Nethercutt Collection et al. v. Regalia – Slander Per Se v. Slander Per Quod

The California Court of Appeal reversed a jury decision awarding plaintiff a whopping $750,000 in damages based on slander per se. Regalia, the plaintiff, was a former employee of an automobile museum. He claimed that he was wrongfully terminated and that the defendants were liable for slander per se based on two allegedly defamatory statements made by Mr. Nethercutt.  The alleged statements were:

"Michael Regalia demanded a commission or finder’s fee of about $230,000 to which he was not entitled"

"The Nethercutt Collection fired Michael Regalia because other employees would not work for him, and that other employees would leave if Michael Regalia remained employed"

Regalia claimed that the above statements were slander per se and the jury agreed but found that he suffered no actual damages as a result of the statements.

The court of appeal went into a lengthy (useful) analysis of slander per se vs. slander per quod.

Statements are slanderous per se if they fall within the four categories of Civil Code section 46. Statements that do not fall within those four categories are slander per quod and require proof of special damages.

"It is a question of law, for the court to determine, whether a communication is libelous or slanderous per se. But it remains within the province of the jury to determine whether the reader understood the article, in light of relevant extrinsic facts, if any to be defamatory."

In other words, it is for the court to make the threshold determination of whether the communication is indeed slanderous per se. Then it is for the jury or trier of fact to determine whether the statements is indeed defamatory.

Here, the appellate court determined that the trial court erred in deciding that the above two statements were slander per se. The firs statement was not slanderous per se because making a demand for money that is rejected does not necessarily reflect negatively on the person making the demand. This does not "directly injure him in his profession, trade or business."

The second statement was not slanderous per se because the fact that one or more employees did not want to work for another employees did not necessarily reflect adversely on the person.

Since Regalia was unable to show special damages at trial and he only claimed slander per se, the appellate court determined that he was not entitled to a retrial. Case over.

Moral of the Story: If you think the alleged defamatory statements are arguably slander per se or slander per quod, make sure you present both to the court.  Don’t gamble. You never know which way the judge or jury will go.

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