K Mart Corp. v. Brzezinski, 71A03-8808-CV-251

• Decision Date: 20 July 1989
• Docket Number: No. 71A03-8808-CV-251,71A03-8808-CV-251
• Parties: K MART CORPORATION, Appellant (Defendant Below), v. Suzanne BRZEZINSKI, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 1276

540 N.E.2d 1276

K MART CORPORATION, Appellant (Defendant Below), v. Suzanne BRZEZINSKI, Appellee (Plaintiff Below).

No. 71A03-8808-CV-251.

Court of Appeals of Indiana,

Third District.

July 20, 1989.

Jim A. O'Neal, Michael A. Wilkins, Terri Czajka, Ice Miller Donadio & Ryan, Indianapolis, for appellant.

Robert J. Palmer, Jeffery A. Johnson, Wendell W. Walsh, May, Oberfell & Lorber, South Bend, for appellee.

STATON, J.

Kmart Corporation (Kmart) appeals the trial court's judgment entered on a jury verdict in favor of Suzanne Brzezinski, awarding her one million dollars ($1,000,000.00) as compensatory damages and eight million dollars ($8,000,000.00) as punitive damages on her complaint against Kmart for malicious prosecution and defamation. This appeal raises ten (10) issues. ¹ 1] Because of our disposition, we need discuss only two:

1. Whether the trial court erred in not finding as a matter of law that probable cause existed for Kmart to prosecute Brzezinski.

2. Whether the trial court erred in refusing Kmart's tendered instruction on the issue of qualified privilege.

We reverse.

Brzezinski was employed by Kmart from 1967 until May 16, 1984, when she was terminated. At that time she was working the 9:00 p.m. to 7:00 a.m. shift as a night filler clerk. When her shift ended on the morning of May 16, 1984, Brzezinski prepared to leave the store, collecting her belongings in a shopping cart. Pursuant to Kmart policy, Michael Minter, the store co-manager, stopped Brzezinski as she passed through the front door to inspect the packages she was taking with her. Brzezinski had with her a box containing a clothes hamper. When Minter opened the box, the hamper was upside down in the box and articles of clothing were sticking out of the vents in the bottom.

Brzezinski and Minter went to the service desk just inside the front doors and Minter called Bud McGee, the store security manager, who had been in the store all night conducting a security survey. McGee joined Minter and Brzezinski at the service desk where they proceeded to remove the merchandise from the hamper and put it on the service desk. At about this time, Patrick Kase, an assistant manager, entered the store. Minter explained to him the situation and told him to go about opening the store for business. McGee recognized some of the articles of clothing as those he, while conducting the night security survey, had seen Brzezinski remove from the clothing rack during her shift.

After removing the merchandise from the hamper, McGee and Minter took Brzezinski, the hamper and the merchandise to McGee's private security office at the back of the store. Minter contacted Kmart's district manager, Philip Gallivan, and informed him that Brzezinski was found shoplifting. Minter also contacted Emery Molnar, the security manager of another Kmart store and a liaison between the individual stores and the district loss prevention manager, Ron Wyand. Gallivan and Molnar then came to the store.

In the security office, McGee and Minter inventoried the merchandise found in the hamper. Some of the articles did not come from the shelves on the store display floor, but came from a storage room where only employees had access to them. Close to $400.00 worth of merchandise was recovered from the hamper.

When Gallivan arrived at the store, Minter and McGee told him that Brzezinski had been stopped leaving the store with unpaid-for merchandise. He reviewed the notes from McGee's night security survey and spoke with Marilyn Maciewjewski, a Kmart employee who had worked with Brzezinski that evening and had returned to the store at Minter's request. Maciewjewski told him that she and Brzezinski had worked together the entire night, except from about 3 to 4 a.m. when Maciewjewski was in the stockroom, and that she had not seen anything out of the ordinary.

The night security survey is a routine surveillance of night employees to ensure they are performing their duties and are not taking excessive breaks. The surveys were conducted at scattered intervals, the employees unaware of when they were being conducted. To conduct the survey, McGee sat in a surveillance room on the second floor of the store where he had a virtually unobstructed peripheral view of the store. During the surveillance, McGee completed a survey form by recording what each employee was doing at specified times.

