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Former Accountant for W.C. Handy Estate Can Proceed with Defamation Claims Against Estate's Trustee and Lawyer

The U.S. District Court for the Southern District of New York denied summary judgment to the trustee and the counsel of the estate of musician W.C. Handy, known as "Father of the Blues," in a defamation lawsuit brought by the estate's former accountant. Agbimson v. Handy, 17cv9252. Plaintiff Eugene Agbimson served as accountant for the Handy estate, beginning in 2003. In 2014, Handy's grandson, Carlos Handy, became sole trustee of his grandfather's estate and hired Mary Jane Hancock as estate counsel. In addition, Handy relative Doal Hanson served as president of Handy Brothers Music Co. from 2011 until Carlos discharged him in November 2016, for alleged self-dealing in company assets. That same month, Hancock sent Agbimson and Hanson an accusatory letter on behalf of the estate that was copied to several estate beneficiaries. Agbimson denied the letter's charges, but Hanson sent a termination letter to Agbimson in December. Agbimson sued Carlos Handy and counsel Hancock, alleging defamation from statements in the November 2016 letter. The defendants argued the letter had been a non-defamatory records' request and that individual statements in the correspondence were substantially true, or not "of and concerning" Agbimson. Senior Southern District Judge William H. Pauley III recently denied the defendants' motion for summary judgment. One of the four challenged statements in Hanson's letter read: "After the May 2016 Trust meeting, it was brought to my attention that both of you [Agbimson and Hanson] are holding Handy Brothers Music Co., Inc. property, monies, accounts, checks, charts of accounts, profit and loss statements, balance sheets, check books, and other company documents and items without the knowledge or permission of Dr. Handy, Trustee of WC Handy Estate Trust." The senior district judge found the statement "reasonably susceptible to a defamatory interpretation. It enumerates any number of important materials that Agbimson and Hanson are retaining 'without [the Estate's] knowledge or permission,' followed immediately by the declaration that 'Handy Brothers [is] not compliant with state and federal laws while operating under your management and accounting practices." The district court concluded, "A reasonable reader could draw the obvious causal connection between Agbimson's purported accounting improprieties and the Estate's financial disarray." The defendants argued, however, that the statement was non-defamatory opinion, but the court observed the "substance of the statement — that Agbimson was improperly holding company property — can be proven true or false" and that "a question of fact remains as to whether it was substantially true in November 2016 that Agbimson was retaining Handy Company and Trust materials without permission. This issue of fact is a quintessential jury question." Senior District Judge Pauley further found that two other statements in the disputed letter "sound[] in the narrower doctrine of 'defamation by implication.'" "The implication is reinforced by Defendants' demand that Agbimson 'surrender' any funds 'immediately,'" the district judge added.

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Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. He is also an entertainment attorney, as well as author of the books Baby You're a Rich Man: Suing the Beatles for Fun & Profit and They Fought the Law: Rock Music Goes to Court, the latter which is available in an updated, expanded edition in Amazon's Kindle Store. For more information: www.stansoocher.com.