y Judgment rendered April 12, 2017.

Transcription

1 NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NO CA 1174 MICHAEL ALOISE, JR. VERSUS CAPITAL MANAGEMENT CONSULTANTS, INC., MARWAN MOHEY-EL-DIEN, E. MARGRIET LANGENBERG, AND BARBARA LANE IRWIN y Judgment rendered April 12, Appealed from the 16th Judicial District Court in and for the Parish of St. Mary, Louisiana Trial Court No Honorable Keith Comeaux, Judge FRED L. HERMAN THOMAS J. BARBERA MAYRA L. SCHEUERMANN NEW ORLEANS, LA ATTORNEYS FOR PLAINTIFF-APPELLANT MICHAEL ALOISE, JR. JEFFREY A. CLAYMAN MARK C. DODART DAN ZIMMERMAN NEW ORLEANS, LA AND TERRY L. ROWE LAFAYETTE, LA ATTORNEYS FOR DEFENDANT-APPELLEE E. MARGRIET LANGENBERG BARBARA LANE IRWIN GONZALES, LA AND E. MARGRIET LANGENBERG PRO HAC VICE FAIRFAX, VA ATTORNEYS FOR DEFENDANTS-APPELLEES CAPITAL MANAGEMENT CONSULTANTS, INC. AND MARWAN MOHEY-EL-DIEN TIMOTHY E. PUJOL MATTHEW W. PRYOR GONZALES, LA ATTORNEYS FOR DEFENDANT-APPELLEE BARBARA LANE IRWIN BEFORE: PETTIGREW AND McDONALD, JJ., AND CALLOWAY,1 J. Pro Tern. 1 Judge Curtis A. Calloway, retired, is serving as judge pro tempore by special appointment of the Louisiana Supreme Court. #., 7/)~~«rf t'pd'.. dx? {!,, Cl<"' " ~.~~'""'

2 PETTIGREW, J. Plaintiff, Michael Aloise, Jr., appeals the trial court's granting of special motions to strike under La. C.C.P. art. 971 and peremptory exceptions of no cause of action filed by multiple defendants, dismissing his petition seeking damages due to defendants' alleged acts of defamation. For the following reasons, we affirm the trial court's judgment, award attorney fees for the appeal, and remand the matter for the purpose of determining the mandatory attorney fees incurred in the proceedings before trial court. FACTUAL BACKGROUND Michael Aloise, Jr., an attorney in Morgan City, filed the instant petition for damages against Capital Management Consultants, Inc. ( CMCI), the spokesperson for CMCI, Marwan Mohey-El-Dien, and two attorneys for CMCI, E. Margriet Langenberg and Barbara Lane Irwin. Aloise alleged the defendants defamed him by accusing him of fraud in pleadings wherein he was not a named party, making defamatory statements about him that were published in the local newspaper, and making defamatory statements about him in a subsequent suit filed by CMCI, which named him as a defendant. The present dispute has its roots in a conspiracy to defraud CMCI of assets and property. According to an affidavit in the record of Donnasue Peveto, the offices of CMCI, Aloise, and James Scott Tucker, were all located at 1200 David Drive in Morgan City. Peter Guarisco was the majority shareholder of CMCI. Based on Peveto's affidavit, it appears Tucker oversaw the financial records and operations of CMCI. Over the thirty years Peveto was employed by CMCI, Aloise acted as CMCI's attorney and represented CMCI in many real estate transactions and also gave advice on various issues affecting CMCI. According to Peveto, Tucker had been the mastermind in a scheme to embezzle the assets of CMCI. Tucker was assisted in this scheme by Peveto and Karen Duhon whom Peveto states had a romantic relationship with Tucker. Peveto's affidavit explains how she, Tucker, and Duhon stole assets from CMCI. Peveto's affidavit specifies that 2

