Demopolis v. Peoples Nat. Bank of Washington

Decision Date04 September 1990
Docket NumberNo. 25739-1-I,25739-1-I
Citation796 P.2d 426,59 Wn.App. 105
CourtWashington Court of Appeals
PartiesChristopher DEMOPOLIS, Appellant, v. PEOPLES NATIONAL BANK OF WASHINGTON, a national banking association; Karr, Tuttle, Koch, Campbell, Mawer & Morrow, P.S., a professional services corporation; and James R. Hermsen, Respondents.
Dan Young, Bjorklund & Young, Seattle, for appellant

John R. Tomlinson, Michael B. King, Lane Powell Moss & Miller, Seattle, for respondents.

WINSOR, Judge.

Christopher Demopolis appeals dismissal of his defamation and Consumer Protection Act (CPA) actions against Peoples National Bank of Washington (Peoples), Peoples' attorney, James Hermsen, and Hermsen's law firm, Karr, Tuttle, Koch, Campbell, Mawer & Morrow, P.S. We affirm in part and reverse in part.

In 1983, Demopolis was involved in three Snohomish County actions involving different aspects of his late father's estate. Hermsen represented Peoples, who was an opposing party in all of the actions. One of Hermsen's trial strategies was to attack Demopolis' credibility.

After Hermsen conducted cross examination of Demopolis during one of the trials, the court recessed. Demopolis, his attorney and others went into the hall outside the courtroom. Hermsen approached and said that he was going to "nail" Demopolis for $150,000 in attorney fees. When Demopolis asked why, Hermsen allegedly said, "Because you have been convicted of perjury." It is undisputed that Demopolis has never been charged with, nor convicted of, perjury.

Demopolis filed an action for defamation and for violation of the CPA against Hermsen, Hermsen's law firm, and Hermsen's client, Peoples. At the close of Demopolis' case We first address the parties' arguments relating to dismissal of Demopolis' defamation claims. A defamation plaintiff must prove four essential elements: (1) falsity, (2) an unprivileged communication, (3) fault, 1 and (4) damages. E.g., LaMon v. Butler, 112 Wash.2d 193, 197, 770 P.2d 1027, cert. denied, --- U.S. ----, 110 S.Ct. 61, 107 L.Ed.2d 29 (1989); Mark v. Seattle

                the trial court granted defendants' motion to dismiss,orally ruling that Hermsen's statement was absolutely privileged and, alternatively, that Demopolis failed to make a prima facie showing of damages.   Demopolis sought direct review in the Supreme Court.   That court declined review and transferred the case to this court.   For the most part we address the issues presented, despite both parties' noncompliance with the Rules of Appellate Procedure governing assignments of error, and respondents' attempt to challenge trial court findings without perfecting a cross-appeal
                Times, 96 Wash.2d 473, 482-483, 635 P.2d 1081 (1981), cert.denied, 457 U.S. 1124, 102 S.Ct. 2942, 73 L.Ed.2d 1339 (1982).   In the instant case, the trial judge ruled that Demopolis failed to meet his burden as to two elements:  an unprivileged communication, and damages.   We find that each of [796 P.2d 429] these rulings was based on incorrect application of the law, and reverse that part of the trial court's order which dismisses Demopolis' defamation claim against Hermsen and his law firm
                

UNPRIVILEGED COMMUNICATION

A. Absolute Privilege. We first address Demopolis' assignment of error to the trial court's ruling that Hermsen was immune from liability because his alleged defamatory statement was an absolutely privileged statement made in the course of a judicial proceeding. Demopolis argues that the statement had no relation to the estate litigation and that no public policy supports extension of the judicial proceeding privilege to a defamatory statement such as the one at issue here. 2

An absolute privilege protects the maker of an otherwise defamatory communication from all liability for libel or slander. Story v. Shelter Bay Co., 52 Wash.App. 334, 338, 760 P.2d 368 (1988). Defamatory communications made by a party or counsel in the course of a judicial proceeding are absolutely privileged if they are pertinent or material to the redress or relief sought. McNeal v. Allen, 95 Wash.2d 265, 267, 621 P.2d 1285 (1980); accord, Restatement (Second) of Torts §§ 586-87, § 586 comment c (1977). This privilege encompasses extrajudicial "pertinent" statements. Restatement, supra § 586 comment a; Annot., Libel and Slander: Attorneys' Statements, to Parties Other Than Alleged Defamed Party or its Agents, in Course of Extrajudicial Investigation or Preparation Relating to Hermsen asserts that the defamatory statement was pertinent to the estate proceedings and therefore privileged because Demopolis' credibility was at issue in those proceedings, and because the statement was a continuation of Hermsen's cross examination of Demopolis. 3 We are not persuaded.

