Kashian v. Harriman

• Decision Date: 23 May 2002
• Docket Number: No. F036962.,F036962.
• Citation: 98 Cal.App.4th 892,120 Cal.Rptr.2d 576
• Court: California Court of Appeals Court of Appeals
• Parties: Edward M. KASHIAN, Plaintiff and Appellant, v. Richard L. HARRIMAN et al., Defendants and Respondents.

120 Cal.Rptr.2d 576

98 Cal.App.4th 892

Edward M. KASHIAN, Plaintiff and Appellant, v. Richard L. HARRIMAN et al., Defendants and Respondents.

No. F036962.

Court of Appeal, Fifth District.

May 23, 2002.

Kimble, MacMichael & Upton, Jon Wallace Upton, Mary Ann Bluhm and Robert W. Branch for Plaintiff and Appellant.

Law Office of Myron F. Smith and Myron F. Smith for Defendants and Respondents.

OPINION

BUCKLEY, J.

Edward M. Kashian brought this action against Richard L. Harriman and Valley Advocates (collectively Harriman) for what he alleged were Harriman's unfair business practices and defamatory statements about him. Harriman filed a special motion to strike Kashian's complaint pursuant to section 425.16 of the Code of Civil Procedure,¹ or what is commonly known as the anti-SLAPP statute. (SLAPP is an acronym for strategic lawsuit against public participation.) The trial court granted Harriman's motion as to all causes of action, and Kashian has appealed. We will affirm.

FACTUAL AND PROCEDURAL HISTORY

Kashian is a prominent businessman and civic leader in Fresno, who, when this dispute arose, was serving as chairman of the board of trustees of Community Hospitals of Central California (CHCC or Community), a nonprofit, tax-exempt corporation.

Harriman is an attorney in Fresno who has filed numerous public interest lawsuits on behalf of various environmental interests in the San Joaquin Valley, including Valley Advocates. The present controversy arose in an entirely different context, however.

In 1999, some local medical providers and advocacy groups became concerned about CHCC's plan to build and operate a for-profit heart hospital in north Fresno in partnership with a group of local physicians. Harriman represented one such provider, Kratzer Graves Pediatrics (KGP). According to news reports at the time, KGP once had been part of Valley PrimeCare Medical Providers, Inc. (Valley PrimeCare), a physicians group that filed for bankruptcy protection in 1997, and whose assets subsequently were sold to Community. Harriman had been retained by the bankruptcy trustee to serve as special counsel for the bankruptcy estate.

In May of 2000, again according to news reports, some of the concerned groups wrote to the Division of Charitable Trusts within the Attorney General's office, seeking an investigation into Community's activities on several grounds, including their concerns that Community's involvement in a for-profit hospital (in direct competition with them) would conflict with its status as a tax-exempt corporation, and would interfere with its completion of a regional medical center in downtown Fresno (under a contract with the county to provide indigent medical care).² Among the organizations that wrote such letters were Saint Agnes Medical Center (St.Agnes) and the Local Health Care Coalition (LHCC).

Harriman's Letter

On May 22, 2000, Harriman wrote a similar letter on behalf of KGP and Valley Advocates, joining in the request for a formal investigation of Community's tax-exempt status.³ According to the letter, Harriman, in his role as special counsel for the bankruptcy estate of Valley PrimeCare, had for the past two years been conducting his own investigation of CHCC and two related business entities. The information he had uncovered in the course of this investigation, he wrote, had led him to believe "that all three entities have been engaged in unfair business practices since at least 1995, in violation of Business & Professions Code § 17200."

"Specifically, the facts support an intentional course of conduct and practice by CHCC [and the other two entities], and its counsel of interfering with the professional medical practices of private practitioners, including ... Valley PrimeCare Medical Providers, Inc. (VPC) and Kratzer Graves Pediatrics (KGP), toward the end of driving them out of business so that CHCC and its related entities could acquire the business of the competing physicians and their medical groups. . . ."

In his letter, Harriman requested the Attorney General's office also conduct an investigation into a possible conflict of interest between Kashian's private business interests and his role as chairman of the CHCC board. It is this part of the letter that would precipitate the present lawsuit. Harriman wrote, in part:

"My clients and others believe that, although Mr. Kashian has been careful to avoid appearing that he has an actual or potential pecuniary interest in the transactions of CHCC, a careful investigation will disclose that there are substantial economic advantages which have accrued to Mr. Kashian and/or business entities with which he has an ownership relationship or was involved in forming and/or engaging [sic ] other property transactions which included land originally acquired, developed, owned, and/or sold by Mr. Kashian, either through partnerships, joint ventures, silent partnerships, and/or indirect ownership, such as medical offices or other commercial property ventures."

