Kelly v. Exxon Corp.

Liss, J., delivered the opinion of the Court. This complex and convoluted case reaches us on appeal and cross-appeal from judgments on verdicts returned by a jury in the Circuit Court for Baltimore County (MacDaniel, J., presiding) in favor oí Stuart F. Kelly (“Kelly”), appellant/cross-appellee, against Exxon Corporation (“Exxon”), appellee/cross-appellant. The jury found that Kelly was entitled to the sum of one thousand dollars ($1,000) as compensatory damages and forty thousand dollars ($40,000) as punitive damages for the alleged malicious prosecution of Kelly by Exxon. The controversy had its genesis in August, 1973, when William J. Clinton, security agent for Exxon, communicated with a Corporal Claude O. Keen of the Maryland State Police ²⁷⁴ and requested his cooperation in an investigation of the disappearance of company products from Exxon’s Dundalk terminal.

The plan agreed upon and carried out on September 26, 1973, was that the assistant terminal superintendent, Brady 'Moore, and the garage superintendent, Edward Anderson, equipped with binoculars, would position themselves on two partially constructed parallel bridges (about 250 feet from the garage) from which they would conduct a surveillance of the night shift garage mechanics. Kelly, one of the two mechanics working, spent several hours repairing a tank truck radiator, and at some point during the evening, he removed several five gallon oil cans from the trunk of his car and was seen carrying them through the garage. The testimony is conflicting as to what occurred from that point on. Kelly said that the cans contained “junk” material which he dumped into the garage trash dumpster; the private use of the dumpster by the mechanics was permitted by the company.

Moore testified that Kelly took the five gallon cans from the trunk of his automobile and proceeded to the manifold lines of a tank truck from which he filled the cans; 1 that he saw Kelly place the cans on the ground near the garage and back his personal car up to the garage; that he further saw Kelly make motions “that any reasonable person would take to be lifting motions; however [Kelly’s] body was between me and the car and I could not physically see those cans go into his car”; and that so far as Moore knew, neither he nor any other Exxon employee had actually seen Kelly carry any gasoline from the Dundalk facility on that night or on any other night. Anderson testified that he saw Kelly back his car up to the garage and heard the manifold valve slam off, but because of obstructions to his view, he did not see Kelly drain any gasoline out of the manifold line of any of the tank trucks or put anything into the trunk of his car. ²⁷⁵ Kelly stated that he may have drained the manifold line of one of the trucks that evening but that this was not unusual because as a safety measure, it was often considered necessary to drain gasoline from the manifolds. This “slop gas” (contaminated gasoline), he said, was either thrown away or with the company’s knowledge used by employees to wash their jackets, gloves or other clothing. He denied placing the cans in the trunk of his car and denied removing any gasoline from the Exxon terminal.

On October 8,1973, Kelly was called into Anderson’s office where a number of Exxon’s management personnel were present; they advised him of the surveillance of his activities on the night of September 26th and that he was suspected of stealing company gasoline. Kelly denied the charge and returned to his work; he was advised later that afternoon that the company had decided to suspend him pending further investigation. A week later, Kelly was informed that he was being terminated for “violation of a posted offense or offenses” relating to the commission of a crime on company time or property and stealing from the company (or from others) on company time or property. On October 24th, Corporal Keen called Kelly and advised him that he was going to have to arrest him; they arranged to meet the following afternoon at police headquarters; and Moore in the interim had that morning executed an affidavit for a summons/arrest warrant alleging that Kelly had taken 15 gallons of gasoline from Exxon’s Dundalk garage terminal.

Kelly was arrested, processed, placed in the lock-up, and later released on his personal recognizance. The case was called for trial before a jury on December 18, 1973, in the Criminal Court of Baltimore, but after the selection of the first four prospective jurors, the State advised the court that it would enter a nolle prosequi in the case. On September 27, 1974, Kelly filed a Declaration in the Circuit Court for Baltimore County against Exxon, Clinton and Moore, individually and as servants and employees of Exxon. The Declaration in a number of counts charged the defendants with malicious prosecution, slander, and false ²⁷⁶ imprisonment arising out of the alleged theft of Exxon’s gasoline.

