Opinion
8512 8513 Index 151771/16
02-26-2019
L.Y.E. DIAMONDS, LTD., et al., Plaintiffs–Appellants, v. GEMOLOGICAL INSTITUTE OF AMERICA, INC., et al., Defendants–Respondents, Rapaport USA, Inc., et al., Defendants.
Miller, Leiby & Associates, P.C., New York (Jeffrey R. Miller of counsel), for appellants. DLA Piper LLP (US), New York (Andrew L. Deutsch of counsel), for respondents.
Miller, Leiby & Associates, P.C., New York (Jeffrey R. Miller of counsel), for appellants.
DLA Piper LLP (US), New York (Andrew L. Deutsch of counsel), for respondents.
Sweeny, J.P., Manzanet–Daniels, Webber, Oing, Singh, JJ.
The motion court correctly dismissed, pursuant to CPLR 3211(a)(1), the defamation and trade libel causes of action on the ground that the statements at issue were protected by a qualified privilege (see Baines v. Daily News, L.P., 51 Misc.3d 229, 26 N.Y.S.3d 658 [Sup. Ct., N.Y. County 2015] [defamation complaint may be dismissed pursuant to CPLR 3211(a)(1) on documentary evidence establishing privilege defense as matter of law]; see also Rodriguez v. Daily News, L.P., 142 A.D.3d 1062, 37 N.Y.S.3d 613 [2d Dept. 2016], lv denied 28 N.Y.3d 913, 2017 WL 113412 [2017] ; Saleh v. New York Post, 78 A.D.3d 1149, 915 N.Y.S.2d 571 [2d Dept. 2010], lv denied 16 N.Y.3d 714, 2011 WL 1756843 [2011] ; compare Fletcher v. Dakota, Inc., 99 A.D.3d 43, 55–56, 948 N.Y.S.2d 263 [1st Dept. 2012] ["we would not give conclusive effect to defendants' position of qualified privilege before any affirmative defense to that effect was raised in a responsive pleading"] [internal quotation marks omitted]; but see Matter of Abbitt v. Car r ube, 159 A.D.3d 408, 410, 72 N.Y.S.3d 53 [1st Dept. 2018] [granting motion to dismiss libel claim on pleadings because petitioner's allegation of malice was "conclusory and therefore insufficient to overcome the privilege"] ).
GIA and Moses produced client agreements that conclusively demonstrate that they made the challenged statements "in the discharge of some public or private duty, legal or moral, or in the conduct of [their] own affairs, in a matter where [their] interest [was] concerned" ( Rosenberg v. MetLife, Inc., 8 N.Y.3d 359, 365, 834 N.Y.S.2d 494, 866 N.E.2d 439 [2007] ). In the agreements, plaintiffs acknowledged GIA's stated duty to serve the public and to maintain its trust in the diamond trade, acknowledged that the duty could be executed by, among other things, public disclosure of information about the diamonds that GIA inspected, including GIA's reasonable suspicions about the quality of the diamonds, and further acknowledged that GIA could make such public disclosures at its discretion and without their prior authorization.
Plaintiffs question the reliability of the client agreements, given the different versions in the record. As they point out, the most comprehensive presentation of the contracts signed by them was made on reply (via an affidavit by GIA associate corporate counsel Christina Yates). However, the signature pages and the terms and conditions of the various agreements were also annexed to defendants' moving papers. Plaintiffs did not annex a competing version to their opposition and, even on appeal, do not directly assert that they would have done so (see Burlington Ins. Co. v. Guma Constr. Corp., 66 A.D.3d 622, 624, 887 N.Y.S.2d 177 [2d Dept. 2009] ). Moreover, the Yates affidavit and exhibits were offered in direct response to plaintiffs' opposition (see Home Ins. Co. v. Leprino Foods Co., 7 A.D.3d 471, 777 N.Y.S.2d 472 [1st Dept. 2004] ).
Plaintiffs argue that, even where a qualified privilege has been conclusively established, a plaintiff should have an opportunity to show common-law or constitutional malice to defeat it (see e.g. Foster v. Churchill, 87 N.Y.2d 744, 751–752, 642 N.Y.S.2d 583, 665 N.E.2d 153 [1996] ; Hoesten v. Best, 34 A.D.3d 143, 158, 821 N.Y.S.2d 40 [1st Dept. 2006] ). They raise the reasonable concern that holding the plaintiff to the allegations in the complaint, where the defendant has established the affirmative defense on a pre-answer motion to dismiss, deprives the plaintiff of an adequate opportunity to defeat the affirmative defense (see Wilcox v. Newark Val. Cent. School Dist., 74 A.D.3d 1558, 1562, 904 N.Y.S.2d 523 [3d Dept. 2010] ). However, holding these particular plaintiffs to the allegations in their amended complaint does not present the risk of unfair surprise (see CPLR 3018[b] ). As a result of motion practice on the original complaint, plaintiffs were aware of defendants' qualified privilege arguments. Yet, rather than amending the complaint to allege facts that would establish malice, they continued to assert only the most conclusory allegations of malice. Plaintiffs rely on Whelehan v. Yazback , 84 A.D.2d 673, 446 N.Y.S.2d 626 (4th Dept. 1981). However, this Court has determined that conclusory allegations do not suffice (see O'Neill v. New York Univ., 97 A.D.3d 199, 212–213, 944 N.Y.S.2d 503 [1st Dept. 2012] ).
Nor do the arbitration proceedings buttress the malice allegations, as those proceedings post-date the statements at issue and shed no light on whether defendants made the statements with the requisite disregard for the truth. In any event, plaintiffs acknowledge that the arbitration resulted in a monetary award against them.
Plaintiffs failed to show that the court applied an incorrect standard in determining the motion to dismiss the amended complaint. Their argument consists of conclusory statements without supporting facts, such as the assertion that it was "entirely possible" that defendants sought to defame them with malice. Nor do these conclusory statements suffice to justify further discovery.
Plaintiffs' remaining causes of action, with the exception of tortious interference with contract, were correctly dismissed as duplicative of the failed defamation and trade libel claims. The tortious interference claim was correctly dismissed, because its conclusory allegations fail to state a cause of action (see M.J. & K. Co. v. Matthew Bender & Co., 220 A.D.2d 488, 490, 631 N.Y.S.2d 938 [2d Dept. 1995] ).
We have considered plaintiffs' remaining arguments and find them unavailing.