RobertG12 (Arizona)
Posts: 160
Posts: 160
Posted:
I received the following in a newsletter from one of the local HOA attorneys who I trust. Since this subject has been discussed before I thought it might contains some points of interest. Sorry for the long post. I hope I have given the proper credit for copyright.
Should the Association File a Defamation Lawsuit? by Beth Mulcahy, Esq.
Discussions of controversial community association issues can turn into insults, name-calling and allegations of evil intent. They are not uncommon forms of expression for an owner expressing dissatisfaction with board policies and the directors who adopt them. These verbal assaults can be sharp-edged, may be inaccurate and are typically intensely personal. But are they also defamatory? Directors sometimes think so, and seek to file suit against the offending owner to halt their tirades.
Demands for legal action usually come in response to something an owner writes rather than to a public statement made. It is flyers, e-mail communications circulated within the community or a website established by a dissident owner to tell “the truth” about how the association is being mismanaged that typically trigger the calls from directors asking our firm to file a defamation law suit on their behalf. The desire to fight back is understandable; no one likes to be called names, have their intelligence questioned or their motives questioned. However, the legal framework makes it very difficult for directors however wronged they may feel, to win a defamation claim.
The Legal Framework
To understand how difficult it is to win a claim, it is helpful to understand some of the legal distinctions and standards of proof the court will make and require. First, there is a difference between slander, which is spoken, and libel, which is written or otherwise communicated in a permanent form – the e-mail messages noted above, statements carved in the clubhouse wall, spray-painted on a door or plastered on a billboard.
Courts also distinguish between defamation claims filed by “private persons,” and claims filed by public figures, which are far more difficult to prove. That distinction is important because courts in many jurisdictions have held that association directors, by virtue of their leadership role in the community, inject themselves voluntarily into public debates, and so qualify as “limited public purpose” figures. As a result, in order to prove defamation, directors must show not only that statements are untrue (the base-line requirement for private individuals), but also that the statements were made maliciously – that is, that the individuals responsible knew the statements were false or made them with “reckless disregard” for their truth. Additionally, the evidence directors present to prove malice must be “clear and convincing.”
That is a tough legal standard – not as tough as “beyond a reasonable doubt” (required in criminal cases), but much higher than the “preponderance of the evidence” standard applied to other civil claims. “Preponderance of the evidence” requires only that the scales tip, however slightly, more one way than the other. It does not have to be a lot — 51 percent will do. Beyond a reasonable doubt pushes the scale to 95 percent, while “clear and convincing” falls somewhere in between – around 75 percent.
For an owner fighting a defamation claim, truth is an absolute defense, but they do not have to prove that the statements were absolutely true – only that they were “substantially” true — or that they were not aware the statements were untrue, or had no reason to question their veracity. Under this legal framework, it is much easier for an owner to deny allegations of malice than it is for directors to prove them.
How much damage was caused?
Simply proving that statements were libelous or slanderous isn’t enough; directors pursuing a defamation claim must also prove that they have suffered “actual damages.” These may include monetary damages or harm to their personal reputation, personal humiliation, mental anguish and suffering or physical suffering.
Establishing monetary losses will be particularly challenging. It is rare that “damage” from defamatory statements would spread beyond the boundaries of the community association. Allegations about poor decision-making or poor business judgment are unlikely to affect a board member’s sales at his/her retail store, or lead to a demotion or the loss of a job.
Non-monetary claims are more subjective and somewhat easier to establish. Directors might claim, for example, that statements caused them emotional distress, forcing them to seek therapy for anxiety or medical treatment for insomnia or stomach ailments. But how much long-term psychological damage did the accusations of mismanagement or stupidity really cause? How much weight or sleep did you lose, how much was attributable clearly and exclusively to the defamation, and how much compensation should you receive? Judges and juries are likely to be skeptical in their judgments and stingy in their awards.
Concern about the constitutional right of free speech will make judges in particular wary of suits that seem designed to quash dissenting views or that might have that effect. For all of these reasons, directors seeking to pursue a defamation claim face a steep uphill legal climb. These actions should not be undertaken lightly and usually, they should not be undertaken at all.
