Bennett v. R & L Carriers Shared Services, LLC

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-2242
CLYDE L. BENNETT,
Plaintiff - Appellee,
v.
R&L CARRIERS SHARED SERVICES, LLC; DAVID JOHN MCGINNIS, SR.,
Defendants - Appellants,
and
R L CARRIERS, INCORPORATED, a/k/a R&L Carriers,
Incorporated, a/k/a R L Carriers, a/k/a R&L Carriers;
FRANKLIN FINLEY; JAY BULLARD; DAVID LOWRY; GREENWOOD MOTOR
LINES, INCORPORATED,
Defendants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. Robert E. Payne, Senior
District Judge. (3:08-cv-00498-REP)
Argued: January 26, 2012 Decided: June 21, 2012
Before AGEE, DAVIS, and FLOYD, Circuit Judges.
Affirmed by unpublished opinion. Judge Davis wrote the majority
opinion, in which Judge Floyd joined. Judge Agee wrote a
dissenting opinion.
ARGUED: Daniel A. Pollack, MCCARTER & ENGLISH, LLP, New York,
New York, for Appellants. John Barry Donohue, Jr., THE LAW
OFFICE OF JOHN BARRY DONOHUE, JR., Richmond, Virginia, for
Appellee. ON BRIEF: Frank E. Ferruggia, Edward T. McDermott,
Steven A. Beckelman, Laura Leacy Kyler, MCCARTER & ENGLISH, LLP,
New York, New York, for Appellants. James B. Thorsen, MARCHANT,
THORSEN, HONEY, BALDWIN & MEYER, LLP, Richmond, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
DAVIS, Circuit Judge:
After a three-day trial in the Eastern District of
Virginia, a jury found Appellants R&L Carriers Shared Services,
LLC (R&L), and David J. McGinnis, Sr., liable to, and returned a
substantial damages verdict in favor of, Appellee Clyde Bennett
on Bennett’s claim for malicious prosecution. Bennett, a former
employee of R&L, had been arrested and indicted on a charge of
embezzlement based on Appellants’ allegations that he had stolen
three computers from the workplace, a trucking terminal.
Bennett’s claim arose under Virginia law, pursuant to
which, “[i]n an action for malicious prosecution, the plaintiff
has the burden of proving four essential elements: that the
prosecution was (1) malicious, (2) instituted by or with the
cooperation of the defendant, (3) without probable cause, and
(4) terminated in a manner not unfavorable to the plaintiff.”
Reilly v. Shepard, 643 S.E.2d 216, 218 (Va. 2007). Appellants
contend before us that the evidence at trial was insufficient as
a matter of law to support the jury’s verdict as to elements
(1), (3), and (4). They contend, in the alternative, that the
amount of the verdict ($1,716,920 in compensatory damages and a
total, as remitted, of $350,000 in punitive damages) is so
excessive as to require, at a minimum, a new trial on damages.
The district court rejected Appellants’ contentions as to
the sufficiency of the evidence at the close of plaintiff’s case
3
and again, in a meticulously-reasoned and comprehensive opinion,
see Bennett v. R & L Carriers Shared Servs., LLC, 744 F. Supp.
2d 494 (E.D. Va. 2010), when they were renewed in a post-verdict
motion under Fed. R. Civ. P. 50(b). The district court remitted
the original punitive damages claim (as required by Virginia
law), but otherwise it also rejected Appellants’ motion for a
new trial under Fed. R. Civ. P. 59. We have carefully considered
Appellants’ contentions and discern no reversible error.
Accordingly, we affirm the judgment.
I.
We first consider Appellants’ contention that the district
court erred in submitting this case to the jury, in light of
what they argue was insufficient evidence to support elements of
Bennett’s claim. We then examine Appellants’ contention that the
jury’s damages award (as remitted) exceeds the bounds of
propriety.
Our approach to appellate challenges to a jury verdict and
a district court’s concomitant denial of a motion for judgment
is well-settled:
We review de novo a district court’s denial of a Rule
50 motion for judgment as a matter of law. Bryant v.
Aiken Reg’l Med. Ctrs. Inc., 333 F.3d 536, 543 (4th
Cir. 2003). Pursuant to Rule 50, the issue for
assessment on appeal is whether there was a legally
sufficient evidentiary basis for a reasonable jury,
viewing the evidence in the light most favorable to
4
the prevailing party, to find for that party. Fed. R.
Civ. P. 50(a); Bryant, 333 F.3d at 543. If reasonable
minds could differ about the verdict, we are obliged
to affirm. [Id.] As with other legal rulings, we
review de novo the conclusions of law on which a trial
court’s denial of judgment as a matter of law is
premised. See Benner v. Nationwide Mut. Ins. Co., 93
F.3d 1228, 1233 (4th Cir. 1996). And we are obliged to
accord substantial deference to a district court’s
interpretation of its own judgment. See Home Port
Rentals, Inc. v. Ruben, 957 F.2d 126, 131 (4th Cir.
1992).
ABT Bldg. Prods. Corp. v. Nat'l Union Fire Ins. Co. of
Pittsburgh, Pa., 472 F.3d 99, 113 (4th Cir. 2006). Guided by
these principles, and according “substantial deference,” id., as
we must, to the district court’s searching interpretation of the
record supporting the judgment, we are constrained to reject
Appellants’ contentions. In rejecting Appellants’ contentions,
we fully embrace, and quote extensively, the comprehensive
opinion of the district court.
A.
Based on all the evidence admitted at trial, and drawing
all reasonable inferences in favor of Bennett as the prevailing
party, the jury was entitled to make the following findings.
R&L Carriers is a national shipping company that, among
other services, manages and completes shipments of various goods
at trucking terminals throughout the country. As of March 2006,
Bennett, who was fifty-years-old, had been employed for more
than two years by R&L as a night shift supervisor at the
5
Colonial Heights, Virginia, terminal, located outside of
Richmond (the Richmond terminal). Bennett was responsible for
overseeing the proper loading and unloading of shipments into
and out of tractor trailers and other vehicles by dockworkers.
On Friday, March 3, 2006, R&L discovered that thirteen
laptop computers had gone missing while passing through the
Richmond terminal en route to their final delivery in Miami,
Florida. Two dockworkers, Conan Spangler and Joseph Mitchell,
had handled the transfer of the laptop shipment from one tractor
trailer to another; inexplicably, they completed conflicting
records as to whether the laptops were on the inbound and
outbound trucks. Specifically, Spangler recorded the laptops as
not received on the inbound tractor trailer from Newark, New
Jersey, while Mitchell, essentially working alongside Spangler,
recorded the laptops as safely loaded on the sealed outbound
tractor trailer. When the tractor trailer was unsealed in
Jacksonville, Florida, the laptops were not onboard.
A couple of weeks later, on March 17, 2006, another theft
occurred from the dock at the Richmond terminal. Six (of a total
of 96) Hewlett Packard computer towers that had been delivered
locally were returned to the terminal because their packaging
had been damaged and, although they were functionally sound, the
computers were rejected by the consignee. The towers were placed
in the “Over, Short, and Damaged” (OS&D) area of the dock. This
6
was “an open area delineated by stanchions and rope.” J.A. 668.
By Sunday, March 19, 2006, two days after being placed there,
three of the six towers were missing from OS&D. (As explained
infra, Appellants’ procured Bennett’s arrest and indictment
based on their contention that Bennett stole the three computer
towers.)
Faced with two apparent thefts within two weeks, the
manager of the Richmond terminal, Franklin Finley, contacted
R&L’s director of operations for the southeast United States,
Jay Bullard, and informed him that the company was “missing some
computers.” J.A. 668. Bullard directed Finley to confirm that
the computers could not be accounted for anywhere on the
delivery line, and once Finley did so Bullard contacted R&L’s
regional security investigator, Appellant McGinnis. McGinnis had
retired in or about 2002 as a police officer after a 21 year
career with the Atlanta, Georgia, police department. Following
his retirement, he had joined R&L as a truck driver. After
working as a driver for two years, in light of his extensive law
enforcement background and his investigative experience, he was
named regional security investigator when the R&L security
division expanded.
McGinnis arrived at the terminal from Atlanta on Monday,
March 27, 2006, aware only of the first theft, i.e., the theft
of the thirteen laptops. His review of the shipping documents
7
related to the laptops confirmed that they had been on the truck
inbound to Richmond and were missing after the shipment was
supposed to be transferred from one truck to another by Spangler
and Mitchell. Understandably, McGinnis’s suspicions immediately
focused on “those two individuals right there [i.e., Spangler
and Mitchell].” J.A. 318. McGinnis asked Bullard and Finley ”who
they considered to be prime suspects,” J.A. 778, and the men
identified dockworkers Spangler, Mitchell, and David Lowrey
”because of their computer knowledge and activities and the fact
that two of the individuals had direct contact with . . . the
missing shipments.” 1 J.A. 778. It is unclear exactly when
1
In one of several telling aspects of these proceedings,
McGinnis prepared an investigative report for R&L in April 2006,
upon his return to his Atlanta office. The investigative report
was introduced at trial and thus amounted to substantive
evidence, i.e., a series of admissions, by Appellants.
Remarkably, several statements made by McGinnis in the
investigative report deviated from, and indeed, contradicted,
McGinnis’s trial testimony.
One of the most striking contradictions related to the
identity of those persons having “a lot of computer knowledge.”
Although McGinnis testified at trial that he had asked only for
the names of people who Bullard and Finley “might suspect. . .
that [have] a lot of computer knowledge,” J.A. 320, his
investigative report indicates that he asked only about who the
men “considered to be prime suspects.” J.A. 778. In any event,
the record shows that despite McGinnis’s testimony on direct
examination that Spangler, Lowrey and Bennett were named
initially, his own investigative report identified Spangler,
Mitchell and Lowrey (not Bennett). Plainly, as the district
court observed, the jury was entitled to credit the
investigative report rather than McGinnis’s trial testimony.
8
McGinnis became aware of the missing computer towers, i.e., the
second incident of workplace theft, but after his arrival in
Richmond he was soon so. 2 As with the laptops, McGinnis confirmed
that the towers had in fact arrived at the terminal before their
disappearance.
McGinnis then began to interview employees. First, he
interviewed Lowrey, for “no more than ten minutes,” about the
missing computers. J.A. 323. Lowrey said he did not know where
the computers were or who might have taken them. McGinnis
encouraged him to come forward with any information and informed
him that R&L’s “silent witness” program provided rewards for
tips that lead to arrests and convictions for employee theft. 3
McGinnis also interviewed Bennett, who similarly denied any
knowledge of where the missing computers were or who might have
taken them. McGinnis did not believe that Bennett was being
forthcoming in this interview based on his assessment of
2
Understandably, during the trial the district judge urged
defendants’ counsel to maintain clarity as to whether particular
testimony was being offered about the laptop computer theft or
the desktop computer tower theft. Counsel for R&L explained that
testimony about the laptops was important because at the
preliminary stage of the investigation, McGinnis “had no idea
whether the same people were involved in the 13 as the three.”
J.A. 331.
3
McGinnis’s investigative report indicates that Lowrey “was
questioned more intensely” than the others “because of his
reported computer knowledge.” J.A. 779.
9
Bennett’s “mannerisms.” J.A. 324. He asserted that, “I could not
make eye contact with him. It was like he was just a robot. Just
his answers were just, I don’t know, I just had a bad feeling
that he wasn’t tell me everything that he knew.” J.A. 324-25.
At some point during this first day of investigation,
McGinnis also interviewed Mitchell, one of the dockworkers who
completed conflicting records about the transfer of the thirteen
laptops from one trailer to another. Mitchell claimed to have
simply made a mistake on the paperwork and offered no further
explanation or information. McGinnis’s investigative report
recorded that, “Of all the employees questioned that evening,
all denied any involvement. However, the mannerisms of Mitchell,
Lowrey, and Bennett left me with a feeling that they were not
being truthful.” J.A. 779-80.
