Appendix — Phillips v. Murchison

APPENDIX A 4g

. f.ta$ { :

~ UNITED STATES! COURT OF APPEALS

For THE ‘aus Crrcuit

. No. 257—September Term, 1966.9 _

(Argued December 15, 1966 Decided August 23, 1967.)

| Docket No. 30615

-o—

RaNDOLPH PHILLIPS, —

\

‘Plaintiff -Appellant,

—V.—

Joun D. Murcuison,

Defendant-A ppellee.

——-—~)

WatTeRMAN, Moore and Fr1nserc,

Circuit Judges.

Before:

—o—

Appeal in diversity action from orders entered in the

United States District Court for the Southern District of -

New York, Dawson, J., and Ryan, Ch.J., dismissing all

fourteen counts of plaintiff-appellant’s*amended and sup-

plementai complaint. The portions of the orders that are ©

appealed are in part affirmed and in part, as to counts 1,

2, and 12 2, , Veversed for further proceedings below.

-Ranvo.pu Prius, New York City; Plaintiff -.

o =. Appellant, pro Se.

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Sruart N. Uppixe, Towntey, Uppixe, Carter &

Ropeers, J. Howarp Carter, Lee W. Meyer,

Ronan S. Danrets, Anson M. Ketuer, New

York City, for Defendant-A ppellee.

—?>

‘Per Curiam:

Appellant, who commenced this diversity action in the

United States District Court for the Southern District of

New York, alleging he had suffered defamation and other

wrongs at the hands of the defendant, appeals from. orders

adverse to him entered below by Judge Dawson and by

Chief Judge Ryan. His amended and supplemental coni-

plaint contains fourteen counts. Judge Dawson dismissed

counts 1 through 5, and counts 8, 13, and 14, as failing to

state claims or causes of action upon which relief could

be granted.

Appellant has taken no appeal from the dismissal of two

of these counts, counts 4 and 5.

Defendant-appellee Murchison some months later moved

for summary judgment in his favor and, upon considera-—

tion of the motion, Chief Judge Ryan granted a final ap-

“pealable judgment for appellee. He did not disturb Judge

Dawson’s disposition of the counts that Judge Dawson had ©

dismissed and he dismissed the remaining six counts, counts

6, 7,910, 11, and 12.. Thereafter appellant timely appealed

these determinations (except from the dismissal of counts

+ and 5).

We of the majority are in complete agreement, with the

_positign taken by our brother Moore in his dissenting opin-

ion that the dismissal orders entered below as to counts 3,

6, 7, 8, 9, 10, 11, 13, and 14 should be affirmed. Moreover,

we of the majority do not cavil with the statement of facts.

underlying these proceedings and the factnal references to

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the history of the Alleghany litigation as he has set them

forth, and therefore we do not find it necessary to discuss

for ourselves that dramatic backdrop to the Phillips action.

_ We of the majority consider that we are.required to hold

that counts 1, 2, and 12 are properly pleaded, and thatthey

set forth claims upon which relief could be granted.

Succinetly stated, it is our ;»wnderstanding that under.

the latest New York state judicial pronouncements made

in Williams v. Williams, 27 App. Div. 2d 530, 275 N. Y. S. 2d

425 (2d Dep’t 1966), and in Chappelle v. Gross, 26 App.

Div. 2d 340, 274. N. Y. 8. 2d )09 (1st Dep’t 1966), decisions

‘ handed down stibsequent to the orders appealed from here,

those erders as to counts 1, 2, and 12 must now be reversed.

Our ‘brother Moore distinguishes these cases and relies

upon New York trial bench decisions by New York State

Justices Streit and Silverman in a collateral action brought

by Phillips in-the New York courts. Portions of these de-

cisions are quoted in the dissenting opinion.

It would seem that these decisions by Justices Streit and

Silverman handed down in the action Phillips brought in

the New York courts are in line with the traditional New

York law relative to allegations which must be set forth

_ in complaints seeking damages for malicious prosecution

and abuse of process, but the two recent Appellate Divi-

sion decisions indicate a change 1 in the rule.

In Chappelle v. Gross, supra, the court dividing 3-2 held

that a complaint alleging that “the institution of tle suit.

with its accompanying lis pendens, was willful, malicious

aud without probable cause, with intent to injure the plain-

tiffs and to prevent them from conveying title to others

with whom plaintiffs had a valid written contraet of sale”

was sufficient to survive a motion to dismiss. The lis

pendens is a provisional remedy but a very mild one which

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affords little interference with person or property com-

pared to arrest, attachment, etc., and the case thus seems

to be a weakening of the requirements of interference with

person or property.

Soon after the Chappelle case was decided by the First

Department. the Second Department handed‘ down the de-

cision upon which Phillips heavily relies, Williams v. Wil-

liams, supra. In that case, also by a divided court, 3-2,

the court upheld a complaint alleging that an action was

instituted ‘not with the intention of prosecuting -it as a

lawsuit, but solely for the purpose of ruining plaintiff’s

business reputation . . . ” despite the absence of any allega-

tion of interference with plaintiff’s person or property.

The case is also important here because it draws the dis-

tinction, a distinction not apparent on the face of the New

York Civil Rights Law §974, between, on the one hand, a

litigant’s publication of a complaint to news media which

media may if they wish abstract a true and fair report for

further news publication, and, on the other, his direct

publication of a complaint to private individuals.

_ Applying the principles of the Williams case to the vari-

ous counts of Phillips’s complaint, it is clear to us that

counts 1 and 2 must be upheld. The allegations made by

Phillips in counts 1 and 2 of his amended and supplemental

complaint are not dissimilar to those alleged i in Williams v

Williams, supra.

The court in Williams described the plaintiff’s _—

tions as follows:

Liberally constr ued, the fir st « cause of action alleges

that defendant Robert. W. Williams caused a corpora-

tion to institute a false, defamatory action against

plaintiff, not with the intention of prosecuting it as a

lawsuit, but solely for the purpose of ruining plain-_

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tiff’s business reputation by widespread publication of

the accusations made against plaintiff in that action;

and that both defendants accomplished such improper

purpose by deliberately and maliciously mailing copies |

of the defamatory complaint to many others in plain-

tiff’s trade. 27 App. Div. 2d at ——; 275 N. Y.S. 2d

at 426.

It held that these allegations sufficiently pleaded a cause

of action.for abuse of process or, if not abuse of process,

at least “a cognizable tort for which the law will provide

a remedy.” 27 App. Div. 2d at , 275 N. Y.S. 2d at 426.

Counts 1 and 2 of Phillips’s complaint allege, inter alia,

that one Jesse Holland, acting as an agent of defendant

' John D. Murchison, filed a verified complaint in the name

of plaintiffs who did not_know anything about the subjeet 7

matter of the action, and that the complaint charged Phil-

lips with “per ‘petrating fraudulent and conspiratorial acts”

with regard to the settlement of two derivative actions, |

involviig Alleghany Corporation, that the complaint was

sham (and indeed was subsequently ‘stricken as such in a

- reported decision of the District Court for the Southern

District of New York, F’reeman v. Kirby, 27 F. R. D. 395

(SDNY 1961)), that it was filed “in furtherance of a con-

spiracy maliciously to use thé process of this Court .

to injure Phillips, and that the contents of the complaint

were published to various news media by Holland. Count

1 states that these acts constitute a malicious use of proc-

ess, and count 2 states that they constitute an abuse of

process.

As in Williams, these allegations sufficiently plead abuse

of process or some other tort because they charge the “mis-

use of legal process to accomplish an improper. collateral

. purpose (citings cases). 27 Xpp. Div. 2d at ——, 275

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N.Y.S. 24 at 426. Inasmuch as that case, the best available

current authority on New York law, holds that an interfer-.

ence with a plaintiff’s person or property is not a necessary

allegation in an abuse of process or inalicious prosecution

*~-eomplaint, counts 1 and 2 state a cause of action under

New York law.

Ht we have stated, the court is unanimous that counts

7, 9 10, and 11 were properly dismissed. They all in-

a the publication of the contents of various complaints

to various news ‘media, and New York Civil Rights Law

§574 is a good defense to such a situation. Lewis v. The

Chemical Foundation; Inc., 262 N. Y. 489 (1933) ; Oglesby

v. Cranwell, 250. App: Div. 720, 293 N. Y. Supp. 67 (2d

Dep’t 1937). Count 12, on the other hand, involved publica-

tion of the complaint directly to named individuals, not

news media, and we of the majority hold that it states a

good cause of action.

The court in Williams held that the Gllegations set forth

supra were not insufficient as a matter slogan before

the defendants’ answer, to support a claim for libel because

the allegations indicated “there was never any ‘fair and

true report’ of the defamatory action by disinterested out-

siders, but only the primary and sole publication of it by

defendants’ malicious mailing, to numerous persons in the:

trade, of the complaint . .°. .”- 27 App. Div. 2d at ——,

275. N. Y.S.2dat 427, |

Count 12 of Phillips’s s complaint alleges, inter alia, that

Murchison mailed copies of the complaint in-an action by

Murchison against Phillips and others to various named

individuals in Minnesota, Ohio, Illinois, Delaware, and

Canada and that the allegations in the complaint were

“false, malicious, and defamatory.”

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_ We are of the opinion that under Williams this allega-

tion sets forth a pleaded cause of action for libel. It is

true that in other counts Phillips charges Murchison with

causing similar information to be published in various

newspapers so that the sole alleged publication of the

material was not limited to individual persons, as in Wil-

hams. However, the Williams court could not have in-

tended to allow a defendant, who has bronght a lawsuit for

“an improper, collateral purpose,” to insulate himself from

liability for his direct publication of a libel to individual

persons by the fact that he also made the statement avail-

. able to the press.

