Family Dollar Trucking, Inc. v. Huff

• Decision Date: 21 October 2015
• Docket Number: No. CV–14–603,CV–14–603
• Parties: Family Dollar Trucking, Inc.; Family Dollar, Inc.; and Family Dollar Services, Inc., Appellants v. Jimmy Huff and Robert Ward, Appellees.
• Court: Arkansas Court of Appeals

474 S.W.3d 100

Family Dollar Trucking, Inc.; Family Dollar, Inc.; and Family Dollar Services, Inc., Appellants

v.Jimmy Huff and Robert Ward, Appellees.

No. CV–14–603

Court of Appeals of Arkansas, DIVISIONS I, II, and III.

Opinion Delivered October 21, 2015

Rehearing Denied December 2, 2015

Spicer, Rudstrom, PLLC, by: Betty Ann Milligan and Bradford J. Spicer, and Wright, Lindsey & Jennings LLP, Little Rock, by: Edwin L. Lowther, Jr., Troy A. Price, and Kristen S. Moyers, for appellants.

Porter Law Firm, by: Austin Porter, Jr., Little Rock, for appellees.

BART F. VIRDEN, Judge

Family Dollar Trucking, Inc.; Family Dollar, Inc.; and Family Dollar Services, Inc. (collectively, Family Dollar) bring this appeal from a judgment entered by the Crittenden County Circuit Court on a jury's verdict awarding Jimmy Ward and Robert Huff a total of $3.25 million on their causes of action for malicious prosecution and outrage after they had been accused of theft and fired from their jobs with Family Dollar. Family Dollar argues that Huff and Ward failed to present sufficient evidence to support their causes of action and that the damages awards were excessive and not supported by the evidence. We hold that there was sufficient evidence to support the malicious-prosecution claims and that the damages awards were not excessive; however, we find the evidence insufficient to support the outrage claim. Accordingly, we affirm in part and reverse and dismiss in part.

Huff and Ward were mechanics in Family Dollar's West Memphis Distribution Center. They were supervised by Dennis Stripling. In part, their duties were to conduct integrity inspections and to remove from service any trailers that were deemed not "road worthy" after the trailers failed the inspections.

According to Huff, starting in 2005 and ending sometime in 2006, he and Ward were given permission by Stripling to purchase and re-sell the trailers that had failed inspection. Stripling informed Family Dollar's corporate fleet-maintenance manager, Bennie Stinson, who approved the sales. When Huff or Ward would sell a trailer, they would give Stripling the amount he said was the price and they would keep the balance. Stripling was supposed to forward the proceeds to Family Dollar. Family Dollar denies that it ever authorized the sales.

When Family Dollar learned of the sales, it began an investigation. Huff and Ward, among others, were terminated from their employment. Family Dollar's investigative reports were given to the West Memphis Police Department, which then conducted its own investigation. At the request of the police, the investigator for Family Dollar signed the affidavits for arrest warrants for Huff, Ward, and Stripling. Charges were filed. Huff and Ward agreed to testify against Stripling. Stripling subsequently pled guilty to a Class A misdemeanor and made restitution. The prosecutor then nolle prossed the charges against appellees.

In April 2009, Huff and Ward filed suit against Family Dollar for malicious prosecution and outrage, contending Family Dollar prosecuted them when Family Dollar knew they were innocent, causing them to suffer mental anguish, humiliation, and emotional distress. They sought both compensatory and punitive damages. Family Dollar answered and counterclaimed for conversion of the trailers.

The case proceeded to a jury trial over four days in early February 2014. At the conclusion of Huff and Ward's case and again at the close of all the evidence, Family Dollar moved for directed verdicts on both causes of action, which the court denied.

The jury returned verdicts of $1.75 million for Huff and $1 million for Ward on their malicious-prosecution claims. The jury also awarded Huff and Ward $250,000 each on their outrage claims. It found for Family Dollar on the claims for punitive damages. The jury found for Huff and Ward on Family Dollar's counterclaim for conversion of the trailers. Judgment was entered on the jury's verdict. After the circuit court denied Family Dollar's motions for new trial, judgment notwithstanding the verdict (JNOV), and remittitur, this appeal followed. The court also stayed the judgment pending this appeal.

