McConathy v. Ungar

765 So. 2d 1214, 2000 WL 1199524
CourtLouisiana Court of Appeal
DecidedAugust 23, 2000
Docket33,368-CW
StatusPublished
Cited by7 cases

This text of 765 So. 2d 1214 (McConathy v. Ungar) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McConathy v. Ungar, 765 So. 2d 1214, 2000 WL 1199524 (La. Ct. App. 2000).

Opinion

765 So.2d 1214 (2000)

James L. McCONATHY, Jr., Plaintiff-Respondent,
v.
Randy J. UNGAR, et al., Defendants-Applicants.

No. 33,368-CW.

Court of Appeal of Louisiana, Second Circuit.

August 23, 2000.

*1215 Mayer, Smith & Roberts by David F. Butterfield, Shreveport, Counsel for Applicant, Randy J. Ungar.

Wiener, Weiss & Madison by John M. Madison, Jr., Mark L. Hornsby, M. Allyn Stroud, Shreveport, Counsel for Applicants, Debra B. Hayes and Lawfirm of Fleming, Hovenkamp & Grayson.

Hudson, Potts & Bernstein, L.L.P. by Robert M. Baldwin, Monroe, Counsel for Respondent.

Before BROWN, STEWART and CARAWAY, JJ.

CARAWAY, J.

In this defamation action, the defendants' notification to insurance policyholders of a class action lawsuit against New York Life Insurance Company is claimed to have defamed the plaintiff, a selling agent for the company. Following the trial court's rejection of defendants' motion for summary judgment, we granted supervisory writs of review. Finding no defamatory words directed to the plaintiff in defendants' notification to policyholders, we reverse the trial court's ruling and grant judgment in favor of defendants, dismissing plaintiffs claims.

Facts and Procedural History

In July 1995, a group of New York Life Insurance Company ("NYLIC") life insurance policyholders filed a class action lawsuit against NYLIC in New York state court. The allegations of the suit included claims that NYLIC misled policyholders regarding the nature of their policy benefits. The class of plaintiffs was nationwide and included persons who had purchased certain NYLIC life insurance policies between January 1, 1982 and December 31, 1994. In August 1995, the parties filed a proposed settlement of the dispute with class-members being afforded until October 31, 1995 to decide whether to participate in the settlement or to opt-out. The notice of the proposed settlement was mailed to policyholders nationwide, including Louisiana policyholders.

Some proposed members of the class were confused by or unhappy with the terms of the settlement. Louisiana attorney Randy J. Ungar, of the law firm of Randy J. Ungar and Associates, filed a lawsuit against NYLIC in Orleans Parish on behalf of a proposed class of policyholders. In connection with this lawsuit, the following letter (hereinafter the "Letter") was mailed by Ungar to approximately 2,950 NYLIC policyholders in Louisiana:

"Randy J. Ungar ATTORNEY AT LAW 111 Rue Iberville, Ste. 400 New Orleans, LA 70130

Dear Policyholder:

There is a class action lawsuit in New York involving certain life insurance sold by New York Life Insurance Company called Willson, et al v. New York Life Insurance Company, et al. If you purchased a Universal or Whole Life Insurance Policy from New York Life from 1982 to 1994, you are subject to this class action and may have received a *1216 notice regarding the proposed class action settlement.
WHAT IS BEING DONE IN WILSON AFFECTS YOUR RIGHTS AND BINDS YOU TO A GROSSLY INADEQUATE SETTLEMENT. As the owner of a New York Life policy, you are entitled to the maximum financial recovery. You were sold life insurance policies, and certain representations were made regarding their value, and now the value of those policies is far less than you were told.
Judge Ward in a case entitled Speaks, et al v. New York Life Insurance Company, filed in New Orleans, has given us the right to contact you to advise you of your rights regarding this matter.
We have reviewed the settlement being offered in Willson and find it to be grossly inadequate and basically fraudulent. New York Life will give you (1) another one of their policies to replace your old, worthless policy; (2) they will loan you money to buy new policies from them to replace the worthless policies you now own; or (3) you can arbitrate your case, but you are forced to prove your entire case and can only recover the amount of your policy. You have no opportunity to recover against New York Life for their blatantly fraudulent actions.
We can provide you with opportunity to recover what you are rightfully entitled to recover. We have enclosed an opt out form. If you do not sign it and return it to the New York Court before October 31, 1995, YOU WILL BE BOUND BY THIS INADEQUATE SETTLEMENT AND WILL BE FORCED TO THE REMEDIES DETERMINED BY THE NEW YORK COURT.
We believe you will benefit most from declining the Willson settlement and opting out. We are willing to represent you, here in Louisiana, on a contingency basis, in the Speaks action.
If you have any questions, please call Mike Tisman at 1-800-654-7139 and he will be prepared to assist you in any way possible.
Sincerely, x/Randy J. Ungar"

After the Letter was sent, the Orleans District Court ordered the attorney to send a second letter to the recipients of the first Letter. This second letter states that the first Letter was not authorized by court order, that NYLIC policies still in force were not worthless as the original Letter inaccurately suggested, that the "grossly inadequate" and "basically fraudulent" descriptions of the New York settlement were Ungar's opinion and that the original Letter failed to comply with Rule 7.2 of the Louisiana Code of Professional Responsibility in that it did not bear the label "Advertisement."

On August 13, 1996, James McConathy, a NYLIC agent from Monroe, filed this lawsuit against Ungar and Randy J. Ungar and Associates. Additionally, Deborah B. Hayes, a Texas attorney, who is alleged to have drafted the Letter, and her law firm, Fleming, Hovenkamp and Grayson ("FH & G") are named as defendants. McConathy claimed that Ungar's original Letter caused him harm. Specifically, McConathy asserts in his petition:

As a result of the actions of defendants, plaintiff has had many policies which he sold canceled and has suffered great losses in sales commissions and other income entitlements. Additionally, plaintiffs future ability to sell insurance and his reputation for honesty and integrity have been severely damaged by defendants' actions.

Hayes, FH & G and Ungar each filed motions for summary judgment. They urged that Ungar's Letter was not "of and concerning" McConathy and therefore not defamatory. Further, Ungar's motion asserted that the communication was subject to a privilege, either absolute or qualified, and thus was not actionable. McConathy also filed his own motion for partial summary judgment on the question of the *1217 defendants' liability, centering the defamation on the Letter's charge of the worthlessness of the NYLIC policies. McConathy characterized the class of persons defamed by the Letter as those Louisiana NYLIC agents who sold insurance policies to employees of LSU Medical Center and he asserted that he was among these few agents.

In written reasons for judgment, the trial court denied all the motions for summary judgment. The court found in rejecting defendants' motions that a material issue of fact remained regarding the size of the group defamed by the Letter. Further, the trial court held that Louisiana law did not recognize a privilege for the content of Ungar's Letter. Finally, the court rejected McConathy's motion on the grounds that he had failed to show that there was no genuine issue of material fact regarding whether the Letter contained defamatory words.

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765 So. 2d 1214, 2000 WL 1199524, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcconathy-v-ungar-lactapp-2000.