1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-31-1996

Hilfirty v. Shipman

Precedential or Non-Precedential:

Docket 95-7206

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Recommended Citation

"Hilfirty v. Shipman" (1996). 1996 Decisions. Paper 137.

http://digitalcommons.law.villanova.edu/thirdcircuit_1996/137
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 No. 95-7206 

 

 JOHN A. HILFIRTY; MARTHA L. MILLER 

 v. 

 DAVID C. SHIPMAN; KENNETH R. SCHRINER; BRETT O. FEESE; 

 STEPHEN C. SCHOPFER; BETTY A. NOLL 

 Martha Miller, 

 Appellant 

 

 Appeal from the United States District Court 

 for the Middle District of Pennsylvania 

 (D.C. Civil No. 4:CV-93-1497) 

 

 Argued January 25, 1996 

 

 Before: COWEN and SAROKIN, Circuit Judges 

and POLLAK, District Judge 

 (Filed July 31, 1995) 

 Donald A. Bailey (argued) 

 Suite #9 

 845 Sir Thomas Court 

 Olde English Gap

 Harrisburg, PA 17170 

 

 Attorney for Appellant 

 

 Gary L. Weber (argued) 

 Mitchell, Mitchell, Gray 

 & Gallagher

 10 West Third Street 

 Williamsport, PA 17701 

 Attorney for Appellee Schriner 

 William A. Hebe (argued) 
 Spencer, Gleason & Hebe 

 17 Central Avenue 

 P.O. Box 507 

Wellsboro, PA 16901 

 Attorney for Appellee Feese 

 J. David Smith 

 McCormick, Reeder, Nichols, 

 Bahl, Knecht & Person 

 835 West Fourth Street 

 P.O. Box 577 

 Williamsport, PA 17703 

 Robin A. Read (argued) 

 McNerney, Page, Vanderlin 

 & Hall 

 433 Market Street 

 P.O. Box 7 

 Williamsport, PA 17703 

 Attorneys for Appellee 

 Schopfer 

 

 OPINION OF THE COURT 

 

SAROKIN, Circuit Judge. 

 Plaintiff Martha A. Miller filed a 42 U.S.C.  1983 action 

for malicious prosecution against numerous defendants after a 

motion by the state to nolle prosequi her criminal charges was 

granted. The motion to nolle prosequi her charges resulted from 

a compromise between the District Attorney's Office and her 

common law husband, John Hilfirty, who was arrested with her. 

Pursuant to this compromise, Hilfirty agreed to enter an 

Accelerated Rehabilitative Disposition ("ARD") program in 

exchange for dismissal of the charges against him and for the 

motion to nolle prosequi the charges against Miller. 

 The district court reviewing Miller's malicious prosecution 

claim granted summary judgment in favor of defendants on the 

ground that Miller failed to make out a prima facie case of 

malicious prosecution because she was unable to meet the 

threshold requirement of demonstrating that the criminal charges 

against her were terminated favorably. 

 We conclude that a grant of nolle prosequi is insufficient 

to support a claim of malicious prosecution only in circumstances 

where the accused herself enters into a compromise with the 

prosecution in which she surrenders something of value to obtain 
the dismissal or where the accused formally accepts the grant of 

nolle prosequi in exchange for her knowing, voluntary release of 

any future claims for malicious prosecution. Because we find 

that Miller neither compromised with the prosecution to obtain 

her grant of nolle prosequi nor formally accepted the nolle 

prosequi in exchange for a release of future civil claims, we 

conclude that the underlying proceeding terminated in her favor 

for purposes of sustaining a malicious prosecution claim, and 

accordingly, we reverse as to the dismissal of the malicious 

prosecution claim. 

 I. 

 John Hilfirty was terminated from his position as a general 

manager of a recycling center operated by the Lycoming Valley 

Association for the Deaf (LVAD) on May 7, 1991. His termination 

followed the deterioration of his relationship with the Chairman 

of the LVAD Board, Betty Noll, due to a dispute regarding the 

alleged misuse of some of LVAD's funds. According to the 

complaint filed by Hilfirty and Miller before the district court, 

Noll was involved in the mishandling of funds, and she had become 

frustrated with Hilfirty's refusal to participate in her scheme. 

 Hilfirty fought against his termination and applied for 

unemployment compensation, which LVAD contested. Hilfirty 

alleged that during the course of his unemployment compensation 

hearing a series of events transpired which led some of the LVAD 

Board members to participate in a conspiracy with county law 

enforcement authorities to have criminal charges filed against 

Hilfirty and Miller, his common law wife, in order to try to ruin 

Hilfirty's reputation. In particular, Hilfirty claimed that 

several LVAD Board members supplied false information to the 

prosecutor's office that Hilfirty had secretly recorded LVAD 

Board meetings and telephone conversations with LVAD Board 

members in violation of Pennsylvania's wire-tapping statute. As a 

result of this information, a search warrant was issued for the 

premises of the house shared by Hilfirty and Miller. The search 

warrant identified the items to be searched for and seized to be 

"[e]lectronical [sic], mechanical, or other device as defined in 

Pa. Crimes Code 5702 Tape Recordings (Audio or Visual) and 

transcripts, notes pertaining to illegal intercepts." Appellee 

Appendix at 13. 

 In the course of the ensuing search, several items were 

seized from the house, including cassette tapes, recorders, a 

small amount of illegal drugs and drug paraphernalia including 

pipes, bongs, and rolling paper. As a result of this seizure, 

the District Attorney's Office filed criminal complaints against 

both Hilfirty and Miller, who were arrested as a result. 

