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N.Y. Appellate Division 2nd Department Overrules Precedent, Holding False Imputation of Homosexuality is not Defamatory Per Se

Posted on: December 31st, 2020 by Art Leonard No Comments

In Laguerre v. Maurice, 2020 WL 7636435, 2020 N.Y. App. LEXIS 8011, 2020 NY Slip Op 07887 (2nd Dept., Dec. 23, 2020), a panel of the N.Y. Appellate Division, 2nd Department, abandoned a departmental precedent dating from 1984, Matherson v. Marchello, 100 App. Div. 2d 233, finding that today a false statement that the plaintiff was a homosexual who watched gay porn on his employer’s computer is not defamatory per se and thus a complaint to that effect must be dismissed for failure to allege special damages.  The court noted with approval the 3rd Department’s 2012 decision in Yonaty v. Mincolla, 97 App. Div. 3d 144, which was the first intermediate appellate ruling in New York to abandon prior case law on this point.  Justice Sheri Roman wrote the opinion for the panel.

Pierre Delor Laguerre was an elder in the Gethsemane Seventh Day Adventist Church in Brooklyn.  He claims that he had a falling out with Pastor Jean Renald Maurice, the defendant, which, according to Justice Roman’s summary, “initially centered around church-related issues, and that Pastor Maurice stated that, if the plaintiff ‘did not submit to him,’ Pastor Maurice would ‘crumble’ the plaintiff.”  According to the complaint, Maurice stated that he would “make false statements against the plaintiff and have the church membership vote to relieve the plaintiff of his responsibilities at the church.”  Laguerre claims that before a congregational meeting with about 300 members in attendance, Maurice made the false statement concerning Laguerre, thus prompting the congregation to vote as Maurice requested.  Laguerre is for per se defamation.

Pastor Maurice moved to dismiss the complaint on three grounds.

First, he argued, the court lacked jurisdiction because this was essentially an ecclesiastical matter.  Laguerre countered that the question of defamation could be decided as a matter of civil law without reference to any religious doctrine, and the trial judge, Justice Devin P. Cohen of Kings County Supreme Court, agreed with Laguerre’s argument on this point and denied the motion to dismiss on jurisdictional grounds, and the Appellate Division panel found this ruling to be correct.

Second, Maurice argued that his statement was privileged under the “common interest” rule, contending that a communication from a pastor to a congregation on a church-related matter could not be made the basis of a defamation claim.  While acknowledging the existence of the privilege, Justice Cohen found that Laguerre’s allegations support the argument that the privilege was lost in this case because the statement was made with “malice,” noting Laguerre’s allegation that Pastor Maurice had threatened to make a false statement about Laguerre to persuade the congregation to terminate his status.  Knowingly making a false statement of fact with malice is not privileged.  The appellate panel also found this ruling to be correct.

However, Pastor Maurice was more successful with his third argument on appeal, that the alleged statement was not defamatory per se.  Laguerre’s complaint relies on Matherson v. Marchello, cited above, to contend that in the 2nd Department a false imputation of homosexuality is automatically actionable as per se defamation.  That is, in ruling on a motion to dismiss, a trial court in the 2nd Department should presume that such a statement would harm the reputation and livelihood of the plaintiff, so the plaintiff would not have to allege special damages such as economic injury in order to maintain his action.  At the time Matherson was decided, there were rulings by all four Appellate Departments to similar effect.  However, the 3rd Department broke ranks in 2012 with Yonaty.  The Court of Appeals has not ruled on the question, so the matter is left to be decided by each Appellate Division department.  Given the state of precedent in the 2nd Department, Justice Cohen had denied the motion to dismiss on this ground as well.  Laguerre appealed Cohen’s decision on all three grounds.

Finding the reasoning of Yonaty to be persuasive, the 2nd Department now holds that Matherson and the earlier cases that it had cited “are inconsistent with current public policy,” wrote Justice Roman.  “This profound and notable transformation of cultural attitudes and governmental protective laws impacts our own consideration of stare decisis,” she wrote.  The court recited a litany of legal developments since 1984, particularly noting the Supreme Court’s 2003 decision in Lawrence v. Texas striking down as unconstitutional a Texas statute outlawing homosexual sex and that court’s 2015 decision in Obergefell v. Hodges finding a constitutional right for same-sex couples to marry.  The court also noted that New York has banned sexual orientation discrimination in employment, housing and public accommodations since 2002 and enacted its own marriage equality law in 2011.

