When a Legal Document is Meant To Cause Harm: Fraud, Deceit, and Bad Faith

Below is the Formal Notification letter that Mr. Elmore was hand delivered by Joan O'Donnell, editor at the Peabody Museum Press.  This letter has already been discussed from the point of view of New Mexico contract law in Shouldn't a Contract Mean What it Says; I now want to discuss it from the perspective of the legal doctrines of Good Faith and Fair Dealing and Fraud and Deceit.  New Mexico courts have held that every contract imposes a duty of good faith and fair dealing .  "The implied covenant...requires that neither party do anything that will injure the rights of the other to receive the benefits of their agreement" (Sanders v. FedEx).   Intentionally drafting a contract that misleads and harms the other party is a violation of this principle, often simply called Bad Faith.  The Formal Notification can also be viewed under a tort claim of Fraud and Deceit.

According to Legal Dictionary Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact, (2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result....The relationship between the parties can make a difference in determining whether a statement is fraudulent.  A misleading statement is more likely to be fraudulent when one party has superior knowledge in a transaction, and knows that the other is relying on that knowledge, than when the two parties possess equal knowledge.  Deceit is similar and involves making a fraudulent statement where the defendant knowingly or recklessly makes a false representation intending that the plaintiff should act upon it where the plaintiff does act to his detriment.

The exact legal status of the Formal Notification letter is not something I need to determine here.  The book contract that Mr. Elmore signed with the Peabody Museum Press had no termination clause that specified what would happen if the book was not published by the Press.  Editor Joan O'Donnell wrote this letter and gave it to Mr. Elmore personally at Marisco's Restaurant in Santa Fe, New Mexico.  Mr. Elmore relied on the express language returning to him "all rights" in his manuscripts and the recommendation from the Board to publish elsewhere when he self-published In Search of Nampeyo: The Early Years: 1875 - 1892.   The letter contains no restrictions or reservations of rights by Harvard.  The criteria for finding against a defendant on one of these charges are strict and, of course, these are matters that must be decided in a court.  However, here I present some of the evidence learned from Discovery documents provided to Mr. Elmore so tardily by Harvard.  Whether we focus on Bad Faith or Fraud and Deceit the same evidence would be relevant.  

We start with the letterhead and first line of text, both of which announce the letter as from the Peabody Museum of Archaeology and Ethnology.  At the Injunction Hearing in December, 2015 Joan O'Donnell testified that the Press was a separate entity from the Museum, and that their contracts were separate   "....since I never signed an agreement with him about the photographs he took...I couldn't revert those rights to him" (p. 136).  Yet, she writes here on behalf of the Museum on Museum letterhead.  Mr. Elmore could not know if she was misrepresenting herself as an agent of the Museum and overstepping her authority.

Ms. O'Donnell wrote the letter as representing the decision of the Editorial Board and conveying the recommendations of that Board.  In fact, the Formal Notification letter was written by Ms. O"Donnell without any input from, or approval by, anyone on the Board and without asking for a legal opinion, though Ms. O'Donnell stated at the Injunction Hearing that the letter was subject to legal and Museum review (p. 115).   She misrepresents to Mr. Elmore that the Formal Notification is endorsed by the Museum and by the Editorial Board, when in fact it was not read or reviewed by anyone.

Documents reveal that the actual decision not to publish was made by Ms. O'Donnell in consultation with Reviewer #1 in December of 2012, before she received the other two reviews, and more than a year before the negative decision was conveyed to Mr. Elmore.  Reviewer #1 wrote to Joan O'Donnell in this email exchange from December 2012 "I think I sense your discomfort in finding the words with  which  to reject this, right?  Ms. O'Donnell answers "It's not that so much as needing to present strong and explicit arguments to my editorial board and the museum brass."   Reviewer #1 goes on to suggest language with which to reject the manuscript  "Unless I had solicited this manuscript, I would pass along people's comments to him, say that  it is not up to the standards of the institution, and encourage him to take it elsewhere."  The language in the Formal Notification letter mirrors the language decided on in this email exchange from 2012.

