Libel

Allegations in Complaint Against Real Estate Agent Broadly Protected Against Libel Liability

So holds the Nevada Supreme Court, applying Nevada law.

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From Williams v. Lazer, decided Thursday by the Nevada Supreme Court:

After respondent threatened to sue appellant over a text message that he perceived as defamatory, appellant filed a complaint with the Nevada Real Estate Division (NRED), alleging that respondent acted unprofessionally and unethically in a real estate matter. Respondent filed the underlying tort complaint based on appellant's NRED complaint.

Appellant, claiming that the anti-SLAPP statute and absolute litigation privilege protected her from liability, moved to dismiss…. [W]e conclude that appellant met the good faith standard under the anti-SLAPP framework because her statements were either opinions, were truthful, or were made without knowledge of their falsehood, as supported by her sworn affidavit. We further conclude that the absolute litigation privilege applies at the second prong of the anti-SLAPP analysis and that an NRED proceeding is quasi-judicial for purposes of the privilege….

Appellant Daphne Williams, an African-American woman, agreed to purchase a condominium that she was renting from the property owner. Respondent, Charles "Randy" Lazer, a licensed real estate professional, represented the seller in the sale, and Williams acted without an agent.

Williams and Lazer had communication problems during the transaction, and after delays in closing, Williams sent Lazer a text stating that she was contemplating filing a complaint with the NRED regarding what she perceived as Lazer's racist, sexist, and unprofessional behavior. Lazer responded to the text by contacting NRED, the seller, Williams's mortgage lender Bryan Jolly, an attorney, and another real estate professional to explain his perception of what occurred. Further, after the sale closed, Lazer sent a demand letter to Williams seeking several thousand dollars and an apology in exchange for not filing a tort action against her based on the text message she sent only to him.

Williams refused the demand and subsequently filed an NRED complaint, alleging that Lazer (1) "displayed unethical, unprofessional, racist and sexist behavior" during the transaction; (2) inappropriately shared confidential information with her about his personal relationship with the seller; (3) contacted the appraiser before the appraisal, which she believed was unethical based on a conversation she had with an NRED employee; (4) falsely claimed that Williams would not allow the seller's movers to enter the condominium to remove the seller's property and that Williams caused delays in closing; (5) failed to send her a fully executed copy of the signed purchase agreement; and (6) had the seller call Williams to encourage her to apologize to Lazer for her text message.

Lazer then filed the underlying complaint, alleging defamation, negligence, business disparagement, and intentional infliction of emotional distress….

[Williams'] statement that Lazer was racist, sexist, unprofessional, and unethical is a non-actionable opinion and that either her remaining factual statements are true or Lazer failed to provide evidence that Williams knew the statements were false when she made them….

In support of her anti-SLAPP special motion to dismiss, Williams provided a sworn declaration in which she described various problems she encountered in purchasing the condominium and working with Lazer. She stated that Lazer was consistently rude and unprofessional and she had "no doubt in [her] mind" that had she not been an African-American woman, Lazer would have treated her with greater respect and professionalism. She further stated her belief that every statement in her NRED complaint was either true or her reasoned opinion based on her experience with Lazer.

Lazer concedes that Williams's allegations of racism and sexism are opinions, and although he challenges her generalized statements that he acted unethically and unprofessionally, those statements were likewise opinion-based.

As we have previously observed, opinion statements are incapable of being false, as "'there is no such thing as a false idea.'" In Abrams v. Sanson, we affirmed a district court order granting the defendant's anti-SLAPP special motion to dismiss, concluding that the challenged statements calling the attorney plaintiff unethical and criticizing her courtroom behavior and methods were expressions of the defendant's personal views and thus opinions. We perceive no difference in Williams's generalized statements here, especially in light of her sworn declaration affirming the statements as her own opinions based on her experience with Lazer. See also Stevens v. Tillman (7th Cir. 1988) (holding that neither general statements charging a person with being racist, unfair, or unjust, nor references to general discriminatory treatment, without more, constitute provably false assertions of fact); Overhill Farms, Inc. v. Lopez (Cal. Ct. App. 2010) ("We agree that general statements charging a person with being racist, unfair, or unjust … constitute mere name calling and do not contain a provably false assertion of fact."). As Williams's opinion-based statements cannot be knowingly false, we conclude that she satisfied her burden as to these statements under the first prong of the anti-SLAPP framework.

