Here's a Whopper! Internet Libel & More. HELP!

[honestliving]

What is the name of your state? Maryland

SIT DOWN, IT'S A LONG ONE....

My husband, myself and our company (Sole proprietors) are named in a suit with 4 counts against and individual and two of his corporations:

1) defamation($2mil comp/$2mil punitive)
2) conspiracy ($2mil comp/$2mil punitive)
3) interference with business relations ($2mil comp/$2mil punitive)
4) preliminary and perm. injunction to remove the site. ($legal costs)

We have been dealing with this individual for the last 2 years. Long story short, my husband and I have operated our own business for the last 16 years. Then we started a separate business with this individual. We made one big mistake, we used our existing company's reputation as leverage to obtain our first credit accounts with the new company (we allowed them to use our existing companys banking info and DUNS for verification...). Both of which my husband signed and gave permission to for those accounts only.

Within a years time, we realized that he was not an honest business man, he was frauding people, he was lying, and he, himself was applying for credit accounts and obtaining credit/services and products using our financial credentials (fed tax ID, Duns, Checking acct numbers) without our knowledge or permission. Needless to say, we found out because he was defaulting on many of them and WE were getting the collection calls. We have written proof of his fraudulent activity.

Once we realized this, we used his attorney (another bad idea) to separate the relationship, demanded that he change the company name and discontinue use of it. He continued. In fact, he continued to obtain more accounts and more debt even after he changed the name!

We asked him on numerous occasions to stop, we confronted him about the debt, all the while he denied and continued to use and default on the credit which has grossly affected our Experian & DUNS credit standing (I've been fighting them for 2 years as well) and our relationship with our one and only advertising medium. I chose not to sue him, I was having him investigated privately instead. I wanted him behind bars not in the courtroom (hindsite hurts!).

So, since I had ownership of the company domain name, and kept it up and running for the year term as agreed to in our separation agreement, I posted the situation on the website as a WARNING to both customers and creditors. I stated the facts of his actions, which could be backed up and proven, but I also expressed my opinions and made statements. I stated that he was a "known fraud, a thief, and a con". All of which are true in my opinion because applying for credit with credentials belonging to someone else is fraud, receiving products from those fraudulently established accounts is theft, and he conned us and many of his customers into believing he was something he wasn't. I further stated that "once he has your personal information, you'll be his next victim.". Yes, that was an opinion, but it actually happened to us and I strongly feel that he victimizes people and they should be warned. I go on to say a couple other things about his business manner to "beware and stay clear as you may be his next victim". Again, opinion based upon my experience with him.

The final thing is that I refer to his newly formed businesses as "not so legitimate". He is suing us on his own behalf and on the behalf of two of his companies. One of which is the newly named company and one that is illegally operating in Maryland, for a fact. The other, operating on accounts established with our company credentials, so in my opinion, I stated FACT about the legitimacy of them. His attorneys feel otherwise.

I've consulted with an attorney, found out that these types of cases are very rare and can be hard for the plantiff to pursue - but apparently, I've said/written more than I should have and the suit can get very ugly and lengthy. One of the reasons we did not pursue him legally ourselves was cost. And now, we're at the juncture again and the cost is even greater to defend ourselves. I was advised to counter sue for the alleged fraudulent and identity theft issues, but all of this costs BOOKOO BUCKS, of which we do not have.

In your professional and experienced opinions, would it be prudent to try to defend ourselves? Pro Se? My husband feels strongly that we should and can, however neither of us has any legal experience, have never sued anyone, have never been sued, nor know anyone that has.... This makes me very nervous.

The attorney I spoke to (and paid for) indicated that if it were up to him, he would shoot for a DISMISSAL to start. And another attorney that I just casually talked to mentioned the counter suit as a viable option. Sounds viable yes, but again, is it something we can realistically handle pro se?!

Your advise, comments and suggestions in this matter would be greatly appreciated. Yes, I've been duped, yes, I've apparently been careless in my handling of this matter and yes, he beat me to the punch! What now?! If he wins, we could lose our business over this.

Thank you for reading.

 

[Zigner]

You absolutely do not want to do this on your own. Get an attorney, fast.

 

[honestliving]

Thank you

Yes, I do believe you're right about that. Now, to forge forward...

 

[davidstarr]

Similar type of case

Hi,

We are involved in a similar type case - we are running an expose' blog on a cyberstalker showing all his past and current offenses.

He has sued us, and Google, and Godaddy.com for $5 million apiece in New York, even though my primary location is in California.

I do not know if you are going pro se or not, but if you are you may want to check in with our case every once and a while because our issues are similar.
You may view it at http://thecourtofpublicopinionandlaw.blogspot.com


I do wish to make one thing abundantly clear - TRUTH is a valid defense in such cases, and the courts are likely to defend your First Amendment rights when you can prove it is true.

