Montgomery Ward Stores v. Wilson

ALPERT, Judge. Having been found liable for malicious prosecution and false imprisonment, appellants, Montgomery Ward Stores and Jeffrey Bresnahan, appeal from a judgment entered by the Circuit Court for Prince George’s County on a jury verdict in favor of appellee, Frances Wilson, in the amount of $15,000 in compensatory damages and $45,000 in punitive damages. Appellants raise the following issues on appeal: I. The circuit court erred in failing to grant appellant’s motion for judgment.

II

The trial court erroneously instructed the jury and erroneously permitted the jury to consider the issue of punitive damages.

III

The trial court erroneously excluded important evidence critical to appellant’s defense. Facts and Proceedings In August 1987, the loss prevention department for the Montgomery Ward store in Temple Hills, Maryland, received complaints from customers regarding unauthorized credit charges on their monthly statements. Appellee was employed as a sales associate with Montgomery Ward from August through October of 1987. On September 4, 1987, she was approached by security guards, who stated that they wanted to interview her.

Appellee proceeded upstairs to the office, where she was interviewed by Jeffrey Bresnahan, Montgomery Ward’s loss prevention manager. She testified that Mr. Bresnahan asked if she “knew of anybody that’s doing any ⁵⁴⁰ stealing in the store.” He then showed her “a couple of slips that had some signatures on them” and asked her if they were her signatures. Appellee denied ever having seen those credit card slips before. Later that day, appellee overheard Mr. Bresnahan say that she was lying and that he would get a warrant for her arrest.

In October 1987, while appellee was working in the store, a security guard and two Prince George’s County Police Officers approached her. She was placed under arrest, handcuffed, and escorted out of the store in front of numerous customers and other employees. Appellee stated that she was “scared, nervous, humiliated, and embarrassed.” Eventually, appellee was informed that she had been arrested on charges of credit card theft. The case against her was later “dismissed” in the District Court.

As a result of the arrest, appellee lost her position with Montgomery Ward and had difficulty finding other employment. Appellee’s mother, Mary Powell, testified that prior to this incident appellee had never been in any trouble with the law. She stated that after the arrest appellee’s personality changed and her “nerves got real bad.” Appellee’s behavior returned to normal within a year, however. Sandra Broadway was employed as a sales associate at Montgomery Ward during August and September of 1987.

She and appellee were co-workers. She testified that Mr. Bresnahan interviewed her on September 2, 1987, regarding unauthorized credit card transactions that had been recorded on her cash register. She told him that appellee was the one responsible for making these credit card charges. Ms. Broadway stated that on several occasions appellee gave her slips of paper with account numbers written on them and asked her to charge merchandise to these accounts.

According to Ms. Broadway, appellee said that she had permission to use these accounts because they belonged to her cousin or her sister. Ms. Broadway said that she accepted these charges from appellee, although appellee never presented a credit card. At trial, Ms. Broadway admitted that it was a violation of store policy to accept credit card charges without presentation of a ⁵⁴¹ credit card or a driver’s license to verify the identity of the person making the charge. Lisa Holmes was employed as a sales associate at Montgomery Ward in August and September of 1987.

She testified that she saw appellee purchase merchandise from Ms. Broadway by giving her a piece of paper with a credit card number on it. She heard appellee say that the charge account belonged to her cousin. Ms. Holmes reported this incident to the loss prevention department when she was interviewed, although she stated that appellee had asked her not to report it. Mr. Bresnahan testified that on August 26, 1987, he started an investigation into complaints of fraudulent credit card use.

Based on his review of the register receipt tapes he determined that these fraudulent charges had all been recorded under Ms. Broadway’s identification number. He initially suspected that Ms. Broadway was responsible for the fraudulent charges. When he interviewed Ms. Broadway, however, she told him that she had permitted appellee to make these charges on several occasions because appellee had claimed that she was authorized to use these credit card account numbers. Although Ms. Broadway’s acceptance of these charges from appellee without presentation of a credit card or a driver’s license was in violation of store policy, Mr. Bresnahan testified that no disciplinary action was taken against Ms. Broadway.

