Kupiec v. American Internat. Adjustment Co., D011359

• Decision Date: 08 November 1991
• Docket Number: No. D011359,D011359
• Citation: 1 Cal.Rptr.2d 371,235 Cal.App.3d 1326
• Court: California Court of Appeals Court of Appeals
• Parties: Monette KUPIEC, Plaintiff and Appellant, v. AMERICAN INTERNATIONAL ADJUSTMENT COMPANY et al., Defendants and Respondents.

Page 371

1 Cal.Rptr.2d 371

235 Cal.App.3d 1326

Monette KUPIEC, Plaintiff and Appellant, v. AMERICAN INTERNATIONAL ADJUSTMENT COMPANY et al., Defendants and Respondents.

No. D011359.

Court of Appeal, Fourth District, Division 1, California.

Nov. 8, 1991.

Review Denied Feb. 20, 1992.

[235 Cal.App.3d 1328] Stephen J. Modafferi, San Diego, for plaintiff and appellant.

Shifflet, Walters, Kane & Konoske, Gregory C. Kane and Christie Morgan, San Diego, for defendants and respondents.

BENKE, Associate Justice.

Monette Kupiec argues the trial court erred in sustaining without leave to amend a general demurrer to her second amended complaint. That complaint sought damages from Landmark Insurance Company (Landmark) and American International Adjustment Company (American) and others for alleged tortious interference with an earlier insurance claim and civil action, intentional concealment of evidence and intentional infliction of emotional distress. Kupiec contends, contrary to the conclusion of the trial court, the complaint stated facts sufficient to support each cause of action.

I BACKGROUND

We state the facts as alleged in Kupiec's complaint. In 1973 Kupiec, an artist, was commissioned by the Hotel Del Coronado Corporation to execute on a removable canvas an oil painting entitled Hotel Del Coronado Tent City, Circa 1904. The 14- by 17-foot painting was completed in 1973 and hung in the Hotel Del Coronado. Kupiec retained all rights in the painting except that of physical possession. In the spring of 1984, Kupiec discovered the painting Kupiec inquired concerning the whereabouts of the painting. Although hotel management was aware it had been destroyed, Kupiec was told by various hotel employees the painting was in storage or transferred to another location or that its location was unknown. Kupiec was barred from the hotel and was told she had no right to see the painting.

was no longer in place and that a wall covering was installed where the painting had been displayed.

Kupiec filed suit against the hotel on various theories. The hotel submitted the matter to its liability carrier, Landmark, which turned it over to American for investigation. In September 1986 Kupiec informed American's counsel she was seeking information concerning the whereabouts of the painting. If she received information the painting was intact, she would dismiss her action. Kupiec also submitted a written settlement demand. American stated it would investigate the matter and inform Kupiec of its findings. Based on this representation, Kupiec agreed to postpone discovery.

In March 1987, American's counsel discovered the painting was still on the hotel's wall but had been painted over and destroyed. Counsel so informed American's adjuster. The adjuster informed his supervisor there was probable liability for destruction of the painting, there was probable coverage under the hotel's policy and the underlying claims would be settled. The adjuster's supervisor, however, instructed exceptions in the policy be explored, the matter be delayed and attempts be made to eliminate Landmark's liability.

In April 1987, Kupiec resumed contact with American's counsel. Despite her continued inquiries, however, counsel withheld all knowledge concerning destruction of the painting and Landmark's probable liability under the hotel's policy. Kupiec commenced discovery. Landmark and American directed counsel and their insured to falsely deny knowledge of the whereabouts of the painting or at least ratified such conduct.

In September 1987, in Kupiec's presence, a wall covering at the hotel was peeled back to reveal the painting still in place but in a severely damaged condition.

In March 1988 Landmark and American settled Kupiec's claim against the hotel.

Thereafter Kupiec brought this action in which she named Landmark, American and others as defendants.

