Sanctions awarded in defamation case

Where two defendants in this defamation case moved for post-trial sanctions against plaintiff and his counsel after a jury returned a defense verdict, the trial court erred by denying one defendant’s motion.

“Although [plaintiff] Scarabelli’s complaint against [defendant] Call was objectively reasonable, his complaint against [defendant] Nestler was baseless, as Nestler’s alleged defamatory statements did not carry the requisite defamatory ‘sting.’”

Background

MCV Associated Physicians (MCVAP) hired Dr. Tiziano Scarabelli. Later, MCVAP “received several complaints from staff members concerning Scarabelli’s lack of professionalism. …

“MCVAP also received complaints from interns, residents, and patients that appeared to constitute allegations of sexual harassment, prompting a Title IX investigation referral.

“During the investigative process, MCVAP placed Scarabelli on administrative leave from February to June 2018. It continued to pay Scarabelli’s salary – over $20,000 per month – during this time. Ultimately, MCVAP chose to not renew Scarabelli’s contract.

“Scarabelli filed a complaint against Drs. Kenneth Ellenbogen, Antonio Abbate, Nestler, Call, and MCVAP (collectively, ‘Defendants’), alleging that they defamed him because he questioned VCU’s cardiac monitoring process.

“In an amended complaint, Scarabelli alleged that Defendants falsely (1) attacked his professionalism and (2) alleged that he committed sexual misconduct with interns, residents, and fellows ‘to discredit [him], stop his concerns regarding the cardiac care of chemotherapy patients, and … ruin him professionally.’ …

“MCVAP counterclaimed, alleging that Scarabelli fraudulently induced his hiring.

“Specifically, MCVAP alleged that Scarabelli submitted a curriculum vitae that he knew ‘contained references to fraudulently procured articles published in medical … journals’ and ‘purposefully concealed … the true circumstances’ of his termination from the University of Alabama. MCVAP claimed it ‘would never have employed’ Scarabelli had it known the truth.”

After a six-day trial, “the jury returned a verdict against Scarabelli, finding that he failed to prove a prima facie defamation case against the above-named individuals. It ruled in favor of MCVAP on the counterclaim, awarding compensatory damages of $102,500 and punitive damages of $143,500.

“Call and Nestler moved for post-trial sanctions on the defamation claims against them. Scarabelli also filed several post-trial motions, including a motion to set aside the verdict on the counterclaim and a motion for a new trial.

“The trial court denied all four motions and entered final judgment pursuant to the jury’s verdict and its post-trial rulings. These appeals followed.”

Call’s motion for sanctions

“Viewed in the light most favorable to the prevailing party – Scarabelli – the trial court did not abuse its discretion in denying Call’s sanctions motion.

“Because Scarabelli and his attorney presented a valid, non-conclusory defamation claim against Call that appeared well-grounded in fact, they did not violate Code § 8.01-271.1. … .

“Here, Call published the January 2018 memorandum to several staff members. In the memorandum, she restated – verbatim – several allegations that Scarabelli had sexually harassed patients and staff and lacked professionalism.

“Call’s statements were vivid, not opinion, and contained sufficient sting to harm Scarabelli’s ‘reputation in the common estimation of mankind.’ …Because Scarabelli vehemently denied these allegations, reasonable people could differ as to the veracity of these statements. For example, Call restated complaints like: ‘He was rude; he constantly interrupted, correcting me and dressed me down in front of the team while I tried to present. … He made me stand up in front of the entire team to “act out” vectors for EKG reading and said “no, not like that, put your hand on your chest. …” and

“‘He made reference during rounds recurrently to “my beautiful eyes”; it made me uncomfortable. … He touched my leg. … He made multiple inappropriate comments on rounds. … I felt like he tried to come on to me, like he was constantly staring at me.’ …

“As such, the truth of Call’s statements in the January 2018 memorandum was a proper question for the jury, despite Call’s contention to the contrary.

“Lastly, Scarabelli’s testimony that he believed Call’s memorandum was made with malintent, in retaliation for his concerns about VCU’s cardiac monitoring processes, was a proper question of credibility for the jury.

“For these reasons, we cannot say that Scarabelli’s claims against Call were ‘objective[ly]’ unreasonable, … were not ‘well grounded in fact,’ or were ‘interposed for an[] improper purpose[.]’ …

“While the jury rejected the claims against Call, Scarabelli presented a valid defamation claim against Call with sufficient evidentiary support. As such, Scarabelli and his attorney did not violate Code § 8.01-271.1, and the trial court did not abuse its discretion in denying Call’s motion for sanctions.”

Nestler’s motion

“Even viewed in the light most favorable to Scarabelli, the trial court abused its discretion in denying Nestler’s motion for sanctions. … Scarabelli failed to present a valid defamation claim against Nestler, as Scarabelli could not provide a single actionable defamatory statement made by Nestler or present any evidence at trial that Nestler defamed him.

“One month before filing the amended complaint, Scarabelli was deposed and admitted that Nestler made no defamatory statements. Rather, Scarabelli was upset about Nestler’s actions[.] …

“Nevertheless, only one month later, Scarabelli and his counsel filed an amended complaint, alleging that Nestler uttered five defamatory statements: (1) ‘based on multiple complaints raised against you by interns,’ (2) ‘concerns that were raised,’ (3) ‘multiple complaints have been raised,’ (4) ‘administrative leave,’ and (5) ‘Dr. Scarabelli was placed on administrative leave.’

“Several of these statements were undeniably true and, therefore, not actionable. … Scarabelli does not contest that he was placed on administrative leave. Instead, he argues that he should not have been placed on administrative leave because it was retaliatory.

“But whether Scarabelli’s administrative leave was unjust is not at issue here, only whether Nestler’s statements were defamatory. Because true statements cannot be defamatory, statements (4) and (5) cannot constitute actionable defamation.

“We note that the other statements appear equally true, as Scarabelli never challenged the fact that complaints were made, only the content and veracity of those complaints.

“Alternatively, none of the above statements contain the requisite defamatory sting. Therefore, they were not actionable. …

“Nestler’s statements could not be construed as an attack on Scarabelli’s reputation or character, as none of these statements are ‘reasonably capable of defamatory meaning.’ … Nestler’s statements constituted mere observations.

“As such, Nestler’s statements contained no defamatory sting on their face and were not actionable defamation. …

“Although sanctions should not be awarded lightly, sanctions must be awarded in certain circumstances under Code § 8.01-271.1(D). This case is one of those rare circumstances.

“One month after Scarabelli stated, under oath, that he could not identify any defamatory statements made by Nestler, Scarabelli – by and through his attorney – filed an amended complaint stating, again, that Nestler defamed him. …

“Under an ‘objective standard of reasonableness,’ both Scarabelli and his attorney violated Code § 8.01-271.1 in filing the amended complaint, motions, and other papers concerning Nestler and in litigating against him for several years.”

Affirmed in part, reversed in part and remanded.

Nestler, et al. v. Scarabelli, et al. Record No. 0497-22-2, Scarabelli v. Ellenbogen, et al., Record No. 0421-22-2, May 2, 2023. CAV (published opinion) (Ortiz) From the Circuit Court of the City of Richmond (Hairston) Charles M. Sims, Charles G. Meyer III, Rachael L. Loughlin for Kenneth Ellenbogen, M.D., Antonio Abbate, M.D., Stephanie Call, M.D., MCV Associated Physicians and John E. Nestler, M.D. L. Steven Emmert for Tiziano M. Scarabelli, M.D., Harris D. Butler, III and Butler Curwood, PLC. VLW 023-7-157, 21 pp.