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A Pennsylvania court has considered whether home inspector's defamation lawsuit against a real estate professional could proceed to trial, even though the home inspector had not produced any direct evidence in support of his claims.
Lee Porter ("Inspector") was hired by Jamie Dailey ("Client") to inspect a property the Client was interested in purchasing. At that time, the Inspector had performed approximately 85 inspections, most of which were the result of referrals from two real estate firms. The Client was referred to the Inspector by Joyce Overdorff ("Licensee") of Joy Realty ("Brokerage"), which was the first referral that the Inspector had received from this firm.
During his inspection, the Inspector discovered a perceived defect in the basement of the home. The Inspector’s subsequent report resulted in the Client not purchasing the home in question. The Licensee sent the Inspector a "scathing fax" accusing of him of not performing his inspection in a professional manner, arguing that he had overexagerrated the problems with the basement and so had caused the transaction to fall apart. The Licensee also made unfavorable comments to the Client about the Inspector when the Client went to the Licensee's office to claim her deposit money.
The Inspector only received six more referrals from real estate firms following his report to the Client, and those six referrals he did receive were close in time to the Client's inspection. The lack of referrals caused the Inspector's business to fail. He filed a lawsuit against the Licensee alleging that the Licensee had published false and defamatory statements about his inspection business to other real estate professionals, which had caused his business to fail. Following discovery, the trial court entered judgment in favor of the Licensee and the Brokerage on the grounds that the Inspector had failed to produce any direct evidence in support of his defamation allegations. The Inspector appealed.
The Superior Court of Pennsylvania reversed the trial court's ruling and sent the case back to the lower court for additional proceedings. A party alleging defamation in Pennsylvania must demonstrate the following: a defamatory communication; publication of statement; application of the statement to the party bringing the lawsuit; understanding of the message by the recipient and its application to the party bringing lawsuit; and special harm resulting to the party bringing lawsuit. The Inspector was unable to produce any direct evidence to support the "publication" element of his defamation claim, as he claimed that the "tight knit" community of real estate professionals made it impossible for him to obtain any statements from them. Therefore, the issue before the court was whether circumstantial evidence was sufficient to allow a jury to consider his claims against the Licensee.
The circumstantial evidence offered by the Licensee was the following: the fax sent to the Inspector by the Licensee; the Licensee's conversation with the Client about the Inspector; and the "sudden dramatic, and otherwise inexplicable cessation of all of the referrals which he been receiving" (emphasis in original) prior to his inspection for the Client. Looking at the applicable law in the state, the court concluded that the quantity and quality of the Inspector's circumstantial evidence was sufficient to allow the Inspector's allegations to survive a motion for summary judgment, since a rational fact finder could conclude that a defamatory statement had been made about the Inspector by the Licensee. This inference was supported by the statements made to the Client by the Licensee. Therefore, the court reversed the ruling of the lower court and sent the case back to the trial court for further proceedings.
Porter v. Joy Realty, Inc., 872 A.2d 846 (Pa. Super. Ct. 2005).