Ethics

Client's termination letters to attorney are protected from defamation suit, court says


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Illustration by Tim Marrs

A client’s letters to an attorney terminating the relationship and criticizing the attorney’s performance do not constitute defamation, a New York court has ruled. Allen Gutterman, owner of several staffing companies, gave three letters in August 2012 to his attorney, A. Bernard Frechtman, terminating the relationship. Both parties work in New York City. According to the decision, the letters included the following statements:

• “We do not believe you adequately represented our interests.”

• “We believe your failure to act in our best interest in reference to certain matters upon first engaging in the matter may equate to misconduct, malpractice and negligence.”

• “We believe that your future representation on this matter only became necessary as a result of mistakes and oversights made by you as acting counsel.”

• “We believe that we should not pay for the value of services for which any misconduct or counsel oversight relates to the represen-tation for which fees are sought.”

Frechtman, who has practiced law for more than 60 years, sued Gutterman and several of Gutterman’s staffing companies for defamation in October 2012. Frechtman had represented Gutterman and his companies for about seven years. The parties’ relationship apparently deteriorated after Frechtman sought to obtain payment for what Frechtman said were outstanding legal fees and expenses of more than $57,000.

“While a client has the right to discharge his attorney at any time,” Frechtman said in his brief, “that right does not include the ability to falsely disparage the attorney’s competence and integrity as an excuse to avoid payment of money owed for legal fees and disbursements, which is precisely the situation presented by the case at bar.”

In his lawsuit, Frechtman contended the aspersions in the termination letters were malicious statements of fact, while Gutterman contended they were protected opinion.

WALKING THE LINE

Justice Saliann Scarpulla of the Supreme Court in New York County granted Gutterman’s request to dismiss the suit in May 2013. On appeal, the Supreme Court’s Appellate Division, First Department, affirmed on Jan. 23 the dismissal of the defamation suit in Frechtman v. Gutterman.

In its decision, the appeals court walked the tricky line between words of opinion and those of fact. Pure opinion often is protected from a defamation suit, unless the opinion implies false assertions of fact. The distinction between protected opinion and unprotected fact is a difficult area, with some jurisdictions including a category of “mixed opinion.”

The court acknowledged that the statements in the termination letters were disparaging, noting that “they may therefore constitute defamation if they amount to false statements of fact, rather than opinion; if they were published to a third party; and if they are not protected by a privilege.” The court determined that Frechtman’s claim satisfied the publication requirement because a third-party company employee prepared the letters.

However, the court determined that the statements in the letters were protected opinion when taken in context, in which “the challenged statements are better understood as opinion than as fact.” The court added that, “while the use of words such as misconduct and malpractice may, viewed in isolation, seem to be assertions of provable fact or claims supported by unstated facts, viewed in their context these statements amount to the opinions and beliefs of dissatisfied clients about their attorney’s work.”

“The court’s invocation of the broad protection for expressions of opinion afforded by New York law is probably the most noteworthy aspect of the decision,” says Lee Levine, a media and defamation attorney based in Washington, D.C. “It demonstrates the often crucial role that context plays in determining whether an allegedly defamatory statement, which might be viewed as a statement of fact when viewed in the abstract, is revealed to be an expression of opinion when read in context.

“In this case, the court undoubtedly got it right when it determined that, when viewed in context, the statements made by these clients about their attorney’s performance would be viewed by the reasonable reader as nothing more than their subjective assessment of the quality of his work on their behalf.”

PRIVILEGED IMMUNITY

The New York appeals court also determined that the contents of a letter sent to an attorney are absolutely privileged as an extension of the litigation privilege.

“The litigation privilege is fairly broad, and when there is a litigation privilege it provides complete immunity from defamation claims,” says Peter Joy, a legal ethics expert and law professor at Washington University School of Law in St. Louis. “As the court discusses, there is a public policy basis for the litigation privilege. The overarching public policy, which the court does not discuss, is that litigation privilege gives individuals a great deal of freedom of expression in pursuing their legal interests in judicial proceedings.”

The court also found that the statements were protected by the qualified privilege in common interest, which applies to members of a group or association who make statements to a person with a corresponding interest or duty in the subject matter. The New York court determined that “a client’s letter to an attorney terminating the attorney’s services and explaining the client’s perceived grounds for the termination qualifies as a communication on a subject in which sender and recipient have a shared interest.”

The court concluded that public policy also furthered free and open communications between attorneys and their clients. “In this particular case, the court focused on the additional public policy that clients and lawyers need open and honest communications for lawyers to fulfill their obligations to clients,” Joy says. “If clients had to self-censor what they told their lawyers, that would chill their speech.”

“If Mr. Frechtman had prevailed, it would have severed public policy and voided the attorney-client privilege, one of the most important privileges in American law,” says attorney Brian H. Bluver, who represented Gutterman. “Mr. Frechtman attempted to turn an attorney fee dispute into a defamation case. Fortunately, the court rejected this attempt and protected important public policy.”

Frechtman disagrees. “I was admitted to the New York state bar in 1952 and never before in over 60 years of practicing law has any client accused me of incompetence or dishonesty. In my view, the court’s decision gives clients carte blanche to disparage their attorney in order to create a reason to avoid, delay or reduce their obligations for the payment of bona fide billing for legal services, expenses and disbursements, simply by expressing their ‘opinion’ that the attorney has acted dishonestly or incompetently, regardless of whether there is any legitimate basis for the accusation,” says Frechtman, who adds that he will not appeal the ruling.

“Based on this decision,” he adds, “an attorney defamed by a client cannot sue for defamation, as the client has immunity from such a claim while other professionals such as doctors or architects are not similarly restricted.”

This article originally appeared in the April 2014 issue of the ABA Journal with this headline: “Heeding the Words: Client’s termination letters to attorney are protected from defamation suit, court says.”

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