Emotions can run hot in HOAs, and both boards and owners are occasionally tempted to say nasty things about one another. But words can spark lawsuits, and both boards and owners should know what they can and can’t say in order to avoid serious liability.
Imagine that you are a member of the Board of Directors of Yellow Brick Road HOA. You suspect that your neighbor, “Dishonest Darryl” (apologies to the honest Darryls out there), is remodeling his unit with money he received from the association to repair water damage caused by a leak in a common area pipe. You believe Darryl exaggerated his claim and took advantage of the association. Elections are coming up and you think that Darryl is going to run for the board. You decide to put your suspicions in the association newsletter and post it on the association’s web site to warn your fellow homeowners. What happens if you are wrong and Darryl sues you? Can any of these actions subject you to liability for defamation? The answer is a resounding “Yes”!
Although there are a number of instances, such as the one above, in which the board of directors of a homeowners association or even a concerned homeowner may have an interest in relaying important but potentially damaging information about a homeowner to other association members, the questions are:
How much can you say? To whom? How do you communicate such information?
The importance of these questions is magnified by the fact that, more and more, homeowner associations are using the Internet to conduct association business. The Internet has increased the speed that information travels and has allowed for instant mass distribution of information. While use of the Internet does not change what does or does not constitute defamation, it does increase the risk for rapid dissemination of potentially harmful information.
For example, the typical board meeting is not (and should not be) recorded, and the minutes of those meetings merely provide a summary of what occurred. Conversely, if the board members communicate among themselves or with association members by e-mail, there is a verbatim record of everything that is said and once the information is disseminated, there is no way to retrieve it.
The very factors that make the web an attractive means to communicate–namely, the speed, the ease of distribution of information, and the fact that it creates a permanent record–also increase the risk of exposure to liability for defamation. By arming you with information about which kinds of communications are defamatory and which are not, this article may help you and your association avoid some common pitfalls both on the internet and elswhere.
What Is Defamation?
Defamation is defined as the act of injuring someone’s reputation by communicating false information about that person to a third person or persons. The communication or publication to a third person can be oral, written or in any other form of fixed expression, such as a cartoon or caricature. Defamation can take one of two forms: libel or slander. This article will focus on libel, which relates to written communications such as e-mail, rather than slander, which relates solely to oral communications.
Libel is defined as a false publication (including writing, printing, picture, effigy or other fixed expression to the eye) that is not protected by law and either:
- Exposes a person to hatred, contempt, ridicule, censure or reproach;
- Causes him to be shunned or avoided; or
- Has a tendency to injury him in his reputation.
Certain communications are defamatory per se (on their face) as applied to anyone; whereas others require additional facts to show why they may be defamatory to a particular person. For instance, calling someone a fascist is clearly defamatory while calling someone an animal lover is not, unless you are saying it to imply falsely that a board member is not enforcing the pet restriction in the CC&Rs because he is an animal lover. If a communication is defamatory, the defamed party does not have to establish that he suffered actual damages but can recover for the presumed injury to his reputation. If the communication is not defamatory, the defamed party has to show that he suffered actual damage because of the defamatory communication.
Following our hypothetical, if Darryl was actually entitled to the money he received from the association, the board member may be subject to a claim for libel because he communicated his unwarranted suspicions to third parties by putting the information in the association’s newsletter and or on its web site. If the board member published the information with the consent or at the direction of the other members of the board of directors, the other board members and the association may also be liable. Likewise, if the board members repeat the defamatory statement to a third party, that repetition may also be considered a publication, which may in turn give rise to a claim for libel or slander against the other board members. In this situation, the act of repeating could be as simple as forwarding the e-mail.
The example above demonstrates that actions taken by one board member may expose other board members or the association to liability for defamation. Comments by a manager may also be the basis for a libel claim against the association and the board, because the manager is the board’s agent, and the manager’s communications are generally made on behalf of the association.
Defenses To A Claim Of Defamation
It may seem that the association, its board of directors, or its manager(s) cannot say much of anything without running the risk of being accused of defamation. Do not despair. There are several defenses to a claim of defamation.
To qualify as libel or slander, a statement or other communication must be false and unprivileged. If a publication is true or if it is subject to one of several privileges enumerated in the California Civil Code, then it is not considered defamatory although it may satisfy all of the other elements of a claim for libel or slander.
