Mike Musselwhite, Mike's Pools and Spas, Pat Stalsby and Amanda Watson v. John Howard and Terry Watson

• Court: Court of Appeals of Texas
• Decided: May 10, 2007
• Docket: 01-05-00839-CV
• Status: Published

Opinion

Opinion issued May 10, 2007

In The

Court of Appeals

For The

First District of Texas

NO. 01-05-00839-CV

MIKE MUSSELWHITE, MIKE'S POOLS AND SPAS, PAT STALSBY, and AMANDA WATSON, Appellants

V.

JOHN HOWARD, Appellee

On Appeal from the 269th District Court

Harris County, Texas

Trial Court Cause No. 2002-47293

MEMORANDUM OPINION

Appellants, Mike Musselwhite, Mike's Pools and Spas, Pat Stalsby, and Amanda Watson, appeal from the trial court's judgment that found them liable for negligence, gross negligence, libel and slander, business libel and slander, malicious prosecution and conspiracy against appellee John Howard. The case was tried before the bench, and the trial court awarded Howard $20,000 in damages. In four issues concerning the claim for malicious prosecution, appellants contend that the evidence is legally and factually insufficient to support the trial court's findings (1) that a malicious prosecution was caused by or through the aid and cooperation of appellants, (2) that a malicious prosecution "terminated in favor" of Howard, (3) that appellants had no probable cause to report a crime to law enforcement, and (4) that appellants' reporting of a crime was founded in malice. Appellants' three remaining issues challenge the legal and factual sufficiency of the court's finding of negligence, libel and slander, and conspiracy. We conclude that the evidence is legally and factually sufficient to support Howard's malicious prosecution claim. We therefore do not reach the appellant's assertions that relate to Howard's other causes of action. We affirm.

Background

Appellant Mike Musselwhite owns Mike's Pools and Spas. Appellant Pat Stalsby is Musselwhite's mother, and the owner of the property on which Mike's Pools and Spas is located. Appellant Amanda Watson is Stalsby's daughter and Musselwhite's sister.

Appellee John Howard co-owned Planet Recreation, a business similar to Mike's Pools and Spas, with his live-in girlfriend Terry Watson, Amanda's husband's sister. Terry became angry with appellants when they located Mike's Pools and Spas within 25 miles of Planet Recreation and entered into business relationships with many of Planet Recreation's vendors.

On January 3, 2003, a flat-bed trailer was stolen from Mike's Pools and Spas. ⁽¹⁾ A security videotape showed the property during the theft. Recognizable on the tape was a truck belonging to Donny Johnson, a delivery driver who had worked both for Mike's Pools and Spas and for Planet Recreation. A woman is visible on the tape; a second person briefly can be seen moving in the shadows. No details are apparent regarding the second person. After approximately four minutes, the truck drives away with the trailer in tow.

That March, after hearing testimony from appellants, a grand jury returned indictments for felony theft against Howard and Terry. When informed of the videotape's existence, Terry admitted that she stole the trailer with Johnson's help. She eventually accepted a plea bargain in exchange for deferred adjudication community supervision, and the charges against Howard were later dropped. No charges were ever filed against Johnson.

The present case was initially brought by Terry, who later took a non-suit, and Howard. Neither Terry nor any appellants were present at trial; appellants were represented by counsel. Howard was the only person to testify. In addition to attesting to the facts above, he stated that he was with Amanda's husband at the time of the theft. Howard testified that Amanda should have known his alibi was true because she saw him twice the night of the theft, first when she picked up her husband, and later when she returned to pick up a coat that her husband had left behind. He testified that Stalsby knew Johnson was involved because she went to Johnson's house and photographed the truck. Howard also testified that he and Terry told Stalsby, Musselwhite, and Amanda that Terry had taken the trailer without Howard's involvement.

Howard related that he did not think the District Attorney wanted to file charges in the case, but did so under pressure from Stalsby, Musselwhite, and Amanda. He stated that after he and Terry posted bond, he learned that appellants "said they had me on the videotape." Howard reported that the District Attorney dropped the charges due to the videotape's failure to show Howard. He also testified that he was allowed to listen to an audio tape in which appellants pressured the District Attorney to re-open the case after it had been dismissed.

After Howard was excused, the trial court viewed the videotape, and the parties rested. The trial court found for Howard and awarded him $20,000.

Sufficiency of the Evidence

Each of appellants' seven issues on appeal includes a complaint that the evidence at trial was legally and factually insufficient to support a finding of liability for the various claims brought by Howard.

