Joseph B. Marshall, individually, and
Marshall & Associates, P.A., a Minnesota Corporation,
Charles R. Shreffler, Jack E. Pierce, Shreffler Law Firm, P.A., 100 South Fifth Street, Suite 2250, Minneapolis, MN 55402 (for appellant)
Curtis D. Smith, Moss & Barnett, P.A., 4800 Norwest Center, 90 South Seventh Street, Minneapolis, MN 55402 (for respondents)
Considered and decided by Amundson, Presiding Judge, Klaphake, Judge, and Shumaker, Judge.
Appellant European Hair Company, Incorporated (EHC), challenges the district court's decision that respondent Joseph B. Marshall's actions were protected by the judicial action privilege and the attorney-client privilege. Furthermore, EHC challenges the district court's decision that EHC's complaint failed to state a claim for which relief can be granted. Because Marshall's actions were protected by the judicial action privilege, we affirm.
Appellant European Hair Company (EHC) is a Minnesota corporation, originally owned by Ira and Shirley Rosen. On June 20, 1996, the Rosens sold EHC to Talaine K. Olafson. Under the agreement Ira Rosen remained with EHC to provide services to Olafson. In August, Olafson retained Joseph B. Marshall, respondent in the instant proceeding, as counsel to seek rescission of the purchase agreement.
On August 10, 1996, Olafson commenced litigation against Ira Rosen, Shirley Rosen, EHC, Weight Management Group, Inc., Ron Singer and Associates, Michael T. Yellen, and five unidentified defendants (Rosen). Olafson sought rescission of the purchase agreement, full restitution, damages, and costs.
In negotiations to settle the litigation, Marshall, in a letter dated August 12, 1996, indicated that his client Olafson would settle for no less than rescission of the purchase agreement and full restitution. In a letter dated August 13, 1996, Richard A. Saliterman, Rosen's attorney, accepted the rescission of the purchase agreement. Ira Rosen took over the affairs of EHC, but the parties continued to dispute the terms of the agreement.
In the course of his representation of Olafson, Marshall was in possession of and looked at various documents of EHC, including its customer list and customer contracts.
EHC alleged that Marshall contacted various customers and employees of EHC both before and after August 12 and that on at least one occasion Marshall solicited clients for a proposed consumer fraud action against Rosen. Marshall has since that time brought approximately 20 actions against Ira Rosen.
On October 22, 1996, Sir Winston Professional Hair Institute, Inc. (Sir Winston), executed a purchase agreement with Ira Rosen to purchase the property and assets of EHC. EHC alleges that the value of the property had decreased as a result of the Marshall's interference. According to the complaint, Marshall's interference consisted of a refusal on his part to promise not to sue Sir Winston unless the proceeds from the sale of EHC were put in a trust.
On October 29, 1996, the district court denied a motion by Olafson to enforce the settlement with Rosen, finding that no mutual agreement on the terms of the settlement had been reached.
In late December 1996, EHC commenced an action alleging five claims against Marshall. Marshall brought a motion to dismiss EHC's claims. The district court granted Marshall's motion. This appeal followed.
D E C I S I O N
Because EHC and Marshall submitted matters outside the complaint to the district court, and the district court did not exclude the material, Marshall's motion to dismiss should be viewed as a motion for summary judgment. Minn. R. Civ. P. 12.02.
On appeal from a summary judgment, this court must determine whether any genuine issues of material fact exist and whether the district court erred in its application of the law. City of Virginia v. Northland Office Properties Ltd. Partnership, 465 N.W.2d 424, 427 (Minn. App. 1991), review denied (Minn. Apr. 18, 1991). The party opposing the motion may not rely on mere general statements of fact, but "must demonstrate at the time the motion is made that specific facts are in existence which create a genuine issue for trial." Hunt v. IBM Mid-America Employees Fed. Credit Union, 384 N.W.2d 853, 855 (Minn. 1986).
The judicial action privilege grants an attorney protection from suit by a non-client for all communications related to actual or seriously contemplated litigation. An attorney is absolutely immune from a suit for defamation by potential defendants arising out of the attorney's solicitation of additional plaintiffs for contemplated litigation. Kittler v. Eckberg, Lammers, Briggs, Wolff & Vierling, 535 N.W.2d 653 (Minn. App. 1995), review denied (Minn. Oct. 10, 1995). In Kittler, the defendant-attorney was retained by a former shareholder of a corporation to commence litigation against the plaintiff for breach of fiduciary duty, misrepresentation, fraud, and theft of corporate property. Id. at 654. The defendant-attorney sent letters to 56 former shareholders of the corporation soliciting their joinder in the litigation. Id. Before the defendant-attorney could commence suit, however, the plaintiff sued the attorney alleging that the solicitation letter contained defamatory statements. Id. The district court held that the absolute judicial action privilege barred the plaintiff's defamation claims arising out of communications in connection with an actual or proposed judicial proceeding. Id. at 655.
In Kittler, the complaint alleged that the letter contained false and defamatory statements that damaged the plaintiffs' reputations. Id. at 657. The issue presented was "whether a defendant in an impending civil action may sue the attorneys for the opposing party on the ground that they wrongfully `solicitated' the action against him." Id. (quoting Rubin v. Green, 4 Cal. 4th 1187, 1191, 847 P.2d 1044, 1045, 17 Cal. Rptr.2d 828, 829 (Cal. 1993)). While the action in Rubin involved a claim of damage from solicitation and Kittler involved a claim of defamation, the Kittler court concluded that the distinction was not meaningful. Id. at 657. The most important issue, the court reasoned, was that both actions alleged harm from contacting potential plaintiffs, a preliminary step in the litigation process. Id.
Marshall's communication with EHC's former clients was clearly related to actual or seriously contemplated litigation. Under the holding in Kittler, Marshall's communication is privileged. The district court's application of Marshall's judicial action privilege was accurate.
Because Marshall's actions were protected under the judicial action privilege, we do not address the issue of the attorney-client privilege.