Contractor suing homeowner over negative Yelp, Angie's List reviews

(CBS News) If you've ever complained online about a business, you may want to think twice about it.

A contractor is suing a Virginia woman for criticizing his work on two major websites, and those bad reviews could cost her big money.

Outside Fairfax County court Wednesday, a lawyer for Jane Perez flipped through pictures allegedly showing botched home repairs. The photos include door hinges, trash allegedly left behind, and what are said to be strands of hair in a refinished floor.

James Bacon, attorney for Perez, said, "I think we presented evidence sufficient to establish that the work was not completed, that he charged for work that had not been done, and that the workmanship was very poor."

Perez hired Christopher Dietz -- a former high school classmate -- in June 2011 to do cosmetic work on her townhouse. Unhappy with the results, she gave him an "F" rating on Angie's List.com, a consumer review website. On Yelp, she accused Dietz of damaging her home, billing her for work he didn't do, and suggested he stole jewelry. She ended her scathing review with this advice, "Bottom line do not put yourself through this nightmare of a contractor."

Dietz issued his own response, and then fired back with a $700,000 lawsuit for defamation.

Dietz said, "There was no question in my mind that I did 150 percent professional job in her house."

He says Perez's claims are all lies -- lies that cost him $300,000 in lost business. Dietz said, "I believe that people should have the right to state how they feel, but when you state stuff as fact and it's not fact or it's not able to be supported there has to be some type of -- for the lack of better words -- punishment."

Wednesday, Dietz was awarded his first victory. A judge ordered Perez to take down any allegations of theft and comments about legal action.

Bacon said, "If we need to, we will appeal to make sure that people are not afraid to speak out."

The court still must decide whether there are grounds for a defamation case.

For Chip Reid's full report, watch the video in the player above.

CBS News legal analyst Jack Ford explained defamation and how it relates to this case. On "CBS This Morning" he said, "Our constitutional right to free speech is not absolute. There are limitations on it. For instance, the classic one, you can't falsely yell 'Fire!' in a crowded theater. ... Because obviously, you can expose people to damage. What you can do is offer up is your opinion about things. As long as it's clearly an opinion. Here's what you can't do. And this is where you get into defamation. You can't make a false statement of fact that damages somebody's reputation. So if I wanted to say, in a situation similar to this, I was just not at all happy with the work that my contractor did. That's okay. That's my opinion. But if i say, 'I was not at all happy with the work that my contractor did, and by the way my contractor is an embezzler' ... or 'he stole jewelry' or even make the argument saying, 'He damaged my house,' now you're making a statement of fact. The law also says, truth is an absolute defense. So if somebody did damage your house or somebody is an embezzler, then you're OK. Even though it damages their reputation, as long as it's true, it's OK. The classic thing to remember is [defamation is] a false statement of fact that damages somebody's reputation, as opposed to opinion."

For more with Ford, watch his full "CTM" interview in the video below.

Ford added, "The Internet is still kind of the wild west. You know, tradition news organizations, we have editorial processes we follow. Reliable sources, fact checking, even though you have the right to do it, is it the right thing to do? If you're going online, everybody uses this, goes and does research first before they buy stuff. Make sure you're doing it in terms of a genuine opinion on your part. Here's the other thing, don't try and cloak your statement of fact and say, 'It's my ... opinion that he damaged my house. It's my opinion this person is a serial killer.' Just because you say the word opinion, doesn't mean it's no longer a statement of fact. The thing to be careful about a statement of fact that's false and damages their reputation."