A-MAC SALES & BUILDERS V DETROIT NEWS INC
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STATE OF MICHIGAN
COURT OF APPEALS
A-MAC SALES & BUILDERS,
UNPUBLISHED
September 30, 2004
Plaintiff-Appellant,
v
DETROIT NEWS, INC., CHARLES HURT and
MELVIN CLAXTON,
No. 247582
Wayne Circuit Court
LC No. 00-038695-CZ
Defendants-Appellees.
Before: Fitzgerald, P.J., and Neff and Markey, JJ.
PER CURIAM.
Plaintiff appeals as of right the trial court’s order granting defendants’ motion for
summary disposition and dismissing its complaint with prejudice. We affirm.
This case stems from the Detroit Public School’s Capital Improvement Program
(hereinafter CIP). Plaintiff was the program manager for at least a portion of the CIP. Given the
extensive size of the CIP1, defendant, Detroit News, started an extensive investigation lasting
months. As a result of the investigation, defendants published a series of articles entitled:
“Wasted Dollars, Broken Buildings” dealing with the CIP. This series of articles appeared in the
newspaper from October 1999 to December 1, 1999. Plaintiff took exception to some of the
information contained in these articles, claiming that they were false and defamatory. On appeal,
plaintiff claims that the lower court incorrectly found that twelve challenged statements in the
article that appeared on November 29, 1999, did not meet the requisite standard for libel, and
thus, incorrectly granted summary disposition in defendants’ favor.
This Court reviews an order granting summary disposition de novo. A motion for
summary disposition pursuant to MCR 2.116(C)(10) tests the factual support of a claim. After
the trial court reviews the evidence in a light most favorable to the nonmoving party, it may grant
summary disposition if no genuine issue concerning a material fact exists and the moving party
is entitled to judgment as a matter of law. Ireland v Edwards, 230 Mich App 607, 612-613; 584
1
In 1994, Detroit voters approved a $1.5 billion bond issue to fund the CIP.
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NW2d 632 NW2d (1998). Whether the evidence presented in a defamation claim is sufficient to
support a finding of actual malice is a question of law. This Court must consider whether the
evidence is sufficient for a rational finder of fact to find actual malice by clear and convincing
evidence. Id. at 622.
Summary disposition is an essential tool courts must use to protect First Amendment
rights. Id. at 613. A communication is defamatory if it tends to lower plaintiff’s reputation in
the community or deters third parties from associating or dealing with plaintiff. Id. at 614.
Plaintiff can establish a defamation claim by showing:
(1) a false and defamatory statement concerning the plaintiff; (2) an unprivileged
publication to a third party, (3) fault amounting at least to negligence on the part
of the publisher, and (4) either actionability of the statement irrespective of
special harm (defamation per se) or the existence of special harm caused by the
publication (defamation per quod). [Id.]
In addition to establishing these common law requirements, plaintiff must also comply with
constitutional requirements. Rouch v Enquirer & News of Battle Creek, Michigan (After
Remand), 440 Mich 238, 251; 487 NW2d 205 (1992). One such constitutional requirement
holds that if plaintiff is a public figure, the plaintiff must establish by clear and convincing
evidence, that defendants published the defamatory statements with actual malice. Collins v
Detroit Free Press, Inc, 245 Mich App 27, 32; 627 NW2d 5 (2001). Courts define actual malice
as actual knowledge of falsity or reckless disregard of whether the statement is false. Id. at 3233 (quotation omitted). Plaintiff concedes on appeal that it is a limited-purpose public figure in
this case. The parties do not dispute the fact that defendants published the contested statements.
1. Statements related to the hiring of O’Brien-Kreitzberg, Inc.
It is undisputed that plaintiff entered into a contract with O’Brien-Kreitzberg, Inc., a New
York firm, which categorized the latter as a consultant. Plaintiff’s relationship with this firm and
the comments about that relationship in the November 29, 1999, article forms a major portion of
plaintiff’s claim of libel.
A
The first statement from the article that plaintiff challenges is: “The company in charge
[plaintiff] apparently breached its contract last spring when it hired an outside firm to handle
several of its most important duties.” Andrew McLemore, Sr., stated at his deposition that
O’Brien-Kreitzberg helped plaintiff prepare the master plan, an operation manual, and the master
schedule. The third statement is directly related to the first, and plaintiff offers the same
argument concerning two statements. The third statement was: “[Plaintiff] is prohibited from
subcontracting any of its management duties ‘without the prior written consent of the board,’
says its contract with the school district.” Plaintiff claims that these statements are patently false
and that defendants possessed evidence establishing that plaintiff did not hire any outside firm to
handle any of its most important work and that any relation with the outside firm did not violate
the contract. We disagree.
