WILSON v. AMERICAN GENERAL FINANCE INC et al
Filing
87
MEMORANDUM OPINION: GRANTING defendants' MOTION for Summary Judgment 77 and DENYING without prejudice plaintiff's Second MOTION for Leave to File 2nd Amended Complaint 75 . An appropriate order will follow. Signed by Judge Joy Flowers Conti on 3/12/13. (kjm)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CIVIL ACTION NO. 10-412
DARNELLA R. WILSON,
Plaintiff,
v.
AMERICAN GENERAL FINANCE INC.,
and A. BRUCE CASTEEL
Defendants.
MEMORANDUM OPINION
CONTI, District Judge
I.
Introduction
There are two motions pending before the court. The first is a motion for summary
judgment filed by defendants American General Finance Inc. (“AGF”) and A. Bruce Casteel
(“Casteel” or collectively with AGF, “defendants”) with respect to the claims filed against them
by plaintiff Darnella R. Wilson (“plaintiff”). (ECF No. 77.) The second motion pending before
the court is plaintiff’s motion for leave to file a second amended complaint. (ECF No. 75.)
On March 26, 2010, plaintiff filed the original complaint in this case. (ECF No. 1.) The
court permitted plaintiff leave of court to file an amended complaint, which she filed on January
5, 2011, alleging claims of libel per se and intentional infliction of emotional distress (“IIED”)
against defendants. (ECF No. 35.) On January 25, 2011, defendants filed an answer to the first
amended complaint. (ECF No. 36.) On May 18, 2011, defendants filed a motion for judgment on
the pleadings and a brief in support thereof. (ECF Nos. 40, 41.) On June 3, 2011, plaintiff filed a
response in opposition to defendants’ motion for judgment on the pleadings and brief in support
thereof. (ECF Nos. 44, 45.) On June 15, 2011, the court granted in part and denied in part
defendants’ motion for judgment on the pleadings. The court granted the motion and dismissed
plaintiff’s claim for IIED and denied the motion with respect to the claim for libel per se. See
Wilson v. Am. Gen. Fin. Inc., 807 F.Supp.2d 291 (W.D. Pa. 2011).
On December 23, 2011, plaintiff filed a first motion for leave to file a second amended
complaint, seeking to add an additional claim of libel per se and a claim of fraud to the first
amended complaint. (ECF No. 67.) On January 12, 2012, defendants filed a brief in opposition to
plaintiff’s first motion for leave to file a second amended complaint. (ECF No. 69.) On February
8, 2012, plaintiff filed a reply brief to defendants’ brief in opposition. (ECF No. 72.) At a hearing
held on February 22, 2012, the court denied plaintiff’s first motion for leave to file a second
amended complaint without prejudice and set dates for the filing of defendants’ motion for
summary judgment and plaintiff’s response thereto.
On March 2, 2012, plaintiff filed a second motion for leave to file a second amended
complaint and a brief in support of her motion seeking “to restate the original claims of Libel Per
Se with greater particularity and amplify the factual circumstances surrounding the pertinent
conduct, transaction or occurrence in the preceding pleading.” (ECF Nos. 75, 76.) On March 16,
2012, defendants filed a response and brief in opposition to plaintiff’s second motion for leave to
file a second amended complaint. (ECF No. 76.)
On April 23, 2012, defendants filed a motion for summary judgment and a brief in
support of their motion. (ECF Nos. 77, 78.) Defendants filed a concise statement of material
facts on the same day. (ECF No. 79.) On May 23, 2012, plaintiff filed a response in opposition to
defendants’ motion for summary judgment and a response to defendants’ concise statement of
material facts. (ECF Nos. 79, 80.) On June 6, 2012, defendants filed a reply to plaintiff’s
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response to defendants’ concise statement of material facts and a reply brief. (ECF Nos. 83, 84.)
On June 15, 2012, a joint concise statement of material facts was filed. (ECF No. 86.)
In defendants’ motion for summary judgment, they argue that they are entitled to
summary judgment because (1) the alleged defamatory communications forming the basis of
plaintiff’s libel per se claim were true or substantially true; (2) the alleged defamatory
communications were conditionally privileged and defendants did not abuse that conditional
privilege; and (3) plaintiff did not suffer any special or actual damages. (ECF No. 78 at 5, 9, 13.)
Plaintiff argues (1) there is a genuine dispute of material fact with respect to whether AGF’S
statements were true; and (2) the evidence of record supports an award of damages in this case.
(ECF No. 81 at 7, 14.)
After an extensive consideration of the parties’ submissions and the applicable legal
principles, the court concludes that in light of the summary judgment standard of review and
based upon the evidence of record, there is no genuine dispute of material fact with respect to
whether AGF’s alleged libelous statements were true or substantially true or whether defendants’
statements were conditionally privileged. Based upon the evidence of record, a reasonable jury
could only find that defendants’ alleged defamatory statements were true or substantially true
and that the communications of the allegedly defamatory statements were conditionally
privileged. The motion for summary judgment filed by defendants against plaintiff will be
GRANTED.
For the reasons set forth below, plaintiff’s motion for leave to file a second amended
complaint will be DENIED without prejudice.
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II.
Defendants’ Motion for Summary Judgment
A. Factual Background
The factual background is derived from the undisputed evidence of record and the
disputed evidence of record viewed in the light most favorable to the nonmoving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (“The evidence of the nonmovant is
to be believed, and all justifiable inferences are to be drawn in his favor.”).
Plaintiff is the owner of Wilson’s II, an expansion of Wilson’s Barbecue, a barbeque
restaurant located in Pittsburgh, Pennsylvania. (Joint Concise Statement of Material Facts
(“J.C.S.F.”) (ECF No. 86) ¶¶ 26-29; Pl. Dep. (ECF No. 79-3) at 9-10.) Until 1999, plaintiff had a
mortgage loan with ContiMortgage. (Pl. Ex. 2 pt. 2 (ECF No. 35-1) at 2.) In 1999, defendant
AGF purchased plaintiff’s account with ContiMortgage and notified plaintiff about the purchase
by letter dated May 26, 1999. (Id.) Plaintiff’s mortgage payment was due to AGF on the second
day of each month in the amount of $397.59 and a late fee of $19.98 would apply if the payment
was received after the fifteenth day of the month. (Def. Ex. 9 (ECF No. 79-1) at 17; Pl. Dep.
(ECF No. 79-3) at 16-18.) AGF’s policy with respect to late or delinquent payments was: “If a
debtor is late or delinquent on mortgage payments, AGF policy is to apply any subsequent
payments first to the late or delinquent month’s payments.” (Def. Ex. 5 (ECF No. 79-8) ¶ 14.) By
way of example, if a debtor misses a payment in May, but sends a payment in June, AGF will
apply the June payment to satisfy the delinquent May payment. (Def. Ex. 5 (ECF No. 79-8) ¶
15.) Consequently, “although a payment was received in June, the debtor [would still be] due for
the June payment because the payment received in June actually paid the amount due for May.”
(Id.). In this way, the debtor’s payments each month will continue to be applied to the prior
month’s mortgage payment until the debtor becomes current on the mortgage. (Id.)
4
On July 13, 2009, plaintiff filed a consumer complaint with the Better Business Bureau
(“BBB”) claiming she was mistreated by AGF with respect to how it was servicing her loan. (Pl.
Ex. 4 (ECF No. 80-6) at 17-20; Pl. Dep. (ECF No. 79-3) at 19.) BBB described its Code of
Business Practices (“BBB’s Code”) as follows:
The BBB Code of Business Practices represents sound advertising, selling and
customer service practices that enhance customer trust and confidence in
business. The Code is built on the BBB Standards for Trust, eight principles that
summarize important elements of creating and maintaining trust in business.
This Code also represents standards for business accreditation by BBB.
Businesses based in the United States and Canada that meet these standards and
complete application procedures will be accredited by BBB.
