Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 15425
OPINION
BUTZ, J.
A nasty dispute between a homeowner and the contractor she hired to perform remodeling work gave rise to this lawsuit by the contractor against the homeowner’s architect for defaming him and interfering with his contract with the homeowner.
Plaintiff Craig Meinhard appeals from a judgment in favor of defendant Robert Creasy in this suit for defamation and interference with economic advantage, based upon a series of letters Creasy wrote charging Meinhard with “persistent and serious” failures to live up to his professional responsibilities as contractor for their mutual client, Nancy Williard.
The trial court found that the five publications were protected by the qualified privilege for communications to interested parties, which could be defeated only by a showing of malice. (Civ. Code, § 47, subd. (c) [hereafter § 47(c)].) Finding no evidence from which a reasonable jury could infer malice, the court granted Creasy’s motion for summary judgment.
Undesignated statutory references are to the Civil Code.
Meinhard argues that there was a triable issue of fact as to whether Creasy’s publications were made with malice. We reject his arguments and shall affirm the judgment.
The facts are taken from the evidence submitted in support of and in opposition to Creasy’s motion for summary judgment.
On February 15, 2004, Nancy Williard hired Robert Creasy to provide architectural services to remodel her single-family residence in June Lake. She discussed the project with Meinhard, indicating she had a budget of about $250,000. Meinhard submitted a cost estimate that indicated the first phase of the project could be done within her budget, but cautioned the figures were rough and that it was impossible to estimate the exact cost accurately.
On July 9, 2004 (unspecified calendar references are to that year), Williard and Meinhard entered into a contract to perform the work. The contract was a “cost plus” contract, paying Meinhard’s cost plus 20 percent for management overhead and profit. The contract called for phase one to be completed by October 31.
By the end of September, Williard was dissatisfied with the progress of construction--the cost had increased dramatically and she still did not have a place to live. Consequently, she asked Creasy to make a site visit. On October 5, Meinhard verbally requested a progress payment. Williard paid him $35,000 on October 6 and another progress payment of $20,000 on October 18, bringing the total amount paid to $180,000.
Creasy drove by the property on October 16, and noticed that Meinhard had made a significant structural error, in that two posts supporting a beam had been placed four feet off from where they were supposed to be according to the plans. Meinhard acknowledged the mistake, but told Creasy it would cost $30,000 to fix and would bankrupt him. In the meantime, a temporary fix was devised.
Meinhard told Williard that he was going to need an additional $100,000 to finish the job, based partly on changes in the scope of the work. He presented her with a spreadsheet indicating he committed over $207,000 and he would need at least another $27,968 to break even. By October 22, Meinhard had stopped work on the project and refused to continue unless further payments were received.
The November 8 letter
Williard directed Creasy to prepare a list of concerns he had about Meinhard’s performance on the project. Based on a review of his notes from meetings with Williard, Meinhard’s cost reports and his own observations, Creasy wrote a letter to Williard dated November 8, outlining four major areas of concern: (1) the misplaced structural posts; (2) Meinhard had stopped work “without just cause” before requesting payment and just before a snowstorm; (3) Meinhard made no attempt to secure the site from water and freezing damage although the winter storm was a well-publicized event, and the structure had sustained damage from snow and water infiltration; and (4) Meinhard did not provide Williard with a timely accounting of the project expenses, precipitating the financial crisis she was now facing. Creasy also found fault with Meinhard’s cost estimation. An October 8 cost spreadsheet which Meinhard provided on October 15 showed total expenses of $110,000. A week later, he submitted a spreadsheet totaling $180,000, an amount which exceeded Williard’s current budget, and gave Williard an ultimatum of paying an additional $30,000 (for his overhead and profit) within three days or he would stop work.
Creasy asserted that Meinhard had “underestimated the cost of his proposed project work by almost 100%.” His current estimate for work excluding exterior finishes, insulation, drywall and rough electrical would be over $260,000. Creasy concluded that one is “left with the perception” that the cost estimate represented “barely more than half the proposed work,” and that this was “in [his] estimation, a failure of professional responsibility.”
Creasy’s recommendations included consultation with legal counsel, an audit of all Meinhard’s records on the project, and fixing existing problems at the contractor’s expense.
