RAYMOND G. CHAMBERS v. PHILIP J. SCUTIERI JR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4831-10T1

RAYMOND G. CHAMBERS and WESRAY

CAPITAL, L.L.C., as successor

of Wesray Capital Corporation,

Plaintiffs-Respondents,

v.

PHILIP J. SCUTIERI, JR.,

Defendant-Appellant,

and

JOSEPH CATULLO, NICOLE CAMPBELL,

MATTHEW L. CARUSO, MATTHEW CLANCY,

RANDI CLANCY, ZACHARY CLANCY, APRIL

DEGRAW, DANIEL DEGRAW, KATHY HEAVE

and JOSEPH ZAKRZEWSKI,

Defendants.

____________________________________

April 4, 2013

 

Argued March 20, 2013 - Decided

 

Before Judges Axelrad, Haas and Happas.

 

On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-0089-08.

 

Daniel A. Bushell (Bushell Appellate Law, P.A.) of the Florida bar, admitted pro hac vice, argued the cause for appellant (Lite DePalma Greenberg, L.L.C. and Mr. Bushell, attorneys; Mr. Bushell, of counsel; Richard A. Morgan (Buchanan Ingersoll & Rooney, P.C.) of the Florida bar, admitted pro hac vice, Jennifer Olmedo-Rodriguez (Buchanan Ingersoll & Rooney, P.C.) of the Florida bar, admitted pro hac vice, and Christopher J. Dalton, on the brief).

 

Lawrence S. Lustberg argued the cause for respondents (Gibbons P.C. and Genova Burns Giantomasi & Webster, L.L.C., attorneys; Angelo J. Genova and Kathleen Barnett Einhorn, of counsel; Celia S. Bosco, Rajiv D. Parikh, Robert W. Ferguson, III, and Ms. Barnett Einhorn, on the brief).

PER CURIAM

In this appeal, we address the issue of whether a trial court, after conducting a bench trial, may issue a permanent injunction preventing defendant from continuing to extort and defame plaintiff with knowingly false statements defendant made with actual malice. We also consider whether the trial court was permitted to make findings concerning the defamatory nature of the statements after a bench trial or whether the matter should have been tried before a jury. After reviewing the record in light of the contentions advanced on appeal, we determine a permanent injunction preventing defendant's continued extortion and defamation of plaintiff was wholly appropriate and that the trial court properly exercised its discretion in conducting a bench trial prior to ordering this equitable remedy. We therefore affirm the trial court's decision in all respects.

 

I.

The following facts were presented at a twenty-day trial conducted by Judge Stephan Hansbury between January 3, 2011 and March 3, 2011. Plaintiff Raymond Chambers is a businessperson who lives in Morristown. Defendant Philip Scutieri, Jr. has lived in Florida since the 1960s. Plaintiff's friend, Frank Adubato married defendant's sister, Joan. Through Adubato, plaintiff met defendant's mother, Delphine and father, Philip Scutieri, Sr. (Senior) and he developed a relationship with them. Plaintiff testified he regarded Delphine as his "second mother." Although plaintiff and defendant never had a close relationship, they saw each other often during the 1960s and 1970s.

Senior owned Murdock Equipment Corp. (Murdock), an equipment leasing company, and he co-owned United Foundation Corporation (United), a paving business with his wife. United leased all its equipment from Murdock. In 1974, Senior and Delphine were indicted for tax fraud for failing to pay federal income taxes for United. As part of a plea agreement which included the dismissal of the charges against Delphine, Senior pled guilty in exchange for a probationary sentence. Senior also agreed to transfer his ownership in Murdock so United could reduce its overall tax liability. However, under the terms of the plea agreement, this transfer could not be made to a "blood relative." Thus, Senior agreed to irrevocably transfer his interest in Murdock to his son-in-law, Adubato. At this time, defendant was in Florida working on his own business ventures, which included the ownership of a hotel.

In 1975, Adubato met with plaintiff and expressed an interest in selling Murdock's equipment so he could use the proceeds to fund other ventures. Plaintiff purchased the equipment through Marketex, a company he owned with two partners. Marketex agreed to pay Adubato with an installment note for $500,000 at six percent interest payable over ten years. Marketex subsequently sold the equipment at auction and, over the course of the next ten years, it paid off the installment note to Adubato.

In 1977, plaintiff and his two Marketex partners formed Hampshire Acquisition Corp. (Hampshire) and, together with Adubato, began looking for investment opportunities in which Adubato "could play an active role." The group identified Louis Lefkowitz & Bro., Inc. (Lefkowitz), a New Jersey leather company, as a potential acquisition opportunity. Hampshire and Adubato formed HAC Corp. (HAC) to acquire Lefkowitz and each invested a share of the purchase price.

In May 1978, Senior died. To assist with legal issues arising from Senior's ownership of property in New Jersey, Delphine sought Adubato's assistance in administering the estate. At Adubato's request, plaintiff referred Delphine to Marie Garibaldi, Esq. to assist Delphine in the preparation of the estate tax returns and in responding to an IRS examination of the estate.

Nineteen years passed. During this period, plaintiff partnered with former Secretary of the United States Treasury, William E. Simon, to form Wesray Corporation, a private equity investment firm based in Morristown. Through this company, plaintiff and Simon sought and acquired subsidiaries or divisions of larger corporations through leveraged buyouts and then sold or traded these entities for profit. Before the business was terminated in 1989, Wesray Corporation had acquired approximately thirty-five companies, including Gibson Greeting Cards (Gibson), Avis Car Rental, Proctor Silex, and Wilson Sporting Goods.1

Plaintiff retired in 1989 and became involved in various charitable, humanitarian and philanthropic efforts. Among other things, he and his wife agreed to pay the college tuition for 1,000 Newark school children. Plaintiff also co-founded the Millennium Promise, which helps African villages grow crops and build schools and medical clinics.2

Defendant had also done well with his business enterprises. By 1997, his net worth was approximately $50 million. He continued to live in Florida.

