Wilbanks v. Wolk

• Decision Date: 17 August 2004
• Docket Number: No. A101100.,A101100.
• Citation: 121 Cal.App.4th 883,17 Cal.Rptr.3d 497
• Court: California Court of Appeals Court of Appeals
• Parties: Scott WILBANKS et al., Plaintiffs and Appellants, v. Gloria WOLK, Defendant and Respondent.

17 Cal.Rptr.3d 497

121 Cal.App.4th 883

Scott WILBANKS et al., Plaintiffs and Appellants, v. Gloria WOLK, Defendant and Respondent.

No. A101100.

Court of Appeal, First District, Division 1.

August 17, 2004.

Steven Ames Brown, for Plaintiffs and Appellants.

James R. Wheaton, Oakland, David Greene, Matthew J. Zimmerman, First Amendment Project, for Defendant and Respondent.

STEIN, Acting P.J.

This is an appeal from an order granting a special motion to strike a complaint as a Strategic Lawsuit Against Public Participation (SLAPP), pursuant to Code of Civil Procedure section 425.16, and awarding defendant her attorney fees. We find that the suit was subject to the special motion to dismiss, requiring plaintiffs to establish a reasonable probability of prevailing on the merits. We further find that plaintiffs made the requisite showing. We therefore reverse.

BACKGROUND

The case concerns statements allegedly made against a viatical settlements brokerage, and the owner of the brokerage.¹ According to a 2001 article in Forbes Magazine, viaticals are arrangements that allow dying persons with life insurance policies to sell their policies to investors for a percentage of the death benefits. As a practical matter, the sooner the viator dies, the greater the return on the investment. In the meantime, the viator obtains funds to pay for medical care or other expenses. Viatical settlement firms provide the capital used to purchase the policies, typically receiving a fee of 20 to 30 percent of the amount of the death benefits. The policies are sold through independent sales agents, or brokers, such as plaintiffs here. The agents or brokers can receive sales commission of 9 percent or more. (Coolidge, Death Wish (Mar. 19, 2001) Forbes Magazine, at p. 206.)

Gloria Wolk, a former insurance agent, has written several books on viaticals, acting as a "consumer watchdog" and an expert on issues surrounding viatical settlements. Wolk established a Web site entitled Viatical & Life Settlements: Consumer Information (as of Aug. 17, 2004). The Web site presents information about viatical settlements, based, apparently, on Wolk's own research. It advertises Wolk's books. It posts advertisements from other sources. In addition, as is particularly relevant here, Wolk, through her Web site, provides information about those who broker life insurance policies, including information about licenses, suits brought by clients against brokers and investigations of brokers by governmental agencies.

Plaintiff Scott Wilbanks is, or was, the president and chief executive officer of Wilbanks & Associates. Plaintiff Wilbanks & Associates is, or was, a viatical settlements broker. According to plaintiffs, Wolk published the following statements about them on her Web site:

"Be very careful when dealing with this broker. Wilbanks and Assoc. is under investigation by the CA dept. of insurance. The complaint originated with a California viator who won a judgment against Wilbanks. How many others have been injured but didn't have the strength to do anything about it?

"The company is under investigation. Stay tuned for details.

"Wilbanks and Associates provided incompetent advice.

"Wilbanks and Associates is unethical."

On July 5, 2001, plaintiffs filed a complaint against Wolk for defamation and unfair business practices, seeking damages and an injunction. Wolk moved to strike the claim for defamation as a SLAPP suit. The court granted Wolk's motion, and awarded Wolk attorney fees and costs in the amount of $7,000.

Plaintiffs appealed.