At the end of the letter is a notation indicating Harriman sent a copy to "Clients."

The Fresno Bee Article

On June 1, 2000, the Fresno Bee published a news article reporting on Harriman's letter, under the headline "Hospital official assailed." The article focussed primarily on the accusations about Kashian, and quoted parts of the letter, including the excerpt cited above. Kashian was quoted in the article as saying the accusations were "`completely false.'" Harriman reportedly refused to comment on the letter when contacted by a Bee reporter.

The same article also appeared on the Bee's Internet website.

Kashian's Lawsuit

On June 19, 2000, Kashian, on behalf of himself and members of the public, filed a lawsuit against Harriman and Valley Advocates, asserting three causes of action. The first was for unfair and deceptive business practices in violation of section 17200 of the Business and Professions Code.⁴ Kashian alleged that Valley Advocates, and some other organizations on whose behalf Harriman had filed environmental lawsuits, were, in fact, one and the same entity, different in name only. Further, he alleged each organization was:

"... a mere shell and sham conceived by Harriman and used by Harriman as his alter ego and a device Harriman uses to create the false impression that a public interest group or an environmental group supports and sponsors the numerous lawsuits filed by Harriman in which entities like Valley Advocates appear as a plaintiff being represented by Harriman, when in fact said lawsuits are filed for Harriman's own personal and individual business purposes and used by Harriman as a form of false advertising in order to enable him to recruit unsuspecting clients who are asked to join in the purported public interest cause being pursued by Harriman."

Harriman's purpose in filing these lawsuits, according to Kashian, was not to advance the public interest but "to extort settlements and reap the financial benefits to Harriman from the amounts paid by the various named defendants, many of them public entities funded by taxpayers, which named defendants choose to settle such suits in order to avoid the costs inherent in defending such suits." On this basis, Kashian sought an order enjoining Harriman from filing or pursuing such lawsuits in the future, and directing him to account for and repay all funds recovered through the ones filed in the past.

Kashian's second and third causes of action were for defamation, and overlapped one another to some degree. Both alleged Harriman's letter was false and defamatory inasmuch as it "stated or lead [sic ] the reader to believe that Mr. Kashian had used his position on the board of Community Medical Centers to advance his own financial interest improperly and in a dishonest, unethical or illegal manner." Both also alleged Harriman had been negligent by failing to verify the truth and accuracy of statements in the letter. The second cause of action was directed primarily at Harriman's delivery of the letter to the Attorney General's office. The third cause of action was focussed on the letter's appearance in the newspaper, and alleged Harriman, "deliberately and with actual malice, published these false [and defamatory] statements by sending or causing to be sent a copy of this letter to the Fresno Bee...."

Harriman's SLAPP Motion

Harriman filed a special motion to strike Kashian's complaint on July 19, 2000. He argued that both his environmental litigation activities and his letter to the Attorney General were absolutely privileged (Civ.Code, § 47, subd. (b)), and failed in any event to constitute a deceptive business practice or an actionable defamation, respectively. In his accompanying declaration, Harriman specifically denied Kashian's allegations about the purposes behind his environmental litigation.

As for Kashian's defamation claims, Harriman acknowledged sending his letter to the Attorney General. And he said he also sent copies to his clients (presumably Valley Advocates and KGP) and to the two other organizations with which he was joining to request an investigation of CHCC (presumably St. Agnes and LHCC). But he declared: "at no time did I provide a copy of the letter, or of its contents, nor did I arrange for the letter to be conveyed, to the Fresno Bee."

Kashian's opposition to Harriman's SLAPP motion dealt principally with the first cause of action for unfair competition. Kashian attached declarations by three individuals who had been involved in one way or another with Harriman's previous environmental lawsuits, as well as his own (Kashian's) declaration; evidentiary objections to Harriman's declaration in support of the motion; and a request the court take judicial notice of certain pleadings and other documents related to the earlier suits. He also challenged Harriman's claims of privilege.

In reply, Harriman argued the evidence proffered by Kashian did not support his unfair competition claim, and...