The next day, Tuesday, McGinnis interviewed Spangler, who
had worked with Mitchell handling the laptop shipment and whose
paperwork contradicted his. Spangler was “real, real evasive”
and “real arrogant” when questioned about the paperwork, and
claimed no knowledge of where the laptops or the towers might
be. J.A. 327-28. That evening McGinnis questioned Spangler
again, becoming “more intense” about the discrepancies between
his records and Mitchell’s records for the laptops. J.A. 330.
Ultimately, during this “intense” interrogation, McGinnis told
Spangler, “I feel like you and Mr. Mitchell took those laptops .
10
. . . I can’t prove it, but I am going to stay here until I can,
because they went somewhere.” J.A. 332. McGinnis’s report noted
that Spangler was “definitely deceptive,” and that:
Based on Spangler’s demeanor, I advised him that I
felt he WAS involved, and further, I intended to
pursue the matter until I could prove his involvement
and have him arrested and placed in jail. I then
advised him that when that happened, he would most
certainly ask for consideration from me, which I would
NOT offer him.
J.A. 780 (emphases in original).
After this second interrogation of Spangler, McGinnis
received a call from Spangler’s wife. Spangler’s wife told
McGinnis that Spangler had come home and stated he was possibly
going to jail for stealing the three tower computers but she
said nothing about the thirteen laptops that McGinnis had
actually questioned Spangler about earlier that day. Further,
Mrs. Spangler told McGinnis that, according to her husband,
Spangler did not steal the tower computers but he knew that
Bennett and Lowrey did steal them. 4 McGinnis told Mrs. Spangler
to call her husband, who was then at work at the terminal, and
instruct him to leave under the pretense of a family emergency
and meet McGinnis at a nearby truck stop.
4
In an extended exchange with the court, Appellants’
counsel agreed that Mrs. Spangler’s statements to McGinnis could
not be treated by the jury as substantive evidence of Bennett’s
involvement in the theft of the tower computers. All agreed her
statements constituted “double hearsay.” J.A. 335.
11
Mrs. Spangler did as she was told and McGinnis met Spangler
at the truck stop. Spangler promptly told McGinnis that he had
withheld information during the Tuesday interrogation because
“he felt like he would be singled out” for his “background.”
J.A. 338. Indeed, Spangler had a felony larceny conviction;
despite Spangler’s apparent allusion to it, McGinnis later
claimed he did not learn that Spangler was a felon until after
Bennett had been arrested and indicted. 5 Spangler told McGinnis
that he and Mitchell had “observed Clyde Bennett take three
computers out the front door of the terminal in the dark while
David Lowrey . . . was down at the guard building distracting
the guard.” J.A. 339-40. McGinnis told Spangler that he wanted a
written version of Spangler’s statement, and Spangler agreed to
provide one. In fact, as McGinnis later learned, Spangler was
not at work on the night that the computer terminals went
missing.
After Spangler told McGinnis that he and Mitchell had
observed Bennett and Lowrey acting together, McGinnis promptly
interviewed Lowrey for a second time. That interview lasted
around 45 minutes and “got a little heated” when Lowrey was
5
In his investigative report prepared just a few weeks
after the meeting, McGinnis wrote that Mrs. Spangler had told
him that Spangler had originally withheld information because he
was afraid that other employees would know he was the one
providing information about the theft of the computer towers.
12
confronted with the information provided by Spangler. J.A. 346.
Indeed, McGinnis described the second Lowrey interview as
“intense and heated.” J.A. 781 (emphasis added). McGinnis
brought enormous pressure to bear on Lowrey, “advis[ing] Lowrey
that he WAS going to be arrested unless he cooperated.” J.A. 781
(emphasis in original). In both his trial testimony and in his
investigative report, McGinnis averred that he told Lowrey that
he knew Clyde Bennett had acted with him to steal the three
tower computers. 6 Eventually, after hearing Spangler’s version of
the alleged theft as recounted to him by McGinnis, Lowrey told
McGinnis that on the night of the theft he [Lowrey] was merely
talking to the terminal guard while Bennett stole the computers.
McGinnis did not believe this account, writing in his
investigative report that, “Lowrey was lying about this to take
the heat off him.” J.A. 781. Lowrey further told McGinnis that
the day after Bennett stole the three tower computers, Bennett
and Lowrey met at a 7-Eleven store and Lowrey purchased one of
the computer towers for $250.
Lowrey, who unbeknownst to McGinnis at the time had prior
convictions for cocaine possession and writing bad checks, told
6
The district judge described the process by which McGinnis
shared what Spangler already told him as “feeding him
information and he is repeating it,” to which McGinnis replied,
“I’m not telling him what to say. Telling him what I heard and
he is agreeing that is the way it happened.” J.A. 350.
13
McGinnis that the computer tower he purchased from Bennett was
at his home. At McGinnis’s insistence, Bullard and McGinnis
immediately accompanied Lowrey to the latter’s home to retrieve
the computer. Before Bullard, McGinnis, and Lowrey departed for
Lowrey’s home, however, McGinnis instructed the terminal
manager, Finley, to call the police to report the theft and to
request their presence upon McGinnis’s return, “when [he] would
press formal charges.” J.A. 781. At trial, McGinnis testified
that he was planning to press charges against Lowrey alone at
this point. Regional manager Bullard testified, however, that
McGinnis told him that he had also decided to have Bennett
arrested before the police arrived at the terminal that day.
Plainly, the jury was entitled to find, as it did, that
Bullard’s testimony, as corroborated by the investigative
report, 7 was accurate, and that McGinnis had determined to have
Bennett arrested before the trio departed for Lowrey’s home.
Tellingly, when Bullard, McGinnis, and Lowrey arrived at
Lowrey’s home, Lowrey refused to permit Bullard and McGinnis to
enter. Rather, Lowrey went in alone and returned with the
computer, still in its box.
7
McGinnis’s investigative report states that upon his
return to the terminal with the computer from Lowrey’s home, he
“explained what had transpired and notified the police that we
wanted to press formal charges against both Lowrey AND Bennett.”
J.A. 782 (emphasis in original).
14
When Bullard, McGinnis, and Lowrey returned with the
computer tower to the terminal, Lowrey was questioned formally
by a property detective for about 45 minutes. The police
determined that he would be charged with Theft by Receiving
Stolen Goods. Lowrey consented to a search of his home and left
the terminal accompanied by a detective who would perform the
search. No seizures resulted from a subsequent search of
Lowrey’s home.
Meanwhile, McGinnis informed the police that Bennett had
not been warned of any suspicion against him yet, and that his
only interview of Bennett was the preliminary one made before
the Spangler allegations. Bennett was brought into a manager’s
office and questioned by the police for about 12 minutes, with
McGinnis and Bullard present but apparently not participating.
McGinnis’s investigative report recounts that, “Bennett was . .
. notified that we KNEW how he had taken the items out of the
terminal and further that we knew how he had sold one of the
computers to Lowrey, which we had confiscated from Lowrey.” J.A.
782 (emphasis in original). Bennett continued to deny any
knowledge of or involvement with the disappearance of any
computers. He was required to remain in the manager’s office
with Finley while the police officers and McGinnis left. The
officers returned 35-40 minutes later, and arrested him for
grand larceny (the formal charge would ultimately be
15
embezzlement), placed him in handcuffs, and escorted him from
the premises “in full view of the dock employees.” J.A. 782.
Although the officer who made the formal arrest testified that
he was not influenced by any R&L employee in his decision to
arrest Bennett and to march him, handcuffed, in front of
employees, the jury was entitled to reject this testimony. This
is particularly true in light of the fact that, as Bennett was
led out of the room, terminal manager Finley told him that he
was fired.
The next day, Thursday, McGinnis interviewed Mitchell, the
dockworker who handled the shipment of missing laptops with
Spangler, for a second time. Mitchell told McGinnis that he had
not provided information earlier because his parents had advised
him to “stay out of the matter,” J.A. 783, but that Spangler had
convinced him to talk. At this second interview, after Bennett
had already been arrested, McGinnis’s investigative report
averred that Mitchell “basically stated exact[ly] what Conan
Spangler had informed me of,” J.A. 783, i.e., that he and
Spangler had observed Bennett take the desktop computer towers
from the dock while Lowrey distracted the guard.
Before McGinnis left Richmond for Atlanta on Friday,
Spangler provided a written statement as he had agreed at their
last meeting. The statement, however, differed significantly
from what he and Mitchell told McGinnis in person over the
16
previous couple of days. Rather than asserting that Bennett and
Lowrey had been seen by both men removing the computers and
distracting the guards, Spangler’s written statement reported
that, “Dave Lowrey has told me that he goes to the guard shack
and distracts the guard while Clyde takes stuff out the front
door to the vehicles.” J.A. 786. McGinnis did not mention the
statement in his investigative report, nor did he ever share it
with police or otherwise advise prosecutors of the discrepancies
in Spangler’s and Mitchell’s stories.
After initially agreeing to take lie detector tests,
Spangler and Mitchell ultimately refused to consent to the
tests. Both men failed to report to work after this refusal and
were terminated by R&L with no further investigation into their
conduct.
A few months later, in November 2006, a preliminary hearing
in Bennett’s embezzlement case was held to determine probable
cause. Finley, Lowrey, and McGinnis all testified, repeating
essentially what is recounted above. McGinnis was not asked
about, and did not offer, any of his observations about the
reliability of the information he had obtained from Mitchell and
Lowrey (although when describing his own understanding of how
Bennett stole the computers, he did mention his belief that
Lowrey had purposefully distracted the guard). He also did not
mention that Spangler’s story – which he shared with Lowrey
17
during his second interview and had apparently been adopted
directly by Mitchell – was inconsistent with his interviews and
written statement.
Finding probable cause, the preliminary hearing judge
certified to the grand jury the embezzlement charge against
Bennett, who was indicted and set for trial. The case was nolle
prossed, however, when Lowrey failed to appear either for
Bennett’s trial, where he was a material witness, or for his own
trial (scheduled for the same day). The prosecutor for both
cases testified that Lowrey’s disappearance was the reason the
nolle prosequi was entered in Bennett’s case.
B.
In June 2008, about a year and half after the embezzlement
charge against him was dropped, Bennett initiated this action in
state court for malicious prosecution, and the action was
removed to federal district court on the basis of diversity of
citizenship jurisdiction. 8 The named defendants included R&L,
terminal manager Finley, regional manager Bullard, and company
investigator McGinnis. Bennett alleged that “the criminal
prosecution brought against [him] was intentionally initiated,
8
Bennett, who is African-American, amended his complaint
after the case was removed to federal court to assert a racial
discrimination claim under 42 U.S.C. § 1981, but the district
court granted judgment as a matter of law in favor of all
defendants on this claim, which is not before us in this appeal.
18
caused, set afoot, instituted, continued, maintained and/or
cooperated in by Defendants wholly without probable cause and
was malicious, done in bad faith, with actual malice and with
the intent to injure[.]” J.A. 18-19.
After several days of trial testimony on liability only,
the jury returned a verdict against each of the defendants on
the malicious prosecution claim. At the subsequent damages phase
of the trial, Bennett’s brothers testified that he had been
“isolated” since the arrest and “not the same at all.” J.A. 559.
He was also described as “very subdued” and “very withdrawn.”
J.A. 560-61. Bennett testified that the arrest made him
“humiliated, embarrassed” and that he felt “betrayed by his
employer” for being “paraded in front of [his co-workers] like a
common criminal.” J.A. 562, 564.
At the time of his arrest, Bennett was earning
approximately $41,600 per year at R&L. After he was fired,
Bennett applied for more than 100 jobs but was able to secure
only part-time employment with his brother, making around $8 per
hour. (Bennett testified that he would enter “accused of theft”
on applications that asked why he left his last job, J.A. 564.)
During this period he was also without medical insurance and was
unable to afford care for various conditions. To support himself
during this period, Bennett emptied a money market retirement
19
account of approximately $81,000 and an annuity worth
approximately $28,000.
The jury ultimately awarded Bennett $1,716,920 in
compensatory damages. In addition, they assessed punitive
damages of $1,500,000 against R&L, $3,000 against terminal
manager Finley, $15,000 against regional manager Bullard, and
$30,000 against McGinnis. The defendants renewed their motions
for judgment as a matter of law under Fed. R. Civ. P. 50(b), and
sought, in the alternative, a new trial under Rule 59. The
district court considered the motions in a thorough opinion. The
court granted the motions for judgment as to Finley and Bullard,
and it remitted the punitive damages award as required by
Virginia law to $350,000. In all other respects, the court
denied the motions. The defendants timely appealed to this
Court.