He stated that he found “no problem” with the way Ms. Broadway had handled the credit charges at issue here. Rather, his interview with Ms. Broadway led him to investigate appellee as a suspect. He stated that when he interviewed appellee she was not cooperative and that her answers were “limited to one word, yes or no.” Mr. Bresnahan then interviewed Ms. Holmes, who stated that she saw appellee charge items by presenting an account number on a piece of paper to Ms. Broadway. Ms. Holmes told Mr. Bresnahan that she heard appellee say that the account belonged to her cousin. ⁵⁴² Mr. Bresnahan testified that the merchandise that was fraudulently charged included a full-figured sweater and a maternity bra.

There was evidence that appellee is a petite woman who would probably not wear such clothing. No attempt was made to compare appellee’s handwriting with any handwriting or signatures on the charge slips. Mr. Bresnahan consulted with the store management and a determination was made to press charges against appellee. No further investigation was undertaken.

The application for the statement of charges was submitted to the Commissioner for Prince George’s County and a warrant was issued for appellee’s arrest. Appellee was arrested and the case was set for trial in the District Court. The charges were subsequently dismissed for reasons that are not apparent in the record. Appellee filed suit for false arrest and malicious prosecution.

Appellants’ motion for judgment was denied, and the jury verdict, in favor of appellee were entered. This appeal followed. I. Malicious Prosecution Appellants contend that the trial court erred by failing to grant their motion for judgment on the malicious prosecution count. The necessary elements for a claim of malicious prosecution are: (a) a criminal proceeding instituted or continued by the defendant against the plaintiff, (b) termination of the proceeding in favor of the accused, (c) absence of probable cause for the proceeding, and (d) malice, or a primary purpose in instituting the proceeding other than that of bringing an offender to justice.

Brewer v. Mele, 267 Md. 437, 440 , 298 A.2d 156 (1972). Appellants argue that appellee failed to establish a legally cognizable claim of malicious prosecution because she did not prove that the criminal proceeding against her was brought without probable cause and with malice. We disagree. ⁵⁴³ Probable Cause In both malicious prosecution and false arrest cases, Maryland courts have frequently addressed the issue of whether probable cause was established as a matter of law or whether a factual dispute warranted submission of the probable cause issue to the jury. Probable cause consists of a reasonable ground of suspicion supported by circumstances strong enough to warrant a cautious person’s belief that the accused is guilty.

Palmer Ford, Inc. v. Wood, 298 Md. 484, 493 , 471 A.2d 297 (1984). In determining whether probable cause existed, the focus is on the facts known, or which reasonably should have been known, to the one initiating the criminal proceeding. Id. at 495 , 471 A.2d 297 . When there are sufficient facts supporting probable cause that are undisputed, probable cause may be decided as a matter of law.

See, e.g., Stansbury v. Luttrell, 152 Md. 553 , 137 A. 339 (1927) (where Luttrell admitted that he directed his servants to cut timber on property that did not belong to him, there was probable cause as a matter of law to prosecute him for theft); Medcalfe v. Brooklyn Life Ins. Co., 45 Md. 198 (1876) (where Medcalfe admitted that he appropriated his principals’ funds to his own use, probable cause for embezzlement existed as a matter of law); Kimbrough v. Giant Food, 26 Md.App. 640 , 339 A.2d 688 (1975) (where Kimbrough, an employee, gave an “incredible” explanation for his conduct in leaving store with groceries that had been mislaid by a customer, probable cause for shoplifting existed as a matter of law). In Exxon Corp. v. Kelly, 281 Md. 689 , 381 A.2d 1146 (1978), an Exxon supervisor claimed that he saw Kelly, a mechanic, loading gasoline into the trunk of his car. Kelly was charged with theft.

