Slaughter v. Friedman

• Decision Date: 23 August 1982
• Citation: 649 P.2d 886,32 Cal.3d 149,185 Cal.Rptr. 244
• Parties: , 649 P.2d 886 Terry W. SLAUGHTER, Plaintiff and Appellant, v. Jay W. FRIEDMAN et al., Defendants and Respondents. L.A. 31541.
• Court: California Supreme Court

Page 244

185 Cal.Rptr. 244

32 Cal.3d 149, 649 P.2d 886

Terry W. SLAUGHTER, Plaintiff and Appellant, v. Jay W. FRIEDMAN et al., Defendants and Respondents.

L.A. 31541.

Supreme Court of California In Bank.

Aug. 23, 1982.

Michelle A. Welsh, Myron E. Etienne, Jr., and Noland, Hamerly, Etienne & Hoss, Salinas, for plaintiff and appellant.

Richard G. Flanagan, L. E. Schweiner, Ives, Kirwan & Dibble, Martin J. Kirwan and Herbert Jung, Los Angeles, for defendants and respondents.

RICHARDSON, Justice.

The case involves the defenses to a libel action. The central issue is the application of section 592A of the Restatement Second of Torts, which creates an absolute privilege for "[o]ne who is required by law to publish defamatory matter ...." Noting that section 592A contains a privilege different from, and more extensive than, the absolute privileges of section 47 of the Civil Code, we conclude that the adoption of the Restatement rule is a matter more appropriately left to the Legislature. We further conclude that plaintiff has adequately alleged defendants' publication of defamatory matter unprotected by any other statutory privilege, and that the trial court erred when it sustained defendants' demurrers and dismissed plaintiff's complaint.

Plaintiff Terry W. Slaughter, an oral surgeon, appeals from a dismissal of his defamation action after entry of an order sustaining a demurrer without leave to amend. Defendants are: U. S. Administrators, Inc. (Administrators), a private insurance corporation which administers dental insurance plans for some of plaintiff's patients, and Jay Friedman, Administrator's dental director. In 1978, plaintiff submitted to defendants claims for certain dental services which he had rendered to eight patients. In denying each claim, defendants enclosed a letter from Friedman to some of the patients explaining the reasons for the denial. In some, but not all, of these letters, Friedman described certain of plaintiff's dental work as "unnecessary"; stated that Administrators would no longer process dental treatment claims from plaintiff because of "overcharging"; and announced that defendants would report plaintiff to the "California Dental Association" for disciplinary proceedings. Friedman further advised the patients to make no further payments to plaintiff pending resolution of the dispute.

Plaintiff sued defendants for libel and for interference with prospective economic advantage. Although defendants' demurrers were sustained on a variety of grounds, we consider here whether plaintiff has adequately alleged the publication of defamatory matter, and, if he has, whether such publication was privileged.

1. Was the Publication Defamatory?

Civil Code section 45 defines libel as "a false and unprivileged publication by writing ... which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation." (Italics added.) We have said that libel includes "almost any language which, upon its face, has a natural tendency to injure a person's reputation. [Citations.]" (Forsher v. Bugliosi [1980] 26 Cal.3d 792, 803, 163 Cal.Rptr. 628, 608 P.2d 716.)

Plaintiff has alleged causes of action for both "libel per se" and "libel per quod." A statement is libelous "per se" when on its face the words of the statement are of such a character as to be actionable without a showing of special damage. A libel "per quod," on the other hand, requires that the injurious character or effect be established by allegation and proof. These definitions are embodied in Civil Code section 45a: "A libel which is defamatory of the plaintiff without the necessity of explanatory matter, such as an inducement, innuendo or other extrinsic fact, is said to be libel on its face. Defamatory language not libelous on its face is not actionable unless the plaintiff alleges and proves that he suffered special damage as a proximate result thereof." Plaintiff contends alternatively that defendants' communications either were libelous on their face, without the necessity of further explanation, or were libelous upon consideration of extrinsic facts showing inducement, innuendo and colloquium. Further, plaintiff purports to state separate causes of action based upon each of the various letters defendants sent to plaintiff's patients. Without analyzing the differing contents of each letter, we have no difficulty in concluding that those letters which accused plaintiff of charging excessive fees or performing unnecessary work reasonably may be deemed defamatory under section 45.

