Downey v. Chutehall Construction Co.

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13-P-819 Appeals Court
CHRISTOPHER DOWNEY & another1 vs. CHUTEHALL CONSTRUCTION CO.,
LTD.; THE FOLLETT COMPANY, INC., third-party defendant.
No. 13-P-819.
Suffolk. September 15, 2014. - November 13, 2014.
Present: Berry, Kafker, & Carhart, JJ.
Libel and Slander. Consumer Protection Act, Unfair or deceptive
act. Privileged Communication. Evidence, Opinion,
Privileged communication. Practice, Civil, Summary
judgment, Entry of judgment.
Civil action commenced in the Superior Court Department on
July 2, 2010.
A motion for partial summary judgment was heard by Judith
Fabricant, J., and entry of final and separate judgment was
ordered by her.
John D. Fitzpatrick for Chutehall Construction Co., Ltd.
Heather Gamache for The Follett Company, Inc.
KAFKER, J. Homeowners Christopher and Mairead Downey (the
Downeys) hired a contractor, The Follett Company, Inc.
(Follett), to investigate the cause of their leaky roof.
1
Mairead Downey.
2
Follett reported that the roof had been installed a number of
years earlier over fiberboard roof insulation that was soaking
wet, thereby causing the later leakage. The Downeys then sued
the installer of the roof, Chutehall Construction Co., Ltd.
(Chutehall), for substandard workmanship, and Chutehall brought
third-party defamation and G. L. c. 93A claims against Follett,
asserting that the statement about installing the roof over the
soaking wet fiberboard insulation was false and defamatory. A
Superior Court judge granted Follett's motion for summary
judgment on Chutehall's claims against Follett. Follett then
filed a motion for the entry of a separate and final judgment
pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 820 (1974), which
Chutehall opposed. The judge allowed Follett's motion, judgment
entered, and this appeal followed.
On appeal, Chutehall argues that the judge erred in
deciding as a matter of law (1) that Follett's report about the
roof constituted a statement of opinion not fact, (2) that
Follett was not negligent in making the statement, and (3) that
the statement was protected by a conditional privilege.
Chutehall also argues that the judge erred in allowing the
motion for entry of separate and final judgment. We conclude
that the statement by Follett was protected by a conditional
privilege that was not abused, and therefore, summary judgment
was properly allowed on the defamation claim. As the c. 93A
3
claim depends on the merits of the defamation claim, summary
judgment was properly allowed on this claim as well. There was
no error in the entry of judgment pursuant to Mass.R.Civ.P.
54(b).
1. Background. In 2005, the Downeys entered a contract
with Chutehall pursuant to which Chutehall installed a new
rubber roof system on the Downeys' townhouse in the Beacon Hill
section of Boston. In 2009, another contractor, hired by the
Downeys to install a rooftop heating, ventilation, and air
conditioning (HVAC) unit for their home, cut a hole in the roof
and discovered that the underlying roof system was wet. At the
contractor's suggestion, the Downeys engaged Follett and J.M.
Lydon Corp. (Lydon), both roofing contractors, to inspect the
roof. In addition, the Downeys hired Gregory R. Doelp, a
structural engineer, to evaluate the roof and any proposals
submitted by Follett and Lydon. After Follett, Lydon, and Doelp
performed their on-site investigations of the roof, the Downeys
requested that they each prepare written findings of their
observations. Specifically, the Downeys requested that Follett
help them understand why the roof was wet and what had caused
the leakage problems. Follett's written report, titled "Roof
Observations," stated, "This roof was installed over a EPDM roof
system that had fiberboard roof insulation that was soaking
wet." Follett recommended that the entire roofing system be
4
removed and replaced. The Downeys ultimately hired Follett to
carry out this recommendation.
In 2010, the Downeys filed a complaint in Superior Court
against Chutehall to recover damages to their townhouse
allegedly caused by substandard roofing work performed by
Chutehall in 2005. In response to the Downeys' lawsuit,
Chutehall asserted third-party claims against Follett for
defamation and violation of G. L. c. 93A, alleging Follett's
statement that the roof was installed over wet insulation was
false and defamatory.2 Chutehall's c. 93A claim is based
entirely on its allegation of defamation. On Follett's motion
for summary judgment, the Superior Court judge ruled that the
alleged defamatory statements were not statements of fact, but
of Follett's professional opinion, that the statements were not
negligently made, and that, in any event, they were
conditionally privileged. The judge further ruled that because
Chutehall's c. 93A claim rested entirely on the allegation of
defamation, that claim must fail as well. A separate and final
2
Originally, Chutehall's defamation claim was based on two
statements: the statement made by Follett in the "Roof
Observations" report, and a written statement made by
Christopher Downey in a prelitigation demand letter to
Chutehall, in which Downey wrote that Follett "noted that the
roofing workmanship was in fact poor and substandard."
