No. 80-463 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

MICHAEL L. REECE, 

Plaintiff and Appellant, 

PIERCE FLOORING, 

a Montana Corporation, 

Defendant and Respondent. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone. 

Honorable Charles Luedke, Judge presiding. 

Counsel of Record: 

For Appellant: 

Charles E. Snyder, Billings, Montana 

For Respondent : 

Crowley, Haughey, Hanson, Toole & Dietrich, Billings, 

Montana 

Submitted on briefs: June 17, 1981 

B)CT 13 1981 Decided: -. 

QG7 J 

Filed : - 
Mr. Chief ~ustice Frank I. Haswell delivered the Opinion of the 

Court. 

In an action for malicious prosecution, the District 

Court of Yellowstone County granted a directed verdict in favor 

of defendant Pierce Flooring at the conclusion of plaintiff's 

case-in-chief . plaintiff Michael Reece appeals. 

Reece, a building contractor working under the business 

name of M & R Enterprises, had been a customer of Pierce Flooring 

since 1972. On August 16 , 1977, Reece owed Pierce Flooring 

$lr201.20 for carpet installed at 807 Saddle rive and $1,372.80 

for carpeting installed at 134 Lantana Drive. Reece owed Pierce 

Flooring a total of $2,744.56 on the two accounts, including 

interest. 

Before Reece left for vacation on August 16, 1977, he 

wrote a check to Pierce Flooring and asked his mother to deliver 

it for him. Intending to pay only the amount owed on the Saddle 

Drive account but not recalling that particular amount, he wrote 

out a blank check to Pierce Flooring, noting as a memo "807 

Saddle Drive." He then asked his mother to find out the amount 

owed on the Saddle Drive account, fill in that amount on the 

check, and give it to pierce Flooring. 

When Reece's mother went to Pierce Flooring, she talked to 

an employee at the front desk and asked how much was owed on the 

Saddle Drive account. According to the testimony of Reece's 

mother, she was then told that she would have to pay the entire 

amount for both the Saddle Drive and the Lantana Drive accounts 

or else Pierce Flooring would place liens on these properties. 

Concerned about the possible liens, Reece's mother made the check 

out for $2,744.56 the entire amount owed on both accounts to 

Pierce Flooring rather than just the amount owed on the Saddle 

Drive account. 

The check was returned for insufficient funds. Reece's 

mother told her son about the circumstances surrounding her deli- 
very of the check when he returned from vacation in early 

September. He knew that the check had not cleared when he 

received his bank statement in mid-September . From mid-September 

to his arrest on November 27, 1977, Reece made no further contact 

with Pierce Flooring and took no action to pay his account. 

On September 12, 1977, Pierce Flooring filed liens on both 

the Saddle Drive and the Lantana Drive properties. In early 

October the check was run through a second time and returned 

again for insufficient funds. Pierce Flooring made several 

attempts to contact Reece but failed. Reecels business phone was 

disconnected in mid-October and his home phone was unlisted. 

Pierce Flooring then mailed to Reecels home address a certified 

letter notifying Reece that criminal prosecution may be initiated 

by Pierce Flooring if the check was not made good within five 

days, as provided in section 45-6-316, MCA. The registered 

letter was returned to Pierce Flooring marked "refused." Reece 

testified that he had not received the registered letter since he 

did not receive his mail at his house address but at his post 

off ice box. 

On October 25, Ron Pierce, general manager of Pierce 

Flooring, signed an "~nvestigative Form for Bad Checks and 

Forgeries" which was the standard form used by the Yellowstone 

County attorney's office to decide whether or not to prosecute a 

bad check charge. One question asked whether the check was given 

in payment for an existing debt, to which Pierce Flooring replied 

"yes." The deputy county attorney who subsequently decided to 

prosecute the case, testified at the trial that he would have 

rejected and probably did reject the case at that time because of 

the affirmative answer to the existing debt question. 

Nevertheless, on November 1, a complaint was filed in the 

Justice Court of Yellowstone County on the charge of issuing a 

bad check (felony) in that Michael Reece "with the purpose to 

secure property, to wit: lien waivers on real estate and 
fixtures" issued the check. The record is unclear as to how the 

deputy county attorney came to the belief that lien waivers had 

been given in exchange for full payment. The deputy county 

attorney testified that such information could have come from 

either law enforcement personnel or from an employee of pierce 

Flooring, but he could not remember why he thought lien waivers 

had been given to Reece. 

