Sacramento Brewing Co v. Desmond, Miller & Desmond

• Decision Date: 26 October 1999
• Docket Number: CO29428,3
• Court: California Court of Appeals Court of Appeals
• Parties: SACRAMENTO BREWING CO., INC., Plaintiff and Appellant, v. DESMOND, MILLER & DESMOND et al., Defendants and Respondents. C029428 Filed

SACRAMENTO BREWING CO., INC., Plaintiff and Appellant v DESMOND, MILLER & DESMOND et al., Defendants and Respondents

C029428

Filed 10/26/99

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT

APPEAL of the judgment of the Superior Court of Sacramento County, Joe S. Gray, Judge. Affirmed

(Super.Ct.No. 97AS06310) (Sacramento)

Mark C. Leas, for Plaintiff and Appellant, Sacramento Brewing Company, Inc.

Steven A. Lewis, Damon M. Thurston, Lewis & Bacon, for Defendants and Respondents, Desmond, Miller & Desmond, William Nolan and Russell Cunningham.

KOLKEY, J.

CERTIFIED FOR PUBLICATION COPY

This appeal raises the issue whether the litigation privilege under Civil Code section 47, subdivision (b) should apply to a "slip of the pen" that misidentifies an innocent party as the debtor in a bankruptcy proceeding -- a misidentification claimed to be defamatory.

The plaintiff in this case, Sacramento Brewing Co., Inc. ("SBC"), argues that the litigation privilege under Civil Code section 47, subdivision (b) should not apply to the defendants' erroneous identification of SBC as the debtor in the caption of a notice of motion filed in a bankruptcy proceeding, since it was a complete stranger to the proceeding. We disagree and hold that the erroneous identification of a party in an otherwise privileged court filing does not affect the privilege's application. The trial court sustained without leave to amend a demurrer to SBC's defamation complaint on the basis of both the litigation privilege under Civil Code section 47, subdivision (b) and the qualified privilege under Civil Code section 47, subdivision (c).¹ We affirm the ensuing judgment of dismissal.

FACTS

The following facts are derived from SBC's complaint, together with facts that are judicially noticed. (Crowley v. Katleman (1994) 8 Cal.4th 666, 672 [For purposes of reviewing a judgment of dismissal following the sustaining of a demurrer, "we accept as true the properly pleaded material factual allegations of the complaint, together with facts that may properly be judicially noticed."].)

According to the complaint, in May 1997, the law firm of Desmond, Miller & Desmond ("Desmond Miller") was counsel to the trustee in the bankruptcy proceeding of Sutter Brewing Company, Inc. In that capacity, on May 2, 1997, Desmond Miller caused to be filed in the United States Bankruptcy Court for the Eastern District of California a notice of motion to sell personal property of the debtor's estate and served the notice of motion on the creditors of the debtor. Although the proof of service accurately identified the debtor, the caption of the notice of motion erroneously designated SBC as the debtor, instead of Sutter Brewing Company, and miscited the Bankruptcy Court case number (by one digit) for the proceeding.² SBC had no connection to the bankruptcy case.

On May 6, 1997 -- two business days after the initial notice of motion was filed -- Desmond Miller caused to be filed an amended notice of motion which corrected the error in the caption.³

In December 1997, SBC filed a complaint against Desmond Miller and two of its attorneys, seeking damages for defamation arising from the publication of the erroneous notice of motion.⁴ Defendants demurred to the complaint, asserting the litigation privilege ( 47, subd. (b)), and alternatively, the common-interest privilege ( 47, subd. (c)). The trial court sustained the demurrer without leave to amend.

DISCUSSION

SBC contends the trial court erred in sustaining the demurrer because neither of the asserted privileges apply.

Since we assume the truth of all properly pleaded material allegations of the complaint with respect to an appeal from a judgment based on the sustaining of a demurrer (Silberg v. Anderson (1990) 50 Cal.3d 205, 210; Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1139), the interpretation of section 47, subdivision (b) is a question of law and subject to our independent review. (Rothman v. Jackson, supra, 49 Cal.App.4th at pp. 1139-1140.)

I

Section 47, subdivision (b) provides that with certain exceptions not relevant here, "[a] privileged publication or broadcast is one made: [] . . . [] (b) [i]n any . . . (2) judicial proceeding . . . ." Thus, the language of the privilege, commonly known as the litigation privilege, is unequivocal: "Generally, a publication made in the course of a judicial proceeding is absolutely privileged." (Obos v. Scripps Psychological Associates, Inc. (1997) 59 Cal.App.4th 103, 106.)

