Mynatt v. Nat'l Treasury Emps. Union, Chapter 39

• Decision Date: 28 September 2021
• Docket Number: M2020-01285-COA-R3-CV
• Parties: KENNETH J. MYNATT v. NATIONAL TREASURY EMPLOYEES UNION, CHAPTER 39 ET AL.
• Court: Tennessee Court of Appeals

KENNETH J. MYNATT v. NATIONAL TREASURY EMPLOYEES UNION, CHAPTER 39 ET AL.

No. M2020-01285-COA-R3-CV

Court of Appeals of Tennessee, Nashville

September 28, 2021

Assigned on Briefs July 1, 2021

Appeal from the Circuit Court for Rutherford County No 75CC1-2020-CV-77158 Darrell Scarlett, Judge

This case involves claims of malicious prosecution and civil conspiracy. The trial court dismissed the claims pursuant to Tennessee Rule of Civil Procedure 12.02(6), determining that the plaintiff could not prove that the underlying criminal prosecution had terminated in his favor, a necessary element of a malicious prosecution claim. Regarding the civil conspiracy claim, the court determined that the conspiracy claim was only actionable if the underlying tort were actionable. Having found that the malicious prosecution claim could not stand, the court concluded that the conspiracy claim had to be dismissed as well. The plaintiff timely appealed. Based upon the applicable standard of review, we conclude that the trial court erred in dismissing the plaintiff's claims, and we accordingly reverse the judgment of dismissal and remand this matter to the trial court for further proceedings.

Tenn R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed; Case Remanded

Daniel A. Horwitz and Lindsay B. Smith, Nashville, Tennessee, for the appellant, Kenneth J. Mynatt.

Leon Dayan and Elisabeth Oppenheimer, Washington, D.C., and Anthony A. Orlandi, Nashville, Tennessee, for the appellees National Treasury Employees Union; National Treasury Employees Union, Chapter 39; John Van Atta; Anthony Reardon; and Colleen Kelley.

Thomas R. Frierson, II, J., delivered the opinion of the court, in which W. Neal McBrayer and Kenny W. Armstrong, JJ., joined.

OPINION

THOMAS R. FRIERSON, II, JUDGE

I. Factual and Procedural Background

On April 29, 2020, the plaintiff, Kenneth J. Mynatt, filed a complaint in the Rutherford County Circuit Court ("trial court") against the following defendants: National Treasury Employees Union ("the Union"); National Treasury Employees Union, Chapter 39 ("Chapter 39"); John Van Atta; Anthony Reardon; and Colleen Kelley (collectively, "Defendants").^[1] Mr. Mynatt asserted that he had been a full-time bargaining unit employee of the United States Department of Treasury, Internal Revenue Service ("IRS") since 1991. As such, Mr. Mynatt had the option of being a member of the Union. Mr. Mynatt stated that after joining the Union, he was assigned to Chapter 39, which was headquartered in Nashville.

Mr. Mynatt further asserted that in September 2009, he ran for the office of executive vice-president of Chapter 39 and was elected to a three-year term. Chapter 39 members concomitantly elected Mr. Van Atta as president. According to Mr. Mynatt, Mr. Van Atta and he were assigned as full-time stewards of Chapter 39, which represents approximately 600 bargaining unit employees in Tennessee, and Mr. Van Atta appointed himself as bookkeeper and treasurer for Chapter 39. Mr. Mynatt averred that only Mr. Van Atta and he maintained authority to sign checks for Chapter 39 or use its debit card, although Mr. Van Atta had sole possession of those items.

Mr. Mynatt claimed that Mr. Van Atta removed him from his stewardship position on July 13, 2011, following Mr. Mynatt's involvement in ongoing, publicized criticism of IRS management as well as Ms. Kelley, the Union's then-president, regarding alleged financial waste. According to Mr. Mynatt, Mr. Van Atta subsequently accused him of misuse of the Union's funds. Mr. Mynatt averred that although he was indicted by the State District Attorney General's office and charged with two felonies based on information purportedly stemming from Mr. Van Atta, those charges were later "retired" for a one-year period and subsequently dismissed on November 28, 2016.

Mr. Mynatt stated that he filed an action in federal district court on November 14, 2017. The federal court dismissed the action, however, on June 10, 2019, and refused to exercise supplemental jurisdiction over Mr. Mynatt's state law claims against Defendants. Mr. Mynatt therefore alleged that his complaint was timely pursuant to Tennessee Code Annotated §§ 28-1-105 and -115. Mr. Mynatt asserted claims of malicious prosecution and civil conspiracy, seeking awards of compensatory and punitive damages as well as attorney's fees.

