Allen v. Osco Drug, Inc.

• Decision Date: 17 March 1978
• Docket Number: No. 47272,47272
• Citation: 265 N.W.2d 639
• Parties: Mary Bea ALLEN, Respondent, v. OSCO DRUG, INC., et al., Appellants.
• Court: Minnesota Supreme Court

Page 639

265 N.W.2d 639

Mary Bea ALLEN, Respondent, v. OSCO DRUG, INC., et al., Appellants.

No. 47272.

Supreme Court of Minnesota.

March 17, 1978.

Syllabus by the Court

1. In an action brought for malicious prosecution, the issue of probable cause is a question of law to be decided by the trial court rather than the jury, but where there was little dispute between parties as to the facts, it was not prejudicial error for the trial court to submit the issue of probable cause to the jury along with the issue of malice and to independently affirm the jury finding of probable cause.

2. The trial court did not err in refusing to allow appellant Gintz to testify about his previous experiences with approximately 500 forged checks; the probative value of such evidence is limited and the offer of proof gives no indication of the ways in which other persons had cooperated with him.

3. The instructions on malice given by the trial court were appropriate in this malicious-prosecution case as contrasted to the instructions on malice that would be appropriate in a defamation action.

Brown, Bins & Klampe, Frederic N. Brown and Michael D. Klampe, Rochester, for appellants.

Baudler, Baudler & Maus and William J. Baudler, Austin, for respondent.

Heard before PETERSON, YETKA, and IVERSON, JJ., and considered and decided by the court en banc.

YETKA, Justice.

Osco Drug, Inc. (Osco Drug), and Maurice Gintz appeal from an order denying their post-trial motion and from judgment in a malicious-prosecution action. After a trial in district court, a jury found by special verdict that appellants had maliciously and without probable cause instituted criminal proceedings against respondent, Mary Bea Allen. Appellants' motion for an order amending jury's verdict or in the alternative, for a judgment notwithstanding the verdict, or for a new trial was denied. We affirm.

The issues presented on appeal are:

(1) Did the trial court err in submitting the issue of probable cause to the jury?

(2) Did the trial court err in excluding evidence of appellant Gintz' prior experiences with forged checks?

(3) Did the trial court err in its instructions to the jury on the issue of malice?

Shortly after midnight on October 30, 1974, Allen's purse was stolen in Austin, Minnesota. The purse contained a wallet with identification and a checkbook with 15 to 25 blank checks. The theft was reported to the Austin police within the hour and to the Northwestern State Bank of Austin at about 8 a. m. the next morning. The Austin police assigned Detective Kenneth Hines to the case. He handled the investigation in its entirety.

Approximately 15 forged checks were issued using the stolen check blanks. The bank gave Allen a photocopy of each check, and she took each of them to Detective Hines. The check involved in this case, No. 292, was issued on October 31, 1974, to the Osco Drug Store at Apache Mall in Rochester, Minnesota. The parties stipulated that it was a forgery. Gintz was the manager of that store and was in charge of handling checks returned to the store as forgeries or alleged forgeries. Osco Drug is a subsidiary of Jewel Companies, Inc.

When the check was returned by the First National Bank of Rochester to Osco Drug, a slip with the notation "alleged forgery" was attached. The check was redeposited by Gintz, but it was returned a second time with a notation that there were insufficient funds to pay it. Gintz phoned Allen's bank and asked for the department that handles insufficient funds checks. He did not make any inquiry of the bank regarding the forgery allegation.

Gintz then phoned Allen, told her that the store was holding her check, and demanded that she redeem it. Allen informed Gintz that she did not issue the check; that her checkbook had been stolen; that forged checks had been issued; and that some forged checks had been issued in Rochester, including at least one other check in Apache Mall. Allen also told Gintz that he could verify the information with Detective Hines of the Austin Police Department. ¹ Gintz called the Rochester police, but they had no record of the alleged forgery. On January 29, 1975, appellants sent Allen a form letter demanding payment within 7 days and threatening criminal prosecution.

Immediately upon receipt of the letter, Allen phoned Gintz. She repeated the information she had given Gintz during the first conversation. Gintz stated that he would not contact anyone further about the check. Following the second conversation, Gintz made no additional investigation of the sources suggested by Allen.

On February 21, 1975, Gintz went to the Rochester Police Department to swear out criminal complaints against several persons, including Allen. While at the police department, and before signing the complaint, Gintz was told by the Rochester police that Allen's checkbook had been stolen and that several forged checks had been passed in Rochester. After receiving this information, Gintz signed the complaint.

