FILED

July 2, 1997

Cecil W. Crowson

Appellate Court Clerk

HELEN S. ROGERS, )

)

Plaintiff/Appellee, ) Appeal No.

) 01-A-01-9611-CV-00500

v. )

) Davidson Circuit

TOM E. WATTS, JR., ) No. 95C-1848

)

Defendant/Appellant. )

COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEAL FROM THE CIRCUIT COURT FOR DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

THE HONORABLE THOMAS BROTHERS, JUDGE

HELEN SFIKAS ROGERS, pro se

Suite 1550

SunTrust Bank Building

201 Fourth Avenue North

Nashville, Tennessee 37219

THOMAS E. WATTS, JR., pro se

201 Fourth Avenue North

Suite 1260

P. O. Box 198494

Nashville, Tennessee 37219

AFFIRMED AND REMANDED

SAMUEL L. LEWIS, JUDGE
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OPINION

This is an appeal by defendant/appellant, Thomas E. Watts, Jr., from the

decision of the Sixth Circuit Court of Davidson County finding Mr. Watts liable for

malicious prosecution and awarding plaintiff/appellee, Helen S. Rogers, $18,000.00

in damages. The facts out of which this matter arose are as follows.

Mr. Watts and Mrs. Rogers are attorneys who were involved in a lawsuit

before the United States District Court. Mr. Watts represented the plaintiffs against

the defendant, Dr. Kanza. The court entered a default judgment against Dr. Kanza,

and the parties began settlement negotiations with the assistance of a United States

Sixth Circuit Court of Appeals attorney. Mr. Robert A. Weaver retained Mrs. Rogers

to try to settle the case.

On 8 September 1992, Mrs. Rogers received a fax from Mr. Weaver which

stated a Harry O’Connor in the United Kingdom was prepared to commit $75,000.00

toward a final settlement of all claims by those who had been awarded a judgment

against Dr. Kanza. Working through the settlement attorney, Mrs. Rogers and Mr.

Watts reached a settlement on behalf of their clients. Pursuant to the agreement, Dr.

Kanza was to pay Mr. Watts’ clients $65,000.00. Mr. Watts confirmed the parties’

agreement by letter dated 14 September 1992.

Nothing in the settlement agreement or the letter set a deadline for payment

of the monies, but Mr. Watts sought payment before 24 September 1992 in the 14

September 1992 letter. On 16 September 1992, Mrs. Rogers sent Mr. Watts a letter

and enclosed the proposed settlement documents Mr. Watts had requested. The letter

read: “The settlement monies are to be wire-transferred into my trust account around

the first of next week and I will let you know when we can complete the settlement.”

When the money had not arrived on 22 September 1992, Mr. Watts wrote Mrs.

Rogers and stated: “Obviously this is not a matter within your control, but my

previous dealings with Mr. Kanza have destroyed all belief that he is a man of his

word. If someone other than Kanza is paying the money, based on their performance

to date, they are of the same bolt of cloth.” Mr. Watts further stated he would

disavow the settlement if the funds were not delivered to him by the next day.
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Mrs. Rogers received a fax from Robert Weaver advising her that Mr.

O’Connor’s assistant had stated that the delay in transferring the funds was due to a

drastic drop in the English pound and that O’Connor was meeting with his bank and

would try to get all of it sorted out. Mr. Weaver stated he thought Mr. O’Connor

would come through with the funds. Mrs. Rogers conveyed the message to Mr. Watts

concerning the drop in currency and the fact the settlement monies could not be paid

at that time. Mr. Watts deemed this “unacceptable.”

Mr. O’Connor faxed a letter dated 24 September 1992 directly to Mr. Watts

which stated: “I cannot honestly state that the English pound situation was the main

cause because of the drop in exchange rates. This was not the major cause of the

delay, but the fact we posted several irrevocable letters of credit in our name as

security based on profit returns of subject contract.” On 25 September Mrs. Rogers

acknowledged the direct conversations Mr. O’Connor had with Mr. Watts and

attempted to confirm that the original settlement was possible as long as it was

completed in approximately two weeks. 

Mrs. Rogers learned from a letter that Mr. Watts had promised the

settlement monies to another person on behalf of his client and that Mr. Watts had

told the creditor the money would be available by 24 September 1992. Mr. Watts’

letter further stated: “In my view, I do not believe the creditor has any claim against

me personally, but in the unlikely and unfortunate event that I am sued, of course, I

will have no option other than to pass the responsibility on to you, and presumably,

you would want to pass it on to your clients.” Mrs. Rogers responded to this letter

that no definite payment date had ever been given. Mr. Watts advised Mrs. Rogers

that he had been sued in a letter dated 3 November 1992. He enclosed a copy of a

general sessions warrant and stated, “[a]s yet, I have not decided what my response

will be, but I thought I ought to keep you up to date on this development.” 