In November 1997, defendant testified he received a telephone call from Delphine, who informed him Adubato was having an affair, had left Joan, and "had walked off with the store[,]" referring to two apartment complexes Delphine had previously sold to Adubato and Joan. Delphine alleged Adubato had converted the apartment buildings into his name in order to deprive her and Joan of income. Delphine said nothing to defendant about plaintiff or Wesray having any involvement in these transactions.

Joan testified she also had no basis to believe plaintiff was involved and she did not believe that plaintiff had ever taken anything from her family or Senior's estate. Joan testified that Adubato was the true owner of Murdock. Joan also confirmed that she and Adubato purchased the apartment buildings from Delphine and paid her $9,600 per month toward the mortgage Delphine held. Joan reconciled with Adubato shortly after Delphine's telephone call to defendant.

Nevertheless, when defendant could not immediately locate Adubato, he called plaintiff and alleged there were problems with the administration of Senior's estate. Defendant arranged to meet plaintiff at a coffee shop in Morristown to discuss the matter. Once there, defendant accused plaintiff of stealing Senior's money and using it to fund the acquisition of Lefkowitz, Wesray, and the leveraged buyouts, particularly the one involving Gibson. Defendant alleged Senior and plaintiff had a "50/50" business arrangement and that, after Senior died, plaintiff and Adubato converted Senior's businesses into their own through the improper administration and probate of Senior's estate. Defendant also alleged that, even though Senior had transferred Murdock to Adubato as part of his plea agreement, Senior still maintained control of that company and Adubato had improperly transferred its assets to plaintiff.

Plaintiff was distraught by these allegations. He told defendant his claims were false. In response, defendant demanded that plaintiff pay him $420 million to resolve the matter. Defendant's own notes from this meeting and from several pre-meeting telephone calls state defendant told plaintiff "I am extremely mindful of your long and expensive road to build your reputation"; "I want you to come up with a number"; and "I think it's in your best interest to get this thing done." Defendant's notes also state he told plaintiff "no one will ever hear a word. No one."

Plaintiff refused defendant's demand for payment and the meeting concluded. That evening, plaintiff wrote a letter to Delphine stating defendant "had a good deal of misinformation and lacked other information." He then outlined what had occurred in the Murdock transaction and the subsequent purchase of Lefkowitz. Plaintiff also told Delphine he "would share everything I have with you," meaning any business records she or defendant would like to inspect.

Significantly, defendant made his allegations against plaintiff without looking at any documents and without undertaking any investigation of the facts. Senior had been required to transfer his ownership in Murdock to Adubato as a condition of his plea agreement. Both the United States Attorney and the IRS, in its examination of Senior's estate, concluded Senior had successfully transferred Murdock to Adubato. No evidence was presented to support defendant's claim that Senior nevertheless still maintained control of the company. Indeed, between 1977 and 1997, neither Senior, Delphine nor defendant made any claim concerning an ownership interest in the company.

Similarly, there was no evidence Senior had been involved in Lefkowitz. The original stock certificates produced at trial proved Senior had never been a stock holder. As was the case with Murdock, Lefkowitz was not listed as an asset on the estate tax return prepared by Garibaldi.

Likewise, there was no record support for defendant's claim that Senior's funds had been used to fund the acquisition of Gibson. Neither Senior nor Lefkowitz are mentioned in the closing books related to this transaction.

In December 1997, plaintiff received a response to his letter to Delphine, with a draft complaint attached making the same allegations defendant had made during their meeting. The complaint sought compensatory and punitive damages for malicious fraud, conspiracy, and "fleec[ing] the Scutieri family." However, the complaint was never filed. Thereafter, plaintiff and his attorneys provided defendant and his counsel with information and documentation refuting defendant's claims.

Over the next seven years, defendant spent approximately $100,000 on a third-party investigation of his claims against plaintiff. He retained investigators and a forensic accounting firm. Despite his efforts, defendant admitted he found no documents showing any transfer of money or assets from Senior or his estate to plaintiff. He admitted his investigators found no evidence that plaintiff had committed any crimes. No documents from the investigation were produced at trial and none of the investigators testified.

By mid-2007, defendant had fallen on hard financial times. His net worth of $50 million had been lost, his hotel was on the verge of bankruptcy, and he was in dire financial straits. It was at this point that defendant commenced the campaign against plaintiff and Wesray that is the subject of the current appeal.

In the fall of 2007, defendant hired his friend, Joseph Catullo to organize and oversee a picketing operation against plaintiff. The picketing began in November 2007 and ended in May 2008. During this period, Catullo staged twenty-three days of picketing in front of Wesray's offices and in several prominent Morristown locations, including around the Morristown Green, a historical park located in the town center, and at the municipal airport. At least a dozen paid picketers participated in each event. Defendant spent over $20,000 on this operation.

The picket signs, all composed and created by defendant, asserted in various ways that, in the 1970s, plaintiff and Wesray had stolen documents, money, and other assets belonging to Senior, which should have passed to Delphine after Senior's death. The signs accused plaintiff and Wesray of committing various crimes, including theft, fraud, tax fraud, and refusing to repay stolen money.

