Court Opinion

ID: 9718744
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:32:45.214786+00
Date Added: 2024-06-11T18:24:02.205900
License: Public Domain

W.H. “Dub” Arnold, Chief Justice. Appellant, Walsticappeals e. circuit-court judgment, based upon a jury verdict, awarding appellee, Carolyn Binns, $750,000.00 in compensatory damages and $2,000,000.00 in punitive damages relating to Binns’s abuse-of-process and malicious-prosecution claims against Wal-Mart. On appeal, Wal-Mart contends that the circuit court erred by failing to direct verdicts on both claims because Binns failed to prove (1) the essential elements of the tort of abuse of process, and (2) the elements of the tort of malicious prosecution, namely, lack of probable cause and malice. Additionally, Wal-Mart argues that Binns was erroneously awarded punitive damages based upon a lesser degree of scienter than was required for the underlying tort. Although the appeal was originally filed in the Court of Appeals, we granted appellant’s request for supreme-court jurisdiction and accepted the case to consider a significant issue needing clarification or development of the law. Our jurisdiction is authorized pursuant to Ark. Sup. Ct. R. 1-2(b)(5) (1999). After considering the issues on appeal, we find merit in appellant’s arguments. Accordingly, we hold that the circuit court erred by failing to direct verdicts on the abuse-of-process and malicious-prosecution claims, and we reverse the award of punitive damages. Background Carolyn Binns was an employee in the Monticello, Arkansas, Wal-Mart lay-away department. David Craig and Tim Langley, two of Wal-Mart’s managers, suspected Binns of theft through falsification of computer cash-register entries. In support of management’s belief that Binns had taken money from the registers, Wal-Mart points to the following facts: (1) on numerous occasions Binns canceled the final payment on a lay-away account shortly after a customer paid off the account and received the merchandise; (2) the register cash reports failed to show an “overage” when Binns performed this function; (3) Craig and Langley believed that the cash reports should have shown an overage in that situation; and (4) no other Wal-Mart employee performed the function Binns performed. Following an internal investigation and questioning of Binns, Langley called the Monticello Police Department and reported the results of Wal-Mart’s investigation. Detective Charles Cater continued the investigation at the Wal-Mart store and, according to Langley, reviewed the entire file compiled by management, including detail tapes, cash reports, Langley’s notes, and payroll archives, that reflected the cancellation of final lay-away payments and the fact that the cash drawer was not “over” on the days on which these layaway payments were canceled. Detective Cater copied some portion of the file and sought an arrest warrant for Binns. Following a probable-cause hearing, a warrant was issued for Binns’s arrest. Flowever, approximately one year later, the prosecuting attorney nolle prossed the charges against Binns, apparently based upon insufficient evidence. Subsequently, Binns filed an action against WalMart for negligent prosecution, abuse of process, and malicious prosecution. Although the circuit court granted Wal-Mart summary judgment on the negligent-prosecution claim, a jury ultimately returned a verdict in Binns’s favor on the remaining claims. Appellee’s principal witness at trial was Kevin Parker, a former Wal-Mart assistant manager at the Monticello store while David Craig was manager. Parker testified as an expert witness regarding procedures Wal-Mart employees should follow in a theft investigation. He also tendered his opinion as to what cash reports and computer records would reveal when a final lay-away account payment was made, canceled, and money remained in the cash drawer. Significantly, Parker acknowledged that management believed they had probable cause to bring charges against Carolyn Binns. Moreover, he testified that, based upon his review of the evidence and his personal knowledge of Craig, there was no ill will, spite, hatred, or spirit of revenge at work. Wal-Mart timely moved for directed verdicts on both the abuse-of-process and malicious-prosecution counts. In response, Binns argued that based upon Kevin Parker’s testimony, probable cause did not exist for her arrest and Craig and Langley were incompetent and negligent in referring her to authorities. She also suggested that Wal-Mart’s motivation was that “[t]hey didn’t know the computer system, . . . They didn’t know how to run it.” In fact, she described their conduct as a “mistake” because they did not ask her any questions about how the computer ran and mistakenly concluded that