II.
In denying the motions before us on review, the district
court undertook a careful evaluation of all the Appellants’
contentions raised now, and rejected their insistence that the
case should never have been submitted to the jury, and that the
damage award was unlawfully excessive. We can hardly improve
upon the district court’s analysis, and so we set it forth below
in detail.
20
A.
Appellants first argue that the district court improperly
denied their motion for judgment as a matter of law as to the
probable cause element of malicious prosecution. As already
mentioned, denial of such a motion is reviewed de novo, with
this Court examining the evidence in the light most favorable to
the non-moving party to determine “whether a reasonable trier of
fact could draw only one conclusion from the evidence.” Brown v.
CSX Transp., Inc., 18 F.3d 245, 248 (4th Cir. 1994) (citing
Townley v. Norfolk & W. Ry., 887 F.2d 498, 499 (4th Cir. 1989)).
Appellants assert that the following undisputed facts
compel the singular conclusion that there was probable cause to
call for Bennett’s arrest: the computer towers were missing from
the OS&D area, Bennett was the last person to leave the terminal
on the last night the towers were there, McGinnis interviewed
ten employees before calling the police, Spangler gave McGinnis
an eyewitness account of Bennett and Lowrey’s theft, Lowrey
confirmed Spangler’s story and added further information
implicating Bennett, and prior to the arrest McGinnis had been
given no information suggesting that any other employee had
taken the items. In addition to these facts, Appellants further
assert that the district court misread Virginia law on the
informant accomplice rule, focusing on the reliability of the
21
informant rather than the reliability of the information
provided by him.
As to both probable cause and the application of the
informant accomplice doctrine, we find the district court’s
reasoning to be rigorous and accurate, and its legal conclusions
sound. We therefore adopt the analysis set out below:
The Defendants argue that Bennett failed to establish
that the Defendants lacked probable cause at the time
they instituted criminal proceedings against Bennett.
In Virginia, in the context of a malicious prosecution
action, probable cause is defined as “knowledge of
such facts and circumstances to raise the belief in a
reasonable mind, acting on those facts and
circumstances, that the plaintiff is guilty of the
crime of which he is suspected.” Andrews v. Ring, 585
S.E.2d 780, 786 (Va. 2003). “The determination whether
a defendant had probable cause to believe that a crime
was committed is judged with reference to the time the
defendant took the action initiating the criminal
charges.” Stanley v. Webber, 531 S.E.2d 311, 314 (Va.
2000). Thus, the relevant inquiry is whether the
Defendants had probable cause to believe that a crime
was committed by Bennett at the time McGinnis told
Officer Deveney that “[R&L] wanted to press formal
charges against both Lowrey AND Bennett.”
* * * * *
The Defendants argue that, as a matter of law,
their probable cause determination was sound because
it was based on the confession of an alleged
accomplice of Bennett’s—Lowrey. The Defendants
correctly state that “information received from one
admitting his participation in a crime is sufficient
to create probable cause for prosecution, if there is
no reason to doubt its truth.” So. Ry. Co. v. Mosby,
70 S.E. 517, 521 (Va. 1911). Indeed, in Mosby, “there
[wa]s no ground upon which it could be fairly
concluded that [the investigator for the railroad
whose shipments had been stolen] knew that the sources
from which he got his information were not reliable
22
before he instituted th[e] prosecution.” Id. The
Western District of Virginia, citing Mosby, echoed
this proposition, explaining that, “[i]f there is no
reason to doubt the truthfulness of the accomplice
when the prosecution was initiated, there is still
considered to be probable cause sufficient to negate a
malicious prosecution claim even if the witness was
later shown to be unworthy of belief.” Caldwell v.
Green, 451 F. Supp. 2d 811, 818 (W.D. Va. 2006).
Bennett does not challenge that this is indeed
the law in Virginia, but, instead, he emphasizes
correctly that “Virginia courts will find probable
cause only if the informant is reliable and
trustworthy,” and he contends that the alleged
informants—Lowrey, Spangler, and Mitchell—“do not pass
the reliability requirement.” The discussion of
Spangler and Mitchell under Mosby, however, is
misplaced because neither Spangler nor Mitchell
implicated themselves as Bennett's accomplices.
Instead, Spangler and Mitchell implicated only Bennett
and Lowrey, and, therefore, Spangler and Mitchell did
not “confess” to anything that would make a probable
cause determination sound under the “informant
accomplice” principle upon which the Defendants rely.
Accordingly, statements from Spangler and Mitchell do
not fall under the “informant accomplice” probable
cause rule. Nevertheless, Bennett’s discussion of the
application of the principle as to Lowrey under Mosby
is on point.
McGinnis noted no less than four times in his
investigation report that, by the time prosecution was
initiated, there was serious reason to doubt Lowrey’s
truthfulness. Specifically, McGinnis noted that “the
mannerisms of ... Lowrey ... left [him] with a feeling
that [he was] not being truthful.” [J.A. 779-80.]
McGinnis noted also that “Lowrey was lying ... to take
the heat off of him.” [J.A. 781.] Additionally, when
Lowrey told McGinnis that he did not know that the
computer he allegedly purchased from Bennett was
stolen, McGinnis noted that “this was another lie.”
[J.A. 781] Similarly, when Lowrey told McGinnis that
he did not know where the other two computers were,
McGinnis noted that this, too, was “another lie.”
[J.A. 781] At trial, McGinnis tried to soften his
23
previously recorded statements by saying that Lowrey
was “deceptive in some of his answers.” [J.A. 104.]
But, McGinnis did not deny that, before he decided to
press charges against both Lowrey and Bennett, he
actually believed that Lowrey was an established liar
and that the lies related to important matters coming
from the person who was the key witness implicating
Bennett in the theft. More troubling still, Lowrey did
not implicate Bennett until McGinnis effectively fed
Lowrey the information that he had received from
Spangler-a man whom McGinnis also believed to be
untruthful—and only then did Lowrey implicate Bennett.
Therefore, Lowrey, the alleged informant accomplice,
appears only to have “confessed” and “informed” on
Bennett once McGinnis led him in that direction.
Moreover, even when Lowrey finally implicated Bennett
by agreeing with a story given to McGinnis by
Spangler, and then by McGinnis to Lowrey, McGinnis
still did not believe that Lowrey was telling him the
truth. Accordingly, McGinnis had every reason to, and
did in fact, “doubt the truthfulness of the accomplice
when the prosecution was initiated.” Caldwell, 451 F.
Supp. 2d at 818. Therefore, the information received
from Lowrey, the “one admitting his participation in a
crime,” was unreliable and was not legally sufficient
to create probable cause for prosecution. Indeed,
under the circumstances, Lowrey’s statement was so
tainted and unreliable that it was of no real
probative value even when considered with the other
information known to McGinnis.
Even without the aid of the “informant
accomplice” rule, the Defendants assert that McGinnis
had probable cause when he “asked Finley to call the
authorities and/or at the time he said R & L would
press charges.” Defs.’ Mem. in Supp. of Defs.’ Mot. to
Dismiss (“Defs.’ Mem. Supp.”) at 17. The Defendants
argue that the following facts known to McGinnis at
the time he decided to have Bennett arrested gave him
probable cause to initiate Bennett's arrest:
(1) Bennett, a supervisor, was responsible
for theft prevention. (2) Lowrey and Bennett
were the last to leave [so] Bennett had
access to the stolen computers. (3) The OS &
D was open [so] the three bulky boxes were
likely in OS & D prior to the time that
24
Lowrey and Bennett left. (4) [According to
Spangler and Lowrey,] Lowrey was talking
with the guard while Bennett took the
computers out the front door.... (5)
[According to Lowrey,] Lowrey had paid $250
to Bennett for one of the stolen computers
and that it was at his house. (6) Spangler
had also implicated Bennett.
These points, individually and collectively,
misapprehend in a material way the evidence adduced at
trial and the inferences which the jury was entitled
to draw from that evidence about what the Defendants
knew at the time they request the police to arrest
Bennett.
Thus, the evidence proved at trial that Bennett
was first implicated in the theft of the March 17,
2006, tower computers by Spangler, a man whom McGinnis
believed to be deceptive and untruthful from the very
beginning. Second, from the outset, McGinnis strongly
suspected that Spangler had been involved in the theft
of the March 3, 2006, shipment of 13 laptops. Then,
too, Spangler only came forward to implicate Bennett
in the March 17, 2006, theft after Spangler believed
(as relayed to McGinnis by Spangler’s wife), from his
two heated interviews with McGinnis, that he, himself,
would be going to jail for theft. The jury thus
reasonably could have found that McGinnis was not
entitled to, or, indeed, did not, rely on what
Spangler, whom McGinnis believed to be a liar, told
him in the third interview when he recited a story
implicating Bennett.
McGinnis fed Spangler’s story to Lowrey, a man
McGinnis had also believed to be a liar from the very
beginning, and Lowrey, after a heated conversation,
agreed with the third Spangler story, simply by saying
that it was “the way it happened.” McGinnis, believing
that Lowrey was continuing to lie and that he also
knew where all three of the missing HP tower computers
were, then accompanied Lowrey to Lowrey’s home where
Lowrey refused to allow McGinnis into his home and
produced only one of the three missing tower
computers. McGinnis returned to the Richmond Terminal
from Lowrey’s home and immediately asked to press
charges against Lowrey and Bennett.
25
In simple terms, then, McGinnis knew the
following when he made the decision to press charges
against Bennett: a liar, likely involved in a recent
company computer theft, who was admittedly concerned
about his own penological interests, changed his story
and told a company investigator that the liar’s shift
supervisor was involved in a second, more recent
company computer theft. Later that night, the
investigator deliberately fed a second liar the first
liar’s story, and this second liar, who was also
implicated in the story, ultimately adopted the story,
but deflected all criminal blame onto the shift
supervisor. The second liar then, after refusing to
allow the investigator into his home, produced from
his home one of three missing computers, but the
investigator believed the second liar also knew where
the other two missing computers were located and was
continuing to lie on that point. Based on the first
and second liars’ stories, and a single ten minute
interview with the shift supervisor wherein the
supervisor protested his innocence, the investigator
decided to have the shift supervisor arrested. A jury
reasonably could have concluded from this record that
there was a lack of probable cause to believe that
Bennett committed the crime.
The Defendants argue that “[w]hat McGinnis did
not know, even if from Bennett’s perspective he should
have known, is implicitly immaterial [to the probable
cause inquiry].” Defs.’ Mem. Supp. at 17. To that end,
the Defendants, though unarticulated precisely as
such, pose the following question to the Court: “Does
determining whether the Defendants had probable cause
to initiate the Plaintiff’s arrest include any
consideration of that which the Defendants did not
know or do, but purportedly should have known or
done?” Defs.’ Mem. Supp. at 2–3. While the Supreme
Court of Virginia has already answered this question
in the negative, the inquiry is irrelevant to this
case because a reasonable jury could have determined
that McGinnis did not have probable cause to have
Bennett arrested without consideration of facts that
he arguably should have discovered. In any event, the
Defendants’ argument is misdirected because the four
items of evidence to which it is directed are
26
probative respecting the element of malice and the
propriety of a punitive damage award.
However, as to the Defendants’ argument, they are
correct in stating that, at the time the arrest
decision was made, they did not yet know that: (1)
Lowrey was a convicted felon, (2) shortly after the
arrest, Spangler would write a contradictory
statement, (3) Spangler had not worked the night he
claimed to have witnessed the theft, or (4) Bennett
was financially comfortable. And, the Defendants are
correct that such knowledge could not be considered by
the jury in deciding the element of lack of probable
cause. Indeed, the jury was properly instructed on
this point by Jury Instruction 25. There is no reason
to believe that the jury disregarded the instruction.