(Def. Ex. 5 (ECF no. 79-8) 3-5.) The “eight principals that summarize important elements of
creating and maintaining trust in business” are: (1) build trust; (2) advertise honestly; (3) tell the
truth; (4) be transparent; (5) honor promises; (6) be responsive; (7) safeguard privacy; and (8)
embody integrity. (Id.) The sixth principle in BBB’s Code is:
6. Be Responsive
Address marketplace disputes quickly, professionally, and in good faith.
An accredited business or organization agrees to:
A. Promptly respond to all complaints forwarded by BBB by:
1. Resolving the complaint directly with the complainant and
notifying BBB, or
2. Providing BBB with a response that BBB determines:
is professional, addresses all of the issues raised by the
complainant, includes appropriate evidence and documents
supporting the business’ position, and explains why any relief
sought by the complainant cannot or should not be granted.
B. Make a good faith effort to resolve disputes, which includes mediation if
requested by BBB. Other dispute resolution options, including arbitration,
may be recommended by BBB when other efforts to resolve dispute have
failed. BBB may consider a business’ willingness to participate in
recommended dispute resolution options in determining compliance with
these standards.
C. Comply with any settlements, agreements or decisions reached as an
outcome of a BBB dispute resolution process.
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D. Cooperate with BBB in efforts to eliminate the underlying cause of
patterns of customer complaints that are identified by BBB.
(Def. Ex. 5 (ECF No. 79-8) 3-5.)
At the time plaintiff filed the consumer complaint, AGF was an accredited member of the
BBB, meaning it agreed to abide by BBB’s Code and was required to respond to all consumer
complaints as instructed in the sixth principle. (Casteel Aff. (ECF No. 79-8) ¶ 5); (Def. Ex. 5
(ECF No. 79-8) 3-5.) At some point before July 29, 2009, AGF learned that plaintiff asserted a
consumer complaint against it with the BBB. (J.C.S.F. (ECF No. 86) ¶ 5.) Casteel, who served as
director of compliance services for AGF, conducted an investigation with respect to plaintiff’s
account with AGF in order to respond to plaintiff’s consumer complaint with the BBB. (Casteel
Dep. (ECF No. 79-8) ¶ 7.)
Casteel’s investigation revealed, and AGF’S adjusted transaction history for plaintiff
indicates, that plaintiff did not make mortgage payments in June 2008, October 2008, January
2009, and June 2009. (Def. Ex. 1 (ECF No. 79-1) at 20-24; Def. Ex. 3 (ECF No. 79-4) at 16-17;
Def. Ex. 5 (ECF No. 79-8) ¶¶ 11-15) AGF’s account statements for plaintiff showed a past due
amount of $1,053.10 in March 2009, a past due amount of $998.28 in May 2009, and a past due
amount of $1,395.87 in June 2009. (Def. Ex. 5 (ECF No. 79-8) 6-8; J.C.S.F. (ECF No. 86) ¶ 3.)
AGF cashed the following checks and money order submitted to it by plaintiff:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
A check dated July 3, 2008 in the amount of $450;
A check dated August 4, 2008 in the amount of $450;
A check dated September 8, 2008 in the amount of $400;
A check dated November 10, 2008 in the amount of $800;
A check dated December 30, 2008 in the amount of $480;
A check dated January 2, 2009 in the amount of $400;
A check dated April 9, 2009 in the amount of $350;
A money order dated May 18, 2009 in the amount of $500;
A check dated June 30, 2009 in the amount of $500; and
A check dated July 29, 2009 in the amount of $450.
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(Pl. Ex. 5 (ECF No. 80-8) at 1-15.) The check dated January 2, 2009 does not provide the date
plaintiff sent the check to AGF or when AGF received or cashed it. (Pl. Ex. 5 (ECF No. 80-7) at
10.) There is no entry on the adjusted transaction history for January 2009. (Def. Ex. 1 (ECF No.
79-1) at 24.) The adjusted transaction history indicates plaintiff made a payment with the
effective date February 5, 2009 in the amount of $400. (Def. Ex. 1 (ECF No. 79-1) at 20-24.)
The cancelled check dated June 30, 2009 in the amount of $500 has a deposit date stamp
of July 13, 2009 on it. (Pl. Ex. 5 (ECF No. 80-8) at 11.) There is no entry for June 2009 in the
adjusted transaction history. (Def. Ex 1 (ECF No. 79-1) at 24.) There is an entry for July 2, 2009
in the amount of $500 in the adjusted transaction history. (Id.)
After investigating plaintiff’s account history with AGF, Casteel wrote a wrote a twopage, single-spaced letter dated July 29, 2009 to Tom Bozikis (“Bozikis”), vice president of
Bureau Operations at the BBB, in response to correspondence from Bozikis dated July 13, 2009
with respect to plaintiff’s accusations of mistreatment. (Def. Ex. 3 (ECF No. 79-3) at 26-27;
Casteel Dep. (ECF No. 79-8) ¶ 10.) The July 29, 2009 letter responded to plaintiff’s accusations
of mistreatment, and provided, in pertinent part:
As of the beginning of June [2009], Ms. Wilson’s account has been delinquent for
several months.
As of the date of this letter [July 29, 2009], her account is past due for April, May,
June, and July payments.
(Def. Ex. 3 (ECF No. 79-3) at 26-27.)
After plaintiff filed her complaint with the BBB, she downloaded and read her file from
the BBB website, which included Casteel’s letter in response to her consumer complaint. (Pl.
Dep. (ECF No. 79-3) at 22-24.) In a letter dated August 19, 2009, plaintiff wrote to AGF,
enclosing a copy of a check made out to AGF dated April 9, 2009, a money order made out to
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AGF dated May 18, 2009, a copy of a check made out to AGF dated June 30, 2009, and a copy
of a check made out to AGF dated July 29, 2009. (J.C.S.F. (ECF No. 86) ¶ 8; Def. Ex. 3 (ECF
No. 79-3) at 28-30; ECF No. 79-4 at 1-6.)
Prior to August 24, 2009, plaintiff retained Carol L. Rosen (“Rosen”) as her counsel. (Pl.
Dep. (ECF No. 79-3) 30-31.) Rosen sent a letter dated August 24, 2009 to AGF on behalf of
plaintiff requesting “[a]n explanation of why Ms. Wilson’s payments were considered past due
from April 2009 to August 2009.” (Pl. Dep. (ECF No. 79-3) at 30-32; Def. Ex. 3 (ECF No. 794.) In response to Rosen’s letter, Jeffrey Ledbetter (“Ledbetter”), in-house counsel for AGF,
wrote a letter dated November 13, 2009, and provided Rosen a copy of plaintiff’s adjusted
transaction history with AGF. (Def. Ex. 3 (ECF No. 79-4) at 11.) Ledbetter’s letter provided:
“[AGF’s] transaction records indicate that Ms. Wilson’s account became four months past due in
April 2009. No payments were made on the account August 2008, January 2009, and March
2009, which caused her account to become progressively more delinquent.” (Pl. Ex. 3 (ECF No.
79-4) at 11.)
B. Summary Judgment Standard
Federal Rule of Civil Procedure 56 provides in relevant part:
(a) Motion for Summary Judgment or Partial Summary
Judgment. A party may move for summary judgment, identifying
each claim or defense – or the part of each claim or defense – on
which summary judgment is sought. The court shall grant
summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law. The court should state on the record
the reasons for granting or denying the motion.
...
(c) Procedures.
(1) Supporting Factual Positions. A party asserting that a fact
cannot be or is genuinely disputed must support the assertion by:
8
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for
purposes of the motion only), admissions, interrogatory answers,
or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.
FED. R. CIV. P. 56(a), (c)(1)(A), (B).
Rule 56 of the Federal Rules of Civil Procedure “mandates the
entry of summary judgment, after adequate time for discovery and
upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential to that
party's case, and on which that party will bear the burden of proof
at trial.”
