Court Opinion

ID: 4697459
Source: CourtListenerOpinion
Date Created: 2021-06-22 14:18:58.44125+00
Date Added: 2024-06-11T08:05:46.008679
License: Public Domain

2021 WI 66

                  SUPREME COURT         OF     WISCONSIN
CASE NO.:              2019AP1918

COMPLETE TITLE:        Cheyne Monroe,
                                 Plaintiff-Appellant,
                            v.
                       Chad Chase,
                                 Defendant-Respondent.

                          ON CERTIFICATION FROM THE COURT OF APPEALS

OPINION FILED:         June 22, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:         March 3, 2021

SOURCE OF APPEAL:
   COURT:              Circuit
   COUNTY:             Dane
   JUDGE:              Valerie Bailey-Rihn

JUSTICES:
KAROFSKY, J., delivered the majority opinion for a unanimous
Court.
NOT PARTICIPATING:

ATTORNEYS:

      For    the     plaintiff-appellant,    there   were   briefs    filed   by
Richard J. Auerbach and Auerbach & Porter, S.C., Middleton. There
was an oral argument by Richard J. Auerbach.

      For the defendant-respondent, there was a brief filed by
Christopher J. Dodge and Fuhrman & Dodge, S.C., Middleton. There
was an oral argument by Jeanne M. Armstrong.
                                                          2021 WI 66
                                                          NOTICE
                                            This opinion is subject to further
                                            editing and modification.   The final
                                            version will appear in the bound
                                            volume of the official reports.
No.    2019AP1918
(L.C. No.   2019CV790)

STATE OF WISCONSIN                      :              IN SUPREME COURT

Cheyne Monroe,

            Plaintiff-Appellant,
                                                                FILED
      v.                                                   JUN 22, 2021

Chad Chase,                                                    Sheila T. Reiff
                                                           Clerk of Supreme Court

            Defendant-Respondent.

KAROFSKY, J., delivered the majority opinion for a unanimous Court.

      APPEAL from an order of the Circuit Court for Dane County,

Valerie Bailey-Rihn, Judge.   Reversed and cause remanded.

      ¶1    JILL J. KAROFSKY, J.    This case is about the tort of

malicious prosecution.    Our focus is on the third element of a

malicious-prosecution action, the "favorable termination" element,

wherein a malicious-prosecution plaintiff must prove that the

prior proceeding was terminated in his or her favor.            Our task is

to decide whether Cheyne Monroe's complaint can survive a motion

to dismiss when her complaint relies upon Chad Chase's withdrawal
                                                                  No.    2019AP1918

of   the   prior   proceeding     to    satisfy    the   favorable-termination

element.1

      ¶2    The    circuit   court      dismissed    Monroe's    complaint     for

failure to state a claim, concluding that the complaint failed to

establish that the prior proceeding was terminated in her favor.2

Relying on Pronger v. O'Dell, 127 Wis. 2d 292, 379 N.W.2d 330 (Ct.

App. 1985), the circuit court ruled that when a party brings a

lawsuit and then withdraws it——prior to an adjudication of the

merits——that       withdrawal     can     never     satisfy     the     favorable-

termination element of a malicious-prosecution action.                   The court

of appeals certified the appeal to this court, pursuant to Wis.

Stat. § (Rule) 809.61, and posed the question as "whether the

malicious    prosecution        defendant's       [withdrawal]    of     a   prior

proceeding can ever satisfy the third element of a malicious

      1The term "favorable termination" describes the favorable
conclusion of a case, regardless of which party initiated that
termination or in what manner. The Restatement (Second) of Torts
§ 674 cmt. j (1977) describes four types of "termination":
(1) favorable adjudication; (2) withdrawal; (3) dismissal of
proceedings because of failure to prosecute; and (4) abandonment.
The facts in this case present us with the second type of
termination, a withdrawal. Therefore, we will refer to Chase's
unilateral, voluntary dismissal of the prior proceeding against
Monroe as a withdrawal. However, we will use the word "dismissal"
when discussing criminal cases, because that term is consistent
both with our cases and the Wisconsin statutes. See, e.g., Wis.
Stat. §§ 971.31(6)-(8), 971.315 (2019-20).        All subsequent
references to the Wisconsin Statutes are to the 2019-20 version
unless otherwise indicated.
      2The Honorable Valerie Bailey-Rihn of the Dane County Circuit
Court presided.

                                         2
                                                             No.    2019AP1918

prosecution claim——that the prior proceeding terminated in the

malicious prosecution plaintiff's favor."