3 Duhon stole $ 2,918, between through fraudulent check transactions, and described other instances of Tucker's and Duhon's stealing of assets belonging to CMCI. The total amount of assets and funds stolen from CMCI is not clear from the record. Following the death of Peter Guarisco in 2005, Tucker informed Aloise that Guarisco's children would become the majority shareholders of CMCI. Tucker died sometime after the date of the last fraudulent check transaction in The embezzlement scheme was discovered, and CMCI instituted civil litigation seeking to recover assets. CMCI intervened in the Succession of James Scott Tucker, Probate No. 19,794; instituted Capital Management Consultants, Inc., et al. v. Jame Elizabeth Tucker Kocher, et al., No. 127,952, consolidated with Capital Management Consultants, Inc. v. Michael Aloise, Jr., No. 128,051, all in the 16th Judicial District Court for St. Mary Parish. The conspiracy to defraud CMCI also resulted in the criminal prosecutions of several individuals and entities: State v. Karen Duhon, ( filed 10/24/2014), and State v. Karen Duhon, Donnasue Peveto, Armand Duhon, ABC Siding Company of Morgan City, Inc.&. Nelson- Tucker LLC, ( filed 6/29/2015), 16th Judicial District Court, Parish of St. Mary. Aloise filed the instant suit for damages against CMCI, Marwan Mohey-El-Dien, E. Margriet Langenberg, and Barbara Lane Irwin. In his petition, Aloise claims the following allegations made against him were defamatory: ( 1) That Aloise assisted Tucker and his wife, Mary, in transferring CMCI's mineral rights to Nelson Tucker and others, despite his position as CMCI's attorney; and ( 2) That Aloise assisted Tucker in property transfers wherein Tucker paid property owners using money of CMCI, then transferred the property into his own name, and also fraudulently converted mineral rights owned by CMCI to parties affiliated with Tucker. Aloise also claimed defendant Mohey-El-Dien, the spokesperson for CMCI, provided statements to the local Morgan City newspapers, which were defamatory. Aloise summarizes the statements by Mohey-El-Dien as indicating CMCI was alleging that Aloise was one of the people who knew about and benefited from the theft of 3

4 CMCI's assets. Mohey-El-Dien was quoted by The Daily Review as explaining how Aloise advised Tucker how to write certain documents and create false resolutions in order to gain control of property rights and transfer mineral rights. Aloise also alleges in his petition that defendants defamed him in a lawsuit filed against him, Capital Management v. Michael Aloise, Jr., No 128,051, 16th Judicial District Court, St. Mary Parish, by making the same or similar defamatory statements as had been previously made in the prior suits and to the press. In response to Aloise's petition for damages, defendants each filed a special motion to strike under La. C.C.P. art. 971, dilatory exceptions of prematurity and vagueness, and peremptory exceptions of no cause of action. On April 12, 2016, the trial court heard the special motions to strike and peremptory exceptions of no cause of action, and issued an oral ruling granting the special motions to strike and peremptory exceptions of no cause of action filed by the defendants. On May 18, 2016, the trial court signed a written judgment in conformity with the earlier oral ruling, but denied the defendants' request for attorney fees. Aloise filed the instant appeal. Defendants each answered the appeal seeking the mandatory award of attorney fees under La. C.C.P. art. 971(8) and each requested additional attorney fees associated with the instant appeal. ASSIGNMENTS OF ERROR Aloise asserts the following assignments of error: 1. The trial court erred in holding that La. C.C.P. art. 971 does not require that the speech be made in connection with a public issue. 2. The trial court erred in shifting the burden of proof to [ Aloise] even after finding the defamatory statements were not made in connection with a public issue. 3. The trial court erred in ignoring the disputed material facts which preclude the granting of a special motion to strike. 4. The trial court erred in sustaining the Exception of No Cause of Action. 4

5 DISCUSSION In his first assignment of error, Aloise contends the trial court erred in its interpretation that La. C.C.P. art. 971 does not require that the speech at issue be made in connection with a public issue and that the trial court's finding the speech was not made in connection with a public issue should have defeated defendants' motions under Article 971. Louisiana Code of Civil Procedure Article 971 provides, in pertinent part: A. ( 1) A cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or Louisiana Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established a probability of success on the claim. 2) In making its determination, the court shall consider the pleadings and supporting and opposing affidavits stating the facts upon which the liability or defense is based. 3) If the court determines that the plaintiff has established a probability of success on the claim, that determination shall be admissible in evidence at any later stage of the proceeding. F. As used in this Article, the following terms shall have the meanings ascribed to them below, unless the context clearly indicates otherwise: 1) "Act in furtherance of a person's right of petition or free speech under the United States or Louisiana Constitution in connection with a public issue" includes but is not limited to: a) Any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law. b) Any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official body authorized by law. c) Any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest. d) Any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest. Article 971 was enacted by 1999 La. Acts, No. 734, Sect. 1. Section 2 of the Act provides: The legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of free speech and petition for redress of grievances. The legislature finds and declares that it is in the public interest to 5

