Lawrence B. Thomas, and Cross-Appellant v. E. J. Korvette, Inc., and Cross-Appellee

476 F.2d 471

• Court: Court of Appeals for the Third Circuit
• Decided: May 3, 1973
• Docket: 71-2061, 71-2062
• Status: Published

Opinions

OPINION OF THE COURT

McLAUGHLIN, Circuit Judge.

This appeal is based on the entry of judgment in plaintiff Lawrence Thomas’ favor in accord with F.R.Civ.P. 59, as explained in 6A Moore’s Fed.Prac. 59.15 [1]. The sum of $150,000 was awarded to Thomas on his malicious prosecution suit against E. J. Korvette. Motions for a new trial and judgment n. o. v. were denied by the trial court, D.C., 329 F. Supp. 1163. Also involved is a cross-appeal by plaintiff-appellee on the amount of damages. The jury awarded $750,000 to plaintiff Thomas, but this amount was remitted by the trial judge from $750,000 to $150,000.

The action was brought against Korvette’s by Thomas, who was the security head at Korvette’s King of Prussia, Pa. store at the time of the incident in question. On November 12, 1965 Thomas was seen by another store employee coming down an escalator to the ground floor with a package under his arm. He was observed looking around a bit at the bottom of the escalator and again glancing about while directly in front of an outside door of the store. This was approximately 11:30 A.M. Thomas left the store with the package. There was no evidence at this time that the package had been paid for. Thomas was then seen placing the package in the trunk of his automobile which was in the store parking lot. On the report of this by the observing employee to the store management, a security officer from one of Korvette’s other stores was summoned to investigate. A Mr. Smith was the investigator called upon, who was experienced in the field. Smith confronted Thomas with questions concerning the alleged package in his car. Thomas claimed that he did have two games in his trunk with an attached register receipt, signifying his payment. Thomas opened his car trunk and an inspection produced no receipt or even any tape residue on the game package.¹ Thomas claimed that the questioning of a specific cashier and register tape would verify his story. Such did not turn out to be the case. Thomas refused to take a polygraph test at that time. He had previously undergone such a test, at the time of his appointment as security head, and was familiar with its usage and format.

On the basis of these facts, Smith determined that there was a bona fide case against Thomas and so he called for the police.² On the arrival of police (7:20 P.M.) Thomas claimed that he had purchased the two items in the toy department, carried them to his car through the front door, and placed them in the trunk of his auto. The police, considering the facts as presented and the story, felt that there was a sound cause of action (P. 678a) against Thomas. The complaint against Thomas was then signed by employee Brown who had witnessed Thomas’ actions in leaving the store with the game. These were all of the facts concerning the incident which Brown had to predicate his filing of the complaint.

There was a hearing before a Justice of the Peace at which time many factual disputes became evident. Thomas here had a further explanation as to the events on the day in question. He alleged, in effect, that he had carried the first game out of the store while following a suspected shoplifter. He asserts that he placed it in his trunk for convenience and paid for it later in the afternoon when he paid for a second game which he had put in his trunk along with the first game. He produced, at this time, a receipt from the toy department cash register from the date in question, but it did not correspond exactly to the price of the two games plus tax. He alleged some error by the check-out girl as the cause of this discrepancy.³

As a result of the conflict in factual accounts and the small sum of money involved, the Justice of the Peace decided to discharge the case putting costs of $11 on defendant Thomas.⁴

Thomas thereafter instituted this action for malicious prosecution against Korvette. The elements for a cause of action for malicious prosecution are stated in Res. Torts (1938) § 653. Summarizing, the Restatement says that if the proceedings were initiated (1) without probable cause, and (2) with the primary purpose other than that of bringing an offender to justice, a private person who initiated such proceedings might be held liable, in cases where a criminal proceeding had been instituted by defendant against plaintiff and where termination of the proceedings was in favor of the accused.

Although there are numerous grounds raised on appeal at this time the result in all malicious prosecution cases is primarily affected by whether or not there was probable cause for the filing of the complaint. Probable cause in malicious prosecution matters is defined in Miller v. Pa. R.R. Co., 371 Pa. 308, 314, 89 A.2d 809, 812 (1952) as “reasonable ground of suspicion supported by circumstances sufficient to warrant an ordinary prudent man in the same situation in believing that the party is guilty of the offense.” See also, Neczypor v. Jacobs, 403 Pa. 303, 308, 169 A.2d 528, 530 (1961) which states, “By probable cause is not meant an actual state of guilt. One is justified in launching a criminal prosecution if the facts convince him, as a reasonable, honest and intelligent human being, that the suspected person is guilty of a criminal offense. The arresting person may be in error, but if his error is an honest one, not motivated by personal malice, bias, or revenge, the law will hold him harmless, regardless of the eventual result of the criminal prosecution.” The problem arises with regards to who should decide that question in this litigation. The trial court allowed the jury not only to make special factual determinations, but also to decide the ultimate question concerning the existence of probable cause. Korvette disputes this disposition by the trial judge declaring that this is a decision solely for the court.

