Arent Fox LLP won a major victory February 18, 2011, in the defense of its clients, Cerritos Infiniti, Inc., a luxury automotive dealership and an affiliate of the Conant Automotive Group of dealerships in Southern California, and its general manager Bill Stephens, in an employment and defamation action filed by two former sales managers.

The plaintiffs’ employment claims were disposed of by summary judgment. The defamation and contract claims were tried in an arbitration before the Hon. Judge Judith Chirlin.  The Arbitrator returned a defense judgment, holding that the defendants did not defame the plaintiffs when Mr. Stephens informed fellow Cerritos employees and a general manager at another Infiniti dealership that plaintiffs – John Holmbeck and Rick Altamirano – had been terminated for submitting fraudulent statements on credit applications to lenders.

The Arbitrator found Mr. Stephens’ statements, which were made at a weekly sales meeting and during a separate conversation with the other Infiniti dealership’s general manager, were true, made without malice, and protected by the “common interest” privilege, found in Section 47(c) of the California Civil Code, which provides that a statement is privileged if it is “[i]n communications, without malice, made to a person interested therein by one who is also interested.”

Additionally, the Arbitrator found that statements about the plaintiffs made to a third party were true and, therefore, not actionable. “There is sufficient evidence to show that it is more likely true than not true that the statement to [the third party] was indeed true,” wrote the Arbitrator.

Arent Fox partner Aaron H. Jacoby along with associate Melanie S. Joo, represented the defendants.