Court Opinion

ID: 2963768
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:14:56.366074+00
Date Added: 2024-06-11T11:42:46.091160
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

          No. 94-1601
                                   FRANK SIMON, II,

                                 Plaintiff, Appellee,

                                          v.

                                    GERSHON NAVON,

                                Defendant, Appellant.

                                 ____________________

          No. 94-1602
                                   FRANK SIMON, II,

                                 Plaintiff, Appellee,

                                          v.

                                   JONATHAN NAVON,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                              FOR THE DISTRICT OF MAINE

                     [Hon. Morton A. Brody, U.S. District Judge]
                                            ___________________
                                 ____________________

                                        Before

                                Selya, Circuit Judge,
                                       _____________
                            Coffin, Senior Circuit Judge,
                                    ____________________
                              and Boudin, Circuit Judge.
                                          _____________
                                 ____________________

               James D. Poliquin for appellants.
               _________________
               C. Donald Briggs, III, with whom Joseph M. Cloutier was on
               _____________________            __________________
          brief for appellee.

                                 ____________________

                                  November 27, 1995
                                 ____________________

               COFFIN, Senior Circuit  Judge.   This case arises  out of  a
                       _____________________

          failed business relationship between  the plaintiff, Frank Simon,

          and  defendants, Gershon and Jonathan Navon,  the sole owners and

          officers  in Maine Coast Trading  Company, a fish brokerage firm.

          A jury found the Navons liable for breach of contract, defamation

          and  abuse  of  process,  and awarded  Simon  approximately  $3.3

          million in compensatory and punitive damages.  The district court

          granted defendants' motion  for new trial unless Simon  agreed to

          remit $1.2 million,  which he  did.  The  defendants now  appeal,

          claiming a host of errors.  After a careful review  of the record

          and  caselaw,  we affirm  the  court's  rulings on  the  contract

          claims, but reverse the  judgment on abuse of process  and remand

          for a new trial on defamation.

                                    I. Background
                                       __________

               At  this juncture, we shall  provide only a  brief sketch of

          the    facts  underlying  the  case,  elaborating  in  subsequent

          sections  of the opinion as necessary to inform our discussion of

          specific  issues.   Maine  Coast  Trading  Company ("Maine  Coast

          Trading"  or "MCTC")  was formed in  November 1990  after Gershon

          Navon approached Simon  about creating a company  to broker fish.

          Navon provided most of the capital  to form the business, and  he

          originally  received 60 percent of  the company's equity.  Simon,

          who had  considerable experience in the  fish brokerage business,

          was  president  of the  company and  ran  its business  office in

          Wiscasset,  Maine.  A smaller  office at Gershon  Navon's home in

                                         -2-

          Connecticut primarily handled checking account and line of credit

          matters.  Jonathan Navon, Gershon's son, was treasurer.

               Maine Coast Trading  entered into two significant  brokerage

          agreements, one with  a company  in which Gershon  Navon was  the

          sole shareholder (Mariculture Products, Ltd., "Mariculture"), and

          one  with  a  company  in  which  Simon  had  a  lesser  interest

          (Aquacorporacion   Internacional    Sociedad   Anonima,   "ACI").

          Although Maine Coast Trading apparently operated smoothly through

          1991, the Navons and Simon early in 1992 were discussing  ways to

          wind down the  company's affairs.  On March 24, 1992, the parties

          signed a letter  agreement that addressed issues  that had arisen

          between  them  in  the  preceding months,  outlining  the  future

          handling of MCTC business.

               The  agreement did  not  resolve matters,  however, and  the

          parties' relationship grew even  more acrimonious.  Disagreements

          arose over which vendors should be paid what amounts and how much

          money was available  in the company's account at  Israel Discount

          Bank  in New  York.  The  ensuing events, most  of which occurred

          between April  and June  of 1992  but whose  sequence is  in some

          cases disputed, included:

               --Simon began holding Maine Coast Trading's receivables
               in  Wiscasset,  contrary  to  the   letter  agreement's
               provision  that he  send those  funds "directly  to IDB
               with no delay";