Hilfirty was charged with five counts of violating the 

Pennsylvania wire-tapping statute, one count of possession of an 

electronic device capable of illicitly intercepting verbal 

communications, one count of criminal conspiracy, one count of 

possession of a controlled substance, and one count of possession 

of drug paraphernalia. Miller was charged with one count of 

criminal conspiracy to intercept oral communications, one count 

of violation of the Pennsylvania wire-tapping statute, one count 
of possession of drug paraphernalia, and one count of possession 

of a controlled substance. 

 Hilfirty and Miller were released on their own recognizance, 

and their cases were consolidated for trial. In the course of 

preparing for trial, Hilfirty and Miller filed a motion to 

suppress the evidence seized during the search on the ground that 

probable cause for issuing the warrant was lacking. Their motion 

was denied. 

 In June of 1992, the District Attorney's Office approached 

Hilfirty's counsel, suggesting that Hilfirty's case be disposed 

of through the ARD program, whereby the charges against Hilfirty 

would be dismissed if he agreed to certain terms, including 

probation for one year, payment of the costs of the prosecution, 

payment of a $250 administrative fee, payment of the costs of 

supervision, performance of 32 hours of community service, and 

the withdrawal of private criminal complaints he had filed 

against defendants Noll and Shipman. After some negotiations, 

Hilfirty agreed to enter the ARD program on the condition that 

the District Attorney's Office would file a motion to nolle 

prosequi the charges against Miller. Accordingly, Hilfirty 

signed, and the court approved, a document through which he 

entered the ARD program. On the same day, the Court of Common 

Pleas of Lycoming County also separately issued an order granting 

the Commonwealth's Motion to Nolle Prosequi the charges against 

Miller. Miller did not sign any documents accepting the grant of 

nolle prosequi. 

 According to two affidavits by attorneys from the District 

Attorney's Office which were presented by defendants to the 

district court in the instant civil action, counsel for both 

Hilfirty and Miller were present at these negotiations. Miller 

presented no evidence to the contrary before the district court, 

although she asserts on appeal that she neither initiated these 

negotiations nor participated in any of these discussions 

herself. Rather, she avers that during these discussions 

Hilfirty's counsel alone agreed that Hilfirty would be willing to 

enter the ARD program if a motion to nolle prosequi Miller's 

charges were granted. 

 Following the disposition of their criminal case, 

Hilfirty and Miller filed a civil complaint in federal district 

court against the following individuals: LVAD Board member David 

C. Shipman; former LVAD Board member Betty Noll; Lycoming County 

Detective Kenneth R. Schriner; Lycoming County District Attorney 

Brett O. Feese; and Stephen C. Schopfer of the Lycoming County 

Solid Waste Department. Plaintiffs' complaint contained five 

counts alleging, inter alia, a section 1983 claim based on 

alleged violations under the First, Fourth, Fifth and Fourteenth 

Amendments of their right to be free from malicious prosecution, 

their right to be free from unlawful searches and seizures, their 

right to their lawful interest in their property and their right 

not to be falsely arrested without due process of law. Their 

complaint further alleged claims under section 1983 for 

conspiracy to deprive plaintiffs of their constitutional rights, 

as well as claims under section 1986 for failure to prevent a 

conspiracy and pendent state claims for malicious prosecution and 
deprivation of life, liberty and property under the Constitution 

of the Commonwealth of Pennsylvania. 

 The five individual defendants in this action responded by 

filing motions to dismiss. Defendants Shipman and Noll framed 

their motions to dismiss alternatively as motions for summary 

judgment. The district court treated all five motions as motions 

for summary judgment because it accepted and considered material 

outside of the pleadings, specifically affidavits, in disposing 

of the motions. It granted summary judgment to defendants on all 

federal claims and Miller's state malicious prosecution claim 

and dismissed the other pendent state claims without prejudice. 

 With the exception of plaintiffs' section 1983 claim of 

malicious prosecution, the district court found that all of 

plaintiffs' federal claims were time-barred because the statute 

of limitations had run. With regard to the malicious prosecution 

claim, the district court found that neither Hilfirty nor Miller 

was able to meet the threshold requirement of demonstrating that 

the underlying proceeding terminated in his/her favor. Hilfirty 

v. Shipman, No. 93-1497, slip op. at 16 (M.D. Pa. June 3, 1994) 

(hereinafter "Dist. Ct. Op."). 

 The only appellant in this matter is Martha Miller, who 

appeals to this court only from that portion of the district 

court's judgment regarding her claim for malicious prosecution. 

The only appellees here are Schriner, Feese and Schopfer. 

 II. 

 The district court had jurisdiction over this matter 

pursuant to 28 U.S.C.  1331 and 1343(3) & (4) and 42 U.S.C. 

1983. This court exercises jurisdiction over this appeal of a 

final order of the district court pursuant to 28 U.S.C.  1291. 

 Our review of the district court's order for summary 

judgment is plenary, and we thus apply the same standards that 

were applicable in the district court. J.F. Feeser, Inc. v. 

Serv-A-Portion, Inc., 909 F.2d 1524, 1530 (3d Cir. 1990), cert.denied, 499 

U.S. 921 (1991). Summary judgment is appropriately

granted when "there is no genuine issue as to any material fact 

and the moving party is entitled to a judgment as a matter of 

law." Fed. R. Civ. P. 56(c). If, however, "the evidence is such 

that a reasonable jury could return a verdict for the nonmoving 

party," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986), summary judgment shall not be granted. Miller, as the 

nonmoving party, is entitled to have all reasonable inferences 

drawn in her favor. See J.F. Feeser, 909 F.2d at 1531. 

