Stationers Corp. v. Dun & Bradstreet, Inc.

• Decision Date: 09 February 1965
• Citation: 42 Cal.Rptr. 449,398 P.2d 785,62 Cal.2d 412
• Court: California Supreme Court
• Parties: , 398 P.2d 785 STATIONERS CORPORATION et al., Plaintiffs and Appellants, v. DUN & BRADSTREET, INC. et al., Defendants and Respondents. L. A. 28136.

Page 449

42 Cal.Rptr. 449

62 Cal.2d 412, 398 P.2d 785

STATIONERS CORPORATION et al., Plaintiffs and Appellants, v. DUN & BRADSTREET, INC. et al., Defendants and Respondents.

L. A. 28136.

Supreme Court of California, In Bank.

Feb. 9, 1965.

Wolver & Wolver and Eugene L. Wolver, Los Angeles, for plaintiffs and appellants.

Flint & MacKay, John J. Waller and Edwin Freston, Los Angeles, for defendants and respondents.

MOSK, Justice.

Stationers Corporation and two of its officers, Lillian Boyd and Omar Boyd, Jr., filed a complaint for 'Defamation of Business, Libel and Negligence' against Dun & Bradstreet, a mercantile agency corporation, and one of its employees. Defendants made a motion for summary judgment under section 437c of the Code of Civil Procedure ¹ and filed three declarations in support of the motion. Plaintiffs filed two in opposition. ² The trial court granted the motion on the ground that no issue of material fact existed, the uncontroverted facts contained in the declarations having established a complete defense under the mercantile agency privilege set forth in section 47, subdivision 3, of the Civil Code. ³ Plaintiffs' principal contention on this appeal from the ensuing judgment is that the motion should have been denied because the declarations showed that there existed triable issues of fact between the parties.

The complaint sets forth six causes of action, all based on two documents issued by defendants. The first three causes of action assert that defendants libeled plaintiffs with malice, and the fourth, fifth, and sixth allege that the libels resulted from defendants' negligence. As to the first three causes of action, it is alleged that prior to the issuance of the pubications in question, a corporation named Healy Enterprises, Inc., had filed an action against plaintiffs and that defendants subsequently issued two written documents concerning the litigation, one of which is referred to as the 'Special Notice' report and the other as the 'Key Account Service' letter. The 'Special Notice' report related that the action was filed by Healy and described the complaint as alleging, among other things, that the Boyds set unnecessarily large salaries for themselves and that this constituted fraudulent misappropriation of corporation assets because neither of them had the experience, education, or qualifications for their respective positions. ⁴ The description of the Healy complaint is asserted to be false in various respects. Primary reliance is placed by plaintiffs upon the 'Key Account Service' letter, issued at the same time, which stated, 'The management (of Stationers) has not been available for comment on the suit filed by Healy Enterprises, Inc. In outside quarters, a number of authorities are of the opinion that this suit has considerable merit, and may bring about the removal of at least Lillian Boyd from the top management. It has long been considered that she was not the one to head this business.' The complaint filed by plaintiffs in the present action asserts that the statements contained in the letter to the effect that the management of Stationers was not available for comment on the Healy suit and that it had long been considered Mrs. Boyd was not the one to head the business are both false, and that the statement falsely attributes the comments to 'authorities' since, assertedly, that word means legal authorities and no such persons were contacted by defendants as to the merits of the Healy suit.

It is further alleged that defendants knew that these statements were not true, that they did not have probable cause to believe them to be true, that the publications were made with malice, and that defendants intended to injure plaintiffs or acted with such wanton and reckless disregard of plaintiffs' rights as to imply hatred toward them. The publications were distributed, continues the complaint, to customers and creditors of Stationers, and such customers and creditors, with defendants' knowledge, showed the publications to others, resulting in distribution to the public generally, particularly to furnishers and users of stationery supplies. General and exemplary damages are prayed for, based on assertions that as a result of the publications Stationers has been injured in its business and the individual plaintiffs have been exposed to hatred and ridicule and harmed in their occupations.

Before setting forth the declarations filed in connection with the motion for summary judgment, we shall consider the rules relating to the granting of such judgments, as well as the substantive law of libel applicable to the type of communication involved here.

