Indictment Establishes Probable Cause

Suit for Malicious Prosecution Requires Favorable Termination of Prosecution

Posted on May 28, 2024 by Barry Zalma

Post 4809

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Mrs. Marty Spann alleged that Defendants Asurion Insurance Services, Inc. (“Asurion”); former District Attorney General Bruce Griffey; and Tennessee Wildlife Resource Agency (“TWRA”) employees Ed Carter, Mitchell Bailey, Dale Grandstaff, Brad Jackson, and Shawn Karns (collectively with Griffey, the “State Defendants”) maliciously prosecuted her for evidence tampering and insurance fraud. The court was faced with two Motions to Dismiss filed by the State Defendants and Asurion.

In Marty Spann v. Ed Carter, et al., No. 3:23-cv-01028, United States District Court, M.D. Tennessee, Nashville Division (May 17, 2024) the USDC resolved the issue of malicious prosecution against an insurer and the state.

FACTUAL ALLEGATIONS

Although the operative Amended Complaint reads like a potential blockbuster movie the Court only needed to recite a few allegations to resolve the pending motions. That is, on February 21, 2014, Mrs. Spann was arrested and charged with tampering with her husband’s cellphone-which she allegedly knew was potential evidence in a TWRA investigation-and filing a false insurance claim with Asurion reporting that the cellphone was missing. On September 13, 2022, more than eight years after the arrest, the State of Tennessee dismissed the charges against Mrs. Spann under Tennessee Rule of Criminal Procedure 48(a).

Mrs. Spann then brought this lawsuit against the State Defendants and Asurion for malicious prosecution, alleging that each Defendant played a role in “bringing the baseless action [against her] to begin with” and “continuing to prosecute the action without probable cause.” Asurion and the State Defendants moved to dismiss the Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

ANALYSIS

Malicious Prosecution Under Tennessee Law

To establish a malicious prosecution claim under Tennessee law, a plaintiff must show that:

1. A prior suit or judicial proceeding was instituted without probable cause,
2. Defendant brought such prior action with malice, and
3. The prior action was finally terminated in plaintiff’s favor.

The State Defendants and Asurion argued that Mrs. Spann’s state malicious prosecution claim failed under the third element because the criminal proceeding at issue did not terminate in her favor. They based the argument on the fact that the Tennessee Supreme Court recently clarified that, for purposes of malicious prosecution, an action is terminated in a plaintiff’s favor only if the termination of the underlying criminal proceeding reflects on the merits of the case and was due to the innocence of the accused. There is no language in the Order or Rule 48(a) that reflects on the merits of the case or indicates that the case was terminated due to Mrs. Spann’s innocence.

Accordingly, the Court dismissed Mrs. Spann’s state malicious prosecution claim because she did not allege facts sufficient to show that the dismissal of her criminal charges constituted a favorable termination.

Malicious Prosecution Under Federal Law

The federal claim, 42 U.S.C. § 1983, provides that an individual may bring a private cause of action against anyone who, acting under color of state law, deprives a person of rights, privileges, or immunities secured by the Constitution or conferred by federal statute. To successfully bring a § 1983 malicious prosecution claim under the Fourth Amendment, a plaintiff must plausibly allege four elements:

1. the defendant made, influenced, or participated in the decision to prosecute the plaintiff;
2. there was no probable cause for the prosecution;
3. as a consequence of the legal proceedings, the plaintiff suffered a deprivation of liberty apart from the initial arrest; and
4. the criminal proceeding was resolved in the plaintiff’s favor.

Because the September 13, 2022 Order of Dismissal establishes that Mrs. Spann’s criminal prosecution ended without a conviction, she has plausibly alleged that the criminal proceeding was resolved in her favor.

Although the Complaint does not specify or indicate how Asurion, a private insurance company, acted with state-given authority. Conclusory allegations are insufficient to show that Asurion is a state actor. Accordingly, the Court dismissed Mrs. Spann’s federal malicious prosecution claim against Asurion because the Complaint failed to allege Asurion acted under color of state law.

The grand jury indictment provides a presumption of probable cause for Mrs. Spann’s prosecution and defeats the claim of malicious prosecution.

Mrs. Spann has not come close to rebutting the probable cause presumption because she has not alleged that any State Defendant provided false testimony to the grand jury to secure an indictment. Accordingly, the Court dismissed Mrs. Spann’s remaining federal malicious prosecution claims for failing to rebut the probable cause presumption created by the February 20, 2014 grand jury indictment.

ZALMA OPINION

Mrs. Spann was arrested, based on probable cause, on two crimes including the crime of insurance fraud. The basis of the claim was the dismissal of the prosecution without a finding of fact, a trial or an acquittal. The state just decided they did not want to try Mrs. Spann for the crime. Proving that no good deed goes unpunished Mrs. Spann took the dismissal and decided to try to profit from the good deed of dismissing her criminal prosecution. Her attempt failed because there was no evidence of malicious prosecution.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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