The owners of more than a dozen local apartment complexes and the company that manages them have filed a lawsuit against a Richmond TV news station and one of its reporters for defamation. They are seeking more than $50 million in damages.
The suit, filed Friday in Chesterfield County Circuit, comes after a series of stories run over the past year by WTVR Channel 6 about Space Properties LLC, a company that manages apartment complexes across the region.
The station’s news reports featured dramatic videos shot at several Space Properties complexes showing residents and former employees describing a range of maintenance issues, including roaches and mold.
The stories also included claims that Space Properties was being investigated by a local housing group and that it had been the subject of numerous complaints to the Better Business Bureau.
One of WTVR’s most recent stories culminated in a slow motion shot of the reporter, Catie Beck, chasing down the head of the company — Robert Owens — to confront him in a parking lot.
The stories, the suit claims, contained inaccuracies, unverified accusations and mischaracterizations and were an allegedly intentional effort to create fear in the minds of Space Properties’ tenants.
Four of the complexes managed by Space Properties and owned by some of the plaintiff LLCs have been sold this year in multimillion-dollar transactions, three of which were related to foreclosure or short sales, according to City of Richmond real estate records.
WTVR General Manager Stephen Hayes said the station had no comment on the suit.
The station has not yet been served with the suit.
Stefan Calos, an attorney with Sands Anderson who is representing Space Properties and the other plaintiffs, said the timing of the suit has to do with the fact that claims of defamation carry a one-year statute of limitations. WTVR ran the original story in August 2010, the suit claims.
“We felt we needed to take action to preserve his rights,” Calos said.
Calos said the plaintiffs have yet to serve the complaint in the hopes that the filing will start a dialogue between the two sides outside of court.
WTVR has been all over Space Properties, airing about a dozen stories since last August.
The situation seemed to reach a boiling point after Beck, the reporter, who is one of the named defendants in the suit, confronted Owens at one of the apartment complexes.
Owens agreed to speak with Beck off-camera, after which he thought the situation had moved in a positive direction, Calos said.
“Owens thought after a long discussion that [Beck] understood things from his perspective and his company’s perspective,” Calos said.
The suit says another story ran after that impromptu meeting.
“The defendants continued to publish stories containing false statements of fact after this interview, knowing that the information was false, contained material omissions and mischaracterized the truth,” the suit claims.
The suit makes its claims on five counts, including defamation against WTVR and Beck, conspiracy to harm in business trade or profession and tortuous interference with a contract.
“After each story was aired, the properties suffered from a decrease in the rate of rental of available units, an increase in defaults on leases, a lower rate of renewal among current residents, an increase in complaints and maintenance requests and an increase in telephone calls regarding complaints or questions,” the suit claims.
For those reasons, the suit seeks $53.84 million in compensatory damages for the individual entities that own the various apartment complexes. That figure is based on a claim of alleged loss of rental income and lost property value.
The plaintiffs also ask the court for $3.05 million in damages for Space Properties for alleged increased demand on its employees’ time to manage properties, responding to complaints, responding to news stories and staff turnover.
Owens wants $5 million for himself for loss of income, diminished value of his properties and reduced credit worthiness. He asks in the suit for another $260,000 for injury to his reputation, humiliation and emotional distress.
Owens, the suit claims, is not a public figure and has an interest in the protection of “his own good name.”
WTVR’s stories also allegedly painted Owens as greedy, unable to manage his operations and motivated by profiting from “financially vulnerable” people.
Should the case make it to trial, Calos said he realizes the challenges of proving defamation.
“Like any plaintiff, the burden of proof is on us,” Calos said. “But we wouldn’t have taken the case if we didn’t think the statements that were published were not untrue, at least significant portions of them.”
Michael Schwartz is a BizSense reporter. Please send news tips to Michael@richmondbizsense.com.