We recognize that the Chappelle and Williams decisions

upon which we base reversal were by intermediate, not

final, state appellate courts, both of which were divided

3-2. However, making our best “estimate” of “what the

state court would rule to be its law,” Bernhardt v. Poly-

graphic Co., 350 U. S. 198, 209 (1956) (concurring opinion

of Frankfurter, J.) we feel required to reverse the judg-

ment as to counts 1, 2, and 12. We are informed that ap-

peals from both the Chappelle and Williams decisions have

been allowed to the New York Court of Appeals, but have

no record, information as to whether anything further has

transpired in those cases in that court. The possibility of

waiting for definitive rulings by the Court of Appeals has,

of course, occvred.to us. However, in view of the Jength

of time that h: . elapsed since plaintiff filed his complaint,

‘ we do not feel justified in delaying our decision indefi-

nitely. If our “estimate” of New York law, as evidenced

by those two cases, should prove to be wrong, we are con-

soled by the knowledge that these remaining three counts

will probably not reach trial before the New York Court

-of Appeals rules, if the appeals are’ pressed; the trial cou rt,

if it deems it advisable to do so, may delay trial for a rea-

& ‘3333

Pe NN aniline Aen Nera Op contin at

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sonable period (althougli allowing pre-trial proceedings to

continue in normal fashion) to await guidance from New

York’s highest court.

We affirm the judgment below except for counts 1, 2, and —

12. As to these counts, the judgment is. reversed, and the

cause is remanded for further proceedings below.

Moors, Circuit Judge (dissenting as to counts 1, 2 and 12):

' Randolph Phillips (Phillips), plaintiff-appellant, appeals

from a judgment dismissing his amended and supplemental

complaint (the complaint). The defendant-appellee; John

~ D. Murchison, was the only defendant served, although his _

brother, Clint W. Murchison, was named as a defendant in .

the complaint. ° Counts 1-5, 8, 13 and 14 were dismissed on

motion (Dawson, D.J.—opinion unreported) ; subsequently,

on inétion for summary judgment and on motion of Phillips —

to vacate the Dawson order of dismissal. Counts 6, 7, 9,

10, 11 and 12 were dismissed, the motion to vacate was

denied and judgment of dismissal entered (Ryan, D.J.;

252 F. Supp. 513). The appeal does not include Counts 4.

and 5. )

The complaint, containing 14 counts, is based upon three

_ legal theories (1) malicious use and abuse of legal’ process

(malicious prosecution) ; (2) defamation; and (3) violation

of certain sections and rules of the Securities Exchange

Act of 1934. a ' | :

_ The bibliographical material relevant to an, understand-

ing of the issues on this appeal is to be found in various

opinions which comprise: the Alleghany, Kirby, Murchison,

Phillips saga (218 F. Supp. 164); affirmed 333 F. 9d 327;

affirmed en banc 340 F. 2d 311; certiorari yranted 381 U.S.

933; dismissed after argument as improvidently granted

384 U.S. 28).

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For almost twenty years, a modern War of the Roses

has been fought on judicial battlegrounds between the Kirby

~ and Murchison forces. Each side has come to the fray well

equipped with all the manpower essential to legal warfare,

1.e., astute counsel, financial advisers, and imaginative public

relations ; generals. Over the years, victories have been

gained, defeats suffered, but the persistence of the litigants

and the always available replacements from the ‘Bar have

enabled the war to continue. Anomalously enough, the bit-

terest battle arose over the treaty of peace. Although not

an original combatant, Phillips, wearing neither a white

nor a red rose, had kept more than in casual touch with the

two camps. He had been a consultant to Brussel in the

Breswick' litigation, i mag in the Zenn* suit, he had,

participated in the New York Central proxy fight, he had -

been a participant in discussions relating to'a settlement

_ of the stockholders’ derivative suits and, in fact, had been ©

regarded as controlling the minority stockholders’ litiga-

tion. Whethet Phillips was primarily responsible for the

settlement of: the stockholders’ suits, he, at least. had an

_ important role. Little wonder then that, when it suited

Alleghany’s interest to challenge the propriety and fairness

of the settlement, charges should be le¥eled at the principal.

participants such as are evidenced by the allegation (Com-

plaint par. 44, Alleghany Corporation v. Kirby, 218 F. Supp.

164, 176) that in return for Phillips’ betrayal of his fiduciary

duty to Alleghany, its stockholders and others’ and in return

for his advocacy in obtaining for Kirby a settlement favor-

_able to Kirby, Kirby undertook to secure for Phillips a

1 Breswick & Co. v. Niiliion 7 5 Ni Supp. 297, 8S. DL N.Y. 1955.

@. \Sede ¥. Aeseloar, 17. We. 28 897; 46 Mise, 2d 378, 259 N. Y.-S.

2d 747. .

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See caida ' owe a 10a

directorship in Investors Diversified Serviees, Ihc. (LDS),

_ employment as a consultant by IDS and other emoluments.

3 On September 7 and 8, 1960, suits were commenced by

‘i stockholders on behalf of Alleghany against Allan P. Kirby, °

F Fred M. Kirby, Phillips, Charles T. Lreland, Jr., and others, \

in substance, to nullify the Kirby settlement releasing him

from any liability in the original stockholders’ suit." The

two main issues%in those suits, formulated after pre-trial

_ conferences, were (1) whether there was a corrupt agree-

fs ' ment between Kirby, Phillips, and lreland, whéreby a set-

. tlement was made for an ammount far less than otherwise

| under which settlement Phillips and Ireland personally

a benefited, and (2) whether Kirby failed to adduce on the

I | court’ liearings facts material to a proper evaluation of

|

Kirby’s liability which were esséntial to a determination

of the fairness and adequacy of the settlement.

i ‘The district court dismissed’ the complaint (Alleghany

iF then under Murchison control had become the plaintiff) find-

ing that Alleghany which had the burden of proof had failed

completely to establish a bréach by Phillips of a “fiduciary

obligation to the minority ‘stockholders in. that he made a

‘secret agreement for his own henefit which was not re-

vealed to the Court” (‘p. 182). The district court then pro-

is _ ceeded to find affirmatively that Phillips’ directorship on

| the TDS Board did not warrant the conclusion that this

if , nomination was pursuant to a pre-existing agreement. As

_ to Kirby’s alleged failure to produce facts essential to a

i proper determination of a fair settlement; the district court

iq » held that any such failure was not a basis for.a collateral

attack upon the judgment. ;

Rie AP aR i a , -

a

2 Freeman, ct ats-v. Kirby, ct al. (Sup. Ct. N. ¥. Co.); Freeman, et al.

v. Kirby, «t al. (U. 8. D.C. 8.°D. N. Y.): and Murchison, et al. vy,

Kirby, et al. (U. 8. D. COS. DON. Y.). The Freeman suits were dis-

missed; the Murchison suit was tried.

matters

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This judgment came before this court for appellate re-

view and was affirmed. 333 F. 2d 327 (1964). No appeal

was taken from the district court’s finding that there was

no fraudulent agreement between Kirby and Phillips. —;

Piqued by the allegations (aspersions to him) in the Sep- |

~ tember 8, 1960 derivative suit Murchison complaint, Phil-

lips embarked upon a litigious campaign against his erst-

while colleagues, associates, employers and friends (1).

In September 1960, Murchison and others sought by.proxy

contest to-secure for themselves the management of Alle-

ghany then in Kirby’s control. Phillips, a paid consultant

to Kirby and Alleghany, on February 24, 1961, commenced |

a derivative action wherein he sought to enjoin a proxy con- | ;

test. His attempt voluntarily to dismiss this suit being

denied by the court, he then served (March 19, 1961), an

amended complaint in which he added a charge of libel .

against Murchison. Over two years later, upon motion for

summary judgment, all counts except Count 2 were dis- *

missed. A second amended complaint was also dismissed.

Then followed the present amended and supplemental com-

plaint.

The Dawson Opinion

Judge Dawson dismissed Count 1 (maliciotis use of proc-

ess), Count 2 (malicious abuse of process), Count 3 (mali-

cious violation of Rule 11, F. R. C. P.), and Count 14 (mali-

cious use and abuse and inequitable and alleged harassment)

as failing to state claims upon which relief could be granted.

No appeal was taken as to this dismissal. ,

Count 1 alleged that a suit entitled Freeman and Manaster

v. Kirby, Phillips et al., in the Federal court was brought

“in furtherance of a conspiracy maliciously to use the proc-

ess of this [Federal] Court and the New York State Su-

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preme Court to the injury end a of plaintiff.” A

similar suit was brought in the New Work State Supreme

Court. The suit was a derivative action on behalf of Alle-:

ghany and was characterized as seeking relief. to obtain a

vacatur of the settlement [of other previous lawsuits in

. fie Federal and State courts] as to wailed only.” 27 F. R. D.

395, 396. €

- Count 2 made the same charges with the conclusory al- .

legation that Murchison was part of a conspiracy “mali-

_ .¢iously to abuse the process of this Court and the New York

' _ State Supreme Court.” —

Count 3 alleged a conspiracy maliciously to violate Rule:

11 of the Federal Rules of Civil Procedure. |

Judge Dawson concluded that it is tht law of New York

that to sustain a complaint in a civil litigation based on

malicious prosecution, there must be an allegation that the

: plaintiff’s person or. property was interfered with in con-

- nection with the prior proceeding. Because there were no

allegations of special circumstances which would take the

ease out of the general rule of interference with pers son or

property, he dismissed Count 1.

The “abuse of process” count (#2) was found to be de-

fective for the reasons applicable to count 1 and, in addition,

because the bad faith alleged was in the institution of the

action—not conduct after the action had been commenced.