 

[mtpockets]

Do not go pro se

If you cannot afford an attorney, find an attorney who will help you on a limited basis. I have done this twice, and it has worked very well.

In the first case, I decided what evidence I wanted to introduce, and he decided when and how we would introduce it. He also made sure correct procedures were followed, wrote the brief and represented me at trial.

In the second case, he helped me with advice until I could scrape up some money for him to take over. Without his guidance I wouldn't have had a clue!

Although the second case is extremely straightforward, both the other party and his attorney are very dishonest. For example, the attorney had produced 3 letters he claims to have sent me. (I haven't received any of them.) Without the attorney's help I would have volunteered information beyond that which was required and made it easier for them to fabricate even more evidence.

Trial is fast approaching and the other party has done no discovery. My attorney's advice at the outset (not to reveal more than is required) will probably make a big difference at trial.

 

[Jiggly1984]

I would definitely make sure you get an attorney. Some things can be defended on your own with lots of time an effort -- a complex libel suit isn't one of those things that should be attempted, especially given the cost -- your business.

I agree that you should first shoot for a dismissal, and argue that he's filing a frivilous lawsuit. Odds are, you can get that. If you don't, file a counterclaim for your damages suffered at this guy's hands. In this situation, it is also possible you can get punitive damages because of how malicious and hurtful his actions are. However, it is very doubtful that, even if he wins his libel claim (which I'll get to in a second), he will win any punitive damages. You simply didn't act in a manner that justifies punishment beyond compensation for "damaging" his reputation.

With regards to the libel thing, the people you've talked to are correct -- libel suits are very difficult for a plaintiff to pursue because of three things: (1) they're very costly and drawn out, moreso for them than for you. (2) Libel complaints are one of the few times that the burden is placed almost entirely in the plaintiff's hands. (3) He has to prove you damaged his reputation, not his character.

I would try and dig up any past on this guy you could. For instance, if he had done anything similar to this in the past, it could go to show that his reputation was already tarnished to start with, and that your statements didn't further that damage.

Two things about libel that go pretty easily to your side. (1) FALSITY is a necessary component of libel. The plaintiff must prove that your statements were false (hence why the burden is so hard to meet... how can he prove he is in fact NOT a thief or con artist?) You said he was known to be a fraud, thief and con, not a CONVICTED fraud theif and con... You're pretty safe there. (2) PURE OPINION, that is, a statement that is not provable true or false, is protected from libel claims. Your statements about people falling victim to this guy are arguably pure opinion.

Best of luck on this issue... you shouldn't have too much of a problem with this guy.

 

[honestliving]

Thank you for the responses & support!

Since posting, I've contacted the Plantiff about settling this out of court, he indicated his agreement to do so, but we're unsure as to the process at this point. I'm hoping he'll drop the case. From his response to my phone call (very apologetic and willing to make the necessary changes so our credit does not continue to be affected), it appears he used the suit initially as a "scare tactic" to have the site shut down. He agreed that this was going to cost us both a lot of money and it would be wise to avoid that.

The deal now is, whether he was being sincere, or whether he was "playing along" so that I'd back down and run out of time (to respond) so he wins. I'm guessing that if he decides to drop the suit, we are notified in some way. Correct?

Can anyone tell me what to expect in terms of "that" process so I know he is dropping it? Any words of wisdom for this process?

You all have been most helpful and informative, I thank you very much! In the meantime, I will use the advise about contacting an attorney and what to look for to avoid too much in initial costs. Thanks again.

 

[mtpockets]

Hire an attorney to help with the settlement

You said he is suing you. Have you been served?

You have a limited time to respond, and your answer must comply with all rules regarding format, service of the plaintiff, etc. If he agrees to a settlement, you need to make sure he files whatever paperwork is necessary with the court.

Good luck.

 

[honestliving]

Ah, yes, the settlement

Yes, we have been served and yes, the clock is ticking. So, we're trying to find an attorney (and fast!) to help us review the documents, prepare to respond and to review the settlement docs once received. Sounds easy, but this is very nerve wracking. We've yet to find an attorney that will help us on a limited basis. Most attorneys want to prepare for the worst and require a $10k retainer at minimum.

Thanks for all the continued help. It's been quite a ride and I can't imagine it's going to end painlessly, so we're bracing for the impact.

We still believe we have a criminal case against this guy, so I hope he settles wisely to avoid any further action from us on him. If he decides he wants a monetary settlement, the settlement will be off, the suit will move forward and we will seek criminal charges against him. While I've not said this to him directly, I don't want to irritate the situation any further, my guess is, he already knows this and will settle accordingly to get this over with. I'm sure he won't want his dirty laundry aired, any more than it already has, I mean, that's why we're in this mess in the first place!

