Va. Cir.: Amended anti-SLAPP fee provision not retroactive

A Yelp reviewer who successfully defended against defamation claims couldn’t claim attorneys’ fees under Va. Code § 8.01-223.2 because 2017 amendments weren’t retroactive, a Virginia circuit court held.

Background

Defendant Jeremiah Jones retained Plaintiff Will Nesbitt Realty LLC to assist him in renting a residential property. In May 2014, the parties signed a Property Management Agreement and a Listing Agreement. With Nesbitt’s help, Jones leased the property to tenants beginning in July 2014, pursuant to a one-year Lease and Lease Addendum provided by Nesbitt.

Although the tenants initially said they intended to renew the lease, they later recanted (after Jones had already signed his own lease to rent an apartment for himself). This information was not conveyed to Jones for 23 days.

After working with Nesbitt for a few months to try to relist the property, Jones told Nesbitt that he was terminating their relationship because he was unsatisfied with Nesbitt’s property management. On December 3, 2015, Jones wrote and posted a Yelp review of Nesbitt. Nesbitt’s attorney then sent Jones a cease-and-desist letter, and Jones edited his original post based on the letter.

Based on Jones’s Yelp posting, Nesbitt sued him for breach of contract and defamation per se. Jones counterclaimed for breach of contract.

Defamation per se

“I paid Nesbitt Realty a year’s worth of property management fees ($2,000+) to do absolutely nothing.” This statement does not constitute defamation per se. The entirety of the Yelp post acknowledges various activities and duties that Nesbitt did perform for him, such as corresponding with Jones about requests from the tenants, sending out repairmen, and listing Jones’s house once the previous tenants vacated the property. In context, the statement at issue was not an assertion that Nesbitt Realty literally did nothing. Rather, it communicates that Jones got minimal value for his money. To the extent that the statement is one of fact, not opinion, Nesbitt hasn’t carried his burden of proving the statement was false, let alone that Jones knew it to be false.

“Nesbitt didn’t’ enforce the lease as I was promised.” Nesbitt has not proven that this statement constitutes defamation per se. He hasn’t shown that the statement was false. In particular, Jones asserted that Nesbitt didn’t ensure that the tenants maintained the home as required in the lease. In his Yelp review, he said the home was not in listing condition following the tenants’ departure, and when it was finally relisted, it was “in terrible condition.” In testimony, Nesbitt acknowledged the poor condition of the house when the tenants left.

“I was promised … that I would be compensated for my troubles – that the fees would be refunded to me; however, I’ve yet to receive any compensation ….” Nesbitt deposited money into Jones’s account in August 2015, so it indeed is not true that Jones didn’t receive “any compensation” from Nesbitt. But until shortly before trial, Jones believed Nesbitt’s payment was a late rent payment from a tenant, and Nesbitt has not proved that Jones lacked a reasonable basis for this belief. Thus, the statement is not defamatory per se.

Breach of contract

The evidence supports Jones’s claim that the Listing Agreement was breached. Nesbitt sent an email on June 29, 2015, stating: “We should have listed the property immediately, but did not. We’re now jumping into action to get the property rented.” The email acknowledges Nesbitt’s responsibility to re-list the property as soon as he learned that the first tenant didn’t intend to renew. Given that (1) Nesbitt made no indication to Jones that a new Listing Agreement was necessary or customary, (2) Nesbitt acknowledged his duty to list the property immediately, (3) the Listing Agreement stated no expiration date, and (4) Nesbitt actually did list the property without asking for a new Listing Agreement, this court finds Nesbitt breached the Listing Agreement’s provision that “Broker shall enter the listing information into the MLS database within 48 hours … of commencement of Listing Period.”

Nesbitt also breached the agreement by advising Jones by email that he was “finished working on this account” without giving the 30-day notice provided in the contract’s early-termination clause.

Based on the foregoing considerations, Jones is entitled to $3,800 – two months’ rent – as relief for this breach.

Attorneys’ fees

Under the Agreement’s fee-shifting provision, Jones is entitled to attorneys’ fees as the prevailing party in the breach-of-contract claims. Jones’s counsel has the burden of proving that he adequately segregated recoverable from non-recoverable costs and expenses. The Property Management Agreement is so entwined with the Listing Agreement, the Lease, and the Lease Addendum that the Property Management Agreement’s phrase “arising out of or relating to this Agreement” clearly includes the lease documents. The lease documents would not have occurred but for the Property Management Agreement. Therefore, Jones is entitled to attorneys’ fees related to the contract claim under the Lease and Lease Addendum.

However, the defamation claims are not subject to attorneys’ fees under the parties’ agreements because these tort claims are completely separate and distinct from any of the contract claims. Jones nevertheless argues that he is entitled to attorneys’ fees under Code § 8.01-223.2, but this court disagrees.

Nesbitt’s cause of action accrued on the date Jones published his original Yelp review – December 3, 2015. Since that date, § 8.01-223.2 has been amended twice, first adding a fee-shifting provision and, most recently, expanding the statute to provide immunity in certain claims of defamation. While the current version of the statute does provide for recovery of attorneys’ fees by a defendant who obtains dismissal of defamation claims pursuant to the statute, the court finds that its amendments are not retroactive. The revised statute does not speak to retroactivity, but does create a substantive right of recovery in a defamation case that didn’t exist prior to the revision. In these circumstances, revisions are not retroactive.

Accordingly, this court cannot award attorneys’ fees and costs to Jones that are solely associated with defending against the defamation claims. Thus, there are two categories of potentially recoverable fees: those solely associated with the contract claims ($9,941) and those reflecting a mixture of contract and defamation claims ($19,303). Based on the reasonableness of the fees and the evidence produced and arguments made at trial, the court awards 100 percent of Jones’s contract-only fees and 50 percent of his contract/defamation mixed fees.

Will Nesbitt Realty LLC v. Jones, CL16-14234, Apr. 30, 2018. Fairfax Cir. (Bellows). Mikhael D. Charnoff for Plaintiff; Steven A. Krieger for Defendant. VLW No. 018-8-039, 25 pp.