Koury v. John Meyer of Norwich

261 S.E.2d 217 (1980)

44 N.C. App. 392

W. C. KOURY v. JOHN MEYER OF NORWICH, a corporation; Casey, Daly & Bennett, P. A., a Professional Association; and Hugh G. Casey, Jr., and Walter H. Bennett, Jr., Individually.

No. 7826SC57.

Court of Appeals of North Carolina.

January 8, 1980.

*220 T. LaFontine Odom, L. Holmes Eleazer, Jr., and Weinstein, Sturges, Odom, Bigger, Jonas & Campbell, Charlotte, for plaintiff-appellant.

William C. Livingston and Kennedy, Covington, Lobdell & Hickman, Charlotte, for John Meyer of Norwich, defendant-appellee.

John G. Golding and Golding, Crews, Meekins, Gordon & Gray, Charlotte, for Casey, Daly & Bennett, P. A., and Hugh G. Casey, Jr., and Walter H. Bennett, Jr., defendants-appellees.

PARKER, Judge.

Summary judgments dismissing plaintiff's claim for false imprisonment were properly entered. The order of Judge Falls under which plaintiff was arrested, although erroneous, was not void, and it protects against an action for false imprisonment both the officer who made the arrest and the defendants who procured the order to be entered. Bryan v. Stewart, 123 N.C. 92, 31 S.E. 286 (1898); Tucker v. Davis, 77 N.C. 330 (1877).

Summary judgments were also properly entered dismissing plaintiff's claim for abuse of process. "Abuse of process consists in the malicious misuse or perversion of a civil or criminal writ to accomplish some purpose not warranted or commanded by the writ." Barnette v. Woody, 242 N.C. 424, 431, 88 S.E.2d 223, 227 (1955). "It consists in the malicious misuse or misapplication of that process after issuance to accomplish some purpose not warranted or commanded by the writ." Melton v. Rickman, 225 N.C. 700, 703, 36 S.E.2d 276, 278 (1945); accord, Stanback v. Stanback, 297 N.C. 181, 254 S.E.2d 611 (1979). There is no cause of action for abuse of process when the process, even though maliciously obtained, is used only for the purpose for which it was intended and the result accomplished was warranted by the writ. Fowle v. Fowle, 263 N.C. 724, 140 S.E.2d 398 (1965); Benbow v. Caudle, 250 N.C. 371, 108 S.E.2d 663 (1959). Here, the arrest order issued by Judge Falls was used for the purpose for which it was intended, and no improper act of the defendants after the issuance of the arrest order has been shown.

This brings us to the principal question presented by this appeal, which is whether the trial court was correct in granting defendants' motions for summary judgments dismissing plaintiff's claim for malicious prosecution. We hold that it was.

"The common law action for malicious prosecution was originated as a remedy for unjustifiable criminal prosecutions. However, in North Carolina and many other states, the right of action has been extended *221 to include the malicious institution of civil proceedings which involve an arrest of the person or seizure of property or which result in some special damage." Carver v. Lykes, 262 N.C. 345, 351-52, 137 S.E.2d 139, 144 (1964); accord, Ely v. Davis, 111 N.C. 24, 15 S.E. 878 (1892). Since plaintiff here was subjected to a civil arrest, his action will lie if he can show the other essential elements of an action for malicious prosecution. To maintain an action for malicious prosecution, a plaintiff must show (1) that the defendant instituted or caused to be instituted against him a criminal proceeding (or, as here, a civil proceeding resulting in some special damage), (2) with malice, (3) without probable cause, and (4) that such proceeding has been terminated in favor of the plaintiff who asserts the claim for malicious prosecution. Taylor v. Hodge, 229 N.C. 558, 50 S.E.2d 307 (1948); see Byrd, Malicious Prosecution in North Carolina, 47 N.C.L.Rev. 285 (1969). Since plaintiff must prove all of these elements in order to maintain his claim, a defendant will be entitled to summary judgment dismissing plaintiff's action if the record discloses that there is no genuine issue as to the material facts which establish the nonexistence of any one of them. In considering the record for the purpose of making that determination, however, the court must view all material furnished in support of and in opposition to the motion for summary judgment in the light most favorable to the plaintiff as the party opposing the motion, since the movant for summary judgment "always has the burden of showing that there is no triable issue of fact and that movant is entitled to judgment as a matter of law." Pitts v. Pizza, Inc., 296 N.C. 81, 86, 249 S.E.2d 375, 378 (1978).

