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December 15, 2011

Action for alleged defamation follows disclosure of document pursuant to a FOIL request

Action for alleged defamation follows disclosure of document pursuant to a FOIL request
Gosden v Elmira City School District, 2011 NY Slip Op 08874, Appellate Division, Third Department

One of the lessons of the Gosden case is that although a settlement agreement that provided that the parties would keep its terms “confidential” may be subject to disclosure pursuant to a Freedom of Information [FOIL] request, its subsequent disclosure pursuant to FOIL does not excuse a party breaching other terms and conditions unrelated to such disclosure set out in the agreement.

Robert Gosden, earlier employed as an administrator by the Elmira City School District entered into an agreement with the school district to settle alleged overpayment it had made to him prior to his retirement from service with the district. The settlement agreement stipulated that [1] Gosden disputed “that any overpayment had occurred" and [2] that the settlement agreement would remain “confidential.”

A local newspaper subsequently obtained a copy of the agreement under the Freedom of Information Law (Public Officers Law Article 6) and published articles about it and a Comptroller's Audit report of the school district dated October 2008.

Gosden and his company, Manus Management Consultant Services, Inc., then contracted with the local Board of Cooperative Educational Services to supply certain services to area school districts, including providing financial responsibility training to Board members.

Two Elmira City School District board members, however, were “reported as being insulted and angry that Gosden would be paid to train them about financial responsibility and they were quoted as saying, among other things, that Gosden had admitted to wrongdoing regarding his annual leave payout.”  Soon thereafter the BOCES canceled a contract with Manus Management.

Manus and his company then sued the school district, alleging that it had breached their contract. Supreme Court agreed, awarding Manus and his company the $8,000 that Gosden had paid to settle the potential claims against him “plus an amount to be determined at an inquest based on lost business” suffered by Manus and his company.
The first issue considered by the Appellate Division concerned the alleged breach of contract cause of action.

The court said while the settlement agreement had set out a confidentiality provision, the parties also recognized in the agreement that it might be disclosed for a lawful purpose and they specifically set forth a clause that "permitted comments by the parties in the case of such disclosure." The agreement stipulated that "[a]ll other inquiries about this Settlement Agreement or the matter to which it pertains will be responded to by the [p]arties by stating that the matter has been 'settled to the satisfaction of the parties.'"

The terms of the agreement did, in fact, become public pursuant to a Freedom of Information Law request and the parties did not claim that this disclosure was improper. 

However two board members had been board members when the settlement was negotiated and remained board members at the time of their comments. According to the Appellate Division, their comments, which were reported in a local newspaper in November 2008 and reiterated at a Board meeting, went beyond the scope of the comments to which the parties had agreed. This, said the Appellate Division, constituted a breach of the terms of the agreement by school district.

The full decision, which address other and related issues, is posted on the Internet at: http://www.courts.state.ny.us/reporter/3dseries/2011/2011_08874.htm

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