6 encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, it is the intention of the legislature that the Article enacted pursuant to this Act shall be construed broadly. Hence, Article 971 was enacted by the legislature as a procedural device to be used in the early stages of litigation to screen out meritless claims brought primarily to chill the valid exercise of constitutional rights of freedom of speech and petition for redress of grievances. Thinkstream Inc. v. Rubin, ( La. App. 1 Cir. 9/26/07), 971 So.2d 1092, 1100, writ denied, ( La. 1/7/08). Under the shifting burdens of proof established by the article, the mover must first establish that the cause of action against him arises from an act by him in the exercise of his right of petition or free speech under the United States Constitution or Louisiana Constitution in connection with a public issue. If the mover satisfies this initial burden of proof, the burden then shifts to the plaintiff to demonstrate a probability of success of the claim. Thinkstream, 971 So.2d at The granting of a special motion to strike presents a question of law. Appellate review of questions of law is simply a review of whether the trial court was legally correct or legally incorrect. On legal issues, the appellate court gives no special weight to the findings of the trial court, but exercises its constitutional duty to review questions of law and renders judgment on the record. Gibbs v. Elliott, ( La. App. 1 Cir. 9/13/13), 186 So.3d 667, 672. In the present case, Aloise argues that the trial court seemed to have interpreted Article 971 as not requiring the alleged defamatory statements to be made in connection with a public issue, as required by La. C.C.P. art In support of this argument, Aloise relies upon Yount v. Handshoe, ( La. App. 5 Cir. 5/28/15), 171 So.3d 381, , wherein the court declined to interpret La. C.C.P. art. 971(F)(l)(b) as allowing any and all statements made in connection with any issue under consideration by a government body. Instead, the Fifth Circuit Court of Appeal interpreted La. C.C.P. art. 971(F)(l)(b), as applying to statements under consideration by a government body and made in connection with public issues. In explaining why it 6

7 found that motions under Article 971(F)(1)(b) must apply to statements made in connection to public issues, the Yount court stated that to allow any cause of action arising from any written or oral statements made in connection with any kind of government activity or proceeding would be subject to special motions to strike regardless of whether or not the statements were made in connection with a public issue. Consequently, any party could defame or invade the privacy of a person involved in a divorce proceeding, traffic violation, child custody dispute, marriage, mortgage registration, passport application, or driver's license renewal and be immunized from legal repercussions of damage to others through the use of an extraordinary procedural remedy. Yount, 171 So.3d at We disagree with the Yount court. First, this court has already found in Gibbs v. Elliott, that the plain language of Article 971(F)(l)(a) and ( b) provides that an act in connection with a public issue" includes "[ a]ny written... statement or writing made before a... judicial proceeding" or " made in connection with an issue under consideration or review by a... judicial body." Gibbs, 186 So.3d at 672. In Gibbs, a plaintiff's defamation suit was dismissed pursuant to a special motion to strike under La. C.C.P. art The defamation suit in Gibbs was based on allegations made against Gibbs in a succession matter, wherein it was alleged that Gibbs had engaged in efforts to transfer assets for purposes of evading judgment creditors. In dismissing Gibbs' claim, this court reviewed the assignment of error that the Article 971 special motion to strike should have been denied because the alleged defamatory statements did not arise out of a matter of public significance, but rather was related to a dispute between private parties. This court declined to interpret the provisions of La. C.C.P. art. 971(F)(l)(a) and ( b) as requiring statements made before a judicial proceeding or in connection with an issue under consideration or review by a judicial body must also be related to matters " in connection with a public issue." Gibbs, 186 So.3d at The Yount interpretation that Article 971(F)(l)(a) and ( b) does not immunize all statements made before a judicial proceeding was followed by Schmidt v. Cal-Dive International, 183 F.Supp. 3d 784 W.D. La. 2016). 7

