JUNGEN ATTORNEY DEMANDS J/S RETRACTION

+++UPDATE -- WEDNESDAY, MARCH 18th 2009 -- [An update, including the Journal Communications, Inc. response and Attorney Kravit's reply can be found appended to the bottom of the original post, which follows here. --Ed.]

KRAVIT MAKES DEMAND OF PAPER
SAYS COVERAGE IS "FALSE AND DEFAMATORY"

Special to the Readers of Milwaukeeworld

By Michael Horne

And The Milwaukee World Hound Dog Team

MILWAUKEEWORLD, Monday, March 16th, 2009 -- Stephen Kravit, the attorney for former Central States Mortgage Company [CSMC] head Richard Jungen, has written a "Notice and Opportunity to Correct Libelous Matter" to Milwaukee Journal Sentinel Editor Martin Kaiser demanding a "retraction and clarification" of items contained in a front page Business Section article published today, Friday, March 13th, 2009, claiming the information conveyed is "false and defamatory to my client."

The article reported an emergency hearing yesterday in Milwaukee County Circuit Court where Judge David A. Hansher, presiding judge of the Civil Division, ordered the freezing of some $2 million in CSMC assets to satisfy a claim by Associated Bank [2009CV003901] against the mortgage company, which suspended operations Monday, March 9th, 2009.

Journal Sentinel articles about the demise of CSMC have repeatedly made mention of an unadjudicated suit filed by Central States against Jungen on February 2nd, 2009 [2009CV001723]. Kravit has previously contended in a communication to the Journal Sentinel on March 10th, 2009 and here at milwaukeeworld that the paper's coverage of the Central States Mortgage closing is unfair to his client, claiming there is no connection between Jungen, who left the firm in 2008, and recent events.

Kravit's letter to Kaiser says:
"The repeated re-statement of, and characterization of, a case brought by Central States against Richard Jungen as a '$15 million fraud and racketeering lawsuit' and the placement of that statement in this story juxtaposed with an unrelated lawsuit filed by Associated Bank against PRESENT Central States management, which does not involve any fact or allegation against Richard Jungen (who was not at Central States in the time period which the lawsuit being reported involves) is false, defamatory, and deliberately puts Richard Jungen in a false light."

Kravit says the Associated Bank lawsuit documents claim:

"PRESENT CSMC management, not Richard Jungen, allegedly unlawfully drew down $2,370,042 as draw requests to initiate 13 mortgages. Only later did Associated find out that the 13 mortgages were sold or refinanced, but the proceeds were not paid back to Associated as required under the agreements between Associated Bank and CSMC. In other words, PRESENT management at CSMC allegedly committed a major fraud against Associated Bank. Richard Jungen is not alleged to have committed that fraud and wasn't at Central States at any relevant time period of that alleged fraud." [Emphasis original--Ed.]

Kravit goes on to tell Kaiser:
"Your writer and/or editors, however, saw fit to place Mr. Jungen in a completely false light, by following a description of the Associated suit with your paper's oft repeated assertion that Mr. Jungen is allegedly involved in a '$15 million fraud and racketeering lawsuit.' The Journal was warned prior to this article that the so-called '$15 million fraud and racketeering lawsuit' illegally states supposed damages suffered by Central States on alleged tort claim against Mr. Jungen and others."

Kravit says the $15 million claim "violates Wis. Stat. Section 802.02(1m)(a) which states: 'With respect to a tort claim seeking the recovery of money, the demand for judgment may not specify the amount of money the pleader seeks.' The $15 million figure was placed in Central States' complaint precisely to have the press repeat that baseless figure over and over, which your paper and all others have dutifully done. The statutory prohibition just cited is to prevent the exact unfair prejudice to the persons sued that has occurred....

"The Milwaukee Journal Sentinel apparently is choosing sides in this dispute. Your paper is ignoring a clear violation of law by Central States, namely picking a pretend number out of the air to lambast Richard Jungen with as some kind of actual loss, and then trumpeting it in story after story, even after you were told use of such a number volated the law. By repeating this slander over and over, and especially after being specifically told that use of any damage number in a tort claim by the pleader violated law, one can only conclude that publication of this false and defamatory statement was deliberate.
"We demand a retraction and clarification. We expect you to publish, in as prominent a place, a statement that the alleged $15 million claimed by CSMC in its lawsuit was placed in that lawsuit in violation of Wisconsin law, and that this figure is from the imagination of the pleader without proof, and was illegally placed in the complaint to cause the public to be prejudiced against Richard Jungen and the other defendants. We expect the Journal to say it regrets the error of publishing that number, and of implying that Richard Jungen had anything at all to do with the allegations in the Associated Bank lawsuit. We expect future stories will be reported accurately and without bias or implication that Richard Jungen caused the present problems at Central States."

I guess we'll have to buy tomorrow's paper to see if Kravit gets his correction. He makes his claim under the provisions of Wisconsin Statutes 895.05.

Here is the letter Kravit sent the Journal Sentinel:

Press Release March 2009 PDF

++UPDATE++ [The following material, including a response from Journal Communications, Inc., and a reply by Atty. Stephen Kravit, made its way to milwaukeeworld today, Wednesday, March 18th, 2009. -- Ed.]

JOURNAL SENTINEL ATTORNEY SAYS "NO" TO CORRECTION DEMAND
JUNGEN LAWYER PREDICTS BANKRUPTCY FOR CENTRAL STATES

By Michael Horne

Jennifer L. Peterson, [UW-'01], Media Counsel and Deputy General counsel of Journal Communications, [NYSE:JRN] sent this letter.[pdf] to Stephen Kravit in response to his request for a retraction and clarification. In the letter, she denied Kravit's request, saying, "the newspaper has concluded that neither a retraction nor a clarification is warranted." She did a dance around Kravit's claim the complaint violates Wis. Stat 802.02(1m)(a) [see link above] which Kravit pounced upon in this return letter, which includes these passages:

"Interesting. Yet you have never reported what you were told repeatedly, and which is true, that Wisconsin Statutes do not permit a pleader to put a number on a tort claim. You do not address or recognize that repeating that number without any context, namely that the $15 million claim is from the imagination of the pleader and is unlawfully stated in the pleading. Apparently, until that claim is made in court "officially" you won't report it.

"That is absurd. I made that claim. You can report that I say so. But you won't, preferring to deliberately repeat without context the existing statement over and over, which we claim, correctly, is illegally set forth. If you don't see the harm there, imagine what the Journal would do if it was sued for defamation, and the pleader said it suffered $15 million in damages in the court proceeding. I can see the high level meeting now, worried as you would be that stating such a large number would spook your lenders and shareholders, and working on the press release, much like my own to you, that would point out the lawlessness under Wisconsin pleading of stating such an imaginary number.

"In the end, this case will never get litigated because CSMC will be filing for bankruptcy. The result will be a permanent stain on the reputation of Richard Jungen. [Emphasis added --Ed.]

"I ask you to reconsider your myopic response and print a retraction/clarification."