Court Finds Client's Criticism Did Not Defame Lawyer

, New York Law Journal

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A client who blasted a veteran attorney's performance in a series of termination letters, going so far as to suggest "misconduct, malpractice, and negligence," did not defame the lawyer, a unanimous state appeals panel has ruled.

The Appellate Division, First Department upheld a lower court's ruling in Frechtman v. Gutterman, 157028/12, agreeing that the client's statements were not defamatory because they were expressions of opinion rather than fact, and protected by both absolute and qualified privilege.

The decision, handed down Thursday, affirmed a ruling by Manhattan Supreme Court Justice Saliann Scarpulla (See Profile) dismissing the defamation case. Appellate Justice David Saxe (See Profile) wrote the decision and was joined by Justices Angela Mazzarelli (See Profile), Rolando Acosta (See Profile), Rosalyn Richter (See Profile) and Paul Feinman (See Profile).

The plaintiff, A. Bernard Frechtman, has practiced law in New York for more than 60 years. His clients included a group medical staffing business, Response Companies, owned by Allen Gutterman, whom he represented in various matters.

In August 2012, Gutterman gave three letters to Frechtman terminating his employment in three separate matters, according to the attorney's complaint, which named Gutterman and his companies as defendants. The letters were allegedly typed by one of Gutterman's employees and then signed by Gutterman.

Frechtman claimed that the letters contained defamatory statements, including:

• "We do not believe you adequately represented our interest."

• "We believe your failure to act in our best interest in reference to certain matters upon first engaging in the matter may equate to misconduct, malpractice, and negligence."

• "We believe that your future representation on this matter only became necessary, as a result of mistakes and oversights made by you acting as counsel."

•"[W]e believe that we should not pay for the value of services for which any misconduct or counsel oversight relates to the representation for which fees are sought."

Frechtman alleged that Gutterman and Response Companies owe him more than $57,000 in unpaid legal fees, and is seeking an additional $250,000 in punitive damages for the alleged defamation.

When Scarpulla dismissed the case, Frechtman appealed.

In upholding Scarpulla's decision, Saxe noted that "it would seem reasonable to conclude" that the claim must fail because the letters were not published. However, he said the Court of Appeals had ruled in Ostrowe v. Lee, 256 NY 36 (1931) that merely dictating a letter to an employee, as Gutterman allegedly did, can be considered "publishing" it to a third party.

Thus, he found, "the publication requirement may be satisfied by the allegation that the document's contents were revealed to such a company employee."

The claim failed, however, because the statements in the letter amounted to opinion, not fact, even though some of the language suggested accusations of specific wrongdoing.

"While the use of words such as 'misconduct' and 'malpractice' may, viewed in isolation, seem to be assertions of provable fact, or claims supported by unstated facts, viewed in their context, these statements amount to the opinions and beliefs of dissatisfied clients about their attorney's work," Saxe wrote.

Even if the statements were factual, they are protected by absolute attorney-client privilege, Saxe said. He cited the First Department's own 2007 decision in Sexter & Warmflash v. Margrabe, 38 AD3d 163, 174, which explicitly held that a letter terminating an attorney was privileged.

Finally, Saxe said, the letters were subject to qualified privilege "as communications upon a subject matter in which both parties had an interest."

The defendants were represented by Brian Bluver, the Response Companies' chief counsel.

Bluver said he believed that Frechtman was essentially using a defamation claim as an attempt to get attorneys' fees he thought he was owed.

If the court had accepted Frechtman's claim, Bluver said, it would have undermined attorney-client privilege.

Frechtman represented himself along with Diane Kaplan. In an email, Frechtman said he was giving "serious consideration" to seeking leave appeal.

He claimed Gutterman's accusations were simply a way to avoid paying the legal fees, noting that even as Gutterman and the defendants terminated his services in three cases, they asked him to keep working on a fourth case.

"Given the fact that I was specifically asked to continue to represent those clients on one pending lawsuit—even while being discharged as their attorney on three others—I believed when I received those letters and I still believe, that the false, baseless and denigrating attack upon my professional competence, abilities and honesty was simply a ploy whose true purpose is to evade full payment of the substantial sum of money that I am owed," he said.

Frechtman, who was admitted to the bar in 1952, said no other client in his entire career has ever accused him of incompetence or dishonesty, and he fears the ruling could set a bad precedent.

"In my view, the court's decision gives clients carte blanche to disparage their attorney in order to create a reason to avoid, delay or reduce their obligations for the payment of bona fide billing for legal services, expenses and disbursements, simply by expressing their 'opinion' that the attorney has acted dishonestly or incompetently, regardless of whether there is any legitimate basis for the accusation," he said.

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