Foley v. Argosy Gaming Co., 03-1793.

• Decision Date: 06 October 2004
• Docket Number: No. 03-1793.,03-1793.
• Citation: 688 N.W.2d 244
• Court: Iowa Supreme Court
• Parties: John C. FOLEY, Individually, and Interim Holdings, L.L.C., Plaintiffs, v. ARGOSY GAMING COMPANY, Defendant.

688 N.W.2d 244

John C. FOLEY, Individually, and Interim Holdings, L.L.C., Plaintiffs, v. ARGOSY GAMING COMPANY, Defendant.

No. 03-1793.

Supreme Court of Iowa.

October 6, 2004.

Maurice B. Nieland and Matthew T.E. Early of Rawlings, Nieland, Probasco, Killinger, Ellwanger, Jacobs & Mohrhauser, LLP, Sioux City, and David B. Johnson and Emily A. Mily of Sidley Austin Brown & Wood LLP, Chicago, Illinois, for defendant.

Theodore Boecker and James D. Sherrets of Sherrets & Boecker, L.L.C., Omaha, Nebraska, for plaintiffs.

STREIT, Justice.

The United States District Court for the Northern District of Iowa has certified four questions to us concerning the law of malicious prosecution. After summarizing the facts and prior proceedings of the underlying dispute, we answer the federal court's questions.

I. Facts and Prior Proceedings

We restrict our discussion to the facts provided with the certified question.¹ Willow Tree Invs., Inc. v. Wilhelm, 465 N.W.2d 849, 849 (Iowa 1991); Foster v. City of Council Bluffs, 456 N.W.2d 1, 2 (Iowa 1990); cf. Iowa Code § 684A.3 (2003). In 2001, John Foley and Interim Holdings (Foley) sued Argosy Gaming Company in the Iowa District Court for Woodbury County for malicious prosecution. Foley claimed Argosy had wrongfully sued him in federal court in Illinois for alleged false statements Foley had made about Argosy. Argosy had voluntarily dismissed the Illinois suit before it came to trial.

Foley claimed that, as a result of the Illinois suit, Interim's insurance carrier declined to renew its policies and Foley lost financing on a real estate deal in Sioux City. Foley also maintained the lawsuit caused him stress, exacerbating preexisting neck and back pain. Foley did not see a doctor, however; instead he resorted to some painkillers he owned.

On Argosy's motion the case was removed to federal court based on that court's diversity jurisdiction. See 28 U.S.C. § 1441. Argosy moved for summary judgment. See Fed.R.Civ.P. 56. Argosy argued Foley's complaint failed to show he suffered a "special injury." To prove malicious prosecution in Iowa, a plaintiff must show arrest of person, seizure of property, or other special injury. See, e.g., Whalen v. Connelly, 621 N.W.2d 681, 688 (Iowa 2000)

. We have defined special injury generally as an "injury that would not ordinarily result in all similar cases involving such a claim." Id. (citation omitted).

Instead of ruling, the federal court on its own motion stayed the federal proceedings and certified four questions to us. The four questions are:

1. Does the requirement of "special injury" to state a claim for a malicious prosecution action still remain the law of Iowa?

2. Is the non-renewal of insurance a "special injury" under Iowa law?

3. Under the facts of this case, is the loss of financing, or interference with financing, a "special injury" under Iowa law?

4. Does Plaintiff's stress, accompanied by neck and back pain, constitute "special injury" under the facts of the case?

Pursuant to our certification statute and in the exercise of our discretion, we now choose to answer these four certified questions. See Iowa Code § 684A.1 (stating we may answer a certified question where (1) it was certified by a proper court; (2) is a question of Iowa law; (3) "may be determinative of the cause ... pending in the certifying court"; and (4) it appears to the certifying court that there is no controlling Iowa precedent). But see Eley v. Pizza Hut, Inc., 500 N.W.2d 61, 63-64 (Iowa 1993)

(recognizing discretion and declining to answer propounded questions because the statement of facts accompanying the certification were not specific enough).

II. The Certified Questions

A. "Does the requirement of `special injury' to state a claim for a malicious prosecution action still remain the law of Iowa?"

Yes. As the federal district court recognized in its order of certification,

In this jurisdiction the rule always has been no cause of action arises from malicious prosecution unless there has been either an arrest, seizure of property, or a special injury sustained which would not necessarily result in all suits prosecuted to recover for like causes of action.

Brody v. Ruby, 267 N.W.2d 902, 904 (Iowa 1978). We first recognized this rule in 1884. Wetmore v. Mellinger, 64 Iowa 741, 744, 18 N.W. 870, 871 (1884). We have required plaintiffs in malicious prosecution cases to prove such special damages ever since. See, e.g., Whalen, 621 N.W.2d at 687-88

