Semones v. Southern Bell Tel. & Tel. Co.

• Decision Date: 02 June 1992
• Docket Number: No. 9126SC478,9126SC478
• Citation: 416 S.E.2d 909,106 N.C.App. 334
• Court: North Carolina Court of Appeals
• Parties: Robert C. SEMONES v. SOUTHERN BELL TELEPHONE & TELEGRAPH COMPANY.

Page 909

416 S.E.2d 909

106 N.C.App. 334

Robert C. SEMONES v. SOUTHERN BELL TELEPHONE & TELEGRAPH COMPANY.

No. 9126SC478.

Court of Appeals of North Carolina.

June 2, 1992.

Weinstein & Sturges, P.A. by Fenton T. Erwin, Jr. and L. Holmes Eleazer, Jr., Charlotte, for plaintiff-appellant.

Petree Stockton & Robinson by John T. Allred, Richard E. Fay, and Charles H. Rabon, Jr., Charlotte, for defendant-appellee.

GREENE, Judge.

Plaintiff appeals from an order entered 26 February 1991, granting defendant's motion for summary judgment on plaintiff's claims for malicious prosecution and abuse of process.

The facts pertinent to this appeal are as follows: Plaintiff was the president of Today's World Furniture, Inc. (Today's World) in Claremont, North Carolina, from its founding in 1979 until early March, 1986. In November, 1985, Rothwell Corporation purchased Today's World. Plaintiff, however, remained president until he resigned in March, 1986. On 3 January 1986, Today's World made a deposit into its account at First Union National Bank (First Union) in Conover. On the same day, Today's World issued a check signed by plaintiff made payable to defendant in the amount of $1,084.88. After plaintiff mailed the check to defendant, plaintiff learned that Today's World's account had been put on hold by First Union. Plaintiff discovered that three of Today's World's creditors had placed the company in involuntary bankruptcy on 15 December 1985. Plaintiff was unaware of the bankruptcy action at the time that he signed the check made payable to defendant.

Defendant presented the check to First Union, which later returned the check marked with the notation "uncollected funds." Defendant notified Today's World that the check had been dishonored and that, unless it was covered and other amounts owed to defendant paid, defendant would disconnect telephone service to Today's World. In late January, 1986, defendant disconnected Today's World's telephone service. Defendant notified Today's World that service would be restored upon payment of amounts owed defendant, which included the amount of the returned check. On 25 January 1986, Today's World made a cash payment of $2,100.00 at Dellinger's Department Store, an authorized collection agent for defendant. This payment included payment for the dishonored check. Defendant restored telephone service to Today's World, and William Self, Rothwell Corporation's liaison at Today's World, informed plaintiff of the payment of Today's World's account with defendant.

In March, 1986, plaintiff resigned from Today's World and moved to Greensboro. On 6 October 1986, one of defendant's service representatives prepared a "Dishonored Check Security Referral" for the 3 January 1986 check that had previously been dishonored. Defendant sent the dishonored check referral to its Security Division where it was assigned to Mike Payne (Payne). Payne was the staff manager who performed investigative work and obtained issuance of warrants for bad checks delivered to defendant. On 8 October 1986, Payne sent a certified letter to plaintiff at plaintiff's Greensboro address. In the letter, Payne stated that the 3 January 1986 check in the amount of $1,084.88 had been dishonored, and that unless it was made good within fifteen days, defendant would institute legal action against plaintiff in accordance with N.C.G.S. § 14-107, North Carolina's worthless check statute.

Near the latter part of October, 1986, plaintiff telephoned Payne concerning the letter. Plaintiff's version and Payne's version of the telephone conversation conflict. Plaintiff stated that he explained the circumstances surrounding the check to Payne, specifically, (1) that the check had been dishonored due to "held funds"; (2) that the check was thereafter paid at Dellinger's Department Store; (3) that service was subsequently reinstated; (4) that plaintiff had resigned from Today's World in March, 1986, and moved to Greensboro; (5) that Today's World was bankrupt; and (6) that Payne should contact William Self at Today's World. According to Payne, plaintiff told him only that he no longer worked at Today's World and that he was merely an employee when he had worked there. Furthermore, plaintiff did not mention the payment at Dellinger's or the bankruptcy. Both plaintiff and Payne stated, however, that at the end of the telephone conversation, Payne told plaintiff that he would look into the matter and get back in touch with plaintiff.

