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Tennenbaum v. Arizona City Sanitary District

United States District Court, Ninth Circuit

June 3, 2013

Michael E. Tennenbaum, Plaintiff,
v.
Arizona City Sanitary District, a political subdivision of the State of Arizona; Francis J. Slavin PC, an Arizona corporation; Francis J. Slavin, husband; Carol J. Slavin, wife, Defendants.

ORDER

G. MURRAY SNOW, District Judge.

Defendant Arizona City Sanitary District ("ACSD") has filed a Second Motion for Summary Judgment. (Doc. 169.) Defendants Francis J. Slavin PC, Francis J. Slavin, and Carol J. Slavin (collectively referred to in the singular as "Slavin") have likewise filed a Motion for Summary Judgment. (Doc. 171.) The Court denies both Motions.[1]

BACKGROUND

Throughout 2008 and 2009, ACSD was embroiled in litigation with Arizona City Golf, LLC, over a contract governing water rights at a golf course in Arizona City, Arizona. (Doc. 172 ¶¶ 2, 17; Doc. 181 ¶¶ 2, 17.) Slavin was one of the attorneys that represented ACSD in the suit. (Doc. 181 ¶ 40.) Plaintiff Michael Tennenbaum was not party to the golf course lawsuit, and claims no involvement in it. ( Id. ¶¶ 44-45.) The history of the contractual rights involving ACSD's supply of effluent to the golf course and other facilities lies at the center of this case.

The long-simmering dispute about ACSD's supply of effluent to the golf course coincided with a bitter disagreement regarding the composition of ACSD's board of directors. (Doc. 183-3, Ex. 7-5.) Two separate recall efforts were made to unseat three of the five directors, one that began on January 7, 2009, and suffered from procedural defects, and another that was filed on October 8, 2009. ( Id.; Doc. 183-4, Exs. 7-5, 7-14.) The recall efforts were motivated by dissatisfaction with ACSD's conduct of the litigation. (Doc. 183 ¶¶ 63-81.) ACSD Board members challenged the second recall effort in court on December 21, 2009. (Doc. 183-8, Ex. 13.)

It was in this context that ACSD, with the assistance of Slavin, drafted a letter to be sent to all 4, 500 ACSD customers on December 30, 2009. (Doc. 181 ¶ 101.) On its face, the letter's purpose was "to clear up the misconception surrounding the current lawsuit between the Arizona City Sanitary District and Arizona City Golf."[2] (Doc. 1-1, Ex. 1.) It then chronicled the history of the dispute. It asserted that Tennenbaum owned Arizona City Development Corporation ("ACDC"), an entity that owned the golf course, country club, Happy Days Park, Paradise Lake, and the Racquet Club. ( Id. ) According to the letter, ACDC entered into an agreement with ACSD in 1979 that provided that ACSD would provide effluent to ACDC to irrigate those facilities as long as ACDC maintained them for the use of Arizona City residents and taxpayers. ( Id. ) ACDC formed Arizona City Club, Inc. (ACCI), and deeded all amenities to it, subject to a restriction that "the amenities would continue for 99 years", thus allowing Arizona City residents to enjoy the various attractions. ( Id. )

The letter continued:

But beginning in 1994, Tennenbaum began taking those public amenities and selling them off for his own profit. Tennenbaum and his sons have sold off every public amenity listed in the agreement, including Arizona City's groundwater rights, for a profit of nearly $5 million. All of the amenities Tennenbaum agreed to maintain for public use are gone and now belong to private owners. The golf course has been privatized. Yet, it continues to use water intended for the benefit of all Arizona City residents and taxpayers.
What began as a mutually beneficial agreement between the District, Tennenbaum and the Arizona City residents is now for the sole benefit of Tennenbaum and his partners. Tennenbaum owns approximately 40 percent of the golf course and is owed about $700, 000 by Arizona City Golf, secured by a mortgage against the golf course. Tennenbaum claims that the District must provide free reclaimed water forever!!
The District will continue to deliver water to the golf course during the lawsuit. At the end of this lawsuit, there will be a fair and balanced agreement put in place which will provide for Arizona City Golf to pay for reclaimed water.... The payment schedule will be phased in until such time when the Arizona City golf course owners will be paying for water the same as all other Arizona golf course owners and you will be relieved of this financial burden.
The Board will continue to fight for your rights, ensuring they will not stay forever in the hands of golf course owners and out-of-state developers who have their own interests-and bank accounts-in mind.

( Id. )

Tennenbaum claims that the letter contains a number of falsehoods. Specifically, he claims that the following statements were untrue: the nature of the contract between ACDC and ACSD, the formation of ACCI, that the Tennenbaums took the amenities and sold them for his own profit, that they sold all of the amenities for a profit of $5 million, that the amenities are no longer for public use, that the ACDC-ACSD agreement is now solely for the benefit of Tennenbaum, Tennenbaum's ownership of the golf course, and Tennenbaum's claim "that the District must provide free water forever." (Doc. 172 ¶ 6; Doc. 181 ¶ 6.) According to Tennenbaum, those statements falsely accuse him of "profiteering" and "gouging." (Doc. 172 ¶ 7; Doc. 181 ¶ 7.)

The letter appeared in the print and online versions of the Arizona City Independent TriValley newspaper, first on January 13, 2010, and again on January 20, 2010. (Doc. 172 ¶ 11; Doc. 181 ¶ 11.) ACSD held a regular public meeting on January 20, 2010, where it discussed the history detailed in the customer letter. (Doc. 172 ¶ 9; Doc. 181 ¶ 9.) The Chairman introduced Slavin, who stated that "all we're trying to do tonight is to tell you what we're all about in terms of the lawsuit. We think it would be very important for you to know that, only because there's been different versions explained out in the community as to what's going on in this lawsuit." (Doc. 172 ¶ 10; Doc. 181 ¶ 10.) Slavin then gave a presentation that, according to the Parties' briefing, largely mirrored the statements made in the letters.

Tennenbaum brought this suit for defamation on October 6, 2010. (Doc. 1.) He claims that there were four separate defamatory statements, all with principally the same content: those made in the letter, the letter's republication twice in the newspaper, and Slavin's statements at the ACSD meeting. Defendants have moved for summary judgment.

DISCUSSION

I. LEGAL STANDARD

Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Substantive law determines which facts are material and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "A fact issue is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson, 477 U.S. at 248). Thus, the nonmoving party must show that the genuine factual issues "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.'" Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (quoting Anderson, 477 U.S. at 250).

Substantive law determines which facts are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment."[3] Anderson, 477 U.S. at 248. In addition, the dispute must be genuine, that is, the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Id. Because "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge, ... [t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor" at the summary judgment stage. Id. at 255 (citing Adickes v. S.H. Kress & Co., 398 ...


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