The following are specific examples of the language found on these signs: "30 YEARS STATE PRISON FOR GRAND THEFT"; "WESRAY PARTNERS CHEAT 98-YEAR OLD WIDOW!"; "WESRAY Partners Cheat 98-Year Old Widow"; "TAX FRAUD[,] GRAND THEFT"; "WESRAY Began With TAX FRAUD and Ended Up With GRAND THEFT"; "Is This The Largest Theft in U.S. HISTORY[?] You Be The Judge"; "Defrauded! . . . He'd better hurry or he won't get to see me in Heaven" (with a photo of defendant's mother); "Coming Soon! The Unraveling Of The Raymond G. Chambers Myth" (with a photo of plaintiff); "It Began as a Broken Promise . . . and Resulted in Grand Theft" (with a photo of plaintiff); "WESRAY Fraud! Newly Discovered Evidence Reveals 98-Year Old Widow Defrauded of Fortune"; "What Do These Men Have in Common Both Are Accused of Fraud and Grand Theft That Includes Stealing Millions From Unwitting Investors" (with photos of plaintiff and Bernard Madoff); "WHY WOULD THIS MAN OFFER TO SHARE EVERYTHING WITH A 98-YEAR OLD WIDOW?" (with a photo of plaintiff); and "$5 MILLION BRIBE OFFERED TO COVER UP GRAND THEFT[.]"

When a licensed investigator hired by plaintiff questioned Catullo as to the purpose behind his picketing, Catullo said that defendant had "a difference" with plaintiff, and that "the picketing would stop" when "[plaintiff] agreed to meet with [defendant] and agreed to the terms and conditions of his demands."

In January 2008, plaintiff and Wesray filed a complaint in the Chancery Division against Catullo, alleging defamation, invasion of privacy, and intentional infliction of emotional distress. The matter was subsequently transferred to the Law Division.

In October 2008, defendant started mailing over 10,000 pamphlets and document-containing compact discs, all containing the same statements, accusations, and photos. Defendant repeated those mailings in January 2009. However, before mailing anything, defendant sent the materials first to plaintiff, his attorney, or both. Defendant composed at least ten different pamphlets, and sent each to over 4,500 recipients. His mailing list included a wide variety of people and entities, including the Secretary General of the United Nations and the offices of all of its members, all members of the United States Congress, many museums, and various global charities and charitable foundations.

The following are specific examples of the language contained in these materials: "The Shameful Unraveling of The Raymond G. Chambers Myth"; "See For Yourself the Documents That Unravel the Disturbing Truth About Raymond G. Chambers"; "The Raymond G. Chambers Myth"; "BETRAYED! Chambers Commits Perjury!"; "Florida's 11th Circuit Determines Scutieri's vs. Chambers' Grand Theft Case Shall be moved to New Jersey"; and "Warning to the Elderly! A Predator may be Living in your Neighborhood[.]"

In addition, the pamphlets contained a telephone number if the recipient wanted more information, and defendant received "a few, a couple" of calls, "just inquiries." In January 2010, defendant sent a new pamphlet to plaintiff's counsel, Angelo Genova, Esq., with a handwritten note that said: "Angelo, I have not sent many of these out . . . Perhaps this is a good place to Stop . . . Your Thoughts. Phil."

Simultaneously with his mailings, defendant created an internet website, named "legendsandliars.com," which contained the same statements, accusations, and photos. He promoted his website on his pamphlets, and he purchased advertising on the internet search engine, www.Google.com because he wanted "everybody on the planet" to read or hear his accusations against plaintiff and Wesray. As of January 2010, the website had been accessed at least 40,000 times. On cross-examination, defendant admitted he had no knowledge of plaintiff having been charged with any crime, had no documents showing an actual transfer of money or assets from Senior to plaintiff, and could not "provide the detail" of any crime committed by plaintiff or Wesray.

In May 2010, plaintiff and Wesray filed their final amended complaint, which streamlined their allegations of defamation, defamation per se, and extortion. By this time, defendant and a number of the other picketers had been added as defendants. Plaintiff and Wesray sought only prospective injunctive relief and did not seek any money damages. On August 6, 2010, Judge Hansbury granted plaintiff's motion to strike defendant's demand for a jury trial.

At trial, plaintiff produced depositions from many of the picketers, who declared that they did not know who plaintiff or Wesray were before they carried defendant's signs, but their opinions of them had diminished based on defendant's accusations. Defendant's friend, Richard Lammerding, testified in his deposition that he had a good opinion of plaintiff after he learned of his $1 million donation to a hospital. However, after receiving one of defendant's pamphlets, viewing his website, and speaking to defendant, Lammerding's "opinion" of plaintiff "became less favorable." Moreover, before going into any business dealings with plaintiff, "which is not likely at all," Lammerding stated he would have "to hear [plaintiff's] side of the story." He explained: "if I were ever to get into a business transaction with Wesray [or with plaintiff], my antenna would be up, and I would be a lot more alert, perhaps, to any improprieties."

On April 26, 2011, following the twenty-day trial, Judge Hansbury issued a lengthy written decision.3 The judge concluded plaintiff and Wesray had demonstrated that defendant's allegations against them were untrue and that defendant had "published these allegations with malice and with an intent to coerce plaintiff into providing money to defendant."

The judge reviewed all the evidence presented at trial and found that nothing in the record supported defendant's claim that Senior had an interest, whether open or concealed, in Murdock after he transferred it to Adubato. Likewise, there was no evidence supporting defendant's assertion there was a "50/50 deal" between Senior, Adubato and plaintiff on any transaction and no evidence that any "theft" of defendant's family's assets had occurred. Thus, the judge rejected defendant's allegations "as entirely unfounded and without evidence."