A. Standard of Review

Appellants first raised evidentiary complaints in a motion for new trial, the denial of which is not before this Court. The issues before us on appeal are somewhat broader than the contentions in appellants' motion for new trial. However, when, as here, trial is held without a jury, complaints of legal and factual insufficiency of the evidence may be raised for the first time on appeal. Tex. R. App. P. 33.1(d); see also Nelson v. Najm, 127 S.W.3d 170, 176 (Tex. App.--Houston [1st Dist.] 2003, pet. denied). We therefore address appellants' sufficiency issues as briefed.

"The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We must credit favorable evidence if a reasonable fact-finder could, and disregard contrary evidence unless a reasonable fact-finder could not. See id. The evidence is legally sufficient if it "would enable reasonable and fair-minded people to differ in their conclusions." See id. at 822. As long as the evidence falls within the zone of reasonable disagreement, "[a] reviewing court cannot substitute its judgment for that of the trier-of-fact." Id. Although the reviewing court "must consider evidence in the light most favorable to the verdict, and indulge every reasonable inference that would support it[,] . . . if the evidence allows of only one inference, neither jurors nor the reviewing court may disregard it." Id.

In determining factual sufficiency, this Court weighs all the evidence, both supporting and conflicting, and may set the finding aside only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Comm'n of Contracts v. Arriba Ltd., 882 S.W.2d 576, 582 (Tex. App.--Houston [1st Dist.] 1994, no writ). In reviewing this challenge, we again examine the evidence to determine whether some evidence supports the trial court's finding. See Lewis v. United Parcel Serv., Inc., 175 S.W.3d 811, 817 (Tex. App.--Houston [1st Dist.] 2004, pet. denied). If some evidence supports the finding, we determine, in light of the entire record, whether the finding is so contrary to the great weight and preponderance of the evidence that the finding is clearly wrong and manifestly unjust, or whether the great weight and preponderance of the evidence supports nonexistence of the finding. Id. In an appeal from a bench trial, we may not invade the fact-finding role of the trial court, which alone determines the credibility of the witnesses, the weight to give their testimony, and whether to accept or reject all or any part of that testimony. Nordstrom v. Nordstrom, 965 S.W.2d 575, 580-81 (Tex. App.--Houston [1st Dist.] 1997, pet denied).

When, as here, the trial court issues findings of fact and conclusions of law, we may review the findings of fact on legal and factual sufficiency grounds and review the conclusions of law de novo as a legal question. See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Although we may not review the conclusions of law for factual insufficiency, we may review the trial court's legal conclusions drawn from the facts to determine their correctness. Id.

B. Malicious prosecution

In their first four issues, appellants assert that Howard presented legally and factually insufficient evidence to prove liability for malicious prosecution.

1. Elements

To recover on a claim of malicious prosecution, the plaintiff must establish:

• the commencement of a criminal prosecution against the plaintiff;

• causation (initiation or procurement) of the action by the defendant;

• termination of the prosecution in the plaintiff's favor;

• the plaintiff's innocence;

• the absence of probable cause for the proceedings;

• malice in filing the charge; and

• damage to the plaintiff.

Richey v. Brookshire Grocery Co., 952 S.W.2d 515, 517 (Tex. 1997). A plaintiff is required to prove these elements by a preponderance of the evidence. Ellis County State Bank v. Keever, 888 S.W.2d 790, 793 (Tex. 1994). Appellants contend that the evidence is legally and factually insufficient to show that they initiated or procured the action, that the prosecution terminated in Howard's favor, that they lacked probable cause, and that they acted with malice in bringing charges.

2. Initiation or Procurement

In their first issue, appellants contend that there is no evidence or the evidence is legally and factually insufficient to support a finding of liability based on the second element of Howard's malicious prosecution claim, initiation or procurement of the action. Specifically, they state that Howard has not presented sufficient evidence that they made any false statements to the District Attorney, or that the District Attorney relied on any such statements in proceeding with Howard's prosecution. See Browning-Ferris Indus., Inc. v. Lieck, 881 S.W.2d 288, 294 (Tex. 1994). Appellants contend that Howard's only evidence that they knew their report to the District Attorney was false was that Terry told appellants and others that she stole the trailer without Howard's participation, a statement which they contend appellants and the District Attorney were entitled to disbelieve. They further contend that because the District Attorney did not testify at the trial, there was no evidence that appellants made false statements to the District Attorney or that the District Attorney relied on any false statements that may have been made.

