Front, Inc., Plaintiff,v.Philip Khalil, et al., Defendants.--------------------------------Philip Khalil, Third-Party Appellant, v. Jeffrey A. Kimmel, et al., Third-Party Respondents.BriefN.Y.Jan 14, 2015To be Argued by: NEIL G. MARANTZ (Time Requested: 30 Minutes) APL—2014-00008 New York County Clerk’s Index No. 111597/11 Court of Appeals of the State of New York FRONT, INC., Plaintiff, – against – PHILIP KHALIL, JAMES O’CALLAGHAN and ECKERSLEY O’CALLAGHAN STRUCTURAL DESIGN, Defendants. ––––––––––––––––––––––––––––––– PHILIP KHALIL, Third-Party Plaintiff-Appellant, – against – JEFFREY A. KIMMEL and MEISTER SEELIG & FEIN LLP, Third-Party Defendants-Respondents. REPLY BRIEF FOR THIRD-PARTY PLAINTIFF- APPELLANT THE MARANTZ LAW FIRM Attorneys for Defendants and Third- Party Plaintiff-Appellant 150 Theodore Fremd Avenue, Suite A-14 Rye, New York 10580 Tel.: (914) 925-6700 Fax: (914) 925-8800 Date Completed: May 19, 2014 i TABLE OF CONTENTS TABLE OF AUTHORITIES……………………………………………………. ii ARGUMENT .......................................................................................................... 1 RATHER THAN ADDRESS THE ARGUMENTS ON APPEAL, RESPONDENTS RELY UPON UTTERLY CONCLUSORY STATEMENTS AND A CASE THAT CITES THE DECISION BEING APPEALED AND WHICH IS OTHERWISE IRRELEVANT ............................................................. 1 CONCLUSION ....................................................................................................... 8 ii TABLE OF AUTHORITIES Cases Vodopia v Ziff-Davis Publishing Co., 243 A.D.2d 368, 663 N.Y.S.2d 178 (1st Dept. 1997)…………………………………………………………… 2 Officemax Inc. v. Cinotti, 966 F. Supp. 2d 74, 81 (E.D.N.Y. 2013)………… 2 - 4 Youmans v. Smith, 153 N.Y. 214, 220, 47 N.E. 265, 267 (1897)…………… 5, 7 Park Knoll Associates v. Schmidt, 59 N.Y.2d 205, 451 N.E.2d 182, 464 N.Y.S.2d 424 (1983)…………………………………………………. 6 1 ARGUMENT RATHER THAN ADDRESS THE ARGUMENTS ON APPEAL, RESPONDENTS RELY UPON UTTERLY CONCLUSORY STATEMENTS AND A CASE THAT CITES THE DECISION BEING APPEALED AND WHICH IS OTHERWISE IRRELEVANT Respondents rely upon the most conclusory of statements as their essential response to this appeal. Legal maxims such as “a statement made in the course of judicial proceedings is absolutely privileged” are oft repeated as if to attempt to confuse the Court into believing that judicial proceedings were pending at the time the defamatory letter in question was published, when in fact there were no such proceedings whatsoever. Indeed, the Kimmel letter was sent by an attorney to individuals not represented by counsel, because there were no pending judicial proceedings and there never had previously been even a hint of any judicial proceedings. Nor were any proceedings commenced for more than six (6) months after the letter was published. Under such circumstances, the law has never afforded the attorney blanket license to make defamatory statements with absolute immunity. Respondents fail to address the policy considerations articulated by this Court with respect to limits of the absolute privilege doctrine. Appellant has endeavored to demonstrate this Court’s long-expressed rationale for limiting application of 2 absolute privilege, and has detailed how, in contrast, the First Department’s decision (the “Appellate Order”) has its genesis solely in the adoption of erroneous dicta, without that court ever having surveyed the law on the subject, addressed such underlying policy considerations or otherwise having explained why absolute privilege should now apply to situations where there are no pending judicial proceedings. In response, Respondents merely conclude that “the First Department has articulated a clear and compelling rationale for such position,” without, of course, pointing to any language that might even remotely suggest any such analysis by that court. Respondents similarly rely upon the conclusory by blithely referring to Vodopia v Ziff-Davis Publishing Co., 243 A.D.2d 368, 663 N.Y.S.2d 178 (1st Dept. 1997), as holding that “statements in pre-suit letter…were absolutely privileged” [Respondent’s Brief, p. 11] even though it has been demonstrated at every level of this appeal – and even recognized by the trial court on the original motion – that the letter in question in that case was in fact sent during pending litigation [R 222-223]. Accordingly, Vodopia cannot be argued as precedent in terms of demonstrating that statements made when there