While this knowledge certainly would have further
informed the determination that probable cause did not
exist, the record about knowledge that McGinnis did
possess at the time of the arrest decision, as
detailed above, without weighing the evidence or
considering the credibility of the witnesses, clearly
provided a legally sufficient evidentiary basis for a
reasonable jury to find for Bennett as to the probable
cause element of his malicious prosecution claim.
Thus, Bennett did not fail to make a showing on this
essential element of his case.
744 F. Supp. 2d at 514-18 (footnotes and some citations omitted
or altered; some punctuation altered).
While Appellants correctly note that the Virginia Supreme
Court has been willing to reverse jury verdicts on review of the
probable cause issue in malicious prosecution cases, such cases
typically involve far stronger evidence of the suspect’s
wrongdoing than the record before this Court provides. In
Reilly, for example, the court found probable cause where an
arrest was made after fingerprints were matched to the plaintiff
27
and estimated by an expert to have been left around the time of
a robbery; the plaintiff had been sought out over a period of
months for interviews but could not be located; the plaintiff
matched the victim’s physical description with unusual accuracy;
and he lived close to where the crime was committed. Reilly, 643
S.E.2d at 217-18, 219. The investigating police officer in
Reilly had no reason to doubt the reliability of the information
he had received from the victim or experts consulted, and “there
were no circumstances know to [him] pointing to any person other
than [the plaintiff].” Id. at 219.
In Commissary Concepts Management Corp. v. Mziguir, 594
S.E.2d 915 (Va. 2004), as well, probable cause was found where
an employer knew money had been missing from the plaintiff’s
shifts in the past; a bank teller reported that extra cash from
a deposit had been returned to the plaintiff; the money was
searched for in the workplace and in the safe where deposits
were stored and was not found; no report of the overage was
made; and the plaintiff had not mentioned the missing cash
despite working shifts after he had received it. 594 S.E.2d at
918. Again, the employer in Mziguir had no reason whatsoever to
question the reliability of information from the bank teller,
and had observed what seemed to be a pattern of theft related to
the plaintiff’s access to cash on-site. See also Bill Edwards
Oldsmobile, Inc. v. Carey, 244 S.E.2d 767 (Va. 1978) (finding
28
probable cause as a matter of law where the defendant had many
months of interactions with the plaintiff regarding unauthorized
and unpaid charges for car parts, the plaintiff had apparently
left town, the car with the embezzled parts was located at the
plaintiff’s friend’s house, and no reliability issues regarding
information or informants were ever raised).
In contrast to these cases, the Appellants here had, from
the beginning of their brief and ham-handed investigation,
strong reason to know, and indeed, actual knowledge, that their
informants were unreliable. McGinnis’s report indicates that he
found Spangler and Mitchell both “deceptive,” and believed
Lowrey’s mannerisms indicated he was being “untruthful.” J.A.
779, 780. When Lowrey was questioned most intensely, and
apparently confirmed that Bennett had stolen the computers,
McGinnis believed his version of events still contained lies
about his own involvement. Furthermore, unlike in Mziguir,
Reilly, and Bill Edwards, there was not a scintilla of
corroborating physical evidence or any pattern of behavior
already observed by the employer in the instant case to bolster
or confirm the accounts given by employees who McGinnis believed
were lying to him.
McGinnis’s own admitted doubts about the reliability of his
informants, at the time he received their accounts implicating
Bennett, and a total lack of objective evidence to corroborate
29
their claims support the district court’s denial of judgment as
a matter of law on probable cause. In so ruling, we agree with
the district court that to the degree the informant accomplice
doctrine applies to informant statements from Spangler and
Lowrey, who never in fact admitted their role in the conduct at
issue, see 744 F. Supp. 2d at 515, those statements are properly
disregarded for the determination of probable cause where an
informant is so evidently unreliable. 9
B.
Appellants next argue that the district court erred in
denying judgment as a matter of law on the dispositive element
of malice. They argue that no evidence was offered of a
malicious motive on McGinnis’s part, and that the district court
improperly inferred malice from a mere failure to undertake
certain investigative steps.
As above, we find the district’s court analysis on the
issue of malice, which again rejected the Appellants’
contentions, to be clearly-put, accurate and persuasive:
9
Appellants also argue that the district court erred by
giving a jury instruction that the statements of Lowrey and
Spangler could be considered only on the question of malice, and
not on the question of the existence of probable cause. Because
the limited use of the statements was conceded by Appellants
below and the record indicates that the limiting instruction to
the jury was in clear reference to these conceded uses, Federal
Rule of Civil Procedure 51(d)(2) concerning plain error does not
apply and we need not address this issue further.
30
The Defendants also assert that Bennett failed to
establish the element of “malice.” In Virginia,
“malice” means “any controlling motive other than a
good faith desire to further the ends of justice,
enforce obedience to the criminal laws, suppress
crime, or see that the guilty are punished.” Hudson v.
Lanier, 497 S.E.2d 471, 473. Virginia also recognizes
that “[m]alice may be inferred from a lack of probable
cause.” Reilly, 643 S.E.2d at 219. Malice can be
inferred from a lack of probable cause, however, only
when the circumstances of the case support the
inference. See Freezer v. Miller, 176 S.E. 159, 168
(Va. 1934); see also Giant of Virginia, Inc. v. Pigg,
152 S.E.2d 271, 276 (Va. 1967); Gaut v. Pyles, 181
S.E.2d 645, 647 (Va. 1971).
The Defendants’ malice argument, though not
articulated precisely as such, is as follows: Bennett
did not adduce evidence of any improper controlling
motive, so the jury must have inferred malice from its
finding of a lack of probable cause; however, a lack
of probable cause alone does not support an inference
of malice, and the circumstances of the case do not
otherwise support the inference; thus, the jury
improperly presumed or imputed malice. For the reasons
set forth below, the Defendants’ argument fails.
The Defendants are correct in arguing that, in
Virginia in a malicious prosecution suit, malice does
not attach automatically when the absence of probable
cause is shown. It is indeed well-established that the
“malice” required in a malicious prosecution case is
not imputed as a matter of law by a simple showing of
the absence of probable cause, but must be proven as a
separate and distinct element of the plaintiff’s
claim. Freezer, 176 S.E. at 168. It is equally well-
established, though, that legal malice may be proven
by inference from a lack of probable cause if the
circumstances of the case support the inference. Id.
In other words, the “[w]ant of probable cause is
evidence of malice.” Mosby, 70 S.E. at 520.
The Defendants’ argument that the “[l]ack of
probable cause alone is insufficient to support an
inference of malice,” Defs.’ Mem. Supp. at 12, fails
as a matter of law. In Virginia, under certain
circumstances, the want of probable cause alone can
serve as legally sufficient evidence to support an
31
inference of malice. See Pigg, 152 S.E.2d at 276; see
also Oxenham v. Johnson, 402 S.E.2d 1, 2 (Va. 1991).
In these instances, “there [i]s such a want of
probable cause” that an inference of legal malice is
warranted. Pigg, 152 S.E.2d at 276 (The malicious
prosecution defendant's “disregard of information
communicated to him constituted an aggravated
circumstance which supports the finding of the jury
that there was such a want of probable cause as
warranted an inference of legal malice.”); Oxenham,
402 S.E.2d at 2 (The defendant’s “lack of probable
cause [alone] was sufficient to support an inference
of [the defendant’s] legal malice” where the defendant
had “caused [an] arrest warrant to issue” against the
plaintiff solely because the plaintiff had refused to
let the defendant search the plaintiff’s residence
without a search warrant.).
As the controlling decisions are applied to this
record, a reasonable jury certainly could have
determined that “there was such a want of probable
cause” at the time McGinnis told the police that he
wanted to press charges against Bennett as to warrant
an inference of legal malice. Pigg, 152 S.E.2d at 276.
The fact that McGinnis decided to have Bennett
arrested before the police were involved in any way
and based solely on the word of witnesses whom he
believed to be liars may reasonably be said to
constitute the type of “aggravated circumstance”
indicative of such a want of probable cause that an
inference of legal malice was warranted. Indeed, the
facts and circumstances behind the jury’s finding of
the want of probable cause are legally sufficient to
support an inference of legal malice. In other words,
the same facts and circumstances that counseled the
jury toward a determination that probable cause did
not exist may similarly have supported an inference
that the Defendants acted with legal malice.
Again, “legal malice” is defined as “any
controlling motive other than a good faith desire to
further the ends of justice, enforce obedience to the
criminal laws, suppress crime, or see that the guilty
are punished.” Hudson, 497 S.E.2d at 473. The
Defendants argue that Bennett did not adduce “evidence
of any motive other than a desire to catch a thief.”
Defs.’ Reply Mem. at 4. The Defendants then ask, as a
32
matter of law, “May a plaintiff establish malice
without any evidence of a controlling motive and
purely rely on inferring motive from a lack of
probable cause?” While the Defendants answer the
question in the negative, Defs.’ Reply Mem. at 4, the
Court answers the question in the affirmative.
As previously explained, legal malice may be
proven by inference from a lack of probable cause if
the circumstances of the case support the inference.
Put differently, any controlling motive other than a
good faith desire to further the ends of justice,
enforce obedience to the criminal laws, suppress
crime, or see that the guilty are punished may be
proven by inference from a lack of probable cause if
the circumstances of the case support the inference.
Thus, an improper motive—legal malice—may be inferred
where supported by the case’s facts and circumstances.
As such, the fact that Bennett did not label and
identify explicitly an alleged improper motive, and
the fact that the jury did not make an explicit
finding as to precisely what they believed the
Defendants’ improper motive was, is of no consequence.
The Court is not aware of any authority that requires
otherwise.
Bennett showed facts and circumstances that were
legally sufficient to support an inference that the
Defendants acted with an improper motive based on the
lack of probable cause. For example, the evidence of
want of probable cause suggested that one such
improper motive may have been a desire to see not that
the guilty were punished, but that anyone was
punished. In other words, deciding to press charges
against the first man accused by men believed by
McGinnis to be untruthful criminals does not tend to
demonstrate a good faith desire to see that the truly
guilty individual is punished. It shows, instead, a
bare desire to punish in general and to put an end to
a frustrating investigation. That, of course, would be
an improper controlling motive which would support a
finding that the Defendants acted with legal malice.
Moreover, the record shows additional evidence
probative of malice (apart from the want of probable
cause). For example, McGinnis decided to have Bennett
arrested without even examining Lowrey’s criminal
33
record (he was a convicted felon) and without
ascertaining whether Spangler even could have been
present to see what, on his third interview, he
claimed to have seen. In fact, a check of company
records would have disclosed that Spangler did not
work on the evening in question. And, a check of the
criminal records of the witnesses whom McGinnis
thought to be liars would have shown that Lowrey had a
felony conviction. And, the corroboration process
would have shown that Bennett had no criminal record
and was comfortably situated financially.
Corroboration is most important when dealing with the
testimony of known liars. Nor did McGinnis inform the
police that he thought Lowrey was a liar or that
Lowrey’s version of events was merely the adoption of
a story told by Spangler, another person McGinnis
thought to be a liar. And, McGinnis did not bring to
the attention of the prosecutor or the Virginia courts
the fact that Spangler’s written story differed
markedly on important points from the version adopted
by Lowrey or that Lowrey had a felony conviction or
that Spangler had not been at work on the evening at
issue. Although those events occurred after Bennett
had been arrested, the disclosure of all or any of
them would have been important in deciding whether the
arrest had been warranted. The failure to disclose
them, therefore, is probative of the existence of a
state of mind at the time of the arrest other than
seeing that the guilty person would be punished.
Furthermore, nothing in the record disclosed any
reason that would have warranted the rush to judgment
that was shown at trial. Nor was it shown that
checking company work schedules and criminal
backgrounds would have been difficult in the least.
The failure to corroborate the evidence given by known
liars and the failure to disclose pertinent
information to the prosecutor or the courts, taken
together (as well as in perspective of the want of
probable cause), further support a finding that
Bennett proved the malice element.
The jury may have inferred such a motive, or it
may have inferred a separate, similarly legally
sufficient motive from the underlying facts and
circumstances or from the absence of probable cause.
