Kitchens v. Bryan County Nat. Bank

• Decision Date: 22 July 1987
• Docket Number: No. 85-2126,85-2126
• Citation: 825 F.2d 248
• Parties: Wayne KITCHENS, Plaintiff-Appellee, v. BRYAN COUNTY NATIONAL BANK, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 248

825 F.2d 248

Wayne KITCHENS, Plaintiff-Appellee, v. BRYAN COUNTY NATIONAL BANK, Defendant-Appellant.

No. 85-2126.

United States Court of Appeals Tenth Circuit.

July 22, 1987.

Rehearing Denied Aug. 14, 1987.

Gary L. Richardson (Gregory Meier with him on the brief), Gary L. Richardson & Associates, Tulsa, Okl., for plaintiff-appellee.

W. Chris Coleman (Myrna R. Schack and Robert H. Gilliland, Jr., with him on the brief), McAfee & Taft, Oklahoma City, Okl., for defendant-appellant.

Before LOGAN, BARRETT, and TIMBERS, ^* Circuit Judges.

BARRETT, Circuit Judge.

Bryan County National Bank (Bank) appeals a jury verdict and judgment entered on behalf of Wayne Kitchens (Kitchens) for malicious prosecution. The Bank alleges that there was insufficient evidence to support a verdict in Kitchens' favor, that there was insufficient evidence to support an award of punitive damages, that the trial court erred in excluding certain evidence and refusing to instruct the jury as the Bank requested, and that Kitchens' claim was barred by the statute of limitations because effective service of process was not timely made. Our review of the record convinces us that these claims are without merit and we will affirm.

Facts

Kitchens and his erstwhile wife, Ellen Flowers Kitchens, were engaged in a small-scale ranching business near Caddo, Oklahoma, for some thirteen years. Their course of dealing with the Bank included the use of a flexible credit arrangement to finance the purchase of young steers and heifers. Generally, the Kitchens would purchase the cattle with a check drawn on their account at the Bank and then meet with Billy Miller, the president of the Bank, to arrange the financing. Billy Miller would then advance the amount they needed using the cattle as security. Since Billy Miller's property was adjacent to the Kitchens', he could keep track of the number of cattle on the Kitchens' land, although he testified that he usually formally inspected the cattle each time one of these transactions was made.

When the cattle had gained enough weight to be profitable, the Kitchens would sell them, repay the Bank, and keep their profit. This arrangement continued from 1978 or 1979 until 1981.

In November, 1980, the Kitchens purportedly purchased 50 head of cattle to add to 123 head that were already on the property. Miller testified that he inspected the cattle and prepared an inspection report on December 7 and 8, 1980. The promissory note and security agreement evidencing the debt for these cattle had been signed by Ellen Kitchens on November 7, 1980. It was agreed that Wayne Kitchens would sign the note at a later date. Also on December 8, 1980, two previous promissory notes and security agreements were rolled over into a new note. Some of these cattle were included on the December inspection report. The parties dispute, however, whether there were a total of 123, or 173, head of cattle on the Kitchens' land. The Bank argues that in fact the Kitchens had 173 cattle on December 7, 1980, although the cattle inspection report of that date listed only 123 cattle. Kitchens maintains that the 50 cattle evidenced by the November, 1980 note had never existed and that Miller knew or should have known this.

In April, 1981, Wayne Kitchens filed a petition for divorce from Ellen Kitchens. Thereafter, Kitchens met with Miller, indicated he wanted their banking relationship to continue, and signed the two notes pledging, respectively, 50 and 123 head of cattle as security. Kitchens testified that when he signed the notes, he only had 123 head of cattle, and by the time he sold them in October, 1981, ten had died. Miller apparently had inspected the cattle in August or September, 1981, and realized that there was a numerical discrepancy. He failed to pursue the matter at the time, however.

After Kitchens sold the cattle in October, 1981, he delivered the proceeds to the Bank. There were insufficient funds to cover the principal and interest on the two notes. In January, 1982, Kitchens filed a voluntary petition in bankruptcy, listing the Bank as a secured creditor on both promissory notes. The Bank filed an adversary complaint, however, asking the court not to discharge Kitchens' debts to the Bank. In May, 1982, the bankruptcy judge denied the Bank's complaint, finding that the debtor had satisfactorily explained the loss of assets. (R., Vol. I, pp. 15-19, Ex. B.)

Thereafter, in May or June, 1982, Miller contacted the Bryan County District Attorney to discuss whether charges should be filed concerning the missing 50 head of cattle. At no time in the trial was it clear whether these cattle had been disposed of by Kitchens or whether, as he testified, he had never in fact owned them.

