Exxon Corp. v. Kelly

• Decision Date: 09 January 1978
• Docket Number: No. 55,55
• Citation: 281 Md. 689,381 A.2d 1146
• Parties: EXXON CORPORATION v. Stuart F. KELLY.
• Court: Maryland Court of Appeals

Page 689

281 Md. 689

381 A.2d 1146

EXXON CORPORATION v. Stuart F. KELLY.

No. 55.

Court of Appeals of Maryland.

Jan. 9, 1978.

Jeffrey D. Herschman and Donald E. Sharpe, Baltimore (Piper & Marbury, Baltimore, on the brief), for appellant.

W. Lee Harrison, Towson (Daniel T. Doherty, Jr. and William E. Seekford, Towson, on the brief), for appellee.

Argued before MURPHY, C. J., and SMITH, DIGGES, LEVINE and ELDRIDGE, JJ.

DIGGES, Judge.

This malicious prosecution suit was generated by an application for an arrest warrant executed and sworn to by Brady Moore, a superintendent for appellant Exxon Corporation, charging Stuart F. Kelly, the appellee here and at the time an Exxon mechanic, with stealing fifteen gallons of the company's gasoline from its Dundalk garage. Trial of this tort action in the Circuit Court for Baltimore County resulted in a jury verdict awarding Kelly $1,000 in compensatory and $40,000 in punitive damages, and this appeal followed. We are asked to resolve several issues which are endemic to suits for malicious prosecution and which will determine whether the verdict may stand; concluding that, under the instructions given the jury by the trial court, it may not, we will reverse the judgment and remand the case for a new trial.

In the late summer and early fall of 1973, Exxon, in cooperation with the Maryland State Police represented by Corporal Claude O. Keen, pursued an investigation into the disappearance of Exxon products from its Dundalk terminal. That investigation was expanded to encompass allegations that mechanics had been stealing material from a maintenance garage, located at the terminal, where large fuel tank trucks were serviced. On September 26, 1973, Brady Moore and Edward W. Anderson, both employed by Exxon in a supervisory capacity, conducted a surveillance, from partially-constructed bridges some 250 feet away, of the garage mechanics working the night shift, one of whom was appellee Kelly. With respect to the events of that evening, Moore, called by Kelly as an adverse witness, testified that he had seen Kelly take three five-gallon cans from the trunk of his automobile, fill the cans with gasoline he drained from the manifold lines of a tank truck, ¹ place the cans at the back of the garage, move his car to the rear of the garage, open the trunk, make motions "that any reasonable person would take to be lifting motions" as if he were placing the cans in the trunk, close the trunk, and return the automobile to its original parking place. Anderson, also testifying at the behest of the appellee, had viewed the scene from a different vantage point and could not state exactly what Kelly did with the cans he took from his trunk. Kelly, on the other hand, while admitting that he removed the cans from his trunk and took them into the garage, as well as that he had moved his car, denied that he had ever stolen any gasoline from Exxon, testifying further that he had taken the cans to the garage dumpster and discarded them, along with the junk contained in them. He also stated that the draining of a manifold was routine if an inspection was to be conducted, and that he could not remember whether he had performed that function on the night in question. A search of Kelly's home garage two days later uncovered no material stolen from Exxon. ²

The parties also differ in their versions of what was said during three subsequent conversations between Kelly and various of Exxon's management personnel concerning the alleged thefts; two of these interviews occurred on October 8, the date on which Kelly was suspended, and the third took place on October 15, the date of Kelly's termination from his employment with Exxon. Exxon insists that Kelly admitted the theft; Kelly maintains that he denied the allegations and that his statements during those talks to the effect that he had occasionally taken gasoline from manifold lines referred only to taking waste gasoline for use on the premises to wash greasy clothing. In any event Exxon, content with having terminated Kelly's employment, at first declined to bring criminal charges; however, at the insistence of Corporal Keen (who told Moore that he would be subpoenaed if he refused to make the charge voluntarily), Moore was given permission by Exxon to supply an affidavit to procure the arrest warrant which was issued on October 25, 1973. When the matter came on for trial on December 18 of that year, the assistant state's attorney in charge, after four jurors had been chosen, entered a nolle prosequi, thus abruptly ending the criminal proceeding against Kelly.

