Yeung v. Maric

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IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ANTHONY YEUNG, M.D., Plaintiff/Appellant, v. ZORAN MARIC, M.D. and DEBRA MARIC, husband and wife, Defendants/Appellees. ________________________________ ) ) ) ) ) ) ) ) ) ) ) 1 CA-CV 08-0653 DIVISION ONE FILED: 06-08-2010 PHILIP G. URRY,CLERK BY: GH DEPARTMENT D O P I N I O N Appeal from the Superior Court in Maricopa County Cause No. CV 2006-013899 The Honorable Robert E. Miles, Judge AFFIRMED The Cohen Law Firm By Larry J. Cohen Attorneys for Plaintiff/Appellant Phoenix Jones, Skelton & Hochuli, PLC By William R. Jones Eileen Dennis GilBride Attorneys for Defendants/Appellees Phoenix G E M M I L L, Judge ¶1 Anthony Yeung, M.D., sued Zoran Maric, defamation and false light invasion of privacy. M.D., for The trial court granted summary judgment to Dr. Maric, finding statements Dr. Maric made in an independent medical examination report -- prepared in connection with a private, contractual arbitration proceeding -- are protected by the absolute privilege afforded to participants arguing that in the judicial trial proceedings. court statements are privileged. erred in Dr. Yeung finding appeals, Dr. Maric s Because we agree with the trial court that the statements are covered by the absolute privilege, we affirm. FACTS AND PROCEDURAL BACKGROUND ¶2 Dr. Yeung is an orthopedic and spinal surgeon. April 2002, he performed surgery on L.L. involved in a motor vehicle accident. In In May 2002, L.L. was She sought treatment from Dr. Yeung for pain in her lower back. Ultimately, Dr. Yeung performed further surgery on L.L. s spine. After the surgery, L.L. continued to seek treatment from other doctors and, in February 2005, another doctor performed spinal fusion surgery on L.L. ¶3 In September 2005, Dr. independent medical exam (IME). that he perform [L.L. s] accident. Maric pain the Maric saw L.L. for L.L. s insurer had requested IME to determine the complaints to the 2002] [May relationship motor in his IME report there was no of vehicle L.L. s attorney accompanied her to the exam. concluded an Dr. objective evidence that L.L. had suffered a physical injury from the May 2002 accident. 2 ¶4 In his IME report, Dr. Maric criticized Dr. Yeung s treatment against of Dr. L.L. Maric Dr. in Yeung superior subsequently court filed alleging an action defamation and false light invasion of privacy based on statements in the IME report.1 alia, Dr. Maric moved for summary judgment, asserting, inter the IME report his had been statements requested were in the therefore course of litigation and absolutely privileged. Dr. Yeung responded that the statements were not privileged because the IME report had been prepared during the course of private, contractual arbitration proceedings involving an uninsured/underinsured motorist policy and such proceedings are not judicial proceedings. ¶5 The trial court granted Dr. Maric s motion for summary judgment, explaining: Plaintiff acknowledged that the IME report of L.L. was prepared for an arbitration proceeding involving L.L. . . . As a result, the Court concludes that [this] IME [report is] protected by an absolute privilege. . . . Although the IME of L.L. involved arbitration, the Court concludes that the reasons for providing immunity to a witness in a court proceeding also apply to a witness in an arbitration proceeding that the parties have agreed will be conducted in lieu of court proceedings. 1 Dr. Yeung alleged Dr. Maric had made defamatory statements about him in several IME reports of other patients, in addition to the IME report of L.L. Only the statements made in the IME report of L.L. are at issue in this appeal. 3 ¶6 Dr. Yeung filed a motion to reconsider, asserting there was no evidence the parties had agreed to the arbitration in lieu of court proceedings. The court denied the motion for reconsideration and also denied Dr. Yeung s subsequent motion for new trial. Dr. Yeung now appeals from the trial court s grant of summary judgment. Arizona Revised Statutes We have jurisdiction pursuant to ( A.R.S. ) section 12-2101(B) and (F)(1) (2003). ANALYSIS ¶7 We review a grant of summary judgment de novo, viewing the evidence and reasonable inferences in the light most favorable to the party opposing summary judgment construing any inferences in favor of that party. and Chalpin v. Snyder, 220 Ariz. 413, 418, ¶ 17, 207 P.3d 666, 671 (App. 2008). Summary judgment is appropriate only if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons, 201 Ariz. 474, 482, ¶ 14, 38 P.3d 12, 20 (2002). ¶8 The issue we must address is whether a witness in a private, contractual arbitration is protected by the absolute privilege that proceedings. by