are no pending judicial proceedings should be afforded absolute privilege. Respondents employ circular reasoning in citing a Federal case, Officemax Inc. v. Cinotti, 966 F. Supp. 2d 74, 81 (E.D.N.Y. 2013), that cites the very decision 3 being appealed here. Certainly, Respondents cannot demonstrate that the Appellate Order employed valid reasoning under New York law merely because a Federal court decision cited it. Moreover, the rationale for that Federal court decision is completely distinguished from the matter at hand. In Officemax, the parties had been engaged in litigation, were represented by counsel, and had entered into a settlement agreement that one party then accused the other party of having breached, through a letter by one counsel to the other. It was the contents of that lawyer-to-lawyer letter that was alleged to have been defamatory. Accordingly, the Federal court did not apply blanket immunity to statements made where there were no pending judicial proceedings, but did so where the statements were pertinent to the prior proceedings where there were ongoing issues: Therefore, the Letter was pertinent to the previous litigation between OMI and W.B. Mason, as it related to the Settlement Agreement that resulted from that litigation. Officemax Inc. v. Cinotti, 966 F. Supp. 2d 74, 81 (E.D.N.Y. 2013) That court went on to point out that: The fact that a defamatory statement is unrelated to one proceeding does not mean that it is unrelated to any other proceeding. As the Letter is related and pertinent to the past and possibly future litigation between OMI and W.B. Mason, it is protected by the litigation privilege. Id. 4 An essential factor in the Federal court decision, and an underpinning of the rationale for its holding that the existence of prior judicial proceedings warrants application of the absolute privilege doctrine, was the fact of the presence of counsel representing the parties in question, and the lawyer-to-lawyer nature of the subject communication: …lawyers, on behalf of their clients, should also have the freedom to speak to opposing counsel with a free and open mind prior to the commencement of litigation. Officemax Inc. v. Cinotti, 966 F. Supp. 2d 74, 81 (E.D.N.Y. 2013). Of course, this is not the situation at bar. This was not a letter from one attorney to another, involving the subject matter of a lawsuit in which both had been involved. The Kimmel letter was an obviously defamatory communication sent by an attorney by means of introduction to individuals who were not represented by counsel, inasmuch as there had never been prior proceedings of any kind whatsoever. Indeed, the Kimmel letter was published with the obvious purpose of intimidating the recipients and dissuading them from entering into a business venture that would compete with the attorney’s client. This was accomplished essentially by defaming Mr. Khalil and his ability to perform the tasks anticipated, due to his alleged violation of “several codes of professional conduct and ethics of various boards of licensure and professional associations…,” having committed “a serious offense that is punishable by up to ten years in prison under the Economic Espionage 5 Act of 1996…,” and having “knowingly violated the terms of [his] application [to the United States Citizenship and Immigration Services] and immigrant status,” among other things [R 135]. No litigation was in fact commenced for over six (6) months after the publication of that letter. In sum, the Federal case cited by Respondents is completely inapposite to the facts of this matter, and obviously provides no authority for this Court in any event. If anything, it demonstrates the danger of the Appellate Order if unchecked, as serving as precedent for the potential erosion of critical public policy considerations repeatedly voiced by this Court in limiting application of the absolute privilege doctrine. As discussed in Appellant’s Brief, casual disregard of concepts as old and established as that contained in Youmans v. Smith, 153 N.Y. 214, 220, 47 N.E. 265, 267 (1897) would ensue if the First Department’s unprecedented blanket application of absolute privilege to “prospective litigation” were accepted as the law. That case, and others through the years that have cited it, have maintained that, even if made in the course of judicial proceedings, defamatory statements still need to be reasonably pertinent to such proceedings, and