Far from helping Mr. Elmore to develop his manuscript as specified in the Letter of Agreement, Ms. O'Donnell seems to have spent the intervening time between December 2012 and January 2014 making sure the manuscript would be rejected by a Board that showed a lot of initial excitement and enthusiasm.  She asked Mr. Elmore to respond in writing to the three reviews he received in May, 2013 and to write a much expanded manuscript for a more scholarly series.  He did this and submitted the second manuscript in November of 2013.  The Peabody Museum Press never communicated with Mr. Elmore about his replies to the reviewers or any of the new material before delivering the Formal Notification.  This document represents the decision as that of the Board and four reviewers.  However, the final decision was not actually made at the Board meeting; that decision was made (officially, this time rather than behind the scenes) after that meeting.  As can be seen from this email exchange between O'Donnell and Peabody Museum Director Jeff Quilter, the two were tasked with another review of the manuscript.  Mr. Quilter chose to leave the decision entirely up to Ms. O'Donnell.  Thus, the last paragraph of the Formal Notification stating  "I have to add, personally, that we tried very hard to make this project work..." is completely at odds with the record of events revealed in the Discovery documents.
  

The Board did hope that the book would be published elsewhere and, as documented in Mr. Elmore's Response to Harvard's Motion for Summary Judgement (p. 14) the Board recommended that the Museum be liberal in allowing Mr. Elmore to use his own photographs so that the book could be published, as they rightly recognized that the book would be useless without the photography.  The Formal Notification conveys the Board's recommendation to publish, but fails to mention any other procedures or restrictions, though these were known by Peabody Museum staff who sat on the Board, and known to Ms. O'Donnell before the book went to print.  Ms O'Donnell testified at the Injunction Hearing (p. 114) about learning of Mr. Elmore's intention to publish his book  "...since it was a pre-publication sale, I was very hopeful that it hadn't gone to press and that something could be worked out before it went to press and we would never have an issue."  This is the same person who deliberately removed a reference to the policies, that Mr. Elmore is now being sued for violating, from a draft letter before sending it to him, as can be seen in these emails between O'Donnell and Museum Staff.  

Ms. O'Donnell's statement that she would support publication of Mr. Elmore's work in American Indian Art Magazine is VERY peculiar.  As documented in the blog entry Attribution of Unsigned Pueblo Pottery, American Indian Art Magazine was the journal that published Mr. Schramm's article "Righting the Record."  It is apparent that Mr. Schramm had access to Mr. Elmore's work when it was still under review and used that access to preemptively attack Mr. Elmore's argument.   As documented in the judge's final rulings, this article was used to discredit Mr. Elmore's work with the Editorial Board as the minutes of the meeting include Mr. Schramm's "early rebuttal" as one of the reasons to reject his manuscript.  All the people who were at the board meeting who were deposed on this subject claimed they could not remember who had given this as a reason for rejection and none seemed knowledgeable about the actual content of this article.   Given these circumstances and the added fact that one of the people Mr. Schramm thanked in his acknowledgements also sat on the board of American Indian Art Magazine, I think it most improbable that American Indian Art Magazine would have published Mr. Elmore's work and Ms. O'Donnell was well aware of that fact.

The controversy surrounding the offer of "10 -15 existing high-quality Peabody photographs to use in such a publication" has been a central focus of this case.  Harvard has made many different representations of the meaning of this phrase ranging from an assertion that it "underlined" that Mr. Elmore could not use his own photographs, to "not saying" what it means.  Mr. Elmore read it as an offer of existing photographs if he would like to use them, which is what it says.  None of the existing Peabody Museum photographs would have been helpful to Mr. Elmore in making his argument, as that required the careful arrangement of groups of pottery in the Keam collection in order to show the connections among them and establish the artistic styles of Nampeyo.  Ms. O'Donnell was well aware that this offer of photographs had little to no value to Mr. Elmore, as she had testified at the Injunction Hearing that Mr. Elmore's book would have very little value without his photographs. 

