Opinion ID: 196426
Heading Depth: 1
Heading Rank: 3

Heading: Malicious Prosecution and Abuse of Process

Text: 17 In his complaint, Simon alleged a cause of action for malicious prosecution based on the lawsuit filed by the Navons in New York in the name of Maine Coast Trading. That action, first brought against Israel Discount Bank to obtain release of $87,000 frozen in the company's account, later was amended to include a claim against Simon seeking $30 million in damages and injunctive relief. Twice during the trial, the parties and the district court displayed confusion about the malicious prosecution claim and its elements, and considered whether the claim would be more aptly characterized as one for a related tort, abuse of process. Ultimately, over the defendants' objection, the court amended the pleadings to substitute abuse of process for the malicious prosecution count, and the jury returned a verdict for Simon on that claim. 1 18 The Navons argue that the district court's handling of this issue was erroneous in two respects. First, they claim that amendment of the pleadings after the close of evidence was unfairly prejudicial because their strategy was based on the assumption that Simon would be unable to prove a necessary element of malicious prosecution, namely, that the challenged litigation had terminated in his favor. 2 Second, they claim that Simon failed as a matter of law to prove the elements of abuse of process. 19 We address only this latter claim. Preliminarily, however, we must determine whether, unlike other grounds asserted in the post-trial motion for judgment as a matter of law, the issue was preserved by timely request at the close of evidence. The parties' final discussion with the court on the malicious prosecution claim occurred during a chambers conference after the close of all the evidence. The conference, focusing on the difference between claims for malicious prosecution and abuse of process, occupied seven pages of transcript. The court concluded the conference with the following statements: 20 I think it's a very, very thin argument, frankly, on abuse of process.... But I'm not going to let this case go to the jury because I'm not going to try this case again if I can help it. And then we'll see what the jury does with it subject to a motion for a judgment N.O.V. after we see how they answer the interrogatories on the case. And you can take your objection. 21 Tr. at 835. Counsel then promptly stated, I object. 22 In its post-judgment opinion, the district court stated that defense counsel could not reasonably have believed that this colloquy preserved the issue for post-verdict review but noted the argument by defendants' new counsel that the chambers discussion had served as the functional equivalent of a motion for judgment as a matter of law. The court observed, however, that treating that dialogue as a de facto motion relating to abuse of process nonetheless would be unavailing because the evidence legally was sufficient to go to the jury. 23 Even in the light of our own stringent adherence to the requirement of a timely formal motion, we think the abuse of process issue was adequately preserved. The lengthy discussion on this point, taken together with the judge's expressed assumption that he would revisit the question in the event of a motion for judgment notwithstanding the verdict, and his statement to the attorney that he could take [an] objection, could not but have led counsel to believe that what had been done thus far was enough to preserve the issue for post-judgment review. Indeed, the colloquy in chambers was the type of exchange that one would expect to follow a motion for judgment as a matter of law on the abuse of process claim. Cf. Bayamon Thom McAn, Inc. v. Miranda, 409 F.2d 968, 971-72 (1st Cir.1969). 3 24 In these circumstances, we conclude that the legal sufficiency of the abuse of process claim warrants appellate consideration. 4 We thus turn to the substantive inquiry, which is governed by a de novo standard of review. Gibson v. City of Cranston, 37 F.3d 731, 735 (1st Cir.1994). 25 It is not surprising that the court and parties were uncertain about how to characterize Simon's claim based on the New York litigation. The torts of abuse of process and malicious prosecution frequently are confused because of their close relationship, see, e.g., Lambert v. Breton, 127 Me. 510, 514, 144 A. 864 (1929); Board of Education of Farmingdale Union Free Sch. Dist. v. Farmingdale Classroom Teachers Ass'n, 38 N.Y.2d 397, 400, 343 N.E.2d 278, 280-81, 380 N.Y.S.2d 635, 639-40 (1975); Note, Abuse of Process, 13 Clev.