Chutehall has waived the issue of this second statement on
appeal, and the only statement we considered is Follett's
written statement.
5
judgment entered pursuant to Mass.R.Civ.P. 54(b), and Chutehall
filed a timely notice of appeal.
2. Discussion. The defendant must prevail on its motion
for summary judgment "if [it] demonstrates, by reference to
material described in Mass. R. Civ. P. 56 (c), unmet by
countervailing materials, that the [plaintiff] has no reasonable
expectation of proving an essential element of [its] case."
Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716
(1991). "A complete failure of proof concerning an essential
element of the [plaintiff's] case renders all other facts
immaterial." Id. at 711. We view the evidence in the light
most favorable to the nonmoving party. See Currier v. National
Bd. of Med. Examiners, 462 Mass. 1, 11 (2012); Dragonas v.
School Comm. of Melrose, 64 Mass. App. Ct. 429, 430 (2005).
a. Chutehall's defamation claim. In order for Chutehall
to recover on its defamation claim, it must establish that (1)
Follett published a defamatory statement of and concerning
Chutehall; (2) the statement was a false statement of fact (as
opposed to opinion); (3) Follett was at fault for making the
statement and any privilege that may have attached to the
statement was abused; and (4) Chutehall suffered damages as a
result, or the statement was of the type that is actionable
without proof of economic loss. See Stone v. Essex County
Newspapers, Inc., 367 Mass. 849, 858-859 (1975); Phelan v. May
6
Dept. Stores Co., 443 Mass. 52, 55-56 (2004); Restatement
(Second) of Torts §§ 558, 599, 600 (1977).
i. Distinction between opinion and fact. To determine
whether the statement in question is defamatory, the court must
decide whether it is an assertion of fact or opinion. The
distinction is often subtle and difficult, particularly at the
summary judgment stage. King v. Globe Newspaper Co., 400 Mass.
705, 709 (1987), cert. denied, 485 U.S. 940 and 485 U.S. 962(1988), quoting from Janklow v. Newsweek, Inc., 788 F.2d 1300,
1302 (8th Cir.), cert. denied, 479 U.S. 883 (1986) ("It is hard
to draw a bright line between 'fact' and 'opinion'"). The
determination is considered a question of law only when it is
unambiguous. See ibid. See also Driscoll v. Board of Trustees
of Milton Academy, 70 Mass. App. Ct. 285, 296 (2007); Gray v.
St. Martin's Press, Inc., 221 F.3d 243, 248 (1st Cir. 2000),
cert. denied, 531 U.S. 1075 (2001). In contrast, "the
determination whether a statement is a factual assertion or a
statement of pure opinion is a question of fact if the statement
reasonably can be understood both ways." King v. Globe
Newspaper Co., supra. See Aldoupolis v. Globe Newspaper Co.,
398 Mass. 731, 733-734 (1986). Therefore, in a defamation
action, "the defendant is entitled to summary judgment if the
challenged statement cannot reasonably be construed as a
statement of fact." King v. Globe Newspaper Co., supra.
7
"However, if a statement is susceptible of being read by a
reasonable person as either a factual statement or an opinion,
it is for the jury to determine." Aldoupolis v. Globe Newspaper
Co., supra.
In determining whether an assertion is a statement of fact
or opinion, "the test to be applied . . . requires that the
court examine the statement in its totality in the context in
which it was uttered or published. The court must consider all
the words used, not merely a particular phrase or sentence. In
addition, the court must give weight to cautionary terms used by
the person publishing the statement. Finally, the court must
consider all of the circumstances surrounding the statement,
including the medium by which the statement is disseminated and
the audience to which it is published." Cole v. Westinghouse
Bdcst. Co., 386 Mass. 303, 309, cert. denied, 459 U.S. 1037(1982), quoting from Information Control Corp. v. Genesis One
Computer Corp., 611 F.2d 781, 784 (9th Cir. 1980).