Payne described his investigation of the case as follows:

[a] copy of the business office record list was attached to the [file] when I received it, and I looked at the credit information on that. It listed [plaintiff] as the owner of the company. I contacted the business office to determine whether there had been any changes in ownership or anything of the company, other than what information I had. And I was advised that [plaintiff] had been the owner of the company and the person they had contacted to collect bills and so on. They had contacted him a number of times, when there had been collection problems with him in the past. And that, essentially, is it.

Payne also stated that he checked the signature card on file at First Union in order to verify that the signature on the check was not a forgery. First Union still had plaintiff listed as an officer of Today's World, and advised Payne that there had been no change in the company ownership.

On 10 December 1986, Payne procured a warrant for plaintiff's arrest charging plaintiff with violating North Carolina's worthless check statute by unlawfully and willfully drawing, making, uttering, and issuing and delivering to defendant a check drawn on First Union for $1084.88, while knowing at the time that he did not have sufficient funds on deposit or credit with the bank with which to pay the check upon presentation. ¹ Payne stated that he based his determination that plaintiff knew that there were insufficient funds in the Today's World First Union account with which to pay the check on "[j]ust the fact that the check was not good." In February, 1987, prior to plaintiff's arrest, defendant was notified that an involuntary bankruptcy petition had been filed against Today's World on 29 October 1986. On 23 February 1987, defendant filed a proof of claim for the sum of $2,851.24 in the United States Bankruptcy Court for the Western District of North Carolina. Plaintiff was arrested at his home pursuant to the worthless check warrant on 25 February 1987. After several continuances, the district attorney voluntarily dismissed the prosecution on 5 October 1987.

In December, 1988, plaintiff filed this action against defendant for malicious prosecution and abuse of process. The trial court granted defendant's motion for summary judgment on both claims.

____________________

The issues presented are whether I) the return of a check due to insufficient funds or lack of credit constitutes prima facie evidence that the person issuing the check had knowledge at the time of issuance that there were insufficient funds or lack of credit with which to pay the check upon presentation; and II) defendant's failure to notify the district attorney of Today's World's bankruptcy supports plaintiff's claim for abuse of process.

I

Plaintiff argues that the trial court erroneously granted summary judgment for defendant on plaintiff's claim for malicious prosecution because defendant failed to show that an essential element of plaintiff's claim is nonexistent.

A claim for malicious prosecution has four essential elements: (1) initiation by the defendant of an earlier proceeding; (2) lack of probable cause for such initiation; (3) malice, either actual or implied; and (4) termination of the earlier proceeding in favor of the plaintiff. Jones v. Gwynne, 312 N.C. 393, 397, 323 S.E.2d 9, 11 (1984). Probable cause in the context of a malicious prosecution action is "the existence of such facts and circumstances, known to him at the time, as would induce a reasonable [person] to commence a prosecution." Pitts v. Village Inn Pizza, Inc., 296 N.C. 81, 87, 249 S.E.2d 375, 379 (1978) (quoting Morgan v. Stewart, 144 N.C. 424, 430, 57 S.E. 149, 151 (1907)). "Implied" or "legal" malice may be inferred from proof that the defendant lacked probable cause for initiating the proceeding. Pitts, 296 N.C. at 86-87, 249 S.E.2d at 379.

Because defendant moved for summary judgment in this case, [it] has "the burden of showing that an essential element of the plaintiff's claim is nonexistent, or that the plaintiff cannot produce evidence to support an essential element of his claim." Taylor v. Taylor Products, Inc., 105 N.C.App. 620, 625, 414 S.E.2d 568, 572 (1992). The existence of the first and fourth elements of malicious prosecution in the instant case is undisputed. Defendant's employee Michael Payne procured the issuance of a warrant for plaintiff's arrest on 10 December 1986 for violation of N.C.G.S. § 14-107, North Carolina's worthless check statute. The proceeding was subsequently voluntarily dismissed by the district attorney. See Pitts, 296 N.C. at 87, 249 S.E.2d at 379 (voluntary dismissal constitutes termination in favor of plaintiff so as to satisfy that element of malicious prosecution). Defendant, however, argues that it is entitled to summary judgment because defendant had probable cause to initiate the worthless check proceeding.

In order to have probable cause to initiate a worthless check proceeding, one need not be certain that the person against whom the action is instituted will be convicted of the crime. It is necessary only that the initiator of the action have reasonable grounds to believe that the person charged is guilty of the crime. 52 Am Jur 2d Malicious Prosecution § 52 (1970). A person commits the crime of issuing a worthless check when he

draw[s], make[s], utter[s] or issue[s] and deliver[s] to another, any check or draft on any bank or depository, for the...