     ¶3   We reverse the order of the circuit court because a

withdrawal   of   a   prior   proceeding   may   satisfy    the    favorable-

termination element of a malicious-prosecution action.               We also

adopt the approach of the Restatement (Second) of Torts § 674 cmt.

j (1977), which is consistent with our cases and focuses on the

circumstances of the termination to determine whether it was

favorable.    We remand this case to the circuit court to apply the

analysis set forth in this opinion.

             I.   FACTUAL BACKGROUND AND PROCEDURAL POSTURE

     ¶4   This case is the third of three lawsuits in which Monroe

and Chase are opposing parties.            The first lawsuit was their

divorce, which occurred in Minnesota in 2013.        As a result of that

divorce, the court issued a custody and placement order granting

primary placement of the parties' minor child to Chase and periods

of non-primary placement to Monroe.         In 2016, after Monroe filed

a motion to establish a regular placement schedule for herself
with the child, the court accepted a stipulation which set forth

an interim placement schedule and transferred jurisdiction of the

case to the Dane County Circuit Court.

     ¶5   Chase then filed the second lawsuit——a termination of

parental rights (TPR) action against Monroe——in the Dane County

Circuit Court, alleging abandonment.             In the second lawsuit,

Chase's allegation of abandonment was based on claims that Monroe

failed to have contact with their child in person or by telephone
calls or letters for approximately three years.            While the second
                                     3
                                                                  No.   2019AP1918

lawsuit was pending, the court in the first lawsuit stayed the

proceedings for approximately nine months.             During that nine-month

stay, as Monroe's complaint in the instant action alleges, she

incurred   legal   fees,    suffered       emotional     distress,      and    most

significantly, was unable to visit with her child.                 On March 28,

2017, Chase withdrew the second lawsuit.

     ¶6    In   March   2019,   Monroe     filed   the    third    lawsuit——the

instant malicious-prosecution action——against Chase, alleging that

Chase initiated the second lawsuit with malice and on false

grounds.    According      to   Monroe's     complaint,     Chase       made   the

abandonment allegation in the second lawsuit knowing it to be

false, because Chase was aware that Monroe had cared for their

child at home for roughly 17 months after the child's birth and

that Monroe and Chase had exercised equal placement for a period

of time after their separation.        Monroe's complaint further stated

that Chase's abandonment allegation contradicted both his sworn

affidavit and the existing stipulation of shared placement in the

first lawsuit.     Despite Monroe's requests and the guardian ad
litem's recommendation that Chase dismiss the second lawsuit, he

refused to do so until right before a court-scheduled hearing.3

     ¶7    In the instant case——the third lawsuit——Chase filed a

motion to dismiss, arguing that Monroe's complaint failed to

satisfy two of the six elements of malicious prosecution:                 (1) the

     3 The amount of time between Chase's withdrawal of his
complaint in the second lawsuit and the court-scheduled hearing is
absent from the record. Monroe's complaint in the instant case
alleges that the withdrawal took place "on the cusp of" that
hearing——that is to say, at the 11th hour.

                                       4
                                                                   No.    2019AP1918

termination of the prior proceeding in favor of the malicious-

prosecution plaintiff; and (2) injury or damage resulting to that

plaintiff from the prior proceeding.             After a hearing, the circuit

court granted Chase's motion, reasoning that a withdrawal that

prevents    a   court   from    "adjudicat[ing]        the    merits"    could   not

constitute      a   favorable      termination    of    the    preceding     case.4

Pronger, 127 Wis. 2d 292, 296 n.2.

      ¶8    Monroe appealed the circuit court's order.              The court of

appeals certified the appeal to this court, and we accepted

certification.

                             II.    STANDARD OF REVIEW

      ¶9    A motion to dismiss tests the legal sufficiency of the

complaint.      Serv. Emps. Int'l Union, Loc. 1 v. Vos, 2020 WI 67,

¶26, 393 Wis. 2d 38, 946 N.W.2d 35.           For purposes of this court's

review, we treat all allegations in the complaint as true.                       Id.

We then determine whether the facts alleged in the complaint could

state a viable cause of action, a legal question we review de novo.

Id.
                                    III. ANALYSIS

      ¶10   The     narrow   question    presented      to    us   is    whether   a

withdrawal can satisfy the favorable-termination element of a

malicious-prosecution action.           We begin our analysis with a brief

overview of the tort of malicious prosecution and survey the

      4After ruling that Monroe's pleadings were insufficient with
respect to the favorable-termination element, the circuit court
stated that, had that element been met, the court would have denied
Chase's motion to dismiss with respect to the damages element.