In either event, a legally sufficient basis existed
for the jury’s finding that the Defendants initiated
34
the criminal proceedings with malice. Therefore,
without weighing the evidence or considering the
credibility of the witnesses, the Court concludes that
Bennett did not fail to make a showing on this
essential element of his case, and the Defendants are
not entitled to judgment as a matter of law.
744 F. Supp. 2d at 521-24 (footnotes omitted; some citations
altered).
We agree with the district court that McGinnis’s decision
to press charges against Bennett solely on the basis of
information from informants he considered unreliable and
deceptive, along with his failure to seek the most basic
corroborating information for these accounts, supports a jury
finding as to malice. At the very least, this evidence precludes
judgment as a matter of law in favor of the Defendant-
Appellants.
C.
The Appellants’ final argument as to judgment as a matter
of law is that the district court erred in ruling that a nolle
prosequi entry for a criminal charge is an outcome “not
unfavorable to the plaintiff” in a malicious prosecution action.
They argue that Bennett had an affirmative burden to show that
the nolle prosequi was entered for reasons that imply innocence,
and that the entry in Bennett’s criminal trial was due only to
Lowrey’s flight. We adopt, again, the court’s rejection of
Appellants’ contention:
35
The Defendants argue that the Court erred in
determining that the Commonwealth of Virginia’s
decision to nolle prosequi the embezzlement charge
against Bennett constituted a termination of the
prosecution “in a manner not unfavorable to” Bennett.
They argue also that the proceeding has not terminated
at all because the Commonwealth still has an intent to
prosecute Bennett for the embezzlement if Lowrey ever
surfaces. In their Rule 50(b) motion, the Defendants
rely on Nicholas v. Wal–Mart Stores, Inc., 33 Fed.
App’x 61 (4th Cir. 2002) and Niese v. Klos, 222 S.E.2d
798 (Va. 1976).
In Nicholas, the plaintiff, a former Wal–Mart
cashier, had been arrested on the complaint of Wal–
Mart management, and charged with a breach of trust
for allowing a customer to leave the store without
paying for merchandise. The Fourth Circuit was tasked
with interpreting the South Carolina Supreme Court’s
holding in McKenney v. Jack Eckerd Co., 402 S.E.2d 887(S.C. 1991) that, “where an accused established that
charges were nolle prossed for reasons which imply or
are consistent with innocence, an action for malicious
prosecution may be maintained.” In Nicholas, the
Fourth Circuit “predict[ed]” that the South Carolina
Supreme Court would find that plaintiffs asserting a
claim for malicious prosecution have the affirmative
burden of proving that the nolle prosequi was in fact
entered under circumstances which imply or are
consistent with innocence of the accused. Nicholas, 33
Fed. App’x at 64–65. Nicholas, is, however, an
unpublished Fourth Circuit case interpreting South
Carolina law, predicting what the South Carolina
Supreme Court would hold. Nicholas, therefore, is in
no way binding on this Court, and the Court does not
find it persuasive in the least as to Virginia law.
In Niese, the Supreme Court of Virginia held
that, “upon entry of the Nolle prosequi order,
evidencing the unwillingness of the Commonwealth to
proceed, the prosecution terminated in a manner not
unfavorable to plaintiff for purposes of instituting a
malicious prosecution action.” Niese, 222 S.E.2d at
800–01 (citing Graves v. Scott, 51 S.E. 821 (Va. 1905)
and Keaton v. Balser, 340 F. Supp. 329 (W.D. Va.
1972)). The Defendants argue that, under Niese,
whether the Commonwealth’s decision not to proceed is
36
a “termination not unfavorable to the plaintiff” must
be determined by “whether there was evidence of the
Commonwealth's ‘[un]willingness ... to proceed.’”
Defs.’ Mem. Supp. at 21 (quoting Niese, supra, 222
S.E.2d at 801). The Defendants, however, misread
Niese.
A proper reading of Niese reveals that the Court
believed that the entry of a nolle prosequi, in and of
itself, evidences the Commonwealth’s unwillingness to
proceed with the prosecution at that time. The context
of the Niese holding does not indicate that the
plaintiff has an affirmative burden to prove that the
nolle prosse in fact evidenced the Commonwealth’s
unwillingness to proceed, and an analysis of the cases
upon which Niese rests its holding—Graves and Keaton—
confirms this interpretation.
In Keaton, the Western District of Virginia
stated plainly that, “[s]ince the Commonwealth
Attorney nolle prossed the warrant for leaving the
scene of the accident on which the malicious
prosecution claim in this action is based, it is
apparent that the second element requiring termination
in the plaintiff’s favor has also been established.”
Keaton, 340 F. Supp. at 332. In other words, the
simple fact that the Commonwealth had nolle prossed
the underlying criminal charge satisfied the element
requiring that the plaintiff show that the criminal
prosecution terminated in a manner not unfavorable to
him.
More importantly, in Graves, the Supreme Court of
Virginia expressly considered and rejected both
positions that the Defendants advance here. In Graves,
the Court acknowledged that a nolle prosse had at one
point been perceived as failing to satisfy the
“termination in a manner not unfavorable to”
requirement of a malicious prosecution case because it
“did not establish the innocence of the [malicious
prosecution] plaintiff, or show want of probable cause
on the part of the [malicious prosecution] defendant.”
Graves, 51 S.E. at 822. Indeed, a nolle prosse and
other forms of “termination” had been held not to have
actually “terminated” the prosecution because, if no
testimony had been heard that caused the criminal
defendant to be discharged, it was not a “final
37
termination.” Id. However, the Supreme Court of
Virginia expressly rejected that outdated reasoning
and agreed with the more modern approach in
recognizing that “a nolle prosequi ends the indictment
past recall, and thereupon the right to a malicious
prosecution suit is perfected.” Id. at 823.
Since Graves, the only time Virginia courts have
acknowledged that a nolle prosse can defeat a
subsequent suit for malicious prosecution is if the
nolle prosse was the result of a voluntary compromise
between the then-criminal defendant and the
Commonwealth. Andrews, 585 S.E.2d at 787 (“A voluntary
compromise ending a criminal prosecution defeats a
subsequent suit for malicious prosecution.”).
Therefore, as Bennett's underlying criminal
prosecution was not nolle prossed as a result of
voluntary compromise, the termination of the criminal
proceeding—the initial embezzlement charge—terminated
the proceeding “past recall,” and it terminated the
proceeding in a manner not unfavorable to Bennett as a
matter of law.
Id. at 524-25 (footnotes omitted; some citations altered).
To reiterate, Virginia has recognized only one exception to
the rule that an order of nolle prosequi permits a malicious
prosecution claim to go forward, namely cases where the order
was entered as a result of an agreement between the government
and defendant. See, e.g., Orndoff v. Bond, 39 S.E.2d 352 (Va.
1946); Synder v. City of Alexandria, 870 F. Supp. 672 (E.D. Va.
1994) (suggesting that agreements are an “example” of a non-
qualifying nolle prosequi situation, but declining to name any
others). Because the order entered in Bennett’s embezzlement
case was not the result of an agreement with the government, the
38
district court properly held under Niese that the outcome was
one “not unfavorable to him” as a matter of law.
D.
Notwithstanding our conclusions above as to the matters of
law, the Appellants finally appeal to this Court to vacate the
compensatory and punitive damages award and order a new trial,
on the grounds that the amounts were “bizarrely excessive.”
Appellants’ Br. 33. “A district court’s denial of a request for
a new trial or request for remittitur rests with the sound
discretion of the trial judge and will not be reversed absent an
abuse of discretion.” Stamathis v. Flying J, Inc., 389 F.3d 429,
436 (4th Cir. 2004) (affirming $350,000 punitive damages
judgment under Virginia law).
Where the conduct in question occurred in Virginia,
“[w]hether [a] verdict should be set aside as excessive is a
matter of Virginia law.” Id. at 438. This law compels a court to
set aside a verdict “if the amount awarded is so great as to
shock the conscience of the court and create the impression that
the jury has been motivated by passion, corruption, or
prejudice, or has misconceived or misconstrued the facts or the
law, or if the award is so out of proportion to the injuries
suffered as to suggest that it is not the product of a fair and
impartial decision.” Shepard v. Capitol Foundry of Virginia,
Inc., 554 S.E.2d 72, 75 (Va. 2001).
39
Addressing first the punitive damages, the Appellants argue
that Bennett offered no evidence that McGinnis was motivated by
“personal animosity or hostility,” nor that he believed Bennett
to be innocent or “was aware of any explanation potentially
exonerating Bennett.” Appellants’ Br. 36. They assert that in
the absence of any such evidence, the district court improperly
relied on its perception of McGinnis’s investigative failures or
mistakes to support a finding of actual malice.
Our decision in Stamathis articulates the evidentiary
requirements of actual malice for punitive damage awards:
In cases involving malicious prosecution or defamation
claims, punitive damages may be awarded if the
defendant demonstrates, by clear and convincing
evidence, that the defendant acted with actual or
express malice . . . . Actual malice is defined as
“conduct which is in conscious disregard of the rights
of others and is wanton and oppressive.”
***
While we acknowledge that lack of probable cause alone
does not infer actual malice, . . . it does lend
support to a finding that the defendants acted with
actual malice.
389 F.3d at 440, 441 (internal citations omitted). The Virginia
Supreme Court has also explained, in somewhat nuanced terms,
that punitive damages are appropriate in malicious prosecution
cases where there is “evidence of misconduct or actual malice,
or such recklessness or negligence as to evince a conscious
40
disregard of the rights of others.” Oxenham, 402 S.E.2d at 5
(internal quotation marks and citation omitted).
In this case, the district court clearly relied (for
purposes of Virginia law and Fed. R. Civ. P. 59) on the reckless
and negligent aspect of actual malice set out above, in holding
that there was a sufficient evidentiary basis for the jury’s
award. The court’s opinion on the whole carefully enumerated the
ways in which McGinnis failed to seek information from Bennett
personally, failed to corroborate information provided by
employees he believed to be deceptive, and failed to turn over
to police Spangler’s written statement which contradicted a
crucial aspect of his initial story (i.e. that he had witnessed
the theft). 744 F. Supp. 2d at 523-24. Its conclusion was that,
[T]he jury’s punitive damage award was not so
excessive as to work an injustice. The facts and
circumstances of this case, along with policy-related
considerations, warranted a return of punitive
damages. The jury’s punitive award neither creates a
miscarriage of justice nor offends any notion of
fairness or justice. Hence, granting of a new trial is
not justified.
Indeed, the rush to judgment and the decisions to
press an arrest on the uncorroborated evidence given
by known liars, and the withholding of exonerating
evidence from the police and the state court all
support the imposition of punishment. And, the award
also serves a deterrent purpose. Perhaps, in the
future R & L and McGinnis will not be so quick to
close a case, and perhaps they might fairly,
objectively and fully conduct an investigation before
having someone arrested. In other words, the punitive
award should also deter wrongful conduct on future
theft investigations at R & L. And, if after checking
41
for corroborative evidence, they determine that the
word of a witness is confirmed to be of no value, they
perhaps will refrain from pressing charges. And, if
they do press charges and then, shortly thereafter,
come across exonerating evidence, they will share it
with the police and the courts.
This case clearly involved a miscarriage of justice
but not the one of which the Defendants complain. The
miscarriage, in fact, was visited on Clyde Bennett.
The record shows clearly the miscarriage reflected in
the jury’s verdicts. Counsel for the Defendants
expressed profound, numbing shock when the verdict was
returned. That may be how the defendants and counsel
felt. But, that reflects that they were (and remain)
tone deaf to the wrongs proved by the record and to
the damage those wrongs visited upon Clyde Bennett.
This record shows beyond question that the verdict of
the jury visited no miscarriage of justice on the
Defendants.
Id. at 538-39.
The Appellants’ arguments seeking to minimize the evidence
adduced at trial as insufficient or improperly considered
ignores the fact that under Virginia law, recklessness and
negligence -- the failure to take proper care when undertaking
an investigation -- can establish actual malice. See, e.g.,
Oxenham, 402 S.E.2d at 5. The district court cited ample
evidence that McGinnis acted recklessly and/or negligently in
the course of his investigation, evidence from which a
reasonable jury could find actual malice. We therefore find no
abuse of discretion in the award of punitive damages.
