Opinion
NOS. 2015-CA-001953-MR NO. 2015-CA-001954-MR NO. 2016-CA-000334-MR
05-11-2018
JAMES BRADLEY ANDERSON APPELLANT v. NORTH MARSHALL WATER DISTRICT; GARY CLARK; PATRICIA ANN DARNELL, as Executrix and Personal Representative of the ESTATE OF B.W. DARNELL; SCOTT T. SOLOMON; ROBERT TURNER; PAULA BOLING; FRANKLIN FUTRELL; and RAY LANGSTON APPELLEES AND PAULA BOLING CROSS-APPELLANT v. JAMES BRADLEY ANDERSON CROSS-APPELLEE AND JAMES BRADLEY ANDERSON APPELLANT v. GARY CLARK; SCOTT T. SOLOMON; AND ROBERT TURNER APPELLEES
BRIEF AND ORAL ARGUMENT FOR APPELLANT/CROSS-APPELLEE, JAMES BRADLEY ANDERSON: J. Stan Lee Lexington, Kentucky BRIEF FOR APPELLEES, NORTH MARSHALL WATER DISTRICT; GARY CLARK; PATRICIA ANN DARNELL; SCOTT T. SOLOMON; ROBERT TURNER; AND APPELLEE/CROSS-APPELLANT PAULA BOLING: Stephen E. Smith, Jr. Whitney J. Denson Hillary R. Chambers Paducah, Kentucky ORAL ARGUMENT FOR APPELLEES/CROSS-APPELLANT: Whitney J. Denson Paducah, Kentucky
NOT TO BE PUBLISHED APPEAL FROM MARSHALL CIRCUIT COURT
HONORABLE DENNIS R. FOUST, JUDGE
ACTION NO. 12-CI-00158 APPEAL FROM MARSHALL CIRCUIT COURT
HONORABLE JAMES T. JAMESON, JUDGE
ACTION NO. 12-CI-00158 OPINION
AFFIRMING AS TO APPEAL NOS. 2015-CA-001953-MR AND 2016-CA-000334-MR; REVERSING AS TO CROSS-APPEAL NO. 2015-CA-001954-MR
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BEFORE: KRAMER, CHIEF JUDGE; JOHNSON AND JONES, JUDGES. KRAMER, CHIEF JUDGE: James Bradley Anderson asserted claims of malicious prosecution and defamation against the above-captioned appellees and cross- appellant in Marshall Circuit Court. The trial court ultimately dismissed all of his claims of malicious prosecution and all but three of his claims of defamation. In Appeal Nos. 2015-CA-001953-MR and 2016-CA-000334-MR, Anderson asserts the trial court erred to the extent that it dismissed any of his claims. Upon review, we affirm.
In Cross-Appeal No. 2015-CA-001954-MR, cross-appellant Paula Boling asserts the trial court erred to the extent that it denied a directed verdict with respect to Anderson's claim against her for defamation. Upon review, we reverse.
The general history of this consolidated matter is as follows. On January 13, 2011, James Bradley Anderson was indicted in Marshall Circuit Court by a grand jury for one count of theft by unlawful taking over $500, in violation of Kentucky Revised Statute (KRS) 514.030. In relevant part, his indictment stated:
On or about September, 2009, in Marshall County, Kentucky, the above named Defendant committed the offense of theft by unlawful taking over $500.00, a Class D Felony, to wit: the Defendant knowingly, unlawfully and while acting under his employment as Superintendent of the North Marshall Water District, had a customer of the water district, Franklin Futrell, issue a check to the defendant in the amount of $4,528.85 for pipe laying in order to receive service from the North Marshall Water District. The check was deposited into the defendant's personal checking account.
Most of the statements in this indictment are undisputedly true. Anderson was the Superintendent of North Marshall Water District (NMWD) at all relevant times. In September 2009, Futrell did want to receive water service from, and become a customer of, NMWD. On September 24, 2009, Anderson knowingly had Futrell issue a check payable to "Brad Anderson" in the amount of $4,528.85 for pipe laying in order to receive service from NMWD. And, shortly thereafter, Anderson did deposit Futrell's check into his own personal checking account.
The only statement in the indictment Anderson disputed was to the effect that when he accepted Futrell's money, he was acting in his capacity as Superintendent of NMWD and accepting Futrell's money on its behalf. To the contrary, Anderson contended as his sole defense to his theft charge that he had lawfully accepted Futrell's money on his own behalf because, at the time he accepted Futrell's check, Futrell had hired him and was paying him to perform the pipe-laying work as an independent contractor.
A jury never had the opportunity to consider Anderson's defense in the criminal proceedings stemming from his indictment. The Marshall Circuit Court ultimately entered an order dismissing Anderson's theft charge on December 20, 2011, without prejudice and without any explanation as to why.
On April 20, 2012, Anderson then filed suit in Marshall Circuit Court and initiated the litigation that forms the basis of these consolidated appeals. In his complaint, Anderson repackaged the defense he never had the opportunity to assert in his criminal matter into several claims of defamation and malicious prosecution against the various appellees and cross-appellant captioned above, making the same three overarching assertions in support of each claim: (1) He was acting as an independent contractor when he accepted $4,528.85 from Futrell; (2) each of the individuals he had chosen to sue either knew or should have known he was acting in that capacity at all relevant times; but (3) despite that, each of those individuals had publicly accused him of acting in his capacity as Superintendent of the NMWD when he accepted Futrell's money, and each of those individuals had aided or encouraged his wrongful prosecution for theft.
During the approximately five years of litigation that followed, each of the individuals and entities Anderson named as defendants moved for summary judgment on varying occasions, asserting Anderson had failed to produce evidence capable of supporting any of the elements of either defamation or malicious prosecution. The trial court denied their motions.
After Anderson's claims proceeded to trial, each of the individuals and entities Anderson named as defendants then moved for directed verdicts, asserting once again that Anderson had failed to produce evidence capable of supporting the elements of either defamation or malicious prosecution. Thereafter, the trial court directed verdicts in favor of Langston, Solomon, and Clark with respect to Anderson's claims of malicious prosecution. The trial court directed verdicts in favor of the NMWD and Clark with respect to Anderson's claims of defamation. The trial court denied motions for directed verdicts in all other respects, and what remained was submitted to the jury.
