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Sanders v. Walsh

California Court of Appeals, Fourth District, Third Division

September 16, 2013

CHERYL SANDERS, Plaintiff and Respondent,
CONSTANCE WALSH et al., Defendants and Appellants.

Appeal from a judgment of the Superior Court of Orange County, No. 30-2010-00435218 Charles Margines, Judge.

Law Offices of Chandler Parker, Chandler A. Parker and Kevin Doran for Defendants and Appellants.

Timothy P. Miller for Plaintiff and Respondent.



Plaintiff Cheryl Sanders sued defendants Constance Walsh and Wiggin Out Salons, Inc. (Wiggin Out), over allegedly defamatory statements posted online. After a bench trial, the court entered judgment for plaintiff, awarding compensatory and punitive damages. Defendants raise five contentions on appeal: (1) The defamatory statements were nonactionable opinion; (2) the court erred in finding they were collaterally estopped from relitigating issues previously decided in a small claims action; (3) the court erred in excluding evidence of plaintiff’s prior felony conviction, which was previously dismissed pursuant to Penal Code section 1203.4; (4) there was insufficient evidence to support a finding of malice related to punitive damages; and, finally, (5) they challenge certain discovery orders in favor of a third party.

We affirm. We reject all of the alleged errors with the exception of the finding that defendants were collaterally estopped from relitigating issues decided in a small claims action. But we find that error was harmless.


This case arises from an aborted sale of a wig. In June 2009, plaintiff’s mother purchased a wig from defendant Wiggin Out due to the loss of her hair while undergoing chemotherapy treatment for breast cancer. Walsh is the owner of Wiggin Out. According to plaintiff, Walsh represented that the wig was custom made. Walsh denies making that statement. Plaintiff tendered a check on her mother’s behalf from West Coast Building Contractors (West Coast), a corporation she formed with her husband, for which she was still an authorized check signer. After realizing the wig was, in fact, not custom made, plaintiff’s mother attempted to cancel the contract and return the wig. Plaintiff stopped payment on the check.

In July 2009, Wiggin Out filed a small claims action against plaintiff’s mother alleging breach of contract. Wiggin Out contended plaintiff’s mother had not attempted to return the wig and cancel the contract. Plaintiff, on behalf of her mother, submitted into evidence a letter issued by Federal Express (FedEx) confirming the package had been sent to Wiggin Out and refused. Wiggin Out argued the letter presented by plaintiff was fraudulent.

Plaintiff’s mother prevailed in the small claims action. The small claims court made the following findings: “[Plaintiff’s mother] does not owe [Wiggin Out] any money on [Wiggin Out’s] Claim. The Court finds [Wiggin Out] made statements to [plaintiff’s mother] to induce [her] to purchase the wig. Said statements were materially false, [at a] time that [Wiggin Out] knew said statements to be false and misleading. Court finds [plaintiff’s mother] detrimentally relied on [Wiggin Out’s] statements, believed them in good faith to be true. Upon discovering [Wiggin Out’s] deceptions [plaintiff’s mother] attempted to cancel the contract and return the wig. [Wiggin Out] refused to accept the wig as redelivered by [plaintiff’s mother] and claims monies owed on the initial contract. Court finds [plaintiff’s mother] owes no monies to [Wiggin Out]. Judgment for [plaintiff’s mother].”

Two months later Walsh and Wiggin Out published a lengthy “rebuttal” to an online posting on regarding the circumstances of the small claims action.[1] The rebuttal consists of a series of paragraphs prefaced by “Fact:” explaining defendants’ version of the facts, with editorial commentary interspersed throughout. There were, essentially, two allegedly defamatory statements made: first, that plaintiff used an “unauthorized” check to purchase the wig, and, second, that plaintiff fabricated a letter from FedEx to try to prove plaintiff’s mother attempted to return the wig to Wiggin Out.

The statement concerning the unauthorized check was as follows: “Fact: [Cheryl’s mother] Came in and bought the wig the same day. Had it cut and colored the same day. The family rejoiced at how beautiful it looked. Fact: Cheryl Saunders who works for the City of Anneheim, CA... wrote an unauthorized check out of her boyfriends (she told us it was her husbands account that Day) from West Coast Building Contractors out of Annehiem and at the bottom by the ‘notes section’ wrote that it was a ‘Prosthetic Donation.’”