not “needlessly defamatory,” in order to entitle the speaker to absolute immunity. Without the context of any proceedings, the concept of pertinence is destroyed, unless a court is charged with the manifest illogic 6 of having to determine the potential viability of defamatory statements to potential (i.e., imaginary) proceedings. Similarly, as pointed out in Appellant’s Brief, the absence of actual proceedings removes the distinction made by this Court in Park Knoll Associates: …a lawyer has immunity for defamatory words spoken in a judicial proceeding but not for words spoken while representing a client in a nonjudicial proceeding … Park Knoll Associates v. Schmidt, 59 N.Y.2d 205, 209, 451 N.E.2d 182, 184 (1983). Again, the untenably vague nature of applying blanket immunity to statements made in the context of “prospective litigation” would require a court, generally in the context of pre-answer motions to dismiss, where relatively few facts are at its disposal, to ascertain the circumstances of the defamatory publication and determine the nature of potential proceedings, e.g., judicial versus non-judicial, and the pertinence of such statements to such imagined proceedings. Essentially, the First Department’s “prospective litigation” concept would run afoul of settled decisions made by this Court, and would do so without any rationale whatsoever having been proffered. Certainly none has been articulated by Respondents, who have simply ignored these arguments in their Brief. Perhaps most cynically, Respondents attempt to sidestep the fact that none of the causes of action in the Complaint have anything whatsoever to do with Mr. Khalil’s immigration status, and that the statement in the attorney’s letter, sent more 7 than six (6) months before that litigation was even filed, was utterly gratuitous in informing United Kingdom residents that the person they were intending to open their New York office was essentially an illegal immigrant. Respondents, obviously mindful of this problem, devote disproportionate space in their brief to trying to convince the Court that this “entire lawsuit is about a foreign national entrusted with Front’s confidential and proprietary information.” [Respondents’ Brief, p.9.]1 Such an appeal to xenophobia is as distasteful as it is utterly irrelevant both to this breach of employment contract/fiduciary duty matter and to responsible legal argument. No reasonable policy objectives are promoted by allowing an attorney unlimited power to use defamatory communications where there are no pending judicial proceedings, nor where there have never been any judicial proceedings whatsoever. No reasonable policy objectives are promoted by allowing an attorney unlimited power to use defamatory communications as a sword, outside the ambit of judicial proceedings, so that the attorney can in essence be hired as a henchman to intimidate a client’s perceived competition. 1 In so doing, Respondents are obviously trying to establish the pertinence of libelous statements to judicial proceedings. It is well-settled that a statement must be reasonably pertinent and not “needlessly defamatory.” Youmans v. Smith, 153 N.Y. 214, 220, 47 N.E. 265, 267 (1897). However, absent pending proceedings a court cannot logically ascertain pertinence of statements to such proceedings. In this case, even with the benefit of hindsight – with proceedings commenced over six (6) months after the defamatory statements were made – those statements involving Mr. Khalil’s immigration status were still completely irrelevant to the eventual lawsuit. 8 The Appellate Order runs afoul of established law in this state, and does so without reason, either expressed or rationally inferable. CONCLUSION The Appellate Order represents a fundamental change in New York law with respect to applicability of the doctrine of absolute privilege to defamatory statements made when no judicial proceedings are pending. It is respectfully submitted that the Appellate Order should be reversed, the Third-Party Complaint should be reinstated, and Mr. Kimmel and his firm, as proper third-party defendants, should be disqualified from further representation of the plaintiff in this matter. Dated: Rye, New York May 19, 2014 Respectfully submitted, THE MARANTZ LAW FIRM Attorneys for Third-Party Plaintiff- Appellant 150 Theodore Fremd Avenue Suite A-14 Rye, NY 10580 (914) 925-6700 By: ____________________ Neil G. Marantz, Esq.