CONTRACTOR’S
STATEMENTS TO HIS CLIENT REGARDING THE WORK OF ANOTHER CONTRACTOR ARE NOT
NECESSARILY DEFAMATORY BECAUSE THEY furthered THE common business interest AND
WERE made in HIS professional capacity.
AS SUCH, THEY ARE PRIVILEGED.
Downey, et al. v. Chutehall
Construction Co., Inc., et al. v. The Follett Company, Inc. (Lawyers Weekly No.
11-149-14)
13-P-819
Appeals Court
CHRISTOPHER DOWNEY
& another[1] vs.
CHUTEHALL CONSTRUCTION CO., LTD.; THE FOLLETT COMPANY, INC., third-party
defendant.
No. 13-P-819.
Suffolk.
September 15, 2014. – November 13, 2014.
Libel and Slander. Consumer Protection Act,
Unfair or deceptive act. Privileged Communication. Evidence,
Opinion, Privileged communication. Practice, Civil, Summary
judgment, Entry of judgment.
Civil action
commenced in the Superior Court Department on July 2, 2010.
A motion for partial
summary judgment was heard by Judith Fabricant, J., and entry of final
and separate judgment was ordered by her.
John D.
Fitzpatrick for Chutehall
Construction Co., Ltd.
Heather Gamache for The Follett Company, Inc.
KAFKER, J. Homeowners Christopher and Mairead Downey (the Downeys) hired
a contractor, The Follett Company, Inc. (Follett), to investigate the cause of
their leaky roof. Follett reported that the roof had been installed a
number of years earlier over fiberboard roof insulation that was soaking wet,
thereby causing the later leakage. The Downeys then sued the installer of
the roof, Chutehall Construction Co., Ltd. (Chutehall), for substandard workmanship,
and Chutehall brought third-party defamation and G. L. c. 93A claims
against Follett, asserting that the statement about installing the roof over
the soaking wet fiberboard insulation was false and defamatory. A
Superior Court judge granted Follett’s motion for summary judgment on
Chutehall’s claims against Follett. Follett then filed a motion for the
entry of a separate and final judgment pursuant to Mass.R.Civ.P. 54(b), 365
Mass. 820 (1974), which Chutehall opposed. The judge allowed Follett’s
motion, judgment entered, and this appeal followed.
On appeal, Chutehall
argues that the judge erred in deciding as a matter of law (1) that Follett’s
report about the roof constituted a statement of opinion not fact, (2) that
Follett was not negligent in making the statement, and (3) that the statement
was protected by a conditional privilege. Chutehall also argues that the
judge erred in allowing the motion for entry of separate and final
judgment. We conclude that the statement by Follett was protected by a
conditional privilege that was not abused, and therefore, summary judgment was
properly allowed on the defamation claim. As the c. 93A claim depends on
the merits of the defamation claim, summary judgment was properly allowed on
this claim as well. There was no error in the entry of judgment pursuant
to Mass.R.Civ.P. 54(b).
1. Background.
In 2005, the Downeys entered a contract with Chutehall pursuant to which
Chutehall installed a new rubber roof system on the Downeys’ townhouse in the
Beacon Hill section of Boston. In 2009, another contractor, hired by the
Downeys to install a rooftop heating, ventilation, and air conditioning (HVAC)
unit for their home, cut a hole in the roof and discovered that the underlying
roof system was wet. At the contractor’s suggestion, the Downeys engaged
Follett and J.M. Lydon Corp. (Lydon), both roofing contractors, to inspect the
roof. In addition, the Downeys hired Gregory R. Doelp, a structural
engineer, to evaluate the roof and any proposals submitted by Follett and
Lydon. After Follett, Lydon, and Doelp performed their on-site
investigations of the roof, the Downeys requested that they each prepare
written findings of their observations. Specifically, the Downeys
requested that Follett help them understand why the roof was wet and what had
caused the leakage problems. Follett’s written report, titled “Roof
Observations,” stated, “This roof was installed over a EPDM roof system that
had fiberboard roof insulation that was soaking wet.” Follett recommended
that the entire roofing system be removed and replaced. The Downeys
ultimately hired Follett to carry out this recommendation.