Subsequently, an Amended Declaration was filed against the same defendants alleging malicious prosecution and slander. On April 26, 1976, a jury was impaneled and the case proceeded to trial. At the close of Kelly’s case-in-chief, the court granted a motion for a directed verdict as to the slander count, removing Clinton as a defendant; Kelly was granted a motion to dismiss his claim as to Moore; and the case proceeded against Exxon only as to the issue of malicious prosecution. We have heretofore specified the verdicts returned against Exxon, which subsequently filed and was denied a motion for judgment notwithstanding the verdict or in the alternative a new trial.

This, then, was the posture of the case antecedent to the appeals and cross-appeals now before us. There are a number of interesting and involved questions raised by the parties, and we shall consider them in the order which we believe will provide the most comprehensive disposition of them. I Cross-appellant, Exxon, raises three issues basic to the determination of the case, and we shall consider these issues first. 1) Was there legally sufficient evidence from which the jury could conclude that there was an absence of probable cause for the institution of the criminal proceeding? Traditionally, malicious prosecution suits are disfavored by the law.

Siegman v. Equitable Trust Co., 267 Md. 309 , 297 A. 2d 758 (1972); North Point Construction Co. v. Sagner, 185 Md. 200 , 44 A. 2d 441 (1945). The reason given by the courts for this disfavor is that criminal prosecutions are essential for the maintenance of social peace and should not be discouraged by the threat of subsequent civil proceedings. Stansbury v. Luttrell, 152 Md. 553 , 137 A. 339 (1927). Maryland, however, does recognize actions for malicious prosecution, and in Gladding Chevrolet, Inc. v. Fowler, 264 ²⁷⁷ Md. 499, 505, 287 A. 2d 280 (1972), the Court stated the elements of such an action: “To prevail in a suit for malicious prosecution the plaintiff must show: (1) that the criminal proceeding instituted or abetted by the defendant has terminated in his favor, apart from whether any inference as to probable cause for the proceeding arises from the termination; (2) a want of probable cause for the proceeding which may, or may not, be inferred from the termination of the proceeding, depending upon the manner of the termination; (3) malice, which is a primary purpose for the institution of the proceeding, other than that of bringing an offender to justice.” Brewer v. Mele, 267 Md. 437 , 298 A. 2d 156 (1972); Banks v. Montgomery Ward & Co, Inc., 212 Md. 31 , 128 A. 2d 600 (1957); and Shipp v. Autoville Ltd., 23 Md. App. 555 , 328 A. 2d 349 (1974).

The initial question to be determined here is whether Kelly produced sufficient evidence of lack of probable cause to entitle him to have the issue put before the jury? Exxon answers in the negative and urges, therefore, that the trial court erred in denying its motion for a directed verdict. Our appellate courts have consistently held that where the facts and inferences reasonably deducible therefrom are clear and undisputed, then the question of probable cause is one of law. Durante v. Braun, 263 Md. 685 , 284 A. 2d 241 (1971); Kennedy v. Crouch, 191 Md. 580 , 62 A. 2d 582 (1948); Kimbrough v. Giant Food, Inc., 26 Md. App. 640 , 339 A. 2d 688 (1975).

When considering a motion for a directed verdict submitted on the ground that there is no evidence legally sufficient to show lack of probable cause, we must apply the fundamental rule that the evidence and inferences fairly deducible therefrom must be viewed in a light most favorable to the party against whom the motion is directed. Levine v. Rendler, 272 Md. 1 , 320 A. 2d 258 (1974); Derby v. ²⁷⁸ Jenkins, 32 Md. App. 386, 363 A. 2d 967 (1975); Picone v. Talbott, 29 Md. App. 536 , 349 A. 2d 615 (1975). In Tully v. Dasher, 250 Md. 424, 440 , 244 A. 2d 207, 217 (1968), the Court of Appeals explicated the test to be applied under these circumstances: “It is well established that when a defendant moves for a directed verdict in his favor he must, for the consideration of the motion, concede the truth of all facts that tend to support the right of the plaintiff to recover as well as all inferences which might naturally and reasonably be deduced from those facts, even though these facts may be contradicted. If there is any legally relevant and competent evidence from which a rational mind could infer a fact in issue, the trial court should not invade the province of the jury by directing a verdict for the defendant.” (Citations omitted).