Thus, there is today no necessary presumption that falsely calling somebody homosexual will harm their reputation, and such a statement no longer falls within the sphere of cases in which reputational harm can be assumed on ground of criminality, professional disqualification or the imputation of a “loathsome illness.”  A false statement that does demonstrably cause economic harm to the plaintiff could still be the basis of a defamation claim, but such harm would have to be alleged and factually supported in the complaint.  Although the court does not discuss the point, it seems likely that being an elder in the church did not make Laguerre an employee and so the loss of his position did not inflict an economic injury on him; otherwise, he might have alleged that as special damages.

“Based on the foregoing,” wrote Justice Roman, “we conclude that the false imputation of homosexuality does not constitute defamation per se.  Matherson’s holding to the contrary should no longer be followed.  Therefore, the plaintiff was required to allege special damages.  He failed to do so, and, consequently, his cause of action alleging defamation per se must be dismissed.”

The unanimous panel of the 2nd Department in this case included, in addition to Justice Roman, Justices Cheryl E. Chambers, Sylvia O. Hinds-Radix, and Colleen D. Duffy.  Laguerre is represented by Maurice Dean Williams of The Bronx, and Pastor Maurice by the firm of Lester Schwab Katz & Dwyer of Manhattan.

Obscure Brooklyn Appellate Ruling Protects Transgender People from Discrimination Without Saying So

Posted on: June 14th, 2018 by Art Leonard No Comments

Talk about “hiding the ball!” On June 6, a unanimous four-judge panel of the New York Appellate Division, 2nd Department, based in Brooklyn, confirmed an Order by the State Division of Human Rights (SDHR), which had adopted a decision by an agency administrative law judge (ALJ) ruling that a Port Jervis employer violated the human rights law when it discharged a transgender employee.

But nobody reading the court’s short memorandum opinion, or the short agency opinion and order, would have any idea that the case involved a gender identity discrimination claim. Surprisingly, given the novelty of the legal issues involved, only the administrative law judge’s opinion, an internal agency document, communicates what the case is actually about.

The case is Matter of Advanced Recovery, Inc. v. Fuller, 2018 N.Y. Slip Op 03974, 2018 N.Y. App. Div. LEXIS 3969, 2018 WL 2709861 (N.Y. App. Div., 2nd Dept., June 6, 2018).

Erin Fuller, a transgender woman, was fired by Mark Rea, the owner and chief executive of Advanced Recovery, Inc., the day Fuller presented a supervisor with a copy of a court order authorizing her change of name from Edward to Erin and the supervisor passed the document to Rea. Rea called Fuller into his office and, according to Fuller, said in the presence of the supervisor, “Now I have a problem with your condition.  I have to let you go.”

Rea and other company officials had been aware for some time that Fuller was transitioning, since she had presented them with a letter from her doctor in 2009 explaining her gender dysphoria diagnosis and how she would be transitioning, and on at least one occasion Rea had reacted adversely to Fuller’s mode of dress, but it wasn’t until he was presented with the legal name change that Rea apparently decided that he had enough and no longer wanted Fuller, a good worker who had been with the company more than two years.

When Fuller went back later to pick up her final paycheck, a supervisor told her that “he felt bad, but your job would be waiting for you as long as you came in wearing normal clothes.”

Attempting to escape possible liability, Rea and the company’s lawyer later came up with a termination letter that cited other reasons for terminating Fuller and said nothing about her name change, mode of dress, or gender identity, but they never sent her that letter, which first surfaced when it was offered as evidence at the SDHR law judge’s hearing on Fuller’s discrimination claim.

The discharge took place on August 4, 2010, several years before Governor Andrew Cuomo directed the SDHR to adopt a policy under which gender identity discrimination claims would be deemed to come within the coverage of the state’s ban on sex discrimination.

Fuller filed her complaint with SDHR on October 13, 2010. On the complaint form, she checked the boxes for “sex” and “disability” as the unlawful grounds for her termination.  After the company was notified of the complaint, it apparently prompted local police to arrest Fuller for altering a medical prescription, a spurious charge based on her changing the pronouns on the note written by a doctor on a prescription form after she missed a few days of work due to hospital treatment.  At the time, she didn’t think of amending her discrimination charge to allege retaliation, unfortunately, waiting until the hearing to raise the issue, by which time the judge had to reject her motion because she waited too long to assert the retaliation claim.