-Mar.L.Rev. 163, 163 (1964) (Abuse); Note, Torts--Abuse of Process Defined, 28 Ark.L.Rev. 388 (1974) (Defined), and abuse of process has been described as one of the most obscure torts in the law, see Note, The Nature and Limitations of the Remedy Available to the Victim of a Misuse of the Legal Process: The Tort of Abuse of Process, 2 Val.U.L.Rev. 129, 129 (1967) (Tort of Abuse). 26 To establish a claim for malicious prosecution, a party must show that the challenged litigation was initiated without probable cause and with malice, and that it terminated in the plaintiff's favor. See, e.g., Nadeau v. State, 395 A.2d 107, 116 (Me.1978). The two basic elements of abuse of process are a bad motive, and the use of a legal process for an improper, collateral objective. See, e.g., id. at 117. 27 The difference between the two often is explained as a matter of timing and scope: malicious prosecution is the appropriate cause of action for challenging the whole of a lawsuit--i.e., asserting that the suit has no basis and should not have been brought--while abuse of process covers the allegedly improper use of individual legal procedures after a suit has been filed properly. See Packard v. Central Maine Power Co., 477 A.2d 264, 267 (Me.1984); Nadeau, 395 A.2d at 117; Wade, J., On Frivolous Litigation: A Study of Tort Liability and Procedural Sanctions, 14 Hofstra L.Rev. 433, 450 (1986). Typical abuse of process cases involve misuse of such procedures as discovery, see Twyford v. Twyford, 63 Cal.App.3d 916, 923-24, 134 Cal.Rptr. 145, 148-49 (1976); subpoenas, see Board of Education of Farmingdale Union Free Sch. Dist., 38 N.Y.2d at 403-04, 343 N.E.2d at 283, 380 N.Y.S.2d at 642-43; and attachment, see Saliem v. Glovsky and Fogg, 132 Me. 402, 404, 172 A. 4 (1934). 28 The abuse tort often is given a wider berth, however, and courts typically will recognize such a claim, regardless of timing, if a plaintiff can show an improper use of process for an immediate purpose other than that for which it was designed and intended, Restatement (2d) of Torts Sec. 682, at 475 (1977). See W. Page Keeton, et al., Prosser and Keeton on The Law of Torts Sec. 121, at 898 (5th ed. 1984) (cases requiring an act after process has issued probably stand only for the narrower proposition that there must be an overt act and that bad purpose alone is insufficient). This results in an overlap between malicious prosecution and abuse of process: a defendant who explicitly threatened to file a baseless lawsuit solely for the purpose of forcing the plaintiff's action in an unrelated matter, and then did commence suit, could be held liable for either tort. 5 In such a case, the otherwise normal procedure of filing a lawsuit is transformed into an act of abuse by the coincidence of the threat. 6 29 Recognizing these two approaches puts the confusion below into perspective, but we need not dwell on their relative merits and applicability here because not even the broader view provides Simon with a basis for recovery. Simon's claim is premised on the Navons' amendment of the New York litigation to include him as a defendant. Even if Maine law, which applies to this diversity case, would recognize an abuse of process claim based on the instigation of a lawsuit, 7 Simon can prevail only if he proves the two requisite elements of the cause of action: ulterior motive and an act of abuse. See Nadeau, 395 A.2d at 116; Saliem, 132 Me. at 405, 172 A. 4. 30 Filing of a lawsuit is a regular use of process, and therefore may not on its own fulfill the requirement of an abusive act, even if the decision to sue was influenced by a wrongful motive, purpose or intent. Saliem, 132 Me. at 405-06, 172 A. 4; see also, e.g., Vahlsing v. Commercial Union Ins. Co., 928 F.2d 486, 490 (1st Cir.1991) (applying Texas law); Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d 377, 379 (Tex.Ct.App.1989); Grell v. Poulsen, 389 N.W.2d 661, 663-64 (Iowa 1986). And, although wrongful motive in the context of an abuse of process claim may be inferred from an improper act, the reverse is not true. Saliem, 132 Me. at 405, 172 A. 4; Sage Int'l, Ltd. v. Cadillac Gage Co., 556 F.Supp. 381, 389 (E.D.Mich.1982) (citing Prosser ). It therefore may not be presumed that the Navons filed the New York lawsuit solely to achieve a collateral objective based on evidence of motive alone. Simon needed to produce evidence independent of motive to prove that an improper act occurred in the Navons' pursuit of the litigation. 31 Simon has failed to offer such evidence. As an initial matter, it is not seriously disputed that the allegations in the complaint, which sought to state a cause of action for malicious prosecution, are inadequate to make out an abuse of process claim. The complaint alleges only that the defendants filed a lawsuit maliciously and probable cause for said lawsuit was lacking. Lack of probable cause is an element of a malicious prosecution claim, but is not a prerequisite for recovery for abuse of process. 