The real crux of the Appellants’ damages claim is that the
compensatory damages awarded –- including $1,159,698 for non-
42
pecuniary injuries -- were so excessive as to warrant vacatur.
They argue that the verdict was contrary to Virginia law because
it was so large as to “‘shock the conscience’ and to suggest
that the jury was motivated by passion, and did not reach a fair
and impartial decision.” Appellants’ Br. 38. The non-pecuniary
award is shocking, they argue, in part because it is “far beyond
any prior award ever affirmed by the Virginia Supreme Court,”
Appellants’ Br. 38, as demonstrated by their table of cases on
point from 1911-2011. Appellants’ Br., Addendum A.
The district court’s reasoning in upholding the
compensatory damage award was, in summary:
The jury saw that Bennett had been humiliated and
demoralized both on the day of his arrest and for
years thereafter, and wrongfully so. It saw that
Bennett had endured mental suffering and distress, and
needlessly so. It saw that his ability to provide for
basic needs such as housing and insurance had been
severely diminished, and that his personal
relationships had been seriously altered as a
consequence of the wrong done by the Defendants.
744 F. Supp. 2d at 535. In light of evidence of these injuries,
the district court found the jury within the bounds of its
proper judgment, and noted, “the verdict did not establish that
the jury included in its damages anything not awardable in
Virginia for malicious prosecution,” nor had either party
requested a special verdict form specifying amounts for various
types of injury. Id. at 536.
43
While the non-pecuniary award (to the degree that it is
distinct) appears to be a windfall by sheer virtue of its size,
we defer to the jury’s conclusions drawn from the evidence
before them. Bennett experienced a drastic reversal of fortune
as a result of his arrest and termination, one that a jury might
reasonably find particularly harsh for a man who had been
scrupulous in his personal savings and work ethic. The jury
apparently concluded that Bennett’s arrest and its lingering
effect on his ability to get a job and to present himself with
the dignity to which he was accustomed and habituated was a
profound injury to his well-being. Without evidence of any error
on their part, we decline to upset their decision.
Turning to the Appellants’ challenge to the pecuniary
damages portion of the compensatory damages award, they argue
that Bennett’s projected future earnings were estimated “by
speculation and conjecture and [were] unsupported by any
evidence.” Appellants’ Br. 41. Bennett was an at-will employee,
they accurately note, whose employment with R&L was therefore
not guaranteed through his retirement age.
This court has explained, in the context of “front pay” for
employment discrimination claims, that future earnings are
“nearly indeterminable” where an employee’s capacity for work
has not been “destroyed or damaged.” Duke v. Uniroyal, Inc., 928
F.2d 1413, 1423 (4th Cir. 1991). Duke also notes, however, that
44
“If a plaintiff is close to retirement front pay may be the only
practical approach.” Id. at 1424. At the time of the trial,
Bennett was approximately 11 and a half years from full
retirement age, had a high school education, and had 30 years
experience in the freight industry. The future earnings
estimates provided to the jury were, of course, just that –
estimates. We do not discern an abuse of discretion in allowing
these estimates to go before the jury when Bennett’s work
history indicated an employee who wanted to work, was competent,
and had every incentive to remain in good standing at R&L until
he was able to retire. See 744 F. Supp. 2d at 534 (“The lost
future earnings damages awarded, though certainly not
established to a mathematical certainty, were proven to a
reasonable certainty and were grounded upon facts specific to
Bennett.”). Unlike Baker v. Kroger, 784 F.2d 1172 (4th Cir.
1986), in which we rejected a future earnings award estimated
for 35 remaining years of work as too speculative, Bennett was
facing just over ten years before Social Security eligibility.
There is no evidence in the record that he would have left R&L
before retirement or been forced out of a job that was in the
field of his expertise and that had afforded him great financial
security. Under these circumstances, we conclude that the
district court did not abuse its discretion in allowing
45
estimated future earnings to be presented to the jury and taken
into account as to the compensatory damage award.
III.
For the forgoing reasons, we hold that the district court
did not err in denying the Appellants’ motions under Fed. R.
Civ. P. 50(b) and 59. In light of the patent and admitted
unreliability of all informants who were questioned during the
Appellants’ brief, indeed pell-mell investigation, there is
adequate evidence in the record supporting the jury’s findings
that the Appellants lacked probable cause to initiate a criminal
prosecution against Bennett, and that they undertook this act
with malice. In addition, we hold that the trial court properly
applied Virginia law as to the legal import of a nolle prosequi
order.
Furthermore, we hold that the damages awarded to Bennett do
not shock the conscience because they rest upon reasonable
estimates of pecuniary and non-pecuniary loss and comport with
Virginia’s statutory limits and standards as to punitive
damages. To be sure, the jury plainly, even generously,
expressed its belief that the Appellants visited a grievous
pecuniary and dignitary harm on Bennett, effectively wiping out
his modest retirement savings, consigning him to the
unemployment rolls for an extended period of time and subjecting
46
him to the proverbial “perp walk” before former subordinates in
the work place. More disturbing still, they prompted his
jailing, even if for only a brief time. For some people, Lowrey
and Spangler, for example, getting arrested might appear to be a
“no big deal” incident of adult life. But the jury was entitled
to consider, as it clearly did, that for some others, Bennett,
for example, it is just short of a psychic brutalization. Cf.
Florence v. Board of Chosen Freeholders of County of Burlington,
566 U.S. ---, 2012 WL 1069092 (2012) (holding that strip
searches of any and all arrestees housed in general population
of local detention centers and jails are constitutionally
permissible); id., slip op. at 1 (Alito, J., concurring)
(describing potential “offensive and deeply humiliating”
procedures facing those arrested for minor offenses); id., slip
op. at 3, 5 (Breyer, J., dissenting) (same).
We cannot know, from the cold appellate record, what the
jury saw on the faces of Bennett or McGinnis and the other
witnesses, or what they heard in the tenor and tone of the
voices of Bennett or McGinnis or those other witnesses, or what
and how such demeanor evidence that is a part of every trial was
weighed and evaluated. The experienced, distinguished district
judge was a percipient witness of all that occurred before him.
The well-established limits to our institutional role requires
that, in the absence of a manifest abuse of the broad discretion
47
the law accords to the judgment of the district court, we must
forebear. 10
For the reasons set forth therefore, the judgment is
AFFIRMED.
10
We respect the conscientiously-held, contrary views as to
the weight, credibility and overall probative value of the
evidence in this case as well-stated by our good colleague in
dissent. For the reasons we express, however, in looking through
the trial court's assessment of the record to determine, for
ourselves, with appropriate deference, see ABT Bldg. Prods.
Corp., 472 F.3d at 113, whether substantial evidence (direct
and circumstantial) supports the judgment, we perceive
rationality, not an exercise of arbitrary power, in the results
reached by jury.
Three of the dissent's observations merit a brief response.
First, one will scan Appellants' briefs in vain for any mention
of "common carrier" or of the existence of any special public
policy of the Commonwealth that should have informed the trial
of this case. If the Commonwealth's public policy wrapped common
carriers in the kind of protective embrace from malicious
prosecution claims favored by the dissent, see Post at 49-50,
one would have thought that, rather than removing this case on
the basis of diversity of citizenship jurisdiction from state
court to federal court and then asking the district court to
certify questions to the Supreme Court of Virginia, as they did
here, Appellants would have chosen to try the case where it was
filed: in the courts of the Commonwealth. We do not believe
public policy contributes to the resolution of this appeal.
Second, the dissent's assertion that the mere fact that
"Lowrey possessed one of the stolen computers confirmed his
statement that he was involved in the theft, and, by extension,
his version of the events," see Post at 55 (emphasis added),
simply defies what we know about human behavior, including the
human capacity for mendacity.
Third, the dissent (weighing the trial evidence for itself)
is confident that the only "motive" harbored by McGinnis was "to
see the guilty punished." See Post at 60. To the contrary, we
are persuaded that the district court did not err in sustaining
the implicit finding of the jury, amply supported by the direct
and circumstantial evidence in the record, that McGinnis was
motivated to see someone punished.
48
AGEE, Circuit Judge:
Virginia courts have long held, and continue to reaffirm,
that malicious prosecution actions are disfavored. As Virginia’s
highest court recently explained, “[a]ctions for malicious
prosecution arising from criminal proceedings are not favored in
Virginia and the requirements for maintaining such actions are
more stringent than those applied to other tort cases to ensure
that criminal prosecutions are brought in appropriate cases
without fear of reprisal by civil actions.” Lewis v. Kei, 708
S.E.2d 884, 889 (Va. 2011); see also Reilly v. Shepherd, 643
S.E.2d 216, 218 (Va. 2007) (same); Bill Edwards Oldsmobile, Inc.
v. Carey, 244 S.E.2d 767, 771 (Va. 1978) (same). The reason for
this intentionally high bar is that “criminal prosecutions [are]
essential to the maintenance of an orderly society.” Reilly, 643
S.E.2d at 219 (citing Ayyildiz v. Kidd, 266 S.E.2d 108, 110-11
(Va. 1980)).
Furthermore, malicious prosecution actions against common
carriers, like R&L here, are particularly problematic. As the
Supreme Court of Virginia recognized more than one hundred years
ago:
[C]haracter [should not be] put lightly in jeopardy, .
. . but it is to be borne in mind that in the interest
of good order and society, and the upholding and
enforcement of good citizenship, prosecutors of
wrongdoers are not to be deterred from doing their
duty to the public by the fear of being mulcted in
heavy damages because of honest mistakes made in
49
instituting criminal prosecutions. Public carriers of
freight are held to be insurers of goods committed to
them for shipment and, if they were lightly to be
mulcted in damages in every case in which an attempt
to punish and thereby stop theft fails, an intolerable
burden would be added to those they are rightly called
upon to bear.
So. Ry. Co. v. Mosby, 70 S.E. 517, 521 (Va. 1911) (emphasis
added).
The majority fails to adhere to—or even refer to—these
long-standing and clearly-expressed principles of Virginia law.
Instead, it allows a jury verdict to stand that conflicts with
these principles. Even taken in the light most favorable to
Bennett, the prevailing party below, the facts of this case
simply do not support the jury’s finding that Bennett met his
burden of showing two elements of his claim: a lack of probable
cause and malice. Accordingly, I would reverse the judgment of
the district court.
Additionally, I disagree with the majority’s conclusion
that the damages here were supported by the evidence. Most
notably, the record lacks any evidence supporting a finding of
actual malice as required for the imposition of punitive
damages. Likewise, as to the jury’s award of more than $1.1
million in non-pecuniary compensatory damages, the amount is
unsupported by the facts adduced at trial, unprecedented in
Virginia for this type of claim, and clearly reflects that the
jury awarded damages based on “passion . . . or prejudice, or .
50
. . that [the award] is not the product of a fair and impartial
decision.” See Shepard v. Capitol Foundry of Va., Inc., 554
S.E.2d 72, 75 (Va. 2001).
For these reasons, I respectfully dissent.
I. Liability
As correctly stated by the district court below and by the
majority opinion, a malicious prosecution action in Virginia
requires the plaintiff to prove “four essential elements: that
the prosecution was (1) malicious, (2) instituted by or with the
cooperation of the defendant, (3) without probable cause, and
(4) terminated in a manner not unfavorable to the plaintiff.”
Maj. Op. at 3 (quoting Reilly, 643 S.E.2d at 218). Defendants
concede that the second element is established, and I agree with
the majority’s analysis in Section II-C regarding the fourth.
See Maj. Op. at 35-39. I part ways with the majority, however,
in its conclusions that there was sufficient evidence from which
the jury could find either a lack of probable cause or legal
malice.
A. Probable Cause
As to the element of probable cause, the majority quotes
extensively from the district court’s opinion, adopting the
lower court’s analysis regarding both probable cause and the
application of the informant-accomplice doctrine. Both the
51
district court’s opinion and the majority opinion err in several
critical respects.
