Case Name:   Lovewell v. Stanford Federal Credit Union

Case No.:       1-12-CV-219901

 

Defendants Stanford Federal Credit Union (“SFCU”) and Joan Opp (“Opp”) (collectively, “Defendants”) each move for summary adjudication of the eighth cause of action in the Second Amended Complaint (“SAC”) of plaintiff Mark Lovewell (“Plaintiff”).  Defendants’ motions are essentially identical and will be addressed together.

 

Plaintiff’s objections to evidence are OVERRULED in their entirety.

 

The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.  (Wong v. Jing (2010) 189 Cal. App. 4th 1354, 1369.)  Because a statement must contain a provable falsehood, courts distinguish between statements of fact and statements of opinion for purposes of defamation liability.  (Id. at p. 1370.)  However, where an expression of opinion implies a false assertion of fact, the opinion can constitute actionable defamation.  (Ibid.)  The critical question is not whether a statement is fact or opinion, but whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.  (Ibid.)

 

Plaintiff alleges that Opp made the following defamatory statements to the Board of SFCU:

 

(1)  Plaintiff exhibited poor judgment in making investments for SFCU;

 

(2)  Plaintiff made certain investments contrary to the directives of Opp and was therefore insubordinate;

 

(3)  Plaintiff made poor investment decisions on behalf of SFCU;

 

(4)  Plaintiff’s performance as Chief Financial Officer and Chief Investment Officer at SFCU was poor;

 

(5)  Plaintiff was untrustworthy;

 

(6)  Plaintiff’s conduct violated the confidentiality of SFCU and its operations and finances; and

 

(7)  Plaintiff was inaccurate and made misstatements in financial reporting, leading Opp to conclude she could not have confidence in Plaintiff’s performance or trust the execution of the performance in his positions as Chief Financial Officer and Chief Investment Officer for SFCU.

 

(SAC, ¶ 85.)

 

Defendants argue that statements 1, 3, 4, and 5 are only Opp’s opinions regarding Plaintiff’s work performance.  In the instant case, statements 1, 3, and 4 are value judgments expressed by Opp and are statements of her opinion regarding Plaintiff’s performance.  As explained in Jensen v. Hewlett-Packard Co. (1993) 14 Cal. App. 4th at pp. 970-971, a statement accusing an employee of “poor performance” is a statement of opinion, not fact.  (See also Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal. App. 4th 1137, 1154.)  Statement 5, however, asserts that Plaintiff is untrustworthy.  This is essentially the same as stating that Plaintiff is dishonest.  Falsely accusing an employee of dishonesty can support a claim for defamation.  (Jensen v. Hewlett-Packard Co. (1993) 14 Cal. App. 4th at p. 965.)  Therefore, statement 5 is a statement of fact that is potentially actionable as defamation.

 

With regard to statements 2, 6, and 7, Defendants argue that those statements are either true or were never said.  Defendants provide evidence that statement 2 (Plaintiff made certain investments contrary to the directives of Opp) is true, specifically regarding an investment made by Plaintiff.  (Stanford Federal Credit Union’s Statement of Undisputed Material Facts in Support of Motion for Summary Adjudication of Eighth Cause of Action (“UMF”), Issue #1, No. 23.)  In opposition, Plaintiff presents evidence attempting to explain the reason for the investment, but does not provide evidence showing that the investment was not made contrary to Opp’s directives.  (See Plaintiff Mark Lovewell’s Response and Opposition to Defendant Stanford Federal Union’s [sic] Separate Statement of Material Facts (“Opposition UMF”), Issue #1, No. 23.)

 

As for statements 6 and 7, Defendants provide evidence that Opp denies making the statements and that there is no evidence she made the statements.  (UMF, Issue #1, No. 60.)  Plaintiff disputes UMF, Issue #1, No. 60, but the evidence cited to in opposition does not show that Opp made statements 6 and 7.  Therefore, Plaintiff fails to raise a triable issue of material fact as to whether these statements were made.

 

In addition to making allegations regarding the statements made to SFCU’s Board, Plaintiff alleges that Opp made the same defamatory statements to headhunters.  (SAC, ¶ 90.)  Defendants provide evidence that Opp never made those statements to headhunters.  (UMF, Issue #1, No. 59.)  In opposition, Plaintiff presents evidence that Opp told Mike Juratovac of O’Rourke & Associations that she hoped Plaintiff did not bring a lawsuit because things could come out which could affect Plaintiff’s bondability.  (UMF, Issue #1, No. 59.)  Plaintiff does not allege in the SAC that this statement was made; it is not one of the enumerated defamatory statements in the SAC.  It is well established that the pleadings determine the scope of relevant issues on a summary judgment motion.  (Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal. App. 4th 60, 74.)  Therefore, Plaintiff evidence regarding an unpleaded statement cannot raise a triable issue of material fact.

 

Defendants argue that, regardless of the issues discussed above, all of the statements are privileged pursuant to Civil Code section 47, subdivision c.  This code section provides, in pertinent part, that a privileged publication is one made in a communication without malice, to a person interested therein, by one who is also interested.   “Communications made in a commercial setting relating to the conduct of an employee have been held to fall squarely within the qualified privilege for communications to interested persons.”  (Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180 Cal. App. 3d 985, 995.)  There is no dispute that the alleged defamatory statements were made in a commercial setting to interested persons (i.e. the Board).  Plaintiff argues, however, that the statements were made with malice and therefore the statements are not protected by Civil Code section 47.

