Lead Opinion
OPINION OF THE COURT
The instant litigation has its genesis in two judgments obtained by the Aetna Casualty and Surety Company against, respectively, the Hambly Construction Company, Inc., in 1970 and William J. Hambly in 1972, in connection with a default by Hambly Construction and Hambly on a contract with New York State to build dormitories at a State college. Aetna subsequently brought an action against, inter alia, Hambly’s attorney and the attorney’s son, Michael A. Gurda and Michael A. Gurda, Jr., who are the plaintiffs herein, seeking to set aside certain conveyances of real property alleged to have been made by Hambly to the Gurdas for the purpose of hindering Aetna’s attempts to satisfy the afore-mentioned judgments. The court, after a non jury trial, found in favor of Aetna on certain causes of action in that certain of the conveyances were made with actual intent to hinder or delay present creditors, and therefore were fraudulent within the meaning of section 276 of the Debtor and Creditor Law. Pursuant to section 276-a of that law, Aetna was also awarded attorneys’ fees.
Defendant Orange County Publications thereafter published, in a newspaper known as the Times Herald Record, an article describing the latter lawsuit. A headline appearing prominently on the first page of the newspaper’s edition of April 21, 1979, proclaimed “Judge: Gurdas, builder defrauded firm.” A caption over the article itself on page 3 read “Gurdas, builder fined in fraud case.” In the body of the article was a statement that the Gurdas and Hambly “defrauded” Aetna, and a quotation attributed to defendant Howard Karger, attorney for Aetna, that the Gurdas “were guilty of intentional fraud at a time he [sic] was an attorney of law admitted to practice in the State of New York”. The Gurdas thereupon each brought an action against Orange County Publications and the Times Herald Record (both hereinafter referred to as the newspaper) and against Karger to recover damages for libel.
This court is now called upon to review Special Term’s decision dismissing the complaints. We turn to so much of the judgments as granted summary judgment in favor of the newspaper.
The question is, of course, whether the article can be said, as a matter of law, to be a “fair and true report of [a] judicial proceeding,” or whether this issue should be left to a jury for determination. We are mindful of the public policy, reflected in section 74 of the Civil Rights Law, of encouraging public scrutiny of judicial proceedings, thereby enhancing the integrity of the courts and reinforcing the accountability of those that administer justice (see Shiles v News Syndicate Co.,
The Legislature, mindful of the possibility of abuse, has seen fit to demand a corresponding duty from those who scrutinize the courts, that their reports indeed be fair and true. This duty is not necessarily to ensure that reports of judicial proceedings be rigidly and technically perfect (see Briarcliff Lodge Hotel v Citizen-Sentinel Publishers,
It is well settled that in actions to recover damages for defamation, whether or not based on a report of judicial proceedings, words are to be construed as persons generally understand them and according to their ordinary meaning (see Cafferty v Southern Tier Pub. Co.,
Applying these general principles to the case at bar, we hold that a jury could find that the ordinary meaning of
We also note the use of the word “fined” in the caption of the article. The word “fine” has been defined as a monetary punishment imposed upon a person or other entity “convicted of [a] crime or misdemeanor” (see American Sur. Co. of N.Y. v Town of Islip,
Furthermore, the use of the phrase “guilty of intentional fraud” in the body of the article, perhaps the words most susceptible to a libelous interpretation, surely could be interpreted by a lay jury or reader to mean that criminal activity was afoot. In an instance, such as this one, where such an interpretation is manifestly so reasonable, it is incorrect to deem the article a fair and true report of a judicial proceeding as a matter of law. The article could reasonably be read in a way that would render it untrue; therefore, it was error to grant summary judgment in favor of the newspaper. Accordingly, this matter must be re
We recognize, as the dissenters emphasize, that the word “fraud” can call to mind concepts, such as “trickery”, “deceit”, or “misrepresentation”, which are free of criminal connotation. And we assure the dissenters that we do not consider those individuals who have paid a fine for misjudging the time remaining on a parking meter or for returning an overdue book to a public library to be criminals. But we are not granting summary judgment in favor of the plaintiffs on their causes of action for libel. To do so would most assuredly be entirely erroneous. Our holding merely directs a jury to be impaneled to decide the issues of fact. The words “fraud” and “fine” may not connote criminal activity to the reasonable person, but then again, they may. If they do, then the newspaper article is by no means a fair, and definitely not a true, report. Questions of fact exist, and our holding today means nothing more and nothing less than that the usual judicial methods for resolving them must be employed.
