McGinn v. Cannon

2013 UT App 246_________________________________________________________
THE UTAH COURT OF APPEALS
GREGORY F. MCGINN,
Plaintiff and Appellant,
v.
BRYAN W. CANNON, PC; BRYAN W. CANNON; AND
STEPHEN W. WHITING,
Defendants and Appellees.
Opinion
No. 20120739‐CA
Filed October 18, 2013
Third District, Salt Lake Department
The Honorable L.A. Dever
No. 110903116
Edward T. Wells and Brady L. Curtis, Attorneys
for Appellant
Kumen L. Taylor and Todd W. Prall, Attorneys for
Appellees
JUDGE GREGORY K. ORME authored this Opinion, in which
JUDGES JAMES Z. DAVIS and MICHELE M. CHRISTIANSEN
concurred.
ORME, Judge:
¶1 Plaintiff Gregory McGinn appeals from the district court’s
decision granting summary judgment in favor of defendants—a
law firm and two of its attorneys—on his claim of wrongful use of
civil proceedings and his request for punitive damages. We affirm.
McGinn v. Cannon
BACKGROUND
¶2 Defendants Bryan W. Cannon, PC and two of its attorneys,
Bryan W. Cannon and Stephen W. Whiting (collectively, the
Cannons) were hired by American Express Company to collect on
a debt incurred by one of its business credit card customers. The
card on which the customer had defaulted was issued to “Michael
Page/Chiropractic First.” The customer was living in California
when he applied for the card and registered “Chiropractic First” as
his assumed business name, but he moved to Utah prior to
defaulting on his credit card obligations. In their attempts to sue for
payment on behalf of American Express, the Cannons searched for
“Chiropractic First” in Utah. They were unaware that “Chiropractic
First,” as listed on the account, was actually a California business.
They located a business by the same name in Utah, however,
registered to McGinn, a chiropractor. They assumed they had
located the responsible party because it was the only business with
that name in Utah, and they consequently served McGinn with a
complaint. McGinn contacted the Cannons shortly thereafter,
denying any involvement with the credit card. The Cannons
nevertheless filed the complaint against McGinn in the district
court. McGinn responded by sending them a proposed motion for
sanctions under rule 11 of the Utah Rules of Civil Procedure. One
of the Cannons instructed a secretary to dismiss McGinn from the
suit without prejudice, but he never followed up to make sure the
dismissal actually happened. The Cannons were instructed by
American Express to close the file, and the Cannons took no further
action against McGinn.
¶3 Concerned that no dismissal had occurred and that the
complaint against him remained of record, McGinn insisted that
the Cannons dismiss the suit against him with prejudice and pay
his attorney fees. The Cannons refused to do so because they were
worried they did not have permission from American Express to
dismiss with prejudice and therefore would only offer McGinn
dismissal without prejudice. McGinn filed a motion for summary
judgment and the previously threatened rule 11 motion for
20120739‐CA 2 2013 UT App 246McGinn v. Cannon
sanctions. Around this time, the customer responsible for the
account in default contacted the Cannons and explained that
McGinn was in no way affiliated with the debt. Based on this
information, the Cannons filed what they styled a motion of non‐
opposition to summary judgment. The district court granted
summary judgment to McGinn and ordered the Cannons to pay
McGinn’s attorney fees incurred in bringing the rule 11 motion. No
attorney fees were awarded to McGinn, however, to compensate
him for his efforts in bringing his summary judgment motion.
¶4 Several months later, McGinn filed this suit against
American Express and the Cannons for wrongful use of civil
proceedings.1 McGinn also sought an award of punitive damages.
The Cannons filed a motion for summary judgment. McGinn
opposed the motion. The court granted the Cannons’ motion for
summary judgment, dismissing McGinn’s complaint. McGinn filed
a motion for a new trial, but it was denied. McGinn now appeals
the summary judgment in favor of the Cannons.
STANDARD OF REVIEW
¶5 “Summary judgment is appropriate only if ‘there is no
genuine issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law.’” Cabaness v. Thomas, 2010
UT 23, ¶ 18, 232 P.3d 486 (omission in original) (quoting Utah R.
Civ. P. 56(c)). “An appellate court reviews a trial court’s legal
conclusions and ultimate grant or denial of summary judgment for
correctness,” and “views the facts and all reasonable inferences
drawn therefrom in the light most favorable to the nonmoving
party.” Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citations and
internal quotation marks omitted).
1. American Express and McGinn have settled, and American
Express has been dismissed as a party to this action.
20120739‐CA 3 2013 UT App 246McGinn v. Cannon
ANALYSIS
I. Wrongful Use of Civil Proceedings
¶6 McGinn argues that the district court erred when it granted
summary judgment in favor of the Cannons as to his claim of
wrongful use of civil proceedings. In order to prevail on a wrongful
use of civil proceedings claim, McGinn must show that the
Cannons pursued their claim against him “‘without probable
cause, and primarily for a purpose other than that of securing the
proper adjudication of the claim in which the proceedings are
based.’” Gilbert v. Ince, 1999 UT 65, ¶ 19, 981 P.2d 841 (quoting
Restatement (Second) of Torts § 674 (1977)). In such cases, a
plaintiff must show that the claim was brought “for the purpose of
harassment or annoyance; and it is usually said to require malice.”
