Sage Intern., Ltd. v. Cadillac Gage Co.

• Citation: 556 F. Supp. 381
• Decision Date: 19 November 1982
• Docket Number: 80-70493 and 80-71074.,79-74829,Civ. A. No. 78-70064
• Parties: SAGE INTERNATIONAL, LTD., a Michigan corporation, Plaintiff, v. CADILLAC GAGE COMPANY, a Michigan corporation, Defendant; and consolidated actions.
• Court: U.S. District Court — Western District of Michigan

556 F. Supp. 381

SAGE INTERNATIONAL, LTD., a Michigan corporation, Plaintiff, v. CADILLAC GAGE COMPANY, a Michigan corporation, Defendant; and consolidated actions.

Civ. A. Nos. 78-70064, 79-74829, 80-70493 and 80-71074.

United States District Court, E.D. Michigan, S.D.

November 19, 1982.

COPYRIGHT MATERIAL OMITTED

Barry Reed, James Safley, Minneapolis, Minn., Jerome Gropman, G. Reynolds Sims, Dennis Peppler, Gropman, Kaplan, Sims & Gibbons, P.C., Southfield, Mich., for plaintiff.

Roger Wardle, Cynthia Cooper Adkison of Davidson, Gotshall, Kohl, Secrest, Wardle, Lynch & Clark, Farmington Hills, Mich., for defendant.

MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS MALICIOUS PROSECUTION AND ABUSE OF PROCESS CLAIMS OF PLAINTIFFS THEODORE HENKE, INTERNATIONAL LOGISTICS GROUP, LTD., ROBERT D. CLOSS, RICHARD NUTTING, GERALD ROSS, AND CHARLES STRONG

PATRICIA J. BOYLE, District Judge.

This matter is before the court on defendant's Motion to Dismiss Malicious Prosecution and Abuse of Process Claims of the plaintiffs in the "Henke Group" which include plaintiffs Theodore Henke, International Logistics Group, Ltd., Robert D. Closs, Richard Nutting, Gerald Ross, and Charles Strong.¹

Defendant brings the instant motion under Fed.R.Civ.P. 12(c) which provides that "after the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." Judgment may be granted under rule 12(c) where the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law. Beal v. Missouri Pacific R.R., 312 U.S. 45, 61 S.Ct. 418, 85 L.Ed. 577 (1941); 5 C. Wright & A. Miller, Federal Practice and Procedure hereinafter Wright & Miller § 1368, p. 690. For purposes of this motion, all wellpleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment. Southern Ohio Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 479 F.2d 478 (6th Cir.1973); 2A Moore's Federal Practice, § 12.15 (2d ed. 1982). In contrast to a rule 12(b) motion in which a claim may be dismissed for failure to satisfy one of the procedural prerequisites, a rule 12(c) motion for judgment on the pleadings, theoretically, is directed toward a determination of the substantive merits of the controversy, and consequently, such a motion should only be granted where it is clear that the merits of the controversy can be fairly and fully decided in this summary manner. 5 Wright & Miller, § 1369, p. 698.

The rule itself provides for a conversion procedure whereby the motion for judgment on the pleadings may be deemed a rule 56 summary judgment motion where matters outside the pleadings are presented to and not excluded by the court; however, it is within the court's discretion whether to accept extraneous matter on a 12(c) motion and treat it as one for summary judgment. See, e.g., A.S. Abell Company v. Baltimore Typographical Union No. 12, 338 F.2d 190 (4th Cir.1964); 5 Wright & Miller, § 1371, p. 705. In the instant situation, I decline to consider matters outside the pleadings, given my conclusion that the issue is one of law which can be resolved on the pleadings, and consequently, the standards governing rule 12(c) are applicable. Although the granting of a 12(c) motion is rare, it is appropriate in this instance.

Professors Wright and Miller note that the pleading burden imposed upon a plaintiff in a malicious prosecution case is somewhat higher than it is in the typical civil action, a fact they attribute to the traditional judicial disfavor of this tort. 5 Wright & Miller, § 1246, p. 224.

Plaintiff's state law claims of malicious prosecution and abuse of process are before the court on the basis of pendent jurisdiction, and consequently, this court is bound to decide this state law issue as it would have been decided had the case been brought in the Michigan state court system. 19 Wright, Miller & Cooper, § 4507, p. 85.

