Nancy KAUFMAN et al., Petitioners, v. The SUPERIOR COURT of Orange County, Respondent; Irving A. KANAREK, Real Party In Interest.
Irving Kanarek, a former attorney, has sued attorneys Nancy Kaufman and Edwin Printemps, their law firm and their former clients, Jose and Hermalinda Rangel, (collectively, “defendants”) for abuse of process and other torts stemming from defendants' prosecution of an earlier lawsuit against Kanarek. The gravamen of Kanarek's complaint is that in the underlying action defendants wrongfully obtained a judgment against him in an unopposed trial when they knew he was mentally incapacitated and they failed to advise the court of his condition. Defendants then used the judgment in a state bar proceeding against him to obtain restitution from the State Bar Client Security Fund. Upon learning of the restitution award, Kanarek suffered emotional distress and financial harm. These allegations form the basis of his causes of action for abuse of process, fraud and intentional infliction of emotional distress.
Though variously styled, each cause of action faces the same potential stumbling block: the “litigation privilege” found in Civil Code section 47, subdivision (b) (hereafter section 47(b)). This privilege applies to any communication made in the context of a judicial proceeding by a participant in that proceeding, so long as the communication is made to achieve the objects of the litigation and is logically related to the action. (Silberg v. Anderson (1990) 50 Cal.3d 205, 212, 266 Cal.Rptr. 638, 786 P.2d 365.) Defendants asserted the litigation privilege (among other grounds) in their demurrer to Kanarek's second amended complaint.
The trial court overruled the demurrer, finding the privilege inapplicable because Kanarek's claims are based not on defendants' communications, but rather on defendants' conduct in remaining silent.1 Defendants filed this writ petition and we stayed the trial court proceedings to consider the issues raised by the demurrer. We now hold that defendants' willful silence in the face of a duty to speak was a communicative act embraced by the litigation privilege. Consequently, the court erred in overruling the demurrer.
In deciding the demurrer, the trial court had to determine if the allegations of the complaint, which are assumed true, state a cause of action. (Code Civ.Proc., § 430.10, subd. (e); Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 238, 282 Cal.Rptr. 233.) The rambling and repetitive nature of Kanarek's second amended complaint surely made this task especially difficult. The first cause of action alone runs 39 pages, much of it filled with material concerning alleged statements by defendants which the trial court found to be clearly privileged under section 47(b) as statements uttered in a judicial proceeding. Buried amid these properly disregarded allegations, the court found particular allegations of defendants' conduct (or, more accurately, silence) which it believed were outside the scope of the litigation privilege and formed cognizable claims. Upon the strength of these pared-down allegations, the court overruled the demurrer. We summarize them here.
On January 6, 1989, defendants filed a first amended complaint naming Kanarek along with his then-wife, Sally Nava, as defendants in an action for breach of contract, fraud, and legal malpractice. Kanarek responded in propia persona. The claims stemmed from certain alleged financial transactions between Kanarek and Nava and their former housekeeper, Hermalinda Rangel, and her spouse, Jose. The complaint was without merit. On November 6, 1989, Kanarek became mentally incapacitated. He was taken to a locked psychiatric ward at Harbor-UCLA Medical Center, an event which garnered a good deal of media attention. Defendants were aware of Kanarek's condition and hospitalization but did not advise the court of these facts.2
Defendants arranged for a non-contested trial to take place on August 20, 1990. The purpose of the trial was to obtain a judgment that could be used to extract money from the State Bar Client Security Fund. When defendants arranged this non-contested trial, they knew Kanarek was mentally incapacitated. Given this knowledge, defendants had a duty to advise the court of his condition and of the need to appoint a guardian ad litem for him. But defendants kept the information to themselves, breaching this duty.3 Kanarek has suffered emotional distress and economic damage from being saddled with the obligation to repay the funds defendants obtained from the State Bar.
