This post examines a recent opinion from the Michigan Court of Appeals: Rooks
v. Krzewski, 2014 WL 1351353 (2014). Joseph Krzewski appealed when, after a bench trial, a udge
held he “portrayed” the two plaintiffs, Jonathan Rooks and Bradley
Guizinga, "in a false light."
The Court of Appeals began
its opinion by explaining that in April of 2010, the plaintiffs
Jonathan
Rooks and Bradley Gruizinga sued Krzewski for “false light invasion of privacy”
and the trial judge found in their favor.
Rooks v. Krzewski, supra. The court then began its analysis of the false
light issues by explaining that Rooks owns
Parkland Realty, Inc., and Parkland Investments, Inc. . . . Through
one of his corporate entities, Rooks purchased an old school building on Broadway
Street in Grand Rapids. He sold [it] to Union Square Condominiums, LLC (Union
Square), an entity owned by Gruizinga, which developed [it] into approximately
180 condominium units. Gruizinga contracted with Parkland Realty to market the
units.
At the
time of trial, [Krzewski] was 30 years old and lived with his parents, James
and Patricia Krzewski. He previously owned a condominium unit in the Landmark
Lofts in Grand Rapids. He has never owned, leased, or occupied a condominium
unit in the Union Square building.
Rooks
first encountered [Krzewski] in 2006 or 2007 at a home show, where [he] was
selling hot tubs. Rooks thought [Krzewski] had a `good sales personality,’ and
invited him to apply for a sales position with Parkland Realty. [Krzewski] had two interviews. However, after Rooks did
some `background checking,’ he hired someone [else].
[They]
had another encounter when [Krzewski] was selling his Landmark Lofts
condominium unit. During the Parade of Homes, [Krzewski] placed a sign on the
street indicating his unit was `Best of Parade.’ Rooks called [Krzewski].
According to Rooks, [he called] to let [Krzewski] know that, because his unit
was not in the Parade of Homes, he could get into trouble with the Home
Builders' Association. Rooks got [Krzewski’s] voicemail, and [it] . . . asked
the caller why he or she would want to buy a condominium unit at Boardwalk,
which has high dues and is a block from the Grand River, when one could live
directly on the river. Rooks asked [Krzewski] to call him, and [he] did. Rooks
told [Krzewski] it did not make sense to promote his condominium unit by
badmouthing other condominium developments. According to [Krzewski], Rooks
threatened to sue him for his unlawful participation in the Parade of Homes.
Rooks v. Krzewski, supra.
The court then
explains that while Krzewski “never owned or lived” in a Union Square
condominium
unit, he posted messages on the Union Square Forums, an Internet website for
discussion of Union Square. His user name was `BestofParade.’ On April 29,
2008, [Krzewski] inquired on the Union Square Forums whether it was true that
an owner of a condominium unit had been injured due to faulty construction.
On
June 29, 2008, [he] answered his own inquiry and stated it was not a
rumor, explaining that `[f]ormer resident Matt Stanley # 324 was injured pretty
bad.’ On November 10, 2008, [Krzewski]
sent Allen Derusha, administrator of the Union Square Forums, a message, asking
Derusha why his posts were being deleted and promising his best `to post
warnings about U2 [Union Square] on Craigslist.com.’
On
January 3, 2009, `Terryb’ from Grand Rapids posted a report about Rooks and his
corporate entities on ripoffreport.com (the ripoff report). The ripoff report
read, in pertinent part:
`Beware
of Jon Rooks, his development companies, and his main partner in development,
Brad Gruizinga. These people mislead buyers, provide extremely shoddy and low
quality workmanship, cut every possible corner, lie when they are confronted,
and then absolve themselves of any ownership of problems after the sale,
leaving their customers with unfinished condos and bad quality work. Here are
just a few actual situations that purchasers of Jon Rooks' condos have
experienced:
1.
Low quality construction work with little soundproofing. Many owners of
Parkland condo developments experience major problems. . . . No insulation was
used in walls, leaving just a few layers of drywall between units. . . .
2.
When you close on your condo, you are given a `punch list’ of construction
items that need to be corrected. . . . Rooks and his company pressured many
people to close on their condos before they were completely finished. The problem is that once the closing documents are signed, Parkland and Jon Rooks
are completely absolved of any further legal responsibility for the
construction. People that closed on their condos years ago still have not had
their punch lists completed. . . .
3.
Jon Rooks and his company advertising [sic] one of his developments as `luxury condos.’
