Myers v. Cohen

• Decision Date: 06 July 1984
• Docket Number: No. 9203,9203
• Citation: 5 Haw.App. 232,687 P.2d 6
• Parties: Michael S. MYERS, Plaintiff-Appellant, v. Ronald B. COHEN and Patrick J. Ryan, Defendants, and John Rapp and Goodsill, Anderson & Quinn, Defendants-Appellees.
• Court: Hawaii Court of Appeals

Page 6

687 P.2d 6

5 Haw.App. 232

Michael S. MYERS, Plaintiff-Appellant, v. Ronald B. COHEN and Patrick J. Ryan, Defendants and John Rapp and Goodsill, Anderson & Quinn, Defendants-Appellees.

No. 9203.

Intermediate Court of Appeals of Hawai'i.

July 6, 1984.

Syllabus by the Court

1. To succeed in a malicious prosecution action, there must be proof that the prior proceeding was (1) terminated in favor of the plaintiff in the present action, (2) brought without probable cause, and (3) initiated with malice.

2. The essential elements in a malicious prosecution action involving an attorney-defendant are the same as for those involving lay persons.

3. Evidence that malice existed must be specific and extrinsic and, if such evidence cannot be produced, summary judgment may properly be granted for the defendant.

4. Where a person was neither a party nor an attorney for a party, received no notice of the hearing, and had no opportunity to argue the matter, the court's order determining that the counterclaim in the case was "completely frivolous" was not binding on him.

5. A party making or opposing a motion for summary judgment may only rely on facts appearing in the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits.

6. The unsworn statements of parties appearing pro se in a civil proceeding, even though set forth in a properly certified transcript, cannot be considered on a motion for summary judgment.

7. A motion for summary judgment should be decided on the basis of admissible evidence. Since an affidavit relating to statements made by the defendant during settlement negotiations and a defendant's letter which included proposed settlement offers are inadmissible under Rule 408, Hawaii Rules of Evidence, they cannot be considered on a motion for summary judgment.

8. The essential elements of abuse of process are (1) an ulterior purpose and (2) a wilful act in the use of the process not proper in the regular conduct of the proceeding. The tort is consummated when the defendant attempts to attain some collateral objective, outside the scope of the operation of the process employed.

9. A party's attorney may be sued and held personally liable if he maliciously participates in the abuse of process.

10. Since the purpose of settlement is includable in the goals of proper process, the filing of a counterclaim, even if frivolous, does not constitute abuse of process by the attorney.

11. The filing of a voluntary petition for reorganization under the bankruptcy act allegedly to deprive the plaintiff of rental income and to seek modification of a sublease is not an attempt to attain collateral objectives since the bankruptcy act automatically stays the collection of delinquent rents, permits a tenant to assume, reject, or even modify the sublease, and is generally directed to the successful rehabilitation of the debtor. Thus, the attorney filing the petition is not guilty of abuse of process.

12. There is no indication of a common law tort of extortion, and Hawaii has no civil extortion statute.

13. Since the creation of a duty in favor of an adversary of the attorney's client would create an unacceptable conflict of interest, an attorney owes no actionable duty to an adverse party.

Jack C. Morse, for plaintiff-appellant; Morse & Nelson, Honolulu, of counsel.

James F. Ventura, for defendants-appellees; Libkuman, Ventura, Ayabe & Hughes, Honolulu, of counsel.

Before BURNS, C.J., and HEEN and TANAKA, JJ.

TANAKA, Judge.

In a tort action, plaintiff Michael S. Myers (Myers) appeals from a summary judgment in favor of defendants, attorney John Rapp (Rapp) and the law partnership of Goodsill, Anderson & Quinn (GA&Q) (collectively appellees). The dispositive issue on appeal is whether the court below erred in granting the summary judgment. We answer no and affirm.

Viewing the evidence and the inferences therefrom in the light most favorable to the non-moving party, as we must under Rule 56, Hawaii Rules of Civil Procedure (HRCP) (1981), Fernandez v. Tenbruggencate, 65 Haw. 226, 649 P.2d 1144 (1982); Hawaii Leasing v. Klein, 4 Haw.App. 1, 658 P.2d 343 (1983), the record reveals the following facts.

Myers and Ben Gromet (Gromet) were the master lessees of certain property in Honolulu. On May 25, 1979, Myers and Gromet sublet a portion of the property (the premises) to John H. McClellan (McClellan) for a term of five years beginning June 1, 1979. In September 1979, McClellan became delinquent in his rent payments. Thereafter, he told Myers and Gromet that in July 1979 he had entered into a secret agreement with Ronald B. Cohen (Cohen) and Patrick J. Ryan (Ryan) whereby each would own a one-third share of Hawaii Mini-Storage, Inc. (HMS), which operated a business on the premises. In October 1979, Myers and Gromet filed a summary possession action against McClellan. A settlement was reached before hearing, whereby McClellan agreed to surrender the sublease, and Myers and Gromet agreed to allow HMS to continue operating on the premises and to look for an equity partner for the business to enable it to pay the rent. However, Cohen and Ryan were not parties to the settlement.