We do not consider this assertion an unambiguous statement
of opinion appropriate for summary judgment. The defamatory
statement on its face appears directly and definitively factual.3
"This roof was installed over a EPDM roof system that had
fiberboard roof insulation that was soaking wet." Importantly,
3
In his deposition, Follett states that it would have been
"impossible" for the insulation not to have been wet when the
roof was installed. See part 2.a.iii, infra.
8
in contrast to statements of opinion, statements that present or
imply the existence of facts that can be proven true or false
are actionable. See Levinsky's, Inc. v. Wal-Mart Stores, Inc.,
127 F.3d 122, 127 (1st Cir. 1997), citing Milkovich v. Lorain
Journal Co., 497 U.S. 1, 18-19 (1990); Gray v. St. Martin's
Press, Inc., 221 F.3d at 248, also citing Milkovich, supra at
18-20. Here, Follett stated that the Downeys' roof had been
installed over wet insulation. This appears to be an assertion
of fact that, at least in theory, could be verified as either
true or false.4
Nevertheless, as the motion judge pointed out, the
installation of the roof was done four years earlier when
Follett was not present, and thus the motion judge concluded
that the statement "can reasonably be understood only as an
expression of Follett's professional judgment, based on its
observations at the time it examined the roof." The published
statement is not, however, in any way introduced as an
expression of opinion. See, e.g., Information Control Corp. v.
Genesis One Computer Corp., 611 F.2d at 784 (statement
"cautiously prefaced as representing 'the opinion of . . .
management'"). Nor is the statement expressly qualified or
limited as being based on the results of particular
4
In Doelp's deposition, for example, he stated that he
could have figured out why the insulation was wet but was never
asked to make that determination. See part 2.a.iii, infra.
9
observations. See Restatement (Second) of Torts § 566 comment c
& illustration 4 ("A writes to B about his neighbor C: 'He
moved in six months ago. He works downtown, and I have seen him
during that time only twice, in his backyard around 5:30 seated
in a deck chair with a portable radio listening to a news
broadcast, and with a drink in his hand. I think he must be an
alcoholic.' The statement indicates the facts on which the
expression of opinion was based and does not imply others.
These facts are not defamatory and A is not liable for
defamation"). Finally, the audience, i.e., ordinary homeowners,
could, we conclude, reasonably be expected to understand
Follett's statement as one of determined fact and not just a
qualified opinion, despite their understanding that Follett did
not personally observe the installation. See Cole v.
Westinghouse Bdcst. Co., 386 Mass. at 309.
In sum, although it is a close question, we conclude that
the unqualified factual assertion here, which might have been
proven true or false, could reasonably be construed as a
defamatory statement of fact. Summary judgment should not have
been granted on the ground that it was an unambiguous opinion.
We therefore turn to the questions of fault and privilege.
ii. Demonstration of fault. Private persons or entities
may recover on defamation claims on proof that the defendant was
negligent in publishing defamatory statements, which reasonably
10
could be interpreted to refer to the plaintiff, assuming proof
of all other elements of a claim for defamation has been
provided. See Stone v. Essex County Newspapers, Inc., 367 Mass.
at 858; New England Tractor-Trailer Training of Conn., Inc. v.
Globe Newspaper Co., 395 Mass. 471, 477 (1985). If, however, a
conditional privilege applies to the communication, negligence
is not enough, as at least recklessness is required. See Bratt
v. International Bus. Machs. Corp., 392 Mass. 508, 514 (1984).
We turn to the privilege issue next, as we consider it
dispositive in the instant case.
iii. Conditional privilege. "The burden is on the
defendant[] to prove, when the issue is properly raised, the
existence of a privilege to publish a defamatory communication."
Jones v. Taibbi, 400 Mass. 786, 802 (1987). Where, as here, a
defendant in a defamation action establishes the existence of a
privilege, the burden rests upon the plaintiff to raise a trial-
worthy issue of an abuse of that privilege. See Judd v.
McCormack, 27 Mass. App. Ct. 167, 173 (1989); Dragonas v. School
Comm. of Melrose, 64 Mass. App. Ct. at 438. In this case, this
would require Chutehall to have introduced sufficient evidence
to establish that Follett published the statements recklessly.
Based on our review of the record, we conclude that Chutehall's
defamation claim failed as a matter of law because the statement
11
is conditionally privileged, and there is no genuine issue of
material fact regarding recklessness.
