Connolly, J.
Shelly J. Nitz is a real estate agent affiliated with HomeServices of Nebraska, Inc. (HomeServices). Matthew M. Steinhausen is a home inspector who inspected a house that one of Nitz' clients owned. More than 2 years after the inspection, Nitz sent an e-mail to HomeServices real estate agents and employees stating that Steinhausen was a "[t]otal idiot." Steinhausen, proceeding pro se, sued Nitz and HomeServices, alleging claims of libel, false light invasion of privacy, and tortious interference with a business relationship or expectancy. The district court sustained Nitz' and HomeServices' motions for summary judgment, reasoning that a qualified privilege protected the e-mail and that the evidence failed to show that Steinhausen had a business relationship or expectancy with Nitz or HomeServices. We affirm the court's judgment as it relates to the claims asserted by Steinhausen in his personal capacity. Because Steinhausen's attempt to also prosecute this action for a business entity is a nullity, we reverse, and remand with directions to vacate the judgment as it relates to claims brought for the entity.
HomeServices is a brokerage firm whose business includes real estate sales. HomeServices does business as HOME Real Estate and Woods Brothers Realty, both of which are trade names owned by HomeServices and "not corporate entities." Nitz is a real estate agent affiliated with HomeServices.
Steinhausen began performing home inspections in 1999. After operating the business as a sole proprietorship, Steinhausen formed Steinhausen Home Inspections LLC (SHI) in 2004. Steinhausen is the sole member of SHI and its registered agent. SHI's primary business is home inspections, but it also performs commercial property inspections and offers consulting services.
In 2008, Nitz represented the seller of a home in Seward, Nebraska. A potential buyer exercised her right to a home inspection, and Steinhausen performed the inspection. Nitz testified that some of the items in Steinhausen's report "were unquestionably beyond the scope of a typical home inspection." Nitz felt that Steinhausen's comments on "non-condition related items" were "likely to tear apart transactions when property condition was not a real issue, to the detriment of a seller."
HomeServices provides its real estate agents with access to a company e-mail network. The network uses "group email lists," or listservs, including the "HRE-HOTSHEET" and "WBR-HOTSHEET" lists (collectively the Hotsheets). The Hotsheets include the e-mail addresses of current HomeServices real estate agents and employees and are accessed through their individual e-mail accounts.
HomeServices' vice president stated that agents use the Hotsheets as a forum to share information and opinions on topics related to the real estate business:
Nitz averred that, in her experience, HomeServices agents use the Hotsheets to communicate amongst themselves their opinions of other Realtors and vendors in the real estate business.
On January 14, 2011, Nitz posted a reply to an e-mail on the Hotsheets with the subject "RE: Steinhausen inspections." Nitz' e-mail stated in its entirety: "He did an inspection in Seward for the agent that sold one of my listings. I will never let him near one of my listings ever again!!! Total idiot."
The record shows that at least two other HomeServices agents sent e-mails on the same subject to the Hotsheets before Nitz sent her e-mail. The author of the first e-mail stated, "IN MY OPINION," Steinhausen was not qualified to inspect residential structures. The author of the second e-mail stated that inspections performed by Steinhausen were poor and that Steinhausen addressed issues unrelated to structural soundness. After Nitz sent her e-mail, another HomeServices agent replied that Steinhausen was "not professional."
Nitz stated that she "did not have any specific facts in mind" when she wrote her e-mail. Nitz did "recall[] having a generally negative impression of ... Steinhausen
At some point in January 2011, Steinhausen received an anonymous letter in the U.S. mail that included a copy of Nitz' e-mail. Steinhausen testified that the letter had no return address and that he did not know who had sent the letter.
After requesting a retraction from Nitz, Steinhausen filed a complaint with the State Real Estate Commission in February 2011 alleging that Nitz' e-mail violated Neb.Rev.Stat. § 81-885.24(22) and (29) (Cum.Supp.2010). Section 81-885.24 authorizes the commission to discipline real estate brokers who commit certain unfair trade practices, including, under subsection (22), "[m]aking any substantial misrepresentations" and, under subsection (29), "[d]emonstrating negligence, incompetency, or unworthiness to act as a broker...." Nitz signed a consent order with the commission that determined that she had violated § 81-885.24(29). The commission ordered Nitz to complete 6 hours of ethics courses.
