Neuman V. Liles – Decision Of Oregon Court Of Appeals

Standard

MARCH 12, 2014
 
IN THE COURT OF APPEALS OF THE STATE OF OREGON

Carol C. NEUMANN and Dancing Deer Mountain, LLC,
an Oregon domestic limited liability company,
Plaintiffs-Appellants Cross-Respondents,

v.

Christopher LILES, Defendant-Respondent Cross-Appellant.

Lane County Circuit Court 121103711; A149982

Charles D. Carlson, Judge.

Argued and submitted April 12, 2013.

Steve C. Baldwin argued the cause for appellants-cross- respondents. With him on the briefs was Watkinson Laird Rubenstein  Baldwin  &  Burgess,  P.C.

Linda K. Williams argued the cause and filed the briefs for respondent-cross-appellant.

Before Armstrong, Presiding Judge, and Nakamoto, Judge, and Lagesen, Judge.*

On appeal, reversed and remanded as to defamation claim, attorney fee award vacated and remanded; otherwise affirmed. Cross-appeal dismissed as moot.

LAGESEN, J.

After attending a wedding at plaintiff Dancing Deer Mountain, LLC, a wedding venue co-owned and operated by plaintiff Carol Neumann and her husband, Timothy Benton, defendant Christopher Liles posted a negative review on Google.com. In the review, defendant characterized the venue as a “disaster” and Neumann as “two faced, crooked, and rude to multiple guest[s].” He stated  fur ther that Neumann and her husband “changed the rules as they saw fit” by informing guests that they needed to leave the premises earlier than they had originally been told, and that Neumann would find a way to retain any security deposit and charge even more money for use of the facility. Neumann and Dancing Deer Mountain sued defendant, with Neumann asserting claims for defamation and inva- sion of privacy by false light, and Dancing Deer Mountain asserting claims for intentional interference with economic relations and invasion of privacy by false light. On defendant’s motion, the trial court dismissed the case under ORS 31.150,1  Oregon’s  anti-Strategic  Lawsuits  against  Public Participation (anti-SLAPP) statute, concluding both that plaintiffs’ claims fell within the scope of ORS 31.150(2), making them subject to the anti-SLAPP procedures, and that plaintiffs failed to establish a prima facie case in support of any of their claims, as required by ORS 31.150(3). We reverse, concluding that the trial court erred when it determined that Neumann had not established a prima facie case in support of her defamation claim.

I. BACKGROUND

Defendant attended a wedding at Dancing Deer Mountain. During the event, tensions arose between Dancing Deer Mountain staff, including Neumann, and the wedding party and guests, after staff observed attendees consuming alcohol in a manner that violated Dancing Deer Mountain’s alcohol policy. Those tensions were exacerbated when, at approximately 8:30 p.m. on the night of the wedding, Neumann and her staff began asking guests to leave, in accordance with Dancing Deer Mountain’s requirement, contained in its rental agreement, that the wedding party and guests vacate the premises by 8:30 p.m.

Two days after the wedding, defendant posted a review of Dancing Deer Mountain on Google.com. The review, which was entitled “Disaster!!!!! Find a different wedding venue,”  stated:

“There are many other great places to get married, this is not that place! The worst wedding experience of my life! The location is beautiful the problem is the owners. Carol (female owner) is two faced, crooked, and was rude to multiple guests. I was only happy with one thing: it was a beautiful wedding, when it wasn’t raining and Carol and Tim stayed away. The owners did not make the rules clear to the people helping with set up even when they saw something they didn’t like they waited until the day of the wedding to bring it up. They also changed the rules as they saw fit. We were told we had to leave at 9pm, but at 8:15 they started telling the guests that they had to leave immediately. The ‘bridal suite’ was a tool shed that was painted pretty, but a shed all the same. In my opinion She will find a why [sic] to keep your $500 deposit, and will try to make you pay even more.”