Again, all the comments here have inspired and helped me tremendously. Thank you.

 

[Quaere]

It’s impossible to judge whether or not your statements were libelous without seeing the full context in which they were written.

Was the complaint filed within the statute of limitations for each count?

I stated that he was a "known fraud, a thief, and a con". All of which are true in my opinion

The statement was either true in the eyes of the law or it is false. The fact that you “thought” it was true, will not help you if it is false.

because applying for credit with credentials belonging to someone else is fraud, receiving products from those fraudulently established accounts is theft,

NO, using the credit to purchase things is not theft. Theft is the act of taking something from someone unlawfully. They guy paid for his purchases with a legitimate credit card/account. This is not theft.

I’m not even sure there was fraud in obtaining the credit. It sounds to me like you are saying he was an owner of a business that had a good credit rating. He used that credit rating to obtain more credit. How is this fraud?

The final thing is that I refer to his newly formed businesses as "not so legitimate". One of which is the newly named company and one that is illegally operating in Maryland, for a fact. The other, operating on accounts established with our company credentials, so in my opinion, I stated FACT about the legitimacy of them.

Unless you qualified that statement with information that makes it clear that you “think” the business is illegitimate, then you stated a fact. If the businesses are legitimate, then the fact you stated was false. If it was false, it is libel.

I've said/written more than I should have and the suit can get very ugly and lengthy. One of the reasons we did not pursue him legally ourselves was cost.

I’d still like to know what you would have pursued against him.

And now, we're at the juncture again and the cost is even greater to defend ourselves.

You can figure on at least $50,000.00 in defense fees.

I was advised to counter sue for the alleged fraudulent and identity theft issues, but all of this costs BOOKOO BUCKS, of which we do not have.

Identity theft? If you’ve got any real case there, it’s your best hope of making this whole thing go away.

In your professional and experienced opinions, would it be prudent to try to defend ourselves? Pro Se? My husband feels strongly that we should and can, however neither of us has any legal experience, have never sued anyone, have never been sued, nor know anyone that has.... This makes me very nervous.

Are you willing to spend hundreds of hours teaching yourself about both the law and procedure? If so, you can defend yourself. Frankly, even if you pay an attorney, you are a fool if you allow that attorney to operate unsupervised and to supervise him, you still have to know and understand the law and procedure.

The attorney I spoke to (and paid for) indicated that if it were up to him, he would shoot for a DISMISSAL to start.

On what grounds? There is no way in the world you’ll get this dismissed for failure to state a claim. You can argue truth as a defense (if you can prove truth) but that is not a decision the Court can render without a trial. You can argue opinion as a defense but again, not without a trial.

If you falsely accused plaintiff of criminal activity or illegitimate business practices, and those accusations are false, he does not have to prove damages. It will be libel per se and damages are presumed. Punitive damages are also a very real threat.

It is true that if they guy already had a tarnished rep that will help your case. If you can find anything at all, plan to use it.

The plaintiff does not have to prove your statements were false. He can’t prove a negative. He merely has to allege that the statements were false and if you want to use the truth defense, the burden shifts to YOU to prove the statements were true.

 

[Quaere]

honestliving, if you turn on your private messenging I will contact you privately.

 

[honestliving]

I fear you misunderstand the basis for my argument.

It’s impossible to judge whether or not your statements were libelous without seeing the full context in which they were written.

---- Yes, of course.

Was the complaint filed within the statute of limitations for each count?

---- Not sure.

I stated that he was a "known fraud, a thief, and a con". All of which are true in my opinion

The statement was either true in the eyes of the law or it is false. The fact that you “thought” it was true, will not help you if it is false.

---- I've personally witnessed his fraudulent, thieving and conning ways and have persons that are willing to testify as victims of his actions. We're not the only ones.

because applying for credit with credentials belonging to someone else is fraud, receiving products from those fraudulently established accounts is theft,

NO, using the credit to purchase things is not theft. Theft is the act of taking something from someone unlawfully. They guy paid for his purchases with a legitimate credit card/account. This is not theft.

---- Your statement: "They guy paid for his purchases with a legitimate credit card/account. This is not theft." tells me that you did not understand what this whole issue is based around. He used credentials not belonging to him, not belonging to his company and never had. He used credentials that belonged to someone else entirely without their consent or permission. Obtained the credit, purchased and received the products, never paid his bills. That is fraud and theft. You mention "legitimate credit card", how can it be legitimate if he applied for credit in someone else's name, used someone else's banking information, used someone else's fed tax ID number to qualify and establish the credit account?! Legitimate card?