DISCUSSION

I. SLAPP Suits, and Legislative Response to SLAPP Suits

The court in Wilcox v. Superior Court (1994) 27 Cal.App.4th 809, 33 Cal.Rptr.2d 446 (disapproved on other grounds in Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 68, fn. 5, 124 Cal.Rptr.2d 507, 52 P.3d 685), one of the first cases to apply anti-SLAPP legislation, explained:

"Litigation which has come to be known as SLAPP is defined by the sociologists who coined the term as `civil lawsuits . . . that are aimed at preventing citizens from exercising their political rights or punishing those who have done so.' (Canan & Pring, Strategic Lawsuits Against Public Participation (1988) 35 Social Problems 506.) The paradigm SLAPP is a suit filed by a large land developer against environmental activists or a neighborhood association intended to chill the defendants' continued political or legal opposition to the developers' plans. [Citations.]

"The favored causes of action in SLAPP suits are defamation, various business torts such as interference with prospective economic advantage nuisance and intentional infliction of emotional distress. [Citation.] Plaintiffs in these actions typically ask for damages which would be ruinous to the defendants. [Citations.]

"SLAPP suits are brought to obtain an economic advantage over the defendant, not to vindicate a legally cognizable right of the plaintiff. [Citations.] Indeed, one of the common characteristics of a SLAPP suit is its lack of merit. [Citation.] But lack of merit is not of concern to the plaintiff because the plaintiff does not expect to succeed in the lawsuit, only to tie up the defendant's resources for a sufficient length of time to accomplish plaintiff's underlying objective. [Citation.] As long as the defendant is forced to devote its time, energy and financial resources to combating the lawsuit its ability to combat the plaintiff in the political arena is substantially diminished. [Citations.] The SLAPP strategy also works even if the matter is already in litigation because the defendant/cross-complainant hopes to drive up the cost of litigation to the point where the plaintiff/cross-defendant will abandon its case or have less resources available to prosecute its action against the defendant/cross-complainant and to deter future litigation. [Citation.]

"Thus, while SLAPP suits `masquerade as ordinary lawsuits' the conceptual features which reveal them as SLAPP's are that they are generally meritless suits brought by large private interests to deter common citizens from exercising their political or legal rights or to punish them for doing so. [Citation.] Because winning is not a SLAPP plaintiff's primary motivation, defendants' traditional safeguards against meritless actions[] (suits for malicious prosecution and abuse of process, requests for sanctions) are inadequate to counter SLAPP's. Instead, the SLAPPer considers any damage or sanction award which the SLAPPee might eventually recover as merely a cost of doing business. [Citation.] By the time a SLAPP victim can win a `SLAPP-back' suit years later the SLAPP plaintiff will probably already have accomplished its underlying objective. Furthermore, retaliation against the SLAPPer may be counter-productive because it ties up the SLAPPee's resources even longer than defending the SLAPP suit itself. [Citations.]" (Wilcox v. Superior Court, supra, 27 Cal.App.4th at pp. 815-817, 33 Cal.Rptr.2d 446, fn. omitted.)

Civil Code section 47, which creates statutory privileges for specified publications or broadcasts, provides some protection from SLAPP suits. Not all communications or conduct leading to SLAPP suits are privileged, however, and while Civil Code section 47 allows a defendant to avoid liability for covered publications or broadcasts, it is not a particularly effective tool for preventing the abuses inherent in SLAPP litigation—the filing of specious suits as a means of causing the defendants to exhaust their resources by defending against the suits.

In 1992, the Legislature enacted Code of Civil Procedure section 425.16 (hereafter section 425.16), finding and declaring that "there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances," and "it is in the public interest to encourage continued participation in matters of public significance, and . . . this participation should not be chilled through abuse of the judicial process." (§ 425.16, subd. (a).)

Under section 425.16, a cause of action asserted "against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States or California Constitution in connection with a public issue [is] subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim." (§ 425.16, subd. (b)(1).)

The section defines acts "in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue," as including: "(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest." (§ 425.16, subd. (e).)

The first category essentially echoes Civil Code section 47, subdivision (b)(1),² protecting statements made in official proceedings. The second category goes further, referring to statements made outside of official proceedings but in connection with an issue under consideration in official proceedings, whether or not those statements are themselves privileged. Statements in this category are subject to a special motion to strike whether or not the issue under...