Ellis County State Bank v. Keever

• Decision Date: 16 December 1992
• Docket Number: No. 05-91-02114-CV,05-91-02114-CV
• Citation: 870 S.W.2d 63
• Parties: ELLIS COUNTY STATE BANK, Tracy Fletcher, John A. Hastings, Jr., and Don Harris, Appellants, v. Glenn KEEVER, Appellee.
• Court: Texas Court of Appeals

Page 63

870 S.W.2d 63

ELLIS COUNTY STATE BANK, Tracy Fletcher, John A. Hastings Jr., and Don Harris, Appellants, v. Glenn KEEVER, Appellee.

No. 05-91-02114-CV.

Court of Appeals of Texas Dallas.

Dec. 16, 1992.

Veronica M. Bates, R. Brent Cooper, R. Michael Northrup, Dallas, for appellants.

Robert F. Wood Jr., Dallas, for appellee.

Before THOMAS, BURNETT and WIGGINS ¹, JJ.

OPINION

BURNETT, Justice.

We withdraw our opinion of October 27, 1992 and vacate the judgment of October 27, 1992. The following are now the court's opinion and judgment.

Ellis County State Bank, Tracy Fletcher, John A. Hastings, Jr., and Don Harris (collectively "Ellis Bank") appeal the malicious prosecution action brought by Glenn Keever. In six points of error, Ellis Bank asserts that the evidence is insufficient to show that it acted with malice and without probable cause and insufficient to support the award of future medical expenses. Ellis Bank further contends that the trial court erred in (1) failing to instruct the jury that the burden of proof was clear and convincing evidence, (2) allowing an excessive award of punitive damages, and (3) awarding prejudgment interest on future and punitive damages. We sustain Ellis Bank's second point of error concerning prejudgment interest on punitive damages and overrule its remaining points of error. Accordingly, we reverse the trial court's award of prejudgment interest on punitive damages and render that Keever not recover prejudgment interest on punitive damages and affirm the remainder of the judgment.

FACTS AND PROCEDURAL HISTORY

In February 1987, Glenn Keever executed a 90-day note for $6,000 with the First State Bank of Milford. As collateral for the loan, the bank took a security interest in office equipment and furniture. On May 4, 1987, Keever filed for protection under Chapter 13 of the bankruptcy code. On May 7, 1987, the note came due. In June 1987, Don Harris purchased all of the assets, including the loan to Keever, from the First State Bank of Milford. Harris obtained a new charter and renamed the bank Ellis County State Bank. Tracy Fletcher, the executive vice president, attempted to collect the loan from Keever.

Plaintiff's Testimony

When Fletcher first called to discuss the note, Keever informed her of the bankruptcy filing and provided his case number and attorney's name. Subsequently, Fletcher made several telephone calls and sent a registered letter to Keever stating that the note was in default. The letter made formal demand for payment in full or return of the collateral. Keever called Fletcher to inform her that a creditors' meeting was scheduled for October 23, 1987. At the creditors' meeting, the bankruptcy court instructed Keever to include Ellis County State Bank on the matrix and to turn over the collateral to the bank. In November, Fletcher failed to keep an appointment with Keever to pick up the collateral.

In February 1988, John Hastings, the attorney for Ellis County State Bank, sent Keever a registered letter and called him on the telephone. The February 29 letter stated that Keever was in violation of hindering a secured creditor and instructed Keever to return the collateral. In response to this letter, Keever called Hastings and told him that he was in bankruptcy and gave him the case number. Hastings contacted Keever's bankruptcy attorney, John Glaze, and made additional arrangements for the bank to pick up the collateral. The bank failed to make its August 26 appointment to collect the collateral.

Defense Testimony

Defense testimony differs significantly from the testimony presented by Keever. As a result of several past due notices and phone calls, Keever agreed to pay the bank $1,000 plus interest and sign a new note. With Keever failing to uphold this agreement, Fletcher made a formal written demand for the collateral on August 28, 1987. On October 20, 1987, Keever informed Fletcher that he filed for bankruptcy in May 1987. Consequently, Fletcher immediately turned the matter over to the bank's attorney, John Hastings.

Unable to verify Keever's bankruptcy, Hastings and Fletcher continued attempts to retrieve the collateral. Keever failed to show up at the appointment made to pick up the collateral. Hastings sought an appointment with the grand jury to seek an indictment for hindering a secured creditor. After making this appointment, Hastings continued attempts to negotiate with Glaze, writing the attorney several times and speaking with him over the telephone.

