Flanagan v. Flanagan

• Decision Date: 14 March 2002
• Docket Number: No. S085594.,S085594.
• Citation: 117 Cal.Rptr.2d 574,27 Cal.4th 766,41 P.3d 575
• Court: California Supreme Court
• Parties: J. Michael FLANAGAN, Cross-Complainant and Appellant, v. Honorine T. FLANAGAN, Cross-Defendant and Respondent.

117 Cal.Rptr.2d 574

27 Cal.4th 766

41 P.3d 575

J. Michael FLANAGAN, Cross-Complainant and Appellant, v. Honorine T. FLANAGAN, Cross-Defendant and Respondent.

No. S085594.

Supreme Court of California.

March 14, 2002.

Law Offices of Jerry K. Straub, Jerry K. Staub, Glendale, Patricia Venegas, Los Angeles; Law Offices of John Nouskajian, Jr., and John Nouskajian, Jr., South Pasadena, for Cross-complainant and Appellant.

Allen, Matkins, Leek, Gamble & Mallory, Edwin W. Green, A. Kristine Floyd, Bruce W. Hepler and Luke G. Anderson, Irvine, for Cross-defendant and Respondent.

Davis, Wright, Tremaine, Gary L. Bostwick, Kelli L. Sager, Los Angeles, Karen N. Frederiksen and Andrew J. Thomas, Los Angeles, for CBS Broadcasting, Inc., The Copley Press, Inc., National Broadcasting Company, Inc., ABC, Inc., and Cable News Network as Amici Curiae on behalf of Cross-defendant and Respondent.

KENNARD, J.

California prohibits the recording of a telephone call without consent from all parties, but only if the call includes a "confidential communication." (Pen.Code, § 632, subd. (a).)¹ Violation of the law is a misdemeanor (ibid.) and may entail a civil penalty of $5,000 or three times the actual damages, whichever is greater (§ 637.2). Our Courts of Appeal have disagreed over the meaning of the critical term "confidential communication." We granted review to resolve that disagreement.

One line of authority holds that a conversation is confidential if a party to that conversation has an objectively reasonable expectation that the conversation is not being overheard or recorded. (Frio v. Superior Court (1988) 203 Cal.App.3d 1480, 250 Cal.Rptr. 819 (Frio); Coulter v. Bank of America

(1994) 28 Cal.App.4th 923, 33 Cal.Rptr.2d 766.) Under the other line of authority, a conversation is confidential only if the party has an objectively reasonable expectation that the content will not later be divulged to third parties. (O'Laskey v. Sortino (1990) 224 Cal.App.3d 241, 273 Cal.Rptr. 674 (O'Laskey); see Deteresa v. American Broadcasting Companies, Inc. (9th Cir.1997) 121 F.3d 460 (Deteresa).) We endorse the standard established in Frio and Coulter.

I. THE CALIFORNIA PRIVACY ACT

The California Invasion of Privacy Act (§ 630 et seq.) was enacted in 1967, replacing prior laws that permitted the recording of telephone conversations with the consent of one party to the conversation. (See Comment, Electronic Surveillance in California: A Study in State Legislative Control (1969) 57 Cal.L.Rev. 1182, 1191.) The purpose of the act was to protect the right of privacy by, among other things, requiring that all parties consent to a recording of their conversation.

This case involves subdivisions (a) and (c) of section 632. Subdivision (a) provides: "Every person who, intentionally and without the consent of all parties to a confidential communication ... eavesdrops upon or records the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of telegraph, telephone, or other device, except a radio, shall be punished by a fine not exceeding [$2,500] or imprisonment .. . not exceeding one year...." (Italics added.)

Subdivision (c) of section 632 addresses the term "confidential communication." It states: "The term `confidential communication' includes any communication carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties thereto, but excludes a communication made in a public gathering or in any legislative, judicial, executive or administrative proceeding open to the public, or in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded." (Ibid., italics added.)

II. THE FACTUAL AND PROCEDURAL BACKGROUND

Because this is an appeal from a judgment notwithstanding the verdict, we state the facts in the light most favorable to the verdict. (Quintal v. Laurel Grove Hospital (1964) 62 Cal.2d 154, 159, 41 Cal.Rptr. 577, 397 P.2d 161.)

John and Honorine T. Flanagan married in 1969. John had two children from a prior marriage—J. Michael (Michael) and Carol. He had also adopted Terri Ann, Honorine's daughter from a previous marriage. At the time of the marriage, John was a successful businessman who owned and operated several mortuaries in Southern California. His estate was valued to be at least $22 million.