The judge found plaintiff and Wesray had established that defendant asserted false and defamatory statements about them and had no privilege to publicize these statements to third parties. The judge explained:

Defendant readily admitted he was the author of the signs, created the website and mailed more than 10,000 brochures including these statements. He acknowledged he hired Mr. Catullo to establish the picketing and paid the picketers daily for each picketing event. He created and drafted the signs. Having already concluded that there was no basis to the allegation that plaintiff stole money from the Scutieri family, the Court concludes that the first test has been met.

 

. . . Defendant readily admits that he is responsible for the publication of the defamatory material. Plaintiff must also establish fault amounting to at least negligence by the publisher. The [c]ourt concludes more than negligence, but actual malice. The [c]ourt concludes that plaintiff has established that the defendant published the defamatory statements with a "high degree of awareness of their probable falsity."

 

The judge next considered harm and damages, noting the different proof requirements if plaintiff were a private or public figure. The judge determined that plaintiff was "a private figure, not a public figure," and therefore, did not need to prove actual damages, as they could be presumed in cases involving private figures. Nevertheless, the judge noted he would have reached the same conclusions even if plaintiff were determined to be a public figure, which required a higher standard of proof of actual malice and actual damages. Having already found actual malice, the judge explained:

Even if damages are not presumed, plaintiff has met his burden to establish that damages were incurred. Plaintiff presented the de bene esse deposition of one of defendant's friends, Mr. [Lammerding]. He clearly said that because of the information provided to him by the defendant about plaintiff, he would be more concerned and less likely to do business with plaintiff.

The picketing and the internet posting defamed the plaintiff to a large audience, the names of whom will never be known to plaintiff. That Mr. [Lammerding's] view of the plaintiff was negatively affected by the defamatory information provided by defendant is sufficient to establish a basis of harm. Because the accusations are those of criminal conduct, they will clearly impact upon anyone intending to do business with plaintiff just as they affected Mr. [Lammerding].

 

The judge also found that defendant's specific purpose in engaging in this conduct was to extort money from plaintiff. The judge stated:

It is clear that the defendant commenced the defamatory conduct when his own financial fortunes were at a low. He had lost his beautiful house in Florida, his expensive car, his expensive boat and his major assets, which had no liens previously, and were now heavily mortgaged. Foreclosure proceedings had commenced in Florida and the financial pinch was on. The defamatory conduct commenced ten years after the defendant allegedly discovered plaintiff's theft. It is not a coincidence that the pressure upon plaintiff placed by the various defamatory actions of the defendant commenced when the fortunes had fallen.

 

Defendant's conduct accelerated. First, there was picketing; then, it accelerated to include letters to many public officials and other parties and creation of an Internet website. P-30 in evidence is of particular significance. This is a handwritten memorandum to plaintiff's counsel which stated: "Angelo, I have not sent many of these out . . . perhaps this is a good place to stop . . . your thoughts" signed by the defendant. There is no other reasonable explanation for this memo except as a means to bring Chambers to the table and pay money or he would distribute the brochure which was enclosed within that note. If his motivation had been to inform the public, he would not have sent this warning to plaintiff's attorney.

 

Based upon these detailed findings, the judge "conclude[d] that defendant's conduct constitute[d] defamation and that unless an injunction [was] issued, continuing damage and harm will befall" plaintiff and Wesray. Accordingly, in the detailed judgment which accompanied his April 26, 2011 written decision, Judge Hansbury entered a permanent injunction against defendant prohibiting both "continuing defamation, as well as . . . continuing acts of extortion." This appeal followed.

 

II.

We turn first to defendant's contention that the judge erred in striking his demand for a jury trial. Defendant claims he had a constitutional right to a trial by jury and that only a jury can determine whether a plaintiff has suffered damages in a defamation action. We disagree.

Defendant plainly had no constitutional right to a jury trial in this matter. In New Jersey, the right to a jury in civil matters is not guaranteed. Ins. Co. of N. Am. v. Anthony Amadei Sand & Gravel, Inc., 162 N.J. 168, 175 (1999). A jury trial is constitutionally required only if expressly permitted by the Legislature or if the right existed at common law when the Constitution was adopted. In re Envtl. Ins. Declaratory Judgment Actions, 149 N.J. 278, 298 (1997). "Traditionally, the right to a jury trial attaches in legal, but not equitable, actions." Id. at 291.

To determine whether an action is legal or equitable for these purposes, courts look first to the remedy sought in the complaint, which is "the most persuasive factor." Weinisch v. Sawyer, 123 N.J. 333, 344 (1991). Plaintiff and Wesray's eighth amended complaint demanded declaratory relief in the form of a permanent injunction. This was the sole relief requested. The Supreme Court explained in In re Environmental Insurance Declaratory Judgment Actions:

Declaratory judgment actions were unknown at common law. In New Jersey, the Uniform Declaratory Judgments Act (the "Act"), N.J.S.A. 2A:16-50 to -62, governs the right to declaratory relief. The Act does not specifically state when the right to a jury trial attaches to an action for a declaratory judgment. Instead, the Act provides that factual issues "may be tried and determined in the same manner as issues of facts are tried and determined in other civil actions . . . ." N.J.S.A. 2A:16-58. Depending on the issue, a declaratory judgment can be either legal or equitable. . . . . In a declaratory judgment action, the right to a jury trial depends on whether the action is the counterpart to one in equity or in law.

 

[Id. at 292 (citations omitted).]

