ROBERT RENS INC v. WOODS

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

ROBERT D. RENS D.D.S., INC., etc. et al., Plaintiffs and Appellants, v. William F. WOODS, Defendant and Respondent.

D004943.

Decided: July 17, 1987

Brown & Deutsch, Robert J. Brown and Anthony S. Deutsch, San Diego, for plaintiffs and appellants. Lewis, D'Amato, Brisbois & Bisgaard and Frank D. Walker, San Diego, for defendant and respondent.

A dentist sued former employees who quit his employment and established a competing dental practice.   The dentist charged their attorney with engaging in a conspiracy with the former employees in establishing the competitive practice.   The complaint alleged the attorney furthered the conspiracy by having one of the employees testify falsely at a deposition.   The court sustained the attorney's demurrer without leave to amend.   The dentist appeals the resultant judgment.   We shall hold the attorney's overt acts to induce the false testimony and the false testimony were made in a judicial proceeding and the cause of action is barred under Civil Code 1 section 47, subdivision 2, and affirm the judgment.

I

We treat the demurrer as admitting all properly pleaded material facts and read the complaint as a whole and its parts in their context.  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)   We recite relevant facts set out in the complaint as admitted by the demurrer. Robert D. Rens, D.D.S., Inc. is a professional corporation authorized to practice dentistry in California.   We assume Robert D. Rens is an individual, the sole shareholder of the professional corporation, and a licensed dentist.   Rens employed dentist Fred Larson, dental hygienist Susan A. Ahlberg and dental assistant Carol Mucci. Larson quit and opened his own dental office, joined by Ahlberg and Mucci.   The former employees, later joined by Karen Morris, solicited Rens's patients, circulated misleading statements to those patients and generally did various things to harm Rens's practice and to take over his patients.   William F. Woods is an attorney.

On November 27, 1985, Rens filed a first amended complaint for unfair competition, interference with business, conspiracy, accounting, conversion and intentional infliction of emotional distress, naming as defendants all of the former employees, Morris and Woods.   Woods was charged in the third cause of action, conspiracy, with having joined with the others in a conspiracy to interfere with Rens's practice and to engage in unfair competition.   Rens alleges Woods furthered the conspiracy and adopted and ratified the acts of the others “by counseling and encouraging the concealment [of the wrongful acts] by having his then client Defendant AHLBERG falsely testify at her deposition on February 24, 1984.”   Rens then says he learned of this action in December of 1984 when Ahlberg's new attorneys advised his lawyer of changes made by Ahlberg to the transcript of her deposition taken February 24, 1984.   The complaint goes on to state that in later depositions Ahlberg testified Woods advised her to testify incorrectly at the first deposition concerning material factual issues.

Woods's demurrer to the second amended complaint 2 contended Woods's conduct in advising Ahlberg to give false testimony at the deposition was protected by the absolute privilege under Civil Code section 47 as constituting a publication made in the course of a judicial proceeding.   The trial court agreed, Rens appeals, and we affirm.

II

Section 47 provides, in pertinent part, that:  “A privileged publication or broadcast is one made ․ [¶] 2.   In any ․ (2) judicial proceeding․”  The deposition here was taken February 24, 1984.   The first amended complaint was filed November 27, 1985.   The parties do not contend the deposition was not taken in the course of judicial proceedings.   They address solely the issue of privilege under section 47.   We accept the issue as presented and turn to the merits.

III

We take as true the allegations in the complaint Woods joined in and abetted the conspiracy to harm Rens by advising Ahlberg to testify falsely as to material matters under oath at her first deposition.   The complaint in effect alleges Ahlberg committed perjury (Pen.Code, § 118) and Woods committed subornation of perjury (Pen.Code, § 127).   Both offenses are punishable as felonies (Pen.Code, § 126).

Early on, the Supreme Court held the subornation of perjury in a criminal proceeding does not constitute a cause of action for damages for malicious prosecution.  (Taylor v. Bidwell (1884) 65 Cal. 489, 490, 4 P. 491.)

“The averments with respect to the defendants' suborning a witness to swear falsely in the criminal prosecution against the plaintiff do not constitute a cause of action for damages.  [Citations.]  In Smith v. Lewis [3 Johns. 157], the court observed that however just and reasonable it may appear, upon the first view of the proposition, that a man who has by perjury injured another, should be answerable, yet, on a nearer inspection, when the mischiefs resulting from upholding that proposition are considered, the conclusion must be that it would be dangerous in the extreme to sustain the action.”