8 Likewise, this court agrees with the approach in Gibbs, and we decline to interpret the plain wording of Article 971(F)(l)(a) and ( b) to require that the statements at issue in a judicial proceeding must also be in connection with a public issue. 3 Moreover, we note that the Yount court opined that unless the provisions of Article 971(F)(l)(a) and ( b) were interpreted as requiring statements made in judicial proceedings to also be made in connection with public issues, any party could defame the privacy of a person involved in a variety of situations. We disagree. Article 971 was enacted by the legislature as a procedural right to be used in the early stages of litigation to screen out meritless claims bought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for redress of grievances. Thinkstream, 971 So.2d at Accordingly, because the allegations in the underlying lawsuits were statements made in a judicial proceeding and Mr. Mohey-EI- Dien's statements to the newspaper were in connection with a judicial proceeding, we find the statements at issue satisfy the initial burden of Article 971 of whether such statements were subject to a special motion to strike. Under the shifting burdens of proof established by Article 971, once the mover establishes that the cause of action against him arises from an act by him in the exercise of his right of petition or free speech under the United States Constitution or Louisiana Constitution in connection with a public issue ( filed before a judicial proceeding and in connection with an issue under consideration by a judicial body under La. C.C.P. art. 971(F)(l)(a) and ( b)), the burden shifts to the plaintiff to demonstrate a probability of success on the claim. See Thinkstream, 971 So.2d at In the present case, the alleged defamatory comments were written and oral statements made before a judicial proceeding and in connection with an issue under 3 In Thinkstream, 971 So.2d at 1101, this court also interpreted Article 971(F)(l)(b) as only applying to statements made in connection with an issue under consideration by a judicial body. The court in Thinkstream did not specifically address the issue of whether the statement before a judicial body was also a matter of public concern. We note that the dispute in Thinkstream arose out of whether a law firm had defamed a party by making certain allegations in an appeal before the State Commissioner of Administration in reviewing whether a bid proposal for software had been properly accepted. Thinkstream, 971 So.2d at

9 consideration or review by a judicial body. La. C.C.P. art. 971(F)(l)(a) and ( b). Once defendants met their initial burden of proof, the burden shifted to Aloise to establish the probability of success on his claim against defendants through the pleadings and supporting and opposing affidavits stating the facts upon which liability is based. A cause of action for defamation arises out of a violation of La. C.C. art Defamation involves the invasion of a person's interest in his or her reputation and good name. To maintain an action for defamation, plaintiff has the burden of proving: 1) defamatory words; ( 2) unprivileged publication; ( 3) falsity; ( 4) actual or implied malice; and ( 5) resulting injury. If even one of these required elements is lacking, the cause of action fails. Thinkstream, 971 So.2d at Malice, for the purposes of the tort of defamation, requires a lack of reasonable belief in the truth of the alleged defamatory statements. Only when a court finds that a statement has been made without reasonable grounds for believing it to be true can the person making the statement be found to be motivated by malice or ill will. Gibbs, 186 So.3d at 672. Based on our review of the evidence in this case, and considering the applicable law with regard to a cause of action in defamation, we find Aloise failed to establish a probability of success in his claims against defendants. According to the record, defendant Langenberg, who legally represented CMCI in litigation seeking recovery of stolen assets ( wherein the alleged defamatory statements were made in the pleadings), filed the pleadings containing the alleged defamatory statements following a duly diligent and reasonable investigation. According to Langenberg, all allegations were made following her review of the matter and with probable cause. The record also contains two affidavits filed by Donnasue Peveto. These affidavits were filed in the same cases wherein the alleged defamatory statements were made concerning Aloise. According to Peveto's affidavits, she was a thirty-year employee of CMCI and had personally engaged in the embezzlement scheme. Peveto stated that Tucker was the " mastermind" of the scheme and had a close, personal relationship with Aloise, who Peveto attested, was aware of the embezzlement. According to Peveto, Aloise had received two Salvador Dali lithographs from Tucker, 9

10 valued between $ 9,000-12,000.00, which belonged to CMCI, as a gift for his participation in the scheme. Peveto further attested that Tucker told her he had wired money stolen from CMCI to Aloise. Peveto also attested that Aloise participated and advised Tucker on preparation of legal documents to facilitate the fraudulent transfer of lots and mineral rights belonging to CMCI to other entities. Although Aloise filed an affidavit denying he engaged or had the intention to engage in any activities that would have facilitated or resulted in the illegal conversion of CMCI's assets, this does not satisfy the burden of showing Aloise had a probability of success on the defamation claims. Considering the foregoing, it does not appear that Aloise could have satisfied the malice element of his defamation suit against defendants because their belief in the truth of the claims was reasonable given the above facts. Even if defendants did not prevail in their civil action against Aloise personally, it does not equate to a determination that their allegations, contained in the pleadings seeking recovery of assets and statements about that litigation, were made with actual malice. Accordingly, we find Aloise failed to establish a probability of success on his defamation claims. Thus, the judgment of the trial court dismissing this matter pursuant to the special motions to strike under Article 971 is affirmed. Because we affirm the dismissal of the suit under Article 971, we find the appeal of the trial court's granting of the exception of no cause of action to be moot. Under La. Code Civ. P. art. 971(B), the prevailing party on a special motion to strike shall be awarded reasonable attorney fees and costs. The trial court did not award attorney fees in this matter, and the defendants challenged such by filing answers to Aloise's appeal. Accordingly, this matter is remanded to the trial court for the purposes of determining and awarding reasonable attorney fees and costs incurred by the prevailing parties, Capital Management Consultants, Inc., Marwan Mohey-El- Dien, E. Margriet Langenberg, and Barbara Lane Irwin. Finally, we note in the defendants' answer to appeal, they also requested attorney fees incurred as a result of this appeal. We award each defendant, Capital 10

