Rivers v. Ex-Cell-O Corp.

300 N.W.2d 420, 100 Mich. App. 824, 1980 Mich. App. LEXIS 3005
CourtMichigan Court of Appeals
DecidedOctober 22, 1980
DocketDocket 44579, 45303
StatusPublished
Cited by30 cases

This text of 300 N.W.2d 420 (Rivers v. Ex-Cell-O Corp.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rivers v. Ex-Cell-O Corp., 300 N.W.2d 420, 100 Mich. App. 824, 1980 Mich. App. LEXIS 3005 (Mich. Ct. App. 1980).

Opinions

[830]*830E. A. Quinnell, J.

In December, 1972, defendant’s auditor and corporate counsel reported to the Wayne County Prosecutor’s Office that plaintiff Donald Rivers, who at that time was defendant’s manager of office services, had embezzled some $100,000 worth of postage stamps over a four-year period. Plaintiff was charged and bound over for trial. However, Wayne Circuit Court Judge Charles Kaufman quashed the information for lack of proof that a crime had been committed. Thereafter, plaintiffs filed their complaint alleging malicious prosecution and loss of consortium. Following a trial, plaintiffs, Mr. and Mrs. Rivers, were awarded damages of $450,000 and $50,000 respectively.

Plaintiff Donald Rivers had been manager of office services for defendant since August, 1971. In this capacity, he was responsible for defendant’s three mailroom facilities. The company had postage meter machines at each mailroom. Defendant’s position was that all but a minimal amount of postage was handled through the machines so that the use of stamps for mailing could not have accounted for the high volume of stamps plaintiff had purchased. Plaintiff, however, contended that he had begun substituting stamps for the meter at one of the facilities in 1969 while he was an assistant to the then manager of office services. He found that the meter in this facility was inadequate because it frequently jammed, employed postage tapes, and was difficult to use for bulky packages.

Defendant’s suspicions were first aroused in October, 1972, when a postal employee phoned defendant’s traffic manager to leave a message for the man who bought the big rolls of stamps. This was reported to plaintiff’s superiors, who were suspi[831]*831cious because of their belief that the company did not use stamps for mailing purposes. Consequently, defendant’s auditor authorized an investigation. The investigation disclosed a large number of checks signed by plaintiff with the designation "recharging meter” written on them. However, the dates on these checks did not correlate with the recorded rechargings. A mailroom employee was also given a stack of envelopes and some stamps to ascertain if the stamps could have been used as postage. The mailroom employee applied the stamps by licking them. The investigator concluded from this "test” that plaintiff would have spent nearly all of his time applying stamps if the large amount of stamps were actually used.

Plaintiff was never interviewed during the course of the investigation. During the trial, however, he pointed out that the "test” did not simulate the conditions under which the stamps were actually applied, namely, that he quickly applied large denominations of postage to bulky packages using a wet sponge.

As a result of defendant’s investigation, the Wayne County Prosecutor’s Organized Crime Task Force became involved in this matter. Defendant also reported a theft loss to its bonding company.

Defendant gave the Task Force a report of its findings. Investigators with the Task Force, working with defendant’s employees, conducted a second audit. Plaintiff was interviewed and explained his version of' the mail operation, including the fact that the department ran under its postage budget. This was considered insignificant by the investigators and a warrant was issued.

Plaintiff argued that defendant withheld material information which would have dissuaded the Task Force from prosecuting. Plaintiff’s case also [832]*832made much of the relationship between defendant and its bonding company. The accusation was made that defendant’s desire to have plaintiff prosecuted was motivated by its own desire to collect on the bond. Defendant’s corporate counsel acknowledged his perception that the bonding company would be more likely to honor the claim if the thief were prosecuted and convicted. In July, 1973, after plaintiff had been bound over for trial, defendant and its bonding company entered an agreement in which the $100,000 claim was paid. The settlement was to become final upon plaintiff’s conviction. This settlement would also become final if plaintiff were to be acquitted, but no civil action proved his innocence. If a civil action were to exonerate plaintiff, however, defendant would be required to refund the money.

Defendant appeals from the jury’s finding of liability. Plaintiffs appeal from the assessment of. damages.

I. Did Plaintiffs Establish All of the Elements Necessary to Sustain a Malicious Prosecution Action?

The elements of a cause of action for malicious prosecution are: (1) a criminal prosecution instituted against plaintiff by defendant, terminating in plaintiff’s favor, (2) absence of probable cause for the criminal proceeding, and (3) malice or a primary purpose in bringing the action other than bringing the offender to justice. Weiden v Weiden, 246 Mich 347, 352; 224 NW 345 (1929), Ringo v Richardson, 88 Mich App 684, 689; 278 NW2d 717 (1979), lv den 407 Mich 906 (1979).

Defendant first contends that it simply disclosed all material information to the police and prosecutor so that it cannot be held liable for "instituting” the criminal charge. Due to the important [833]*833state policy of encouraging citizens to report possible criminal violations within their knowledge, a defendant cannot be held liable for malicious prosecution unless he took some active role in instigating the prosecution. If the defendant, as complainant, has made full and fair disclosure of all of the material facts within his knowledge to the prosecutor, and the prosecuting attorney recommends a warrant, no recovery may be had against said defendant, for under such circumstances the complainant has not "instituted” the charge. Renda v International Union, U A W, 366 Mich 58, 83-87; 114 NW2d 343 (1962). Clanan v Nushzno, 261 Mich 423, 428-429; 246 NW 168 (1933).

In the case at bar, however, the jury could properly conclude that defendant’s agents did not disclose all material facts to the prosecutor. Plaintiff ran under budget in 1972 and close to budget in 1970 and 1971 while allegedly stealing approximately one-third of his postage budget in each of these years. The budgets for the years 1970 through 1972 were in accord with budgets from years in which no thefts occurred. Moreover, adjusting for postal rate increases, postage costs actually decreased from 1970 to 1972. The Task Force discounted the budget compliance as an indication of innocence, based on management representations about the budgeting process. Defendant’s agents stated that the plaintiff could have padded the budget to conceal his theft and, also, stated that the budget for any given year was simply based on the previous year’s budget. In fact, plaintiff prepared his department’s budget only in 1972. Furthermore, all of the budgets from 1970 through 1972 were reviewed by plaintiff’s superiors.

The most salient factor supporting the jury’s [834]*834conclusion involves the designation of purpose in the description column of the checks used for stamps. Plaintiff had written on a large number of checks “recharging meter”. However, these checks did not correlate with the recorded rechargings. The fact that the checks designated for meter recharging were actually used for the purchase of stamps seemed very incriminating. However, the investigator who conducted the internal audit for the company reported findings critical of the company’s accounting procedures in a memo to a corporate vice-president.

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Bluebook (online)
300 N.W.2d 420, 100 Mich. App. 824, 1980 Mich. App. LEXIS 3005, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rivers-v-ex-cell-o-corp-michctapp-1980.