Kunysz v. Sandler

Filed 1/15/10 Kunysz v. Sandler CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Jamoa A. Moberly, Judge. Reversed and remanded with directions pursuant to Code of Civil Procedure section 128, subdivision (a)(8).

Law Office of Andrew D. Weiss and Andrew D. Weiss for Defendant and Appellant.

Steven L. Dickinson for Plaintiff and Respondent.

* * *

THE COURT:*

Construction litigation between a building contractor and a homeowner has now spawned two successive lawsuits between them: the first involving construction defect claims by the homeowner, and the second involving defamation claims by the contractor.

Both lawsuits resulted in damage awards to the respective plaintiffs. In the second lawsuit, which is the subject of the instant appeal, the jury awarded $300,000 to the building contractor, including a $125,000 punitive award, even though it found that the building contractor sustained no actual damages.

The parties have determined to end this mutually destructive litigation cycle. As part of a settlement, reached through this courts judicial settlement program, they have filed a stipulated request to reverse the judgment on appeal.

We grant the request. We discern no public policy reason to preserve the underlying judgment under the statutory criteria. (Code Civ. Proc.,  128, subd. (a)(8)[1].)

I

Homeowner Steven Sandler hired contractor Paul Kunysz to complete extensive repair and renovation work to his home after it was damaged in the El Nio storms. The relationship soured and Sandler initiated the first lawsuit. Sandler recovered more than $100,000 in compensatory and punitive damages against Kunyszs father (who also was a defendant), but not against Kunysz.

Kunysz thereupon filed a defamation lawsuit against Sandler. Kunysz alleged that during the pendency of the initial litigation, Sandler called a former client, Paul Ochwat, to complain that Kunysz was building homes illegally without proper permits. Ochwat, however, testified that he did not believe these statements and continued to do business with Kunysz.

Sandler unsuccessfully filed an anti-SLAPP motion and appealed when the trial court denied the motion and his motion for reconsideration. In Kunysz v. Sandler (2007) 146 Cal.App.4th 1540, we affirmed the denial on timeliness grounds.

Kunyszs defamation lawsuit proceeded to trial. Kunysz sought punitive damages against Sandler for trying to ruin him, including by filing the first lawsuit and by complaining to the contractors state license board.

The trial court instructed the jury that, if Kunysz proved the elements of defamation, it could award him compensation even if he had not proved any actual damages for harm to reputation or shame. Instead, the jury was instructed to award damages for this assumed harm in whatever sum you believe is reasonable. While the jury did not find that Kunysz sustained any actual damages, the jury returned with a verdict of $300,000, including $175,000 in presumed damages and $100,000 in punitive damages. Sandler again appealed.

The parties settled the instant action during the pendency of the appeal. In addition to a money payment by Sandler to Kunysz, the settlement included a stipulated request that we reverse the judgment.

II

We are required by statute to make specific findings on a case-by-case basis before accepting and confirming the parties stipulation for reversal of a judgment. (See Union Bank of California v. Braille Inst. of America, Inc. (2001) 92 Cal.App.4th 1324, 1328 (Union Bank); In re Rashad H. (2000) 78 Cal.App.4th 376, 381.) The predicate findings are: (A) There is no reasonable possibility that the interests of nonparties or the public will be adversely affected by the reversal. [] (B) The reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement. ( 128, subd. (a)(8).) The parties must . . . submit memoranda of points and authorities and declarations and other documentary evidence persuasively demonstrating that reversal of the judgment in question will not adversely affect nonparties or the public, erode public trust, or reduce the incentive for pretrial settlement. . . . (Hardisty v. Hinton & Alfert (2004) 124 Cal.App.4th 999, 1007.)

We have examined the appellate record and conclude that the statutory criteria are present.

There is no reasonable possibility that the interests of nonparties or the public will be adversely affected by a stipulated reversal. This matter only involves a dispute between these two litigants, and arises from statements made during a single telephone call which statements were never believed to be true. Reversal thus will not have an adverse impact upon the public interest. There are no important rights, or unfair, illegal or corrupt practices, or torts affecting a significant number of persons.

