Ralston v. Garabedian

623 F.Supp.3d 544

Matthew RALSTON v. Mitchell GARABEDIAN, Esq., Kurtis N. Poulos, Mitchell Garabedian Law Office.

CIVIL ACTION NO. 19-1539

United States District Court, E.D. Pennsylvania

Signed August 26, 2022

James E. Beasley, Jr., Lane R. Jubb, Jr., Louis Tumolo, The Beasley Firm, LLC, Philadelphia, PA, for Matthew Ralston.

Kurtis N. Poulos, Greenfield, WI, Pro Se.

Mary Ellen Poulos, Pro Se.

MEMORANDUM

with Findings of Fact & Conclusions of Law

KEARNEY, District Judge

We presided over an extended bench trial addressing whether a former student and his attorney defamed a teacher at a boarding school by accusing the teacher of sexual abuse from 1993 to 1995 in two 2018 letters demanding a million dollars in compensation when the former student and his attorney agreed they would not sue. But no one believed the sexual abuse claims.

The teacher suffered no reputational harm. The central issues today are whether the former student fabricated the allegations and, if so, whether the teacher can recover damages from the attorney and former student by adducing clear and convincing evidence of their actual malice.

We find the former student defamed the teacher with actual malice as the sexual abuse accusations are demonstrably false and the former student should be liable for causing emotional distress damages to the teacher. We also find the former student's attorney is not entitled to the judicial privilege. The attorney wrote the most heinous of allegations towards the teacher without the expected care particularly when he sent a second demand letter after learning of material inconsistencies in the former student's story after his first demand letter. But the teacher does not prove reputational injury necessary for compensatory damages. And the teacher does not adduce evidence of the attorney's actual malice by clear and convincing evidence as necessary for presumed and punitive damages.

I. Background

We provide a synopsis of our lengthy Findings of Fact and Conclusions of Law. A Wisconsin lawyer trying to help her adult son struggling with alcohol-related health problems added "two and two" to infer a boarding school teacher sexually abused her adult son as a student at the boarding school twenty-five years earlier. The former student first mentioned being "assaulted" at the boarding school approximately ten years ago to his mother but did not mention sexual abuse nor identify a teacher as the abuser. But the mother began investigating potential claims against the boarding school before he mentioned sexual abuse after the boarding school's headmaster generally advised its alumni of sexual abuse at boarding schools across the country in April 2016.

The headmaster sent another letter in November 2017 confirming historical allegations of sexual abuse at the boarding school. The headmaster hired experienced attorneys to vet and investigate reports from alumni. The mother remembered a geometry teacher chose her son to answer questions during a class she visited in the 1990s. The mother "put two and two together" and somehow concluded the teacher sexually abused her son as a student. A Minneapolis lawyer told the mother a claim for redress for the teacher's mid-1990s conduct is barred by the Pennsylvania statute of limitations. The mother continued. She identified a well-known child victim advocate and attorney in Massachusetts. The mother called the attorney seeking his advice about notifying the boarding school of the purported assault by the teacher she remembered from decades earlier who she now inferred sexually abused her son.

The Massachusetts attorney spoke to the mother and her son. The attorney also knew Pennsylvania's statute of limitations barred the former student's claim. He agreed to represent the former student in contacting the boarding school but both agreed in their retainer agreement to not sue the boarding school since the statute of limitations barred the claim. The former student never authorized or wanted to sue the boarding school. The attorney never met the former student in person or over a video feed but spoke to him twice on the phone before sending an April 11, 2018 letter to the boarding school's headmaster seeking $1,000,000 from the school based on the teacher's alleged sexual abuse of the former student from 1993 to 1995. The attorney based his letter on telephone representations made to him by the former student who accused the teacher of sexual abuse. The attorney then largely ignored the former student's inquiries on the status of his claim for months after sending the April 11, 2018 letter.

The boarding school and the former teacher (now working at the boarding school as a capital giving officer) could not so easily ignore the attorney's words. The teacher learned of the April 11, 2018 letter and experienced deep personal distress. Several members of the boarding school's executive community learned of the letter. But no one believed the allegations. No one thought any less of the teacher. The boarding school increased the teacher's compensation after positive performance reviews.

Despite the boarding school's belief in the teacher, the boarding school immediately attempted to uncover the facts and invited an investigation into the alleged abuse. The former student's attorney remained unresponsive even when the former student contacted him checking on his progress after not hearing from him for months. The attorney finally contacted the former student in December 2018. The former student changed his story as to where the abuse occurred and his age during the abuse. But these material changes did not stop the attorney from sending a second letter to the school on December 26, 2018 with more lurid allegations even though the attorney and former student agreed they would not sue. No one believed this second letter either and the school did not alter the teacher's role with its alumni nor reduce his compensation.

The boarding school repeatedly asked the Massachusetts attorney to cooperate in an investigation, but the attorney would not cooperate unless the boarding school agreed to non-confidential mediation. The attorney hoped the threat of reputational harm would result in a million-dollar payday his client never sought without facing judicial scrutiny.

The boarding school repeatedly contacted the attorney in early 2019 to further its investigation. The attorney did not respond. The attorney instead reminded the mother and the former student he could not proceed given the Pennsylvania statute of limitations, but they should reassess after one year in case Pennsylvania changed its statute of limitations. Hearing nothing from the attorney, the boarding school dropped its investigation in April 2019.

The teacher, still fraught over the allegations, considered a lawsuit to clear his name. The boarding school's lawyer told him not to sue as it would force the school to place him on leave and litigation would harm everyone. The teacher sued anyway seeking to clear his name. He sued the attorney and the former student in April 2019 knowing suing a former student could result in losing his position working with the school's alumni.

Throwing lurid accusations into demand letters when you will not sue differs from the civil discovery process leading to the crucible of trial. We held a trial hoping to discover the truth based on testimony including from the teacher and the student. The former student's mother did not appear or testify over a virtual platform afforded to all witnesses. We evaluated the credibility of several fact and expert trial witnesses surrounding this most serious claim of teacher sexual abuse. We are ever mindful of the need to bring predators of our students to trial and potential justice either through the criminal system or through civil remedies based on investigated facts.

The trial evidence amply demonstrated the former student's sexual abuse story is not credible. We find the former student, for whatever reason, concocted the sexual abuse claims as shown by several determinative facts.

The attorney's words in two demand letters sent knowing he would not file a lawsuit are not entitled to judicial privilege. The attorney and the former student agreed to not sue. But we cannot award damages to the teacher from the attorney. The attorney's statements did not injure the teacher's reputation. The teacher created and maintained such a reputation of renown that no one believed the former student or the well-known attorney. The teacher lost his job in mid-2019 because he decided to sue a former student but he maintained his reputation after allegations no one believed. And the teacher did not adduce clear and convincing evidence the attorney acted with actual malice as required by decades of defamation law largely based on sustaining freedom of the press but now extended to require the same heightened standard of proof for statements by non-media speakers about private persons if the private persons do not establish reputational injury. We do not condone the attorney's conduct after a limited investigation. We are offended by his cavalier approach to facts which could destroy a teacher's career particularly when his client starts to change material facts. But failure to investigate to the level we expect is not clear and convincing evidence of actual malice. We cannot find by clear and convincing evidence the attorney subjectively disbelieved the former student's story or entertained serious doubts as to its truth as required by long-established law. The evidence instead shows the attorney refused to doubt the core of the former student's claim. We cannot award the teacher damages from the attorney based on the evidence.

The scrutiny afforded by direct and cross-examination allows us to find the former student fabricated his story and, even absent reputational harm, is liable for the emotional distress caused to the teacher based on the former student's actual...