina Iàw,"a defamatory
statement made in due course of a judicial proceeding is absolutely privileged and will not support a
7

relevant' do not mean relevant within the technical
360 S.!ø.2d

^t

des of evidenc eJ' Jones, 21,0 Tenn. at 547 ,

54. Essentially, "[t]he mâtter to which the pdvilege does not extend must be so

palpably irrelevant to the subject mattet of the controvefsy that no feasonable man can doubt

its irrelevancy and imptopdety." Id. at 546, 360 S.!ø.2d

^t

53-54 (intemal quotations and

citation omitted). When analyzed, "this concept fof litigation ptivilege] is to be libetally
construed in order to insure unfettered access to the judicial process." Bradfeld u. Dotson,No.

02401-9902-CV-00060, 1.999 \ØL 628086, at *4 (Ienn. Ct. Á'pp. Aug. 16, 1'999) (citation

omitted). \Mhether the pdvilege exists is a question of law fot the judge. lones,21.0 Tenn. at
545,360 S.W2d

^t53.

Here, Plaintiff contends that the statements ate privileged for four teasons. First,

Piaintiff suggests that the allegations tn paragraph 22 of his Complaint demonsttate his
"determination to ptoduce the screenplay, notwithstanding his belief as

to [the]

particular

facts," which somehow illustrate a meeting of the minds between the parties. (Docket Etttry
1,5

at

7.)

Plaintiff asserts that the use of his "poetic license" was necessâry to bring

"Defendant's 'life story' to

film." (Id.) In his reply bdef, Plaintiff further

states that

it is highly

plausible that the parties' alleged agreement is a unilateral conttact, thus Plaintiffs unilateral
efforts, which include the exetcising of his poetic license "in light of the true facts," would be
"squarely relevant to the issue of whether an enforceable contract existed[.]"

pocket E.tt

y

20 at3.)

civil action for defzmztion, even though it be made with exptess malice." Harrzan u. Be/k,165 N.C.
App. 819, 824,600 S.E.2d 43,47 Q004) (intemal quotations and citation omitted). rVhen making a
determination of whether a stâtement is absolutely pdvileged, "a fNoth Catolina] court must
determine (1) whether the statement wâs made in the course of a judicial proceeding; and Q) whether
it was sufficiently relevant to that proceeding." Id. (qaotation omitted).
8

Undet North Carolina law,3 "[i]t is essential to the fotmation of any contract that there
be mutual assent of both parties to the teÍms of the agfeement so as to establish a meeting

the minds." Harri¡on u. IYal-Mart

Stores,

of

Inc., 170 N.C. ,A.pp. 545, 550, 61,3 S.E.zd 322,327

(2005) (internal quotations and citation omitted);

see

also Creeclt u.

Melnik',347 N.C. 520,

527 ,

495 S.E.2d 907,91.2 (1998) ("ìØhen there has been no meeting of the minds on the essentials

of an agreement, no contract results.") (intetnal quotations and citation omitted). Specifically

"in the context of a unilateral conftact, a meeting of the minds can exist when a p^rry theteto
accepts an offer by action not by words." Staîe a. Sanders,208 N.C. App. 1'42,1'46,701' S.E.2d

380, 383 (2010). Here, even given the most libetal reading, thete is nothing in the defamed
allegations that will advance Plaintiffs argument that a meeting of the minds existed, nor v/ill

it be relevant to any defense against such argument. For example, the allegations telated to
Defendant's unpaid child support bear no relevance âs to whether thete v/as a meeting of the

minds as to the alleged exclusive rþhts contract between the parties. Likewise, Defendant's
alleged misappropdated slogans, misrepresented family health

chatíty contdbutions bear no relevance

histor/, and misteptesented

to the subject matter of this action. Thus,

this

atgument fails.