On Sunday, November 27, 1977, Reece was arrested in his 

home. He was booked and kept in the Yellowstone County jail 

until he arranged bail of $2,800. On December 1, 1977, the 

complaint was dismissed by the deputy county attorney on the 

grounds that new evidence indicated that it was not in the 

interest of justice to prosecute. 

Thereafter Reece filed a civil action for malicious prosecution against Pierce Flooring. It came on for trial on October 

6, 1980. At the conclusion of plaintiff's case-in-chief the 

District Court granted Pierce Flooring's motion for a directed 

verdict as follows: 

"THE COURT: All right. Well, gentlemen, on the 

authority that's been cited to me, that the 

question of lack of probable cause is a question 

of law to be determined by the Court--and that 

specifically is Wendel vs. Metropolitan Life 

Insurance Company, 83 Montana 252--I think the 

Court is compelled to grant the motion and 

dismiss the complaint in this cause, and it is 

SO ordered." 

Plaintiff Reece appeals presenting essentially two issues 

for review: 

(1) Is probable cause a question of law to be determined 

by the Court? 

(2) If not, is the evidence sufficient to create a jury 

issue on probable cause? 

In a civil action for malicious prosecution, the plaintiff 

must allege and prove (1) that a judicial proceeding was commenced and prosecuted against him, (2) that the defendant was 

responsible for ins tigating , prosecuting or continuing such 
proceeding, (3) that there was lack of probable cause for 

defendant's acts, (4) that defendant was actuated by malice, (5) 

that the judicial proceeding terminated favorably for plaintiff, 

and ( 6) that plaintiff suffered damage and the amount thereof. 

McGuire v. Armitage (1979) , Mon t . I 603 P.2d 253, 36 

St.Rep. 2142; Stephens v. Conley (1914), 48 Mont. 352, 138 P. 

189. The issues in this appeal concern the third element listed 

above. 

In this case the District Court ruled that lack of probable cause was a question of law to be determined by the court 

on the basis of our 1928 opinion in Wendel v. Metropolitan Life 

Insurance Co., 83 Mont. 252, 272 P. 245. This was error. 

We acknowledge the existence of an isolated general statement in Wendel to that effect: 

"Therefore, in actions for malicious 

prosecutions, the real controversy is, 

generally, upon the question of malice and want 

of probable cause. The burden of proving these 

essential elements rests upon the plaintiff, and 

whether there was a want of probable cause is 

purely a question of law." 

Wendel involved a malicious prosecution action by a discharged 

employee against his former employer following dismissal of a 

larceny prosecution instigated by his former employer. A jury 

verdict in favor of the discharged employee was reversed on 

appeal on the ground that the uncontroverted facts established 

probable cause as a matter of law. In that context where the 

facts of the larceny were undisputed and the criminal charge was 

dismissed for failure of the state to diligently prosecute the 

same, the question of probable cause became a question of law for 

the court. We expressly disapprove the application of this rule 

generally to actions for malicious prosecution holding the rule 

properly applicable only where there is no conflict in the evidence on the issue of probable cause and such uncontroverted 

evidence admits of only one conclusion on that issue. 

The cases of Orser v. State of Montana (1978), 178 Mont. 
126, 582 P.2d 1227, and 3-D Lumber Co. v. Belgrade State ~ank 

(1971), 157 Mont. 481, 487 P.2d 1136, are similar to Wendel. In 

both cases the evidence relating to the presence or absence of 

probable cause was undisputed and admitted of only one 

conclusion. Under such circumstances the issue of probable cause 

became a question of law for the court. Any application of that 

principle to cases involving conflicting evidence on the issue of 

probable cause is expressly disapproved. 

Puutio v. Roman (1926), 76 Mont. 105, 245 P. 523 

expresses the correct rule in malicious prosecution cases. 

