Robert Stratton v. Judy Stratton Ussing

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2014-CA-00352-COA
ROBERT STRATTON APPELLANT
v.
JUDY STRATTON USSING APPELLEE
DATE OF JUDGMENT: 02/28/2014
TRIAL JUDGE: HON. FORREST A. JOHNSON JR.
COURT FROM WHICH APPEALED: AMITE COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT: WILLIAM D. BOERNER
ATTORNEY FOR APPELLEE: CAREY R. VARNADO
NATURE OF THE CASE: CIVIL - TORTS - OTHER THAN PERSONAL
INJURY AND PROPERTY DAMAGE
TRIAL COURT DISPOSITION: GRANTED SUMMARY JUDGMENT IN
FAVOR OF APPELLEE
DISPOSITION: AFFIRMED - 10/13/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE GRIFFIS, P.J., ISHEE AND MAXWELL, JJ.
MAXWELL, J., FOR THE COURT:
¶1. Under Mississippi Rule of Evidence 408, evidence of an offer to settle a disputed
claim is inadmissible when the purpose of the evidence is to prove the validity or invalidity
of the claim or its amount. But the rule is clear that settlement evidence is admissible “when
it is offered for another purpose.” M.R.E. 408. Here, Judy Stratton Ussing offered evidence
that her brother, Robert Stratton, paid her $10,000 for her to release him from “any and all
claims” she had against him—including a pending criminal charge. The purpose of this
settlement evidence was not to prove the validity or amount of any claim Judy had against
Robert. Rather, it was to defend herself from the malicious-prosecution lawsuit Robert filed
against her. Because Judy offered the release for “another purpose,” the circuit court did not
abuse its discretion by admitting it.
¶2. But one of the elements Robert must prove to establish malicious prosecution is that
the proceedings were terminated in his favor. And on de novo review, we find Robert cannot
do so. Though the embezzlement charge against Robert was dismissed, the dismissal was
not on the merits. It was instead negotiated by a voluntary monetary settlement between Judy
and Robert—an obvious compromise described in the release. We find the nature of this
dismissal is fatal to Robert’s malicious-prosecution claim, since “dismissal reached as a
result of a voluntary settlement or compromise does not constitute a termination in favor of
the accused.”1 Because Robert cannot raise a genuine fact issue on this required element of
his malicious-prosecution claim, summary judgment was proper.
¶3. We thus affirm.
Background Facts and Procedural History
¶4. Years before Robert sued his sister Judy in circuit court for malicious prosecution, she
sued him in chancery court for breach of fiduciary duty. The chancery action was based on
Robert’s alleged mishandling of proceeds from timber cut on property in Amite County in
which Judy owned an interest.
¶5. On July 13, 2009, while the chancery action was still pending, Judy filed a criminal
1
Van v. Grand Casino of Miss., Inc., 724 So. 2d 889, 892 (¶11) (Miss. 1998).
2
affidavit in municipal court. This affidavit accused Robert of criminal embezzlement of the
timber proceeds. See Miss. Code Ann. § 97-23-19 (Rev. 2014). A week after pleading not
guilty to the embezzlement charge, Robert entered into a “mutual and full and final release”
with Judy. Contrary to its title, the release was primarily one sided. Robert agreed to pay
Judy $10,000 for her promise to “release and discharge [Robert] from any and all claims,
demands, actions, causes of action[], suits and damages of every kind and nature whatsoever,
for the cutting of timber and receipt of timber proceeds[.]” (The only exception was Judy’s
chancery action—an action the release expressly permitted to continue.) But “[b]oth parties”
did mutually “agree not to pursue any of the pending criminal charges filed by either against
the other in the State of Mississippi.”
¶6. The release was executed on August 25, 2009. More than three years later, in
December 2012, the embezzlement charge against Robert was finally dismissed.