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Although plaintiff contends that the services performed by O’Brien-Kreitzberg were not
“its most important duties,” these duties are specifically mentioned in the scope of services
section of the program management services agreement between plaintiff and the Detroit Public
Schools. Raymond McLemore (identified as a principal of plaintiff) testified at his deposition
that plaintiff’s most important duties included scheduling the project and planning with the
architects. He also stated that O’Brien-Kreitzberg worked on the master schedule and the
operation manual. He admitted that these activities were program management services. Ralph
Boyd (identified by defendants as a Senior Project Manager for O’Brien-Kreitzberg, which is not
disputed by plaintiff) stated at his deposition that O’Brien-Kreitzberg prepared the program
management and procedures manual, developed a program level master schedule, a program
management master plan, and reviewed the cost management system. These facts support the
truth and accuracy of the statements that plaintiff had O’Brien-Kreitzberg handling some of its
“most important duties.” Plaintiff has failed to meet its burden to demonstrate the falsity of these
statements inasmuch as plaintiff’s own principals’ statements support the truth of the challenged
statement.
The remaining question is whether plaintiff proved falsity of the portion of the statement
that claims plaintiff’s agreement with O’Brien-Kreitzberg violated the program management
services agreement. The parties dispute whether O’Brien-Kreitzberg was a subconsultant or a
subcontractor under their contract. Interpretation of a contract is a question of law, reviewed de
novo by this Court. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463; 663 NW2d 447
(2003). The primary goal in construing a contract is to honor the intent of the parties. Liggett
Rest Group, Inc v City of Pontiac, 260 Mich App 127, 136; 676 NW2d 633 (2003). This Court
achieves this goal by applying the contract language as written. Id.
Viewing together the two contract sections identified by the parties, we find that, at the
very least, a subcontract occurs when plaintiff enters into an agreement for the provision of any
of the services or additional services listed in the agreement. The deposition testimony indicates
that O’Brien-Kreitzberg performed those services. Therefore, a fair interpretation of the contract
indicates that plaintiff violated the contract by not receiving prior written approval of O’BrienKreitzberg’s involvement in the work before entering into an agreement with them. Plaintiff has
failed to prove the statements false, as is required. Given that plaintiff has failed to establish
falsity of challenged statements one and three, it has not established the requisite constitutionally
required malice and has not established libel.
B
Plaintiff also challenges the statement: “[Plaintiff], a Detroit firm, violated its contract
when it quietly hired national construction management firm O’Brien-Kreitzberg of New York to
perform aspects of the construction effort that [plaintiff] hadn’t handled.” Plaintiff takes issue
with use of the term “quietly.”
The record supports the finding that the statement is true. Raymond McLemore indicated
that plaintiff did not inform the Board of its intentions before entering the contract with O’BrienKreitzberg. Kifah Jayyousi, Assistant Superintendent for Facilities Management and Capital
Improvements for DPS, wrote in a letter to Andrew McLemore, Sr., that he had not received any
detailed information on O’Brien-Kreitzberg. Plaintiff only points to three letters written after it
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entered into its agreement with O’Brien-Kreitzberg to support its argument that it did not
“quietly” hire O’Brien-Kreitzberg; these letters do not reveal anything regarding the hiring
process. They merely indicate that plaintiff’s relationship with O’Brien-Kreitzberg was not kept
quiet after the contract was entered. Therefore, we find that plaintiff has failed to demonstrate
that the claim that it “quietly” hired O’Brien-Kreitzberg is false and has failed to establish libel.
C
The next statement challenged by plaintiff is: “Shortly after hiring O’Brien-Kreitzberg, a
master schedule, a program management master plan and a procedures manual was produced for
[plaintiff], said Ralph Boyd, a senior project manager with O’Brien-Kreitzberg. Further, Boyd
said in a deposition earlier this month, [plaintiff] passed the work off as its own.” Plaintiff takes
exception to the “passing off the work as its own” contention.
The only evidence that plaintiff points to in order to establish that this statement is false is
the testimony of Raymond McLemore. He stated that no documents were produced indicating
that O’Brien-Kreitzberg was working on the project until the operations manual was released
with both companies’ logos. He indicated that the schedule did not include such a logo.
