South Arkansas Petroleum Co. v. Schiesser

36 S.W.3d 317, 343 Ark. 492, 2001 Ark. LEXIS 54
CourtSupreme Court of Arkansas
DecidedFebruary 1, 2001
Docket00-614
StatusPublished
Cited by32 cases

This text of 36 S.W.3d 317 (South Arkansas Petroleum Co. v. Schiesser) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
South Arkansas Petroleum Co. v. Schiesser, 36 S.W.3d 317, 343 Ark. 492, 2001 Ark. LEXIS 54 (Ark. 2001).

Opinion

TOM GLAZE, Justice.

This appeal is brought by South Arkansas Petroleum Co., Inc. (SAPCO), from a jury verdict which found SAPCO hable for malicious prosecution and abuse of process committed against appellee Dana Schiesser. The jury awarded Schiesser $110,000.00 in compensatory damages and $250,000.00 in punitive damages. Schiesser initiated the lawsuit against SAPCO after she successfully defended herself against felony theft charges. The charges were based upon allegations by SAPCO’s executive officers, Clint and Jim Johnson, which they had reported to the Monticello police and the Drew County prosecuting attorney. On appeal, SAPCO argues Schiesser proved neither malicious prosecution nor abuse of process.

We first address SAPCO’s arguments as they relate to malicious prosecution. To prevail on her claim of malicious prosecution, Schiesser was required to prove the following elements: (1) a proceeding instituted or continued by the defendant against the plaintiff; (2) termination of the proceeding in favor of the plaintiff; (3) absence of probable cause for the proceeding; (4) malice on the part of the defendant; and (5) damages. McLaughlin v. Cox, 324 Ark. 361, 922 S.W.2d 327 (1996). Here, SAPCO does not question elements (2) and (5), but it does question whether Schiesser proved the other three.

SAPCO first submits that there is no substantial evidence that it instituted or continued the criminal charges against Schiesser; in making this argument, it relies on comment g to the Restatement (Second) of Torts, § 653 (1977). Section 653 sets out the elements of the tort of malicious prosecution, and comment g provides in relevant part as follows:

[ A] private person who gives to a public official information of another’s supposed criminal misconduct. . . obviously causes the institution of such subsequent proceedings as the official may begin on his own initiative, but giving the information or even making an accusation of criminal misconduct does not constitute a procurement of the proceedings initiated by the officer if it is entirely to his discretion to initiate the proceedings or not.

SAPCO contends that the Monticello police obtained a warrant for Schiesser’s arrest on their own initiative, and there was no evidence that the prosecuting attorney filed charges against Schiesser upon any basis other than the prosecuting attorney’s own discretion. SAPCO cites Matthews v. Blue Cross & Blue Shield of Michigan, 572 N.W.2d 603 (Mich. 1998), because of its reliance on comment g to the Restatement. There, the Michigan court stated the settled rule that a prosecutor’s exercise of his or her independent discretion in initiating and maintaining the prosecution is a complete defense to an action for malicious prosecution. Comment g to the Restatement, however, further provides that, when a private person makes an accusation of criminal misconduct about another to an official, the person must believe the accusation or information is true. “If, however, the information is known by the giver to be false, an intelligent exercise of the officer’s discretion becomes impossible, and a prosebution based upon it is procured by the person giving the false information.” Restatement (Second) of Torts § 653 cmt. g (emphasis added). Despite SAPCO’s attempt to distinguish “the Restatement approach,” Arkansas law is consistent with comment g and the Michigan case, as well. In McLaughlin, supra, this court stated the absence of probable cause is an essential element in a claim for malicious prosecution, and it is only when the defendant makes a full, fair, and truthful disclosure of all facts known to him to competent counsel (or the prosecuting attorney) and then acts bona fide upon such advice, that this will be a good defense to a claim of malicious prosecution. See also Kellerman v. Zeno, 64 Ark. App. 79, 983 S.W.2d 136 (1998).

SAPCO’s argument that the evidence entitles it to the so-called “advice-of-counsel” defense, as related above in comment (g) and our McLaughlin decision, is futile. In short, SAPCO’s owner, Clint Johnson, gave law enforcement officials information alleging criminal misconduct on Schiesser’s part, but was not forthcoming with all the pertinent information which he had in his possession when he first reported the alleged theft to Monticello police.

Before contacting Monticello Police Investigator John Dement, Clint Johnson checked some of the store’s daily reports during a period beginning in June 1996, and ending in January 1997, and found that these reports reflected $7,809 in “overrings.” Based on that, and without looking at each day’s shift reports (which would have shown which employee did the overrings), Clint Johnson concluded Schiesser had stolen that amount of money. On June 26, 1997, 1 Clint and Jim Johnson confronted Schiesser about the overrings; she replied that she did not take any money, but that “she would repay it not to have her name drug [sic] through the mud.” Both of the Johnsons accused Schiesser of stealing money, and told her if she did not repay the money, they would prosecute her. Schiesser subsequently decided not to pay any money because she denied having taken it.

In July 1997, Clint Johnson went to Officer Dement’s office in order to file a complaint against Schiesser; he provided Dement with paperwork which he claimed supported SAPCO’s allegations of theft. Although the daily reports Clint Johnson gave Dement showed Schiesser had entered “overrings” on them between June 1996 and January 1997, Schiesser was indisputably out of the country and out of state on a number of those days. Clint Johnson was apprised of these errors by reading the daily reports, but he never gave that information to Dement. Clint Johnson also conceded Schiesser could not be shown to have been in the store on other days that Clint Johnson had daily reports purportedly bearing Schiesser’s signature. Thus, while Clint Johnson knew Schiesser could not have signed a number of the daily reports he gave Dement, Johnson, for whatever reason, failed to give this exculpatory information to Dement. It is also worthy to mention that, on one of the days Schiesser was accused of stealing money, the amount missing was supposedly $728.00. Such amount was clearly fictitious, because the store had never sold merchandise that totaled more than $350.00 in one day. This error, too, was known by Clint Johnson, but not given to Officer Dement before charges were filed against Schiesser.

When reviewing a challenge to the sufficiency of the evidence, we examine the evidence and all reasonable inferences arising therefrom in the light most favorable to Schiesser, the appellee. See SEECO, Inc. v. Hales, 341 Ark. 673, 22 S.W.3d 157 (2000). Here, the evidence abundandy shows SAPCO was not entitled to the “advice-of-counsel” defense it sought at trial. SAPCO clearly did not make a full and fair disclosure of all facts known to it, and in fact, what SAPCO did provide misled the police and the prosecuting attorney.

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Bluebook (online)
36 S.W.3d 317, 343 Ark. 492, 2001 Ark. LEXIS 54, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-arkansas-petroleum-co-v-schiesser-ark-2001.