Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-00058/USCOURTS-caed-2_06-cv-00058-1/pdf.json

Parties Involved:
Conseco Insurance Company
Counter Claimant
Conseco Marketing, LLC
Counter Claimant
Conseco Services, LLC
Counter Claimant
Victor A. Gonsalves
Counter Defendant
Darin Lucas
Defendant

Document Text:

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Unless otherwise noted, “defendant” will be used 1

throughout this order to identify Darin Lucas.

1

 UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

VICTOR A. GONSALVES,

NO. CIV. S-06-0058 WBS KJM

Plaintiff, ORDER RE: MOTION FOR SUMMARY

JUDGMENT

 

v.

CONSECO INSURANCE COMPANY,

formerly known as CONSECO

ANNUITY ASSURANCE COMPANY,

CONSECO SERVICES, LLC, CONSECO

MARKETING, LLC, DARIN LUCAS,

and DOES 1 to 200 inclusive,

Defendants.

----oo0oo----

Currently before the court is defendant Darin Lucas’ 1

motion for summary judgment with respect to plaintiff Victor A.

Gonsalves’ claims of defamation and intentional infliction of

emotional distress.

I. Factual and Procedural Background

On or about May 4, 1999, plaintiff entered into a

written contract with defendant Conseco Marketing, LLC to work as

an independent contractor selling insurance and annuity policies

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 1 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

and certificates. (Compl. ¶ 102; Ex. 1 at 19, 22.) Defendant is

an insurance broker under whom plaintiff worked as a subproducer. 

(Lucas Decl. ¶ 5.) Plaintiff was terminated from his employment

without cause on or about June 15, 2003. (Id. ¶ 16.) Defendant

contends that because one of plaintiff’s clients had terminated

his policy and returned money to plaintiff, and because defendant

himself had overpaid plaintiff by entering three payments for one

transaction, plaintiff is in possession of monies that rightfully

belong to defendants. (Lucas Decl. ¶ 13.) Defendant

subsequently sent plaintiff a demand for payment in the amount of

$13,718.70 for an outstanding debit balance. (Compl. ¶ 16.) 

Plaintiff responded by disputing the alleged debt, and now

contends that the balance is inflated and that the value of his

“counterclaims” (assumedly, the value of the claims in this suit)

is likely to be in excess of the amount of the debt. (Compl. ¶¶

17, 21.) 

At some point during this dispute, defendant received

notice from the Debt Management Unit at Conseco Annuity Assurance

that he was required to pay off his debit balance. (Lucas Decl.

¶¶ 5, 18.) On May 27, 2004, defendant posted plaintiff’s name

and social security number onto a website maintained by Vector

One, a company that permits subscribers to report an insurance

agent who left employment with an outstanding debit balance for

commissions. (Lucas Decl. ¶¶ 21, 19; Def.’s Mot. for Summ. J.

Ex. G (Letter from President of Vector One).) 

On or about January 27, 2005, a prospective employer

plaintiff had contacted found plaintiff’s name on the Vector One

website and informed plaintiff that he was listed on the website. 

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 2 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

(Gonsalves Decl. ¶ 7.) On February 16, 2005, plaintiff filed a

complaint in Placer County Superior Court alleging defamation. 

(Def.’s Mot. for Summ. J. 4; Gonsalves Decl. ¶ 15.) Plaintiff

voluntarily dismissed his lawsuit without prejudice on September

26, 2005 against the Conseco defendants and on October 31, 2005

against defendant Lucas; he asserts that this dismissal was

prompted by the trial court’s erroneous rulings. (Id. ¶ 19.) In

his declaration, plaintiff states that the trial court later

dismissed the lawsuit with prejudice for failure to timely file

an amended complaint, and that the trial court’s dismissal with

prejudice is currently on appeal. (Id. ¶ 20.) 

On December 7, 2005, plaintiff filed a new complaint in

California Superior Court for the County of Sacramento against

defendants Conseco Insurance Co. (formerly known as Conseco

Annuity Assurance Co.), Conseco Services, LLC, Conseco Marketing,

LLC, Darin Lucas, and Does 1 through 200. (Compl.) In that

complaint, plaintiff alleged the following causes of action: (1)

defamation, (2) intentional infliction of emotional distress, and

(3) breach of contract. (Id.) The first two causes of action,

defamation and intentional infliction of emotional distress, are

based on the alleged debit balance and posting of plaintiff’s

information on the Vector One website. (See id.) On January 9,

2006, defendants removed the action to federal court on the basis

of diversity jurisdiction. (Defs.’ Notice of Removal.) 

Defendant Lucas now moves for summary judgment under

Federal Rule of Civil Procedure 56 with respect to plaintiff’s

claims of defamation and intentional infliction of emotional

distress. Defendant argues that plaintiff’s defamation claim is

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 3 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

barred by the statute of limitations, that the allegedly

defamatory statement is true, and that the publication of the

statement is protected under California’s common-interest

privilege. Defendant additionally argues that plaintiff’s

intentional infliction of emotional distress claim fails because

the underlying defamation claim fails, and also because plaintiff

cannot demonstrate all of the elements of the claim as a matter

of law. 