II DISCUSSION

Kupiec argues the trial court erred in sustaining without leave to amend a general demurrer to her second amended complaint. That complaint sought damages from American and others for alleged tortious interference with the earlier insurance claim and civil action against the hotel, intentional concealment of evidence and intentional infliction of emotional distress. Kupiec contends that contrary to the conclusion of the trial court, the complaint stated facts sufficient to support each cause of action. We conclude the demurrer was properly sustained.

"In reviewing a judgment of dismissal entered upon the sustaining of a demurrer without leave to amend, we treat the demurrer as admitting all material facts properly pleaded and all reasonable inferences which can be drawn therefrom. [Citations.] The function of a demurrer is to test the sufficiency of a pleading by raising questions of law. [Citations.] It is error to sustain a demurrer where a plaintiff has stated a cause of action under any possible legal theory. [Citations.] But it is not an abuse of discretion to sustain a demurrer without leave to amend if there is no reasonable possibility that the defect can be cured by amendment. [Citations.]" (Von Batsch v. American Dist. Telegraph Co. (1985) 175 Cal.App.3d 1111, 1117, 222 Cal.Rptr. 239.)

Kupiec argues she pleaded all elements of intentional, or in the alternative negligent, interference with prospective economic advantage and the trial court erred in sustaining the demurrer without leave to amend as to that cause of action.

In her first cause of action Kupiec alleged that having notice of her claim and the hotel's probable liability, American intentionally interfered with her prospective economic advantage by purposefully misrepresenting and concealing its actual knowledge of the whereabouts of the painting and by otherwise delaying resolution of her claim against the hotel. In the alternative Kupiec alleged that based on American's knowledge of her claim and knowing her inability to independently determine the whereabouts of the painting, a duty of care arose on behalf of American not to negligently interfere with Kupiec's prospective economic advantage. Kupiec alleged American's conduct breached that duty. Kupiec contends the same facts are sufficient to state causes of action for intentional concealment of evidence and intentional infliction of emotional distress.

We conclude the demurrer was properly sustained as to all of Kupiec's causes of action because the communicative acts on which they are based were privileged under CIVIL CODE SECTION 47¹, subdivision (b)(2).

Section 47, subdivision (b)(2), makes privileged any publication or broadcast made in a judicial proceeding. The privilege has been given broad application to further the public policies it is designed to serve. The section affords litigants freedom of access to the courts and open channels of communication by absolutely protecting them from derivative litigation based on communicative acts during judicial proceedings. (Silberg v. Anderson (1990) 50 Cal.3d 205, 211, 213-216, 266 Cal.Rptr. 638, 786 P.2d 365.)

Originally designed to provide a privilege in defamation situations, the section now applies to any communication, not just a publication, and applies to all torts except malicious prosecution. The privilege applies to any communication (1) made in a judicial or quasi-judicial proceeding, (2) by litigants or other participants authorized by law, in or out of court, (3) to achieve the objects of litigation and (4) has some connection or logical relation to the action. (Silberg v. Anderson, supra, 50 Cal.3d at p. 212, 266 Cal.Rptr. 638, 786 P.2d 365.)

However, section 47, subdivision (b)(2), applies only to communicative acts and does not privilege tortious courses of conduct. (Kimmel v. Goland (1990) 51 Cal.3d 202, 205, 271 Cal.Rptr. 191, 793 P.2d 524; Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1132, fn. 12, 270 Cal.Rptr. 1, 791 P.2d 587.) In Kimmel v. Goland, supra, 51 Cal.3d 202, 271 Cal.Rptr. 191, 793 P.2d 524, our Supreme Court determined the recording of a confidential telephone conversation in anticipation of litigation in violation of Penal Code section 632 was not privileged by section 47, subdivision (b)(2). The key in determining whether section 47, subdivision (b)(2), applied is whether the harm alleged was the result of a communicative act or a course of conduct. (Kimmel v. Goland, supra, 51 Cal.3d at pp. 210-212, 271 Cal.Rptr. 191, 793 P.2d 524.) In Kimmel...