Shahvar v. Superior Court, H011565

• Citation: 30 Cal.Rptr.2d 597,25 Cal.App.4th 653
• Decision Date: 02 June 1994
• Docket Number: No. H011565,H011565
• Court: California Court of Appeals
• Parties: , 63 USLW 2062, 9 IER Cases 1008, 22 Media L. Rep. 1893 Elias SHAHVAR of Santa Clara County, Petitioner, v. The SUPERIOR COURT, Respondent; ASP COMPUTER PRODUCTS, INC., et al., Real Parties in Interest.

Page 597

30 Cal.Rptr.2d 597

25 Cal.App.4th 653, 63 USLW 2062, 9 IER Cases 1008,

22 Media L. Rep. 1893

Elias SHAHVAR of Santa Clara County, Petitioner, v. The SUPERIOR COURT, Respondent;

ASP COMPUTER PRODUCTS, INC., et al., Real Parties in Interest.

No. H011565.

Court of Appeal, Sixth District, California.

June 2, 1994.

As Modified June 22, 1994.

Robert H. Bunzel, Christopher J. Hunt, Fabrice V. Nijhof, Bartko, Tarrant & Miller, San Francisco, for petitioner and cross-defendant Elias Shahvar.

Sherwood M. Sullivan, John T. Kennedy, Hopkins & Carley, San Jose, for real parties in interest and cross-complainants ASP Computer Products, Inc., Amnon Even-Kesef, Ellen V. Sigal and Gerald Sigal.

MIHARA, Associate Justice.

The trial court overruled a demurrer by cross-defendant Elias Shahvar to a libel claim in a cross-complaint by ASP Computer Products, Inc., Amnon Even-Kesef, Ellen Sigal, and Gerald Sigal ("cross-complainants"). Shahvar seeks a writ of mandate. At issue is whether Shahvar was privileged under Civil Code section 47 to transmit a facsimile copy of a complaint to a newspaper. Cross-complainants contend that this facsimile communication was not privileged because it preceded the filing of the complaint. Shahvar asks us to take judicial notice that the complaint was filed the same day as the facsimile communication. For the reasons stated below we conclude that the time of the complaint's filing is unimportant and that the conduct was not privileged because the communication was made to someone unrelated to the litigation. In reaching this conclusion, we disagree with Abraham v. Lancaster Community Hospital (1990) 217 Cal.App.3d 796, 266 Cal.Rptr. 360. Accordingly, we will deny the petition.

Discussion

"A general demurrer presents the same question to the appellate court as to the trial court, namely, whether the plaintiff has alleged sufficient facts to justify any relief, notwithstanding superfluous allegations or claims for unjustified relief." (B & P Development Corp. v. City of Saratoga (1986) 185 Cal.App.3d 949, 952-953, 230 Cal.Rptr. 192.) In light of this standard of review, we summarize the allegations of the cross-complaint, particularly the challenged fifth cause of action.

ASP Computer Products, Inc., was formed by Even-Kesef, Shahvar, and another person in early 1987 to market printer sharing and connectivity products. Even-Kesef was and is the president, chief executive officer, and a shareholder of ASP. Ellen Sigal is a shareholder and director of ASP. Gerald Sigal is her husband. The Sigals invested in ASP. Shahvar held several positions with ASP over the years. ASP eventually terminated Shahvar for poor performance and misconduct.

On April 2, 1993, Shahvar had his lawyer transmit a facsimile copy of a complaint to the San Francisco Examiner newspaper (the Examiner). This complaint falsely alleged, among other things, that Ellen and Gerald Sigal submitted invoices to ASP for work they did not do and that Gerald Sigal violated ASP's by-laws by transferring stock to Ellen Sigal for consideration in an effort to avoid shareholder or director liability to Shahvar. Shahvar's facsimile communication induced the Examiner to publish an article on Sunday, April 4, 1993, that summarized the complaint's allegations. On April 5, 1993, Shahvar filed the complaint in Santa Clara County Superior Court. Shahvar also distributed copies of the Examiner article to social and business associates of Even-Kesef and the Sigals in Santa Clara County and in Israel. Cross-complainants' subsequent libel action sought general, special, and punitive damages resulting from Shahvar's conduct.

1. The litigation privilege

Civil Code section 47 shields certain statements from defamation liability. "A privileged publication or broadcast is one made ... [i]n any ... judicial proceeding...." " '[T]he obvious purpose of section 47 [is] to afford litigants the utmost freedom of access to the courts to secure and defend their rights without fear of being harassed by actions for defamation.' (Albertson v. Raboff (1956) 46 Cal.2d 375, 380, 295 P.2d 405].)" (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 771, 234 Cal.Rptr. 653.) This "litigation privilege" (Silberg v. Anderson (1990) 50 Cal.3d 205, 209, 266 Cal.Rptr. 638, 786 P.2d 365) is "absolute in that it applies regardless of whether a statement was uttered with malice or bad faith." (Financial Corp. of America, supra, 189 Cal.App.3d at p. 771, 234 Cal.Rptr. 653; cf. Silberg, supra, 50 Cal.3d at pp. 215-216, 266 Cal.Rptr. 638, 786 P.2d 365.)

