Opinion
NO. 01-09-00448-CV
12-29-2011
QUALITY INFUSION CARE, INC., Appellant v HEALTH CARE SERVICE CORPORATION D/B/A BLUE CROSS AND BLUE SHIELD OF TEXAS; HOWARD KING; AND HILL & FINKEL, L.L.P., Appellees
On Appeal from the 152nd District Court
Harris County, Texas
Trial Court Case No. 2008-04683
MEMORANDUM OPINION
Quality Infusion Care, Inc. seeks reversal of the trial court's summary judgment in favor of appellees Health Care Service Corporation d/b/a Blue Cross and Blue Shield of Texas, Howard King, and Hill & Finkel, L.L.P. in Quality's suit against them for tortious interference with contract, negligence per se, and business disparagement. In two issues, Quality contends that (1) there is no evidence that King's statements were protected by the judicial-proceeding privilege or, alternatively, a fact issue exists as to whether such privilege applies to King's statements and (2) the trial court's application of the privilege to the tortious-interference-with-contract and negligence-per-se claims (the nondefamation causes of action) was error.
We reverse.
Background
Quality is a licensed Texas pharmacy. Blue Cross is a health care insurer that provides coverage to some of the patients served by Quality. King is the attorney Blue Cross hired to defend various suits filed by Quality. Hill & Finkel is the law firm with which King practiced at the time this suit was filed.
In September 2006, Quality sent letters to some of its patients threatening suit if it did not receive payment for services rendered to them. As these patients were insured by Blue Cross-administered health benefit plans, Quality sent copies of these letters to Blue Cross. The letters stated, in part, as follows:
Unfortunately if this account is not resolved immediately, you will be named in a lawsuit filed by Quality Infusion Care, Inc. We're sorry to have to resort to such extreme measures, but your insurance company is leaving us no choice.
King thereafter, at Blue Cross's request, contacted many of the recipients by telephone seeking information about the subject matter raised in the letters. He met personally with some of the patients he had contacted by phone, and each of those with whom he met engaged his services to respond to Quality's threatened litigation. Quality does not dispute this claim except as to one person, Ann Williams. Thereafter, King, ostensibly on behalf of these Blue Cross insureds (including Ms. Williams), wrote to Quality, noting the "imminent threat of litigation" made by Quality, advised Quality of the patients' rights and of possible counterclaims, and suggested settlement. Quality did sue several patients (although not Ms. Williams) and, in one suit, named Blue Cross as a third-party defendant.
Based on King's contact with those patients who had received its letters, Quality filed the instant suit in October 2006 claiming that King disparaged Quality and committed other torts in these conversations. Quality filed suit against King, Hill & Finkel, and Blue Cross.
King and Hill & Finkel answered and asserted the affirmative defense of absolute privilege. In May 2008, King filed a motion for summary judgment based on the judicial-proceeding privilege in which Blue Cross joined. The following September, Hill & Finkel, too, moved for summary judgment upon this same basis. The trial court granted the three motions for summary judgment, dismissing the entire case. This appeal ensued.
The record does not include the answer that was presumably filed by Blue Cross.
Discussion
In its first issue, Quality contends that trial court's dismissal of the case should be reversed and the entire case remanded for trial because (a) there is no competent evidence to support a finding that King's statements were protected by the judicial-proceeding privilege and/or (b) Quality raised a fact issue as to whether the judicial-proceeding privilege should apply to King's statements.
A. Standard of Review
To prevail on a summary-judgment motion, a movant has the burden of proving that it is entitled to judgment as a matter of law and that there is no genuine issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). When deciding whether there is a disputed, material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Every reasonable inference must be indulged in favor of the nonmovant and any doubts must be resolved in his favor. Id. at 549. When the trial court does not specify the grounds for its grant of the motion for summary judgment, the court must affirm the summary judgment if any of the theories presented to the trial court are meritorious. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).
B. The Judicial-Proceeding Privilege
The basis of the judicial-proceeding privilege is that communications made in the course of a judicial proceeding will not serve as a premise for a civil action for liable or slander, regardless of the negligence or malice with which they are made. James v. Brown, 637 S.W.2d 914, 916 (Tex. 1982). The Restatement (Second) of Torts states the rule as follows:
An attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.RESTATEMENT (SECOND) OF TORTS § 586 (1977) (cited in Crain v. Smith, 22 S.W.3d 58, 62 (Tex. App.—Corpus Christi 2000, no pet.). Comment a of this section states:
The privilege stated in this Section is based upon a public policy of securing to attorneys as officers of the court the utmost freedom in their efforts to secure justice for their clients. Therefore the privilege is absolute. It protects the attorney from liability in an action for defamation irrespective of his purpose in publishing the defamatory matter, his belief in its truth, or even his knowledge of its falsity. . . . The publication of defamatory matter by an attorney is protected not only when made in the institution of the proceedings or in the conduct of litigation before a judicial tribunal, but in conferences and other communications preliminary to the proceeding.Id. at § 586, cmt. a.