Steinhausen claimed that Nitz' January 14, 2011, e-mail interfered with his business relationships with HomeServices, agents of HomeServices, and prospective clients. In particular, Steinhausen testified that several HomeServices agents dissuaded their clients from contracting with SHI. Steinhausen estimated that he suffered $30,000 per year in lost business following Nitz' e-mail and would continue to suffer the same losses for the next 25 years.
Steinhausen testified that Nitz' e-mail and its aftermath also weighed on him personally. According to Steinhausen, he "was physically ill" after learning about Nitz' e-mail and "went through a period of depression, anger, [and] sadness." Steinhausen testified that he had trouble sleeping but that he had not visited a medical doctor or been diagnosed with depression.
Steinhausen — who testified that he was not represented by a lawyer — filed a "Pro Se Civil Complaint" in January 2012, identifying himself as the "Owner/Operator" of "Steinhausen Home Inspections." The caption identified the plaintiff as "MATTHEW M. STEINHAUSEN D/B/A STEINHAUSEN HOME INSPECTIONS, LLC," and the defendants as "HOMSERVICES OF NEBRASKA, INC. and SHELLY J. NITZ and WOODS BROTHERS REALTY." The complaint — stating claims of libel, false light invasion of privacy, and tortious interference with a business relationship or expectancy — appears to allege wrongs committed against both Steinhausen and SHI. For example, the opening sentence states that the "Plaintiff" is "Matthew M. Steinhausen, a small business owner residing in rural Lincoln," and alleges that the defendants "publicly placed the Plaintiff in a false light." The same paragraph, however, contains allegations that Nitz "defamed Steinhausen Home Inspections" and that HomeServices and Woods Brothers Realty "creat[ed] an environment of discrimination towards Steinhausen Home Inspections, LLC." The requested relief includes damages for "economic loss" and "emotional suffering" and an injunction prohibiting HomeServices "from discrimination of Steinhausen Home Inspections."
The defendants filed a joint answer that generally denied the allegations in the complaint. The defendants affirmatively alleged that Nitz' statement was opinion, Nitz' statement was protected by a qualified privilege, and Woods Brothers Realty is a trade name owned by HomeServices and, therefore, not a proper party.
The trial court sustained the motions of Nitz and HomeServices for summary judgment
Steinhausen appealed, and the caption on the cover of his brief identified the appellant as "MATTHEW M. STEINHAUSEN; D/B/A Steinhausen Home Inspections, LLC." The notice of appeal states that the party appealing is "Plaintiff, Matthew M. Steinhausen." The Nebraska Court of Appeals ordered the "Appellant" to show cause why it should not dismiss the appeal because SHI had not appeared by an attorney licensed to practice law in Nebraska. After the parties submitted responsive briefs, the court determined that cause had been shown and that the appeal could proceed. But the court cautioned that Steinhausen "may only proceed `pro se' with regard to claims on his own behalf as an individual, and not on behalf of Steinhausen Home Inspections, LLC." After the Court of Appeals' order, we moved the appeal to our docket under our statutory authority to regulate the caseloads of the appellate courts of the state.
Steinhausen assigns, restated, that the district court erred by determining that (1) Nitz' e-mail was privileged, (2) the privilege was not abused by actual malice, (3) Steinhausen had no valid business relationship or expectancy, (4) the false light invasion of privacy claim was subsumed within the libel claim, and (5) certain exhibits offered by Steinhausen were not admissible. Steinhausen also assigns that the court erred by "not properly applying the tests or elements of `protected opinion,'" although the court did not decide whether Nitz' e-mail was capable of defamatory meaning.
We will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from the facts and that the moving party is entitled to judgment as a matter of law.
HomeServices argues that "Steinhausen's appeal was made on behalf of only one appellant, the business, as opposed to the business and himself individually."
Persons not licensed to practice law in Nebraska are prohibited from prosecuting an action or filing papers in the courts of this state on behalf of another. Neb. Rev.Stat. § 7-101 (Reissue 2012) provides:
But, under Neb.Rev.Stat. § 7-110 (Reissue 2012), "[p]laintiffs shall have the liberty of prosecuting, and defendants shall have the liberty of defending, in their proper persons." We have explained that the phrase "`in their proper persons'" means "in their own persons."