¶7. Six months later, in May 2013, Robert sued Judy in circuit court. He alleged Judy’s
filing of the criminal affidavit made her liable for malicious prosecution.2 Soon after filing
2
In his complaint, Robert also asserted intentional-tort claims (libel, defamation,
slander, and intentional infliction of emotional distress) and a general negligence claim. But
as Judy successfully argued to the circuit court, only the malicious-prosecution was timely.
This is because a malicious-prosecution claim does not accrue until the criminal proceedings
are dismissed. E.g., City of Mound Bayou v. Johnson, 562 So. 2d 1212, 1217 (Miss. 1990).
Here, despite Robert and Judy’s settlement in August 2009, the pending embezzlement
charge was not dismissed until December 2012. So his May 2013 complaint fell within the
one-year statute of limitations. See id. But Robert’s other claims accrued when Judy filed
the criminal affidavit in July 2009. So whether these claims fell under a one-year statute of
limitations for intentional torts or the general three-year statute of limitations, their
limitations periods had run by May 2013. Moreover, Robert conceded Judy intentionally
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her answer, before any discovery had been completed, Judy moved for summary judgment.
She argued the release proved there was no genuine issue of material fact and that she was
entitled to a judgment in her favor as a matter of law.
¶8. For Robert to recover for malicious prosecution, he had to show “(1) the institution
of a criminal proceeding; (2) by, or at the instance of, the defendant; (3) termination of such
proceedings in [the] plaintiff’s favor; (4) malice in instituting the proceeding; (5) want of
probable cause for the proceeding; and (6) the plaintiff’s suffering of injury or damage as a
result of the prosecution.” Strong v. Nicholson, 580 So. 2d 1288, 1293 (Miss. 1991)
(citations omitted). Specifically, Judy argued Robert could not prove want of probable
because of the release, which she claimed was conclusive evidence that probable cause
existed to file the criminal affidavit. Why else, she suggested, would Robert pay her $10,000
other than to stop her from pursuing the embezzlement charge?
¶9. Robert responded by arguing summary judgment was premature, given neither side
had yet to respond to discovery. But he consented to go forward with the summary-judgment
hearing on the sole issue of whether the release entitled Judy to summary judgment. Robert
argued the release was not even admissible, but instead was precluded by Mississippi Rule
of Evidence 408. He claimed the release was evidence of him furnishing valuable
consideration to settle the embezzlement charge. So as he saw it, Judy could not rely on the
release to support her summary-judgment motion. See M.R.E. 408.
filed the affidavit against him, so he abandoned his negligence-based tort theories.
4
¶10. The trial judge disagreed. Not only did the judge find the release was admissible
under Rule 408, but also the judge found the release entitled Judy to summary judgment. He
granted Judy’s motion and entered a judgment in her favor. Robert appealed.
Discussion
¶11. On appeal, Robert argues there were genuine material fact issues precluding summary
judgment and urges the release was inadmissible.
I. Admission of Release
¶12. We begin with Robert’s challenge to the release. Under Rule 408, evidence of
furnishing “a valuable consideration in compromising or attempting to compromise a claim
which was disputed as to either validity or amount, is not admissible to prove liability for or
invalidity of the claim or its amount.” M.R.E. 408. According to Robert, Rule 408 keeps
Judy from offering the $10,000 settlement as proof the embezzlement charge was valid.
¶13. But Rule 408 is not a blanket ban on settlement offers. Instead, the rule “only
excludes offers when the purpose is proving the validity or invalidity of the claim or
amount.” M.R.E. 408 cmt. “This rule . . . does not require exclusion when the evidence is
offered for another purpose[.]” M.R.E. 408 (emphasis added). And we find Judy offered
the release for “another purpose.”
¶14. The release represents Robert’s offer to pay Judy $10,000 to release him from “any
and all claims” Judy had against him—including the pending criminal charge. Judy did not
offer the release to prove Robert was liable and/or guilty of any of the released claims. She
5
merely offered it in Robert’s separately filed civil lawsuit to defend against Robert’s
malicious-prosecution claim. See Wilbourn v. Wilbourn, 106 So. 3d 360, 373 (¶44) (Miss.