There this Court reversed a directed verdict for the defendant 

setting forth the applicable law in this language: 

"It is settled in this jurisdiction, and 

elsewhere generally, that a cause should never 

be withdrawn from the jury, unless the conclusion necessarily follows, as a matter of law, 

that a recovery cannot be had upon any view 

which can reasonably be taken of the facts which 

the evidence tends to establish. A motion for a 

directed verdict in favor of the defendant is in 

effect a demurrer to the plaintiff's evidence; 

it admits as true all material facts in evidence 

which tend to establish plaintiff's cause of 

action, whether such facts be produced by the 

plaintiff or the defendant. Such facts, with 

every legitimate inference that may be drawn 

from them, are to be considered in the light 

most favorable to the plaintiff. The fact that 

the testimony in behalf of the defense pleaded 

is uncontradicted will not justify a directed 

verdict in favor of the defendant, if the 

inferences to be drawn from it are open to different conclusions by reasonable men ." 

(Citations omitted. ) 

The distinction between the judge and jury function was 

recently succinctly expressed by the Georgia Court of Appeals 

in this manner: 

"Want of probable cause is an essential element 

of a malicious prosecution cause of action. 

Ordinarily, the existence of probable cause is a 

question of fact for jury determination. Only 

where the material facts are not in dispute, or 

when only reasonable inference can be drawn from 

the evidence, does the existence of probable 

cause become an issue of law for the court to 

resolve." Kviten v. Nash (1979), 150 Ga.App. 589, 

258 S.E.2d 271. 

We hold, therefore, that a directed verdict in a malicious 
prosecution action is error where the evidence, including reasonable inferences, is susceptible to different conclusions by 

reasonable men when viewed in the light most favorable to the 

party opposing the directed verdict. We further hold that under 

such circumstances the issue of probable cause must be submitted 

to the jury for determination and not be decided by the court as 

a matter of law. 

We now examine the evidence in the light most favorable to 

the plaintiff to determine if the evidence is sufficient to 

establish a jury issue on probable cause. Probable cause means 

"reasonable grounds for suspicion, supported by circumstances 

reasonably strong in themselves to warrant a reasonably prudent 

and cautious man in the belief that the accused is guilty of the 

offense with which he is charged." Cornner v. Hamilton (1922), 62 

Mont. 239, 204 P. 489, quoted with approval in Orser v. State of 

Montana, supra. Moreover, since an action for malicious prosecution runs counter to important legal and social policies, such as 

encouraging criminal proceedings against those who appear guilty 

of a crime, it is not favored by the law and the burden on the 

plaintiff is heavy. Wendel, supra; Orser, supra. 

The undisputed evidence indicates that plaintiff Reece was 

charged on the basis of a report signed by pierce who instigated 

the criminal proceeding. There was no full disclosure of the 

facts surrounding the check to the prosecutor then or thereafter. 

Pierce did not disclose the following facts: (1) that Reesets 

mother passed the check to Pierce Flooring in the increased amount 

after being advised that liens would be filed against both properties if the check were not made out for the full amount, (2) 

that liens had been filed against both properties, (3) that the 

report was turned over to the police department after Pierce 

determined that Reece was not going to come in and work out 

something on the check. 

Additionally an employee of Pierce Flooring testified by 
deposition that she kept Pierce informed of anything on the case 

that came to her attention and disputed many of Pierce's statements indicating his lack of knowledge on developments concerning 

the progress of prosecution in the case. The basis of the criminal charges against Reece was that the check was given to 

secure lien waivers from pierce on the two properties. When the 

prosecutor contacted Pierce Flooring for copies of the lien 

waivers, this employee did not tell him there were no lien 

waivers but instead wrote him a memo stating: 

"I can9 t find a copy of the lien waiver. The 

girl that was here before me would not always 

take copies of the lien waivers." 

This memorandum was dated November 4, 1977, almost two months 

after liens had been filed by pierce Flooring against both 

properties. 

We hold that the foregoing evidence is sufficient to present a jury issue on the presence or absence of probable cause 

for the prosecution against plaintiff Reece . The total evidence 

presents a basis for differing conclusions concerning whether 

P i e r c e F l o o r i n g 9 s a c t i o n s were those that would warrant a reasonably cautious and prudent man to believe that Reece was guilty 

of the offense of which he was charged; whether the facts 

surrounding the issuance and delivery of the check were fairly 

presented to law enforcement officers; whether the charge was 

filed to collect a preexisting debt with nothing of value given 

to Reece; and whether Pierce Flooring fabricated facts to motivate criminal proceedings against Reece. These are issues for 

determination by a jury, not questions of law to be decided by 

the Court. We express no opinion concerning the ultimate determination of these issues, only that they are properly to be 

resolved by a jury. 

