A general contractor recently obtained a favorable ruling on a counterclaim against a homeowner for false statements made to the Better Business Bureau, HomeAdvisor, and the Florida Department of Business and Professional Regulation. The details of the case give a great example of how contractors can combat false, bad reviews.
In QBIQ Corp. v. Echarte, a general contractor entered into a contract with a homeowner for a home renovation. After entering into the contract, the homeowner unilaterally cancelled it and the general contractor kept a portion of the deposit. In response, the homeowner made multiple, complaints to the Better Business Bureau, HomeAdvisor, and the Florida Department of Business and Professional Regulation about the contractor.
Ultimately, the homeowner sued the contractor for breach of contract. The contractor counterclaimed, seeking damages for the defamatory statements, an injunction, breach of contract, and for filing a false police report. The trial court ultimately entered judgment in favor of the contractor on the breach of contract claim, but despite finding that the homeowner’s statements were false, failed to enter judgment in favor of the contractor on the defamation claims.
On appeal, the contractor argued that this failure was an error. In evaluating the evidence, the appellate court determined that the following statements by the homeowner were defamatory:
The homeowner told the BBB that the contractor immediately cashed her deposit, that her communications with the contractor went unanswered, that no work was done, and that the contractor stole her check.
The homeowner told HomeAdvisore.com that the contractor took her money, ran off and never did the work.
The homeowner told the DBPR that the contractor did not work and that she was unable to communicate with the contractor.
For all of these the trial court and appellate court both found them to be false, going so far as to say that the homeowner “wove a web of blatant, self-serving lies.” The appellate court confirmed that these false statements tended to injure the general contractor’s business. The appellate court also confirmed that the trial court improperly found that the homeowner had a privilege to make those statements where no evidence was provided in support of such a privilege.
Despite this, the appellate court affirmed the trial court’s refusal to enter an injunction preventing the homeowner from making further online comments or requiring the removal of the previously made comments. While this relief is sometimes available, the traditional remedy is compensation for any damages suffered. An injunction is only available where it is made as part of another intentional tort. Since there was no evidence of such a tort here, the appellate court confirmed that the contractor was not entitled to an injunction.
There are two great take aways from this case. The first is that it is one of the few cases dealing with defamatory statements against a contractor that gives good information and examples of statements. If you find that a homeowner has made similar comments about you or your company online, and they are false, then you may have a claim against them for defamation. The second, less positive result from this case is that it likely makes it harder to obtain an injunction requiring the removal of the defamatory statements. That being said, one solution may be to post a copy of the final judgment finding the comments defamatory if the court cannot or will not order them to be removed.
********* UPDATE *********
Following the Appellate court’s ruling the trial court revisited the final judgment entered in the case to determine what, if any damages, suffered by the general contract were attributable to the defamatory statements made by the home owner. The trial court examined that evidence presented and determined the following:
The general contractor testified that he would have expected to receive 3 jobs from HomeAdvisor during the time period the homeowner’s review was online, but that he received none, and that he believed this damaged his business by causing $29,835 in lost profit. The court determined this was insufficient to establish damages because the general contract provided no evidence that anyone ever saw the bad reviews left by the homeowner online.
Based on this, the trial court awarded nominal judgment in favor of the general contractor in the amount of $1.00, and awarded neither party their costs incurred.
The critical takeaway from this conclusion by the trial court is even if statements are defamatory, you may not be able to recover from them unless you are able to prove specific damages that arose from those statements. Here, because the general contractor could not do so, the trial court declined to award him any of those damages.
If you’re interested in reviewing the specific documents referenced in this article, please use the links below.