Marten v. Godwin, 499 F.3d 290, 295 (3d Cir. 2007) (quoting Celotex Corp. v. Catrett, 477 U.S.
317, 322-23 (1986)).
An issue of material fact is in genuine dispute if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986); see Doe v. Abington Friends Sch., 480 F.3d 252, 256 (3d Cir. 2007) (“A
genuine issue is present when a reasonable trier of fact, viewing all of the record evidence, could
rationally find in favor of the non-moving party in light of his burden of proof.”) (citing
Anderson, 477 U.S. at 248; Celotex Corp., 477 U.S. at 322-23).
“[W]hen the moving party has carried its burden under Rule 56(c),
its opponent must do more than simply show that there is some
metaphysical doubt as to the material facts . . . . Where the record
taken as a whole could not lead a rational trier of fact to find for
the nonmoving party, there is no ‘genuine issue for trial.’”
Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986)).
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In deciding a summary judgment motion, a court must view the facts in the light most
favorable to the nonmoving party and must draw all reasonable inferences, and resolve all doubts
in favor of the nonmoving party. Doe v. Cnty. of Centre, Pa., 242 F.3d 437, 446 (3d Cir. 2001);
see Woodside v. Sch. Dist. of Phila. Bd. of Educ., 248 F.3d 129, 130 (3d Cir. 2001); Heller v.
Shaw Indus., Inc., 167 F.3d 146, 151 (3d Cir. 1999). A court must not engage in credibility
determinations at the summary judgment stage. Simpson v. Kay Jewelers, Div. of Sterling, Inc.,
142 F.3d 639, 643 n.3 (3d Cir. 1998).
When the nonmoving party bears the burden of proof at trial, the moving party may
discharge its burden by pointing out “that there is an absence of evidence to support the nonmoving party’s case.” Celotex, 477 U.S. at 325. Once the moving party has made this showing,
the burden then shifts to the nonmoving party, who cannot simply rest on the allegations in the
pleadings and must “do more than simply show that there is some metaphysical doubt as to the
material facts.” Matsushita Elec., 475 U.S. at 586. Summary judgment is proper in cases where
the nonmoving party’s evidence in opposition is “merely colorable” or “not significantly
probative.” Anderson, 477 U.S. at 249-50.
C. Discussion
1. General Framework – Defamation (Libel Per Se Claim)
Plaintiff is asserting that defendants’ statements to the BBB constituted libel per se,
which is a method of defamation. Joseph v. Scranton Times L.P., 959 A.2d 322, 334 (Pa. Super.
Ct. 2008) (“Defamation, of which libel, slander, and invasion of privacy are methods, is the tort
of detracting from a person's reputation, or injuring a person's character, fame, or reputation, by
false and malicious statements.”) In Tucker v. Fischbein, 237 F.3d 275 (3d Cir. 2001), the Court
of Appeals for the Third Circuit recognized:
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Under Pennsylvania law, a defamation plaintiff bears the burden to show:
(1) The defamatory character of the communication.
(2) Its publication by the defendant.
(3) Its application to the plaintiff.
(4) The understanding by the recipient of its defamatory meaning.
(5) The understanding by the recipient of it as intended to be applied to the
plaintiff.
Tucker, 237 F.3d at 281 (citing 42 PA. CONS. STAT. § 8343(a)). “In Pennsylvania, a defamatory
statement is one that ‘tends to so harm the reputation of another as to lower him in the estimation
of the community or to deter third persons from associating or dealing with him.’” Resnick v.
Manfredy, 52 F. Supp.2d 462, 470 (E.D. Pa.1999) (quoting U.S. Healthcare, Inc. v. Blue Cross
of Greater Phila., 898 F.2d 914, 922 (3d Cir. 1990)).
Pennsylvania has enacted statutory provisions governing actions for defamation. The
applicable burdens of proof are codified at 42 PA. CONS. STAT. § 8343, which provides:
§ 8343. Burden of proof
(a) Burden of plaintiff.--In an action for defamation, the plaintiff has the burden
of proving, when the issue is properly raised:
(1) The defamatory character of the communication.
(2) Its publication by the defendant.
(3) Its application to the plaintiff.
(4) The understanding by the recipient of its defamatory meaning.
(5) The understanding by the recipient of it as intended to be applied to the
plaintiff.
(6) Special harm resulting to the plaintiff from its publication.
(7) Abuse of a conditionally privileged occasion.
(b) Burden of defendant.--In an action for defamation, the defendant has the
burden of proving, when the issue is properly raised:
(1) The truth of the defamatory communication.
(2) The privileged character of the occasion on which it was published.
(3) The character of the subject matter of defamatory comment as of
public concern.
42 PA. CONS. STAT. § 8343(a), (b).
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A written defamation is considered libel. See Joseph, 959 A.2d at 334 (“A ‘libel’ is any
malicious publication that is written, printed, or painted, or procured to be written, printed, or
painted, and which tends to expose a person to contempt, ridicule, hatred, or degradation of
character.”) A publication imputing unworthiness of credit is libelous. Altoona Clay Prods., Inc.
v. Dun & Bradstreet, Inc., 367 F.2d 625, 630-31 (3d Cir. 1966). Words recognized as injurious
on their face are actionable per se. Joseph, 959 A.2d at 344 n.23. In discussing the plaintiff’s
burden to prove damages in the context of libel per se, the Pennsylvania Superior Court in
Joseph instructed:
With words that are actionable per se, only general damages, i.e., proof that one's
reputation was actually affected by defamation or that one suffered personal
humiliation, or both, must be proven; special damages, i.e., out-of-pocket
expenses borne by the plaintiff due to the defamation, need not be proven. Brinich
v. Jencka, 757 A.2d 388, 397 (Pa. Super. 2000). A plaintiff in a defamation action
need not prove special damages or harm in order to recover; he may recover for
any injury done to his reputation and for any other injury of which the libel is the
legal cause. Agriss, 483 A.2d at 474. Pennsylvania has adopted the rule of
Restatement (Second) of Torts, § 569 (1977), that all libels are actionable without
proof of special harm. Curran v. Philadelphia Newspapers, Inc., 376 Pa. Super.
508, 546 A.2d 639, 641 n. 3 (1988).
Joseph, 959 A.2d at 344.
Here, defendants argue they are entitled to summary judgment against plaintiff’s claims
of libel per se against them based upon the first two defenses set forth in section 8343(b): truth
and conditional privilege.1
2. Truth as a defense
With respect to truth as a defense, a defendant can meet his burden of proving the truth of
the communication as long as he proves the statement to be substantially true. Chicarella v.
1
As mentioned supra, defendants also argue that the evidence of record does not support an
award of special or actual damages. In light of the court’s discussion with respect to the
affirmative defenses of truth and conditional privilege infra, defendants’ argument with respect
to damages is moot.
12
Passant, 494 A.2d 1109, 1115 n.5 (Pa. Super. Ct. 1985) (cited in Tucker v. Merck & Co., Inc.,
102 Fed. App’x 247, 253 (3d Cir. June 29, 2004)). “‘Pennsylvania has determined proof of
substantial truth must go to the ‘gist’ or ‘sting’ of the alleged defamatory matter.’” Keeshan v.
Home Depot, U.S.A., Inc., No. 00-529, 2001 WL 310601, at *15 (E.D. Pa. Mar. 27, 2001)
(quoting Gilbert v. Bionetics Corp., No. 98-2668, 2000 WL 807015, at *3 (E.D. Pa. June 6,
2000)). “The test is ‘whether the [alleged] libel as published would have a different effect on the
mind of the reader from that which the pleaded truth would have produced.’” Dunlap v. Phila.
Newspapers, Inc., 448 A.2d 6, 15 (Pa. Super. Ct. 1982) (quoting ROBERT D. SACK, LIBEL,
SLANDER, AND RELATED PROBLEMS 50-51, 137-38 (1st ed. 1982)). Thus, “[m]inor inaccuracies
do not amount to falsity so long as ‘the substance, the gist, the sting, of the libelous charge be
justified.’” Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 517 (1991) (quoting Heuer v.
