Barrett Mobile Home Transport, Inc. v. McGugin

• Decision Date: 12 February 1988
• Citation: 530 So.2d 730
• Parties: BARRETT MOBILE HOME TRANSPORT, INC. v. John McGUGIN, et al. 86-224.
• Court: Alabama Supreme Court

Page 730

530 So.2d 730

BARRETT MOBILE HOME TRANSPORT, INC. v. John McGUGIN, et al.

86-224.

Supreme Court of Alabama.

Feb. 12, 1988.

Rehearing Denied July 29, 1988.

John W. Cooper, Valley Head, for appellant.

Joseph C. McCorquodale III of McCorquodale & McCorquodale, Jackson and M. Clay Alspaugh and James P. Rea of Hogan, Smith, Alspaugh, Samples & Pratt, Birmingham, for appellees.

BEATTY, Justice.

Appeal by defendant, Barrett Mobile Home Transport, Inc. ("Barrett"), from an interlocutory order (see Rule 5, A.R.App.P., "Appeal by Permission") in favor of the plaintiffs, John and Lois McGugin and Harry and Brenda Willis, in plaintiffs' action against Barrett for malicious prosecution.

This case presents a question of first impression in Alabama, viz., whether a claim for malicious prosecution accrues at the time the trial court renders its judgment in the proceeding complained of, notwithstanding a later appeal from that judgment.

The McGugins and the Willises filed an action against Barrett for damages arising out of Barrett's transportation of a mobile home belonging to the plaintiffs. In the course of that action, Barrett filed a counterclaim against the plaintiffs, seeking damages for storage and repair expenses incurred during Barrett's handling of the mobile home. Later, Barrett amended its counterclaim, adding a second count against the Willises which sought a deficiency judgment on the note and security interest in the mobile home.

That case proceeded to trial on February 27, 1980. Barrett dismissed its first counterclaim prior to the submission of the case to the jury. The jury awarded damages to the McGugins and found in favor of the Willises on Barrett's second count of its counterclaim, for the deficiency judgment. Thereafter, Barrett filed several post-judgment motions.

On April 2, 1980, while these motions were pending, the plaintiffs filed the present action for malicious prosecution based on the counterclaims that Barrett had filed in the underlying case. The trial court denied Barrett's post-judgment motions in the first action.

Barrett appealed the judgment in the underlying case, which was ultimately affirmed by the Court of Civil Appeals. 423 So.2d 1371. From that decision, a petition for writ of certiorari was filed in this Court, which we first granted but subsequently quashed on December 22, 1982. 423 So.2d 1375.

Nothing occurred in the present malicious prosecution action until Barrett reopened the pleadings on July 22, 1985. Thereafter, in the course of pleading, the Willises amended their complaint in order to state that there had been a final termination of Barrett's second counterclaim in the plaintiffs' favor. The trial court granted Barrett's motion to strike that amendment to the Willises' complaint. Upon a motion to reconsider, the trial court set that order aside, thereby allowing the Willises' amended complaint to stand. It is from the September 8, 1986, interlocutory order allowing the amendment that Barrett appeals to this Court.

The issues presented for our review are:

(1) Whether a claim for malicious prosecution accrues at the time the trial court renders its judgment in the underlying proceeding, notwithstanding a later appeal from that judgment.

(2) Whether an action for malicious prosecution may be based on a counterclaim filed in the underlying proceeding.

I.

The threshold issue in this appeal is this: When does a cause of action for malicious prosecution accrue?

Barrett argues that the plaintiffs' filing of their malicious prosecution claim was premature in that there had been no final termination of the proceeding in favor of the plaintiffs, an essential element in the accrual of a malicious prosecution action. At the time the plaintiffs filed the present action on April 2, 1980, Barrett's post-judgment motions were still pending in the trial court. The appellate process was finally exhausted more than two years later, when this Court quashed Barrett's writ of certiorari as having been improvidently granted. Nevertheless, in allowing the plaintiffs to amend their complaint, the trial court ruled that the claim for malicious prosecution accrued upon the entry of the trial court's judgment in the underlying proceedings. We disagree with that determination; however, because this is a question of first impression in Alabama, our decision will be prospective in its application.

In Kroger Co. v. Puckett, 351 So.2d 582 (Ala.Civ.App.1977), the Court of Civil Appeals noted the elements necessary to maintain a suit for malicious prosecution. These include:

"(1) institution or continuation of an original judicial proceeding, either civil or criminal; (2) by or at the instance of the defendant; (3) termination of such proceeding in plaintiff's favor; (4) malice in instituting the proceeding; (5) want of probable cause for the proceeding; and (6) injury or damage as the result of the prosecution's complaint."