 III. 

 The district court issued summary judgment in favor of 

defendants on the malicious prosecution claim because it 

determined that Miller was unable to meet the threshold 

requirement of demonstrating that the criminal action "terminated 

in a manner 'consistent with innocence, such as acquittal or 

reversal of conviction.'" Dist. Ct. Op. at 16 (quoting Junod v. 

Bader, 458 A.2d 251, 253 (Pa. Super. Ct. 1983) (citing Anolik v. 

Marcovsky, 186 A. 418 (Pa. Super. Ct. 1936))). Specifically, the 

district court concluded that the "nol prossing of charges as 
part of a plea bargain agreement [does not] equat[e] to the 

termination of the underlying proceedings in plaintiffs' favor." 

Dist. Ct. Op. at 19. We are required to determine whether the 

district court was correct in its assessment that there was no 

genuine issue of material fact regarding whether the underlying 

proceedings terminated in Miller's favor. 

 A. 

 As an initial matter, we will assess whether the district 

court appropriately converted the 12(b)(6) motions filed by 

defendants into motions for summary judgment. The district court 

explained that in reviewing the motions to dismiss, it accepted 

and considered four affidavits presented by defendants and the 

affidavit of Hilfirty, attached to plaintiffs' Memorandum of Law 

and Facts, and that accordingly, it considered all motions as 

motions for summary judgment. Dist. Ct. Op. at 7 n.19. Federal 

Rule of Civil Procedure 12(b) provides that if, on a motion to 

dismiss under Rule 12(b)(6), 

 matters outside the pleading are presented to and not 

 excluded by the court, the motion shall be treated as 

 one for summary judgment and disposed of as provided in 

 Rule 56, and all parties shall be given reasonable 

 opportunity to present all material made pertinent to 

 such a motion by Rule 56. 

Fed. R. Civ. P. 12(b). Given that the district court accepted 

and considered documents outside of the pleadings in the course 

of disposing of defendants' motion, its treatment of these 

motions as motions for summary judgment was appropriate under the 

plain terms of the rule. See 5A Charles Alan Wright & Arthur 

Miller, Federal Practice and Procedure  1366 at 493 (West 1990) 

(noting that "[o]nce the court decides to accept matters outside 

the pleading, it must convert the motion to dismiss into one for 

summary judgment"). 

 Miller argues in her brief before this Court, however, that 

the "lower court's decision was pre-mature" [sic] and claims that 

"[d]iscovery should have been allowed." Appellant's Brief at 11. 

Specifically, Miller contends that, had she had the opportunity 

to present the district court with more material regarding the 

circumstances under which the compromise was reached between the 

prosecution and Hilfirty, it would have been evident to the 

district court that she did not participate in the compromise and 

that, therefore, the court's grant of nolle prosequi should be 

considered to be a termination of the proceedings in her favor. 

 While she does not clearly define her argument as such, we 

interpret her claim to be that the district court erred in 

failing to provide notice that it was treating the motions to 

dismiss as motions for summary judgment and erred in failing to 

provide her an opportunity to submit material in support of her 

position. It is, indeed, well-established that prior to 

converting a motion to dismiss into a motion for summary 

judgment, the district court must provide adequate notice to the 

parties. Rose v. Bartle, 871 F.2d 331, 342 (3d Cir. 1989) ("We 

have held that it is reversible error for a district court to 

convert a motion under Rule 12(b)(6) . . . into a motion for 
summary judgment unless the court provides notice of its 

intention to convert and allows an opportunity to submit 

materials admissible.") (and cases cited therein); 5A Wright & 

Miller, supra,  1366 at 501 ("It is important that the court 

give the parties notice of the changed status of the motion and a 

'reasonable opportunity to present all material made pertinent to 

such a motion by Rule 56.'"). Certainly, the nonmoving party 

must have adequate notice and time to present to the district 

court material relevant to her claim in order to demonstrate that 

there is a genuine issue of material fact that renders summary 

disposition of the case inappropriate. 

 We find in the instant matter that Miller had adequate 

notice that the court would convert defendants' motions to 

dismiss into summary judgment motions, as well as adequate 

opportunity to respond. The primary reason for our conclusion is 

that two of the five motions to dismiss were framed in the 

alternative as motions for summary judgment. See Dist. Ct. Op. at 

6. This court has previously held that "[w]here a party has 

filed a motion for summary judgment, the opposing party is under 

an obligation to respond to that motion in a timely fashion and 

to place before the court all materials it wishes to have 

considered when the court rules on the motion." Cowgill v. 

Raymark Industries, Inc., 780 F.2d 324, 329 (3d Cir. 1985). That 

the two motions were framed only in the alternative as motions 

for summary judgment does not alter our conclusion. Miller was 

on notice that the court was considering two motions for summary 

judgment, and she had the opportunity to respond over a period of 

nearly eight months, between the filing of the defendants' 

motions to dismiss in late October 1993 and the district court's 

final judgment in June of 1994. Furthermore, neither Miller nor 

Hilfirty ever objected to defendants' submission of affidavits 

with their motions, nor did either Miller or Hilfirty make a 

motion for discovery before the court. Rather, Hilfirty 

submitted his own affidavit with their brief before the court. 

Thus, it was appropriate for the district court to treat the 

motions as ones for summary judgment. 

 B. 

 We will now assess the district court's conclusion that 

Miller failed to meet the threshold requirement for a claim for 

malicious prosecution. 

 In order to state a prima facie case for a section 1983 

claim of malicious prosecution, the plaintiff must establish the 

elements of the common law tort as it has developed over time. 