Owners were promised exercise facilities and two laundry rooms. However, . . .
Rooks' company purchased used exercise equipment that broke down less than a
year later. Owners were then stuck with the bill of thousands of dollars to
replace [it]. Owners were also promised to [sic] laundry rooms, but Rooks
decided only one was necessary, with only two washers and dryers for 180
condos. . . .
4.
Jon Rooks and Brad Gruizinga have the condo association documents written so
they maintain control over the condo association even when 95% or more of the
condos have been sold. . . .
7.
Jon Rooks is a pathological liar. You can't believe anything he says. . . .'
Rooks v. Krzewski, supra. This part
of the opinion has nine lengthy paragraphs outlining allegations attributed to
Krzewski. I cannot include all of that in
this post; if you would like to read the whole thing you can find the entire opinion online, for free, here.
The court then took up
the “ripoff.report.com” issue, explaining that Krzewski acknowledged
he is a registered user of ripoffreport.com. His user name is `Upsetcustomer.’ [He]
denied he was `Terryb’ or . . . prepared any portion of the ripoff report.
According to [Krzewski], he made no efforts to contact `Terryb’ or to learn the
identity of `Terryb.’
[Krzewski]
posted three comments to the ripoff report. In the first comment, titled `JON
“CROOKS” ROOKS,’ [he] wrote, `I would suggest contacting the BBB of Western
Michigan and file a complaint. This man associates himself with a lot of
snakes. . . .’ In the second complaint, [he] wrote that . . . he had been
threatened with a lawsuit by Rooks after voicing his concern about high
maintenance fees at Boardwalk. He, therefore, understood why `Terry B.’ decided
to conceal his identity.
The
third comment, which defendant wrote under the user name `paybacksabitch,’ was
titled, `WARNING!!! WATCH OUT FOR BINDING ARBITRATION CLAUSE IN PARKLAND REALTY
PURCHASE AGREEMENT AND/OR CONTRACT.’ [Krzewski] posted some questions and answers
regarding binding mandatory arbitration and a page from `Parkland Realty's
purchase agreement’ that included a provision on dispute resolution. [At trial,
Krzewski] testified that he received the purchase agreement through a Freedom
of Information Act (FOIA) request he sent to the Bureau of Commercial Services
after reading of a complaint on the Internet.
Rooks v. Krzewski, supra. Again,
the opinion gives more detail than I can include here.
One other thing of
note is that on December 28, 2009, Krzewski “made a posting” to Craigslist to
which he attached three documents, one of which was “a criminal record report
that showed Rooks had been charged with operating while intoxicated in 1996.”
Rooks v. Krzewski, supra. He
testified at trial that he obtained the report “from the state of Michigan
through ICHAT.” Rooks v. Krzewski, supra. Again,
there were many more comments posted in various places, none of which were, to
say the least, complimentary to Rooks. If you are interested, check out the full
opinion at the site noted above.
While the case was
being prepared for trial, the judge ordered that the plaintiffs’ computer
expert, Brandon Fannon, was to be allowed to inspect Krzewski’s computers. Rooks
v. Krzewski, supra. After Krzewski
turned his laptop over to the plaintiffs to be examined, they moved for an
order to show cause and sanctions. Rooks v. Krzewski, supra. The judge held a hearing on the motion and
Fannon testified that the plaintiffs hired him to examine
four computers: (1) a desktop computer from [Kraweski’s]
place of employment; (2) a desktop computer that belonged to [his] parents; (3)
a laptop computer that belonged to [Krzewski]; and (4) a desktop computer that
belonged to [him]. Fannon was concerned that data had been deleted from [Krzewski’s]
parents' desktop computer and from [his] laptop computer.
He
explained that [Krzewski’s] parents' desktop computer had been delivered to him
on November 24, 2010, and earlier that morning, disk cleanup and disk
defragmentation had been run on [it]. In addition, three files in a folder
titled `AOL Saved PFC,’ which is a container file for email, had been accessed
at 9:12 a.m., but the three files were no longer on the computer. Fannon
believed it was highly unlikely that the steps taken on the desktop computer
were for a purpose other than to cause data loss. In addition, [he] testified
that similar steps had been taken to [Krzewski’s] laptop computer before it was
delivered to him. . . . [T]he Firefox browser was uninstalled and disk cleanup
and disk defragmentation were run. . . . Fannon was not prepared to say that
information on [Krzewski’s] laptop computer was completely destroyed or was
unavailable.
