Among the cases the Silberg case disapproved of for relying on the interests of justice test was Fuhrman v. California Satellite Systems, supra, 179 Cal.App.3d 408, 421, a case which had involved prelitigation statements and also had applied the good faith and serious consideration of litigation test. The Supreme Court observed "in many of the decisions purporting to utilize the 'interest of justice' test [including the Fuhrman case], the court could have reached the same result, no privilege, on the basis of the absence of one of the traditionally recognized factors." (Silberg v. Anderson, supra, 50 Cal.3d 205, 217.) Specifically, as to the Fuhrman case, the Supreme Court noted Fuhrman's result would have been the same without the interest of justice test because a "factual question existed as to whether the potential lawsuit was actually contemplated." (Id. at p. 218.) In other words, Silberg upheld that portion of Fuhrman which looked to the serious and good faith consideration of litigation test. Thus, under Silberg the two tests -- "interest of justice" and "good faith and serious consideration" -- refer to different matters.
Furthermore, Aronson's claim the privilege for prelitigation statements conflicts with the recent Supreme Court decision in Rubin v. Green, supra, 4 Cal.4th 1187. In Rubin, a mobile home park owner sued attorneys who had solicited clients from among the renters in the mobile home park for a suit against the park owner for defects in the park. The attorneys sent a notice they were intending to sue the park owner. The park owner sued the attorneys for allegedly defamatory statements made by the attorneys while soliciting clients. The Supreme Court held these prelitigation statements were clearly within the litigation privilege of section 47, subdivision (b) and this privilege was absolute, barring any action against the attorneys for defamation. (Id. at pp. 1202-1203.)
We conclude the good faith, serious consideration of litigation test is not, as Aronson suggests, a test for malice and it is not a variation of the "interest of justice" test. The genesis of the test is the Restatement Second of Torts, section 586, comment e which seeks to prevent application of the privilege when the statements are made at a time when the possibility of litigation is not seriously considered. Thus, the good faith and serious consideration of litigation test of the Restatement is thus addressed to the requirement the statements "have some connection or logical relation to the action. [Citations.]" (Silberg v. Anderson, supra, 50 Cal.3d 205, 212.) In other words, if the statement is made with a good faith belief in a legally viable claim and in serious contemplation of litigation, then the statement is sufficiently connected to litigation and will be protected by the litigation privilege. The privilege then applied is absolute.
In oral argument, Aronson argued the recent case of Edwards v. Centex Real Estate Corp., supra, 53 Cal.App.4th 15, 35, has added another requirement to the litigation privilege as applied to prelitigation statements, i.e., that "the contemplated litigation must be imminent." The Edwards court stated:
The language in Edwards must be viewed in the context of the case. Edwards involved an attempt to apply the litigation privilege to statements made by a developer and insurance company many years before the litigation was commenced. These statements were made in the course of settling with homeowners who had found cracks and rust stains in the foundations of their homes and who, in reliance on these statements, executed releases and accepted the repairs and compensation offered by the developer and insurance company. Later, after the homeowners discovered large new cracks in their foundations, learned the cracking in their foundation was due to fundamental design problems not addressed by the earlier repairs, and discovered the developer and insurance company had failed to tell them of a more thorough investigation of and repairs made to another home in the subdivision involving similar problems, the homeowners sued the developer, engineering firm and insurance company for fraud, misrepresentation, and negligence among other causes of action based on fraud in obtaining the releases. The developer and engineering firm, citing the litigation privilege, sought to exclude all the statements they had made to the homeowners before the original repairs. Thus, in Edwards, the court was faced with an extreme situation, where the statements were very remote in time from the actual litigation. The "imminent" language was in response to this remoteness; to emphasize that litigation must be contemplated at the time the statements are made. The court held the litigation privilege did not apply because the statements were simply too remote from the litigation. The case does not hold or suggest that a complaint must be drafted before the privilege will apply. In short, the question in Edwards was not "imminentness," but remoteness. Edwards does not support Aronson's suggestion that a complaint must be drafted or in the process of being drafted when the statements were made. Moreover, "imminency" is not an issue in the case of a classic demand letter, such as that involved here. The very function of a demand letter is to notify the other party that litigation is imminent unless certain steps are taken. We conclude that the litigation privilege is not conditioned upon an "imminency" requirement separate from the requirement that prelitigation statements be made in serious and good faith consideration of litigation.