Howard responds that the evidence showed that the appellants knew that he did not take the trailer. Regarding appellants' knowledge that the statements to the District Attorney were false, Howard states that the evidence shows that:

• Amanda Watson knew Howard did not steal the trailer because she picked up her husband at Howard's house on the night the trailer was taken, returning later for a coat her husband had left behind;

• Stalsby knew Howard did not steal the trailer because Johnson's truck was clear on the videotape, and Stalsby would have recognized the truck;

• appellants all knew Howard did not steal the trailer because Terry, who did take the trailer, told appellants that Howard did not commit the offense with her.

Howard further contends that the evidence shows that the charges against him--brought two months after the theft--were filed solely because appellants claimed the security camera videotape clearly showed Howard taking the trailer, a statement that they knew to be false.

For a finding that a plaintiff has met the initiation-or-procurement element of a malicious prosecution claim where the decision to prosecute is left to a law enforcement official or the grand jury, the evidence must show that the defendant knowingly provided false information, and also that the false information caused a criminal prosecution. King v. Graham, 126 S.W.3d 75, 76 (Tex. 2003). "[T]he plaintiff has the burden of proving that that decision would not have been made but for the false information supplied by the defendant." Id. at 78.

We may not invade the fact-finding role of the trial court in a trial before the bench. See Lilley v. Lilley, 43 S.W.3d 703, 705-06 (Tex. App.--Austin 2001, no pet.). The trial court's fifth finding of fact states that "The defendants . . . filed a criminal complaint for the theft of a trailer with the Liberty Couny, Texas District Attorney against . . . Howard." In its sixth finding of fact, the trial court found that "The Liberty County, Texas Grand Jury, after hearing testimony from [appellants], returned a true bill indictment of . . . Howard for said theft." In its thirteenth finding of fact, the trial court stated that "The court finds by a preponderance of the evidence that [appellants] . . . commenced a criminal prosecution against John Howard." In the light most favorable to the verdict, we conclude that the evidence shows that the defendants initiated or procured the accusations against Howard by knowingly using false information. Howard testified that Amanda knew he was not at the crime scene on the night the trailer was taken; that Stalsby recognized the truck on the security video as belonging to Johnson; and, that each defendant was told by Terry that Howard did not participate in the theft. The trial court, in accordance with Howard's testimony that the District Attorney only filed charges after appellants "started making accusations that they were going to file charges," found that appellants filed a criminal complaint against Howard. The trial court further found, in accordance with appellants' counsel's concession at trial, that appellants testified before a grand jury that then returned an indictment for theft against Howard. Viewing this evidence in a light most favorable to the trial court's judgment, we conclude that the evidence is legally sufficient to establish the element of initiation or procurement.

Concerning our factual sufficiency of the evidence review, weighing all the evidence both for and against a finding on the element of initiation or procurement, we conclude that the finding of liability is neither clearly wrong nor manifestly unjust. As stated above, there is some evidence in support of the court's finding that appellants knowingly made false statements to the District Attorney and that the District Attorney would not have proceeded against Howard but for those statements. Because appellants direct us to no evidence in the record against the finding, and because we have found none, we cannot conclude that the finding is contrary to the overwhelming weight of the evidence. We hold that the evidence is both legally and factually sufficient to sustain the trial court's finding on the second element of malicious prosecution. We overrule appellants' first issue.

3. Termination in Howard's Favor

In their second issue, appellants contend that there is no evidence or the evidence is legally and factually insufficient to support a finding of liability based on the third element of Howard's malicious prosecution claim, that the prosecution terminated in his favor. They contend that Howard had the burden to show that he was no longer in jeopardy of further prosecution. Citing the supreme court's opinion in Davis v. City of San Antonio, they assert that to prove this element, Howard was required to show that the criminal action terminated in his favor on the merits, or that the prosecution cannot be revived. 752 S.W.2d 518, 523 (Tex. 1988). They state that the only evidence Howard presented was his own testimony that the District Attorney dismissed the charges against him, and that this evidence, without more, does not prove this element of the cause of action.

Howard, citing the Restatement of Torts, responds that proceedings were terminated in his favor when the prosecutor formally abandons those proceedings. See Restatement (Second) of Torts § 659 (1977) ("Criminal proceedings are terminated in favor of the accused by . . . (c) the formal abandonment of proceedings by the public prosecutor."). Here, he asserts, the indictment was dismissed and the charges dropped because of insufficient evidence.

