Procedural Posture

Plaintiff deputy sheriff sued defendants, alleging causes of action for fraud, breach of settlement agreement, intentional infliction of emotional distress, and conspiracy to commit a civil wrong. Appellant and respondents had business lawyer draft their briefs and submitted to the court. Defendants filed a special motion to strike, pursuant to Code Civ. Proc., § 425.16. The Sonoma County Superior Court, California, granted in part and denied in part defendants’ motion to strike. Defendants appealed. The deputy cross-appealed.

Overview

One of the defendants was the deputy’s ex-wife. The deputy’s cause of action for breach of contract alleged that his ex-wife breached the terms of the settlement agreement by making voluntary statements to the county sheriff’s office that employed the deputy with respect to an internal affairs investigation regarding the deputy. The court concluded that the litigation privilege barred the deputy’s breach of contract claim. The dispute in this case involved a significant public concern – a governmental investigation into inappropriate conduct by a police officer. The public purpose was served by application of the litigation privilege. According to the complaint, the ex-wife responded to inquiries of an internal affairs investigator from the sheriff’s office. Application of the privilege under these circumstances promoted full and candid responses to a public agency. Denying application of the privilege would have exactly the opposite effect. Because the litigation privilege applied, the deputy could not prevail on his breach of contract cause of action, and the trial court erred in failing to strike this cause of action.

Outcome

The order was reversed insofar as it denied defendants’ motion to strike the cause of action for breach of contract and was affirmed in all other respects.

Procedural Posture

Defendant sought review of orders by the Superior Court of San Mateo County (California), denying its petitions to compel arbitration in two class actions filed against it by plaintiffs.

Overview

Plaintiffs, insured persons, filed class actions against defendant insurer, alleging breaches of an insurance contract and an implied covenant of fair dealing, false advertising, breach of oral contract, breach of fiduciary relationship, and misrepresentation of the terms of insurance policy. The trial court denied defendant’s request to submit plaintiffs’ disputes to arbitration, concluding that defendant breached its duty of good faith and fair dealing to plaintiffs and waived its right to demand arbitration. The trial court found that defendant failed to apprise plaintiffs when it rejected their claims of the availability of arbitration or of the procedure by which they could seek arbitration. Defendant argued that the trial court erred in refusing to compel arbitration. The court held that defendant did not give plaintiffs’ interests as much consideration as its own when it failed to inform plaintiffs of their rights to demand arbitration in a timely manner, and it upheld the trial court’s determination.

Outcome

The court upheld the lower court’s orders because defendant insurer waived its right to compel arbitration with plaintiffs.