Chapter 24 MALICIOUS PROSECUTION

• Jurisdiction: North Carolina

24 MALICIOUS PROSECUTION

A. Definition

The essence of an action for malicious prosecution is wrongful institution or prosecution of an action or proceeding without probable cause, to the damage of the complainant.¹
The common law action for malicious prosecution was originated as a remedy for unjustifiable criminal prosecutions. However, in North Carolina and many other states, the right of action has been extended to include the malicious institution of civil proceedings that involve an arrest of the person or seizure of property or which result in some special damage.²

While North Carolina law extends the protection afforded by the action to wrongful institution of civil proceedings,³ the courts have limited the action when it is based on administrative proceedings to instances where there is a type of confinement or interference with the right to earn a livelihood.⁴ Prior actions for injunctive relief,⁵ replevin⁶ and involuntary bankruptcy may all be the basis of actions for malicious prosecution.⁷

Malicious prosecution and abuse of process are often confused.⁸ The two are closely related,⁹ and frequently plaintiffs raise both claims in a single action. Indeed, the North Carolina Supreme Court has said the legal theories underlying malicious prosecution and abuse of process parallel one another to a substantial degree and often the facts of a particular case would support a claim under either theory.¹⁰ However, abuse of process concerns improper use of the process after it has been issued and is distinguished from malicious prosecution in that the latter is based on malice in causing the process to issue.¹¹ In an early case, the North Carolina Supreme Court said that "malicious abuse of process" will support an action even if the process was lawfully issued, but in the execution has been illegally used. "If this is not so," said the court, "the law has given two remedies for the same wrong, when one was all-sufficient."¹²

B. Elements

Whether the underlying action is civil or criminal, to recover for malicious prosecution, the plaintiff must show that:

(1) The defendant initiated the earlier proceeding,¹³
(2) There was malice by the defendant in doing so,¹⁴
(3) There was a lack of probable cause for initiation of the earlier proceeding, and
(4) Termination of the previous proceeding was in favor of the plaintiff.¹⁵

Additionally, if the previous proceeding was a civil action, the plaintiff must prove "special damages."¹⁶

C. Elements Defined

1. Defendant Initiated the Previous Proceeding

Before a defendant may be held liable in an action for malicious prosecution, it must appear that he or she prosecuted, instituted or instigated the proceeding of which the plaintiff complains, and this fact, unless admitted, must be established.¹⁷ Courts have said the element is met if the defendant instituted, "procured,"¹⁸ "caused to be instituted," or "participated in"¹⁹ the prior action.²⁰

Decisions by the Court of Appeals have applied the "but for" test. Under that analysis, where it is unlikely there would have been a criminal prosecution of the plaintiff except for the efforts of the defendant, a genuine issue of fact exists and a jury should consider the facts comprising the first element of malicious prosecution.²¹ However, the North Carolina Supreme Court has now held that the "but for" test is no longer appropriate.²² Instead, the court has decided the Restatement of Torts has the better approach.²³ "Unlike the 'but for' test," said the court, "the Restatement recognizes that police and prosecutors have discretionary authority that can insulate from liability those who provide erroneous or mistaken information."²⁴The Restatement balances and protects important public interests, allowing citizens to make reports in good faith to police and prosecutors without fear of retaliation if the information proves to be incomplete or inaccurate and, if the information is false, it only protects a reporting party who believes it to be true. It encourages independent investigation by those in law enforcement who receive information. Under a Restatement comment specifically cited by the court, when a private person gives a public official information about supposed criminal misconduct about which that official is ignorant, giving that information — or even making an accusation of criminal misconduct — is not procurement of the proceedings initiated by the officer if it is left entirely to the officer's discretion to initiate the proceedings or not, even though supplying the information causes institution of those subsequent proceedings. The informer is not liable when he or she gives to a prosecuting officer information he or she believes to be true when the officer then in exercise of his or her uncontrolled discretion initiates criminal proceedings based on that information, even though the information proves to be false and the informant's belief was one a reasonable person would not entertain, since exercise by the officer of discretion makes initiation of the prosecution his or her own.²⁵

