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Wolfe Financial Inc. v. Rodgers

United States District Court, M.D. North Carolina

April 17, 2018

WOLFE FINANCIAL INC., et al., Plaintiffs and Counter-Defendants,
v.
JOHN RODGERS, et al., Defendants and Counter-Claimants.

          MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          L. PATRICK AULD, UNITED STATES MAGISTRATE JUDGE.

         This case comes before the undersigned United States Magistrate Judge for a recommended ruling on Matthew Mathosian's Motion for Temporary Restraining Order and Preliminary Injunction (“Preliminary Injunction Motion”) (Docket Entry 35). (See Docket Entry dated Feb. 8, 2018; see also Docket Entry 44 (withdrawing request for temporary restraining order).)[1] For the reasons that follow, the Court should deny the Preliminary Injunction Motion.

         I. BACKGROUND

         A. The Pleadings

         On October 5, 2017, Mathosian, along with Wolfe Financial Inc. (d/b/a Integrity Mortgage Group) (“Integrity”) and Marian Siemering, commenced this action. (See Docket Entry 1.) They filed their First Amended Complaint (“FAC”) five days later. (See Docket Entry 4.) It asserts nine causes of action against various configurations of nine individuals and entities, including John Rodgers and Prime Mortgage Lending, Inc. (“Prime”). (See Id. at 2-3, 7-14.) As concerns the Preliminary Injunction Motion, the FAC alleges, as “Count VIII, ” that Rodgers committed “Libel/Slander Per Se” against Mathosian. (Id. at 12; see also Id. at 15 (requesting, as relief from Rodgers, an injunction prohibiting “any further libel or slander of Mathosian, ” as well as “an award of punitive and compensatory damages due to [Rodgers's] libel and slander of Mathosian”).) Pertinent to that claim, the FAC states:

1) “Siemering and Mathosian previously worked for Rodgers at Prime, but left to move to Integrity” (id. at 6; see also Id. at 3 (“Rodgers is . . . a 50% owner of Prime. . . . Prime is a direct competitor to Integrity in the mortgage lending industry.”));
2) “[s]ince [Siemering and Mathosian] left, Rodgers has . . . disparag[ed] them to potential employees . . . [and] accus[ed] them of telling lies about him” (id. at 6);
3) “Rodgers has also carried on a campaign of disparaging Mathosian and injuring his reputation and good will in the mortgage banking community” (id.; accord Id. at 12; see also Id. at 7 (“Rodgers has repeatedly emailed Mathosian's current employer, making disparaging comments about him.”));
4) “Rodgers has made false and malicious statements attributing conduct and behavior to Mathosian that are contrary to customary and lawful mortgage banking business practices” (id. at 6; accord Id. at 12; see also Id. at 6-7 (giving as concrete examples of such “false statements”: “repeatedly referr[ing] to Mathosian as a liar, ” “referr[ing] to Mathosian as lacking sales experience, ” “referr[ing] to Mathosian as being overpaid, ” and “call[ing] Mathosian a sociopath to industry colleagues”));
5) “Rodgers made and is making these false and malicious statements knowing they were false or with a reckless disregard for the truth, without reasonable grounds to believe they were true, and with intent to injury [sic] and defame Mathosian” (id. at 12);
6) “[t]he false and malicious statements have negatively impacted Mathosian's income and ability to hire, and have injured Mathosian's reputation and good will” (id.);
7) “[t]he false and malicious statements have caused parties to back out of deals with Mathosian, severely impacting his income” (id.; see also Id. at 6 (“Mathosian make[s] a large portion of [his] income based on loan activity, and [is] paid a percentage of closed loans.”)); and
8) “[a]s a direct result of Rodgers'[s] actions, Mathosian has been irreparably harmed and continues to be irreparably harmed, and Rodgers'[s] actions have contributed to [Mathosian's] emotional distress” (id. at 12).[2]

