State of New York
Supreme Court : County of Monroe

- against -

Index No.2000/8284

ANDREW V. SIRACUSE, J.

DATED: Rochester, New York

A fractious factional dispute in a Knights of Columbus Council has grown into something close to all-out warfare. The plaintiff, who is part of one faction within Council 178 of that organization, claims that he was defamed by comments made both orally and in print by the defendants. His claims center on the actions of defendant Larry Allen, at the time the Grand Knight of Council 178, the highest officer in that body; but Mr. Smith also alleges separate claims against other defendants for other supposedly defamatory remarks. He adds claims for conspiracy and intentional infliction of emotional distress, and among his 26 separate causes of action are a good many against the Council itself, which is an unincorporated association; against the State Council of the Knights of Columbus; and against the Supreme Council, the highest governing body for the Knights of Columbus in North America. The institutional defendants have settled with the plaintiff, who also withdrew a request for a restraint on funds held by the local council. There remain the actions against the individual defendants, who have all moved to dismiss the complaint for failure to state a cause of action. The court hereby grants this motion.

The origins of the bitterness between the Smith and Allen factions is not evident from these papers, though the plaintiff's vehemently anti-abortion views and practice and his attacks on homosexuals did not sit well with the views held by the defendants (see Allen's notes reproduced in plaintiff's exhibit U). There is no question, however, as to the immediate cause of the present dispute. Understanding it, though, requires a small amount of background information.

Because of its status the local Councils of the Knights of Columbus do not hold real property. Each Council is therefore connected with a Columbus Home Association, which is incorporated as a not-for-profit corporation and is legally able to buy, sell and hold property for the Council's use. In 1999 the plaintiff became treasurer of both Council 178 and the allied CHA; these are two different posts and plaintiff won two separate elections.

The plaintiff apparently inherited a situation that required some skill and creativity to resolve. Some time in 1996 the CHA had sold property, but had never filed for tax-exempt status; moreover, it had not filed all necessary tax returns on the capital gains realized by the sale. Furthermore, the capital gains exemption it would be entitled to was for a limited time only, and taxes would become payable if new property were not purchased in that time. This was not done, presumably because of the intensity of the factional disputes, although Mr. Allen's counsel has intimated that it was also because plaintiff wished to devote some of the proceeds to a campaign against abortion by acquiring property near the Rochester Planned Parenthood building and by buying a radio station with other groups with similar views.

Whatever the intentions of the various players, the proceeds of the sale, some $500,000, were eventually to be transferred to the Council's account. It appears that Mr. Smith at first showed this sum in his statements to Council 178 and then removed it. This decision was prompted by an IRS determination that left CHA liable for approximately $125,000 in unpaid taxes, and because a separate, ongoing proceeding in Supreme Court resulted in an order prohibiting transfer of the money.

This sets the stage for most of the accusations that pepper the complaint. Only one issue appears to be completely unrelated to the financial concerns; the plaintiff's first cause of action states that on July 2, 1999, defendants Gary Fouquet and Robert Ridley sent a letter to other Council members and to the State and Supreme Council stating that the plaintiff was a member of a radical anti-abortion group, the Lambs of Christ, which he was attempting to fund with the property sale proceeds. The letter further stated that the plaintiff faced a civil suit by the Attorney General and was on probation from a conviction on other charges.

Plaintiff's counsel sent a letter of correction to Messrs. Fouquet and Ridley, and on July 28, 1999 they sent a letter of retraction and apology. They did not reallege these statements, and thus, most generously, the alleged defamation took place on July 2, 1999. Actions for libel and slander must be commenced within one year of the occurrence (CPLR 215 [3]). As the present action was commenced by filing the complaint on July 27, 2000, this cause of action is untimely.

It is not therefore necessary for the court to consider whether these words would in fact support a defamation claim, but it is clear that they suffer from the same defect that vitiates all of the remaining claims: they were made in good faith, without malice, to a specified group on a matter of common concern, and as such are protected by a qualified privilege. Moreover, plaintiff's papers also omit any claim for special damages, and this is fatal with respect to all but one of his claims.