 

The privilege of Civil Code section 47 creates a presumption that the subject communications were made without malice.  (Lesperance v. North American Aviation, Inc. (1963) 217 Cal. App. 2d 336, 341.)  Malice has been defined as “a state of mind arising from hatred or ill will, evidencing a willingness to vex, annoy or injure another person.”  (Brown v. Kelly Broadcasting Co. (1989) 48 Cal. 3d 711, 723.)  Malice may also be established by a showing that the publisher of a defamatory statement lacked reasonable grounds to believe the statement true and therefore acted with reckless disregard for plaintiff’s rights.  (Cuenca v. Safeway San Francisco Employees Fed. Credit Union, supra, 180 Cal. App. 3d at p. 997; see also Kashian v. Harriman (2002) 98 Cal. App. 4th 892, 931.)

 

Defendants provide evidence that Opp believed there were problems with Plaintiff’s performance.  Opp’s concerns about Plaintiff were reflected in a performance review of Plaintiff and in Opp’s notes after a meeting with Plaintiff.  (UMF, Issue #2, Nos. 9-10, 31.)  Plaintiff does not present evidence in opposition sufficient to demonstrate that Opp lacked reasonable grounds to believe the statements that she made to the Board.  Rather, Plaintiff contends that Opp acted with a state of mind arising from hatred or ill will, and evidencing a willingness to vex, annoy, or injure Plaintiff.  Plaintiff argues that a jury could find: (1) Opp made the alleged defamatory statements because Plaintiff continued to express his dissatisfaction with the scope of the investigation into a non-compliance issue; (2) Opp acted with malice in relating to Plaintiff’s recruiter, Juratovac, that she had concerns about Plaintiff’s bondability; (3) Defendants acted with malice in the manner in which SFCU treated the mortgage overage following Plaintiff’s termination; and (4) SFCU offered Plaintiff a severance package with unconscionable conditions.

 

With regard to the first argument, Plaintiff presents evidence that SFCU had certain compliance issues and that he expressed concerns regarding the adequacy of the investigation into those issues.  (Plaintiff Mark Lovewell’s Statement of Additional Facts in Dispute in Opposition to Defendant Stanford Federal Credit Union’s Motion for Summary Adjudication as to the Eighth Cause of Action, No. 33.)  However, Plaintiff does not tie this evidence to the statements allegedly made by Opp.  As discussed above, the evidence shows that Opp had legitimate concerns regarding Plaintiff’s work.  Plaintiff does not provide evidence sufficient to raise a triable issue of material fact regarding whether Opp actually sought to have Plaintiff terminated because of issues with the investigation.  At best, Plaintiff’s arguments in this regard are speculation, which cannot raise a triable issue of material fact to defeat a motion for summary judgment.

 

With regard to Opp’s statement to Mike Juratovac of O’Rourke & Associations that she hoped Plaintiff did not bring a lawsuit because things could come out which could affect Plaintiff’s bondability, it is not apparent how this statement shows malice.  The evidence shows that Opp had legitimate concerns regarding Plaintiff’s performance; in other words, she was not simply making things up to hurt Plaintiff.  Further, there is no evidence that Opp said anything specific to Juratovac relating to Plaintiff’s performance.

 

Regarding the mortgage overage, Plaintiff alleges that he had a mortgage with SFCU and that SFCU charged him an interest rate of 4% instead of the 3% rate he should have been given and that he was overcharged and the overage was applied to his principal balance without his consent.  (SAC, ¶¶ 54-56.)  Plaintiff does not provide any evidence that Opp was involved in any way with his mortgage or that he ever spoke with her about it and therefore any conduct connected to his mortgage cannot raise a triable issue of material fact as to the defamation claim.

 

Plaintiff’s final argument concerns his severance package.  Plaintiff contends that the severance package contained unconscionable provisions.  Specifically, Plaintiff asserts that the severance package stated he would receive $145,000 if he gave up his rights against SFCU and consulted in perpetuity for SFCU without compensation.  (Plaintiff Mark Lovewell’s Statement of Additional Facts in Dispute in Opposition to Defendant Stanford Federal Credit Union’s Motion for Summary Adjudication as to the Eighth Cause of Action, No. 69.)  First, it is not apparent how the severance package or any of its terms demonstrates malice by Opp in making the alleged defamatory statements.  Second, whether these terms of the severance agreement are considered unconscionable or not, Plaintiff’s own evidence shows that even Plaintiff did not accept the conditions he would receive half of the severance amount.  (Id.)  Moreover, Plaintiff provides no evidence that SFCU was required to offer him any severance package at all.  Therefore, the severance package does not raise a triable issue of material fact regarding whether Opp acted with malice.

 

In sum, Defendants have met their initial burden of showing that Opp’s statements were privileged pursuant to Civil Code section 47.  Plaintiff has failed to raise a triable issue of material fact regarding whether Opp acted with malice such that her statements would not be privileged.  Accordingly, Defendants’ motions are GRANTED.