At the close of Anderson's case, NMWD moved for a directed verdict in this respect. Thereafter, the instructions the trial court drafted and submitted to the jury did not provide the jury with the option of holding NMWD liable for defamation. In a post-judgment motion, Anderson claimed this qualified as error. But, the trial court overruled Anderson's motion, explaining Anderson had cited no legal ground for altering, amending, or vacating its judgment. In light of these circumstances, what occurred in this respect was effectively a directed verdict.
Ultimately, the jury found against Anderson regarding his remaining malicious prosecution claims. The jury found in favor of Anderson regarding his defamation claims against Boling, Futrell, and Langston. The jury also found no wrongdoing by NMWD, Solomon, and Turner; but, despite having done so, the jury proceeded to award freestanding punitive damages against NMWD, Solomon, and Turner. Subsequently, the trial court vacated the jury's award of punitive damages, but otherwise entered judgment in conformity with the jury's verdict. These consolidated appeals followed.
In Appeal No. 2015-CA-001953-MR, Anderson argues the trial court erred by determining he was a public figure for purposes of his defamation claims; excluding evidence of what he characterizes as defamatory statements made by some or all of the appellees/cross-appellant, some of which were made to law enforcement officials; admitting evidence that he believes was irrelevant and prejudicial; denying his motion for a transfer of venue; and by vacating the freestanding punitive damages that the jury awarded him against appellees NMWD, Solomon, and Turner.
In Appeal No. 2016-CA-000334-MR, Anderson takes issue with the trial court's decision to award appellees NMWD, Solomon, and Turner a total of $1,018.94 in taxable costs as prevailing parties in the underlying litigation. He argues NMWD, Solomon, and Turner should not have been considered prevailing parties because, in his view, the trial court erred in vacating the jury's award of freestanding punitive damages against those parties.
In Cross-Appeal No. 2015-CA-001954-MR, cross-appellant Paula Boling takes issue with the trial court's decision to deny her motion for a directed verdict with respect to Anderson's claim against her for defamation. Specifically, she argues Anderson failed to prove any of the required elements of defamation.
With that said, Boling's cross-appeal echoes the dispositive issue at the forefront of each of these consolidated appeals: Whether this matter should have been submitted to a jury at all. For the reasons discussed below, we answer that question in the negative. This matter should have been dismissed as a matter of law at either the summary judgment or directed verdict phases. The trial court erred in failing to do so.
As explained in Nazar v. Branham, 291 S.W.3d 599, 605 (Ky. 2009),
[s]ummary judgment is only appropriate where the moving party establishes that there is no genuine issue of material fact warranting resolution by a jury. See Ky. R. Civ. P. 56.03; see also Steelvest Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 482 (Ky. 1991). Similarly, motions for directed verdict are appropriate if the moving party can establish that based on the evidence presented at trial, reasonable minds could not differ on the proper resolution of the case. See Ky. R. Civ. P. 50.01; Spivey v. Sheeler, 514 S.W.2d 667, 673 (Ky. 1974). Both standards require, however, the reviewing court to construe the facts in favor of the non-moving party.Here, as discussed, the sufficiency of the evidence that Anderson presented is raised as an issue in a variety of ways. In Appeal No. 2015-CA-001953-MR, Anderson argues that his evidence was sufficient to prevent any defendant from properly receiving a directed verdict; and, that but for what he characterizes as the trial court's erroneous exclusion of certain other evidence, the jury likely would have found in his favor regarding the various claims it decided against him. For their part, the appellees who filed a responsive brief in Anderson's appeal (i.e., NMWD, Gary Clark, the Estate of B.W. Darnell, Scott Solomon, Robert Turner, and Paula Boling) argue the opposite. Likewise, in her cross-appeal (2015-CA-001954-MR), Paula Boling argues her motion for directed verdict was erroneously denied because, despite what the jury determined, Anderson failed to prove any requisite element of his defamation claim against her.
Moreover, we may alternatively affirm the trial court's ultimate decision to dismiss Anderson's claims against any appellee to the extent that their directed verdict motions, or any prior summary judgment motion they filed, should have been granted. See Goetz v. Asset Acceptance, LLC, 513 S.W.3d 342, 344-45 (Ky. App. 2016) ("It is the rule in this jurisdiction that the judgment of a lower court can be affirmed for any reason in the record. . . . And, if an appellate court is aware of a reason to affirm the lower court's decision, it must do so, even if on different grounds." (Internal quotes, citations, and brackets omitted.))
DEFAMATION
We begin with Anderson's claims of defamation. Anderson refers to these claims in general terms. For example, he repeats throughout his brief that the "appellees" had "defamed" him "in connection with the Futrell transaction and Appellees' assertions that Anderson stole money from Futrell and/or NMWD." He argues the trial court erred in excluding "defamatory" statements the appellees allegedly made during interviews they gave to law enforcement officials and the NMWD Board of Commissioners relating to his alleged theft. He argues the trial court erred in excluding "non-actionable defamatory statements, which were relevant to and probative of malice."
But, Anderson's use of generalities poses two problems. First, his brief fails, for the most part, to cite any instance in the evidence--including any of the evidence excluded from the jury's consideration--detailing when and where any specific appellee made any specific statement to the effect that he "stole money from Futrell and/or NMWD."
And, in the few instances where his brief does provide specifics, what he provides is irrelevant. For example, Anderson cites what he characterizes as instances where appellees Futrell and Langston accused him of theft based upon what was stated in his indictment. However, the jury found in Anderson's favor regarding his defamation claims against Futrell and Langston; and Futrell and Langston did not appeal. Anderson also focuses greatly upon instances where, in his view, various other appellees made disparaging remarks about him on occasions prior to April 20, 2011. Due to the applicable statute of limitations, however, the trial court limited Anderson's defamation claims to statements made after April 20, 201l; and, Anderson does not claim the trial court erred in that respect.