The Ryan Opinion

Judge Dawson died in August 1964. On November 2,

1965, Murchison inoved for summary judgment (Rule 56(b)

Fed. R. Civ. P.), dismissing Counts 6; 7, 9, 10, 11 and 12

of the amended and supplemental complaint, and plaintiff

moved to vacate so much of the Dawson order. dated May

8, 1964, from which no appeal had been taken which had

dismissed Counts 1 I, 2. 3, 8, 13 and 14. Judge Ryan denied

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Phillips’ motion ‘to review Judge Dawson’s dismissal of .

Counts 1, 2,.3, 8 and 13, and addressed himself to Counts

6, 7, 9, 10, 11 and 12. The court held that there wasa judicial . F

proceeding pending at the time of the publications, that

New York law applied even to the out-of-state publications.

(Counts 11 and 12), and that the publications were a fair

and true report: of the judicial proceeding which they pur- :

ported to report. Accordingly, the court held that Counts = [_-

6, 7, 9, 10, 11 and 12 should be dismissed because the al- *

leged defamations were absolutely privileged under the stat- ;

ute (Sees 74, supra). ae

While his Federal court action was in progress, Phillips —

.

_ also had pending‘a suit in the State court based upon similar .

charges. In Phillips v. Alleghany Corporation, New York .

Law Journal, December 29, 1965, p. 16, cols. 6-8), Phillips

had made charges against Alleghany of malicious prosecu-

tion and abuse. of process.(Counts 1 and 2 here) -based upon

the institution of the Murchison (Alleghany) v. Kirby, et al, f

suit in the.Federal court. As to the malicious prosecution f

charge, the court (Mr. Justice Streit, New York Supreme

Court) dismissed it; saying:

“An action for malicious prosecution of a civil proceed-

‘ing cannot be maintained where there has heen no

showing that the plaintiff’s person or property was the

subject of inierference in the prior action by a provi-

sional remed® such as arrest, attachment or injunc-

~ . tion or\ otherwise.”

citing Sachs v. Weinstein, 208 App. Div. 360, wherein the

court said (p. 365) that without such interference a

“defendant, although successful is not entitled to main-

tain an action for. malicious prosecution against the

plaintiff, notwithstanding such action may have heen

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prosecuted without probable cause and maliciously. and

resulted in damage to the defendant in excess of the

costs recovered by him.”

See also Paul v. Fargo, 84 App. Div. 9.

Dismissing the abuse of process cause of action, the State -

court said:

“An ulterior mative in the use of court. process is not

enough. There must he a further.act done outside the

use of the process, some perversion of the process

(Hauser v. Bartow, 273 N. Y. 370, 374).”

Although the charges in the State Supreme Court case

were based upon the Murchison suit, the Freeman suit was

no different in theory and the same legal principles apply.

Phillips did not appeal from this decision. Instead he

took advantage of leave to replead the fourth cause of ac-

tion, also dismissed, which added to previous allegations

the proxy fight motive. -

This amended complaint, the gravamen of which was

“that he was sued maliciously and without probable cause

in a civil action,” was also attacked as insufficient and

suffered the same fate. In dismissing it, Mr. Justice Silver-

man (now Surrogate) held (New York Law Journal, June

8, 1966, p. 17, col. 6) that:

“As & cause of action for malicious mwenwetien the

complaint is insufficient for failure to allege an_inter-

ference with plaintiff’s person or property by a pro-

visional remedy in the previous action”;

that

“(There are reasons for the inposition of barriers to

maintenance of malicious prosecution causes still recog-

nized as valid in this jurisdiction.”: P

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and that

“Avoidance of these barriers may not be had by de-

nominating the cause as one of prima facie tort * * * .”

Despite no decision by the New York Court of Appeals

changing, or even throwing any doubt as to the law as

declared in previous decisions, the majority believe that. - '

two 3-2 decisions in the First and Second Departments of _

the Appellate Division of the New York Supreme Court,

Chappelle and Williams, supra, now establish as the law

that “an interference with a plaintiff’s person or property

is not a necessary allegation in an abuse of process or

malicious prosecution. complaint”—at least they say that

this is their best estimate. Of course neither case stands

for any such proposition. Chappelle involved a definite

interference with property, namely, the filing of a lis

pendens; Williams was based on the allegation that the

suit was brought “not with the intention of prosecuting

it as a_lawsuit, but solely for the purpose of ruining plain-- ;

tiff’s business reputation by widespread publication of the

accusations made against plaintiff.”

.

ao

The complaint under consideration in Williams was

radically different from the complaint before us. On its

face, the complaint here shows that the purpose of the

action was, in a derivative action on behalf of Alleghany E

Corporation against Kirby, Phillips and Ireland, to attack

the settlement of two other derivative actions brought on

behalf of Alleghany (Zenn v. Anzalone and Breswick & Co.

v. Briggs). ‘In the light of this allegation, which must be

accepted for the purposes of. this decision, it is clear

that the allegations which the court in Williams deemed

essential are not present here. Nor could they very well

he made since Phillips can scarcely allege that there was no

3341

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intention to prosecute and that the action was brought

solely to ruin his reputation. The requirement of al-

. legations which state a cause of action is not outmoded.

in these rapidly changing legal times because defendants _

are still entitled to have plaintiffs prove their charges. ,

In Chappelle, the court held that a complaint alleging

_ that “the institution of the suit, with its accompanying lis

pendeus, was willful, malicious and without probable cause,

with intent to injure the plaintiffs and to prevent them

from céSveying title to others with whom plaintiffs had a

valid written contract of sale.” was sufficient to survive

a motion to dismiss (appeal pending in New York Court

of Appeals). Furthermore, the comments in dissent of

Mr. Justice Steuer in my opinion state a sounder policy, i.e.,

“If every successful defendant could turn around and sue

‘ the plaintiff and, by a liberal use of the word ‘malicious’

; state a cause of action, a never ending source of new litiga-

; tion would have a forum. ’ Questions once thought to have

been put to rest could be relitigated almost without limit.

Judgment.should mark the conclusion of the disputes be- .

tween the parties and not be an invitation to further litiga-

tion” (p. 345).

The issues sought to be revived in this action have been

litigated and re-litigated. There is no reason to believe that

New York law departs from the policy of finality of judg-

.ment. Nor is there reasonable expectation -that the New.

York Court of Appeals: will reverse the principles well

established during the years by the decisions expounding ~

New York law relied upon by Judge Dawson and Justices

Streit and Silverman.

The fallacy of the majority is the assumption that the

allegations of counts 1 and 2 “are not dissimilar” to those

in Williams. Even if Williams were to change the New

3342

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York law as to abuse of process actions and to set new

requisites of a valid cause of action, plaintiff will indeed

be hard put on any trial to prove (1) lack of intention to ~

prosecute a lawsuit and (2) that thé suit was brought

“solely” to injure plaintiff. On its face, the complaint re-

veals that the suit was brought to upset a settlement in a

stockholders’ derivative suit. In this so-called liberal age

of notice pleading, were the old requirement of allegata et

probata to be sloughed off, plaintiff ought to assume the

burden of the “allegata” so that at the end of his case

defendant can point to the failure of the “probata.”

In short, I would affirm Judge Ryan’s judgment in its

entirety. Phillips has had his “day” in court. A “day”

even in Dickensian law should not be a lifetime.

-18a-

Judgment of the Court of Appeals docketed ‘on

October 20,1967

Cnited States Court of Somes

For HE

SECOND Circuit

—i>

At a Stated Term of the United States Court of Appeals, in and for the Second Circuit, held at

the United States Courthouse in the City of New York, on the twenty-third day of

August _ ome thousand nine hundred and sixty-seven.

Present :

NON, STEPRY P, WATERMAN,

HCN, LEOMAPN P, MODPE, gine) "oF 8s,

> a” . ee - e-¢

NOS, WTLPPED FEIN’L®C, 4D rere. Ke

4% j

MPR

Randolph JUCKETED AS

‘Plaintif£-Appellant \ I ee 8 ENT* i”

bi Cehetb— 20,2 ey

John D. Murchison and Clint w. Murchison | UN

Jr., individually and as persons doing ¥

business under the firm name and style | AT 7 in

of Murchison Brothers, < °

' Defendants-Appellees.

e

Mid rrvmernia the wien t 2 den tai alin ire ecalatai actin Satis Nala itll taiialells -

-19a-

Appeal from the United States District Court for the Southern

District of New _—s . ; .

This cause came on to be heard on the transcript of record from the United States District Court

for the Southern District of Kew York - and was argued by counsel.

.ON CONSIDERATION WHEREOF. it is now hereby ordered, adjudged, and decreed that

the jucoment x of said District Court be and it hereby is

affirine’, except for Counts 1, ? and 12, and as to those counts, tle

saie juec--:nent be and it here'y i¢ reversed and that the action be and

it hereby is remanded for further proceedings in accordance: with the

-alelin of this Euurt with costs to the appellant.

. A. DANIEL FUSARO

a Clerk

?

~ . Pg na FUSARU

: , Dy S = ae, ae

A trus cope

ee

Clers

e8Oae:

UNITED STATES COURT OF APPFAIS

* FOR THE SECOND-CIRCUIT ORDER DENYING

| “PETITION FOR

REHEARING

ee Ss FILED

Randolph Phillips, OCT .20,1967

Plaintiff-Appellant,

= |

John D. Murchison,

Defendant -Appellee.

Petition for Rehearing

Randolph Phillips, New York City,

Appellent, pro se

Petition denied.

SRW.

LePeMe

WePe

October 19, 1967

UeSeCiJIJT

-2la-45a-

Pages Omitted ‘

Record references to pages

la to 45a are to the com-

plaint as printed in the

Appellant's Appendix to the

Court of Appeals, copies

of which are being filed

with the record herein,

Te tens gee inten re a Sl wine

a .