Our standard of review of the denial of a motion for directed verdict is whether the jury's verdict is supported by substantial evidence. Crawford Cnty. v. Jones, 365 Ark. 585, 232 S.W.3d 433 (2006). Similarly, in reviewing the denial of a motion for JNOV, we will reverse only if there is no substantial evidence to support the jury's verdict, and the moving party is entitled to judgment as a matter of law. Id. Substantial evidence is that which goes beyond suspicion or conjecture and is sufficient to compel a conclusion one way or the other. Id. It is not our place to try issues of fact; rather, we simply review the record for substantial evidence to support the jury's verdict. Id. In determining whether there is substantial evidence, we view the evidence and all reasonable inferences arising therefrom in the light most favorable to the party on whose behalf judgment was entered. Id. A motion for directed verdict should be denied when there is a conflict in the evidence, or when the evidence is such that fair-minded people might reach different conclusions. See McMickle v. Griffin, 369 Ark. 318, 254 S.W.3d 729 (2007) (citing Wal–Mart Stores, Inc. v. Kelton, 305 Ark. 173, 806 S.W.2d 373 (1991) ). The circuit court found, and we affirm that such was the case here.

Family Dollar first challenges the jury's verdicts on the malicious-prosecution claims. Our supreme court recently set forth the elements of a cause of action for malicious prosecution as follows:

In order to establish a claim for malicious prosecution, a plaintiff must prove the following five elements: (1) a proceeding instituted or continued by the defendant against the plaintiff; (2) termination of the proceeding in favor of the plaintiff; (3) absence of probable cause for the proceeding; (4) malice on the part of the defendant; and (5) damages. Malice can be inferred from lack of probable cause. Malice has been defined as any improper or sinister motive for instituting the suit. Probable cause for prosecution must be based upon the existence of facts or credible information that would induce the person of ordinary caution to believe the accused person to be guilty of the crime for which he is charged. Ordinary caution is a standard of reasonableness, which presents an issue for the jury when the proof is in dispute or subject to different interpretations.

McMullen v. McHughes Law Firm, 2015 Ark. 15, at 15–16, 454 S.W.3d 200, 210 (internal citations omitted).

The thrust of Family Dollar's argument is that probable cause conclusively existed because Tonya Alexander, sitting as a special judge, issued arrest warrants for Huff and Ward, and that it acted on the advice of the deputy prosecuting attorney, Lindsey Fairley.¹ Acting upon the advice of counsel is a defense to a charge of malicious prosecution. Kellerman v. Zeno, 64 Ark. App. 79, 983 S.W.2d 136 (1998). However, to avail itself of the defense, Family Dollar must have made a full, fair, and truthful disclosure of all facts known to it and acted in good faith on counsel's advice. Id. Family Dollar has the burden of proving this defense. Id.

The jury in this case was instructed on the advice-of-counsel defense. According to Huff and Ward, the jury might well have found that Family Dollar did not fully disclose to counsel all facts known to its investigator, in particular that Dan Gazaway, Family Dollar's investigator in this matter, believed that Huff and Ward were telling the truth when they told him that they had permission from Stripling and others to sell the trailers. We agree.

Jimmy Huff testified that he had previously bought surplus Family Dollar property by going to his supervisor at the time, Richard Morgan. Regarding the trailers in question in this lawsuit, he said that he spoke with his supervisor, Dennis Stripling, about purchasing some of the trailers that did not pass the integrity tests and that Stripling spoke with Mike Preston, Family Dollar's regional transportation manager in West Memphis, and Bennie Stinson, Family Dollar's corporate fleet-maintenance manager, to get approval. According to Huff, Stripling later told Huff he could buy trailers for $400. Huff and Ward purchased and then sold other trailers over a one-year period, turning the $400 cost of each trailer over to Stripling. Huff assumed that Stripling was forwarding the money to Family Dollar.

Bennie Stinson testified that, at the time, Family Dollar had no written policies or procedures in place for the disposition of property. Stinson stated that he advised Stripling about the process he used at Family Dollar's corporate office in North Carolina regarding disposal of Family Dollar's property, but left it up to Stripling and Preston to determine the process for disposing of property at the West Memphis Distribution Center. One of the purchasers of multiple trailers, James Kitchens, testified that he personally talked with Stinson, who advised him that the disposition of the trailers was up to Stripling.

Dan Gazaway testified that Preston told him that Stripling had authorization from Stinson to dispose of some trailers. He also said that Huff repeated his statement outlined above. Gazaway stated that Preston knew trailers were either being sold or given away, which is why Preston was fired. Gazaway stated he never told the prosecutors or the police that he believed Huff and Ward were being truthful or that they were acting pursuant to instructions from Stripling, Preston, or Stinson.

Lieutenant Troy Galtelli of the West Memphis Police stated that it would have been significant in his investigation to know that a management official allowed the trailers to be sold. He also did not recall Gazaway's telling him that Stripling set the prices for the trailers and that Huff and Ward paid that price before reselling the trailers....