Peoples Bank & Trust Co. v. Stock, 1-279A52

• Citation: 392 N.E.2d 505,181 Ind.App. 483
• Decision Date: 31 July 1979
• Docket Number: No. 1-279A52,1-279A52
• Parties: PEOPLES BANK & TRUST CO., Defendant-Appellant, v. Sonja K. STOCK, Plaintiff-Appellee.
• Court: Court of Appeals of Indiana

Page 505

392 N.E.2d 505

181 Ind.App. 483

PEOPLES BANK & TRUST CO., Defendant-Appellant, v. Sonja K. STOCK, Plaintiff-Appellee.

No. 1-279A52.

Court of Appeals of Indiana, First District.

July 31, 1979.

Seymour M. Bagal, Jon R. Pactor, Indianapolis, George J. Lewis, Greenfield, for defendant-appellant

David W. Foley, Indianapolis, for plaintiff-appellee.

LOWDERMILK, Presiding Judge.

STATEMENT OF THE CASE

Defendant-appellant Peoples Bank & Trust Company (Peoples) challenges the judgment entered by the Hancock Circuit Court awarding plaintiff-appellee Sonja K. Stock (Stock) $75,000 in her action for malicious prosecution.

We affirm.

FACTS

Michael Canada died November 28, 1974. For more than a year immediately preceding his death, Canada had dated and sometimes shared an apartment with Sonja Stock. Through his place of employment Canada held a policy of life insurance with Metropolitan Life Insurance Company. On May 29, 1974, Canada named "Sonja K. Stock, Fiancee" as beneficiary. On July 31, 1974, Canada named "Sonja K. Canada, Wife" as beneficiary.

After Canada's death, Attorney Arthur E. Ecklund, who had represented Canada's former wife in the proceeding for the dissolution of their marriage, went to Peoples and requested that Peoples serve as personal representative of Canada's estate. Canada's estate consisted of assets with a total value of $1,258.31. On December 13, 1974, a petition for issuance of letters of administration was filed by Virginia A. Canada (Canada's former wife), as natural guardian of Michael Canada's two minor children. Peoples was appointed personal representative, and Arthur E. Ecklund was named as counsel for the personal representative.

On January 17, 1975, Peoples, as personal representative of Michael Canada's estate, brought suit against Metropolitan Life Insurance Company and Stock. In the complaint Peoples sought a restraining order to prevent Metropolitan from paying the proceeds of Canada's life insurance policy to "an imposter alleging to be Sonja K. Canada Wife" prior to the holding of a hearing. In Count II Peoples alleged, Inter alia :

"4. That the Defendant, Sonja K. Stock, is wrongfully alleging and holding herself out to be one Sonja K. Canada, when in fact she is not.

5. That the Defendant, Sonja K. Stock, is not the designated beneficiary of the above mentioned policy.

6. That the Defendant, Sonja K. Stock, has no insurable interest in said policy or the proceeds thereof."

After hearing evidence the Marion Circuit Court entered its judgment on April 18, 1975:

"WHEREFORE, IT IS ORDERED, DECREED AND ADJUDGED that the court finds against plaintiff on its complaint, and the court finds that defendant Sonja K. Stock a/k/a Canada is the beneficiary in the above described group life insurance and that she is entitled to judgment in the sum of $11,500.00. The Marion County Clerk is ordered to pay Sonja K. Stock a/k/a Canada the sum of $11,500.00 to satisfy the judgment."

On July 2, 1975, Michael Canada's estate was closed. All assets had been consumed by court costs and fees of the personal representative and its attorney.

Sonja Stock brought suit against Peoples on August 19, 1975, charging that Peoples had filed its lawsuit against her maliciously and without probable cause. Although the trial court initially permitted Peoples to file a third party complaint against Ecklund, the trial court subsequently granted Stock's motion to strike the third party complaint. A jury returned a verdict in favor of Stock and awarded damages of $75,000. The Hancock Circuit Court entered judgment accordingly.

ISSUES

1. Did Stock fail to meet her burden of proving Peoples' lack of probable cause?

2. Did Peoples prove its defense of reliance on advice of counsel?

3. Did Stock fail to prove Peoples' malice?

4. Did Stock fail to prove that Peoples had instituted an action against her?

5. Was Stock's action for malicious prosecution barred by Peoples' discharge as personal representative of Canada's estate?

6. Did Stock fail to plead and prove damages?

7. Were punitive damages appropriate in this case ?

8. Did the jury award excessive damages?

9. Did the trial court err in granting Stock's motion to strike Peoples' third party complaint?

10. Was Stock's action for malicious prosecution barred because she failed to file a claim in Canada's estate?

11.-16. Did the trial court err in giving and refusing certain instructions?

