Nielsen v. Spencer, 20070431-CA.

Citation196 P.3d 616,2008 UT App 375
Decision Date23 October 2008
Docket NumberNo. 20070431-CA.,20070431-CA.
PartiesMichael Reid NIELSEN, Plaintiff and Appellee, v. Lorenzo M. SPENCER, Defendant and Appellant.
CourtCourt of Appeals of Utah

Budge W. Call, Salt Lake City, for Appellant.

C. Richard Henriksen Jr., Robert M. Henriksen, and Jonathan G. Winn, Salt Lake City, for Appellee.

Before Judges GREENWOOD, THORNE, and McHUGH.

OPINION

THORNE, Associate Presiding Judge:

¶ 1 Lorenzo M. Spencer appeals from a jury verdict against him and in favor of Michael Reid Nielsen on Nielsen's claims for wrongful use of civil proceedings and abuse of process. We affirm the judgment below but reverse the district court's award of prejudgment interest.

BACKGROUND

¶ 2 Spencer married his wife, Jewelya, on September 30, 1981. In 1988, Jewelya renewed an intimate relationship with Nielsen, whom she had dated in high school. This relationship resulted in Jewelya giving birth to twin girls. Jewelya always suspected that Nielsen was the father of the twins, but she did not tell Spencer about the affair or Nielsen's possible paternity until the twins were eighteen months old. Six months later, Nielsen's paternity of the twins was verified by blood test. Spencer and Jewelya's marriage continued, as did Jewelya's relationship with Nielsen. A paternity suit against Nielsen was eventually settled, with Nielsen agreeing to pay support for the twins.

¶ 3 Sometime after the birth of the twins, Spencer and Jewelya were sued for alienation of affections by the husband of a woman with whom Spencer was alleged to have had a sexual encounter. That lawsuit was settled. In late 1995, Nielsen and Jewelya spent two days together in California. Shortly thereafter, in January 1996, Jewelya and Spencer separated, and in March 1996 Jewelya filed for divorce.

¶ 4 In May 1996, Spencer sued Nielsen for alienation of affections.1 The district court dismissed Spencer's action as a discovery sanction on April 3, 2001. The district court's order of dismissal stated that "this is a unique case in which [Spencer's] conduct in failing to fully respond to discovery has been egregious." The court's lengthy order went on to document several years' worth of Spencer's failure to comply with discovery orders, noting that there had been three prior hearings on the subject. The court concluded that Spencer's actions warranted dismissal of his alienation of affections claim, stating that "[Spencer's] behavior and conduct was willful, was in bad faith, and was the fault of [Spencer] and that [Spencer] engaged in persistent and dilatory tactics intending to frustrate the judicial process."

¶ 5 Nielsen then sued Spencer for wrongful use of civil proceedings and abuse of process, filing his complaint on December 18, 2001. Nielsen claimed that Spencer's alienation of affections claim was brought without probable cause and that Spencer's discovery tactics represented an abuse of process. As damages, Nielsen sought his attorney fees from both lawsuits, lost earnings and benefits, loss of employment, mental pain and suffering, other damages subject to being proved at trial, and punitive damages. Nielsen did not specifically claim that his attorney fees from the prior suit constituted special damages subject to an award of prejudgment interest.

¶ 6 A three-day jury trial was held in June 2006. Extensive testimony was offered as to the status of Spencer and Jewelya's relationship as it evolved over time, and Nielsen's involvement with Jewelya. Nielsen testified to various allegedly improper litigation tactics employed by Spencer during the alienation of affections suit, including attempting to take the depositions of Nielsen's wife and mother, intentionally causing crucial evidence to be lost, designating multiple unnecessary witnesses, and generally causing delay and unnecessary defense expenses for Nielsen. Nielsen also testified to $178,960 in total damages, alleging $15,960 in lost earnings, $95,000 in attorney fees incurred in defending Spencer's prior suit, and $86,000 in fees incurred in prosecuting the present action.

¶ 7 Nielsen's claims were submitted to the jury. The district court instructed the jury that Nielsen's wrongful use of civil proceedings claim would be established if the jury found by a preponderance of the evidence that (1) Spencer had brought a civil suit against Nielsen without a reasonable belief that he would prevail, i.e., without a reasonable belief in the existence of the facts upon which the suit was based or a reasonable belief that the facts may warrant relief under the law; (2) Spencer commenced or continued the suit for the primary purpose of harassment, annoyance, or malice or a primary purpose other than that of securing proper adjudication of the claim; and (3) Spencer's prior suit was terminated in Nielsen's favor. Nielsen's abuse of process claim was defined to the jury as Spencer using civil process for a purpose other than that for which it was intended. The jury was instructed that it could find such abuse of process by finding that Spencer had utilized one or more of the abusive litigation tactics described by Nielsen at trial.

