In terminating a third party vendor, a board of directors must be careful in disseminating information concerning the basis for its decision – especially if the decision was due to poor performance or contractual violations by the vendor.
In Florida, a cause of action for defamation can be brought against a corporation, including specifically, a community association. The easiest way to understand defamation is through its definition. It is “the unprivileged publication of false statements which naturally and proximately result in injury to another.” Hoch v. Loren, 273 So. 3d 56 (Fla. 4th DCA 2019). There are however elements to a claim for defamation which must be met or there is no liability. Those are:
- actor must act with knowledge or reckless disregard as to the falsity on a matter concerning a public official, or at least negligently on a matter concerning a private person;
- actual damages; and
- statement must be defamatory.
Jews for Jesus, Inc. v. Rapp, 997 So. 2d 1098, 1106 (Fla. 2008).
Publication is the thing most everyone hangs their hat on when claiming they have been defamed. But simply saying something out loud may not be publication. The statements must be made “to one other than the person defamed.” Am. Ideal Mgmt., Inc. v. Dale Village, Inc., 567 So. 2d 497, 498 (Fla. 4th DCA 1990). Even then, no liability for publication exists, “(a) the matter is published upon an occasion that makes it conditionally privileged and (b) the privilege is not abused.” Nodar v. Galbreath, 462 So. 2d 803 (Fla. 1984).
Since most associations are accused by vendors (management companies, landscapers, contractors, etc.) of defamation, the question becomes, “how does a board convey to the membership the reasons it had for terminating a vendor without risking suit for defamation?” The answer is that a board can convey the relevant information to its members but it must do so with extreme care.
The case of Dale Village is extremely helpful in understanding the level of care which must be employed. In Dale Village, the association’s board association terminated its management company and posted two informational bulletins outlining its reasons for terminating the company so its membership would understand the decision. The management company sued the association for defamation. The association asserted that the bulletins were subject to a “qualified privilege” and such that it had no liability for defamation. The essential elements of a qualified privilege are:
- good faith;
- an interest in the subject by the speaker or a subject in which the speaker has a duty to speak;
- a corresponding interest or duty in the listener or reader;
- a proper occasion; and
- publication in a proper manner.
The qualified privilege vanishes, however, when the defamatory statement is made with express malice rather than for a proper purpose. The burden is on the person claiming the qualified privilege does not exist to prove express malice. Express malice exists when the motive for the statement is to intentionally injure the party against whom the statement is made. Nodar v. Galbreath, 462 So. 2d 803 (Fla. 1984). It is not enough to show that the speaker has malice or general hostility toward the person claiming defamation, there must be a primary motivation to injure. To prove express malice there must be at least ill will, hostility and evil intention to defame and injure. See Nodar and Boehm v. Am. Bankers Ins. Grp., Inc., 557 So. 2d 91, 94 (Fla. 3rd DCA 1990).
Based on the requirements for a qualified privilege and express malice, the management company in Dale Village produced evidence that the bulletins had been sent to non-member residents and that they had been posted on the recreation center’s bulletin board which was frequented by non-residents. These bulletins (i.e., the communications) therefore reached not only owners and residents who arguably should have the information but also non-residents who had no need for the information thus placing the qualified privilege shield at risk which would have exposed the association to liability.
Although the Dale Village Appellate Court sent the case back to the trial level for a determination as to whether non-residents would have a sufficient interest in the bulletins to warrant extending the qualified privilege, we find it to be unwise for an association to publish unflattering information regarding a vendor to anyone other than its own members.
Generally speaking, to protect itself from a defamation claim, a community association’s board should only make and publish information that is truthful and without malice, that is communicated only to its members, and that is made for the purpose of informing its members about association business.