she took money. Notably, Binns also admitted that she had no indication that either Craig or Langley were motivated by revenge, ill-will, spite, or hatred. Binns also averred that Wal-Mart used the criminal prosecution in an effort to extort money from her. However, her own recollection belies that claim. She testified that Langley told her, “No matter what you say we’re going to prosecute; you’re going to pay this money back.” In light of this statement, Binns argues that the evidence was sufficient for the jury to infer malice, a required element for the tort of malicious prosecution. The circuit court agreed and denied appellant’s directed-verdict motions. From the verdict and damages awarded in favor of appellee, comes the instant appeal. I. Abuse of process  Wal-Mart’s first point on appeal challenges the circuit court’s denial of its directed-verdict motion on Binns’s abuse-of-process claim. In reviewing the trial court’s denial of appellant’s directed-verdict motion, we must view all reasonable inferences in the light most favorable to Binns and affirm the jury’s verdict if there is substantial evidence to support it. Substantial evidence is that which is of sufficient force and character that it will compel a conclusion one way or another, forcing or inducing the mind to pass beyond suspicion or conjecture. Garrett v. Brown, 319 Ark. 662, 665, 893 S.W.2d 784, 786 (1995). Here, we conclude that the jury lacked sufficient evidence to support the verdict, and we reverse.  In order to prove the tort of abuse of process, a plaintiff must establish the following elements: (1) a legal procedure set in motion in proper form, even with probable cause, and even with ultimate success, but (2) perverted to accomplish an ulterior purpose for which it was not designed, and (3) a willful act in the use of process not proper in the regular conduct of the proceeding. Union Nat. Bank of Little Rock v. Kutait, 312 Ark. 14, 16, 846 S.W.2d 652, 654 (1993). The key to an abuse-of-process claim is improper use of process after issuance, even when issuance has been properly obtained. Id. As distinguished from malicious prosecution, abuse of process “is somewhat in the nature of extortion or coercion.” Id. In the instant case, Binns failed to introduce sufficient evidence to support her abuse-of-process claim. First, she produced no evidence that Wal-Mart committed an abusive or coercive act after the arrest warrant was issued. Second, she introduced no evidence that the process was initiated to accomplish an ulterior purpose for which it was not designed. In fact, Binns’s own testimony failed to support her theory that Wal-Mart threatened criminal prosecution in an effort to extort money from her. According to Binns’s, Langley told her, “No matter what you say we’re going to prosecute; you’re going to pay this money back.” The tenor of Langley’s alleged statement is that Binns would not escape prosecution regardless of her promise to pay. Likewise, appellee’s suggestion that Langley attempted to have her criminal charges reinstated after they were nolle prossed is not sufficiently borne out by the record. Langley testified only that he may have made one phone call to the prosecutor after he learned that the criminal charges were nolle prossed.  In sum, we cannot say that substantial evidence supported the jury’s findings that Wal-Mart’s actions were undertaken to accomplish an ulterior purpose for which the process was not designed. Nor can we find substantial evidence in the record that Wal-Mart acted wilfully in the use of process after issuance. Viewing all reasonable inferences in the light most favorable to appellee, we reverse the circuit court’s denial of appellant’s direct-verdict motion, and we reverse the jury’s verdict. II. Malicious prosecution  Wal-Mart’s second point on appeal assigns as error the circuit court’s denial of its directed-verdict motion with respect to Binns’s malicious-prosecution claim. Again, when we review the trial court’s denial of appellant’s directed-verdict motion, we must view all reasonable inferences in the light most favorable to Binns and affirm the jury’s verdict if there is substantial evidence to support it. Garrett, 319 Ark. at 665, 893 S.W.2d at 786. We have held that the essential elements of the tort of malicious prosecution are (1) lack of probable cause, and (2) malice. Cordes v. Outdoor Living Center, Inc., 301 Ark. 26, 31, 781 S.W.2d 31, 33 (1989). Significantly, the two elements are not interchangeable, although malice may be inferred from lack of probable cause. Id. Probable cause for prosecution must be based upon the “existence of facts or credible information that would induce the person of ordinary caution to believe the accused person to be guilty of the crime for which he is charged.” Id.  