See Lee v. Mihalich, 847 F.2d 66, 70 (3d Cir. 1988); see alsoMcArdle v. 

Tronetti, 961 F.2d 1083, 1088 (3d Cir. 1992); 

Singleton v. City of New York, 632 F.2d 185, 195 (2d Cir. 1980) 

(collecting cases), cert. denied, 450 U.S. 920 (1981). In 

Pennsylvania, like most jurisdictions, a party bringing a 

malicious prosecution claim must demonstrate that (1) the 

defendants initiated a criminal proceeding; (2) the criminal 

proceeding ended in the plaintiff's favor; (3) the proceeding was 

initiated without probable cause; and (4) the defendants acted 

maliciously or for a purpose other than bringing the plaintiff to 
justice. Haefner v. Burkey, 626 A.2d 519, 521 (Pa. 1993); seealso Lee, 847 

F.2d at 69-70. 

 The resolution of this case rests on an assessment of 

whether Miller is able to meet the second requirement, i.e. 

demonstrate that the criminal proceedings below ended in her 

favor. According to the Restatement (Second) of Torts  659 

(1976), which has been relied upon by the Pennsylvania Supreme 

Court, criminal proceedings are terminated in favor of the 

accused by 

 (a) a discharge by a magistrate at a preliminary 

 hearing, or 

 (b) the refusal of a grand jury to indict, or 

 (c) the formal abandonment of the proceedings by the 

 public prosecutor, or 

 (d) the quashing of an indictment or information, or 

 (e) an acquittal, or 

 (f) a final order in favor of the accused by a trial or 

 appellate court. 

Id., quoted in Haefner, 626 A.2d at 521. 

 Miller's basic argument is that the prosecution's decision 

to move for nolle prosequi of her charges amounts to a "formal 

abandonment of the proceedings by the public prosecutor," and 

thus the district court should have found that the criminal 

proceedings had terminated in her favor. In particular, Miller 

refers us to the Pennsylvania Supreme Court's decision in 

Haefner, where the court determined that the plaintiff had met 

the threshold requirement for a malicious prosecution claim after 

the prosecution "nolle prossed the remaining charges because of 

insufficient evidence." Haefner, 626 A.2d at 521. The court 

there noted, "'if the defendant is discharged after abandonment 

of the charges by the prosecutor, this is sufficient to satisfy 

the requisite element of prior favorable termination of the 

criminal action.'" Id. (quoting Woodyatt v. Bank of Old York 

Road, 182 A.2d 500, 501 (Pa. 1962)). 

 While Haefner clearly indicates that a grant of nolle 

prosequi can be sufficient to satisfy the favorable termination 

requirement for malicious prosecution, not all cases where the 

prosecutor abandons criminal charges are considered to have 

terminated favorably. Indeed, the Pennsylvania Supreme Court has 

previously held that a prosecutor's decision to withdraw criminal 

charges pursuant to a compromise with the accused is not 

considered to be a termination sufficiently favorable to support 

a malicious prosecution claim. See Alianell v. Hoffman, 176 A.2d 

207 (Pa. 1935). Haefner, which did not involve a compromise 

agreement, did not disturb this holding. 

 It is indeed well-established at common law that 

 [a] termination of criminal proceedings in favor of the 

 accused other than by acquittal is not a sufficient 

 termination to meet the requirements of a cause of 

 action for malicious prosecution if 

 (a) the charge is withdrawn or the prosecution

 abandoned pursuant to an agreement of compromise with 

 the accused . . . . 
Restatement (Second) of Torts  660. While the Pennsylvania 

Supreme Court has never adopted this section of the Restatement, 

the Pennsylvania Superior Court has. See Junod v. Bader, 458 

A.2d 251, 253-54 (Pa. Super. Ct. 1983) (finding that an ARD 

termination as a result of a compromise is not sufficient for 

meeting the threshold test for malicious prosecution and citing 

to section 660 of the Restatement). Section 660(a) of the 

Restatement has also been adopted by a multitude of other state 

courts, see, e.g., Broaddus v. Campbell, 911 S.W. 2d 281, 284 

(Ky. Ct. App. 1995); Piper v. Scher, 533 A.2d 974, 976 (N.J. 

Super. Ct. App. Div. 1987); Joiner v. Benton Community Bank, 411 

N.E.2d 229, 232 (Ill. 1980); Robinson v. Fimbel Door Company, 

306 A.2d 768, 770 (N.H. 1973), and at least two federal courts of 

appeals have accepted the general premise that dismissals 

resulting from a compromise with the prosecution are not 

"favorable terminations." See Taylor v. Gregg, 36 F.3d 453, 456 

(5th Cir. 1994) (holding that dismissal of charges pursuant to a 

pre-trial diversion agreement with prosecutors is not termination 

of proceedings in favor of the accused to the extent that it will 

support a malicious prosecution claim); Singleton, 632 F.2d at 

194 (same). 

 The basic premise for this rule is that, unlike a situation 

where the prosecution seeks a grant of nolle prosequi "because of 

insufficient evidence," Haefner, 626 A.2d at 521, dismissal of 

charges as a result of a compromise is not an indication that the 

accused is actually innocent of the crimes charged. SeeRestatement 

(Second) of Torts  660 cmt. c ("[T]he fact of a 

compromise indicates that the question of [the accused's] guilt 

or innocence is left open."); Davis v. Chubb/Pacific Indem. 