         Rodgers answered, denying in material part the foregoing allegations. (See Docket Entry 15 at 5, 9; see also Id. at 10 (“The statements [Mathosian] claim[s] are defamatory are true.”).)[3]B. The Preliminary Injunction Motion and Related Filings On January 16, 2018, Mathosian filed the Preliminary Injunction Motion. (See Docket Entry 35.) Pursuant thereto, he proposed that the Court enter this injunction:

         WHEREAS. Plaintiff Matthew Mathosian has moved for a preliminary injunction enjoining Defendant John Rodgers from libeling and slandering Mathosian, it is hereby ordered as follows:

1. Until this case is decided on the merits, Rodgers shall cease making any libelous or slanderous statement about [] Mathosian;
2. Until this case is decided on the merits, Rodgers shall cease making any derogatory statement about [] Mathosian;
3. Until this case is decided on the merits, Rodgers shall cease making any untrue statement about [] Mathosian.

(Docket Entry 35-1 at 1 (emphasis added).)

         Beyond the allegations of the FAC (quoted in Subsection I.A.), the Preliminary Injunction Motion relies for factual support on:

1) the assertion that, “on December 14, 2017, well after [Mathosian, Siemering, and Integrity] filed this lawsuit, Rodgers sent a libelous email to a member of the mortgage lending industry that Integrity was in the process of hiring and has since hired, named Adam Cohn” (Docket Entry 35 at 2 (citing Id. at 9-13));[4] and
2) the “certifi[cation] that [Mathosian's attorneys] ha[d] given written notice to [] Rodger's [sic] counsel that [sic] of their intent to file [the Preliminary Injunction Motion], and sought, to no avail, to have [] Rodgers agree to stop making any further statements” (id.).

         Rodgers responded in opposition to the Preliminary Injunction Motion (see Docket Entry 38) and submitted therewith an affidavit from one of his attorneys, Matthew P. McGuire, authenticating attached correspondence from the period of January 12-16, 2018, between McGuire and Thomas G. Pasternak (one of Mathosian's attorneys), some of which reflected copying to Edward B. Cole (Mathosian's other attorney) (see Docket Entries 38-2, 38-3, 38-4). That affidavit and related correspondence show as follows:

1) near mid-day, [5] Friday, January 12, 2018, Pasternak e-mailed McGuire, (A) reporting that Mathosian (through Pasternak and Cole) “plann[ed] on bringing a TRO/PI motion against [] Rodgers to stop him from making further defamatory statements about [] Mathosian” and (B) asking “if [Rodgers] will agree to stop doing so, so that [they] don't have to bring the motion” (Docket Entry 38-3 at 3);
2) within minutes, McGuire replied (copying Cole), soliciting “a concrete example” (id.);
3) Pasternak promptly answered by transmitting part of the email from Rodgers to Cohn (dated December 14, 2017) which Mathosian later appended to his Preliminary Injunction Motion (see id.; see also Docket Entry 35 at 10);
4) shortly, McGuire rejoined (again copying Cole) that the example offered by Pasternak contained “nothing defamatory, ” but nonetheless committed to “speak with [Rodgers] about refraining from any further commentary” (Docket Entry 38-3 at 2);
5) Pasternak “disagree[d with McGuire's assessment of the email] and [requested] an answer [about an agreement to cease making defamatory statements] by COB Monday[, January 15, 2018]” (id.);
6) on that Monday (a federal holiday honoring Dr. Martin Luther King, Jr.), McGuire e-mailed Pasternak that McGuire was “out sick with the flu but w[ould] provide a response tomorrow” (id.);
7) Pasternak responded: “[s]onics [sic] good” (id.);
8) as promised, on Tuesday, January 16, 2018, McGuire e-mailed Pasternak a letter “writ[ten] on behalf of [McGuire's] clients in response to [Pasternak's] December 19, 2017 letter to [one of McGuire's] associate[s about other matters], as well as in response to [Pasternak's] January 12 emails concerning allegedly defamatory comments made by [] Rodgers” (Docket Entry 38-4 at 2; see also Docket Entry 38-2 at 3 (“The following day, January 16, 2018, at 2:39 pm ET, I sent Mr. Pasternak a letter via email that addressed a No. of outstanding issues in the case, including his concerns about allegedly defamatory comments being made by Mr. Rodgers.”));
9) in that letter, McGuire (A) expressed his view that “the easier problem to solve is a mutual agreement to refrain from any negative comments about the other side, ” (B) confirmed that he “ha[d] spoken with [his] clients, and they are willing to abide by such an agreement if [Pasternak's] clients are as well, ” and (C) reiterated that McGuire's “clients will agree to . . . [a m]utual non-disparagement agreement” (Docket Entry 38-4 at 2-3; see also Docket Entry 38-2 at 4 (“I have redacted portions of this copy [of the letter provided to the Court] because they contain communications that could be deemed inadmissible pursuant to Rule 408 of the Federal Rules of Evidence. Should the Court wish, I would be glad to provide an unredacted copy of the letter.”)); and
10) McGuire “did not receive any response to the January 16 letter prior to [] Mathosian's filing of his [Preliminary Injunction] Motion” (Docket Entry 38-2 at 4; see also Notice of Electronic Filing, Docket Entry 35 (documenting filing of Preliminary Injunction Motion “on 1/16/2018 at 5:44 PM EST”)).