Referring again to the billing issue, Creasy commented: “The fact that [Meinhard] remarked to you that he was fraudulently billing the bogged[-]down [P]ettibone lift to another project is just reason to suspect that his accounting on your project may be compromised or fraudulent as well.”
During a visit to the property on October 16, Williard saw a SkyTrak or Pettibone lift sitting near her property, and asked Meinhard if she was being charged for it. Meinhard told her she was not, because he was billing it to another project.
Creasy concluded that “in the interest of maintaining [his] professional relationship with [Meinhard]” it would be preferable that the content of the letter not be shared with anyone who might communicate it to him.
Williard showed the November 8 letter to her accountant, Don Porter, her attorney, Neil McCarroll, and her brother. She may have also provided a copy of the letter to lenders.
The November 26 letter
On November 18, Creasy and Meinhard met at the jobsite and engaged in a discussion about possible resolutions to the outstanding issues. Creasy also informed Meinhard of the risks of not completing the project. Because Meinhard refused to return to the jobsite, Williard directed Attorney McCarroll and Creasy to write a letter to Meinhard, documenting his derelictions. The letter was prepared jointly by Williard, Creasy and McCarroll, but went out on Creasy’s letterhead. Before the letter was sent, McCarroll advised Williard that Meinhard was in breach of his contract.
On November 26, Creasy wrote a second letter, which was copied to Williard and Attorney McCarroll. The letter began by telling Meinhard that Creasy was disappointed to learn that he had not followed through with a plan to enclose Williard’s home. He continued: “I thought that we had had a very cordial if not friendly meeting wherein I had openly empathized with your circumstances and was attempting to help you avoid a situation that was exposing you to severe liabilities.” Creasy stated that his goal was to “help you understand the risks you have created for yourself so that you might be able to rectify them before they become intractable, and in doing so prevent further damages to [Williard’s] house and home.”
Creasy also recounted a conversation he had with his wife’s father, who was a district attorney in Texas for 32 years, and confirmed that Meinhard was “terribly mistaken” about the “basics of contract law.” Another conversation with Williard’s real estate lawyer friend confirmed this assessment.
The letter continues by stating that “[Williard’s] friend also noted that it would appear there may have been a diversion of construction funds which is considered a felony in California.” Creasy explained that facts Meinhard had verified during their meeting on the site “seem to indicate that you have failed to provide the standard of conduct expected of licensed contractors by the state licensing board. The evident failures of professional responsibility are numerous and grave.” He added that “[i]f [Williard] were to submit a complaint to the state contractor’s licensing board, it is my understanding that they would litigate on her behalf to recover all damages, revoke your license, and invoke punitive damages. Please believe that neither she nor I wish to see such a fate befall anyone.” The letter concluded with a list of remedial steps Williard wanted Meinhard to undertake, including securing the house against water damage, replacing damaged materials and providing a “written proposal for the rectification of the major construction errors and a timeline for their resolution.”
Meinhard replied by letter dated November 29, defending his work on the project and characterizing Creasy’s November 26 letter as “an unprofessional and unwarranted attack on my character, integrity and business ethics.” Meinhard also demanded a written retraction of all statements impugning his conduct with respect to the performance of the Williard contract. Creasy showed the letter to Attorney McCarroll, who advised him that no retraction was necessary.
The November 30 letter
On November 30 Creasy sent a letter to Attorney McCarroll, apparently at McCarroll’s request, that detailed Creasy’s “technical analysis” of comments in Meinhard’s November 29 letter.
The December 31 letter
At Williard’s request, Creasy wrote a letter dated December 31 addressed to Williard and copied to Attorney McCarroll, setting forth a timeline of events and outlining Meinhard’s errors and improprieties with respect to the project.
Project termination
By letter dated January 10, 2005, Attorney McCarroll wrote a letter on Williard’s behalf, formally notifying Meinhard that he was removed from the project for failure to cure his breaches of the contract.
Litigation
With the dispute unresolved, in February 2005, Meinhard sued Williard to foreclose a lien and for breach of contract. Williard filed a cross-complaint against Meinhard, alleging breach of contract, fraud, negligent misrepresentation, and breach of the implied covenant of good faith and fair dealing.