Most jurisdictions allow a common law action for malicious prosecution (also labelled as "wrongful use or initiation of civil proceedings") where it appears from the complaint that the alleged prosecution has terminated in plaintiff's favor, that the defendant had no probable cause, and that he acted from malicious motives. 15 Michigan Law & Practice, Malicious Prosecution, § 1, p. 573 (1982); W. Prosser, Torts § 120 (4th ed. 1971); Restatement (Second) of Torts, § 674 (1977). Annot. 84 A.L.R.2d 555 (1978). The Michigan Supreme Court has recently affirmed its allegiance to the "English Rule" recognizing a fourth prerequisite for a common law claim of malicious prosecution — that of "special injury". Friedman v. Dozorc, 412 Mich. 1, 312 N.W.2d 585 (1981).² Without specifically defining the term, the court concluded, upon an exhaustive review of prior case law, that an action for malicious prosecution will lie only upon a showing of "special injury equivalent to a seizure of property as a result of the defendant's institution of civil proceedings." Id. at 40-41, 312 N.W.2d 585, citing, e.g. Brand v. Hinchman, 68 Mich. 590, 36 N.W. 664 (1888) (a "technical seizure" of property in which writ of attachment was ordered by court, but not levied, and deputies remained in store for half hour); Leeseberg v. Builders Plumbing Supply Co., 6 Mich.App. 321, 149 N.W.2d 263, leave denied, 379 Mich. 768 (1967) (writ of attachment caused plaintiff's warehouse to be locked for two weeks); Rowbotham v. Detroit Automobile Inter-Insurance Exchange, 69 Mich.App. 142, 147, 244 N.W.2d 389 (1976) (defendant filed an improper certificate of unsatisfied judgment with the state motor vehicle department, causing an unjustified suspension of Rowbotham's driver's license); Krzyszke v. Kamin, 163 Mich. 290, 128 N.W. 190 (1910) (injunction restrained plaintiff from disposing of his personal property at auction on strength of judgment creditor's bill containing patently insufficient averments).

In rejecting the American rule, under which no special injury is required, the court criticized the views of Dean W. Prosser and that school of thought which sees "the preferred remedy for a wrongful tort action as another tort action." Friedman, 412 Mich. at 42, 312 N.W.2d 585. The court reasoned that where a broadly defined action for malicious prosecution is recognized meritorious as well as frivolous claims are likely to be deterred and free access to the courts is inevitably chilled. Id. at 46, 312 N.W.2d 585. To elaborate briefly on Justice Levin's policy discussion in Friedman, I note also that the assumptions underlying the "English Rule" are that one full hearing will promptly and fully resolve the differences between the parties and that the prevailing party may recover the costs of defending a frivolous action. Id. at 32, n. 20, 312 N.W.2d 585. This court recognizes the flaws in these assumptions in the context of present day litigation: parties are not routinely compensated with costs and attorneys fees absent some statutory basis for such an award, overcrowding of dockets precludes a speedy resolution of even wholly meritless actions, and summary resolution of insubstantial claims by trial courts is infrequent. While I recognize that these factors may require the faultless defendant to litigate for an inordinate amount of time with consequent expense, recognition of these problems supports, rather than detracts from the state court's conclusion that an unrestrained cause of action for malicious prosecution is not the solution. Such a policy would serve not only to chill the meritorious lawsuit but also to trigger the same process all over again.

The task of this court in interpreting the decisions of the Michigan Supreme Court is to examine the facts of this case and to predict how that court would decide the issue. 19 Wright, Miller & Cooper, § 4507, p. 85. Given that court's careful analysis of the special injury requirement as a whole and given the court's stated rationale for its decision, which includes "the preservation of free access to the courts," Friedman, 412 Mich. at 28, 312 N.W.2d 585, this court may not presume that the holding is limited to instances in which a doctor sues a lawyer for a malicious malpractice action.

Thus, while this case is distinct from the Friedman fact situation in certain respects, I do not believe that the Michigan Supreme Court would view the allegations of any of the plaintiffs as stating a claim of "special injury." Plaintiffs allege respectively in their malicious prosecution and abuse-of-process counts that, by reason of defendants' conduct, they were prevented from proceeding with their usual business and trade (Amended Complaint of Henke Group, ¶¶ 35, 40, 44), that the individual plaintiffs lost their employment (Amended Complaint of Henke Group, ¶ 36), that, as a result of said interference, plaintiffs lost income, profits, and business and suffered damage to reputation and good will (Amended Complaint of Henke Group, ¶¶ 35, 40), and that plaintiffs suffered substantial expenses in the defense of the Macomb County action (Amended Complaint of Henke Group, ¶¶ 35, 36, 40, 41).

Under the sham litigation counts, plaintiffs allege injuries in connection with the sham litigation which are essentially equivalent to those stated above. (See Amended Complaint of Henke Group, ¶¶ 15(d), 18.) In addition, plaintiffs claim incidental damages and damages for mental anguish. (See, e.g., Amended Complaint of Henke Group, ¶ 36.)

These various injury allegations of plaintiffs can be reduced to the following idea: that Ex-Cell-O's suit intimidated and threatened plaintiffs so that they were prevented from conducting their business or employment. This theory focuses on the "technical" or "constructive taking" escape valve that Friedman alludes to which, in limited instances, may...