Eskamani v. Auto-Owners Ins. Co.

• Decision Date: 08 October 2020
• Docket Number: No. 20190450-CA,20190450-CA
• Citation: Eskamani v. Auto-Owners Ins. Co., 476 P.3d 542 (Utah App. 2020)
• Parties: Rachel ESKAMANI and Peggy Hunt, Appellants, v. AUTO-OWNERS INSURANCE COMPANY, Appellee.
• Court: Utah Court of Appeals

476 P.3d 542

Rachel ESKAMANI and Peggy Hunt, Appellants,

v.AUTO-OWNERS INSURANCE COMPANY, Appellee.

No. 20190450-CA

Court of Appeals of Utah.

Filed October 8, 2020

William J. Hansen, Karra J. Porter, Bryson R. Brown, Salt Lake City, and Kristen C. Kiburtz, Attorneys for Appellants

Richard K. Glauser, Albert W. Gray, Michael W. Wright, and Clayton H. Rather, Salt Lake City, Attorneys for Appellee

JUDGE KATE APPLEBY authored this Opinion, in which JUDGES JILL M. POHLMAN and RYAN M. HARRIS concurred.

Opinion

APPLEBY, Judge:

¶1Rachel Eskamani and Peggy Hunt¹ appeal the district court's grant of summary judgment in favor of Auto-Owners Insurance Company(Auto-Owners) and dismissal of their claims for wrongful use of civil proceedings and abuse of process.Eskamani also appeals the district court's ruling denying her request for discovery sanctions against Auto-Owners.We affirm in part and reverse in part.

BACKGROUND²

¶2 This appeal is the third in a series of three lawsuits involving Eskamani and Auto-Owners or its insured.In December 2009, a café owned by Eskamani was damaged when a contractor ruptured a nearby high-pressure water line, causing water to flood the premises.That same month the contractor, through its insurance carrier, Auto-Owners, tendered Eskamani a partial payment for the initial costs of cleanup and repair of the café.

¶3 In November 2010, Eskamani filed suit against the contractor, alleging she had not been paid in full for the water damage sustained in the flood (Flooding Suit).

¶4 Approximately a year later, Eskamani became frustrated with the contractor and, more specifically, Auto-Owners.She posted online—as well as on signs displayed on the windows of her café—various complaints and statements regarding Auto-Owners’ handling of the insurance claim.The signs referred to Auto-Owners by name and, among other things, asked Auto-Owners to "[p]ay up in [f]ull."The dispute garnered the attention of a local television channel, which ran a report of the story on the nightly news.

¶5 Shortly thereafter, the contractor filed an offer of settlement pursuant to rule 68 of the Utah Rules of Civil Procedure.The offer, which included a dollar figure, was conditioned on Eskamani "stop[ping] all contact of whatever nature with ... Auto-Owners" and "refrain[ing] from oral or written publishing of any kind in relationship to ... Auto-Owners."Eskamani rejected the offer, and litigation in the Flooding Suit continued.

¶6 In January 2012, Auto-Owners filed a complaint against Eskamani for defamation (Defamation Suit) arising from the statements she posted online and in the windows of her café regarding Auto-Owners’ handling of the insurance claim and the Flooding Suit.The complaint stated three claims for relief: defamation, defamation per se, and tortious interference with existing and prospective economic relations.Auto-Owners sought injunctive relief, attorney fees, compensatory damages, and punitive damages against Eskamani.

¶7 Eskamani initially submitted a pro se response titled "Answer to Complaint & Request for Motion to Dismiss & Request for Sanctions."After considering Eskamani's motion, as well as the pleadings, the district court determined a hearing was not necessary to decide the matter and denied Eskamani's motion.³

¶8 Following the denial of her motion to dismiss, Eskamani retained counsel, who later filed a motion for summary judgment on Eskamani's behalf.The motion was limited in scope, arguing only that Eskamani's allegedly defamatory statements were "not capable of sustaining a defamatory meaning, as they[were] vague statements of opinion," and "even if the statements were defamatory, the statements [were] privileged and not actionable under the Fair Comment/Opinion privilege."Further, the motion asserted that because her "statements [were] not defamatory and not actionable," there was no basis for the tortious interference claim.Eskamani did not challenge any of the other elements Auto-Owners was required to establish to succeed on its defamation and tortious interference claims, including the element of damages.The district court in the Defamation Suit denied Eskamani's motion for summary judgment without a hearing.

¶9 In September 2012, Eskamani and the contractor settled the underlying Flooding Suit, but Auto-Owners continued to pursue the Defamation Suit against Eskamani.In July 2013, during a deposition conducted pursuant to rule 30(b)(6) of the Utah Rules of Civil Procedure,⁴ Auto-Owners acknowledged it would not try to establish any actual damages in the Defamation Suit:

We're not necessarily looking for damages, because the damages would be difficult, if not hard to prove, but we do believe we would be entitled to probably nominal damages or whatever damages the court may determine.But we do not intend to provide or try to prove any loss of business as a result of her statements.