Ct. App. 2011) (citation omitted) (holding Rule 408 did not bar admitting a letter, which
allegedly contained a settlement offer, because the settlement offer was for a claim other than
the one being litigated). So the scenario Rule 408 is meant to prohibit is not in play here.
¶15. Neither does this case square with the stated policy behind the rule. Rule 408 was
specifically designed to promote compromises in civil litigation. M.R.E. 408 cmt. (noting
“public policy favors the out-of-court compromises and settlement of disputes”). And here,
the purpose of the release was not to “amicably resolv[e]” a civil lawsuit between the
siblings. Parmley v. 84 Lumber Co., 911 So. 2d 569, 573 (¶22) (Miss. Ct. App. 2005).
Rather, as Judy sees it, the release was to stop her from pursuing criminal charges against
her brother. So deeming the release inadmissible under Rule 408 would not promote the
public policy behind the rule. See M.R.E. 408 cmt.
¶16. Policy issues aside, the rule is clear that evidence of a settlement is admissible if
offered for “another purpose.” M.R.E. 408. Judy offered the release to prove she was not
liable for malicious prosecution—not that Robert was guilty of embezzlement. We thus find
no abuse of discretion in the circuit judge’s decision to admit the release. See Armistead v.
State, 805 So. 2d 592, 596 (¶14) (Miss. Ct. App. 2001) (acknowledging decisions about the
admission of evidence fall within the trial court’s discretion).
II. Summary Judgment
6
¶17. While we review evidentiary decisions for abuse of discretion, we review grants of
summary judgment de novo. Smith v. Waggoners Trucking Corp., 69 So. 3d 773, 776 (¶14)
(Miss. Ct. App. 2011) (citation omitted). Mississippi Civil Procedure Rule 56 directs a trial
court to render judgment “forthwith if the pleadings, depositions, answers to interrogatories
and admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.” M.R.C.P. 56(c). “Rule 56 requires that we view the evidence in the light most
favorable to the party against whom the motion has been made.” Smith, 69 So. 3d at 776-77
(¶14) (citing Harrison v. Chandler-Sampson Ins., 891 So. 2d 224, 228 (¶11) (Miss. 2005)).
“If any triable issues of [material] fact exist, we must reverse.” Id. at 777 (¶14). But “when
the nonmoving party ‘fails to make a showing sufficient to establish the existence of an
element essential to his case and on which he bears the burden of proof at trial,’” we must
affirm summary judgment. Kitchens v. Dirtworks, Inc., 50 So. 3d 388, 389 (¶4) (Miss. Ct.
App. 2010) (quoting Borne v. Dunlop Tire Corp., 12 So. 3d 565, 570 (¶16) (Miss. Ct. App.
2009)).
¶18. Here, the record does not contain a full array of “depositions, answers to
interrogatories and admissions on file, together with the affidavits.” Instead, Judy filed her
summary-judgment motion before any discovery was complete, based on her argument that
the release was enough to entitle her to a judgment as a matter of law.
A. Want of Probable Cause to Initiate Criminal Proceeding
7
¶19. One of the elements Robert must prove in his malicious-prosecution claim is “want
of probable cause” to initiate the criminal embezzlement proceeding. Strong, 580 So. 2d at
1293. According to Judy, the release is proof positive she had probable cause. But under
Rule 56, we must view the release in the light most favorable to Robert, the nonmovant. And
doing so, we do not find the release conclusively resolves the probable-cause issue.
¶20. “Probable cause is determined from the facts apparent to the observer when
prosecution is initiated.” Miles v. Paul Moak of Ridgland, Inc., 113 So. 3d 580, 585 (¶11)
(Miss. Ct. App. 2012) (emphasis added) (quoting Van v. Grand Casinos of Miss., Inc., 767
So. 2d 1014, 1019-20 (¶14) (Miss. 2000)). Here, Judy initiated the criminal prosecution
against her brother on July 13, 2009—forty days before the release was entered. The release
says nothing about the observable facts as of July 13, 2009, let alone conclusively establishes
that on that date there existed both a subjective, honest belief by Judy that her brother was
guilty of embezzlement as well as an objectively reasonable basis for that belief. See id. (“To
establish ‘probable cause requires the concurrence of (1) a subjective element—an honest
belief in the guilt of the person accused, and (2) an objective element—reasonable grounds
for such beliefs.’” (quoting Strong, 580 So. 2d at 1294)).