There is a truth at the core of Kanarek's claims. This is the principle that a plaintiff may not take advantage of a defendant's legal disability to obtain a judgment without a fair adversary hearing. A plaintiff who is aware of a defendant's mental incapacity or some other factor preventing the defendant from participating in a legal proceeding is duty-bound to inform the court of this fact.
In Olivera v. Grace (1942) 19 Cal.2d 570, 122 P.2d 564, the California Supreme Court addressed a similar scenario, where a plaintiff proceeded to a default judgment against a person she knew to be mentally incompetent. “Where the defendant is under such a legal disability and the plaintiff has knowledge of his condition, a duty rests upon the plaintiff to disclose such matters to the court and to have a guardian appointed for the purpose of the proceeding. [Citations.] If the plaintiff knows of the defendant's incompetency but conceals such information from the court and, to prevent a true adversary hearing, proceeds to a default judgment by taking advantage of defendant's condition, his conduct constitutes a fraud upon the court as well as upon the incompetent defendant.” (Id., at p. 577, 122 P.2d 564; see also In re Marriage of Park (1980) 27 Cal.3d 337, 343, 165 Cal.Rptr. 792, 612 P.2d 882 [husband's failure to disclose wife's deportation “breached his duty of disclosure and perpetrated a fraud upon the court as well as his wife” in marriage dissolution proceeding].)
Courts have long recognized such “extrinsic fraud” as a basis for setting aside a judgment. (In re Marriage of Park, supra, 27 Cal.3d at p. 342, 165 Cal.Rptr. 792, 612 P.2d 882; Olivera v. Grace, supra, 19 Cal.2d at p. 575, 122 P.2d 564 [and see cases cited there].) Kanarek, however, seeks something else in this action: He seeks to establish defendants' liability in tort for their breach of this duty of disclosure. It is this claim for monetary damages which runs headlong into the litigation privilege.
In Silberg v. Anderson, supra, 50 Cal.3d 205, 266 Cal.Rptr. 638, 786 P.2d 365, the Supreme Court provided a definitive analysis of the expansive application and absolute nature of the litigation privilege and the policies underlying it. Though originally created to protect litigation participants from derivative defamation actions, the privilege now applies to all torts, with the exception of malicious prosecution. (Id., at p. 212, 266 Cal.Rptr. 638, 786 P.2d 365.) It applies to “any communication, whether or not it amounts to a publication ․ [and] it applies to any publication required or permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is involved. [Citations.]” (Ibid.)
The privilege is held to be absolute in nature “to effectuate its vital purposes[.]” (Id., at p. 215, 266 Cal.Rptr. 638, 786 P.2d 365.) Foremost among these purposes is ensuring “the utmost freedom of access to the courts” by barring derivative tort actions. (Id., at p. 213, 266 Cal.Rptr. 638, 786 P.2d 365.) The privilege also promotes complete and truthful testimony, encourages zealous advocacy, gives finality to judgments, and avoids unending litigation. (Id., at p. 214, 266 Cal.Rptr. 638, 786 P.2d 365.) Given the importance of the policies undergirding it, the litigation privilege “has been referred to as ‘the backbone to an effective and smoothly operating judicial system.’ [Citation.]” (Id., at pp. 214-215, 266 Cal.Rptr. 638, 786 P.2d 365.)
The trial court here ruled the litigation privilege inapplicable because Kanarek's claims involve no “communication” by defendants, but rather defendants' unprivileged “conduct” in remaining silent where there was a duty to speak. Case law offers some support for the “communication/conduct” distinction drawn by the court. In Kimmel v. Goland (1990) 51 Cal.3d 202, 271 Cal.Rptr. 191, 793 P.2d 524 the Supreme Court held the litigation privilege “precludes recovery for tortiously inflicted injury resulting from publications or broadcasts made during the course” of litigation but “does not bar recovery for injuries from tortious conduct ” regardless of its relation to the litigation. (Id., at p. 205, 271 Cal.Rptr. 191, 793 P.2d 524.) The court rejected defendants' claim that the litigation privilege “shields a person from liability for the unlawful recording, in anticipation of litigation, of confidential telephone conversations.” (Ibid.)