During the course of Brzezinski's shift, McGee observed her remove several blouses from the clothing rack near the front of the store and take them to the service desk where she removed them from the hangers and neatly folded them. Brzezinski then carried the blouses to the furniture area of the store where the hampers were kept. She ducked down out of sight and reappeared without the blouses.

While looking around in the furniture area of the store, Gallivan and Molnar found a pricing ticket on the floor in front of where the hampers were kept. The ticket matched one of the blouses found in the hamper.

Brzezinski denied that she tried to steal the merchandise, but her account was not corroborated by other employees working that evening. When asked if she would submit to a polygraph examination, she agreed to do so, but one was never given. Additionally, a notation in Molnar's investigation report indicates that the hamper carton was taken to the South Bend Police Department for fingerprinting, but there is no evidence whether the carton was in fact fingerprinted.

When Lorraine Taylor, the store's personnel manager, arrived for work that morning she was told about the situation concerning Brzezinski, and she joined the others in the security office. Karen Nash, another employee who worked in advertising and personnel, arrived for work and was told by Kase that Brzezinski was being held in the security office for shoplifting. Nash asked Eva Naugel, another store employee who worked in the office, if it was true and Naugel confirmed that Brzezinski was in the security office. Subsequent to the incident, other store employees inquired about Brzezinski and Minter told them the circumstances surrounding her termination.

After Gallivan, Minter, McGee and Molnar completed their investigation, they informed Wyand, the district loss prevention manager, of the situation and Brzezinski was terminated for theft of merchandise and misappropriation of company funds. Stanley Thompson, the store manager, was on vacation when the incident occurred. When he returned, he was informed of the events leading to Brzezinski's termination. In addition, the night security survey, McGee's security report, the list of the hamper's contents and the statements of other Kmart employees who were working that night were forwarded to Kmart headquarters in Troy, Michigan.

Kmart's upper management made the decision to prosecute Brzezinski for shoplifting. Consequently, Minter and McGee discussed the situation with the St. Joseph County prosecutor and forwarded to them the Kmart Corporation report of investigation, prepared by McGee, and the list of merchandise found in the hamper, prepared by Minter and McGee. From this material, supplemental affidavits in support of probable cause were prepared for Minter and McGee, which they signed, and the charging information, which Minter signed. The prosecutor determined probable cause existed and submitted the charging information to a judge for a probable cause hearing. Judge Hosinski of the St. Joseph Superior Court determined that probable cause existed and issued a warrant for Brzezinski's arrest. A jury trial in the criminal case against Brzezinski resulted in a finding of not guilty. Brzezinski then instituted the civil action leading to this appeal.

I. Probable Cause

Kmart argues that the evidence is insufficient to support the judgment on the malicious prosecution claim because a judicial determination of probable cause was made in the criminal proceeding.

To succeed on a claim for malicious prosecution, the plaintiff must prove 1) the defendant instituted, or caused to be instituted, a prosecution against the plaintiff, 2) the defendant acted maliciously in doing so, 3) the prosecution was instituted without probable cause, and 4) the prosecution terminated in the plaintiff's favor. Johnson County REMC v. Burnell (1985), Ind.App., 484 N.E.2d 989, 992. Kmart argues that Brzezinski did not carry her burden of proof on the third element, lack of probable cause. It is undisputed that a judicial determination of probable cause was made in the criminal proceedings against Brzezinski.

A judicial determination of probable cause in a criminal proceeding constitutes prima facie evidence of probable cause in a subsequent malicious prosecution suit. Id. However, the prima facie case may be rebutted by evidence that shows the finding of probable cause was induced by false testimony or fraud, or other improper means such as the defendant withholding material facts at the hearing. Id. When a judicial determination of probable cause has been made, the prima facie case cannot be overcome by a showing of a negligent failure to investigate thoroughly where there is some factual basis for bringing a claim. More than mere negligence must be shown to rebut the prima facie case. Id. at 993.

The prosecutor relied on the affidavits of McGee and Minter and Kmart's report of investigation to draft the charging information. These materials were submitted to the judge at the probable cause hearing and he determined there was probable cause to believe Brzezinski had committed a crime. Brzezinski argues there is evidence that Kmart withheld material information. Specifically, she points to 1) Kmart's night security survey, 2) fingerprinting of the hamper carton, 3) Brzezinski had been employed for almost seventeen years and had never been written up for violating Kmart policy, 4)...