We have carefully reviewed the record and find substantial disagreement between the appellant and appellee as to what occurred on the night of September 26, 1973. There are discrepancies even in the testimony of Exxon’s witnesses as to what they observed that night. Kelly’s version of the events of that evening are consistent with his complete innocence of the charge made against him; the versions of Moore and Anderson may at best be characterized as giving rise to a suspicion that Kelly was stealing gasoline but are not enough to amount to probable cause as a matter of law. The witnesses disagree as to what occurred in the office conference on October 8 — Kelly places a different interpretation on his alleged admissions than does Exxon.

In .his testimony, Kelly categorically denied ever stealing any gasoline during his 17 years as an employee of Exxon, flatly denied stealing any gasoline on September 26, and positively denied ever admitting to anyone that he stole gasoline. It would serve no useful purpose to detail the innumerable contradictions in the testimony of Kelly, Moore, Clinton, and Anderson, but these contradictions, we believe, are sufficient to have raised a substan ²⁷⁹ tial issue of material fact justifying the submission of the issue of probable cause to the jury. 2) Did the plaintiff produce sufficient evidence to justify the submission of the issue of malice to the jury"! It is axiomatic that malice is an essential element of a malicious prosecution action. The issue of malice in such an action is not, however, confined to a mere determination of whether one party acted out of ill-will, spite, hatred, or reckless conduct but rests upon a determination as to whether a party acted “with any motive other than that of bringing an offender to justice.” Gladding Chevrolet, Inc. v. Fowler, supra; Durante v. Braun, supra; Safeway Stores, Inc. v. Barrack, 210 Md. 168 , 122 A. 2d 457 (1956); Johns v. Marsh, 52 Md. 323 (1879).

Exxon argues that Kelly presented evidence which negated any showing of malice either by proof of actual malice or by inference which might be drawn from an alleged lack of probable cause. It contends that where the plaintiff-appellant negates such an inference in his own case, the trial court must direct a verdict for the defendant-appellee. Wesko v. G.E.M., Inc., 272 Md. 192 , 321 A. 2d 529 (1973); Siegman v. Equitable Trust Co., supra. It urges that there is no evidence in the record that either Exxon or Moore, its employee upon whose affidavit the warrant was issued, harbored any malice or ill-will towards Kelly.

Our review of the facts, however, convinces us that there was evidence produced by appellant which justified submitting the issue of malice to the jury: The testimony of Moore, Kelly’s principal accuser, vacillated from his earlier position of having seen Kelly steal the 15 gallons of gasoline to his later statements (to the assistant state’s attorney) that “I could not physically see the cans lifted into the car, and could not say that I could see something I didn’t.” Kelly was suspended from employment and a week later fired from a job which he had performed satisfactorily for 17 years. The State policeman, Keen, and a representative of Exxon were permitted to search Kelly’s garage, but no ²⁸⁰ Exxon property was found there. The value of the gasoline allegedly taken by Kelly amounted to approximately three dollars. It is not surprising then that having already imposed the sanctions of loss of employment and fringe benefits, Exxon — as evidenced by the following colloquy between counsel for Kelly and Moore — declined to bring any criminal charges: “Q. Who are you sure of was there at that meeting, who are you sure, positive was at that meeting?

A. Ashby Keen, Bud Ulle and A1 Roberts and myself. 2 Q. Okay. And at that time you said you didn’t want to bring any criminal charges? A. That’s correct. Q. Who said that, did Mr. Ulle say that or Mr. Roberts?

