Begley v. Ireson.
2020 COA 157. No. 19CA1245. Summary Judgment—Litigation Privilege.
November 5, 2020
Begley and Hirsch (plaintiffs) own residential property on which they wanted to demolish the existing house and build a new one. Ireson is their neighbor on one side, and Hoeckele was their neighbor on the other. Plaintiffs contracted with Forte Development Group, LLC (Forte) to undertake the project, and Forte demolished the existing home and began shoring work necessary to excavate the basement of the new home. However, Forte ceased work because, as alleged by plaintiffs, Ireson and Hoeckele, individually and through their attorney Gibbs, made statements, threats, and complaints that their properties had been damaged during construction. Plaintiffs further alleged that when excavation began again, Gibbs threatened police intervention and demanded that the work stop.
Plaintiffs filed a complaint against Ireson, Hoeckele, and Gibbs asserting claims for intentional interference with contract and intentional interference with prospective contractual relations. Ireson and Hoeckele then filed a lawsuit against plaintiffs and Forte. Hoeckele moved to dismiss plaintiffs’ complaint for failure to state a claim upon which relief can be granted, arguing that her allegedly tortious conduct was protected by the litigation privilege. Ireson and Gibbs joined in the motion and the district court dismissed the complaint, holding that plaintiffs failed to allege that Ireson and Hoeckele caused Forte to breach the contract and that Gibbs’s conduct was absolutely privileged.
Plaintiffs appealed and a division of the Court of Appeals reversed. On the litigation privilege issue, the case was remanded to determine whether the prospective litigation was contemplated in good faith. On remand, Gibbs moved for summary judgment. The court granted the motion and awarded Gibbs costs as the prevailing party. Ireson and Hoeckele moved for summary judgment on the same grounds. The district court partially granted the motion, concluding that they could not be vicariously liable for Gibbs’s conduct because it was privileged. However, it held that genuine issues of material fact remained regarding Ireson’s and Hoeckele’s conduct before they retained Gibbs. Later, the parties filed a joint motion to dismiss with prejudice the remaining claims against Ireson and Hoeckele, which was granted.
On this second appeal, plaintiffs argued that it was error to find the application of the litigation privilege warranted summary judgment in favor of Gibbs, Ireson, and Hoeckele. Statements made by an attorney during or in preparation for pending legal proceedings are absolutely privileged so long as the remarks have some relation to the proceeding. Prelitigation statements are privileged only if the statement is related to prospective litigation and the prospective litigation is contemplated in good faith.
Plaintiffs contended that the litigation privilege shields only defamatory statements and Gibbs’s statements were not defamatory. However, the litigation privilege applies to nondefamatory statements as well. Plaintiffs also contended that it was error for the district court to conclude that Gibbs’s allegedly tortious statements “related to” contemplated litigation. Here, all of Gibbs’s statements were made on behalf of his clients and related to potential claims and initiation of litigation. Accordingly, the district court did not err by concluding that Gibbs’s allegedly tortious conduct related to prospective litigation.
Plaintiffs further contended that it was error to conclude that Gibbs contemplated the litigation against them in good faith because good faith is a question that cannot be resolved on summary judgment. While “good faith” is not usually something that can be decided on summary judgment, the record and affidavits submitted, and the fact that litigation was actually commenced, showed good faith on the part of Gibbs and shifted the burden to plaintiffs to establish a triable issue of fact as to Gibbs’s good faith contemplation of litigation. Plaintiffs failed to meet this burden. Therefore, the entry of summary judgment was proper.
Lastly, plaintiffs argued that it was error to fail to conduct a hearing on Gibbs’s request for an award of costs. If a party contests the factual basis for or reasonableness of an award of costs and timely requests a hearing, the district court must hold a hearing. Plaintiffs timely requested a hearing, so the district court erred in not holding one.
The summary judgment in favor of defendants was affirmed. The award of costs was reversed and the case was remanded for a hearing on Gibbs’s bill of costs.