Group, 493 F. Supp. 89, 92 (E.D. Pa. 1980) (noting that entry 

into an ARD program is a compromise that leaves the question of 

guilt or innocence open). Both the Restatement and case law 

suggest that only terminations that indicate that the accused is 

innocent ought to be considered favorable. See Restatement 

(Second) of Torts  660 cmt. a ("Proceedings are 'terminated in 

favor of the accused' . . . only when their final disposition is 

such as to indicate the innocence of the accused."); Taylor, 36 

F.3d at 456 (noting that "proceedings are terminated in favor of 

the accused only when their final disposition indicates that the 

accused is not guilty") (citing Singleton, 632 F.2d at 193); 

Jaffe v. Stone, 114 P.2d 335, 338 (Cal. 1941) (holding that 

"[t]he theory underlying the requirement of favorable termination 

is that it tends to indicate the innocence of the accused"). 

 The district court relied upon this principle that the 

withdrawal of charges pursuant to a compromise is not a favorable 

termination in concluding that Miller was barred from filing a 

malicious prosecution claim. The court considered the grant of 

nolle prosequi of Miller's charges to be the result of a 

compromise and thus concluded that the termination of the 

underlying proceedings was not sufficiently favorable to sustain 

Miller's malicious prosecution claim: 

 The Commonwealth's willingness to nol pros the charges 

 filed against [Miller] were conditioned on Hilfirty's 
 entry into the ARD program. According to the 

 uncontradicted affidavits of prosecuting attorney 

 Ciampoli and First Assistant District Attorney Kenneth 

 A. Osokow, had Hilfirty not agreed to enter the ARD 

 program, the charges against Miller would not have been 

 dropped. The quid pro quo demanded and received by the 

 Commonwealth deprives the nol pros of its effect and 

 indicates that the nol prossing of the charges against 

 Miller does not equate to, and cannot be considered as, 

 a termination in her favor sufficient to support an 

 action for malicious prosecution. 

Dist. Ct. Op. at 18-19. 

 However, that Miller was a beneficiary of Hilfirty's 

compromise agreement with the prosecution does not require a 

finding that she, herself, entered into a compromise. The 

Restatement specifically contemplates that a termination is not 

sufficiently favorable to support a claim for malicious 

prosecution if "the charge is withdrawn . . . pursuant to an 

agreement of compromise with the accused." Restatement (Second) 

of Torts,  660 (emphasis added). An accused has entered into a 

compromise with the prosecution only if she herself offers 

something in return for the dismissal of her charges -- the 

equivalent of "consideration" in a contract arrangement. This 

"consideration" could be, for example, entry into an ARD program 

such as that entered into by Hilfirty, or an agreement to pay 

restitution or return property to the victim. This

interpretation is consistent with the common understanding of a 

compromise, where both parties give something up in order to 

accommodate the agreement, as well as with case law in which 

compromises have been found to bar malicious prosecution claims. 

See, e.g., Alianell, 176 A.2d at 207 (finding malicious 

prosecution claim barred where the prosecution "agreed to 

withdraw the charges in consideration of a payment of $20 and the 

return of the goods in question"); Junod, 458 A.2d at 252-53 

(finding malicious prosecution claim barred because accused 

agreed to enter into ARD program and comply with its terms in 

exchange for dismissal of charges); Taylor, 36 F.3d at 455-56 

(finding malicious prosecution claim barred because accused 

entered into pre-trial diversion agreement, thereby agreeing to 

enter into program of supervision); Singleton, 632 F.2d at 188, 

194 (finding malicious prosecution claim barred because accused 

consented to an adjournment in contemplation of dismissal, 

thereby agreeing to enter into a program "not unlike probation" 

where he is subject to the observation of the prosecution); 

Broaddus, 911 S.W.2d at 284 (finding malicious prosecution claim 

barred because "[t]he dismissal was not the unilateral act of the 

prosecutor; [the accused] gave up something to secure the 

dismissal of the charges"); but see Tucker v. Duncan, 499 F.2d 

963, 964 (4th Cir. 1974) (finding malicious prosecution claim 

barred simply because prosecution agreed to a nolle prosequi of 

accused's charges "after his attorney spoke with the prosecutor 

in a back room"). 

 In the instant case, the compromise that occurred was not 

between Miller and the prosecution, but rather between Miller's 
co-defendant, Hilfirty, and the prosecution. While Hilfirty 

offered the "quid pro quo" or "consideration" of entry into the 

ARD program in exchange for the prosecution not bringing him to 

trial and agreeing to move for nolle prosequi of Miller's 

charges, Miller herself offered no "consideration" or "quid pro 

quo" in exchange for the grant of nolle prosequi. Thus, we do 

not find that she herself entered into any compromise with the 

prosecution indicating that the charges against her terminated 

favorably. 

 The district court, however, appears to have concluded that 

the nolle prosequi of Miller's charges was not a favorable 

termination because Miller was bound by Hilfirty's compromise. 

The district court treated Hilfirty's "quid pro quo" as though it 

were from Miller as well in finding that "[t]he quid pro quo 

demanded and received by the Commonwealth deprives the nol pros 

of its effect and indicates that the nol prossing of the charges 

against Miller does not equate to . . . a termination in her 

favor . . . ." Dist. Ct. Op. at 19. 

 We thus are left to determine whether a compromise entered 

into by one party can bind that party's co-defendant such that 

the co-defendant is deprived of her ability to file a malicious 

prosecution claim. This question has been answered affirmatively 

by one Pennsylvania Superior Court case, Georgiana v. United Mine 

Workers of America, International Union, 572 A.2d 232, 235 (Pa. 

Super. 1990). Although the district court decision did not cite 

to Georgiana, we will discuss the case in some detail because of 

its similarities to the instant matter. 

