Norfolk Southern Ry. Co. v. Higginbotham

• Decision Date: 23 November 2011
• Docket Number: No. 101499.,101499.
• Citation: 721 S.E.2d 541,228 W.Va. 522
• Parties: NORFOLK SOUTHERN RAILWAY COMPANY, Norfolk Southern Corporation, James D. Farley, and Charles Paxton, Petitioners Below, Petitioners v. James W. HIGGINBOTHAM, Respondent Below, Respondent.
• Court: West Virginia Supreme Court

228 W.Va. 522

721 S.E.2d 541

NORFOLK SOUTHERN RAILWAY COMPANY, Norfolk Southern Corporation, James D. Farley, and Charles Paxton, Petitioners Below, Petitioners

v.James W. HIGGINBOTHAM, Respondent Below, Respondent.

No. 101499.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 27, 2011.Decided Nov. 23, 2011.

Syllabus by the Court

1. “ ‘To maintain an action for malicious prosecution it is essential to prove (1) that the prosecution was malicious, (2) that it was without reasonable or probable cause, and (3) that it terminated favorably to plaintiff.’ Syl. pt. 1, Lyons v. Davy–Pocahontas Coal Co., 75 W.Va. 739, 84 S.E. 744 (1915).” Syl. pt. 1, Preiser v. MacQueen, 177 W.Va. 273, 352 S.E.2d 22 (1985).

2. “ ‘In an action for malicious prosecution, plaintiff must show: (1) that the prosecution was set on foot and conducted to its termination, resulting in plaintiff's discharge; (2) that it was caused or procured by defendant; (3) that it was without probable cause; and (4) that it was malicious. If plaintiff fails to prove any of these, he can not recover.’ Radochio v. Katzen, 92 W.Va. 340, Pt. 1 Syl. [114 S.E. 746, (1922) ].” Syl. pt. 3, Truman v. Fidelity & Casualty Co. of New York, 146 W.Va. 707, 123 S.E.2d 59 (1961).

3. The rules delineating the elements of a malicious prosecution claim in syl. pt. 1, Preiser v. MacQueen, 177 W.Va. 273, 352 S.E.2d 22 (1985), and syl. pt. 3, Truman v. Fidelity & Casualty Co. of New York, 146 W.Va. 707, 123 S.E.2d 59 (1961), are the same, and procurement is an inherent element in both.

4. “ ‘Upon a motion for [pre-verdict judgment as a matter of law], all reasonable doubts and inferences should be resolved in favor of the party against whom the verdict is asked to be directed.’ Syllabus point 5, Wager v. Sine, 157 W.Va. 391, 201 S.E.2d 260 (1973).” Syl. pt. 1, Stanley v. Chevathanarat, 222 W.Va. 261, 664 S.E.2d 146 (2008).

Scott K. Sheets, Esq., Huddleston Bolen, Huntington, WV, James S. Whitehead–PHV, Sidley Austin, LLP, Chicago, IL, for Petitioners.

Marvin W. Masters, Esq., The Masters Law Firm, Charleston, WV, David L. White, Esq., Law Office of David L. White, Charleston, WV, for Respondent.

BENJAMIN, Justice:

This case is before the Court upon the appeal of the defendants below Norfolk Southern Railway Company, Norfolk Southern Corporation, James D. Farley, and Charles Paxton (hereinafter “petitioners”). In this malicious prosecution case, the petitioners appeal from the March 24, 2010, final order of the Circuit Court of Mason County, in which the circuit court denied their post-trial motions for judgment as a matter of law, a new trial, and remittitur. The petitioners contend, inter alia, that the circuit court erred in not granting its motions because the court incorrectly found at trial that the petitioners had procured the prosecution of the plaintiff below, James W. Higginbotham (hereinafter “respondent”), as a matter of law. After a thorough review of the record presented for consideration, the briefs, the legal authorities cited, and the arguments of the petitioners and the respondent, we find that the circuit court committed reversible error by determining as a matter of law that the petitioners procured the malicious prosecution of the respondent. We therefore reverse the circuit court's order denying the petitioners' post-trial motions and remand this case for proceedings consistent with this opinion.

I.FACTUAL AND PROCEDURAL BACKGROUND

The respondent has worked for various railroads since 1964. He became an employee of Norfolk Southern Corporation in 1998 when the railroad he was working for at the time, Conrail, merged with Norfolk Southern Corporation. The respondent was also the part owner of a construction business, RJW Construction (hereinafter “RJW”), for which he worked for 27 years. RJW's business consisted primarily of installing and maintaining rail road tracks for private plants, coal facilities, and similar ventures. RJW often bought rail and other equipment to construct tracks.

This case arose from the petitioners' accusation that the respondent stole rail the petitioners claimed to own. The rail in question was located in a remote area of Kanawha County known as Blue Creek.¹ The alleged scheme to steal the Blue Creek rail revolved around the activities of four men: the respondent; the respondent's longtime business associate and local scrap rail dealer, Charles Chandler; a rail dealer from Florida who had previously dealt with the respondent, David Clark; and a CSX employee, Thomas Crawford.