                                        5
                                                                  No.   2019AP1918

relevant Wisconsin cases that address the disputed element.                    We

then adopt the approach of the Restatement (Second) of Torts § 674

cmt. j, which is consistent with our cases.              Last, we remand the

case to the circuit court to apply the analysis set forth in this

opinion.

                      A. The Tort of Malicious Prosecution

       ¶11   A malicious-prosecution plaintiff must prove each of the

following six elements:

       1. There must        have been a prior institution or
          continuation      of judicial proceedings against the
          plaintiff;

       2. Such former proceedings must have been by, or at the
          instance of the defendant;

       3. The former proceedings must have terminated in favor
          of the plaintiff;

       4. There must have been malice in instituting the former
          proceedings;

       5. There must have been want of probable cause for the
          institution of the former proceedings; and

       6. There must have been injury or damage resulting to
          the plaintiff from the former proceedings.
Elmer v. Chicago & N.W. Ry. Co., 257 Wis. 228, 231, 43 N.W.2d 244

(1950).      It is only the third——the favorable-termination element—

—that is at issue here.       We are to determine whether the withdrawal

of the prior proceeding can satisfy that element.                 To do so, we

must   first      analyze   and   then   clarify    Wisconsin   law     regarding

favorable terminations.

       ¶12   We     begin   our    analysis    by     examining     Wisconsin's
foundational favorable-termination case, Lechner v. Ebenreiter,

                                         6
                                                                        No.     2019AP1918

235 Wis. 244, 292 N.W. 913 (1940).                   In that case, the district

attorney moved to dismiss larceny charges against Lechner, who

agreed to turn over the disputed property to a third party.                             Id.

at 253.          Later, when Lechner sued the district attorney for

malicious        prosecution,       the    circuit    court     determined       that    a

dismissal in a criminal case could serve as a favorable termination

in   a       malicious-prosecution        action,    except     when    the     original

proceeding        had   been   terminated:          (1) "without       regard    to     its

merits . . . by         agreement     or    settlement     of    the    parties";       or

(2) "solely by the procurement of the accused as a matter of favor,

or as a result of some act, trick, or device preventing action and

consideration by the court."5              Id. at 252 (quoted source omitted).

The basis for this rule is that a termination resulting from a

settlement        or    agreement    between     parties      signifies       that    the

malicious-prosecution plaintiff made an "admission that there was

probable cause" to initiate the action that he or she cannot later

retract.        Id.

       In addition to contesting whether a withdrawal can be a
         5

favorable termination, Chase also contends that his withdrawal
constitutes an "act . . . preventing action and consideration by
the   court."     Lechner   v.  Ebenreiter,   235 Wis. 244,   252,
292 N.W. 913 (1940). This argument ignores the fact that, like
the exception for terminations obtained "as a matter of favor,"
the exception for terminations "as a result of some act, trick, or
device" is likewise applicable where such terminations are
obtained "solely by the procurement of the accused." Id. This
exception would be applicable in the instant case if Monroe had
obtained the withdrawal through an "act, trick, or device," but it
is unavailable here, where the withdrawal was obtained by Chase,
the complainant in the prior proceeding.

                                             7
                                                                         No.     2019AP1918

       ¶13    In Lechner, we concluded that Lechner's agreement to

turn   over    the    disputed        property     did    not    bar   his     malicious-

prosecution action because the agreement was solely an admission

that he had no right to possess the property, rather than an

admission     to     the   crime      of    larceny.       Id.    at 254-55.          Said

differently, even though Lechner turned over the property, he never

conceded that the prosecutor had probable cause to charge him in

the first place.           As a result, he was not barred from filing a

malicious-prosecution action against the district attorney.

       ¶14    We were presented with a similar issue in Bristol v.

Eckhardt, 254 Wis. 297, 299, 36 N.W.2d 56 (1949), in which Bristol,

who had defaulted on a tractor loan, moved that tractor to the

state of Oregon in order to avoid its repossession.                          The district

attorney dismissed the complaint at the request of Bristol's

attorney, so that upon Bristol's release from custody he might

refinance the tractor and settle with the bank.                               Id. at 300.

Consistent with Lechner, we held that the termination of the

proceedings against Bristol was not favorable to him for two
reasons.       First,      the   dismissal        was    obtained      "at    [Bristol's]

procurement."        Id. at 301.       Second, the circumstances demonstrated

that the district attorney's dismissal was based not on a lack of

probable cause for initiating the proceedings, but on his desire

to   avoid    the    expense     of    extraditing        Bristol      from    Oregon   to

Wisconsin.      Id. at 301-02.             The district attorney still believed

the criminal charge against Bristol to be "sustainable."                          Id.

