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April 21, 1995


The opinion of the court was delivered by: McDADE, District Judge.


Before the Court is Defendant's Motion for Summary Judgment [Doc. # 7]. Defendant, The Chronicle Publishing Company, owned, operated, published, and distributed a daily newspaper circulated generally throughout central Illinois entitled The Pantagraph. Plaintiff Ronald Pope ("Pope") organized and incorporated Co-Plaintiff Serendipity: Russian Consulting & Development, Ltd. ("Serendipity"). The present controversy surrounds an article and editorial concerning Plaintiffs published by The Pantagraph in July 1992. Plaintiffs claim that the article and editorial are defamatory and cast them in a false light. Defendant moves for summary judgment on all counts of the Complaint. Plaintiffs respond to Defendant's motion by arguing that genuine disputes of material fact preclude the entry of summary judgment in this case. For the reasons which follow, the motion of Defendant is allowed.

"A motion for summary judgment is not an appropriate occasion for weighing evidence; rather, the inquiry is limited to determining if there is a genuine issue for trial." Lohorn v. Michal, 913 F.2d 327, 331 (7th Cir. 1990). See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). This Court must "view the record and all inferences drawn from it in the light most favorable to the party opposing the motion." Holland v. Jefferson National Life Ins. Co., 883 F.2d 1307, 1312 (7th Cir. 1989). When faced with a motion for summary judgment, the non-moving party may not rest on its pleadings. Rather, it is necessary for the non-moving party to demonstrate, through specific evidence, that there remains a genuine issue of triable fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991). "The mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. at 252, 106 S.Ct. at 2512.


There are no disputes as to the facts material to the resolution of the present motion. Plaintiff Pope organized and incorporated Co-Plaintiff Serendipity in October of 1991. Serendipity was created by Pope as a vehicle through which to foster economic, investment, trade, tourism, and educational development in the former Soviet Union. On January 9, 1992, Pope and Serendipity negotiated an agreement with the City of Vladimir, Russia ("the City") to build a western style house in the City. This project, known as the "First American Home in Russia," was to be a joint venture with the City supplying the land, cement for the foundation, heavy equipment, room and board for visiting construction crews, and other services, and Serendipity supplying certain materials and construction expertise. Contributing to the project were Bloomington-Normal homebuilders and corporations who volunteered their labor, expertise, appliances, and other materials.*fn1 Serendipity described the American House as a gift to the citizens of Vladimir, and its purpose, at least in part, was to educate Russian builders as to American construction techniques, provide assistance to Bloomington-Normal's sister city, and to provide a location in the City for sister city activities. The primary role played by Plaintiffs was that of planner and facilitator.

In the early months of 1991, problems with the American house project began to develop. Igor Eremeev,*fn2 a Vladimir city official, sent a telex message to Pope on February 4, 1992. This message expressed worries concerning the City's ability to finance its portion of the American House project and the absence of information concerning the preparations of the "American side." In a telex sent February 5, 1992, and again on February 21, 1992, Pope responded to Eremeev's telex. Pope stated that it was unfortunate that the City was experiencing financial problems, that Serendipity would cover the costs which the City could not cover, that a new agreement would have to be reached, that Serendipity would supply information in response to specific requests, and that "failure to build the home at this late date will send a strong signal to both foreign businessmen and tourists that Vladimir is not a good place to work or visit." On February 24, 1992, Eremeev sent another telex to Pope stating that he had received no reply to his earlier telex. The badly garbled telex also appeared to state that Pope's interference with the administration of City affairs would make mutual collaboration difficult. On February 25, 1992, Pope responded to this telex by stating that no specific requests for information had been made and that he was "sorry there have been problems with communication between us." Following Pope's telex, Eremeev sent another telex which stated that he had just received Pope's previous telexes and that set forth a list of specific requests for information. In addition, the telex, in what comes across as an indignant tone, informs Pope that Russian interns would not be traveling to Bloomington-Normal to study American construction techniques.