‘ no

tee

——

46a

— B

815-329

Memorandum 420930 Filed May 8, 1964

| Dawson, DJ.: °

- This is a motion for dismissal of the complaint under

Rule 41(b) for failure to comply with the rules and the

orders of this court, or in the alternative, for a dismissal

' of certain counts under. Rule 12(b) for failure to state a

claim upon which relief can be granted. The complaint is

being attacked for failure to be “simple, concise and direct”

(Rule 8(e)), for setting forth events which have happened

since the date of the original pleading, without a motion

first being made under Rule 15(d),-and for setting forth

claims which may be barred by the statute of limitations.

The complaint presently under attack is the fourth com-

plaint in this action. The original. coniplaint was filed on

February 24, 1961.. The second complaint was filed as of

right before the original complaint had been answered.

_, This second complaint was dismissed on motion by order of

‘the court on November 1, 1963, with leave to replead count 2.

A third complaint was filed on November 7, 1963, and by

_ order of the court on December 5, 1963 was dismissed with

leave to replead again. The fourth complaint, now under

attack, entitled “Amended and Supplemental Complaint”

was filed on January 28, 1964. It contains fourteen counts

and two exhibits for a total of thirty-seven pages.

Mr. Phillips has appeared pro se in this action. Although

he has written a large amount of prose in his complaints, it

is very difficult to determine exactly what his claims are.

Previous hearings upon his complaint, resulting in the -

orders above referred to, have been designed to bring the

litigation to a point at which the Court can determine ex-

actly what issues are involved. The Court has been very

47a

Memorandum #29939 Filed May 8, 1964

lenient with Mr. Phillips in trying to instruct him on the |

necessity of putting his claims in specific and definite form.

_ However, he seems to think that as a pro se litigant he can

burden the Court with numerous pleadings whose prolixity

is exceeded: only by their indefiniteness. It is necessary

_ that some definiteness be reached in the pleadings so that

the parties may understand them and so that the Court

may determine what issues are to be tried when this case

is reached for trial. Mr. Phillips may. prefer to keep his

complaint indefinite so as to use it as a handle for time-

consuming and vexatious depositions. This is not the proper

function of a pleading. — an

Mr. Phillips’ procedure in this case is typical of the. con-

duct referred to by Judge Kaufman of the Court of Appeals .

in the endorsement appearing on the order in Ackert v.

Bryan, No. 27240, dated June 21, 1963. In this memoran-

dum of Judge Kaufman, attached to he order, he said,

ee to Mr. Phillips:

. He comes before this Court wearing the cloak of a

pro se applicant, and seeks to extract from us the

solicitude ordinarily afforded one appearing without .

counsel. But this should not shield him from rebuke

when merited. He is an intelligent, able and sophisti-

cated litigant, who is no stranger to this Court, having

appeared frequently in his own behalf both in the Dis-

trict Court and the Court of Appeals. We would expect

that one possessed of his background would be con-

scious of the outer limits of forceful advocacy and fully

aware wlien his acts transgress those limits. Moreover,

we are not to be manipulated by resourceful but merit-

less moves in a long-closed litigation, moves which

48a .

» Memorandum #29939 Filed May 8, 1964

serve. ‘nly to distract us from meee judicial busi-

ness... ..” |

The present complaint now contains claims in three main

_ categories, malicious prosecution, defamation, and violation

of the proxy rules under the Securities Exchange Act of

1934. I shall discuss these categories and the counts there-

under seriatim. — |

M. alicious ‘Prosecution

~~

“a,

In the general ‘area of malicious. pr osecution, plaintiff

Phillips has used four counts to. seek recovery for the same -

act under _ Slightly. different legal theories: The act com-

_» . plained of i is the instigation of civil actions in this court and

in the New York State Supreme Court against Mr. Phillips —

Xo and others. Count 1 seeks recovery on the theory of “a

conspiracy maliciously to. ‘use the process of this Court

‘and the New York State ‘Supreme Court.” Count 2 adds.

_. the slightly different theory of a “conspiracy maliciously

to abuse the, process.” Count 3 more specifically charges

8 “conspiracy maliciously to violate Rule 11 of the Fed-

eral Rules of Civil Procedure.” Count 14 i in part alleges “a

“malicious. use and abuse of process against plaintiff dnd .

an inequitable and illegal harassment of plaintiff through }

judicial proceedings.” ...

Mr. Phillips is asserting. ‘claims - of “malicious use of

process,” “abuse of process,” “conspiracy to violate Bule

_ il,” and-“an inequitable and illegal harassment of plaintiff

through judicial proceedings.”

Each of these theories. requires separate analysis. The

*. law which must be applied is, of course, the law of the

aA tt Ae A eth trap LEE ee pac Me As wath nee Cro ternalicatain

49a

_ Memorandum #29939 Filed May 8, 1964

State of Sie York since jurisdiction is based on diversity

- of citizenship and the: acts constituting the tort, as well

as the injury itself, took place within the state. Erie Rail-

road Co. v. Tompkins, 304 U. S. 64 (1938). .

The common law tort of malicious prosecution was

originally restricted to relief from unjustifiable criminal]

litigation, but a majority of states have now extended that

tort to ordinary civil actions.’ Prosser, Law of Torts, 199

(2d ed. 1955).° When civil litigation is involved the term

often applied is “malicious use of process.” That is the .

term Mr. Phillips has used in gount 2 of his fourth com-

plaint. \

Although New ‘York still ieee the ‘remedy for the

ordinary civil ‘suit, relief has been granted in certain ex-

ceptional cases. It is commonly stated in New York that

— to sustain a complaint based on malicious prosecution when

civil litigation is involved, there must be an allegation

_ that the plaintiff’s person or property was interfered with

in connection with the prior proceeding. See, c.g., Black v.

Judelsohn, 251. App. Div. 559, 296 N. Y. S. 860 (lat iy

1937); Schierloh v. Kella y, 253 App. Div. 373, 2 N. Y. S.

2d 188 (2nd Dep’t 1938) ; Woodurd vy. Svilbangten Fe = ral

Savings & Loan Association, 161 N. . Y. S. 2d 522 (Sup. Ct.-

1957).

For additional cases see, Annot., 150 ALR 897, 902

(1944).

However recovery has hose shin ed in at least one case

for an ordinary civil suit repeatedly initiated without °

ground although there was no interference with person or.

property. 7? v. Bull, 1 Wend, N. Y. 345 (1828).

ad

ANON EPO NEA KB . oy

50a

Memorandum #29939 Filed May 8, 1964

Perhaps a more uccurate statement of the rule in New

York is as follows:

“Damages are rarely recovered, however, for the mali-

cious prosecution of a civil action, unless person or

property is interfered with by some incidental remedy,

“such as arrest, attachment or injunction.” Burt v.

Smith, 181'N. Y. 1, 2,73 N. EK. 495 (1905).

(The same statement can be found in Hubbard v. Banker,

24 N. Y. S. 2d 289, 294 (County Court 1940), aff’d 260 App. .

Div. 901, 23 N. Y. S. 2d 198 (4th Dep’t 1940)).

Plaintiff has. failed to state any special circumstances

which would take this case out of the general rule. Since

no interference with person or property has been alleged,

the claims of malicious prosecution must be dismissed.

Abuse of process differs from. malicious prosecution in

that the gist of the tort is not commencing an action or

causing process to issue without justification, but misusing

or misapplying process justified in itself for an end other

than that which it was designed to accomplish. Assets Col-

lecting Uo. v. Myers, 167 App. Div. 133, 152 N. Y. S. 930

(1st Dep’t 1915). .

In New York State abuse of process is generally said

to require the same allegation of interference of person

or property as does malicious _prosecution. Silverman v.

. UFA Eastern Division Distribution Inc., 135 Mise. 814, 236

N. Y. S. 18 (Sup. Ct. 1929) ; Tricomi v. Tricomi, 192 Mise.

763, 81 N. Y. S. 2d 750 (Sup. Ct. 1948); Roberts v. B. Gertz

Inc., 24 Mise. a 58, 208 N. Y. 8. 2d 62 (Sup. Ct. 1960).

z >

rear as tl as nce ae aw lain tee ose in Dy .

51a.

Memorandum #29939 Filed May 8, 1964

A possible exception to the general rule is found in the

ease gf Cardy v. Maxwell, 9 Mise. 2d 329, 169 N. Y. S. 2d

047 (Sup. Ct. 1957), where a cause of action was found

when the complaint alleged that the defendants threatened

the plaintiff with adverse newspaper publicity unless he

paid several million dollars to them to withhold further

action by them. The Cardy case résts upon its own special

facts, however. It appears to be an aggravated case to

which the general rule does not apply. It is in that sense

parallel to the Pangburn case, supra.

In the abuse of process count, just as in thé count for

malicious use of process, plaintiff has failed to state any

special circumstances which would take this case out of

the general rule.

Furthermore, abuse of process does not lie since the al-

leged bad faith on the part of the defendants was the in-

stitution of the action, not the abuse of the process of the

court after it had been issued. See, Assets Collecting Co.

v. Myers, 167 App. Div. 133, 152 N. Y. S. 930 (Ist Dep’t

1915) ; Miller v. Stern, 262 App. Div. 5, 27 N. Y. S. 2d 374

' (1st. Dep’t 1941) ; Lyons v. Scriber, 174 N. Y. S. 332 (Sup.

Ct. 1918); oe v. Rubinstein, 35 N. Y. S. 2d 926

(Sup. Ct. 1942).

Certain remarks in the Lyons case fit the | case at bar

exactly :

“The only allegations in the complaint, which by any

possibility related to acts subsequent to the issuance

of the summons herein, are the statements of. the pub-

lication of the particulars of the complaint ‘and the

verbal statements alleged to have been made by the

5 a ee .

SEE NI AO CR Rt:

Nees,

RRR

a

RPS EY ary

PRO PUR , Neer 07

52a

Memorandum #29939 Filed May 8, 1964

defendants after such publication. This was not abuse

of process.” (At p. 334). :

The theories of “conspiracy to violate rule 11,” and “an

inequitable and illegal harassment: of plaintiff through ju-

dicial proceedings,” insofar as they are distinct from mali-

cious use of “process and abuse of process, are not recog-

nized torts. |

Counts 1, 2, 3 and 14, the malicious prosecution counts,

must therefore be dismissed for failure to state a claim

upon which relief can be granted.