A defendant may be liable under the doctrine of respondeat superior for the acts of an agent in initiating legal action,²⁶ but where the action was taken by a person not authorized to act on behalf of the plaintiff in the matter, the defendant is not liable.²⁷ The motives or purpose of the defendant in instituting the proceedings is not material to resolution of the first element.²⁸

In Chidnese v. Chidnese,²⁹ the court addressed the question of whether an attorney can be held liable for a criminal proceeding initiated by his or her client. The court concluded an attorney may, in certain circumstances, be held liable for a malicious criminal prosecution initiated by a client, assuming all elements of the action are met. Citing and following two Restatement provisions,³⁰ the court concluded that when an attorney alone suggests initiating criminal proceedings, without any impetus from his or her client, that attorney may be held to have procured the malicious prosecution. Specifically, the court held that "an attorney should be considered to have procured a malicious criminal prosecution initiated by a client only when the attorney advises the client, without any instigation from the client regarding a criminal prosecution, to initiate criminal proceedings."³¹ The court, not surprisingly, was concerned that attorneys not be punished for zealously and lawfully advocating for a client who has improper motives that are unknown to the lawyer. Thus, it explicitly adopted language of the Restatement (Third) of the Law Governing Lawyers that says that for an attorney to be liable for malicious prosecution, the attorney has to have acted without good cause and primarily for a purpose other than bringing an offender to justice or helping a client assert his or her rights.³² Additionally, the plaintiff must prove all elements of the action separately from the liability of the client. Finally, to afford lawyers a further layer of protection, the court specifically adopted a Restatement exception to liability when a lawyer procures institution of criminal proceedings by a client and either has probable cause for acting or acts primarily to assist his or her client to obtain a proper adjudication in that proceeding of the client's claim.

This element is the least discussed, but a number of courts have tersely noted that a plaintiff successfully met the element.³³ In one case,³⁴ a court concluded that a defendant could not be held liable for malicious prosecution because she did not initiate the action on her own accord, but went to a magistrate's office because she was instructed to do so by her employer. In another case,³⁵ the plaintiff failed to meet the first element where a police officer and his supervisor decided to arrest the plaintiff based on the information received from the defendant corporation, but the defendant's agents neither directed that the arrest be made, pressed charges themselves, nor appeared at the magistrate's office at any time.³⁶

North Carolina requires that the proceeding the defendant initiated be based on "valid process" before an action for malicious prosecution may be brought.³⁷ A commentary observes that when the process is void or fails to state a criminal offense, the proceedings are a nullity, but "mere irregularity" does not make it invalid.³⁸ The North Carolina Supreme Court addressed the matter in International Brotherhood of Electrical Workers v. Country Club East, Inc.,³⁹ and reiterated that when a prior criminal prosecution is the subject of an action for malicious prosecution, the action cannot be maintained unless that prior criminal prosecution was based on valid process. The court added that it is different in actions for false arrest or false imprisonment and that whether an action is maintainable as one for malicious prosecution or as for false arrest or imprisonment often turns on whether the arrest or imprisonment is under valid process. The court also addressed an issue apparently of first impression: whether an action for malicious prosecution may be maintained when a prior civil action or proceeding is the subject and the process is invalid. A party "who procures a temporary injunction from a court of general jurisdiction," held the court, "will not be permitted to defeat an action for malicious prosecution based on the procurement thereof solely on the ground that the court which issued the restraining order did not have jurisdiction of the subject matter."⁴⁰

2. Malice

The burden to show malice is on the plaintiff.⁴¹ "The malice necessary to support a claim for malicious prosecution is not express or particular malice such as ill will, grudge or a desire for revenge, but is rather general malice which consists of a wrongful act done intentionally, and without excuse or just cause."⁴² Thus, prosecuting another for "real guilt," no matter how malicious the motives may be, will not render a person...