First, contrary to the majority’s reasoning, under Mosby,
McGinnis was permitted to credit Lowrey’s testimony that Bennett
was involved in the theft of the computer towers, and also
permitted to credit Spangler and Mitchell’s statements that
Bennett was responsible for the theft.
The district court and majority refer to the “accomplice”
rule, and further state that “[t]he discussion of Spangler and
Mitchell under Mosby . . . is misplaced because neither Spangler
nor Mitchell implicated themselves as Bennett’s accomplices.”
Maj. Op. at 23. But Mosby’s analysis was not so limited. In
Mosby, there were two individuals who reported suspicious
behavior by Mosby to the company’s investigator. 70 S.E. at 518-
19. One directly accused Mosby of being involved in a theft
ring, and also admitted his own participation in the crime. Id.
at 518. As to him, the Mosby court stated what the district
court here referred to as the “accomplice” rule, i.e., “that
information received from one admitting his participation in a
crime is sufficient to create probable cause for prosecution, if
there is no reason to doubt its truth.” Id. at 521. But a second
individual who was not an accomplice, but simply another
employee, also gave information implicating Mosby. In referring
to the accomplice and the second individual, the Mosby court
52
referred more generally to the fact that an investigator may
rely on “sources [of] information,” where he did not know that
the sources “were not reliable.” Id. This was true even though
the accomplice was a “notorious thief and wholly unworthy of
belief” and the non-accomplice company employee had a
“treacherous memory.” Id. at 520. Thus, under Mosby, the mere
fact that Spangler and Mitchell were not admitting their
participation in a crime does not mean that McGinnis could not
credit their statements, or that their statements did not help
to establish probable cause. See also Lewis, 708 S.E.2d at 890
(“Police may rely on the statement of a reported eyewitness as
establishing probable cause to seek an arrest. See Reilly, 643
S.E.2d at 218-19 (finding that probable cause existed when the
arresting officer obtained a warrant based on a positive
identification of a suspect by an eyewitness). . . . ”). In
Lewis, in fact, the police officer relied solely on an
eyewitness who reported that Lewis attempted to kidnap a child,
and did not conduct any investigation in the case. Id. The
Supreme Court of Virginia held that evidence established
probable cause as a matter of law. Id.
Second, I disagree with the majority’s conclusion that the
focus should be on the reliability vel non of an informant,
rather than the reliability of the information provided by him.
The majority suggests that none of the statements of any of
53
these men could be reasonably relied on by McGinnis because he
already believed them to be “liars.” But even accepting, as we
must on appeal, that McGinnis thought Spangler, Mitchell, and
Lowrey were “liars” in general, or were minimizing their own
involvement in the thefts of either the laptops or the computer
towers, that is insufficient alone to negate the existence of
probable cause. The mere fact that an accomplice is lying about
some aspects of his own involvement in a crime does not render
his statement that another person was involved necessarily
untrustworthy. That is, it is entirely possible that even a
person who is generally untrustworthy in some endeavors will
give accurate and trustworthy information in another setting.
Cf. Mosby, 70 S.E. at 520-21. Indeed, if an individual had to be
absolutely trustworthy in order for his statement to be
credited, virtually no accomplice would ever qualify, since by
definition, an accomplice is a criminal.
Both of these errors by the majority distort the legal
significance of the evidence actually before the jury. That
evidence shows that there were three individuals telling
McGinnis that Bennett perpetrated a theft. While there may have
been reasons to doubt the reliability of Lowery generally, there
was nothing known to McGinnis that should have caused him to
doubt Lowrey’s particular accusations against Bennett.
Similarly, while McGinnis may have had reason to believe that
54
Mitchell and Spangler were involved in the theft of laptops,
that alone is insufficient to lead him to believe that the
information they were providing about Bennett was necessarily
false or unreliable.
Moreover, other Virginia cases bolster the conclusion that
there was probable cause here. The majority opinion
unconvincingly attempts to distinguish Reilly, Bill Edwards, and
Commissary Concepts Mgmt. Corp. v. Mziguir, 594 S.E.2d 915 (Va.
2004), on the grounds that in the case at bar “there was not a
scintilla of corroborating physical evidence or any pattern of
behavior already observed by the employer . . . .” Maj. Op. at
29. In fact, however, McGinnis had “corroborating physical
evidence”—he recovered one of the stolen computers from Lowrey.
The fact that Lowrey possessed one of the stolen computers
confirmed his statement that he was involved in the theft, and,
by extension, his version of the events, which included the
statement that Bennett was also involved.
The majority dismisses these cases as ones that “involve
far stronger evidence of the suspect’s wrongdoing” than the
instant case, Maj. Op. at 27; however, that is a
mischaracterization. In Mziguir, for example, the court
concluded that probable cause existed to believe an employee was
embezzling despite the fact that the supposedly “missing” money
had actually been placed by the employee in the restaurant safe,
55
and simply had not been discovered by management. 594 S.E.2d at
917-18. Indeed, rather than asking the employee where the money
was, the company simply asked the police to arrest him. Id. at
917. After he was arrested, he was able to explain to company
employees exactly where in the safe the money was, and the
charges were dismissed. Id. Despite the fact that a simple
question to the employee or a thorough search of the safe would
have revealed—and ultimately did reveal—the employee’s
innocence, the Supreme Court of Virginia nonetheless found that
there was probable cause as a matter of law to ask for his
arrest. Id. at 918. Thus, the Court concluded that the trial
court erred in denying the motion to set aside the jury verdict.
Id.
Similarly, the district court and majority here fail to
recognize the significant evidence McGinnis had before him,
which was sufficient to establish “probable cause.” Even if
there was additional information in existence (but unknown to
McGinnis) that could have undercut the accusations against
Bennett, that information does not undercut probable cause.
McGinnis might have been more thorough in his investigation,
just as the employer in Mziguir could have been. As with most
investigations viewed through the lens of hindsight, there was
more relevant information he could have learned, but the
majority rightly acknowledges that the failure to discover those
56
facts “could not be considered by the jury in deciding the
element of lack of probable cause.” Maj. Op. at 27. Three
different people implicated Bennett (one of whom was an
accomplice) and the accomplice then produced tangible evidence
supporting his story that he was involved in the theft. In my
view, probable cause existed as a matter of law, 1 and the
district court erred in construing Virginia law to the contrary.
B. Malice
The final element of a malicious prosecution claim that a
plaintiff must prove is that the defendant acted with “legal
malice.” This type of malice is distinct from the “actual
malice” required for the imposition of punitive damages. See
Giant of Va., Inc. v. Pigg, 152 S.E.2d 271, 276-77 (Va. 1967).
In the context of a malicious prosecution claim, legal malice is
“any controlling motive other than a good faith desire to
further the ends of justice, enforce obedience to the criminal
1
While it could not be considered as evidence of probable
cause by the jury since it occurred after Bennett’s arrest, it
is nonetheless telling that an impartial state court judge,
after hearing the testimony of Lowrey and the findings of
McGinnis’ investigation, found there was probable cause to
certify to the grand jury the criminal proceedings against
Bennett. See Mosby, 70 S.E. at 520-21 (noting that “the police
justice and two grand juries” who returned bills of indictments
against Mosby “gave credence to the evidence of both
[accomplices], as [the investigator] had done” and that the
investigator’s belief that the plaintiff was guilty was “shared
in by the police justice and two grand juries”).
57
laws, suppress crime, or see that the guilty are punished.”
Hudson v. Lanier, 497 S.E.2d 471, 473 (Va. 1998) (emphasis in
original). Thus, it requires the “intentional doing of a
wrongful act with an evil or unlawful purpose” and must be
proven separately. Freezer v. Miller, 176 S.E. 159, 168-69 (Va.
1934) (emphasis in original). Malice can be inferred from
probable cause, but only where the circumstances of the case
warrant it. See id. Indeed, the majority apparently agrees that
such an inference is possible only where the circumstances of
the case warrant it. See Maj. Op. at 31-32 (citing Pigg, 152
S.E.2d at 276; Oxenham v. Johnson, 402 S.E.2d 1, 2 (Va. 1991)).
Notably, after quoting extensively from the district
court’s ruling regarding legal malice, the majority concludes
that McGinnis’s decision to press charges against Bennett
“solely on the basis of information from informants he
considered unreliable and deceptive, along with his failure to
seek the most basic corroborating information for these
accounts, supports a jury finding as to malice.” Maj. Op. at 35.
This conclusion fails to follow Virginia law concerning legal
malice, which clearly holds that “neither lack of probable cause
nor the mere failure to act as a reasonably prudent man under
the circumstances in instituting the prosecution is the same
thing as malice.” Freezer, 176 S.E. at 168. As explained in
Freezer, the circumstances of the case will warrant an inference
58
of malice from a lack of probable cause only where there is “no
reasonable ground for the institution of a prosecution.” Id. at
169 (emphasis in original). This is so because legal malice
requires a “wrong motive or purpose [which] must be proved as a
fact and will not be imputed by the law from the mere
intentional doing of a wrongful act without legal justification
or excuse.” Id. (emphasis in original).
Virginia cases applying these principles show that more is
required than what is present in the case at bar. In Hudson, for
example, the Supreme Court of Virginia required proof of ill
motive in a malicious prosecution case. 497 S.E.2d 471. The
trial court had dismissed the action at the close of evidence on
the grounds that the plaintiff failed to prove that either
individual defendant acted with malice. The Supreme Court of
Virginia affirmed the circuit court’s conclusion that there was
insufficient proof of malice, because the plaintiff had failed
to prove that either defendant “had a controlling motive other
than to ‘further the ends of justice, enforce obedience to the
criminal laws, suppress crime, or see that the guilty are
punished.’” Id. at 473 (citing Freezer, 176 S.E. at 169
(emphasis in Freezer)). Similarly, in Freezer, the Supreme Court
of Virginia explained that “[e]ven if there was no probable
cause for the prosecution, but it is shown there was in fact no
wrongful motive, the action for malicious prosecution cannot be
59
maintained, and a verdict for the plaintiff will be set aside.”
176 S.E. at 170.
The facts of this case, similarly, do not warrant an
inference that malice was present, and there is no independent
evidence of wrongful intent or any other improper “controlling”
motive by Defendants. It is undisputed that McGinnis had never
met Bennett before the investigation, and Bennett admitted that
he never heard Finley say anything derogatory about him. See
Reilly, 643 S.E.2d at 218 (noting, as to the malice element,
that there was “no contention that [the investigator] had any
personal ill-will against [the plaintiff] or that [the
investigator] had even known or heard of him before the case was
assigned to him for investigation”). Moreover, there was no
evidence offered of any motive by McGinnis other than a motive
to see the guilty punished. See Hudson, 497 S.E.2d at 473.
The decision in Pigg, is instructive as to when the
circumstances of a case can warrant a finding of malice. There,
the Supreme Court of Virginia concluded that the lack of
probable cause before it was sufficient to support a finding of
malice for purposes of liability, but the conduct of the
defendant in that case was far more egregious than the facts of
the case at bar. 152 S.E.2d 271. In that case, a store employee
tasked with apprehending shoplifters flatly refused to consider
the plaintiff’s explanation that she had purchased items earlier
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in the day and the receipt was in her car. He refused to even go
to the car (which was in the store parking lot) and examine the
receipt. Instead, he arrested her, escorted her to a nearby
police precinct and swore out a warrant charging her with petit
larceny. Id. at 273-74. There, despite the plaintiff inviting an
inquiry into her innocence and offering a plausible explanation
for her having the items in her purse, there was no
investigation conducted.
Here, by contrast, R&L brought in an investigator, who
spent days reviewing records and interviewing numerous people,
several of whom implicated Bennett. Additionally, one of the
witnesses who implicated Bennett not only admitted his own
participation in the crime, but produced corroborating physical
evidence to back up his story (a stolen computer tower). Unlike
in Pigg, there was no flat, blanket refusal here to consider the
plaintiff’s potential innocence.