Recently, Carden v. Getzoff (1987) 190 Cal.App.3d 907, 915, 235 Cal.Rptr. 698, considered Taylor binding under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937, and affirmed dismissal of a complaint following an order sustaining a demurrer without leave to amend.   The complaint alleged abuse of process and pleaded emotional distress damages related to false testimony given by a wife's expert accounting witness in dissolution proceedings on the goodwill value of the husband's work as an anesthesiologist on a hospital center staff.   The complaint alleged the witness testified as to the value based on an examination of the husband's “practice” and a comparison of the value of three other comparable anesthesiology medical practices.   In fact, the three were not anesthesiologists with comparable practices and were fictitious entities.   The court held the false testimony was absolutely privileged and the action was barred by section 47.  (Carden, supra, 190 Cal.App.3d at p. 910, 235 Cal.Rptr. 698.)

“ ‘[A]lthough the statutory privilege accorded to statements made in judicial proceedings appears in the code in the chapter on defamation, it applies to virtually all other causes of action, with the exception of an action for malicious prosecution.  [Citation.]’  ․ The decisions in Fuhrman v. California Satellite Systems (1986) 179 Cal.App.3d 408, 420 [231 Cal.Rptr. 113] ․ and Rosenthal v. Irell & Manella (1982) 135 Cal.App.3d 121, 125 [185 Cal.Rptr. 92] ․ make it clear that the privilege ‘has been applied to defeat tort actions based on publications in protected proceedings but grounded on different theories of liability’ (Rosenthal supra, 135 Cal.App.3d at p. 125 [185 Cal.Rptr. 92] ), listing several theories of liability, attempted but rejected, including abuse of process, intentional infliction of mental distress, inducing breach of contracts, invasion of privacy, fraud, interference with prospective economic advantage, negligent misrepresentation, and negligence.  [Citation.]

“While courts have argued about the scope of the privilege [citation], it is clear that ‘the privilege has been applied to publications which were private communications between parties and which communications were related not only to actual but potential court actions.’  [Citation.]

“Unless some other exception to the privilege applies, it seems clear to us that the ‘publications' made both in the document prepared by respondent and in respondent's testimony at the dissolution proceedings are covered by the absolute privilege of section 47, subdivision 2.   The dissolution action was pending, and respondent had been hired as an expert witness for appellant's wife.   This situation is clearly part of a judicial proceeding, unlike the private processing of dental claims found not to be covered by the privilege in Slaughter v. Friedman (1982) 32 Cal.3d 149, 156 [185 Cal.Rptr. 244, 649 P.2d 886]․  The allegations in appellant's second amended complaint are also unlike Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 826 [106 Cal.Rptr. 718] ․ where the privilege was erroneously claimed by people who were not litigants, witnesses, or attorneys, the ‘designated persons ․ to whom the absolute privilege has been extended by law,’ and the defamatory statements were allegedly communicated to ‘strangers ․ who had no interest in the action.’  Fuhrman v. California Satellite Systems, supra, 179 Cal.App.3d 408 [231 Cal.Rptr. 113], can also be distinguished since the judicial proceeding herein, the dissolution, was ‘ “contemplated in good faith and under serious consideration.” ’  (Id., at p. 421  [231 Cal.Rptr. 113], italics in original.)”  (Carden v. Getzoff, supra, at pp. 913–914, 235 Cal.Rptr. 698, fns. omitted.)

The court found no other exception to the privilege applied.   Concurring, Justice Danielson urged the Supreme Court reexamine Taylor or the Legislature review section 47, pointing out Taylor does not identify the dread mischiefs and dangers resultant from holding a perjurer or suborner accountable in a civil action.

Rens suggests Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 106 Cal.Rptr. 718, and Barbary Coast Furniture Co. v. Sjolie (1985) 167 Cal.App.3d 319, 213 Cal.Rptr. 168, relax the absolute privilege and authorize his action against Woods.   In Bradley, defamatory statements were uttered outside the court and not during any legal proceeding (id. 30 Cal.App.3d at p. 826, 106 Cal.Rptr. 718) and were the basis for an action in slander.   The publication was not made to achieve the objects of the litigation.   In Barbary, an attorney represented a company in bankruptcy proceedings and procured confirmation of a plan of arrangements for payment of debts.   A complaint by the company and shareholders charged the company president and the attorney with a number of breaches of fiduciary duty including formation of an entity to compete with the company during the course of the bankruptcy proceedings.   The pleadings and affidavits adduced during hearings on the attorney's motion for summary judgment demonstrated these nefarious attorney activities.   Without mentioning section 47, the trial court granted the motion which was reversed on appeal.   On appeal, for the first time, the attorney claimed the section 47 privilege.   The court reversed dismissal of the complaint saying the attorney misrepresentations with respect to the company in the context of the pleadings were not made in furtherance of the chapter XI proceeding and to promote the interests of justice.