The May 26, 2005 letter
On May 26, 2005, Creasy wrote a letter to Williard largely repetitious of previous ones, summarizing the events surrounding the Meinhard project. Creasy advised Williard it was his belief that “you have an extremely strong case for the Contractors State License Board,” on account of Meinhard’s “numerous and grave” failures of professional responsibility.
PROCEDURAL HISTORY
Meinhard commenced the present action in February 2005 by filing a complaint against Creasy for libel and intentional interference with economic advantage.
After the parties conducted voluminous discovery, Creasy filed a motion for summary judgment. In response, Meinhard moved to amend his complaint. The court granted the motion, and also allowed the parties to file supplemental papers.
Meinhard’s first amended complaint (FAC) asserts a cause of action for libel based on Creasy’s letters of November 8, November 26, November 30, December 31, 2004, and May 26, 2005. Meinhard alleges these letters were libelous on their face because they accused him of fraud, improper and immoral conduct and dishonesty, all of which exposed him to hatred, contempt and ridicule, and injured his reputation as a licensed contractor. The FAC further alleged that the publications were made with “malice, oppression and fraud.”
The second cause of action of the FAC alleges that Creasy interfered with Meinhard’s economic relationship with Williard by making false charges of felonious diversion of construction funds, forming an illegal contract with Williard, committing serious professional errors in the conduct of his business and committing improper and immoral conduct.
Meinhard’s third cause of action for slander alleged that Creasy made oral accusations of unprofessional and unethical conduct similar to those appearing in the letters.
After considering the massive amount of discovery excerpts submitted in favor and opposition to the summary judgment motion, the trial court rendered a decision concluding that (1) the accusations of misconduct by Creasy were not opinions but assertions of fact; (2) all of the subject statements were protected by the “interested person” privilege and therefore immune from civil liability absent a showing of malice (§ 47(c)); and (3) no reasonable jury could conclude that Creasy harbored malice in the making of the statements. The court therefore granted summary judgment in favor of Creasy.
DISCUSSION
I. Standard of Review
An appellate court reviews the trial court’s decision to grant summary judgment de novo. The appellate court reviews the ruling, not the rationale. In reviewing the summary judgment, the appellate court applies the same three-step analysis used by the trial court: The appellate court (1) identifies the issues framed by the pleadings; (2) determines whether the moving party has negated the opponent’s claims; and (3) determines whether the opposition has demonstrated the existence of a triable, material factual issue. (Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256, 261.)
On appeal from a summary judgment, “[a]s with an appeal from any judgment, it is the appellant’s responsibility to affirmatively demonstrate error and, therefore, to point out the triable issues the appellant claims are present by citation to the record and any supporting authority. In other words, review is limited to issues which have been adequately raised and briefed.” (Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107, 116; accord, Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 120-121.)
II. Defamation and the Qualified Privilege
Defamation consists of either libel or slander. (§ 44.) Slander is a false and unprivileged oral communication, which includes statements that charge a person with a crime or tend directly to injure him or her with respect to his or her profession. (§ 46.) Libel is a “false and unprivileged publication” that exposes a person to hatred, contempt or ridicule, or has a tendency to injure him in his occupation. (§ 45, italics added.) “By this definition, the absence of a privilege is an element of the tort. [Citation.] A claim of privilege thus constitutes a direct attack upon the tort.” (Stockton Newspapers, Inc. v. Superior Court (1988) 206 Cal.App.3d 966, 975, disapproved on a different ground in Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 732-733, fn. 18.)
The trial court concluded that the charges of unprofessionalism and misconduct against Meinhard as set forth in Creasy’s letters and oral statements were assertions of fact rather than opinion, and therefore could sustain an action for defamation if other elements of the tort are met. Since Creasy does not contest this finding, we shall assume its correctness.
A statement of opinion is not actionable, unless it implies the existence of undisclosed defamatory facts. (Copp v. Paxton (1996) 45 Cal.App.4th 829, 837.) In his moving papers, Creasy asserted, as one ground for summary judgment, that his statements regarding Meinhard’s alleged transgressions were nonactionable statements of opinion.
