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Henrick v. Mealor

United States District Court, M.D. Tennessee, Nashville Division

July 11, 2019

JOSH HENRICK, et al., Plaintiffs/Counter-Defendants,
TRINITY MEALOR, et al., Defendants/Counter-Plaintiffs,
ERIN HENRICK, Third Party Defendant.




         I. Introduction

         Pending before the Court are Plaintiffs'/Counter-Defendants' and Third-Party Defendant's Joint Partial Motion to Dismiss (Doc. No. 54), Defendants'/Counter-Plaintiffs' Response (Doc. No. 69), and Plaintiffs'/Counter-Defendants' Reply (Doc. No. 76). For the reasons set forth herein, the Joint Partial Motion to Dismiss (Doc. No. 54) is GRANTED, in part, and DENIED, in part. The counterclaim and third-party claims for defamation are dismissed. In all other respects, the Motion is denied.

         II. Factual and Procedural Background

         The claims in this case arise out of the formation and operations of Tennessee Hemp Supply, LLC. (Doc. No. 88). Plaintiffs Josh Henrick and Jason Chambers contend they are owners of the business, and Defendants Trinity Mealor and Brandon Harris make the same claim. (Id.) Plaintiffs assert claims for conversion, breach of fiduciary duty, fraud and misrepresentation, unjust enrichment, conspiracy, violations of the Tennessee Consumer Protection Act, Tenn. Code Ann. §§ 47-18-101, et seq., trademark infringement and violations of the Lanham Act, 15 U.S.C. §§ 1114, et seq., false or fraudulent trademark registrations, unfair competition, breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. As part of their Answer (Doc. No. 49), Defendants Mealor and Harris assert counterclaims for defamation, conversion, intentional interference with business relationships, and trademark infringement. Defendant Mealor has also asserted third-party claims for defamation and malicious prosecution against Third-party Defendant Erin Henrick.[1] (Id.) Through the pending Motion, Plaintiffs and Mrs. Henrick seek to dismiss the claims for defamation, intentional interference with business relationships, and malicious prosecution.

         III. Analysis

         A. The Standards Governing Motions to Dismiss

         In considering a motion to dismiss, a court must determine whether the plaintiff has sufficiently alleged “a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). Well-pleaded factual allegations are accepted as true and are construed in the light most favorable to the nonmoving party. 129 U.S. at 1950; Mills v. Barnard, 869 F.3d 473, 479 (6th Cir. 2017).

         B. Defamation

         Counter-defendants and Third-party Defendant (hereinafter “Counter-defendants”) argue the defamation claims are barred by the “litigation privilege, ” and are insufficiently pled under Rule 8 of the Federal Rules of Civil Procedure. Counter-plaintiffs and Third-party Plaintiff (hereinafter “Counter-plaintiffs) argue the defamation claims are sufficiently pled, and the litigation privilege does not apply because “[t]here are not presently facts in the record from which the Court can determine whether the defamatory statements were made inside or in anticipation of this litigation.” (Doc. No. 69, at 3).

         In order to establish a claim for defamation under Tennessee law, a plaintiff must show: (1) a party published a statement; (2) with knowledge that the statement was false and defaming to the other; or (3) with reckless disregard for the truth of the statement or with negligence in failing to ascertain the truth of the statement. Brown v. Christian Bros. Univ., 428 S.W.3d 38, 50, (Tenn. Ct. App. 2013). Tennessee courts have recognized a “litigation privilege” that bars defamation claims for “statements made in the course of judicial proceedings which are relevant and pertinent to the issues.” Jones v. Trice, 210 Tenn. 535, 360 S.W.2d 48, 50 (1962); see also Issa v. Benson, 420 S.W.3d 23, 28 (Tenn. Ct. App. 2013). The policy underlying the privilege recognizes that “access to the judicial process, freedom to institute an action, or defend, or participate therein without fear of the burden of being sued for defamation is so vital and necessary to the integrity of our judicial system that it must be made paramount to the right of an individual to a legal remedy where he [or she] has been wronged thereby.” Jones, 360 S.W.2d at 51. Tennessee courts have expressly extended this absolute privilege to “communications preliminary to proposed or pending litigation.” Myers v. Pickering Firm, Inc., 959 S.W.2d 152, 159 (Tenn. Ct. App. 1997); see also Issa, 410 S.W.3d at 28.

         The statements underlying the defamation counterclaim in this case are as follows: (1) “stating to others on social media and otherwise outside of any judicial proceeding that counter-plaintiffs have stolen money and property from them and do not in fact own the business that they created and own;” (2) issuing “a press release to (among others) WGNS News Radio stating that counter-defendants were the owners of Tennessee Hemp Supply, LLC and that counter-plaintiffs falsely claimed to be the owners;” (3) stating “on social media that counter-plaintiffs ‘siphon[ed] all the monies off to a private account;'” (4) posting “on social media that counter-plaintiffs stole from them, that counter-plaintiffs were an ‘embezzling fraud,' ‘embezzled more than 100k' from them, called counter-plaintiffs ‘con artist and thief' and asked people to not do business with them;” and (5) posting “[o]n social media . . [stating that] counter-plaintiffs called customers ‘sheeple' and ‘unfairly and disgustingly raised prices.” (Doc. No. 49, at 3-4).

         In their original Complaint, filed in state court on June 27, 2018, Counter-Defendants alleged Counter-Plaintiffs took over the business, bank accounts, and other assets that were, in fact, owned by Counter-Plaintiffs. (Doc. No. 2-3, at ¶¶ 9-30). A review of the pleadings reveals that the first four statements underlying the defamation counterclaim formed the core of the allegations made in this case. All of the allegedly defamatory statements were directly relevant and pertinent to the issues raised.[2]

         In addition, despite Counter-Plaintiffs' argument to the contrary, it is apparent the statements were made preliminary to proposed litigation. Based on the parties' pleadings, it is undisputed that the business relationship at issue here came to an abrupt end on June 24, 2018, when Counter-Defendant Henrick attempted to fire Counter-Plaintiffs. (Doc. No. 2-3 ¶¶ 16-18; Doc. No. 20 ¶ 7). Counter-Defendants instituted this litigation three days later. (Id.) Thus, the allegedly defamatory statements were made in the three-day period between the end of the business relationship and the beginning of litigation. Having determined that the allegedly defamatory statements were made preliminary to proposed litigation and were relevant to the litigation, the Court concludes the litigation privilege applies to bar the defamation counterclaim.

         The statements alleged to be defamatory in the Third-Party Complaint are that “third-party plaintiff [Trinity Mealor] has stalked [Erin Henrick] and burglarized and stole her property.” (Doc. No. 49, at 7). As discussed above, the claims in this litigation include allegations of theft and embezzlement of physical assets and bank accounts. Thus, Mrs. Henrick's[3] allegedly defamatory statement that Mr. Mealor burglarized and stole her property is covered by the litigation privilege for the reasons described above - the ...

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