| Rufeh v Schwartz |
| 2008 NY Slip Op 03624 [50 AD3d 1002] |
| April 22, 2008 |
| Appellate Division, Second Department |
| Mark Rufeh et al., Respondents-Appellants, v Seth M.Schwartz et al., Appellants-Respondents. |
—[*1] Cuddy & Feder LLP, White Plains, N.Y. (Andrew P. Schriever and Joshua J. Grauer ofcounsel), for respondents-appellants.
In an action to recover damages for defamation, the defendants appeal from so much of anorder of the Supreme Court, Westchester County (Donovan, J.), entered May 4, 2007, as deniedthat branch of their motion which was pursuant to CPLR 3211 (a) (7) to dismiss the cause ofaction to recover damages for slander, and the plaintiffs cross-appeal from so much of the sameorder as granted that branch of the defendants' motion which was pursuant to CPLR 3211 (a) (7)to dismiss the cause of action to recover damages for libel.
Ordered that the order is reversed insofar as appealed from, on the law, and that branch of thedefendants' motion which was to dismiss the cause of action to recover damages for slander isgranted; and it is further,
Ordered that the order is affirmed insofar as cross-appealed from; and it is further,
Ordered that one bill of costs is awarded to the defendants.
The plaintiff Mark Rufeh entered into a contract to purchase a home in Scarsdale from thedefendants. A dispute arose between the parties regarding the necessity of a separate certificate ofoccupancy for the basement of the home, and the closing did not take place on the scheduleddate. In a separate action commenced against the defendants, Mark Rufeh alleged, inter alia, thatthe defendants had breached the contract of sale and sought to recover the down payment he hadgiven to them (see Rufeh v Schwartz, 50 AD3d 1000 [2008]). In their answer in that action, the defendantsasserted counterclaims, alleging, inter alia, that Mark Rufeh entered into the contract of sale aspart of a fraudulent scheme designed to induce Scarsdale School District officials to permit thechildren of his wife, the plaintiff Patricia Rufeh, to enroll in Scarsdale schools by leading thoseofficials to believe that he was establishing residency in Scarsdale, when, in fact, he neverintended to consummate the purchase of the subject property.
The plaintiffs then commenced the instant action against the defendants, seeking to recoverdamages for libel based upon various statements made in the defendants' answer in theunderlying action. The complaint identified the following statements in the defendants' answer inthe breach of contract action, among others, as defamatory: Mark Rufeh defrauded PatriciaRufeh, "a woman he calls his wife;" Mark Rufeh defrauded the Scarsdale schools by inducingthem to enroll Patricia Rufeh's children under false pretenses; Mark Rufeh "claims that he gotmarried for the first time three years ago to [Patricia Rufeh], who is approximately 10 to 15 yearshis junior;" Mark Rufeh "is not the father of [Patricia Rufeh's] children and has not adoptedthem;" and Mark Rufeh "was duping the Village of Scarsdale."
The plaintiffs subsequently amended their complaint to add a second cause of action, seekingto recover damages for slander based upon allegations that the defendant Carolyn Karp Schwartztold the Scarsdale Superintendent of Schools that Patricia Rufeh's children should be refusedenrollment in the Scarsdale school system because the plaintiffs were not honoring the contractof sale (which they had submitted as proof of their intended residency in Scarsdale) and wereattempting to deceive and defraud the school system into believing that they intended to purchasethe defendants' home.
The defendants moved to dismiss the complaint pursuant to, inter alia, CPLR 3211 (a) (7).The Supreme Court granted that branch of the defendants' motion which was to dismiss the libelcause of action, but denied that branch of the motion which was to dismiss the slander cause ofaction.
For purposes of defending against a libel cause of action, "[s]tatements made by parties,attorneys, and witnesses in the course of a judicial or quasi-judicial proceeding are absolutelyprivileged, notwithstanding the motive with which they are made, so long as they are materialand pertinent to the issue to be resolved in the proceeding" (Sinrod v Stone, 20 AD3d 560, 561 [2005]; see Wiener vWeintraub, 22 NY2d 330, 331 [1968]; Marsh v Ellsworth, 50 NY 309, 311-312[1872]; Allan & Allan Arts v Rosenblum, 201 AD2d 136 [1994], cert denied 516US 914 [1995]). While the Supreme Court correctly observed that some of the defendants'allegations may have been more appropriately stated in different language, the allegations all hadat least some marginal relevance to the fraud theory the defendants were advancing. Accordingly,the statements were privileged, and the Supreme Court properly granted that branch of thedefendants' motion which was pursuant to CPLR 3211 (a) (7) to dismiss the cause of action torecover damages for libel.
Generally, a plaintiff alleging slander must plead and prove that he or she has sustainedspecial damages, i.e., "the loss of something having economic or pecuniary value" (Libermanv Gelstein, 80 NY2d 429, 434-435 [1992] [internal quotation marks omitted]; seeAronson v Wiersma, 65 NY2d 592, 594-595 [1985]). A plaintiff need not prove specialdamages, however, if he or she can establish that the alleged defamatory statement constitutedslander per se. Among the four recognized types of slander per se are statements which "tend toinjure another in his or her trade, business or profession" (Liberman v Gelstein, 80 NY2dat 435). In this case, the complaint does not allege that the plaintiffs sustained special damages.Instead, the plaintiffs claim that the allegedly defamatory [*3]statements to the Superintendent of Schools constituted slander perse because they harmed Mark Rufeh's reputation in the Scarsdale community, where he haddeveloped a financial services and real estate development business that depended on hisreputation for honesty, and where there were many people who, like Mark Rufeh, worked in theWall Street financial services sector.
Contrary to the plaintiffs' contention, the alleged defamatory statements did not tend to injureMark Rufeh in his trade, business, or profession. This category of slander per se "is limited todefamation of a kind incompatible with the proper conduct of the business, trade, profession oroffice itself. The statement must be made with reference to a matter of significance andimportance for that purpose, rather than a more general reflection upon the plaintiff's character orqualities" (Liberman v Gelstein, 80 NY2d at 436 [internal quotation marks omitted]; see Zysk v Fidelity Tit. Ins. Co. of N.Y.,14 AD3d 609 [2005]). In this case, the alleged defamatory statements, i.e., that theplaintiffs were not honoring the contract of sale and were attempting to deceive and defraud theschool system into believing that they intended to purchase the defendants' home, constitutednothing more than a general reflection upon the plaintiffs' character or qualities. The allegedstatements referred to Mark Rufeh in his personal capacity, not in his capacity as an officer of aWall Street financial firm. An allegation that Mark Rufeh engaged in a single breach of contract,and even a single incident characterized as fraud, does not relate specifically to his occupation asan officer of a financial firm. Were such an allegation sufficient to constitute slander per se inthis case, then virtually any accusation of fraud would always constitute slander per se. We rejectas unduly broad such an interpretation of the exception to the requirement of special damages forplaintiffs who sustain injury in their trade, business, or profession.
Thus, the alleged defamatory statements did not constitute slander per se, and the slandercause of action therefore cannot survive without an allegation of special damages. Since no suchallegation has been made, that branch of the defendants' motion which was pursuant to CPLR3211 (a) (7) to dismiss the cause of action to recover damages for slander should have beengranted. Prudenti, P.J., Fisher, Miller and Balkin, JJ., concur.