Anderson also asserts that several more instances of disparaging remarks appear in a document he refers to as "Plaintiff's Joint Response to Defendants' Motion for Summary Judgment, filed October 17, 2014, in the trial court record as an unpaginated 'large document,' at Ex. 7, generally." However, no such document was ever included with the appellate record.
Indeed, during the seven-day trial of this matter, none of the appellees (other than Futrell) testified they expressed any opinion that Anderson committed the theft for which he was indicted. Anderson adduced nothing to the contrary apart from his own allegations, speculation and conjecture. This is reason enough to affirm each of the trial court's dispositive rulings against Anderson relating to his defamation claims, and to reverse the trial court's decision to deny cross-appellant Boling's motion for directed verdict.
See, e.g., Henninger v. Brewster, 357 S.W.3d 920, 929 (Ky. App. 2012) (explaining "[c]onclusory allegations based on suspicion and conjecture are not sufficient to create an issue of fact to defeat summary judgment." (quotations and citation omitted)); see also Neal v. Welker, 426 S.W.2d 476, 479-80 (Ky. 1968) ("hope or bare belief . . . that something will 'turn up' cannot be made basis for showing that a genuine issue as to a material fact exists").
The second problem is equally imposing. Over the course of this matter, Anderson has assumed that if any of the several appellees did express an opinion that he committed the theft for which he was indicted (whether in public, to law enforcement, or to anyone at all), such an opinion would have qualified as actionable defamation. This is the extent of how he suggests any of the parties he named as defendants in his suit defamed him.
Anderson's assumption grossly misapprehends the law. The requisite elements of defamation are as follows:
(a) a false and defamatory statement concerning another; (b) an unprivileged publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication. As we have repeatedly stated, words are said to be actionable per se when there is a conclusive presumption of both malice and damage.Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 282 (Ky. 2014) (internal footnotes and quotations omitted).
Because it is dispositive to our analysis, we will primarily focus upon the first element of defamation. As an aside, the trial court ruled prior to trial that Anderson's alleged theft addressed a matter of public concern, namely, the integrity of a local official tasked with managing a public utility. Although Anderson asserts that the trial court erred in this respect, we agree with the trial court's ruling. See Cromity v. Meiners, 494 S.W.3d 499, 504 (Ky. App. 2015) (explaining statements regarding the integrity of a local police officer addressed an issue of public concern).
Consequently, Anderson faced a high burden with respect to the first element of his defamation claims: He was required to demonstrate his charge was provably false by providing "a factual basis upon which falseness can be established." Doe v. Coleman, 497 S.W.3d 740, 750 (Ky. 2016). Stated differently, if the only evidence Anderson provided to demonstrate he did not commit theft was his word against the word of several other witnesses, Anderson's evidence was insufficient as a matter of law to prove the first essential element of defamation. Cromity, 494 S.W.3d at 504 ("The only evidence available is Meiners' word against Cromity's. Thus, we find no means of definitively proving Meiners' statement either true or false."); see also Doe, 497 S.W.3d at 750 ("A bare denial is not sufficient, but rather some facts supporting falsity must be put before the court.").
With that in mind, we now turn to what led to Anderson's indictment, and what verifiable evidence, if any, Anderson produced to dispute it. The relevant facts are as follows.
Franklin Futrell, his wife, and his neighbors (David and Davaleane Fulks), lived on Scale Road and shared a well that was located on Futrell's property and which functioned as their source of drinking water. Futrell testified that in the early months of 2009, Davaleane informed him that she had obtained an estimate from NMWD of what it would cost them to connect their respective residences to water service and that they could split the cost of doing so if he and his wife wanted to stop using the well. Futrell declined at the time, but the Fulkses began having difficulties obtaining water from the well around the following spring; and, when the well completely failed the following summer, Futrell became more amenable to the idea. Futrell testified:
FUTRELL: [Davaleane] went back and discussed it with [NMWD] again and reached a figure, an estimate of how much it would cost, and came back and told me. And I told her that I believed I would go with that because it would be cheaper than digging a well. And she went and told them to, that we would take water from them.
COUNSEL: You remember when that was, what time of the year?
FUTRELL: It was in September of 2009.
Around mid-September 2009, Anderson--a man Futrell had never met before or spoken with--then arrived at Futrell's residence. Futrell testified:
FUTRELL: [Anderson] came telling me that he had an estimate on the cost of the installation of the line, and if I wanted it, it would cost so much money. And, uh, my neighbor and I discussed it and, uh, we decided to take it and split the money right down the middle. And I believe [Davaleane] called him and he came back out, excuse me, he came back out and got a check from me and a check from her.
COUNSEL: Do you remember when that was?
FUTRELL: That would have been after the middle of September '09.
Futrell testified that when he met with Anderson, Anderson said nothing about being an independent contractor; Anderson said nothing about doing any of the installation work himself; and, he did not hire Anderson to do anything. Rather, Futrell thought he was speaking with a representative of NMWD. This was the impression he drew from his discussions with the Fulkses about who they had contacted for an estimate of the cost of receiving water service. Moreover, Anderson had undisputedly arrived at Futrell's residence in an NMWD truck--a truck that NMWD supplied Anderson for his use in performing his duties as NMWD Superintendent. Futrell also testified Anderson explained to him how NMWD would require the project to be done. From Futrell's recollection, Anderson told him NMWD would not permit him to rent a backhoe and install the piping himself; NMWD would engineer the project; and, the project could only be performed by one of NMWD's contractors.
Futrell testified Anderson led him to believe NMWD would accept money from him and use it to hire one of its contractors to perform the necessary work. This, Futrell testified, was why he made the $4,528.85 check that he gave to Anderson on September 22, 2009--representing his half of the total cost of the project--payable to the order of NMWD.
Futrell testified his understanding of who he was dealing with did not change two days later when Anderson once again arrived at his residence in an NMWD truck on September 24, 2009; this time asking for a check payable to himself, rather than payable to NMWD:
ANDERSON'S COUNSEL: What explanation did he give you?
FUTRELL: He came back and told me that he was dealing with Frankfort on the 2020 water and that should I make the check out to him it would expedite the installation and the acquirement of the piping.
