John Svensen v. Jeff Hester (Appeal from Lauderdale Circuit Court: CV-20-900339).

• Court: Supreme Court of Alabama
• Decided: May 17, 2024
• Docket: SC-2023-0680
• Status: Published

Opinion

Rel: May 17, 2024

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA OCTOBER TERM, 2023-2024

_________________________

SC-2023-0680 _________________________

John Svensen

v.

Jeff Hester

Appeal from Lauderdale Circuit Court (CV-20-900339)

MITCHELL, Justice.

At the height of public concern over COVID-19, John Svensen wrote

a check to Jeff Hester's company, CJH, Inc., d/b/a Ginesis Products SC-2023-0680

("Ginesis"), in exchange for several thousand bottles of hand sanitizer.

That check bounced. Ginesis sued Svensen and his company,

Marketpointe, LLC, to recover the money that was allegedly owed. After

protracted litigation, Hester pressed charges against Svensen for the bad

check, leading to Svensen's arrest. Eventually, on the motion of the

Lauderdale County District Attorney's Office, the Lauderdale Circuit

Court dismissed the criminal complaint as barred by the statute of

limitations, and Svensen, free from the specter of prosecution, sued

Hester for malicious prosecution. The circuit court entered summary

judgment for Hester. Svensen appealed. We affirm.

Facts and Procedural History

In early 2020, Marketpointe contracted to purchase hand sanitizer

from Ginesis. In July 2020, as part of that transaction, Svensen, on

behalf of Marketpointe, gave Hester, Ginesis's agent, a check for $23,400.

That check bounced because Marketpointe's account had insufficient

funds. For that bad check, and other allegedly unpaid invoices, Ginesis

sued Svensen and Marketpointe in the Lauderdale Circuit Court.

Neither Svensen nor Marketpointe answered the complaint, and

the circuit court entered a default judgment against them. Soon after, 2 SC-2023-0680

Svensen, appearing pro se, filed a motion to vacate the default judgment

for improper service, which the circuit court granted. The circuit court

then set a bench trial for September 2021. The trial date came and went,

but Svensen did not appear. As a result, the circuit court entered another

default judgment against Svensen and Marketpointe. After Svensen

provided an excuse, the circuit court vacated the default judgment and

reset the matter for a bench trial.

In the meantime, Hester considered his options. On the advice of

his attorney, he took the bounced check to the Lauderdale County

Sheriff's Department. There, a lieutenant investigated the issue. After

discussion with employees of the Lauderdale County District Attorney's

Office, the investigating lieutenant advised Hester to sign an affidavit on

a criminal complaint against Svensen. That affidavit stated, in full:

"Before me, the undersigned Judge/Magistrate of the District Court of Lauderdale County, Alabama personally appeared JEFF HESTER who being by me, first duly sworn, does depose and say that he/she has probable cause for believing and does believe that JOHN SVENSEN who [sic] name is to the affiant otherwise unknown, than as stated, with intent to defraud, did make, utter, draw or deliver a check or draft upon a bank/credit union, to-wit: REGIONS BANK the amount of 23,400.00 service fee of 30.00 totaling 23,430.00 payable to JEFF HESTER that said Defendant at the time of such JOHN SVENSEN union [sic] with which to pay the same upon its 3 SC-2023-0680

due presentation, in said county within twelve months before making this affidavit, against the peace and dignity of the State of Alabama."

(Emphasis added.)

In October 2021, after Hester had signed the affidavit, Svensen was

arrested and charged with negotiating a worthless instrument. See

§ 13A-9-13.1, Ala. Code 1975. As a result, the circuit court stayed the

civil proceedings against Svensen. Several months later, the State filed

a motion to dismiss the criminal charge after realizing it was time-

barred. See § 15-3-2, Ala. Code 1975.

The circuit court in the civil case then lifted the stay. At that point,

Svensen, now represented by counsel, filed an amended answer and

counterclaims, as well as a third-party complaint for malicious

prosecution against Hester. In the third-party complaint, Svensen

alleged that Hester had caused Svensen's arrest without probable cause

and with malice because, he said, Hester knew the statute of limitations

had run. He requested compensatory as well as punitive damages.