Kee, 59 P.2d 1063, 1064 (Cal. Dist. Ct. App. 1936)).
In the first amended complaint, plaintiff alleges that AGF willfully and knowingly
fabricated an account delinquency and published false and defaming assertions to the BBB and
Rosen in a deliberate attempt to defame plaintiff. (ECF No. 35, ¶ 14.) Defendants are entitled to
summary judgment in this case, however, because “no reasonable juror could conclude that the
Plaintiffs’ evidence supports a finding that the communications were not substantially true.”
Pacitti v. Durr, 310 Fed. App’x 526, 528-29 (3d Cir. 2009).
a. Letter to the BBB
In Casteel’s letter to the BBB, he wrote that plaintiff had “been delinquent for several
months” and as of July 29, 2009, “her account [was] past due for April, May, June, and July.”
(Def. Ex. 3 (ECF No. 79-3) at 26-27.) Defendants argue they are entitled to summary judgment
13
against plaintiff’s claim of libel per se based upon this letter because Casteel’s statements were
true or substantially true. (ECF No. 81 at 14-15.)
Plaintiff’s adjusted transaction history with AGF shows that plaintiff did not make a
payment to AGF in June 2008, October 2008, January 2009, March 2009, or June 2009. (Def.
Ex. 1 (ECF No. 79-1) at 20-24.) Plaintiff made payments in April 2009, May 2009, July 2009,
and August 2009 as evidenced by the checks she attached to the letter dated August 19, 2009
sent to AGF. (J.C.S.F. (ECF No. 86) ¶ 8; (Def. Ex. 3 (ECF No. 79-3) at 28-30; ECF No. 79-4 at
1-6.) Because of AGF’s policy of applying payments toward late or delinquent payments,
however, the payments made in April 2009, May 2009, July 2009, and August 2009 would have
been applied to satisfy prior missed payments, including late fees, that had not been made in full.
(See Casteel Aff. (ECF No. 79-8) ¶¶ 14-16.) As of July 29, 2009, the day Casteel wrote the letter
to the BBB, plaintiff had not satisfied her obligation to make a payment for April 2009, May
2009, June 2009, or July 2009 because the payments made in those months were credited to
satisfy plaintiff’s prior missed payments. It follows that Casteel’s representations that plaintiff’s
account had “been delinquent for several months” and as of July 29, 2009, “her account [was]
past due for April, May, June, and July” were true. (Def. Ex. 3 (ECF No. 79-3) at 26-27.)
Plaintiff argues, however, that Casteel’s statements were not true and points to alleged
discrepancies in the adjusted transaction history as proof of their untruthfulness. (Id.) Plaintiff
points to two cancelled checks, one dated January 2, 2009 in the amount of $400, and one dated
June 30, 2009 in the amount of $500, to dispute the validity of AGF’s adjusted transaction
history. Plaintiff argues the adjusted transaction history incorrectly indicates she did not make
payments in January or June 2009. (ECF No. 86 ¶ 12.) This evidence, however, is not sufficient
14
to show there is a genuine dispute of material fact with respect to the truth or falsity of Casteel’s
statements.
The copy of the check dated January 2, 2009 does not provide the date plaintiff sent the
check to AGF or when AGF received or cashed it. (Pl. Ex. 5 (ECF No. 80-7) at 10.) The adjusted
transaction history indicates plaintiff made a payment with the effective date February 5, 2009 in
the amount of $400. (Def. Ex. 1 (ECF No. 79-1) at 20-24.) Plaintiff points to checks cashed by
AGF as proof of payment. (Pl. Ex. 5 (ECF No. 80-8) 1-15.) There is no evidence of record,
however, that plaintiff issued a check in February 2009, i.e., there is no check or money order in
the record dated February 2009. The evidence of record indicates that plaintiff was given credit
for the payment made via the January 2, 2009 check, and that the January 2, 2009 check was
recorded on plaintiff’s adjusted transaction history with the effective date February 5, 2009.
Without evidence of the day the check was received or cashed, a reasonable jury could not find
that Casteel’s statement that plaintiff’s account had “been delinquent for several months” or that
as of July 29, 2009, “her account [was] past due for April, May, June, and July” was false simply
because AGF credited plaintiff on February 5, 2009 for a payment made by check dated January
2, 2009. (Def. Ex. 3 (ECF No. 79-3) at 26-27.)
With respect to the check dated June 30, 2009 for $500, the cancelled check has a deposit
date of July 13, 2009. (Pl. Ex. 5 (ECF No. 80-8) at 11.) There is no entry for June 2009 in the
adjusted transaction history, but there is an entry for July 2, 2009 in the amount of $500. (Def.
Ex 1 (ECF No. 79-1) at 24.) Plaintiff’s check for July 2009 was dated July 29, 2009, and
therefore, could not serve as the basis of the July 2, 2009 entry on the adjusted transaction
history. (Pl. Ex. 5 (ECF No. 80-8) at 12.) The evidence of record indicates the June 30, 2009
check was accounted for in the adjusted transaction history in the entry dated July 2, 2009. A
15
reasonable jury could not find, therefore, that Casteel’s statement that plaintiff’s account had
“been delinquent for several months” or that as of July 29, 2009, “her account [was] past due for
April, May, June, and July” was false simply because AGF credited plaintiff on July 2, 2009 for
a payment made with a check dated for June 30, 2009. (Def. Ex. 3 (ECF No. 79-3) at 26-27.)
Based upon the foregoing, defendants met their burden to show there is no genuine
dispute of material fact with respect to the truth or substantial truth of Casteel’s statements in his
letter to the BBB. Summary judgment will, therefore, be granted in favor of defendants with
respect to plaintiff’s claim of libel per se based upon Casteel’s letter to the BBB dated July 29,
2009.
b. Letter to Rosen
Rosen sent a letter on plaintiff’s behalf to AGF dated August 24, 2009 with respect to
AGF’s position that plaintiff was past due on her mortgage from April 2009 to August 2009. (Pl.
Dep. (ECF No. 79-3) at 30-32; Def. Ex. 3 (ECF No. 79-4). In response, on November 13, 2009,
Ledbetter wrote to Rosen: “[AGF’s] transaction records indicate that Ms. Wilson’s account
became four months past due in April 2009. No payments were made on the account August
2008, January 2009, and March 2009, which caused her account to become progressively more
delinquent.” (Pl. Ex. 3 (ECF No. 79-4) at 11.) As noted above, the adjusted transaction history
indicates no payments were made in June 2008, October 2008, January 2009, March 2009, or
June 2009. (Def. Ex. 1 (ECF No. 79-1) at 20-24.) The adjusted transaction history shows that
plaintiff was credited for a payment of $450 on August 5, 2008. (Def. Ex 1 (ECF No. 79-1) at
24.) Ledbetter’s statement that plaintiff did not make a payment in August 2008 was, therefore,
incorrect. Ledbetter’s conclusion that plaintiff’s account was four months past due in April 2009
was accurate, however, because the adjusted transaction history shows plaintiff did not make
16
payments in four months – June 2008, October 2008, January 2009 and March 2009 – and the
payments after those dates were insufficient to make up the prior missed payments and to
become current on all payments due, including late fees. (Def. Ex. 1 (ECF No. 79-1) at 20-24.)
As stated above, in determining whether a defendant’s statement is substantially true for
the purpose of defending against a defamation claim, “[t]he test is ‘whether the [alleged] libel as
published would have a different effect on the mind of the reader from that which the pleaded
truth would have produced,’” Dunlap, 448 A.2d at 15 (quoting ROBERT D. SACK, LIBEL,
SLANDER,
AND
RELATED PROBLEMS 50-51, 137-38 (1st ed. 1982), and thus, “[m]inor
inaccuracies do not amount to falsity so long as ‘the substance, the gist, the sting, of the libelous
charge be justified.’” Masson, 501 U.S. at 517 (quoting Heuer, 59 P.2d at 1064). Despite
Ledbetter informing Rosen that plaintiff did not make a payment in August 2008 as opposed to
October 2008, Ledbetter’s conclusion that plaintiff was four months delinquent was true.
