Surace v. Wuliger

• Decision Date: 06 August 1986
• Docket Number: No. 85-1339,85-1339
• Citation: 495 N.E.2d 939,25 Ohio St.3d 229
• Parties: , 25 O.B.R. 288, RICO Bus.Disp.Guide 6387 SURACE, Appellee, v. WULIGER, Appellant, et al.
• Court: Ohio Supreme Court

Page 229

25 Ohio St.3d 229

495 N.E.2d 939, 25 O.B.R. 288, RICO Bus.Disp.Guide 6387

SURACE, Appellee, v. WULIGER, Appellant, et al.

No. 85-1339.

Supreme Court of Ohio.

Aug. 6, 1986.

Syllabus by the Court

As a matter of public policy, under the doctrine of absolute privilege in a judicial proceeding, a claim alleging that a defamatory statement was made in a written pleading does not state a cause of action where the allegedly defamatory statement bears some reasonable relation to the judicial proceeding in which it appears.

The genesis of the cause sub judice arises out of an action filed in the United States District Court for the Northern District of Ohio, Regional Refuse Systems, Inc. v. Inland Reclamation Co. (case No. C83-1820). Daniel Dzina was a plaintiff in that federal action, and William T. Wuliger was his attorney. That action was predicated on, inter alia, the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and alleged that several of the named defendants had attempted to reduce competition in the refuse disposal business by operating their companies through a pattern of racketeering activity. With respect to the RICO part of the action, one of the pleadings in the complaint alleged:

"34. In 1975 or 1976, defendant James Palladino, who was already operating defendant Ohio Bulk, gathered together certain investors to form defendant Inland and purchase and operate a sanitary landfill located at 6705 Richmond Road, Glenwillow, Ohio. Said investors included defendant James Palladino himself, defendants Harry Fedele, and Albert Seymour. Also, said investors included such known underworld figures as Danny Greene, Joseph Surace, John Nardi, Harvey Reiger and Frank Embrecia."

On August 12, 1983, appellee, Joseph F. Surace, instituted the instant action in the Court of Common Pleas of Cuyahoga County against Dzina and Wuliger, appellant herein, alleging that the foregoing pleading in the RICO action was libelous, false and malicious, and that its import was neither relevant nor pertinent to said RICO action. Appellee alleged damages as a result of the defamatory pleading in the form of mental anguish, humiliation and harm to his reputation.

On October 26 and 27, 1983, Dzina and appellant filed Civ.R. 12(B)(6) motions to dismiss the complaint for failure to state a claim upon which relief could be granted, on the basis that the alleged defamatory pleading was absolutely privileged. The trial court agreed and, on August 16, 1984, granted the motions to dismiss.

Upon appeal, the court of appeals reversed and remanded for further proceedings. The appellate court held that the complaint stated a cause of action because Surace was not a party to the RICO suit. The court applied an "alternative remedies" theory, reasoning that appellee had no alternative remedy to clear his name in the RICO proceeding since he was not a party to that action. The court opined that appellee's action is maintainable, especially in light of Section 16, Article I of the Ohio Constitution which provides that "every person, for an injury done him in his * * * reputation, shall have remedy by due course of law * * *." In reviewing the various tests formulated by Ohio courts in similar cases, the appellate court stated that it was not prepared to hold that any defamatory attack is excused simply because it is inserted in a pleading. The court further opined that Dzina and appellant should have filed motions for summary judgment, rather than motions to dismiss pursuant to Civ.R. 12(B)(6).

The cause is now before this court pursuant to the allowance of a motion to certify the record.

McCarthy, Lebit, Crystal & Haiman Co., L.P.A., Irwin S. Haiman and William A. Barnett, Cleveland, for appellee.

William D. Beyer and Roger L. Kleinman, Cleveland, for appellant.

SWEENEY, Justice.

Appellee argues that the due process provision of the Ohio Constitution permits redress of his cause of action because he has no alternative remedy to pursue, inasmuch as he was not named as a party in the RICO action. Appellee maintains that the alleged defamatory pleading is neither relevant nor pertinent to the RICO action, pursuant to this court's prior decisions in Mauk v. Brundage (1903), 68 Ohio St. 89, 67 N.E. 152 and Bigelow v. Brumley (1941), 138 Ohio St. 574, 37 N.E.2d 584 . Appellee further contends that such a pertinence standard must necessarily be strict in light of due process considerations and that, therefore, this court should affirm the court of appeals' reversal of this cause.