Baird v. Intermountain Sch. Fed. Credit Union, 555 P.2d 877, 878 (Utah
1976).
¶7 McGinn argues that there are genuine issues of material fact
regarding both the Cannons’ purpose in bringing the claim and
whether there was probable cause for the claim. McGinn points to
evidence that the Cannons failed to verify his connection with the
defaulted account prior to filing suit and argues that “[a] jury could
easily believe from [the Cannons’] testimony that the failure to take
time and make a reasonable effort to determine that only persons
connected to a debt by objective evidence are named as defendants
in collection suits is a law firm policy designed to enhance profits.”
¶8 While we are required to view the facts in the light most
favorable to McGinn, we are “not required to draw every possible
inference of fact, no matter how remote or improbable, in favor of
the nonmoving party. Instead, [we are] required to draw all
reasonable inferences in favor of the nonmoving party.” See IHC
Health Servs., Inc. v. D & K Mgmt., Inc., 2008 UT 73, ¶ 19, 196 P.3d
588 (emphasis in original).
20120739‐CA 4 2013 UT App 246McGinn v. Cannon
¶9 The Cannons presented evidence that they believed McGinn
was involved with the defaulted account because of the shared
business name and that their failure to dismiss the case was a result
of poor communication with one of their legal secretaries and
uncertainty regarding their ability to dismiss with prejudice
without permission from their client. McGinn presented neither
affirmative evidence of an intention on the Cannons’ part to harass
or annoy through the continuance of their suit nor evidence of
malice. The only facts that McGinn relies on to support his
argument are the existence of the claim and the Cannons’ failure to
verify a connection, beyond the shared business name, between
McGinn and the delinquent account. An inference that the
Cannons’ primary purpose was to harass and annoy is
unreasonable in light of the undisputed evidence advanced by the
Cannons and the absence of any affirmative evidence supporting
McGinn’s theory. McGinn’s assertions, therefore, go beyond
inference and are more a matter of conjecture and speculation. We
conclude that there are no facts in dispute that would impact the
“rights or liabilities of the parties” and that summary judgment
was therefore appropriate.2 See Alliant Techsystems, Inc. v. Salt Lake
Cnty. Bd. of Equalization, 2012 UT 4, ¶ 31, 270 P.3d 441 (citation and
internal quotation marks omitted).
II. Punitive Damages
¶10 McGinn next argues that the district court erred when it
granted summary judgment denying McGinn’s claim for punitive
2. Both improper purpose and a lack of probable cause are required
to support a claim of wrongful use of civil proceedings. See Gilbert
v. Ince, 1999 UT 65, ¶ 19, 981 P.2d 841. Because we conclude that
summary judgment was proper based on McGinn’s failure to set
forth evidence tending to establish the improper purpose
requirement—in the face of the Cannons’ evidence showing they
had no improper purpose—we need not reach the parties’
arguments related to probable cause.
20120739‐CA 5 2013 UT App 246McGinn v. Cannon
damages. Punitive damages may be awarded only if “it is
established by clear and convincing evidence that the acts or
omissions of the tortfeasor are the result of willful and malicious or
intentionally fraudulent conduct, or conduct that manifests a
knowing and reckless indifference toward, and a disregard of, the
rights of others.” Utah Code Ann. § 78B‐8‐201(1)(a) (LexisNexis
2012). “‘Punitive damages are not awarded for mere inadvertence,
mistake, errors of judgment and the like, which constitute ordinary
negligence.’” Behrens v. Raleigh Hills Hosp., Inc., 675 P.2d 1179, 1186
(Utah 1983) (quoting Restatement (Second) of Torts § 908 cmt. b
(1979)).
¶11 We conclude that there are no facts of record that would
support a finding that the Cannons’ suit against McGinn went
beyond an inadvertent mistake or error of judgment and was
instead conduct of a malicious or knowing and reckless nature.
Meanwhile, the Cannons have pointed to undisputed facts that
show they based their mistaken belief of McGinn’s connection to
the debt on the shared business name—a name that matched up
perfectly with McGinn’s chosen profession—and that it was the
only business by that name in Utah. They also provided evidence
that their reasons for failing to dismiss the case with prejudice
included mistake, miscommunication, and their inability to talk
with their client for permission to take such action despite multiple
phone calls to American Express that went unreturned.3 While such
evidence may have supported a jury verdict of negligence, that is
not the legal standard required for punitive damages. We conclude
that it was proper for the district court to determine that the facts
before it could not reasonably support a genuine issue as to malice,
fraud, or knowing recklessness. We agree with the district court’s
assessment that “[McGinn’s] labeling [the Cannons’] actions . . . as
substantial harm, an extreme departure from ordinary care, or
reckless disregard does not make it so.”
3. As previously noted, American Express has settled with McGinn.
20120739‐CA 6 2013 UT App 246McGinn v. Cannon
CONCLUSION
¶12 We conclude that it was proper for the district court to grant
summary judgment to the Cannons, dismissing McGinn’s claim of
wrongful use of civil proceedings. We also conclude that the
district court did not err when it determined that punitive damages
were not, in any event, appropriate in this case.
¶13 Affirmed.
20120739‐CA 7 2013 UT App 246