               --Jonathan  Navon  issued  a  check in  the  amount  of
               $36,000 as accumulated salary  to himself, and a $9,000
               check  to Mariculture,  Gershon Navon's  other company,
               for  office rent and expenses.  He did not seek Simon's
               approval  for these  expenditures, as  required by  the
               letter agreement.  No  previous payments for such items
               ever had been made;

                                         -3-

               --Simon opened  a checking  account at  Camden National
               Bank  in Maine,  deposited  accumulated receivables  of
               $68,000, and  immediately wired the entire  sum to ACI,
               the company in which he had an interest.  Over the next
               few weeks, other  receivables collected  by Simon  were
               deposited  in this  account and  checks were  issued to
               various vendors;

               --Israel  Discount  Bank  froze  Maine  Coast Trading's
               account at Simon's request;

               --At a telephonic meeting of MCTC's board of directors,
               convened by an attorney  in Portland, Maine, the Navons
               voted to remove Simon  as president and elected Gershon
               to replace  him.   Simon initially participated  in the
               telephone call, but complained about lack of notice and
               hung up before the vote;

               --Several litigations were initiated: ACI filed a civil
               action against  Maine Coast  Trading in state  court in
               Maine;  an involuntary petition  for bankruptcy, signed
               by  Simon as  ACI's representative,  was filed  against
               Maine Coast  Trading; Maine Coast  Trading (through the
               Navons)  sued  Israel Discount  Bank  in  New York  for
               freezing  its  account,  and  later added  Simon  as  a
               defendant, increasing the  damages request from $87,000
               (the amount of funds in the account) to $30 million.

               Simon filed this lawsuit in October 1992, alleging breach of

          contract,  defamation,  negligent and  intentional  infliction of

          emotional  distress,  tortious  interference  with  contract  and

          malicious  prosecution.    The  district  court  granted  summary

          judgment for  defendants on the tortious  interference claim, and

          granted judgment  as a matter of law  on the claims for negligent

          and  intentional infliction  of distress.   At  the close  of all

          evidence,  the  court recharacterized  the  malicious prosecution

          claim  as a  claim for  abuse of  process.   The jury  found both

          Navons liable on each  of the three remaining claims -- breach of

          contract,  defamation and abuse of process -- and awarded a total

                                         -4-

          of $2.3  million in compensatory damages and  punitive damages of

          $1 million against Gershon and $36,000 against Jonathan.

               In acting on defendants' post-judgment motions, the district

          court  found the  $2.3 million  in compensatory  damages "clearly

          excessive  and against the weight of the evidence," and ordered a

          new trial if Simon failed to accept a remittitur of $1.2 million.

          He  agreed to  the  remittitur, and  this  appeal by  the  Navons

          followed.  They  claim entitlement to judgment or a  new trial on

          each  of the  substantive claims, as  well as  on damages.   They

          further argue that they are entitled to a new trial on all issues

          based  on a  series  of circumstances  that  infected the  jury's

          verdict with undue passion or prejudice.

               We  address  each of  these  issues in  turn,  after briefly

          considering the relevant standards of review.

                                II. Standard of Review
                                    __________________

               The district  court rejected  the Navons'  post-trial motion

          for judgment  as a matter of law because they failed to make that

          request at the close  of all evidence, thus forfeiting  the right

          to  such a determination.  See Keisling v. Ser-Jobs for Progress,
                                     ___ ________    ______________________

          Inc., 19 F.3d 755, 758-59 (1st Cir. 1994); Della Grotta  v. Rhode
          ____                                       ____________     _____

          Island, 781 F.2d 343, 349 (1st Cir. 1986); Fed. R. Civ. P. 50(b).
          ______

          Once  abandoned, a claim for judgment as  a matter of law may not

          be  revived  on  appeal except  upon  a  showing  of plain  error

          resulting  in a  manifest  miscarriage  of  justice.    Shell  v.
                                                                  _____

          Missouri  Pac. R.R.  Co.,  684 F.2d  537,  540 (8th  Cir.  1982);
          ________________________

                                         -5-

          Martinez  Moll v. Levitt  & Sons of  Puerto Rico, Inc.,  583 F.2d
          ______________    ____________________________________

          565, 570 (1st Cir. 1978).  