¶21. That Robert was willing to offer $10,000 for Judy to stop pursuing the embezzlement
charge may, as Judy asserts, corroborate her honest, reasonable belief Robert embezzled the
timber funds. Or it may prove the opposite—that she lacked an honest, reasonable belief,
which is why she was so willing to accept money to back off the criminal charge. Or
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Robert’s $10,000 offer may, as Robert argued at the summary-judgment hearing, have been
much more about the ongoing civil feud between the siblings. The point being, at the
summary-judgment stage, it is not this court’s role to determine the real explanation. We
must merely decide if this issue is triable. See M.R.C.P. 56 cmt. And viewing the release
in the light most favorable to Robert, the nonmoving party, we cannot say the release
removed all dispute over whether Judy, forty days prior to executing the release, had
probable cause to file the criminal affidavit against her brother.
B. Proceedings Must Terminate in Plaintiff’s Favor
¶22. But while the release does not factually resolve the probable-cause element, it does
“show that there is no genuine issue as to [another] material fact.” M.R.C.P. 56(c). Another
necessary element Robert must prove is that the criminal proceedings terminated in his favor.
See Strong, 580 So. 2d at 1293.
¶23. At first blush it appears this element is met, as the embezzlement affidavit against
Robert was in fact dismissed. However, not all dismissals are deemed favorable terminations
for purposes of malicious-prosecution actions. Stewart v. Se. Foods, Inc., 688 So. 2d 733,
737 n.2 (Miss. 1996). To be coined “favorable termination” in this context, “the dismissal
of criminal proceedings must reflect on the merits of the criminal action.” Bearden v.
BellSouth Telecomms., Inc., 29 So. 3d 761, 764 (¶10) (Miss. 2010) (citing Van v. Grand
Casinos of Miss., Inc., 724 So. 2d 889, 893 (¶15) (Miss. 1998)). Generally, a criminal
proceeding terminates in the accused’s favor “only when [the] final disposition is such as to
9
indicate [his] innocence.” Id. at 764 (¶11) (quoting Restatement (Second) of Torts § 660
cmt. a (1977)). And most important to this particular case is that, under Mississippi law,
“dismissal reached as a result of a voluntary settlement or compromise does not constitute
a termination in favor of the accused.” Van, 724 So. 2d at 892 (¶11) (citing Jones v. Donald
Co., 137 Miss. 602, 602, 102 So. 540, 540 (1925)); see also Stewart, 688 So. 2d at 737 n.2.
¶24. So no matter how a jury might decide the probable-cause issue, Robert’s claim is
snagged on the favorable-termination element. That is because the release he negotiated with
Judy unquestionably resulted from a voluntary monetary settlement for dismissal of the
embezzlement affidavit against Robert.3 This much is undisputed.
¶25. Because of the compromise-based dismissal, Robert cannot show the criminal
proceedings terminated in his favor. Thus, he is unable to create a triable fact issue on this
required element of malicious prosecution. See Kitchens, 50 So. 3d at 389 (¶4). For this
reason, we affirm the circuit judge’s order granting summary judgment to Judy.
¶26. THE JUDGMENT OF THE AMITE COUNTY CIRCUIT COURT IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLANT.
LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, ISHEE, FAIR, JAMES
AND WILSON, JJ., CONCUR. CARLTON, J., CONCURS IN RESULT ONLY
WITHOUT SEPARATE WRITTEN OPINION.
3
The release states, “Both parties agree not to pursue any of the pending criminal
charges filed by either against the other in the State of Mississippi.”
10