– By Laurie S. Poole, Esq. (originally published in October 1999)

A California appellate court recently determined that cam-paign flyers distributed by two owners were not libelous against an association.

In Palm Springs Tennis Club v. Rangel, Plaintiff, Palm Springs Tennis Club (“PSTC”), a non-profit corporation that operates a timeshare resort, sued one of its members for distributing two flyers, prior to an election of PSTC’s board, that allegedly contained false statements about a board member. The flyers stated that the association’s minutes of a March, 1995, board meeting referenced certain incidents, including that PSTC’s board president attempted to assault one of the defendants and that he further raised his voice to and insulted the only female board member. In fact, the minutes of this particular board meeting do not reference any such events.

PSTC sued the owners, claiming that the campaign flyers were libelous against the corporation and that the documents impeded it’s ability to attract qualified board members, cast doubt on the credibility and effectiveness of board members and reduced the resale value of the time-share ownership by creating a negative perception in the minds of potential buyers.

Libel is defined by California Civil Code Section 45 as a “false and unprivileged publication by writing… which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.”

The appellate court found that the allegedly libelous statement did not directly relate to the trade or business of PSTC as they were written not about the board as a whole or its ability to function adequately, but were written about one board member in an effort to prevent the member from being re-elected to the board. The court further indicated the statements were made about the board member solely in his capacity as a candidate for the board, and not about his capacity as an officer of the corporation. The court was unable to see how any reasonable reader could ascribe from the statements any direct relationship to PSTC’s trade or business. Since the statements were not made in direct relation to PSTC’s trade or business, the court determined that the statements did not fall within the definition of “libel” under California

law. The court upheld the trial court’s dismissal of the case.