Applying these principles in the present case, it is undisputed that defendants instituted the proceeding in which plaintiff was subjected to civil arrest and that the proceeding terminated in favor of the plaintiff when Judge Snepp dissolved the arrest order and dismissed the amended complaint under Rule 12(b)(6). Although defendants deny that they acted with malice, the record discloses that a genuine issue exists for jury determination as to whether this is so, and aside from express malice, which plaintiff might or might not be able to prove at trial, "implied malice may be inferred from want of probable cause in reckless disregard of plaintiff's rights." Pitts v. Pizza, Inc., supra at 86-7, 249 S.E.2d at 379. Thus, determination of this appeal turns upon whether the record discloses that there is no genuine issue as to the material facts which establish that defendants acted with probable cause.

In cases grounded on malicious prosecution, probable cause "has been properly defined as the existence of such facts and circumstances, known to him at the time, as would induce a reasonable man to commence a prosecution." Morgan v. Stewart, 144 N.C. 424, 430, 57 S.E. 149, 151 (1907). The existence or nonexistence of probable cause is a mixed question of law and fact. Cook v. Lanier, 267 N.C. 166, 147 S.E.2d 910 (1966); Taylor v. Hodge, supra. If the facts are admitted or established it is a question of law for the court. Carson v. Doggett, 231 N.C. 629, 58 S.E.2d 609 (1950). Conversely, when the facts are in dispute the question of probable cause is one of fact for the jury."

Pitts v. Pizza, Inc., supra, at 87, 249 S.E.2d at 379.

In the present case, the facts are not in dispute. In their amended complaint which defendants filed in the action brought by Meyer against Libby's, defendants based their claim that they were entitled to have Koury arrested upon the following allegations:

(6) That the defendant [Libby's] denied owing for the goods on the grounds that it had tendered to the plaintiff [Meyer] a check with payment in full language and that the plaintiff had knowingly accepted this check. (7) That the defendant, through its agent, W. C. Koury, had written the payment in full language after the check had been accepted by the plaintiff and cleared the bank and returned to the defendant. *222 (8) That the foregoing acts of the defendants [Libby's and Koury, who was joined as an additional party defendant] constitute a fraud on the plaintiff and the court.

At the time the amended complaint was filed there was no dispute, nor is there any now, concerning the truth of the allegations contained in paragraphs 6 and 7. Plaintiff Koury has admitted that he typed the "payment in full" language on the back of the check after it was cashed by Meyer. He has admitted that he gave false testimony under oath when he testified that the typed language was on the check when it was first presented to Meyer. Koury's obvious purpose in adding the typed statement to the back of the check and then committing perjury concerning it was to perpetrate a fraud by having the check operate as a bar to defeat Meyer's claim. The question thus becomes whether knowledge of these undisputed facts[1] furnished the defendants, at the time they undertook to have Koury subjected to civil arrest, probable cause to have him arrested. This is a question of law for the court.

The North Carolina statute which specifies the causes for which a defendant in a civil action may be subjected to pre-judgment arrest is G.S. 1-410. For purposes of this appeal the pertinent portions of G.S. 1-410 are as follows:

G.S. 1-410. In what cases arrest allowed.The defendant may be arrested, as hereinafter prescribed, in the following cases: * * * * * * (4) When the defendant has been guilty of a fraud in contracting the debt or incurring the obligation for which the action is brought, in concealing or disposing of the property for the taking, detention or conversion of which the action is brought, or when the action is brought to recover damages for fraud or deceit. (Emphasis added.)