               The court  did reach  the merits of  defendants' alternative

          request for a new trial, which may be granted notwithstanding the

          failure  to make a  pre-deliberations request  for judgment  as a

          matter of  law.  See Wells  Real Estate v. Greater  Lowell Bd. of
                           ___ __________________    ______________________

          Realtors, 850 F.2d 803, 810 (1st Cir. 1988); Fed. R.  Civ. P. 59;
          ________

          9A  C.A. Wright  & A.  Miller, Federal  Practice and  Procedure  
                                         ________________________________

          2539,  at 362  (1995).   The  court  denied a  new  trial on  the

          substantive claims, but, as noted earlier, granted a new trial on

          damages contingent  on the remittitur.   Defendants now challenge

          the court's refusal to  further disturb the jury's verdict.   Our

          review, however,  is extremely circumscribed; we  may reverse the

          court's decision only  for an  abuse of discretion.   Sanchez  v.
                                                                _______

          Puerto Rico Oil Co., 37 F.3d 712, 717 (1st Cir. 1994).  With this
          ___________________

          limitation in mind, we turn to appellant's claims of error.

                   III. Malicious Prosecution and Abuse of Process
                        __________________________________________

               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

                                         -6-

          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

               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.

               We address only this  latter claim.  Preliminarily, however,

          we must determine whether,  unlike other grounds asserted  in the

                              
          ____________________

               1  We   note   that  some   jurisdictions   distinguish   in
          nomenclature between  claims  alleging malicious  instigation  of
          process  in criminal and civil  cases.  Where  the distinction is
          recognized,   "malicious   prosecution"   refers    to   criminal
          proceedings  and "malicious  use of  process" or  "wrongful civil
          proceedings" applies to civil cases.  See W. Page Keeton, et al.,
                                                ___
          Prosser  and Keeton on  The Law of  Torts   120, at  892 (5th ed.
          _________________________________________
          1984);  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, 130  (1967).  To  the extent
          there are  differences  between the  two  causes of  action,  see
                                                                        ___
          Restatement (2d) of Torts    653, 674 (1977), they are irrelevant
          _________________________
          to our discussion here. 

               2  It appears that that  action was stayed  because of Maine
          Coast  Trading's bankruptcy.  So far as we can ascertain, neither
          the  original complaint nor the amended complaint naming Simon is
          a part of the record in this case.

                                         -7-

          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:

               I think  it's a very,  very thin argument,  frankly, on
               abuse of process . . . . But I'm 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.

          Tr. at 835.  Counsel then promptly stated, "I object."

               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.

               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

                                         -8-

          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
          __________    _______

               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
                              
          ____________________

               3  Bayamon  Thom  McAn  and several  subsequent  cases,  see
                  ___________________                                   ___
          Keisling  v. Ser-Jobs for Progress,  Inc., 19 F.3d  755, 759 (1st
          ________     ____________________________
          Cir.  1994); Della Grotta v.  Rhode Island, 781  F.2d 343, 349-50
                       ____________     ____________
          (1st  Cir. 1986); Beaumont v. Morgan, 427 F.2d 667, 670 (1st Cir.
                            ________    ______
          1970), recognize  a limited exception  to the requirement  that a
          motion  for judgment  as a matter  of law  -- though  made at the
          close of plaintiff's case -- must  be renewed at the close of all
          the evidence.  The exception is permitted "in a  case combining .
          .  . judicial assurance concerning  preservation of rights at the
          time  of  motion and  . .  .  brief and  inconsequential evidence
          following the motion. . . ."  Bayamon Thom McAn, 409 F.2d at 972.
                                        _________________
          The instant case  seems to us an even more  modest departure from
          the  formal procedures for preserving  a claim for  judgment as a
          matter of law.

               4 Our decision in Martinez Moll  v. Levitt & Sons of  Puerto
                                 _____________     ________________________
          Rico, Inc., 583  F.2d 565,  568-70 (1st Cir.  1978), refusing  to
          __________
          consider  appellant's sufficiency  argument, is  not inconsistent
          with this  result.  In that  case, the appellant had  moved for a
          directed  verdict  on  other grounds  at  the  close  of all  the
          evidence,  but  had failed  to  question the  sufficiency  of the
          evidence.   Because the issue  had never been  raised until after
          the jury's verdict, we concluded  that there was "no basis .  . .
          for  treating the present case as one where there was substantial
          compliance with the  Rule."  Id. at 570.   We noted, in addition,
                                       ___
          that "the  court did  nothing that could  reasonably have  caused
          [defendant]  to believe that all had been done that was necessary

                                         -9-

          is  governed by a de novo standard  of review.  Gibson v. City of
                            __ ____                       ______    _______

          Cranston, 37 F.3d 731, 735 (1st Cir. 1994).  
          ________

               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").