Generally, ordinary caution is a standard of reasonableness and an issue for the jury. Id. However, when the facts relied upon to establish probable cause are undisputed, the question of whether probable cause exists is one for the courts. Keebey v. Stifft, 145 Ark. 8, 21, 224 S.W. 396, 400 (1920). If Wal-Mart, as the defendant in this malicious-prosecution case, “believed and had grounds for entertaining ‘honest and strong suspicion’ that (Binns] was guilty” of a crime, it was entitled to a directed verdict. See id. Here, Wal-Mart claims that its employees, Craig and Langley, believed and had grounds for an honest and strong suspicion that Binns was taking money from the cash registers because (1) she canceled customers’ final lay-away payments shortly after they left the store with merchandise, and (2) cash reports revealed no corresponding cash overage. Notably, Binns introduced no evidence to contradict Wal-Mart’s argument that Craig and Langley believed that the cash report should have shown an overage under these circumstances. In fact, she suggested that they made a “mistake.” Viewed in the light most favorable to Binns, we cannot say that the jury had substantial evidence to find that Wal-Mart lacked probable cause. To maintain a malicious-prosecution action, Binns must also prove the existence of malice. See Kable v. Carey, 135 Ark. 137, 142, 204 S.W. 748, 750 (1918). In support of the malice element, Binns relies upon the expert testimony of Kevin Parker, who reported that the Wal-Mart computer system would not have shown an overage when she canceled the last payment, even if she did not remove from the drawer the amount of the canceled payment. However, Parker also testified that, in his opinion, Craig and Langley believed that they had probable cause to conclude that Binns was taking money from the register. Moreover, based upon his evidentiary review and personal knowledge, Parker admitted that he did not believe that Craig and Langley’s actions in initiating the criminal proceedings arose from ill will, spite, or a spirit of revenge. Similarly, Binns’s own testimony confirms her belief that Wal-Mart management acted out of incompetence.  In the absence of any evidence of malice, the malicious-prosecution claim dissolves. Moreover, we expressly reject Binns’s argument that malice may be presumed from appellant’s negligence. Viewing all reasonable inferences in the light most favorable to Binns, we hold that the jury lacked substantial evidence to satisfy the elements of malicious prosecution. Accordingly, we conclude that the trial court erred by failing to direct a verdict in Wal-Mart’s favor, and we reverse the jury’s verdict. III. Punitive damages Wal-Mart’s final point on appeal is that the circuit court erred by permitting punitive damages to be awarded based upon a lesser degree oí scienter than was required for the underlying tort. The jury returned a general verdict for damages, awarding Binns $750,000.00 in compensatory damages and $2,000,000.00 in punitive damages, attributable to both the abuse-of-process and malicious-prosecution claims. Based upon AMI 2217, the circuit court instructed the jury that “in order to recover punitive damages from [Wal-Mart], Carolyn Binns has the burden of proving that the defendant intentionally pursued a course of conduct for the purpose of causing damage.” (Emphasis added.) In selecting AMI 2217, the court declined Wal-Mart’s proffered instruction requiring Binns to prove ' that Wal-Mart “intentionally and maliciously pursued a course of conduct for the purposes of causing damages to Carolyn Binns, carried out with the state of mind characterized by hatred, ill will, or a spirit of revenge.”  Appellant notes that the use of AMI 2217 under the instant facts creates an inconsistent standard for awarding punitive damages when the underlying tort involves malice. We agree. For example, the underlying claim of malicious prosecution (which could have formed the sole basis for the challenged punitive-damages award), requires that the plaintiff prove intent and a spirit of ill will, hatred, or revenge. However, the jury instruction submitted inconsistendy permits an award based on a lesser degree of scienter, merely proof that the defendant intentionally pursued a course of conduct for the purpose of causing damage. In hght of the nature of appellee’s claim, we conclude that the circuit court erred by submitting AMI 2217 to the jury because the instruction is inadequate for a tort requiring proof of malice. We reverse the circuit court’s judgment and award of punitive damages. Special Associate Justices W.H. “SONNY” DILLAHUNTY and JONANN CONIGLIO FLEISCHAUER, join. Glaze and Brown, JJ., dissent. Corbin, Imber, and Smith, JJ., not participating.