We do not intend, by our holding today, to cut back on the First Amendment guarantees of free press and free speech which are so deeply engrained in our constitutional and social heritage. We reaffirm the principle, by which the jury that will try these actions should be guided, that in order to be afforded the protection of section 74 of the Civil Rights Law, a report of a judicial proceeding need not be a verbatim report, absolutely true and correct in all respects. A “fair and true report”, not a rigidly and technically perfect one, is all that is required (see Briarcliff Lodge Hotel v Citizen-Sentinel Publishers, supra; George v Time, Inc., supra; Holy Spirit Assn. for Unification of World Christianity v New York Times Co.,
We may now turn our attention to the two remaining issues before us. We affirm the judgments under review insofar as they granted summary judgment in favor of Howard Karger. His statement to the author of the article was a mere opinion of what had transpired, and hence, was protected under the rule of Rinaldi v Holt, Rinehart & Winston (supra).
Finally, we note that Special Term properly declined to award discretionary costs to Karger pursuant to CPLR 8303 (subd [a], par 2).
Notes
To be sure, an action for libel based on a fair and true report of a judicial proceeding could at one time be maintained if actual malice were shown (former Civ Prac Act, § 337 [L 1920, ch 925]). The actual malice exception was deleted in 1930 (L 1930, ch 619).
Concurrence in Part
(concurring in part and dissenting in part). In our view, the plaintiffs’ actions against the Times Herald Record and its publisher are inconsistent with the guarantees of the First Amendment and with the letter and spirit of section 74 of the Civil Rights Law. Accordingly, we respectfully dissent from so much of the majority’s holding as would deny the newspaper’s motion for summary judgment. Briefly stated, the facts pertinent to the issue are these:
In 1965 William J. Hambly was in the construction business. In or about May of that year, his firm, Hambly Construction Company, Inc., entered into a contract with the State of New York to build certain dormitories at a branch of the State University at Delhi, New York. In order to obtain the contract, the company was required to secure a performance bond, and, to that end, Hambly entered into an agreement with the Aetna Casualty and Surety Company. Aetna agreed to issue the bond and, in return, Hambly agreed personally to indemnify Aetna for any loss sustained on account of a default by his construction company in the completion of the dormitories. Subsequently, the company did in fact default on the job and Aetna was called upon to complete the construction. Aetna
When the judgments were returned unsatisfied, Aetna instituted an action seeking to set aside certain conveyanees of real property made by Hambly. Aetna alleged that those conveyances were fraudulent because they were knowingly made with actual intent to hinder, delay or defraud present or future creditors. Specifically, and as relevant here, Aetna complained of a transfer, made on November 2, 1970, when Hambly conveyed all his interest in certain properties to his attorney Michael A. Gurda and to Gurda’s son, Michael A. Gurda, Jr. Both Gurdas were therefore named as defendants in the action.
On April 19, 1979, following a non jury trial, the court issued a memorandum decision finding that Aetna was entitled to judgment on the first and fifth causes of action of each of its two amended complaints which had been consolidated for trial and which involved different parcels of property. The claims found to have been established in each instance were essentially that (1) with knowledge that Hambly had incurred debts to Aetna, the Gurdas agreed that Hambly would convey his interest in certain property to them so as to hinder, delay or defraud Aetna in the collection of moneys to which it was due or was to become due; and (2) the Gurdas accepted the conveyance from Hambly with knowledge and with intent to hinder, delay or defraud Aetna in the collection of the said moneys. The court also found that, in addition to a money judgment, Aetna was entitled to recover attorneys’ fees pursuant to section 276-a of the Debtor and Creditor Law.
In its decision, the court found that the evidence adduced at trial established “an actual intent to hinder or delay [Aetna] in satisfying any judgment which [Aetna] might
The dispute now before this court arose out of the publication of an article about the ease in the Times Herald Record, a Middletown newspaper published by Orange County Publications, a division of Ottaway Newspapers, Inc. Above the masthead of its April 21, 1979 edition, the paper ran a headline which read:
“Judge: Gurdas, builder defrauded firm”
The headline, which appeared with others on the front page, referred the reader to page 3 of the paper. On that page an article regarding the case appeared under the headline:
“Gurdas, builder fined in fraud case”
The article read in pertinent part as follows:
“An acting state Supreme Court justice has found that Middletown attorneys Michael A. Gurda, Sr., his son, Michael Jr., and a former local contractor defrauded an insurance company through the 1970 sale of land along Dolson Avenue in Middletown * * *
“ [The justice] found the Gurdas and contractor William J. Hambly defrauded the Aetna Casualty and Surety Co., when the contractor sold his half-interest in the 26-acre parcel to the attorneys in November 1970. If the ruling withstands an expected appeal, it would force the Gurdas and Hambly to pay $185,000 and legal fees, which have not yet been determined.