In 2010, the Downeys
filed a complaint in Superior Court against Chutehall to recover damages to
their townhouse allegedly caused by substandard roofing work performed by
Chutehall in 2005. In response to the Downeys’ lawsuit, Chutehall
asserted third-party claims against Follett for defamation and violation of
G. L. c. 93A, alleging Follett’s statement that the roof was
installed over wet insulation was false and defamatory.[2] Chutehall’s c. 93A
claim is based entirely on its allegation of defamation. On Follett’s
motion for summary judgment, the Superior Court judge ruled that the alleged
defamatory statements were not statements of fact, but of Follett’s
professional opinion, that the statements were not negligently made, and that,
in any event, they were conditionally privileged. The judge further ruled
that because Chutehall’s c. 93A claim rested entirely on the allegation of
defamation, that claim must fail as well. A separate and final judgment
entered pursuant to Mass.R.Civ.P. 54(b), and Chutehall filed a timely notice of
appeal.
2. Discussion.
The defendant must prevail on its motion for summary judgment “if [it]
demonstrates, by reference to material described in Mass. R. Civ. P. 56 (c),
unmet by countervailing materials, that the [plaintiff] has no reasonable
expectation of proving an essential element of [its] case.” Kourouvacilis
v. General Motors Corp., 410 Mass. 706, 716 (1991). ”A complete
failure of proof concerning an essential element of the [plaintiff’s] case
renders all other facts immaterial.” Id. at 711. We view the
evidence in the light most favorable to the nonmoving party. See Currier
v. National Bd. of Med. Examiners, 462 Mass. 1, 11 (2012); Dragonas
v. School Comm. of Melrose, 64 Mass. App. Ct. 429, 430 (2005).
a. Chutehall’s
defamation claim. In order for Chutehall to recover on its defamation
claim, it must establish that (1) Follett published a defamatory statement of
and concerning Chutehall; (2) the statement was a false statement of fact (as
opposed to opinion); (3) Follett was at fault for making the statement and any
privilege that may have attached to the statement was abused; and (4) Chutehall
suffered damages as a result, or the statement was of the type that is
actionable without proof of economic loss. See Stone v. Essex
County Newspapers, Inc., 367 Mass. 849, 858-859 (1975); Phelan v. May
Dept. Stores Co., 443 Mass. 52, 55-56 (2004); Restatement (Second) of Torts
§§ 558, 599, 600 (1977).
i. Distinction
between opinion and fact. To determine whether the statement in
question is defamatory, the court must decide whether it is an assertion of
fact or opinion. The distinction is often subtle and difficult,
particularly at the summary judgment stage. King v. Globe
Newspaper Co., 400 Mass. 705, 709 (1987), cert. denied, 485 U.S. 940 and
485 U.S. 962 (1988), quoting from Janklow v. Newsweek, Inc., 788
F.2d 1300, 1302 (8th Cir.), cert. denied, 479 U.S. 883 (1986) (“It is hard to
draw a bright line between ‘fact’ and ‘opinion’”). The determination is
considered a question of law only when it is unambiguous. See ibid.
See also Driscoll v. Board of Trustees of Milton Academy, 70
Mass. App. Ct. 285, 296 (2007); Gray v. St. Martin’s Press, Inc.,
221 F.3d 243, 248 (1st Cir. 2000), cert. denied, 531 U.S. 1075 (2001). In
contrast, “the determination whether a statement is a factual assertion or a
statement of pure opinion is a question of fact if the statement reasonably can
be understood both ways.” King v. Globe Newspaper Co., supra.
See Aldoupolis v. Globe Newspaper Co., 398 Mass. 731,
733-734 (1986). Therefore, in a defamation action, “the defendant is
entitled to summary judgment if the challenged statement cannot reasonably be
construed as a statement of fact.” King v. Globe Newspaper Co.,
supra. “However, if a statement is susceptible of being read by a
reasonable person as either a factual statement or an opinion, it is for the
jury to determine.” Aldoupolis v. Globe Newspaper Co., supra.
In determining
whether an assertion is a statement of fact or opinion, “the test to be applied
. . . requires that the court examine the statement in its totality in the
context in which it was uttered or published. The court must consider all
the words used, not merely a particular phrase or sentence. In addition,
the court must give weight to cautionary terms used by the person publishing
the statement. Finally, the court must consider all of the circumstances
surrounding the statement, including the medium by which the statement is
disseminated and the audience to which it is published.” Cole v. Westinghouse
Bdcst. Co., 386 Mass. 303, 309, cert. denied, 459 U.S. 1037 (1982), quoting
from Information Control Corp. v. Genesis One Computer Corp., 611
F.2d 781, 784 (9th Cir. 1980).
