Motion sequence 001 in the instant action (the NYO Action) and motion sequence 001 in the related action Gans v. Korangy Publishing, Inc. d/b/a the Real Deal, Index No.155255/13 (the RD Action) are herein consolidated for disposition.

The defendants New York Observer (NYO) and Korangy Publishing, Inc. d/b/a the Real Deal (the RD) move in their respective actions pursuant to CPLR 3211(a)(1) and (7) for dismissal of the complaint of Robert Gans (Gans).

"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction" (Leon v Martinez, 84 NY2d 83, 87 [1994]). "We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (id.).

Both the NYO Action and the RD Action arise out of an article published by the New York Post (the NYP Article), reporting on the judicial proceeding commenced by the Atelier Condominium (the Atelier) against Gans (the Atelier Action). It stated that Gans (Gans) was [*2]being sued by the board of the Atelier for "allegedly allowing an escort service to be run by one of his employees out of an apartment there", which is owned by Swingtime LLC ("Swingtime"), a company owned and controlled by Gans (Garson Aff., Ex. C, p. 1). The information contained within the NYP Article was subsequently republished by the NYO (the NYO Article) and the RD (the RD Article, collectively, the Republished Articles).

Thereafter, Gans simultaneously commenced the NYO Action and the RD Action alleging a single cause of action for defamation against the NYO and the RD for inaccuracies in the Republished Articles.

Gans alleges that the inaccurate statement in the NYO Article states that:

Gans argues that the allegations in the complaint in the Atelier Action, in which he is a defendant, do not allege that "[Gans] was operating an escort service out of his apartment, nor is it alleged therein that [Gans] was using the unit for business purposes" (Complaint, ¶ 12). Furthermore, he alleges that the NYP Article does not report that "[Gans] was running an escort service out of the apartment owned by Swingtime" (id. at ¶ 13).

In both the NYO Action and the RD Action, Gans alleges in that as a result of the inaccurate republications, "the NYO and the RD have falsely and maliciously charges [Gans] with criminal conduct, to wit, the promotion of prostitution under the New York Penal Law, a Class D felony" (id. at 14). As a result, Gans alleges that he has suffered special damages because he was rejected by numerous mortgage lenders on the basis that he was running an escort service.

"Defamation has long been recognized to arise from the making of a false statement which tends to expose the plaintiff to public contempt, ridicule, aversion or disgrace, or induce an evil opinion of him in the minds of right-thinking persons, and to deprive him of their friendly intercourse in society" (Dillon v City of New York, 261 AD2d 34, 37 [1st Dept 1999][internal quotation marks omitted]).

Pleading a cause of action for defamation requires "a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a [*3]negligence standard, and it must either cause special harm or constitute defamation per se" (id. at 38).

To successfully plead a cause of action for defamation "the words must be construed in the context of the entire statement or publication as a whole, tested against the understanding of the average reader, and if not reasonably susceptible of a defamatory meaning, they are not actionable and cannot be made so by a strained or artificial construction" (id.).

Defamation is not actionable unless the plaintiff suffers special damage or the statement falls into one of the established exceptions (Liberman v Gelstein, 80 NY2d 429, 434 [1992]). The four established exceptions include statements: (i) charging plaintiff with a serious crime; (ii) that tend to injure another in his or her trade, business or profession; (iii) that plaintiff has a loathsome disease; or (iv) imputing unchastity to a woman (id. at 435).

A cause of action for defamation per se is sustainable "[w]hen statements fall within one of these categories, the law presumes that damages will result, and they need not be alleged or proven", allowing the plaintiff to sustain a cause of action for defamation per se (id.).

Gans alleges that the Republished Articles constitute defamation per se because they charge Gans with a serious crime, specifically promoting prostitution.

This Court disagrees. It is clear from a review of the Republished Articles that there are no statements that could be reasonably understood to impute that Gans is being charged with the commission of a serious crime when read in context with the publication as a whole.

First, the Republished Articles do not contain the word "prostitution" at all (Friedberg Aff., Ex. C, D). Additionally, they further provide that the unit is owned through Swingtime, not Gans, and that Paula Echevri, an alleged girlfriend of Gan's, is being accused by Atelier of "operating an illegal escort

The statements are an accurate reporting of the allegations contained the complaint of the Atelier Action that alleges "[u]pon information and belief, Echevri is operating an illegal escort service using her unit as her place of business" (id. at Ex. B).

The statements in the Republished Articles are insufficient to sustain a cause of action for defamation per se. As a result, Gans must plead special damages to sustain a cause of action for defamation.

Gans alleges he suffered special damage in that he "and/or one or more entities owned or controlled by him have been rejected by numerous mortgage lenders with respect to a significant loan and [Gans] has been informed that the cause of the rejection was the published allegations that Gans was running an escort service" as a result of the Republished Articles (Complaint, ¶ 21). Gans provides no additional information or evidence to support his allegations of special damage.

Gans failure to provide any additional information beyond his vague and conclusory allegations relating to the special damage he allegedly suffered as a result of the Republished Articles is fatal to his cause of action (Akpinar v Moran, 83 AD3d 458, 459 [1st Dept 2011] [allegation of the loss of "$17 million in venture funding from unspecified individuals who read the statements fails to adequately plead special damages"]).

Consequently, the cause of action for defamation must be dismissed in the NYO Action and the RD Action.

Accordingly, it is

ORDERED that the defendant New York Observer LLC's motion to dismiss is granted in its entirety with costs and disbursements as taxed by the Clerk of the Court upon presentation of a bill of appropriate costs, and it is further

ORDERED that in the related action Gans v. Korangy Publishing, Inc. (Index Number 155255/2013) that the defendant Korangy Publishing, Inc. d/b/a The Real Deal's motion to dismiss is granted in its entirety with costs and disbursements as taxed by the Clerk of the Court upon presentation of a bill of appropriate costs.

J.S.C.