the is afforded to participants in judicial Because the socially important interests promoted privilege are present in 4 arbitrations as well as in judicial proceedings, we agree with the trial court and conclude the privilege does apply. The Absolute Privilege for Statements by Witnesses in Litigation ¶9 would It is well established in Arizona that statements that otherwise be actionable in defamation will escape liability because the defendant is acting in furtherance of some interest of social importance, which is entitled to protection even at the expense of uncompensated harm to the plaintiff s reputation. Green Acres Trust v. London, 141 Ariz. 609, 612, 688 P.2d 617, 620 (1984) (quoting Prosser, Law of Torts (4th Ed. 1971) § 114, p.776)); see also Darragh v. Superior Court, 183 Ariz. 79, 81, 900 P.2d 1215, 1217 (App. 1995); W. Tech., Inc. v. Sverdrup & Parcel, Inc., 154 Ariz. 1, 4, 739 P.2d 1318, 1321 (App. 1987). ¶10 Accordingly, Arizona courts have determined that witnesses in judicial proceedings are protected by an absolute privilege, and they are immune from civil suits arising from allegedly defamatory testimony during depositions and at trials. See, e.g., Darragh, 183 Ariz. at 81, 900 P.2d at 1217. The absolute privilege in this area promotes the socially important interest of ensuring complete exposure of pertinent information for a tribunal s disposition. 613, 688 P.2d at 621. Green Acres Trust, 141 Ariz. at A witness who fears subsequent damages 5 liability might inclined to be shade reluctant his to testimony come in forward favor to of testify the or potential plaintiff, to magnify uncertainties, and thus deprive the finder of fact of candid, objective, and undistorted Briscoe v. LaHue, 460 U.S. 325, 333 (1983). evidence. The privilege is absolute, and the speaker s motive, purpose or reasonableness in uttering a false statement [does] not affect the defense. Green Acres Trust, 141 Ariz. at 613, 688 P.2d at 621.2 ¶11 Arizona courts have held that the privilege extends to reports, litigation consultations, and are and prepared advice as institution or defense of a case. that are preliminary relevant steps in to the Darragh, 183 Ariz. at 82, 900 P.2d at 1218; see also W. Tech., Inc., 154 Ariz. at 4-5, 739 P.2d at 1321-22. Absent the privilege, a person who prepared a report as a preliminary step to litigation could be held liable on the ground that, although his deposition and trial testimony are privileged, his reports and conferences with his client are not. ¶12 Darragh, 183 Ariz. at 82, 900 P.2d at 1218. To fall within the privilege, the defamatory statement need not be strictly relevant to the judicial proceeding, but 2 The absolute privilege at issue here is a creature of the common law. In contrast, a panel of our colleagues has recently held that a doctor s allegedly defamatory statements to the Arizona Medical Board enjoy only a qualified privilege, based on the applicable Arizona statute. See Advanced Cardiac Specialists, Chartered v. Tri-City Cardiology Consultants, P.C., 222 Ariz. 383, 388, ¶ 19, 214 P.3d 1024, 1029 (App. 2009). 6 it must relate to, bear on, or be connected with the judicial proceeding and have some reference to the subject matter of the proposed or pending litigation. Green Acres Trust, 141 Ariz. at 613, 688 P.2d at 621 (quoting Restatement (Second) of Torts 586, cmt. c). Also, the statement must be made in connection with a proceeding that is actually contemplated in good faith and under serious consideration by the witness or a possible party to the proceeding. The bare possibility that the proceeding might be instituted is not to be used as a cloak to provide immunity for defamation seriously considered. when the possibility is not W. Tech., Inc., 154 Ariz. at 5, 739 P.2d at 1322 (quoting Restatement (Second) of Torts 588 cmt. e). Application of the Privilege In Private, Contractual Arbitrations ¶13 applies The to trial court witnesses ruled in that this the absolute private, uninsured/underinsured motorist coverage arbitration. contends this was error. privilege contractual Dr. Yeung He argues the privilege should apply only when an arbitration proceeding contains minimum judicial safeguards, and he asserts the trial court failed to determine whether such safeguards were present at this arbitration. He also argues there was no evidence that legal proceedings were under serious consideration at the time Dr. Maric prepared the IME report, as may be required for the privilege to apply. 