Information
could be recovered from the volume shadow copy, and he had not done any
analysis of the volume shadow copy. Windows XP, the operating system on
]Krzewski’s] parent's desktop computer, however, does not automatically
generate a volume shadow copy.
Rooks v. Krzewski, supra.
Krzewski admitted he
had run disk defragmentation and disk cleanup on his laptop
shortly
before he delivered it to Fannon. He explained he had private images on the
computer, which were irrelevant to the case, and did not want Fannon to see
them. In addition, [Krzewski] acknowledged that he deleted the Firefox browser
from his laptop computer. He did not want Fannon to see the websites he had
visited.
[He]
denied he performed disk cleanup and disk defragmentation on his parents'
desktop computer. He presumed his mother ran the disk cleanup and disk
defragmentation. His mother has said she runs these programs all the time.
However, [Krzewski] had told his mother Fannon was an expert in computers and
that, if there were any images or emails on the computer she did not want
Fannon to see, she should get rid of them.
At
the conclusion of the hearing, the trial court stated that, because personal
information is stored on a computer, what [Krzewski] did was `somewhat
understandable.’ However, it also stated that `from the truth-seeking perspective,
it's simply not allowed.’ The trial court held that [Krzewski] was required to
pay for Fannon's additional efforts to obtain and review information on [his] laptop
computer and [his] parents' desktop computer. However, the trial court was not
prepared to say that evidence had been lost because Fannon and [Krzewski’s]
expert agreed the deleted data could probably be recovered from the volume
shadow copy.
Rooks v. Krzewski, supra.
At trial, Fannon
testified that since the hearing, he had not done anything to
further
analyze [Krzewski’s] parents' desktop computer. The operating system on the
computer did not create volume shadow copy and, therefore, the data that was `overwritten’
was no longer accessible or recoverable. Fannon recalled that on November 24,
2010, the day he was supposed to analyze the parents' desktop computer, the
computer was delivered to his office at 12:30 p.m. He discovered that at 9:12
a.m., the AOL address book was accessed, but the address book was no longer on
the computer. In addition, after the AOL address book was accessed, the recycle
bin was emptied and disk cleanup and disk defragmentation were run on the
computer. The disk defragmentation was manually executed.
Fannon
believed this was a `sophisticated, yet unsophisticated’ attempt to permanently
delete data. According to Fannon, the same steps were taken to [Krzewski’s]
laptop computer before it was delivered to his office on January 4, 2011. . . .
Fannon [said] anything [Krzewski] posted to the Internet in 2009 was not done
using the laptop computer. Fannon testified that he found nothing on “Krzewski’s]
desktop computer to indicate that any data had been deleted from that computer.
Rooks v. Krzewski, supra. At trial,
Patricia Krzewski testified that she “knows how to defragment her computer” and
“does so about once a week.” Rooks v.
Krzewski, supra.
The Court of Appeals
then addressed the false light issue, noting that the trial judge found
Krzewski was Terryb, based on “circumstantial evidence.” Rooks v. Krzewski, supra. The
trial judge noted that Terryb has not been
formally identified. As such, one
can conclude this is a false name. [Krzewski] has a history of using false
names on his internet posts. It appears the earliest Terryb post was in
October, 2009. This was about one year after [Krzewski] first began posting
negative comments on various forums and wrote, `I will do my best to post
warnings about U2 on Craigslist.com.’
Rooks v. Krzewski, supra.
In finding for the
plaintiffs, the trial judge found that Krzewski, posing as Terryb,
knew
or acted in reckless disregard of the falsity of the statements. . . . [T]he information
contained in the ripoff report was detailed and required research and that,
although it was evident [he] had spent `considerable time and effort “digging
up dirt”’ on Rooks and Gruizinga, many of the facts were `half-truths or
complete fabrications,’ which were
similar to [his] unilateral declarations
that Rooks damaged a fishery. . . . According to the trial court, [Krzewski]
published any negative information about Rooks or Gruizinga he could find
without regard to the accuracy of it. [He] did so, stated the trial court,
because he had an `irrational ax to grind’ with plaintiffs because Rooks did
not hire him and Rooks confronted him about his improper claim that his
condominium unit was `Best of Parade.’