Hester filed a motion for summary judgment on the malicious-

prosecution claim, which the circuit court granted. After denying

Svensen's postjudgment motion to alter, amend, or vacate, the circuit

4 SC-2023-0680

court, at Svensen's request, certified as final under Rule 54(b), Ala. R.

Civ. P., the summary judgment on Svensen's malicious-prosecution

claim. Svensen then appealed.

Standard of Review

We review a summary judgment de novo. Nettles v. Pettway, 306

So. 3d 873, 875 (Ala. 2020). "[I]f the moving party establishes the absence

of a genuine issue of material fact, the burden shifts to the nonmoving

party to present substantial evidence" of a genuine issue of material fact.

Lands v. Ward, 349 So. 3d 219, 222 (Ala. 2021). This Court has said that

"substantial evidence is evidence of such weight and quality that fair-

minded persons in the exercise of impartial judgment can reasonably

infer the existence of the fact sought to be proved." West v. Founders Life

Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala. 1989).

Analysis

To prevail on a malicious-prosecution claim, a plaintiff must

demonstrate " '1) that a prior judicial proceeding was instigated by the

defendant 2) without probable cause and 3) with malice; 4) that that prior

proceeding was terminated in the plaintiff's favor; and 5) that the

plaintiff suffered damage[] as a result of that prior proceeding.' " 5 SC-2023-0680

Dolgencorp, LLC v. Spence, 224 So. 3d 173, 183 (Ala. 2016) (quoting

Whitlow v. Bruno's, Inc., 567 So. 2d 1235, 1237 (Ala. 1990)). This appeal

turns on the probable-cause element. In particular, Svensen contends

that Hester lacked probable cause to sign the affidavit that caused

Svensen's arrest for negotiating a worthless instrument. We disagree.

Probable cause is a " ' "reasonable ground for suspicion, supported

by circumstances sufficiently strong in themselves to warrant a cautious

man in the belief that the person accused is guilty of the offense

charged." ' " Eidson v. Olin Corp., 527 So. 2d 1283, 1285 (Ala. 1988)

(quoting Parisian Co. v. Williams, 203 Ala. 378, 383, 83 So. 122, 127

(1919)). In other words, a person acts with probable cause if he could

have reasonably believed that the accused committed the charged crime.

There is no genuine issue of material fact here; Hester had probable

cause to believe that Svensen had committed the crime of negotiating a

worthless negotiable instrument.

It is a crime in Alabama to knowingly write someone a bad check.

The elements of negotiating a worthless negotiable instrument are

simple: the accused must have (1) "negotiate[d] or deliver[ed]" (2) "a

negotiable instrument for a thing of value" (3) "with the intent, 6 SC-2023-0680

knowledge, or expectation that the instrument would not be honored by

the drawee." § 13A-9-13.1(a). It is undisputed that Svensen's actions

met the first two elements: Svensen delivered Hester a worthless check

in exchange for hand sanitizer, and a check is a quintessential

"negotiable instrument." See § 7-3-104(f), Ala. Code 1975. As to the third

element, a reasonable person would suspect that Svensen knew the bank

would not honor the check. After all, Svensen wrote a check for funds

that did not exist and has made no attempt to rectify the situation,

despite Ginesis's attempts to collect. Indeed, Svensen does not even

argue on appeal that he lacked knowledge that the check would be

dishonored. With all of these elements satisfied, it follows that Hester

had probable cause to believe that Svensen had committed the offense.

Svensen nonetheless argues that Hester lacked probable cause

because, he says, Hester knew that the one-year statute of limitations for

misdemeanor offenses had expired. Svensen points out that the affidavit

Hester signed stated that Svensen wrote the bad check "within twelve

months before making this affidavit." Because Hester signed the

affidavit in October 2021 and Svensen wrote the bad check in July 2020,

Svensen says that Hester must have known that Svensen's prosecution 7 SC-2023-0680

was time-barred. That knowledge, Svensen asserts, shows that Hester

did not have a reasonable basis for believing that he had committed the

charged crime.

