Joyce v. Thompson Wigdor & Gilly LLP, Slip Copy, 2008 WL 2329227 (S.D.N.Y. 2008)

Brief Summary
Even in the absence of a claim of casualty connected special damages, a law firm that failed to bring a defamation claim on behalf of a client can be sued for malpractice if the defamation claim was actionable as libel per se.

Complete Summary
Plaintiff Michelle Joyce sued her former law firm, Thompson Wigdor & Gilly LLP (“Thompson”), for, inter alia, malpractice based on the firm’s failure to bring a defamation claim against Joyce’s former employer, The Source magazine, and related entities. On Thompson’s motion to dismiss for failure to state a claim, the District Court, Southern District of New York, held that Joyce could pursue the malpractice claim because her underlying defamation claim, in spite of a lack of allegations of special damages, was actionable as libel per se.

Joyce alleged three defamatory statements made by defendants from The Source. In a published interview, one of The Source defendants stated “[t]he other woman didn’t even do nothing around here. She faked that she was having breast cancer so that we wouldn’t fire her.” Id. at *1. The court analyzed these two sentences as separate statements. In a press release, a defendant from The Source also stated “[w]e also suspect that Ms. Joyce falsified health claims in an effort to attack The Source when she learned that she was going to be terminated.” Id. Thompson allegedly knew of these statements. But the firm argued that these statements were protected opinion, or alternatively they were not defamation per se, and therefore not actionable in the absence of special damages.

The court held that the first statement, “[she] didn’t even do nothing around here[,]” was an opinion protected from a claim of defamation under New York law because it had no readily understandable precise meaning and lacked factual content. The court cited multiple cases where statements critical of job performance were held to be non-defamatory.

The second statement — regarding faking breast cancer — was, according to the court, not protected opinion because it had a “precise and definite meaning and it [was] readily capable of being proven to be true or false.” The court found significant the fact that this statement was made by an executive at The Source whom the reader would assume to have actual knowledge of whether Joyce had faked breast cancer. Thompson argued that the statement was protected opinion because it could be understood as “heated rhetoric” or “hyperbole,” but the court noted that the so-called hyperbole defense had only been applied to generic epithets and not, as in this case, to specific statements of fact. Id. at *9-10.

The court held that the third statement — regarding falsifying health claims — was not opinion for the same reasons as the second statement, but noted that the words “[w]e . . . suspect” at the beginning of the statement presented a closer question. The court noted that this statement, despite being couched in the form of an opinion, could lead an average reader to assume that it was based on facts because the speaker, Joyce’s employer, presumably had the most direct knowledge of relevant facts.

The court next held that the latter two statements were libelous per se because they contained accusations of fraud related to her profession. This rendered the statements subject to the trade exception to the special damages rule.

Finally, the court dismissed Joyce’s claims for breach of contract, breach of fiduciary duty, negligent misrepresentation and fraudulent misrepresentation as duplicative of her malpractice claim.

Significance of Opinion
This opinion demonstrates the potential for malpractice based on failure to bring a claim and the consequent need for lawyers to make clear what they have and have not agreed to do in their representation of the client.

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