We can use the Formal Notification together with information gleaned from Discovery to ask whether there is evidence of an intent to deceive and harm Mr. Elmore, using the criteria for Fraud enumerated above. (1)  The return of "all rights" to his manuscripts and the statement that the letter was from the Peabody Museum and not merely from its Press are either factually false or reckless statements.  (2) Ms. O'Donnell's Injunction Hearing testimony cited above shows that she was aware of these inaccuracies.  (3) The clearest evidence that Ms. O'Donnell intended to deceive Mr. Elmore comes from her removal from an email of the very policy she now tasks him with violating.  (4) Mr. Elmore relied on this letter, which says clearly that he has both the right and a recommendation from the Board to publish his manuscript elsewhere, and lastly (5) Mr. Elmore is now suffering the harm of an onerous lawsuit for doing exactly as Ms. O'Donnell's letter recommended. 

Mr. Elmore is not an academic and is a first time book author.  He relied on the Peabody Museum and its Press because of the high reputation they have in the academic world and their long history of publishing books on important Museum collections.  Thus, Harvard "has superior knowledge in [this] transaction, and knows that the other is relying on that knowledge".  Despite Mr. Elmore's repeated requests that procedures, decisions, and other protocols be communicated to him, it was rare for him to be given information that he needed to produce a manuscript acceptable to Harvard or to learn critical facts that might have prevented this lawsuit.  This email from Joan O'Donnell indicates that she was well aware that Mr. Elmore, as one of the "people in the real world", lacked information about the procedures and processes in academia.  In another email she concludes "mea culpa, mea culpa, mea maxima culpa" revealing that she knows very well it is her job to communicate information to Mr. Elmore and that she had been exceptionally tardy in doing so, only responding after repeated inquiries.  Harvard has spent a lot of time informing the courts about the details of their private processes, but would have done much better if they had given Mr. Elmore such information in a timely manner.

Harvard has cancelled a court ordered settlement conference for the third time.  Harvard is not willing to talk and insists that its view of the matter must prevail absolutely.  Harvard has been steadfast in its demand that every unsold copy of In Search of Nampeyo be destroyed. 


 This is the ninth in a series of blogs about In Search of Nampeyo and Harvard's lawsuit against Steve Elmore. Future essays will deal with constitutional issues of free speech, the stealing of intellectual property, and abuse of the legal system.

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Shouldn't a Contract Mean What it Says? I: The Return of Rights Letter

Note:  This is the first entry of a two part analysis of the contracts at issue in Harvard vs. Steve Elmore and the book In Search of Nampeyo: The Early Years, 1875 - 1892.

In this essay I will look at the controversy around the return of rights or Formal Notification letter that was delivered to Mr. Elmore in January, 2014 when the Peabody Museum Press rejected the manuscript of In Search of Nampeyo.  Mr. Elmore read this letter, did his due diligence by checking its meaning with two attorneys, and then self-published his book.   Here is the letter: 

As you can see, the letter returns to Mr. Elmore “all rights in the manuscript…including all versions of the manuscript submitted to the Peabody Museum Press” and that “The Board recommends that you find a magazine or trade publisher…to publish the work.”  Orally and in later emails, Ms. O’Donnell recommended two university presses and a particular trade publisher as alternative places to publish the manuscript.  There are no clauses in this document reserving rights for the Peabody Museum Press or for the Peabody Museum.   There are no constraints or special conditions put on Mr. Elmore’s ability to publish.  While particular venues for publication are suggested, he was not required to use any of these venues.  

This Formal Notification is a legal document written on behalf of the whole Editorial Advisory Board, which included Jeff Quilter, the Peabody Museum director, Steven LeBlanc, the Director of Collections, and Project Manager Donna Dickerson, among others.  Mr. Elmore read the letter as representing the position the Board took with regard to his manuscript.