But the Kimmel court explicitly limited its holding “to the narrow facts before us involving noncommunicative acts[.]” (Ibid., italics added.) In a footnote, the court expanded on this point. “[O]ur holding that the litigation privilege does not apply is limited to the injury resulting from plaintiffs' and [their attorney's] conduct. To the extent the complaint rests on [the attorney's] alleged communicative acts of ‘counseling’ and ‘advising’ his clients, the privilege is clearly operative.” (Id., at p. 208, fn. 6, 271 Cal.Rptr. 191, 793 P.2d 524, italics added.) In other words, the court in Kimmel drew a finer distinction than that drawn by the trial court here. While noncommunicative conduct is unprivileged, the privilege does apply to communicative acts. (See also Rubin v. Green (1993) 4 Cal.4th 1187, 1196, 17 Cal.Rptr.2d 828, 847 P.2d 1044) [a law firm's alleged acts of wrongful attorney solicitation based on its use of a nonattorney to meet and discuss with mobilehome park residents a possible lawsuit against park owners “were communicative in their essential nature and therefore within the privilege of section 47(b).”]
The question before us, then, is whether defendants' alleged act of failing to disclose Kanarek's mental incapacity to the court in the underlying action was a communicative act within the scope of the litigation privilege. We have found no authority directly on point.4 In several cases involving application of the litigation privilege, the nondisclosure of critical information was part of the communicative conduct to which the privilege was held to apply. For example, in Silberg v. Anderson, supra, 50 Cal.3d 205, 266 Cal.Rptr. 638, 786 P.2d 365, a former husband sued the attorney who had represented his wife in dissolution proceedings. The attorney had recommended a supposedly neutral and independent psychologist to evaluate the parties for the purpose of determining custody issues. The attorney had failed to disclose she had a preexisting personal relationship with the psychologist. The attorney allegedly used this undisclosed relationship to influence the psychologist to favor the wife in his evaluation and to issue a biased report. The court held the attorney's statements as to the psychologist's neutrality and independence were privileged under section 47(b) and ordered all of husband's tort claims dismissed. (Id., at pp. 219-220, 266 Cal.Rptr. 638, 786 P.2d 365.)
In Kupiec v. American Internat. Adjustment Co. (1991) 235 Cal.App.3d 1326, 1 Cal.Rptr.2d 371, an artist sued a hotel's insurance carrier and the company's claims adjuster for tortious interference with an earlier insurance claim and civil action, intentional concealment of evidence, and intentional infliction of emotional distress. The artist alleged that defendants concealed both the destruction of her painting which had hung in the hotel and the insurer's probable liability under the hotel's policy. She further alleged that defendants either directed the hotel's counsel to falsely deny knowledge of the whereabouts of the painting, or at least ratified such conduct. The court found the “alleged concealment and misrepresentation of facts and the alleged actions of [the insurance company] to abuse the discovery process are all acts that are, in their essential nature, communicative.” (Id., at p. 1333, 1 Cal.Rptr.2d 371.) Accordingly, the court held these acts were within the scope of the litigation privilege and the demurrer was properly sustained. (Ibid.; see also Doctors' Co. Ins. Services v. Superior Court (1990) 225 Cal.App.3d 1284, 1299, 275 Cal.Rptr. 674 [medical malpractice insurer's conduct in concealing its insured's liability-and its own duty to indemnify-by instructing its insured and another doctor to lie in their depositions was privileged under section 47(b) ].)
