Tomash v. John Deere Indus. Equipment Co.

• Decision Date: 14 January 1987
• Docket Number: No. 84-1891,84-1891
• Citation: 399 N.W.2d 387
• Parties: James Leonard TOMASH, Appellant, v. JOHN DEERE INDUSTRIAL EQUIPMENT COMPANY and Power Equipment Company, Appellees.
• Court: Iowa Supreme Court

Page 387

399 N.W.2d 387

James Leonard TOMASH, Appellant, v. JOHN DEERE INDUSTRIAL EQUIPMENT COMPANY and Power Equipment Company, Appellees.

No. 84-1891.

Supreme Court of Iowa.

Jan. 14, 1987.

Phillip D. Seidl and Mary K. Hoefer of The Tom Riley Law Firm, P.C., Cedar Rapids, for appellant.

Scott E. McLeod of Lynch, Dallas, Smith & Harman, Cedar Rapids, for appellee John Deere Indus. Equipment Co.

Patrick M. Roby and Diane Kutzko of Shuttleworth & Ingersoll, P.C., Cedar Rapids, for appellee Power Equipment Co.

Considered by REYNOLDSON, C.J., and HARRIS, WOLLE, LAVORATO, and NEUMAN, JJ.

REYNOLDSON, Chief Justice.

Plaintiff James Leonard Tomash filed a petition against defendants John Deere Industrial Equipment Company (Deere) and Power Equipment Company (PEC) alleging abuse of process and intentional infliction of emotional distress. After Tomash presented his evidence, trial court directed verdicts for defendants on both counts. The court of appeals reversed and remanded for new trial. After further review, we vacate the court of appeals' decision and affirm trial court's judgment.

The controlling facts are largely undisputed. To the extent facts or the inferences to be drawn from them are disputed, we of course construe the evidence in Tomash's favor. Iowa R.App.P. 14(f)(2), (17); Poulsen v. Russell, 300 N.W.2d 289, 296 (Iowa 1981).

October 31, 1977, Tomash purchased from PEC a Steiger Bearcat tractor and an Ashland I-100 pull scraper (hereafter collectively referred to as "tractor"). The tractor purchase price was approximately $36,800. PEC allowed a credit of approximately $9300 on a trade-in, leaving an unpaid balance of $27,500.

This balance was to be paid on contract with the tractor subject to a security agreement. PEC sold and assigned the contract and security agreement to Deere. November 2, 1978, Deere perfected its security interest in the tractor.

April 26, 1978, after making three payments totaling approximately $2950, Tomash sold the tractor to Clinton Rice for $20,000. Tomash deposited Rice's check in a joint account he and his wife maintained at the Merchants National Bank in Cedar Rapids. This deposit brought the account up to $20,266.

Tomash, who was experiencing marital difficulties, then left the state. Before leaving, Tomash asked his wife to pay the balance due on the tractor. She did not, and within a week of the sale Tomash wrote over $11,000 worth of checks on the checking account. None of this money went to Deere.

In September 1978, Tomash was contacted by Robert DeLeon, Deere's finance manager. DeLeon reported to Tomash the latter's wife had made only two monthly payments on the tractor. Three payments had not been received, and as a result the tractor contract was in default $3800.

Tomash told DeLeon the tractor had been sold. DeLeon, rather than demand immediate payment in full as was his right under the security agreement, warned Tomash he must bring his payments up to date. DeLeon also agreed to allow Tomash, whose financial situation was precarious, to seek replacement collateral. Replacement collateral was never obtained.

Tomash, however, was able to pay the $3800 then due and continued making monthly payments through January 1979. In February 1979, Tomash asked Deere for a two-month deferral. DeLeon agreed to this request.

Tomash later made two additional payments before completely defaulting on his contract obligation. Although Tomash made significant payments throughout the period prior to final default, he also bounced numerous checks and in general substantially hindered DeLeon's attempts to collect the money due, to locate the tractor, and to secure new collateral.

Finally recognizing further collection efforts would be futile, DeLeon, on Deere's behalf and as allowed under the financing agreement in effect between Deere and PEC, reassigned Tomash's contract and security agreement to PEC. The reassignment was made on February 18, 1980. If no collection could be made by PEC, Deere agreed to bear $5000 of the loss; PEC would bear the balance.

April 23, 1980, Virgil Peters, PEC's manager, signed a complaint in the Cedar Rapids Police Department. Peters' complaint supplied the following as a factual basis: "Mr. Jim Tomash on October 31, 77, purchased on contract 2 items--1. Steiger Bearcat Tractor; and 2. Ashland pull type Scraper[.] ... [T]o this date [Tomash] has not paid the contract balance due." An independent police investigation was undertaken. Between April 23 and December 4, 1980, PEC's attorney, James Benz, twice contacted the county attorney concerning the progress of the investigation.