Providing Rosen with the correct month of a missed payment would not have had a different
effect on her mind because the conclusion would have been the same, i.e., plaintiff was
delinquent on her mortgage payments from April 2009 to August 2009. The court concludes that
defendants met their burden to show there is no genuine dispute of material fact with respect to
Ledbetter’s letter to Rosen being substantially true, and plaintiff did not point to evidence
sufficient for a reasonable jury to find otherwise. Ledbetter’s minor inaccuracy with respect to
the month of a missed payment (August rather than October) does not amount to a falsity which
prevents the entry of summary judgment in favor of defendants in this case. Summary judgment
will, therefore, be granted in favor of defendants with respect to plaintiff’s claim of libel per se
based upon Ledbetter’s letter to Rosen dated August 24, 2009.
3. Privilege
17
a. General Framework
Defendants asserted an alternate defense of privilege. A defendant may defend a
defamation action by showing that he made a statement pursuant to a privilege. 42 PA. CONS.
STAT. § 8343(b)(2). “Communications which are made on a proper occasion, from a proper
motive, in a proper manner, and which are based upon reasonable cause are privileged.’”
Thompson, 631 F.Supp.2d at 686 (quoting Moore v. Cobb-Nettleton, 889 A.2d 1262, 1268 (Pa.
Super. Ct. 2005) (citing Miketic v. Baron, 675 A.2d 324, 329 (Pa. Super. Ct. 1996);
RESTATEMENT (SECOND) OF TORTS § 595 (Protection of Interest of Recipient or a Third Person)).
If a defendant carries its burden to show that a communication is conditionally privileged, the
burden shifts to the plaintiff to establish that the defendant abused its conditional privilege.
Miketic, 675 A.2d at 329.
Here, the applicable conditional privilege is one that arises from an occasion. The court
concludes that if faced with the issues presented by defendants’ motion for summary judgment
and the procedural posture of this case, the Pennsylvania Supreme Court would apply section
593 of the Restatement (Second) of Torts. See e.g. Moore, 889 A.2d at 1268; Chicarella, 494
A.2d at 1112-13. Section 593 of the Restatement (Second) of Torts provides:
One who publishes defamatory matter concerning another is not liable for the
publication if
(a) the matter is published upon an occasion that makes it conditionally
privileged and
(b) the occasion is not abused.
RESTATEMENT (SECOND) OF TORTS § 593. In Chicarella, the court explained the circumstances in
which a conditional privilege arising from an occasion applies:
An occasion giving rise to a conditional privilege occurs when (1) some interest
of the publisher of the defamatory matter is involved; (2) some interest of the
18
recipient of the matter, or a third party, is involved; or (3) a recognized interest of
the public is involved.
Chicarella, 494 A.2d at 1112-13. Pennsylvania state courts recognize a conditional privilege
arising from an occasion when some interest of the publisher or the recipient is involved as set
forth in sections 594 and 595 of the Restatement (Second) of Torts. See e.g. Am. Fut. Sys., Inc.
v. Better Bus. Bureau of E. Pa., 923 A.2d 389, 408 n.2 (Pa. 2007) (J. Baldwin, concurring) (“For
additional situations in which the conditional privilege may apply to elevate the level of fault, see
Restatement (Second) of Torts § 594 (Protection of the Publisher's Interest); § 595 (Protection of
Interest of Recipient or a Third Person)….”); Moore, 889 A.2d at 1268; Baker v. Lafayette Coll.,
504 A.2d 247, 272 (Pa. Super. Ct. 1986).
Section 594 of the Restatement (Second) of Torts describes a conditional privilege for the
protection of the publisher’s interest:
An occasion makes a publication conditionally privileged if the circumstances
induce a correct or reasonable belief that
(a) there is information that affects a sufficiently important interest of the
publisher, and
(b) the recipient's knowledge of the defamatory matter will be of service in the
lawful protection of the interest.
RESTATEMENT (SECOND) OF TORTS § 594.
The Restatement (Second) of Torts § 595 describes a conditional privilege with respect to
the protection of the interests of a recipient or a third person:
(1) An occasion makes a publication conditionally privileged if the circumstances
induce a correct or reasonable belief that
(a) there is information that affects a sufficiently important interest of the
recipient or a third person, and
19
(b) the recipient is one to whom the publisher is under a legal duty to publish
the defamatory matter or is a person to whom its publication is otherwise
within the generally accepted standards of decent conduct.
(2) In determining whether a publication is within generally accepted standards of
decent conduct it is an important factor that
(a) the publication is made in response to a request rather than volunteered by
the publisher or
(b) a family or other relationship exists between the parties.
RESTATEMENT (SECOND) OF TORTS § 595.
Once the defendant satisfies his or her burden to show that the conditional privilege
applies to his or her communication, the burden shifts to the plaintiff to establish that the
defendant abused the conditional privilege. Miketic, 675 A.2d at 329; see RESTATEMENT
(SECOND) OF TORTS § 600.2 As set forth by the Pennsylvania Supreme Court in American Future
Systems, where the plaintiff is a private figure, a defendant abuses a conditional privilege if he or
she negligently published the allegedly defamatory communication. Am. Fut. Sys, 923 A.2d at
400 (“[S]tates are free to allow a private-figure plaintiff to recover by establishing that the
defendant acted negligently rather than maliciously....Indeed, we do find this to be the
appropriate standard relative to a private-figure plaintiff for the reasons discussed above
pertaining to the Pennsylvania Constitution's protections in the area of reputational interests, and
in view of our understanding of the United States Supreme Court's present interpretation of the
First Amendment.”). The Court of Appeals for the Third Circuit has noted: “[U]nder current
2
Section 600 provides:
Except as stated in § 602, one who upon an occasion giving rise to a conditional
privilege publishes false and defamatory matter concerning another abuses the
privilege if he
(a)
knows the matter to be false, or
(b)
acts in reckless disregard as to its truth or falsity.
RESTATEMENT (SECOND) OF TORTS § 602.
20
Pennsylvania law, a showing of negligence is both required for a plaintiff to prove a defamation
claim and sufficient for a plaintiff to overcome the conditional privilege provided by state law.”
Pacitti, 310 Fed. App’x at 528 (citing Am. Fut. Sys, 923 A.2d at 397). Based upon this rationale,
the court in Pacitti recognized:
The Pennsylvania Supreme Court recently noted that, because a plaintiff can
overcome state law conditional privileges simply by proving a defamation claim,
the conditional privileges have “lost their significance” and become
“superfluous.”
Id. (quoting Am. Fut. Sys, 923 A.2d at 397, 398). Under the circumstances presented in this case,
i.e. a motion for summary judgment filed by the defendants based upon the affirmative defense
of conditional privilege, however, asserting the defense of conditional privilege is not
superfluous because plaintiff has not previously established that defendants were negligent in
publishing the allegedly defamatory statements. See Manning v. Flannery, No. 10-178, 2012 WL
2191741, at *3 n.3 (W.D. Pa. June 14, 2012).3 The court will, therefore, determine whether
defendants met their burden to show a conditional privilege applies to their communications and,
3
In Manning, the court considered a motion for reconsideration with respect to the court’s entry
of summary judgment in favor of a defendant against the plaintiff’s claim for defamation based
upon the defendant’s assertion of the affirmative defenses of conditional privilege and truth.
Manning, 2012 WL 2191721, at *1. In holding defendant’s assertion of a conditional privilege
was not superfluous in that case despite the court’s holding in American Future Systems, the
court explained:
Plaintiff cites those cases for the general proposition that a plaintiff can overcome
state law conditional privileges just by proving a defamation claim. These cases
are inapposite here where in opposing summary judgment, Plaintiff was not
required to establish the prima facie elements of his defamation claims, nor did
he. Thus, proof of negligence to show abuse of a conditional privilege was not
superfluous where, as here, negligence in publishing the statement had not
previously been established.