On February 28, 1975, Allen was arrested on a warrant, booked, and released on her own recognizance. On April 18, 1975, Allen pleaded "not guilty," and 5 days later the charge was dismissed on motion of the prosecuting attorney. Thereafter, Allen brought a malicious-prosecution action against Osco Drug and Gintz. The jury found that the complaint was issued without probable cause and with malice, and it awarded Allen $1,500 in compensatory damages, $8,000 in punitive damages against Osco Drug and $630 in punitive damages against Gintz.

1. Probable cause. The question of whether probable cause is an issue for the court or the jury is clear under Minnesota law. Although there are some cases which may be read as making probable cause a jury question, ² the correct rule was set forth in Survis v. A. Y. McDonald Mfg. Co., 224 Minn. 479, 499, 28 N.W.2d 720, 731 (1947), as follows:

"Where the facts are not in dispute, the issue of probable cause should be determined by the trial court. Where the facts are in dispute, they should be submitted to the jury, either (a) for the return of specific findings of fact or (b) for the return of a general verdict in accordance with appropriate instructions and dependent on whether the jury finds one or another version of the facts to be true. Cole v. Curtis, 16 Minn. 161 (182) (Gil. 161); Burton v. St. P. M. & M. Ry. Co., 33 Minn. 189, 22 N.W. 300; Polzin v. Lischefska, 164 Minn. 260, 204 N.W. 885; Reiherzer v. Bresky, 170 Minn. 266, 212 N.W. 456. Upon appeal to this court, we are required to determine the issue of probable cause rather as a legal conclusion than as a mere question of fact. Thus, in Eastman v. Leiser Co., 148 Minn. 96, 102, 181 N.W. 109, 112, the principle was stated to be:

" 'If the facts are undisputed, the question of probable cause is for the court. The inferences to be drawn from any given state of facts are for the court. It is for the court to declare the ultimate conclusion, as to whether facts, either admitted or established by proof, are sufficient to show want of probable cause. In reviewing a nisi prius determination upon a given state of facts as to the existence of probable cause such determination is not treated as a mere conclusion of fact to be sustained if there is evidence reasonably supporting it. It is treated rather as a legal conclusion, and, in reviewing it, an appellate court will measure its correctness by its own judgment from the facts shown, considering the evidence and weighing it as if heard in the court of review, in order to determine the correctness of the determination below.' "

This rule is in line with the majority of jurisdictions. ³

The reason for making what appears to be a question of fact i. e., what is reasonable conduct under the circumstances into a question of law is the court's distrust of the malicious-prosecution action. Prosser, Torts (4 ed.) § 119, p. 846. The best procedure would have been for the court to submit special verdicts on the disputed facts to the jury and then decide the issue based on the jury's findings or to instruct the jury on which facts it should find for plaintiff. Cf. Cole v. Curtis, 16 Minn. 161(182) (1870); Cohen v. Cook, 224 Tenn. 729, 462 S.W.2d 499 (1970). The trial court instead gave a detailed instruction on probable cause without specifying which facts should be determined and submitted the issue to the jury. ⁴

Even where the trial court correctly submits the issue of probable cause to the jury it is the duty of this court to review the facts de novo and to determine the issue as a matter of law. In its memorandum in this case, the trial court affirmed the jury's finding of lack of probable cause. There was little or no dispute about the facts, as appellants admitted in oral argument. Thus, since appellants had the issue of probable cause decided both by the jury and the trial court, they have no cause to complain.

Appellants argue that the mailing of the letter on January 29, 1975, constituted probable cause as a matter of law. Minn.St. 609.535 ⁵ provides inter alia that the intent element in a worthless-check charge may be proved by showing failure to pay within 5 business days after the mailing of notice of nonpayment. If Allen had, in fact, issued the check and had not responded to the letter consistently with her previous response, there would be some merit to appellants' claim. In light of Allen's repeated consistent explanation, Gintz' failure to investigate fully, and Gintz' ignoring the information received on the day he signed the complaint, this contention is not persuasive.

Appellants' reliance on Landers v. Kroger Co., 539 S.W.2d 130 (Tenn.App.1976), and Nichols v. Woodward & Lothrop, Inc., 322 A.2d 283 (D.C.App.1974), certiorari denied, 419 U.S. 1108, 95 S.Ct. 780, 42 L.Ed.2d 804 (1975), is misplaced. In Landers, the court held that there was probable cause to institute proceedings for the issuance of a worthless check. The manager of the store had...