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WACHS v. WINTER

August 18, 1983

EMANUEL WACHS, Plaintiff, against BRUNO WINTER, Defendant.


The opinion of the court was delivered by: NICKERSON

ORDER

NICKERSON, District Judge

 The attached reports of Magistrate A. Simon Chrein dated January 19, 1983 and June 22, 1983 are adopted in all respects. The Clerk shall enter judgment for plaintiff in the amount of $26,550. So ordered.

 [Appendix I]

 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

 EMANUEL WACHS, Plaintiffs, against BRUNO WINTER, Defendant.

 REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE

 CV 81 2640 (Nickerson, J.)

 The Honorable Eugene H. Nickerson has referred this matter to the United States Magistrate for a report and recommendation on the issue of damages.

 Plaintiff Emanual Wachs was born in Hungary in 1906. He is now a citizen of Israel where he is a practicing attorney. Defendant, Bruno Winter, was last known to reside in Flushing, New York during which time (1970-1973) he had retained plaintiff to represent him regarding the inheritance of real property located in Israel.

 Plaintiff filed suit against defendant on August 12, 1981 for libel growing out of said representation. Defendant accused plaintiff of improper and unprofessional conduct in four letters and one cable to Israeli government officials and members of the Israeli judiciary which were dated August 21, 1972, August 27, 1972, October 14, 1972, March 12, 1973 and March 20, 1973. In those letters defendant accused plaintiff of collaborating with the adverse party, manipulating false documents to the detriment of defendant's cause and imposing his services as an attorney upon defendant. By his actions plaintiff alleges that the defendant has impugned plaintiff's professional integrity, honest, loyalty and competency. Plaintiff further alleges that defendant did so maliciously and recklessly with utter disregard for the truth and for the purpose of injuring plaintiff's good name.

 By letter of December 22, 1972 the Israeli Bar advised defendant that it had investigated his charges against plaintiff and had concluded that defendant's complaints were groundless. Nevertheless, defendant sent two more letters in March, 1973 to the Israeli Ministry of Justice and the President of the Supreme Court in Jerusalem. Subsequently, on May 2, 1973 the Israeli Ministry of Justice informed defendant that no evidence had been found in support of his allegation that plaintiff participated in the manipulation of forged documents.

 As a result of defendant's actions plaintiff alleges he has suffered great pain and mental anguish and has been irreparably injured not only in his profession and professional standing before the Israeli Bar but also before the Israeli judicial and executive branches in the city of Haifa, Israel and elsewhere.

 Plaintiff seeks $150,000 in compensatory damages for each of the four letters written and published by the defendant, as well as $150,000 in exemplary or punitive damages and the costs and expenses of this action.

 Whereas defendant failed to either plead or otherwise defend in this action as required by Fed. R. Civ. P. 55(a), an entry of default was noted by the Clerk of this Court on December 15, 1981.

 Since defendant has defaulted in this matter, it is not necessary to discuss the merits of plaintiff's claims. Any affirmative defenses such as statute of limitations or privilege with regard to the libel must be deemed waived and may not be considered. Fed. R. Civ. P. 8(c); Strauss v. Douglas Aircraft Co., 404 F.2d 1152 (2d Cir. 1968). The allegations contained in plaintiff's complaint must be deemed true. Fed. R. Civ. P. 8(d). The only issue to be resolved is the calculation of damages to which plaintiff is entitled.

 On May 6, 1982 the undersigned conducted a hearing to ascertain the injuries sustained by plaintiff. Although neither party raised the issue, since plaintiff is an Israeli citizen who was injured by libelous statements made and published by defendant in Israel, the question arises as to which law of damages applies: that of Israel or that of New York, the forum state. A strong argument could be made for the application of Israeli law since plaintiff is domiciled in Israel, the libelous statements were published there and plaintiff's injuries were sustained in Israel. See Machleder v. Diaz, 538 F. Supp. 1364, 1369-70 (S.D.N.Y. 1982); Restatement (Second) of Conflict of Laws § 149, comment d (1971). The only connection with New York is that it is defendant's last known residence. *fn1"