We do not consider
this assertion an unambiguous statement of opinion appropriate for summary
judgment. The defamatory statement on its face appears directly and
definitively factual.[3] ”This roof was installed
over a EPDM roof system that had fiberboard roof insulation that was soaking
wet.” Importantly, in contrast to statements of opinion, statements that
present or imply the existence of facts that can be proven true or false are
actionable. See Levinsky’s, Inc. v. Wal-Mart Stores, Inc.,
127 F.3d 122, 127 (1st Cir. 1997), citing Milkovich v. Lorain Journal
Co., 497 U.S. 1, 18-19 (1990); Gray v. St. Martin’s Press, Inc.,
221 F.3d at 248, also citing Milkovich, supra at 18-20.
Here, Follett stated that the Downeys’ roof had been installed over wet
insulation. This appears to be an assertion of fact that, at least in
theory, could be verified as either true or false.[4]
Nevertheless, as the
motion judge pointed out, the installation of the roof was done four years
earlier when Follett was not present, and thus the motion judge concluded that
the statement “can reasonably be understood only as an expression of Follett’s
professional judgment, based on its observations at the time it examined the
roof.” The published statement is not, however, in any way introduced as
an expression of opinion. See, e.g., Information Control Corp. v. Genesis
One Computer Corp., 611 F.2d at 784 (statement “cautiously prefaced as
representing ‘the opinion of . . . management’”). Nor is the statement
expressly qualified or limited as being based on the results of particular
observations. See Restatement (Second) of Torts § 566 comment c &
illustration 4 (“A writes to B about his neighbor C: ’He moved in six
months ago. He works downtown, and I have seen him during that time only
twice, in his backyard around 5:30 seated in a deck chair with a portable radio
listening to a news broadcast, and with a drink in his hand. I think he
must be an alcoholic.’ The statement indicates the facts on which the
expression of opinion was based and does not imply others. These facts
are not defamatory and A is not liable for defamation”). Finally, the
audience, i.e., ordinary homeowners, could, we conclude, reasonably be expected
to understand Follett’s statement as one of determined fact and not just a
qualified opinion, despite their understanding that Follett did not personally
observe the installation. See Cole v. Westinghouse Bdcst. Co.,
386 Mass. at 309.
In sum, although it
is a close question, we conclude that the unqualified factual assertion here,
which might have been proven true or false, could reasonably be construed as a
defamatory statement of fact. Summary judgment should not have been
granted on the ground that it was an unambiguous opinion. We therefore turn
to the questions of fault and privilege.
ii. Demonstration
of fault. Private persons or entities may recover on defamation
claims on proof that the defendant was negligent in publishing defamatory
statements, which reasonably could be interpreted to refer to the plaintiff,
assuming proof of all other elements of a claim for defamation has been
provided. See Stone v. Essex County Newspapers, Inc., 367
Mass. at 858; New England Tractor-Trailer Training of Conn., Inc. v. Globe
Newspaper Co., 395 Mass. 471, 477 (1985). If, however, a conditional
privilege applies to the communication, negligence is not enough, as at least
recklessness is required. See Bratt v. International Bus.
Machs. Corp., 392 Mass. 508, 514 (1984). We turn to the privilege
issue next, as we consider it dispositive in the instant case.
iii. Conditional
privilege. ”The burden is on the defendant[] to prove, when the issue
is properly raised, the existence of a privilege to publish a defamatory
communication.” Jones v. Taibbi, 400 Mass. 786, 802
(1987). Where, as here, a defendant in a defamation action establishes
the existence of a privilege, the burden rests upon the plaintiff to raise a
trial- worthy issue of an abuse of that privilege. See Judd v. McCormack,
27 Mass. App. Ct. 167, 173 (1989); Dragonas v. School Comm. of
Melrose, 64 Mass. App. Ct. at 438. In this case, this would require
Chutehall to have introduced sufficient evidence to establish that Follett published
the statements recklessly. Based on our review of the record, we conclude
that Chutehall’s defamation claim failed as a matter of law because the
statement is conditionally privileged, and there is no genuine issue of
material fact regarding recklessness.
Under Massachusetts
law, a publication will be deemed conditionally privileged if the publisher of
the statement and the recipient have a common interest in the subject and the
statement is “reasonably calculated to further or protect that interest.”
