Contentious elections of an association’s board of directors can result in some serious allegations against candidates being communicated to an association’s members. “The board is wasting our money!” “He’s lazy and doesn’t want to do anything!” “She’s horrible at this!” While board members and candidates may feel wronged by inaccurate or false statements, they should be prepared for the possibility that they may have to endure what may otherwise be actionable cases of defamation outside of the context of a community association. The same applies to leaders of other groups with a collective interest, such as unions or trade organizations.

In a community association, members may exercise what the courts have recognized as a “qualified privilege” to speak their frank opinions on matters of shared interest without fear of defamation claims, provided certain requirements are met. This is because the collective interest of the members on such matters is viewed by the courts to outweigh individuals’ concerns about their personal reputation.

In order to examine the question of whether qualified privilege will apply, a judge will consider the following elements of a statement: (1) good faith, (2) an interest to be upheld, (3) a statement limited in its scope (e.g. limited to community association matters), (4) a proper occasion, and (5) publication in a proper manner and to proper parties only. Marks One Car Rental, Inc. v. Auto Club Group Ins. Co., 55 F. Supp. 3d 977 (E.D. Mich. 2014). Notice it does not matter whether the statement is true or not, which is instead an element of determining whether a statement is defamatory in the first place.

But what if someone has evidence of malice? Perhaps an opponent emailed a candidate saying something like, “I’ll enjoy defeating you in the election and putting an end to your evil deeds,” and then later circulated it to the members. This may be evidence that a defendant was acting with malice, not acting in good faith and should be held accountable for defamatory statements. Malice has been defined by the courts as “a bad or vindictive spirit or a feeling of hatred or ill will”, and a jury is to make the decision when a statement or surrounding circumstances may be evidence of same. Nuyen v. Slater, 372 Mich. 654, 127 N.W.2d 369 (1964)

An example of violating the limited scope requirement for qualified privilege may be if the statement includes accusations of personal issues outside the association, for example, “He’s been fired from every job he ever had.”

And what if the statements are posted to a publicly accessible website or on social media? This may violate the requirement that the publishing of the statements be limited to those with an interest.

One Michigan Supreme Court case regarding qualified privilege, Bufalino v. Maxon Bros., Inc., 368 Mich. 140, 117 N.W.2d 150 (1962), included a community association as a defendant. This case was brought at a time before fair housing laws were created, and at that time, some associations had a screening process in place by which potential residents were approved or disapproved. The plaintiff brought a defamation claim objecting to the distribution of his screening information and certain communications that alleged he had “a reputation for violent direct action when he or his associates are opposed in any manner.” The court made clear that the question of whether the screening process itself was proper was not before the court; they were only considering the question of whether the association had a valid claim of qualified privilege. Particularly essential to that determination was the question of whether statements were made to proper parties only, and the court ruled in favor of the association, stating that they were indeed proper.

Keep in mind that this is not a two-way street; candidates and members of boards of directors cannot claim a qualified privilege with respect to all members of the association. Some directors have been known to get into trouble when distributing responses to communications from disgruntled members that are sent to all members. The initial communication may be defamatory against the director yet subject to the qualified privilege, and the director’s response may also be defamatory against the member yet not subject to the qualified privilege. And a qualified privilege certainly would not apply to distributing personal information about members to the entire association, such as incorrect delinquent assessment information (and distributing individuals’ delinquent assessment information is a bad idea in any event). Additionally, be careful about what goes into your community newsletter, and be sure to review communications addressed to all members from your management company before they are distributed to the membership.

Because associations are inherently quasi-governmental in nature, the qualified privilege concept can be seen as supporting members’ free speech rights, somewhat similar to how we are free to criticize politicians. However, whether or not a qualified privilege will apply is highly fact-specific, and it’s possible that different judges may rule differently on the same case. So be sure to consult with your attorney to protect you from potential claims of defamation.

 

By Robert M. Meisner, Esq. and Mark Petrie, Legal Assistant