"The usual formulation 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 have [sic ] some connection or logical relation to the action." (Silberg, supra, 50 Cal.3d 205, 212, 266 Cal.Rptr. 638, 786 P.2d 365; cf. Financial Corp. of America, supra, 189 Cal.App.3d 764, 772-773, 234 Cal.Rptr. 653.) "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.... The 'furtherance' requirement was never intended as a test of a participant's motives, morals, ethics or intent. (See Financial Corp. of America v. Wilburn, supra, 189 Cal.App.3d at p. 777, 234 Cal.Rptr. 653; [citation].)" (Silberg, supra, 50 Cal.3d at pp. 219-220, 266 Cal.Rptr. 638, 786 P.2d 365.) In other words, the communication must have an objective relationship to the litigation.

"A document is not privileged merely because it has been filed with a court or in an action. The privileged status of a particular statement therein depends on its relationship to an actual or potential issue in an underlying action." (Financial Corp. of America, supra, 189 Cal.App.3d 764, 776, 234 Cal.Rptr. 653.) In Financial Corp. of America, supra, this court concluded that all the allegations in a complaint filed in federal court were privileged where the plaintiffs did not identify a single allegation in the complaint as unrelated to the litigation it commenced. (Id. at pp. 776-777, 234 Cal.Rptr. 653.) Abraham v. Lancaster Community Hospital, supra, 217 Cal.App.3d 796, 266 Cal.Rptr. 360, concluded that all allegations in a proposed amended complaint were privileged because they were "directly related to the issues raised by the pleadings." (Id. at p. 823, 266 Cal.Rptr. 360.)

The basis for cross-complainants' libel cause of action is not that Shahvar filed a false complaint in court. Rather, the libel claim is based on Shahvar's communication of a copy of the complaint to the newspaper, which induced the newspaper to publish an article summarizing the complaint's allegations. Cross-complainants contend that Shahvar's communication of his allegations to a third party, the Examiner, was unrelated to this litigation and therefore not covered by the litigation privilege. We agree. "[R]epublications to nonparticipants in the action are generally not privileged under section 47(2), and are thus actionable unless privileged on some other basis." (Silberg v. Anderson, supra, 50 Cal.3d 205, 219, 266 Cal.Rptr. 638, 786 P.2d 365.) Although this statement in Silberg was dictum, we find it persuasive.

Our position is further supported by two other cases which have applied this limitation of the privilege. The first of the two, Financial Corp. of America, supra, considered the privileged nature of allegedly defamatory statements made by an attorney prior to filing a complaint. This court concluded that settlement demands to the opponent and evidence-gathering statements to potential witnesses were privileged "so long as litigation is seriously anticipated in good faith." (189 Cal.App.3d 764, 777-778, 234 Cal.Rptr. 653.) The opinion also discussed a different type of statement. "As plaintiffs properly point out, they alleged defendant made the above-described accusations to 'persons throughout Northern California.' ... Without speculating on the circumstances surrounding the making of a statement on any particular occasion, we generally observe an attorney will not 'be protected by the absolute privilege as to actionable words spoken before persons in no way connected with the proceeding [citations].' (Bradley, supra, 30 Cal.App.3d 818, 827 [disapproved on another ground in Silberg, supra, at pp. 216-219, 266 Cal.Rptr. 638, 786 P.2d 365].) The possible relationship of a listener or reader to anticipated litigation may determine whether the statement has some relation to it." (189 Cal.App.3d 764, 778, 234 Cal.Rptr. 653.) While Financial Corp. of America applied the litigation privilege liberally, it concluded that the defendant's demurrer to the defamation claim should have been overruled because the plaintiffs alleged that the defendant had made unprivileged statements to persons who were unrelated to the litigation. (Ibid.; cf. ITT Telecom Products Corp. v. Dooley (1989) 214 Cal.App.3d 307, 316, fn. 8, 262 Cal.Rptr. 773.)

In the second case, Susan A. v. County of Sonoma (1991) 2 Cal.App.4th 88, 3 Cal.Rptr.2d 27, the appellate court held that "the privilege does not apply where publication is to persons in no way connected with the proceeding." (Id. at pp. 93-94, 3 Cal.Rptr.2d 27.) In Susan A., a psychologist had discussed with newspaper and television reporters his evaluation of a minor who had been arrested for attempted murder. (Id. at p. 92, 3 Cal.Rptr.2d 27.) The court noted that a statement to newspaper reporters about a National Labor Relation Board decision had been found to be outside the litigation privilege in Washer v. Bank of America (1943) 21 Cal.2d 822, 136 P.2d 297 (disapproved on another ground in MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 551, 343 P.2d 36) and...