The prohibition of the unauthorized practice of law is not for the benefit of lawyers.
A legal proceeding in which a party is represented by a person not admitted to practice law is a nullity and is subject to dismissal.
The prohibition on representation by a layperson applies to entities. For example, we have held that a corporation,
We conclude that a licensed member of the Nebraska bar must represent an LLC in the courts of this state. An LLC is an entity distinct from its members.
We decline to recognize an exception for LLC's with a single member. Because Steinhausen is the sole member of SHI, it might be true that no other person's financial interest in SHI would be harmed by Steinhausen's lay representation. But a layperson's lack of professional skills and ethical obligations "imposes undue burdens on opposing parties and the courts," and "[t]hese considerations are just as important when the LLC has only one owner."
To the extent that Steinhausen appeals on behalf of SHI, the appeal is a nullity. But Steinhausen has the right to prosecute an appeal in his own behalf.
But we do not restrict our inquiry to the titles of the complaint and the appellant's brief. The character in which one is a party to a suit, and the capacity in which a party sues, is determined from the allegations of the pleadings and not from the caption alone.
Here, Steinhausen argues that he is the sole appellant whereas the defendants argue that SHI is the sole appellant. Both Steinhausen and HomeServices note that the pleadings and briefs have consistently referred to a single "plaintiff" or "appellant." But the relief requested in the complaint is inconsistent with a reading that there is a single plaintiff. For example, the complaint prays for an injunction preventing discrimination against SHI and, three paragraphs later, damages for emotional distress. Steinhausen argues that "[l]ibel, libel per se and false light invasion of privacy are all torts affecting individual persons, not businesses."
After examining the pleadings, briefs, and record as a whole, we conclude that Steinhausen has prosecuted this action and attempted to appeal for both himself and SHI. Because his appeal on behalf of SHI
On appeal, Nitz argues that the court should have determined whether her statement was capable of defamatory meaning before deciding whether it was privileged. Nitz contends that "[i]n today's parlance, `idiot' is merely a subjective pejorative term."
In the ordinary case, a defamation claim has four elements: (1) a false and defamatory statement concerning the plaintiff, (2) an unprivileged publication to a third party, (3) fault amounting to at least negligence on the part of the publisher, and (4) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication.
The threshold question in a defamation suit is whether a reasonable fact finder could conclude that the published statements imply a provably false factual assertion.
And context is important to whether an ordinary reader would view a statement as one of fact or opinion.
As noted, whether the language is hyperbolic is relevant to distinguishing fact from opinion. Rhetorical hyperbole — "language that, in context, was obviously understood as an exaggeration, rather than a statement of literal fact" — is not actionable.
Exercises in "name calling"
To analyze Nitz' communication, we begin with the context in which it was made. Nitz sent the e-mail to the Hotsheets, which the evidence shows are accessed by HomeServices real estate agents and used, among other purposes, as a forum to express their thoughts on vendors in the real estate community. The reasonable expectations of the audience of Nitz' e-mail
We next turn to the language of Nitz' e-mail itself. To recap, Nitz stated: "He did an inspection in Seward for the agent that sold one of my listings. I will never let him near one of my listings ever again!!! Total idiot." The word "total" means "complete in extent or degree" or "absolute."
Steinhausen argues that his false light invasion of privacy claim is not subsumed into his libel claim because he "clearly separated libel from false light in his arguments."
Invasion of privacy as a common-law tort has evolved over the years into several separate torts, one of which is placing a person before the public in a false light. The contours of the tort are now governed by Neb.Rev.Stat. § 20-204 (Reissue 2012), which provides:
We have held that if a plaintiff asserts claims of both libel and false light invasion of privacy based on the same statement, the false light claim is subsumed within the defamation claim and is not separately actionable.
The district court entered summary judgment against Steinhausen's tortious interference with a business relationship or expectancy claim because the record showed that Steinhausen did not have a business relationship or expectancy with Nitz or HomeServices. On appeal, Steinhausen contends that "[t]he business relationship to which [he] is claiming interference is the relationship between [him] and his home inspection clients being discouraged by Nitz and other HomeServices associates not to use [Steinhausen]."