7 See W. Tech., Inc., 154 Ariz. at 5, 739 P.2d at 1322. Whether the privilege applies is a question of law that we review de novo. See Green Acres Trust, 141 Ariz. at 613, 688 P.2d at 621. ¶14 Arizona courts have not yet addressed whether witnesses at arbitration proceedings are within the privilege. Our analysis begins with the Restatement (Second) of Torts § 588, which provides: A witness is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding or as part of a judicial proceeding in which he is testifying, if it has some relation to the proceeding. See Ledvina v. Cerasani, 213 Ariz. 569, 572-73, ¶ 10, 146 P.3d 70, 73-74 (App. 2006) (citing § 588 and stating Arizona views Restatement as authority controlling precedent). in This defamation privilege cases also in absence applies to matter that constitutes a false light invasion of privacy. Restatement (Second) of Torts § 652F. of any See Judicial proceedings are proceedings in which an officer or tribunal exercises judicial functions. Restatement (Second) of Torts § 588 cmt. d. The Restatement further provides that an arbitration proceeding may be included, id., and explains that, in a grievance proceeding arising under a collective bargaining agreement, the arbiter is exercising a judicial function, and the indications are that the 8 protection of this Section extends to him as well. Restatement (Second) of Torts § 585 cmt. c. ¶15 In Architects, Craviolini 89 Ariz. v. 24, Scholer 27, 357 & P.2d Fuller 611, 613 Associated (1961), our supreme court explained that arbitrators in private, contractual arbitrations exercise quasi-judicial functions. The court stated that arbitrators are therefore protected by an absolute immunity: The immunity in question here is one bestowed by public policy on those people who, by office or by contract, are called upon to act as judges. It is in every real sense a judicial immunity. It attaches to every act done in the judicial capacity. . . . In the role of arbitrator . . . goes the cloak of immunity. ¶16 Id. at 28, 357 P.2d at 614. These principles support a corresponding immunity for witnesses who participate Arbitrators perform in quasi-judicial arbitration functions, proceedings are quasi-judicial in nature. proceedings. and arbitration Witnesses in private, contractual uninsured/underinsured motorist coverage arbitration proceedings privilege should regarding generally be defamatory covered by statements, the absolute assuming the statements are related to the proceeding and basic procedural safeguards -- see infra ¶ 21 -- are present in the proceeding. ¶17 Several jurisdictions have determined that witnesses in private, contractual arbitrations are immune from suit. 9 In Moore v. Conliffe, 871 P.2d 204, 209 (Cal. 1994), the California Supreme Court held: It is apparent, upon even brief reflection, that the purposes of the litigation privilege . . . strongly support application of the privilege to a witness who testifies in the course of a private, contractual arbitration proceeding. The court noted arbitration was designed to eliminate the need to resort to the court system and that the risk that a witness s fear of potential liability either will deter the witness from testifying voluntarily at all, or in as candid and complete a manner as is essential to the truthseeking mission of the process, is as great in the arbitration setting as in a court proceeding. ¶18 Similarly, in Id. Corbin v. Washington Fire and Marine Insurance Co., 398 F.2d 543 (4th Cir. 1968), the Fourth Circuit of the United States Court of Appeals upheld a district court s determination that witnesses arbitrations are immune from suit. in private, contractual The district court in that case had noted that arbitrations require the presentation of evidence and that denying immunity to witnesses would make it difficult for arbitrators to obtain necessary evidence: Freedom to develop a relevant record and to present pertinent arguments, without fear of reprisal by way of threatened libel or slander actions, is a necessary prerequisite to the fair resolution of any controversy through arbitration. 10 Corbin v. Washington Fire (D.S.C. 1968). and Marine Ins. Co., 278 F.Supp. 393, 396 See also Shearson Hayden Stone, Inc. v. Liang, 493 F. Supp. 104, 109 (N.D. Ill. 1980); Gilbert v. Sperbeck, 126 P.3d 1057, 1059-60 (Alaska 2005); Kloch v. Ratcliffe, 375 N.W.2d 916, 919-921 (Neb. 1985). ¶19 Dr. Yeung contends the absolute privilege should apply to arbitration proceedings only when minimum judicial safeguards are in place.3 He argues there safeguards before the trial court. was no evidence of such He points out the trial court did not know the terms or restrictions of the arbitration agreement or what rules applied, and he contends there was no evidence of whether the arbitration was binding, the arbitrator was qualified, Dr. Maric testified at the arbitration, the IME report was used at the proceeding, or the arbitration had been mandated by L.L. s insurance policy or separately agreed upon by the parties. ¶20 The record establishes that the IME report was prepared during the course of private, contractual arbitration 3 In support of this proposition, Dr. Yeung cites Rolon v. Henneman, 517 F.3d 140 (2d Cir. 2008), Odyniec v. Schneider, 588 A.2d 786 (Md. 1991), and Katz v. Odin, Feldman & Pittleman, P.C., 332 F. Supp. 2d 909 (E.D. Va. 2004), among other cases. Each case suggests the privilege should apply only when certain procedural safeguards are present at the arbitration, such as the ability to issue subpoenas or to require testimony under oath. As explained herein, we find the safeguards in this case sufficient. 