The statements concerning the allegedly fabricated FedEx letter were as follows: “Fact: New court date. Cheryl Saunders came into court with a made up letter from Fed Ex stating that ‘Constance Walsh opened the package and saw what was in it and gave it back to Fed Ex.’” “Now we have [Cheryl’s mother] (first court date sayingthat we had the wig) and now Cherly turning in a falsified document with a cut and pasted Fed Ex label and no Fed Ex Address with bogus info attached.” “Fact: Because of the actual lies and fabrication that came out of Cheryl and [her mother’s] mouths that day in court we thought for sure that we had won. But unfortunatly we learned that small claims does not go by the law. Small claim judges go by their own laws. So the law did not pertain in this case nor did the fact that purgury took place and false evidence was submitted and not followed up.”

Several months later, an anonymous author posted the following on the Web site “Investigation on the City of Anaheim? Cheryl Sanders in the planning dept. We all know what is going on in the City of Anaheim planning dept. Our residents are tired of our tax dollars being sunk into the City of Anaheim, into the planning dept and into the friends and family members (sub-contractors) of the employees of the planning department! How much extra ‘under the table’ money is being made from our planning dept????? A nice detailed audit and internal investigation will fix this rather quickly as we have demanded one from our government! We the residents of Anaheim are tired of the Planning Dept. planning for themselves and not our community. We hope that people like Cheryl Sanders are investigated, audited and brought to justice!!!!!! We are tired City of Anaheim and the people are now joining together to bring justice to our community! Oh, I agree on keeping our own lawns in order, however we cannot let the city ‘flip and spin’ the responsibility back on to its residents!! This is an old trick and now its our turn to make the city of Anaheim responsible for its dishonest acts that are happening behind closed doors!”

The same day, an anonymous author posted the following statements on the Web site “Thank you Cheryl Sanders for hurting the community by giving all the construction business in Anaheim for a underthe table bribe. I hope that an investigation takes place soon and you end up behind bars.” “Cheryl Sanders at the City of Anaheim Planning Dept. has been putting up a front long enough. We hope to bring you down soon. Your dishonesty and greediness will soon come to an end.” Upon reading these postings, plaintiff was “devastated” and concerned about losing her job and livelihood.

Shortly thereafter, plaintiff filed a complaint against Does, later amended to name Walsh and Wiggin Out, alleging causes of action for libel, false light, and intentional and negligent infliction of emotional distress. Walsh and Wiggin Out answered, asserting an affirmative defense of, among other things, truth.

After plaintiff filed her first amended complaint, Walsh called plaintiff offering to take the Internet postings down.

Prior to trial, plaintiff moved in limine to exclude evidence and argument that would dispute or contradict the findings made by the court in the small claims action. Plaintiff claimed defendants were collaterally estopped from relitigating such issues.

The motion was directed at four factual issues: (1) Whether the FedEx letter confirming the attempted return of the wig was fraudulent; (2) whether plaintiff acted dishonestly in stopping payment on the check for the wig; (3) whether plaintiff had authorization to use the corporate check from West Coast; and (4) whether plaintiff committed promissory fraud regarding her intention to honor the check. The court held that defendants were estopped from contesting the first issue, the authenticity of the FedEx letter, but not the remaining issues.

At trial plaintiff testified, contrary to the and postings, that she did not work in the planning department at the City of Anaheim, but instead the public utilities department, that she had no control whatsoever over who was awarded city contracts, and that none of her friends or family did any contracting work for the City of Anaheim. She further testified there had been no investigations of her and that her reviews at work had been consistently positive. However, due to the recent scandal in the City of Bell and the increased scrutiny on city employees, she felt compelled to reveal the posts concerning the alleged bribery and corruption to her supervisor at the City of Anaheim. Doing so was humiliating. She was also embarrassed at the prospect of citizens or her acquaintances discovering the postings, and believes her future prospects for promotion are limited by the existence of the postings.

Walsh testified and admitted authoring the posting but denied responsibility for the and postings. Walsh had admitted in discovery responses, however, that the e-mail address, which was associated with the postings and postings, was hers. Further, plaintiff presented expert testimony tying the e-mail address used in the and postings to Walsh and Wiggin Out.

After a bench trial the court found each of the statements in the,, and postings were made by Walsh and Wiggin Out and were false and defamatory. The court awarded plaintiff $10, 000 on her intentional infliction of emotional distress claim and another $10, 000 on her defamation claim. The court then held a punitive damages phase of the trial and found defendant Walsh acted with malice. The court awarded $4, 000 in punitive damages against Walsh. Defendants timely appealed.


The Defamatory Statements Were Not Mere Opinion

Defendants first contend the various Web postings did not constitute factual claims, but instead ...

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