The general sessions court found Mr. Watts guilty of negligence and entered

judgment in favor of the third party creditor. Mr. Watts appealed to the Sumner

County Circuit Court and filed a third party complaint against Mrs. Rogers for fraud

and fraudulent misrepresentation. At the end of the proof, Mr. Watts moved to amend

the third-party complaint to include a claim of negligent misrepresentation. The
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circuit court found Mr. Watts guilty of negligence, denied the motion to amend the

complaint, and dismissed the third-party complaint. Mr. Watts appealed to this court

which reversed and dismissed the judgment against Mr. Watts and dismissed as moot

Mr. Watts’s appeal of the dismissal of the third-party complaint. McFarlin v. Watts,

895 S.W.2d 687 (Tenn. App. 1994). The third-party creditor filed an application for

permission to appeal to the Tennessee Supreme Court. The supreme court denied the

application on 6 March 1995.

In the meantime, Mrs. Rogers filed a complaint for malicious prosecution

against Mr. Watts in the Davidson County Circuit Court on 14 November 1994. Mr.

Watts filed a motion to dismiss and argued the court should dismiss the complaint

because the case which formed the basis of the claim was not final. The court granted

the motion.

Mrs. Rogers re-filed her complaint in the Davidson County Circuit Court

on 9 June 1995. Mr. Watts moved to strike portions of the complaint involving

dealings between the parties in 1983. From 1980 to 1983, Mrs. Rogers, other

attorneys, and Mr. Watts shared office space. The attorneys had agreed Mr. Watts

would pay the rent and the remaining attorneys, including Mrs. Rogers, would pay

the other office expenses. In 1983, the other attorneys and Mrs. Rogers learned Mr.

Watts had not paid the rent for many months and the landlord had sent an eviction

notice. Mrs. Rogers and the other attorneys moved out at the end of the next month

and formed their own association. The court denied the motion to strike these facts

from the complaint. Mr. Watts then filed a motion in limine objecting to any

evidence of the parties’ dealings as being to remote and not tending to prove an

essential element of the claim. The court took the motion under advisement and later

denied it. After a trial, the court awarded Mrs. Rogers a judgment against Mr. Watts

in the amount of $18,000.00. 

On appeal, Mr. Watts raises two issues. First, he contends Mrs. Rogers

failed to prove each element of her claim for malicious prosecution and second, he

argues the court erred when it allowed evidence of the parties’ dealings in the early

1980's. We first discuss Mr. Watts’s issue of whether Mrs. Rogers carried her burden

of proof as to her cause of action for malicious prosecution.
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This court has set out the elements necessary to establish a claim for

malicious prosecution. 

In deciding a malicious prosecution case, the trier of fact need

only focus on three issues: (1) were the underlying judicial

proceedings initiated by the defendant finally terminated in the

plaintiff’s favor, would the facts and circumstances known to the

defendant at the time he or she initiated the judicial proceedings

have led an ordinarily prudent person to believe that the person

accused was guilty of the crime charged, and (3) whether the

defendant initiated the judicial proceedings against the plaintiff

with malice. 

Lantroop v. Moreland, 849 S.W.2d 793, 797 (Tenn. App. 1992) (citations omitted).

Finality

The underlying judicial proceeding was finally terminated in Mrs. Rogers’

favor. This court dismissed the underlying judicial proceeding on appeal. 

Additionally, Mr. Watts, in response to a question from the trial judge in the instant

case, admitted he had abandoned his attempt to proceed on the fraudulent

misrepresentation cause of action. A court may consider abandonment of a cause of

action when determining finality. See Christian v. Lapidus, 833 S.W.2d 71, 74

(Tenn. 1992). 

Probable Cause

Mr. Watts bases his probable cause argument on the claim that a condition

of the settlement was availability of the money. Mr. Watts admits, however, that

when he sued Mrs. Rogers he assumed Mrs. Rogers knew of this condition, but Mr.

Watts made this demand to Mr. Jones, Mrs. Rogers’ partner, in earlier negotiations

prior to Mrs. Rogers’ involvement in the case. Moreover, Mr. Jones unconditionally

denied he had such a conversation with Mr. Watts, and the trial court resolved this

credibility issue in favor of Mrs. Rogers. Also, Mr. McFall, the settlement attorney,

denied Mr. Watts’ claim and stated “I have absolutely no recollection that Tom Watts

ever made an issue of the availability or not of settlement funds.” He further stated

he did not recall Mr. Watts requiring the money be in Mrs. Rogers’ escrow account

as a condition of negotiating a settlement.
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Mr. Watts contends in his brief Mrs. Rogers’ course of conduct was

fraudulent. This contention flies in the face of the requirements for fraud under the

laws of this state. Mr. Watts testified in the instant case that after the general sessions

court’s judgment was entered against him he reviewed the situation, researched the

law, and concluded Mrs. Rogers’ representations were fraudulent under the law.

“Fraud is never presumed in the absence of a confidential relationship and

the burden of proof is on the party asserting the fraud.” Piccadilly Square v.

Intercontinental Constr. Co., 782 S.W.2d 178, 184 (Tenn. 1989). A plaintiff must

clearly prove allegations of fraud. Pipkin v. Lentz, 49 Tenn. App. 206, 222, 354

S.W.2d 87, 94 (1961) (citing Bevins v. Livesay, 32 Tenn. App. 1, 8, 221 S.W.2d 106,

109, (1949)). 

