Fink v. Oshins, 36055.

• Decision Date: 17 July 2002
• Docket Number: No. 36055.,36055.
• Parties: Donald M. FINK, Appellant, v. Richard A. OSHINS, Respondent.
• Court: Nevada Supreme Court

49 P.3d 640

118 Nev. 428

Donald M. FINK, Appellant, v. Richard A. OSHINS, Respondent.

No. 36055.

Supreme Court of Nevada.

July 17, 2002.

Graziadei & Cantor, Ltd., Las Vegas, for appellant.

Pearson, Patton, Shea, Foley & Kurtz, Las Vegas, for respondent.

BEFORE SHEARING, ROSE and BECKER, JJ.

OPINION

PER CURIAM:

In this appeal we consider the scope of an attorney's privilege as a defense to defamation actions.

FACTS

Richard A. Oshins, Esq., created the "Timothy St. James 1994 Irrevocable Trust" for Dr. Timothy St. James and his family. According to the trust agreement, Denise St. James, Dr. St. James' wife, was named as the primary beneficiary, and the couple's two children were named as secondary beneficiaries. Complying with tax law requirements, the trust agreement provided for two different types of trustees, a family trustee and an independent trustee. The trust agreement named Denise as the family trustee and Donald M. Fink, an insurance salesman who had sold insurance products to Dr. St. James, as the independent trustee. As the family trustee, Denise had the power to control the identity of the independent trustee, allowing her to remove the named individual under certain conditions.

On June 21, 1995, Dr. St. James was killed in an automobile accident. As dictated by the trust agreement, Denise and Fink then became trustees.

Denise asserts that she began "losing faith" in Fink soon after her husband's funeral. According to Denise, Fink told her that as trustees they "could draw as much or as little in fees from the trust" as they wanted, "around $30,000 plus per year, but, he stated, `Of course, I'll be receiving much more than you because I'll be doing all the work.'" Fink's apparent attitude was, in Denise's words, a "red flag." She explained, "This shocked me because it sounded like [Fink] thought there was money just growing on a tree somewhere and he could take as much as he wanted."

Fink later contacted Oshins regarding the trust. During the conversation, Fink allegedly expressed concern about allowing Denise to participate in the beneficial enjoyment of trust assets because Dr. St. James had been planning to divorce Denise before his death and because Dr. St. James had transferred assets offshore in order to conceal them from Denise. Fink explained that he wanted to use the trust assets solely for the benefit of the St. James children. Concerned about the emerging conflict, Oshins recommended that Fink consider resigning as independent trustee and hiring independent counsel.

According to Oshins, during a later conversation Fink allegedly stated that he intended to invest the trust's insurance proceeds with his business partners. He also proposed charging the trust an annual fee of 1 to 1 1/2 percent, approximately $20,000-30,000, for his services. Oshins advised Fink not to invest the trust's insurance proceeds because that was Denise's responsibility as the family trustee. Oshins also told Fink that Fink's proposed fees were excessive. Consequently, Fink threatened to delay obtaining the insurance proceeds or to use them to fight for his right to control the trust.

Thereafter, Denise and Oshins had a conversation, which Denise summarized as follows: "Mr. Oshins told me that Don Fink had told him that he was hiding some of Tim's assets offshore in order to conceal them from me." Denise asserts that this information "caused [her] to further lose trust in Mr. Fink." Denise then informed Fink that she would be removing him as the independent trustee. Fink allegedly responded, "I will drain you dry till you don't have a dime left."

Denise retained another attorney to take care of certain matters concerning her deceased husband's estate and to assist Oshins in certain trust matters, including having Fink removed as independent trustee. In February 1996, Denise notified Fink that he was being removed as independent trustee based on the excessiveness of his proposed fees and based on his failure to inform her of his drug-related criminal history, a disclosure required by the trust documents. Fink then sued Denise, seeking to prevent his removal. The lawsuit was settled in 1997 for an undisclosed amount purportedly in Fink's favor.