The original book contract, called the “Letter of Agreement”, defines “manuscript” as “electronic and hard copy; including front matter, text, bibliographic references, copies of illustrations, and figure captions.”  It also states that Mr. Elmore’s book was a “work for hire”.  The United States Copyright Act says all rights to a work made for hire vest originally in the author of the work, in this case Harvard. Because all rights, including publication rights and rights of copyright, were initially vested with Harvard when Mr. Elmore was working for Harvard under the Letter of Agreement, these same rights were returned to Mr. Elmore in the Formal Notification letter.

However, In their suit against him, Harvard claims that “manuscript” only refers to the text, and that Mr. Elmore had not been given permission to publish the photographs he took while doing research in the Peabody Museum collections.  I will examine the complex array of issues around the photographs in my next blog entry.  For the sake of understanding how the Formal Notification letter should be interpreted under New Mexico law, we need to turn for guidance to New Mexico case law and some Uniform Jury Instructions. 

Using New Mexico case law we learn that language in a contract, if not specifically defined, is taken as having its customary or “dictionary” meaning and a term must be interpreted “in its usual, ordinary, and popular sense”, “…clear and unambiguous clauses must be accepted as the expression of the intent of the parties, and enforced by the courts as written.”….“Resort will not be made to a strained construction for the purpose of creating an ambiguity when no ambiguity in fact exists” (Battishill v Farmer's Alliance).   In the Formal Notification letter, “all rights” would mean exactly that. Harvard attempts to read into this contract a meaning different from the clear words on the page and to insist that this contract be understood according to other facts or principles not stated; according to New Mexico law, this should not be successful. Any uncertainties as to meaning “must be construed most strongly against that party which drafted the contract” (Schaeffer v.Kelton).  Mr. Elmore should not be required to guess at any secret meanings or intentions.  He is required to read and follow the contract as delivered to him, especially as he had no part in drafting it. 

Harvard offers a strained reading of this letter that requires many additional assumptions. For instance, Harvard claims that the “10 - 15 high quality existing Peabody photographs” were meant to substitute for over 100 ceramics, carefully arranged in groups, that Mr. Elmore used to demonstrate his thesis.  Harvard insists that this offer of free photographs has the obvious meaning, without their stating it explicitly, of a prohibition on Mr. Elmore using his own photographs.  Ms. O’Donnell admitted in court testimony at the injunction hearing (p. 124) that there would be “very little value” to Mr. Elmore's work without his own photographs, yet Harvard insists he should have understood the letter in this nonsensical manner.

When questioned in her deposition (transcript in preparation) about the offer of photographs, Ms O’Donnell, the author of the letter, seemed to have no idea what she meant by it, she "was not saying one way or the other” whether the offered photographs were meant as substitutions or in addition to Mr. Elmore’s photographs.  Suddenly, after litigating this case for a year, Harvard offered a new interpretation of this phrase in their latest motion for summary judgement on the Permission to Photograph Collections contract.  Now, these photographs are starter photographs, and not the substitutes for all of Mr. Elmore’s Keam collection photography that Harvard had insisted on all along.   This serves to demonstrate the very poor quality of this contract.  The editor does not seem to know what it means and Harvard’s attorney feels free to change his own interpretation at will to fit present circumstances.  Mr. Elmore understands this phrase to mean only what it says; it is an offer of 10 - 15 existing photographs from the Peabody Museum that he can use in his book free of charge if he wants to.  That is what the contract says.