Subsequently, a nolle prosequi was entered and Kelly filed suit for, inter alia, false imprisonment and malicious prosecution. The Court of Appeals held that because Kelly categorically denied stealing the gas, the facts relied upon to determine probable cause were in dispute, and the issue of probable cause was a jury question. The court stated, ⁵⁴⁴ “[Furthermore, under conflicting evidence ‘the issues as to probable cause and malice, however great the preponderance of probability may [seem] to be on the side of [the] defendant, [are] issues of fact, not law, and under our theory and system of trials their submission to the jury [is] necessary.’ ” Id. at 698 , 381 A.2d 1146 (quoting Veid v. Roberts, 200 Ala. 576 , 76 So. 934, 934 (1917)). Thus, where the parties dispute the facts supporting probable cause, the absence of probable cause is a question for the jury..

See Montgomery Ward & Co. v. Cliser, 267 Md. 406 , 298 A.2d 16 (1972) (where store detective claimed that customer put merchandise in his pocket, but customer denied this, probable cause was a jury issue); Safeway Stores, Inc. v. Barrack, 210 Md. 168 , 122 A.2d 457 (1956) (where security guard claimed, that customer had concealed items, but customer denied this, probable cause was a jury question); Kennedy v. Crouch, 191 Md. 580 , 62 A.2d 582 (1948) (where Crouch called Kennedy a “screwball,” but Crouch contended that he had not made “loud and unseemly noises,” probable cause for prosecution on disorderly conduct charge was a jury question); Glover v. Fleming, 36 Md.App. 381 , 373 A.2d 981 , cert. denied, 281 Md. 738 (1977) (where initial suspect in theft stated that he had seen Fleming steal the money, but Fleming denied this, probable cause was a jury issue). Additionally, failure to make an adequate investigation of suspicious circumstances may destroy probable cause. K-Mart Corp. v. Salmon, 76 Md.App. 568, 579 , 547 A.2d 1069 (1988), cert. denied, 314 Md. 496 , 551 A.2d 867 (1989). This is so 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. Id. For instance, in Montgomery Ward & Co. v. Keulemans, 275 Md. 441 , 340 A.2d 705 (1975), a security guard claimed ⁵⁴⁵ that he saw Keulemans, an employee, shoplift sunglasses by placing them in his pocket. When he was confronted, Keulemans stated that he had purchased the sunglasses at People’s Drug Store.

Keulemans was arrested. After his acquittal, he filed suit for, inter alia> false arrest, false imprisonment, and malicious prosecution. The Court of Appeals held that probable cause was a jury issue because the security guard in this case should have investigated further, before bringing charges against Keulemans. Id. at 448 , 340 A.2d 705 .

In the case now before us, appellee was implicated solely by the evidence of Ms. Broadway, the initial suspect. While Ms. Holmes stated that she saw appellee charge items and heard appellee say that the credit account belonged to her cousin, we note that this evidence is not necessarily inconsistent with appellee’s innocence. Ms. Holmes did not identify the fraudulent credit charges at issue here as having been made by appellee. Additionally, it is clear that Mr. Bresnahan knew that Ms. Broadway had failed to follow store policy by requiring proper identification before accepting the fraudulent charges.

There was evidence that the clothing that was charged was not likely to be worn by appellee. Finally, no attempt was made to compare appellee’s handwriting to the forged signatures on the credit slips. Given these facts, the jury could have found that further investigation was warranted. 1 Thus, we conclude that there was sufficient evidence of lack of probable cause to warrant submitting this issue to the jury. Malice In the context of a malicious prosecution case “malice” has been defined as “a primary purpose in instituting the proceeding other than that of bringing an offender to justice.” ⁵⁴⁶ Barrack, 210 Md. at 173 , 122 A.2d 457 .

Once the jury determined that probable cause was lacking, it was permitted to infer malice. See, e.g., Banks v. Montgomery Ward & Co., 212 Md. 31, 42 , 128 A.2d 600 (1957); Barrack, 210 Md. at 175 , 122 A.2d 457 ; Medcalfe, 45 Md. at 204 (“[mjalice may be inferred from the want of probable cause”). As the Court of Appeals held in Boyd v. Cross, 35 Md. 194, 197 (1872): Malice is a question of fact for the jury, and its existence may be and most generally is inferred from the want of probable cause for the prosecution, but it does not necessarily follow that because there is an absence of probable cause, the defendant must have been actuated by malice. The presumption of malice,. resulting from the want of probable cause is only prima facie, and may be rebutted by the circumstances under which the defendant acted.