ANDERSON'S COUNSEL: And did you make a second check out to him?
FUTRELL: I did.
Continuing in this vein, Futrell added that he believed Anderson's request was unusual at the time, but that he did not understand how NMWD did business, so he ultimately did not question it.
On September 28, 2009, Futrell executed a "Service Application For Water" with NMWD, a one-page document that generally explained what Futrell was entitled to expect from NMWD water service, how he was to go about receiving it, and that he, as a NMWD customer, was required to pay for the installation of the service lines. About one month later, workers arrived on Scale Road and performed the installation of the service lines. Anderson was not among those workers, nor did he supervise them. During the approximately one month it took to complete the project, the workers informed Futrell that they were employed by R&R Piping. It is undisputed that R&R Piping is a contractor frequently utilized by NMWD.
Afterward, the Futrells and Fulkses had a functioning water line and regular service from NMWD. As to Futrell's remaining interactions with Anderson, Futrell testified they were limited to only three more occasions. On the first occasion, Futrell made small talk with Anderson "for about thirty seconds" later that fall while Anderson was on NMWD business doing "something around the fire hydrant" near his property. On the second occasion, which was in October of the following year, Anderson was also on NMWD business; he knocked on Futrell's door, told Futrell he needed to "flush the water lines" because "degreaser had been allowed to get into the lines and had contaminated the water," and proceeded to open the fire hydrant and flush the water out of it for the next half hour or so.
Futrell's third and final interaction with Anderson occurred in early November 2010, and has much to do with Futrell's earlier mention of "2020 water," and the ultimate issue of whether Anderson committed theft. Before describing that interaction, however, some additional background is necessary.
What Futrell referenced in his testimony as "2020 water" is an entity known as "Water Vision 2020" (hereinafter "WV2020"), an independent governmental agency of the Marshall County Fiscal Court established to appropriate funds and resources that the fiscal court receives from the Kentucky Infrastructure Authority to improve the water services of Marshall County; so-named because it is the "vision" of this entity to provide water line extensions and to supply potable water to every resident in Marshall County by the year 2020. To that end, WV2020 allocates the funds it receives to cover the cost of labor and to provide materials for water line extension projects throughout Marshall County, but only for projects it approves of in advance.
Anderson testified that as Superintendent of NMWD, he was well-aware that WV2020 would reimburse NMWD after NMWD paid contractors who were hired to perform water line extension projects that had received WV2020 approval. Anderson also acknowledged that the Scale Road Project had never received WV2020 approval.
Nevertheless, WV2020 paid for the Scale Road Project. This occurred because R&R Piping factored an amount representing the time it worked on the Scale Road Project into a $28,865.20 invoice that it submitted to NMWD on November 22, 2009. But, rather than listing the Scale Road Project on the invoice, R&R Piping specified on the invoice that it concerned two other water line extension projects it was also performing for NMWD around that time which had received WV2020 approval (hereinafter the "Coldwater and Lowery Road Projects"). Thereafter, NMWD paid R&R Piping's invoice (with a check that Anderson, as NMWD Superintendent, issued on its behalf). And thereafter, NMWD was reimbursed by WV2020 (after Anderson, as NMWD Superintendent, requested reimbursement from WV2020 for paying the November 22, 2009 invoice).
The exact amount of what R&R Piping charged for the Scale Road Project remains unknown. At most, Les Reynolds, the owner of R&R Piping, recalled Anderson "may have" asked him for a "time estimate." Reynolds further testified his company charged $158.60 per hour, and that the Scale Road Project ultimately took "about four days" to complete.
As to what became of the money Futrell testified he thought he had paid Anderson to reimburse NMWD for hiring R&R Piping to complete the Scale Road Project, Anderson kept it. He deposited $528.85 of it into his personal banking account and took the remainder as cash.
We now return to what occurred when Anderson met with Futrell in early November 2010, over a year after the Scale Road Project had been completed. Shortly beforehand, Anderson had learned of a rumor that he was being investigated for allegedly using his position as NMWD Superintendent to steal $4,528.85 from either NMWD or one of its customers. Therefore, Anderson testified, he and his father, Terry (who was at the time a commissioner of the Marshall Fiscal Court) had decided to conduct their own investigation. They arrived at Futrell's house and, as Futrell testified:
FUTRELL: They rang the doorbell. I went and answered it, and he and his father came in. He sat—Brad Anderson—he sat and never opened his mouth. His father asked me if I knew who he was, and I said yes, I know who you are. He said there has been a mistake made and we found out that, uh, someone else has paid for the cost of the installation on your water line, and we wish to give you back your money. And at that point I informed him that the state police had informed me not to have any contact with him or any dealings with him. He left.
Terry Anderson, who was with Brad Anderson during this visit, similarly testified "I told Futrell we'd learned Brad had money that didn't belong to him and I wanted it to be paid back or returned where it belonged."
Futrell was not the only person Terry and Brad Anderson visited on or about that date in November 2010. They also visited Les Reynolds, the owner of R&R Piping, while Reynolds was on his way to a job site in Lake City. Reynolds testified at trial (and explained to the Kentucky State Police during an interview in November 2010, about one week after Terry and Brad visited him) that he told Terry, as he had told Brad when Brad had visited him earlier that same day, that in 2009, R&R Piping had already been paid for its work on the Scale Road Project by NMWD. As to the remainder of their conversation, Reynolds testified:
REYNOLDS: I explained the scenario or whatever to Terry, and he said, well, Les, it looks like we need to pay you for doing that job. I said Terry, I can't. I've done been paid for it. So I mean, I'm not, I can't do that. And I could have very well took Terry's money that day. But I didn't.
COUNSEL: And did he tell you how much money he was offering to pay you that day?
REYNOLDS: No.
COUNSEL: You just knew that he was offering to pay you some amount of money that day?
REYNOLDS: Compensation for I guess whatever I thought was right for the job, but no. It just can't happen.
COUNSEL: And that was Terry Anderson who was offering to pay you that money?
REYNOLDS: No, it was Brad. Terry was just with him.