Nine months following termination of the criminal cause, Kelly filed this tort action seeking damages from Exxon, William Clinton ³ and Brady Moore for false imprisonment and slander as well as malicious prosecution. When the suit was tried before a jury beginning on April 26, 1976, on the latter two allegations, the court as a matter of law eliminated the slander count, and upon Kelly's dismissing his claim against Moore, the suit proceeded against Exxon alone, Clinton having been named a defendant only as to the slander count. When the jury's verdict in Kelly's favor was reduced to a final judgment, Exxon filed a timely appeal to the Court of Special Appeals. ⁴ That court affirmed the trial court's decision in all respects, after holding (1) there was sufficient evidence from which the jury could have concluded that there was no probable cause for the institution of the criminal proceeding against Kelly, (2) Kelly produced sufficient evidence to justify the submission of the issue of malice to the jury, and (3) the trial court correctly instructed the jury that the nolle prosequi could be considered as evidence of lack of probable cause. Kelly v. Exxon Corp., 35 Md.App. 272, 370 A.2d 162 (1977). Since, under the circumstances present here, we do not agree that the nolle prosequi may be evidence of want of probable cause, we must reverse; however, a new trial is necessary because, even absent use of the nolle prosequi, there remains, contrary to Exxon's contention, sufficient conflicting evidence to be resolved by a jury relative to the existence of probable cause and malice.

We note initially that the principles governing a suit for malicious prosecution, whether it springs from the prosecution of a civil action or a criminal cause, are generally well-settled. While the tort is not a favorite of the law, Siegman v. Equitable Trust Co., 267 Md. 309, 316-17, 297 A.2d 758, 762 (1972); Durante v. Braun, 263 Md. 685, 688, 284 A.2d 241, 242 (1971); North Pt. Constr. Co. v. Sagner, 185 Md. 200, 206-07, 44 A.2d 441, 444 (1945), the cause of action remains a viable one in this State, Durante v. Braun, supra, the elements of which, when growing out of a criminal charge, have been enunciated by this Court on a number of occasions:

The necessary elements of a case for malicious prosecution of a criminal charge 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. (Safeway Stores, Inc. v. Barrack, 210 Md. 168, 173, 122 A.2d 457, 460 (1956), quoted in Durante v. Braun, supra, 263 Md. at 688 (284 A.2d at 243). ⁵)

The issues in the case before us involve only the sufficiency of the appellee's proof of the latter two elements.

We turn first to Exxon's contention that it was error for the trial court to instruct the jury that "the fact that the charges against (Kelly) were nol prossed by the prosecution may be considered as evidence of want of probable cause." ⁶ In assessing the evidentiary effect, as regards probable cause, of the nolle prosequi in this case, we would point out as a preliminary matter that the effect of other forms of termination of the proceedings in favor of the accused is already well-established in Maryland. For example, in Norvell v. Safeway Stores, Inc., 212 Md. 14, 21, 128 A.2d 591, 594 (1957), we held that an acquittal by the jury is not evidence of want of probable cause, since the acquittal "may be based on a mere lack of proof beyond a reasonable doubt, and throws no light on the sufficiency of the evidence on which the instigator acted at the time the proceedings were instituted . . . ." Id. at 20, 128 A.2d at 593. On the other hand, in Banks v. Montgomery Ward & Co., 212 Md. 31, 40, 128 A.2d 600, 605 (1957), we indicated that the discharge of an accused at the preliminary hearing of a criminal charge is evidence of lack of probable cause, since "it is the function of (a magistrate) to pass upon the sufficiency of the case against the accused to justify prosecution." Id. (quoting W. Prosser, Law of Torts § 98, at 656 (2d ed. 1955), currently § 119, at 845 (4th ed. 1971) ). The rationale underlying those two rules, however, is of no definitive aid in formulating a principle by which to determine what effect should be given a nolle prosequi. This is so because, while it may be the function of the state's attorney to assess the sufficiency of the case against the accused to justify investing the State's time and money in a prosecution, as with a magistrate at a preliminary hearing, his decision to nolle prosequi a case may equally as well be based on factors which throw no light whatever on the sufficiency of the evidence on which the prosecution was instituted. Thus it is not surprising that there appears to be no generally settled rule on the matter. See W. Prosser, Law of Torts § 119, at 845-46 & n.39 (4th ed. 1971); ⁷ Restatement (Second) of Torts § 665(2) (1977); 52 Am.Jur.2d Malicious Prosecution § 163, at 284-85 (1970); 54 C.J.S. Malicious Prosecution § 38, at 1002 (1948).

We think it apparent that the evidentiary effect of a nolle prosequi must depend upon the circumstances of its...