         Based on that sequence of events, in opposing the Preliminary Injunction Motion, Rodgers (through McGuire) explicitly accused Mathosian and his attorneys of exhibiting a “lack of candor to the Court in seeking [such] extraordinary relief.” (Docket Entry 38 at 2.) Specifically, Rodgers's Response argued: “Mathosian claims he unsuccessfully attempted to obtain Rodgers'[s] agreement to stop making disparaging comments. To the contrary, counsel for Rodgers expressly informed Mathosian's counsel of Rodgers'[s] willingness to enter a mutual non-disparagement agreement just hours before Mathosian filed the instant Motion.” (Id.)

         Mathosian thereafter replied. (See Docket Entry 45; see also Docket Entry 44 at 1 (“withdraw[ing]” request for “temporary restraining order”).) In that Reply, Mathosian contested neither the Response's account of the communications between McGuire and Pasternak (summarized above) nor the Response's accusation that Mathosian's attorneys had fallen short of their duty of candor regarding their efforts to secure voluntary cessation of defamatory commentary; instead, Mathosian's Reply countered: “To the extent Rodgers's arguments rely upon his counsel's statement that he is willing to no longer engage in making defamatory statements regarding Mathosian, such arguments are belied by the fact that Rodgers made such statements in text messages and emails after he was sued for making those very statements.” (Docket Entry 45 at 3 (citing Declaration of Matthew Mathosian (Docket Entry 45-1), which, in turn, does not clearly describe any concrete, defamatory statement reportedly made by Rodgers after this action commenced).)

         Additionally, as evidentiary support for the Preliminary Injunction Motion, Mathosian tendered (with his Reply) a Declaration (purportedly made “under penalty of perjury, ” but without certification of its contents as “true and correct, ” as provided by 28 U.S.C. § 1746 (see Docket Entry 45-1 at 1)):

1) repeating the generalized allegations (previously presented in the FAC, as detailed in Subsection I.A.) that “Rodgers has made false and malicious statements attributing conduct and behavior to [Mathosian] that are contrary to customary and lawful mortgage banking business practices” (id. at 2), that Rodgers “repeatedly e[-]mail[ed Mathosian's] current employer with disparaging comments” (id.), and that “Rodgers'[s] actions have caused [Mathosian] substantial harm in lost wages” (id.), as well as the somewhat-more-particularized allegations that “[c]ertain branches and employees that had committed to joining Integrity changed their mind [sic] after hearing Rodger's [sic] statements” (id.), and that “Rodger's [sic] false statements included . . . repeatedly calling [Mathosian] a liar, claiming that [Mathosian] lack[s] sales experience, claiming that [Mathosian is] overpaid, [and] calling [Mathosian] a sociopath to industry colleagues” (id.); and
2) attaching, as “specific examples of Rodger's [sic] statements[, ] . . . an e[-]mail to the Prime staff after Mathosian resigned[ in which] Rodgers implied that Mathosian was overpaid and not a good salesman . . . [, as well as an e-mail] Rodgers sent [] Siemering . . . implying that Mathosian was a sociopath” (id. (citing Id. at 5-7 (undated e-mail from Rodgers to Prime staff), 9-13 (e-mail dated December 27, 2016, from Rodgers to Siemering))).[6]