 

"The fact that a single civil action may contain both legal and equitable claims and defenses is hardly unusual." Sun Coast Merch. Corp. v. Myron Corp., 393 N.J. Super. 55, 85 (App. Div. 2007), certif. denied, 194 N.J. 270 (2008). In Wood v. New Jersey Manufacturers Ins. Co., the Court explained:

Regardless of how an action is styled, the procedure applied to determine whether an action is primarily legal and thus subject to trial by jury or equitable to which no jury trial right attaches is well-settled: "'we look to the historical basis for the cause of action and focus on the requested relief[,' and o]f the two, the more persuasive factor is the requested relief." And, it matters not if the action places at issue both equitable and legal concerns because, under the doctrine of ancillary equitable jurisdiction, "[i]f an action is primarily equitable, a court of equity may assume jurisdiction over ancillary legal issues."

 

. . . .

 

The determination of whether a jury trial attaches to a plaintiff's cause of action cannot be driven by the label a party affixes to its pleading; it is the obligation of the judiciary to transcend superficialities and reach the substance of what is alleged and sought.

 

[ 206 N.J. 562, 575-76 (2011) (internal citations omitted).]

 

Here, plaintiff's and Wesray's defamation and extortion claims were clearly legal in nature. However, in their eighth amended complaint, plaintiff and Wesray sought only equitable relief in the form of a permanent injunction. Thus, any legal determinations as to defamation and extortion became ancillary to that equitable disposition, which required the court to determine only whether they had a "legal right" to such relief, and whether the relief would prevent "a continuing, irreparable injury." Verna v. Links at Valleybrook Neighborhood Ass'n, 371 N.J. Super. 77, 89 (App. Div. 2004). In other words, the predominant relief sought by plaintiff and Wesray was equitable in nature and, because the ancillary legal issues of defamation and extortion were intertwined with the necessary determination of the equitable right to an injunction, we conclude that the determination of those ancillary legal issues by way of a bench trial was wholly appropriate. See Sun Coast Merch. Corp., supra, 393 N.J. Super. at 86-87 ("When equitable claims or defenses are lodged . . . the ultimate determination . . . is for the judge alone to decide.").

III.

Defendant next argues plaintiff and Wesray failed to meet their burden of proving defamation or that his conduct was undertaken for the purpose of extorting money from plaintiff. Defendant also contends the judge erred by finding that plaintiff was a private, rather than a public, figure for purposes of the defamation analysis. These arguments lack merit.

"Final determinations made by the trial court sitting in a non-jury case are subject to a limited and well-established scope of review[.]" Seidman v. Clifton Sav. Bank, 205 N.J. 150, 169 (2011). "'[W]e do not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice[.]'" In re Trust Created by Agreement Dated December 20, 1961, 194 N.J. 276, 284 (2008) (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)). The court's findings of fact are "binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998).

By comparison, we review the trial judge's determinations on legal issues de novo. A trial judge's "interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Twp. Comm., 140 N.J. 366, 378 (1995). Applying these well-established standards of review here, we discern no basis to set aside Judge Hansbury's final judgment.

To recover on a defamation claim, a plaintiff must prove (1) he or she suffered damages from (2) the defendant making false and defamatory factual statements about the plaintiff (3) to third parties in a non-privileged situation, (4) with either (a) knowledge that those statements were false, (b) a reckless disregard for the truth or falsity of the statements, or (c) negligence in failing to ascertain the truth or falsity of the statements, depending on the private or public nature of the plaintiff and of the subject matter. G.D. v. Kenny, 205 N.J. 275, 292 93 (2011); DeAngelis v. Hill, 180 N.J. 1, 12-13 (2004).

"As a general rule, a statement is defamatory if it is false, communicated to a third person, and tends to lower the subject's reputation in the estimation of the community or to deter third persons from associating with him." Lynch v. N.J. Educ. Ass'n, 161 N.J. 152, 164 65 (1999). Accord W.J.A. v. D.A., 210 N.J. 229, 238 (2012). Consequently, "the truth of the statement is a complete defense to a defamation action." McLaughlin v. Rosanio, Bailets & Talamo, Inc., 331 N.J. Super. 303, 312 (App. Div.), certif. denied, 166 N.J. 606 (2000). In fact, truth may be asserted as a defense by the speaker making the alleged defamatory statement at issue even when that statement is not "perfectly accurate." G.D., supra, 205 N.J. at 293.

Judge Hansbury found plaintiff and Wesray met their burden of proving the statements defendant made about them were patently and knowingly false and the judge found they had met their burden by clear and convincing evidence. Here, it cannot seriously be questioned that defendant defamed plaintiff through his campaign of picketing, issuing pamphlets, and creating an internet site. When defendant first made his allegations in 1997, plaintiff and his attorneys provided him with documents demonstrating the propriety of all the transactions in which plaintiff had been involved. Over the course of the next several years, defendant's own investigation into his allegations demonstrated they were baseless. Yet, with full knowledge he had no basis for continuing to make these claims, defendant broadened his audience and orchestrated twenty-three days of picketing against plaintiff and Wesray, the distribution of thousands of pamphlets ridiculing them, and the creation of a website designed to spread his false messages.

The judge's finding that defendant made these statements in an attempt to extort millions of dollars from plaintiff is also amply supported by the record. Defendant launched his campaign only after his personal financial situation deteriorated to a point where his hotel business was entering bankruptcy. He demanded over $400 million in return for his promise that, if plaintiff paid, he would "keep quiet." The written notes defendant maintained, combined with his taunting messages to plaintiff and his attorney, that he "would stop" his campaign if his demands were met, further support the judge's findings.

