Criticize the Contractor? An Arbitration Award for Defamation

Hell hath no fury like a homeowner scorned, particularly one with access to sophisticated IT professionals who will establish and optimize a website solely to criticize the contractor. But the cabinetry contractor – whose arbitration award including attorneys’ fees was just affirmed by a Connecticut appellate court – is having the last laugh. The arbitrator awarded damages and attorneys’ fees for the homeowners’ defamatory actions. And the appellate court confirmed that the arbitrator did not engage in “manifest disregard” for the law when he found the homeowners to have acted maliciously in conducting their war of words. In an age of web-based commentary and criticism that forms the basis of sites such as Yelp, the homeowners’ actions here went well beyond the norm. The husband used his company’s IT professionals to establish a website and take steps to ensure that anyone searching for the cabinetry business would find his site, with all its critical comments, first. But the original site (the current site appears to be a toned-down version, and as of this post has not been updated with the recent decision) included statements that the arbitrator found not only defamatory, but also to have been issued with malice. The homeowners argued to the appeals court that the award manifestly disregarded the pertinent legal standards. But the arbitrator had specifically rejected the homeowners’ arguments that their statements were protected opinion, or were immunized by the doctrine of fair comment, or were true. The arbitrator also cited the prevailing legal standards in the award. The appellate court agreed that manifest disregard for the law would be a basis to overturn the award, if the arbitrator had exhibited such disregard. It found he had not. Under Connecticut law, to award punitive damages in a defamation case requires proof of actual malice. In satisfaction of that standard, the court noted several instances where the homeowners had published statements about the contractor either with knowledge of their falsity or with reckless disregard for the truth. It found “ample support” for that decision. Thus, the arbitrator had followed CT law in finding libel per se under CT law, and actual malice by the homeowners. The case is SBD Kitchens, LLC. v. Jefferson, 2015 Conn. App. LEXIS 216 (June 16, 2015).