Under Massachusetts law, a publication will be deemed
conditionally privileged if the publisher of the statement and
the recipient have a common interest in the subject and the
statement is "reasonably calculated to further or protect that
interest." Sheehan v. Tobin, 326 Mass. 185, 190-191 (1950)
(citation omitted). See Humphrey v. National Semiconductor
Corp., 18 Mass. App. Ct. 132, 133 (1984) (privilege applies to
employee of one company making disparaging comments about
performance of employee of another company with which first has
business relationship); Flotech, Inc. v. E.I. Du Pont de Nemours
& Co., 814 F.2d 775, 778 (1st Cir. 1987) (privilege applies to
company's statement that it views its own product as ineffective
for particular purpose even if statement implies ineffectiveness
of third party's product); Restatement (Second) of Torts § 596.
The courts have consistently recognized the common interest
privilege within the business context. See Bratt v.
International Bus. Machs. Corp., 392 Mass. at 512-513("Massachusetts courts have recognized that a person may possess
a conditional privilege to publish defamatory material if the
publication is reasonably necessary to the protection or
furtherance of a legitimate business interest"); Humphrey v.
National Semiconductor Corp., supra at 133-134.
12
Despite Chutehall's assertions to the contrary, Follett's
statement involved a common business interest between Follett
and the Downeys, i.e., the evaluation of the likely source of
the roof's leak so that repairs could be made. Follett's
statement furthered this common business interest as it affected
the Downeys' decision on how they should proceed in addressing
the roof's leakage. Additionally, the statement was made in
Follett's professional capacity and only after the Downeys
specifically requested Follett to explain the source of the
leak. The exchange between Follett and the Downeys is assuredly
of the type contemplated by the privilege, and to claim
otherwise would rob the privilege of its intended purpose.
This conclusion is supported by case law from other
jurisdictions as well. As seen in Briggs v. Newton, 984 P.2d
1113, 1121 (Alaska 1999), the common business interest privilege
was applied to a statement made by a contractor to his client
regarding the work of prior contractors. The Alaska Supreme
Court emphasized that the business privilege is "clearest when a
legal relationship exists between the defendant and the person
on whose behalf" he is making the contested statement, and the
communication serves the purposes of that legal relationship.
Ibid. (citation omitted). In Briggs, as in the instant case,
the defendant and his client had a contractual relationship
related to the need for repair work on the house, and the
13
communication was included in a document that was designed to
explain the need for such repair work.
Moreover, nothing in the record suggests that this
conditional privilege was forfeited by Follett. Massachusetts
case law maintains that a publisher may abuse, and lose, a
conditional privilege in a number of ways, including if the
plaintiff offers proof that the defendant (1) acted out of
malice, (2) knew the information was false, (3) had no reason to
believe the information to be true, (4) acted in reckless
disregard of the truth or the defendant's rights, or (5)
published the information unnecessarily, unreasonably, or
excessively. See Bratt v. International Bus. Machs. Corp., 392
Mass. at 513-515; Dragonas v. School Comm. of Melrose, 64 Mass.
App. Ct. at 438-439. As underscored by the Supreme Judicial
Court, "whatever the manner of abuse, recklessness, at least,
should be required" to overcome the privilege. Bratt v.
International Bus. Machs. Corp., supra at 515. See Dexter's
Hearthside Restaurant, Inc. v. Whitehall Co., 24 Mass. App. Ct.
217, 223 (1987) ("Recklessness is the minimum level of
misconduct"). Negligence is not enough to cause the loss of the
privilege.
Recklessness is a difficult standard to meet. "[R]eckless
conduct is not measured by whether a reasonably prudent man
would have published or would have investigated before
14
publishing." HipSaver, Inc. v. Kiel, 464 Mass. 517, 530 (2013),
quoting from St. Amant v. Thompson, 390 U.S. 727, 731 (1968).
Rather, the defendant's conduct is measured by what the
defendant had reason to believe. See Foley v. Polaroid Corp.,
400 Mass. 82, 95-96 (1987). "There must be sufficient evidence
to permit the conclusion that the defendant in fact entertained
serious doubts as to the truth of his publication." HipSaver,
Inc. v. Kiel, supra. Cf. Garrison v. Louisiana, 379 U.S. 64, 74
(1964) (equating "reckless disregard" with "high degree of
awareness of . . . probable falsity").