The agency concluded, after investigation, that it had jurisdiction over the discharge claim and set the case for a public hearing before an ALJ. At the hearing, Fuller was represented by attorneys Stephen Bergstein and Helen Ullrich, who persuaded the judge that Fuller had a valid claim and that the reasons given by the employer for firing her were pretexts for discrimination.  The same lawyers represented Fuller when the company appealed the judge’s ruling to the Appellate Division.

Relying on a scattering of trial court decisions holding that transgender people are protected from discrimination under the New York Human Rights Law, ALJ Robert M. Vespoli concluded that Fuller “states a claim pursuant to New York State’s Human Rights Law on the ground that the word ‘sex’ in the statute covers transsexuals.”

“Complainant also has a disability,” wrote Vespoli, “as that term is defined in the Human Rights Law.” The New York Human Rights Law’s definition of “disability” is broader and more general than the federal definition in the Americans with Disabilities Act, and New  York law does not have the explicit exclusion of coverage for people with “gender identity disorders” that is in the federal law.  Under New York’s law, a disability is “a physical, mental or medical impairment resulting from anatomical, physiological, genetic or neurological conditions which prevents the exercise of a normal bodily function or is demonstrable by medically accepted clinical or laboratory diagnostic techniques.”  The statute provides that a disability may also be a “record of such impairment or the perception of such impairment.”

“During the relevant time period,” wrote Vespoli, “Complainant was diagnosed with gender dysphoria. This condition falls within the broad definition of disability recognized under the Human Rights Law,” citing a 2011 decision by the agency to recognize its jurisdiction in a transgender discrimination case. The employer could not claim ignorance about Fuller’s transition, because in 2009 she had presented the company with her doctor’s letter explaining the situation, after which she began to dress and groom differently.

In his opinion dated February 20, 2015, Judge Vespoli rejected the employer’s evidence of other reasons for the discharge, finding that the proffered letter was a document created after the discharge for the purpose of litigation, that it had never been delivered to Fuller, and that the reasons it offered were pretexts for discrimination. The judge recommended awarding Fuller $14,560.00 in back pay and $30,000.00 for mental anguish caused by the discrimination.  He also recommended imposing a civil penalty on the company of $20,000.00.

The company filed objections to Vespoli’s recommendations with the Commission, but did not specifically object to Vespoli’s finding that Fuller had a disability or that the agency had jurisdiction over this case on grounds of sex and disability. The Commission’s Notice and Final Order of April 1, 2015, overruling without discussing the company’s evidentiary objections and adopting the judge’s recommendations and findings, said nothing about the details of the case, beyond noting that Fuller had complained of discrimination because of sex and disability.

The company’s appeal to the court again did not explicitly contest the ruling that the statute covers the case, instead urging the court to find that the ruling was not supported by substantial evidence of discrimination. Perhaps because the company’s appeal did not raise the question whether the Human Rights Law bans discrimination because of gender identity, the Appellate Division’s ruling also  did not  mention that the complainant is a transgender woman, and did not discuss the question whether this kind of case is covered under the disability provision.  Rather, the court’s opinion recites that the complainant alleged “that the petitioners discriminated against her on the basis of sex and disability,” and that the agency had ruled in her favor.  “Here there is substantial evidence in the record to support the SDHR’s determination that the complainant established a prima facie case of discrimination, and that the petitioners’ proffered reasons for terminating the complainant’s employment were a pretext for unlawful discrimination.  The petitioner’s remaining contentions are either not properly before this Court or without merit.”

Of course, Fuller’s brief in response to the appeal would have mentioned this issue, and SDHR, which cross-petitioned for enforcement of its Order, mentioned the issue as well.

The court wrote that there is “substantial evidence in the record” to support the agency’s ruling, so the court presumably looked at the record, including the ALJ’s opinion, and was aware that this was a gender identity discrimination claim.  The appellate panel surely knew that this was an important issue in the case.