We conclude the court here did not err in applying an absolute, rather than qualified, privilege standard to the statements made in this case.
Aronson contends the court improperly restricted his examination of Kinsella and his attorneys on what legal theories were discussed with Kinsella and what work was actually performed toward filing a lawsuit. Aronson asserts that by raising the litigation privilege as a defense, Kinsella waived the attorney-client and work product privilege.
When Kinsella raised the litigation privilege in his motion for summary judgment and attached declarations by his attorneys, Aronson sought to depose the attorneys. Kinsella opposed discovery and sought a protective order from the court based on the attorney-client and work product privileges. The court ruled Aronson was entitled to inquire into Kinsella's state of mind as to whether he intended to file a lawsuit, the attorneys' advice to Kinsella as to whether Kinsella had a legitimate legal claim, and to inquire about the meeting between Kinsella's attorney, Flores, and DepoTech's attorney, Andrews, but Aronson was not entitled to inquire into what work was actually done toward filing a lawsuit, to matters occurring after the October 26 letter was sent (except the Flores/Andrews discussion) or whether Kinsella had malice (e.g., anger or "bad intent") toward Aronson because malice was irrelevant. Following the depositions, Aronson moved for an order to compel further answers about the legal advice and theories discussed by Kinsella and his attorneys, the amount of legal and factual research conducted by the attorneys and discussions as to the amount of damages Kinsella suffered. The court denied the motion.
These rulings by the court were proper. Kinsella, by raising the litigation privilege, did not waive either the attorney-client privilege or the work product privilege. The thoughts, conduct or work product of his attorneys was not at issue; what was at issue was Kinsella's state of mind. (Contrast Merritt v. Superior Court (1970) 9 Cal.App.3d 721, 730 [work product of attorney put in issue by claim insurance company had confused attorney by providing conflicting information of policy limits].) Aronson was entitled to discover from the attorneys whether they had, in fact, been consulted by Kinsella, whether they believed Kinsella was seriously considering litigation and whether they told Kinsella he had a valid claim since these were relevant to determining whether Kinsella's statements were made in good faith and serious consideration of litigation and thus were related to litigation. The court permitted this discovery. To the extent Aronson complains that he was not permitted to examine Kinsella and his attorneys on the legal theories they discussed, we note Aronson already had notice of Kinsella's legal theory since it was expressly stated in the October 26 letter.
We conclude the court properly issued the protective order.
We apply the usual standard for summary judgment to this case, i.e., we conduct a de novo examination of the record to determine whether there are any genuine issues of material fact or whether the moving party is entitled to summary judgment as a matter of law. [FN 7] (Lichty v. Sickels (1983) 149 Cal.App.3d 696, 699.) While "[s]ummary judgment is a drastic procedure, should be used with caution [citation] and should be granted only if there is no issue of triable fact [citations]" (Brose v. Union-Tribune Publishing Co. (1986) 183 Cal.App.3d 1079, 1081), it is also true "[j]ustice requires that a defendant be as much entitled to be rid of an unmeritorious lawsuit as a plaintiff is entitled to maintain a good one." (Larsen v. Johannes (1970) 7 Cal.App.3d 491, 507.) "A defendant is entitled to summary judgment if the record establishes as a matter of law that none of the plaintiff's asserted causes of action can prevail. [Citation.]" (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)
Code of Civil Procedure section 437c, subdivision (e) provides:
"If a party is otherwise entitled to a summary judgment pursuant to this section, summary judgment shall not be denied on grounds of credibility or for want of cross-examination of witnesses furnishing affidavits or declarations in support of the summary judgment, except that summary judgment may be denied in the discretion of the court, where the only proof of a material fact offered in support of the summary judgment is an affidavit or declaration made by an individual . . . where a material fact is an individual's state of mind, or lack thereof, and that fact is sought to be established solely by the individual's affirmation thereof."