Manning, 2012 WL 2191741, at *3 n.3.
21
if so, whether plaintiff has met her burden of establishing defendants abused the conditional
privilege.
Defendants argue they are entitled to summary judgment because the evidence of record
shows that there is no genuine dispute of material fact with respect to Casteel’s letter to the BBB
and Ledbetter’s letter to Rosen being conditionally privileged under either section 594 or 595
and that the privilege was not abused. (ECF No. 78 at 9-12.) Plaintiff argues the conditional
privilege does not apply in this case because defendants’ statements “were false and contain no
facts; no facts of interest; no proper purpose; and no proper motive.” (ECF No. 81 at 15.) The
court will first address whether the letters are within the scope of a conditional privilege and next
will address whether the privilege was abused.
b. Letter to the BBB
Casteel’s letter to the BBB was published under circumstances that make it conditionally
privileged under sections 594 and 595 of the Restatement (Second) of Torts. Under section
594(a), a publication is conditionally privileged if “there is information that affects a sufficiently
important interest of the publisher” and “the recipient's knowledge of the defamatory matter will
be of service in the lawful protection of the interest.” RESTATEMENT (SECOND) OF TORTS § 594.
Here, the particularly important interest of the publisher was AGF’s interest in its business
reputation and its accreditation with the BBB. Comment h to section 594 provides:
For the conditional privilege to arise under the rule stated in this Section, it is not
necessary that the publisher's interest be actually in danger. It is enough that the
circumstances are such as to lead a reasonable man to believe that the interest is in
danger and that the defamatory publication is reasonably necessary for its
protection.
Id. § 594 cmt. h. AGF was an accredited business and agreed to abide by BBB’s Code. (ECF No.
79-8, ¶ 5.) Accreditation with the BBB is contingent upon a business affirming that “it meets and
22
will abide by [certain] standards,” including to (1) build trust; (2) advertise honestly; (3) tell the
truth; (4) be transparent; (5) honor promises; (6) be responsive; (7) safeguard privacy; and (8)
embody integrity. (Def. Ex. 5 (ECF No. 79-8) 3-5.) Plaintiff filed a consumer complaint with the
BBB accusing AGF of mistreating plaintiff in the way it was servicing her loan. If plaintiff’s
accusations were proven true, AGF’s mistreatment of plaintiff may have served as a violation of
BBB’s Code and AGF may have lost its accreditation with the BBB. Under those circumstances,
a reasonable jury could only find that a defendant in the position of AGF had a reasonable belief
that its business reputation was in danger and Casteel’s letter to the BBB was reasonably
necessary for its protection.
Casteel’s letter to the BBB also satisfies the second element of the conditional privilege
under section 594 because the BBB’s knowledge of the alleged defamatory matter, i.e., plaintiff
was delinquent on her mortgage loan payments, served the BBB in the lawful protection of
AGF’s interest in protecting its business reputation and BBB accreditation. If AGF lost its
accreditation with the BBB, its business reputation most likely would be harmed. As an
organization issuing accreditation, BBB would have the power to strip AGF of its accreditation if
it violated BBB’s code. A person in the position of Casteel, therefore, would have a reasonable
belief that it was necessary for Casteel to tell the BBB about the actions AGF took against
plaintiff and its reasons for those actions, which included the alleged defamatory statement that
plaintiff was delinquent on her mortgage payments, to prevent BBB from taking action against
AGF. Under the foregoing analysis, Casteel’s letter to the BBB was published under
circumstances that make it conditionally privileged under section 594 of the Restatement
(Second) of Torts.
23
Defendants are also entitled to assert a conditional privilege under section 595. First, a
person in the position of Casteel may have a reasonable belief that the information contained in
his letter to the BBB would “affect[] a sufficiently important interest of the [BBB].”
RESTATEMENT (SECOND)
OF
TORTS § 595(1)(a). Here, the BBB had an important interest in
“enhanc[ing] customer trust and confidence in business” by enforcing BBB’s Code against the
businesses it accredited. (Def. Ex. 5 (ECF No. 79-8) 3-5.) A person in the circumstances of
Casteel may have a reasonable belief that interest would be harmed if the BBB failed to respond
to and investigate plaintiff’s complaint that she was mistreated by a BBB accredited business.
Being sent information about AGF’s position and reasoning with respect to its treatment of
plaintiff would be necessary for BBB to protect its interest in enhancing customer trust and
confidence in business. Under those circumstances, a person in the position of Casteel would
have a reasonable belief that the information contained in the letter to the BBB affected a
sufficiently important interest of the BBB.
Second, under section 595, the recipient of the alleged defamatory statement must be “a
person to whom its publication is otherwise within the generally accepted standards of decent
conduct.” RESTATEMENT (SECOND)
OF
TORTS § 595(1)(a). An important consideration in
determining whether the publication is within generally accepted standards of decent conduct is
whether “the publication is made in response to a request rather than volunteered by the
publisher.” RESTATEMENT (SECOND) OF TORTS § 595(2)(a). Here, AGF was required to respond
to consumer complaints under BBB’s Code. Under the sixth principle of trust, AGF had a duty to
respond to plaintiff’s consumer complaint in order to “address[] all of the issues raised by the
complainant” and “include[] appropriate evidence and documents supporting the business’
position, and explains why any relief sought by the complainant cannot or should not be
24
granted.” (Def. Ex. 5 (ECF No. 79-8) 3-5.) Plaintiff filed a consumer complaint with the BBB.
AGF was informed about the complaint and was required to provide a response to the complaint
under the sixth principle of BBB’s Code. (Def. Ex. 5 (ECF No. 79-8) 3-5.) AGF responded via
Casteel’s letter dated July 29, 2009, which contained the alleged defamatory statements. Because
the alleged defamatory statements were made in response to the BBB’s correspondence with
respect to plaintiff’s consumer complaint, the court concludes publication of the alleged
defamatory remarks to Bozikis, as vice president of the BBB, is within generally accepted
standards of decent conduct.
Under either section 594 or 595 of the Restatement (Second) of Torts, a reasonable jury
could only find that a conditional privilege arose in favor of defendants with respect to plaintiff’s
claim of libel per se based upon Casteel’s letter to Bozikis.
c. Letter to Rosen
Ledbetter’s letter to the BBB was published under circumstances that make it
conditionally privileged under sections 594 and 595 of the Restatement (Second) of Torts. Under
section 594(a), a publication is conditionally privileged if “there is information that affects a
sufficiently important interest of the publisher” and “the recipient's knowledge of the defamatory
matter will be of service in the lawful protection of the interest.” RESTATEMENT (SECOND)
OF
TORTS § 594. At the time of Rosen’s inquiry and Ledbetter’s allegedly defamatory response,
Rosen was serving as legal counsel to plaintiff. Rosen sent a letter dated August 24, 2009 to
AGF on behalf of plaintiff requesting “[a]n explanation of why Ms. Wilson’s payments were
considered past due from April 2009 to August 2009.” (Pl. Dep. (ECF No. 79-3) at 30-32; Def.
Ex. 3 (ECF No. 79-4.) AGF has a sufficiently important interest in protecting its business against
lawsuits. The alleged defamatory remarks contained in Ledbetter’s letter to Rosen provided
25
Rosen the answer to her question and provided AGF’s reasoning for why plaintiff was not
current on her mortgage payments. Under those circumstances, a reasonable jury could only find
that a person in Ledbetter’s circumstances had a reasonable belief that providing that information
to Rosen would protect AGF’s interest in preventing legal action against the company.