¶10 Following the deposition, Auto-Owners filed a motion for summary judgment on its claim of defamation per se, the only one of its claims that did not require it to prove actual damages.In the memorandum supporting its motion, Auto-Owners stated it was "voluntarily dismiss[ing] its claims for tortuous [sic] interference and defamation," each of which required Auto-Owners to prove actual damages.

¶11 Eskamani filed a cross-motion for summary judgment on the remaining claim of defamation per se.The district court⁵ granted Eskamani's motion, ruling that Auto-Owners’ claim for defamation per se "fail[ed] as a matter of law" because Eskamani's allegedly defamatory statements were "not capable of sustaining a defamatory meaning."It also deemed Eskamani's statements too "vague and ambiguous as to their meaning to fit within the narrowly defined [claim for d]efamation per se," and it concluded her statements were "capable of having more than one meaning" and did "not comment on the lawfulness of [Auto-Owners’] business or its conduct."Auto-Owners did not appeal this ruling.

¶12 More than a year later, Eskamani filed the action giving rise to this appeal (Tort Suit).Initially, she filed a pro se complaint against Auto-Owners alleging a series of tort claims, and the parties began conducting discovery.In October 2015, Eskamani served Auto-Owners with requests for production of documents that directed Auto-Owners to produce its "complete underlying claims files relating to" the Defamation Suit.

¶13 Eskamani later retained counsel and filed an amended complaint alleging two causes of action—wrongful use of civil proceedings and abuse of process.Auto-Owners’ answer to the amended complaint asserted for the first time an advice-of-counsel defense, alleging it filed the Defamation Suit in reliance on the advice of its attorney.Auto-Owners then amended its earlier discovery responses and produced documents supporting its new defense, after which Eskamani took the depositions of three of Auto-Owners’ employees.During one deposition, an employee testified that his decision to proceed with the Defamation Suit was based in part on a written opinion by Auto-Owners’ Utah attorney, a copy of which should have been "in the file" produced to Eskamani.

¶14 Eskamani thereafter served notice of the deposition of Auto-Owners’ Utah attorney.But Auto-Owners asked Eskamani to postpone the deposition until after the district court had ruled on a then-pending motion for summary judgment challenging Eskamani's standing to prosecute the Tort Suit.When Eskamani refused, Auto-Owners sought relief from the court, indicating it would "voluntarily produce [its Utah attorney] once the Court has had an opportunity to review this matter and rule that [Eskamani] has standing."The court granted the requested relief, continuing the deposition "until after the Court rules on [Auto-Owners’]Motion for Summary Judgment regarding [Eskamani's] standing in this case."

¶15 In November 2016, on the final day of fact discovery, Auto-Owners supplemented its prior disclosures, producing 715 pages of documents relevant to its advice-of-counsel defense.Eskamani responded with a motion, "pursuant to Utah Rules of Civil Procedure 26, 33 and 37," asking the district court to "enter an order striking Auto-Owners’ reliance-on-the-advice-of-counsel defense, precluding Auto-Owners from using 715 pages of recently-disclosed documents at trial, and barring [Auto-Owners’ attorney] from testifying at trial."

¶16The court denied the motion, reasoning that requests for sanctions"are properly addressed in the context of rule 37" of the Utah Rules of Civil Procedure, "which provides ‘the court, upon motion, may impose appropriate sanctions for the failure to follow its orders .’ "(QuotingUtah R. Civ. P. 37(b).)But "[a]bsent the existence of such order and a failure to comply therewith, rule 37 does not authorize imposition of sanctions."The court accordingly denied Eskamani's request to strike Auto-Owners’ advice-of-counsel defense.

¶17 Auto-Owners then filed a motion for summary judgment on Eskamani's remaining claims for abuse of process and wrongful use of civil proceedings.After briefing and oral argument, the district court granted the motion, concluding Eskamani had failed to present sufficient evidence to establish either claim.Eskamani timely appeals.

ISSUES AND STANDARDS OF REVIEW

¶18 Eskamani argues the district court erred in granting Auto-Owners’ motion for summary judgment on her claims for wrongful use of civil proceedings and abuse of process."We review a district court's decision to grant summary judgment for correctness, granting no deference to the district court's conclusions."Gillmor v. Summit County , 2010 UT 69, ¶ 16, 246 P.3d 102(quotation simplified).

¶19 Eskamani also argues the district court erred in denying her motion to strike Auto-Owners’ advice-of-counsel defense.Specifically, she asserts the court erred in ruling that a party cannot seek exclusion of untimely disclosed documents unless the nonproducing party has violated a...