We noted in Forsher, supra, in reviewing a trial court's order sustaining a demurrer without leave to amend, that our "inquiry is not to determine if the communications may have an innocent meaning but rather to determine if the communication reasonably carries with it a defamatory meaning. [Citations.]" (26 Cal.3d at p. 803, 163 Cal.Rptr. 628, 608 P.2d 716.) So viewed, plaintiff's patients reasonably may have understood defendants' letters as accusing him of charging excessive fees or performing unnecessary dental work. Such accusations, if false and unprivileged, would be actionable tending, as they do, to injure plaintiff professionally. Indeed, plaintiff's complaint includes allegations that the patients involved either have not paid for plaintiff's services or have terminated their relationship with him because of the alleged defamation.

Defendants assert, however, that their letters contain mere statements of opinion, not fact. (See Gregory v. McDonnell Douglas Corp. [1976] 17 Cal.3d 596, 600-601, 131 Cal.Rptr. 641, 552 P.2d 425.) Although accusations of "excessive" fees or "unnecessary" work when made by laymen might indeed constitute mere opinion, similar accusations by professional dental plan administrators carry a ring of authenticity and reasonably might be understood as being based on fact. As we recently generalized, "Where ... the allegedly libelous remarks could have been understood by the average reader in either sense, the issue must be left to the jury's determination. [Citation.]" (Good Government Group of Seal Beach, Inc. v. Superior Court [1978] 22 Cal.3d 672, 682, 150 Cal.Rptr. 258, 586 P.2d 572.)

We conclude that plaintiff adequately alleged the publication of defamatory matter. Defendants appear to concede that if a defamatory publication was pleaded, plaintiff's action for interference with his economic relationships with his patients likewise would lie, based upon allegations of loss of former and prospective patients, unless defendants' publication was justified by reason of the privileged nature of that publication. (See A. F. Arnold & Co. v. Pacific Professional Ins., Inc. [1972] 27 Cal.App.3d 710, 714, 104 Cal.Rptr. 96.)

We turn now to a consideration of the privilege issue.

2. Was the Publication Privileged?

Within the context of defamation, Civil Code section 47, in part, recognizes the following privileges:

(1) An absolute privilege for a publication or broadcast made "In the proper discharge of an official duty" (subd. 1).

(2) An absolute privilege for a publication made "In any (1) legislative or (2) judicial proceeding, or (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable [by a mandate action] ..." (subd. 2).

(3) A qualified privilege for a publication made "In a communication, without malice, to a person interested therein, (1) by one who is also interested, ..." (subd. 3).

Relative to subdivision 1, although, as noted below, defendants were required by both federal and state law to provide an explanation of the reason for denying reimbursement of patients' claims, they were neither officials nor acting in an official capacity. As we recently explained in Kilgore v. Younger (1982) 30 Cal.3d 770, 778, 180 Cal.Rptr. 657, 640 P.2d 753, "The absolute privilege [of subdivision 1] is extended to 'high-ranking state and federal officials, such as the President of the United States, the governor of any state or territory, cabinet officers of the United States and the corresponding officers of any state or territory' [citation] on the rationale that their ability to function would be impaired and society adversely affected if they were not absolutely free of the threat of suit by the defamed seeking recompense for injury. [Citations.] .... For the absolute privilege to attach, the public official need only be properly discharging an official duty." (Italics added.) No case has yet applied the "official duty" privilege to private individuals. Similarly, we have long held that no absolute immunity attaches to a state officer who is acting in a private capacity. (The Hale Company v. Lea [1923] 191 Cal. 202, 206-207, 215 P. 900.)

With respect to subdivision 2 of section 47, the private processing of dental claims cannot be deemed part of any "legislative," "judicial," or "official" proceeding, or indeed any proceeding "authorized by law" and reviewable by writ of mandate. In Hackethal v. Weissbein (1979) 24 Cal.3d 55, 60, 154 Cal.Rptr. 423, 592 P.2d 1175, we explained that use of the word "official" probably was intended to deny application of the absolute privilege to nongovernmental proceedings. Justice Tobriner's dissent urged that "quasi-judicial" proceedings conducted by a medical "peer review" authority likewise should be shielded by the privilege, because such proceedings were reviewable by administrative mandate. (24 Cal.3d at pp. 61-71, 154 Cal.Rptr. 423, 592 P.2d 1175.) Perhaps in response to the dissent, the Legislature added clause 4 to subdivision 2 of section 47, applying the privilege to proceedings authorized by law and reviewable by mandate. It is clear, however, that the private processing of dental claims does not fall within this newly extended category.

The "official proceeding" privilege has been...