Case Example: False Accusation and Arrest Leads to Defamation Lawsuit

Here we follow a woman arrested for leaving a restaurant without paying as she sues the owner for defamation of character. See how this slander lawsuit is resolved.

This case study is presented for educational purposes only. It is based on actual events, although names have been changed to protect those involved. Any resemblance to real persons or entities is purely coincidental.

Our study reviews a defamation and slander lawsuit filed by our fictional victim Ann Lund against the owner of a restaurant for making what she described as “malicious, willful, and reckless remarks about her, all which were patently untrue.” Those remarks, Lund said, were intended to “embarrass, humiliate and vilify” her in the community.

The case arises from an incident where a restaurant owner believed a woman had dined at his restaurant and left without paying the bill. The owner called the police, who ended up arresting the woman in the parking lot.

The woman was Anne Lund, a local practicing attorney.

Because of the arrest, Lund’s name appeared in the local newspaper. The negative publicity from this caused her to lose several clients and a substantial sum in lost revenue.

Attorney Lund filed a defamation and slander lawsuit against the restaurant owner.

Events Leading to the Lawsuit

Attorney Ann Lund left the county courthouse about 12:30 on a Tuesday afternoon, after completing her morning court docket. As she was driving back to her office, she noticed a newly opened delicatessen, and she decided to stop and have lunch.

After being seated, she ordered a spinach salad, a roast beef sandwich, and iced tea. While waiting for her meal, Lund heard someone at the next table call her name. She immediately recognized the person as another attorney she knew from the courthouse. Lund waved back at the other woman.

About 20 minutes later, and after finishing her meal Lund beckoned to her waiter and asked for her check. The check amounted to $15.65. Lund took out a twenty-dollar bill and left it on the table to cover the check and tip.

After leaving the money, she stood up, walked past the cash register, and out the front door of the restaurant.

The restaurant’s owner Marty Wilson was the only person permitted to use the cash register. Wilson had stepped away from the register for a couple of minutes. When he returned and saw Lund’s empty table, he called her waiter over and asked him if the woman paid him. The waiter said no, so Wilson called the police.

The police responded within minutes. Wilson told them a woman had just finished eating and had walked out without paying her bill. He described her to the police as wearing a black skirt with a red blouse.

As they were about to get back into their squad car, the officers noticed two women speaking in the adjacent parking lot. One of the women was wearing a black skirt with a red blouse. They approached the woman, who turned out to be Lund and began to question her.

When they confirmed she just left the restaurant only minutes before, they asked her if she paid her bill. Lund said, of course she did. The officers asked her if she had a credit or debit card receipt. Lund said she had no receipt since she had paid in cash.

The police officers asked Lund to turn around and handcuffed her. They arrested her for “Theft Under Fifty Dollars.”

Lund was booked into the county jail, where she sat for seven hours until the local magistrate set her bail. She paid the $100 bail in cash and left.

Livid, Lund drove back to the restaurant and confronted Wilson. She threatened him with a lawsuit for telling the police she left without paying her check.

Wilson directed her attention to a small sign on the register. It read, “Customers Must Pay At the Register.”

Telling him that was ridiculous, Lund stormed out and drove back to her office.

The next day, the local newspaper published Lund’s name and the details of her arrest. Almost immediately, she began hearing from clients who wished to end their association with her.

Lund had enough. She prepared and filed a lawsuit against Wilson for defamation of her character.

Gathering Evidence of Defamation

In her lawsuit, Lund contended Wilson’s statement to the police, her arrest, and the publication of her arrest in the local newspaper defamed her character. She attached as exhibits the police report, and a copy of the newspaper article.

Lund gathered evidence of her damages, including termination letters from clients, income statements, and an affidavit from her accountant about the significant loss of income she suffered.

Lund’s fellow attorney, Barbara Franklin, volunteered to provide a sworn statement. She was glad to be able to give some compelling witness testimony.

Franklin testified under oath that she happened to see Lund as Lund was about to leave the restaurant that Tuesday afternoon. Franklin said she was unable to get Lund’s attention at the time.

As Franklin watched Lund, she distinctly remembered Lund placing what appeared to be a twenty-dollar bill on the table on top of the check. At the time, she thought nothing of it. But after reading about Lund’s arrest, she knew she had to say something.

Lund also took the sworn depositions of every waiter and busboy on duty within two hours of her being at the restaurant.

Lund’s intense questioning of the waiters and busboys revealed that one of the busboys had a reputation for taking the waiters’ tips. Although no one saw him do it, all the waiters had a strong suspicion he was stealing cash left by customers on their tables.

Lund subpoenaed the busboy to appear for a deposition. Knowing he was under oath and subject to imprisonment for perjury, the busboy admitted he saw Lund leave the twenty-dollar bill on the table that day.

When he went to clean the table, he said, he took the twenty-dollar bill and put it in his pocket. The waiter, he thought, would think the woman paid at the register with a credit card and probably also left his tip on the card as well.

Only later did the waiter realize what happened.

Settlement Negotiations

Once the busboy admitted to having stolen the $20, Wilson’s defense attorney advised him it was time to negotiate a settlement.

Lund agreed to accept $100,000 to settle her case and dismiss the lawsuit. However, Lund not only wanted compensation for her financial losses, but she also wanted her name publicly cleared.

Wilson agreed to take out a full-page ad in the same newspaper that printed the news of Lund’s arrest. In the ad, Wilson would apologize to Lund, explaining Lund not only paid the check but also left a very generous tip for her server.

Important Points About Defamation Cases

  • You can’t win a defamation of character case if the objectionable information shared about you is correct. No matter if the damaging information was confidential, it’s not defamation if it’s true.
  • Be prepared to show how the untrue information caused damages, like loss of income, loss of clients, or other forms of monetary damages.
  • Some statements are so damaging; you don’t have to prove economic loss. Talk to a personal injury attorney if you think that describes your situation.
  • Newspapers and other news outlets aren’t usually liable for defamation unless it’s proven they knew the harmful statement was false when they published it.
Charles R. Gueli, Esq. is a personal injury attorney with over 20 years of legal experience. He’s admitted to the NY State Bar, and been named a Super Lawyer for the NY Metro area, an exclusive honor awarded to the top five percent of attorneys. Charles has worked extensively in the areas of auto accidents,... Read More >>