This statute has been in effect for more than a century, appearing as § 149, subsection 4, of the Code of Civil Procedure of 1868. The breadth of its language suggests that it was designed to authorize civil arrests to the full extent permitted by our North Carolina constitutional provision against imprisonment for debt "except in case of fraud." Art. I, Sec. 28, N.C. Constitution. Speaking of this constitutional exception permitting imprisonment in case of fraud, our Supreme Court long ago expressed the view that the exception comprehended "fraud in attempting to hinder, delay and defeat the collection of a debt by concealing property and other fraudulent devices." Melvin v. Melvin, 72 N.C. 384, 386 (1875). In our opinion Koury's activities in adding the "payment in full" language to the check after it had been cashed by Meyer, and in then attempting to use the check to defeat Meyer's claim, constituted fraud within the intent of G.S. 1-410(4) and within the North Carolina constitutional exception permitting imprisonment in case of fraud. Therefore, we hold that when Meyer and its attorneys filed the amended complaint seeking to recover punitive damages for Koury's fraud, they had probable cause to seek his arrest under G.S. 1-410(4). This, apparently, was the view *223 adopted by Judge Falls when he issued his order of 1 April 1976 directing that Koury be arrested. That order in itself, even though subsequently set aside by Judge Snepp, is conclusive in favor of the defendants in the present action on the question of probable cause so that they may not now be held liable for malicious prosecution. Overton v. Combs, 182 N.C. 4, 108 S.E. 357 (1921); Baranan v. Kazakos, 125 Ga.App. 19, 186 S.E.2d 326 (1971); see Annot., 58 A.L.R.2d 1422 (1958).

We note that some two years after Judge Falls entered his order of 1 April 1975 directing Koury's arrest, a three-judge federal court considered a case in which the constitutionality of G.S. 1-410 was challenged on the grounds that it violates the due process and equal protection clauses of the Fourteenth Amendment to the Federal Constitution. Grimes v. Miller, 429 F. Supp. 1350 (1977), aff'd 434 U.S. 978, 98 S. Ct. 600, 54 L. Ed. 2d 473 (1977). Although the court in that case expressly declined to pass on the constitutionality of G.S. 1-410, holding that the plaintiff lacked standing to challenge the North Carolina pre-judgment arrest statutes and confining its decision to a consideration of G.S. 1-311 which provides for post-judgment civil arrest, the reasoning of the opinion of the court, written by Craven, Circuit Judge, raises a serious question as to whether G.S. 1-410 violates the due process and equal protection clauses of the Fourteenth Amendment. That question is not presently before us. Even if G.S. 1-410 should ultimately be declared unconstitutional, defendants would have been entitled to rely upon it when they caused Koury's arrest in 1975. See, Powell v. Duke University, 18 N.C.App. 736, 197 S.E.2d 910 (1973); cert. denied 284 N.C. 122, 199 S.E.2d 660 (1973).

The summary judgments dismissing all of plaintiff's claims against all defendants are

Affirmed.

ROBERT M. MARTIN and HARRY C. MARTIN, JJ., concur.

NOTES

[1] At the hearing before Judge Falls on return of the show cause order, attorney Hugh G. Casey, Jr., one of the defendants in the present action, appearing for Meyer, stated to Judge Falls that he had information that Libby's had transferred all its inventory and fixtures to another corporation owned by Koury and that this corporation had in turn given a security interest to the bank. He presented this as justification for holding Koury on "a bond sufficient to the judgment that we may obtain." On this appeal, defendant-appellants point out that the record shows that when Meyer later obtained judgment in the amount of $2700.00 against Libby's, the sheriff returned execution reporting no assets to be found, and they argue that this shows that Libby's assets had in fact been disposed of. We do not consider these matters relevant to the present appeal, since the question here is not whether defendants in this action had other grounds, such as those set forth in subsection (5) of G.S. 1-410, which could have furnished them with probable cause to have Koury arrested, but whether the grounds which they utilized by stating them in their amended complaint furnished probable cause.