         Because Mathosian submitted his Declaration with his Reply (rather than with his Preliminary Injunction Motion), the Court (per the undersigned United States Magistrate Judge) granted Rodgers's Unopposed Motion for Leave to File a Surreply. (See First Text Order dated Feb. 9, 2018 (granting Docket Entry 47).) Rodgers then filed his Surreply. (See Docket Entry 49.)

         C. The Evidentiary Hearing

         The undersigned Magistrate Judge set an evidentiary hearing on the Preliminary Injunction Motion. (See Second Text Order dated Feb. 9, 2018.) The order doing so mandated that, “on or before 02/13/2018, the parties (through counsel) shall exchange by e-mail . . . copies of any documents the party may seek to introduce at the hearing.” (Id.; see also Text Order dated Feb. 13, 2018 (granting Mathosian's Motion for a Continuance of Preliminary Injunction Hearing (Docket Entry 50) and re-setting the hearing, but providing that “[a]ll of the requirements established in the prior Text Order setting the original hearing date remain in force”).) Ultimately, the hearing took place, with Mathosian testifying as the only witness and offering documentary evidence (resulting in the admission of some exhibits and the deferral of admission decisions as to others), as well as counsel for each side addressing their efforts to reach a non-disparagement agreement before Mathosian filed the Preliminary Injunction Motion. (See Docket Entries 53, 56.) The hearing concluded with argument from counsel on the merits of the Preliminary Injunction Motion (see Docket Entry 56 at 82-96), after which the undersigned Magistrate Judge “t[ook] th[e] matter under advisement” (id. at 96; see also Id. (“I'll enter a written recommendation that will be for the review of a district judge for final determination.”)).

         i. Mathosian's Testimony

         Mathosian began his testimony with some background information about himself and his move from Prime to Integrity. (See Id. at 27-35.) He then identified (as Exhibit 7) the e-mail Rodgers sent to Prime staff upon Mathosian's departure (one of the e-mails Mathosian submitted with his Declaration (Docket Entry 45-1 at 5-7)). (See Docket Entry 56 at 36.)[7] After agreeing with his attorney (Pasternak) that “Rodgers in this e-mail to his staff sa[id] things about [Mathosian], ” Mathosian struggled to “point those [things] out, ” whereupon Pasternak prompted Mathosian to look for comments “about [him] being not a good sales manager.” (Docket Entry 56 at 36-37.) Mathosian then responded: “[Rodgers] said . . . [Mathosian] lacked the ability to diffuse situations with borrowers and realtor partners[ and] . . . had zero originating, underwriting or processing experience, which caused issues for people.” (Id. at 37.) Apparently dissatisfied with that response, Pasternak re-directed Mathosian to a different part of the e-mail, which said Rodgers “would hire a true sales manager that would help [Prime] grow.” (Id.) Despite Pasternak's prodding, Mathosian could not locate “anything else in this . . . e-mail that [he] think[s] malign[ed him].” (Id.)[8]

