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February 10, 1996


The opinion of the court was delivered by: CONABOY

 Presently before the Court is the Defendant's, Lawrence P. Simms (hereinafter "Simms"), Motion for Partial Summary Judgement. (Doc. 129). Simms is seeking a partial summary judgement as to whether or not certain statements made by Simms through letters addressed to other shareholders of the corporation, Exeter Architectural Products, Inc. (hereinafter "Exeter"), defamed the Plaintiffs, Charles D. Flack, Jr. and Harold E. Flack, II (hereinafter "the Flacks").


 The facts of this case are well known to all parties involved, and a full recitation of those facts can be found in this Court's published opinions of Simms v. Exeter Architectural Products, Inc., 868 F. Supp. 668 (M.D. Pa. 1994) and 868 F. Supp. 677 (M.D. Pa. 1994), as well as this Court's Memorandum and Order dated September 29, 1995 (Doc 149). However, for purposes of resolving Simms' pending motion, a brief factual and procedural history surrounding this motion follows.

 Simms initiated an action pursuant to 28 U.S.C. § 1332 on May 25, 1993, seeking legal and equitable relief. On February 14, 1994, the Flacks filed in state court a civil action against Simms for defamation. The Flacks' defamation claim arises out of numerous letters which Simms had written to other Exeter shareholders. Within these letters, Simms stated, inter alia that: 1) the Flacks committed illegal acts under Pennsylvania Business Law; 2) the Flacks have obstructed the operation of the corporation's board under its own by-laws; 3) the Flacks attempted to remove this case from federal court to state court because the Flacks had influence over members of the state bench; 4) the Flacks have misrepresented the financial condition of the corporation to the shareholders; 5) the Flacks extended a loan to the Exeter corporation at "above market rates" *fn1" ; and 6) that Exeter seems to be paying the legal expenses for the Flacks' lawsuit.

 The Flacks also claim that other defamation claims, in the form of slander claims, are based on oral statements made by Simms concerning the Flacks. This defamation case was later consolidated into the above-captioned matter by order of this Court dated June 2, 1994.


 Pursuant to Fed. R. Civ. P. 56(c), a motion for summary judgment will only be granted if there is no genuine issue of material fact and if the moving party is entitled to relief as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-8, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1985). A fact is "material" if proof of its existence or nonexistence would effect the outcome of the lawsuit under the applicable law in the case. Anderson, 477 U.S. at 248. An issue of material fact is "genuine" if the evidence is such that a reasonable jury might return a verdict for the non-moving party. Hankins v. Temple University, 829 F.2d 437, 440 (3d Cir. 1987).

 In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the nonmoving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3d Cir. 1988). A moving party is entitled to a judgment as a matter of law if the nonmoving party does not make a sufficient showing on an essential element of his case with respect to which he has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1985).

 In support of his Motion for Partial Summary Judgement, Simms claims that he is entitled to summary judgement because: 1) he was conditionally privileged to make the statements; 2) there is no evidence that any of the statements in the letters was false; 3) the statements contained in the letters were of his own opinion; and 4) there is no evidence that the Flacks have incurred any damage because of his statements.

 After reviewing the pleadings, affidavits and relevant case law, Fed. R. Civ. P. 56(e), we shall deny Simms' Motion for Partial Summary Judgement (Doc. 129). We shall address each claim seriatim.2

 Simms claims that he "had a duty and therefore a privilege to inform the shareholders of his views of what was happening at Exeter." In essence, Simms is claiming that since he is still a director of Exeter, he had a duty to inform the shareholders of the occurrences at Exeter. The Flacks contend that Simms has no such privilege, and, even if he did have such a privilege, that Simms has abused his conditional privilege, resulting in a loss of that privilege.

 It is well established that the publisher of a defamatory statement is not liable if the publication was made subject to a certain privilege. Elia v. Erie Insurance Exchange, 430 Pa. Super. 384, 391, 634 A.2d 657 (1993), appeal denied, 430 Pa. 384, 634 A.2d 657 (1994); Chicarella v. Passant, 343 Pa. Super. 330, 337, 494 A.2d 1109 (1985). "Conditional privileges arise when the communication involves an interest of the publisher, the recipient, a third party or the public." ...

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