Korvette asks for a judgment n. o. v. but according to 5A Moore’s Fed.Prac. 50.07 [2], such may be granted only when, without weighing the credibility of the evidence, there can be but one reasonable conclusion as to the proper judgment. Where there is conflicting evidence, or there is insufficient evidence to make a “one-way” verdict proper, judgment n. o. v. should not be awarded. The court must view the evidence in the light most favorable to the party who secured the jury verdict. In light of the factual conflict, obvious from the different versions of the story told here, there is no foundation to order a judgment n. o. v. However, motions for a new trial are based on the court’s discretion and “the appellate court will exercise its power to review the lower court’s ruling and reverse when the lower court * * * failed to exercise its discretion; or where the trial court abused its discretion.” 6A Moore’s Fed.Prac. 59.05 [5].⁵ Our query therefore is to determine if there was prejudicial error by the trial court in this suit which adversely affected substantial rights of appellant as to dictate a new trial on the merits.

An examination of the Restatement of Torts and how it has been interpreted by pertinent Pennsylvania case law will help to decide this question. Restatement of Torts, § 673, Comment d, adopted by Pennsylvania in Miller v. Pa. R.R. Co. 371 Pa. 308, 89 A.2d 809 (1952) considering this type situation, states:

“ * * * upon the issues of favorable termination and probable cause, the jury has only the function of finding the circumstances under which the defendant acted. The court determines whether, under those circumstances, the termination was sufficiently favorable to the accused, and whether the defendant had or had not probable cause. Where there is no conflict in the testimony as to what the circumstances were, the court has no need for finding of the jury. The jury is not called upon to act unless there is a conflict in the testimony which presents an issue of fact for its determination.

“The respective functions of the court and jury in determining the issue of probable cause, can be exercised by them in one of two ways. The better but less usual method is to require the jury to find a special verdict setting forth the circumstances under which they find that the proceedings were initiated. Upon these findings the court then determines whether the defendant had probable cause. The usual method is for the court to charge the jury under what combination or combinations of circumstances, which may be found under the evidence, the defendant did or did not have probable cause for initiating the proceedings.” (Emphasis supplied).

Each side here has mentioned Simpson v. Montgomery Ward, 354 Pa. 87, 46 A. 2d 674 (1946) which discussed the restatement and cited certain words which, they feel, support their respective positions on the point. Korvette urges that Simpson holds, in malicious prosecution suits, the question of probable cause for the criminal prosecution must be decided by the court. Thomas cites Simpson, supra, as standing for the proposition that where there is a conflict in testimony, the trial judge must submit the issue of probable cause to the jury. We think that each side is correct to an extent. This appeal provides a good discussion of the law in the area and illustrates the complicated function of determining probable cause in problems containing factual conflict. Res. 673, Comment d, provides two solutions to the type of issue before us; a “better” as well as the “usual” method. This appeal presents notice of the difficulty which a jury might have distinguishing probable cause from obvious guilt and innocence in certain areas. In that kind of dilemma, Simpson recognizes the necessity of judicial determination of probable cause. This is the situation in which Res. 673d dictates using the “better but less usual method” of determining probable cause, according to Simpson. That designated situation being where “jurors are likely to confuse the issue of the guilt or innocence of the defendant in the criminal case, out of which the civil action originated with the basic issue, whose determination decides the civil action. That basic issue is the want of probable cause for the criminal prosecution”, Simpson, 354 Pa. at 92, 46 A.2d at 676. In the instant matter, this specific situation (the high likelihood that the jury might confuse guilt or innocence with probable cause) did exist, and yet even so, the question was submitted to the jury. The problem can be seen plainly through the undisputed facts and circumstances in this appeal. The attorney for Thomas accentuated and compounded the difficulty by his summation when he told the jury “Did he steal those games? That is the only question because when you get the answer to that question, then all of the legal questions about probable cause, reasonable investigation, and all that, fall right into place * * (489a). Furthermore, the trial judge himself recognized the morass which this statement created for the jury when he remarked, at sidebar, as appellant notes in his brief, “Let me point out that your (plaintiff’s counsel) entire argument to the jury was directed to the issue of guilt or innocence, virtually your entire argument.” Those statements and the complicated nature and confusing tone of much of the evidence presented at trial, make it very clear that this was an excellent example of why a probable cause question is for the court to decide after the jury has answered appropriate special interrogatories,⁶ even though there was conflict in the testimony. Some indication of the jury’s confusion of the real question here might be evidenced by their inquiry on rendering a verdict, at which time they were extremely concerned with what would become of the police and arrest records of Thomas as a result of their actions. Submission of the question of probable cause to the jury was certainly not harmless error, since the jury, because of its finding of “no probable cause” came up with an enormous award in Thomas’ favor. “An improper submission * * * of a material issue to the jury is another ground for a new trial.” Moore’s Fed. Prac. 59.08 [2],