Beyond Reasonable Criticism
The only exception to that advice is if the offending statements involve criminal activity of some kind — for example, allegations that a board member has stolen funds or committed fraud. These statements go far beyond anything that might be construed as reasonable criticism; their truth could be established easily (either the money was stolen or not); the owner responsible would be hard-pressed to argue convincingly that they had no reason to question the truth of the allegations they made; and the reputational and professional damage to the directors targeted could be considerable. But even in the most dysfunctional associations, the statements likely to offend board members rarely rise (or descend) to this level, and a libel action is unlikely to be the most effective response.
Encourage Open Discussion
The angry outbursts that make directors feel defamed usually come from owners frustrated because they have not had an opportunity – or don’t think they have had an opportunity – to express their views, air their criticism, or offer their suggestions. Responding by suing these owners is not only likely to be futile; it is likely to backfire, sending a message to all owners, not just the offending ones, that the board does not tolerate criticism or dissent. This is precisely the opposite of the message that boards should try to convey.
Creating an atmosphere that encourages open discussion, including criticism, can go a long way toward defusing tensions before they erupt in angry accusations and personal verbal attacks. Scheduling periodic open forums where owners can discuss their concerns, setting aside a designated time for owners to speak at board meetings and creating an “owners’ corner” on the association’s website are some of the strategies boards can use to encourage input from owners and to make them feel their opinions are welcome and valued.
Develop a Thick Skin
If a director decides that he/she has been defamed and insists on suing the owner or owners responsible, should the association pay the legal bills? The answer is not clear. You could argue that this is really a personal battle, which the offended board member —who, perhaps, is too easily offended — should fight and fund alone. However, you could also argue, reasonably, that the action is related to service on the board and thus should be an association expense. The safest course in this case would be to have the full board of director’s vote on and approve the expenditure of funds.
However, you do not want to get to this point in the first place; with only very rare exceptions, boards simply should not pursue defamation claims. Like elected officials in the public sector, association directors must accept criticism – even nasty, uncivil and unfair criticism – as part of their job.
MULCAHY LAW FIRM, P.C.
E-mail: [email protected]
Copyright 2009 by MULCAHY LAW, P.C., All Rights Reserved
Should the Association File a Defamation Lawsuit? by Beth Mulcahy, Esq.
Discussions of controversial community association issues can turn into insults, name-calling and allegations of evil intent. They are not uncommon forms of expression for an owner expressing dissatisfaction with board policies and the directors who adopt them. These verbal assaults can be sharp-edged, may be inaccurate and are typically intensely personal. But are they also defamatory? Directors sometimes think so, and seek to file suit against the offending owner to halt their tirades.
Demands for legal action usually come in response to something an owner writes rather than to a public statement made. It is flyers, e-mail communications circulated within the community or a website established by a dissident owner to tell “the truth” about how the association is being mismanaged that typically trigger the calls from directors asking our firm to file a defamation law suit on their behalf. The desire to fight back is understandable; no one likes to be called names, have their intelligence questioned or their motives questioned. However, the legal framework makes it very difficult for directors however wronged they may feel, to win a defamation claim.
The Legal Framework
To understand how difficult it is to win a claim, it is helpful to understand some of the legal distinctions and standards of proof the court will make and require. First, there is a difference between slander, which is spoken, and libel, which is written or otherwise communicated in a permanent form – the e-mail messages noted above, statements carved in the clubhouse wall, spray-painted on a door or plastered on a billboard.
Courts also distinguish between defamation claims filed by “private persons,” and claims filed by public figures, which are far more difficult to prove. That distinction is important because courts in many jurisdictions have held that association directors, by virtue of their leadership role in the community, inject themselves voluntarily into public debates, and so qualify as “limited public purpose” figures. As a result, in order to prove defamation, directors must show not only that statements are untrue (the base-line requirement for private individuals), but also that the statements were made maliciously – that is, that the individuals responsible knew the statements were false or made them with “reckless disregard” for their truth. Additionally, the evidence directors present to prove malice must be “clear and convincing.”