Sheehan v. Tobin, 326 Mass. 185, 190-191 (1950) (citation
omitted). See Humphrey v. National Semiconductor Corp., 18
Mass. App. Ct. 132, 133 (1984) (privilege applies to employee of one company
making disparaging comments about performance of employee of another company
with which first has business relationship); Flotech, Inc. v. E.I. Du
Pont de Nemours & Co., 814 F.2d 775, 778 (1st Cir. 1987) (privilege
applies to company’s statement that it views its own product as ineffective for
particular purpose even if statement implies ineffectiveness of third party’s
product); Restatement (Second) of Torts § 596. The courts have
consistently recognized the common interest privilege within the business
context. See Bratt v. International Bus. Machs. Corp., 392
Mass. at 512-513 (“Massachusetts courts have recognized that a person may
possess a conditional privilege to publish defamatory material if the
publication is reasonably necessary to the protection or furtherance of a
legitimate business interest”); Humphrey v. National Semiconductor
Corp., supra at 133-134.
Despite Chutehall’s
assertions to the contrary, Follett’s statement involved a common business
interest between Follett and the Downeys, i.e., the evaluation of the likely
source of the roof’s leak so that repairs could be made. Follett’s
statement furthered this common business interest as it affected the Downeys’
decision on how they should proceed in addressing the roof’s leakage.
Additionally, the statement was made in Follett’s professional capacity and
only after the Downeys specifically requested Follett to explain the source of
the leak. The exchange between Follett and the Downeys is assuredly of the type
contemplated by the privilege, and to claim otherwise would rob the privilege
of its intended purpose.
This conclusion is
supported by case law from other jurisdictions as well. As seen in Briggs
v. Newton, 984 P.2d 1113, 1121 (Alaska 1999), the common business
interest privilege was applied to a statement made by a contractor to his
client regarding the work of prior contractors. The Alaska Supreme Court
emphasized that the business privilege is “clearest when a legal relationship
exists between the defendant and the person on whose behalf” he is making the
contested statement, and the communication serves the purposes of that legal
relationship. Ibid. (citation omitted). In Briggs, as
in the instant case, the defendant and his client had a contractual
relationship related to the need for repair work on the house, and the
communication was included in a document that was designed to explain the need
for such repair work.
Moreover, nothing in
the record suggests that this conditional privilege was forfeited by Follett.
Massachusetts case law maintains that a publisher may abuse, and lose, a
conditional privilege in a number of ways, including if the plaintiff offers
proof that the defendant (1) acted out of malice, (2) knew the information was
false, (3) had no reason to believe the information to be true, (4) acted in
reckless disregard of the truth or the defendant’s rights, or (5) published the
information unnecessarily, unreasonably, or excessively. See Bratt
v. International Bus. Machs. Corp., 392 Mass. at 513-515; Dragonas
v. School Comm. of Melrose, 64 Mass. App. Ct. at 438-439. As underscored
by the Supreme Judicial Court, “whatever the manner of abuse, recklessness, at
least, should be required” to overcome the privilege. Bratt v. International
Bus. Machs. Corp., supra at 515. See Dexter’s Hearthside
Restaurant, Inc. v. Whitehall Co., 24 Mass. App. Ct. 217, 223 (1987)
(“Recklessness is the minimum level of misconduct”). Negligence is not
enough to cause the loss of the privilege.
Recklessness is a
difficult standard to meet. ”[R]eckless conduct is not measured by
whether a reasonably prudent man would have published or would have
investigated before publishing.” HipSaver, Inc. v. Kiel,
464 Mass. 517, 530 (2013), quoting from St. Amant v. Thompson,
390 U.S. 727, 731 (1968). Rather, the defendant’s conduct is measured by
what the defendant had reason to believe. See Foley v. Polaroid
Corp., 400 Mass. 82, 95-96 (1987). ”There must be sufficient evidence
to permit the conclusion that the defendant in fact entertained serious doubts
as to the truth of his publication.” HipSaver, Inc. v. Kiel,
supra. Cf. Garrison v. Louisiana, 379 U.S. 64, 74
(1964) (equating “reckless disregard” with “high degree of awareness of .
. . probable falsity”).
Follett’s
deposition, through its designee, Donald Follett, demonstrates that he
undertook an investigation before proffering the conclusion that the most
recently installed roof had been put in over wet insulation. Donald
Follett conducted two on-site inspections of the roof and made several test
cuts in the roofing system. He determined that the top roof membrane and
insulation was dry but the underlying roof materials were soaking wet. He
also concluded that the wetness at the higher elevations was consistent with
the wetness at the lower areas. He stated that at the very top area of
the roof there were “no penetrations for water to get in.” These test
cuts and observations led him to conclude that the uppermost roofing system had
been installed over wet insulation. Indeed he stated at his deposition
that “it would have been impossible that that roof . . . insulation was not
wet” when the roof was installed. He described himself as “convinced,” so
much so that once he made the test cuts, he did not do further investigation
regarding leaks.
