Gurda v. Orange County Publications Division of Ottaway Newspapers, Inc.

OPINION OF THE COURT

Weinstein, J.

The instant litigation has its genesis in two judgments obtained by the Aetna Casualty and Surety Company against, respectively, the Hambly Construction Company, Inc., in 1970 and William J. Hambly in 1972, in connection with a default by Hambly Construction and Hambly on a contract with New York State to build dormitories at a State college. Aetna subsequently brought an action against, inter alia, Hambly’s attorney and the attorney’s son, Michael A. Gurda and Michael A. Gurda, Jr., who are the plaintiffs herein, seeking to set aside certain conveyances of real property alleged to have been made by Hambly to the Gurdas for the purpose of hindering Aetna’s attempts to satisfy the afore-mentioned judgments. The court, after a non jury trial, found in favor of Aetna on certain causes of action in that certain of the conveyances were made with actual intent to hinder or delay present creditors, and therefore were fraudulent within the meaning of section 276 of the Debtor and Creditor Law. Pursuant to section 276-a of that law, Aetna was also awarded attorneys’ fees.

Defendant Orange County Publications thereafter published, in a newspaper known as the Times Herald Record, an article describing the latter lawsuit. A headline appearing prominently on the first page of the newspaper’s edition of April 21, 1979, proclaimed “Judge: Gurdas, builder defrauded firm.” A caption over the article itself on page 3 read “Gurdas, builder fined in fraud case.” In the body of the article was a statement that the Gurdas and Hambly “defrauded” Aetna, and a quotation attributed to defendant Howard Karger, attorney for Aetna, that the Gurdas “were guilty of intentional fraud at a time he [sic] was an attorney of law admitted to practice in the State of New York”. The Gurdas thereupon each brought an action against Orange County Publications and the Times Herald Record (both hereinafter referred to as the newspaper) and against Karger to recover damages for libel.

The newspaper moved for summary judgment dismissing the complaints as to them on the ground that the published article was “a fair and true report of any judicial proceeding” within the meaning of the absolute privilege set forth in section 74 of the Civil Rights Law. The court granted the motion. It reasoned that although the fraud defined in the Debtor and Creditor Law was not equivalent to the type of fraud that the average layman associates with the term (that is to say, criminal intent to defraud), the article’s failure to draw this distinction did not render it not “fair and true” so as to deprive the newspaper of the protection afforded by the Civil Rights Law. The court also held that the attorneys’ fees award against the Gurdas could reasonably be described, by a lay reporter, as a fine, even though it was not a fine in the strict legal sense. The court reached a similar conclusion with respect to Karger, and granted his motion for summary judgment dismissing the complaints as to him.

This court is now called upon to review Special Term’s decision dismissing the complaints. We turn to so much of the judgments as granted summary judgment in favor of the newspaper.

The question is, of course, whether the article can be said, as a matter of law, to be a “fair and true report of [a] judicial proceeding,” or whether this issue should be left to a jury for determination. We are mindful of the public policy, reflected in section 74 of the Civil Rights Law, of encouraging public scrutiny of judicial proceedings, thereby enhancing the integrity of the courts and reinforcing the accountability of those that administer justice (see Shiles v News Syndicate Co., 27 NY2d 9; Williams v Williams, 23 NY2d 592). However, such scrutiny safeguards neither integrity nor accountability when it is applied carelessly (see Williams v Williams, supra). In such cases, the harm to persons defamed outweighs the benefits to be gained from public scrutiny of the courts. Therefore, the privilege set forth in section 74 of the Civil Rights Law is absolute, irrespective of the presence or absence of malice or bad faith,* but only when the report is “fair and true”.

The Legislature, mindful of the possibility of abuse, has seen fit to demand a corresponding duty from those who scrutinize the courts, that their reports indeed be fair and true. This duty is not necessarily to ensure that reports of judicial proceedings be rigidly and technically perfect (see Briarcliff Lodge Hotel v Citizen-Sentinel Publishers, 260 NY 106; Keogh v New York Herald Tribune, 51 Misc 2d 888, affd 28 AD2d 1209, mot for lv to app den 21 NY2d 955; George v Time, Inc., 259 App Div 324, affd 287 NY 742). Neither will the omission of mere details in an otherwise accurate account render the report libelous (see Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, cert den 434 US 969). But there is a fine line between reports of judicial proceedings which are generally true and fair, and hence absolutely privileged, and reports which a trier of fact could find to be meaningfully false and unfair, and therefore not privileged. The newspaper article involved here has crossed that fine line.

It is well settled that in actions to recover damages for defamation, whether or not based on a report of judicial proceedings, words are to be construed as persons generally understand them and according to their ordinary meaning (see Cafferty v Southern Tier Pub. Co., 226 NY 87; Rovira v Boget, 240 NY 314). Courts should not strain to interpret words so as to render them inoffensive and hence nonlibelous (see Mencher v Chesley, 297 NY 94; Schermerhorn v Rosenberg, 73 AD2d 276). Moreover, if the headlines of an article are susceptible of a libelous interpretation, a libel action should not be dismissed even though the body of the article may be inoffensive (see Campbell v New York Evening Post, 245 NY 320; Shubert v Variety, Inc., 128 Misc 428, affd 221 App Div 856).

