Case Title: Wright v. Lawson

Citation: 530 P.2d 823

Docket Number: 

State: utah

Court: Utah Supreme Court

Date: 1975-01-10T00:00:00Z

Document:
530 P.2d 823 (1975) D. Kent WRIGHT et al., Plaintiffs and Appellants, v. Kenneth D. LAWSON et al., Defendants and Respondents. No. 13719. Supreme Court of Utah. January 10, 1975. Edward M. Garrett of Hanson & Garrett, Salt Lake City, for plaintiffs and appellants. Thomas N. Crowther and John Parsons of Parsons, Kruse & Crowther, Salt Lake City, for defendants and respondents. TUCKETT, Justice: The plaintiffs initiated these proceedings alleging that they had been libeled by the defendants. The defendants filed a motion for a summary judgment which was granted by the court, and the plaintiffs are here seeking a reversal. The plaintiffs are directors of the Utah corporation known as Com Tel, Inc. The defendants were shareholders of a corporation known as Marketing Systems, Inc., and were officers and directors of that corporation. Marketing Systems and Com Tel entered into a reorganization agreement which provided for the transfer of all Marketing Systems shares to Com Tel in return for a specified number of Com Tel shares and a contingent transfer of additional Com Tel shares to former Marketing Systems shareholders. Disputes between Com Tel and the former shareholders of Marketing Systems arose concerning the contingent transfers of Com Tel shares. The defendants brought a suit in the United States District Court against Com Tel *824 and its directors alleging breach of the acquisition agreement, unlawful offer and sale of securities, fraud and unjust enrichment. On September 10, 1973, an annual meeting of shareholders of Com Tel was had. It was attended by Kenneth D. Lawson and Ray M. Unrath, defendants here, and former shareholders of Marketing Systems. Lawson and Unrath had with them their attorneys, John Parsons and James Kruse. A dispute arose at the meeting and it was adjourned "sine die" without the election of directors. On September 25, 1973, John Parsons, acting for former Marketing Systems shareholders, sent a letter to D. Kent Wright, president of Com Tel and a plaintiff herein. The plaintiffs' claim of libel resulted from that letter. The letter is of considerable length and we have extracted therefrom the portions pertinent to this controversy. The court below was of the opinion that the letter which referred to the case pending in the federal court and with reference to possible future litigation was absolutely privileged. The correctness of the court's ruling as to privilege is the sole matter before this court on appeal. It is the rule in England that immunity exists as to any utterance arising out of a judicial proceeding and having any reasonable relation to it, although it is quite irrelevant as to any issue involved.[1] The majority of American courts have adopted the rule that there is no immunity unless particular statements are in some way "relevant" or "pertinent" to some issue in the case. The words "relevant" and "pertinent" have a technical meaning in legal parlance, and we believe it would be advantageous to adopt a rule that the statement alleged to be libelous must have some relationship to the cause or subject matter involved.[2] The letter here under consideration deals almost entirely with the conduct of the shareholders' annual meeting, and the rights of the defendants as shareholders who participate in the election of a board of directors, failure of those in charge of the meeting to proceed with such an election, and the withholding of information to which the shareholders were entitled. The letter made reference to the case pending in the federal court and also to the fact that the defendants may seek appropriate *826 legal relief to have their demands complied with. We are of the opinion that the mention of the pending lawsuit, and the mention of the fact that the defendants would perhaps seek other legal relief if their demands were not met, have no sufficient relationship to pending or anticipated litigation which entitles it to an absolute privilege. We express no view on the issue of whether or not the statements contained in the letter are in fact libelous. The decision of the court below is reversed, and the matter is remanded for further proceedings. Appellants are entitled to costs. HENRIOD and ELLETT, JJ., concur. CALLISTER, C.J., does not participate herein. CROCKETT, Justice (concurring in part, dissenting in part). I agree with the rule announced in the main opinion that the matter should have some relevancy to, or reasonable relationship with, the legal business or negotiations with respect to which privilege is claimed. If a communication meets that test, it has a qualified or conditional privilege. See 50 Am.Jur.2d, Libel and Slander, Section 211, and cases there cited. This should be considered in conjunction with the fact that the allegedly libelous statements are mere generalities accusing unlawful and improper conduct in relation to the controversy. In doing so, it is my opinion that it should be ruled as a matter of law that the letter is not libelous. When the trial court has made the correct ruling in dismissing the action, we should affirm it if it is justified under the law. See Peterson v. Fowler, 29 Utah 2d 366, 510 P.2d 523 (1973); 5 C.J.S. Appeal & Error § 1464(1). Wherefore, it is my opinion that the summary judgment rejecting defendant's contentions was properly granted and that its action should be sustained. I further observe that if this case is remanded for further proceedings, it is the duty of this court to pass on matters which may become material to settlement of the issues. See Rule 76(a); and LeGrand Johnson Corp. v. Peterson, 18 Utah 2d 260, 420 P.2d 615; and therefore the majority opinion of the court should indicate its view on whether the content of the letter is defamatory. [1] Munster v. Lamb, 11 Q.B.D. 588, 52 L.J.Q.B. 726; Seaman v. Netherclift, L.R. 2 C. p. 53, 46 L.J.C. p. 128. [2] Johnston v. Schlarb, 7 Wash. 2d 528, 110 P.2d 190; Timmis v. Bennett, 352 Mich. 355, 89 N.W.2d 748; Simon v. Stim, 11 Misc.2d 653, 176 N.Y.S.2d 475; Youmans v. Smith, 153 N.Y. 214, 47 N.E. 265; Reliance Ins. Co. v. Hollins, 16 Utah 2d 44, 395 P.2d 537; Theiss v. Scherer, 6 Cir., 396 F.2d 646, 36 A.L.R.3d 1322; 69 Har.L.Rev. 875; Prosser On Torts 3d Ed., p. 795; Sec. 45-2-3, U.C.A. 1953.