NUWAVE INVESTMENT CORPORATION, TROY W. BUCKNER, and JOHN S. RYAN, Plaintiffs-Respondents,
HYMAN BECK & COMPANY, INC., ALEXANDER HYMAN and RICHARD DEFALCO, Defendants, and FIRST ADVANTAGE LITIGATION CONSULTING, LLC (f/k/a BACKTRACK REPORTS, INC.), Defendant-Appellant. NUWAVE INVESTMENT CORPORATION, TROY W. BUCKNER, and JOHN S. RYAN, Plaintiffs-Appellants,
HYMAN BECK & COMPANY, INC., and ALEXANDER HYMAN, Defendants-Respondents, and FIRST ADVANTAGE LITIGATION CONSULTING, LLC (f/k/a BACKTRACK REPORTS, INC.), and RICHARD DEFALCO, Defendants.
Argued February 26, 2013
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-0411-06.
Kenneth A. Schoen and Becky L. Caruso argued the cause for appellant in A-5275-10 (Bonner, Kiernan, Trebach & Crociata, LLP, attorneys; Mr. Schoen, Alexander H. Gillespie and Ms. Caruso, on the brief).
John F. Olsen argued the cause for respondents NuWave Investment Corp., Troy W. Buckner, and John S. Ryan in A-5275-10 and appellants in A-5451-10 (Law Office of John F. Olsen, attorney; Mr. Olsen, on the brief).
Ian S. Marx argued the cause for respondent Hyman Beck & Company, Inc. in A-5451-10 (Greenberg Traurig, LLP, attorneys; Philip R. Sellinger, on the brief).
Before Judges Messano, Lihotz and Kennedy.
These two appeals were calendared back-to-back and argued together. We have consolidated the appeals for the purpose of filing a single opinion.
Plaintiffs Troy Buckner and John Ryan were principals of NuWave Investment Corporation (NuWave, and collectively, plaintiffs), which Buckner founded after he left employment with defendant Hyman Beck & Company (Hyman Beck), the employer of defendants Alexander Hyman and Richard A. DeFalco (collectively, the Hyman Beck defendants). Defendant First Advantage Litigation Consulting, LLC, formerly known as BackTrack Reports, Inc. (BackTrack), prepared background investigative reports regarding the financial industry for clients considering investment opportunities. BackTrack prepared such reports on Buckner, Ryan and NuWave. Those reports included statements, many of which were attributed to the Hyman Beck defendants, that plaintiffs considered defamatory.
On February 8, 2006, plaintiffs filed a complaint asserting: trade libel and defamation against all defendants; intentional interference with economic advantage as to the Hyman Beck defendants; and negligence as to BackTrack. Plaintiffs subsequently filed an amended complaint asserting malicious abuse of process against BackTrack.
Plaintiffs' defamation claim against the Hyman Beck defendants was dismissed based upon the applicable one-year statute of limitations. See N.J.S.A. 2A:14-3 ("Every action at law for libel or slander shall be commenced within 1 year next after the publication of the alleged libel or slander."). Subsequent dismissals left only the defamation claim against BackTrack for trial.
The jury found BackTrack liable and awarded the following amounts as "presumed damages": NuWave -- $1 million; Buckner --$150, 000; Ryan -- $50, 000. The jury further determined that NuWave suffered $1.406 million in "actual damages" as a proximate result of BackTrack's defamatory statements, but neither Buckner nor Ryan suffered actual damages. The jury also determined that BackTrack proved Hyman "and/or" DiFalco had defamed plaintiffs and their defamation was "injurious to the plaintiffs, " apportioning responsibility as follows: BackTrack -- 37%; Hyman -- 53%; DeFalco -- 10%. Lastly, the jury determined that BackTrack "engaged in malicious or willful and wanton conduct entitling" plaintiffs to punitive damages in the amount of $250, 000. The judge molded the verdict and entered an order for judgment on May 20, 2011, that also included pre-judgment interest.
BackTrack now appeals. It argues that the judge erred by permitting the jury to award "presumed damages." In this regard, BackTrack's argument is multi-faceted. It contends that: the reports were not defamatory, or, certainly not libelous per se; and, "the presumed damages doctrine" is inapplicable in the absence of proof of "actual malice" or "where evidence of actual damages is offered." BackTrack also argues the judge erred: in concluding no "qualified privilege" applied to the reports; by finding BackTrack owed a duty to plaintiffs; by denying BackTrack summary judgment on the ground that the complaint was barred by the statute of limitations; and by denying BrackTrack's motion for a directed verdict. Lastly, BackTrack attacks the award of punitive damages because the judge denied a request for curative instructions based upon comments made by plaintiffs' counsel in his summation.
Plaintiffs also appeal. They contend the judge erred in dismissing their claim against the Hyman Beck defendants as barred by the statute of limitations, arguing the "discovery rule" applies.
We have considered these arguments in light of the record and applicable legal standards. On BackTrack's appeal, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion. As to plaintiffs' appeal, we affirm.
Prior to trial, both sides moved for summary judgment. By order dated January 28, 2011, the judge granted plaintiffs partial summary judgment as to two issues. Because the grant of partial summary judgment to plaintiffs on one of those issues affected the course of the trial and requires our reversal, we address that first.
The judge determined that certain statements contained in the BackTrack reports were per se defamatory. The nature of these statements can be understood most easily by reference to the jury verdict sheet used during trial, which, with minor editing changes by the judge for clarity, accurately set forth the contents of the BackTrack reports:
1. "[W]e basically fired [Buckner] . . . He was terminated here. His employment was terminated at the end of his contract."
2. "Mr. Buckner got fired."
3. "[Buckner] was down 50% for us, in five years."
4. "[Buckner] stole things from [Hyman Beck] when he left."
5. "[W]hen [Buckner] was removed from Hyman Beck – he did a lot of crazy things, like" take the server; take a lot of trading systems that didn't belong to him."
6. "[Ryan] was stealing things and sending them over to [Buckner] . . . [Ryan was stealing] [i]nternal file, emails, [and] customer lists."
7. "[Ryan] was the one that stole the system from [Hyman Beck] . . . . They stole the server from [Hyman Beck].
8. "[T]he tables of [NuWave's] performance data are fudged."
9. "[Buckner] doubled over an account without telling the customer. He doubled the positions on the account. They agreed to a risk amount, or an account size. The customer called and complained and he said, 'Look, I have power of attorney . . . ."
10. "[Buckner] double leveraged the account without asking the client. And when he did that the client called him and said they didn't want to trade that amount of leverage. [Buckner] responded saying, 'I have power of attorney on this account. I can do what I deem necessary . . . '"
11. "Ryan and Buckner basically lost a big account. I don't know who it was, but there was an account there that gave them $15 million."
12. "[When Ryan] left [Hyman Beck], he erased his entire hard drive. We had to hire people to come in here to figure out what he did."
13. "[Ryan] actually took [Hyman Beck] down for a day, by changing our default gateway, remotely. And when we traced [the] address back, it came back to NuWave Corp."
14. "They tried to take our Internet service down."
15. "The last couple of years were awful performance. [Buckner] should be showing that record [from Hyman Beck] . . . . [B]y law you are required to show your results."
16. "[Buckner's] not allowing his track record that he had at Hym[a]n Beck to follow him . . . . [H]e's not taking it with him from his new shop. You know that from his Web site . . . . [I]t needs to be on his Web site, because that's his track record."
17. "[Buckner's] blown up three times in the business . . . [Buckner] blew up when he was at . . . ...