K-Mart Corp. v. Salmon

ROSALYN B. BELL, Judge. The K-Mart Corporation appeals a final judgment entered on a jury verdict in favor of Sheryl LeVee Salmon, appellee. On October 14, 1987, a Baltimore County Circuit Court jury awarded Salmon $28,000 on her malicious prosecution claim against K-Mart and Christopher Cañóles, a ⁵⁷² K-Mart employee, and $37,000 on her false imprisonment claim against K-Mart and Sharon Witkowski, also a K-Mart employee. The jury also awarded Salmon $100,000 in punitive damages against K-Mart, as well as $1,000 punitive damages each against Cañóles and Witkowski.

Salmon filed a cross-appeal. The issues on appeal are: —Whether the trial court erred in finding that, as a matter of law, K-Mart and its employee Cañóles acted without probable cause in bringing criminal charges against Salmon. —Whether the issue of malice on the part of Cañóles and, hence K-Mart, was properly preserved for appellate review. —Whether the trial court erred in submitting Salmon’s claim of false imprisonment to the jury. We affirm the trial court and uphold the final judgments entered on the jury verdicts. We also affirm the trial court in respect to the judgments which are the subject of the cross-appeal and address those issues separately, infra.

Sheryl LeVee Salmon discovered that she had lost her purse containing her house keys, wallet, credit cards, checkbook, and a K-Mart check cashing courtesy card on June 7, 1985, a Friday afternoon. That evening, Salmon took the following preventive measures: she notified all the companies with whom she held credit cards, and advised her landlord to change her locks. She also called the 24-hour number on her Easy Bank Card, 1 telling the Easy Bank personnel that she had a checking account. She was told that her checking account could not be closed via telephone, but that she must do it in person Monday morning.

That Monday morning, June 10, Salmon appeared at her bank in order to close the checking account. The bank transferred funds to a new account, leaving enough in the old account to cover any outstanding checks. Salmon did not report her K-Mart check cashing courtesy card lost or stolen because ⁵⁷³ she believed, based on past experience, that K-Mart did not accept checks without first verifying identification. On June 7, a Friday evening, the same day Salmon lost her purse, an unkempt woman accompanied by two young children entered the K-Mart store on North Point Boulevard in Baltimore.

The assistant manager at the store, John Pussier, asked another employee, Kevin Hagan, to watch the woman who he thought to be a potential shoplifter. This woman asked Hagan if she could use a check to purchase an expensive stereo. Hagan replied that she would first have to have her check approved. Hagan later saw that the woman had purchased the stereo, and he loaded it into her car.

He noticed that her car had out-of-state plates, and that the young children who had previously been with the woman were missing. Hagan wrote down the car’s tag number and gave the information to Pussier because Hagan was concerned that perhaps the check had not been approved. Pussier asked Hagan to run out and see if she was still in the parking lot. When Pussier learned that she had already left, he remarked, “We could have a problem.” Cecelia Schell was the K-Mart sales clerk who rang up the purchase of the stereo.

The woman presented a check from Salmon’s lost checkbook in the amount of $656.64 and Salmon’s K-Mart check cashing courtesy card, telling Schell that the check had been preapproved. Because the check was for an amount over $50, Schell, in accordance with K-Mart practice, called Pussier to reapprove the check. Pussier arrived at the register accompanied by Christopher Candes, K-Mart’s loss prevention manager, and reapproved the check. When Schell asked for identification, the woman stated that she could not provide a driver’s license because it had been revoked, and that her husband was driving.

Because the woman was unable to present any identification other than the check cashing courtesy card, Schell again called Pussier. This time, Pussier arrived with Marlene Yasiliades, another K-Mart assistant manager. Although Vasiliades was unsatisfied with the woman’s identi ⁵⁷⁴ fication, Pussier again gave the check his approval. After the woman left, Cañóles, Pussier, and Vasiliades discussed whether the check should have been approved.

Approximately a week after she closed her checking Account, Salmon received a bank notice indicating that the closed account had been overdrawn. She called her bank, which provided her with the check number and amount, but could or would not tell her to whom the check was written. Salmon’s bank advised her to wait for the payee to contact her. On July 3 at about 6:30 p.m., Salmon came home froni work to find a message to call one Witkowski at a particular number.

The message contained no other information. Salmon immediately called this number, which turned out to be a K-Mart number. Thinking that her purse had been found, Salmon asked Witkowski, a K-Mart security guard, if she had her purse. Witkowski replied that she did not, but that she “had her bad check.” Salmon asked for additional information, which Witkowski would not provide.

She refused to give Salmon a chance to ask questions, stating only that she “did not have time” for Salmon, and “[w]e are going to get you. We know. We have got your check, and we know you.” She then told Salmon to call another number and ask for Hinckle. Hinckle turned out to be an officer with the Baltimore County Police Department.