Basically, plaintiff offers no evidence to support falsity besides its own partial denial. This is
insufficient to establish clear and convincing evidence of actual falsity. Locricchio v Evening
News Ass’n, 438 Mich 84, 122, 128; 476 NW2d 112 (1991).
Plaintiff argues that defendants recklessly disregarded the falsity of the statement by not
investigating Boyd’s statement further. Plaintiff repeatedly makes claims in this argument
without any documentary support. Plaintiff claims that defendants should have known that the
relationship between plaintiff and O’Brien-Kreitzberg had soured, but offers no explanation of
why or how defendants would have this knowledge. Plaintiff claims that documents and
witnesses exist contradicting Boyd’s statement, but attached none of this evidence to its brief in
opposition to summary disposition. Plaintiff claims that defendants knew of these documents,
but again fails to document why or how defendants would know of these mysterious documents.
Plaintiff implies that Boyd is not a credible witness, but fails to support this beyond its own
accusation and fails to document how defendants would know of this lack of credibility. In
short, plaintiff has failed to offer any proof that the statement was false or that defendants acted
in reckless disregard of falsity. Plaintiff has simply failed to meet its clear and convincing
burden.
D
The next section of the article challenged by plaintiff states: “According to a contract
that took effect April 6, 1999, [plaintiff] was to pay O’Brien-Kreitzberg for a variety of program
management services, including a master schedule and a master plan.” There is also a second
statement in an editorial on December 1, 1999, which states: “The News has now discovered
that last April, [plaintiff] hired O’Brien-Kreitzberg, a national management firm[,] to perform
such key tasks as developing a master plan for the program.” Plaintiff has two objections to
these sentences. First, it argues that it is false that it hired O’Brien-Kreitzberg to develop a
master plan. Second, plaintiff claims that O’Brien-Kreitzberg was hired only to provide
assistance and advice.
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The project description in the agreement between O’Brien-Kreitzberg and plaintiff states
that O’Brien-Kreitzberg will provide program and project management services work on the
CIP. Work authorizations attached to the agreement state that O’Brien-Kreitzberg would
provide personnel to develop a program procedure manual and to work on the master schedule.
Andrew McLemore, Sr., stated that O’Brien-Kreitzberg helped plaintiff prepare the master plan,
an operation manual, and the master schedule. Raymond McLemore stated that O’BrienKreitzberg worked on the master schedule and the operation manual. He admitted that these
activities were program management services. Boyd stated in his deposition that O’BrienKreitzberg prepared the program management and procedures manual, developed a program
level master schedule, a program management master plan, and reviewed the cost management
system. These facts support the finding that defendants’ statements are true.
Libel does not exist where the “gist” or the “sting” of the statement is substantially true.
Northland Wheels Roller Skating Ctr, Inc v Detroit Free Press, 213 Mich App 317, 325; 539
NW2d 774 (1995) (quotation omitted). Substantial truth is an absolute defense to a defamation
claim. Collins, supra, at 33. Therefore, plaintiff failed to articulate a valid claim based on these
statements. The trial court correctly granted summary disposition.
2. Statements Regarding Conflict of Interest.
The next statements challenged by plaintiff stem from the following:
Other issues include [plaintiff’s] refusal to file a form disclosing any conflict of
interest, such as any business relationships the company has with the construction
firms it is supposed to be managing for the bond program. Such relationships
could cloud a program manager’s loyalty to the district. But one such conflict of
interest was put into place by the contract the old elected school board drafted.
That contract put [plaintiff] in a supervisory position over the remaining projects
included under a previous bond program. [Plaintiff] is the construction firm for at
least one of those unfinished jobs, a renovation of the Schools Center Building,
the district’s administrative headquarters.
Plaintiff contends that these statements are untrue because no conflict of interest existed to
report, and the School Center project was not a bond project creating a conflict of interest.
Despite plaintiff’s contention, it seems that a conflict of interest existed. The program
management service agreement states that plaintiff would act as the program manger for various
projects including the 1986 Bond Series Projects. Andrew McLemore, Jr., testified that, in fact,
the 1986 Bond Series funded part of the School Center project with which plaintiff was involved.
Plaintiff admits that it never filed a conflict of interest report. Therefore, there is adequate
support for the finding that the contested statements were true. Substantial truth is an absolute
defense to a defamation claim. Id. at 33. Plaintiff has failed to prove by clear and convincing
evidence that these statements were false, and as such, its claim must fail.