; Employers Mut. Cas. Co. v. Cedar Rapids Television Co., 552 N.W.2d 639, 643 (Iowa 1996); Royce v. Hoening, 423 N.W.2d 198, 201 (Iowa 1988); Brody, 267 N.W.2d at 904; Aalfs v. Aalfs, 246 Iowa 158, 160-68, 66 N.W.2d 121, 122-27 (1954); White v. Int'l Text-Book Co., 156 Iowa 210, 219, 136 N.W. 121, 125 (1912); Dorr Cattle Co. v. Des Moines Nat'l Bank, 127 Iowa 153, 158, 98 N.W. 918, 920-21 (1904); Smith v. Hintrager, 67 Iowa 109, 109, 24 N.W. 744, 744 (1885); cf. Asay v. Hallmark Cards, Inc., 594 F.2d 692, 695 n. 1 (8th Cir.1979) ("Iowa clearly requires special damages for malicious prosecution actions."); Hanson v. Hancock Mem'l Hosp., 938 F.Supp. 1419, 1447 (N.D.Iowa 1996); Bickel v. Mackie, 447 F.Supp. 1376, 1379 (N.D.Iowa 1978). See generally Mark S. Cady, Curbing Litigation Abuse and Misuse: A Judicial Approach, 36 Drake L.Rev. 483, 487 (1987) (acknowledging and criticizing special-injury requirement for tort of malicious prosecution). On many of these occasions — most recently less than four years ago in Whalen — we have explicitly declined to abandon the special-injury rule notwithstanding a stated awareness that other authority does not require it. See, e.g., Whalen, 621 N.W.2d at 688 ("We are aware other authority no longer requires this element.") (citing, in part, Restatement (Second) of Torts §§ 674 cmt. e, at 455, 681 cmt. d, at 470 (1977)); Brody, 267 N.W.2d at 905 (noting slight majority of jurisdictions did not impose the special-injury requirement but finding "no persuasive reason" to change course); Aalfs, 246 Iowa at 160-62,

66 N.W.2d at 122-24 (declining invitation to overrule Wetmore even though there was a line of authority holding otherwise); see also Royce, 423 N.W.2d at 201-02 (declining invitation to abandon "outdated" special-injury rule).

Following in the footsteps of those in preceding generations, Foley argues the special-injury rule is outdated and now should be abandoned. As phrased, the certified question expressly permits Foley to run this well-trod course. In our judicial system, of course, one may always question whether a precedent is controlling by asking whether it remains the law; it is manifest that we are free to overrule precedents when circumstances warrant. We do not "atavistically cling ... to distinctions which can have no practical significance but to interpose ancient formalities in the path of justice." Learned Hand, The Deficiencies of Trials to Reach the Heart of the Matter, Address Before the N.Y. City Bar Ass'n (Nov. 17, 1921), in 3 Lectures on Legal Topics 89, 93 (1926) [hereinafter Hand Lecture] (quoted in Engel v. C.B.S., Inc., 93 N.Y.2d 195, 689 N.Y.S.2d 411, 711 N.E.2d 626, 630 (1999)); see, e.g., Barreca v. Nickolas, 683 N.W.2d 111, 121-23 (Iowa 2004)

(abandoning improper purpose definition of actual malice).

Once again, however, we decline to abandon the special-injury rule. In the case at bar, Whalen clearly controls and nothing has subsequently happened — in Iowa or in other jurisdictions — to call into doubt the continued validity of our unanimous holding in that case. Cf. Cameron v. Hardisty, 407 N.W.2d 595, 598 (Iowa 1987)

(declining to overrule prior cases in response to certified question where "no reason, factually or legally, to depart from the rule expressed in our prior decisions"). "A substantial number of courts ... [still] permit the action for wrongful civil proceedings only when the plaintiff has suffered `special injury' or `special grievance' as a result of the wrongful litigation." 2 Dan B. Dobbs, The Law of Torts § 437, at 1232 (2001 & Supp.2004); see, e.g., Engel, 689 N.Y.S.2d 411,

711 N.E.2d at 629-31 (in answering certified question, "[d]ispelling rumors of the special injury requirement's demise" in New York; noting that special-injury rule is "[n]o mere ancient formalism" but rather "its justifications in American jurisprudence have continuing viability"). We also note that generally reconsideration of stare decisis is not a matter for us to decide via certified question. See, e.g., Cavalli v. McMahon, 174 Conn. 212, 384 A.2d 374, 376-77 (1978); Cowan v. Ford Motor Co., 437 So.2d 46, 47 (Miss.1983); Liriano v. Hobart Corp., 92 N.Y.2d 232, 677 N.Y.S.2d 764, 700 N.E.2d 303, 309 (1998); W. Helicopter Servs., Inc. v. Rogerson Aircraft Corp., 311 Or. 361, 811 P.2d 627, 631 (1991); Concerned Dunes W. Residents, Inc. v. Georgia-Pacific Corp., 349 S.C. 251, 562 S.E.2d 633, 639 (2002); cf. Tarr v. Manchester Ins. Corp., 544 F.2d 14, 15 (1st Cir.1976) ("The purpose of certification is to ascertain what the state law is, not, when the state court has already said what it is, to afford a party an opportunity to persuade the court to say something else."). But see Hartford-Carlisle Sav. Bank v. Shivers, 566 N.W.2d 877, 879 (Iowa 1997) (where recent case had shed doubt upon "the absolute bar rule," answer to certified question necessitated).

Having answered the first certified question in the affirmative, we now turn to the three remaining questions. For the sake of simplicity, we rephrase and combine them into a single question. Shaw v. Agri-Mark, Inc., 663 A.2d 464, 465 n. 1 (Del.1995).

B. "Does the non-renewal of insurance, loss of financing, or stress constitute `special injury' under Iowa law?"

No. In applying the special-injury rule,

we have distinguished between the ordinary trouble and expense which regularly attend litigation (whether legitimately or maliciously prosecuted) and the unusual hardship arising from arrest,

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