Defendants are also entitled to assert a conditional privilege under section 595. First, a
reasonable jury could only find that a person in the position of Ledbetter had a reasonable belief
that the information contained in his letter to Rosen would affect Rosen’s sufficiently important
interest. RESTATEMENT (SECOND)
OF
TORTS § 595(1)(a). Here, Rosen’s sufficiently important
interest was the representation of her client. A person in the circumstances of Ledbetter would
have a reasonable belief that interest would be harmed if Ledbetter failed to respond to her
inquiry with respect to why plaintiff’s payments were considered delinquent from April 2009 to
August 2009. If defendants were not forthcoming with that information, Rosen may have been
forced to take legal action on behalf of plaintiff in order to protect her client’s interest. It was in
the best interest of Rosen, as counsel for plaintiff, for Ledbetter to be forthcoming about AGF’s
reasoning for considering plaintiff’s payment past due. Under those circumstances, a reasonable
jury could only find that a person in the position of Ledbetter had a reasonable belief that the
information contained in the letter to Rosen would affect her sufficiently important interest of
representing plaintiff.
Second, under section 595, the recipient of the alleged defamatory statement must be “a
person to whom its publication is otherwise within the generally accepted standards of decent
conduct.” Id. An important consideration in determining whether the publication is within
generally accepted standards of decent conduct is whether “the publication is made in response
to a request rather than volunteered by the publisher.” Id. As stated above, Ledbetter’s letter was
26
written in direct response to a request by Rosen, as opposed to being volunteered by AGF. Under
those circumstances, a reasonable jury would have to find that the publication was made within
the generally accepted standards of decent conduct. Under either section 594 or 595 of the
Restatement (Second) of Torts a conditional privilege arose in favor of defendants with respect
to plaintiff’s claim of libel per se based upon Ledbetter’s letter to Rosen.
d. Abuse of Conditional Privilege
Even if a conditional privilege arises, it is clear, under Pennsylvania law and pursuant to
section 593 of the Restatement (Second) of Torts, the privilege cannot be abused. 42 PA. CONS.
STAT. § 8343(a)(7); Am. Fut. Sys, 923 A.2d at 400; Miketic, 675 A.2d at 329; RESTATEMENT
(SECOND) OF TORTS § 593. A publisher abuses the conditional privilege based upon an occasion
if the plaintiff is a private figure and the publisher negligently publishes the defamatory
statement. Am. Fut. Sys, 923 A.2d at 400. Plaintiff carries the burden to show that the
conditional privilege asserted by defendants was abused, i.e., defendants were negligent. 42 PA.
CONS. STAT. § 8343(a)(7); Am. Fut. Sys, 923 A.2d at 400. The evidence of record does not
support a reasonable jury finding that Casteel or Ledbetter knew or should have known the
information they published was not true. After receiving an inquiry from the BBB with respect to
plaintiff’s complaint, Casteel conducted an investigation into plaintiff’s account history, and
wrote a two-page, single-spaced letter to Bozikis, a vice president of the BBB, detailing his
findings. With respect to Ledbetter, his letter indicates he consulted branch records and
transaction records and learned about a conversation plaintiff had with a district manager about
how to make her loan current. Under those circumstances and in light of the prior discussion in
which the court determined that a reasonable jury would have to find the statements in issue were
true or substantially true, the court must conclude that plaintiff failed to adduce sufficient facts
27
for a reasonable jury to find that either Casteel or Ledbetter abused an applicable conditional
privilege. Defendants are, therefore, entitled to summary judgment against plaintiff’s claims of
libel per se based upon Casteel’s letter to the BBB and Ledbetter’s letter to Rosen.
III.
Plaintiff’s Motion for Leave to File a Second Amended Complaint
A. Additional Factual Allegations set forth in the Proposed Second Amended
Complaint
In the proposed second amended complaint, plaintiff alleges a “Record of requests for
your credit history” (“record of credit inquiries”)4 prepared by Experian, a credit reporting
agency, supports an additional claim for libel per se against defendants.5 (ECF No. 75-4 at 48.)
According to plaintiff, in June 2009, defendants falsely reported a loan application to Experian.
(ECF No. 75-1 ¶ 19.)
In the record of credit inquiries, Experian stated that certain credit inquiries would be
“shared with others” and certain credit inquiries would be “shared only with [plaintiff].” (ECF
No. 75-4 at 48.) The inquiries “shared with others” are inquiries resulting from “an action
[plaintiff] took, such as applying for credit or financing or as a result of a collection.” (Id.) The
inquiries “shared only with [plaintiff]” are inquiries not initiated by an action plaintiff took. (Id.)
Under the “[i]nquiries shared with others” column on plaintiff’s record of credit inquiries, it
indicates that on June 30, 2009, AGF reviewed plaintiff’s credit report for a “permissible
purpose.” (ECF No. 75-4 at 48.) The record of credit inquiries provides that a permissible
purpose could be for a person’s “current creditor” to inquire about the person’s credit history “to
4
The record of credit inquires’ report number is 334-6482-12. (ECF No. 75-4 at 48.)
5
The record of credit inquiries provides that it was “Prepared for DARNELLA WILSON.” (ECF
No. 75-4 at 48.)
28
monitor [his or her] accounts” or to consider extending credit to that person. (Id.) According to
plaintiff:
The averred defaming report number (#334-6482-12) was instigated by Defendant
AGF’s false report to Experian that Ms. Wilson had recently applied for credit
from AGF and they had denied credit. See Exhibits 6 [the record of credit
inquiries] & 7 [the notice] attached. Such inquires [sic] are known in the financial
services industry as a “hard inquiry” and are also known to have an automatic
negative impact a person’s credit rating.
(ECF No. 75-1 ¶ 20.)
Along with the record of credit inquiries, plaintiff references a second document in the
proposed second amended complaint in support of her proposed claim of libel per se. The second
document is entitled “Statement of Credit Denial, Termination, or Change Notice” (the
“notice”).6 (ECF No. 75-4 at 50.) In plaintiff’s deposition, which was submitted as an exhibit to
defendants’ motion for summary judgment and plaintiff’s response to the motion for summary
judgment, she testified that she received the notice from AGF. (Pl. Dep. (ECF No. 79-3) at 5455.) The notice lists plaintiff’s name and address in a section entitled “Applicant’s Name and
Address” and provides the following:
Description of Account, Transaction or Requested Credit: Foreclosure
Description of Action Taken: Credit is denied
6
In plaintiff’s response to defendants’ motion for summary judgment, she references AGF
“falsely report[ing] a loan application to the Experian Credit Reporting Agency,” and that AGF
“communicated lies about her to Experian.” (ECF No. 81 at 4, 7.) The record of credit inquiries
and the notice were included as part of the record in support of defendants’ motion for summary
judgment. (ECF No. 79-5 at 14, 15.) As pointed out by defendants in their reply brief, at the time
defendants filed their motion for summary judgment, there was no claim asserted in the first
amended complaint against defendants based upon the record of credit inquiries or the notice.
The court, therefore, considers plaintiff’s proposed claim for libel per se based upon the record
of credit inquiries and the notice for the first time in its discussion of plaintiff’s motion for leave
to file a second amended complaint.
29
(ECF No. 75-4 at 50.) The notice indicates that the reason for credit denial was plaintiff’s
“Temporary or Irregular Employment” and that the “credit decision was based in whole or in
part on information obtained in a report from [Experian,] the consumer reporting agency….”
(Id.) In the proposed second amended complaint, plaintiff alleges:
Defendant AGF knowingly placed the Plaintiff’s name and address in the section
labeled “Applicant’s Name and Address” thereby materially misrepresenting that
Ms. Wilson had recently applied for credit from AGF. Furthermore, AGF knew
that Ms. Wilson had not currently applied to them for credit when they
represented “Credit is denied” in the section labeled “Description Of Action
Taken” [sic]
Plaintiff further avers that AGF knowingly made the material misrepresentation of
the court action of foreclosure by placing the word “Foreclosure” in the
“Description of Account, Transaction, or Requested Credit” section. Furthermore,
AGF knew at the time they made the statement that no foreclosure against Ms.