We now turn to what verifiable facts, if any, Anderson adduced during trial to prove his assertions that: (1) He was acting as an independent contractor when he accepted $4,528.85 from Futrell; (2) each of the individuals he had chosen to sue either knew or should have known he was acting in that capacity at all relevant times; but (3) despite that, each of those individuals had publicly accused him of acting in his capacity as Superintendent of the NMWD when he accepted Futrell's money, and each of those individuals had aided in his wrongful prosecution for theft.
The majority of Anderson's proof was as follows. Anderson testified he clearly explained to Futrell on each of the occasions they met in September 2009 that NMWD was "not in the business" of installing service lines and that NMWD allowed its employees to perform "side jobs" installing service lines as independent contractors. Anderson testified that he specifically informed Futrell that Futrell was hiring him as an independent contractor to perform the installation. Anderson testified that when he revisited Futrell on September 24, 2009, asking for a personal check, he explained to Futrell:
ANDERSON: It didn't matter which party paid for what. Uh, that was an agreement between the neighbors to split the cost fifty-fifty. Uh, there was two checks written to North Marshall Water District. North Marshall Water District does not, did not, and probably never will go into the business of installing water lines. That was what I was going to do on my own time as a private contractor. So the check that was written, I didn't pay any attention to the checks whenever they were first written, whenever I noticed he had, the checks were written to both, uh, both checks were written to the water district. One of them had to be returned. It didn't matter to Fulks or Futrell, it made no difference, but one of them had to be for the labor, which North Marshall Water District did not provide and was not gonna provide, nor ever probably will provide.
ANDERSON'S COUNSEL: Who was gonna do the labor?
ANDERSON: I was gonna do the labor.
Anderson also testified that when he accepted Futrell's money, he fully intended to do the installation work. However, he later determined he could not do it, so he "subcontracted" the project to R&R Piping without negotiating any price for the work knowing how much R&R Piping would charge him for it. Thereafter, Anderson testified, he assumed R&R Piping would bill him personally, rather than NMWD. He testified he gave his wife the $4,000 he had received from cashing Futrell's check; he specifically told her to wait for a bill from R&R Piping for the Scale Road Project; and he just assumed she would pay whatever bill R&R Piping sent him. He also testified that throughout the fourteen months that followed, he did not ask anyone whether R&R Piping had sent him a bill, or whether his wife had paid it. In any event, he testified, he only came to suspect something had gone wrong when he learned of the rumor that the Kentucky State Police were investigating him for theft in November 2010.
This was the majority of Anderson's proof. Notably, the continuing theme of this proof is that it derived exclusively from Anderson's own uncorroborated, contradicted, and self-serving testimony.
Specifically, Anderson presented no evidence aside from his testimony supporting that the Futrells and the Fulkses agreed to hire him to perform the work of installing the service lines connecting their residences to NMWD's water distribution facilities. Nor did he call the Fulkses to testify and verify his version of events. In fact, Anderson testified he could not recall having any interaction with the Fulkses, apart from collecting the check the Fulkses had made payable to NMWD, not himself.
Specifically, he gave the following testimony at trial:
ANDERSON'S COUNSEL: Now, uh, at what point did the Fulks[es] get involved, if you recall?
ANDERSON: To my knowledge, I, to this day I have never met the Fulks[es], I never spoke with the Fulks[es], the only dealings I think the, the Fulks[es] have ever had were, uh, writing a check to North Marshall Water District. I never, never had any dealing with the Fulks[es] to my knowledge.
Anderson produced nothing demonstrating NMWD had ever regarded him as one of its approved contractors; that he had ever performed any kind of work as an independent contractor for NMWD or any of its customers before or after allegedly doing so in this instance; or that he ever had any kind of license to perform work as a contractor.
Anderson admitted that when the necessary work on the Scale Road Project commenced, he did not perform it or supervise it.
Anderson admitted, consistently with what Futrell testified about regarding him as a representative of NMWD (rather than a contractor), that sometimes NMWD did accept money from customers and use it to hire and pay its approved contractors to perform the work necessary to install water service lines:
COUNSEL: Normally, your customers who are receiving water and preparing to receive water from North Marshall Water District would pay the water district for those new extensions, correct?
ANDERSON: The people paying for water extensions were paying for them and they were being done on their own. Yes.
COUNSEL: Okay. And they did not normally pay you, as the Superintendent, for the water line extension?
ANDERSON: They, they a lot of the times paid the contractor whoever it may be.
COUNSEL: And frequently the North Marshall Water District would actually hire the contractor to do the work for the extension, correct?
ANDERSON: In some occasions. In some occasions, not.
COUNSEL: And if North Marshall Water District hired the contractor, then the customer would reimburse North Marshall Water District for the cost of the contractor's services?
ANDERSON: That's exactly right.
Anderson admitted that charging $9,057.69 for the total cost of the Scale Road Project was not even his idea. Rather, that price had originated from a February 19, 2009 cost estimate prepared by Construction Site Services, a company that frequently provided such estimates to NMWD. The estimate also bears no indication that it was prepared for Anderson's benefit as an independent contractor. Rather, when it was presented to Anderson at trial, Anderson verified that he had obtained the estimate for the benefit of NMWD:
COUNSEL: As I look at exhibit number four, it says "the following prices are my prices on," and then there's an "N," period, "Marshall," correct?
ANDERSON: Mm-hm. Correct.
COUNSEL: Does that mean for North Marshall Water District?
ANDERSON: Correct.
COUNSEL: And so when you obtained that quote in February of 2009, that was a quote you obtained for North Marshall Water?
ANDERSON: Correct.
Despite Anderson's representation that he had specified one of the $4,528.85 checks (either from the Futrells or the Fulkses) needed to be for labor, and the other needed to be for materials, neither of the checks he accepted from the Futrells or Fulkses indicated that one was for materials and the other was for labor. Moreover, the estimate from Construction Site Services, upon which Anderson based the total cost of the project, did not divide the cost of labor and materials in that manner.
The February 19, 2009 quote from Construction Site Services estimated the total cost of materials at $4,001.69, and the total cost of labor at $5,056.00.