1. What Statements are Covered by the Judicial-Proceeding Privilege
Generally, the immunity afforded by the absolute privilege means that any statement made in the trial of any case cannot constitute the basis for a defamation action, regardless of the negligence or malice with which it is made. Helfand v. Coane, 12 S.W.3d 152, 157 (Tex. App.—Houston [1st Dist.] 2000, pet. denied). The privilege extends to any statement made by the judge, jurors, counsel, parties, or witnesses, and attaches to all aspects of the proceedings. Id.
The privilege has also been applied to out-of-court statements by attorneys, "as long as the statement is made preliminary to or in connection with a judicial proceeding." Id. In Texas, an attorney's statements, even out of court, are absolutely privileged against claims for defamation if the communications are made "in contemplation of and preliminary to judicial proceedings." Krishnan v. Law Offices of Preston Henrichson, P.C., 83 S.W.3d 295, 302 (Tex. App.—Corpus Christi 2002, pet. denied) (citing Watson v. Kaminiski, 51 S.W.3d 825, 827 (Tex. App.—Houston [1st Dist.] 2001, no pet.)). In order for a communication to be privileged, it must "relate to pending or proposed litigation and must further the attorney's representation." Watson, 51 S.W.3d at 827.
The privilege has been accorded to protect a letter from an attorney which was sent to plaintiff's investors seeking evidence for use in pending litigation and to protect comments made by an attorney in an interview before suit was filed, which were later quoted in a newspaper. See Daystar Residential, Inc. v. Collmer, 176 S.W.3d 24, 28 (Tex. App.—Houston [1st Dist.] 2005, writ denied) (comments in interview); Russell v. Clark, 620 S.W.2d 865, 869 (Tex. App.—Dallas 1981, writ ref'd n.r.e.) (contents of letter).
The fact that statements were made before a suit was filed has no bearing on whether they are protected by the judicial-proceeding privilege. Id. "The only factors are whether [the] statement bore some relationship to the proposed litigation and furthered [the attorney's] representation of his client, regardless of the time when they were made." Id. Even if litigation fails to materialize after the communication, the privilege attaches as long as the communication relates to a contemplated proceeding. Krishnan, 83 S.W.3d at 302-03.
2. What Causes of Action Are Precluded When the Judicial-Proceedings Privilege Applies
The judicial-proceeding privilege shields against claims for defamation. Texas courts, however, have extended the protection afforded by that privilege to other causes of action that stem from the communication of defamatory material. See Bird v. W.C.W., 868 S.W.2d 767 (Tex. 1994) (Texas Supreme Court upheld summary judgment on negligence claims on basis of judicial-privilege proceeding because communication itself was privileged.). "The privilege would be lost if the appellant could merely drop the defamation causes of action and creatively replead a new cause of action." Hernandez v. Hayes, 931 S.W.2d 648, 654 (Tex. App.— San Antonio 1996, writ denied).
When the basis of a claim is damages that flow from communications made in the course of a judicial proceeding, we have held that the privilege should be extended beyond defamation. Laub v. Pesikoff, 979 S.W.2d 686, 691 (Tex. App.— Houston [1st Dist.] 1998, writ denied). "This Court has held that the judicial privilege is not limited to claims of libel or slander, and it should be applied to claims arising out of communications made in the course of judicial proceedings, regardless of the label placed on the claim." Crain v. Unauthorized Practice of Law Comm., 11 S.W.3d 328, 335 (Tex. App.—Houston [1st Dist.] 1999, pet. denied). Moreover, Texas courts have recognized the privilege with respect to claims for tortious interference, civil conspiracy, intentional infliction of emotion distress, denial of due process, and negligent misdiagnosis, as well as claims for business disparagement. See Daystar Residential, 176 S.W.3d at 27-29; Laub, 979 S.W.2d at 692; Griffin v. Rowden, 702 S.W.2d 692, 694-95 (Tex. App.—Dallas 1985, writ ref'd n.r.e.). To avoid the circumvention of the policy behind the privilege, we have held that "the privilege should be extended beyond defamation when the essence of a claim is damages that flow from communications made in the course of a judicial proceeding." Laub, 979 S.W.2d at 691.
C. No Evidence to Support Appellees' Claim of Judicial-Proceeding Privilege
Quality brought suit against appellees based on the communications King had with some of its patients. During discovery, counsel for Quality sought to question King about what was said in those communications, but King asserted the attorney-client privilege and refused to testify concerning details of the conversations that are the foundations of Quality's claims. Despite this fact, however, appellees filed motions for summary judgment based on the judicial-proceeding privilege, claiming that everything said within these conversations was completely privileged. In support of these motions, appellees attached King's affidavit, in which he did not state what he told the patients, but instead merely recited that "everything I said to each of these patients was in complete anticipation of a lawsuit . . . and related to the . . . threatened lawsuit over payment for services."
