Fireworks Restoration Co. v. Hosto

371 S.W.3d 83, 40 Media L. Rep. (BNA) 1914, 2012 WL 1610538, 2012 Mo. App. LEXIS 634
CourtMissouri Court of Appeals
DecidedMay 9, 2012
DocketNo. ED 97181
StatusPublished
Cited by14 cases

This text of 371 S.W.3d 83 (Fireworks Restoration Co. v. Hosto) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fireworks Restoration Co. v. Hosto, 371 S.W.3d 83, 40 Media L. Rep. (BNA) 1914, 2012 WL 1610538, 2012 Mo. App. LEXIS 634 (Mo. Ct. App. 2012).

Opinion

ROY L. RICHTER, Judge.

Michael Hosto . (“Defendant”) appeals from the trial court’s judgment after a jury returned a verdict in favor of The Fireworks Restoration Company, LLC (“Plaintiff’) on its defamation claim and awarded Plaintiff $1 in actual damages and $150,000 in punitive damages. Finding no error, we affirm.

I. BACKGROUND

The evidence, taken in the light most favorable to the verdict, shows that in 1999 Defendant and Peter Mitchell (“Mitchell”) co-founded Plaintiff, a property damage restoration company. The principal business function of Plaintiff was to respond on behalf of a property owner and initiate repair services following the incurrence of property damage. Plaintiff coordinated all facets of restoration, encompassing everything from the initial boarding up of the property immediately after the damage to the final repairs of the property. By working in conjunction with insurance companies, Plaintiff was able to gradually grow and establish itself in the restoration market.

In 2003, Defendant and Mitchell organized 1800 BoardUp, Inc. (“BoardUp”), a company which was to serve as a lead generating service for restoration companies. This new company leased the Board-Up phone number in various area codes, along with BoardUp’s Dalmatian logo and marketing system, to restoration contractors nationwide. Plaintiff was the first BoardUp franchisee and licensed use of the BoardUp phone number for five area codes encompassing significant portions of central and eastern Missouri and the southwestern portion of Illinois.

Both BoardUp and Plaintiff remained cooperatively managed by Defendant and Mitchell for another four years. However, following a marked deterioration in their relationship and the commencement of litigation, Defendant and Mitchell dissolved their business associations by entering into a Settlement Agreement in September 2007. As a part of that agreement, Defendant paid Mitchell $85,000 for his interest in BoardUp and Defendant became Board-Up’s sole owner. Likewise, Mitchell paid Defendant $80,000 for his interest in Plaintiff and became Plaintiffs sole owner. [86]*86These winding-up transactions were not, however, the conclusion of the parties’ dealings.

Admittedly upset with the distribution under the Settlement Agreement and angry with Mitchell, Defendant accessed the internet and posted three fictitious, derogatory reviews regarding Plaintiff and its restoration work. The first two reviews were posted on March 31, 2008, on Google and Yahoo, respectively. In those fabricated reviews, Defendant falsely used the names of prior customers of Plaintiff and posted a detailed and denigratory assessment of Plaintiff that encouraged potential customers to avoid contracting with Plaintiff. In pertinent part, the first two reviews stated:

Grade: F. Dealing with these people was the single biggest mistake I have ever made in my whole life. I[t] was a miserable experience and the job was done so poorly we decided to sell the house. They were great salesman [sic] but their workman [sic] were idiots and the owner was not willing to help in any way.... I was so happy just to get them out of my life I paid them much more than I should have because their law firm threatened to lien my house if I disagree[d] with any part of then* bill.... All I can say is ... if they show up in your front yard in the middle of the night after your house catchs [sic] on fire, RUN! Do yourself a favor and call your insurance company and get a referal [sic] for legitimate business people.

Additionally, on April 8, 2008, Defendant posted another derogatory review on Google, this time anonymously outlining Plaintiffs allegedly untrustworthy business practices and poor customer service. Just like his first two reviews, Defendant wrote his third fabricated review from the perspective of an unhappy former customer and gave a detailed negative assessment of Plaintiffs business practices. The third review stated, inter alia:

They were a pain in the neck when I least needed one! Like the other guy[,] The Fire Works Restoration Company showed up in the middle of the night while the firemen where [sic] still putting out the fire.... Their emergency board up guys were great.... I liked them so much I decided maybe they weren’t so bad when a salesman from the Fire Works Restoration Company showed up the next day.... Then they offered to do a “Free Estimate.” ... So [F]ire [W]orks was a lot higher than the other company. [T]hey got into a long drawn out fight about 1) the cost to remove the water and 2) the cost to dry out the house and 3) the cost to rebuild the house and 4) the cost to clean our stuff. The whole thing turned out to be such a nightmare that I figured it was just easier to deal with the insurance company contractor (the one these guys told me was gonna rip me off!!!!). [S]o when I told them I was not going with them then they sent me a bill even bigger than the first that the insurance company already said they didn’t want to pay. [T]he [F]ire [W]orks guy said it was a “supplement” and the first bill was not complete. [T]hey wanted an additional $1,700 more than the first bill (which was already too high!!!). Moral of the story — people that seem nice usually are nice ... but not always.

Following its discovery of the reviews, Plaintiff brought a “John Doe” lawsuit to ascertain the identity of the poster of the fabricated reviews. On June 20, 2008, Yahoo identified Defendant as the person who posted the review on its website. On July 1, 2008, Defendant e-mailed Mitchell, admitting he was the author of the defamatory reviews and indicating he regretted posting them in his effort to hurt Mitchell, [87]*87by and through Plaintiff. The review on Yahoo remained active and visible for approximately two months after its initial posting and before its removal. The two Google reviews remained active and visible for nearly two years before their removal.

Plaintiff subsequently brought a defamation suit against Defendant, individually, and Defendant’s businesses, BoardUp, 1-800 BoardUp of St. Louis, LLC, and Critical Path Restoration, LLC. In response, Defendant filed a counterclaim alleging defamation against Mitchell. Following trial, the jury found in Plaintiffs favor on its defamation claim against Defendant, individually, and awarded Plaintiff $1 in actual damages and $150,000 in punitive damages. In addition, the jury rejected both Plaintiffs defamation claim against BoardUp and Defendant’s counterclaim against Mitchell.1 Plaintiff then filed a motion for additur and Defendant moved for judgment notwithstanding the verdict (“JNOV”) or, in the alternative, remittitur. The trial court denied both motions and Defendant now appeals.

II. DISCUSSION

Point I: Plaintiff Adduced Sufficient Evidence of Reputational Harm.

In his first point on appeal, Defendant argues the trial court erred in denying his motion for JNOV because Plaintiff failed to prove actual damages. Specifically, Defendant alleges the verdict was against the weight of the evidence because Plaintiffs evidence was insufficient to demonstrate damage to its reputation. We disagree.

Standard of Review

We review the trial court’s denial of a JNOV motion to determine whether the plaintiff has made a submissible case. Johnson v. Allstate Indem. Co., 278 S.W.3d 228, 235 (Mo.App.

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Bluebook (online)
371 S.W.3d 83, 40 Media L. Rep. (BNA) 1914, 2012 WL 1610538, 2012 Mo. App. LEXIS 634, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fireworks-restoration-co-v-hosto-moctapp-2012.