Appellants present an incomplete statement of the law as presented in Davis. In that case, the supreme court said:

The City has not cited, nor have we found, any case absolutely requiring a termination on the merits, e.g., a verdict of "not guilty," as a necessary element of a cause of action for malicious prosecution. Instead, the essential question seems to be whether "the proceedings have terminated in favor of the accused." Restatement (Second) of Torts § 653(b) (1977). Even when the termination is indecisive as to the accused's guilt, it is nevertheless favorable if the prosecution cannot be revived. Id. at § 660, cmt. g. An exhibit admitted at trial indicates that the prosecuting attorney formally requested dismissal of all charges against Davis because of limitations problems.

Davis, 752 S.W.2d at 523. We note that, here, the evidence indicates that the prosecution of Howard was dismissed because the prosecutor determined that there was no evidence of his guilt--the charges were dismissed after the District Attorney viewed the videotape, which does not show Howard. Comment g, cited favorably by the court in Davis, elaborates on the "revival of prosecution" rule relied on by appellants, stating that "the abandonment of particular proceedings does not constitute a final termination of the case in favor of the accused. Only an abandonment of the charge brought against him will suffice." Restatement (Second) of Torts § 660, cmt. g.

Viewing the evidence in a light most favorable to the trial court's verdict, Howard's testimony established that the prosecutor abandoned the charge brought against him, and not merely "particular proceedings." We hold that the evidence is legally sufficient to support the trial court's finding in Howard's favor on the element that requires proof that the termination of the proceedings was in Howard's favor. Furthermore, because appellants direct us to no evidence in the record against the finding, and because we have found none, we cannot conclude that the finding is contrary to the overwhelming weight of the evidence. We hold that the evidence is also factually sufficient to sustain the trial court's finding on the third element of malicious prosecution. We overrule appellants' second issue.

4. Probable Cause

In their third issue, appellants contend that there is no evidence or the evidence is legally and factually insufficient to support a finding of liability based on the fifth element of Howard's malicious prosecution claim, that appellants lacked probable cause to bring proceedings against Howard. They contend that "[i]t is undisputed that Appellants['] truck had been stolen and that the video revealed that Terry Watson (the girlfriend of Appellee) was involved along with another male who Appellants believed to be Appellee." They further contend that they were under no duty to inquire into Howard's alibi. See Richey, 952 S.W.2d at 518 (quoting Marathon Oil Co. v. Salazar, 682 S.W.2d 624, 627 (Tex. App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.) ("A private citizen has no duty to inquire of the suspect whether he has some alibi or explanation before filing charges.")). They again point out that Howard did not call the District Attorney "to establish what facts offered by Appellants that he relied on, if any, in establishing whether there was probable cause that a crime had been committed."

Howard responds that Amanda had no probable cause to believe he took the trailer, because she knew he was home that night. He further contends that appellants as a group had no probable cause to believe he took the trailer because Terry Watson told them the next day that she had taken it with Johnson's help. Finally, Howard points to the videotape, where Johnson's truck was recognizable but where he could not be seen. Taken together, Howard argues, "the beliefs and evidence Appellants acted on did not amount to probable cause."

Probable cause is defined as "'the existence of such facts and circumstances as would excite belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor [complainant], that the person charged was guilty of the crime for which he was prosecuted.'" Richey, 952 S.W.2d at 517 (quoting Akin v. Dahl, 661 S.W.2d 917, 921 (Tex. 1983), cert. denied, 466 U.S. 938, 104 S. Ct. 1911 (1984)).

In malicious prosecution actions, we are to presume that the defendant acted reasonably and in good faith and had probable cause to initiate the proceedings. Richey, 952 S.W.2d at 517. "That presumption disappears once a plaintiff produces evidence that the motives, grounds, beliefs, and other evidence upon which the defendant acted did not constitute probable cause." Id. at 518. The burden then shifts to the defendant to offer proof of probable cause. Id. In determining probable cause for the purposes of a malicious prosecution claim, "[i]t is the events prior to the institution of the proceedings which must be examined, and only those events, to determine if the defendants had probable cause to act." Akin, 661 S.W.2d at 920. When, as here, the facts and events leading up to the initiation of prosecution are undisputed, probable cause is therefore a question of law. Richey, 952 S.W.2d at 518. The issue before this Court is therefore whether the undisputed facts underlying the decision to prosecute support a reasonable belief that Howard was guilty of theft. See id.