Wilson had occurred.
AGF published the aforementioned misrepresentations to Experian Credit
Reporting Agency for public appearance from June 30, 2009 to July 2011. As a
result, Plaintiff has been injured per se by loss of credit worthiness, loss of
reputation, and an inability to complete the restoration of her business facility in
order to expand an existing business into the specialty food restaurant market.
(ECF No. 75-1 ¶¶ 21-23.)
B. Standard of Review for a Motion for Leave to Amend
The court may grant a plaintiff leave to amend a complaint under Federal Rule of Civil
Procedure 15(a)(2), which provides: “The court should freely give leave when justice so
requires.” Rule 15, however, “does not permit amendment when it would be futile.” Kenny v.
United States, No. 10-4432, 2012 WL 2945683, at *4 (3d Cir. Jul. 19, 2012). Futility “‘means
that the complaint, as amended, would fail to state a claim upon which relief could be granted.’”
Id. (citing Burtch v. Millerg Factors, Inc., 662 F.3d 212, 231 (3d Cir. 2011)). In other words,
“[t]he standard for deciding whether claims are futile for the purpose of granting leave to amend
a complaint is the same as a motion to dismiss.” Markert v. PNC Financial Servs. Group, Inc.,
30
828 F.Supp.2d 765, 771 (E.D. Pa. 2011). Thus, the court takes the factual allegations of the
proposed amended complaint as true, draws all reasonable inferences in favor of the plaintiff,
and denies the motion to amend if the factual allegations in the complaint do not raise plausible
claims and are not sufficient “to raise a right to relief above the speculative level.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 545 (2007) (citing 5 C. WRIGHT & A. MILLER, FEDERAL
PRACTICE
AND
PROCEDURE § 1216, pp. 235–236 (3d ed. 2004) (“[T]he pleading must contain
something more ... than ... a statement of facts that merely creates a suspicion [of] a legally
cognizable right of action”)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’
devoid of ‘further factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 557). 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.”
Id. “[I]f the court determines that plaintiff has had multiple
opportunities to state a claim but has failed to do so, leave to amend may be denied.” See 6
CHARLES A. WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE
AND
PROCEDURE § 1487 (2d ed. 2010).
C. Discussion
To satisfy the pleading standards set forth in Iqbal and Twombly, a plaintiff asserting a
defamation (libel per se) claim under Pennsylvania law must plead factual allegations sufficient
for the court to find it is plausible plaintiff may establish the following elements:
(1) The defamatory character of the communication.
(2) Its publication by the defendant.
(3) Its application to the plaintiff.
(4) The understanding by the recipient of its defamatory meaning.
(5) The understanding by the recipient of it as intended to be applied to the
plaintiff.
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Tucker, 237 F.3d at 281 (citing 42 PA. CONS. STAT. § 8343(a)). Plaintiff seeks to assert a claim of
libel per se in the proposed second amended complaint based upon the record of credit inquiries
prepared by Experian. This document indicates there are several reasons a credit inquiry could
have been made including that plaintiff inquired about obtaining credit. Since it is possible that a
credit inquiry could be made for that purpose, on its face, the record of credit inquiries would not
reflect any defamatory import.
“In Pennsylvania, a defamatory statement is one that ‘tends to so harm the reputation of
another as to lower him in the estimation of the community or to deter third persons from
associating or dealing with him.’” Resnick, 52 F. Supp.2d at 470 (quoting U.S. Healthcare, Inc.,
898 F.2d at 922). “If the publication imputes insolvency, financial embarassment [sic],
unworthiness of credit or failure in business of the plaintiff, it would be libelous.” Sarkees v.
Warner-West Corp., 37 A.2d 544, 546 (Pa. 1944) (cited by Altoona, 367 F.2d at 629). An inquiry
with respect to a person’s credit history, however, does not impute unworthiness of credit to that
person; indeed, the credit inquiry may result in a report that places a plaintiff in a positive light.
In Ayvazian v. Moore Law Grp., No. 12-1506, 2012 WL 2574947, at *4-5 (C.D. Cal.
July 3, 2012), the court considered whether a credit inquiry was defamatory and could be
considered libel per se under California law. In that case, a defendant inquired about plaintiff’s
credit history. Id. The plaintiff contended the credit inquiry caused him “shame and
embarrassment, loss of reputation, and severe emotional distress.” Id. at *4. The court concluded
plaintiff’s contention that a credit inquiry constituted libel per se was “absurd” because there was
nothing about the credit inquiry that “create[d] a ‘presumption’ of fiscal irresponsibility” as
plaintiff contended and it did not expose plaintiff to “hatred, contempt, or ridicule.” Id. (citing
Cal. Civ. Code. § 45a.) Here, similar to Ayvazian, there is nothing in the record of credit inquiry
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that imputes fiscal irresponsibility to plaintiff. It follows that that Experian’s report indicating
defendants inquired about plaintiff’s credit history is not capable of a defamatory meaning
because it does not “impute[] insolvency, financial embarassment [sic], unworthiness of credit or
failure in business” to plaintiff. Sarkees, 37 A.2d at 546. Plaintiff, therefore, failed to set forth a
claim for defamation based upon the alleged defamatory report prepared by Experian.
It is noted there were no factual allegations that defendants published the record of credit
inquiries; rather, it was prepared by Experian. Even assuming for the sake of argument there was
a plausible defamatory statement, the factual allegations in the proposed second amended
complaint are not sufficient for the court to conclude the claim is plausible because there are no
allegations that the record of credit inquiries was published to third parties. The record of credit
inquiries provides: “The inquiries in this [record] are shared with companies that view your
credit history.” (ECF No. 75-4 at 48.) Plaintiff did not plead that anyone else viewed her credit
history reporting AGF’s inquiry.
With respect to the notice, plaintiff does not allege it was published to a third party. As
discussed above, she testified that she received that document from AGF. (Pl. Dep. (ECF No. 793) at 54-55.) The notice in and of itself cannot, therefore, support a claim for libel per se. The
extent to which plaintiff relies upon the statements in the notice to support a claim of defamation
against defendants with respect to the record of credit inquiries is unclear from the face of the
proposed second amended complaint and the exhibits attached thereto. Plaintiff alleges that AGF
published the misrepresentations contained in the notice to Experian for public view, but the
record of credit inquiries does not contain the information in the notice. The record of credit
inquiries contains only the innocuous statement that AGF inquired about plaintiff’s credit
history. Under those circumstances, and in light of the foregoing discussion, plaintiff did not set
33
forth a plausible claim for libel per se in the proposed second amended complaint. Plaintiff’s
motion for leave to file a second amended complaint will, therefore, be denied without prejudice.
To the extent plaintiff has factual information with respect to AGF’s communications to
Experian that would support a plausible claim for libel per se, she may file a motion for
reconsideration.
IV. Conclusion
For the reasons set forth in this memorandum opinion, there is no genuine issue of
material fact with respect to the truth or substantial truth of the statements claimed by plaintiff to
be libelous per se and no reasonable jury could render a verdict in favor of plaintiff on her claim.
In the alternative, there is no genuine issue of material fact with respect to the existence of a
conditional privilege for those statements, and the plaintiff failed to adduce sufficient evidence
from which a reasonable jury could find defendants abused the applicable conditional privileges.
Defendants’ motion for summary judgment (ECF No. 77) will, therefore, be GRANTED and an
appropriate order will be entered.
With respect to plaintiff’s motion for leave to file a second amended complaint, she failed
to set forth factual allegations sufficient for the court to conclude that she could set forth a
plausible claim for libel per se based upon the record of credit inquiries or the notice sent to her
by AGF. Plaintiff’s motion for leave to file a second amended complaint will, therefore, be
DENIED without prejudice. The clerk shall mark this case closed. An appropriate order will be
entered.
Dated: March 12, 2013
By the court,
/s/ Joy Flowers Conti
Joy Flowers Conti
United States District Judge
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