A. A1 Roberts. Q. Did he say why? A. It has not been our practice as a company to bring criminal actions in this area, we have done it, but it is not a normal practice.” It was Keen, as evidenced by his testimony which follows, who insisted that charges be brought against Kelly: “Q. Isn’t it true that you, during this period between September 28 and October 6, informed Mr. Clinton that should Exxon decide not to allow Mr. Moore to execute an affidavit you would have to consider the possibilities of subpoening him to give testimony? A. Yes, sir.

Q. Why did you do that? A. Well, I felt Mr. Kelly should be charged just as the others were, and I wanted to see him charged.” Moore in his testimony further illuminated the reason why criminal charges were placed against Kelly: “Q. What did the State Police have to do with Mr. Kelly being charged? A. At the time we ²⁸¹ discussed in Mr. Bud Ulle’s office several other cases, I told them of the information that I had seen, that I had seen Kelly take fifteen gallons of gasoline, and we were told that we should press charges. We declined to do so.

And [Keen] said, if we refuse to come down and make the charge I would be subpoenaed to come down and do so. Q. How could you be subpoenaed to come down and do so? A. I was told by the State Police that I would be because I had seen a crime committed.” (Emphasis supplied). It is obvious that Exxon’s decision to place the charge against Kelly was occasioned not by its desire to bring a miscreant to justice but to satisfy the demand of Corporal Keen.

To describe the latter’s conduct as officious seems to us to be rather charitable. Exxon contends that it is not malicious as a matter of law for a private person to initiate a prosecution on the advice of a disinterested law enforcement officer to whom that person has disclosed all material facts. But these are not the facts in this case: It was the far from disinterested law enforcement official who insisted that the employee be charged and who threatened to subpoena the private individual if he did not cooperate in securing the warrant. It was to appease the police officer as well as to avoid the inconvenience and embarrassment of being subpoenaed to testify that Exxon authorized Moore to swear out the warrant.

Whether Exxon’s submission to the police officer’s pressure amounted to a malicious act was, we believe, a jury question. It was for the jury to determine from the facts and the law whether the prosecution instituted by Exxon was justified or malicious. The maxim maleficia propositis distinguintur — evil deeds are distinguished from evil purposes — is here illustrated, where the swearing out of a warrant is not per se an evil deed but may be made one by the unacceptable purpose for which the act was done. 3) Did the trial court err in instructing the jury that the nolle prosequi could be considered by the jury as evidence of lack of probable caused ²⁸² Exxon concedes that the termination of the criminal proceeding against Kelly by way of nolle prosequi was sufficient to permit Kelly to file an action for malicious prosecution. Norvell v. Safeway Stores, Inc., 212 Md. 14 , 128 A. 2d 591 (1957).

It is undisputed that dismissal by a magistrate at a preliminary hearing is prima facie evidence of a want of probable cause while acquittal after a trial is not. Banks v. Montgomery Ward & Company, Inc., supra. More difficult to ascertain is what the effect is, if any, of a nolle prosequi in the determination of the issue of probable cahse. Exxon argues that the trial court erred when it instructed the jury as follows: “In considering whether or not there was a lack of probable cause in this case for the bringing of a larceny charge against the plaintiff by the defendants, the fact that the charges against the . defendants were nol prossed by the prosecution may be considered as evidence of want of probable cause.

It does not mean it is; it just may be considered as evidence of probable cause álong with other elements in the case.” Kelly, as cross-appellee, contends that this issue is not properly before this Court because in not stating the reason for its exception to the trial court’s charge to the jury, Exxon failed to comply with the requirements of Maryland Rule 554 d. 3 The purpose of Rule 554 d is to insure that both the trial judge and opposing counsel understand the nature and the grounds of the exception. It provides an opportunity for the trial judge to correct, amend, or clarify an instruction before the jury retires to consider its verdict. No special form is required for the objection and no ground even need be stated provided all parties understand the reason for the ²⁸³ objection.