Here, Howard presented legally and factually sufficient evidence to rebut the presumption that appellants acted with probable cause. Viewing the evidence in the light most favorable to the verdict, the trial court could reasonably have believed that Howard's absence from the videotape and Terry's repeated statements declaring Howard's innocence were facts and circumstances that would not excite belief that Howard committed theft. The burden therefore shifted to appellants to present evidence of probable cause.

Appellants' assertion that they had no duty to inquire into Howard's alibi misstates the law. The supreme court has stated, "When the objective elements of a crime reasonably appear to have been completed, a private citizen has no duty to inquire whether the suspect has some alibi or explanation before filing charges." First Valley Bank of Los Fresnos v. Martin, 144 S.W.3d 466, 470 (Tex. 2004) (emphasis added). Appellants presented no evidence that Howard was guilty of the objective elements of a crime. Finally, despite their assertion in their appellate brief, there is no evidence in the record before us that appellants believed that Howard was one of the persons on the tape. We hold that the evidence is legally and factually sufficient to support the trial court's finding that appellants lacked probable cause to initiate proceedings against Howard. We overrule appellants' third issue.

5. Malice

In their fourth issue, appellants contend that there is no evidence or the evidence is legally and factually insufficient to support a finding of liability based on the sixth element of Howard's malicious prosecution claim, malice in initiating or procuring the theft charge against Howard. They state that Howard presented no evidence or legally and factually insufficient evidence to show malice because they were under no duty to inquire into Howard's alibi, and because they were free to disbelieve Terry's statements that Howard did not participate in the theft.

In response, Howard reiterates that:

• Terry confessed to the crime, and stated that Howard was not involved;

• Howard did not appear on the security videotape;

• Stalsby would have recognized Johnson's truck from the videotape; and

• Amanda knew Howard was home on the night of the theft.

He states that appellants pressured the District Attorney to bring charges despite the above knowledge, and that they tried to get the District Attorney to re-open the case after charges were dismissed.

Malice is defined as "ill will or evil motive, or such gross indifference for the rights of others as to amount to a knowing, unreasonable, wanton, and willful act." Luce v. Interstate Adjusters, Inc., 26 S.W.3d 561, 566 (Tex. App.--Dallas 2000, no pet.). Howard stated that at the District Attorney's office, he was allowed to listen to phone calls and audio tapes in which Stalsby and Amanda stated that they did not care whether he was guilty or not. The trial court entered a finding of fact that states, "The court finds that with regard to the truth of the statement, [appellants] were acting with malice."

Viewing the evidence in a light most favorable to the trial court's judgment, the evidence supports the contention that the bringing of theft charges against Howard was a knowing, unreasonable, wanton, and willful act. Furthermore, fair disclosure is relevant to the question of malice. Martin, 144 S.W.3d at 470. Howard's testimony (1) that appellants knew or had been told that he had not committed the crime, (2) that the District Attorney only brought charges after appellants started making accusations, (3) that appellants based their accusations on a videotape on which Howard does not appear, and (4) that the District Attorney played Howard a tape where appellants asked that the case be reopened after it was dismissed, all lends further support a finding of malice.

We hold that Howard presented legally sufficient evidence to support the trial court's finding that appellants acted with malice in initiating or procuring theft charges against Howard. Furthermore, because appellants direct us to no evidence in the record against the finding, and because we have found none, we cannot conclude that the finding is contrary to the overwhelming weight of the evidence. We hold that the evidence is also factually sufficient to sustain the trial court's finding on the third element of malicious prosecution. We overrule appellants' fourth issue.

C. Remaining claims

If, as here, a case is tried on more than one alternative theory of recovery, and the fact-finder returns favorable findings on more than one of those theories, then if one of the theories is declared invalid on appeal, then the plaintiff may still recover under the alternative theory. See Durban v. Guajardo, 79 S.W.3d 198, 207 (Tex. App.--Dallas 2002, no pet.) (citing Boyce Iron Works, Inc. v. Sw. Bell Tel. Co., 747 S.W.2d 785, 787 (Tex. 1988)). Having overruled appellants' sufficiency of the evidence complaints relating to Howard's malicious prosecution claim, we need not reach appellants' remaining issues, because even if we invalidated all of Howard's remaining claims, we would still affirm the trial court's award of damages under his valid claim.

Conclusion

We affirm the judgment of the trial court.

Elsa Alcala

Justice

Panel consists of Justices Taft, Alcala, and Hanks.

1. The trailer was recovered a few weeks later, apparently undamaged, after an unidentified person called police and told them where it was located.