Olson v. Doe, No. S258498 (Cal. Jan. 13, 2022)
Doe and Olson reside in the same condo building. Doe claims that Olson and his cronies in the HOA are sexually harassing and stalking her. Eventually Doe sought a civil harassment restraining order under Code of Civil Procedure § 527.6. That got resolved in a mediated settlement, where the parties agreed not to communicate with or disparage each other. Doe says the harassment continued nonetheless. She complained to HUD, which referred the matter to DFEH for investigation.
Doe subsequently filed a civil complaint. Olson cross-claimed, alleging a breach of the non-disparage from the settlement, to which Doe responded with an anti-SLAPP motion. The trial court granted the motion. The Court of Appeal affirmed, but only in part. According to the Court of Appeal, Doe’s complaints to HUD and DFEH were protected by the litigation privilege in Civil Code § 47(b), so Defendant couldn't succeed. But, since Doe had surrendered her right to disparage in the settlement, the litigation privilege did not apply to statements made in her civil complaint. The Supreme Court granted review.
Interestingly, in a unanimous opinion by Justice Liu, the Court ducks the litigation privilege issue, which is tricky. It instead finds that the non-disparagement clause—which said simply that “[t]he parties agree not to disparage one another”—did not apply to statements made in subsequent civil litigation. Basically, according to the Court, despite the seemingly unambiguous text, the clause was meant only to prevent the parties from trash talking each other amongst their acquaintances in the building. The opinion reaches this result based on a lot of contextual information provided by the civil harassment statutes, and the mediation that resolved the restraining order claim. It effectively finds that the parties could not have intended to broadly preclude making disparaging allegations in future litigation when they agreed “not to disparage one another.”
Court of Appeal reversed.
It’s an interesting way to reach the result and avoid hard § 47(b) issues, and it is quite likely right on the merits of the contract claim. But I’m not sure what’s going on here is fully faithful to the burdens that apply in the second step of the anti-SLAPP analysis. To beat the motion, Olson needed only to come up with a prima facie case on his breach of contract claim. So long as he had evidence that, if believed by a jury, could sustain a finding in his favor, his claim had minimal merit and the motion would have been denied. (Or at least the § 47(b) issue would need to be addressed.)
On the element of breach, it seems like Olson has that in on plain text of the agreement. It does not seem too hard to say that a reasonable juror could understand “[t]he parties agree not to disparage one another” to mean that the parties will not disparage each other, including in court. Sure, given California’s extraordinarily loose parol evidence rule, could context and other extrinsic factors result in the more limited construction that the Court finds here? No doubt. As I said, as a factual matter, the Court is quite likely right. Doe deserves to prevail on the crossclaim.
Moreover, the use of non-disparagement clauses to chill valid civil litigation—especially in factual contexts like the one presented by this case—is problematic from a policy standpoint. Indeed, the tension between the parties’ freedom to contract and the right to petition for redress is what makes the § 47(b) question avoided by the Court so difficult. So I also get, and share, the Court’s impetus to give Doe an early offramp.
But are the contextual cues here so weighty that no reasonable juror could find that the parties did not agree to what the document seems to say on its face? I.e., would Doe be entitled to summary adjudication on the interpretation of the contract? Because that’s what needs to be the case in order to establish that Olson doesn’t have a prima facie case. The Court, however, never says that Doe’s take prevails as a matter of law. Indeed, it doesn’t really address head on how the parol evidence rule affects the burden issue. Instead, the opinion feels it is engaged in fact-finding. Which is a mistake.
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