Unsuccessful in their attempts to collect the collateral, Hastings and Fletcher testified before the grand jury. At the malicious prosecution trial, Hastings and Fletcher stated that they testified truthfully before the grand jury and did not attempt to mislead or deceive the grand jury in their testimony. Both Hastings and Fletcher testified that they informed the grand jury about Keever's bankruptcy.

Indictment and Arrest

In December 1987, Ellis Bank brought the case before the Ellis County grand jury to seek an indictment against Keever for hindering a secured creditor. Ellis Bank did not pursue the indictment until November 15, 1988. Hastings and Fletcher testified before the grand jury. Keever did not appear before the grand jury. The grand jury issued an indictment on November 15, 1988, which was later dismissed due to a typographical error. On November 29, 1988, a second indictment issued. On December 2, 1988, Keever learned of the indictment and turned himself into the police. Keever was arrested and incarcerated until making bail. Keever was arraigned on December 28, 1988 and plead not guilty. The criminal district court quashed the indictment, and the district attorney declined to seek reindictment. On August 30, 1990, Ellis Bank received the collateral.

Malicious Prosecution Action

Subsequently, Keever brought a malicious prosecution action against Don Harris, Tracy Fletcher, John A. Hastings, Jr., and Ellis Bank. At the trial, Keever testified that as a result of the criminal indictment, he suffered from post-traumatic stress disorder and depression. At the conclusion of the trial, the jury awarded Keever actual damages of $110,600, jointly and severally against all Defendants. The jury awarded punitive damages of $1,000,000 against the bank; $25,000 against Fletcher; $260,000 against Hastings; and $250,000 against Harris.

SUFFICIENCY OF THE EVIDENCE

In three points of error, Ellis Bank asserts that the evidence is insufficient to show that Ellis Bank acted with malice and without probable cause in pursuing an indictment for hindering a secured creditor and insufficient to support the jury finding of future medical expenses.

When determining a factual sufficiency point of error, this Court must consider and weigh all the evidence in the case. We should set aside the verdict and remand the cause for a new trial if we conclude that the verdict is so against the great weight and preponderance of the evidence as to be manifestly unjust, regardless of whether the record contains some evidence of probative force in support of the verdict. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986). It is an erroneous ruling of law that the existence of any evidence of probative force in support of the verdict determines that the verdict is not contrary to the overwhelming weight of all the evidence. In re King's Estate, 150 Tex. 662, 664-65, 244 S.W.2d 660, 661 (1951).

Probable Cause

In its sixth point of error, Ellis Bank asserts that the evidence is insufficient to show that it acted without probable cause in instituting criminal proceedings against Keever. Ellis Bank asserts that no probable cause existed because Ellis Bank and its employees testified truthfully before the grand jury and made no attempt to deceive the prosecutor or the grand jury.

A claim for malicious prosecution entails the following seven essential elements:

1. A criminal prosecution was commenced against the plaintiff;

2. The prosecution was caused by the defendants or by and through their aid and cooperation;

3. The prosecution terminated in favor of the plaintiff;

4. The plaintiff was innocent;

5. The defendants lacked probable cause to bringing about the proceeding;

6. The defendants acted with malice in bringing about the proceeding; and

7. The plaintiff suffered damages as a result.

Compton v. Calabria, 811 S.W.2d 945, 949 (Tex.App.--Dallas 1991, no writ).

The burden of proving that no probable cause existed for instituting the proceedings in a malicious prosecution case is initially upon the plaintiff. There is, invariably, an initial presumption that if a defendant acted reasonably and in good faith, he had probable cause. The presumption disappears, however, when the plaintiff produces evidence that the motives, grounds, beliefs, and other evidence upon which the defendant acted were indeed not probable cause for commencing the proceedings that the defendant instituted. Id. at 949.

Probable cause for a criminal prosecution has been defined as the existence of such facts and circumstances as would excite belief in the mind of a reasonable person, acting on facts within his knowledge, that the person charged was guilty of the crime for which he was prosecuted. Id. at 950. A party who files or causes to be filed a criminal complaint against another person does so with probable cause if, in good faith, she makes a full and fair disclosure of the facts and circumstances known to her, and the complaint is filed on the basis of that disclosure. Ada Oil Co. v. Dillaberry, 440 S.W.2d 902, 910 (Tex.Civ.App.--Houston [14th Dist.] 1969, writ dism'd); Eans v. Grocer Supply Co., 580 S.W.2d 17, 21 (Tex.Civ.App.--Houston [1st Dist.] 1979, no writ). If the party causing the complaint to be filed does not act in good faith in disclosing to the prosecuting attorney or grand jury all material facts known to the party, probable cause does not exist. Compton, 811 S.W.2d at 950; Eans, 580 S.W.2d...