Thus, as we have held that the issue of probable cause was a jury question, the existence of malice was also properly submitted to the jury. We hold that appellants’ motion for judgment as to the malicious prosecution count was properly denied. Favorable Termination Appellants additionally contend that appellee failed to establish the second element under a claim of malicious prosecution; namely, that the criminal proceeding below terminated in her favor. Brewer, 267 Md. at 440 , 298 A.2d 156 .

The record reveals, however, that this argument was not presented below in either motion for judgment. It therefore has not been preserved for our review. Md.Rule 8-131(a) (1994). 2 ⁵⁴⁷ Even if this issue had been preserved for review, the record does not fully support appellants’ contention. At the beginning of the proceeding, appellants sought and were granted a motion in limine to limit testimony suggesting a finding in the District Court of “not guilty.” Evidence relating to the favorable termination element, therefore, was restricted to testimony that the charges were “dismissed.” An acquittal, dismissal, or abandonment of prosecution, absent evidence suggesting unfavorable circumstances, is sufficient to sustain an action for malicious prosecution.

See Banks v. Montgomery Ward & Co., 212 Md. 31, 38 , 128 A.2d 600 (1956); Goldstein v. Rau, 147 Md. 6, 13 , 127 A. 488 (1925). See also State v. Meade, 101 Md.App. 512, 529 , 647 A.2d 830, 838 (1994). The appellee having established a prima facie case, the burden shifted to appellants to rebut the evidence of favorable termination below. See Ristaino v. Flannery, 317 Md. 452, 457-59 , 564 A.2d 790 (1989).

As the evidence remained uncontradicted, we cannot say the trial judge erred in denying the motion for judgment and submitting the case to the jury. False Arrest/Imprisonment Appellants next contend that appellee failed to establish a legally cognizable claim of false arrest. “False imprisonment and false arrest are common law torts that apparently differ only in terminology.” Great Atlantic & Pacific Tea Co. v. Paul, 256 Md. 643, 654 , 261 A.2d 731 (1970). Under the common law, the tort of false arrest consisted of an arrest without legal authority. See Kimbrough v. Giant Food, Inc., 26 Md.App. 640, 643 , 339 A.2d 688 (1975).

Additionally, pursuant to statute, a merchant who causes the arrest of a person may not be held civilly liable for false arrest if, in causing the arrest, the merchant had probable cause to believe that the person had committed the crime of theft. Md.Ann. Code (1989 Repl.Vol.), § 5-307, Cts. & Jud.Proc. Article. Thus, where probable cause is shown, a merchant will not be liable for false arrest.

As we have stated, we conclude that the question of the existence of probable cause for appellee’s arrest and prosecution was properly submitted to the jury. ⁵⁴⁸ Appellants cite Brewer v. Mele, 267 Md. 437, 440 , 298 A.2d 156 (1972), for the proposition that where an arrest has been effected by valid legal process, an action for false arrest is ordinarily not available. As appellants did not raise this argument below, it is not preserved for our review. Md.Rule 8-131(a) (1994). 3 II. Appellants next contend that the trial court erred in its instructions to the jury on the issue of punitive damages.

The court properly instructed the jury that appellee had the burden to show by clear and convincing evidence that she was entitled to punitive damages. Additionally, the court stated that either actual malice or implied malice could support an award of punitive damages in this case. Implied Malice In defining implied malice, the court said: The law considers that malice exists in the risk and danger that were known or should have been known at the time. The conduct was performed in such a way to show it was so reckless and so dangerous that it had the disregard for the rights of others, or the conscious disregard for what they did.

It is not, I repeat the words, not necessary to show that such conduct was influenced or motivated by hatred. We conclude that the court correctly instructed the jury that a finding of