               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.
                                 ___  ____  ___

                              
          ____________________

          to preserve  the  issue for  review."   Id.    In both  of  those
                                                  ___
          respects, this case is distinguishable.

                                         -10-

               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).
          ___ ______    ________________

               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   682,  at 475 (1977).
                          __________________________

          See W.  Page Keeton, et  al., Prosser  and Keeton on  The Law  of
          ___                           ___________________________________

          Torts   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

                                         -11-

          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

               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

                              
          ____________________

               5  Interestingly, the  Georgia  courts and  legislature have
          merged  the two torts  into a new  abusive litigation  tort.  See
                                                                        ___
          Yost v. Torok, 256 Ga. 92, 95-96, 344 S.E.2d 414,  417-18 (1986);
          ____    _____
          Block  v. Brown,  199  Ga. App.  127,  130, 404  S.E.2d  288, 291
          _____     _____
          (1991).

               6  When abuse of process  is based on  conduct subsequent to
          initiation of the lawsuit,  the requirement of an "act"  of abuse
          typically  would be satisfied  by showing  use of  the individual
          legal  process  in  an improper  manner.    See,  e.g., Board  of
                                                      ___   ____  _________
          Education  of Farmingdale  Union Free  Sch. Dist.  v. Farmingdale
          _________________________________________________     ___________
          Classroom  Teachers Ass'n,  38 N.Y.2d  397, 343  N.E.2d 278,  380
          _________________________
          N.Y.S.2d 635 (1975)  (subpoenas issued  for 87  teachers for  the
          same day, paralyzing normal operations of the schools); Saliem v.
                                                                  ______
          Glovsky  and  Fogg,  132 Me.  402,  172  A.  4 (1934)  (excessive
          __________________
          attachment).

                                         -12-

          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.
               ______

               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;
                                                ______

          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.  Poulson, 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; 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.

                              
          ____________________

               7 For purposes of the timing distinction drawn by the courts
          and  commentators, we  think  it evident  that  amendment of  the
          complaint against Israel Discount Bank to include a claim against
          Simon must be viewed as the initiation of process, rather than as
          a  subsequent act.  Process against Simon originated with the new
          complaint,  and  that is  logically  where  the  analysis of  any
          litigation-related tort claim by him must begin as well.  

                                         -13-

               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.

               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."

               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
                              
          ____________________

               8  To the  contrary, a  multi-million-dollar  damage request
          strikes  us as a  fairly routine feature of  modern lawsuits.  We
          would  not like  to contemplate  the litigious  scene if  the law
          recognized  inflated  ad damnum  requests  as  meeting the  "act"
          requirement of abuse of process.

                                         -14-

          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.

               But, as we have seen, a  showing of bad motive in connection

          with "regular"  process is not enough.   See supra at  12-13.  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

               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

                              
          ____________________

               9  Although  not cited  in  Simon's  brief, during  colloquy
          concerning the Navons' motion for judgment  as a matter of law at
          the  end  of  plaintiff's case,  Simon's  counsel  referred to  a
          statement by Gershon Navon to his client that "I'm going to crush
          you."  This was simply evidence of motive; Simon provided no link
          between the statement and the New York litigation.

                                         -15-

          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

               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").

               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
                              
          ____________________

               10 The only case cited by Simon in support of his contention
          that amending  the suit, seeking injunctive  relief, and imposing
          excessive  legal  fees constitute  acts  of abuse  of  process is
          Baubles & Beads v.  Louis Vuitton, S.A., 766 S.W.2d 377 (Tex. Ct.
          _______________     ___________________
          App.  1989).   That  case  could not  be  more  unhelpful to  his
          position.  Not only was the claim there based on  a typical post-
          filing procedure --  an ex parte  seizure order --  but both  the
          trial  and appeals courts found  that there had  been no abuse of
          process. 

                                         -16-

          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.  