Plaintiffs remaining ârguments also fail. He atgues that the allegations ate relevant to
the defenses of performance and lack of consideration, and to the issue of damages. (Docket

Entry 1,5 at7-9). Essentially Plaintiff asserts that based upon the communications of the
parties, it could have been anticipated, and Defendant did in fact, assert a defense that Plaintiff

3 Contract formation regarding Plaintiffs underlining breach of contract claim is apptopriately
analyzedunder North Carolina law.
9

failed to fulfill his obligations under the parties' agreement. (Id. at 8;

Affìrmative Defense, Docket Entry

1,3

scteenwriter, of what the 'teal story'

see also

Def.'s Tenth

at1,0.) He further states that his "understanding, as a

of the Defendant's life may be, is therefote direcdy

relevant to whether [Plaintiffl fulfilled his obligationsf.]" (Docket Etttty 15 at 8.) Assuming
arguendo that Plaintiffs undetstanding of Defendant's teal life story is germane to the issue

not does

of whether Plaintiff performed undet the agteement, Plaintiff cites no

case law

draw any logical conclusion as to how known omitted informatiorr

prove he fulfilled his

car:.

he

obligation to depict Defendant's "reâl life" story. Mote importantly, there are no basis to infer
any rclevance of these allegations to Plaintiffs performance upon the alleged exclusive dghts

contract. Likewise, Plaintiff fails to show any relevance of these allegations to any lack of
consideration defense, or to the issue of damages.

In sum, the statements in paragraph 22 of Plaintiffs complaint Iack

any showing

of

"teasonablfe] relevan[cy] to the judicial proceedings" here. Jone421.0Tenn. at547,360 S.W.2d

^t

54. To the extentPlaintiff relies upon

Jones,

the facts hete are distinguishable. In Jones,the

plaintiff Sones) was in constant attendance in a trial wheteby the defendant (Trice) \¡/âs a
defendant in another case. (d.

^t

537

,360 S.W.2d.

^t

49.) At the conclusion of the tdal, Tdce

moved for a new tdal on the grounds of imptoper jury influence by Jones. (Id. at 537,360
S.W.2d.

^t

49-50.) Jones then sued Ttice fot libel based upon Trice's statements made in her

motion for a new

trial. (Id. at 537, 360 S.W.2d. at 49.) Tdce demured on the gtounds of

absolute privilege because the statements were made during the course of judicial ptoceedings.
(Id. at 537-38,360 S.W.2d. at 50,) On appeal, the Supteme Court of Tennessee afftmed the

trial court's ordet sustaining the demuttet. (Id. at 548,360 S.!7.2d. at 55.) That coutt held

10

that the relevancy of the afîtdavitdetailing the libelous statements "seem[ed] sufficientJy clear."

(Id. at 547,360 S.ìø.2d.

^t

54) In the present case, the relevancy of Plaintiffs

allegations in

question is all but clear. Indeed, this Court has pteviously taised such concerns. In a recent
memorandum opinion and order, Chief DisttictJudge ÏTilliam L. Osteen, Jt. stated:

to contain significant extraneous material that, in many
fespects, appeafs to be completely ktelevant. For example, it is unclear why
Plaintiff would deem it necessary to this bteach-of-contract claim to make a
number of the allegations against Defendant, such as allegations tegarding his
child support status or interactions with charities. This coutt can see no
relationship between these spurious allegations and the breach-of-contract

F]h. Complaint

seems

claim asserted hete[.]
Ca$ro, 2016

WL 4508349, at *1.

In conclusion, the Court finds that the allegations at issue in pangraph22 of Plun1d:ffs
complaint are "so palpably irelevant to the subject matter of the controveÍsy" in the pending
contract dispute "that no reasonable man càn doubt its irelevancy and imptopriety
2L0 Tenn.

at 546,360 S.V/.2d at 53-54 (internal quotations and citation omitted).

)'

Joneq

Because

such statements are not protected by the litigation ptivilege, Plaintiffs motion to dismiss
Defendant's counterclaim should be denied.

III.

CONCLUSION

For the Íeasons stated herein,

IT IS HEREBY

RECOMMENDED that

Plaintiffs motion to dismiss Defendant's counterclaim (Docket Entry 14) be DENIED.

Strteø llt4gistrats ludgß

Decembet 12,2016
Durham, Notth Carolina
1I

the