Texas Beef Cattle Co. v. Green

• Decision Date: 25 April 1996
• Docket Number: No. 94-1004,94-1004
• Citation: 921 S.W.2d 203
• Parties: 39 Tex. Sup. Ct. J. 523 TEXAS BEEF CATTLE COMPANY et al., Petitioners v. Jeff GREEN, Individually and d/b/a J & F Cattle Company, Respondent.
• Court: Texas Supreme Court

Page 203

921 S.W.2d 203

39 Tex. Sup. Ct. J. 523

TEXAS BEEF CATTLE COMPANY et al., Petitioners v. Jeff GREEN, Individually and d/b/a J & F Cattle Company, Respondent.

No. 94-1004.

Supreme Court of Texas.

Argued Sept. 19, 1995.

Decided April 25, 1996.

P. Michael Jung, Dallas, for petitioners.

Bill Daniel, Mike B. Johnston, and James G. Gumbert, Houston, for respondent.

ON APPLICATION FOR WRIT OF ERROR TO THE COURT OF APPEALS FOR

THE NINTH DISTRICT OF TEXAS

CORNYN, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, HECHT, ENOCH, SPECTOR, OWEN, BAKER, and ABBOTT, Justices, join.

Texas Beef Cattle Company's motion for rehearing is granted in part and overruled in part. Jeff Green's motion for rehearing is overruled. We withdraw our opinion and judgment of January 11, 1996, and substitute the following opinion.

This malicious prosecution and tortious interference with contract case is the culmination of three lawsuits filed in two counties arising out of competing claims to several hundred head of cattle. We address three main issues: first, whether a civil case upon which a malicious prosecution suit is predicated has "terminated" in favor of a plaintiff before appeals of the underlying case have been exhausted; second, whether the "special injury" requirement for damages has been satisfied in this case; and third, whether actual malice or legal malice is the relevant inquiry in a justification defense to a claim of tortious interference with contract.

We hold that an underlying civil claim does not terminate in favor of the plaintiff in a malicious prosecution case until the appeals process has been exhausted, and that the special injury threshold for damages in such cases requires an interference with the plaintiff's person or property. We also hold that a jury finding that interference is legally justified is not nullified by a finding of actual malice. Accordingly, we reverse the judgment of the court of appeals and render judgment for W.H. O'Brien, the managing partner of Texas Beef Cattle Company (Texas Beef), and Texas Beef on the malicious prosecution claim, and render judgment for O'Brien on the tortious interference with contract claim.

The facts of this case are convoluted. In search of a buyer and at the behest of Doug Florence, a cattle stocker for and joint venturer with Texas Beef, Jeff Green shipped 253 head of cattle to the Beck Ranch, located in the Texas Panhandle. During negotiations with O'Brien, Green offered to sell these cattle to Texas Beef. O'Brien declined, saying that the price was too high.

Florence then proposed to Green that he sell the cattle to Cargill Agricultural Credit Corporation. Cargill, however, was only interested in 247 of the 253 head of cattle. Green agreed to the sale and told O'Brien that 247 of the cattle would be relocated to Caprock IV, a feedyard in Dalhart, to close the deal with Cargill. Following this agreement, Florence shipped the cattle to Caprock IV, where they were registered in his name. Cargill subsequently issued a $102,853.65 draft to Green, and Green warranted the buyer's title to the cattle.

Florence later confessed to Texas Beef that he had stolen all or a major portion of Texas Beef's cattle pastured on the Beck Ranch. O'Brien subsequently claimed to Cargill that some or all of the cattle delivered by Florence to Caprock IV belonged to Texas Beef. These were the same 247 head of cattle that Texas Beef had chosen not to buy just weeks before. Cargill responded by relocating the cattle to the Dalhart sale barn for auction, where 233 were sold for $102,000.00. As a result of Texas Beef's and Cargill's competing claims to the sale proceeds, the Dalhart Livestock Auction interpleaded the funds into the registry of the court in Hartley County.

The first lawsuit concerning the contested cattle was filed by Texas Beef in Hartley County. Texas Beef sued Cargill for conversion, and later joined Green and several other parties who claimed title to the cattle that had been in either Florence or Texas Beef's possession. The trial court issued a temporary injunction against Cargill, preventing both its collection of the auction proceeds and the sale of any other cattle located on Caprock IV to which Texas Beef claimed an interest. Cargill cross-claimed against Green on his warranty of title.