Under these circumstances, there is no basis to disturb the judge's conclusion that plaintiff and Wesray proved by clear and convincing evidence that defendant made his statements with actual malice. As our Supreme Court noted in Costello v. Ocean County Observer:

[A] plaintiff might show actual malice by demonstrating that the defendant had obvious reasons to doubt the veracity of the informant or the accuracy of his reports. Or the plaintiff might show that the defendant had found internal inconsistencies or apparently reliable information that contradicted the story's libelous assertions but nevertheless had published the article. Although failure to investigate fully will not by itself be sufficient to prove actual malice, a failure to pursue the most obvious available sources for corroboration may be clear and convincing evidence of actual malice.

 

[ 136 N.J. 594, 615 (1994) (internal citation and quotation marks omitted).]

 

The record fully supports Judge Hansbury's finding that defendant never had a good faith reason to believe his claims. He had absolutely no proof for his allegations. His investigators failed to present him with any evidence that plaintiff had done any of the things he alleged. Defendant's own sister, Joan, corroborated plaintiff's position that Adubato owned Murdock and denied defendant's allegation that plaintiff had ever committed any crimes against the Scutieri family. Given the absence of any evidence or reasonable basis for defendant's claims, the judge properly found, by clear and convincing evidence, that defendant published his defamatory material with actual malice.

The finding that defendant acted with actual malice renders defendant's next claim of error moot. Defendant argues the judge erred in finding plaintiff was not a public figure and that the statements defendant made dealt with a private, rather than a public matter. This distinction is important because when the plaintiff in a defamation action is a private citizen and the speech relates to a private concern, fault is established by a preponderance of the evidence that the defendant communicated his or her statement while acting negligently in failing to ascertain its truth or falsity. Turf Lawnmower Repair v. Bergen Record Corp., 139 N.J. 392, 402-13 (1995); Feggans v. Billington, 291 N.J. Super. 382, 391 (App. Div. 1996). Private citizens are those who do not voluntarily thrust themselves into the public limelight. Turf Lawnmower Repair, supra, 139 N.J. at 412. "Speech that does not involve matters of public concern requires that greater weight be placed on an individual's interest in an unimpaired reputation." Senna v. Florimont, 196 N.J. 469, 491 (2008).

However, public figures enjoy less protection from defamatory statements. Hill v. Evening News Co., 314 N.J. Super. 545, 555 (App. Div. 1998). For public figures, or where the speech relates to a matter of public concern, fault is established by clear and convincing evidence that the defendant communicated his or her statement with "actual malice," that is, he or she acted knowingly, or with reckless disregard for the truth of the defamatory statement. Senna, supra, 196 N.J. at 496-97; DeAngelis, supra, 180 N.J. at 13. In addition, the plaintiff is obligated to prove actual damages for public figures or for public concerns. Rocci v. Ecole Secondaire Macdonald-Cartier, 165 N.J. 149, 156-57 (2000).

Because Judge Hansbury found plaintiff and Wesray proved that defendant acted with actual malice by clear and convincing evidence, it does not matter whether plaintiff was or was not a private, rather than a public, figure. In addition, while a public figure must also establish actual, rather than presumed, damages, there was ample evidence in the record to support the judge's finding that plaintiff and Wesray also met this burden. Plaintiff and Wesray did not rely solely upon the presumption they were damaged by the defamation. W.J.A., supra, 210 N.J. at 239-40 (holding that damages to the reputation of a private citizen are presumed to flow from defamation). They presented the testimony of defendant's friend, Lammerding, who the court observed "clearly said that because of the information provided to him by the defendant about the plaintiff, he would be more concerned and less likely to do business with plaintiff." Plaintiff and Wesray also submitted the deposition testimony of several other witnesses, each of whom testified their opinion of plaintiff and Wesray had diminished as a result of defendant's publicized accusations. This testimony clearly established the reputational harm, and resulting damages, plaintiff and Wesray suffered as a result of defendant's defamation.

Judge Hansbury also properly rejected defendant's contention that his comments were directed to a matter of "public concern." There is ample evidence in the record to support the judge's finding that defendant's accusations concerned a purely private matter between defendant and plaintiff, in which defendant falsely accused plaintiff of committing crimes in an attempt to extort money from him.

Defendant's final argument on this point, that his statements were mere "opinion, rhetoric, or hyperbole" also lacks merit. The judge reviewed the picketer's placards, the pamphlets defendant distributed, and the messages on his website and concluded they were defamatory per se. We agree. A statement is actionable as defamatory if it is reasonably susceptible to a defamatory meaning. The question of whether "a statement is susceptible of a defamatory meaning is a question of law for the court." Ward v. Zelikovsky, 136 N.J. 516, 529 (1994). "A prime example" of a statement that is defamatory per se "is [a] false attribution of criminality." Romaine v. Kallinger, 109 N.J. 282, 291 (1988).

Here, defendant's statements amount to a collective message that plainly and falsely accused plaintiff and Wesray of having committed crimes. Even if this were not the case, however, the statements were nevertheless clearly susceptible of a defamatory meaning. We review a statement's content, verifiability, and context to evaluate its susceptibility to a defamatory meaning. Ward, supra, 136 N.J. at 529. Defendant's statements certainly had a defamatory content because they falsely accused plaintiff and Wesray of committing crimes. For example, when asked to explain the intended meaning of his pamphlet and website comparing plaintiff to Bernie Madoff, defendant testified, "the essence of it is there was a crime committed, Ray did it, and so did Bernie Madoff."

With regard to verifiability, the statements defendant made implied "reasonably specific assertions of fact." Id. at 531. The statements on the picket signs, pamphlets and website either expressly accused plaintiff and Wesray of committing crimes or so strongly implied criminal conduct that any reasonable person would view them as statements of fact, rather than merely opinion. Finally, the context in which the statements were made was an extortion campaign to falsely accuse plaintiff and Wesray of criminal acts in the hopes of receiving millions of dollars to stop the campaign. Thus, Judge Hansbury's finding that defendant's statements were defamatory, and not mere "opinion, rhetoric or hyperbole," is well supported by the record.