The directed verdict and judgment are vacated. This cause 

is remanded to the District Court for a new trial. 
Chief ~ustice 

We concur: 
Mr. Justice Gene B. Daly dissenting: 

I respectfully dissent. 

The majority here has allowed themselves the luxury 

of becoming involved in a morass of Red Herrings about lien 

waivers, etc., and uncontroverted evidence, and has totally 

disregarded the authority that pertains when a citizen 

proceeds through the county attorney rather than directly, 

i.e., a justice court complaint. 

On October 25, 1977, Ron Pierce, general manager of 

Pierce Flooring, signed an "Investigative Form for Bad 

Checks and Forgeries," the standard form used by the Yellowstone County Attorney's office to decide whether to 

prosecute a bad check charge. ----- The form was filled out 

properly, including -- one question - which asked whether the 

check was given in payment for an existinq -- debt, ---- to which 

Pierce Floorinq replied "yes." The deputy county attorney 

who subsequently decided to prosecute the case testified - at 

------- the trial that - he would have -- rejected, --- and probably did 

reject the case, at - that time because of the affirmative -- 

answer to the existinq debt question. 

Nevertheless, on November 1, a complaint was filed in 

the Justice Court of Yellowstone County on the charge of 

issuing a bad check (felony) in that Michael Reece "with the 

purpose to secure property, to wit: lien waivers on real 

estate and fixtures" issued the check. The record is unclear 

as to how the deputy county attorney came to the belief that 

lien waivers had been qiven in exchange for full~9ment. 

The deputy ---- county - attorney testified that such information 

could have come from either law ---- enforcement personnel -- or 

---------- from an em~loyee -- ------------------ of Pierce Flooring, --- but he could not 
--- remember why -- he thouqht lien - waivers ----------- had been given ------- to 

Reece. 

The county attorney's office received a note from 

Pierce Flooring on November 8, 1977, stating that copies of 

a lien waiver could not be found. The deputy county 

------- attorney ----------- who swore out the - affidavit -- in support of the - 

complaint against Reece testified that had he not been -- so 

busy, he would have dismissed the case at that time or would 

have confirmed that lien waivers could not be found and then 

would have dismissed the case. 

On Sunday, November 27, 1977, Reece was arrested in 

his home. He was booked and kept in the Yellowstone County 

jail until he arranged bail of $2,800. On December 1, 1977, 

the complaint was dismissed by the deputy county attorney on 

the grounds that new evidence indicated that it was not in 

the interest of justice to prosecute. 

Reece presents essentially one issue for review: 

Whether the District Court erred by granting Pierce 

Flooring's motion for directed verdict on the grounds that 

Reece failed to show want of probable cause on the part of 

Pierce Flooring. 

Reece argues that the question of want of probable 

cause should not have been decided by the District Court as 

a matter of law because the record contains sufficient proof 

of probable cause to submit this issue to the jury. He 

argues specifically that when the evidence he presented is 

viewed in its most favorable light it shows: 

1. Pierce Flooring's actions were not those of a 

prudent, cautious and reasonable man; 

2. All facts surrounding the check were not fairly 
and fully represented to the law enforcement officers; 

3. The charge was filed to collect a preexisting 

debt and nothing of value was given to Reece; 

4. Pierce Flooring failed to make sufficient inquiry 

into the circumstances under which the check was issued; and 

5. Pierce Flooring intentionally misled the law 

enforcement officer and fabricated facts to motivate 

criminal proceedings against Reece. 

It is true that upon a motion for a directed verdict 

by a party, the evidence introduced by the opposing party 

must be viewed in its most favorable light. See Sistock v. 

Northwestern Telephone Systems, Inc. (1980), Mont. 

, 615 P.2d 176, 178, 37 St.Rep. 1247, 1249, and cases 

cited therein. Nevertheless, such a rule does not mean that 

this Court can make numerous factual inferences which are 

not supported by the record. Considering the evidence in 

the light most favorable to Reece, I cannot say that the 

District Court erred in its verdict. 

Further, it is a well-settled rule in this state that 

it is the function of the court to determine whether 

probable cause exists in a malicious prosecution case; it is 

a question of law to be determined by the court. Orser v. 

