Tiedemann v. Superior Court

• Decision Date: 17 August 1978
• Citation: 148 Cal.Rptr. 242,83 Cal.App.3d 918
• Parties: John H. TIEDEMANN, Petitioner, v. SUPERIOR COURT of the State of California IN AND FOR the COUNTY OF ALAMEDA, Respondent; Richard S. NAIR, Real Party in Interest. Civ. 42924.
• Court: California Court of Appeals Court of Appeals

Page 242

148 Cal.Rptr. 242

83 Cal.App.3d 918

John H. TIEDEMANN, Petitioner, v. SUPERIOR COURT of the State of California IN AND FOR the COUNTY OF ALAMEDA, Respondent Richard S. NAIR, Real Party in Interest.

Civ. 42924.

Court of Appeal, First District, Division 1, California.

Aug. 17, 1978.

Hearing Denied Oct. 25, 1978.

Boornazian, King & Schulze, A Professional Corp., Barbara Rosenfeld Davis, Oakland, for petitioner; James L. McIntosh, Oakland, of counsel.

Jay R. Martin, Clinton A. Johnson, Roy H. Ikeda, Crosby, Heafey, Roach & May, Professional Corp., Oakland, for real party in interest Richard S. Nair.

RACANELLI, Presiding Justice.

In this proceeding we consider the question whether an informer's communication to an enforcement agency of the United States Treasury Department concerning a possible perpetration of a tax fraud falls within the scope of absolute privilege under the provisions of section 47, subdivision 2, of the Civil Code. ¹ We conclude for the reasons which we discuss that the statutory privilege applies immunizing the informer from liability in a defamation suit based upon such communication.

The petition seeking relief in mandamus and prohibition stems from the following sequence of events as reflected in the record before us: On December 11, 1973, petitioner Tiedemann, a disgruntled former business associate of real party in interest Nair, confidentially informed agents of the intelligence division of the federal Internal Revenue Service that Nair (1) failed to report taxable income and overstated allowable deductions in connection with certain mutual business and securities transactions and (2) was obliged to terminate his former employment as a stock brokerage officer due to improperly claiming personal expenditures through the firm's business expense accounts. Through a fortuitous circumstance, Nair learned of the incriminating charge in mid-January 1975; deducing that Tiedemann was the anonymous source of the defamatory statements, ² Nair filed the underlying action requesting general and punitive damages for libel and slander based upon such statements. Following the overruling of his general demurrer, Tiedemann filed an answer setting up affirmative defenses, including a claim of privilege pursuant to Civil Code section 47, subdivision 3; ³ thereafter, Tiedemann's motion for judgment on the pleadings grounded on a theory of absolute privilege was denied in July 1977. Subsequently, Tiedemann moved for summary judgment on the same grounds (accompanied by alternative requests of reconsideration for judgment on the pleadings or sustaining of his earlier demurrer without leave to amend). On November 16, 1977, the court denied Tiedemann's motion but granted Nair's then pending motion to compel answers over Tiedemann's objections based upon constitutional grounds and claim of confidentiality. ⁴ On January 19, 1978, we summarily denied Tiedemann's petition to mandate the entry of summary judgment (or alternative relief) and to prohibit enforcement of the discovery order. On February 10, 1978, Tiedemann's petition for hearing was granted by the state Supreme Court which ordered the matter retransferred to this court with directions to issue an alternative writ; we issued our alternative writ on the same day. Thereafter, Nair lodged his return answering and demurring to the petition.

Contentions

Tiedemann first contends that statements made to the Internal Revenue Service agency in order to initiate official action to investigate a possible tax fraud constitutes a "privileged publication . . . made . . . (i)n (an) . . . official proceeding authorized by law; . . ." (§ 47, subd. 2.) Nair, after first demurring that no cause is stated justifying extraordinary review, vigorously resists the claim of privilege contending that it may not be invoked where (1) the publication motivated solely by revenge could not achieve a proper objective of the agency; (2) the publisher has no personal stake in the official administrative proceedings; and (3) the statements are wilfully false in violation of federal law. Although other questions of privilege during discovery are also raised, our resolution of the dominant issue of statutory privilege is dispositive herein.

I. Propriety of Extraordinary Review

Preliminarily, we address the challenge raised by real party that review by mandamus is inappropriate. The prerogative writ has long been recognized as an appropriate vehicle to review interlocutory orders where questions of a grave nature and of significant legal impact requiring immediate resolution are presented (Babb v. Superior Court (1971) 3 Cal.3d 841, 851, 92 Cal.Rptr. 179, 479 P.2d 379), where an abuse of discretion is patently manifest (Hurtado v. Superior Court (1974) 11 Cal.3d 574, 579, 114 Cal.Rptr. 106, 522 P.2d 666), or where an important question of privilege is presented (Sav-on-Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 5, 123 Cal.Rptr. 283, 538 P.2d 739; Roberts v. Superior Court (1973) 9 Cal.3d 330, 336, 107 Cal.Rptr. 309, 508 P.2d 309; see generally 5 Witkin, Cal.Procedure (2d ed. 1971) Extraordinary Writs, § 89, pp. 3865-3866). The issues presented by the petition fall well within the ambit of review by mandamus. Moreover, the granting of an alternative writ itself constitutes a determination of the absence of another adequate remedy. (Morse v. Municipal Court (1974) 13 Cal.3d 149, 155, 118 Cal.Rptr. 14, 529 P.2d 46; Babb v. Superior Court, supra, 3 Cal.3d at p. 851, 92 Cal.Rptr. 179, 479 P.2d 379.) Accordingly, we turn to the merits of the petition.