Numerous decisions have discussed the law of summary judgments, and the rules relating thereto are well settled. The matter to be determined by the trial court in considering such a motion is whether the defendant (or the plaintiff) has presented any facts which give rise to a triable issue. The court may not pass upon the issue itself. Summary judgment is proper only if the affidavits in support of the moving party would be sufficient to sustain a judgment in his favor and his opponent does not by affidavit show such facts as may be deemed by the judge hearing the motion sufficient to present a triable issue. The aim of the procedure is to discover, through the media of affidavits, whether the parties possess evidence requiring the weighing procedures of a trial. In examining the sufficiency of affidavits filed in connection with the motion, the affidavits of the moving party are strictly construed and those of his opponent liberally construed, and doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. Such summary procedure is drastic and should be used with caution so that it does not become a substitute for the open trial method of determining facts. (Desny v. Wilder (1956) 46 Cal.2d 715, 725-726, 299 P.2d 257; Coyne v. Krempels (1950) 36 Cal.2d 257, 260-261, 223 P.2d 244; Eagle Oil & Ref. Co. v. Prentice (1942) 19 Cal.2d 553, 556, 122 P.2d 264; Snider v. Snider (1962) 200 Cal.App.2d 741, 747-749, 19 Cal.Rptr. 709; Code Civ.Proc. § 437c.) Thus, the trial court was justified in granting the motion here only if the declarations filed in support of it, strictly construed, contain facts sufficient to entitle the defendants to judgment, and those of the plaintiffs, liberally construed, show that there was no issue of fact to be tried.

We turn now to the substantive rules applicable to the case before us. Defendants, as we have seen, claim that the communications in question are privileged under section 47 subdivision 3, of the Civil Code, which provides that a publication is privileged if it is made without malice, to a person interested therein, by one who is also interested, or by one who is requested by the person interested to give the information.

No California case appears to have applied the privilege set forth in this section to a mercantile agency, but it has been applied in an analogous situation. In Pavlovsky v. Board of Trade (1959) 171 Cal.App.2d 110, 340 P.2d 63, the defendant was a board whose members reported the names of debtors to it and the membership thereupon acted jointly to refuse credit to those whose names had been reported. The court held that section 47, subdivision 3, applied but stated that the board was not a mercantile agency because it did not collect and distribute credit information for profit. A majority of other jurisdictions which have considered the question hold that the reports of mercantile agencies are privileged if made without malice to one who has an interest in the matters communicated (see Note, 30 A.L.R.2d 776, 777 et seq.), and when such reports meet the requirements of section 47, subdivision 3, they should be accorded the privilege set forth in that section. In determining whether a defendant may take advantage of the privilege, it has been held that malice may be inferred if the defendant does not have reasonable or probable cause to believe his statement to be true. (MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 552, 343 P.2d 36; Brewer v. Second Baptist Church (1948) 32 Cal.2d 791, 797-800, 197 P.2d 713; see Snively v. Record Publising Co. (1921) 185 Cal. 565, 577, 198 P. 1.)

When the declarations filed in connection with the motion for summary judgment are viewed in the light of the principles set forth above, it is clear that the trial court erred in granting the motion because at least one triable issue of fact was raised by plaintiffs, namely, whether defendants had probable cause to believe their statements to be true, and therefore, whether they had acted with malice.

The three declarations filed in support of the motion were made by employees of Dun & Bradstreet, who describe the method by which they compiled and distributed the publications, and in each case it is asserted that the declarant bears no ill will or hatred toward the plaintiffs. W. R. Wagoner, the employee who is joined as a defendant in the action, declares that he had received a teletyped communication requesting information about the Healy suit and thereupon requested another employee to obtain details about the suit from court files. Upon securing the information regarding the substance of the Healy complaint, Wagoner attempted, without success, to reach both Albert Hasler, an officer of Stationers, and Lillian Boyd. Before releasing the publications he spoke to the local credit managers of two suppliers who sell office supplies to Stationers, and they told him that Mrs. Boyd was inadequate as an administrator and that the suit filed by Healy might result in her removal from office. During the three or four months prior to the issuance of the publications he had discussed Stationers' situation with two other credit managers of firms which sold office supplies to Stationers, a former executivelevel employee of...