Hagberg v. California Federal Bank FSB

• Decision Date: 05 January 2004
• Docket Number: No. S105909.,S105909.
• Parties: Lydia Ortiz HAGBERG, Plaintiff and Appellant, v. CALIFORNIA FEDERAL BANK FSB, Defendant and Respondent.
• Court: California Supreme Court

7 Cal.Rptr.3d 803

81 P.3d 244

32 Cal.4th 350

Lydia Ortiz HAGBERG, Plaintiff and Appellant, v. CALIFORNIA FEDERAL BANK FSB, Defendant and Respondent.

No. S105909.

Supreme Court of California.

January 5, 2004.

Vakili & Leus, Sa'id Vakili; and Peter A. Zablotsky for Plaintiff and Appellant.

Gary Williams for ACLU Foundation of Southern California as Amicus Curiae on behalf of Plaintiff and Appellant.

Delia Y. Guevara; Haight, Brown & Bonesteel, Jules S. Zemen, Los Angeles; Yocca Patch & Yocca, Mark W. Yocca and Paul Kim, Los Angeles, and for Defendant and Respondent.

Bill Lockyer, Attorney General, Manuel M. Medeiros, State Solicitor General, Andrea Lynn Hoch, Chief Assistant Attorney General, James M. Schiavenza, Assistant Attorney General, and Paul T. Hammerness, Deputy Attorney General, as Amici Curiae on behalf of Defendant and Respondent.

Leland Chan, San Francisco, and C. Dawn Casey for California Bankers Association and American Bankers Association as Amici Curiae on behalf of Defendant and Respondent.

GEORGE, C.J.

We granted review in this case to consider whether tort liability may be imposed for statements made when a citizen contacts law enforcement personnel to report suspected criminal activity on the part of another person. As we shall explain, we agree with the trial court, the Court of Appeal, and the great weight of authority in this state in concluding that such statements are privileged pursuant to Civil Code section 47, subdivision (b) (section 47(b)),¹ and can be the basis for tort liability only if the plaintiff can establish the elements of the tort of malicious prosecution.

I

Plaintiff Lydia Ortiz Hagberg, a Hispanic woman, opened an account at a Pasadena branch of California Federal Bank, FSB (Cal Fed). A few months later she appeared at this branch to cash a check made out to her by the commercial institution Smith Barney. She presented her California driver's license, her Cal Fed ATM card, the Smith Barney check, and her Smith Barney account summary, along with the envelope in which she had received the check. The teller, also apparently a Hispanic woman, suspected that the check was a counterfeit and brought it to her supervisor, Nolene Showalter, apparently a person of European descent. Showalter agreed that the check had a suspicious appearance, in that some of the print was "fuzzy and unclear" or "smudged" and part of the address line was missing — features not commonly found on Smith Barney checks. Showalter contacted Smith Barney by telephone, was informed that the check was not valid, and then contacted Cal Fed's corporate security office. The regional security manager, Gary Wood, instructed her to telephone the police, and she did so. A transcript of the telephone call to the police discloses that Showalter explained that Hagberg had attempted to negotiate a counterfeit check. The police dispatcher asked questions concerning the identity and appearance of the person attempting to cash the check, apparently in order to assist the police in determining whom they should contact at the bank. Showalter answered these questions and also volunteered that the bank's corporate security officer "just wants somebody to hang on to her [until] he can check this out. Because our first call to them, they said it was counterfeit.... [¶] And we've taken a lot of losses." The dispatcher asked the person's ethnicity, and Showalter answered, "White — well, maybe Hispanic; kind of reddish hair, short."

While Showalter spoke to the police dispatcher, Wood, the bank's regional security manager, himself telephoned Smith Barney and was informed that the check was valid and that the information earlier received by Showalter from Smith Barney was erroneous. This information was relayed to Showalter, who interrupted her statement to the police dispatcher with the news. She informed the dispatcher that Cal Fed no longer required the assistance of the police and that the bank was "getting into trouble here with this." The dispatcher responded that the police were already at the bank, and when Showalter looked up, she could see a police officer approaching Hagberg. Showalter asked the dispatcher if she should tell the police officers to leave, and the dispatcher told her to do so. Showalter stated in her declaration that she "immediately walked over to the teller window as the police officers were approaching the customer" and that she "reached over the teller's desk with [her] hand to catch their attention and told the police we had canceled the call." She stated: "The police, however, proceeded with an investigation and detained the customer." Showalter did not speak to Hagberg.