On March 18, 1992, and April 15, 1992, articles appeared in the Vladimirskie Vedomosti, a local Vladimir newspaper published by the District Council of People's Deputies, discussing the First American Home project. These articles were written by a reporter named Svetlana Bitkina. Generally, these articles described the progress of the project, quoted from the telexes exchanged by Pope and Eremeev, questioned the motives of Pope and Serendipity, and raised doubts about the usefulness and benefits of the project to the City. The tenor of the articles is, generally, negative and suspicious. On April 9 and 10, 1992, an article written by Tatyana Veksler, a Serendipity representative, appeared in the newspaper Molva. This article refuted the contentions of the articles written by Ms. Bitkina.

In March of 1992, Serendipity and the City met to discuss the project and began to negotiate a revision of their agreement. To reflect the new and worsened financial condition of the City, Serendipity and the City entered into a new agreement on May 18, 1992. Pursuant to this agreement, Serendipity would absorb the majority of the project's cost in exchange for an extension of the period in which the American House would be the property of Serendipity. According to the terms of the contract, the project was to be completed on July 4, 1992, and immediately "pass into the property of the firm 'Serendipity' until the year 2003." The American House was dedicated on July 4, 1992, and completed soon thereafter. It then became the property of Serendipity which had exclusive use and possession of the house until January 1, 2003.

On July 5, 1992, the Pantagraph published an article discussing the American House project which was entitled "Vladimir newspaper questions Pope's project." The article opened by stating that the project "has been plagued by cross-cultural misunderstanding and poor communication, according to articles in a Vladimir newspaper." The articles to which the Pantagraph article referred were those written by Ms. Bitkina and published in the Vladimirskie Vedomosti on March 18 and April 15, 1992. The article next stated that at least one other Vladimir newspaper gave the project positive coverage. The article then synopsized Ms. Bitkina's articles; quoting liberally from the articles in so doing. Nowhere in the article does its author, Elaine Graybill, express an opinion as to the veracity of the Bitkina articles or offer self generated commentary on the project, Serendipity, or Pope.

On July 14, 1992, the Pantagraph published an editorial entitled "Let's avoid looking like 'ugly Americans'." The editorial concerned the American House project, Pope, and the questions raised by the articles written by Ms. Bitkina. The editorial began by posing a hypothetical wherein Russians came to Bloomington-Normal, offered to build a house on land supplied by the cities, and stated that they would keep the title to the house. Such a proposal, the editorial surmised, would not be warmly received. The editorial went on to state that the laudable goals of the American House project were clouded by questions about business motives behind the project, and Pope's statement warning Vladimir officials of the consequences of failing to complete the project risked creating the appearance of "ugly Americans." The editorial ended by stating that "[w]e should be forging relationships, not creating suspicions."

Plaintiffs responded to the article and editorial published by the Pantagraph by filing the present law suit. The Complaint sets forth four claims. In Counts One and Three, Plaintiffs claim that the July 5, 1992 article published by the Pantagraph defamed and cast them in a false light, respectively. Specifically, Plaintiffs claim that the article defamed and cast them in a false light in one or more of the following respects:

  a. the article, in paragraph 6, falsely stated
  that Plaintiffs promoted and characterized the
  project as "humanitarian aid" to "struggling
  people of Vladimir," when instead, the project was
  being carried on to "further the interests of an
  American business;"
  b. the article, in paragraphs 16-21, falsely
  stated and insinuated that Plaintiffs misled or
  withheld information from Vladimir officials
  regarding costs, and forced the project upon the
  c. the article, in paragraph 28, falsely stated
  that Pope "is already representing himself as some
  sort of benefactor for all Vladimirites," whose
  ideas "are literally pouring down upon Vladimir as
  if from a cornucopia;"
  d. the article, in paragraph 29, falsely stated
  that Plaintiffs' ideas "always seem to cost the
  hosting side a pretty penny," and that Plaintiffs'
  December 28, 1991, visit to Vladimir was "hosted
  by a unit within the city council at a cost of
  40,000 rubles" and the "entourage celebrated the
  holidays in the Pokrovsky Monastery in Suzdal and

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