Berman v. RCA Auto Corp

In Berman v. RCA Auto Corp. (1986) 177 Cal. App. 3d 321, the court examined whether a termination in favor of the defendant based on the immunity conferred by former Civil Code section 47, subdivision (2) was a favorable termination for purposes of a subsequent malicious prosecution action. In the underlying action, RCA sued several defendants and Berman, attorney for one of the defendants, made certain representations to the court while defending his client. RCA claimed Berman's representations were false and therefore amended its underlying complaint to add Berman as a defendant, alleging Berman's false statements had injured RCA. The trial court in the underlying action dismissed the claim against Berman because his statements were absolutely privileged under former Civil Code section 47, subdivision (2). (Berman, at pp. 322-323.) Berman then filed a malicious prosecution claim against RCA. The trial court dismissed Berman's claim because it concluded dismissal of the underlying claim based on privilege cannot satisfy the favorable termination element. On appeal, RCA argued the trial court was correct because a termination based on privilege is a procedural or technical termination rather than one that substantively evaluated the merits of the alleged wrongfulness of the defendant's conduct. ( Berman v. RCA Auto Corp., supra, 177 Cal. App. 3d at pp. 322-323.) The Berman court rejected RCA's argument, reasoning that although the privilege is similar to a procedural defense to the extent it must be raised by the defendant, it is substantive because: "The privilege is a limitation upon liability. When a publication is absolutely privileged, there is no liability, even though it is made with actual malice . . . .. . . The absolute protection from liability it provides makes the privilege quite unlike the procedural defenses. Procedural defenses are designed to protect the integrity of the judicial system; they are rules by which lawsuits are tried. Procedural defenses do not absolutely shield a defendant from liability. . . .The section 47, subdivision 2, privilege, on the other hand, creates an immunity. It is a bar to liability designed to protect the rights of the individual speaker, to insure that nothing will impede the individual's access to the courts. The privilege focuses not on the timing or the manner of a lawsuit, but solely on the defendant. . . .. . . In this instance the termination reflects the opinion of the Legislature that the action lacks merit because the protection of the right of an individual's access to the courts outweighs an individual's right to a civil remedy for harm resulting from misrepresentations made at a judicial proceeding. . . . The Legislature has in effect said that suits based on privileged statements are suits . . . without merit." (Berman, supra, at pp. 324- 325.)