Anderson also produced nothing aside from his testimony supporting that R&R Piping had ever agreed to function or understood it was functioning as his "subcontractor;" or that he intended for R&R Piping to bill him, personally, for the work, rather than NMWD. To the contrary, Reynolds stated (in his interview with the Kentucky State Police and later in his trial testimony) that when Anderson approached him about having R&R Piping perform the Scale Road Project in September 2009, Anderson only told him during their conversation "whenever you make your bill, don't list it, but bill me." Taken in the context in which the statement was made, Reynolds testified he understood that the "me" in that statement was a reference to Anderson in his capacity as NMWD Superintendent; and that Anderson, in that capacity, was asking R&R Piping to do a WV2020-approved project on Scale Road, but to not list "Scale Road" on the invoice.
Reynolds was interviewed regarding this matter by Detective Steven Silfies of the Kentucky State Police (KSP) prior to Anderson's indictment. His interview was introduced into evidence at trial. During his interview, Reynolds explained who he understood he was dealing with when he met with Anderson in September 2009 regarding the Scale Road Project:
REYNOLDS: [Anderson] said, "whenever you make your bill," he said, "don't list it, but bill me." Well I understood it, which it might've been my mistake, when I'm placing him, "me" is the water company. I never understood to bill him. You know what I'm saying? Cause that ain't normal practices for me, I never, I mean, I have never billed an individual, a Superintendent.Likewise, Reynolds testified at trial it was his clear understanding that Anderson, as NMWD Superintendent, had instructed him to bill NMWD for the time R&R Piping spent on the Scale Road Project, but not to list it on his invoice.
COUNSEL: Why is Scale Road not mentioned on this invoice dated November 22, 2009?
REYNOLDS: Cause I was asked not to.
COUNSEL: Okay. And who asked you not to list that on this invoice?
REYNOLDS: Brad Anderson.
COUNSEL: And did you ever submit an invoice to the North Marshall Water District for the Scale Road Project?
REYNOLDS: No.
COUNSEL: But it was included in this invoice?
REYNOLDS: Yes.
COUNSEL: You included the hours that you did on Scale Road in some of the hours you show for Coldwater and Lowery Road, is that right?
REYNOLDS: Yeah.
As to why Reynolds omitted mentioning the Scale Road Project in his invoice to NMWD, he testified that he did not understand the inner-workings of the NMWD. He said he typically did what the NMWD Superintendent instructed him to do.
Specifically, Reynolds testified:
COUNSEL: You said you actually billed that work to North Marshall Water District, and we've seen the invoice and talked about the invoice today, correct?
REYNOLDS: Yes.
COUNSEL: And you told us earlier before we went to lunch today that the invoice that you submitted did not show Scale Road because you were asked not to list that on your invoice, correct?
REYNOLDS: Yes, sir.
COUNSEL: Alright. And is that unusual that you wouldn't show a job like that on an invoice?
REYNOLDS: Well, yeah, it would be real unusual for North Marshall, but not sometimes when we're out doing our other water work, other Superintendents for whatever reason, I don't have a clue, but they'll direct me on how to do things.
And, as to why Reynolds believed he was dealing with the NMWD Superintendent at that time, he testified he was not informed that Anderson was functioning as an independent contractor. Rather, Reynolds and his company had had many dealings with Anderson in the past; they had never worked with Anderson in any capacity other than his capacity as Superintendent of NMWD; and Reynolds testified the Scale Road Project was "no different than any of the hundreds of other jobs we done for [NMWD.]" When Anderson approached R&R Piping about doing the work, R&R Piping was in the middle of performing several other water line installation projects for NMWD. When Anderson met with Reynolds in September 2009 at Scale Road to discuss the specifics of the project, Anderson arrived at their meeting driving an NMWD truck.
Reynolds also testified that whenever his company was hired by NMWD to install water lines, NMWD or WV2020 always furnished the piping. This was the case with the Scale Road Project; the piping that R&R Piping installed was furnished from WV2020's supply. In fact, Anderson admitted giving R&R Piping permission to use WV2020's piping (which was stored on the NMWD premises) for the Scale Road Project. Anderson further admitted NMWD ultimately reimbursed WV2020 for the piping that R&R Piping used on the Scale Road Project.
This was reflected in the following testimony:
COUNSEL: Now, you mentioned the fact earlier that you are familiar with what the, uh, Water Vision 2020 program is, correct?
ANDERSON: Correct.
COUNSEL: And that's that government grant program that provides, uh, water supply to areas where it's needed.
ANDERSON: Correct.
COUNSEL: And, uh, did Water Vision 2020 keep a stockpile of water pipe for use on those projects at North Marshall Water District?
ANDERSON: Um, there was a pile of pipe there that was funded by Water Vision 2020. Yes.
COUNSEL: And, uh, to use Water Vision 2020 pipe a project was supposed to be approved by, uh, Water Vision 2020?
ANDERSON: Correct.
COUNSEL: And was that Mr. Gifford?
ANDERSON: Correct.
COUNSEL: And Scale Road was not a Water Vision 2020 project, was it?
ANDERSON: No, it was not.
COUNSEL: Do you know that R&R Piping used 2020 pipe on that, on that project?
ANDERSON: Pipe is pipe, it's kinda like dollar bills are dollar bills. They both work. Um, we took pipe out of this pile because it was readily available and later restocked it. That's what the check for the material was for.
COUNSEL: Alright. But at least at the time that pipe was used, that had not been approved as a, as a 2020 project?
ANDERSON: No.
. . .
ANDERSON: It was pipe that came out of a pile that was bought by Water Vision 2020 that was over at the water plant. The money was collected to reimburse that pipe, to restock that pipe.
COUNSEL: So it was Water Vision pipe? And the Water District reimbursed--
ANDERSON: It was blue pipe. It did not have stenciled in big, bold letters "water vision pipe," no, it didn't.
COUNSEL: So, did you not take any care, pipe that was owned by a grant company, by a grant program, that was separate from the water district?
ANDERSON: Yes, I did take care. We collected money to replace it.
. . .
COUNSEL: And that was the Water Vision 2020 pipe, and then the Water District reimbursed 2020 for that, correct?