Similarly, the facts
led Lydon, the other roofing contractor that examined the Downeys’ roof, to
conclude, “This roof would be adequate if it was not installed over a wet
roof.” Doelp, the engineer hired by the Downeys to evaluate the roof and
the repair proposals made by Follett and Lydon, testified that Follett’s
conclusion was plausible, and that Donald Follett, a roofer, would be in a
“better position than I would be to make that judgment.”
Doelp did, however,
acknowledge some uncertainty. Based on his own investigation, Doelp
testified that he could not be sure Chutehall’s 2005 work on the Downeys’ roof
was the source of the leakage problems, as he had also identified other
potential sources of the wetness of the insulation and leakage. He noted,
for example, that there were potential leak problems around the head house,
chimney, and metal parapet. He further stated that the water “could have
been there when they put the roof over. [But] [i]t could have happened
later.” He did not know. He speculated that he “could figure that
out, but . . . was never asked to do that.”
The record here does
not support a finding of recklessness. The facts at Follett’s disposal
provided solid reasons to believe the statement it made to the Downeys.
Donald Follett testified that he was firmly convinced by his investigation.
Although there is a question whether Follett should have done more to
investigate the source of the leak, and that leads to some uncertainty about
the correctness of its conclusions, in the absence of any evidence that Follett
“entertained serious doubts as to the truth of [the] publication,” HipSaver,
Inc. v. Kiel, 464 Mass. at 530, Chutehall has failed to demonstrate
a genuine issue of material fact regarding recklessness. The judge did
not err in allowing Follett’s motion for summary judgment on Chutehall’s
defamation claim.
b. The
G. L. c. 93A claim. As conceded by Chutehall, its
G. L. c. 93A claim is based on the alleged defamatory statements made
by Follett. Accordingly, this claim rises or falls on the outcome of the
defamation claim. Dulgarian v. Stone, 420 Mass. 843, 853
(1995) (“[W]here allegedly defamatory statements do not support a cause of
action for defamation, they also do not support a cause of action under
G. L. c. 93A”). Therefore, the trial judge properly allowed
Follett’s motion for summary judgment on Chutehall’s G. L. c. 93A
claim.
c. Final
and separate judgment. Under Mass.R.Civ.P. 54(b), “the court may
direct the entry of a final judgment as to one or more but fewer than all of
the claims or parties . . . upon an express determination that there is
no just reason for delay and upon an express direction for the entry of
judgment.” “Whether there are multiple claims in an action and whether
those claims have been finally adjudicated are matters of law subject to plenary
review by an appellate court.” Long v. Wickett, 50 Mass.
App. Ct. 380, 386 (2000). “The determination of the presence or absence
of a just reason for delay, on the other hand, is left to the sound discretion
of the trial judge and is subject to reversal only for an abuse of that
discretion.” Ibid. The record supports the trial judge’s
decision that there was no just reason for delay given that Chutehall’s claims
against Follett were independent of the claims between Chutehall and the
Downeys.[5] We decline to vacate the
entry of separate and final judgment.
3. Conclusion.
For the reasons discussed above, the judge did not err in allowing Follett’s
motion for summary judgment on Chutehall’s defamation and c. 93A claims or in
entering a separate and final judgment as to those claims.
Judgment entered
January 22,
2013, pursuant to
Mass.R.Civ.P.
54(b)
affirmed.
[2] Originally, Chutehall’s
defamation claim was based on two statements: the statement made by
Follett in the “Roof Observations” report, and a written statement made by
Christopher Downey in a prelitigation demand letter to Chutehall, in which
Downey wrote that Follett “noted that the roofing workmanship was in fact poor
and substandard.” Chutehall has waived the issue of this second statement
on appeal, and the only statement we considered is Follett’s written statement.
[3] In his deposition, Follett
states that it would have been “impossible” for the insulation not to have been
wet when the roof was installed. See part 2.a.iii, infra.
[4] In Doelp’s deposition, for
example, he stated that he could have figured out why the insulation was wet
but was never asked to make that determination. See part 2.a.iii, infra.
[5] Although not argued by the
parties, we also note that the issue may be moot, as the remaining claims
between Chutehall and the Downeys have proceeded to judgment.