The
trial court further found that, even if [Krzewski] was not `Terryb,’ [his] reckless
disregard of the falsity of the statements was exemplified by the following:
(1) [he] used a variety of disguised names to post material on the Internet,
making it look as if there were a variety of posters; (2) [he] sent an email to
Rooks's business competitors; (3) [he] published that Stanley, a nonexistent
condominium unit owner, was injured due to construction negligence; (4) [he]
wrote that one of Rooks's developments had a negative effect on a critical fish
habitat in the White River, despite having never been to the area; (5) [he]
admitted in a pretrial proceeding he attempted to erase or hide evidence on his
computers; and (6) [he] lied and declared his former condominium unit `Best of
Parade’ to lure potential purchasers to it.
Rooks v. Krzewski, supra.
The Court of Appeals began its analysis with the trial
judge’s finding that Krzewski was Terryb, noting that if the only evidence that supported the trial
court's finding . . . was the fact that [Krzewski] used `false names’ on the
Internet, we would be left with a definite and firm conviction that the trial
court erred in finding that defendant was `Terryb’”, but his “use of `false
names’ is not the only evidence that supports the trial court's finding.” Rooks v. Krzewski, supra. It
explained that in finding Krzewski was Terryb, the judge did not believe
[his] testimony that he was not `Terryb’ or that he did not prepare
any portion of the ripoff report. We are required to give due regard to the
special opportunity of the trial court to judge the credibility of the
witnesses who appeared before it. . . .
Second,
`where a party deliberately destroys evidence, or fails to produce it, courts
presume the evidence would operate against the party who destroyed it or
failed to produce it.’ Hamann v. Ridge Tool Co., 213 Mich. App.
252, 539 N.W.2d 753 (Michigan Court of Appeals 1995). Fannon testified that `sophisticated,
yet unsophisticated’ attempts to permanently remove data from [Krzewski’s]
laptop computer and his parents' desktop computer were done only hours before
the computers were delivered to his office. The attempt to delete data
from [his] laptop computer does not lead to any presumption against [Krzewski].
Fannon
testified that he analyzed the volume shadow copy on the computer, and a
booklet of what he found was presented at trial. There was no testimony that
the attempt to delete data from the computer resulted in the actual loss of any
data. However, Fannon testified that the data that was overwritten when disk
cleanup and disk defragmentation were run on [Krzewski’s] parents' desktop
computer was no longer accessible or recoverable because volume shadow copy was
not used by the computer's operating system. Although [his] mother testified
that, whenever she thought there might be a virus on the desktop computer, she
ran disk cleanup and disk defragmentation on the computer, because the disk
cleanup and disk defragmentation were run only hours before the desktop
computer was delivered to Fannon, the evidence supports a finding that [Krzewski],
who lived with his parents, ran the cleanup and defragmentation in an attempt
to destroy data. Accordingly, the evidence presented at trial allowed a
presumption that the data deleted from defendant's parents' desktop computer
would have operated against [Krzewski].
Third,
in its opinion, the trial court stated [Krzewski] had `an irrational ax to
grind’ with Rooks and Gruizinga. [He] took numerous actions to grind his ax. He
posted on the Union Square Forums that he would do his best to post warnings
about Union Square on craigslist.com. He posted three comments to the ripoff
report, and in [them] said, in part, that Rooks . . . associated with `snakes,’
and had threatened to sue him. [He] repeatedly posted the ripoff report on
craigslist.com. To postings, he attached a criminal record report . . . that
showed Rooks had been charged with operating while intoxicated. . . .. He
submitted uncomplimentary reviews of Rooks on realestateratingz.com. . . .
The
evidence supporting the trial court's finding that [Krzewski] was `Terryb’
cannot be classified as overwhelming or significant. Nonetheless, the evidence
showed that [he] actively pursued
grinding his ax with Rooks and Gruizinga, often doing so while using “false
names” on the Internet, and that [Krzewski] was aware of and used ripoffreport.com.
This
evidence, when combined with the regard that we must give to the trial court's
determination that [his] testimony he was not “Terryb” was not credible and the
presumption that data from [Krzewski’s] parents' desktop computer would have
operated against [him], does not leave us with a definite and firm conviction
that the trial court made a mistake when it found that defendant was ‘Terryb.’ .
. . Accordingly, we affirm the trial
court's factual finding that [Krzewski] was the author of the ripoff report.
Rooks v. Krzewski, supra.
Again, if you are interested in reading more about the facts
and precisely what the trial court and Court of Appeals did in this case, check
out the full opinion here.
According to the news story you can find here, Krzewski
plans to appeal this ruling to the Michigan Supreme Court, raising a 1st Amendment issue.
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