The problem with Svensen's theory is that expiration of the

limitations period has nothing to do with whether the defendant actually

committed the offense charged. That is why the timeliness of an action

does not bear on whether " ' "a cautious man" ' " would believe " ' "that the

person accused is guilty of the offense charged." ' " Eidson, 527 So. 2d at

1285 (citation omitted).

For that reason, courts across the country have expressly rejected

arguments like the one Svensen makes here. See, e.g., Sands v.

McCormick, 502 F.3d 263, 269 (3d Cir. 2007) (explaining that whether a

prosecution is time-barred is not "a relevant consideration" when charges

are filed); Pickens v. Hollowell, 59 F.3d 1203, 1207 (11th Cir. 1995)

(holding that probable cause exists whenever the elements of a crime are

facially satisfied and that officers have no duty to "investigate and decide

the potential viability of a defense, such as the statute of limitations,"

before charging or arresting someone). In short, the validity of a statute-

of-limitations defense is " 'appropriately evaluated by the district 8 SC-2023-0680

attorney or by a court after a prosecution is begun.' " Sands, 502 F.3d at

269 (quoting Pickens, 59 F.3d at 1207-08). Accordingly, requiring crime

victims to determine whether a prosecution is time-barred before signing

a complaint "is too heavy a burden." Sands, 502 F.3d at 269. That logic

applies with full force here.

Svensen argues that our opinion in Empiregas, Inc., of Elberta v.

Feely, 524 So. 2d 626 (Ala. 1988), contradicts that rule. But he misreads

Empiregas. In that case, the plaintiff brought a malicious-prosecution

claim against a company that had sued him to recover an overdue balance

after the limitations period had run. 1 An agent who acted on behalf of

the malicious-prosecution defendant "acknowledged that he knew the

claim was barred" before initiating a judicial proceeding. Id. at 628

(emphasis added). This Court held that, in those circumstances, evidence

1The prior judicial proceeding in Empiregas was civil in nature. Alabama courts do not distinguish between the wrongful initiation of criminal and civil actions when considering a malicious-prosecution claim. See 2 Angela K. Upchurch, Alabama Personal Injury & Torts § 12:25 (2023) (stating that "the institution or continuation of an original civil or criminal proceeding against the plaintiff" is an element of malicious prosecution (emphasis added)); Mitchell v. Folmar & Assocs., LLP, 854 So. 2d 1115 (Ala. 2003) (affirming a jury award in a malicious- prosecution case based on a civil fraud suit). 9 SC-2023-0680

of the defendant's behavior was "proper for the jury's consideration." Id.

Thus, instead of replacing the traditional probable-cause rule, Empiregas

recognized a limited exception if the defendant had actual knowledge

that the prior proceeding it instigated was meritless.

That exception is not applicable here. Unlike in Empiregas, the

record in this case does not indicate that Hester knew Svensen's

prosecution was time-barred. After an investigation into the check by a

lieutenant in the Lauderdale County Sheriff's Department -- who knew

all the relevant facts and determined that Marketplace's account had

insufficient funds when Svensen wrote the bad check -- the lieutenant

advised Hester to "sign the affidavit for a criminal complaint against

Svensen." Although Hester's affidavit incorrectly stated that Svensen

wrote the check within the prior 12 months, that is not substantial

evidence that Hester knew about and intentionally flouted the statute of

limitations. And Hester may have signed the affidavit -- which he did

not write -- for an innocuous reason. For example, Hester may have

misread the inartfully drafted affidavit or he may have thought that some

form of tolling applied. Because Svensen has not provided any evidence

that Hester had actual knowledge that the prosecution was time-barred, 10 SC-2023-0680

the Empiregas exception is inapplicable. Hester thus had probable cause

to initiate criminal proceedings against Svensen.

Conclusion

Because there is no genuine dispute that Hester had probable cause

to initiate criminal proceedings against Svensen, we affirm the circuit

court's summary judgment in Hester's favor.

AFFIRMED.

Parker, C.J., concurs.

Shaw, Bryan, and Mendheim, JJ., concur in the result.