Wednesday, January 2, 2002
C.A. Limits Scope of Statutory Action Over Taped Conversation
By KENNETH OFGANG, Staff Writer/Appellate Courts
A plaintiff seeking damages for the unlawful taping of a conversation, based on California’s Privacy Act, must show that he or she did not expect the contents to be repeated to non-participants, the Fourth District Court of Appeal has ruled.
The panel Friday overturned an award of damages to Charles Burns, a sales manager for Amplicon, Inc, against food company Nature’s Best. Burns, whose company leases computer equipment and software, claims that Nature’s Best taped two phone calls he and an associate, Nazli Ozen, made in 1995 in connection with a proposed lease.
Burns charged that unbeknownst to him and his associate, Nature’s Best had proposed the transaction as a pretext. What the company really wanted to do, he alleged, is gain information that might be helpful in a lawsuit between the two companies regarding a previous transaction that Burns and Ozen knew nothing about.
Burns and Amplicon sued Nature’s Best in municipal court under the Privacy Act, seeking statutory damages for the interception of “confidential communication[s]” in violation of Penal Code Sec. 632. The act provides for a recovery of three times actual damages or $5,000 per violation, whichever is greater.
The action was later consolidated with the earlier suit, and Orange Superior Court Judge William McDonald ordered the privacy suit tried first.
Tim Groff, chief financial officer for Nature’s Best and the person overseeing the earlier lawsuit for the company, testified that he did not know whether Ozen had really “cold called” or was trying to get information for the suit.
Groff acknowledged that he pretended to be interested in doing business with Ozen solely to gain information to help with the lease suit, and that he recorded two of the conversations, including one in which Burns also participated. Groff said he used a speakerphone, had another Nature’s Best employee, controller Joe Lira, present in his office, and did not inform Ozen or Burns that they were being taped.
Burns testified that at the time of the conversations, he was unaware of the prior lawsuit and that he was aware that Groff was on the speakerphone and that Lira was present. During discovery, he said that he did not ask that the contents of the conversation not be repeated or care whether anyone besides Groff or Lira was listening, and that he had no knowledge or expectation that he was being taped.
On cross-examination at trial, defense counsel attempted to ask Burns whether he intended or expected that Groff and Lira not repeat what they discussed, but McDonald sustained relevancy objections.
The judge instructed the jury, using the language of Sec. 632, that a communication is confidential if “any party to the communication desired it to be confined to the parties,” but not if “circumstances were such that the parties . . . could reasonably expect that the communication may be overheard or recorded.”
But he rejected the defendant’s proposed instruction that a communication is not confidential unless “there was a reasonable expectation that the parties to the communication would not subsequently convey the information to anyone else.”
Instead, McDonald told the jury that an expectation that the conversation will be repeated to others “has no bearing on whether the communication was confidential at the time it was made” and that “[i]f it was reasonable for any party to expect that the communication was confined to the parties at the time the communication was made, the communication is confidential.”
The jury found that Nature’s Best had illegally recorded the two phone calls. It also found that Burns, who said he became distressed over whether he was going to be able to keep his job once he learned that he had been recorded in an effort to gain information for use against his employer in litigation, had suffered $12,000 in actual damages.
McDonald awarded $10,000 to Amplicon and $25,000—the old municipal court jurisdictional limit—to Burns under the statute. Nature’s Best later settled with Amplicon but pressed its appeal of the judgment in favor of Burns.
Presiding Justice David Sills, writing for the Court of Appeal, said Nature’s Best is entitled to a new trial. Nature’s Best’s proposed jury instruction on the definition of confidentiality was correct, and the questions it posed to Burns about his intent were relevant, the jurist said.
Sills said the trial judge erred in relying on Coulter v. Bank of America (1994) 28 Cal.App.4th 923. The court there held that an employee who had taped conversations with his co-workers in anticipation of litigation with his employer had violated Sec. 632, even if the co-workers expected the contents to be repeated to other employees.
The presiding justice explained that a party whose private conversation was surreptitiously recorded may have a common-law privacy claim, even if the plaintiff expected that the contents would be repeated to others.
“But this is not the case for a statutory claim under section 632,” Sills declared. “The statutory language defines a confidential communication as one in which there is an objectively reasonable expectation by at least one party that the conversation will be confined to the participants.”
The case is Burns v. Nature’s Best, 02 S.O.S. 18.
Copyright 2002, Metropolitan News Company