The District Attorney filed criminal charges against both Kitchens and his ex-wife alleging that they had unlawfully disposed of encumbered property, specifically the mysterious 50 head of cattle. At the preliminary hearing on April 14, 1983, the District Attorney offered to dismiss the charges against both of the Kitchens if they would sign covenants not to sue the Bank. Ellen Kitchens agreed to this disposition, but Wayne Kitchens did not. At the hearing, the court sustained Kitchens' demurrer to the State's evidence and the criminal charges were dismissed on April 20, 1983. Kitchens moved to Arkansas during the pendency of the criminal charges and filed the instant case in the United States District Court for the Eastern District of Oklahoma on March 29, 1984, based on diversity of citizenship.

I.

The Bank argues that the evidence outlined above failed to establish malicious prosecution as a matter of law and failed to establish conduct for which punitive damages would be appropriate. The Bank also disputes the evidence as to actual damages. The standards for appellate review set forth below and our review of the evidence persuades us that these contentions have no merit.

In Rasmussen Drilling v. Kerr-McGee Nuclear Corp., 571 F.2d 1144 (10th Cir.), cert. denied, 439 U.S. 862, 99 S.Ct. 183, 58 L.Ed.2d 171 (1978), we discussed the standards governing appellate review of a jury verdict following trial of a diversity based civil case. There we held that our review in relation to evidence was limited to the inquiry as to whether the record contains substantial evidence to support the jury's or court's conclusion, viewing the evidence in the light most favorable to the prevailing party. Id. at 1149. The jury, moreover, has the exclusive function of appraising credibility, determining the weight to be given to the testimony, drawing inferences from the facts established, resolving conflicts in the evidence, and reaching ultimate conclusions of fact. Id. We, the appellate court, do not try to second-guess the jury, nor is it our function to infer material facts or to make controlling inferences which the trial court, or jury, has not inferred or made and which, if done, would in effect constitute trial de novo. Id. at 1148.

Bearing these standards in mind, we turn to the elements necessary to establish malicious prosecution: (1) that the prosecution was commenced against plaintiff; (2) that it was instituted or instigated by defendant; (3) that it was malicious; (4) that it has been legally and finally terminated in plaintiff's favor; and (5) that it was without probable cause. Park v. Security Bank and Trust Co., 512 P.2d 113 (Okl.1973).

The Bank contends that there is insufficient evidence in the record that the Bank instituted or instigated the prosecution against Kitchens because the District Attorney testified that he undertook an investigation and assumed responsibility for filing the criminal prosecution. We cannot say that there was not substantial evidence to the contrary, however, or that the jury could not reasonably have inferred that the Bank instigated the charges. In particular, we note the undisputed fact that Billy Miller signed the complaint. It was also undisputed that Billy Miller took the matter to the district attorney initially, and appeared to testify on the two or three occasions when the preliminary hearing was scheduled, continued, and rescheduled. These are merely factors which come readily to mind. There was substantial other evidence in the record to support a conclusion that the Bank instigated the prosecution.

The Bank further contends that there was no evidence of malice as it applies to malicious prosecution. In Imo Oil & Gas Co. v. Knox, 154 Okl. 100, 6 P.2d 1062 (1932), the same argument was made. The Oklahoma Court held:

The third element of the action for malicious prosecution, malice, does not necessarily mean 'malus animus,' i.e. that the action complained of was actuated by ill will or hatred toward the person prosecuted. It is sufficient if the known and necessary consequence of the act done is injury to that person. 'By it is meant an unreasonable and wrongful act done intentionally, without just cause or excuse.'

Id. at 1064.

The jury, not this court, was in a position to evaluate Billy Miller's motives for contacting the District Attorney. It was for the jury to decide whether Miller's conduct amounted to "an unreasonable and wrongful act done intentionally, without just cause or excuse," or whether it in fact was prompted by "malus animus," or ill will. Inasmuch as there is substantial evidence in the record to support the jury's conclusion as to malice, we will not disturb the verdict for this reason, either.

The Bank maintains that if there is evidence of probable cause, it is a complete defense to a malicious prosecution action regardless of the motives of the defendant. The Bank argues that the evidence can only be interpreted one way, and that it is undisputed that Miller had probable cause to believe that Kitchens had committed a criminal offense. From this, the Bank contends that according to Williams v. Frey, 182 Okl. 556, 78 P.2d 1052, 1055 (1938), the existence of probable cause...