I’m not even sure there was fraud in obtaining the credit. It sounds to me like you are saying he was an owner of a business that had a good credit rating. He used that credit rating to obtain more credit. How is this fraud?

---- By now I'm sure you realize that you've misunderstood the the basis for this issue. His company never had credit, it was a startup, he used credentials belonging to ANOTHER company, to obtain credit for his company and used for his own financial gain and in most cases, defaulted on. So in fact, he created BAD credit & debt for my company of which he never owned, or was employed by at any time.

The final thing is that I refer to his newly formed businesses as "not so legitimate". One of which is the newly named company and one that is illegally operating in Maryland, for a fact. The other, operating on accounts established with our company credentials, so in my opinion, I stated FACT about the legitimacy of them.

Unless you qualified that statement with information that makes it clear that you “think” the business is illegitimate, then you stated a fact. If the businesses are legitimate, then the fact you stated was false. If it was false, it is libel.

---- In fact, I can prove this statement 100% and have the IRS to back it up.

I've said/written more than I should have and the suit can get very ugly and lengthy. One of the reasons we did not pursue him legally ourselves was cost.

I’d still like to know what you would have pursued against him.

---- I'm sure you've figured this one out by now.

And now, we're at the juncture again and the cost is even greater to defend ourselves.

You can figure on at least $50,000.00 in defense fees.

I was advised to counter sue for the alleged fraudulent and identity theft issues, but all of this costs BOOKOO BUCKS, of which we do not have.

Identity theft? If you’ve got any real case there, it’s your best hope of making this whole thing go away.

---- Actually, we're investigating our options of which, we're told we have quite a few in our favor.

In your professional and experienced opinions, would it be prudent to try to defend ourselves? Pro Se? My husband feels strongly that we should and can, however neither of us has any legal experience, have never sued anyone, have never been sued, nor know anyone that has.... This makes me very nervous.

Are you willing to spend hundreds of hours teaching yourself about both the law and procedure? If so, you can defend yourself. Frankly, even if you pay an attorney, you are a fool if you allow that attorney to operate unsupervised and to supervise him, you still have to know and understand the law and procedure.

The attorney I spoke to (and paid for) indicated that if it were up to him, he would shoot for a DISMISSAL to start.

On what grounds? There is no way in the world you’ll get this dismissed for failure to state a claim. You can argue truth as a defense (if you can prove truth) but that is not a decision the Court can render without a trial. You can argue opinion as a defense but again, not without a trial.

If you falsely accused plaintiff of criminal activity or illegitimate business practices, and those accusations are false, he does not have to prove damages. It will be libel per se and damages are presumed. Punitive damages are also a very real threat.

---- Got it, again, have not falsely accused anyone. I have proof of everything stated.

It is true that if they guy already had a tarnished rep that will help your case. If you can find anything at all, plan to use it.

The plaintiff does not have to prove your statements were false. He can’t prove a negative. He merely has to allege that the statements were false and if you want to use the truth defense, the burden shifts to YOU to prove the statements were true.

---- Again, I am aware that truth is a defense, especially if it can be backed up and proven, which it can.

Thank you for your comments, however, this one seems to be headed into the wrong direction.

 

[Quaere]

If what he did amounts to identity theft, why aren’t the police handling the investigation?

They guy either committed a criminal act or he didn’t. If he did, he should have been charged by now. A criminal conviction is all you will need to prove the “truth” of the statement you made calling him a thief.

If you can’t get a criminal conviction, it will do you no good to defend the libel by saying that in your opinion, what he did amounted to theft.

Let us know how it goes. I will be interested to hear how your motion to dismiss turns out. Good luck!

 

[honestliving]

Thanks, I'll keep you posted.

If what he did amounts to identity theft, why aren’t the police handling the investigation?

--Actually, he is being investigated at this time but this case is so complicated that our local police dept. couldn't make heads or tales of it since the accounts were established all over the country and not in our city. I've been in contact with the States Attorney as well, it's been a real circus! It' been very difficult to get anyone to do anything because it's such an "unusually complicated" situation.

They guy either committed a criminal act or he didn’t. If he did, he should have been charged by now. A criminal conviction is all you will need to prove the “truth” of the statement you made calling him a thief.

If you can’t get a criminal conviction, it will do you no good to defend the libel by saying that in your opinion, what he did amounted to theft.

--Will definately keep you posted! Last we heard, his attorney was going to send us a Consent Order, so we're sitting tight.

Let us know how it goes. I will be interested to hear how your motion to dismiss turns out. Good luck!

-- Thanks again!

 

[honestliving]

Final Outcome

The case against us and our company has been dismissed with predjudice. We signed a Consent Order and round 1 is over with.

I know we can again find ourselves in this boat if the Plantiff chooses, but hopefully, he'll be behind bars before that happens.

Thanks all for the help!