Salmon asked him to explain Witkowski’s accusations, and he told her that K-Mart received a bad check drawn on her account, and that Witkowski’s attempts to get her to honor it had produced no result. Salmon informed Officer Hinckle about her lost purse and that, until that afternoon, no one from K-Márt had contacted her. Hinckle told Salmon that Witkowski, acting for K-Mart, had sworn out a warrant for her arrest. After Salmon explained more completely about her lost purse, the officer told her that she should call him the next day, and in the interim he would check on the status of the warrant and speak to the District Court Commissioner. ⁵⁷⁵ Salmon’s attempts to reach Hinckle the next day (July 4th) proved fruitless.

She was told to call back the next day. Salmon called the Baltimore County Police Department at 7:00 a.m. the next day and told another officer the problem and that she wanted to do anything in her power to straighten out the situation. This officer suggested that she come to the police station. Salmon did so, and was arrested, booked, and charged.

She was released on her own recognizance, and when she went home found a notice that the post office was holding a certified letter for her. The letter was notice from K-Mart of the dishonored check. The notice advised Salmon that she had 10 days from her receipt of the notice in which to tender payment, and that if not paid within the 10 days the matter would then be turned over to local prosecutorial authorities. 2 The notice was dated July 2, and signed by Witkowski. Witkowski had scrawled this message at the bottom of the notice: “This matter has been turned over to the County Police.” Salmon hired an attorney to represent her on the charge of uttering a bad check. 3 This attorney spoke to Ganóles and to William Lowman, another K-Mart assistant manager, advising them that they had the wrong person.

Salmon’s attorney pointed out that the description of the woman who passed the check was dissimilar to that of Salmon. Cañóles and Lowman stated that they had the right person and intended to prosecute. Ganóles later obtained Salmon’s photograph, and called the State’s Attorney to tell him that ⁵⁷⁶ charges had been instituted against the wrong person. The criminal case was called on August 13, 1985.

Salmon appeared in court that day and was found not guilty when the State produced no evidence against her. Salmon subsequently filed the civil action in the instant case against Cañóles, Witkowski and the K-Mart Corporation, seeking damages for malicious prosecution, false imprisonment, defamation, abuse of process, negligent supervision and negligence. Summary judgment was entered for all appellants on Salmon’s claims of defamation and negligent supervision. At the close of Salmon’s case-in-chief, the trial court entered judgment for all appellants on the negligence claim, and judgment was entered for appellant Witkowski on the malicious prosecution claim.

At the close of all the evidence, appellants renewed their motion for judgment and the trial court entered judgment for Cañóles on the false imprisonment claim. The trial court entered judgment for all appellants on Salmon’s abuse of process claim. The trial court denied appellants’ motion for judgment on the malicious prosecution claim against Cañóles and K-Mart. The trial court also ruled that, as a matter of law, Cañóles, and therefore K-Mart, had no probable cause to institute criminal charges against Salmon.

Probable Cause Appellants K-Mart and Cañóles contend that the trial-court erroneously denied their motion for judgment, arguing that the undisputed evidence showed that they did indeed have probable cause to initiate and maintain the criminal action against appellee. We disagree. In a malicious prosecution action, the plaintiff must prove that the defendant had no probable cause to institute or maintain the underlying criminal proceeding. ⁵⁷⁷ Exxon Corp. v. Kelly, 281 Md. 689, 693 , 381 A.2d 1146 (1978). 4 Probable cause is defined as a reasonable ground of suspicion supported by circumstances strong enough to warrant an ordinary and cautious person’s belief that the accused is guilty. Sincere belief that the accused is guilty is not enough—there must be a reasonable basis for the belief.

Banks v. Montgomery Ward, 212 Md. 31, 39 , 128 A.2d 600 (1957). In evaluating probable cause, the focus is on those facts known to, and genuinely believed by, the one initiating (or continuing) the criminal proceeding. Palmer Ford, Inc. v. Wood, 298 Md. 484, 495 , 471 A.2d 297 (1984). Absence of probable cause is a mixed question of law and fact.

That is, the existence of the facts relied upon to show absence of probable cause is a jury question, but whether the factual setting does or does not show absence of probable cause is a question for the court. Palmer Ford, Inc., 298 Md. at 498 , 471 A.2d 297 . 5 The trial court in the instant case did not require the jury to determine a factual setting because the important facts were not disputed. In his instruction, the trial court informed the jury that the requisite element of lack of probable cause had already been established. In Montgomery Ward & Company v. Keulemans, 23 Md.App. 81, 99 , 326 A.2d 45 (1974), aff'd, 275 Md. 441 , 340 A.2d 705 (1975), we held that there was no probable cause ⁵⁷⁸ where a security officer failed to investigate thoroughly an explanation offered by the accused before arresting him.

In Keulemans , a Montgomery Ward security officer claimed to have seen a store shipping manager (appellee) steal a pair of sunglasses. Two hours later, the security officer arrested appellee, even though appellee told him he had purchased the glasses at Peoples Drug Store. Before taking him to the police station, the security officer questioned the manager of Peoples where appellee claimed to have purchased the glasses. The manager stated that Peoples no longer carried the sunglasses.

The security officer, however, did not ask whether Peoples had carried sunglasses at the time appellee claimed to have purchased them. Appellee was acquitted and later brought a malicious prosecution action against the security officer and Montgomery Ward. Keulemans, 23 Md.App. at 90-93 , 326 A.2d 45 . In Keulemans , we set out the factors to be considered in determining whether a security officer should investigate further before instituting a criminal proceeding. “Circumstances known or believed by- the accuser may be incriminating to the accused and yet may not so clearly indicate guilt that a reasonable man would initiate criminal proceedings without investigation.