11 proceedings involving an uninsured/underinsured motorist policy.4 We acknowledge that such arbitrations do not necessarily operate in the same way and with the same safeguards as full scale judicial litigation. But Arizona public policy favors arbitration as a means of disposing of controversies, Allstate Ins. Co. v. Cook, 21 Ariz. App. 313, 315, 519 P.2d 66, 68 (1974), and to Arbitration Act. that end Arizona has enacted the Uniform See Foy v. Thorp, 186 Ariz. 151, 153, 920 P.2d 31, 33 (App. 1996). Under the Act, parties to arbitration must be provided notice of the proceeding, are entitled to present evidence, and may be represented by an attorney, and the arbitrator may issue subpoenas and has the power to administer oaths. these See A.R.S. §§ 12-1505 to 12-1507 (2003). safeguards make arbitration sufficiently We believe analogous to judicial litigation to warrant application of the privilege.5 See Jeanes v. Arrow Ins. Co., 16 Ariz. App. 589, 591-92, 494 P.2d 1334, 1336-37 (1972) (applying Act in uninsured motorist coverage context, in support of enforcing arbitration provision 4 Uninsured motorist insurance policies almost uniformly include provisions which specify that some of the issues that may arise when an insured makes a claim for insurance benefits shall be submitted to arbitration. 2 Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured Motorist Insurance § 22.1, at 297 (3d ed. 2005). 5 These safeguards apply in the absence of an agreement to the contrary, see A.R.S. §§ 12-1503 and 12-1505, and there is nothing in the record that suggests the arbitration provision in this case contains contrary provisions. 12 in policy); Steven Plitt, Arizona Liability Insurance Law § 4.2, at 229-240 (1998) (discussing applicability of Act to uninsured/underinsured motorist coverage arbitration). ¶21 The absolute privilege afforded to participants judicial proceedings is rooted in public policy. in See, e.g., Linder v. Brown & Herrick, 189 Ariz. 398, 406, 943 P.2d 758, 766 (App. 1997). We agree with the reasoning in Moore, 871 P.2d at 205, and the reasoning affirmed in Corbin, 278 F. Supp. at 396, that public policy supports extending the absolute privilege to participants in private, contractual arbitration proceedings. Witnesses in arbitrations serve the socially important interest of providing arbitrators the evidence necessary to dispose of the case, and they must be protected from the threat of litigation, even at the expense of uncompensated harm to another person s reputation. in preparation for Because Dr. Maric prepared the IME report a private, contractual arbitration, his statements are absolutely privileged. ¶22 Dr. litigation Yeung was next seriously issued his IME report. argues there contemplated was at no the evidence time Dr. that Maric Dr. Maric testified at his deposition, however, that he believed L.L. s case was being litigated when he prepared arbitrated. the IME report. And L.L. s case was in fact The trial court did not err in finding the report 13 was prepared in connection with an anticipated or seriously contemplated arbitration proceeding. ¶23 Dr. Yeung also cites Ritchie v. Krasner, 221 Ariz. 288, 211 P.3d 1272 (App. 2009), in a supplemental citation of authority. The IME report in that case, unlike here, was not prepared for litigation or arbitration, and statements in the IME report were therefore not eligible for the absolute privilege afforded to participants in judicial proceedings. at ¶¶ 58-59. Id. Additionally, Ritchie was a malpractice action, not a defamation claim. Id. at ¶ 2. For these reasons, we do not find Ritchie to be apposite here. CONCLUSION ¶24 Because we agree with the trial court that an absolute privilege protects allegedly defamatory Dr. Maric from statements made potential in his liability IME report, for we affirm the summary judgment. _____/s/_________________________ JOHN C. GEMMILL, Presiding Judge CONCURRING: ___/s/___________________________ JON W. THOMPSON, Judge ___/s/___________________________ PATRICK IRVINE, Judge 14

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