Truth As A Defense
For example, if Darryl is actually obtaining money from the association under false pretenses, then the board member cannot be held liable for defamation, even though the statement may damage Darryl’s reputation, because the information communicated is true. Truth is an absolute defense to a claim for defamation.
The defense of truth may be particularly appropriate when applied to CC&R violations. If a board member or management company is discussing a homeowner violation with other board members, then as long as they can prove that the homeowner did, in fact, commit the violation, they will not be liable for defamation despite the damage to the homeowner’s reputation. The only difficulty arises in proving that the homeowner actually committed the alleged violation and that the description is accurate, such that the defense of truth applies.
What about liability for publishing CC&R violations on the association’s web site or in a monthly newsletter? Although this publication would also be subject to the defense of truth, other factors, like invasion of privacy by publicizing private facts, such as the status of a homeowner’s account, might create problems for the association.
Qualified Common Interest Privilege
There is a qualified privilege for communications made, without malice, by a person who has an interest in the communication to another interested person, provided that the interested persons are related to one another in such a way that it can be reasonably assumed that the motivation behind the communication was innocent. This so-called “common interest” privilege has been used to defeat a claim of privilege where a former tenant sued an association and its board for libel for sending a letter to the owner of the unit stating that the tenant had exposed himself to a child. The court found that the communication was privileged because the homeowner had an interest in receiving the information.
Going back to our Darryl example, the concerned board member’s communications to fellow board members or homeowners might be subject to the qualified common interest privilege because they are clearly discussing something of common interest; namely, obtaining association funds under false pretense and Darryl’s fitness for office. Our board member may be in trouble, however, if he does not have a good reason to believe that Darryl obtained the funds under false pretense because he could be guilty of malice, which would negate the qualified “common interest” privilege.
Protection For Acts In Furtherance Of Free Speech
Additional protection for speech that might otherwise be classified as defamatory can be found in the anti-SLAPP (anti-strategic lawsuit against public participation) statute, which protects people or organizations from actions that interfere with the exercise of the right to free speech. In the recent case of Damon v. Ocean Hills Journalism Club, the California Court of Appeal applied the anti-SLAPP statute to protect board members’ and homeowners’ statements criticizing the performance of the association’s manager at board meetings and in a newsletter published by a member of the association. In finding that the communications were protected, the court recognized that the association was a quasi-governmental entity. The court stated that the newsletter and board meetings, which were open to the association community, constituted a public forum, even though the newsletter expressed only one point of view. The court found that the communications dealt with a matter of public interest because they related to the manner in which a large (3000-member) residential community would be governed. The court also found that the statements at issue were not false statements but were the personal opinions of the speakers as to the manager’s performance. As such, the statements were protected speech and the manager’s defamation action was dismissed.
Applying the Damon decision to the Darryl hypothetical, our board member might be protected for his publication of his suspicions in the association newsletter or on the association’s web site because, depending on the size of the association, those communication vehicles would likely be deemed public forums. Likewise, because the communications relate to possible misuse of association funds and a candidate’s fitness to hold office, the communications are clearly about a matter of public interest. Accordingly, our board member’s communications in those forums would likely be protected.
So, if your association, through its board of directors and/or manager, plans on using the Internet to communicate information to its members, there are certain guidelines that should be followed to minimize the association’s, individual board members’ and manager’s risk of exposure to liability for libel. Those guidelines are as follows:
- Make sure the communication about the person looks “official” so that the use of the Internet is considered a public forum and falls under the anti-SLAPP statute.
- Make sure the communication pertains to the owners’ interest as members of the association or as homeowners.
- Minimize the use of adjectives in your communication; be objective and recite facts that can be supported by evidence.
- Even though board members and managers have reason to believe certain facts to be true, refrain from using affirmative language by using “may” and “could” instead of “did,” etc.
Armed with these guidelines, your association should be able to communicate to its members on the internet about other persons while reducing the risk of exposure to a libel lawsuit.
Matt Ober and Melanie Bingham are attorneys. Ober is a Senior Partner at the Pasadena law firm of Richardson Harmon Ober PC where he heads the community association law practice, which provides legal representation to common interest developments throughout Southern California.