Truthful statements are generally not actionable as defamation. A substantially true statement that is factually accurate in all material respects and that does not imply any undisclosed defamatory message is not something upon which a defamation lawsuit may be brought. Still, a defendant who asserts a truth defense needs to establish not simply that some technical aspect of the statement is true but that its defamatory sting is true. When a published statement accuses the plaintiff of intentional criminal conduct, for example, the defendant cannot defeat a defamation per se claim by pointing to a technical or arguable inaccuracy in the statement as a whole that does not establish intentional criminal conduct.
Let’s look at last week’s decision in Patricia Thurston v. BankUnited, N.A., from the Western District of Virginia. Patricia Thurston owned residential real property in Roanoke County, which she sold in January 2024. Pike Title and Escrow, LLC, handled the closing and prepared a settlement statement showing that Thurston was to receive $66,484.74 in sale proceeds. Thurston provided wiring instructions for her Truist Bank account, and Pike Title transmitted those instructions to BankUnited, N.A., the bank that held Pike Title’s escrow account. On January 12, 2024, BankUnited wired the funds to Thurston’s account without incident, and the transaction initially appeared complete and proper. At the time of closing, a prior deed of trust on the property had been paid in full; Pike Title prepared a Certificate of Satisfaction reflecting that payoff and recorded it shortly thereafter, having charged Thurston a recording fee for that purpose.
Approximately ten days later, BankUnited contacted Truist Bank and demanded return of the wired funds, asserting that the wire transfer was the result of “confirmed fraud” and a “real estate scam.” BankUnited repeated those assertions in subsequent communications, including an email with the subject line “REAL ESTATE WIRE FRAUD,” and later claimed that Thurston had falsified an Owner’s Affidavit stating there were no outstanding liens on the property. These accusations were apparently based on the fact that Thurston signed
Thurston responded that the lien was actually paid earlier, on January 9, 2024, and that the later recordation date was the result of ministerial lag rather than deception. She sued for defamation per se, contending that BankUnited falsely accused her of criminal wire fraud. Accepting the allegations of the complaint as true at the motion to dismiss stage, the court agreed with her that even if her affidavit contained a false statement (and it wasn’t even clear that it did), the alleged falsity did not establish wire fraud or other intentional criminal conduct. In other words, the alleged truth of the bank’s statements did not correspond to the defamatory sting of those statements.
The court drew a distinction between an arguably incorrect statement in a closing affidavit, on the one hand, and an affirmative accusation of intentional criminal fraud, on the other. The court deemed it entirely plausible that Thurston’s affidavit was made in good faith given that the lien had, in fact, been paid prior to closing, even if the certificate had not yet been recorded. “Even assuming that the affidavit was false because it was signed a day before Pike Title recorded the Certificate of Satisfaction releasing the lien, it does not prove that Thurston committed real estate fraud,” the court wrote. “The affidavit does not make true that Thurston ‘falsified the documents’ and that Thurston was part of a “real estate scam” that amounted to ‘real estate wire fraud.’”
For these reasons, the court denied BankUnited’s motion to dismiss, finding that Thurston had alleged a valid claim of defamation per se.