II. Discussion

Summary judgment is proper “if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(c). A material fact is one that could affect the outcome of

the suit, and a genuine issue is one that could permit a

reasonable jury to enter a verdict in the non-moving party’s

favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). 

The party moving for summary judgment bears the initial

burden of establishing the absence of a genuine issue of material

fact and can satisfy this burden by presenting evidence that

negates an essential element of the non-moving party’s case. 

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). 

Alternatively, the movant can demonstrate that the non-moving

party cannot provide evidence to support an essential element

upon which it will bear the burden of proof at trial. Id.

Any inferences drawn from the underlying facts must, however, be

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 4 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

viewed in the light most favorable to the party opposing the

motion. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,

475 U.S. 574, 587 (1986). The substantive law governing a case

determines the materiality of a fact. T.W. Elec. Serv., Inc. v.

P. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 

The parties do not dispute that California law applies. (Def.’s

Mot. for Summ. J. 3; Pl.’s Opp’n to Mot. for Summ. J. 8.) 

A. Plaintiff’s Defamation Claim

Under California law, there is a one year statute of

limitations for tort claims such as defamation. Cal. Code. Civ.

Pro. § 340(c); see also Shively v. Bozanich, 31 Cal. 4th 1230,

1246 (2003). The statute of limitations period for defamation

claims begins running “when the cause of action accrues,” which

is when the statement at issue is published. Id.; see also

Traditional Cat Ass’n v. Gilbreath, 118 Cal. App. 4th 392, 402-03

(2004). Internet publications, like newspaper publications, are

subject to the single publication rule, under which publication

occurs when an allegedly defamatory statement was first posted on

the internet or published in a newspaper. Gilbreath, 118 Cal.

App. 4th at 403-04. Under this rule, each subsequent viewing of

the posting does not count as a new publication. Id. at 404. 

However, “a party has a cause of action for libel each

time the defamatory matter is published, even if the originator

of the defamatory matter did not republish the defamatory matter,

as long as republication should have been reasonably foreseeable

by the originator.” Schneider v. United Airlines, 208 Cal. App.

3d 71, 77 (1989). The court in Schneider applied this reasonable

foreseeability test to a defendant who had supplied information

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 5 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

to a credit reporting agency. Id. at 78. The court concluded

that this foreseeability exception to the single publication rule

applied, and held that each time the credit information was

republished, the plaintiff suffered a new injury and accrued a

new cause of action. Id. 

Here, defendant’s publication of the allegedly

defamatory statement occurred on May 27, 2004. Plaintiff

contends that the information was republished on or about January

27, 2005, when a prospective employer checked the Vector One

report. (Gonsalves Decl. ¶ 7.) The purpose of the Vector One

website was to allow subscribers to report former employees who

left employment with outstanding debit balances; prospective

employers could then run a credit check on a prospective employee

through the Vector One website. Defendant originated publication

with the knowledge that republication was reasonably foreseeable,

and as in Schneider, reasonably foreseeable republication

generates a new cause of action for defamation. Therefore, when

defendant filed this lawsuit on December 7, 2005, the one-year

statute of limitations had not run. 

Alternatively, defendant moves for summary judgment on

plaintiff’s defamation because the published information was

true. Truth is an absolute defense to a claim for defamation. 

Smith v. Maldonado, 72 Cal. App. 4th 637, 648 (1999). Defendant

proffers plaintiff’s commission statement as evidence of the

existence and amount of the debt. (Def.’s Mot. for Summ. J. Ex.

C.) Additionally, defendant’s posting to the website indicated

only that plaintiff owed a debt to First Annuity and Ins.

Marketing, Co.–-the amount was not specified. Because there is

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 6 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Moreover, although plaintiff cites to Exhibit 2 of his 2

declaration for this proposition, this exhibit is a letter from

Ann Beagle of the Debt Management Unit of Conseco Insurance

Group, in which she informs Mr. Gonsalves that he owes the amount

defendant contends he owes, or $13,718.70. (Gonsalves Decl. Ex.

2.) 

7

no evidence that the amount of a debt is reported on Vector One, 

plaintiff’s argument that the amount of the debt owed is disputed

is immaterial. However, plaintiff additionally argues that the 2

information on the website indicated that he owed a debt to First

Annuity and Ins. Marketing, Co. and another debt to Conseco

Insurance Companies, which would mean that the same debt was

incorrectly listed twice on the website. 