                Pending or Anticipated Civil Litigation as Privileged, 23 A.L.R.4th 932, 940-946 (1983);  cf. Story, 52 Wash.App. at 340-41, 760 P.2d 368 (extending absolute privilege for statements made during the course of quasi-judicial administrative proceedings to statements made during the proceedings' investigatory phase).   Thus, the fact that Hermsen's defamatory statement was made outside the courtroom does not necessarily prevent him from asserting the privilege.
                

A statement is pertinent if it has some relation to the judicial proceedings in which it was used, and has any bearing upon the subject matter of the litigation. Johnston v. Schlarb, 7 Wash.2d 528, 540, 110 P.2d 190, 134 A.L.R. 474 (1941).

The privilege ... is confined to statements made by an attorney while performing his function as such. Therefore it is available only when the defamatory matter has some reference to the subject matter of the proposed or pending litigation, although it need not be strictly relevant to any issue involved in it. Thus the fact that the defamatory publication is an unwarranted inference from the evidence is not enough to deprive the attorney of his privilege.... On the other hand, the privilege does not cover the attorney's publication of defamatory matter that has no connection whatever with the litigation.

Restatement, supra § 586, comment c. The determination of pertinency is a question of law for the court, Cooperstein v. Van Natter, 26 Wash.App. 91, 95 n. 2, 611 P.2d 1332, review denied, 94 Wash.2d 1013 (1980); Restatement, supra § 619(1), and should be based upon an examination of the whole proceeding to which the defamatory statements are alleged to be pertinent. Johnston, 7 Wash.2d at 540, 110 [796 P.2d 430] P.2d 190; accord, Whether Hermsen's statement is sufficiently pertinent to warrant an extension of the judicial proceedings privilege is a close question. Resolution of the issue is hampered by the lack of a record from the estate litigation, 4 and by the fact-specific nature of relevant decisions from this and other jurisdictions. See, e.g., Sussman v. Damian, 355 So.2d 809, 812 (Fla.App.1977) (attorney's defamatory attack on opposing counsel's integrity, made in the courthouse elevator after heated motion argument, was unrelated to cause at hand and therefore was not absolutely privileged); 5 Cummings v. Kirby, 216 Neb. 314, 343 N.W.2d 747 (1984) (attorney's post-trial defamatory statement to client, made during discussion of alternative post-trial procedures, was absolutely privileged); Viss v. Calligan, 91 Wash. 673, 675-76, 158 P. 1012 (1916) (no privilege for witness who " 'broke out' during the course of his testimony and proceeded to defame the [defamation plaintiff]" with allegations irrelevant to the proceeding). 6 We therefore consider whether the purposes and policies of absolute privileges "The absolute privilege, while broad in scope, has been applied sparingly. 'Absolute privilege is usually confined to cases in which the public service and administration of justice require complete immunity.' " Herron v. Tribune Pub'g Co., 108 Wash.2d 162, 177, 736 P.2d 249 (1987) (quoting Bender v. Seattle, 99 Wash.2d 582, 600, 664 P.2d 492 (1983)). The privilege does not extend to statements made in situations for which there are no safeguards against abuse. Story, 52 Wash.App. at 338-39, 760 P.2d 368. Thus, an absolute privilege is allowed only in "situations in which authorities have the power to discipline as well as strike from the record statements which exceed the bounds of permissible conduct." Twelker v. Shannon & Wilson, Inc., 88 Wash.2d 473, 476, 564 P.2d 1131 (1977).

Green Acres Trust v. London, 142 Ariz. 12, 25, 688 P.2d 658, 671 (1983) (Green Acres I ), rev'd in part on other grounds, 141 Ariz. 609, 688 P.2d 617 (1984) (Green Acres II ); McCarthy v. Yempuku, 5 Haw.App. 45, 678 P.2d 11, 15-16 (1984). would be served by finding the requisite pertinency here, and hold that they would not.

We are convinced that it would not advance public service and the administration of justice to extend an absolute privilege to Hermsen's statement. An Arizona case is instructive:

As an immunity which focuses on the status of the actor, the privilege immunizes an attorney for statements made "while performing his function as such." Restatement (Second) of Torts § 586, Comment c. We agree that "special emphasis must be laid on the requirement that it [statement] be made in furtherance of the litigation and to promote the interest of justice." Bradley v. Hartford Accident & Indemnity Co., 30 Cal.App.3d 818, 826, 106 Cal.Rptr. 718, 723 (1973) (emphasis in original). Without that nexus, the defamation only serves to injure reputation.

(Footnote omitted.) Green Acres II, 688 P.2d at 621-22. The Green Acres II court also pointed out that although attorneys must have freedom to advance their clients' interests, a lawyer's duty to represent a client with zeal does not militate against the concurrent obligation to treat all persons involved in the legal process with consideration, and to avoid inflicting needless harm. 7 688 P.2d at 623.

Moreover, in the particular circumstances of this case there are no safeguards to protect against an abuse...

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