Cutts v. American United Life Ins. Co.

• Decision Date: 13 March 1987
• Parties: William J. CUTTS v. AMERICAN UNITED LIFE INSURANCE CO., a corporation, and Blount International Limited, a corporation. 85-160.
• Court: Alabama Supreme Court

Page 1211

505 So.2d 1211

William J. CUTTS v. AMERICAN UNITED LIFE INSURANCE CO., a corporation, and Blount International Limited, a corporation.

85-160.

Supreme Court of Alabama.

March 13, 1987.

Barry Hess and Richard M. Crump of Hess, Atchison & Horne, Mobile, for appellant.

Mary Beth Mantiply, Mobile, for appellee American United Life Ins. Co.

Richard T. Dorman and C. Grantham Baldwin of Johnstone, Adams, Howard, Bailey & Gordon, Mobile, for appellee Blount Intern. Ltd.

On Application for Rehearing

ALMON, Justice.

The original opinion issued in this case is withdrawn and the following is substituted as the opinion of this Court.

This is an appeal from summary judgments entered in favor of the defendants. We affirm.

In February of 1979, Process & Systems, Inc. "P & S", a company owned by the appellant, William J. Cutts, entered into a contract with Blount International, Ltd. "Blount", to perform fabrication work for one of the locks on the Tennessee-Tombigbee Waterway. This contract was subsequently amended by change orders in October 1979 and September 1981. The change orders provided that, upon the submission of a request, Blount would reimburse P & S for "casualty, liability, workmen's compensation and other insurance costs." However, no request for reimbursement was ever sent to Blount, and none was paid.

In late 1980, American United Life Insurance Company "AUL" issued a group health policy for the employees of P & S, to be effective November 15, 1980. In the latter part of 1981, a dispute arose between P & S and AUL over insurance premiums and, on December 28, 1981, AUL sent a letter to P & S stating that premiums had been paid to May 15, 1981, and that if further premiums were not received, AUL would consider the account delinquent. No further funds were received and the insurance was retroactively terminated as of May 15, 1981. P & S's position in the dispute was that premiums had been paid through November of 1981.

In the summer of 1982, the Mobile County district attorney's office, at the request of two former employees of P & S, began an investigation regarding money withheld from employees' paychecks for insurance premiums and the existence of insurance coverage. During the course of the investigation, Mobile Assistant District Attorney Tom Harrison contacted both Blount and AUL. Harrison told the general counsel for Blount of the investigation and inquired generally as to what the contract with P & S provided for and whether there was a provision regarding the payment of insurance by Blount. Harrison was later told that there was no such agreement between Blount and P & S, and that no Blount representative had made any commitment to Cutts or anyone else to provide insurance. Counsel for Blount did not inform Harrison of the substance of the change orders, which provided that Blount would reimburse P & S for the cost of its employees' insurance.

Harrison also contacted AUL and questioned its agents about the insurance policy it issued to P & S. He was told that a policy did exist and that P & S was to pay the premiums, but that there was a dispute regarding the premiums due and that the insurance had been terminated in May of 1981. Harrison did not recall being told, nor did a letter from AUL confirming the information reveal, that the policy in question was terminated in late 1981 or early 1982, retroactive to May of 1981. Based on all the information he received, Harrison presented the case to a grand jury, which returned two indictments against Cutts for theft of property in the first degree on the ground that Cutts had withheld premiums from employees' paychecks but had not remitted them to AUL.

After the indictment was returned, counsel for Cutts provided Harrison with copies of the contract change orders in question showing that there was, in fact, a contractual provision regarding the payment of insurance and also provided correspondence from AUL regarding the dates of the termination of the policy. As a result, Harrison nol-prossed the indictments and discontinued his investigation.

Cutts brought suit against AUL and Blount. In his amended complaint, he alleged:

"In response to [Harrison's] request, the Defendants provided information to the Mobile County District Attorney's Office and based on this information, the District Attorney's Office presented the case to the Grand Jury and the Plaintiff was indicted thereby suffering the following injuries and damages...."

In his first cause of action, he alleged that AUL negligently stated that the policy was terminated on May 14, 1981, without disclosing the facts concerning the disagreement over the premium payments, the retroactive termination, or Cutts's contention that the premiums were paid to November 1981. In his second cause of action, Cutts alleged that AUL intentionally, willfully, and wantonly made these statements or failed to disclose the information. His third cause of action alleged that Blount negligently "stated that there was no provision in the contract between Blount and Process & Systems relating to the payment of insurance premiums." His fourth cause of action alleged that this statement constituted intentional, willful, and wanton conduct. His fifth cause of action was for defamation, against AUL only.

Both Blount and AUL filed motions for summary judgment with supporting affidavits. Cutts responded with his own affidavit, two affidavits by Assistant District Attorney Harrison, and the deposition of the general counsel for Blount. The trial court granted both motions, and this appeal followed.

The burden on motion for summary judgment is upon the moving party to show that there is no genuine issue of a material fact and that the movant is entitled to a judgment as a matter of law. If there is a scintilla of evidence which supports the position of the non-movant, summary judgment must be denied. Rule 56, A.R.Civ.P.; Booth v. United Services Auto Ass'n, 469 So.2d 1281, 1282 (Ala.1985).

Cutts argues that once the defendants voluntarily undertook to provide information to the district attorney, they were thereafter charged with the duty of acting with due care, citing the doctrine that one who volunteers to act, though under no duty to do so, is thereafter charged with the duty of acting with due care and is liable for negligence in connection therewith. Dailey v. City of Birmingham, 378 So.2d 728, 729 (Ala.1979). In this case, Blount and AUL did not "volunteer" any information about Cutts and P & S. Neither Blount nor AUL instigated the investigation; rather, they responded to a request from a law enforcement official who was directing a criminal investigation. We have found no case, and Cutts has cited none, which recognizes a cause of action for negligently, or even intentionally, willfully, or wantonly, failing to produce information in response to a district attorney's request.

Cutts's complaint, if it states a claim at all, can only be an action for malicious prosecution. Malicious prosecution is an action disfavored in the law. Evans v. Alabama Professional Health Consultants, Inc., 474 So.2d 86 (Ala.1985); Jordan v. Empiregas, Inc., of Belle Mina, 337 So.2d 732 (Ala.1976); Boothby Realty Co. v. Haygood, 269 Ala. 549, 114 So.2d 555 (1959); Daniel v. Goodyear Tire & Rubber Co., 225 Ala. 446, 143 So.2d 449 (1932). ¹ The wrongdoing which Cutts alleges centered around the procurement of the indictment against him. Indeed, the damages he claims are for the expense, emotional suffering, and humiliation incurred in being indicted and having to defend himself. The policy disfavoring malicious prosecution claims would also disfavor bringing claims arising out of facts within the ambit of malicious prosecution but couched in other terms, especially general allegations of negligence, willfulness, or wantonness. Therefore, in the absence of any other clearly recognized theory under which Cutts could proceed, his complaint must be treated as one for malicious prosecution.

The elements of malicious prosecution are: (1) a judicial proceeding initiated by the defendant, (2) the lack of probable cause, (3) malice, (4) termination in favor of the plaintiff, and (5) damage. Allen v. Molton, Allen & Williams Realty Co., 495 So.2d 27 (Ala.1986); Johnson v. Haynie, 414 So.2d 946 (Ala.1982); Brown v. Parnell, 386 So.2d 1137 (Ala.1980); S.S. Kresge Co. v. Ruby, 348 So.2d 484 (Ala.1977); Sanders v. Davis, 153 Ala. 375, 44 So. 979 (1907).

Prior to the adoption of the Alabama Rules of...