Lundquist v. Reusser

• Decision Date: 21 July 1994
• Docket Number: No. S030738,S030738
• Court: California Supreme Court
• Parties: , 875 P.2d 1279 Vivienne LUNDQUIST, Plaintiff and Respondent, v. Heinz REUSSER et al., Defendants and Appellants. .

Page 776

31 Cal.Rptr.2d 776

7 Cal.4th 1193, 875 P.2d 1279

Vivienne LUNDQUIST, Plaintiff and Respondent, v. Heinz REUSSER et al., Defendants and Appellants.

No. S030738.

Supreme Court of California,

In Bank.

.

July 21, 1994.

Archbald & Spray, Barry Clifford Snyder, Katherine H. Bower and Douglas B. Large, for defendants and appellants.

Glen M. Reiser, Cynthia H. Reiser, Nordman, Cormany, Hair & Compton and Michael C. O'Brien, for plaintiff and respondent.

GEORGE, Justice.

Under the "common-interest privilege," codified in California in Civil Code section 47, subdivision (c) (hereafter section 47(c)), ¹ a defendant who makes a statement to others on a matter of common interest is immunized from liability for defamation so long as the statement is made "without malice." In this case we must determine whether, when it is established that the statement in question was made on an occasion that falls within the parameters of the common-interest privilege, it is the plaintiff who bears the burden of proving that the statement was made with malice, or the defendant who bears the burden of proving that the statement was made without malice.

In the present case, the Court of Appeal held that the trial court erred in instructing the jury that, under section 47(c), defendants bore the burden of proof upon the issue of malice; in addition, the Court of Appeal found that this instructional error was prejudicial and required reversal of the judgment rendered by the trial court in favor of plaintiff. For the reasons discussed hereafter, we agree with the Court of Appeal that the trial court erred in instructing the jury that defendants, rather than plaintiff, bore the burden of proof upon the issue of malice under section 47(c), but we disagree with the Court of Appeal's determination that this instructional error was prejudicial in the present case. As we shall explain, in view of the trial court's instructions on the issue of punitive damages, and the jury's award of punitive damages in favor of plaintiff, we believe there is no reasonable probability that the instructional error regarding the application of section 47(c) affected the outcome of the case. Accordingly, we conclude that the judgment of the Court of Appeal, overturning the judgment rendered by the trial court in favor of plaintiff, should be reversed.

I.

Plaintiff Vivienne Lundquist is an established breeder of Peruvian Paso horses, animals prized for their rarity, beauty, and smooth, elegant gait. She claimed defendants Heinz and Sylvia Reusser defamed her at a meeting of 30 to 40 owners and breeders of Peruvian Paso horses, held in Buellton, Santa Barbara County, on August 14, 1988. At this seminar, Heinz Reusser participated in a panel discussion with other recognized experts regarding the use of drugs and surgery to enhance the appearance and performance of show horses. Reusser told the audience that, prior to his acquisition of a "multiple-champion" mare, the animal had been altered surgically in order to conceal a neck bulge--a defect that he described as a "cosmetic conformational problem." ²

Heinz Reusser did not identify the mare or the breeder, but asked his wife, Sylvia Reusser to distribute to the audience six photographs depicting the mare and her foal. John Burges, a horse breeder who attended the seminar and had purchased several Peruvian Paso horses from Vivienne Lundquist, believed he recognized the mare. He asked Sylvia Reusser whether the photographs depicted a Peruvian Paso mare, raised by Lundquist, named Perla de Oro. Sylvia Reusser responded that the rules of the seminar prohibited her from identifying the mare by name, prompting Burges to ask, "Do I know that mare?" Sylvia Reusser's reply suggested that Burges knew the mare. ³ Burges and others in attendance deduced the mare was Perla de Oro, and Lundquist was the breeder. Following the seminar, rumors spread among Peruvian Paso horse owners and breeders that Vivienne Lundquist surgically altered her show horses to conceal conformational defects.

Upon ascertaining that the rumors originated from the seminar, Lundquist filed the present lawsuit, alleging that she had been defamed by the Reussers and that they had damaged her reputation and caused her to suffer emotional distress. In their answer, the Reussers raised the affirmative defense that the challenged communication was protected by the common-interest privilege set forth in section 47(c), because the statement was made without malice to other interested persons.

