Hui v. SturbaumHui v. Sturbaum
JONES, P. J.—Chiropractor Anthony K. Hui sued defendant Beth Sturbaum for defamation, claiming Sturbaum—then an insurance company claims investigator—made false statements to California‘s Department of Insurance (DOI) and to Winne Yu, an assistant to personal injury lawyer Frank Kim. The trial court granted Sturbaum‘s anti-SLAPP motion, concluding Dr. Hui‘s claims arose from protected activity (
Dr. Hui appeals. He does not challenge the court‘s findings with respect to Sturbaum‘s communications with the DOI. Instead, he contends the court erred by granting the anti-SLAPP motion because Sturbaum‘s statements to Yu did not arise from protected activity under
We requested supplemental briefing on whether the protected conduct alleged in Dr. Hui‘s slander cause of action was merely incidental to any unprotected conduct alleged in that claim. We now affirm. In the unpublished portion of the opinion, we conclude Sturbaum‘s communications with Yu are protected under
FACTUAL AND PROCEDURAL BACKGROUND
Dr. Hui graduated from chiropractic school in 1997. In 1998, he founded Pine Street Chiropractic (Pine Street). A “considerable volume” of Pine Street‘s business came from “referrals of personal injury clients from numerous local law firms.” National Legal Associates—a firm run by Attorney Frank Kim—referred personal injury clients to Pine Street for treatment.
In 2003, Dr. Hui settled a civil case brought by a former patient claiming he “mishandled” her. Dr. Hui received a 30-day suspension of his chiropractic license and five years’ probation. During that time, he could not treat female patients without a third party present. Dr. Hui‘s chiropractic license was “fully restored” in March 2008.
In 2008, Sturbaum was a claims representative for Federated Mutual Insurance Company (Federated). She handled liability claims submitted to Federated; she also read “Alerts” posted by the National Insurance Crime
In 2009, Sturbaum saw an NICB task force Alert concerning Kim and Dr. Hui. In 2010, the DOI informed Sturbaum it was “investigating Pine Street for potential fraudulent activity” and asked her to provide information. Sturbaum cooperated with the investigation and provided the requested information. In June 2010, Winne Yu, Attorney Kim‘s assistant, called Sturbaum to settle the claim. Yu and Sturbaum discussed Federated‘s position on the claim. Shortly thereafter, Dr. Hui learned about the DOI investigation.
The Complaint
In November 2010, Dr. Hui filed the operative first amended complaint suing Doe defendants for trade libel, libel per se, and slander.3 In September 2011—and before serving Sturbaum with the complaint—Dr. Hui‘s attorney deposed Yu. Shortly thereafter, Dr. Hui substituted Sturbaum for Doe 1. In the “factual background” allegations of the operative first amended complaint, Dr. Hui alleged he learned he had become “the target of a DOI investigation ‘pursuant to false reports’ ” submitted by defendants who claimed he “was running a fraudulent chiropractic business, conducted intentional overcharges for services, engaged in fraudulent or improper billing, and conducted unnecessary and/or unauthorized treatments.” Dr. Hui also alleged defendants told personal injury attorneys in the area “not to send their clients to [him] because various insurance companies and/or the DOI were going to put [him] out of business for the improper acts falsely ascribed to [him]. Personal injury attorneys also learned independently of the false accusations ascribed to [Dr. Hui] and subsequent inquiries by the DOI into [Dr. Hui‘s] business practices.”