December 4, 1980, the Linn County attorney filed first-degree theft charges against Tomash. Four days later an associate district court judge found the charge was supported by probable cause and issued a warrant for Tomash's arrest. Tomash subsequently was arrested on December 22, 1980, and was freed on bond the following day. A trial information was filed on January 13, 1981, and listed Peters and DeLeon as witnesses. Because Clinton Rice, the primary prosecution witness, died before trial, charges against Tomash were dismissed March 11, 1981, on motion of the county attorney.

The record discloses that during the time the above criminal case was pending Tomash's financial affairs were entangled in the United States Bankruptcy Court for the Northern District of Iowa. April 27, 1981, that court determined Tomash had "willfully and maliciously converted the tractor or the proceeds realized from the sale thereof to his own benefit and to the detriment of [PEC]." The court entered judgment against Tomash for the value of the tractor as a nondischargeable debt.

June 21, 1982, Tomash instituted the present action, claiming abuse of process and intentional infliction of emotional distress. As stated, trial court directed verdicts in favor of defendants and dismissed Tomash's petition. After the court of appeals reversed trial court's judgment, we granted Deere's and PEC's motions for further review.

I. The elements necessary to demonstrate an abuse of process are well established in Iowa. Most recently, in Grell v. Poulsen, 389 N.W.2d 661 (Iowa 1986), we reiterated that:

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.

Id. at 663 (quoting Restatement (Second) of Torts § 682 (1977)); Schmidt v. Wilkinson, 340 N.W.2d 282, 284 (Iowa 1983); Mills County State Bank v. Roure, 291 N.W.2d 1, 4 (Iowa 1980); see also Sarvold v. Dodson, 237 N.W.2d 447, 448-49 (Iowa 1976).

In short, to succeed in such a claim two elements must be shown: (1) legal process; and (2) its use in an improper or unauthorized manner. These two elements focus largely on the actual misuse of otherwise properly issued legal process, and are easily contrasted with the elements of malicious prosecution, which focus primarily on the malicious institution of criminal proceedings without probable cause. See Sisler v. City of Centerville, 372 N.W.2d 248, 251 (Iowa 1985).

To establish improper use of process, plaintiff must show "[s]ome act or threat directed to an immediate objective not legitimate in the use of the process." Schmidt, 340 N.W.2d at 284 (quoting Restatement (Second) of Torts § 682 app. (1981)). For example, the use of criminal process to coerce or extort an individual to pay a debt or to take some action or refrain from taking it is an abuse of process. Id. However, if an individual does no more than initiate and prosecute a criminal or civil action to its authorized conclusion, no abuse of process can be shown, regardless of the individual's malicious intent in doing so. Grell, 389 N.W.2d at 663-64; Schmidt, 340 N.W.2d at 284; Froning & Deppe, Inc. v. South Story Bank and Trust Co., 327 N.W.2d 214, 215 (Iowa 1982).

At bottom, as we stated in Grell: "An[y] act which is proper in the regular prosecution of a proceeding cannot be relied upon as a basis for an abuse of process claim." 389 N.W.2d at 664. Rather, to show abuse of process, plaintiff must show defendants took some "specific action in connection with their use of process which can be characterized as unlawful or irregular." Id. In other words, plaintiff must show defendants "committed some act in the use of process that was not proper in the regular prosecution of the proceeding." Id.

The record is barren of any credible evidence from which a jury reasonably could find Deere either initiated or misused legal process. The overwhelming evidence shows the criminal investigation leading to Tomash's arrest was initiated solely by PEC when it lodged its complaint in the Cedar Rapids Police Department. Deere initiated no criminal proceeding against Tomash and, while aware PEC was considering such action, was not involved in its decision to do so. Once the complaint was made by PEC, Deere neither supported nor encouraged the investigation leading to the formal filing of theft charges. There was uncontradicted evidence that two and one-half years passed before Deere became aware formal charges actually had been filed against Tomash.

In response, Tomash attempts to rely on an isolated comment in a letter from DeLeon to PEC that never mentioned criminal charges, and on DeLeon's name appearing on the trial information's minutes of testimony as evidence Deere was involved in initiating legal process against Tomash. These isolated traces of Deere's asserted activities do not constitute substantial evidence that Deere played any significant role in initiating or prosecuting the criminal proceedings. Rather, these fragments of evidence are purely circumstantial in nature. They support Tomash's contention only by use of "surmise, speculation, or conjecture" and are of "[in]sufficient probative force to constitute the basis for a legal inference." Harsha v. State Savings Bank, 346...