## Facts

- John R. Darvish owned and led Darcars Automotive Group and hired Shahriar Gohari in 1987; Gohari rose to senior vice president.
- After leaving Darcars, Gohari sought to buy an automobile dealership, a transaction requiring Toyota’s approval of him as dealer principal.
- Toyota sought information about Gohari; Darvish communicated negative statements to Toyota about Gohari’s honesty and integrity.
- Gohari alleged Darvish’s statements caused Toyota to reject him, defeating Gohari’s contract to purchase the dealership.
- A Montgomery County jury found Darvish liable for defamation against Gohari and tortious interference with the purchase contract involving Gohari and Arlington Motors, Inc.
- The jury awarded $500,000 compensatory damages for defamation and $2,120,000 for tortious interference.

## Issues

1. Whether Maryland common-law qualified privilege applies to a franchisee’s communications to its franchisor, made at the franchisor’s request, about a former employee seeking a franchise from that franchisor.
2. Whether failure to instruct the jury on qualified privilege required a new trial, or was harmless because the verdict necessarily reflected actual malice that would defeat the privilege.

## Decision

- The Court of Appeals of Maryland held that Darvish’s statements to Toyota fell within an established category of common-law qualified privilege (common interest/interest of others) when provided at the franchisor’s request regarding an applicant for a franchise.
- The court concluded the intermediate appellate court erred by ordering a new trial without analyzing harmless error.
- On the record and instructions given, the jury’s findings necessarily implied actual malice, which defeats qualified privilege.
- Because a privilege instruction and additional privilege-related proof would not have changed the outcome, any instructional error was harmless.
- The court reversed the decision vacating the judgment, effectively reinstating the jury’s verdict for Gohari (and Arlington Motors) and the damages awards.

## Legal Principles

- A qualified privilege protects defamatory communications made in good faith on a subject in which publisher and recipient share a common interest, or where the publication is made in the recipient’s legitimate interest upon request for the information.
- In the franchisor–franchisee setting, a franchisee may have a qualified privilege to give a franchisor information about a former employee when the franchisor requests it and the former employee has applied for a franchise.
- Qualified privilege is defeated by actual malice (including ill will or reckless disregard for truth) and by abuse such as excessive publication.
- Appellate reversal for failure to instruct on a defense requires harmless-error analysis; if the verdict necessarily includes findings that would defeat the omitted defense, the error is harmless.

## Conclusion

Maryland treated franchisor-requested reference communications as within traditional qualified privilege, but held that omission of a privilege instruction did not warrant a new trial where the jury’s verdict necessarily reflected actual malice, making any instructional error harmless and leaving the plaintiff’s defamation and tortious interference recovery intact.


Gohari v. Darvish, 363 Md. 42, 767 A.2d 321 (Md. 2001)