Moreover, the mere fact that Bennett proclaimed he was
innocent does not alter this result. The malicious prosecution
plaintiff in Mosby likewise emphatically denied any guilt, but
the court nonetheless concluded that there was probable cause to
have him arrested. 70 S.E. at 520 (“Taking [Mosby’s
proclamations of innocence] and considering them in connection
with information [the investigator] then had, we cannot agree
that they were so convincing of [his] innocence that a
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reasonably prudent man should have desisted in his purpose to
have him arrested.”). In short, no inference of legal malice is
warranted under the facts of the case at bar.
I would therefore conclude that Bennett failed to establish
both a lack of probable cause and malice, and that the jury’s
verdict should be overturned.
II. Damages
Because I would reverse the judgment of the district court
as to Defendants’ liability, I would not find it necessary to
address any of Defendants’ challenges to the damages awards.
Nonetheless, because the majority reaches those issues, I will
set out two aspects of the district court’s approval of the
verdict and majority’s analysis that I believe to be error.
First, the jury’s award of non-pecuniary damages in the
amount of more than $1.1 million is wholly unsupported by the
evidence and “shocks the conscience.” Accordingly, I would
vacate that portion of the compensatory damages award. 2 Second,
because Plaintiff has not satisfied the standards under Virginia
2
At trial, Defendants briefly cross-examined Bennett, and
offered no evidence of their own to contest the pecuniary
damages sought. Although the evidence supporting the jury’s
pecuniary damages award was minimal, see J.A. 589 (district
court admonishing plaintiff’s counsel for being unable to
clearly explain or identify the damages), I nonetheless conclude
that it was sufficient under the standard of review, assuming
there was liability on the part of the defendants.
62
law for an award of punitive damages, I would vacate the jury’s
award of punitive damages.
A. Non-pecuniary Compensatory Damages
The jury awarded over $1.1 million for non-pecuniary
damages to Mr. Bennett, in addition to more than $500,000 in
pecuniary losses. 3 The district court acknowledged that the non-
pecuniary award was “large.” J.A. 746. Likewise, the majority
describes the award as “the jury plainly, even generously,
express[ing] its belief that the [Defendants] visited a grievous
pecuniary and dignitary harm on Bennett . . . .,” Maj. Op. at
46, and acknowledges that the award “appears to be a windfall by
sheer virtue of its size.” Maj. Op. at 44. The majority
nonetheless concludes that the jury’s award was not so great as
to “shock the conscience [or] create the impression that the
jury has been motivated by passion, corruption, or prejudice”
and that it was no “so out of proportion to the injuries
suffered as to suggest that it is not the product of a fair and
impartial decision.” Shepard v. Capitol Foundry of Va., Inc.,
3
As noted by the majority, the jury was not asked to
provide a breakdown of its damages award by category. Maj. Op.
at 43. The district court assumed the jury had given the full
amount sought by Plaintiff for pecuniary damages and then
attributed the rest of the award to non-pecuniary damages. The
pecuniary damages included lost past and future wages, and the
amounts Bennett used from his retirement account and annuity
fund.
63
554 S.E.2d 72, 75 (Va. 2001) (quoted in Maj. Op. at 39). I
disagree and would hold the district court abused its discretion
in refusing to vacate the non-pecuniary damages award.
As a preliminary matter, while I fully recognize that
Virginia does not employ an “average verdict rule” to determine
the excessiveness of a damage award, see John Crane, Inc. v.
Jones, 650 S.E.2d 851, 858 (Va. 2007), it is noteworthy that the
award here is substantially higher than any malicious
prosecution damage award affirmed by the Supreme Court of
Virginia in the past one hundred years, if not in that Court’s
history. As Defendants note in their brief, 4 from 1911-2011, the
Supreme Court of Virginia heard and decided 42 malicious
prosecution cases involving monetary awards. Of those cases
where the award was affirmed, the highest award of compensatory
damages ever affirmed was in 2011, in the amount of $185,000.
See Br. of Appellants at 3-4 & Addendum A (citing O’Connor v.
Tice, 704 S.E.2d 572 (Va. 2011)). Even more significantly, the
total compensatory damages awards in all of those cases affirmed
during that same 100-year period equaled $249,850. The
compensatory damages awarded here was almost seven times the
combined amount of all affirmed awards in a century.
4
This summary of case information was compiled by
Defendants, but Bennett has not been challenged its accuracy.
64
Setting aside any comparison to other awards, the amount
here is plainly excessive and shocks the conscience because it
is so disproportionate “to the injuries suffered so as to
suggest that it is not the product of a fair and impartial
decision.” Shepard, 554 S.E.2d at 75. Indeed, the evidence of
humiliation, pain and suffering, and other emotional damages,
was practically non-existent in the case at bar, and certainly
insufficient to support an award of over $1 million. See
Gazette, Inc. v. Harris, 325 S.E.2d 713, 745 (Va. 1985) (holding
$100,000 compensatory damage award excessive as a matter of law
where libel plaintiff “experienced no physical manifestation of
any emotional distress[,] . . . sought no medical attention for
any condition resulting from the publication, [and there was] no
evidence that [his] standing with his peers was diminished as
the result of the libel”); cf. Schnupp v. Smith, 457 S.E.2d 42,
49-50 (Va. 1995) (allowing $200,000 non-pecuniary damages award
to stand, but detailing specific injury to reputation and
detailed information regarding the effect of the defamation on
plaintiff and his family); see also Sloane v. Equifax Info.
Servs., LLC, 510 F.3d 495, 503 (4th Cir. 2007) (summarizing and
setting forth various factors properly considered in determining
the potential excessiveness of an award for emotional distress,
including the context in which the distress arose, corroborating
testimony, the nexus between the conduct of the defendant and
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the emotional distress, mitigating circumstances, physical
injuries as a result of the distress and medical attention
resulting from it, psychiatric or psychological treatment and
loss of income) (citation omitted).
In this case, there was no evidence that Bennett suffered
any physical symptoms at all as a result of his alleged
distress. He never saw a physician, therapist or counselor, or
sought other psychiatric treatment. He never took any medicine.
He expressly admitted that he did not know of anyone with whom
his reputation had been harmed. His testimony regarding how he
felt about what had occurred or about how it had affected him,
emotionally or physically, was limited to the rather conclusory
testimony that he was “humiliated, embarrassed and felt betrayed
by [his] employer.” J.A. 562. While the district court
ultimately affirmed the jury verdict, it also acknowledged the
paucity of the evidence regarding harm to reputation. J.A. 586
(district court: “that is about as thin as evidence as you could
have . . . Why is it you try a case and put on no damages? I
don’t understand it.”).
Additionally, the entirety of the “corroborating evidence”
here came from Bennett’s two brothers, who testified with
incredible brevity that Bennett was a changed person, and that
he used to be “happy, easy going, [and] fun,” but after the
criminal proceedings, he was “not the same,” “quiet” and
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“subdued.” J.A. 559, 560. Why Plaintiff’s counsel decided not to
question them more extensively, and why Plaintiff himself did
not testify more fully as to his damages, are not for us to
determine. 5 It is sufficient that, on the record before us, there
is no evidence that would lead an impartial and fair jury to
conclude that an award of $1.1 million for non-pecuniary damages
(in addition to more than a half-million dollars in pecuniary
damages) was warranted.
Contrary to the majority’s implication, Maj. Op. at 46-47,
I do not suggest that a false arrest could never traumatize a
person or entitle them to a large award, and we can speculate
that events may well have greatly affected Bennett. But that is
all we would be doing—speculating. Likewise, that is what the
jury impermissibly must have done because the evidence is simply
not there to support its verdict. The majority’s description of
the arrest here as “just short of a psychic brutalization,” Maj.
Op. at 47, is wholly unsupported by any testimony from Bennett
or anyone else that it had that effect on him. Quite simply,
Plaintiff failed to put forth sufficient evidence of emotional
5
While it may be uncomfortable for a plaintiff to discuss
his feelings, emotional difficulties, or emotional pain in front
of a courtroom of strangers, when he seeks vast amounts of money
for mental anguish and suffering, he must offer sufficient
evidence to support any such award. The award here was not so
supported and I would not allow it to stand.
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pain or suffering so as to justify an award of more than $1
million for non-pecuniary damages.
B. Punitive Damages
I also would vacate the award of punitive damages, both
because there has been no showing of actual malice and because
it is excessive.
As the majority notes, this Court has held that a Virginia
malicious prosecution plaintiff must prove his entitlement to
punitive damages by clear and convincing evidence. Stamathis v.
Flying J., Inc., 389 F.3d 429, 440 (4th Cir. 2004). 6 The punitive
damages award here cannot stand, because the record is devoid of
any evidence of actual malice by Defendants, let alone clear and
convincing evidence. The majority misstates and misapplies
Virginia law in suggesting that mere negligence in an
investigation can establish actual malice. Maj. Op. at 42
(relying on Oxenham, 402 S.E.2d 1). Virginia law has never held
that common negligence could support the imposition of punitive
damages. Rather, the negligence or recklessness must be of such
a character as to “evince a conscious disregard of the rights of
others.” Oxenham, 402 S.E.2d at 5. Again, for reasons similar to
6
Neither party has cited to a Virginia case clearly stating
that this is the proper standard for an award of punitive
damages for malicious prosecution. Plaintiff, however, does not
challenge that this is the proper standard and so for purposes
of this opinion I will presume it applies.
68
those discussed in Sections I-A and I-B supra (addressing
elements of probable cause and legal malice), the record does
not contain evidence of actual malice, which is required to
support an award of punitive damages.
Indeed, even in cases where legal malice sufficient to
impose liability is found, the Supreme Court of Virginia has
refused to impose punitive damages absent a much stronger
showing as to actual malice than that present in the case at
bar. In Pigg, for example, the Supreme Court of Virginia upheld
the jury’s finding as to liability, but reversed the award of
punitive damages, finding no actual malice. The Court reasoned:
There is no evidence that [the defendants] acted with
actual malice, or with evil purpose, or a spirit of
mischief, in causing the arrest of Mrs. Pigg. They did
not know her, and there is no showing of personal
animosity, ill will, rudeness, or oppression, and
actual malice cannot be inferred from a showing of
want of probable cause. Here the jury inferred, as it
had a right to do, that lack of probable cause and the
circumstances, including the refusal of [the employee]
to go to her car and examine her sales slip showing a
prior purchase of the merchandise involved,
constituted legal malice. But the fact that [the
employee] was not performing his duty in a reasonable
way cannot be blown up to show that he was guilty of
actual malice. Consequently, the evidence does not
warrant the award for punitive damages.
152 S.E.2d at 277.
The same is true here. While the majority repeatedly casts
aspersion on McGinnis’ investigation (characterizing it as
“brief,” “pell-mell” and “ham-handed,” Maj. Op. at 29, 46),
69
these characterizations cannot contort the evidence in the
record to the level required for a finding of actual malice.
McGinnis spent several days conducting more than ten witness
interviews. He reviewed documentation and apparently tried to
ascertain what had occurred and to convince individuals with
knowledge to come forward or to confess. He may have reached an
incorrect conclusion. Particularly with the benefit of
hindsight, he could have performed a more thorough
investigation. But at most he was negligent; conduct which does
not meet the standard for actual malice. See Pigg, 152 S.E.2d at
277. To hold him and R&L liable for punitive damages is not
supported by the record and is contrary to Virginia law.
III. Conclusion
If we assume that Bennett was merely a victim here, the
primary perpetrators of the wrong against him were not
Defendants, but were Lowery, Spangler, and Mitchell, who falsely
implicated Bennett in a theft he claims he did not commit. Any
harm visited upon Bennett thus rests squarely upon their
shoulders, not upon the Defendants’. At the time Defendants
elected to call the police, McGinnis had three individuals
reporting to him that Bennett committed the theft. He was
permitted to rely on their statements in reporting to the police
that he believed Bennett had committed theft. At the time the
investigation was handed over to the police—with probable cause
70
to believe Bennett had committed the theft—Defendants had no
further obligation to Bennett. Under Virginia law, they should
not be held liable for malicious prosecution and be subject to
an excessive award of compensatory damages and punitive damages
solely for what was, at worst, an incomplete investigation.
Based on this record, I am firmly of the view the Supreme
Court of Virginia would find the applicable standards for proof
of malicious prosecution, and certainly damages, were not met in
this case. I respectfully dissent.
71