               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, 44-55
                              ________     ___________

          (1991), and trial  courts in Maine likewise have  such authority,

          Chiapetta  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.

               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, the jury's
                                       ______

          verdict on that count must be reversed.

                                    IV. Defamation
                                        __________

                                         -17-

               Simon alleged that the Navons defamed him by telling several

          creditors  of MCTC  that  he was  responsible  for the  company's

          lingering debts, and by causing an attorney to  write a letter in

          July  1992 to Camden National Bank stating that the account Simon

          had opened there was  unauthorized and was being used  "to divert

          and dispose of a  substantial amount of payments received  by him

          in collecting MCTC's receivables."11

               The  Navons argue  that the  letter,  which was  the primary

          element  of the  defamation count,12  cannot as  a matter  of law

          support  the  claim  because  its  contents  were  both  true and

          privileged and  because the  Navons as  individuals could  not be

          deemed responsible for the content of a letter written by someone

          else.  We reach only the first of these contentions. 

                              
          ____________________

               11 The full text of the letter, which was signed by Attorney
          Andrew  A. Cadot  and addressed  to the  bank's president,  is as
          follows:

                    We are attorneys for Maine Coast Trading Co., Inc.
               ("MCTC").  We understand that an account  was opened in
               the name of  MCTC by Frank Simon II.   This account was
               not authorized  by MCTC,  but, we understand,  has been
               used  by  Mr.   Simon  to  divert  and   dispose  of  a
               substantial  amount  of  payments  received by  him  in
               collecting MCTC's receivables.

                    Please  accept this  letter as  MCTC's instruction
               not to  permit any further transactions  in the account
               without our  prior  approval on  behalf  of MCTC.    In
               addition, we request that you provide us with copies of
               the documents used to open this account and all records
               of transactions in the account.

               12 Indeed, it was the sole basis for a finding of defamation
          against  Jonathan Navon, as all of the other statements were made
          by Gershon.

                                         -18-

               As explained  earlier, our  review  should be  limited to  a

          determination whether the district court abused its discretion in

          rejecting  defendants' motion  for  a new  trial.   The  district

          court,  however,  did not  address  the defamation  issue  in its

          opinion, although the point was raised in  defendants' motion; we

          therefore  have  no  basis upon  which  to  evaluate  its ruling.

          Consequently, we  have considered not whether  the district court

          abused  its discretion in denying the Navons' motion, but whether

          a  new trial  is  necessary because  the  jury's verdict  was  so

          clearly against the  weight of  the evidence as  to constitute  a

          manifest  miscarriage  of  justice.    See   Quinones-Pacheco  v.
                                                 ___   ________________

          American  Airlines, 979 F.2d 1, 3-4 (1st Cir. 1992); Wagenmann v.
          __________________                                   _________

          Adams, 829 F.2d 196, 200-201 (1st Cir. 1987).
          _____

               The Navons assert that the letter was not defamatory because

          it  was not false.   They emphasize that  Simon conceded at trial

          that  MCTC's  bylaws  reserved  check-writing  authority  to  the

          Navons.  Moreover, they point out, Simon acknowledged that he had

          no  authorization from  MCTC's  board of  directors  to open  the

          Camden  National Bank  account.    The  Navons claim  that  these

          undisputed facts  prove the  accuracy of Cadot's  statements that

          the "account was not authorized by MCTC," and that Simon had been

          "divert[ing] and dispos[ing]" of MCTC funds.

               In  response   to  the  evidence  regarding   his  corporate

          authority  under the  bylaws, Simon  offered only  his subjective

          belief that he had the authority to  do what he did and the  fact

          that his  lawyer advised him to  take such steps.   We think this

                                         -19-

          falls well  below what  is  necessary to  negate the  defendants'

          showing based on the company's bylaws, which presumably represent

          the parties' agreement on the scope of, and limitations on, their

          powers.  Neither  Simon's belief  that the actions  he took  were

          justified,  nor  his  lawyer's  unexplained  concurrence  in that

          belief,  can support a finding that his conduct was authorized by

          MCTC.  The letter may have been misleading in revealing so little

          about  the nature of  Simon's unauthorized conduct,  but, on this

          record, it could not be deemed false.