Defamation

The 4th and 5th counts of the Amended and Supplemental

Complaint purport to state causes: of action for libel. The

‘complaint shows that the alleged libelous. statements were

contained in.a draft of a complaint delivered by attorney

Adams (attorney for defendant John D. Murchison) to an

attorney by the name ‘of Holland (alleged to be an agent

of Murchison). The 4th count relates to a complaint de-

nominated the “Klafter complaint”; the 5th cause of ac-

tion relates to a complaint denominated as the “Murchison

complaint.” ; a car:

We have, therefore, a situation where on the face of the

pleading one attorney delivered to another attorney a draft

of a complaint. Each of these complaints was purportedly

a derivative action on behalf of Alleghany Corporation

- against Phillips and against various other defendants. It

was a draft of the complaint in an action on behalf of a

corporation in which defendant Murchison was admittedly

Memorandum #29939 Filed May 8, 1964

a large stockholder and in which he had an important in-

terest. It appears from Paragraph-9 of the complaint that

attorney Holland thereafter composed a complaint, filed

it in this court in such an action, and that in connection

with the complaint filed by him he used the draft complaint

hitherto referred to.’ It is alleged in Paragraph 13 that

Holland acted as an agent of the defendant Murchison in

this matter. a rs

We have, therefore, in summary, this situation: that one

attorney far defendant Murchison drafted a complaint and

gave it to another attorney alleged to be an agent of de-

fendant Murchison for his consideration in the institution

of an action. These were steps which were preliminary

steps in the course of taking a legal-action. Whether the

allegations in the draft complaint could be supported would,

of course, be a matter for the subsequent judicial proceed-

ings. It would be a strange situation if every time a de-

-fendant won a lawsuit he could sue his opponent for. libel .

because his attorney consulted another attorney on. the

drafting of the complaint. It certainly could not he allowed

that an attorney who consults his associate about the draft-.

ing of a complaint and shows. him a draft of a complaint

can be charged with libel if it subsequently turned out that

the allegations could not be sustained ‘at the trial. To

apply any ‘such rule would be utterly disruptive of legal

proceedings and the proper representation of clients hy

their attorneys. _

It is for this reason that there is an absolute privilege

for statements made in the course of judicial proceedings

if the statements are material or pertinent to the issues:

involved. Youmans &. Smith, 153 N. Y. 214, 47 N. E. 265

(1897); People ex rel. Bensky v. Warden of City Prison,

a 3

”

+

-

54a -

Memorandum #29939 Filed May 8, 1964

258 N. Y. 55, 179 N. E. 257 (1932); Andrews v. Gardiner, .

224 N. Y. 440, 121 N. E. 341, 2 ALR 1371 (1918). This rule

has bee liberally construed so as to afford its protection

not only to formal pleadings and affidavits, but also’ to

communications between parties to the. action and their

attorneys. See, Zirn v. Collum, 187 Mise. 241, 63 N: Y. S.

2d 439 (Sup. Ct. 1946) ; Di T'ullio v. Deacy, 16 Mise. 2d 565,

183 N. Y. S. 2d 585 (Sup. Ct. 1958).

The rule has also been applied to the’ printing and dis-

tribution of copies of proposed questions to be used in

disbarment proceedings. Youmans v. Smith, supra. —

The publication of a draft complaint is covered by the

privilege. The drawing of drafts and their distribution

among attorneys and clients are necessary steps in taking —

legal action. _ |

The allegedly libelous material was clearly pertinent to

the judicial proceedings which the attorneys Adams and

Holland were thinking of instituting. :

@n the face of the complaint the alleged de matters

were absolutely privileged under the cireumstan ces set forth

in the complaint. A trial on any such issue would\inevitably

result in dismissal of the complaint. There is no reason to

burden this Court and the parties with long litigation where

the outcome is so obvious. The 4th and 5th counts are

dismissed for failure to-state causes of action.

Counts 6, 7, 9, 10, 11 and 12 are based upon allegations

of defamation. Counts 6 and 7 allege defamation by tele-

phone calls to various newspapers. -Counts 9, 10 and 11

-allege defamation by the issuance of a press release to news-

papers. Count 12 alleges defamation by distribution to vari-

' Memorandum #29939 Filed May 8, 1964

ous persons of a copy of a complaint filed in this court,

which plaintiff says was defamatory.

Under the circumstances of this case it may be dubious

whether plaintiff will be able to establish the defamation

which he alleges in the counts of the complaint. But this

issue cannot be decided merely upon the face of the com-

plaint. It must await further proceedings in the litiga-

tion. These counts of the complaint are _ inartistically

drawn but they are sufficient to advise the defendants of

the nature of the claims made and to define the issues with

sufficient clarity to enable them to be tried.

So much of the motion as seeks to dismiss counts 6, 7,

9, 10, 11 and 12 of the complaint is denied.

Paragraphs 75 and 76 of the complaint are stricken ‘pur-

suant to Rule 12(f) as immaterial, impertinent and scan-

dalous. The. allegations contained therein certainly have

no part in this litigation.

Alleged Violations of the Securities Act

Counts: 8 and 13 appear to claim damages for violations

of the Securities Act, although it is difficult ‘to ascertain

from a reading of the complaint exactly what the conten-

tions of the plaintiff are with reference to these counts. In-

sofar as these counts may relate to alleged defamation, his

right of recovery is protected in the other counts of the ”

complaint. Insofar-as the counts may allege violations of

the Securities Act, or the rules and regulations thereunder,

plaintiff has alleged no facts sufficient to show any damage

resulting to him personally by reason thereof. The meet-

ings of stockholders concerning which proxies were solicited

have -been held. He did not seek to enjoin the use of the

.

PLL IOP LY RIT

SPN NRE TAY

OAR TP SAIL A LYRO RE NOW

TELINO GTR vie deste nae, Pemeow

PEL (EE Arh Pda ei AN. |

Gited etek cx

56a

Memorandum #29939 Filed May 8, 1964

proxies or to enjoin the holding of the meetings or the

action taken thereat. For him to wait and now seck per-

sonal damages for-alleged violations of the Securities Act

is not justified. If there were any violation of the proxy

rules, such violation cannot be said to be related in any

way to the damages sought to be recovered by the plain-

tiff. Cf., Mills v. Sarjem Corporation, 133 F. Supp. 753,

. at p. 768 (D. C. N. J. 1955).

The motion to dismiss counts 8 and 13 of the complaint

for failure to state a cause of action is granted.

So ordered. |

Dated: New York, |

May 8, 1964

/8/ Arcuie O. Dawson

U.S. D. J.

APPENDIX C __5za

3 /—508-535—

Opinion Filed March 28, 1966

Randolph Phillips, plaintiff, pro se.

Townley, Updike, Carter & Rodgers, New York City, for

defendant, John D. Murchison, J. Howard Carter, Lee W.

Meyer, Ronald §S. Daniels, Anson M. Keller, New York

City, of counsel.

Ryan, Chief Judge.

Defendant John Murchison has moved under Rule 56(b)

F. R. Civ. P. for summary judgment dismissing the

_ amended and supplemental complaint with prejudice upon

* the ground that the matter complained of in the pending

counts of the said complaint are absolutely privileged as

a matter of law under Section 337 of C. P. A. (now See. 74

of the Civil Rights Law). This privilege has been pleaded

. as an affirmative defense to all counts.’ |

Plaintiff has moved for an order “vacating that part of

this Court’s memorandum and order of May 8, 1964 [by

' Judge Dawson] dismissing Counts 1, 2, 3, 8, 13 and-14 of

the amended and supplemental! complaint”.

ad

“Although the suit is filed against Murchison brothers,

individually and as a partnership, the only defendant who

has been served and has appeared is John D. Murchison.

' Section 337 of the New York Civil Practice Act (now Section 74

of the Civil Rights Law) provides in relevant part :

“A civil action cannot be maintained against any person,

firm or corporation, for the publication of a fair and true

report of any judicial proceeding, legislative proceeding or

other official proceeding, or for any heading of the report

which is a fair and true headnote of the statement. published.”

58a

Opinion Filed March 28, 1966

- The complaint rests on allegedly libelous newspaper re-

ports but the alleged offending newspapers have not been

sued. This is the fourth complaint since 1961 which plain-

tiff has filed in support of the charge that he was defamed

—the three prior complaints were dismissed by Jndge

Dawson. as were six counts of the fourth leaving for our |

disposition the 6th, 7th, 9th, 10th, 11th and 12th counts.

At the outset, we deny plaintiff’s motion because -this

Court has no authority or power to review J udge Dawson’s

dismissal of :these counts on May 8, 1964. That, after his

decision the Judge signed an order to show cause to re-

consider Counts 8 and 13, which’ was never heard because

of his death prior to its return date is no authority for re-

consideration of his decision by me. I cannot say that Judge

Dawson would have vacated his decision and reinstated

these counts; the signing of the order to show cause was an

indifferent judicial act of no determinative significance. It

decided nothing—not even whether the Court would recon-

sider. In fact, examination of the reasons urged by plain-

tiff for reconsideration discloses nothing which in our opin-

ion might have caused Judge Dawson to. change his deci-

sion, J. 1. Case Co. v. Borak, 377 U.S. 426, 84S. Ct. 1555,

12 L, Id. 2d 423 the authority relied on by plaintiff in sup-

port of his order to show’ cause does not validate these

counts. Besides since Judge Dawson’s death plaintiff has

done nothing to bring the order to show cause on for hear-

ing until defendant made the instant ‘motion to dismiss the

remaining counts. Now eighteen months later, plaintiff

seeks reconsideration not only of Counts 8 and 13 but of |

the remaining ones, as to which he had never sought re-

59a

4 Opinion Filed March 28, 1966

consideration. Obviously, plaintiff thought as little of his

chances of succeeding as we do. This motion is denied,—

both procedurally and on the merits.