Quality claims that the statements in the affidavit were conclusory, and even if not, King was an interested witness and the statements were not readily controvertible. See TEX. R. CIV. P. 166a(c). Accordingly, Quality argues that the affidavit was insufficient to meet appellees' summary-judgment burden to prove that King's statements related to a judicial proceeding and were made in legitimate furtherance of his representation of his client.
1. The Law
The judicial-proceeding privilege is a defense the defendant has the burden to establish as a matter of law. Crain, 22 S.W.3d at 60. The decision as to whether a statement relates to a proposed or existing judicial proceeding is a question of law for the court. Krishnan, 83 S.W.3d at 302; Russell v. Clark, 620 S.W.2d 865, 870 (Tex. Civ. App.—Dallas 1981, writ ref'd n.r.e.). In order to determine whether a communication falls under the judicial-proceeding privilege, the court "must consider the entire communication in its context." Russell, 620 S.W.2d at 870. The trial court must then "extend the privilege to any statement that bears some relation to an existing or proposed judicial proceeding." Watson, 51 S.W.3d at 827.
There are multiple components to the absolute privilege: (1) the act to which the privilege applies must bear some relationship to (2) a judicial proceeding in which the attorney is employed, and (3) the act must be in furtherance of that representation. Daystar, 176 S.W.3d at 29. Accordingly, courts have held that the determination of whether a communication is absolutely privileged requires sufficient discovery. Id. at 30. We have held that cross-examination of the maker of the allegedly privileged statement can address the components of absolute privilege. See Helfand, 12 S.W.3d at 157.
A conclusory affidavit which states the affiant's subjective belief on issues concerning the judicial-proceeding privilege is not competent summary-judgment evidence. See Krishnan, 83 S.W.3d at 299 (affiant's statement that "I drafted each of these letters in good faith . . . I had every intention of bringing suit against each . . .of these health care providers, including Dr. Caballero" held to be based on affiant's subjective believe and not competent summary-judgment evidence.). A statement of subjective belief, which is not supported by other summary-judgment evidence, is insufficient to support a summary judgment. Rizkallah v. Conner, 952 S.W.2d 580, 586 (Tex. App.—Houston [1st Dist.] 1997, no writ).
A statement is not an improper legal conclusion if it is based on stated underlying facts. See id. If, however, a statement is nothing more than a legal conclusion, it is improper evidence. Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991). "Statements of legal conclusions amount to little more than the witness choosing sides on the outcome of the case." Rizkallah, 952 S.W.2d at 587. Furthermore, a conclusory statement that does not provide the underlying facts to support the conclusion is improper summary-judgment evidence and is not susceptible to being readily controverted. Id.; TEX. R. CIV. P. 166a(c).
2. Application of Law to the Facts
Here, King's affidavit gives the context of the communication he made with the patients, but fails to give the communication itself. In his affidavit, King described his representation of Blue Cross in the context of other lawsuits filed by Quality. He testified about the letters Quality sent to its patients threatening suit if it did not receive payment for services and further testified that Quality copied Blue Cross with these letters. He stated that at the time the letters were sent, he was representing Blue Cross in suits filed against it by Quality and that each of the patients with whom he spoke had received one of the letters from Quality.
King did not, however, testify as to a single statement he made to any patient. Instead, he stated that everything he said "was in complete anticipation of a lawsuit by [Quality] against the patient, [Blue Cross], or both, and related to the subject matter raised by [Quality] in its letter to the patient, namely, the threatened lawsuit over payment for services."
The decision about whether a statement relates to a proposed or existing judicial proceeding is a question of law for the court. Krishnan, 83 S.W.3d at 302. King's statement, i.e., that everything he said to the patients "related to" the threatened lawsuit, is precisely what the court was to decide, based on an analysis of the "entire communication." See Watson, 51 S.W.3d at 827. Accordingly, we hold that King's statement is a legal conclusion, unsupported by the underlying facts of what he actually said to the patients. See Rizkallah, 952 S.W.2d at 587 (testimony which is nothing more than a legal conclusion not supported by underlying facts is improper summary-judgment evidence). Conclusory statements are insufficient to support a summary judgment. See id.; Wadewitz v. Montgomery, 951 S.W.2d 464, 466 (Tex. 1997). As appellees supplied no other evidence in support of their summary-judgment motions based on the judicial-proceeding privilege but the conclusory affidavit of King, they failed to meet their burden to show the applicability of the judicial-proceeding privilege.
Conclusion
We sustain Quality's first issue. Accordingly, we have no need to reach Quality's other issue. We reverse the trial court's judgment and remand the case to the trial court for further proceedings.
Jim Sharp
Justice
Panel consists of Justices Keyes, Sharp, and Massengale.