               We therefore conclude  that the Navons  met their burden  of

          establishing that  the challenged statements were  true, and thus

          not actionable.  See, e.g., Haworth v. Feigon, 623 A.2d 150,  158
                           ___  ____  _______    ______

          n.6 (Me.  1993) (truth  is an  affirmative defense in  defamation

          action); Picard  v.  Brennan, 307  A.2d  833, 834-35  (Me.  1973)
                   ______      _______

          (same).  Even if Simon had some general authority as president to

          take  actions that  he  felt were  in the  best  interest of  the

          company -- a possibility  we cannot consider since the  record on

          appeal contains  neither the  bylaws nor  other evidence  of such

          authority -- it still would be  true that MCTC had not authorized
                                                    ____

          the  account.   Simon remained  a minority  shareholder, and  the

          Navons  constituted a  majority of  the board  of directors.   In

          addition, if the account and check-writing were unauthorized, the

          letter also was accurate in reporting that  Simon had "divert[ed]

          and  dispos[ed]"  of  MCTC  receivables,   the  word  "diversion"

          typically being  associated with  the unauthorized use  of funds,
                                                ____________

          see Black's Law Dictionary (6th ed. 1990), at 477. 
          ___ ______________________

                                         -20-

               The jury's  verdict did not specify the  statements on which

          defamation liability  was premised,  and our conclusion  that the

          Cadot letter could not support the claim on this record therefore

          requires  a  new  trial on  defamation.13    In  addition to  the

          letter,  Simon  alleged  that  Gershon  defamed  him  in  several

          statements  made  to  his colleagues  or  customers  in  the fish

          industry.14    Although  in   our  view  these  statements,  too,

          provide  a flimsy  premise for  defamation liability,  the Navons

          have not urged  as a basis  for appeal that they  are inadequate.

          In any event, we leave the specific contours of the  new trial to

          the discretion of the district  court after consultation with the

          parties.

                          V. Breach of Contract and Damages
                             ______________________________

               The  Navons also argue that they are entitled to judgment or

          a new trial on the breach of contract claim  because the evidence

          presented was insufficient to  support a finding for Simon.   The

          district court rejected the  motion for new trial on  this issue,

                              
          ____________________

               13  The  Cadot letter,  of course,  may  be admissible  at a
          retrial should Simon develop a different record.

               14  In closing  arguments, counsel  for both  Simon and  the
          Navons emphasized in particular an April 14,  1992 letter written
          by Gershon  to the vice president  of ACI, in  which Navon blamed
          Simon  for  the delay  in MCTC's  payments  to ACI.    Navon also
          accused Simon in the letter of various actions that "rob[bed] MCT
          from its ability to conduct  business."  The two other bases  for
          defamation  cited   by  Simon's  counsel  in   argument  involved
          statements by Gershon to MCTC creditors laying blame on Simon for
          MCTC's delinquent accounts.

                                         -21-

          concluding that the jury instructions properly and completely set

          out  the relevant law and that the jurors presumably followed the

          instructions in  reaching their verdict.   Having read  the trial

          transcript in its entirety, we find no abuse of discretion in the

          court's denial of a new trial on this issue.

               Simon presented ample evidence that the Navons agreed toward

          the end  of March 1992 to  pay certain crucial  creditors of MCTC

          promptly --  a promise that a  jury could find to  be implicit in

          the written agreement  of March 24th -- but then  failed to do so

          despite  Simon's urgent  pleas and  the availability  of adequate

          funds.  Although the defendants  presented a different version of

          events -- laying  the blame  for the delinquencies  on Simon  for

          cancelling the IDB  line of  credit -- the  judgment between  the

          conflicting accounts was for the jury to make.   In addition, the

          jury  was entitled to believe  Simon's testimony that  he did not

          retain MCTC's receivables and open the account at Camden National

          Bank  until after the Navons breached an express provision of the
                      _____

          March  24th agreement  by paying  themselves a  total of  $45,000

          without his  permission.  As  we have  noted, our review  at this

          stage  is extremely  deferential; whether  or not  we would  have

          reached the  same conclusion were  the factual  question ours  to

          resolve  in the first instance,  we cannot say  that the district

          court  erred in  allowing  the jury's  verdict  to stand  on  the

          contract claim.