ANDERSON: Correct, to my knowledge.
Reynolds further testified the first time he came to believe a mistake may have been made was fourteen months after the Scale Road Project had been completed, when Anderson visited Reynolds (about a week before Reynolds was interviewed by the police in relation to its investigation of Anderson for theft) and told Reynolds, for the first time, that R&R Piping had been functioning as Anderson's "subcontractor" on the Scale Road Project and that it was a mistake for R&R Piping to have billed NMWD.
As discussed further below, Special Prosecutor David Hargrove's ultimate decision to move the Marshall Circuit Court to dismiss Anderson's theft charge was influenced by Anderson's payment of $4,528.85 to WV2020 (which Hargrove regarded as "restitution"), but he testified his decision was also influenced by Reynolds' belief that a mistake may have occurred. Hargrove testified when he interviewed Reynolds roughly two years after the Scale Road Project had been completed, Reynolds was more inclined to believe it had not been Anderson's intention for R&R Piping to bill NMWD for the hours it took to complete the Scale Road Project. At trial, Hargrove explained:
HARGROVE: When I talked to [Reynolds] about that, and Mr. Anderson through his attorney, I don't know that I, Mr. Anderson may recall but I don't know that I ever spoke to him, but his attorney said that he had told Mr. Reynolds to invoice him directly for it. I'm not, I don't believe that was the initial story that the state police had, but I can't recall that completely and accurately, but I talked to Mr. Reynolds. When I talked to him, he was very nervous. And, obviously, when a Commonwealth's Attorney's coming to talk to you, I don't do that often, but it may have made him nervous, but he, he was more apologetic and the fact that he, he said "I, I believe that Brad told me to send him the bill," he said "Just, I don't remember," and he could not testify, certainly, that he did tell him that, or did not tell him that. But he said, "But I believe he did, and I just forgot to do it because I was doing a lot of projects." I honestly believe he was a little concerned that he might be in some trouble because he did not specifically invoice the Scale Road Project. But ultimately, you know, we weren't looking to, I wasn't looking to hang anyone at the time and, in all honesty, we were looking to see what the truth was.In this vein, Reynolds told Detective Silfies during his interview with the KSP (which he gave fourteen months after R&R Piping had completed the Scale Road Project and invoiced NMWD):
REYNOLDS: What [Anderson] explained last week when he come to me, he said that he contracted that job like he was a contractor and was gonna do the work, like, on a weekend and something like that, and then he said I understood I, this job was too big and he said that's why. And I thought no, that's the first I heard of that.Likewise, at trial Reynolds testified:
SILFIES: Did he ever do a water district job before that or since?
REYOLDS: I don't know. I don't know about that. And, I mean, he was expecting me, which I guess he was, to send him a bill, and I didn't know to send him a bill because I had been compensated for my work.
SILFIES: Because you did it [pointing to an invoice to NMWD Reynolds brought with him to the interview] relating to work all the time.
REYNOLDS: All the time.
SILFIES: Yeah. Well, I appreciate it. I mean, it made some stuff clearer for me.
REYNOLDS: And [Anderson], I mean matter-of-fact when I spoke with him he said "Les, I took that as a side-job." Hell, Brad, I didn't know that. I didn't know you done that. It ain't normal. It ain't normal.
SILFIES: Yeah.
REYNOLDS: I mean, if that's the darned case, everywhere I, everywhere I go to work, I mean before I even sink a buck in the ground now, are you gonna pay me? Or is the city gonna pay me? You know what I'm saying? I don't know. He, he meant to do the job, I'm pretty danged sure, Steve, but he didn't.
. . .
SILFIES: But the first time you noticed anything was last week, what [Anderson] said about, brought this up to your attention that he was contracting you and he was the primary contractor, and that he was, you were supposed to bill him?
REYNOLDS: Mm-hm [nodding].
COUNSEL: Mr. Reynolds, you said that you know that this was a mistake or misunderstanding now, correct?
REYNOLDS: Yes.
COUNSEL: You didn't know that it was a mistake or misunderstanding until someone came to you fourteen months later and told you that you should have done something different, correct?
REYNOLDS: Yes.
The only evidence supporting it was indeed a mistake came from Anderson's testimony alone. Likewise, Anderson provided nothing aside from his own testimony to support that when he (acting in his role as NMWD Superintendent) issued and signed the check from NMWD to pay R&R Piping's November 22, 2009 invoice for $28,865.20, he did not know the hours R&R Piping expended on the Scale Road Project had been factored into the amount of that invoice.
What is undisputed, however, is that for over a year after NMWD paid R&R Piping's November 22, 2009 invoice, Anderson made no inquiries to anyone about whether R&R Piping had been paid for the Scale Road Project. And, Anderson only began making inquiries after he came to suspect he was being investigated by the authorities for theft.
As discussed, Anderson also testified that after he took $4,000 from cashing the Futrells' check, he gave the cash to Natalie Haley, his then-wife; and he told her to expect a bill from R&R Piping. This, too, was contradicted. At trial, Haley testified Anderson did not give her any of that money; she could not recall Anderson's ever asking her about or telling her to expect any invoice from R&R Piping; it was never her understanding that Anderson expected her to pay any such invoice; and, she further testified that Anderson never blamed her for any failure to pay such an invoice.
In short, Anderson largely provided his own self-serving testimony to support that anyone knew or should have known he accepted $4,528.85 from Futrell on his own behalf as an independent contractor, rather than on behalf of the NMWD as its Superintendent. As discussed, this was insufficient as a matter of law to demonstrate that his charge of theft was provably false and was accordingly insufficient to support the first element of any of his claims of defamation.
That aside, what remained of Anderson's proof was, in the words of his appellate brief, as follows:
[T]he criminal charges against Anderson were dismissed by the motion of the special prosecutor. Accordingly, a reasonable juror could certainly find that [the opposing parties'] accusations against Anderson were false based on the evidence presented at trial.