At trial, Vivienne Lundquist testified that, since the mid-1970's, she had been involved in breeding and showing Peruvian Paso horses. In 1978, one of her horses, Perla de Oro, then eight months of age, developed a throat abscess, necessitating surgical removal of the abscess by a veterinarian. After the infected area healed, a 14-inch surgical scar remained, which nonetheless did not prevent Perla de Oro from winning multiple championships. The scar easily was visible during the summer months, becoming less visible during the winter, when the mare's coat was thicker. Lundquist denied that Perla de Oro ever had had a conformational defect or undergone cosmetic surgery, testimony that was corroborated by the veterinarian who performed the operation to remove the abscess.

Perla de Oro's success in the show ring attracted the attention of Heinz and Sylvia Reusser, who had established their own horse-breeding business in the mid-1980's and had purchased three other Peruvian Paso horses from Vivienne Lundquist. Prior to the sale of Perla de Oro to the Reussers, the mare had given birth to four foals, none of which exhibited conformational defects. In 1985, when the mare was pregnant with a fifth foal, Lundquist sold her to the Reussers for $25,000, without mentioning the surgery performed on Perla de Oro's neck seven years earlier.

Heinz Reusser testified that he and his wife had been particularly interested in Perla de Oro because of Vivienne Lundquist's representation to them, made shortly before the sale, that Perla de Oro was in foal to La Briego, a stallion Heinz Reusser described as "very charismatic." Lundquist testified Perla de Oro indeed had been bred to La Briego, but that the effort did not produce a foal, leading Lundquist to "re-breed" the mare to another stallion, Romanesco--a circumstance Lundquist had neglected to mention when making her initial representations to the Reussers. Upon discovering her error as to the sire's identity, and disclosing it to the Reussers prior to consummating the sale of Perla de Oro, Lundquist offered to rescind the sale, but the Reussers declined, preferring instead that Lundquist arrange a subsequent breeding of Perla de Oro to La Briego. Lundquist agreed to do so.

Following the sale of Perla de Oro to the Reussers, and the subsequent birth of her foal (Rio Allason), which displayed no conformational defects, the Reussers elected to forego the opportunity to have the mare bred to La Briego, instead breeding Perla de Oro to the mare's own half-brother, HMS Domingo (a stallion renowned for his fluid stride). This union led to the birth, in January 1988, of Tanya, the foal depicted in the photographs (distributed by the Reussers at the seminar) as having been born with an abnormal bulge beneath her chin. The Reussers believed the bulge in Tanya's neck constituted a genetic defect, although no veterinarian or other specialist in equine physiology had so advised them.

Following Tanya's birth, and the shedding of Perla de Oro's winter coat in the spring of 1988, the Reussers discovered the scar on the mare's neck, located in the same area as the bulge beneath Tanya's chin. The Reussers consulted a veterinarian, who told them that muscle tissue had been surgically removed from Perla de Oro's neck, that he was unable to ascertain whether the surgery had been for medical or cosmetic purposes, and that he knew of no medical reason for such an operation. The Reussers compared "baby pictures" of Perla de Oro and Tanya and--without even attempting to contact Vivienne Lundquist --concluded that cosmetic surgery had been performed on Perla de Oro in order to conceal a genetic defect. ⁴

John Burges, one of the horse breeders who attended the seminar, testified that, upon hearing Heinz Reusser's remarks attributing the scar on Perla de Oro's neck to "secret" surgery performed to conceal a genetic defect, and upon viewing the photographs distributed at the seminar by Sylvia Reusser, he believed he had made a "huge mistake" in purchasing Peruvian Paso horses from Vivienne Lundquist. Shortly after returning to his residence in Texas, he telephoned Heinz Reusser to inquire whether the mare depicted in the photographs was Perla de Oro. Reusser confirmed that it was.

Vivienne Lundquist testified other breeders and owners of Peruvian Paso horses, including individuals who had not attended the seminar, subsequently informed her that they had heard she had been accused of surgically altering her horses. Lundquist testified the accusations damaged her reputation and caused her to suffer emotional distress. At trial, she waived her claim for economic losses directly attributable to the communications made by the Reussers at the seminar, and sought only general and punitive damages arising from the injury to her reputation and from the infliction of emotional distress.

The trial court instructed the jury that, whereas plaintiff bore the burden of proving that the statements in question were made by defendants and were defamatory, defendants bore the burden of proving that the statements were made on a privileged occasion and were made without malice. ⁵ By contrast, in advising the jury upon the issue of punitive damages, the trial court instructed the jury that, in order to obtain such damages, plaintiff bore the burden of proving, by clear and convincing evidence, that defendants had acted with malice and oppression toward...