Krouse v. Bower
In Krouse v. Bower, 2001 UT 28, 20 P.3d 895, the Court held that a demand letter was not excessively published even though it was sent to people who at the time were not directly involved in a lawsuit.
In that case, counsel for two condominium owners sent a demand letter to counsel for the condominium owners' association.
The letter indicated that courtesy copies of the letter were to be delivered to the individual condominium owners within the association, and, indeed, these copies were later distributed to the other owners. Although the plaintiffs, who were mentioned in the letter, later sued for defamation, the trial court held that the letter fell within the judicial proceeding privilege.
On appeal, the Court affirmed the privileged status of the demand letter and reviewed the issue of whether it was excessively published.
In doing so, the Court expressed concern that delivery of the letter directly to the individual owners, rather than to just their counsel, was not "necessary to effectuate the purpose of pursuing settlement," which was the alleged purpose of the letter.
Nevertheless, the Court held that the individual owners had a "clear legal interest" in the letter's subject matter.
The Court noted the overall circumstances of the letter's publication and pointed out that the association members were clients of the attorney who was the addressed recipient of the letter.
Further, the Court noted that the owners' association was a potential, and later named, party to the threatened lawsuit.
In light of these facts, the Court held that the individual owners would have likely received a copy of the letter or known of its substance and existence.
Because the purpose of the judicial proceeding privilege is to encourage "open, forthright discussion" and to promote "honest communication between the parties and their counsel in order to resolve disputes," the Court concluded that publication of the letter to the individual owners was not excessive.