In addition to controversy about the meaning of the Formal Notification letter, there is also uncertainty about its status.  The judge ruled that the Formal Notification, on which Mr. Elmore relied when he published his book, was not part of the contract because Harvard “could have written something different” in that letter.  “The contract does not require Harvard to return the rights if the manuscript was not approved for publication...Consequently, Harvard’s alleged failure to honor its subsequent decision to return rights to Mr. Elmore never denied Mr. Elmore of his “reasonable expectations arising from the Contract.” (Case 1:15-cv-00472-RB-KK  Document 137 Filed 04/22/16  P. 10).   This ruling confuses me; I think it means that since the original Letter of Agreement did not have a termination clause that specified exactly what would happen with the manuscript if the press decided to reject it, the Formal Notification letter is not to be strictly construed as part of the Letter of Agreement. 

However, Harvard did choose to write and deliver exactly the letter that Mr. Elmore relied on when he made his decision to publish the manuscript.   Mr. Elmore would naturally consider the definitions of “work for hire” and “manuscript” from the Letter of Agreement and read and follow the policies in the Permission to Photograph Collections form (more on that next time) when making his choices.  If we look at Luther Wilson’s expert testimony (p. 14 - 20), he includes a well written, professional Publishing Agreement which has, for instance, specific arbitration and termination clauses.  This would have been preferable to the vaguely worded Letter of Agreement that Mr. Elmore and Ms. O’Donnell signed.

Rather than being a part of the contract in a strict sense, the Formal Notification letter would now be considered an “accord and satisfaction” under New Mexico law.  According to the Uniform Jury Instructions, this apples “to all transactions where discharge of a contract duty occurs through acceptance of something in substitution”  (UJI 13-836).  In this case, Mr. Elmore accepted the return of rights to his manuscript and the ability to publish it elsewhere in lieu of the Peabody Museum Press publishing his book.  Harvard offered this, and Mr. Elmore accepted it.   

The fact that Harvard is now suing Mr. Elmore for doing exactly as they recommended can be viewed under the doctrine of “promissory estoppel”.  The elements of promissory estoppel are “(1) An actual promise must have been made which in fact induced the promisee’s action or forbearance; (2) The promisee’s reliance on the promise must have been reasonable; (3) The promisee’s action or forbearance must have amounted to a substantial change in position; (4) The promisee’s action or forbearance must have actually been foreseen or reasonably foreseeable to the promisor when making the promise; and (5) enforcement of the promise is required to prevent injustice”  (UJI-13-815).   

In this case, the return of rights and recommendation to publish elsewhere were clear and Mr. Elmore relied on the promise and invested the time and money to ready the book for publication and to print it.  Harvard, who recommended this course of action to him, could have reasonably foreseen that this would occur.  A manifest injustice would occur should Harvard prevail in its claims against Mr. Elmore in this instance.  Harvard’s own interpretation of the Formal Notification letter amounts to denying Mr. Elmore the opportunity to publish the fruits of his 25 years of research together with the evidence he had created in the form of pottery arrangements. The Peabody Museum enjoys the many benefits of the work Mr. Elmore did for them, while under contract to produce a book, in terms of increase in the prestige and value of their Keam collection and use of his attributions of pottery to Nampeyo.  

The Formal Notification letter was signed by editor Joan O’Donnell, but written on behalf of the entire Editorial Advisory Board.  Mr. Elmore naturally thought that the letter included the input of others on the board who represented the interests of the Peabody Museum (director Jeff Quilter and director of collections Steven LeBlanc) and the press (production manager Donna Dickerson).  Though Joan O’Donnell stated in her testimony at the injunction hearing that she could have written whatever she wanted in the letter “subject to…review by attorneys or by museum policies” (p. 115), there is no evidence at all that anyone else helped draft the letter or reviewed it before it was sent.  It seems that everyone involved, including Harvard’s own attorneys, simply accepted, without question or any wider inquiry, Ms O’Donnell’s personal account of and interpretation of this letter.  As was also the case with their copyright infringement charges, Harvard sues first and asks questions later.

 This is the fifth in a series of blogs about In Search of Nampeyo and Harvard's lawsuit against Steve Elmore. Future essays will deal with another contract in this case, legal aspects of peer reviewer anonymity, and abuse of the legal system.

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