McClatchey Newspapers, Inc. v. Superior Court (1987) 189 Cal.App.3d 961, 234 Cal.Rptr. 702, considered a complaint which charged a newspaper and two reporters with a conspiracy to introduce defamatory material into a deposition which was then reported in the press.   The plaintiffs argued the section 47, subdivision 2 privilege was inapplicable to the conspiracy charge.   Concluding the conspiracy allegations did not pierce the protective shield of the statute and directing the trial court to enter judgment for the defendants, McClatchey declined to accept the reasoning in Bradley and Barbary.   Finally, Taylor is squarely on point here and as Carden admonishes, and laments, Auto Equity compels us to affirm the judgment.

Judgment affirmed.

I respectfully dissent from the opinion of the majority who could not be more wrong in their analysis of the facts of this case, the law which they discuss, and their belief that those legal principles have any application whatsoever to the issues which are material to this appeal.   Like the gullible country boy who on his first appearance at the county fair participates in a pitchman's shell game, the majority have once again proved that a clever advocate's literary sleight-of-hand is sometimes quicker than the judicial eye.   In a resplendent display of prestidigital advocacy, respondent solemnly avers his liability for conspiring to interfere with Dr. Rens' dental practice in association with his codefendants is somehow immunized by Civil Code section 47, subdivision (2), which bars civil proceedings for damages incurred as a result of oral or written publications in conjunction with or related to judicial proceedings.   A herring of redder hue is difficult to imagine.

I

The majority correctly notes Woods' contention is that the privilege in section 47, subdivision (2) protects him from civil liability for the act of giving a witness legal advice to lie during a deposition associated with a judicial proceeding.   The majority, however, overlooks the context in which the proposition is stated by respondent in his brief.   The respondent cites Steiner v. Eikerling (1986) 181 Cal.App.3d 639, 643, 226 Cal.Rptr. 694, for the proposition that the foregoing privilege is an absolute defense to any cause of action in tort which does not sound in malicious prosecution, including a civil conspiracy cause of action.   Having stated this bald proposition, respondent does not refer to any facts or analysis in Steiner which, even on a casual reading, shows it has no application to the pleadings in this case.   It is surprising the majority did not at least refer to Steiner since it is the single case respondent cites to establish the premise to justify applying section 47, subdivision (2) here.   The balance of respondent's argument merely discusses application of that privilege in other context.

The first sentence in Steiner distinguishes it from this case.   Justice Poche wrote, “The primary focus of this appeal is whether any cause of action can be stated against those who knowingly prepare and offer a forged will for probate.”  (Id. at p. 640, 226 Cal.Rptr. 694.)   In Steiner, certain persons filed a forged will designating themselves as beneficiaries of a decedent's estate and attempted to have it probated.   Other potential heirs successfully contested the filing of that will and it was found to be a forgery.   Later, the contestants sued the forgers by alleging a civil conspiracy and a cause of action for malicious institution of civil proceedings.   This civil conspiracy alleged the defendants had conspired to engage in actions for the purpose of forging a will and presenting it for probate.   Thus, the damages for which relief was sought were incurred by actions preliminary to and in the direct course of judicial proceedings.   This is precisely the basic factual scenario in every reported decision in which the privilege of section 47, subdivision (2) has been held to immunize a person from civil liability.   That is, the damages sought from the tortfeaser were those directly incurred as a result of the tortious activity related to judicial proceedings.   Thus, in Steiner the damages were alleged to be the legal fees, travel and lodging expenses incurred in being forced to contest the unnecessary legal proceedings incurred only because of the preparation of the filing of the forged will and (apparently) general damages associated therewith.   So it is also with Carden v. Getzoff (1987) 190 Cal.App.3d 907, 235 Cal.Rptr. 698, where the emotional distress damages were incurred, if at all, because of perjured witness testimony in a judicial proceeding.   The same is true of the relevant cases which Steiner and Carden cite as authority:  Ribas v. Clark (1985) 38 Cal.3d 355, 212 Cal.Rptr. 143, 696 P.2d 637 and Pettitt v. Levy (1972) 28 Cal.App.3d 484, 104 Cal.Rptr. 650.

Although the majority does not mention Pettitt and Ribas, they are the precedent which Steiner and Carden found to be binding and, more significantly, that McClatchy Newspapers, Inc. v. Superior Court (1987) 189 Cal.App.3d 961, 234 Cal.Rptr. 702, strictly adheres to as precedent.  (Id. at p. 971, 234 Cal.Rptr. 702.)   The plaintiffs in McClatchy sought damages incurred as a result of newspaper publication of statements made during the course of a deposition related to a judicial proceeding.   This is the classic Ribas, Pettitt, Steiner and every other fact situation expressed by any reported decision in which the privilege of section 47, subdivision (2) was found to apply.   The fact that the causes of action were couched, in some cases, as conspiracies was irrelevant because the damages sought related specifically and only to the underlying purpose of those conspiracies (i.e. the tort) which, unlike this case, were directly related to a present or anticipated judicial action.