Plaintiffs sued defendant, alleging that by publishing the review, defendant committed the  torts  of  defamation and invasion of privacy by false light against Neumann, and the torts of intentional interference with economic relations and invasion of privacy by false light against Dancing Deer Mountain. Defendant filed a special motion to strike all claims under ORS  31.150.  Defendant’s  theory  was  that his  online  review  qualified  as  either  a  “written  statement presented in a place open to the public or a public forum in connection with an issue of public interest,” ORS 31.150(2)(c), or, alternatively, “other conduct in furtherance of the exercise of the constitutional right of free speech in connection with a public issue or an issue of public interest,” ORS 31.150(2)(d), thereby making the anti-SLAPP procedures applicable to plaintiffs’ claims, which arose out of defendant’s online review. In response, plaintiffs submitted evidence to support a prima facie case on their claims, in accordance with ORS 31.150(3). Plaintiffs also argued that the anti-SLAPP procedures should not apply to their claims because their claims did not target speech in connection with government: “Anti-SLAPP statutes were created to allow for unfettered speech in matters of governmental gatherings. They were not intended to apply to cases such as  this.”

Following a hearing, the trial court granted the special motion to strike in full. The court entered a general judgment dismissing  the  complaint without  prejudice,  and awarding $8,000 in attorney fees, $337 in costs, and a $500 prevailing party fee to defendant.

Plaintiffs timely appealed, and defendant timely cross-appealed. On appeal, plaintiffs assert that the trial court erred in two respects: by concluding that their action was subject to the anti-SLAPP procedures, and by concluding that Neumann had not established a prima facie case of defamation. On cross-appeal, defendant contends that the trial court erred by awarding  him  less than the full amount of attorney fees that he requested.

II. STANDARD OF REVIEW

A “two-step burden-shifting process” governs the resolution of a special motion to strike under Oregon’s anti- SLAPP statute, ORS 31.150. Young v. Davis, 259 Or App 497, 501, 314 P3d 350 (2013). In accordance with ORS 31.150(3), a court must first determine “whether the defendant has met its initial burden to show that the claim against which the motion is made ‘arises out of’ one or more protected activities described in [ORS 31.150(2)].” Id. Second, if the defendant meets that burden, the court must determine whether the plaintiff has “establish[ed] that there  is  a  probability  that the plaintiff will prevail on the claim by presenting substantial evidence to support a prima facie case.” Id. (internal quotation marks omitted). Each step of that process presents a question of law. See Young, 259 Or App at 507-10 (whether the plaintiff has established a probability of prevailing presents a legal question);  Blackburn  v.  Brady,  116 Cal App 4th 670, 676 (2004) (whether anti-SLAPP statute “applies to a particular complaint[ ] presents a legal ques- tion”). Accordingly, we review for legal error a trial court’s ruling on an ORS 31.150 special motion to strike. See Young, 259 Or  App at  510 (reviewing  for  legal error  trial court’s determination that the plaintiff’s evidence did  not
establish  a  prima  facie  case);  see  also  Sylmar  Air  Conditioning v. Pueblo Contracting Services, Inc., 122 Cal App 4th  1049, 1056 (2004) (“We independently determine whether a cause of action is based upon activity protected under the statute, and if so, whether the plaintiff has established a reasonable probability of prevailing.”); Blackburn, 116 Cal  App  4th  at 676 (same).

III. ANALYSIS

As noted, plaintiffs contend that the trial court erred at both steps of the process governing the resolution of a special motion to strike. They argue that “[p]laintiffs’ complaint is not a SLAPP suit,” and that the trial court therefore erred by concluding that their complaint was subject to dismissal under ORS 31.150. Plaintiffs  argue  further that, even if their complaint falls within the scope of Oregon’s anti-SLAPP statute, the trial court erred when it concluded that Neumann had not presented substantial evidence establishing a prima facie case of defamation. For the reasons explained below, we do not resolve the first alleged error identified by plaintiffs, but agree that the trial court erred when it concluded that Neumann had not established a prima facie case of defamation sufficient to withstand dismissal under ORS 31.150. Accordingly, we reverse.

With respect to the first alleged error identified by plaintiffs—the trial court’s determination that plain- tiffs’ claims were subject to the anti-SLAPP procedures— plaintiffs do not offer a focused argument on appeal as to why defendant’s online review does not fall into one of the four categories of protected activities delineated in ORS 31.150(2). In particular, plaintiffs do not address defendant’s theory that his review was a statement “in connection with an issue of public interest” published in “a place open to the public or a public forum” under ORS 31.150(2)(c). In fact, plaintiffs do not address the terms of the statute at all, or argue that the text, context, and legislative history demonstrate that the legislature did not intend for online reviews such as the one at issue here to fall within the scope of ORS 31.150(2)(c) or, alternatively, ORS 31.150(2)(d). Instead, relying primarily on law review articles and Illinois cases interpreting the Illinois anti-SLAPP statute — a  statute that is worded differently from, and more narrowly than, ORS 31.150—plaintiffs assert that we “should rule in accordance with [those] authorities* and reverse the trial court” and that “[t]he same reasoning should apply to the interpretation of every anti-SLAPP statute.”