 In Georgiana a woman and her husband were sued for fraud by 

the United Mine Workers. Eventually, the woman entered into a 

settlement agreement pursuant to which the complaint against her 

and her husband was dropped. Id. at 233. The husband later 

filed a claim for malicious use of civil process against the 

United Mine Workers, but the trial court granted a demurrer on 

the ground that the settlement agreement was effective against 

both him and his wife and the underlying proceedings thus had not 

terminated in the husband's favor. Id. On appeal, the 

Pennsylvania Superior Court reversed: "We cannot agree that the 

unilateral action of one party in negotiating a settlement 

necessarily binds another party who did not participate in that 

settlement, simply because the parties are named defendants in 

the same suit." Id. at 235 (emphasis added). However, the court 

did allow that "the fact-finder could determine that, even though 

appellant himself did not negotiate the settlement, his wife 

acted on his behalf in order to prevent an inquiry into her 

husband's conduct." Id. In support of its conclusion, the court 

cited to Comment b of  660(a) in the Restatement (Second) of 

Torts, which reads as follows: 

 There are two factors common to [indecisive 

 terminations not considered favorable for purposes of 

 malicious prosecution]: First, the charge is withdrawn 

 for a cause not incompatible with the guilt of the 

 accused or the possibility of obtaining his conviction; 

 second, the withdrawal is at the request or with the 

 consent of the accused or is due to something done by 
 him or on his behalf for the purpose of preventing a 

 full and fair inquiry into his guilt or innocence. 

Id. (emphasis added). The court thus remanded the matter so that 

a fact-finder could determine whether the wife's settlement of 

the action should bind her husband, based upon "the particular 

circumstances surrounding [the] settlement, and not upon the 

status of the parties." Id. 

 While our research has revealed no other case from 

Pennsylvania or any other jurisdiction in which a court has 

concluded that there may be circumstances in which one party's 

settlement agreement may bind another, we nonetheless predict 

that the Pennsylvania Supreme Court would adopt Georgiana's 

fundamental holding. See Kiewet Eastern Co., Inc. v. L & R 

Const. Co., Inc., 44 F.3d 1194, 1201 n.16 (3d Cir. 1995) 

(explaining that, when the Pennsylvania Supreme Court has not 

spoken on an issue, we look to the decisions of the intermediate 

Pennsylvania courts). We find no indication in any other 

Pennsylvania case law that Georgiana would not be followed. SeeWisniewski 

v. Johns-Manville Corp., 759 F.2d 271, 273-74 (3d Cir. 

1985) ("Although lower state court decisions are not controlling 

on an issue on which the highest court of the state has spoken, 

federal courts must attribute significant weight to these 

decisions in the absence of any indication that the highest state 

court would rule otherwise."). 

 Having determined that we will follow Georgiana's basic 

holding, we still are left to enumerate the specific findings 

that a trial court is required to make in order to conclude that 

one party is bound by the settlement agreement of her codefendant such that she is barred from bringing a malicious 

prosecution claim. Georgiana makes clear only that this 

determination is to be based upon "the particular circumstances 

surrounding [the] settlement, and not upon the status of the 

parties." Georgiana, 572 A.2d at 235. It provides us with no 

other guidance, however, and we are left to rely upon policy 

considerations in making this determination. 

 As a threshold matter, we can envision no scenario in which 

it would be appropriate for a co-defendant to enter into a 

settlement agreement on behalf of another party without that 

party's consent. The contents of a settlement agreement may have 

profound effects upon an individual's life. Accordingly, we find 

that a court may determine under Georgiana that a party is bound 

by her co-defendant's settlement agreement only if it finds that 

the party has knowingly authorized her co-defendant to serve as 

her agent in entering the agreement. 

 We further think that policy considerations suggest that a 

court may conclude that a party is bound by her co-defendant's 

settlement agreement only if it finds that she fully understands 

the consequences of her consent. A court certainly would not 

accept a plea bargain from a criminal defendant absent a 

statement from that defendant that he fully understands the terms 

of the agreement and the consequences of entering the plea. 

While we recognize that the repercussions of allowing a criminal 

defendant to enter a guilty plea, perhaps accepting jail time 

without fully understanding the consequences of his actions, are 
undoubtedly greater than those of allowing an accused to 

relinquish her right to file a malicious prosecution claim, it is 

nonetheless our view that a maliciously prosecuted individual's 

right to file a civil action is of significant importance; we are 

thus loath to allow for a situation where such a right is 

unknowingly relinquished. 

 It is, indeed, easy to envision a scenario where such could 

occur. For example, a wife might agree to allow her husband to 

represent both of them in negotiations with the prosecution, 

knowing that she is completely innocent of all alleged charges 

and fully expecting that her husband will be able to obtain a 

dismissal of all charges against her. Assuming her husband 

succeeds in accomplishing this in the course of negotiating his 

own compromise, she would most likely presume that she had been 

exonerated of all wrongdoing and would expect that she would be 

able to pursue a malicious prosecution claim. She would have 

given up nothing in exchange for the dismissal; no consideration 

would have been offered that would leave her innocence in doubt 

and she would have every reason to believe that her proceedings 

had terminated favorably. Yet, if Georgiana were interpreted to 

allow the husband's compromise to bind his wife without requiring 

any inquiry into her understanding of the consequences of the 

agreement, she would be unable to vindicate her right to be free 

from malicious prosecution. 

 Such an outcome is highly undesirable and can be avoided. 