The facts regarding Oshins' statements to Denise emerged during Fink's action to prevent his removal. In July 1997, Fink filed the present action against Oshins, asserting, among other claims, that Oshins had defamed him in communications with Denise and various other individuals.¹

During discovery in this lawsuit, Fink's counsel deposed Dr. Richard Lewin, M.D., who was a client of both Oshins and Fink in their respective roles as trust attorney and insurance salesman. Dr. Lewin testified that in the summer and fall of 1996 he and Oshins had conversations to discuss Dr. Lewin's estate plan. During those conversations, Oshins mentioned Fink's drug problem and his alleged wrongful interference with the St. James trust. According to Dr. Lewin, Oshins had told him either expressly or impliedly that Fink was a "thief." Fink intended to amend his complaint to assert another defamation claim based on this new information, but he was unable to do so before summary judgment was granted in Oshins' favor.

Oshins moved for summary judgment, asserting that an absolute or a conditional privilege barred Fink's claims. Following a hearing, the district court granted partial summary judgment, concluding that Oshins' statements to Denise and to Dr. Lewin were absolutely privileged. But the district court refused to grant summary judgment as to Fink's claims that were based on Oshins' statements made to the other individuals named in the complaint. Also, the district court did not rule on Oshins' conditional privilege defense. After denying Fink's motion for reconsideration, the district court certified its order as a final judgment. Fink now appeals the district court's grant of partial summary judgment.

DISCUSSION

Although the district court's order granted only partial summary judgment, because it adjudicated Fink's claims that were based on Oshins' statements to Denise and Dr. Lewin, we may review the order insofar as it pertains to those claims.² We will uphold a district court's grant of summary judgment only if a review of the record in the light most favorable to the nonmoving party demonstrates that there are no genuine issues of material fact.³ In this case, the propriety of the district court's summary judgment depends on whether the court correctly applied the absolute privilege, a question of law that we review de novo.⁴

Oshins' statements to Denise St. James

Fink first challenges the district court's grant of summary judgment regarding Oshins' statements to Denise. As evidence of Oshins' alleged defamation, Fink points to the affidavit in which Denise asserted, "Mr. Oshins told me that Don Fink had told him that he was hiding some of Tim's assets offshore in order to conceal them from me." The district court concluded that Oshins' statements were absolutely privileged and granted summary judgment to Oshins accordingly. On appeal, Fink contends that the district court erred in applying the absolute privilege.

In Circus Circus Hotels v. Witherspoon, this court recognized "the long-standing common law rule that communications uttered or published in the course of judicial proceedings are absolutely privileged."⁵ The policy behind the absolute privilege, as it applies to attorneys participating in judicial proceedings, is to grant them "as officers of the court the utmost freedom in their efforts to obtain justice for their clients."⁶ This privilege, as its name indicates, is absolute: it "precludes liability even where the defamatory statements are published with knowledge of their falsity and personal ill will toward the plaintiff."⁷ The absolute privilege is for the court to apply.⁸

The scope of the absolute privilege is quite broad. The defamatory communication "need not be strictly relevant to any issue involved" in "the proposed or pending litigation,"⁹ it only need be "in some way pertinent to the subject of controversy."¹⁰ Further, the privilege applies not only to communications made during actual judicial proceedings, but also to "communications preliminary to a proposed judicial proceeding."¹¹ The scope of the privilege does, however, have limits. When the defamatory communication is made before a judicial proceeding is initiated, it will be cloaked with immunity only if the communication is made "in contemplation of initiation" of the proceeding.¹² In other words, at the time the defamatory communication is made, the proceeding must be "`contemplated in good faith and under serious consideration.'"¹³ Within these limits, courts should apply the absolute privilege liberally, resolving any doubt "in favor of its relevancy or pertinency."¹⁴

Fink contends that Oshins' statements to Denise provided the impetus for her to begin considering removing Fink as independent trustee and, therefore, Oshins' statements fall beyond the scope of the absolute privilege. In the context of the applicable law, the question before the district court was whether Oshins' statements to Denise were made after Denise began "serious consideration" of undertaking proceedings to remove Fink. We conclude that the district court's decision to apply the privilege under these circumstances was correct. In particular, we note that Denise stated that she "began losing faith" in Fink shortly after her husband's funeral when Fink informed her that as trustees, they "could draw as much or as little in fees from the trust" as they wished. This conversation, which, according to the record, took place before Oshins' conversation with Denise that provided the basis for Fink's defamation claim, gave the district court sufficient ground to conclude that Denise had begun serious consideration of the proceedings necessary to remove Fink well before Oshins spoke with her. Fink argues that...