In late May 2016, a high school student drowned in the pool at the Hillcrest Event Center, a recreational facility in Orion, Illinois near the Iowa border. Davenport station KWQC TV-6 reporter Dan Stevens investigated the drowning incident and looked into the background of Hillcrest owners Dan Kost, and his wife Terri Kost. Stevens reviewed prior court records and discovered that Dan Kost served a federal prison sentence in 1990 for a financial fraud conviction arising from his participation in a credit card fraud scheme. Additional records showed that after being released from prison, Dan Kost bought Hillcrest and later applied to the Small Business Administration for a low interest disaster assistance loan when Hillcrest sustained damage during severe rains. The same records demonstrated that in 1998 Dan Kost was convicted on four felony counts arising from false statements he made to the Small Business Administration in connection with obtaining the loan for Hillcrest.
On June 2, 2016 Stevens published an article on the KWQC TV-6 website detailing his discoveries about Dan Kost’s criminal past. Following the article’s publication, Dan Kost’s wife Terri and Hillcrest sued KWQC TV-6 and Stevens for defamation per se based on the article headline statement (“TV-6 Investigates: Fraud, false statements part of Hillcrest Event Center’s past”) and one additional article statement (“When TV-6 Investigates looked more into the owners and the history, we found fraud and prison time.”). Mandell Menkes lawyers Steven Mandell, Natalie Harris and George Desh filed a motion to dismiss on behalf of defendants Nexstar Media Group, Inc. (the owner/operator of KWQC-TV 6) and Stevens. Mandell Menkes argued that neither of the Statements were “of and concerning” Terri Kost, and that the statements could be reasonably construed as referring to Dan—and not Terri or Hillcrest. In addition, Mandell Menkes argued that the statements were protected by the fair report privilege because the article was a fair abridgment of the court records Stevens reviewed.
On September 20, 2018, Rock Island County judge Clarence Darrow granted Defendants motion to dismiss, finding that the Statements are protected by the fair report privilege and noting that the article “is a fair abridgement of Dan Kost’s criminal case because the Defendants utilized official proceedings about Kost’s fraud conviction and the gist of the news account is easily comparable [to] the official proceeding.” In addition, Judge Darrow agreed that the Statements “can be innocently construed because when the newspaper headline and the text of the article are read together as a whole, the defamatory statements can be interpreted as referring to Dan Kost and not Plaintiff Terri nor Plaintiff Hillcrest.”