City Pulse wins libel suit

Thursday, Nov. 17 — An Ingham County judge has dismissed alibel suit against City Pulse by businessman Paul Vlahakis over a December 2009story that reported that he was the county’s second biggest property taxdelinquent.

Vlahakis’ main argument was that City Pulse had inaccuratelyreported on its cover that he owed property taxes because the taxes wereactually owed by various LLCs through which Vlahakis does business as aproperty owner and landlord.

But in a written opinion issued today, Visiting CircuitJudge Richard D. Ball said, “The record in this case shows the description ofplaintiff on the front cover of the publication, when read with the content ofthe article, is substantially true.” City Pulse had argued that the substantialtruth doctrine in libel law should prevail in this case. In libel law, truth isconsidered an “absolute defense” against libel claims. The substantial truthdoctrine provides some defense in cases where published information may not beliterally true.

In an earlier ruling on a motion by City Pulse, InghamCircuit Judge Joyce Draganchuk had indicated that Vlahakis had operated hisLLCs in way that negated his claim that the taxes are owed by the LLCs and nothim.

“It shall be taken as true in this case that Plaintifffreely paid and managed the LLCs from his personal accounts and as anindividual,” wrote Draganchuk, who went on medical leave this fall. Ball, whois a District Court judge in East Lansing, heard arguments on the motion byCity Pulse for summary judgment.

Vlahakis is the managing member of three LLCs that werelisted as the owners of property on which over $327,000 in taxes were declareddelinquent in 2009. Most of the money was owed for 101 S. Washington Square, ahigh-rise office and retail building on the southeast corner of Washington andMichigan Avenue. The delinquent taxes were paid in spring 2010, avoidingforeclosure.

In his ruling, Ball said the LLCs “amounted to plaintiff’salter-ego.”

Vlahakis sued Neal McNamara, City Pulse’s former newseditor, who wrote the story, and To The Max LLC, which owns City Pulse.
City Pulse and McNamara were represented by Stuart R. Shafer of Lansing, who was assisted by First Amendment attorney John J. Ronayne III of Plymouth, Mich. Vlahakis was represented by Andrew P. Abood and Timothy McCarthy of the Abood Law Firm in East Lansing.
To read Ball’s ruling, click here.