Stoner v. Nash Finch, Inc.

• Decision Date: 26 September 1989
• Docket Number: No. 880239,880239
• Citation: 446 N.W.2d 747
• Parties: Robert L. STONER, Plaintiff, Appellee and Cross-Appellant, v. NASH FINCH, INC., Defendant, Appellant and Cross-Appellee. Civ.
• Court: North Dakota Supreme Court

Page 747

446 N.W.2d 747

87 A.L.R.4th 117

Robert L. STONER, Plaintiff, Appellee and Cross-Appellant, v. NASH FINCH, INC., Defendant, Appellant and Cross-Appellee.

Civ. No. 880239.

Supreme Court of North Dakota.

Sept. 26, 1989.

Coles & Snyder, Bismarck, for plaintiff, appellee and cross-appellant; argued by Robert J. Snyder, Bismarck.

Lucas & Smith, Bismarck, for defendant, appellant and cross-appellee; argued by A. William Lucas, Bismarck.

GIERKE, Justice.

Nash Finch, Inc., appeals from a judgment entered on a jury verdict finding it liable to Robert L. Stoner for abuse of process and awarding Stoner $25,200 in compensatory damages and $200,000 in punitive damages. Nash Finch also appeals from orders denying post-trial motions. Stoner has filed a cross-appeal. We affirm.

The evidence, viewed in the light most favorable to the verdict, reveals that during 1985 Stoner was employed by Nash Finch as manager of its Warehouse Market in Bismarck. Stoner, age 51 at the time, had been employed for 17 years by Nash Finch, a national wholesaler and retailer of grocery products, and the company considered him a valued employee.

Based upon information supplied by a former employee of Nash Finch, Ronald Curran, a loss prevention manager for the company, conducted a secret investigation concerning Stoner's alleged acceptance from various product vendors of prizes and premiums which were routinely offered as part of sales promotions. Although Nash Finch sent out circulars to company employees once or twice a year which stated that this practice was prohibited, ¹ the actual widespread practice in the company was for all levels of employees, including managers, supervisors, and headquarter personnel to accept and keep the premiums and prizes. Curran determined that Stoner had been accepting and keeping prizes and premiums through the years and compiled a list of those items. Curran contacted his supervisors at the home office in Minneapolis, and it was decided that Curran and Richard Wallace, vice president of the Warehouse Market division, would travel to Bismarck and confront Stoner with the results of the investigation.

On November 15, 1985, Curran and Wallace met with Stoner at a Bismarck motel, showed him the list of prizes and premiums, which totaled approximately $6,000, and asked if he had accepted the items. Stoner admitted that he had, with one exception, received the premiums and prizes After the Bismarck meeting, Wallace returned to Minneapolis. During the next several days, Wallace, Russell Mammel, the president of Nash Finch, and Stuart Deuring, house counsel for the company, discussed possible further actions to be taken against Stoner. One option discussed was to sue Stoner for the amount of premiums and prizes he received. According to Deuring, this option was rejected because it would be too "time-consuming", and, even if a judgment was obtained, it might not be collectable. Another option discussed was a possible criminal action. Deuring researched the matter and telephoned the office of the Burleigh County State's Attorney. He spoke with an assistant state's attorney and inquired as to the monetary levels for the various theft offenses and the possibility of a deferred imposition of sentence. Although the company was not interested in pursuing a felony charge, it was interested in a possible misdemeanor charge and restitution. Curran contacted Officer Myron Heinle of the Bismarck Police Department and told him that the company was investigating Stoner for possible theft of the premiums and prizes.

listed. At that point, Stoner was fired as an employee of Nash Finch.

During this period of time, Nash Finch officials also became aware that, because of Stoner's termination of employment, he was eligible for a payout of his accumulated profit sharing monies. Company officials discovered that the amount of Stoner's payment would be far in excess of the amount of premiums and prizes received by him. Company officials also discovered that Stoner had granted Nash Finch a second mortgage on property located in Minnesota. The mortgage was given to secure a $15,000 loan from the company which Stoner used as a down payment for a home when he was transferred to Bismarck. At the time of Stoner's termination, the loan balance was approximately $7,500 and Stoner was making payments of $60 per week.