Turning to the remaining statements, Williams's declaration explained that she believed every statement she made was true as well as the basis for that belief, which, under these circumstances, is sufficient to show that her statements were truthful or made without knowledge of their falsehood. While Lazer provided several declarations that allege some of Williams's statements are factually wrong, such declarations do not constitute contrary evidence to refute Williams's affidavit because they do not allege, much less show, that Williams knew any of the statements were false when she made them.

For example, Williams stated that she believed Lazer's preappraisal contact with the appraiser was unethical based on a conversation she had with an NRED employee who told her that a seller's agent is not supposed to make such contact. Although Lazer provided a declaration stating that such contact is permissible, that does not mean that Williams did not have a subjective belief that it was impermissible at the time she filed her NRED complaint. Moreover, the parties' declarations support that the gist of some of Williams's remaining statements, including that Lazer did not provide her with a copy of the fully executed purchase agreement and that he falsely claimed that she refused to allow the seller to remove property from the condo, were true, and thus made in good faith. Accordingly, we conclude that Williams met her burden of showing that she made the remaining statements in good faith and thus satisfied her burden under the first prong of the anti-SLAPP framework….

Under the second prong of the anti-SLAPP analysis, Lazer had the burden of showing that his claims had at least minimal merit in order to proceed with the litigation…. [We] hold that the absolute litigation privilege applies at the second prong of the anti-SLAPP analysis because a plaintiff cannot show a probability of prevailing on his claim if a privilege applies to preclude the defendant's liability….

[T]he absolute litigation privilege extends "to quasi-judicial proceedings before executive officers, boards, and commissions." A proceeding is quasi-judicial for purposes of the absolute litigation privilege if it "(1) provide[s] the opportunity to present and rebut evidence and witness testimony, (2) require[s] that such evidence and testimony be presented upon oath or affirmation, and (3) allow[s] opposing parties to cross-examine, impeach, or otherwise confront a witness."

We conclude that an NRED proceeding initiated by a complaint from a party in a real estate transaction is quasi-judicial because it meets the criteria outlined in Spencer…. In order for the absolute litigation privilege to apply to statements made in the context of judicial or quasi-judicial proceedings, "(1) a judicial proceeding must be contemplated in good faith and under serious consideration, and (2) the communication must be related to the litigation." Thus, "the privilege applies to communications made by either an attorney or a nonattorney that are related to ongoing litigation or future litigation contemplated in good faith."

We conclude that Williams filed her NRED complaint in good faith and in relation to litigation. Because Williams's NRED complaint is a complaint in a quasi-judicial proceeding, the absolute litigation privilege applies and protects Williams's NRED complaint. Because all of Lazer's claims derive from the allegedly defamatory statements contained in Williams's NRED complaint, which is protected by the absolute litigation privilege, we hold that he cannot show by prima facie evidence a probability of prevailing on his claims….

Williams's statements either were opinions incapable of being knowingly false, were true, or were not knowingly false. Lazer's declarations asserting that Williams's statements were factually false are insufficient to show that she made the statements in bad faith because his declarations do not show that she knew the statements were false when she made them. The district court thus erred in determining that Williams did not meet her burden under the first prong of the anti-SLAPP analysis.

Further, statements made in an NRED complaint are subject to the absolute litigation privilege, as proceedings before the real estate commission are quasi-judicial, and whether the privilege applies to particular statements is relevant to the second prong of the anti-SLAPP analysis because a plaintiff cannot prevail on defamation-based claims and related torts if the privilege applies. Under the facts here, the absolute litigation privilege protects Williams's NRED complaint because the complaint itself initiated a quasi-judicial proceeding. Accordingly, the district court erred in concluding that Lazer demonstrated a probability of prevailing on his defamation claims. Therefore, we reverse the district court's order denying Williams's anti-SLAPP special motion to dismiss and remand with instructions that the district court grant the motion….

Congratulations to Marc Randazza and Alex Shepard, who represented Ms. Williams.