II. Absolute Privilege

The thrust of petitioner's claim is that a communication made to agents of the federal Internal Revenue Service, an official administrative agency, designed to initiate appropriate investigative and enforcement proceedings, constitutes a publication made in an "official proceeding authorized by law" (§ 47, subd. 2) and is cloaked with absolute immunity. We examine that claim in light of existing authority interpreting the scope of absolute privilege provided under the statute.

It is now well established in California case law that the privilege conferred under subdivision 2 is absolute and unaffected by the presence of malice. (Ascherman v. Natanson (1972) 23 Cal.App.3d 861, 864-865, 100 Cal.Rptr. 656; Albertson v. Raboff (1956) 46 Cal.2d 375, 379, 295 P.2d 405; Gosewisch v. Doran (1911) 161 Cal. 511, 513-515, 119 P. 656; Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 824, 106 Cal.Rptr. 718; Hackethal v. Weissbeim (1978) 82 Cal.App.3d 559, 563, 147 Cal.Rptr. 284.) The absolute immunity attaches if all of the following conditions have been met: "the publication (1) was made in a judicial proceeding; (2) had some connection or logical relation to the action; (3) was made to achieve the objectives of the litigation; and (4) involved litigants or other participants authorized by law." (Bradley v. Hartford Acc. & Indem. Co., Supra, 30 Cal.App.3d, at p. 825, 106 Cal.Rptr. at p. 722, accord: Twyford v. Twyford (1976) 63 Cal.App.3d 916, 925, 134 Cal.Rptr. 145; and Younger v. Solomon (1974) 38 Cal.App.3d 289, 301, 113 Cal.Rptr. 113.)

The descriptive statutory phrase "in any other official proceeding authorized by law" has been broadly interpreted to include those proceedings which resemble judicial and legislative proceedings such as administrative boards and quasi-judicial and quasi-legislative proceedings. (Ascherman v. Natanson, supra, 23 Cal.App.3d 861, 865, 100 Cal.Rptr. 656, 659, and authorities there collected.) In order that the privilege apply, it is unnecessary that the defamatory matter be relevant or material to an issue before the tribunal but need only have some proper connection or relation to the proceeding and in achieving its objectives. (Ascherman v. Natanson, supra, at p. 865, 100 Cal.Rptr. 656; Bradley v. Hartford Acc. & Indem. Co., supra, 30 Cal.App.3d 818, 824, 106 Cal.Rptr. 718.) The privilege embraces preliminary conversations attendant upon such proceeding so long as they are in some way related to or connected to the pending or contemplated action. (Ascherman v. Natanson, supra, 23 Cal.App.3d, at p. 865, 100 Cal.Rptr. 656; see Rest.Torts, § 588.)

In determining whether an administrative body or agency possesses such quasi-judicial power, the preliminary factors to be determined are "(1) whether the administrative body is vested with discretion based upon investigation and consideration of evidentiary facts, (2) whether it is entitled to hold hearings and decide the issue by the application of rules of law to the ascertained facts and, more importantly (3) whether its power affects the personal or property rights of private persons (citations)." (Ascherman v. Natanson, supra, 23 Cal.App.3d 861, 865, 100 Cal.Rptr. 656, 659; accord: Hackethal v. Weissbeim, supra, 82 Cal.App.3d 559, 564, 147 Cal.Rptr. 284.)

The privilege doctrine embodied in the statute is grounded upon considerations of public policy designed "To afford litigants freedom of access to the courts . . . and to promote the unfettered administration of justice even though as an incidental result it may (sometimes) . . . provide . . . immunity to the . . . malignant slanderer (citations) . . . ." (Bradley v. Hartford Acc. & Indem. Co., supra, 30 Cal.App.3d 818, 823, 106 Cal.Rptr. 718, 721.) Consistent with that underlying purpose, California decisions have carefully constructed narrow perimeters within which absolute protection is afforded restricting immunity to those instances furthering the purpose of the litigation in promotion of the interest of justice. (Bradley v. Hartford Acc. & Indem. Co., supra, at p. 826, 106 Cal.Rptr. 718 (defamatory communications outside of the legal proceedings to disinterested third parties made by those not a party to the action unprivileged); Younger v. Solomon, supra, 38 Cal.App.3d 289, 113 Cal.Rptr. 113 (disclosure made during discovery of the defendant...