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10/28/94 FRANK PANNELL AND DAPTS v. HUGH ALLEN

October 28, 1994

FRANK PANNELL AND DAPTS, INC.
v.
HUGH ALLEN REYNOLDS



Appeal from Geneva Circuit Court. (CV-90-074). Charles L. Woods, TRIAL JUDGE.

As Corrected February 10, 1995. Rehearing Denied February 10, 1995. Released for Publication May 27, 1995.

Steagall, Hornsby, C. J., and Maddox, Shores, and Ingram, JJ., concur.

The opinion of the court was delivered by: Steagall

STEAGALL, JUSTICE.

Hugh Allen Reynolds sued DAPTS, Inc., doing business as Goodyear Tire and Rental Center, and Frank Pannell and J. T. Yeager, each individually and as agents of DAPTS, alleging breach of contract, fraud, slander, and two separate acts of malicious prosecution; Lisa Reynolds, Hugh Reynolds's wife, also claimed damages for an alleged loss of consortium. Before trial, the Reynoldses dismissed all claims as to Yeager and, as to DAPTS and Pannell, dismissed all claims except the two counts of malicious prosecution and the loss of consortium claim. During trial, the court dismissed one of the malicious prosecution claims as to Pannell. Both Pannell and DAPTS moved for directed verdicts at the close of the Reynoldses' evidence; they renewed the motions at the close of all the evidence, and later, after the jury had returned a verdict for the Reynoldses, they moved for a judgment notwithstanding the verdict. The trial court denied all of those motions.

The jury returned a general verdict for Hugh Reynolds, awarding him $10,000 in damages against DAPTS on one of the malicious prosecution claims (hereinafter called "count one") and $35,000 against Pannell on the second malicious prosecution claim (hereinafter called "count two"). The jury also returned a general verdict against DAPTS on count two, but awarded no separate damages. The trial court entered a judgment pursuant to the verdict; it later amended its order to enter a judgment in favor of DAPTS and Pannell on the loss of consortium claim. *fn1 Pannell and DAPTS appeal.

DAPTS, Inc., an Alabama corporation whose sole shareholders were Pannell and Yeager, hired Hugh Reynolds as a mechanic in one of its stores in which it did business under the name Goodyear Tire and Rental Center ("Goodyear"). In June 1988, Reynolds began planning to leave the state and to move his family to Lumberton, Mississippi, where his wife's parents resided. In July 1988, Reynolds obtained a loan from The Citizens Bank, after Pannell had agreed to co-sign the note. As collateral on the note, Reynolds pledged his two automobiles, a tool chest, and tools.

Reynolds testified at trial that he informed Pannell on July 14, 1988, that he was quitting his job and leaving the state for Mississippi; Pannell disputed that testimony. Reynolds moved with his family to Mississippi on July 15, 1988. On that same day, someone from Goodyear notified the Geneva police that there had been a theft on the premises, and Officer Steve Morgan arrived to investigate. There was no sign of forced entry. Yeager told Officer Morgan that some tools and a toolbox were missing and that they belonged to Reynolds, who had not come in to work that day. Yeager implied to Officer Morgan that Reynolds had a key to the premises, and he told Officer Morgan that 93 tires were missing from inventory.

Officer Morgan went to Reynolds's former residence and found it vacant. He then prepared a report and turned the matter over to Assistant Chief of Police Junior Farris, who spoke with Yeager; he then further investigated the premises of Goodyear and searched Reynolds's vacant residence. Based on that investigation, Assistant Chief Farris caused to have issued a warrant for Reynolds's arrest, charging him with theft of the missing tires.

On October 7, 1988, Reynolds was arrested in Mississippi, returned to Alabama, and charged with theft of property. After he learned of Reynolds's arrest, Roy G. Dowdy, Executive Vice President of The Citizens Bank, contacted Pannell to remind him of his obligations as cosigner on Reynolds's loan. Thereafter, Pannell began to make payments on the loan. Pannell then contacted his own attorney and told him that he had co-signed a note with Reynolds, that Reynolds had taken collateral for the loan from the state, and that the bank had been calling on Pannell to make payments on the loan. Pannell's attorney informed him that he had legal justification to obtain an arrest warrant charging Reynolds with defrauding secured creditors. On the same day that Reynolds was arrested for theft of property, Pannell signed a warrant against Reynolds for defrauding a secured creditor.

The theft of property charge was "no billed" by the grand jury on January 6, 1989, and the charge of defrauding secured creditors was dismissed on April 3, 1989. Reynolds's subsequent malicious prosecution count one was based on the theft of property arrest, and count two was based on the fraud arrest.

DAPTS and Pannell argue that the trial court erred in denying their respective motions for directed verdict and their motions for J.N.O.V. on the malicious prosecutions claims.

In reviewing the trial court's denial of these motions, we are bound by the same standard as the trial court. Ogle v. Long, 551 So.2d 914 (Ala. 1989). We must determine whether the party with the burden of proof produced sufficient evidence of a conflict warranting a jury's consideration. Macon County Comm'n v. Sanders, 555 So.2d 1054 (Ala. 1990); Bussey v. John Deere Co., 531 So.2d 860 (Ala. 1988). The evidence must be viewed in a light most favorable to Reynolds, the nonmoving party. Twilley v. Daubert Coated Products, Inc., 536 So.2d 1364 (Ala. 1988).

In order to succeed in a malicious prosecution action, a plaintiff must prove 1) that a prior judicial proceeding was instigated by the present defendant, 2) that it was instigated without probable cause and with malice, 3) that the prior proceeding ended in favor of the present plaintiff, and 4) that the present plaintiff was damaged thereby. Fina Oil & Chemical ...


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