There were additional factors present which also show the necessity of a new trial. Korvette has questioned the district court’s actions in permitting plaintiff to introduce evidence on a 1969 slander claim.⁷ Korvette asserts this to have been most damaging to its defense; that alleged slander was not pleaded or included in the pre-trial order and was barred by the statute of limitations. Some mention of that claim had been made at the pre-trial solely with respect to the damage item of loss of earning capacity, (p. 23a). It was determined admissible only to serve to “possibly shed light on any claim of malice in connection with the original transaction.” (p. 31a). However, through the action of the trial court granting Thomas’ motion to amend his complaint, it allowed an entirely new claim to be considered by the jury while it was passing upon the original contention of the plaintiff. The decision of whether or not to permit a change (in the pre-trial order) is within the discretion of the trial judge and “appellate interference with this discretion should be kept at a minimum.” Ely v. Reading Co., 424 F.2d 758 (3 Cir. 1970). We wholeheartedly agree with and follow that conclusion in its proper place but, in this instance we have the kind of circumstance which produced manifest injustice by its late addition. There was much evidence offered on this separate slander issue, which was not done merely to show malice. In our case, a verdict had been reached on the slander alone and the assertion of damages had even been argued. Finally, after all this had been given in great detail to the jury, the trial judge stated that the 1969 slander charge, as such, was barred by the statute of limitations, and consideration of it should be limited to the assertion of malice. We are satisfied that the insertion of the slander attack was not merely harmless error or “favorable to defendant.” It is impossible to guarantee that a jury of laymen would be able to cast the testimony concerning slander completely aside, in reaching its decision on damages. Thomas’ lawyer made deliberate reference to it, when discussing the question of punitive damages. From the sum which the jury awarded plaintiff, ($750,000) it is crystal clear that the prejudicial effect of the admission of this testimony even if relevant to, and admitted only for, the issue of malice, far outweighed its probative value. It should not have been allowed into evidence. The manner in which it was used, was not covered at pre-trial and under the circumstances, it should not have been allowed at trial. It definitely had an unwarranted detrimental effect on appellant’s defense.

A new trial on the merits is necessary in this appeal. There are many interrelated allegations of error, all of which must be examined and can be disposed of by a new trial. The defendant is entitled to have the district court judgment amended to enter judgment for it on the 1965 slander court and to provide for a new trial in accordance with this opinion.⁸

1 . The store policy was to attach receipts to the packages by means of cellophane tape. Thus it was felt by Smith that had there been a piece of tape affixed at one time to the package or packages, there would at least have remained some evidence of tape residue, even if the receipt itself were now missing.

2 . Act of June 24, 1939, P.L. 872 § 816.1, added July 5, 1957, P.L. 501 § 1, as amended 18 P.S. § 4816.1 subsection (b) provides in pertinent part:

“(b) Any person wilfully concealing unpurchased goods or merchandise of any store * * * either on the premises or outside the premises of such store, shall be prima facie presumed to have so concealed such article with the intention of converting the same to his own use without paying the purchase price thereof within the meaning of subsection (a) of this section * * * Persons so concealing such goods may be detained, in a reasonable manner and for a reasonable length of time, by a peace officer or a merchant or a merchant’s employee in order that recovery of such goods may be effected. Such detention by a peace officer, merchant or a merchant’s employee shall not render such peace officer, merchant or merchant’s employee, criminally or civilly liable for false arrest, false imprisonment or unlawful detention.”

3 . Store policy was to total all sales singly on the register so that no mistake would be made in totals. However, it was admitted that some of the clerks did not absolutely follow this policy at all times and instead added the cost of more than one item in their heads.

4 . The Justice of the Peace did not feel this case deserved serious attention saying “The amount of money involved isn’t important enough to hold him.” (for court) P. 717 (a) “ * * * I am not worried about the 11 bucks for a deal like this.” P. 718(a)

5 . The term abuse, when applied to a court’s exercise of its discretion is peculiarly of legal significance, wholly unrelated to the meaning of the same term when used in common parlance. Action that would be necessary in ordinary affairs to make one guilty of an abuse, connotes conduct of a different grade than what is meant when a court is said to have abused its discretion. Abuse of discretion in law means that the court’s action was in error as a matter of law. And when such abuse exists, reversal will be ordered.

6 . For the type of special questions, see those suggested by the Supreme Court of Pennsylvania in Simpson v. Montgomery Ward & Co., 354 Pa. 87, 46 A.2d 674 (1946).

7 . This slander claim was based on an alleged ’phone call made in February 1969 by a Mr. Snyder of Miley Detective Agency, to Korvette’s security department. Mr. Thomas had applied for a Job with Miley at this time, and Snyder was supposedly calling Korvette’s to check Thomas’ background. Snyder testified that he was put directly on the line with a man identifying himself as the security manager. Snyder told this man that he intended to hire plaintiff for a position of trust. (236a). This man at Korvette’s was then said to pause, check some records, and then tell Mr. Snyder that Thomas was a “thief,” that he didn’t know whether criminal charges were still pending, and that plaintiff “could not be trusted.” (236a-37a).

8 . In view of the reversal of the district court judgment, the cross-appeal at No. 71-2062 will be dismissed as moot.