We thus conclude that, when a co-defendant acting as an 

authorized agent of another party, say his wife, enters into a 

compromise that provides for the dismissal of charges against 

her, she cannot be barred from filing a malicious prosecution 

claim if she herself offered no consideration in exchange for the 

dismissal, unless it is clear that she was fully aware that such 

waiver would be the consequence of allowing her husband to enter 

into the compromise on her behalf. 

 These two determinations -- whether a party (1) consented to 

allow her co-defendant to enter an agreement on her behalf, and 

(2) whether she was fully aware that by allowing her co-defendant 

to enter the agreement she would be barred from filing a 

malicious prosecution claim -- are fact questions. We believe, 

however, that policy considerations suggest that a jury not be 

left to make this all-important state-of-mind determination by 

merely piecing together snippets of evidence regarding the nature 

of the settlement agreement. As noted above, we believe that the 

right to file a malicious prosecution claim is a deeply important 

one. Persons who are unjustly prosecuted may suffer emotional 

pain, permanent damage to their reputation and real financial 

costs. Furthermore, it is in the public interest to ensure that 

persons against whom prosecutions are maliciously filed are 

provided an opportunity to recover civil damages; such actions 

protect those persons wrongly prosecuted and deter malicious 

prosecutions, thereby lending legitimacy to the institution of 

criminal prosecution. 

 In order to ensure that no person who may have been subject 

to malicious prosecution inadvertently or unintentionally waives 

the right to pursue such claim, we conclude that, in instances 
where a party authorizes her co-defendant to enter into a 

compromise agreement providing for the dismissal of her criminal 

charges and she offers no consideration in exchange for such 

dismissal, she will not have been found to have relinquished her 

right to file a malicious prosecution claim unless it is plain 

from the record of a hearing in open court or a written releasedismissal agreement that such relinquishment was knowing, 

intentional and voluntary. 

 While we recognize that this requirement is not specifically 

suggested by the language of Georgiana, we think that it is a 

highly sensible requirement and an outgrowth of that opinion. 

First, and most importantly, it ensures that individuals 

consciously consider their options and understand the 

consequences of their actions before waiving their civil rights. 

Second, it provides for a bright-line rule, avoiding the need for 

extensive fact-finding on the part of a jury; either a defendant 

has agreed to relinquish her rights or she has not. Third, it 

ensures a meeting of the minds between the prosecution and an 

accused. If, for example, the prosecution affirmatively seeks to 

require an accused to relinquish her right to file a civil claim 

when dismissing the charges against her, such an intention will 

be plain from the face of the court record or the releasedismissal agreement. Finally, such a requirement imposes no cost 

or undue burden on the prosecution. Rather, it precludes the 

need for lengthy inquiries into state of mind or the significance 

of a dismissal of charges. Indeed, it may well be that such a 

requirement will limit the number of malicious prosecution cases. 

 We take care to note that any such in-court waiver or 

release-dismissal agreement will be valid only if it is 

voluntary; there is no evidence of prosecutorial misconduct; and 

the agreement is not offensive to the relevant public interest. 

See Cain v. Darby Borough, 7 F.3d 377, 380 (3d Cir. 1993) (in 

banc) (citing Town of Newton v. Rumery, 480 U.S. 386, 398 

(1987)). This three-pronged test will ensure that prosecutors do 

not deliberately seek to avoid liability for themselves or others 

who wrongfully initiated such proceedings by forcing individuals 

into a waiver or signing of these agreements. In addition, the 

test prevents prosecutors from adopting a blanket policy of 

routinely obtaining in-court waivers or release-dismissal 

agreements every time they agree to dismiss the charges against 

one defendant in the course of agreeing to a compromise with a 

co-defendant; instead, they must make their determinations about 

whether to seek a waiver or release-dismissal agreement on a 

case-by-case basis. See id. at 382. 

 In light of the above analysis, we find that the district 

court erred in concluding that Miller could be bound by a 

compromise entered into by her husband such that she was 

precluded from filing a malicious prosecution claim. Even if 

defendants' representation that Miller herself sought or accepted 

the grant of nolle prosequi were true -- facts which are not 

necessarily indicated by the record -- there is no indication in 

the form of a release-dismissal agreement with the prosecution or 

a record of a hearing in open court indicating that she knew that 

her acceptance of the grant of nolle prosequi, for which she 
offered no consideration, would deprive her of her ability to 

file a malicious prosecution claim. In the absence of a releasedismissal agreement or a waiver reflected in a court record 

coupled with our earlier conclusion that the grant of nolle 

prosequi was not the result of a compromise between Miller 

herself and the prosecution, we conclude that this case is 

governed by Haefner, 626 A.2d at 521, and that the grant of nolle 

prosequi is "sufficient to satisfy the requisite element of prior 

favorable termination of the criminal action." Id. (citation 

omitted). Accordingly, Miller may pursue her claim for malicious 

prosecution. 

 IV. 

 For the foregoing reasons, we reverse the district court's 

grant of summary judgment regarding Miller's ability to 

demonstrate the favorable termination of her underlying criminal 

proceedings, and we remand this matter to the district court for 

further proceedings consistent with this opinion. 

 

Hilfirty v. Shipman, No. 95-7206 

POLLAK, District Judge, concurring: 

 In Georgiana v. UMW, 572 A.2d 232 (Pa. Super. 1990), the 

Pennsylvania Superior Court rejected the proposition "that the 

unilateral action of one party in negotiating a settlement 

necessarily binds another party who did not participate in that 

settlement. . . ." Id. at 235. Today, this court, in an 

opinion which I join, holds "that, in instances where a party 

authorizes her co-defendant to enter into a compromise agreement 

providing for the dismissal of her criminal charges and she 

offers no consideration in exchange for such dismissal, she will 

not have been found to have relinquished her right to file a 

malicious prosecution claim unless it is plain from the record of 

a hearing in open court or a written release-dismissal agreement 

that such relinquishment was knowing, intentional and voluntary." 

