Backdrop Was Diane Harkey’s Defamation Lawsuit Against State Board of Equalization Candidate After Her Exoneration In Alleged Fraud Charges For Her Husband’s Activities With Point Center Financial.
The next post stems from a State Board of Equalization candidate race in which plaintiff, one of the candidates, allegedly made slanderous statements about Diane Harkey, another of the candidates, based on her involvement with her husband’s Point Center Financial business—with husband and his business found liable, but with the jury exonerating Ms. Harkey. However, plaintiff candidate had insinuated—even though a statement can be literally true, its “gist or sting” can be false and actionable as defamation—that Ms. Harkey had been sued for fraud even though plaintiff neglected to inform anyone she had been exonerated (or, at least, Ms. Harkey presented evidence plaintiff knew of the exoneration). Plaintiff moved to SLAPP Ms. Harkey’s suit, but she voluntarily withdrew the suit. However, the trial court awarded plaintiff $12,270 in attorney’s fees based on the theory that he would have been the prevailing party against Ms. Harkey if the SLAPP motion had been heard on the merits.
Ms. Harkey’s appeal of the adverse fee determination was successful, reversed in Harkey v. Wyland, Case No. G050197 (4th Dist., Div. 3 Dec. 8, 2015) (unpublished), a
3-0 decision authored by Justice Bedsworth.Although a voluntarily dismissal usually has adverse consequences, a different matter in the SLAPP context—the trial judge still has to determine if the SLAPP motion had merit in order to justify a fee award. (Liu v. Moore, 69 Cal.App.4th 745, 753 (1999).)
Given this standard, Ms. Harkey presented enough evidence to show that plaintiff may have known about the exoneration before making the alleged defamatory statement such that the SLAPP motion would not be meritorious. That meant—POOF!—the SLAPP fee award evaporated on appeal.