In 1992, after John had been diagnosed with prostate cancer, his physician prescribed medication to slow the spread of the cancer. In 1993, Honorine began to give John his prescribed monthly injections.

Under John's 1990 estate plan, upon his death Honorine would receive all his property for life, with a power of appointment over the remainder. In default of appointment, the property would go to Terri Ann. In April 1995, John and Honorine amended the trust to give his grandchildren (Michael's and Carol's children) a remainder interest in his share of the property, but they did not provide anything for Michael or Carol directly.

Sometime in the spring of 1995, Honorine told her manicurist, Dale Denels, that she would pay $100,000 for someone to kill John. In September 1995, Honorine told Denels that she was injecting John with water instead of medicine. Denels began taping her telephone conversations with Honorine.

In March 1996, Denels told Michael that John's life was in danger and she played a tape recording of one of her conversations with Honorine. Michael then met with John and played the tape for him. John moved out of the home he shared with Honorine and moved in with Michael. Soon thereafter he was taken to the University of Southern California's Norris Cancer Clinic. The clinic physician prescribed increased medication, which led to a dramatic decline in the blood marker measuring the spread of John's cancer. This led the physician to conclude that John had not been receiving the prescribed medication during the months before his arrival at the clinic.

John changed his will to divide all his property between Carol and Michael, excluding Honorine and her daughter. In April 1996, he filed for dissolution of the marriage and termination of the trust established by his previous estate plan.

In August 1996, however, John and Honorine reconciled. John returned to the family residence and executed a new estate plan leaving Michael and Carol $150,000 each, with Honorine and Terri Ann receiving the balance of the estate. This was the plan in effect on March 19, 1997, when John died of cardiovascular disease unrelated to his prostate cancer.

Honorine filed this lawsuit against Michael and manicurist Denels, alleging conspiracy, invasion of privacy, and infliction of emotional distress. Honorine alleged Denels violated section 632 by recording her telephone conversations with Honorine without the latter's consent. Michael cross-complained, alleging that after John's return to the family home in the summer of 1996, Honorine, without Michael's knowledge or consent, taped all of Michael's telephone conversations with John.

The case went to trial in 1998. In the first part of a bifurcated trial, the jury rejected all counts of Honorine's complaint against Michael and Denels. It then heard the evidence on Michael's cross-complaint against Honorine.

Honorine testified that she installed a voice-activated tape recorder either at the end of 1995 or the beginning of 1996. She said that she installed the machine with John's consent and that she did not know her conduct might be illegal. She listened to the tapes daily, keeping those she considered useful and recording over the remainder. She based her suit against Michael partly on the communications on the tapes.

Relying on telephone company records, Michael testified that Honorine had recorded 27 telephone calls between him and his father. He placed nine calls from a cellular phone.² Some of the cellular phone calls appeared to be redials when a connection was lost.

Michael introduced into evidence the tapes of three of the telephone calls. He described some of the other calls: one was to get directions to a place where he was to meet with John, four were to remind John to notify the gatekeeper that Michael was coming to visit, and two were to confirm the times and places for meetings. Michael testified that Honorine had forbidden John to speak with him, and Michael considered all of his conversations with his father to be confidential. He did not know his calls were being recorded.

The jury found that 24 calls were confidential³ and awarded Michael $5,000 for each call, for a total of $120,000, plus punitive damages of $1.2 million. On Honorine's motion for a new trial or for judgment notwithstanding the verdict, the trial court limited Michael's statutory damages to $5,000 and struck the punitive damages award. The court reasoned that multiple conversations involving the same subject should be considered a single violation, and that absent proof of actual damages in excess of the statutory civil penalty of $5,000 (§ 637.2), the constitutional prohibition against excessive fines (see Hale v. Morgan (1978) 22 Cal.3d 388, 149 Cal. Rptr. 375, 584 P.2d 512) limited Michael's general damages to $5,000. Michael appealed.

The Court of Appeal rejected both the trial court's reasoning that constitutional principles limited damages to $5,000, and Honorine's contention that the statute should be construed to provide a single $5,000 award per victim irrespective of the number of recorded conversations. It held that two of the three conversations played to the jury were confidential, but that because Michael had presented no evidence of the specific content of the remaining conversations, he had failed to prove they were also confidential. It therefore found Michael was entitled to statutory damages of $5,000 for each of the two confidential conversations, for a total...