To succeed on a claim for tortious interference with a business relationship or expectancy, a plaintiff must prove (1) the existence of a valid business relationship or expectancy, (2) knowledge by the interferer of the relationship or expectancy, (3) an unjustified intentional act of interference on the part of the interferer, (4) proof that the interference caused the harm sustained, and (5) damage to the party whose relationship or expectancy was disrupted.
Members of an LLC cannot, in their own behalf, maintain a claim for tortious interference with the business relationships or expectancies of the LLC.
Here, the evidence shows that any relationships or expectancies with Nitz, HomeServices, or prospective buyers of home inspection services are the relationships and expectancies of SHI, and not Steinhausen personally. Steinhausen formed SHI in 2004, aware that doing so would allow him to "limit[] [his] liability to the outside world." All of the home inspection reports in the record show that the business relationship was between SHI and the individual home buyers. For example, each report contains a "Home Inspection
Put simply, while there might be evidence of interference with SHI's business relationships or expectancies, the record lacks any evidence that Steinhausen himself had any business relationships or expectancies. As the sole member of SHI, Steinhausen might have experienced reduced distributions from SHI if SHI's business was interfered with. But this does not permit him to maintain an action for interference with SHI's business relationships and expectancies. Steinhausen failed to produce evidence creating a genuine factual dispute regarding the first element of a tortious interference with a business relationship or expectancy claim: A valid business relationship or expectancy.
Steinhausen argues that the court erred by excluding certain exhibits offered by him and a portion of Nitz' deposition. The court sustained the defendants' objections to exhibits 11 through 16 offered by Steinhausen on the ground that they were not among the types of evidence that may be received on a motion for summary judgment under Neb.Rev.Stat. § 25-1332 (Reissue 2008). The court also sustained the defendants' form and foundation objections to a portion of Nitz' deposition. In a footnote to its order, however, the court stated that "[t]he majority of the documents contained in Exhibits 11 through 16 are contained in other exhibits received by the court and have been considered accordingly."
In a civil case, the admission or exclusion of evidence is not reversible error unless it unfairly prejudiced a substantial right of the complaining party.
We conclude that the exclusion of exhibits 11 through 16 did not unfairly prejudice a substantial right of Steinhausen. The court received the documents comprising exhibits 11, 12, 13, 15, and 16 elsewhere in the same form or with immaterial formatting differences. Exhibit 14 is the consent order issued by the State Real Estate Commission and signed by Nitz. Witnesses testified as to the type of order issued by the commission, the findings of the commission, and the discipline Nitz received. The handful of facts contained in the "stipulations"
We also conclude that the exclusion of a portion of Nitz' deposition did not unfairly prejudice a substantial right of Steinhausen. The court excluded 23 lines of Nitz' deposition, in which Steinhausen asked Nitz whether any information in the report for the 2008 Seward inspection was inaccurate or whether he "overlooked or missed" anything. Nitz replied that she did not know. In a portion of Nitz' deposition that the court received, Steinhausen asked Nitz whether she "kn[e]w of any problems with the [Seward property] that were overlooked or unreported by [Steinhausen]." Nitz testified that she did not know. Because the court received substantially similar evidence, the exclusion of a portion of Nitz' deposition did not unfairly prejudice a substantial right of Steinhausen.
Steinhausen has attempted to appeal for both himself and SHI, the LLC of which he is the sole member. Because Steinhausen is not licensed to practice law in Nebraska, his appeal for SHI is a nullity.
As to the errors assigned by Steinhausen in his own behalf, we conclude that the e-mail sent by Nitz stated an opinion and, therefore, was not actionable as libel. The false light invasion of privacy claim was subsumed within the libel claim because both claims were based on the same statement. Finally, Steinhausen's tortious interference claim fails because he did not produce evidence that he, personally, had a valid business relationship or expectancy that could have been interfered with.
In its order sustaining the defendants' motions for summary judgment, the district court stated that "[t]he Plaintiff's complaint is dismissed with prejudice." Steinhausen attempted to prosecute this action both in his own behalf and on behalf of SHI, but his attempt to do so on behalf of SHI was a nullity. Therefore, the judgment as it relates to SHI must be vacated. We affirm the judgment as to Steinhausen in his personal capacity.
AFFIRMED IN PART, AND IN PART REVERSED AND REMANDED WITH DIRECTIONS.
WRIGHT, J., not participating.