If defendant posted information about a debt owed to

First Annuity and Ins. Marketing, Co. after that debt had already

been posted by Conseco Insurance Companies, then defendant’s

posting was duplicative and made in error. However, neither

plaintiff nor defendant has provided evidence to show

conclusively whether the debt was listed twice on the website in

error, or whether a debt with Conseco Insurance Companies had

already been listed on the Vector One website at the time

defendant posted a debt owed to First Annuity and Ins. Marketing,

Co. Therefore, there appears to be a genuine dispute of material

fact as to the truth of defendant’s statement, and the court

cannot grant summary judgment as to the defamation claim on these

grounds.

Defendant additionally argues that the communications

were subject to the common interest privilege for defamation

claims, pursuant to California Civil Code § 47(3). Under this

provision, a communication is privileged when made between a

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 7 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

communicator and a recipient with a common interest in order to

further that interest, as long as the publication was not

motivated by malice. See Coastal Abstract Serv., Inc. v. First

Am. Title Ins. Co., 173 F.3d 725, 735 (9th Cir. 1999) (explaining

that, under California law, the common interest privilege

“immunizes a person’s statement to others on matters of common

interest from liability in tort, provided that the person did not

act with malice”). A defendant asserting the common interest

privilege bears the burden of demonstrating that the privilege

applies. Lundquist v. Reusser, 7 Cal. 4th 1193, 1208, 1210

(1994). “[T]o be protected [under the common interest

privilege,] the communication must be one ‘reasonably calculated

to further that interest.’” Cuenca v. Safeway S.F. Employees

Fed. Credit Union, 180 Cal. App. 3d 985, 996 (1986). 

Additionally, “[i]n determining whether a defendant may take

advantage of the privilege, it has been held that malice may be

inferred if the defendant does not have reasonable or probable

cause to believe his statement to be true.” Stationers Corp. v.

Dun & Bradstreet, Inc., 62 Cal. 2d 412, 418 (1965). 

In the employment context, the privilege has been

applied to communications by employers about the conduct of an

employee that may otherwise reflect upon the employer or affect

relations with existing employees. See Deaile v. Gen. Tel. Co.

of Cal., 40 Cal. App. 3d 841, 846 (1974) (finding the disclosure

of “the factors surrounding [the] plaintiff’s forced retirement”

privileged when they “were only disseminated in an effort to

preserve employee morale and job efficiency”). In Pavlovsky v.

Bd. of Trade of S.F., 171 Cal. App. 2d 110, 113 (1959), the

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 8 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

privilege was extended to an unincorporated association that

specifically had a clear purpose to provide for joint action by

all of its members in dealing with financially embarrassed or

insolvent debtors,” and a constitution and by-laws that supported

that purpose. 

Here, defendant contends that Vector One and the

insurance industry had a common interest in reporting information

about agents who left their prior company with a debit balance so

that prospective employees could be screened effectively. 

However, unlike the organization in Pavlovsky, there is no

evidence presented here of Vector One’s purpose, and it is

unclear whether Vector One has a purpose other than to secure its

own commercial gain through providing a service that insurance

companies would find useful. Moreover, as discussed supra,

information about the same debt may have been posted twice; if

so, defendant would not have had reasonable cause to believe the

statements were true. Because defendant has not established that

he shares a common interest with Vector One and plaintiff has

successfully raised the inference of malice, there is a genuine

issue of material fact as to whether the common interest

privilege applies. 

B. Plaintiff’s Intentional Infliction of Emotional

Distress Claim

A related claim in the complaint is intentional

infliction of emotional distress as a result of the defamation. 

The elements of a claim for intentional infliction of emotional

distress are as follows: “(1) extreme and outrageous conduct by

the defendant with the intention of causing, or reckless

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 9 of 10
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

disregard of the probability of causing, emotional distress; (2)

the plaintiff’s suffering severe or extreme emotional distress;

and (3) actual and proximate causation of the emotional distress

by the defendant’s outrageous conduct.” Ess v. Eskaton Props.,

Inc., 97 Cal. App. 4th 120, 129 (2002) (quoting Cervantez v. J.C.

Penney Co., 24 Cal. 3d 579, 593, 156 (1979)). 

Plaintiff’s claim is that his former employer posted

his information on a website containing information about former

insurance agents who owed a debt to their former employers, and

thereby intentionally caused him distress. Defendant attempts to

counter this claim by stating that he harbored no malice toward

plaintiff and was merely reporting a debt he had a right to

report. These unsupported allegations are insufficient to

satisfy defendant’s burden of presenting evidence to negate an

essential element of this claim, or to demonstrate that plaintiff

will not be able to present any evidence at trial on any element

on which he bears the burden of proof. Celotex, 477 U.S. at 322-

23. Therefore, the court cannot grant summary judgment on this

claim. 

IT IS THEREFORE ORDERED that defendant’s motion for

summary judgment with respect to the claims of defamation and

intentional infliction of emotional distress be, and the same

hereby is, DENIED.

DATED: May 22, 2006

Case 2:06-cv-00058-WBS -KJM Document 49 Filed 05/22/06 Page 10 of 10