In order to sustain a cause of action for fraudulent

misrepresentation, the plaintiff must show that: 1) the defendant

made a representation of an existing or past fact; 2) the

representation was false when made; 3) the representation was in

regard to a material fact; 4) the false representation was made

either knowingly or without belief in its truth or recklessly; 5)

plaintiff reasonably relied on the misrepresented material fact; 6)

plaintiff suffered damage as a result of the misrepresentation. 

Metropolitan Gov’t of Nashville and Davidson County v. McKinney, 852 S.W.2d

233, 237 (Tenn. App. 1992). Mr. Watts admitted when questioned by the trial court

that this was the law.

At best, any representation made by Mrs. Rogers concerned a future fact as

to when settlement monies were to be transferred into her trust account. The trial

judge found Mr. Watts did not have any reasonable grounds upon which to conclude

Mrs. Rogers’ statements were fraudulent. The trial court stated “the evidence simply

did not support such a finding but, in fact, the evidence was devoid of probable

cause.” We agree.

The dissent cites a portion of Buda v. Cassel Brothers, Inc. and concludes

that Mr. Watts is not liable to Mrs. Rogers because Mr. Watts had probable cause “to

seek the relief involved in the original action.” We respectfully disagree with this

conclusion. After making the statement quoted in the dissent, the Buda court

continued:
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If it is established that the party instituting the proceeding

reasonably believes in the existence of the facts upon which the

claim is based and has reasonable belief that under those facts the

claim may be valid or has reasonable belief in reliance upon the

advice of counsel, sought in good faith and given after full

disclosure of all relevant facts within his knowledge and

information, then probable cause is established.

Buda v. Cassel Bros., Inc., 568 S.W.2d 628, 631-32 (Tenn. App. 1978). As

previously explained, we are of the opinion that Mr. Watts could not and did not have

a reasonable belief that the claim of fraudulent misrepresentation could be valid.

Thus, there was no probable cause.

Malice

Malice may be inferred in a malicious prosection case from the lack of

probable cause; however, here, there is ample evidence from which the court could

find actual malice.

Mrs. Rogers and Mr. Watts practiced law together from 1980 to 1983. They

had a close business and personal relationship. Mrs. Rogers and Mr. Watts had a

confrontation because of monetary considerations, and Mrs. Rogers and four other

attorneys who had been practicing with Mr. Watts moved out of the office and formed

their own association. Mrs. Rogers and two of the other attorneys testified as to the

facts surrounding the confrontation and to the fact that after they left the office the

relationship between them and Mr. Watts was very strained. This was not disputed

by Mr. Watts. 

In addition to the strained relationship, Mr. Watts demonstrated his anger

over the failed settlement. Mr. Watts’ testimony at the underlying proceeding

revealed his frustration over the fact that the general sessions court entered a

judgment against him.

Mr. Watts testified in the instant case that the idea of pursuing a third-party

complaint against Mrs. Rogers “was not taken primarily or even secondarily or

tertiarily to spite her or cause her harassment or anything of that sort, it was taken

purely to protect my own pocket.” The facts, however, suggest otherwise. Mr. Watts
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proceeded under the theory of fraudulent misrepresentation even though he could

have obtained the same recovery had he proved negligent misrepresentation. At trial,

Mr. Watts admitted he could have obtained the same recovery under negligent

misrepresentation and would have had a lesser burden. We can not find any evidence

in the record establishing a reasonable basis for Mr. Watts’ decision to file suit based

on fraudulent misrepresentation rather than negligentmisrepresentation. We can only

infer there was no reason other than ill will. Mr. Watts also sought punitive damages

in the third-party complaint against Mrs. Rogers which is more than the mere

indemnity he had said he was seeking.

The dissent also raises an issue regarding the propriety of the damage

award. Neither party raised this issue on appeal and we do not feel it is necessary to

address the issue sua sponte. Nevertheless, we are of the opinion that the damage

award was proper.

A malicious prosecution action is one to recover damages caused

by a judicial proceeding instituted with malice and without

probable cause. Such damages are allowable under such an

action as proximately result to the plaintiff, his person, property,

or reputation from a previous unsuccessful civil or criminal

proceeding which was prosecuted without probable cause and

with malice.

Ryerson v. American Sur. Co., 213 Tenn. 182, 185, 373 S.W.2d 436, 437 (Tenn.

1963). It is not necessary that the damages result from the particular claim; only that

the result from the institution of the judicial proceeding. The damages awarded to

Mrs. Rogers were a result of the institution of the action against her by Mr. Watts.

Our review of this record fails to reveal any error. Mr. Watts’ first issue is

without merit. Moreover, we have considered Mr. Watts’ remaining issues and

arguments and find them to be without merit. 

Therefore, it results that the judgment of the trial court is in all respects

affirmed, and the cause is remanded to the trial court for any further necessary

proceedings. Costs on appeal are taxed to defendant/appellant, Tom E. Watts, Jr.

_______________________________________

SAMUEL L. LEWIS, JUDGE
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CONCUR:

_____________________________________

HENRY F. TODD, P.J., M.S.

BEN H. CANTRELL, JUDGE,

DISSENTING IN SEPARATE OPINION