The Anti-SLAPP Motion, Opposition, and Reply
Sturbaum moved to strike the operative complaint pursuant to
Sturbaum also argued Dr. Hui could not establish a probability of prevailing on the merits because, among other things, her statements to the DOI were absolutely privileged under
Sturbaum submitted a declaration in support of the motion averring she believed the billing invoices submitted by Dr. Hui for claimants’ treatment violated California regulations and the
In opposition to the motion, Dr. Hui argued Sturbaum‘s statements to third parties were not protected under
Dr. Hui also argued he had a probability of prevailing because neither Sturbaum‘s communications with the DOI, nor her statements to Yu, were privileged under
Dr. Hui submitted a transcript of Yu‘s deposition, taken before Sturbaum was named as a defendant and served with the complaint. At her deposition, Yu testified Kim asked her in June 2010 to call Federated to “settle the case and obtain the necessary documents to resolve [the claim].” During a conversation with Yu, Sturbaum said “the case was not worth money because . . . this was a small impact matter. So she . . . questioned . . . the medical treatment.” Sturbaum also “may have” mentioned “that the billing could have been fraudulently billed. [
¶
] She mentioned that [Dr.] Hui . . . had misconduct or some sort of complaint . . . that [he] should have stopped seeing female patient[s].”5 Sturbaum also stated the billings were “excessive because of the type of impact” in the car accident and that the billings “could be fraudulent.” Yu assumed Sturbaum thought claimants should not have been injured because the property damage to the vehicle was “minimal.” Finally, Sturbaum “mentioned that she . . . made a complaint or [was] going to make a complaint [about] Dr. Hui.” Yu thought Sturbaum “may have suggested that we shouldn‘t have any business to do with Dr. Hui.”¶
] But on the other hand, [Sturbaum] was saying a lot of things that may not be relevant to the case.” Yu told Dr. Hui that “an adjuster [was] making these allegations about his practice . . . .” After her conversation with Sturbaum, Yu initially was “hesitant” to refer patients to Dr. Hui but she eventually decided Sturbaum‘s statements were “probably false,” which “stopped” her from reconsidering referrals to Dr. Hui. Yu could not remember whether she declined to provide a referral to Dr. Hui after talking with Sturbaum. She explained it was Kim‘s practice to only “[o]ccasionally” refer clients to specific doctors; instead, his office “gives names of doctors for clients to choose, and clients may pick one that may be close to their work or residence.”Dr. Hui offered a declaration in opposition to the motion averring he was surprised to learn the DOI was investigating Pine Street “apparently based on one or more reports that claimed [he] was running a fraudulent chiropractic practice, creating intentional overcharges for services, engaging in fraudulent or improper billing, or performing unnecessary and unauthorized treatments.” Dr. Hui stated he learned an insurance company adjuster “had told personal injury attorneys that [his] billing was fraudulent and that they should not send [him] any business.” According to Dr. Hui, the adjuster told National Legal Associates “not to continue doing business with [his] practice and to stop sending referrals to Pine Street . . . because of fraudulent billing and sexual misconduct.” Dr. Hui further averred he experienced a “sudden downturn” in his business beginning in June 2010, including “dramatically fewer client referrals from National Legal Associates after June 2010.” The “drastic decrease in new business . . . forced” him to stop making mortgage payments on his house, to file for bankruptcy, and to close Pine Street.
In reply, Sturbaum argued her communications with the DOI and “with an interested party concerning [Dr. Hui‘s] billing practices and his prior sexual misconduct” were protected under
The Order Granting the Anti-SLAPP Motion
Following a hearing, the court granted the motion. The court concluded Dr. Hui‘s claims were “based on non-incidental allegations arising from protected activity covered by the anti-SLAPP statute. . . . To the extent
DISCUSSION
“In ruling on a special motion to strike, the trial court follows a two-step analysis that involves shifting burdens. [Citation.] The moving defendant carries the initial burden to show the challenged cause of action arises from protected free speech or petitioning activity. [Citation.] The burden is satisfied by demonstrating that the conduct underlying the plaintiff‘s claim fits into a category of protected activity set forth in
“If the court finds the defendant‘s threshold showing has been made, the burden shifts to the plaintiff to produce evidence establishing a probability of prevailing on the cause of action. [Citation.] To meet this burden, the plaintiff must plead and substantiate a legally cognizable claim for relief. [Citation.] ’ “Put another way, the plaintiff ‘must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.’ ” ’ [Citation.]” (Castleman, supra, 216 Cal.App.4th at p. 490.)