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3. Statement Concerning Plaintiff’s Performance.
Next, plaintiff contests a statement regarding a memorandum to it from Detroit Public
Schools official, Jayyousi. The article stated:
Less than two months later [than December 1998], Jayyousi wrote a confidential
memo to [plaintiff] executives, telling them: “I am very concerned about your
company’s performance as program manager on the Capital Improvement
program. . . . to date we have missed all target dates in terms of program
management activities.”
Plaintiff contends that this statement is false because it had not even entered into the agreement
making it the sole program manager at the time of the letter.
Plaintiff seems to argue that this statement implied the libel that plaintiff was not
completing projects when it should have been. Plaintiff does not contend that it was in fact
performing the work, just that it was excused from performing the work by lack of a contract.
This argument is disingenuous. The agreement itself states that it was effective retroactively to
January 1, 1999. This language clearly implies that plaintiff should have been active at least
during the months of January and February 1999. Further, it is undisputed that plaintiff had a
previous contract from 1996 which made plaintiff a co-program manager on the project.
Raymond McLemore admitted at his deposition that plaintiff continued to work under this
contract until the new contract was signed. Under the circumstances, we find that plaintiff has
failed to carry its burden of providing clear and convincing evidence that the statement was false.
4. Statements Concerning Plaintiff’s Experience and Qualifications.
Plaintiff also challenges statements about its experience and qualifications. The article
stated: “[Plaintiff] . . . was hired by the board despite having no experience managing such a
large building project.” Plaintiff contends that it, in fact, had project management experience
and that the article implied the project controlled by plaintiff was larger than it was because the
CIP was actually divided into six parts.
At his deposition, counsel asked Raymond McLemore “Up until that time, you [plaintiff]
have never been involved in such a large project, correct, either in dollar volume or the number
of individual components to the project, correct.” Raymond McLemore admitted that this was
true. He also admitted that plaintiff had never worked as a program manager prior to this
project. Andrew G. McLemore testified that plaintiff’s internal construction specialist group
together or individually had never served as a program manager to a project of the scope or size
of the CIP. In essence, plaintiff admitted that it did not have experience managing a project of
this size or character. Given these admissions, we must accept those facts as true. Substantial
truth is an absolute defense to a defamation claim. Collins, supra, at 33.
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5. Statement About Political Contributions.
Plaintiff challenges characterization of it as a “heavy contributor to the campaigns of
former elected school board members.” Plaintiff contends that it was merely an average
contributor to the board members’ campaigns. The parties do not dispute the fact that plaintiff
contributed to the campaigns. They merely debate the characterization of the amount of these
contributions. Basically, the only issue is the word “heavy.” Following the guidance of the
United States Supreme Court, this Court has stated that not all expressions of opinion are
actionable as defamation. Instead, a statement must be provably false to constitute defamation.
Ireland, supra, at 616. A subjective assertion, on the other hand, is not actionable. Id. The
disputed term in this case is such a subjective assertion. The understanding of the term “heavy”
can differ from person to person, mind to mind. It is not the type of term that can be proven
false. Therefore, we find that the statement cannot amount to defamation. Id.
6. Statement About Suspension of the Project.
The final statement challenged by plaintiff involves the suspension of the project. The
article stated:
The new school administration, put in place after the state Legislature sidelined
the elected school board, has suspended the 15-year building program approved
by the city voters in 1994 until it can be reviewed. [Plaintiff’s] role in the
program is included in that review, district chief operational officer Nate Taylor
said earlier this month.
Plaintiff claims that this statement is untrue because the bulk of its projects were not put on hold.
Plaintiff again quibbles over the use of an adjective. This time it argues that the article
implied the term “bulk,” that is, it implied that the bulk of plaintiff’s activities or projects were
suspended. The term “bulk,” like “heavy,” is a subjective term that cannot be objectively
proven. Therefore, it cannot be libel. Id. at 616. Further, plaintiff admits that all new projects
were suspended. This is exactly what the challenged statement says. Again, substantial truth is
an absolute defense to a defamation claim. Collins, supra, at 33.
7. Conclusion.
The challenged statements were either true or plaintiff failed to demonstrate falsity by
clear and convincing evidence. Therefore, they do not meet the established standard for libel
against a public figure. We find that the trial court correctly granted summary disposition in
defendants’ favor as they were entitled to judgment as a matter of law.
Affirmed.
/s/ E. Thomas Fitzgerald
/s/ Janet T. Neff
/s/ Jane E. Markey
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