In November 1979, Ryan threatened to tear out the fixtures in the premises. Myers and Gromet filed a complaint against Cohen, Ryan, and HMS in First Circuit Court Civil No. 59644 (Civil No. 59644) to enjoin such action. On December 6, 1979, on behalf of Cohen, Ryan, and HMS, Rapp answered by denying, inter alia, that the lease was in default and counterclaimed for damages. The counterclaim alleged, inter alia, that Myers and Gromet had fraudulently schemed with McClellan, wrongfully filed a summary possession action, schemed to appropriate HMS from its partners, induced McClellan to break his agreement with Cohen and Ryan, used deceptive business practices, and committed other unspecified intentional torts. At the time the counterclaim was filed, Rapp was aware that the rental payments were in arrears.

On January 14, 1980, Rapp filed a chapter 11 petition in the Bankruptcy Court for the District of Hawaii on behalf of HMS, stating that HMS was the tenant of the premises, while aware that McClellan was the actual sublessee. In June 1980, the bankruptcy proceeding was dismissed as moot. On November 13, 1981, the counterclaim in Civil No. 59644 was found to be frivolous and unsupported by the law and the facts, and attorneys' fees were awarded to Myers and Gromet.

On June 25, 1982, Myers filed this action, Civil No. 71985, against Cohen and Ryan for malicious prosecution, abuse of process, and deceptive trade practices. He sought compensatory and punitive damages, treble damages under Hawaii Revised Statutes (HRS) § 480-13, and costs and attorneys' fees. On June 29, 1982, he filed an amended complaint in Civil No. 71985, naming appellees as additional defendants. On September 21, 1982, appellees filed a motion for summary judgment pursuant to Rule 56, HRCP, and for final judgment pursuant to Rule 54(b), HRCP (1981). After a hearing, the trial court entered its order on November 30, 1982, granting a summary judgment in favor of appellees, determining that there was no just reason for delay, and directing the entry of final judgment. ¹ This timely appeal followed.

Myers contends that the facts in the record and the reasonable inferences therefrom viewed in the light most favorable to him show the commission by Rapp ² of malicious prosecution, abuse of process, or some other intentional torts. ³ He asserts, therefore, that appellees were not entitled to a summary judgment as a matter of law. We disagree.

Since Myers' complaint in Civil No. 71985 is not set out in separate counts, it is not entirely clear which of Rapp's acts allegedly constitute the elements of malicious prosecution, abuse of process, and other tortious conduct. Thus, we will attempt to sort them out in our analysis of each claim.

I. MALICIOUS PROSECUTION

The only recently reported case in Hawaii that addresses the issue of malicious prosecution where the prior proceeding was a civil action is Brodie v. Hawaii Automotive Retail Gasoline Dealers Ass'n, Inc., 2 Haw.App. 316, 631 P.2d 600 (1981), rev'd, 65 Haw. 598, 655 P.2d 863 (1982). On certiorari, the Hawaii Supreme Court reversed as unnecessary our remand of the case which gave the appellant an opportunity to adduce evidence of malice. However, it "concur[red] with [our] exposition of the law governing malicious prosecution and motions for summary judgment." Brodie, 65 Haw. at 599, 655 P.2d at 864.

Under Brodie, the following elements are essential in proving a claim for malicious prosecution. There must be proof that the prior proceeding was (1) terminated in favor of the plaintiff in the malicious prosecution action, (2) brought without probable cause, and (3) initiated with malice. W. Prosser, Law of Torts § 120 (4th ed. 1971) (Prosser). The defendant in Brodie was a lay association. Citing the Restatement (Second) of Torts (1977) (Restatement), Myers claims that the elements to prove malicious prosecution are different when the defendant is an attorney. Specifically, he states that as to the third element in a malicious prosecution case involving an attorney-defendant, it may be shown that the suit was motivated by malice or, alternatively, "was instituted for some purpose other than the proper adjudication of the claim on the merits." Opening Brief at 13. We disagree.

The Restatement does indicate that an attorney may be liable for malicious prosecution if he acts for an improper purpose. Restatement § 674 comment d. However, in the general principles enunciated in § 674, the Restatement indicates that any person is subject to liability for malicious prosecution if "he acts without probable cause, and primarily for a purpose other than that of securing the proper adjudication of the claim in which the proceedings are based" and notes in § 676 comment c that the element of...