Applying these general principles to the case at bar, we hold that a jury could find that the ordinary meaning of the words in the article or its headlines rendered them false and unfair in a meaningful way, and hence, libelous. Special Term properly observed that the terms “fraud” and “defraud” can connote criminal activity (cf. Penal Law, arts 185, 190). However, it erred in holding that the article’s failure to differentiate between civil and criminal fraud, a distinction too subtle to be known to most layman readers of the article, was of no legal consequence. Since a jury could well find that the ordinary meaning of the words “fraud” and “defraud” is the criminal one, in which case the article would no longer be a fair and true report of a judicial proceeding, a trial must be held to determine this issue. We think it is particularly noteworthy that the headline regarding the fraud was prominently emblazoned across the masthead. It is possible, therefore, that even if a reader, upon reading the entire article, would have been able to discern that there was no question of criminal fraud involved, he might very well notice the headline and then not proceed to read the explanation in the body of the article.

We also note the use of the word “fined” in the caption of the article. The word “fine” has been defined as a monetary punishment imposed upon a person or other entity “convicted of [a] crime or misdemeanor” (see American Sur. Co. of N.Y. v Town of Islip, 268 App Div 92, 96; see, also, Penal Law, art 80). While this certainly is not the only reasonable meaning that could be attached to the word, we are satisfied that an issue of fact exists as to whether the use of the word “fined” in the caption was libelous.

Furthermore, the use of the phrase “guilty of intentional fraud” in the body of the article, perhaps the words most susceptible to a libelous interpretation, surely could be interpreted by a lay jury or reader to mean that criminal activity was afoot. In an instance, such as this one, where such an interpretation is manifestly so reasonable, it is incorrect to deem the article a fair and true report of a judicial proceeding as a matter of law. The article could reasonably be read in a way that would render it untrue; therefore, it was error to grant summary judgment in favor of the newspaper. Accordingly, this matter must be remanded for a trial of the Gurdas’ causes of action against the newspaper.

We recognize, as the dissenters emphasize, that the word “fraud” can call to mind concepts, such as “trickery”, “deceit”, or “misrepresentation”, which are free of criminal connotation. And we assure the dissenters that we do not consider those individuals who have paid a fine for misjudging the time remaining on a parking meter or for returning an overdue book to a public library to be criminals. But we are not granting summary judgment in favor of the plaintiffs on their causes of action for libel. To do so would most assuredly be entirely erroneous. Our holding merely directs a jury to be impaneled to decide the issues of fact. The words “fraud” and “fine” may not connote criminal activity to the reasonable person, but then again, they may. If they do, then the newspaper article is by no means a fair, and definitely not a true, report. Questions of fact exist, and our holding today means nothing more and nothing less than that the usual judicial methods for resolving them must be employed.

We do not intend, by our holding today, to cut back on the First Amendment guarantees of free press and free speech which are so deeply engrained in our constitutional and social heritage. We reaffirm the principle, by which the jury that will try these actions should be guided, that in order to be afforded the protection of section 74 of the Civil Rights Law, a report of a judicial proceeding need not be a verbatim report, absolutely true and correct in all respects. A “fair and true report”, not a rigidly and technically perfect one, is all that is required (see Briarcliff Lodge Hotel v Citizen-Sentinel Publishers, supra; George v Time, Inc., supra; Holy Spirit Assn. for Unification of World Christianity v New York Times Co., 49 NY2d 63; Grobe v Three Vil. Herald, 69 AD2d 175, affd 49 NY2d 932). Omission of minor details in an otherwise accurate account is not actionable (see Rinaldi v Holt, Rinehart, & Winston, 42 NY2d 369, cert den 434 US 969, supra). But the faults of the newspaper article in question were neither minor nor omissions. They were several prominently printed words and phrases which might very well imply to layman readers that the Gurdas had committed a criminal offense. We cannot say that, as a matter of law, the article was a fair and true report of the lawsuit. A trier of fact must determine whether the fair import of the article was libelous or whether it was, indeed, viewed in its entirety, a fair and true report of a judicial proceeding (see Mencher v Chesley, 297 NY 94, supra; Colpitts v Fine, 42 AD2d 551).

We may now turn our attention to the two remaining issues before us. We affirm the judgments under review insofar as they granted summary judgment in favor of Howard Karger. His statement to the author of the article was a mere opinion of what had transpired, and hence, was protected under the rule of Rinaldi v Holt, Rinehart & Winston (supra).

Finally, we note that Special Term properly declined to award discretionary costs to Karger pursuant to CPLR 8303 (subd [a], par 2).

* To be sure, an action for libel based on a fair and true report of a judicial proceeding could at one time be maintained if actual malice were shown (former Civ Prac Act, § 337 [L 1920, ch 925]). The actual malice exception was deleted in 1930 (L 1930, ch 619).