We turn now to defendant’s motion and to the two ques-

tions which are determinative of its outcome,—whether the

matter complained of was published in connection with a

judicial proceeding and if so whether it fairly and accu- '

rately reported the proceeding. The first question can be

resolved on the documents filed in connection with thi-

motion; the second requires a comparison of the content

of the judicial proceeding with the matter reported.

It is urged by defendant that the determination of both

_ questions may be made by the Court as a matter of law

because the question of whether the privilege attached is

a question of law. Plaintiff urges that neither may be de-

' termined by the Court since underlying both are disputed

issues of fact which require a trial.

The defamatory statements charged in this suit arise

out of the reporting of commencement of two derivative

stockholders suits on behalf. of Alleghany Corporation

against Phillips and. others: one, the Freeman suit in the

New York State Court and the other, the Murchison suit in.

this Court.

. Specifically, the complaint alleges in the remaining sails

before us, as follows:

Count 6 charges that plaintiff was slandered ‘on Septem-

ber 7, 1960, when defendant’s “agent” Holland (his attor-

ney) telephoned the Wall Street Journal to report to it

the institution of the Freeman suit, and that plaintiff was

_ -libeled by that paper’s republication of the report on Sep-

Sa ee.

60a

Opinion::Filed March 28, | 1966 ;

tember 8, 1960, In this count plaintiff sets forth that part

of the report which he charges was defamatory, |

Count 7 charges that plaintiff was similarly slandered

. when Holland telephoned this ‘information to the Herald -

‘Tribune on the same day, and, that plaintiff was libeled

when that paper republished this report on September 8,

1960. Again, plaintiff sets out that part of the report which.

_ he claims defamed him.

Count 9 charges that plaintiff ‘was libeled by defendant

when Hill & Knowlton, a firm of press. agents acting on -

defendant’s. behalf, issued from their New York office a

press release to newspapers and wire services in the State

. of New York and elsewhere in the United ‘States, and to

individuals in the State of New York and elsewhere in the

United States, through the use of the mails and otherwise,

which was headed “For: Murchison Brothers For IM-

MEDIATE RELEASE: THURSDAY , SEPTEMBER a,

1960”; that by issuing said press release through Hill &

. Knowlton, Ine., defendant Murchison caused the substance

of it to be published by newspapers, magazines, and wire

services throughout the United States, thereby causing

widespread and extensive circulation of the aforesaid false,

malicious, and defamatory statements. This count goes

on to recite the dismissal on‘the merits of the charges

against plaintiff which had been so publicized in the press

release, and the failure of defendants to cause aspress re-

- lease to be issued publicizing this decision of this Court,

or communicating the decision of this Court to those news- .

papers which had reprinted defendants’ press release.

The Tenth Count charges that plaintiff was defamed as

a result of the republication of the press release of Sep-

tember 8, 1960 in the New York Times and in the New York

World Telegram and Sun on September 9, 1960.

__ paper’s Business Editor in Minneapolis. |

The Twelfth Count charges that the mailing on Séptem-

6la

Opinion Filed March 28, 1966

The Eleventh Count charges a similar defamation as a .

result of the republication of the press release in the Min-

-neapolis Morning Tribune of September 9, 1960, which

statements are alleged to have been telephoned to the news-

paper by defendant or his agents in New York City to that

ber 13, 1960, by defendant of copies of the Murchison com-

plaint to his fellow directors throughout the United States

‘ and Canada constituted a libel and alleges as well that

some of the allegations of the complaint itself were libelous.

No questién is présented as to the defamatory. nature of —

the statements pleaded. in the complaint.” Renee:

In ‘support, of his position that. there were judicial pro-

ceedings pending at the time ofall publications complained

of and that there is,no question as to when these judicial

proceedings began, defendant has submitted various affi-

davits based on personal knowledge. With respect to the

Freeman suit against Phillips, Kirby and Ireland in the

State Court there is an affidavit of Holland, attorney for

the stockholder Freeman, which unequivocally states that

“Tn short, and bluntly put, it. is charged that for a price,

Phillips sold out to Kirby and betrayed the interests of those he

purported to represent, in advocating the acceptance of a separate

settlement with Kirby for $1,100,000 when he knew the latter’s

liability in the lawsuits had been evaluated at $35,000,000, and

that the sum of $1,100,000 was considerably less than Kirby would

have had to pay in settlement except for the alleged corrupt-

conduct; that the’conspiracy encompassed the lifting of the in-

junction of this Court, as well as the entry of an order of dis-

missal as to Kirby, which were achieved by the concealment of his

alleged duplicitous conduct from Woth Courts.” Murchison v.

Kirby, ‘D. C., 27 F. R. D. 14, 1Z (1961). ae oe

Bilan. bain Ak ere nk ans rat “ See See Ser

62a

Opinion Filed: March. 28, 1966

he, Holland, personally sérved the Freeman summons and

complaint upon Ireland and Alleghany on September 7,

1960, and that subsequent to this service he, Holland, tele-

phoned the Wall Street-Journal ‘and New York Herald Trib-

une to inform them of the institution of this suit. The

summons and complaint are attached as an exhibit and

are dated and verified respectively “September 7, 1960.

There is no question that the date of the newspaper publi-

. cations was September 8, 1960. Although.no affidavit of

. Service of the summons and complaint on Ireland and Alle-

ghany has been submitted on this motion, the sworn state-

ment of Holland, a member of the bar of this Court, and

counsel for Freeman at the time, is supported by the .re-

port in the Wall Street Journal on September 8, 1960, that

“Mr. Ireland confirmed he had been served with the suit,

7 which i is being brought in New York State Supreme Court.”

For this statement to have appeared in the paper; which

was on public sale on the morning’ of September 8, .1960,

it would have had to be printed at the latest the night of

September 7, 1960, the day on which Holland says he served

Ireland. The affidavit of Mr. Carter, attorney for defendant

on this motion, adopts and reaffirms the statements in

Holland’s affidavit.

With respect to the Murchison suit filed in this Court ,

against Kirby, Phillips and others, there is the affidavit of

Huschle, an attorney in the office of the attorneys for Murch-

ison in that suit (and present counsel) to the effect that

he filed the complaint in this Court on September 8, 1960

sometime before 4:30 P.M. and that he reported the com-

pletion of such filing to a member of the firm. The records

63a

Opinion Filed March 28, 1966

of this: Court established that this complaint was filed on

that day. There isa further affidavit of Cheney, Vice-Presi-

dent of Hill & Knowlton, press agents for’Murchison, stat-

ing that on September 8, 1960 he read the Murehison

complaint and discussed its allegations with counsel for

Murchison and prepared a press: release to announce ‘the

‘commencement of the action, but that he was instructed not

to and did not distribute the release until he had received

word from, counsel of the filing of the complaint. Mr.

Carter’s affidavit adopts and reaffirms these statements.

Opposed to these we have two affidavits of plaintiff. and

a Rule 9(g) statement reciting numerous facts as to which

he says there is a genuine issue. We will consider only

those that are relevant to this motion:

‘1. Whether or not the publications, complained of in

the 6th, 7th, 9th, 10th and lith Counts were a “fair and

true report of the judicial proceeding they purported to

wopert. 2 t

2. Whether the statements in the affidavit of Holland

as-to the times of service of his complaint in the Freeman

action and of his telephoned conununications to the W all

Street Journal and the Herald Tribune are true.

3. Whether thesstatement in the affidavit of Cheney ax

to the time of his receipt of the Murchison complaint, his

discussions with Murchison’s attorneys, the preparation

of the press release and its delivery to others is ove.

4. Whether the statement in the affidavit of Husehle ax

to the time of the filing of the Murchison complaint and

his notification to his office i is true.

eS ee

64a

Opinion Filed. March 28, 1966.

do. Whether the statements in the affidavit of Mr. Carter —

—referring to the above three affidavits are true.

Plaintiff’s affidavits to support these’ issues Msofar as

relevant are to the effect that he denies the allegations in

all the affidavits “as to the times of service of the complaints

referred to, of the times of @ublication of the complaints .

referred to, and of the times of the discussions or reports,

therein. referred to”; and that he “challenges their eredi-

bility with respect to their material allegations.”

Further averments as to the time of the “filing” of the

Freeman action in the State Court, and of the service upon

him in both actions and 6f his opportunity to answer the‘

_ complaints are totally immaterial to the question before

us and do not challenge the facts relied on by defendant

to support his motion. contd

It cannot be disputed (and plaintiff conceded this) that

an action of the nature here involved is commenced i in ‘the

New York State court by the service of the summons upon

any one defendant, and in the Federal court “[a] civil

action is commenced by filing a complaint with the court.”

(Rule 3 F. R. Civ.’P.). The filing of the complaint in the

Freeman suit in the State Court, and the service of’ a-de-

fendant with process in the Murchison ‘suit in the Federal

court is not required in the establishment of the pendency

of a judicial proceeding. Once thie pendency of the ju-

dicial proceedings has been established the privilege at-

~ . taches irrespective of whether the proceedings were public

knowledge or known to. plaintiff. (Campbell.v. New York

Evening Post, 245 N. Y. 320, 1st N. E. 153, 52 A. L. R.

1432). :

tie:

65a

Opinion Filed March 28, 1966

* Plaintiff’s denial is a group denial of the material alle-

gations of the time of service and the telephone calls,

lumped together so vaguely ag to: meke it impossible to

‘determine exactly what plaintiff is-contesting. He denies

“times of service of the complaints”, which could include

_ service of the Murchison complaint and which is not rele-

vant; he denies “times of publication” which could include

the sdusbens ealls, as well as the press release, the dis-

cussions with counsel and the newspaper reports—some of @

which are incontestable. Although plaintiff has had more _

than five years in which to inform himself of the true facts —

relating to the time of service, the telephone calls, the dis-

cussions, ete. he has stated no facts to contradict counsel’s

sworn statements and the supporting exhibits.

