Sargee v. Security Industrial Insurance Co.

540 So. 2d 1276, 1989 WL 22904
CourtLouisiana Court of Appeal
DecidedMarch 15, 1989
DocketNo. 87-1324
StatusPublished
Cited by2 cases

This text of 540 So. 2d 1276 (Sargee v. Security Industrial Insurance Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sargee v. Security Industrial Insurance Co., 540 So. 2d 1276, 1989 WL 22904 (La. Ct. App. 1989).

Opinion

DOUCET, Judge.

The above numbered and entitled appeal was consolidated with an appeal entitled Hardy v. Security Industrial Insurance Company, 540 So.2d 1281 (La.App. 3rd Cir.1989). Both appeals arise out of the same factual situation. We decide all issues presented in both appeals in this opinion but render a separate decree in the companion appeal.

Plaintiff, Lavelle Sargee, was employed by defendant, Security Industrial Insurance Company, from July 3, 1979 until April 30, 1982. She was originally hired as a debit agent whose principal responsibilities were to collect premiums on the small industrial policies that the defendant issued. Eventually, Sargee became staff manager and supervised approximately five debit agents.

Plaintiff, Betty Hardy, was employed by Security Industrial from July of 1980 until June of 1982. During this time, Hardy was a debit agent and was under the supervision of Sargee.

After Sargee left her employment with Security Industrial, Security Industrial refused to pay her the salary and commissions which were due her. Sargee then sued Security Industrial in city court for all [1278]*1278that was due her. Mrs. Hardy served as a witness on behalf of Mrs. Sargee.

After a trial on the merits, Security Industrial was cast for an amount equal to the back due wages owed to Sargee plus penalties and attorneys fees.

Shortly after the city court decision, Sar-gee and Hardy were each sued by Security Industrial for $12,500.00 for damages sustained as a result of the two women allegedly signing various checks and cash surrender forms on behalf of several insureds without the insureds’ permission.

Subsequently, an attorney for Security Industrial authored a letter to the District Attorney of Natchitoches Parish, Louisiana, advising the District Attorney of the alleged misdoings of Hardy and Sargee. The matter was then presented to the Natchitoches Parish Grand Jury and the Grand Jury handed down indictments on Hardy and Sargee citing numerous counts of forgery and theft. Sargee and Hardy were never given the opportunity to testify before the Grand Jury.

Hardy and Sargee appeared before the district court on a preliminary examination concerning the numerous counts of forgery and theft. Here, the district judge issued a written opinion ruling that there was no probable cause for the continuation of the criminal proceedings against the two.

After the dismissal of the charges against Hardy and Sargee, the two filed suit against Security Industrial on the theory of malicious prosecution. After a trial on the merits, the court ruled in favor of plaintiffs awarding each $10,000.00 and specifically stated that they had borne the burden of proving the requisite elements of malicious prosecution. It is from this judgment that Security Industrial appeals.

In Security Industrial’s first assignment of error, it urges that the trial court erred in finding that Security Industrial Insurance Company was liable for malicious prosecution. We disagree.

In order to analyze appellant’s first assignment of error, it is necessary to discuss certain policies that were adopted by Security Industrial. Security Industrial had a policy whereby it discouraged its agents and managers from letting insurance policies lapse. Normally, an insurance policy lapses when it is 31 days in arrears. Security Industrial instructed its agents and managers that it was permissible to carry an insured over the 31 day period. Generally, a family had several policies in effect at any given time. If an agent had a customer who was unable to keep his policies current, the agent, with the insured’s permission, could turn in one of the policies for its cash value and apply this amount toward the rest of the policies in order to keep the other policies current. The agent would send off the cash surrender form and a check would eventually issue. With the insured’s permission, the agent would sign the check on behalf of the insured and deposit the check into the company account and give the insured credit on their accounts page in the debit ledger. This would bring the insured up-to-date. If the agent was unable to eventually collect on the lapsed policy, the agent or the staff manager in charge of those books had the responsibility of payment.

In Parks v. Winnfield Life Insurance Co., 336 So.2d 1021 (La.App. 3rd Cir.1976), writ denied, 339 So.2d 351 (La.1976), this court set forth the six elements which must be present in order to prove malicious prosecution. The six elements are as follows:

1. The commencement or continuance of an original or civil judicial proceeding;
2. Its legal causation by the present defendant against plaintiff who was defendant in the original proceeding;
3. Its bona fide termination in favor of the present plaintiff;
4. The absence of probable cause for such proceedings;
5. The presence of malice therein;
6. Damage conforming to the legal standards resulting to plaintiff.

Security Industrial asserts that of these six elements, plaintiffs failed to prove the absence of probable cause and the presence of malice.

[1279]*1279With respect to the probable cause element, it is well established in our jurisprudence that when a plaintiff in an action for malicious prosecution is discharged upon preliminary examination, as occurred in the criminal prosecution against Sargee and Hardy, there is a presumption of want of probable cause and the defendant who instigated the criminal prosecution has the burden of showing that he acted on probable cause and without malice. Robinson v. Rhodes, 300 So.2d 249 (La.App. 2nd Cir.1974), writ refused, 303 So.2d 178 (La.1974), and cases cited therein; Hoff v. Canal Refining Co., Inc., 454 So.2d 188 (La.App. 1st Cir.1984).

Security Industrial supports its assertion that it acted with probable cause, inter alia, by urging that several of its insureds signed affidavits stating that their respective policies were cashed without their permission. Security Industrial is referring to the fact that an employee of Security Industrial, Mr. Cleo Calmes, secured these affidavits from a number of individuals who had insurance with the company. However, the affidavits do not state whether or not the insured had in fact given permission to Sargee or Hardy to sign the cash surrender forms or checks. Instead, the affidavits state that the insureds never received the check, that they never signed an application for change or surrender and never received any of the premiums personally. Plaintiffs readily admit that all of these statements are true. After plaintiffs received the particular insureds’ permission to sign the cash surrender form or check, the money was immediately put in the company account and credit was given to the insured for this amount. Thus, under this set of circumstances, the insureds would not have received the check, would not have signed the application for change or surrender and would not have received any of the premiums personally.

Security Industrial further supports its assertion that it had probable cause to take action against plaintiffs by alleging that plaintiffs admitted to forging the names of the policyholders on various cash surrender forms and checks.

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Related

Sargee v. Security Industrial Ins. Co.
544 So. 2d 408 (Supreme Court of Louisiana, 1989)
Hardy v. Security Industrial Insurance Co.
540 So. 2d 1281 (Louisiana Court of Appeal, 1989)

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Bluebook (online)
540 So. 2d 1276, 1989 WL 22904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sargee-v-security-industrial-insurance-co-lactapp-1989.