               Nor may we on this record  second-guess the district court's

          handling of the damages issue.  Simon presented evidence, through

                                         -22-

          an economist and multiple witnesses involved in the Maine seafood

          industry,  that MCTC's  failure to  pay its  debts had  a lasting

          financial impact  on him.15   Although the  Navons now  challenge

          as  legal  error  certain  premises  upon  which  the  economist,

          McCausland, relied, they neither  objected to this testimony when

          it was  presented nor argued  at the close  of the  evidence that

          Simon  had failed as a matter of  law to prove breach of contract

          damages.16

               The  district court  nevertheless  agreed that  McCausland's

          testimony was flawed, that the jury's verdict accepting his  view

          was against the weight of  the evidence, and that a new  trial on

          damages  should  be  held  unless Simon  accepted  a  substantial

          remittitur.  We  think the court's  response was appropriate  and

          complete; it recognized both that Simon produced evidence of harm

                              
          ____________________

               15  Simon testified  that salmon  farmers in  Eastport, with
          whom he  did substantial business,  won't sell  him fish  anymore
          because  they are  still  owed money  by  MCTC.   One  fisherman,
          Prenier, stated that he was leery of doing business with Simon in
          the aftermath of  the MCTC problems, and  that Simon's reputation
          in the industry has  not been repaired.  Colon McLernon, owner of
          Maine Pride Salmon, testified that "our company has moved product
          to other companies and has stayed away from Mr. Simon."

               16  One  of  the  Navons'  specific  complaints  centers  on
          McCausland's  reduction of Simon's 1992 and 1993 income by losses
          incurred at Rain Forest, the company he partially owned that took
          over  some  of  MCTC's business.    The  Navons  note that  Simon
          answered in the negative when asked the  following question: "You
          cannot lay  the blame for any  of the problems of  Rain Forest at
          the feet of the  Navons, isn't that right,  for 1992?"   Whatever
          that question and answer  are worth with respect to  Simon's 1993
                                                                       ____
          income,  we note that the jury could have understood the response
          as  a misstatement  in  light of  other less  ambiguous testimony
          concerning the  inability to do business  with downeast fishermen
          following MCTC's demise.   

                                         -23-

          and that  the jury's  verdict improperly adopted  his exaggerated

          claims regarding  the extent of that  harm.  We find  no abuse of

          discretion.

                         VI.  Undue Passion, Bias, Prejudice 
                              ______________________________

               The Navons  point  to eleven  events at  trial --  including

          certain court  rulings and comments  by opposing counsel  -- that

          they contend created an  atmosphere of bias and  prejudice toward

          them and led  the jury to award grossly excessive  damages.  They

          claim  that  one  or  more of  these  events  independently,  and

          certainly  the  cumulative effect  of  all  of them,  constituted

          reversible error requiring a new trial.

               We  have considered each of their points, many of which were

          not  raised at the appropriate  time before the  trial court, but

          find  that none warrants a total rejection of the jury's verdict.

          We  do  not say  that the  Navons'  argument is  entirely without

          force; we hold only that we are satisfied that the district court

          was  within its discretion to reject the claims it considered and

          that, particularly  in light  of  the need  for  a new  trial  on

          defamation, no manifest injustice occurred that would cause us to

          disturb any more of the jury's determinations.  

                                   VII. Conclusion
                                        __________

               We summarize our holdings as follows:

               (1) Simon  has failed, as a matter of law, to prove an abuse

          of  process, and the judgment of the  district court in his favor

          is reversed.

                                         -24-

               (2) The jury's finding that the Cadot letter was  defamatory

          was against the weight  of the evidence in  light of the  Navons'

          proof that the statements  it contained were true.   The judgment

          for  Simon on defamation therefore must be vacated, and the claim

          remanded for a new trial.

               (3) The compensatory and punitive damages awards on the tort

          claims, totaling $1.3 million, are vacated.

               (4)  The jury's judgment of liability on the contract claim,

          and its award of $836,000 in damages, are affirmed.

               Affirmed  in part,  reversed in part,  vacated in  part, and
               ____________________________________________________________

          remanded  for proceedings  consistent  with this  opinion.   Each
          __________________________________________________________   ____

          party shall bear its own costs.
          _______________________________

                                         -25-