Nuwave Investment Corp. v. Hyman Beck & Co.
432 N.J. Super. 539
| N.J. Super. Ct. App. Div. | 2013Background
- Plaintiffs Buckner and Ryan founded NuWave after leaving Hyman Beck; BackTrack (investigative firm) prepared and sold reports repeating statements attributed to Hyman and DeFalco about plaintiffs' conduct.
- Plaintiffs sued (2006) for defamation, trade libel, interference and negligence; most claims were dismissed on limitations grounds except defamation claim against BackTrack.
- Trial jury found BackTrack liable: awarded large "presumed damages" to NuWave and the principals, actual damages to NuWave ($1.406M), apportioned fault among BackTrack, Hyman, DeFalco, and awarded punitive damages.
- BackTrack appealed, challenging (inter alia) the court's ruling that several statements were libelous per se, the use of presumed damages, denial of qualified privilege, duty to plaintiffs, statute of limitations rulings, directed verdict denial, and punitive-damages instruction issues.
- Plaintiffs separately appealed dismissal of claims against Hyman Beck defendants as time-barred, arguing the discovery rule tolled the limitations period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the statements were defamatory / libelous per se | Statements were false factual allegations harming reputation and thus actionable | Many statements were opinion or not per se defamatory; some not actionable | Court: majority of challenged statements were factual and defamatory; judge correctly found libel (not mere opinion) |
| Whether "presumed damages" could be awarded alongside proven actual damages | Plaintiffs relied on presumed damages doctrine for reputational harm | BackTrack argued presumed damages inapplicable absent actual malice and cannot be awarded if actual damages proved | Court: Presumed damages may only be used as a nominal procedural remedy when no actual damages proved; jury award of large presumed damages vacated and damages retrial ordered |
| Whether BackTrack's reports were protected by a qualified/common-interest privilege | Plaintiffs: no privilege; reports were commercial background checks for clients | BackTrack: reports were privileged communications to interested investors (citing Lutz/Bainhauer principles) | Court: No qualified privilege—BackTrack had no common interest or duty in subject matter and served clients, so judge rightly denied privilege |
| Whether plaintiffs could toll defamation statute of limitations under discovery rule | Plaintiffs: discovery rule should toll until they found the reports in 2005 | Defendants: statute fixes accrual at publication; discovery rule inapplicable to libel per Lawrence | Court: Affirmed dismissal of claims against Hyman Beck; discovery rule not applied to defamation under NJ precedent; legislative inaction counsels against expansion |
Key Cases Cited
- Leang v. Jersey City Bd. of Educ., 198 N.J. 557 (exposition of defamation elements and factors for defamatory meaning)
- W.J.A. v. D.A., 210 N.J. 229 (clarified limits of presumed damages in defamation and that malice standard not required for private-figure, private-concern defamation)
- Ward v. Zelikovsky, 136 N.J. 516 (framework for distinguishing opinion vs. verifiable factual statements)
- Sisler v. Gannett Co., 104 N.J. 256 (when expert testimony on journalistic practices may be appropriate in defamation)
- Lawrence v. Bauer Publishing & Printing, 89 N.J. 451 (holding discovery rule inapplicable to libel actions under N.J. law)