In Silberg v. Anderson (1990) 50 Cal.3d 205, the California Supreme Court stated that "[t]he usual formulation [for the litigation privilege] is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action. [Citations.]" (Id. at p. 212.) "The requirement that the communication be in furtherance of the objects of the litigation is, in essence, simply part of the requirement that the communication be connected with, or have some logical relation to, the action, i.e., that it not be extraneous to the action." (Id. at pp. 219-220.)

In this case, the parties do not dispute that the communication -- the erroneously captioned notice of motion -- satisfies the first two prongs of this formulation: It was made (1) in a judicial proceeding (2) by litigants or other participants authorized by law. After all, the complaint acknowledges that counsel to the trustee for Sutter Brewing Company -- a litigant in the proceeding -- "caused the name of [SBC] to be included in documents prepared in relation to the bankruptcy proceedings of Sutter Brewing Co., Inc." And those documents, whose proof of service accurately identified the debtor, were filed in the bankruptcy court. Hence, the notice of motion was made in a judicial proceeding by a litigant to that proceeding. SBC argues, however, that because SBC is "a complete stranger" to the bankruptcy proceeding, "the defective notice of motion has no connection to the bankruptcy case" and thus the "logical-relation" requirement necessary to establish the litigation privilege does not apply.

However, there are a line of cases, never expressly overruled, that do not require that a publication made in a judicial proceeding have a "logical relation" to the action. Thus, we first address whether the "logical-relation" requirement must be satisfied in order to entitle a publication made in a judicial proceeding to fall within the litigation privilege. After all, the statutory language of the privilege imposes no such requirement. In 1911, in Gosewisch v. Doran (1911) 161 Cal. 511, 513-515, the California Supreme Court noted that there were two lines of authority -- one which made the privilege absolute and the other which placed a relevance limitation on the privilege -- but declined to resolve the split in authority:

"The prevailing rule in England and in some of the American states has been that the privilege attaching to defamatory statements made in the course of judicial proceedings is absolute. . . . On the other hand, many courts in this country have limited the privilege to declarations pertinent and material to the matter in controversy. [Citations.] And this limitation of the rule applied in a case arising in this state prior to the amendment of 1874 to section 47 of the Civil Code. (Wyatt v. Buell [1874] 47 Cal. 624.) The language of subdivision 2 of the amended section is, however, broad and unrestricted in its terms, and this court, in Hollis v. Meux [1886] 69 Cal. 625 [58 Am. Rep. 574, 11 Pac. 248], suggested a doubt as to whether the Legislature, by enacting that subdivision, intended to change the rule announced in Wyatt v. Buell, so as to render communications made in a judicial proceeding absolutely privileged. The court . . . found it unnecessary to resolve this doubt. . . . Subject to the possible limitation of relevancy and materiality, the privilege attaching to statements made in the course of judicial proceedings is absolute." (Gosewisch v. Doran, supra, 161 Cal. at pp. 513-515.)

In Moore v. United States Fid. & Guar. Co. (1932) 122 Cal.App. 205, the Court of Appeal found that the decisions that placed a relevancy limitation on the privilege pronounced a "rule independent of statute," and citing Gosewisch, stated that "[o]ur conclusion is that the wording of the statute makes the privilege absolute." (122 Cal.App. at p. 211.)

By 1956, our Supreme Court was approvingly citing Gosewisch v. Doran, supra, 161 Cal. 511, and Moore v. United States Fid. & Guar. Co., supra, for the proposition that "publications made in the course of a judicial proceeding are absolutely privileged." (Albertson v. Raboff (1956) 46 Cal.2d 375, 379.) However, in Albertson, in deciding whether the recordation of a notice of lis pendens is a "publication in the course of a judicial proceeding," our Supreme Court added a "reasonable relation" requirement. In determining whether a publication made outside of the court was made "in" a judicial proceeding, the court ruled: "If the publication has a reasonable relation to the action and is permitted by law, the absolute privilege attaches." (46 Cal.2d at p. 381, emphasis added.) It explained that "the privilege applies to any publication, such as the recordation of a notice of lis pendens, that is required [citation] or permitted [citation] by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is invoked." (46 Cal.2d at p. 380-381, emphasis added.) The "reasonable relation" test is now referred to as a "logical-relation" test. (Silberg v. Anderson, supra, 50 Cal.3d at p. 212.)

Admittedly, a "logical-relation" test is necessary to determine whether a...