As the Fourth Department has stated the law:

[A] qualified privilege [exists in] *** communications "made by one person to another upon a subject in which they both have an interest". In the absence of any proof of malice, statements protected by a qualified privilege are not actionable (McDowell v Dart and Aero Ind., Inc., 201 AD2d 895, 895-896, citations omitted).

In the voluminous and contentious papers submitted by the plaintiff, which are replete with allegations that the papers of Allen and the other defendants are lies, plaintiff nowhere denies the relevance of the qualified privilege doctrine. And it is therefore necessary for him to allege actual malice:

When defendant's statements are presumptively privileged the rule is that, in order to render them actionable, it is "incumbent on the plaintiff to prove that [they were] false and that the defendant was actuated by express malice or actual ill-will. While there are numerous cases in the books in which it is said that as to privileged communications the good faith of the defendant and the existence of actual malice are questions of fact for the jury, the expression must not be misunderstood. Those questions are for the jury only where there is evidence in the case warranting their submission to the jury, and the burden of proof is on the plaintiff". Falsity is not sufficient for an inference of malice. "'It must be *** consistent only with a desire to injure the plaintiff to justify *** [sending] the question of malice to the jury'". "By actual malice is meant 'personal spite or ill will, or culpable recklessness or negligence'" (Shapiro v Health Ins. Plan of Greater N.Y..7 NY2d 56, 61, citations omitted).

Although the complaint contains an allegation of malice, it is nothing more than that, and it is improperly pleaded as if it were a separate cause of action--the 25th of the 26 claims.

Furthermore, it is black letter law that only certain forms of defamation are actionable without proof of special damages. In the present circumstances the only per se defamation alleged is a single statement that plaintiff embezzled the CHA funds. For all other claims the plaintiff was required to plead as well as prove "(1) the words ***; (2) their publication by the defendant; (3) their falsity; (4) that the defamatory matter was spoken or published concerning the plaintiff; (5) extrinsic facts showing the meaning of the words to be libelous or slanderous, where such words are not actionable per se; (6) malice, where the words are qualifiedly privileged; and (7) damages" (5A Carmody-Wait 2d §29:440). This is clearly a pleading requirement: Slander as a rule is not actionable unless the plaintiff suffers special damage. Special damages contemplate "the loss of something having economic or pecuniary value" (Restatement [Second] of Torts § 575, comment b). Plaintiff has not alleged special damages, and thus his slander claims are not sustainable unless they fall within one of the exceptions to the rule.

The four established exceptions (collectively "slander per se") consist of statements (i) charging plaintiff with a serious crime; (ii) that tend to injure another in his or her trade, business or profession; (iii) that plaintiff has a loathsome disease; or (iv) imputing unchastity to a woman. When statements fall within one of these categories, the law presumes that damages will result, and they need not be alleged or proven (Liberman, v. Leonard Gelstein, 80 NY2d 429, at 434-5, citations omitted).

Plaintiff did not allege special damages anywhere in his papers, and no claim for loss of anything of economic or pecuniary value can be construed from his pleadings. It is with these principles in mind that the court turns to the causes of action that remain. Of these, only one appears to contain an allegation of per se slander: the fourth cause of action alleges that defendant Allen telephoned the Deputy Grand Knight of Council 178 and accused plaintiff and unnamed others of embezzling council funds. This would appear to constitute an allegation of theft, and thus of a serious crime, and indeed an allegation of embezzlement, with nothing more, has been held sufficient to support a defamation claim (see, 43A NY Jur 2d, Defamation and Privacy, § 22, at 229). If there were no question of privilege, the complaint would have to stand on this cause of action alone, even though the allegation is the minimum necessary and there is no supporting material from the person who allegedly heard the comment. However, even an allegation of slander per se must be affirmatively stated to have been with malice if it is protected by qualified privilege, and nothing in the papers supports a finding of malice.