We recently declined to address a similar argument in Young under similar circumstances, where, as here, the plaintiff did not develop a sufficiently focused argument on appeal as to why the allegedly defamatory statements at issue did not fall within the scope of ORS 31.150(2). 259 Or App at 505 (observing that it is not “our proper function to make or develop a party’s argument when that party has not endeavored to do so itself” (citations and internal quotations marks omitted)). We take the same approach here, both to be consistent with Young and because the trial court’s determination that the online business review at issue qualifies as a protected activity under ORS 31.150(2) is not clearly erroneous. Indeed, we note that the trial court’s interpretation of ORS 31.150(2) to encompass online business reviews appears to be consistent with the plain text of the statute,5 although we do not assess the ultimate correctness of that interpretation at this time.

We nevertheless conclude that the trial court erred by dismissing Neumann’s defamation claim. Contrary to the court’s conclusion, the evidence supporting the defamation claim was sufficient to meet the “low  bar”  established  by ORS 31.150 “to weed out meritless claims meant to harass or intimidate” a defendant. Young, 259 Or App at 508; see also Staten v. Steel, 222 Or App 17, 32, 191 P3d 778 (2008), rev den, 345 Or 618 (2009) (“The purpose of the special motion to strike procedure, as amplified in the pertinent legislative history, is to expeditiously terminate unfounded claims that threaten constitutional free speech rights, not to deprive litigants of the benefit of a jury determination that a claim is meritorious.” (Emphases in original.)). That is, the evidence submitted by plaintiffs, if credited, would permit a reasonable fact finder to rule in Neumann’s favor on the defamation claim, and the evidence submitted by defendant does not defeat Neumann’s claim as a matter of law. Young, 259 Or App at 508-11.

Under Oregon law,  a  claim  for  defamation  has three elements: “(1) the making of a defamatory statement; (2) publication of the defamatory material; and (3) a resulting special harm, unless the statement is defamatory per se and therefore gives rise to presumptive special harm.”  National Union Fire Ins. Co. v. Starplex Corp., 220 Or App 560, 584, 188 P3d 332, rev den, 345 Or 317 (2008). “In the professional context, a statement is defamatory if it is false and ascribes to another conduct, characteristics or a condition incompatible with the proper conduct of his lawful business, trade, [or] profession.” 6  Brown v. Gatti, 341 Or 452, 458, 145 P3d 130 (2006) (internal quotation marks and citations omitted). Statements falsely alleging facts that are “likely to lead people to question [a] plaintiff’s fitness to per- form his job” are defamatory per se. L & D of Oregon, Inc.  v. American States Ins. Co., 171 Or App 17, 25, 14 P3d 617 (2000) (discussing the holding in Slover v. State Board of Clinical Social Workers, 144 Or App 565, 568-69, 927 P2d 1098 (1996)); see also National Union Fire Ins. Co., 220 Or App at 584-85 (statements that would tend to harm a plain- tiff in his or her business or profession are actionable per se without proof of special harm).

Here, the evidence submitted by plaintiffs, if true, would permit a reasonable fact finder to find in Neumann’s favor on a claim of defamation concerning her profession. Specifically, if true, plaintiffs’ evidence could permit a reasonable fact finder to find that defendant published false statements attributing to Neumann conduct and characteristics “incompatible with the proper conduct of [her] lawful business” of operating a wedding venue, as well as a false statement alleging that Neumann is dishonest.