¶ 8 The jury returned a verdict in favor of Nielsen on both claims, but it awarded damages only for Spencer's wrongful use of civil proceedings. The jury awarded damages in the amount of $95,000, with no punitive damages. Although the $95,000 award corresponded to the amount of attorney fees Nielsen had claimed in defending against Spencer's alienation suit, the special verdict form did not identify the source of the damages figure, nor did it classify the damages as general or special damages. Nevertheless, in its judgment on the verdict, the district court characterized the award as "special damages" and included prejudgment interest on the award dating back to September 20, 2001.

¶ 9 When Spencer objected to the interest award, Nielsen argued that the $95,000 in damages represented his attorney fees from the prior lawsuit and were thus special damages entitling him to prejudgment interest dating back to the filing of Spencer's suit in 1996. After a hearing, the district court concluded that the $95,000 in damages represented Nielsen's claimed fees; that the damages constituted special damages under Utah Code section 78-27-44, see Utah Code Ann. § 78-27-44 (2002); that section 78-27-44 entitled Nielsen to prejudgment interest; and that interest should be awarded from the date of termination of Spencer's suit, April 3, 2001. The district court issued an amended judgment reflecting these rulings. Spencer now appeals from the district court's judgment.

ISSUES AND STANDARDS OF REVIEW

¶ 10 Spencer makes various arguments that his prior alienation of affections suit against Nielsen cannot support a wrongful use of civil proceedings claim against him.2 Spencer's arguments concerning the elements of the tort of wrongful use of civil proceedings present questions of law that we review for correctness. See Dipoma v. McPhie, 2000 UT App 130, ¶ 4, 1 P.3d 564. To the extent those arguments were not preserved below, Spencer argues that the district court's decisions constitute plain error or exceptional circumstances. See generally Chapman v. Uintah County, 2003 UT App 383, ¶ 10, 81 P.3d 761 (discussing preservation requirement). Spencer also argues that the jury erred when it determined that his prior suit was brought without probable cause and was dismissed in Nielsen's favor such that it would support Nielsen's wrongful use of civil proceedings claim. Challenges to the sufficiency of the evidence supporting a jury verdict will succeed only if the marshaled evidence demonstrates that the jury's decision is clearly erroneous. See Martinez v. Wells, 2004 UT App 43, ¶ 33, 88 P.3d 343.

¶ 11 Spencer also makes various challenges to the district court's award of prejudgment interest. "`A trial court's decision to grant or deny prejudgment interest presents a question of law which we review for correctness.'" Bennett v. Huish, 2007 UT App 19, ¶ 11, 155 P.3d 917 (quoting Smith v. Fairfax Realty, Inc., 2003 UT 41, ¶ 16, 82 P.3d 1064).

ANALYSIS
I. Wrongful Use of Civil Proceedings

¶ 12 Spencer raises four arguments challenging the jury's verdict finding him liable for wrongful use of civil proceedings. Two of these arguments present questions of law, as they ask us to interpret and apply the elements of the tort of wrongful use of civil proceedings. Specifically, Spencer argues that the questions of whether his prior lawsuit against Nielsen was brought without probable cause and whether Nielsen prevailed on the merits of that suit are questions of law that should have been resolved by the district court in Spencer's favor. Spencer also argues as a factual matter that even if these questions were proper jury questions, no reasonable jury could have resolved either question in Nielsen's favor.

A. Nielsen's Claim Was Properly Submitted to the Jury

¶ 13 We begin our analysis by noting that Spencer correctly identifies two of the elements of a wrongful use of civil proceedings claim. The tort of wrongful use of civil proceedings is defined as follows:

"One who takes an active part in the initiation, continuation, or procurement of civil proceedings against another is subject to liability to the other for wrongful civil proceedings if (a) he [or she] 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 (b) except when they are ex parte, the proceedings have terminated in favor of the person against whom they are brought."

Hatch v. Davis, 2004 UT App 378, ¶ 22, 102 P.3d 774 (emphasis added) (alteration in original) (quoting Gilbert v. Ince, 1999 UT 65, ¶ 19, 981 P.2d 841);3 see also Restatement (Second) of Torts § 674 (1977). For purposes of this tort, a person brings a suit with probable cause "`if he [or she] reasonably believes in the existence of the facts...

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