Plaintiff's counsel has repeatedly stressed that an audit conducted internally by The New York State Council found no impropriety in Mr. Smith's handling of the CHA funds. She has suggested that the defendants' awareness of this audit casts doubt on their contention that they criticized and questioned the plaintiff's conduct in good faith. It may be noted that the audit was inconclusive enough for another Justice of this court to order a formal accounting of the monies; but without passing on this argument, it is clear that it can have no application to the April 30 phone conversation. The audit was not conducted until the next month, and the report of its conclusions is dated June 3.

This one fact would seem to eliminate the possibility of constitutional malice--that is, knowingly making a false statement (see, e.g., Liberman, v. Leonard Gelstein, supra, at 434). Nor is there any showing of "malice of the common-law variety (spite or ill will)" (loc. cit.) There is clearly tremendous animus between the parties, and neither side has refrained from intemperate rhetoric; but the court does not find that this comment, if it was indeed made, was prompted by any motive to injure that rises to this level. Since malice is a pleading requirement, the fourth cause of action is defective.

The remaining claims against the individual defendants all fall into the category of slander per quod, where the requirement of pleading special damages is strictly enforced. They are further defective in the failure to show legal malice of either the constitutional or common law variety. The seventh cause of action claims that Mr. Allen wrote defamatory comments on a letter sent to him by plaintiff's counsel and that a copy was seen by an official of the State Council. This letter, exhibit L in the complaint, contains nothing defamatory in itself. It calls the dispute a travesty, asks Smith if it is true that he has been without a job for 12 years, refers to the embarrassment and disgrace the conflict is causing, and calls Smith intransigent; Allen then proposes that Smith form a new council and compliments him on his leadership abilities. Considering that the attorney's letter calls Allen's actions malicious, inflammatory, and "inexcusably vicious", urges him to resign in order to avoid further scandal and disgrace, and threatens Allen's removal as Grand Knight and his expulsion from the Knights of Columbus, the court believes that the defendant's rhetoric does nothing more than respond to the plaintiff's own tone.

The ninth cause of action states, upon information and belief, that Allen told attorney Samuel J. Ianacone, Jr. that Smith had failed to tell him why the CHA funds were not listed in the March 31 accounts and had resisted demands to turn the records over for an audit. These statements, if they were made, were clearly privileged, and were made to the council's attorney. Moreover, their falsehood is not at all apparent.

On May 30 Allen wrote to Smith and two others charging them with various breaches of Council rules. This is a privileged communication and does not constitute libel. For this, the plaintiff's twelfth cause of action, as for all the others, there is no allegation of special damages.

On June 4 Allen allegedly told two members of the council that he had been unable to get a good answer as to the missing funds and that information was being withheld from him. Even if this can be said to have been specifically directed at the plaintiff, the above-mentioned failures make this claim insufficient.

It should not be necessary to treat the remaining allegations in detail, as they all express Allen's frustration with what he saw as Smith's intransigence and none of them are actionable without special damages. The final claims, in fact, descend to something approaching comic opera. Smith contends that he was libelled by a statement that he was acting in defiance of the bishop. (This is the only specific allegation made against Mr. Preston's client.) The court does not need to venture onto issues precluded by the separation of church and state; it need only note that because of this separation such a criticism is unlikely to have any pecuniary consequences. And the twenty-second cause of action claims that various defendants called Smith a liar at council elections, and Allen called him a hypocrite and said, "you're a fraud and a phoney." Such name calling is not actionable slander.

It should not be necessary to add that the claims for conspiracy, intentional infliction of emotional distress, and malice are also without merit, and would be so even if it were proper to bring these in addition to the defamation claims they all depend on.

This complaint, for all of its length and vitriol, is close to frivolous. The multiple causes of action against the State and Supreme Councils, which allege nothing more than a failure to side with the Smith faction, thus permitting Allen's alleged libels to continue, is especially without merit. These, however, are not before the court. Those claims that remain are dismissed, and the defendant's motions are therefore granted in their entirety. Two separate bills of costs are payable, one to Mr. Rooney and one to the remaining individual defendants. Mr. Evans may prepare the order.

February 6, 2001

Andrew V. Siracuse, J.S.C.

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