The new issue raised by defendants' demurrer is whether concealment alone, without accompanying statements, qualifies for immunity under the litigation privilege. The answer lies in the complex nature of silence itself. Silence can signify nothing, or it can communicate a good deal, all depending on context. The law attributes meaning and effect to silence in certain factual settings.5 For example, “[a]n estoppel may arise from silence where there is a duty to speak.” (Skulnick v. Roberts Express, Inc. (1992) 2 Cal.App.4th 884, 891, 3 Cal.Rptr.2d 597.) Such “estoppel by silence” arises where there is an obligation to speak and the failure to do so leads another to rely on a mistaken set of facts and act to his or her detriment. (Ibid.)
In the eyes of the law, silence in another context is even more telling. The implications of this particular brand of silence are described vividly in a dissenting opinion by Justice Johnson in People v. Celestine (1992) 9 Cal.App.4th 1370, 12 Cal.Rptr.2d 179: “The human inclination to speak out with a denial when accused of any crime or even lesser forms of evil conduct is so strong that Anglo-American jurisprudence has built an independent exception to the hearsay rule around the failure to follow that inclination. The ‘admission by silence’ or ‘adoptive admission’ exception to the hearsay rule is recognized in its own section of the Evidence Code. ‘Evidence of a statement offered against a party is not made inadmissible by the hearsay rule if the statement is one of which the party, with knowledge of the content thereof, has by words or other conduct manifested his adoption or his belief in its truth.’ (Evid.Code, § 1221.) ․ Essentially this hearsay exception holds that anyone who fails to deny an accusation or to offer an exculpatory explanation under circumstances where denial is reasonably appropriate is considered to have admitted the truth of the accusation. Thus a person's silence is deemed to be the equivalent of his having uttered the substance of the declarant's accusation.” (Id., at pp. 1378-1379, 12 Cal.Rptr.2d 179 (conc. & dis. opn. of Johnson, J.).)
Likewise, defendants' silence in the face of a duty to inform the court of Kanarek's mental incapacity communicated something substantial. It implicitly conveyed the message that there was nothing to report concerning Kanarek's nonappearance at the settlement conferences and trial; i.e., defendants knew of no legal disability preventing his participation. This implicit message was, of course, false. It was a message nonetheless. Defendants' silence, though reprehensible if Kanarek's allegation is true, was a communicative act protected by the litigation privilege. Consequently, it is not actionable as abuse of process, fraud, or any other tort.6
Applying the litigation privilege to a plaintiff's willful failure to disclose a defendant's legal incapacity seems incompatible with the rule from Olivera v. Grace, supra, 19 Cal.2d 570, 122 P.2d 564 that this same nondisclosure can support an action to set aside the judgment for extrinsic fraud. But there is a difference between setting aside a judgment and holding the perpetrator of the extrinsic fraud liable for damages. It is only the latter approach which is barred by the litigation privilege. The policies served by the privilege (e.g., permitting unfettered access to the courts and encouraging vigorous advocacy) are not hindered by allowing a judgment to be set aside; these policies would be implicated if defendants were exposed to the possibility of a damage award.
A peremptory writ of mandate shall issue directing the superior court to vacate its order overruling the demurrer and to enter an order sustaining the demurrer without leave to amend as to the attorney defendants, Nancy Kaufman and Edwin Printemps. As to Jose and Hermalinda Rangel, the plaintiffs in the underlying action, the writ shall direct the superior court to enter an order sustaining their demurrer but granting Kanarek leave to amend for the limited purpose of pleading sufficient facts to set aside the judgment in the underlying case on the basis of extrinsic fraud.7 No claim for monetary damages may be stated in the complaint. The alternative writ is discharged and the stay is dissolved.
1. The court sustained the demurrer only as to the second cause of action for abuse of process in connection with the state bar proceeding, noting that the tort of abuse of process does not extend to administrative proceedings. (Stolz v. Wong Communications Limited Partnership (1994) 25 Cal.App.4th 1811, 1822, 31 Cal.Rptr.2d 229.)* * *
2. When Kanarek failed to appear at two scheduled mandatory settlement conferences (MSC), in March and then in August of 1990, defendants said nothing to the court of Kanarek's mental incapacity. (Nava did not appear at either MSC since her default had been entered earlier.)