Two days later, Green filed suit in Liberty County against Texas Beef, its partners, and Florence. Green alleged nonpayment for several shipments of cattle delivered to Florence and resold by Florence to Texas Beef, and that he was not certain which cattle had been paid for. Texas Beef countersued Green for conversion of the 247 head of cattle delivered to Caprock IV, the identical claim it asserted in the Hartley County case.

The Liberty County suit was tried first, in May of 1989, and resulted in a judgment for Green, including the 247 head of cattle claimed by Texas Beef. This judgment was affirmed by the Beaumont Court of Appeals, and we denied Texas Beef's application for writ of error on June 5, 1991.

Although it lost its counterclaim on the 247 head of cattle in the Liberty County suit, Texas Beef pursued that same claim in Hartley County, along with several other claims that had not been litigated in the Liberty County suit. The trial court ordered a separate trial on Green's affirmative defenses of res judicata and collateral estoppel, which resulted in a jury finding that Texas Beef's claims to the 247 head of cattle had been finally decided in the Liberty County suit. The Hartley County court ultimately rendered judgment for Green on all claims.

The Amarillo Court of Appeals affirmed that judgment in part and reversed it in part, 860 S.W.2d 722, agreeing that Texas Beef's claims to the 247 head of cattle were barred by res judicata but that its claims to other cattle were not barred. After denying the application for writ of error, this Court overruled the motion for rehearing on March 9, 1994.

Green filed this case in Liberty County on April 3, 1992, ten days after the trial court signed the judgment in the Hartley County case. He alleged that Texas Beef's continuation of the Hartley County suit after it lost the first Liberty County suit tortiously interfered with his contract with Cargill and amounted to malicious prosecution. Following a jury trial, the trial court rendered judgment for Green on both claims. The jury found, in part, that while both Texas Beef and O'Brien were legally justified in interfering with Green's contract with Cargill, O'Brien had interfered maliciously. Malice was defined in the charge as ill will, spite, evil motives, and the purposeful injuring of another. Based on this finding, the trial court disregarded the justification finding for O'Brien. The trial court also rendered judgment for Green on the malicious prosecution claim, even though the underlying Hartley County suit was still on appeal. The Beaumont Court of Appeals affirmed, 883 S.W.2d 415, and we granted Texas Beef and O'Brien's application for writ of error.

I. Malicious Prosecution

To prevail in a suit alleging malicious prosecution of a civil claim, the plaintiff must establish: (1) the institution or continuation of civil proceedings against the plaintiff; (2) by or at the insistence of the defendant; (3) malice in the commencement of the proceeding; (4) lack of probable cause for the proceeding; (5) termination of the proceeding in plaintiff's favor; and (6) special damages. James v. Brown, 637 S.W.2d 914, 918 (Tex.1982). The parties dispute the existence of the fifth and sixth elements. We will first address the fifth element of this cause of action, whether at the time Green brought his malicious prosecution suit, the underlying Hartley County case had terminated in his favor. When the trial court rendered judgment in the malicious prosecution case, the appeal of the underlying civil case in Hartley County had not been resolved. ¹

A. Termination

Green argues that the Hartley County case terminated in his favor upon entry of the trial court judgment and that an appeal should have no affect on his malicious prosecution claim. Green argues that our holding in Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1 (Tex.1986), supports the court of appeals's determination that the Hartley County trial court judgment terminated the case despite the pendency of the appeal. We disagree.

In Scurlock, after carefully weighing the alternatives, we held that a judgment is generally final for the purposes of issue and claim preclusion regardless of the taking of an appeal. Id. at 6. The principal reason we cited for this rule was the nonsensical alternative of retrying the same issues between the same parties in subsequent proceedings with the possibility of inconsistent results. Id. We are not persuaded, however, that this rule should be extended to the malicious prosecution context. Although Green's conversion claim was litigated in the first Liberty County suit, and thus precluded the second suit based on the same claim in Hartley County, the malicious prosecution suit did not, strictly speaking, relitigate the claims in those cases. The issues in the malicious prosecution suit are more accurately characterized as being predicated upon Green's success in the Hartley County suit and distinct from the issues tried there. Far from relieving litigants and the judicial system of repetitive lawsuits with the possibility of inconsistent results, we believe that extension of the Scurlock rule to malicious prosecution cases would actually promote repetitive and unnecessary litigation because it would allow the plaintiff to prosecute a claim only to have it rendered meaningless if later all or part of the appeal of the underlying action is decided adversely. See Moran v. Klatzke, 140 Ariz. 489, 682 P.2d 1156, 1159 (Ct.App.1984). Thus, our holding today is consistent with the policy underlying Scurlock: the prevention of unnecessary...