 

 

IV.

Defendant next argues the judge erred by granting plaintiff and Wesray a permanent injunction preventing him from continuing to defame them in an attempt to extort money. He asserts a court can never "restrain by way of an injunction, an individual's speech, regardless of whether it is determined to be defamatory." We disagree.

Our Supreme Court has not yet directly spoken on the question of whether permanent injunctive relief is appropriate where a plaintiff proves the defamatory nature of the defendant's statements by clear and convincing evidence following a trial. To date, neither have we.

However, the availability of this relief has been recognized by our trial courts. Thus, in Mayfair Farms, Inc. v. Socony Mobil Oil Co., Inc., the court noted that "[t]he power to enjoin [libelous and slanderous statements] exists and can be used in a proper case." 68 N.J. Super. 188, 195 (Ch. Div. 1961). Similarly, in Barres v. Holt Rinehart & Winston, Inc., the court stated that, where the plaintiff had been the subject of a continuing course of defamatory conduct, he or she "might be entitled to an injunction against further circulation of the same material." 131 N.J. Super. 371, 392 (Law Div. 1974), aff'd on other grounds, 74 N.J. 461 (1977). This is consistent with a judicial recognition that personal rights, including one's reputation, are entitled to judicial protection and that injunctive relief is available to safeguard such interests. Higgins v. Am. Soc'y of Clinical Pathologists, 51 N.J. 191, 200-01 (1968).

While our courts have not yet squarely addressed this issue, other state courts have recognized that permanent injunctive relief is an appropriate remedy to stop defamatory speech after a trial has been conducted. See, e.g., Balboa Island Vill. Inn, Inc. v. Lemen, 156 P.3d 339, 343 (Cal. 2007) ("an injunction issued following a trial determined that the defendant defamed the plaintiff that does no more than prohibit the defendant from repeating the defamation, is not a prior restraint and does not offend the First Amendment"); see also Retail Credit Co. v. Russell, 218 S.E 2d, 54, 62 (Ga. 1975) (upholding permanent injunction limited to material found libelous after full trial); Advanced Training Sys. v. Caswell Equip. Co., 352 N.W.2d 1, 9-11 (Minn. 1984) (same); O'Brien v. Univ. Cmty. Tenants Union, 327 N.E.2d 753, 755 (Ohio 1975) (same).

The recurring theme of these cases, which sanctioned the issuance of an injunction prohibiting future defamatory conduct, is that the injunctions were issued after a full trial had been held and a finding made that the statements were, in fact, false and defamatory and, therefore, not entitled to First Amendment protection. That is plainly the case here. As Judge Hansbury found after a twenty-day trial, defendant engaged in a demonstrated pattern of repeated defamation in aid of extortion. He continued this conduct up to the very eve of the trial and, absent the current injunction, there can be no question he would resume his campaign.

Thus, the circumstances of this case stand in stark contrast to those presented in the cases defendant primarily relies upon, which he asserts prohibit a court from even entertaining the possibility of issuing an injunction. Those cases are clearly distinguishable because, unlike here, they involved situations where the court issued a preliminary injunction, without first conducting a trial or hearing to determine the full extent of the defamatory conduct. See John R. Thompson Co., Inc. v. Delicatessen & Cafeteria Workers Union, Local 410, 126 N.J. Eq. 119, 121 (Ch. 1939); A. Hollander & Son Inc. v. Joseph Hollander, Inc., 117 N.J. Eq. 578, 582 (Ch. 1935). In both these cases, the court denied a preliminary injunction the party sought prior to a final adjudication of whether the challenged speech was false. In this case, however, Judge Hansbury entered a final, permanent injunction only after conducting a full trial on the merits, and only after finding that defendant's false accusations against plaintiff and Wesray constituted defamation for the purpose of extortion.

Under these circumstances, we reject defendant's contention that "equity cannot enjoin defamation." We hold that where the trial court has conducted a trial and has concluded the defendant's statements were defamatory, the court may consider the issuance of a permanent injunction to prevent the defendant from continuing his or her course of conduct in the future. Plainly, a party who is the victim of defamation is entitled to "an effective remedy." W.J.A., supra, 210 N.J. at 248. To ensure this occurs, we conclude that a trial court must have the ability to issue a permanent injunction to protect the individual's good name and dignity in an appropriate case.

This was clearly an appropriate case for the issuance of a permanent injunction against defendant. The decision to enter injunctive relief falls squarely within the discretion of the trial court and we review a trial judge's decision to grant such an injunction only to determine if an abuse of discretion has occurred. Sheppard v. Township of Frankford, 261 N.J. Super. 5, 9-10 (App. Div. 1992). There is no basis to find Judge Hansbury abused his discretion in this case.

In conjunction with Rule 4:52-4, we have outlined the factors a judge should consider in evaluating an application for permanent injunctive relief as follows:

(1) the character of the interest to be protected; (2) the relative adequacy of the injunction to the plaintiff as compared with other remedies; (3) the unreasonable delay in bringing suit; (4) any related misconduct by plaintiff; (5) the comparison of hardship to plaintiff if relief is denied, and hardship to defendant if relief is granted; (6) the interests of others, including the public; and (7) the practicality of framing the order or judgment.

 

[Sheppard, supra, 261 N.J. Super. at 10.]

 

The injunction Judge Hansbury issued satisfies these criteria. As required by Rule 4:52-4, the order describes the acts enjoined in detail and specifically lists over thirty statements, six picket signs, and nine pamphlets that are enjoined from further publication.