11 Management Consultants, Inc., Marwan Mohey-El-Dien, E. Margriet Langenberg, and Barbara Lane Irwin, the amount of $ as attorney fees incurred in connection with this appeal. All costs of this appeal are assessed to the appellant, Michael Aloise, Jr. JUDGMENT AFFIRMED IN PART; EXCEPTION OF NO CAUSE OF ACTION MOOT; ATTONREY FEES AWARDED ON APPEAL; MATTER REMANDED FOR DETERMINATION AND AWARD OF ATTORNEY FEES PROCEEDINGS. INCURRED IN TRIAL 11

12 MICHAEL ALOISE, JR. VERSUS CAPITAL MANAGEMENT CONSULTANTS, INC., MARWAN MOHEY-EL-DIEN, E. MARGRIET LANGENBERG, AND BARBARA LANE IRWIN COURT OF APPEAL FIRST CIRCUIT 2016 CA 1174 McDONALD, J. Concurring. I agree with the result reached by the majority but write separately to express my views regarding the interpretation of LSA-C.C.P. art The legislature's intent in enacting Article 971 was to deter a disturbing increase in lawsuits brought to chill the valid exercise of the constitutional rights of free speech and petition for redress of grievances Acts. No. 734, 2. See U.S.C.A. Const. Am. I and LSA-Const. Art. 1, 7, 9. The right to petition government for a redress of grievances encompasses the basic act of filing litigation in a court. Borough ofduryea, Pa. v. Guarnieri, 564 U.S. 379, 387, 131 S.Ct. 2488, 2494, 180 L.Ed.2d 408 ( 2011); Nave/lier v. Sletten, 29 Cal. 4th 82, 88, 52 P.3d 703, 709 ( 2002). Article 971(F)(l)(a) and ( b) statutorily define a protected act to include statements made before a judicial proceeding or in connection with an issue under consideration by a judicial body - that is, statements made during the course of litigation or in connection with an issue under consideration in litigation. So, it appears that the right to litigate is in itself a matter of public concern. Here, the defendants' statements in the underlying litigation are deemed to relate to a public issue under Subsection 971(F)(1)(a), because they were filed in pleadings in a judicial proceeding. And, Mr. Mohey-El-Dien's statements to the press are deemed to relate to a public issue under Subsection 971(F)(1)(b), because they related to the underlying litigation and, as such, were made in connection with an issue under consideration by a judicial body. There is no additional requirement that the defendants' statements somehow separately relate to "an issue of public interest." In

13 contrast, the protected acts in Section ( F)(l)(c) and ( d) are statutorily defined to require a connection with an "issue of public interest" or with a "public issue." In Gibbs and in Thinkstream, when challenged acts fell within the statutory definitions of Subsections ( F)(l)(a) and ( b), this court found them to be protected acts with no further discussion of whether the acts separately related to an issue of public interest. Accord Samuel v. Remy, (La. App. 1 Cir. 8/31/16), 2016 WL unpublished), writ denied, La. 11/29/16). This interpretation is in line with the legislature's stated intent that Article 971 be broadly construed Acts. No. 734, 2. I note, however, that the Yount court found such an interpretation overly broad and would require all protected acts under Article 971 to be separately connected to an issue of public interest." As noted by the majority, a federal district court has recently agreed with Younts reasoning in Schmidt v. Cal-Dive International, Inc., 183 F.Supp.3d 784 ( W.D. La. 2016). It also appears that our Fourth Circuit agrees with Younts reasoning as expressed in Shelton v. Pavon, ( La. App. 4 Cir. 2/15/17), So.3d_ Despite these conflicting interpretations, it appears that we are bound by Article 971's language that recognizes the constitutional right of petition as a matter of public interest, by statutorily defining statements made in litigation, and in connection with litigation, as such.