“Only a ’ “minimum level of legal sufficiency and triability” ’ is needed to satisfy the second prong of the anti-SLAPP statute. [Citation.] The evidence
I.
Sturbaum Met Her Burden of Demonstrating the Complaint Arises From Protected Activity*
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II.
Dr. Hui Has Not Established a Probability of Prevailing Because the Common Interest Privilege in Civil Code Section 47 Protects Sturbaum‘s Statements to Yu
As noted above, the court determined Sturbaum‘s communications with the DOI were absolutely privileged. It also concluded Sturbaum‘s statements to Yu were protected by the common interest privilege codified in
Dr. Hui contends the court erred by applying the common interest privilege to Sturbaum‘s statements to Yu. We disagree. Sturbaum‘s employer, Federated, shared a business relationship with Kim, the attorney retained by claimants. (King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 440 [60 Cal.Rptr.3d 359] [“[p]arties in a business or contractual relationship have the requisite ‘common interest’ for the privilege to apply“].) In addition, Sturbaum‘s statements were “reasonably calculated to protect or further a common interest.” (Williams v. Taylor (1982) 129 Cal.App.3d 745, 752 [181 Cal.Rptr. 423] (Williams).)
During their conversation, Sturbaum “may have” told Yu the claim “could have been fraudulently billed” and “may have” mentioned the billing “could be fraudulent.”9 She also “may have suggested that [Kim] shouldn‘t have any business to do with Dr. Hui.” If Dr. Hui was engaging in fraudulent or unethical activity, it was important for Sturbaum to notify those with whom Dr. Hui did business and who were affected by the improprieties, particularly Kim. In addition, Sturbaum had a direct and immediate concern in protecting Federated‘s interest in settling meritorious claims. (See Williams, supra, 129 Cal.App.3d at p. 752 [privilege applied where defendant automobile shop made, to claims adjuster with whom body shop did business, statements concerning plaintiff body shop manager‘s termination for irregularities in records concerning work performed].) Assuming it occurred, Sturbaum‘s suggestion that Kim‘s firm “should stop doing business with Dr. Hui” was not extraneous or irrelevant to protecting Federated‘s pecuniary interests and its business relationship with National Legal Associates. (Kashian, supra, 98 Cal.App.4th at p. 914.) The same is true with respect to Sturbaum‘s purported comment that “[Dr.] Hui . . . had misconduct or some sort of complaint . . . that [he] should have stopped seeing female patient[s].” Yu was “not sure if [Sturbaum] actually said that . . . specifically.” Assuming it occurred, this statement was made in the course of Federated‘s business or professional relationship with National Legal Associates. (Ibid.)
We are not persuaded by Dr. Hui‘s reliance on a portion of the opinion in Mann, where the court determined the common interest privilege did not apply to statements defendants made to customers of a competing company, Water Systems Support Inc. (WSSI). (Mann, supra, 120 Cal.App.4th at p. 109.) The Mann court rejected the defendants’ claim that their statements were privileged under
Here and in contrast to Mann, Federated shared a business relationship with Kim. In addition, Yu testified her employer, Kim, directed her to call Sturbaum to “settle” the claim and “obtain the necessary documents to resolve” it, suggesting Yu asked for information about Federated‘s position on the claim and any impediments to securing payment of the outstanding bill. According to Yu, Sturbaum explained why the claim “was not worth money” and questioned the treatment Dr. Hui provided. This is not a situation like the one in Mann, where one company disparaged its competitor. Here, Sturbaum told Yu the claim ”could have been fraudulently billed” and was “excessive” and ”could be fraudulent.” (Italics added.) Both Sturbaum and Kim shared a common interest in resolving the claim and Sturbaum‘s comments were reasonably calculated to further that interest.
DISPOSITION
The trial court‘s order granting the anti-SLAPP motion (
Simons, J., and Needham, J., concurred.