       ¶15    The following year, we decided Elmer which, like Lechner
and Bristol, was a criminal case.                 In Elmer, 257 Wis. at 233-34,
                                              8
                                                                    No.   2019AP1918

the district attorney filed a complaint against Elmer for stealing

railroad rails and later dismissed the charges due to insufficient

evidence.     Elmer then sued the district attorney for malicious

prosecution.     Id. at 231-32.       In Elmer, we reiterated the Lechner

rule:   "The discharge by an examining magistrate, or a [dismissal]

by the district attorney except under circumstances . . . relating

to compromises[], is a sufficient termination of the action to

support an action for malicious prosecution."                Id. at 234 (quoted

source omitted).     We remanded the case for a fact-finder to assess

the   circumstances      of   the   dismissal    to   determine      whether    the

district attorney's dismissal was a favorable termination.                    Id.

      ¶16    Later, in Thompson v. Beecham, 72 Wis. 2d 356, 241 N.W.2d

163 (1976), we were presented with another malicious-prosecution

action that ended in a compromise and                 settlement.         Applying

Lechner, we reiterated that "[a] voluntary compromise . . . is not

a favorable termination" because "[e]ach party gave up a claim,

and each party received a benefit."             Id. at 360-61.

      ¶17    The court of appeals subsequently applied the Lechner
rule in Tower Special Facilities, Inc. v. Investment Club, Inc.,

104 Wis. 2d 221, 228, 311 N.W.2d 225 (Ct. App. 1981), in which the

parties     terminated    the   prior   proceeding      by    entering     into     a

stipulation    for   dismissal      with    prejudice   and     without     costs.

Because the case was dismissed pursuant to the stipulation, the

court of appeals held that the proceeding was not terminated in

favor of the malicious-prosecution plaintiff.                 Id.     Reiterating

our holding in Lechner, the court of appeals concluded that the
stipulated dismissal could not satisfy the favorable-termination
                                        9
                                                                  No.    2019AP1918

element because the stipulation constituted "an admission that

there was probable cause that the plaintiff [could not] afterwards

retract . . . and try the question, which by settling he waived."

Id. (quoted source omitted).

     ¶18   After Tower Special Facilities, the court of appeals

analyzed    the     favorable-termination        element    in    another     case

involving a withdrawal, Pronger, 127 Wis. 2d 292.                 In that case,

Pronger filed a sexual-harassment suit in state court, and the

defendant, O'Dell, counterclaimed for malicious prosecution.                   Id.

at 294.    Pronger then withdrew her complaint in order to proceed

with an identical action in federal court.                 Id.     The court of

appeals    held     that   O'Dell   prematurely      filed       the    malicious-

prosecution action since he instituted it as a counterclaim, before

the sexual-harassment action had terminated in any way——favorable

or unfavorable.      Id. at 296.       In reaching its decision, the court

of appeals did not analyze the circumstances surrounding Pronger's

withdrawal.       In a footnote, the court stated, "[i]n addition, we

note that a [withdrawal] that does not adjudicate the merits of
the claim does not constitute a favorable judicial termination of

an action sufficient to support a claim for malicious prosecution."

Id. at 296 n.2.

     ¶19   In the present case, the circuit court relied on the

Pronger footnote, deciding that Pronger mandated the dismissal of

Monroe's complaint.        The circuit court read Pronger as barring any

malicious-prosecution         action     where    the      underlying       action

terminated in a withdrawal that did not "adjudicate the merits of
the claim." Id. The circuit court reached this conclusion despite
                                        10
                                                              No.   2019AP1918

our   consistent    line   of   cases    permitting,   with    only   a   few

explicitly-delineated exceptions, a malicious-prosecution action

based on the withdrawal of the prior proceeding.         Read in context,

the Pronger footnote does not mandate a result that is inconsistent

with our cases.     The Pronger court's holding was narrow and only

addressed situations in which the previous case was still pending—

—not terminated.

          B. Adoption of the Restatement (Second) of Torts Approach

      ¶20    Having surveyed the relevant cases, we next look to the

Restatement (Second) of Torts § 674 cmt. j, which is consistent

with our cases, and which we now adopt.         Several courts in other

jurisdictions have also adopted the Restatement's approach.6

      ¶21    The Restatement (Second) of Torts § 674 cmt. j, provides

as follows:

      Termination in favor of the person against whom civil
      proceedings are brought.     Civil proceedings may be
      terminated in favor of the person against whom they are
      brought . . . by (1) the favorable adjudication of the
      claim by a competent tribunal, or (2) the withdrawal of
      the proceedings by the person bringing them, or (3) the
      dismissal of the proceedings because of his [or her]
      failure to prosecute them. . . . Whether a withdrawal or
      abandonment constitutes a final termination of the case
      in favor of the person against whom the proceedings are
      brought, and whether the withdrawal is evidence of a
      lack of probable cause for their initiation, depends

