Facts

Plaintiff Gregg Welsh was one of three owners of a single family residence at 1676 East Valley Road known as the "Mañana" estate. Defendant Gulf Horizons, Ltd. owned the property next door, 1666 East Valley Road, which was occupied by defendant Haddon Dillon, who became the owner of record in July 2007. Mañana is accessed by a 56 foot by approximately 145 foot "easement for driveway purposes" over the 1666 parcel, created when the 1666 parcel was split off from Mañana.

In 2006, plaintiff began construction of a gate in the easement, which did not previously have a gate. Dillon had objected to construction of a gate in the easement. Gulf sent a letter to plaintiff asserting that Mañana's rights in the easement were limited to "ingress and egress." Plaintiff countered that Mañana's rights included all rights associated with customary and usual "driveway purposes," including building a gate.

In December 2006, the Mañana owners, including plaintiff, filed an action to quiet title; reform the deed creating the easement; requesting a prescriptive easement; and seeking injunctive relief.

Plaintiff filed the defamation and nuisance lawsuit in March 2007 alleging that Dillon had interfered with his rights of use and enjoyment, both of the easement, and of Mañana, by harassing him and visitors to Mañana; interfering with the use of the easement and damaging the pre-existing gate on the Mañana parcel; and allowing the easement area to deteriorate so as to interfere with his efforts to sell Mañana.

Plaintiff further contended that Dillon, individually and through her son, had defamed him.

Plaintiff argued that in doing what she did, Dillon was acting as agent for Gulf.

At trial, Gulf contended that the conduct of Dillon was unrelated to its ownership or operation of the 1666 property, and that Dillon was not its agent.

Dillon generally denied the conduct, and asserted that as owner of 1666, she had the right to control the easement other than allowing ingress and egress to Mañana.

Dillon contended further that all losses suffered by plaintiff stemmed either from his participation in the quiet title lawsuit, or the physical condition of Mañana.

APPELLANT'S CONTENTIONS:
Appellant Dillon contended that the trial judge committed prejudicial error by failing to instruct the jury on the legal effect of Civil Code Section 47(b) which holds that communications about pending litigation matters are privileged; arguing that in the absence of such an instruction, the jury likely had found Appellant liable simply for defending the quiet title action, which was privileged conduct.

Appellant further contended that there was not substantial evidence of any loss to Welsh caused by the alleged nuisance; and that the damages awarded were not supported by substantial evidence.

RESPONDENT'S CONTENTIONS:
Respondent Welsh countered that the appellant's trial counsel had never requested that an instruction on Section 47(b) be given and that, even if one had been denied, the privilege does not cover non-litigation related conduct about which there was sufficient evidence to support the verdict of liability for nuisance.

Respondent further pointed out that it was appellant, not respondent, who argued to the jury that the other, pending litigation was the actual cause of plaintiff's losses, thus waiving the claim that discussion of the other lawsuit was prejudicial.

As to damages, respondent contended that there was substantial evidence of the total damages caused by the various factors, including the Welsh lawsuit and physical condition of Mañana, as well as the nuisance, and that the jury presumably apportioned the total damages to reflect those caused solely to plaintiff and caused solely by the appellant's nuisance conduct toward him.

Damages

Plaintiff claimed past economic loss of $25,000 per month related to the cost of owning Mañana while it could not be sold due to the need to disclose the nuisance conduct, and loss of two sales during the same period. Plaintiff contended his total losses were between $200,000 and $2 million.

Result

The judgment of $596,000, plus $3,866 in costs, as well as $115,332 in interest accruing while the appeal was pending, was satisfied in the sum of $714,197 on Feb. 10, 2011.

Other Information

In a unanimous opinion written by Justice Coffee, the verdict was affirmed. The court found that, despite opportunity to do so, appellant had failed to request an instruction on Civil Code 47(b) at trial, thus waiving any argument about failure to give an instruction on this point. The trial court had no obligation to give such an instruction on its own. The court held further that, even if it was error not to have given such an instruction, the error would not have been prejudicial due to the fact that there was ample evidence of non-privileged conduct to support the jury's verdict, and that appellant had waived the error by arguing below that the cause of plaintiff's damages was his participation in the quiet title lawsuit, not appellant's conduct. The court found that substantial evidence of non-privileged conduct by appellant supported both the finding of nuisance, and that the nuisance conduct damaged the plaintiff. On the issue of the amount of damages awarded, the court found that the jury had substantial evidence of past economic losses to plaintiff and lost profits from the two canceled sales caused in part by the nuisance conduct of appellant.