Cursory research in published New York court opinions would show that there is no prior appellate ruling in New York finding that a gender identity claim can be asserted under the Human Rights Law’s prohibited grounds of “sex” and “disability.” The court took its time on this case, waiting until June 6, 2018, to issue a ruling upholding an administrative decision that was issued on April 1, 2015.  Despite taking all this time, the court produced an opinion that never mentions these details, that provides no discussion of the ALJ’s analysis of the jurisdictional issue, and that does not expressly state agreement with the trial court ruling that Judge Vespoli specifically cited in support of his conclusions.

This may be the first case in which a New York appellate court has affirmed a ruling holding that an employer violated the state’s Human Rights Law by discriminating against an employee because of her gender identity, but you wouldn’t know it by reading the court’s opinion. While the court’s failure to mention the doctrinal significance of its ruling may be explainable because the employer did not raise the issue on its appeal, it’s omission nonetheless renders the decision basically useless as an appellate precedent.

One can fairly criticize the court for failing to play its proper role in a system of judicial precedent to produce a decision that can be referred to by later courts. The judges whose names appear on this uninformative opinion are Justices Mark C. Dillon, Ruth C. Balkin, Robert J. Miller, and Hector D. LaSalle.

Governor Cuomo’s directive, issued while this case was pending before the Appellate Division, actually reinforced existing practice at the State Division of Human Rights, as the earlier opinions cited in Judge Vespoli’s opinion show, but in the absence of an explicit appellate ruling, enactment of the Gender Identity Non-Discrimination Act remains an important goal and its recent defeat in a Senate committee after renewed passage by the Assembly is more than merely a symbolic setback for the community.

A legal team of Caroline J. Downey, Toni Ann Hollifield and Michael K. Swirsky represented SDHR before the Appellate Division, which had cross-petitioned for enforcement of its decision. Port Jervis lawyer James J. Herkenham represented the company, and Stephen Bergstein of Bergstein & Ullrich presented Fuller’s response to the appeal.

 

 

 

 

 

 

New York Appeals Court Allows Breach of Contract Claim on Alleged Joint/Venture Partnership Agreement of Lesbian Couple

Posted on: November 14th, 2013 by Art Leonard No Comments

A panel of the New York Appellate Division, 2nd Department, in Brooklyn, ruled on November 13 that a lesbian can sue her former same-sex partner for breach of an alleged contract that they would share assets equally, including retirement contributions and earnings, after their relationship ended.   While agreeing with the trial judge, Kings County Supreme Court Justice Yvonne Lewis, that plaintiff Laura Dee could not pursue an equitable claim on theories of constructive trust, unjust enrichment or action for an accounting, Justice Leonard B. Austin wrote for the court that Dee’s allegations provided a sufficient basis for a breach of contract claim.  One member of the four-judge panel, Presiding Justice Mark C. Dillon, wrote a dissenting opinion asserting that Dee had failed to allege that the parties had any agreement about what would happen if their relationship ended.

Laura Dee and Dena Rakower “lived together in a committed, same-sex relationship for nearly 18 years,” according to Justice Austin’s opinion.  They raised two children together.  Each of them was the biological mother of one of the children and the adopted mother of the other.  In 1996 they purchased a house as “joint tenants with rights of survivorship.”  After their first child was born, Dee alleges that they decided, in light of the cost of child care, that she would give up her full-time job and work part-time so that she could “be home with the child (later, children) and perform other non-financial services for the benefit of the family and for the parties’ partnership and/or joint venture.”  Rakower would continue working full-time.

Dee claimed that there was a mutual unwritten agreement about shared assets.  That is, they recognized that Dee would be making a non-economic contribution to the relationship by staying home to care for their children, and that Rakower “would be earning more income for, and [Dee] would be contributing more non-financial services to, the parties’ partnership/joint venture.”  Consequently, Dee claims, the women “specifically agreed to share equally in all financial contributions made by each of them and that such contributions were for their mutual benefit.”  As Justice Austin describes Dee’s allegations, “the parties allegedly specifically discussed that [Rakower] would continue to accrue retirement savings while [Dee] would no longer be able to, and agreed that [Dee] would be entitled to one half of [Rakower’s] retirement contributions and earnings for the period that [Dee] did not work at a job that provided her with a retirement plan.”  The parties split up before New York enacted marriage equality, so they were never married and could not use the state’s Equitable Distribution Law as a basis to divided up assets upon termination of their relationship.

