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Former Treasurer Michelle Worob Will Get A Second Chance Against Former Chamber Directors On Defamation Claims
More than four years after Rockland County Supreme Court Justice Paul Marx dismissed former Pearl River Chamber treasurer Michelle Worob’s lawsuit against former board members Lisa Williams, Matthew Worgul, and Brian Campbell, an appeals court reinstated Worob’s claims for defamation and defamation per se.
In February 2021, Worob filed a lawsuit in Rockland County Supreme Court against the defendants to recover damages for defamation, defamation per se, intentional infliction of emotional distress, and negligent infliction of emotional distress. Worob alleged, among other things, that the defendants made various statements that were published in Rockland County Business Journal and to individual members of the community accusing her of misappropriating monies from the Pearl River Chamber of Commerce while she was acting as its treasurer.
The defamation lawsuit against the former directors claimed their negative public characterizations of Worob’s work as treasurer amounted to defamation. In her lawsuit, Worob, owner of Luigi O’Grady’s Deli in Pearl River, alleged the defendants made statements suggesting she, who served as treasurer from 2011 to 2019, “misappropriated monies for her own benefit and gain.”
Worob, who was seeking $1 million in damages, had disputed allegations of wrongdoing in her role as treasurer and touted her accomplishments over many years with the Chamber in the suit.
A fourth defendant, Jenna Fabio, was released by stipulation between the attorneys representing both sides.
The lawsuit arose after the former directors, who left in late 2020, became vocal over the nonprofit’s history of accounting practices.
After the suit was filed, the Chamber hired forensic accountant James DeMinno CPA of New City to get to the bottom of the allegations.
The auditor concluded, in a report issued in July 2021, “the financial position of Pearl River Chamber of Commerce for 2018, 2019, and 2020, and the results of its operating activities and its cash flows for the year then ended in conformity with accounting principles generally accepted in the U.S.”
However, in a separate section of the audit called “Notes to the Financial Statements,” the auditor says: “there were numerous checks (of small amount[s]) that were issued to ‘Cash’. We could not decipher the endorsement signature, verify who the payment was made to. No check should be issued to Cash. The recipient’s name and the purpose of the check should be reflected on each check.”
The Notes also say reimbursement checks should not be issued without accompanying receipts, that anyone receiving a check of $600 or more should be issued a 1099. And the Notes point out that “multiple checks written to different catering venues for gift certificates lacked names in the memos.” The Notes also question a $351 payment on July 31, 2018 to O&R.
Defendants claimed the audit confirmed their statements were accurate, but the trial court never addressed the merits of the accusations against Worob’s bookkeeping practices.
In October 2021, Justice Marx dismissed all of the claims, saying that Worob complaint did not plead adequate facts to support her claims, and that because she was a “public figure” she had to plead and prove the defendants acted with “actual malice” – a heightened legal standard applied to defamation claims brought against public figures.
Worob’s attorney, Brian Condon, appealed that ruling.
Last week, Worob won her appeal. The appellate panel affirmed the dismissal of Worob’s claims for negligent and intentional infliction of emotional distress, but reversed Justice Marx’s dismissal of Worob’s defamation claims.
The appellate court made two key findings. It found that the trial court “improvidently exercised its discretion in denying the plaintiff’s cross-motion for leave to amend the complaint . . . as the proposed amendments were not palpably insufficient or patently devoid of merit” and that the trial court “must liberally construe the complaint, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory.”
In other words, the Court should have allowed Worob to amend her complaint and abused its discretion in dismissing it.
The appellate court also rejected Justice Marx’s finding that Worob was a public figure, saying Worob was neither a public figure nor a “limited-purpose” public figure.
The court said, “Certain individuals may be considered public figures for all purposes while others ‘may invite publicity only with respect to a narrow area of interest’ and may fairly be considered public figures only where the alleged defamation relates to the publicity they sought.”
Limited-purpose public figures are those that “have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved.”
The court said that Worob “did not achieve such pervasive fame or notoriety that she became a public figure for all purposes, nor did she inject herself into a particular public controversy.” Based on those findings, the court said Worob was not required to plead actual malice, and the dismissal based on the failure to plead actual malice was a reversible error.
Now, more than four years after being dismissed, the case goes back to Rockland County Supreme Court for further proceedings. A new judge will be assigned as Justice Marx was reassigned to Westchester County Supreme Court.