Typescript, supra, p. 26. This holding -- which comports with 

the test generally applicable to waivers of civil rights claims, 

see W. B. Matula, 67 F.3d 484, 497 (3d Cir. 1995), Cain v. Darby 

Borough, 7 F.3d 377, 380 (3d Cir. 1993) (in banc) -- is 

characterized as an "outgrowth" of Georgiana. Typescript, supra, 

p. 26. 

 While I accept this court's hospitable reading of Georgiana, 

and agree that the Pennsylvania Supreme Court, when it has 

occasion to address the issue, is likely to adopt Georgiana's 

"fundamental holding," Typescript, supra p. 22, I add these 

concurring words to make the point that, in the case at bar, even 

under a narrower reading of Georgiana, a grant of summary 

judgment against Miller was not warranted. 

 The narrower reading of Georgiana would place particular 

weight on the Superior Court's statement "that the question 

whether one defendant's settlement of an action should bind 
another defendant must depend on the particular circumstances 

surrounding that settlement . . . ." 572 A.2d at 235. That 

statement follows the Georgiana court's discussion of section 660 

of the Restatement (Second) of Torts, the section which is 

Georgiana's analytic bedrock. That section, captioned 

"Indecisive Termination of Proceedings," provides as follows: 

 A termination of criminal proceedings in favor of the 

 accused other than by acquittal is not a sufficient 

 termination to meet the requirements of a cause of 

 action for malicious prosecution if 

 (a) the charge is withdrawn or the prosecution 

 abandoned pursuant to an agreement of compromise with 

 the accused; or 

 (b) the charge is withdrawn or the prosecution 

 abandoned because of misconduct on the part of the 

 accused or in his behalf for the purpose of preventing 

 proper trial; or 

 (c) the charge is withdrawn or the proceeding 

 abandoned out of mercy requested or accepted by the 

 accused; or 

 (d) new proceedings for the same offense have been 

 properly instituted and have not been terminated in 

 favor of the accused. 

Restatement (Second) of Torts 660 (1977). 

 Plainly, the "termination of criminal proceedings in favor 

of" Miller is not covered by clause (b): i.e., there is no hint 

that the charges against Miller were withdrawn "because of 

misconduct . . . for the purpose of preventing proper trial." 

Nor is there any suggestion that either clause (c), relating to 

"abandon[ment] out of mercy," or clause (d), relating to the 

institution of new proceedings, had application to Miller. 

 The only aspect of section 660 that might be inquired into 

is clause (a), relating to withdrawal of charges "pursuant to an 

agreement of compromise with the accused." On the record made 

below, evidence that Miller entered into an "agreement of 

compromise" is extremely tenuous. To be sure, it has been 

averred that Miller's attorney was present at discussions with 

the assistant district attorney and with Hilfirty's attorney. 

The assistant district attorney characterized the result of these 

discussions as a "joint agreement," under which "the Commonwealth 

agreed to recommend the ARD program for Mr. Hilfirty and to nolle 

pros the charges against Ms. Miller." Ciampoli Affidavit,  6, 

Appellees' Appendix at 2. But there is no suggestion that 

Miller, via her attorney or otherwise, took any sort of active 

role in these discussions. To the contrary, it would appear that 

it was Hilfirty's attorney who, on his client's behalf, entered 

into a bargain with the Commonwealth Ä namely, that Hilfirty 

would enter the ARD program and the Commonwealth would drop the 

charges against Miller. Moreover, according to the assistant 
district attorney, "the Commonwealth would not have agreed to 

dismiss the charges against Miller if Hilfirty had not agreed to 

the ARD program." Id. In other words, it appears that the 

Commonwealth included Miller in the "joint agreement" as an 

inducement to Hilfirty to accept ARD. 

 One who acquiesces in an arrangement under which she 

surrenders nothing does not thereby accept a "compromise," at 

least not in the sense in which the Restatement means that word. 

Comment c to section 660 of the Restatement provides an 

illuminating explanation of the rationale for section 660(a)'s 

rule that a prosecution that terminates with an agreement of 

compromise does not terminate favorably. It states: "Although 

the accused by his acceptance of a compromise does not admit his 

guilt, the fact of compromise indicates that the question of his 

guilt or innocence is left open. Having bought peace the accused 

may not thereafter assert that the proceedings have terminated in 

his favor." Restatement (Second) of Torts  660 cmt. c (1977). 

In this case, the most that can be said is that Miller acquiesced 

in a compromise structured by the Commonwealth and Hilfirty. 

Since there is no evidence that Miller made any affirmative 

effort whatsoever to seek out a compromise, she can hardly be 

thought to have "bought peace." In short, the circumstances of 

the dismissal of the case against Miller in no way call into 

question the favorable nature of the termination of Miller's 

prosecution. 

 Thus, even if the Pennsylvania Supreme Court were to build 

on Georgiana more narrowly than we do -- even if, for example, 

the Pennsylvania Supreme Court were to conclude that a dismissal 

of criminal charges which was negotiated by a co-defendant might 

in certain "particular circumstances" bar a suit for malicious 

prosecution notwithstanding that the would-be plaintiff had not 

executed a written release-dismissal agreement or stated in open 

court her intention to relinquish her potential claim -- the 

particular "particular circumstances" presented on this appeal 

are not of a sort that could properly operate to bar Miller's 

suit. 

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