Title: Chard v. Galton
Citation: 277 Or. 109, 559 P.2d 1280
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: February 3, 1977

559 P.2d 1280 (1977)
277 Or. 109
Joan D. CHARD, Appellant,
v.
Herbert B. GALTON et al., Respondents.

Supreme Court of Oregon, Department 1.
Argued and Submitted October 8, 1976.
Decided February 3, 1977.
*1281 Cameron C. Thom, Coos Bay, argued the cause for appellant. With him on the brief was McInturff, Thom &amp; Collver, Coos Bay.
James H. Gidley, Portland, argued the cause for respondents. With him on the brief was Cosgrave &amp; Kester, Portland.
Before DENECKE, C.J., and HOLMAN, TONGUE and SLOPER, JJ.
HOLMAN, Justice.
This is an action seeking damages for defamation. Plaintiff appeals from an order granting a summary judgment for defendants.
Plaintiff was involved in an accident with a Mr. and Mrs. McGregor. Defendants, a firm of lawyers, represented the McGregors in claims for damages against plaintiff. Plaintiff was covered by a policy of liability insurance. In an attempt to settle the McGregors' claims, defendants wrote a letter to a representative of plaintiff's insurer. This letter contained the following statement, which is the basis for plaintiff's claim for defamation:
Subsequent to the writing of the letter, actions against plaintiff were instituted by defendants on behalf of both McGregors. These actions sought both actual and exemplary damages, the claim for exemplary damages being based upon the contention that the accident occurred while plaintiff was operating her vehicle under the influence of intoxicants.
Plaintiff's contention on appeal is as follows:
Plaintiff apparently concedes that the communication was absolutely privileged if the statement in the letter, though false, was "relevant and pertinent" to the McGregors' proposed litigation against plaintiff. The following is a statement of the law in 3 Restatement of the Law of Torts 229-31, § 586:
Oregon has no cases determining what constitutes, for the purpose of the attorney's absolute privilege, an adequate relationship between the litigation and statements or writings made by an attorney preliminary thereto. In Strycker v. Levell and Peterson, 183 Or. 59, 67, 190 P.2d 922 (1948), this court quoted with approval the following language from McKinney v. Cooper, 163 Or. 512, 519, 98 P.2d 711, 713 (1940), concerning how the relationship is determined when the statements are made during litigation:
In Irwin v. Ashurst, 158 Or. 61, 70, 74 P.2d 1127, 1131 (1938), this court said, regarding the same subject:
These cases all concern the relation to the litigation of statements or writings made during or as part of the litigation itself. However, if it is logical to extend the umbrella of absolute privilege to include similar statements which are made by a lawyer outside of the pleadings and actual trial of the case (and we believe that it is), there seems to be no logical reason why the same liberal criteria for the determination of what constitutes "some relation" should not be applicable. It is equally important that a lawyer enjoy the same degree of freedom in settlement of his client's case as that which he enjoys in its actual pleading or trial.
In Zirn v. Cullom, 187 Misc. 241, 63 N.Y.S.2d 439, 440-41 (1946), an action for libel was based upon statements in a letter from the attorney of the defendant partnership offering settlement. In holding that statements made in the letter were absolutely privileged, the court said as follows:
It is our opinion that the statement in the present case was sufficiently related to the subject of the litigation to be absolutely privileged. The value of a case in settlement, in which a claim is based upon allegations of a defendant's intoxication while operating a motor vehicle, could not help being affected by whether such defendant has had a past pattern of alcoholic problems. Appearance, demeanor, and reputation in the community can all be affected by such a pattern. All these factors can be important in determining a jury verdict and, thus, the value of settlement. A claim of previous serious difficulty with automobiles and alcohol is one which would be investigated by a defendant's insurance company as a matter of course in evaluating the insured's vulnerability to a judgment. The test of "some relation," as used here, is not whether the evidence of the occurrence would be admissible in the trial of the case but whether it would have sufficient tangential relevance to affect the value of a settlement. We believe it does have such relevance.
The judgment of the trial court is affirmed.