Hagberg testified at her deposition that a police officer drew her away from the teller's window, spread her legs, patted her down, and handcuffed her. Her handbag was searched, and the officer asked her whether she was in possession of weapons or stolen property and whether she was driving a stolen vehicle. Hagberg testified that, as the police were placing her under arrest, she looked at the Hispanic teller who had been serving her, and that the teller announced to Hagberg that Hagberg "looked like a criminal." Hagberg's ordeal ended 20 minutes later, when she was released. The record contains a transcript of Hagberg's telephone call to Smith Barney, evidently later the same day, in which the Smith Barney representative explained that Smith Barney had made a mistake in informing Cal Fed that the check was not valid. In this telephone call, Hagberg evidenced distress over her detention.

On September 9, 1999, Hagberg filed a complaint against Cal Fed and 100 unnamed parties as defendants.² The complaint alleged seven causes of action, including race discrimination in violation of the Unruh Civil Rights Act (§§ 51, 52.1), false arrest and false imprisonment, slander, invasion of privacy, intentional infliction of emotional distress, and negligence. She claimed humiliation and emotional distress, and sought damages and penalties of $1.6 million for past and future medical expenses and loss of earnings, as well as attorney fees and costs.

Cal Fed filed its answer on October 15, 1999 and a motion for summary judgment on July 27, 2000. In support of its motion for summary judgment, Cal Fed contended that its statements to the police concerning suspected criminal activity by Hagberg were subject to the absolute privilege established by section 47(b). Cal Fed also claimed immunity under federal law, citing title 31 United States Code section 5318(g), part of the so-called safe harbor provision of the Annunzio-Wylie Anti-Money Laundering Act. Cal Fed also claimed that, even if it were not entitled to immunity for privileged communications under state and federal law, Hagberg had not presented any facts evidencing conduct in violation of the Unruh Civil Rights Act. In support of its motion for summary judgment, Cal Fed proffered Showalter's declaration, portions of plaintiff's deposition testimony, copies of Cal Fed's interrogatories and plaintiff's answers to interrogatories, and the transcript of a recording of the telephone conversation between Showalter and the police dispatcher, as noted above.

The evidence indicated that although Hagberg believed that the only explanation for her treatment was racial or ethnic prejudice on the part of bank employees, the only evidence she possessed in support of this theory was the circumstance that she was of Hispanic descent and the facts noted above regarding the treatment she received at the time of the incident. On August 10, 2000, plaintiff filed her opposition to the motion for summary judgment. In support, plaintiff presented additional testimony from her deposition, a transcript of a recordings of telephone calls made during the incident, a photocopy of the questioned check, the Showalter declaration, and a copy of Cal Fed's written loss prevention procedures. Her deposition testimony indicated her belief that the teller's remark that she looked like a criminal could have been motivated only by racial or ethnic prejudice, and added that the check she proffered would not have been questioned at her place of business. Her deposition also indicated that one of the police officers who detained her suggested that she complain about her treatment. On August 18, 2000, defendant filed its reply.

Plaintiff filed motions for continuance to permit further discovery, but they were denied. On August 24, 2000, the trial court granted defendant's motion for summary judgment. It explained at the hearing on the motion for summary judgment that the absolute privilege established by section 47(b) applied to Cal Fed's statements to the police concerning suspected criminal activity. It declared: "Although it is subject to abuse, it seems to me the right of a private citizen, or a public citizen for that matter, to contact the police and advise the police of what they suspect to be criminal activity must be absolute and must be without threat of recourse." The court found support for its conclusion in a decision by this court (Silberg v. Anderson (1990) 50 Cal.3d 205, 266 Cal.Rptr. 638, 786 P.2d 365 (Silberg)) and also in several Court of Appeal decisions. It noted that there was some disagreement on the point in the Courts of Appeal, but it followed the majority view, reiterating that "public policy would dictate that parties must have [unfettered] access to make police reports." Because it had decided the case on this basis, it declined to reach Cal Fed's claim to immunity under federal law. The court's judgment briefly reviewed the evidence, including evidence plaintiff had offered in opposition to the motion for summary judgment, and stated "[a]fter duly considering the evidence proffered by Plaintiff, the Court does not find any triable issue of fact." Furthermore, it determined: "Defendant's report to police and communications related thereto are privileged pursuant to Section 47(b) of...