According to the respondent, Mr. Crawford forged a document indicating that CSX claimed ownership of the Blue Creek rail and that it authorized the removal and sale of the rail. In May of 2000, Mr. Chandler paid Mr. Crawford cash for the forged document with the knowledge that the document was forged. Mr. Chandler presented the document to the respondent, and the respondent agreed to broker the sale of the Blue Creek rail between Mr. Chandler and Mr. Clark. Mr. Chandler used one of RJW's backhoes to remove the rail. The respondent brokered the sale of a portion of 105 pound rail ² to Mr. Clark for $10,000. Mr. Clark also paid the respondent $6,500 for inspecting the rail on his behalf. Additionally, the respondent paid Mr. Chandler $10,000 for a portion of 127 pound rail.

Sometime after the commencement of the removal of the Blue Creek rail, a Norfolk Southern supervisor, Mark Lonsinger, became aware that the Blue Creek rail was being removed and sold.³ Mr. Lonsinger informed the Norfolk Southern Division Engineer, Phillip Merilli, that he had a report that CSX was selling the rail. In response, Mr. Merilli sent Mr. Lonsinger to Blue Creek to investigate the removal and sale of the Blue Creek rail which Mr. Merilli believed Norfolk Southern owned, not CSX. Mr. Lonsinger found Mr. Chandler removing the rail, at which time Mr. Chandler presented the forged CSX document to Mr. Lonsinger.

Upon receiving Mr. Lonsinger's report that the rail was actually being removed and sold, Mr. Merilli sent Mr. Lonsinger back to Blue Creek with Norfolk Southern Police Department Special Agent Paxton for additional investigation. ⁴ Upon discovering that the respondent was involved in the removal and sale of the rail, Lonsinger took the respondent out of service for Norfolk Southern, and a formal investigatory hearing was held. After a hearing in 2000, the respondent's employment was terminated; however, an arbitration panel ⁵ reinstated his employment in 2001.⁶

After the arbitration panel reinstated the respondent's employment, the Norfolk Southern officers submitted the matter to the assistant prosecutor, Robert Schulenberg. Between his receipt of the matter and his submission of the case to a grand jury two years later, Norfolk Southern police contacted Mr. Schulenberg approximately once per month, totaling 29 calls. The petitioners claim that the frequency of the calls is in accordance with standard practice for the Norfolk Southern police. At his request, the petitioners provided Mr. Schulenberg with assistance by gathering additional facts. Norfolk Southern also provided written statements taken from Mr. Chandler, Mr. Crawford, and Mr. Lonsinger; the Norfolk Southern police report; and documentary evidence found in the respondent's company vehicle. Mr. Schulenberg then presented the case to the grand jury to pursue indictments against the respondent, Mr. Clark, and Mr. Crawford.⁷

The petitioners acknowledged that an error was made by the Norfolk Southern police in their report which indicated that the respondent, instead of Mr. Chandler, had dealt directly with Mr. Crawford in procuring the forged CSX document. The petitioners also acknowledge that upon presenting the case to the grand jury, Norfolk Southern's Special Agent Farley ⁸ made erroneous statements about the events surrounding the case to the grand jury. ⁹ The respondents contend, however, that Special Agent Farley's statements were made from his memory of the events and that he believed at the time that the statements were truthful.

The Kanawha County grand jury indicted the respondent, Mr. Chandler, and Mr. Clark. The respondent was never arrested or incarcerated, and a $500 bond he posted was ultimately returned to him. The indictments against the three men were all dismissed over a year later.¹⁰ The respondent then pursued the malicious prosecution suit which underlies this appeal.

The trial of the malicious prosecution claim began on August 28, 2007. At the close of the respondent's case in chief, the respondent moved for a judgment as a matter of law on the issue of whether the petitioners had procured his prosecution, which is one element of his required proof. The petitioners simultaneously moved for a complete judgment as a matter of law. The circuit court denied the petitioners' motion, but it granted the respondent's motion. At that time the petitioners had not presented their case in chief. The petitioners again moved for judgment as a matter of law at the close of the trial. Again the circuit court denied the motion. The court instructed the jury as to the finding of procurement as a matter of law, but it submitted the questions as to the other elements of malicious prosecution at issue—probable cause and malice—to the jury.

The jury returned a verdict in favor of the respondent. The verdict included an award of $420,000 in damages. The circuit court entered the judgment order in favor of the respondent on December 4, 2007. On December 17, 2007, the respondents filed a motion for judgment as a matter of law, new trial, or remittitur. Two and a half years later, on March 24, 2010, the circuit court entered a final order denying the petitioners' post trial motions. In its final order, the circuit court found “that the undisputed evidence indicates that the defendants did in fact procure the prosecution.” The circuit court supported its conclusion by referencing the error...