Plaintiff seeks to create. an issue of fact out of. nothing

more than his bald statement that there is an issue of fac!

as to the truthfulness or falsity of counsel’s. statements.

All he discloses by this challenge to the credibility of coun-

sel’s: statements is a baseless hope that by cross examina-

tion he will be ‘able. to establish that both former and. -

present counsel for Murchison are not truthful: He has

shown no facts which would form the basis for reaching

the conclision that counsel did not serve the summons and

complaint in the Freeman suit when he swears he did. Cer- _

tainly, this Court is not to conclude, without substantial

' basis fer doing so that two members of its bar of experi-

énce and good reputation have perjured themselves and de-

ceived the Court in order to gain some procedural advan-

tage over their adversary. No genuine issue of the credi- ©

bility of these witnesses requiring a trial has been raised;

‘y

a te

STS OER eee eRe

¥

66a

Opinion Filed March 28, 1966 .

summary judgment will Tie in such case (Topp-Cola’ Co. v.

Coca-Cola Co., D. C., 185 F. Supp. 700; Orvis.v. Brickman,

D. C., 95 F. Supp. 605, aff'd. 90 U. S. App: D, C. 266, 196

F. 2d 762; Scolnick v. Lefkowitz, 329 F. 2d 716, 2d: Cir.

1964). To hold otlierwise would mean that any time issue

has been joined in an ‘action, summary judgment will not

lie. Rule 56(e) requires not a reassertion by the adverse —

party of his allegations or denials but a response by affi-

davits setting forth specific facts showing the issue which |

must be tried,

We find that there was a judicial proceeding pending at

the time of the publications in the Wall Street Journal and

the Herald Tribune, the libel alleged in Counts 6 and 7,

and at the time that Holland telephoned these papers—

the slander charged in Counts 6 and 7. It follows that. we

find that the republication of the press release in the World

Telegram, the New York Times and the Minneapolis Morn-

ing Tribune of September 9, 1960 reporting the institution

of the Murchison suit in this Court was made while there ir

was a judicial proceeding pending, in view of the-fact that -

complaint had been filed in this Court on September 8, 1960.

This brings us to Count 9, which as we have seen charges

libel through the issuance and publication of the press re-

: leasé by defendant’s press agent reporting the institution

of the Murchison suit to the newspapers and their publica-

tion of it on September 9, 1960. The issuance of the press

release to the newspapers ‘is: sworn by Cheney, the press

agent, to have been made on September 8, 1960 after he

had been advised ‘by counsel for Murchison that the com-

plaint had been filed. Again, plaintiff has submitted no .

Lae VEL eee Set Oe eer ey eee Ate mane awd te tana etait leslie

Opinion Filed March 28, 1966 .

, a

~ facts showing that there is a question as to when Cheney

Teleased the press release to the papers, and in fact under

-his very vague denial he has not ever concretely denied that

the press release was in fact released following the institu-

tion of suit. Using the Cheney affidavit as a springboard,

plaintiff in a-belated attempt to immunizé this Count 9 from

the protection of a judicial proceeding, attempts to argue

that he was libeled when counsel for Murchison prior to the .

filing .of the complaint showed Cheney the complaint in.

order that he might prepare a press release. There is no -

question that Cheney did sce the complaint prior to its

filing—he has so sworn—as there is no. question that

plaintiff has nowhere charged that this disclosure. by de-

fendant to his press agent constituted the publication com-

plained of by him.. It is unnecessary for this Court to de-

termine whether publication by a party to a press agent

>» under contract to the party for the purpose of having him

_ prepare a press release of a contemplated judicial proceed- -

ing is protected or actionable, Plaintiff has repeatedly de-

scribed his count as charging “publication of defamatory

matter by press release throughout the United States” and

cites Munafo v. Helfand, D. C., 140 F. Supp. 234, 237 for

the proposition that “delivery of the press release to the

newspapermen was publication in and of itself,” making it

quite clear that this is the publication complained of and -

not the prior’one by counsel to “Cheney.

We find that publication of the pr ess release by Cheney

to the newspapers was made when there was a judicial

proceeding pending and that it was therefore privileged.

After four complaints and Six years there would be no

reason to permit the filing of. an amended count char ging

Naan is id i inn wince WL doe

68a

| Opinion Filed March 28; 1966

"libel by. publication to defendant’s agent in view of the

fact that such a claim is barred by the one-year statute of

-limitations, (CPLR 215 (C. P. A. §51(3)) that it may not

- Telate back to the libei now pleaded (Hartmann v. Time,

Inc., 3 Cir., 166 F. 2d 127, 1 A..L. R. 2d 370) and that.

the damage, if any, suffered by plaintiff arose not from °

the publication by defendant to ‘its press agent, but rather ~~

from the publication by the defendant’s agent to the news-

papers. ; Les :.

The second question to be determined with reference to.

all the remaining counts is whether the publications—the |

telephone call, the press release and the newspaper reports

_ —fairly: and truly reported the judicial proceedings we

have found pending. The resolution of this is essential not

because plaintiff has charged that they were not fair and

true reports, for he has not done so, but because this is

the other statutory requirement, which must be met. be-

fore the privilege attaches. The ultimate question ‘of ap-

plication of the statute to the publication is of course one

of law for the Court, but the primary one of fairness and

truth may or may not present a: question of fact which °

_ might require a hearing before the statute may be applied.

Whether such a factual issue exists can be determined .

only from an examination of the evidence before the Court

—that is, the complaints which form the basis of the ju-

dicial proceedirigs and the language employed to Teport

_ them. Obviously if the reports were verbatim reprints of

_ the complaints, the matter would end there, but they. are |

_not and it is necessary therefore to compare the reports

with the complaints in order to determine whether there

. 69a

es Opinion Filed March 28, 1966

is an issue as to their fairness and truthfulness. The com-

plaints, the press release and ‘the. newspaper reports are

before the Court—they are undisputed. No claim is made

that the telephone calls made by Holland, which form the

basis. for plaintiff’s claim of slander in Count 6, published

matter other than that which appeared in the newspaper

-- reports, which are undisputed, so that as fo this charge of

slander no issue is presented. That the Court may make

_the determination is established. Gregory v. Daily Gasette

Co., 22 A. D. 2d 846, 254 N.Y. 8. 2d 66.

“Where as here and as, conceded by the parties, all of

_the essential facts appear in the pleadings and the only

question is a question of law as to whether the publica- .

tion is a fair report of court documents atttached to

the complaint, judgment on the pleadings is proper.”

Schachter v. Néws Syndicate Co. Inc., 270 App. Div.-

378, 380, 59 N. Y. S. 2d 693, 694 (1st Dept. 1946.)

In George v. Time Ine., 259 poms Div. 324; 19 N.Y. S. 2d

- 385; 386, App. Div. 1st Dept. 1940, it was held that “** *

on the undisputed facts in this.record as to the content of

the Circuit Court’s opinion. (the judicial proceeding), and

the language used by defendant in reporting it, the issue

as to whether the article was a fair and true report was

an issue of law for the court.”

This is in accord with Seelman; Libel and Slander in the |

State of New. York (rev. ed. 1964) at p. 278. where the law

of New York is tersely stated that :

“Where the question of fair report arises solely from.

the publication of the contents of — documents; or

70a

Opinion Filed- March 28, 1966:

\, upon undisputed testimony of the court occurrence, it

\ "is for the 2ourt to decide.” 7 3

- The question of malice, a true question of fact, does not —

defeat the privilege ; its resolution therefore even if pleaded

is not hecessary to an application of the privilege (Kelley

v. Hearst Corp., 2 A. D. 2d 480, 157 N.Y. S. 2d 498 ; Farrell

v. New York Evening Post, 167 Mise. 412, 3 N. Y.-S. 24

1018 (Sup. Ct. N. Y. Co..1938)). - | ae Cae

The entire reports must.be read, -but the following ex-

cerpts illustrate their overall nature. Soret

The Wall Street Journal report (Exhibit “2”) pleaded

in the 6th Count has: the lead caption: ,

“TWO MINORITY HOLDERS SUE, KIRBY, OTHER

TOP OFFICERS OF ALLEGHANY <<

Suit “Charges He gave R. Phillips Seat on LD. &

Board: Got Favorable ‘Settlement of ’55 Suit

There follows a synopsis of what the Freeman suit charges

and who are named as defendants. It goes on to quote both

defendants—Ireland that the charges were ridiculous and

a statement to the effect. that he had been served and by

Phillips that he had ‘not been served and that he was not

going to be intimidated or coerced from performing his

.duty in spite of the chargé made against him; the report

also quotés Murchison on charges of wrongdoing made,

against him by stockholders of I. D. §. a

The report in the Herald Tribune ((Exhibit “3”), the

‘th Count) dears the.caption a

“ALLEGHANY .FACED BY NEW SUIT INTEREST .

CONFLICT CHARGE LEVELED.”

&

~*~ ¢

| a.

71a

7

Opinton Filed March 28, 1966 |

and describes the suit as a battle between millionaires |

(Kirby and Murchison) for control of Alleghany; then quot-. > *

-ing from the complaint it says that the suit charged that’ |

Kirby entered ‘into a “secret agreement and conspiracy” E-

with Phillips to procure favorable settlement of another

suit in return for a promise té Phillips of “certain per- * —

quisites”, among Which were that Phillips would be named >

a director of I. D. S. with a salary and expense account.