“The defendants in the case are not required to pay the penalty until the appeal process is exhausted * * *
“ ‘Based on a review of the decision, [the Judge] found that Mr. Gurda and his son were guilty of intentional fraud at a time he [sic] was an attorney of law admitted to practice in the State of New York’ said Howard Karger of the Newburgh law firm * * * representing Aetna”.
The article went on to trace the somewhat complex history
Following the publication of the article, the Gurdas each instituted a defamation action against the Times Herald Record, its publisher, and attorney Howard Karger. The Gurdas’ complaints were essentially identical, each asserting the same three causes of action. The first, against the paper, was predicated upon the front-page headline, “Judge: Gurdas, builder defrauded firm”; the second, also against the corporate defendants, was based upon the inside headline and the portion of the article quoted above, with the exception of the two sentences concerning the amount of the “penalty” assessed and when that “penalty” would have to be paid; the third cause of action was against Karger for the comment attributed to him by the newspaper. Special Term granted the defendants’ motions for summary judgment and dismissed the complaints. The entire court agrees that, because Karger’s remark constituted a protected expression of opinion, the causes of action against him were properly dismissed. However, the majority reverses Special Term’s judgments insofar as they dismissed the causes of action in each complaint directed against the newspaper and its publisher. The majority holds that there are triable issues of fact regarding whether the Gurdas were libeled by the newspaper report. It is with this conclusion that we disagree.
The plaintiffs’ case against the corporate defendants rests entirely upon the use of three words in the headlines and body of the article. Those words are “defrauded”, “fraud”, and “fine”. As to the first two, the majority would deny summary judgment to the paper because (1) “in actions * * * for defamation * * * words are to be construed as persons generally understand them and according to their ordinary meaning”, (2) “the terms ‘fraud’ and ‘defraud’ can connote criminal activity”, and (3) “a jury could well find that the ordinary meaning of the terms ‘fraud’ and ‘defraud’ is the criminal one”. The court makes a similar finding with respect to the word “fine,” noting that that term “has been defined as monetary punishment imposed upon a person or other entity ‘convicted of [a] crime or misdemeanor’ ”.
Whenever a libel action is brought against a newspaper, the courts are called upon to strike a balance between the individual’s right to protect his good name and the guarantees of the First Amendment which safeguard the people’s right to an active, thriving and untrammeled press, an indispensable component of any free and democratic society. (See, e.g., Schermerhorn v Rosenberg,
The purpose of providing immunity to fair and true reports of judicial proceedings is said to be to encourage the dissemination of information concerning the judicial branch of government and thereby to serve the public interest “in having proceedings of courts of justice public, not secret, for the greater security thus given for the proper administration of justice.” (Lee v Brooklyn Union Pub. Co.,
The Gurdas complain that they were defamed by the headlines and article .which stated that they had been found to have “defrauded” Aetna and they had been “fined” in a “fraud” case. Regardless of the specific factual findings rendered, the fact remains that the court unequivocally held that the Gurdas had violated section 276 of the Debtor and Creditor Law. That section provides: “276. Conveyance made with intent to defraud. Every conveyance made and every obligation incurred with actual intent, as distinguished from intent presumed in law, to hinder, delay, or defraud either present or future creditors, is fraudulent as to both present and future creditors.” (Emphasis supplied.)
In light of this statutory language, we cannot agree with the majority that the corporate defendants may be found liable for defamation for using the words “fraud” and “defrauded,” for we conclude as a matter of law that, in reporting judicial proceedings, a newspaper may not be held to a stricter standard in the correct use of technical and legal terms than is the Legislature which drafted the statutes themselves. Plainly, a newspaper must be afforded immunity under section 74 of the Civil Rights Law when it reports on judicial proceedings using the very language of the statutes at issue in those proceedings.
Moreover, as to the word “fine,” although it is clear that no fine, as such, was imposed, the court did rule that, in addition to a money judgment, Aetna was entitled to attorneys’ fees pursuant to section 276-a of the Debtor and Creditor Law. The award of attorneys’ fees in this case was, in actuality, not entirely unlike the imposition of a fine since it was permissible only upon a finding that the Gurdas had been party to a “fraudulent” transfer within the meaning of the statute. (See Debtor and Creditor Law, § 276-a.) Clearly, the award of counsel fees could well have been seen as a penalty or “fine” by one untutored in the law. And, in determining whether the paper’s use of the word was unreasonable, we are guided by the observation of the Court of Appeals in Holy Spirit Assn. for Unification of World
Freedom of expression must have breathing space to survive (cf. National Assn. for Advancement of Colored People v Button,
Hopkins and Lazer, JJ., concur with Weinstein, J.; Mollen, P. J., and Titone, J., concur in part and dissent in part, in an opinion.
Two judgments of the Supreme Court, Orange County, both dated September 17,1979, modified, by deleting there