Contrast the above cases which have applied section 47, subdivision (2) with the present action where the damages sought against Woods are only alleged to have been incurred as a result of the underlying tort of the conspiracy of which he was involved, i.e. the conversion of Dr. Rens' property, unfairly competing with his business, and interfering with his business opportunities.   No damages for emotional distress, loss of profits, fees or otherwise are sought because of any effect of the purportedly false deposition testimony.   Section 47, subdivision (2) has no applicability to this pleading and the resolution of the demurrer.

II

Further, in allowing themselves to be distracted by the nonrelevant decisions eliminating civil liability for damages incurred by persons injured by perjurers or those who suborn perjury, they chase a will-o'-the-wisp passing itself off as Taylor v. Bidwell (1884) 65 Cal. 489, 4 P. 491.   The majority somehow overlooks the fact that Rens' complaint neither charges Ahlberg nor Woods with perjury or subornation of perjury in the sense the cases construing Taylor are concerned.   The complaint here only charges Ahlberg with conversion, unfair competition, and interference with business.   Woods is only charged with those torts.   In Taylor, the plaintiff sought damages for malicious prosecution based upon perjury committed in the course of the judicial action described as malicious.  Taylor merely held that where the gist of the action is perjury and it is perjury from which the damages actually flow, one cannot avoid a statute of limitations which was applicable to the cause of action based on malicious prosecution by attempting to separately state a cause of action for perjury.   In Legg v. Ford (1960) 185 Cal.App.2d 534, 542–543, 8 Cal.Rptr. 392, the majority “hypothesized” that a cause of action entitled “conspiracy to permit perjury” would not be actionable standing alone because subornation of perjury is not a separate tort.   However, there is no conspiracy to commit perjury pleaded in Dr. Rens' cause of action, nor are there any damages sought against Woods because of any subornation of perjury.

It is noteworthy that both parties here view Dr. Rens' complaint as charging a conspiracy between Larson, Ahlberg, Morris, Mucci, and Woods.   Count three merely sets forth an overt act by which Woods is alleged to have been deemed to join the conspiracy to convert, to unfairly compete, and to interfere with Dr. Rens' business opportunity.   The allegation that Woods joined a conspiracy after its commencement any particular manner does not create a cause of action based on “publication” of perjured testimony or a cause of action based on perjured testimony at all.   Count three alleges a civil conspiracy and the gist of that conspiracy is the damages suffered by Dr. Rens by the acts which had already occurred relating to the conversion unfair competition and interference with his business.

Regardless of when which joined the conspiracy, he is deemed a party to every act previously done by any coconspirator.  (de Vries v. Brumback (1960) 53 Cal.2d 643, 648, 2 Cal.Rptr. 764, 349 P.2d 532.)   In a decision replete with citations to precedent, the court held a person who joined a conspiracy to convert property was liable for all previous of acts of his coconspirators including conversion of goods before he joined the conspiracy.   Here also, if Woods became a conspirator, no matter how late in the game, he is responsible for the damages for any actionable tortious acts committed previously by his coconspirators.   It is those damages for which the complaint seeks redress here and to which it is limited.

In passing, I only comment that whatever Carden's purpose in referring to Taylor, it has no applicability in this case.

One may well suspect Woods' alleged involvement in the charged torts of conversion, unfair competition, and business interference has been presented through the mechanism euphemistically referred to as “artful” pleading.   This characterization, implying a lack of factual support for liability, all too often triggers a reflexive desire to engage in judicial euthanasia.   However, summary judgment, not demurrer, is the device legislatively devised to winnow out those cases.

One should not imply from the foregoing criticism that I have any quarrel with the remainder of the majority decision.

FOOTNOTES

FN1. All statutory references are to the Civil Code unless otherwise specified..  FN1. All statutory references are to the Civil Code unless otherwise specified.

2.   The demurrer is noticed as to a second amended complaint which is not included in the record.   The moving and opposition papers refer to matters admitted by the demurrer which are identical to those matters we have related and reviewed in the first amended complaint.   The order sustaining the demurrer does not refer to either a first or second amended complaint.   We shall assume the second, if there is one, is identical to the first which is set out in the record, so far as words are concerned.

BUTLER, Associate Justice.

KREMER, P.J., concurs.