State (1978), 178 Mont. 126, 582 P.2d 1227; 3-D Lumber Co. 

v. Belgrade State Bank (1971), 157 Mont. 481, 488-489, 487 

P.2d 1136, 1140; Wendel v. Metropolitan Life Ins. Co. 

(1928), 83 Mont. 252, 263, 272 P. 245, 249. The District 

Court was therefore acting within its prerogative to decide 

this case on a directed verdict, as a matter of law, if the 

record supports its conclusion that Reece failed to present 

his prima --- facie case of malicious prosecution and, in 
particular, that Reece failed to show that Pierce Flooring 

acted without probable cause by going to the Yellowstone 

County Attorney and filling out an information sheet on bad 

checks . 

There is no question that want of probable cause is 

the gist of an action for malicious prosecution. McGuire v. 

Armitage (1979), Mont. , 603 P.2d 253, 36 St.Rep. 

2142; Wilson v. Gehring (1968), 152 Mont. 221, 448 P.2d 678; 

Fauver v. Wilkoske (1949), 123 Mont. 228, 211 P.2d 420; 

Cornner v. Hamilton (1922), 62 Mont. 239, 204 P. 489. 

Probable cause means "reasonable ground for suspicion, 

supported by circumstances sufficiently strong in themselves 

to warrant a reasonably prudent and cautious man in the 

belief that the accused is guilty of the offense with which 

he is charged." Cornner, 62 Mont. at 243, 204 P. at 491, as 

quoted in Orser, 178 Mont. at 137, 582 P.2d at 1233. Moreover, since an action for malicious prosecution runs counter 

to important legal and social policies, such as encouraging 

criminal proceedings against those who appear guilty of a 

crime, it is not favored by the law and the burden on the 

plaintiff is heavy. See Wendel, 83 Mont. at 262-263, 272 P. 

at 248; accord, Orser, 178 Mont. at 135, 582 P.2d at 1232. 

Reece, therefore, had a heavy burden to show that 

Pierce Flooring acted without probable cause, and clearly he 

cannot meet that heavy burden by arguing only tenuous 

inferences. 

Although there may be some question as to a full disclosure of all of the facts surrounding the issuance of the 

check, it is clear from the record that Pierce Flooring was 

relying - upon the decisions made ---- at the county attorney's 
office concerniny what information was important and what --- ----. ------ 

information was not important. Pierce Flooring truthfully ------- 

and accurately filled out the county attorney's information --- 

sheet on which the decision to prosecute was based. 

Any confusion over the existence of lien waivers was 

eradicated on November 8, when the county attorney's off ice 

received the note from Pierce Flooring tnat there was no 

record of any lien waivers. From November 8, 1977 to 

November 27, when Reece was arrested, according to the 

testimony of the deputy county attorney in charge of the 

case, there was sufficient disclosure of information by 

Pierce Flooring to warrant dismissal of the case. 

As this Court noted in Halladay v. State Bank of 

Fairfield et al. (1923), 66 Mont. 111, 117-118, 212 P. 861, 

". . .The rule is that, where the prosecutinq 

officer starts -- a criminal proceedinq upon a 

full and fair statement of the facts from the 

--------- accuser, he acts for --- the state; and so he 

does when he proceeds - upon -- his own personal - 

knowledqe . . . 

"Generally, it may be said that a prosecuting 

officer is charged with the duty of determining when to commence a particular prosecution, and when to discontinue it. He stands 

upon a different footinq --- from a defendant, 

- who goes to - a Turnof -- the peace, swears 

out a warrant, -------- and directs the prosecutinq 

officer - to see to its execution. The county 

attorney in this ------------- state, not only -------- directs 

under what conditions a criminal action shall 

be commenced, but from the time ----- it begins --- 

------ until it ends his supervision and control is 

complete, limited only by such - restrictions 

as the law imposes. . . 

". . . If, therefore, a prosecuting officer 

incorrectly determines that certain facts 

given to him constitute a crime and proceeds 

to set on foot necessary action, - the 
informant is not liable, because the fault is 

not his, but ---- that of the officer. . ." B 

(Emphasis supplied.) 

In light of Pierce Flooring's reliance on the 

expertise of the county attorney's office in terms of what 

information was important and what was not, it cannot be 

said that Pierce Flooring was not acting prudently and 

cautiously and without probable cause. I would affirm the 

District Court's directed verdict for Pierce Flooring. 

Justice