(Emphasis added.) 351 So.2d at 585. It is with respect to the third of these elements that Barrett claims error, arguing that the plaintiffs' action for malicious prosecution was premature, since it was filed before the final appellate disposition of the underlying case.

In its brief, Barrett refers this Court to the cases of Johnston v. Duke, 284 Ala. 359, 224 So.2d 906 (1969), and Johnson v. Byrd, 279 Ala. 491, 187 So.2d 246 (1966), for the proposition that a plaintiff in a malicious prosecution action must wait for an appeal to be decided in its favor in order to show the requisite termination favorable to the plaintiff. However, in each of those cases, the malicious prosecution plaintiffs were restrained from seeking relief until a favorable appellate termination because they had lost in the underlying case. Clearly, those cases are not analogous to the case sub judice, since the present plaintiffs successfully defended against Barrett's allegedly malicious counterclaims.

Although the question of the effect of an appeal from a favorable judgment in the underlying proceeding on a plaintiff's right to maintain an action for malicious prosecution is one of first impression in Alabama, there is ample authority on this issue from other jurisdictions. One line of cases holds that the right to commence an action for malicious prosecution accrues upon the entry of the judgment in the underlying proceeding, and that this right is not affected by an appeal from that judgment. Allen v. Burdette, 89 W.Va. 615, 109 S.E. 739 (1921); Foster v. Denison, 19 R.I. 351, 36 A. 93 (1896); Levering v. National Bank of Morrow County, 87 Ohio St. 117, 100 N.E. 322 (1912). In the Levering case, the Ohio Supreme Court recognized that, while an appeal would not be grounds for dismissing a malicious prosecution action, the pendency of an appeal might be a good reason for a stay of the malicious prosecution proceeding until the disposition of the appeal. See also, Daniel v. Pappas, 16 F.2d 880 (8th Cir.1926); Luby v. Bennett, 111 Wis. 613, 87 N.W. 804 (1901).

On the other hand, the weight of authority supports the rule that the pendency of an appeal precludes a malicious prosecution action. The Restatement (Second) of Torts § 674, comment j (1977), reflects the majority view in its commentary on the requirement in § 674(b) that the underlying proceedings must "have terminated in favor of the person against whom they are brought":

"A favorable adjudication may be by a judgment rendered by a court after trial, or upon demurrer or its equivalent. In either case the adjudication is a sufficient termination of the proceedings, unless an appeal is taken. If an appeal is taken, the proceedings are not terminated until the final disposition of the appeal and of any further proceedings that it may entail." (Emphasis added.)

See also Annot., 41 A.L.R.2d 863 (1955); 54 C.J.S. Malicious Prosecution § 56, at 1024 (1948) ("The general rule seems to be that the action will not lie during the pendency of an appeal from a judgment rendered in the proceedings complained of"); 52 Am.Jur.2d Malicious Prosecution § 44 at 212 (1970) ("Generally ... where an appeal has been taken from the judgment rendered in the allegedly malicious suit, the pendency of the appeal precludes the maintenance of an action for malicious prosecution, since the proceedings are not considered terminated until after the rendition of judgment in the appellate court").

This majority rule advances a compelling interest. In postponing the filing of a malicious prosecution action until the disposition of the case on appeal, this rule eliminate repetitious and unnecessary litigation. As the Court of Appeals of Arizona has noted, "[i]t would be a waste of judicial resources to allow the plaintiff in the malicious prosecution action to prosecute his claim only to have it rendered meaningless if later the appeal of the underlying action is decided against him." Moran v. Klatze, 140 Ariz. 489, 682 P.2d 1156, 1159 (Ct.App.1984). We hold, therefore, that the pendency of an appeal will preclude an action for malicious prosecution.

While our decision will preclude the initiation or continuation of an action for malicious prosecution during the pendency of an appeal, the problem remains as to the appropriate judicial response when the malicious prosecution plaintiff files the action prior to the time the appeal is taken. If a cause of action for malicious prosecution is deemed to accrue at the entry of final judgment in the underlying case, any malicious prosecution action filed in the period between the trial court's entry of judgment and the expiration of the time for filing a notice of appeal would be overshadowed by the specter of the losing party's right of appeal. Indeed, if that party filed a notice of appeal, the malicious prosecution action would then be due to be dismissed, since the proceedings would not be considered terminated until after the appellate court's decision.

There is authority for the proposition that a...