Follett's deposition, through its designee, Donald Follett,
demonstrates that he undertook an investigation before
proffering the conclusion that the most recently installed roof
had been put in over wet insulation. Donald Follett conducted
two on-site inspections of the roof and made several test cuts
in the roofing system. He determined that the top roof membrane
and insulation was dry but the underlying roof materials were
soaking wet. He also concluded that the wetness at the higher
elevations was consistent with the wetness at the lower areas.
He stated that at the very top area of the roof there were "no
penetrations for water to get in." These test cuts and
observations led him to conclude that the uppermost roofing
system had been installed over wet insulation. Indeed he stated
at his deposition that "it would have been impossible that that
15
roof . . . insulation was not wet" when the roof was installed.
He described himself as "convinced," so much so that once he
made the test cuts, he did not do further investigation
regarding leaks.
Similarly, the facts led Lydon, the other roofing
contractor that examined the Downeys' roof, to conclude, "This
roof would be adequate if it was not installed over a wet roof."
Doelp, the engineer hired by the Downeys to evaluate the roof
and the repair proposals made by Follett and Lydon, testified
that Follett's conclusion was plausible, and that Donald
Follett, a roofer, would be in a "better position than I would
be to make that judgment."
Doelp did, however, acknowledge some uncertainty. Based on
his own investigation, Doelp testified that he could not be sure
Chutehall's 2005 work on the Downeys' roof was the source of the
leakage problems, as he had also identified other potential
sources of the wetness of the insulation and leakage. He noted,
for example, that there were potential leak problems around the
head house, chimney, and metal parapet. He further stated that
the water "could have been there when they put the roof over.
[But] [i]t could have happened later." He did not know. He
speculated that he "could figure that out, but . . . was never
asked to do that."
16
The record here does not support a finding of recklessness.
The facts at Follett's disposal provided solid reasons to
believe the statement it made to the Downeys. Donald Follett
testified that he was firmly convinced by his investigation.
Although there is a question whether Follett should have done
more to investigate the source of the leak, and that leads to
some uncertainty about the correctness of its conclusions, in
the absence of any evidence that Follett "entertained serious
doubts as to the truth of [the] publication," HipSaver, Inc. v.
Kiel, 464 Mass. at 530, Chutehall has failed to demonstrate a
genuine issue of material fact regarding recklessness. The
judge did not err in allowing Follett's motion for summary
judgment on Chutehall's defamation claim.
b. The G. L. c. 93A claim. As conceded by Chutehall, its
G. L. c. 93A claim is based on the alleged defamatory statements
made by Follett. Accordingly, this claim rises or falls on the
outcome of the defamation claim. Dulgarian v. Stone, 420 Mass.
843, 853 (1995) ("[W]here allegedly defamatory statements do not
support a cause of action for defamation, they also do not
support a cause of action under G. L. c. 93A"). Therefore, the
trial judge properly allowed Follett's motion for summary
judgment on Chutehall's G. L. c. 93A claim.
c. Final and separate judgment. Under Mass.R.Civ.P.
54(b), "the court may direct the entry of a final judgment as to
17
one or more but fewer than all of the claims or parties . . .
upon an express determination that there is no just reason for
delay and upon an express direction for the entry of judgment."
"Whether there are multiple claims in an action and whether
those claims have been finally adjudicated are matters of law
subject to plenary review by an appellate court." Long v.
Wickett, 50 Mass. App. Ct. 380, 386 (2000). "The determination
of the presence or absence of a just reason for delay, on the
other hand, is left to the sound discretion of the trial judge
and is subject to reversal only for an abuse of that
discretion." Ibid. The record supports the trial judge's
decision that there was no just reason for delay given that
Chutehall's claims against Follett were independent of the
claims between Chutehall and the Downeys.5 We decline to vacate
the entry of separate and final judgment.
3. Conclusion. For the reasons discussed above, the judge
did not err in allowing Follett's motion for summary judgment on
Chutehall's defamation and c. 93A claims or in entering a
separate and final judgment as to those claims.
Judgment entered January 22,
2013, pursuant to
Mass.R.Civ.P. 54(b)
affirmed.
5
Although not argued by the parties, we also note that the
issue may be moot, as the remaining claims between Chutehall and
the Downeys have proceeded to judgment.