32 In his brief, Simon supports the abuse of process claim by pointing to trial evidence of the deteriorating business relationship with the Navons and testimony indicating that the Navons routinely used litigation in business disputes. Simon highlights the amendment of the bank suit and the request for $30 million in damages and injunctive relief. He further claims that activities took place in New York causing the Plaintiff to expend $60,000 in his own funds to defend himself from a baseless lawsuit. 33 Although Simon suggests that the demand for high damages and the imposition of defense costs were abusive, there is nothing per se irregular in a plaintiff's filing a complaint that seeks high--even unrealistic--damages, 8 or in causing a litigation opponent to spend money in defense. Indeed, at one point during colloquy with the court, Simon's counsel acknowledged that the bringing of a $30 million lawsuit is not in itself an abuse of process, and argued that what was significant was the evidence of motive. 34 But, as we have seen, a showing of bad motive in connection with regular process is not enough. See supra at 16. To satisfy his burden, Simon needed to show a specific link between the New York lawsuit with an impermissible, collateral purpose of the Navons. This requirement could have been satisfied, for example, with evidence of a threat made explicitly to Simon or a disclosure confided to a third party that the Navons planned to file suit solely to hurt Simon's credit rating. See Sage Int'l, 556 F.Supp. at 388-90 (Plaintiff must allege that defendant committed a specific act which was directed at the collateral, ulterior objective.... In sum, there must be some basis [for finding] ... that the improper act was the means to further the improper purpose.) 9 35 We think it fairly evident that Simon did not present such evidence because it does not exist, and that the claim he originally brought--malicious prosecution--was better suited to the facts. His problem, as the district court recognized, was that a claim for malicious prosecution would remain premature as a matter of law until the New York lawsuit ended. Revising the claim into one for abuse process, however, involved something like trying to fit the proverbial square peg into a round hole. The facts and the law simply were incompatible. 10 36 In the malicious prosecution context, the requirements of lack of probable cause and favorable termination of the litigation ensure that a defendant is not found liable simply for having a bad motive; these elements support a finding that the lawsuit was baseless. Similarly, proof of a specific act in an abuse of process setting provides concrete assurance that a process actually has been abused, and that liability will not be based on the badly motivated use of procedures that perhaps were burdensome but not improper--a basis that would indeed dramatically lower the threshold of viable abuse of process litigation. See Westmac, Inc. v. Smith, 797 F.2d 313, 321 (6th Cir.1986) (Merritt, J., dissenting) (proof of specific conduct limits the dangers of inquiry into ... subjective purpose). 37 Significantly, the need to prove an act also distinguishes a claim for abuse of process in initiating litigation from a premature claim for malicious prosecution; if the factfinder were permitted to infer abuse, a plaintiff able to show bad motive often would be able to offer a convincing argument that the challenged litigation was brought for an improper purpose connected to the bad feelings. This is, in essence, what Simon sought to do. Such an approach, however, renders the malicious prosecution tort irrelevant. 38 This is not to say that a plaintiff can litigate with impunity, so long as he does so without explicit threats concerning collateral matters. Rule 11 of the Federal Rules of Civil Procedure authorizes judges to sanction parties or attorneys who file pleadings, motions or other papers for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, a determination left to the considered judgment of the court. Fed.R.Civ.P. 11(b), (c). Federal courts have inherent power to sanction parties and attorneys for abuse of the litigation process, even in diversity cases, Chambers v. NASCO, Inc., 501 U.S. 32, 44-45, 111 S.Ct. 2123, 2132-2138, 115 L.Ed.2d 27 (1991), and trial courts in Maine likewise have such authority, Chiappetta v. LeBlond, 544 A.2d 759, 760 (Me.1988). Tort recovery, however, is limited to those instances in which plaintiffs are able to prove the elements of the abuse of process cause of action. 39 Because Simon presented no evidence of an act in the use of process other than such as would be proper in the regular prosecution of the charge, Saliem, 132 Me. at 405, 172 A. 4, the jury's verdict on that count must be reversed.