Appellant argues that statements made in judicial proceedings and pleadings are absolutely privileged, and that the pleading in issue does meet the standards established in Mauk, supra, and Bigelow, supra, because the pleading was relevant and pertinent to the RICO action. Appellant submits that our decision in Erie County Farmers' Ins. Co. v. Crecelius (1930), 122 Ohio St. 210, 171 N.E. 97, sets forth the public policy rationale underlying the absolute privilege doctrine, which is that the absence of such a privilege would thwart the truth-seeking process if parties to a lawsuit were faced with the possibility of a defamation action for any statements made concerning any particular individuals. Appellant contends that the fact that appellee was not a party to the RICO action is irrelevant, and that appellee does perhaps have an alternative remedy to redress his claimed injury by filing a motion to intervene in the RICO case, and then proffering a motion to strike the alleged defamatory statement pursuant to Fed.R.Civ.P. 12(f). Appellant submits that any doubts concerning relevance or pertinence must be resolved in favor of the pleader, based on public policy grounds, and that other jurisdictions have held that absolute privilege applies even though the libelous statement refers to a person who is not a party to the suit in which the defamatory statement appears. Lastly, appellant contends that affirmance here could subject judges to potential liability for harsh statements made to an attorney or a party in a case, and could force attorneys to violate the Code of Professional Responsibility by not zealously representing clients out of fear of a possible defamation action.

In order to properly resolve the instant controversy, a short review of the policy underlying and precedent supporting the doctrine of absolute privilege is necessary.

The late Dean Prosser once noted that "[t]he defense of privilege, or immunity, in cases of defamation does not differ essentially from the privileges, such as those of self-defense, protection of property, or legal authority, available as to assault and battery. It rests upon the same idea, that conduct which otherwise would be actionable is to escape liability because the defendant is acting in furtherance of some interest of social importance, which is entitled to protection even at the expense of uncompensated harm to the plaintiff's reputation." Prosser, Law of Torts (4 Ed.1971) 776, Section 114.

In Mauk, supra, this court stated 68 Ohio St. at 97-98, 67 N.E. 152:

" * * * [I]n order to be privileged, the [defamatory] statement must be pertinent and material to the matter in hand. To be pertinent and material it must tend to prove or disprove the point to be established, and have substantial importance or influence in producing the proper result. * * * Whether or not the occasion gives the privilege is a question of law for the court * * *."

Mauk set forth a relatively strict standard which has been variously termed as the "legally relevant" or "pertinence to the occasion" test. A defamatory statement under this guideline was said to be absolutely privileged only when the statement was material and pertinent to the subject matter in which it appeared. In addition, the Mauk court made it clear that it is a question of law for the court to determine whether a statement, alleged to be defamatory, should be accorded absolute privilege.

Then, in Erie County, supra, this court held in the syllabus:

"No action will lie for any defamatory statement made by a party to a court proceeding, in a pleading filed in such proceeding, where the defamatory statement is material and relevant to the issue."

This court noted in Erie County at 212-213, 171 N.E. 97 that the "English rule" allows no action for any defamatory statement made in a pleading, even where the statement is false, malicious or irrelevant to the matter in which it appears. The "American rule," on the other hand, differs only in the respect that the alleged defamatory statement "must be relevant and material to the issue in order to be privileged." Id. at 213, 171 N.E. 97.

With regard to the public policy considerations inherent in the doctrine of absolute privilege, the Erie County opinion observed at 215, 171 N.E. 97 that " * * * as an incidental result it [absolute privilege] may in some instances afford immunity to the evil disposed and the malignant slanderer. * * * A contrary rule would manifestly result in a multitude of slander and libel suits, which would not only bring the administration of justice into disrepute, but would, in many instances, deter an honest suitor from pursuing his legal remedy in a court of justice."

Thus, in Erie County, this court enunciated the public policy underlying the absolute privilege doctrine alluded to in Mauk, supra, where it was noted at, 68 Ohio St. 97, 67 N.E. 1152 that due process applies generally, unless some other rule of law or public policy considerations demand a contrary application.

In Bigelow v. Brumley, supra, 138 Ohio St. at 586-588, 37 N.E.2d 584 this court refined and slightly modified the tests set forth in Mauk and Erie County, by stating that questions concerning the applicability of absolute privilege depend on whether the alleged defamatory statement has reference and relation to the subject matter of the action in which it is found. The Bigelow court stopped short of rejecting the...