TENDLER USA v. DUN BRADSTREET INC (1974)

Court of Appeal, Fourth District, Division 2, California.

 Arthur S. TENDLER, doing business as USA Stereo, Plaintiff and Appellant. v. DUN & BRADSTREET, INC., a corporation, Defendant and Respondent.

Civ. 13820.

Decided: November 26, 1974

A. Lee Adair, Newport Beach, for plaintiff and appellant. Argue, Freston & Myers, and Edwin Freston, Los Angeles, for defendant and respondent.

 OPINION

Plaintiff appeals from a judgment of dismissal entered after the sustention of defendant's demurrer to the complaint and plaintiff's failure to amend and failure to post security required by section 830 of the Code of Civil Procedure in defamation cases.

Plaintiff is a businessman in Orange County, engaged in the retail sale of stereo tapes, accessories and components under the fictitious name USA Stereo. Defendant is in the business of obtaining and providing financial and credit reports concerning businesses and businessmen in the United States. Defendant furnishes this information to its customers for a fee so  that those customers may pass judgment on the credit and ability to pay of the business or businessman on whom the report is given.

The heart of plaintiff's complaint alleges: “That on or about June 6, 1972, defendant, without plaintiff's consent and without plaintiff's knowledge, undertook to prepare, issue and publish a financial and credit report to be used by and furnished to plaintiff's creditors and prospective creditors. That said report was so negligently researched and prepared so as to cause said report to contain many false, misleading, and inaccurate facts concerning plaintiff and plaintiff's personal and financial status.” It is further alleged that as a proximate result of defendant's negligence,” ... plaintiff has been damaged in its |sicŒ goodwill, business reputation, as well as his credit and financial status and reputations with his creditors and creditors with whom he sought to do business ... in the amount of $500,000.00.”

The trial court sustained defendant's general demurrer to the complaint and granted plaintiff 30 days in which to amend and to post the security required by section 830 of the Code of Civil Procedure in defamation cases.¹

Plaintiff elected not to amend his complaint and failed to post the required security as a result of which the court entered judgment dismissing plaintiff's action.

Contentions, Discussion and Disposition

Plaintiff concedes that his complaint fails to state a cause of action for defamation. He contends, however, that his complaint states a cause of action for negligence. We do not agree.

The gravamen of the complaint is injury to plaintiff's reputation. Injury to the interest in good reputation is governed by the law of defamation. (See Prosser, Law of Torts (4th ed.) p. 737; Rest. Torts, ch. 24, Scope Note; cf. Grimes v. Carter, 241 Cal.App.2d 694, 702, 50 Cal.Rptr. 808.)

It is true that, absent overriding First Amendment considerations (see New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686; Gertz v. Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789), a cause of action for defamation may be based upon negligent conduct of the defendant. (See Davis v. Hearst, 160 Cal. 143, 157,  158, 116 P. 530.) Indeed, absent First Amendment considerations, recovery for defamation may be had in many cases without proof of intentional wrongdoing or negligence. (See Prosser, Law of Torts (4th ed.), supra, p. 771, et seq.)

Here, however, plaintiff's complaint shows on its face that defendant's actions were cloaked in the conditional privilege statutorily provided for in California by subdivision 3 of Civil Code, section 47.² (See Stationers Corp. v. Dun & Bradstreet, Inc., 62 Cal.2d 412, 418, 42 Cal.Rptr. 449, 398 P.2d 785; Roemer v. Retail Credit Co., 3 Cal.App.3d 368, 370, 83 Cal.Rptr. 540.) When the conduct of the defendant is thus conditionally privileged, plaintiff must, in order to state a cause of action, allege that defendant acted with malice in fact. (Civ.Code, s 47, subd. 3, supra; Dietrich v. Litton Industries, Inc., 12 Cal.App.3d 704, 714, 90 Cal.Rptr. 856; Harris v. Curtis Publishing Co., 49 Cal.App.2d 340, 349, 121 P.2d 761.) Mere negligence cannot constitute evidence of malice in fact. (Davis v. Hearst, supra, 160 Cal. at p. 167, 116 P. 530; Roemer v. Retail Credit Co., supra, 3 Cal.App.3d at pp. 371-372, 83 Cal.Rptr. 540.)

Defendant's general demurrer to plaintiff's complaint was properly sustained and, plaintiff having failed to amend, a judgment of dismissal was proper.

Judgment affirmed.

FOOTNOTES

1.  Code of Civil Procedure, section 830 reads in pertinent part: “Before issuing the summons in an action for libel or slander, the clerk shall require a written undertaking on the part of the plaintiff in the sum of five hundred dollars ($500)....”

2.  Civil Code, section 47, subdivision 3 reads:“A privileged publication ... is one made--“3. In a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such relation to the person interested as to afford a reasonable ground for supposing the motive for the communication innocent, or (3) who is requested by the person interested to give the information.” (Emphasis supplied.)

KAUFMAN, Associate Justice.

TAMURA, Acting P.J., and WHYTE,* J., concur.