In determining whether an investigation should be made, the following factors are important; the necessity of prompt action to prevent escape; the availability of information other than that in the possession of the accuser; the existence of a ready opportunity to obtain an explanation from the person accused or to ascertain his reputation; the character of the source from which the accuser’s information comes. The accuser may properly be required to make inquiry as to the veracity of his informants where his belief is founded upon their information. He may even be required to distrust the accuracy of his own observations when they are made under such circumstances that they may be suspected of inaccuracy. In all these cases the fact that an investigation might prove ⁵⁷⁹ dangerous, or the probability that it would be futile, are matters to be taken into account.” Keulemans, 23 Md.App. at 96 , 326 A.2d 45 , quoting Restatement of Torts § 662 at 408-09 (1938) (emphasis added).

We went on to state that failure to conduct an adequate investigation may destroy probable cause because the test for probable cause is not limited to actual knowledge of the person initiating criminal proceedings, but rather extends to any knowledge which could or ought to have been gained by a reasonable person. There may be no probable cause where a proper investigation would have cleared away suspicious circumstances. Keulemans, 23 Md.App. at 98 , 326 A.2d 45 , quoting Scott v. Dennett Surpassing Coffee Co., 51 A.D. 321 , 64 N.Y.S. 1016, 1017-18 (1900). Appellant does not contend that the trial court should have submitted the issue to the jury for it to determine a factual setting.

Here, the trial court had an undisputed set of facts on which to make its probable cause determination. We hold that there was no error in the trial court’s determination that Ganóles, and therefore K-Mart, lacked probable cause. We explain. The trial court correctly looked at all that was known by appellant Ganóles when he set the criminal process in motion against appellee.

The facts showed that appellant Ganóles was in the immediate area when the check was approved, discussed the purchase with Pussier and with Vasiliades, and expressed his concern about the purchase. It is appellant’s position that, even given these facts, probable cause existed because Cañóles knew that the woman possessed both the checks and the courtesy card, and that no one had reported appellee’s courtesy card as lost or missing. 6 According to appellants, these facts constituted compelling evidence that the woman was Salmon. They argue that, when the check was later dishonored and Salmon failed to contact Ganóles about the overdraft, and his call ⁵⁸⁰ to her bank did not indicate that the check had been lost or stolen, probable cause to initiate criminal action existed as a matter of law. The trial court disagreed with this analysis, denying appellants’ motion for judgment because appellants should not have disregarded all the information they possessed which indicated that someone else wrote the check.

Analyzing the factors we set forth in Keulemans , it is clear that the ordinary prudent person would have investigated further before causing appellee to be arrested. Here, appellant Cañóles had observed that the check was approved without the customarily required photographic identification, and knew that his fellow employees were uncomfortable with the transaction. When the check was returned “account closed,” he should have considered all the information together and concluded that the matter warranted further investigation. He had the information from appellee’s courtesy card application and thus could have easily contacted her at home, or at her place of employment.

Also easily available to Candes were the other K-Mart employees 7 who had information about the circumstances surrounding the offering of the check. Here, as in Keulemans , there were no exigent circumstances necessitating a prompt arrest of appellee. As in Keulemans , Candes had taken some steps toward investigation but failed to follow through—he called appellee’s bank to verify that the account was closed, but did not contact appellee. We do not hold that in every case, or even in most cases, a store employee must investigate circumstances surrounding the offering of a check which is later dishonored.

In most cases, the dishonored check and the resulting failure to make it good would constitute probable cause. Here, however, there was evidence showing that Candes, as well as other K-Mart employees, had serious doubts about the woman’s identity. Because a reasonable person would have conducted a more thorough investigation, the probable cause for arrest was destroyed, as it was in Keulemans . ⁵⁸¹ In light of this undisputed evidence, we hold that the trial court did not err in concluding that, as a matter of law, appellants lacked probable cause to institute criminal proceedings against appellee. Preservation of Issue for Appellate Review Appellants ask us to reverse the malicious prosecution judgment because appellee failed to establish malice, a necessary element of the tort.

We decline to do so, as appellants failed properly to preserve the issue for our review. At the close of appellee’s case-in-chief, appellants made their motion for judgment, giving the trial judge a formal written motion accompanied by a 20-page memorandum of law. In the written motion, appellants asserted that appellee failed to prove that the criminal prosecution had been instituted “without probable cause and with malice.” The memorandum of law supporting the motion contained a very brief discussion of malice. After presenting the trial judge with these materials, the jury was sent out of the courtroom and appellants’ arguments on their motion were heard.

Appellants failed to mention malice in their oral argument to the trial judge and instead focused on probable cause. The trial judge’s denial of appellants’ motion, issued immediately afterward from the bench, reflected precisely what was argued before him: he gave careful and detailed consideration to the probable cause question, but made no specific ruling as to malice. After presenting their defense witnesses, appellants renewed their motion for