Under a subheading “Payment Held Inadequate” Phillips Beas

.1s quoted as saying that’ he had requested the removal of.

the Murchisons for wrongdoing, and that he would not be

intimidated or coerced from performing his duties to the |

I. D. S. stockholders. iat - 8 2 :

- The press release ((Exhibit “5”), Count79), bears the

- heading . e

“FOR: MURCHISON BROTHERS FOR IMMEDI. - 7

ATE RELEASE: THURSDAY, SEPTEMBER 8, -° _

1960” | pees SS , :

and begins by stating that Murchison and others had ©

charged defendants and Phillips with conspiracy to defraud

the courts and Alleghany; it then continues with a sum-

mary of the complaint “filed in the United States Southern -

District Court”, quoting from it that it alleges that Phillips )

was to receive “a position of prominence as a diréctor or

officer of I. D. S ALLEGHANY or one of its affiliates,”,

adding in parentheses and not quoting that (“Phillips is

now a director of I. D. S.”). It also quotes from the com.

-plaint that he would be a “salaried consultant to. Alleghany

or one of its affiliates” and not quoting, in parentheses

72a

_— Filed March 28, 1966

(“Phillips i is now ‘on the payroll of I. D. S. asa consultant

at $2,500. inonthly.”).

The report in the ‘World Telegram ((Exhibit 46”),

Count 10) under the heading ° “MURCHISONS JOIN

FIGHT FOR ALLEGHANY CONTROL” reports on the -

contest between the Murchisons- and Kirby for control of

Alleghany and describes very briefly the suits filed in the

State and the Federal Courts saying that they charged that

defendants Kirby, Ireland and Phillips “conspired to put

over on the federal and state courts a fraudulent settle-.

_ Inent” and that Kirby “made a secret agreement to reward

Phillips witha directorship arid a-job”.

The report in the New York Times ( (Exhibit or),

Count 10) under the caption

TWO ADDITIONAL LAWSUITS FILED AGAINST

OFFICIALS OF ALLEGHANY -

is even briefer; it summarizes the two coinplsinta as charg-

’ ing “a secret agreement and conspiracy” among the three

defendants and a “fraud on the courts” in a “secret agree-

ment between Phillips and Kirby.”

The report of the Minnéapolis: Morning Tribune ((Ex-

hibit 8”), Count 11) carries the by-line

MURCHISONS CHARGE CONSPIRACY IN ALLE.

fa _ GHANY CORP. SETTLEMENT

ce among paraphrases of the allegations of. the complaint

_« makes the following:statements of plaintiff describing. him

as “a leader in the suits against the. management of Alle-

ghany” aridgsince the settlement “active in Alleghany af-

e ‘73a |

Opinion ayes March 28, a

fairs,” “a director of IDS *°* * and ae of the IDS

law and finance comnittee” and “a leader in the recent

shakeup of the management of “IDS”. It further quotes

from the complaint that “Phillips. in collaboration with -

Ireland was to use the position created for him in Alle-

ghany or L. D. S. to hara&s and discourage any opposition

to Kirby within the management or among the stockholders

of {. D. S.,” and that “Phillips now is receiving $2,500. a

month from I. D. 8. for services as a consultant.”

, A comparison of paragraphs of the complaints with the

reports leaves no doubt that far from inputing greater

turpitude to plaintiff than do the judicial proceedings, they

are very restrained i in accurately summarizing the content

. of these proceedings. The emphasis is on Kirby and Mur-

-chison, rather than on Phillips, who is made to appear as a

- weapon in the hands of Kirby in his battle against Murchi-

son, which had for long occupied the attention of the press

and the public. The language travels very closely on the

language of the complaints and where it does not there are

no words used which might be susceptible of charging plain-

tiff with greater wrongdoing than do the complaints.

Plaintiff really does not dispute the fairness and truthful-

ness of the language used, but rather relies on legal argu-

ments to destroy privilege. Thus, he says that the language

of the press release is not privileged because it- contains

factual statements which are not reported as allegations

of the complaints, and he points to the language found in _

parentheses in the press release. “

There are two answers to this argument—one is that

although not reported as a charge in the complaint, these

two statements were in fact allegations of the complaints,

74a

Opinion. Filed March’ 28, 1966. .

and the second is, that even if they ‘were*not, #f: they were

true and not in themselves: libelous they would not destroy

the privilege. That a ‘statement of. fact is.:interspersed

among a report of judicial proceedings ‘does not’ deprive’

the report of .the protection. of the statute so long as the _

statement does not affect its truthfulness or. fairness {Briar-

cliff L. Hotel v. Citizen-Sentinel Publishers, 260 N. Y. 106,.

183 N. E. 193). So too, the headings or. lead lines of the

reports themselves are protected if they are fair.and true—

headnotes of the statements published. Here, the headings

are no more thar an index of what appears in the. context.

below; and only one refers to plaintiff! The Wall Street

Journal. states that Kirby is charged with having given

plaintiff a seat on the'L D. S. Board and with having ob-

tained a favorable settlement of..the-stockliolders’ suit.

Nothing could bea more accurate or fairer summary of

what was charged in the ‘complaints. , - OS

Plaintiff’s other argument is that the privilege is de-

feasible becduse defendant failed to publish his subsequent

. Vindication, and that the report therefore was not full, fair

or impartial. =)

The report here was co-extensive with the judicial pro-

ceeding—only the complaints were then in existence and

‘that is what was reported, It was as complete as could be

and that is when the privilege attached, not years later ;

it was not destroyed because the charges ultimately were

not sustained, Dismissal of the charges did not render

the charges in the complaint non-existent as a record in a

judicial proceeding. George v. Time, Inc., supra; Cainpbell

v. New York Evening Post, supra. There is no principle

| 758.

Opinion Filed March 28, 1966

of law which so eradicates the privilege which has attached

cbecause of subsequent events.

Plaintiff’s next argument is undeserving of much com-

ment. If the report is privileged because made in con- _

nection with a judicial proceeding, it matters not what its

source is, The report determines the privilege, not its .

source, su that it is immaterial whether the newspapers .

(who are not the defendants here) obtained their informa-

tion directly from the complaints. Murchison, the defen-

dant, and his agent obviously did obtain the information

from that- source. . :

Plaintiff finally urges ‘that the privilege does not apply

to the Murchison action ‘because the publication was by

Murchison .a party to the complaint. But, the statute im-

munizes “any person” including parties to the litigation

(Lewis v. Chemical Foundation, 262 N. Y. 489, 188 N . E. 33;

Robinson v. Battle, 148 App. Div. 230, 133°N. Y. S. 57;

Oglesby v. Cranwell, 250 A. D. 720, 293 N. Y.'S. 67).

Reaching at long last Count 12, it is clear that the mailing

of the copies of the complaint by Murchison-‘to his fellow

directors was on September 13, 1960 long after. its filing

was completely privileged as a publication of a judicial

proceeding. No question of fairness or truth is presented

here since the publication was of the complaint itself...

Plaintiff has again argued that the Civil Rights Law of

New York does not apply to the out of state publications

alleged in the 11th and 12th Counts. This was an argument

raised before Judge Dawson in support of plaintiff's prior.

motion to strike the defense of privilege under New York

law, and rejected by Judge Dawson on defendant’s allega-

tion that the judicial proceedings were pending here, and

Y ‘

7a.

Opinion Filed March 28, 1966

that the publigations emanated from New York, where

plaintiff was resident and where damage, fe any, was in-

flicted. This is where the tort was committed, , but even if

it were not, the New York law would ‘still apply as the

place havi ing the ‘most significant relationship with the

occurrence (Babcock v. Jackson, 12 N. Y. 2d 473, 240 N. Y.S.

\ 2d 743, = N. E. 2d 279, 95 A. L. R. 2d 1; King v. Hilde- -

. brandt, 2 Cir., 331 F.. 2d 476; ‘etaienient of Conflicts, ©

2d Sec. 379(e)).

_ The motion ‘to dismiss Counts 6, 7, 3, 10, 1 and 12 and

to enter judgment for defendant is granted upon the com-

plete defense at law that the alleged defamations were

absolutely privileged. The Clerk is dire¢ted to enter judg-

ment of dismissal of these remaining counts with costs and

with prejudice;

So ordered.

Dated: New York, N. Y.

March 25, 1966

/8/, Syuvester J. Ryan

_ Umited States District Judge

th *>

-77Ta-

3a

Judgment

UNITED. STATES DISTRICT. COURT

SouTHERN District or New York

61 Civil 713

~~

Ranp@ppu Pars,

. . Plamtiff ,

—vs.— | |

_ JOHN D. Murcuison and Cunt W. MuRCHISON, JR., indi-

vidually and as persons doing business under the firm

' Name and. a oe of MurcHison BroTHEns,

Defendants.

— >

The defendant John D. Murchison, the only defendant

having been served-and having appeared in the above en-

titled action having moved for summary judgment pur-

suant to Rule 56 (b) Federal Rules of Civil Procedure to

‘dismiss Counts 6, 7, 9, 10,11 and 12 of the amended and

* supplemental complaint, the only remaining counts herein,

and the plaintiff having moved for an order vacating the

order of this Court dated May 8, 1964 with respect to the

dismissal of Counts 1, 2, 3, 8, 13 and 14 of the amended and

supplemental complaint, said motions having come on to

be heard before the Honorable Sylvester J. Ryan, United

States District Judge, and the Gourt thereafter having

handed down its opinion filed on March 28th 1966 denying

plaintiff’s motion and granting the defendant’s motion with

prejudice and with costs, it is

fy.

-7 8a- -

4a

: Judgment

ORDERED, ADJUDGED and Decrrzp: That the defendant

Joun JD. ‘Mourcuison have judgment against the plaintiff

RanpotPu PHrurrs dismissing the amended and supple-

mental complaint with prejudice and with costs.

Dated; New York, N. Y.

March 28, 1966

Joun J. Oxear, Jr.

Clerk