      6See, e.g., Nelson v. Miller, 660 P.2d 1361, 1363-65 (Kan.
1983); Frey v. Stoneman, 722 P.2d 274, 279 n.7 (Ariz. 1986);
Barrett Mobile Home Transp., Inc. v. McGugin, 530 So.2d 730, 735-
36 (Ala. 1988); Christian v. Lapidus, 833 S.W.2d 71, 74 (Tenn.
1992); Cult Awareness Network v. Church of Scientology, Intern.,
685 N.E.2d 1347, 1355 (Ill. 1997).

                                    11
                                                                No.   2019AP1918

       upon the circumstances under which the proceedings are
       withdrawn.[7]
       ¶22      According to both our cases and the Restatement (Second)

of Torts § 674 cmt. j, whether a withdrawal constitutes a favorable

termination depends upon the circumstances of the withdrawal.                In

this case, it is undisputed that Chase's withdrawal was a final

termination of the second lawsuit.               Whether it was favorable to

Monroe, however, depends upon the circumstances of the withdrawal.

       ¶23      Having adopted the Restatement (Second) of Torts § 674

cmt.       j,   we   next    address   Chase's   arguments   disfavoring    the

Restatement's approach.            Chase urges us to join the minority of

jurisdictions, reject the Restatement's approach, and adopt a

blanket rule that a withdrawal can never serve as a favorable

termination          underlying    a   malicious-prosecution    action.      He

maintains that a contrary holding would hinder free access to the

courts and have a "chilling effect" on plaintiffs who wish to

withdraw their actions when appropriate.             He raises the specter of

plaintiffs pushing on with litigation despite a lack of resources

or change of heart, for fear of being subject to a malicious-
prosecution action if they withdraw.             We are unpersuaded by these

arguments.

       ¶24      We    do    not   agree   with   Chase   that   adopting    the

Restatement's approach lowers the bar for malicious-prosecution

       A separate subsection of the Restatement (Second) of Torts,
       7

§ 672(1), enumerates a different set of elements to be proven by
a malicious-prosecution plaintiff when the underlying action is
criminal in nature. Because the prior proceeding before us is a
civil action, and neither party has argued that we adopt § 672(1),
we do not address that section here.

                                          12
                                                               No.   2019AP1918

actions.     The Restatement's approach balances free access to the

courts with an individual's right not to be haled into court

without    reason,    and    prevents    bona   fide   malicious-prosecution

defendants from escaping responsibility simply by withdrawing at

the last moment.

     ¶25    Further, the remaining five elements of a malicious-

prosecution action provide an additional safeguard against the

pursuit of baseless actions.            A successful malicious-prosecution

plaintiff must still satisfy, among others, the requirements that

the prior proceeding was brought with malice and without probable

cause for its initiation, i.e., the fourth and fifth elements of

a malicious-prosecution action.           If the prior proceeding is truly

valid but a party withdraws the claim due to a lack of funds,

change of heart, or some other innocuous reason, a malicious-

prosecution plaintiff will be likewise unable to satisfy those

elements.

                           C. Remand to the Circuit Court

     ¶26    Having adopted the Restatement's approach and concluded
that a withdrawal of a prior proceeding may satisfy the favorable-

termination element of a malicious-prosecution action, our inquiry

stops.     The record before us is devoid of any evidence as to why

Chase withdrew the second lawsuit.              Monroe's complaint alleges

that Chase falsely claimed in the second lawsuit that Monroe had

not contacted their child for approximately three years, while

admitting contact and communication between Monroe and the child

in an affidavit filed in the first lawsuit.            Whether or not Chase's
withdrawal     of    the    second   lawsuit     constitutes    a    favorable
                                        13
                                                                 No.     2019AP1918

termination remains a question for a fact-finder. For that reason,

we reverse the order of the circuit court and remand the case to

apply the analysis set forth in this opinion.

                                 IV.    CONCLUSION

      ¶27    We reverse the order of the circuit court because a

withdrawal    of   a   prior    proceeding     may   satisfy    the    favorable-

termination element of a malicious-prosecution action.                    We also

adopt the approach of the Restatement (Second) of Torts § 674 cmt.

j,   which   is    consistent    with    our   cases   and     focuses    on   the

circumstances of the termination to determine whether it was

favorable.    We remand this case to the circuit court to apply the

analysis set forth in this opinion.

      By the Court.——The order of the circuit court is reversed and

the cause is remanded.

                                        14
    No.   2019AP1918

1