On December 5, 1985, Deuring and Curran met with Stoner at a Bismarck motel. Deuring had with him several documents he had earlier prepared. Those documents included a blank demand promissory note and a "Release and Settlement Agreement" to which was attached a list of the amounts of premiums and prizes received by Stoner and the amount of the balance remaining due on the mortgage. One of the items admittedly accepted by Stoner, a VCR, was left off of the list. Deuring testified that at the meeting, the demand note and a criminal misdemeanor charge were "proposed to Mr. Stoner together." According to Stoner, Deuring told him that the amount of items he had received would constitute a felony, but that things had been "set up" so that if he pled guilty to a misdemeanor charge, the state's attorney would recommend to the judge that he receive a deferred imposition of sentence. Stoner was also informed that the reason charges were being filed was "to make this firing of me the most benefit to show other employees in the company that they wanted this practice stopped...." Stoner was then asked to sign the release and the demand note. After crossing one item off of the list, the amount of $13,271.45 was entered on the release and demand note, and Stoner signed the documents.

Immediately after the meeting, Deuring, Curran, and Stoner went to the Bismarck Police Department and met with Officer Heinle. Stoner told Heinle that he had taken the VCR, with an approximate value of $319, that it was a premium prize, and that he was aware of the company policy. Deuring and Curran told Heinle that, with regard to the balance of the $6,000 in premiums and prizes accepted by Stoner, the company "would attempt to be reimbursed through the civil process." Heinle prepared a report which was forwarded to the state's attorney. On December 18, 1985, Stoner was formally charged with class A misdemeanor theft of property, i.e., the VCR.

In early January 1986, Deuring obtained Stoner's profit sharing check, which totaled approximately $22,000. On January 9, Deuring flew to Bismarck with the check and demand note. After arriving in Bismarck, Deuring accompanied Stoner to a Nash Finch officials soon learned that Stoner was considering bringing a lawsuit against the company. Deuring contacted the state's attorney and requested that the misdemeanor charge against Stoner be dismissed. According to Deuring, the reason for doing so was that the company had "no interest in defending lawsuits," and that the company had received the money owed to it. On February 20, 1986, the state's attorney filed a motion to dismiss the charge against Stoner, and the court ordered a dismissal on February 21, 1986.

bank, where Deuring required that Stoner obtain a certified check made out to Nash Finch in the amount of the demand note. After receiving the check, Deuring gave Stoner the canceled demand note and satisfaction of mortgage and left.

Stoner subsequently brought this action against Nash Finch for malicious prosecution and abuse of process. The jury returned a verdict in favor of Nash Finch on the malicious prosecution action but found in favor of Stoner on the abuse of process action. The jury awarded Stoner $25,200 in compensatory damages and $200,000 in punitive damages. Nash Finch brought several post-trial motions which were denied by the court. These appeals followed.

ABUSE OF PROCESS

Nash Finch asserts that the evidence was insufficient to sustain the jury's finding of abuse of process. In reviewing a jury verdict, we view the evidence in the light most favorable to the verdict and if there is substantial evidence to support the verdict, we will not set it aside. E.g., Matter of Estate of Knudsen, 342 N.W.2d 387, 392 (N.D.1984). We believe there was substantial evidence to support the jury's verdict in this case.

The tort of abuse of process is described in Restatement (Second) of the Law of Torts Sec. 682 (1976): "One who uses a legal process, whether criminal or civil, against another primarily to accomplish a purpose for which it is not designed, is subject to liability to the other for harm caused by the abuse of process." The essential elements of the tort are discussed in Prosser and Keeton, The Law of Torts Sec. 121, at p. 898 (5th ed. 1984):

"The essential elements of abuse of process, as the tort has developed, have been stated to be: first, an ulterior purpose, and second, a wilful act in the use of the process not proper in the regular conduct of the proceeding. Some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. The improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club. There is, in other words, a form of extortion, and it is what is done in the course of negotiation, rather than the issuance or any formal use of the process itself, which constitutes the tort." [Footnotes omitted.]

In A & A Metal Bldgs. v. I-S, Inc., 274 N.W.2d 183, 187 (N.D.1978), we said:

"The elements of abuse of process were discussed by this Court in Blair v. Maxbass Security Bank of Maxbass, 44 N.D. 12, 176 N.W. 98 (1919). In Blair, supra 176 N.W. at 100, we stated that an abuse of process can occur only when the facts constituting...