That is a tough legal standard – not as tough as “beyond a reasonable doubt” (required in criminal cases), but much higher than the “preponderance of the evidence” standard applied to other civil claims. “Preponderance of the evidence” requires only that the scales tip, however slightly, more one way than the other. It does not have to be a lot — 51 percent will do. Beyond a reasonable doubt pushes the scale to 95 percent, while “clear and convincing” falls somewhere in between – around 75 percent.
For an owner fighting a defamation claim, truth is an absolute defense, but they do not have to prove that the statements were absolutely true – only that they were “substantially” true — or that they were not aware the statements were untrue, or had no reason to question their veracity. Under this legal framework, it is much easier for an owner to deny allegations of malice than it is for directors to prove them.
How much damage was caused?
Simply proving that statements were libelous or slanderous isn’t enough; directors pursuing a defamation claim must also prove that they have suffered “actual damages.” These may include monetary damages or harm to their personal reputation, personal humiliation, mental anguish and suffering or physical suffering.
Establishing monetary losses will be particularly challenging. It is rare that “damage” from defamatory statements would spread beyond the boundaries of the community association. Allegations about poor decision-making or poor business judgment are unlikely to affect a board member’s sales at his/her retail store, or lead to a demotion or the loss of a job.
Non-monetary claims are more subjective and somewhat easier to establish. Directors might claim, for example, that statements caused them emotional distress, forcing them to seek therapy for anxiety or medical treatment for insomnia or stomach ailments. But how much long-term psychological damage did the accusations of mismanagement or stupidity really cause? How much weight or sleep did you lose, how much was attributable clearly and exclusively to the defamation, and how much compensation should you receive? Judges and juries are likely to be skeptical in their judgments and stingy in their awards.
Concern about the constitutional right of free speech will make judges in particular wary of suits that seem designed to quash dissenting views or that might have that effect. For all of these reasons, directors seeking to pursue a defamation claim face a steep uphill legal climb. These actions should not be undertaken lightly and usually, they should not be undertaken at all.
Beyond Reasonable Criticism
The only exception to that advice is if the offending statements involve criminal activity of some kind — for example, allegations that a board member has stolen funds or committed fraud. These statements go far beyond anything that might be construed as reasonable criticism; their truth could be established easily (either the money was stolen or not); the owner responsible would be hard-pressed to argue convincingly that they had no reason to question the truth of the allegations they made; and the reputational and professional damage to the directors targeted could be considerable. But even in the most dysfunctional associations, the statements likely to offend board members rarely rise (or descend) to this level, and a libel action is unlikely to be the most effective response.
Encourage Open Discussion
The angry outbursts that make directors feel defamed usually come from owners frustrated because they have not had an opportunity – or don’t think they have had an opportunity – to express their views, air their criticism, or offer their suggestions. Responding by suing these owners is not only likely to be futile; it is likely to backfire, sending a message to all owners, not just the offending ones, that the board does not tolerate criticism or dissent. This is precisely the opposite of the message that boards should try to convey.
Creating an atmosphere that encourages open discussion, including criticism, can go a long way toward defusing tensions before they erupt in angry accusations and personal verbal attacks. Scheduling periodic open forums where owners can discuss their concerns, setting aside a designated time for owners to speak at board meetings and creating an “owners’ corner” on the association’s website are some of the strategies boards can use to encourage input from owners and to make them feel their opinions are welcome and valued.
Develop a Thick Skin
If a director decides that he/she has been defamed and insists on suing the owner or owners responsible, should the association pay the legal bills? The answer is not clear. You could argue that this is really a personal battle, which the offended board member —who, perhaps, is too easily offended — should fight and fund alone. However, you could also argue, reasonably, that the action is related to service on the board and thus should be an association expense. The safest course in this case would be to have the full board of director’s vote on and approve the expenditure of funds.
However, you do not want to get to this point in the first place; with only very rare exceptions, boards simply should not pursue defamation claims. Like elected officials in the public sector, association directors must accept criticism – even nasty, uncivil and unfair criticism – as part of their job.
MULCAHY LAW FIRM, P.C.
E-mail: [email protected]
Copyright 2009 by MULCAHY LAW, P.C., All Rights Reserved