3. Defendants ask us to take judicial notice of a declaration and certain attached exhibits from the court file in the underlying case which they contend disprove the allegation that they failed to inform that court of Kanarek's mental incapacity. A demurrer may be grounded on “any matter of which the court is required to or may take judicial notice[.]” (Code Civ.Proc., § 430.30, subd. (a).) The problem with defendants' request is that it was not first made before the trial court.While Evidence Code section 459, subdivision (a) requires us to judicially notice any matter “properly noticed by the trial court” along with all matters the trial court was required to notice under section 451 or 453 of the Evidence Code, we have discretion as to matters the trial court could have judicially noticed but did not. The trial court did not take judicial notice of the documents at issue here for a simple reason: Defendants failed to include them among the particular documents and “facts” specified in their request for judicial notice below. “When the ground of demurrer is based on a matter of which the court may take judicial notice ․ such matter shall be specified in the demurrer, or in the supporting points and authorities for the purpose of invoking such notice․” (Code Civ.Proc., § 430.70, emphasis added.) Since defendants failed to specify the subject documents in the demurrer, they can hardly expect us to consider these document as a basis for finding the trial court abused its discretion in overruling the demurrer. We decline to take the judicial notice requested. As to those documents that were judicially noticed below, we agree with the trial court that none establishes as a matter of law that defendants advised the court in the underlying case of Kanarek's mental incapacity.* * *
4. In Pollock v. Superior Court (1991) 229 Cal.App.3d 26, 279 Cal.Rptr. 634, we cited section 47(b) in support of our holding that attorneys may not “sue one another for omissions or representations made as officers of the court during the course of litigation.” (Id., at p. 29, 279 Cal.Rptr. 634.) We did not, however, decide in Pollock whether “omissions” (i.e., acts of nondisclosure) were privileged under section 47(b). The issue was not raised in the case.
5. The significance of silence was explored dramatically in the acclaimed play A Man For All Seasons. (Bolt, A Man For All Seasons (1960).) In the play, the great 16th Century Lord Chancellor of England, Sir Thomas More, thrown in prison for refusing to publicly sanction King Henry XIII's divorce and remarriage, believed his silence on the subject would save him. More declared at his trial, “The maxim of the law is-‘Silence gives consent.’ If therefore, you wish to construe what my silence ‘betoken,’ you must construe that I consented, not that I denied.” (Id., at pp. 120-121.) Unhampered by the law, the king construed More's silence as disapproval, and had his friend beheaded.
6. While defendants' alleged wrongful conduct may not be actionable in tort, it may be punished in other ways. In Silberg v. Anderson, supra, 50 Cal.3d 205, 266 Cal.Rptr. 638, 786 P.2d 365, the court noted that “in a good many cases of injurious communications, other remedies aside from a derivative suit for compensation will exist and may help deter injurious publications during litigation. Examples of these remedies include criminal prosecution for perjury ․ or subornation of perjury ․; criminal prosecution under Business and Professions Code, section 6128; and State Bar disciplinary proceedings for violation of Business and Professions Code, section 6068, subdivision (d) [admonishing attorneys ‘never to seek to mislead the judge or any judicial officer by any artifice or false statement of fact or law.’].” (Silberg v. Anderson, supra, 50 Cal.3d at pp. 218-219, 266 Cal.Rptr. 638, 786 P.2d 365, fns. omitted.)
7. Along with the lack of a fair adversary hearing, a party seeking to set aside a judgment for extrinsic fraud must show (1) no inexcusable neglect in seeking this equitable relief and (2) facts “indicating a sufficiently meritorious claim to entitle [the party] to a fair adversary hearing. [Citations.]” (In re Marriage of Park, supra, 27 Cal.3d at pp. 345-346, 165 Cal.Rptr. 792, 612 P.2d 882.)
WALLIN, Associate Justice.
SILLS, P.J., and CROSBY, J., concur.