Dee filed suit after the split-up, claiming, among other things, that she was entitled to have an accounting of the amount of money to which she was entitled under this agreement, and to have Rakower pay it over to her, either on a theory that Rakower had a contractual duty to do so, or alternatively that Dee had an equitable claim to the money.  Dee’s equitable claim pursued alternative theories: either that Rakower be treated as holding Dee’s share of the assets as a constructive trustee for Dee, or that Dee was entitled to the money on the theory that allowing Rakower to retain it under the circumstances would be unjust enrichment of Rakower.

Justice Lewis of Supreme Court in Brooklyn granted Rakower’s motion to dismiss these claims entirely, concluding that Dee’s factual allegations did not support any of these legal theories.

Reversing Justice Lewis on the contract claim, Justice Austin wrote, “These factual allegations adequately set forth the existence of a contract pursuant to which the plaintiff would quit working full-time, thereby ceasing to earn money toward her own retirement plan, and pursue part-time work enabling her to stay home to care for the parties’ children, in exchange for a one-half share in the defendant’s retirement accounts accrued during those years that the plaintiff refrained from working at a job which provided retirement benefits.”   These allegations, if proven at trial, would sufficiently show that each party assumed an obligation to the other for their mutual benefit, the essence of a contractual agreement.  Since Dee also alleged that Rakower breached their agreement by refusing her request for the money, the basic elements of a breach of contract claim were met.  Rakower, of course, is denying these allegations, but that is not relevant when the issue is whether the court should dismiss the case before trial for failure by the plaintiff to allege the necessary facts to state a legal claim.

“The fact that the alleged agreement was made by an unmarried couple living together does not render it unenforceable,” Austin wrote, pointing to an important 1980 decision by the New York Court of Appeals, Morone v. Morone, which established that such agreements between cohabiting unmarrid couples could be enforceable as contracts, “provided only that illicit sexual relations were not part of the consideration of the contract.”  Justice Austin found this case sufficiently similar to Morone to come within the scope of that precedent.

In his dissent, Justice Dillon argued that even if there was some oral agreement, it was not clear from Dee’s allegations that the parties had specifically agreed about what would happen if their relationship ended.  Giving a close reading to Dee’s allegations, he saw only an agreement that within their relationship there would be a sharing of assets, with each party’s contributions, whether economic or non-economic, being for the joint benefit of both of them.  Dillon argued that the court could not make a contract for the parties, only enforce whatever contract they actually made, and he did not think that Dee had alleged any specific agreement about what would happen if their relationship ended.

Austin’s responded that Dee’s allegations were sufficient, writing, “The plaintiff’s failure to specifically allege that there was a ‘meeting of the minds’ as to how the assets would be distributed upon the termination of the parties’ relationship does not compel the conclusion that the complaint fails to state a cause of action to recover damages for breach of contract.  There is no requirement that a breach of contract cause of action include such an allegation in order to survive a motion to dismiss . . .  where the complaint sets forth all of the elements necessary to plead a breach of contract cause of action.”  Austin found that Dee’s allegations included “sufficient definiteness to the material terms of the alleged agreement between the parties to establish an enforceable contract.”  That is, if a court ultimately found at trial that a contract was made, Dee’s allegations, together with evidence offered at trial, could provide the basis for a court to decide what to award as damages.

As to the constructive trust theory, Austin found that Rakower had correctly responded in this appeal that under the Employee Retirement Income Security Act, the money in her retirement account could not be subjected to a constructive trust.  Even though she hadn’t made that argument to Justice Lewis, “it is a legal argument that appears on the face of the record and could not have been avoided had it been brought to the attention” of the trial judge.  Austin also found that Dee had failed to allege that Rakower had been enriched at Dee’s expense, a necessary allegation for an unjust enrichment case.  He also found that Dee’s allegations fell short of those necessary for an equitable action for an accounting.

Thus the equitable claims are out of the case, but the breach of contract claim is revived for trial.  Dee also asserted other claims against Rakower, not specified in the appellate court’s opinion, so the case now resumes in Supreme Court in Brooklyn, including the contracts claim.

Michele Kahn represents Dee and David P. Rubinstein represents Rakower in this litigation.