On June 22, 2020, Defendants filed a motion to dismiss, contending that Mr. Mynatt's complaint failed to state a claim upon which relief could be granted. Mr. Mynatt filed a response opposing dismissal. The trial court conducted a hearing on August 7, 2020, and ruled from the bench at the conclusion of the hearing, dismissing Mr. Mynatt's claims.

The trial court entered an order of dismissal on September 8, 2020. In its order, the trial court stated: "To establish a malicious prosecution claim, a plaintiff must show that the underlying action terminated in the plaintiff's favor on the merits." The court found that upon taking Mr. Mynatt's allegations as true, the disposition of his criminal charges did not support a malicious prosecution claim because a "retirement" of charges was akin to a pretrial diversion or a suspension of the charges, subject to revival at any time. The court further found that even if the charges were dismissed following retirement, such did not constitute a determination on the merits.

In addition, the trial court determined that the conspiracy claim was only actionable if the underlying tort were actionable. Having adjudged that the malicious prosecution claim could not stand, the court concluded that the conspiracy claim had to be dismissed as well. The court accordingly granted Defendants' motion and dismissed Mr. Mynatt's claims. Mr. Mynatt timely appealed.

II. Issues Presented

Mr. Mynatt has raised the following issues for our review, which we have condensed and restated slightly:

1. Whether the trial court erred in determining that Mr. Mynatt failed to state a claim of malicious prosecution.

2. Whether the trial court erred in determining that the intermediate retirement of Mr. Mynatt's criminal charges prior to dismissal of the charges did not constitute a termination in his favor.

3. Whether the trial court erred in dismissing Mr. Mynatt's claims of malicious prosecution and civil conspiracy.

Defendants raise the following additional issues, which we have likewise restated slightly:

4. Whether Mr. Mynatt's malicious prosecution claim also fails because he failed to allege that Defendants procured a prosecution without probable cause.

5. Whether Mr. Mynatt's civil conspiracy claim also fails because he failed to allege that Defendants had a common design to accomplish an unlawful purpose.

III. Standard of Review

As our Supreme Court has explained concerning motions to dismiss for failure to state a claim under Tennessee Rule of Civil Procedure 12.02(6):

A Rule 12.02(6) motion challenges only the legal sufficiency of the complaint, not the strength of the plaintiff's proof or evidence. The resolution of a 12.02(6) motion to dismiss is determined by an examination of the pleadings alone. A defendant who files a motion to dismiss "'admits the truth of all of the relevant and material allegations contained in the complaint, but . . . asserts that the allegations fail to establish a cause of action.'" Brown v. Tenn. Title Loans, Inc., 328 S.W.3d 850, 854 (Tenn. 2010) (quoting Freeman Indus., LLC v. Eastman Chem. Co., 172 S.W.3d 512, 516 (Tenn. 2005)).

In considering a motion to dismiss, courts "'must construe the complaint liberally, presuming all factual allegations to be true and giving the plaintiff the benefit of all reasonable inferences.'" Tigg v. Pirelli Tire Corp., 232 S.W.3d 28, 31-32 (Tenn. 2007) (quoting Trau-Med [of Am., Inc. v. Allstate Ins. Co.], 71 S.W.3d [691, ] 696 [(Tenn. 2002)]). A trial court should grant a motion to dismiss "only when it appears that the plaintiff can prove no set of facts in support of the claim that would entitle the plaintiff to relief." Crews v. Buckman Labs. Int'l, Inc., 78 S.W.3d 852, 857 (Tenn. 2002). We review the trial court's legal conclusions regarding the adequacy of the complaint de novo.

Webb v. Nashville Area Habitat for Humanity, Inc., 346 S.W.3d 422, 426 (Tenn. 2011) (other internal citations omitted).

IV. Malicious Prosecution Claim

The overarching issue raised by Mr. Mynatt concerns the propriety of the trial court's dismissal of his malicious prosecution claim. The court found that upon taking Mr. Mynatt's allegations as true, the disposition of his criminal charges did not support a malicious prosecution claim because a "retirement" of charges was, in essence, a temporary suspension of the charges subject to revival at any time. The court further concluded that even though the charges were ultimately dismissed following retirement, such did not constitute a determination on the merits. Mr. Mynatt argues that the trial court erred in its determination because certain dispositions other than an acquittal can support a subsequent malicious prosecution action, such as when the charge is dismissed for lack of proof or the court enters a judgment of nolle prosequi. Defendants contend that termination of the underlying action must in some way reflect the criminal defendant's innocence and that the dismissal in this matter failed to do so.

A malicious prosecution claim may be brought with respect to an underlying criminal prosecution or civil lawsuit, and the essential elements of the claim are:

(1) a prior suit or judicial proceeding was brought against the plaintiff without probable cause,

(2) the defendant brought such prior action with malice, and

(3) the prior action was finally terminated in

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