         Next, Mathosian reviewed Exhibit 1, which he described as “an e-mail [incorporating an internet article] that [Rodgers] sent to [Siemering] basically advising her she should not be associating with [Mathosian] because [Rodgers] believed that [Mathosian] was a sociopath and . . . highlight[ing] certain qualities . . . that [Rodgers] felt that [Mathosian] exhibited.” (Id. at 38; see also Docket Entry 45-1 at 9-13 (appending same e-mail to Mathosian's Declaration);[9] Docket Entry 56 at 39 (admitting Exhibit 1 without objection from Rodgers), 58 (“Q. Do you know if Mr. Rodgers sent [Exhibit 1] to anyone else [other than Ms. Siemering]? A. No.”), 61-62 (“Q. [After receiving Exhibit 1], in fact, [Ms. Siemering] did leave [Prime] and went to work with you at Integrity, didn't she? A. She did. Q. And you still work with [her], correct? A. I do. Q. Did [Exhibit 1] impact your work relationship with [her] in any way? A. Ultimately, no. . . . Q. Okay. So other than [you] perhaps being offended, there were no adverse consequences from Mr. Rodgers sending [Exhibit 1] to Ms. Siemering, were there? A. I would say other than that, no, nothing.”).)

         Mathosian then discussed Exhibit 2, a “text [message] that [] Rodgers sent to [Siemering]” (Docket Entry 56 at 39), which Mathosian took “issue” with “first and foremost” not due to any alleged defamatory content, but instead because it conveyed Rodgers's “intention . . . to start torpedoing [Integrity]” and “to offer his services to put [Siemering] with other firms” (id. at 39-40; see also Docket Entry 45-1 at 2 (referencing, in Mathosian's Declaration, same “torpedoing” language), 15 (attaching same text message as appears in Exhibit 2)). Beyond that concern, Mathosian merely noted that, in Exhibit 2, Rodgers “said that [Mathosian] was lying . . . which was not true.” (Docket Entry 56 at 40.)[10]

         At that point, Mathosian “turn[ed] to Exhibits 3, 4, and 5” (id. at 41), which he identified as “a text [message] string from [] Rodgers to [] Cohn” (id.). Mathosian testified that his “impression [of the string] was that [] Rodgers was both [sic] threatening [Cohn] that if [Cohn] came to work with [Mathosian] that [Cohn] would be wrapped up in litigation. [Rodgers] also told [Cohn] that there would be better options and better places to work than to come and work with [Mathosian].” (Id. at 43-44.)[11]

         Mathosian also testified that “Exhibit 6 was an e-mail that [] Rodgers sent to [] Cohn. . . . [It] accus[es Mathosian] of misrepresenting [his] incentive bonus . . . [to] st[eal] $14, 000 and then it goes on to say that . . . crimes of moral turpitude and embezzlement don't normally sit well with state banking commissioners, investors, and warehouse banks.” (Id. at 44-45; see also Docket Entry 35 at 9-13 (including same e-mail, dated December 14, 2017, with Preliminary Injunction Motion).)[12] On cross-examination, Mathosian conceded that the “allegation that [he stole from Prime by misrepresenting his incentive pay] . . . [w]as made in [Prime's] counterclaims against Mathosian . . . .” (Docket Entry 56 at 74; see also Id. at 75 (documenting Mathosian's agreement with statement in Exhibit 6 that “‘[c]rimes of moral turpitude and embezzlement don't normally sit well with state banking commissions, investors or warehouse banks'”).)

         Lastly, Mathosian examined Exhibit 9, “a complaint to the State of Florida from [Ryan] Kerian [of Prime] that alleges that as a result of . . . this particular lawsuit [Integrity] had declined [Kenyetta Crosdale's] application for a mortgage and that [Integrity] . . . w[as] not treating her fairly and appropriately” (id. at 48; see also Id. at 79 (“I don't believe Mr. Rodgers'[s] name was mentioned in [Exhibit 9].”)), and Exhibit 8, “a letter from Ms. Crosdale that says that she did not, in fact, authorize the complaint [set forth in Exhibit 9] and that she was, in fact, very happy with [Integrity's] services” (id. at 48; see also Id. at 78-79 (acknowledging that Exhibit 8's only reference to Mathosian bestows “a compliment”)).[13]

         ii. Representations of Counsel about Non-Disparagement Agreement

         Along with taking Mathosian's testimony, the undersigned Magistrate Judge engaged with Cole, Pasternak, and McGuire concerning their discussions about a non-disparagement agreement (as an alternative to litigating the Preliminary ...


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