Section 47(c) codifies the common law privilege of common interest, “which protected communications made in good faith on a subject in which the speaker and hearer shared an interest or duty. This privilege applied to a narrow range of private interests. The interest protected was private or pecuniary; the relationship between the parties was close, e.g., a family, business, or organizational interest; and the request for information must have been in the course of the relationship.” (Brown v. Kelly Broadcasting Co., supra, 48 Cal.3d at p. 727.) If a communication is made in such a context, the aggrieved party may recover damages only if the speaker acted with malice. (§ 47(c); Lundquist v. Reusser (1994) 7 Cal.4th 1193, 1203-1204 (Lundquist).) Because Creasy’s communications regarding Meinhard were transmitted only to Williard, her family members, her attorney and accountant, and possibly her lenders, and were made within the context of a dispute over the construction project, we find they were obviously protected by the common interest privilege (see Rancho La Costa, Inc. v. Superior Court (1980) 106 Cal.App.3d 646, 664-665), and Meinhard does not argue otherwise.
III. Evidence of Malice
By application of section 47(c), if Creasy’s statements were protected by a qualified privilege, they cannot give rise to a cause of action for defamation unless uttered with malice. (Lundquist, supra, 7 Cal.4th at p. 1204.) This appeal thus turns on whether there was sufficient evidence to go to a jury that Creasy’s assertions of professional misconduct against Meinhard were made with malice. This issue is ordinarily a question of law, for the court. (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 915 (Kashian).)
“‘“The malice necessary to defeat a qualified privilege is ‘actual malice’ which is established by a showing that the publication was motivated by hatred or ill will towards the plaintiff or by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff’s rights.”’” (Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1370, quoting Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 413.) Malice may not be inferred from the communication alone. (§ 48.) Moreover, the burden is on the plaintiff to prove malice; the defendant has no burden to show the absence of malice. (Lundquist, supra, 7 Cal.4th at pp. 1196-1197; Kashian, supra, 98 Cal.App.4th at pp. 914-915.)
Here, the evidence showed that Creasy was the architect employed by Williard to design her remodeling project. When Williard became embroiled in a disagreement with her contractor (Meinhard), Creasy was called upon to evaluate Meinhard’s performance. All of Creasy’s assertions regarding Meinhard’s performance on the project were made to parties directly involved in a private, contractual dispute. Creasy did not attempt to disseminate the statements to outside parties, as would be expected of a publisher harboring ill will or hatred.
More importantly, the evidence showed Creasy’s assertions regarding possible diversion of funds, illegal provisions in the contract, failure to protect the structure against the elements, and grossly overestimating the cost of the project were not recklessly thrown out, but were based on his own or his client’s observations, her accountant’s audit, or legal advice from Attorney McCarroll, who advised Creasy throughout the course of the dispute. Indeed, McCarroll directed that the letters be signed by Creasy rather than himself because, in his experience when lawyers send letters, it polarizes the parties’ positions and makes disputes difficult to resolve.
Meinhard makes the astonishing claim that “the truth or falsity of any of [Creasy’s] statements is not before this court and . . . is not appropriate for resolution by summary judgment.” We disagree.
It is only when the defendant’s conduct amounts to a reckless or wanton disregard for the truth, so as to reasonably imply a willful disregard for or avoidance of accuracy, that common law malice is shown. (Roemer v. Retail Credit Co. (1970) 3 Cal.App.3d 368, 370-371; see also Bierbower v. FHP, Inc. (1999) 70 Cal.App.4th 1, 9.)
If Creasy’s accusations that Meinhard breached his obligations of professional responsibility had a sound basis in fact, he could not have uttered them with malice, for the latter implies callous indifference to the truth. Meinhard’s failure to offer any evidence that Creasy’s assertions were false therefore may be taken as an implied concession that they had a plausible basis in fact.
Meinhard submitted no evidence to refute Creasy’s assertions that he grossly overestimated the cost of the project, made a serious structural error in the placement of the support posts, failed to protect the work site against weather damage, and walked off the job without giving proper notice under the contract.