This section does not apply here because the court credited Kinsella's statement; Kinsella's declaration was not the only evidence of his state of mind (e.g., there was the October 26 letter itself as well as the statements by his attorneys); and finally, Kinsella was not a person "otherwise entitled to summary judgment" since the court found he was entitled to summary judgment and granted it in his favor.
Initially, we observe the October 26 letter itself is a classic prelitigation demand letter. It was written by an attorney on a potential party's behalf to another potential party to the litigation. It set out the objectionable statements, the reasons why they were objectionable and the legal basis which would support litigation. It made specific demands and threatened legal action if the demands were not met. This classic prelitigation demand letter is precisely the type of statement that the litigation privilege is intended to protect since it represents the first step toward litigation and the purpose of the litigation privilege is to provide "the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions. [Citations.]" (Silberg v. Anderson, supra, 50 Cal.3d 205, 213.)
Second, it is undisputed that Kinsella honestly believed he had a viable legal claim against DepoTech based on the allegedly false statements in the DepoTech business plan and Aronson's resume. Undisputed evidence established the letter was sent only after Kinsella had consulted three different attorneys, each of whom advised him he had a valid legal claim. The fact there had been a ruling in a prior action that Aronson was entitled to compensation from Avalon for work on the Vertex project does not raise a triable issue of fact since the prior action involved a different matter, i.e., the value of Aronson's services rather than whether Aronson helped in the financing, founding or establishment of Vertex as those terms are used in the venture capital community.
Third, undisputed evidence established at the time the letter was sent, Kinsella was seriously contemplating litigation. Kinsella stated in a declaration and in his deposition that he was seriously considering litigation. Kinsella's attorney, Michael O'Donnell, stated Kinsella intended to sue if the matter were not resolved. Both Aronson and DepoTech understood Kinsella was seriously contemplating litigation; Aronson removed himself from DepoTech for the good of the company because it "simply could not afford a lawsuit with Kinsella" and agreed to indemnify DepoTech for any liability arising from a judgment based on Kinsella's claims of Aronson's alleged fraud and deception. Aronson also submitted his resume for Kinsella's review and explained he had not "broadly distributed it to potential employers for fear that Mr. Kinsella [would] sue [him] as he threatened to do to DepoTech." DepoTech's attorney discussed with Kinsella's attorney the potentiality of a lawsuit and steps necessary to avoid one. [FN 8]
Initially, we note Aronson's citation for this deposition testimony consists of his quotation of this asserted deposition testimony in a memorandum he filed in opposition to Kinsella's motion for summary judgment. A quotation in memorandum, which may or may not be accurate, is not evidence (e.g., a declaration, affidavit, document or deposition) which raises a triable issue of fact. Moreover, our review of the portion of Andrews's testimony which is part of the record on appeal indicates the quoted exchange is taken out of context. Andrews initially testified he could not remember whether Flores's statement that Kinsella was unlikely to sue was made before or after Andrews told Flores that Aronson was no longer with DepoTech. Later, in the deposition, Andrews testified it was "highly likely" that Flores told him Kinsella was not likely to sue after Andrews told him Aronson's resume was being removed from DepoTech's business plan. Flores in his deposition stated he told Andrews that Kinsella was not likely to sue once he learned that Aronson was no longer with DepoTech and that Aronson's resume would no longer be circulated as a part of DepoTech's business plan.
"Q. And what did Flores tell you?
"A. He told me to the best of my recollection, that Mr. Kinsella was not considering suing DepoTech Corporation."
We conclude the court properly granted summary judgment on the basis Kinsella's statements in the October 26 letter were absolutely privileged under section 47, subdivision (b).
Kinsella appeals the court's denial of summary judgment on the ground Aronson was "libel-proof," i.e., because undisputed evidence established that some of the statements in his resume were false therefore Aronson could not have been damaged by any of the statements Kinsella made disputing the truth of Aronson's claims as to GenPharm International and Vertex.
We need not reach this issue since we have already concluded summary judgment was properly granted on the ground Kinsella's statements in the October 26 letter were absolutely privileged under section 47, subdivision (b).
The judgment is affirmed.
NARES, J., and HALLER, J., concurring.