Opinion
Civil No. 04-770-JO.
August 23, 2004
Thomas K. Doyle, BENNETT HARTMAN MORRIS KAPLAN, LLP, Portland, OR, Attorney for Plaintiff.
Jennifer L. Hungerford, Nancy J. Hungerford, THE HUNGERFORD LAW FIRM, Oregon City, OR, Attorneys for Defendants.
OPINION AND ORDER
Plaintiff Donald Bellairs ("Bellairs") filed a Section 1983 action against the Beaverton School District, district Superintendent Jerome Colonna and school district board Chairman Craig Irwin, in their official and personal capacities (collectively, the "District"), alleging federal constitutional claims and pendant state law claims for acts surrounding his dismissal in February, 2004 as a contract teacher with the Beaverton School District.
The District moves for a Federal Rule of Civil Procedure 12(b)(6) dismissal for failure to state a claim (#3). Specifically, the District asserts that Bellairs's defamation claim, one of the four claims brought in this action, fails to allege sufficient facts to support the claim.
For the reasons stated below, the District's motion is DENIED.
FACTS
Bellairs worked for the District as a contract teacher. On January 14, 2004, Superintendent Colonna met with Bellairs to discuss school administrative policies. At that time, Bellairs expressed to Superintendent Colonna "concerns he had regarding school funding, hiring procedures, and favoritism." Complaint, 3. Thirteen days later, on February 3, 2004, the District gave Bellairs a Notice of Dismissal that "indicated that the Beaverton School District was terminating plaintiff based, in part, on his speaking out on school funding matters, and other issues, in the January 14, 2004 meeting." Complaint, 3.
That same month, February 2004, Bellairs applied to a mortgage lender for a loan to purchase property. As part of the loan application process, the prospective lender mailed an employment verification form to the District. The District indicated on the form that as of Friday, February 20, 2004, Bellairs had "resigned his teaching position" effective that following Monday, February 23, 2004. However, Bellairs had not resigned, and the District terminated Bellairs on February 24, 2004, for the reasons stated in the Notice of Dismissal given Bellairs two weeks prior to his dismissal.
Subsequently, Bellairs was unable to obtain a mortgage loan from the inquiring lender and has been unable to secure mortgage financing at rates equal to, or better than, what was available to him in February 2004. Bellairs claims that the District's act of falsely reporting his imminent resignation injured his reputation with the inquiring lender and cost him the lost opportunity to secure mortgage financing at a more favorable rate than was later available. Bellairs seeks monetary damages for his severe emotional and physical injury resulting from the alleged defamation.
STANDARD
A federal district court should not grant a Rule 12(b)(6) motion to dismiss for failure to state a claim unless it appears beyond doubt that the plaintiff can prove "`no set of facts in support of his claim which would entitle him to relief.'"Gilligan v. Jamco Development Corp., 108 F.3d 246, 248 (9th Cir. 1997) (quoting Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). The court must treat all facts alleged in the complaint as true. See Parks School of Business, 51 F.3d at 1484. Moreover, the court resolves all doubts in favor of the non-moving party. See Everest Jennings, Inc. v. Am. Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir. 1994).
DISCUSSION
The District argues that Bellairs's defamation claim should be dismissed because "the statement that an employee resigned is not capable of defamatory meaning." Defendants' Memorandum in Support of Motion to Dismiss, 2. Bellairs, in turn, argues that in the context of a mortgage loan application, falsely stating that he resigned defamed his credit with a prospective lender. Plaintiff's Response, 3.
Under Oregon law, to establish a defamation claim, a plaintiff must show that the defendant made a false statement that "tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him." Beecher v. Montgomery Ward Co., 267 Or. 496, 499-500, 517 P.2d 667 (1973); see, King v. Menolascino, 276 Or. 501, 503-504, 555 P.2d 442 (1976) (applying the Restatement test of what is defamatory).
As a threshold matter, whether a statement is capable of being defamatory is a question of law. See Reesman v. Highfill, 327 Or. 597, 604, 965 P.2d 1030 (1998); Beecher, 267 Or. at 500 ("The court determines whether a communication is capable of a defamatory meaning.") (emphasis in original). The court considers the plain meaning of the statement and reasonable inferences drawn from the context of the communication. See King, 276 Or. at 504. A communication is capable of being defamatory if it "would subject another to hatred, contempt or ridicule * * * [or] tend to diminish the esteem, respect, goodwill or confidence in which [the other] is held or to excite adverse, derogatory or unpleasant feelings or opinions against [the other]." Reesman, 327 Or. at 603; see, King, 276 Or. at 503-504 (citingFarnsworth v. Hyde, 266 Or. 236, 238, 512 P.2d 1003 (1973), for what makes a communication defamatory). Finally, the inference of a defamatory meaning must be a reasonable one. See Reesman, 327 Or. at 604 (citation omitted).
Here, the District informed the inquiring lender that Bellairs would resign his job as a school teacher. A job resignation may occur for a number of reasons, good and bad, i.e., resigning to take a new position or, alternatively, facing an option of resigning or being fired. Therefore, the term is facially innocuous.
However, the context may infer a derogatory judgment about a person that is defamatory. See, e.g., Beecher, 267 Or. at 500 (third-party letter to employer requesting assistance in collecting money from employee "could have been understood by the recipients in a defamatory sense as being derogatory of plaintiff's credit."); cf. Reesman, 327 Or. at 604-605 (statement that a corkscrew climb "is definitely frowned upon by FAA authorities" does not reasonably imply that the maneuver was improper and thereby does not imply pilot was unsafe). The employment status of a loan applicant is key to showing a financial capability to repay a loan. If a borrower is unemployed, a prospective lender would have little cause to consider making a loan.
I find that in the context of a mortgage application inquiry, falsely telling the inquiring lender that the applicant has resigned his job does a very real harm to the applicant's ability to acquire a mortgage loan from that lender. Further, it undermines the veracity of information provided to the lender by the applicant.
The District also argues that Bellairs's reputation was not injured because only the inquiring mortgage lender was deterred from conducting business with Bellairs. Defendants' Reply, 2. This argument goes to publication of the libel and not to the threshold question of law of whether informing the lender that Bellairs "resigned his teaching position" is capable of a defamatory meaning.