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DEFENDANTS' Plaintiff principal of design company contracts with defendant hospital to provide design services for construction of new dialysis center - Hospital audits billings submitted by plaintiff and finds irregularities - Plaintiff alleges that chairman of hospital grounds committee defamed her when he called her "a crook" - Damage to business reputation and viability of her company.

Suffolk County

The plaintiff brought this action against the hospital and the codefendant Stanley Becker, the chairman of the hospital’s grounds committee alleging that Becker had defamed her on two occasions wherein he had called her "a crook." The allegation regarding the first instance of defamation at the hospital meeting in June ________, was dismissed because there was no evidence that a third party heard Becker calling the plaintiff "a crook." There was, therefore, no publication of the alleged slanderous comment. The jury was asked to determine whether the second instance in which Becker had called the plaintiff "a crook" was defamatory.

The plaintiff was the principal and sole owner of a design services company which provided architectural, engineering and interior design services. Her company had been engaged in numerous construction projects with the defendant hospital since the mid-1990s. This work included the plaintiff’s services to the hospital in its construction of a new dialysis center. The parties entered into a contract which provided the terms of the plaintiff’s services and remuneration. The contract specified those items which had to be pre-approved by the hospital prior to the plaintiff including them in the project. There was a mark-up scale provided in the contract that set forth the percentages the plaintiff could mark-up items from the plaintiff’s vendors’ prices.

The evidence revealed that in ________, the hospital’s accounting department performed an audit of the plaintiff’s billing on the dialysis project. It found a pattern of irregular billing, duplicate bills, unsubstantiated bills, incorrect mark-ups, and unapproved items. The auditor reported these findings to the defendant, Stanley Becker, who was a member of the hospital’s board and the chairman of its building and grounds committee. At the annual hospital meeting held in June ________, the plaintiff approached the defendant Becker and introduced herself. Both the plaintiff and Becker agreed that Becker then said to the plaintiff "You’re a crook." The plaintiff alleged that Becker also called her a "liar," a claim that Becker denied.

In September ________, there was a meeting at the dialysis center concerning problems with the flooring that had been designed by the plaintiff. Present at the meeting were the plaintiff, the p 7 3 defendant Becker, and the flooring vendors. Becker asked the flooring vendors how much they had charged the plaintiff for the flooring products. Becker then asked the plaintiff how much she had charged the hospital for these products. There was a substantial discrepancy. The parties agreed that Becker again called the plaintiff "a crook." The plaintiff responded that "you just bought yourself a slander case." Becker’s defense was that the statement was, in fact, truthful.

He established its truthfulness by bringing in evidence examined during the hospital’s audit. The auditor testified as to the billing discrepancies. In addition, a flooring vendor testified that he had heard the defendant’s comments. The plaintiff conceded that there were inconsistencies in her billing on the dialysis project, but called these "minor clerical errors." She also argued that she was justified in over-billing the hospital because it had owed her money for previous projects. Finally, she maintained that it was the standard of the industry to mark-up for items not specified in the contract.

The defendants’ motion for a bifurcated trial was granted and the instant jury determined only the liability issue. After a trial of two weeks and after deliberating for three hours (including lunch), the jury returned a verdict of no liability against the defendants. It found that the statement that the plaintiff was a crook was truthful. The plaintiff had demanded almost $________ in damages in her complaint and alleged that her business had been ruined as a result of the defendants’ alleged defamation.

However, because the jury did not find liability, it did not determine damages.

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