The judge's decision also balances the Sheppard factors and properly gives greater weight to plaintiff and Wesray's interest in maintaining their good names than to defendant's interest in making defamatory statements in an effort to extort money from them. Plaintiff and Wesray brought suit within two months after defendant took his defamatory campaign "public" by paying picketers to make false accusations against them. Thus, they did not "delay in bringing suit." As the judge found, there is no evidence whatsoever that either plaintiff or Wesray engaged in any misconduct of their own. Finally, the judge specifically found that "continuing damage will continue to befall" plaintiff and Wesray in the absence of an injunction. Under these circumstances, we discern no basis to disturb the judge's decision to issue the injunction.

Defendant's argument that the injunction is flawed because the judge did not specifically find that plaintiff and Wesray would be "irreparably harmed" by his continued defamation of them lacks merit. Defendant relies on our decision in Paternoster v. Shuster, 296 N.J. Super. 544 (App. Div. 1997) in support of this contention. However, that case involved a temporary, preliminary injunction, where we have consistently the moving party is required to demonstrate irreparable harm. Id. at 555-56. In Paternoster, however, we noted that the factors set forth in Sheppard should be applied to determine whether a permanent injunction should be issued. Id. at 556. A requirement that the moving party demonstrate a "likelihood of continuing threat of irreparable harm" is not one of the Sheppard factors. Ibid.

We also reject defendant's argument that the injunction is overly broad. It is not. Paragraph I of the April 26, 2011 judgment enjoins defendant from "future extortion or attempted extortion." It states:

First, pursuant to N.J.S.A. 2C:20-5(b) & (c) and 2C:20-21[,] [d]efendant is permanently enjoined, restrained and prohibited from performing any act in furtherance of any endeavor to obtain money or other property from [plaintiff] by threatening to accuse him of an offense or publicizing any secret or asserted fact, whether true or false, tending to subject [plaintiff] to hatred, contempt or ridicule or to impair his credit or business repute, including but not limited to allegations that [plaintiff] has, as to the Scutieri family:

 

1. committed theft;

 

2. committed grand theft;

 

3. committed fraud;

 

4. committed tax fraud;

 

5. is a swindler;

 

6. stolen, converted or misappropriated assets of the Scutieri family;

 

7. cheated any member of the Scutieri family;

 

8. committed a crime;

 

9. covered up or concealed a crime; or

 

10. committed perjury.

 

Second, pursuant to N.J.S.A. 2C:20-5(g) and 2C:20-21, [d]efendant is permanently enjoined from otherwise obtaining or attempting to obtain property from [plaintiff] by threat or extortion in violation of N.J.S.A. 2C:20-5.

 

Defendant argues this paragraph of the judgment is overbroad because it could include truthful, factual allegations. We disagree. By its express terms, this paragraph merely enjoins defendant from violating the criminal law by making statements with the purpose of extorting or attempting to extort plaintiff. It then provides examples of statements that would be covered if made for the purpose of extorting plaintiff or Wesray. Defendant can certainly not complain that he has been enjoined from violating the Criminal Code.

Paragraph II of the judgment is also not overbroad or vague as defendant suggests. This paragraph enjoins defendant from publishing certain specified statements attributing criminal behavior to plaintiff and Wesray "as to the Scutieri family." Defendant is also prohibited from displaying picket signs, distributing pamphlets, or operating an internet site containing accusations involving the Scutieri family that are the same or similar to those involved in his campaign. A list of the statements found to be defamatory is included in the judgment. Again, these are statements Judge Hansbury found, after a twenty-day trial, were false, defamatory, made with actual malice, and intended to extort money from plaintiff and Wesray.

Thus, while the injunction is comprehensive in its detail, it is nevertheless discrete, narrow and specifically limited to defendant's false accusations involving the Scutieri family. It properly prevents defendant from repeating these falsehoods which Judge Hansbury found would occur if an injunction were not issued.

Defendant also complains that Paragraph III of the judgment is improper because it extends the injunction to third parties operating in concert with defendant. We disagree. This paragraph states the "injunction is binding upon [d]efendant and such of his officers, agents and employees, and upon such persons in active concert or participation with them as receive actual notice of this Order by personal service or otherwise." This provision merely prevents defendant from continuing his defamatory campaign against plaintiff and Wesray through the use of third parties affiliated with him. Under the circumstances of this case, where defendant hired picketers to make false accusations against plaintiff and Wesray, we believe that this provision is properly part of the appropriate remedy ordered by Judge Hansbury.

In sum, we conclude defendant had no right to a jury trial in this defamation action. Judge Hansbury carefully considered the evidence presented at the bench trial and made detailed findings supporting his conclusion that, by clear and convincing evidence, plaintiff and Wesray proved that the statements were false, defamatory, and made by defendant with actual malice as part of a scheme to extort money from them. The circumstances of this case clearly warranted the issuance of a permanent injunction to prevent defendant from repeating and re-publishing the defamatory material.

Affirmed.

1 In 1989, Wesray Corporation merged with Wesray Capital Corporation, another private equity firm. In 1996, Wesray Capital Corporation was dissolved and its assets were used to form Wesray Capital, LLC (Wesray), a plaintiff in this case. Plaintiff holds no personal interest in this entity.

2 In 2008, plaintiff was appointed as the United Nations Secretary-General's Special Envoy for Malaria and he helped raise almost $5 billion for that cause. Later that year, he was awarded the Presidential Citizens Medal.

3 Catullo consented to the entry of a permanent injunction against him. The remaining defendants defaulted.