In particular, that evidence demonstrates that defendant published in an online  forum7  statements  alleging that Neumann was “rude to multiple guest[s],” that she “changed the rules” by directing guests to leave at 8:15 p.m. after originally telling guests that they could stay  until 9:00  p.m.,  that  Neumann  “will  find a  [way]  to  keep  your $500 deposit, and will try to make you pay even more,” and that Neumann is “crooked.” Neumann’s evidence also provides a basis from which a fact finder could find that defendant’s statements were false. Neumann and two others who were present at the wedding that defendant attended submitted affidavits in which they declared that defendant’s statements were not true. And a fact finder could find that defendant’s online statements impute to Neumann conduct that is incompatible with the proper conduct of the operation of a wedding venue. Couples often intend weddings to be significant, once-in-a-lifetime events that (they hope) will be unblemished by breaches in etiquette and unexpected hitches.   As   Dancing   Deer   Mountain’s   co-owner   Benton observed in his affidavit, “no one in their own best inter- est would call a venue who[se] owners” were  alleged  to have engaged in the conduct that defendant ascribed to Neumann; that conduct is inconsistent with a positive wed- ding experience.

In addition, a fact finder could find that defendant’s statement that Neumann is “crooked,” apart from implying that she is not a wedding vendor who can be trusted, alleges that she is dishonest, and would be defamatory for that reason. See Mannex Corp. v. Bruns, 250 Or App 50, 52, 57-61, 279 P3d 278 (2012) (recognizing that statements that the plaintiff “was a ‘crook[],’ that [a third party] should ‘never want to do business with [the plaintiff],’ and that [the third party] should ‘remember that name’” were defamatory, although concluding that the plaintiff’s claim  for  defamation failed because the statements were protected by qualified privilege); Durr v. Kelleher, 54  Or  App  965,  967-68, 636 P2d 1015 (1981) (affirming trial court verdict awarding damages on defamation claim where “[t]he court found that [the] defendant had maliciously slandered [the] plaintiff by calling him a ‘crook’ and a ‘dishonest’ police officer”).

Finally, because a fact finder could find that defendant’s statements attacked Neumann’s professional or business reputation, and, for that reason, would be defamatory per se, plaintiffs were not required to present evidence of special harm to establish a prima facie case of defamation. See National Union Fire Ins. Co., 220 Or App at 584-85 (statements are per se defamatory if they “tend[] to injure the plaintiff in his or her profession or business”; only when a statement is not slander per se must a plaintiff allege special harm). Plaintiffs nevertheless did present evidence that would permit a fact finder to find that Neumann was harmed by defendant’s statements. Neumann and her co-owner attested to a fairly significant drop in bookings of the venue for weddings almost immediately after the challenged post was made, as well as to expenditures made to mitigate the harm to Neumann’s reputation as a wedding-venue  operator. A reasonable fact finder could find based on that  evidence that Neumann suffered special harm resulting from defendant’s  statements.

Defendant makes several arguments as to why plaintiffs’ evidence  is insufficient to  establish the prima facie case required by ORS 31.150. For the reasons set forth below, we are not persuaded by them.

First, defendant asserts that his statements were nonactionable opinion. “Opinions, as ‘statements that can- not reasonably be interpreted as stating actual facts,’ are constitutionally protected.” Hickey v. Settlemier, 141 Or App 103, 110, 917 P2d 44, rev den, 323 Or 690 (1996) (quoting Milkovich v. Lorain Journal Co., 497 US 1, 20, 110 S Ct 2695, 111 L Ed 2d 1 (1990)). “Nevertheless, when an ‘opinion’ implies the existence of undisclosed defamatory facts, it is actionable.” Id. Here, notwithstanding defendant’s use of the phrase “in my opinion” at one point in the review, defendant’s statements reasonably could be understood to state facts or imply the existence of undisclosed defamatory facts. By stating that Neumann was rude to multiple guests, defendant, at a minimum, implied that Neumann engaged in conduct that breached the rules of decorum expected at a wedding. By stating that, in his opinion, Neumann will find a way to keep a wedding party’s deposit and then charge more, defendant implied that that is, in fact, what happened at the wedding he attended. The statement that Neumann forced guests to leave earlier than agreed upon is an assertion of fact, as is the statement that Neumann is crooked, in the context of the review.