Meinhard nevertheless maintains he introduced evidence that certain assertions by Creasy were made in reckless disregard for the truth. Specifically, Meinhard claims that Creasy recklessly accused Meinhard of diverting funds from the project, because he admitted in deposition that he could not tell for certain whether a diversion occurred without a forensic analysis. However, Creasy’s November 8 letter does not flatly accuse Meinhard of diversion. Instead, it concludes that, in light of Meinhard’s own admission to Williard that he billed the Pettibone lift on her project to another client, there was “just reason to suspect” that Meinhard might be diverting funds from her project as well. This suspicion was given credence by the fact that Williard’s accountants had discovered a “large discrepancy” between the spreadsheets Meinhard had provided. Hence, far from being recklessly false, Creasy’s “reason to suspect” statement was well grounded in the facts known to him.
Meinhard also cites as evidence of malice Creasy’s admission at deposition that he “did not know” whether his charge that Meinhard’s contract was illegal “was true or not.” This argument misleadingly omits the first portion of Creasy’s testimony, in which he stated that he was merely representing what Williard’s attorney, McCarroll, had told him. Creasy is an architect, not an attorney. That he based his assertion on the advice of legal counsel convincingly shows an absence of malice.
Citing Fisher v. Larsen (1982) 138 Cal.App.3d 627, Meinhard asserts that malice can be inferred from the fact that Creasy derived the information from which he based his accusations from “biased sources” (i.e., Williard and Attorney McCarroll). But he points to no evidence showing that these sources were biased. And, ironically, the “sources” whom Meinhard claims Creasy should have discounted are the same persons to whom the alleged defamatory statements were made. Acceptance of Meinhard’s argument would thus foreclose his ability to show damage, since his reputation could not possibly have been harmed if the recipients of the alleged defamatory statements were also the sources of the information contained therein.
Meinhard suggests that Creasy intended to harm him because he admitted in his November 30 letter to Attorney McCarroll that an imputation of criminality would “motivate” Meinhard to finish the work. This is a distortion of the letter. What Creasy actually says is: “My communications with [Meinhard] were with the sole intent of motivating him to do the work he was required to do. The tenor of my letter was amicable and apologetic for the inadvertently bad news it carried.” Creasy goes on to tell McCarroll that “your assurance that my statements are well supported truths may go a long way toward avoiding an unnecessary defense [to a potential defamation claim].” (Italics added.) These statements are hardly demonstrative of malice.
Finally, Meinhard’s reliance on Lundquist, supra, 7 Cal.4th 1193 is unavailing. In Lundquist, the defendant horse breeders discovered an unexplained bulge in the neck of a horse they bought from the plaintiff, and believed the animal had been surgically altered to conceal a genetic defect. (Id. at p. 1197.) The defendants then made a speech at a horse breeders’ convention, suggesting that the plaintiff had surgically altered her horses for cosmetic purposes. (Id. at p. 1197 & fn. 2.)
Lundquist held only that the trial court incorrectly instructed the jury that the defendants rather than the plaintiff bore the burden of proof on the issue of malice. (Lundquist, supra, 7 Cal.4th at pp. 1196-1197.) The court’s holding thus does not advance any of Meinhard’s arguments. (See Stoll v. Shuff (1994) 22 Cal.App.4th 22, 27 [“‘Opinions are not authority for issues they do not consider’”].)
In any event, Creasy’s letters are not comparable to the defendants’ conduct in Lundquist. Unlike the Lundquist defendants who, without consulting an expert, jumped to the conclusion that the horse had been cosmetically altered, Creasy relied on Williard’s observations, her accountant’s review of Meinhard’s spreadsheets and Attorney McCarroll’s legal advice, in making his assertions regarding Meinhard’s performance.
We conclude that Meinhard failed to negate application of the privilege with any competent evidence of malice. His conclusory averments that Creasy’s statements were made with malice are not supported by evidence that raises a triable issue of fact. Judgment was properly entered on the causes of action for libel and slander.
IV. Intentional Interference with Economic Advantage
The failure of Meinhard’s defamation claims necessarily defeats his cause of action for intentional interference with economic advantage, which was based on the same communications. Meinhard cannot overcome the privilege of section 47(c) by casting his claim under the guise of a different tort. “California permits no cause of action based upon the defamatory nature of a communication which is itself privileged under the defamation laws.” (Brody v. Montalbano (1978) 87 Cal.App.3d 725, 738-739.)
DISPOSITION
The judgment is affirmed. Creasy is awarded his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: SCOTLAND, P.J., MORRISON, J.