 This court has jurisdiction of the within matter on the basis of diversity of citizenship of the parties. A federal court sitting in diversity must apply the substantive law of the forum state. Klaxon Company v. Stentor Electric Manufacturing Co., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941); Rosenthal v. Warren, 475 F.2d 438 (2d Cir.), cert. denied, 414 U.S. 856, 38 L. Ed. 2d 106, 94 S. Ct. 159 (1973). Since New York is the forum, its conflict of laws rule would be applied. See Machleder v. Diaz, 538 F. Supp. at 1369. Under New York's choice of law rule one looks to "the law of the jurisdiction which has the strongest interest in the resolution of the particular issue presented." Babcock v. Jackson, 12 N.Y.2d 473, 484, 191 N.E.2d 279, 288, 240 N.Y.S.2d 743, 752 (1963). See also Rosenthal v. Warren, 475 F.2d at 442; Lawlor v. Gallagher Presidents' Report, Inc., 394 F. Supp. 721, 726 (S.D.N.Y. 1975), remanded, 538 F.2d 311 (2d Cir. 1976); Nader v. General Motors Corporation, 25 N.Y.2d 560, 255 N.E.2d 765, 307 N.Y.S. 2d 647 (1970); Tooker v. Lopez, 24 N.Y.2d 569, 249 N.E.2d 394, 301 N.Y.S.2d 519 (1969). Where the parties are from different states, this is usually the law of the place of injury (i.e., lex loci delictus,) unless it can be shown that displacing this rule would advance the substantive law purposes of the states involved. Neumeier v. Kuehner, 31 N.Y.2d 121, 286 N.E.2d 454, 335 N.Y.S.2d 64 (1972).

 It would appear from the facts of this case that Israeli law would apply since all relevant actions and injuries took place there. See Vishipco Line v. Chase Manhattan Bank, N.A., 660 F.2d 854, 860 (2d Cir. 1981), petition for cert. filed, 50 U.S.L.W. 3717 (U.S. Feb. 26, 1982) (No. 81-1591). Further, Israel would have a very strong interest in protecting its citizens from libel. See Tooker v. Lopez, 24 N.Y.2d at 576, 249 N.E.2d at 398, 301 N.Y.S.2d at 525. However, we need not reach the issue of choice of law since both parties have failed to raise it. Luckett v. Bethlehem Steel Corporation, 618 F.2d 1373, 1378 n. 3 (10th Cir. 1980).

 A federal court sitting in diversity is not required to take judicial notice of the laws of foreign countries. See Fed. R. Civ. P. 44.1. *fn2" If the parties fail to raise the issue of choice of law, the court is not obligated to do so on its own. Vishipco Line v. Chase Manhattan Bank, N.A., 660 F.2d at 860; Commercial Insurance Company of Newark, New Jersey v. Pacific-Peru Construction Corp., 558 F.2d 948, 952 (9th Cir. 1977); Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 155 n. 3 (2d Cir.), cert. denied, 393 U.S. 826, 21 L. Ed. 2d 96, 89 S. Ct. 86 (1968). There is no evidence that either side has argued for application of foreign law. See Luckett v. Bethlehem Steel Corporation, 618 F.2d at 1378 n. 3. The failure of the parties to alert the court in pleadings or otherwise constitutes a waiver of this issue. See Morse Electro Products Corp. v. S.S. Great Peace, 437 F. Supp. 474, 487-88 (D.N.J. 1977). When both parties have been silent on the issue of which law to apply, it can be said that they have acquiesced in the application of the forum law. See Clarkson Company Limited v. Shaheen, 660 F.2d 506, 512 n. 4 (2d Cir. 1981), cert. denied, 455 U.S. 990, 102 S. Ct. 1614, 71 L. Ed. 2d 850 (1982). This view agrees with that of the Restatement (Second) of Conflict of Laws which calls for the application of forum law (i.e., New York law) where no or little information regarding the foreign law has been supplied. Id. at § 136, comment h at 378; accord, In re Air Crash Disaster Near Chicago, Illinois on May 25, 1979, 644 F.2d 594, 631 (7th Cir.), cert. denied, 454 U.S. 878 (1981).

 Under New York law a written statement is libelous per se, i.e., actionable without allegations or proof of special damages:

 "if it tends to expose a person to hatred, contempt or aversion, or to induce an evil or unsavory opinion of him in the minds of a substantial number of the community, even though it may impute no moral turpitude to him" . . . [or] tends to disparage a person in the way of his office, profession or trade." Nichols v. Item Publishers, Inc., 309 N.Y. 596, 600-01, 132 N.E.2d 860, 861-862 (1956); quoting Mencher v. Chesley, 297 N.Y. 94, 100, 75 N.E.2d 257, 259 (1947). (Emphasis added).

 See also Rudin v. Dow Jones & Company, 510 F. Supp. 210, 212 (S.D.N.Y. 1981); Handelman v. Hustler Magazine, Inc., 469 F. Supp. 1048, 1050 (S.D.N.Y. 1978).

 Letters published concerning an attorney which, on their face, are susceptible in their ordinary meaning of a construction that would tend to injure him in that capacity, are libelous per se. Kleeberg v. Sipser, 265 N.Y. 87, 91, 191 N.E. 845, 846 (1934). Examples of such statements include those which show a lack of character or a total disregard of professional ethics, e.g., statements that indicate an attorney has been disloyal to the best interest of his client, see November v. Time, Inc., 13 N.Y.2d 175, 194 N.E.2d 126, 244 N.Y.S.2d 309 (1963); Levy v. Gelber, 175 Misc. 746, 747, 25 N.Y.S.2d 148, 149 (Sup. Ct. Bronx County 1941), or statements that ...


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