Second, relying on federal cases, defendant asserts that his statements are not defamatory because, in his view, the context of the statements demonstrates that they are figurative, rhetorical, or hyperbolic. See Obsidian Finance Group, LLC v. Cox, 812 F Supp 2d 1220, 1222-25 (D Or 2011), aff’d in part, rev’d in part on other grounds, 740 F3d 1284 (9th Cir 2014) (describing test used by the Ninth Circuit to determine whether a statement is opinion or fact for defamation purposes under its First Amendment jurisprudence, and noting several examples of non-actionable hyperbole, figurative language, and rhetoric). To the extent that extra- jurisdictional authority informs our analysis, we disagree that defendant’s statements, as a whole, are hyperbolic. True, some of what defendant says in the challenged post is opinion and is hyperbolic (e.g., “worst wedding experience of my life!”). However, the bulk of the post is non-rhetorical and factual (e.g., “[t]he owners did not make the rules clear”; “when they saw something they didn’t like they waited until the day of the wedding to bring it up”; “[w]e were told we had to leave at 9pm, but at 8:15 they started telling the guests that they had to leave immediately”;  “[t]he  ‘bridal  suite’ was a tool shed that was painted pretty, but a shed all the same”). Those factual details demonstrate that defendant’s statements are not mere hyperbole and, more to the point, would not be brushed off as mere hyperbole by a reasonable reader of those statements. See Wheeler v. Green, 286 Or 99, 104-06, 593 P2d 777 (1979) (analyzing whether recipient of statements would have understood statements  to  defame the plaintiff in order to determine whether statements were defamatory).

Third, defendant claims that plaintiffs qualify as limited public figures who were required to present evidence that defendant acted with malice in order to establish a prima facie case of defamation. However, the evidence at this stage of the proceedings does not show that plaintiffs are public figures or limited public figures, as that phrase has been interpreted by Oregon courts, and defendant is not a “media defendant.” See Bank of Oregon v. Independent News, 298 Or 434, 441, 693 P2d 35 (1985), cert den, 474 US 826 (1985) (“Two recent cases have held that liability applies where the plaintiff is not a ‘public figure’ and the defendant is not a part of the media.” (Citing Wheeler, 286 Or 99; Harley-Davidson v. Markley, 279 Or 361, 568  P2d 1359 (1977).)); id. at 443 (“Merely opening one’s doors to the public, offering stock for public sale, advertising, etc., even if considered a thrusting of one’s self into matters of public interest, is not sufficient to establish that a corporation is a public figure.”). As a result, Neumann was not required to present evidence of malice in order to establish a prima facie case of defamation under ORS 31.150.

Finally, defendant argues that, to establish a prima facie case of defamation, Neumann was required to present evidence rebutting his affirmative defense that he had a qualified privilege to make the statements that he did, or showing that he abused that qualified privilege. But a claim of privilege is an affirmative defense to a claim for defamation on which a defendant bears the burden of proof. Walsh v. Consolidated Freightways, 278 Or 347,  355,  563 P2d 1205 (1977). On this record, we cannot conclude as a matter of law that defendant was privileged to make the allegedly defamatory statements regarding Neumann.8 See Young, 259 Or App at 507-10 (in resolving a special motion to strike, a court assesses a defendant’s evidence only to evaluate whether the defendant’s evidence defeats the plaintiff’s claim as a matter of law).

Accordingly, we conclude that the trial court erred when it struck Neumann’s defamation claim, and we reverse the judgment of dismissal for that reason.  Because  plain- tiffs have not separately addressed the trial court’s dis- missal of the  other claims  in their  briefing on  appeal, we do not reverse the court’s decision to strike those claims.9 We note, however, that those claims were dismissed with- out prejudice—as was required by ORS 31.150(1)—and that the trial court retains its authority on remand under ORCP 23 to entertain proposed amendments to the pleadings, as appropriate. ORCP 23; Allen v. Premo, 251 Or App 682, 685-87, 284 P3d 1199 (2012). Finally, because we have reversed the judgment in defendant’s favor, we also vacate the attorney fee award because it was predicated on the trial court’s determination that the special motion to strike should be granted as to all of plaintiffs’ claims. ORS 20.220(3). Thus, defendant’s cross-appeal, challenging the fee award, is moot.

IV. CONCLUSION

For the foregoing reasons, the trial court erred by granting the special motion to strike Neumann’s defamation claim. We therefore reverse the trial court’s decision as to the  defamation  claim,  vacate  the  attorney  fee  award,  and remand for further proceedings consistent with this opinion.

On appeal, reversed and remanded as to defamation claim, attorney fee award vacated and remanded; otherwise affirmed. Cross-appeal dismissed as moot.

See full Decision with footnotes in PDF format

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