North Carolina Lawyers Weekly
The North Carolina Court of Appeals has upheld the dismissal of a defamation suit against a lawyer who testified at a now-disbarred attorney’s disciplinary hearing.
Since the proceeding concerned the lawyer’s handling of client funds, and the lawyer’s comments were relevant, his testimony enjoyed an absolute privilege.
In June 2013, Brandon Shelton, an attorney with Ogletree Deakins in Charlotte, received an unusual request from his opposing counsel in an employment discrimination case. The attorney, Lena Watts-Robinson, returned a settlement check made out to her client and requested that the check be reissued and made payable directly to her law firm.
Shelton declined to re-issue the check. At a disciplinary proceeding brought against Watts-Robinson the next year, Shelton testified that his “concern was that Ms. Watts-Robinson was potentially trying to run some kind of scam on [her client], and I did not want my client to be in the middle of a dispute” between the two.
Watts-Robinson was ultimately disbarred for mishandling client funds. She subsequently sued Shelton for defamation based on his testimony at the hearing. On Dec. 30, the North Carolina Court of Appeals upheld a trial court’s order dismissing the suit, finding that Shelton’s statements were sufficiently related to the judicial proceeding against Watts-Robinson, making them absolutely privileged.
Under North Carolina law, a statement made in the course of a judicial proceeding is absolutely privileged, and cannot support a civil action for defamation, unless it is “palpably irrelevant” to the proceeding. Watts-Robinson argued that since the disciplinary hearing was not focused on any alleged scam she ran, Shelton’s claim was not sufficiently relevant to the proceeding to qualify as privileged.
Judge Rick Elmore, writing for a unanimous court, disagreed, ruling that the subject matter of Watts-Robinson’s disciplinary hearing was her alleged mismanagement of entrusted client funds, including the settlement proceeds at issue in Shelton’s testimony.
“Considering the entire exchange in context, Shelton’s response to questioning that he was concerned ‘Watts-Robinson was potentially trying to run some kind of scam on [her client]’ after she requested the settlement check be reissued in a manner that would permit her to deposit the check into her own bank account, because she was concerned [the client] would not reimburse her for some expense, was sufficiently relevant such that it was not palpably irrelevant to the subject matter of the disciplinary proceeding,” Elmore wrote.
At trial, Watts-Robinson also moved to exclude evidence of her disbarment, arguing it was more prejudicial than probative. Although the court never explicitly ruled on her motion, it refused to exclude the disbarment order and considered it deciding to dismiss the suit. The Court of Appeals agreed, holding that the disbarment order was relevant to deciding whether the statements were privileged.
Steve DeGeorge of Robinson Bradshaw & Hinson in Charlotte represented Shelton. DeGeorge said that the public policy objective of ensuring that people are willing to come forward and provide testimony without being fearful of a civil defamation claim is a powerful one, and that he was happy to see the Court of Appeals issue a decision clearly reaffirmed that principle.
“Mr. Shelton simply answered a question that was posed to him by the state bar,” DeGeorge said. “The privilege worked exactly like it was supposed to work, and I think the lesson is that if a lawyer is asked by the [DHC] to testify about some matter they worked on, they can do so freely without fear of facing a civil action for a defamation claim.”
Watts-Robinson represented herself. Watts-Robinson said she was not surprised by the court’s ruling, but reiterated that she strongly disputed the account Shelton gave in his testimony. She said she had not yet considered whether she would petition the Supreme Court for discretionary review of the ruling.
“I was hopeful that they [the court] were going to try to find the truth, because that’s what they should be looking for is the truth,” Watts-Robinson said.
The 11-page decision is Watts-Robinson v. Shelton (Lawyers Weekly No. 011-013-17). The full text of the opinion is available online at nclawyersweekly.com.
Follow David Donovan on Twitter @NCLWDonovan