DISCUSSION AND DECISION

The elements of an action for malicious prosecution are listed in Barrow v. Weddle Brothers Construction, (1974) 161 Ind.App. 601, 605, 316 N.E.2d 845, 849:

"In an action for malicious prosecution, the plaintiff must prove (1) that the defendant instituted or caused to be instituted a prosecution, (2) that the defendant acted with malice, (3) that there was a want of probable cause for instituting the prosecution, and (4) that the prosecution was terminated in the plaintiff's favor. . . ." (Citations omitted)

Issues One and Two

Peoples maintains that (a) Stock failed to meet her burden of proving Peoples' lack of probable cause for instituting its action against her, and (b) Peoples proved its defense of reliance on advice of counsel. ¹

In Indianapolis Traction & Terminal Co. v. Henby, (1912) 178 Ind. 239, 248, 97 N.E. 313, 317, the Supreme Court offered this guidance:

"In the abstract, probable cause is a pure question of law, but its existence in a given case is a mixed question of law and fact, when one or more of the elementary facts thereof, relied upon is controverted. In such case the court must hypothetically state to the jury the material facts which the evidence tends to prove, and positively direct, as to the law, on the assumed state of facts. Where the facts are uncontroverted, the court must determine the existence or nonexistence of probable cause. . . ." (Citation omitted)

In the case of Treloar v. Harris, (1917) 66 Ind.App. 59, 71-72, 117 N.E. 975, 979, Harris sued Treloar for malicious prosecution after Treloar had unsuccessfully brought an action to have Harris declared insane. At trial the court had given the following instruction:

". . . 'Probable cause' is that apparent state of facts found to exist upon reasonable inquiry; that is, such inquiry as the given case renders convenient and proper, which would induce a reasonable, intelligent, and prudent man to believe the person against whom the charge is preferred or action brought or filed is insane or of unsound mind, and if defendant brought an action against plaintiff maliciously in the court of James S. Keigwin, charging plaintiff with being insane, Without making the inquiry that a prudent, cautious person would make under like circumstances, then and in that case, as a matter of law, the bringing of the action, or, in other words the prosecution was instituted without probable cause." (Our emphasis)

When Treloar challenged the instruction on appeal, the Appellate Court responded:

"It is insisted that this instruction is erroneous, in that it told the jury that if appellant did not make the inquiry that a prudent cautious person would make under like circumstances, there was no probable cause for the prosecution of the original proceeding against appellee. The cases of Lacy v. Mitchell ((1864)), 23 Ind. 67, and Hutchinson v. Wenzel ((1900)), 155 Ind. 54, 56 N.E. 845, cited by appellant, lend no support to this objection, but on the contrary, impliedly at least, recognize that substantially the inquiry indicated in the instruction is an essential of probable cause. The inquiry essential in such cases is that which the given case renders convenient and proper, and which a man of prudence and caution would make under like circumstances. . . ."

The defense of reliance on advice of counsel is explained in the context of an action for malicious prosecution resulting from a criminal prosecution in Indianapolis Traction & Terminal Co. v. Henby, supra, at pages 248-49 of 178 Ind., at page 317 of 97 N.E., but the explanation has validity also in a suit based upon a civil proceeding:

"Where, before the commencement of the prosecution, the prosecutor honestly and in good faith sought advice of reputable counsel, and made to such counsel a full and true statement of all the material facts within his knowledge, and such counsel thereupon advised the prosecutor that the facts so stated warranted the prosecution, and, relying on the advice, the prosecutor in good faith commenced the action, such facts constitute probable cause, and consequently a complete defense against an action for malicious prosecution, although the advice given was erroneous. . . ." (Citations omitted)

In 52 Am.Jur.2d Malicious Prosecution § 80 (1970) appears reference to a limitation upon the defense:

"The attorney must have been impartial, without prejudice or bias, and disinterested in order for his advice to serve as a defense to an action for malicious prosecution. There cannot be justifiable reliance on the opinion of an attorney who had an interest of his own to protect by the proceeding, or who was prejudiced against the person proceeded against." (Footnotes omitted)

The same principle is expressed in this manner in 54 C.J.S. Malicious Prosecution § 48a (1948):

"The advice of counsel to avail as a defense must have been given by a competent, disinterested, regularly admitted and practicing attorney and counselor at law in good standing who is not the defendant himself. . . ." (Footnotes omitted)

The Appellate Court of Illinois had occasion to consider the meaning of the word "disinterested" in Schipper & Block, Inc. v. Carson Pirie Scott & Co., (1970) 122 Ill.App.2d 34, 256 N.E.2d 854, 857:

"Disinterested is defined as: 'Not having any interest in the matter referred to or in controversy; free from prejudice or partiality; impartial or fair minded; without pecuniary interest; not previously interested; not biased or prejudiced.' 27 C.J.S. 314. The term 'disinteres...