The likelihood of reversible error is relevant, but not essential, to our determination to accept the stipulation. (Union Bank, supra, 92 Cal.App.4th at pp. 1330-1331.) Many commentators and courts have criticized the common law doctrine of presumed damages in private defamation cases as an oddity of tort law which rests upon ill-defined and problematic distinctions between slander per se and slander per quod. (See discussion in Nethercutt Collection v. Regalia (2009) 172 Cal.App.4th 361, 368, fn. 3 (Nethercutt).)

In Nethercutt, the Court of Appeal reversed a $750,000 judgment in assumed damages to a former museum director who was slandered by false statements that he demanded a finders fee for his role in helping the museum acquire a valuable artifact. The court took a narrow view of what constituted slander per se and held that the director could not obtain any recovery given the jurys finding that he did not suffer actual damages. The category [of injury to business reputation] is especially indeterminate . . . . (Nethercutt, supra, 172 Cal.App.3d at p. 369.)

And in Cheung v. Daley (1995) 35 Cal.App.4th 1673, the appellate court reversed a $62,000 punitive award in a bitter neighborhood dispute where the jury, while finding that defendant acted with fraud, oppression and malice in fraudulently conveying his property to avoid a judgment debt, also determined that plaintiffs had not sustained any actual damage. The court stated that defendants conduct, though actuated by spiteful or resentful motives, did not, as expressly found, result in any damage to plaintiff. Evil thoughts or acts, barren of result, are not the subject of exemplary damages. (Id. at p. 1675.)

The punitive award appears to have been based in part upon what may have been privileged acts by Sandler in filing the initial lawsuit and in making a complaint to the state licensing board. (See Chabak v. Monroy (2007) 154 Cal.App.4th 1502 [physical therapist cannot bring defamation suit against patient for filing police report about inappropriate touching during treatment session].) [The patients] statement to the police arose from her right to petition the government and thus is protected activity. (Id. at p. 1512.)

In weighing the public interest for and against the stipulated request for reversal, we underscore the strong public interest in effective appellate mediation programs. When lawyers responsibly settle litigation, public trust in the courts is advanced. (Union Bank, supra, 92 Cal.App.4th at p. 1331.) In this era of diminished public resources and furlough days, there is a compelling public need to efficiently use the appellate courts to resolve active controversies, rather than appeals that can and should be settled. The savings that result for both the courts and the parties by settling an appeal provide a compelling efficiency rationale for the continued existence and growth of the programs. (Scanlon, A Case for Judicial Accountability: When Courts Add a Settlement Detour on the Traditional Appellate Path, (2002) 17 Ohio St. J. on Disp. Resol. 379, 394-395 (hereafter Scanlon).)

Appellate settlements, reached through full and informed party participation, reduce transactional costs, allay emotional concerns, promote party dignity and recognition, and avoid unpredictable and time-consuming judicial outcomes. Disputants frequently can accomplish more consensually, especially when they pursue creative pie-expanding alternatives, they can achieve adversarially. [I]n our current world, both international and domestic, practicing in the interests of justice includesindeed, should give great priority tothe peace-seeking and problem solving aspects of lawyering. (Menkel-Meadow, Practicing In the Interests of Justice in the Twenty-First Century: Pursuing Peace as Justice (2002) 70 Fordham L.Rev. 1761, 1763.) Often, the parties will be better off putting litigation behind them and getting on with their lives. It is usually in your clients economic and emotional interest to make a sincere effort to settle the dispute. (Eisenberg, et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2008) 6:107, p. 6-16 (rev.#1, 2006).)

The judgment is reversed pursuant to the parties stipulation. As requested by the parties, the parties shall bear their own costs on appeal.

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* Before Sills, P. J., OLeary, J., and Moore, J.

[1] Statutory references are to the Code of Civil Procedure.