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May 25, 1991


The opinion of the court was delivered by: Spatt, District Judge.


This litigation arises out of a dispute between two court reporters concerning work that one reporter subcontracted with the other to perform. The dispute culminated in a letter being sent by the defendant to the Federation of Shorthand Reporters claiming that the plaintiff has a "practice of modifying transcripts" and that he "refus[es] to pay for the agreed upon rates". It is these two statements that form the basis of this defamation action.

The defendant moves pursuant to Fed.R. Civ.P. 56(b) for summary judgment to dismiss the complaint as a matter of law, and also pursuant to Fed.R.Civ.P. 11 for sanctions against counsel for plaintiff. For the reasons that follow, both motions are denied.


The following facts are undisputed, except where indicated otherwise.

Plaintiff Michael Yesner ("Yesner"), is a certified court reporter and the president and sole shareholder of the plaintiff MGM Court Reporting Service, Inc. ("MGM"). Defendant Beth Spinner is also a certified court reporter, doing business as B & T Reporting ("B & T").

On May 16, 1990, Yesner received a request from a regular client of his, the law firm of McCormick Shaw & Moremus, to provide a court reporter for a deposition in connection with a state-court action pending in Richmond County, New York the following day. Due to short notice and Yesner's prior commitments, he was unable to provide a reporter from MGM, but subcontracted with the defendant B & T to cover the deposition.

The deposition took place as scheduled on May 17, 1990. Afterward, Spinner sent Yesner a copy of the transcript and statement for services rendered on June 13, 1990. Upon a review of the transcript, Yesner immediately notified Spinner that it was unacceptable, since it was allegedly replete with errors. He refused to pay Spinner.

On or about June 21, 1990, Spinner contacted the law firm of McCormick Shaw & Moremus directly, and spoke with Edith Alacan, the office manager. At this point, the parties' versions of what transpired in that conversation differ. However, after the conversation, Alacan contacted Yesner, allegedly stating to Yesner that the law firm would no longer utilize the services of Yesner or MGM.

Yesner then sent a letter to Spinner, dated June 22, 1990, advising her that Yesner lost the McCormick Shaw & Moremus account as a result of Spinner's conversation with Alacan. In turn, Spinner wrote a two-page letter dated June 27, 1990 to the Federation of Shorthand Reporters, with copies sent to the State Board of Shorthand Reporting, MGM, McCormick Shaw & Moremus, James Cameron, Esq. and Jerome Balch, Esq. The letter stated, in pertinent part, as follows:

  "In addition to this, Mr. Yesner in his letter dated June 22,
  1990 has indicated his plans for legal action. Obviously, this
  situation does concern me, but more importantly, Mr. Yesner's
  practice of modifying transcripts and secondly, his refusal to
  pay agreed upon rates concerns me more" (emphasis supplied)
  ("the June 27 Letter").

Yesner thereafter commenced this action alleging tortious interference with business relations and libel stemming from these two alleged defamatory statements contained in the June 27 Letter.

Defendant Spinner now moves pursuant to Fed.R.Civ.P. 56(b) for summary judgment on the following grounds: (1) the two statements contained in the June 27 Letter are not defamatory as a matter of law; (2) even if the statements are defamatory, the plaintiff has not sustained damages and is therefore entitled only to nominal damages, if any; and (3) actual damages, if any, were not caused by either of the two statements in the June 27 Letter. Spinner also moves pursuant to Rule 11 for sanctions on the ground that the plaintiff states in his complaint that he has lost McCormick Shaw & Moremus as a client, when in fact he has not.*fn1


a. Summary Judgment Standard.

Summary judgment shall be granted in favor of a party if it is demonstrated that there are no genuine issues of material fact for trial, and that the movant is entitled to judgment as a matter of law (see Fed.R. Civ.P. 56[c]; see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 [1986]). The Court must, however, resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion see Liscio v. Warren, 901 F.2d 274, 276 [2d Cir. 1990]; Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 [2d Cir. 1986], cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 [1987]). Once a party moves for summary judgment, in order to avoid the granting of the motion, the non-movant must come forward with specific facts showing that a genuine issue for trial exists (see National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 [2d Cir. 1989]). However, mere conclusory allegations, speculation or conjecture will not avail a party resisting summary judgment (see Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 [2d Cir. 1990]). If there is evidence in the record as to any material fact from which an inference ...

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