Anderson adds little more to this argument in his brief. To be clear, however, the dismissal of criminal proceedings is not evidence of innocence, nor is it evidence of the falsity of the underlying charges. At most, even a dismissal with prejudice only demonstrates reasonable doubt as to guilt. See Cromity, 494 S.W.3d at 504 (explaining, in the context of a defamation claim, that an acquittal is not definitive proof of the falsity of a criminal charge). And, Anderson's dismissal was without prejudice.
In light of the above, the trial court ultimately reached the correct result by dismissing Anderson's defamation claims against appellees NMWD, Clark, Solomon, and Turner; to that extent, we affirm its judgment. But, the trial court erred by failing to direct a verdict in favor of cross-appellant Boling; to that extent, we reverse.
As discussed, Futrell and Langston filed no cross-appeal. Therefore, our decision has no effect upon the validity of Anderson's judgment against them.
MALICIOUS PROSECUTION
As discussed the trial court submitted roughly half of Anderson's malicious prosecution claims to the jury, but ultimately dismissed all of them. On appeal, Anderson asserts that to the extent the trial court dismissed any of his malicious prosecution claims, whether as the result of a directed verdict or a judgment in conformity with the jury's verdict, the trial court erred. As to why, he repeats the same general arguments he offered with respect to his defamation claims, asserting in his brief that the parties he filed suit against "provided law enforcement officials with inaccurate, false, or misleading information."
To prevail on a claim of malicious prosecution, the claimant must prove:
1) the defendant initiated, continued, or procured a criminal or civil judicial proceeding, or an administrative disciplinary proceeding against the plaintiff;
2) the defendant acted without probable cause;
3) the defendant acted with malice, which, in the criminal context, means seeking to achieve a purpose other than bringing an offender to justice; and in the civil context, means seeking to achieve a purpose other than the proper adjudication of the claim upon which the underlying proceeding was based;Martin v. O'Daniel, 507 S.W.3d 1, 11-12 (Ky. 2016).
4) the proceeding, except in ex parte civil actions, terminated in favor of the person against whom it was brought; and
5) the plaintiff suffered damages as a result of the proceeding.
Each of the parties Anderson sued for malicious prosecution moved for either summary judgment or a directed verdict, arguing Anderson failed to demonstrate any of these elements. Moreover, it is the prerogative of this Court to affirm on any basis supported by the record. Upon review, there are several reasons for affirming the result reached by the trial court as a matter of law, but we will focus upon the two most prominent.
Even assuming any of the individuals who Anderson sued instituted the criminal proceedings that led to his indictment, the first problem with his claims is the matter of probable cause. As explained in Reid v. True, 302 S.W.2d 846, 847-48 (Ky. 1957),
[s]ince public policy favors the exposure of crime, and malicious prosecution actions are not favored in the law, there must be a clear showing that the defendant acted without probable cause. Lexington Cab Co. Inc., v. Terrell, 282 Ky. 70, 137 S.W.2d 721. The burden was on the plaintiff to establish this element of his claim. J. B. Colt Co. v. Grubbs, 206 Ky. 809, 268 S.W. 817.
Where sufficient undisputed facts show probable cause, the question is one of law for the court. See Stearns Coal Co. v. Johnson, 238 Ky. 247, 37 S.W.2d 38; Louisville & N. R. Co. v. Sharp, 282 Ky. 758, 140 S.W.2d 383.
Here, it is true that Anderson had an explanation for the unusual circumstance of how he came into possession of $4,528.85--which, by his own admission, did not belong to him.
[B]ut the guilt or innocence of the accused is not material on the question of probable cause . . . we are not in this suit trying the plaintiff. We are trying the defendant[s]. Whether or not the plaintiff's story was true, we need not determine. It may be assumed that the circumstances were as the plaintiff presented them. Be that as it may, the question here is whether or not the defendant[s] could reasonably reject plaintiff's possible explanations and instead draw [their] own conclusion[s] from the undisputed facts.Id. at 848 (citation omitted).
With respect to the lack of probable cause element of malicious prosecution, the question is whether or not--based upon the facts in this case--there existed reasonable grounds for believing a crime had been committed which justified invoking the processes of law to have that question judicially determined. Id. In that respect, Anderson's argument at any given time during these proceedings can be summarized as follows: His explanation that he acquired $4,528.85 as the result of a mistake should have been believed by all interested parties, and Futrell's explanation (i.e., that Anderson acquired $4,528.85 from Futrell as the result of theft) should have been disbelieved.
However, Anderson fails to demonstrate why it would have been unreasonable for anyone to disbelieve him and to believe Futrell instead. As outlined above in the context of our discussion of Anderson's defamation claims, Anderson failed to demonstrate Futrell's explanation and version of events were provably false; and, Anderson's own explanation and version of events derived from his self-serving testimony that was either uncorroborated, or contradicted by circumstantial evidence supporting that he committed the theft for which he was indicted. Accordingly, and as a matter of law, Anderson failed to demonstrate a lack of probable cause.
Moreover, one of the more prominent bases upon which the appellees moved for directed verdicts with respect to Anderson's malicious prosecution claims was the third of the above-stated elements; they pointed out that Anderson ultimately paid WV2020 the full amount of what he had been accused of stealing from NMWD; they argued he had done so as part of a compromise for dismissing his theft charge; and they further argued this compromise conclusively demonstrated that Anderson's theft charge did not terminate in his favor.
To the extent that Anderson formulated a response to this argument, he gave his clearest formulation during his closing arguments before the jury:
There was no plea agreement. There was no deal. If there was a plea bargain, there would be a signed document, that's how that works. They didn't present that. What we have instead is an indictment for stealing four thousand and some, and I agree with Mr. Smith, it's a number that'll remain in my memory for a long time. That's what he was indicted for, stealing that money
from the North Marshall Water District or from Mr. Futrell. That indictment, those charges, were dismissed. They say it's a plea agreement, this is not a plea agreement. There was no plea. In fact, they, they, when Mr. Hargrove was on the witness stand, they tried to get him to say that, that there was a deal, and Mr. Hargrove himself said, no, let me backpedal, no there wasn't. I mean, that was without any prompting, he did that himself. There wasn't a deal. And his motion to dismiss, his memorandum, his motion to dismiss, is in evidence. It's one of about sixty pieces, sixty exhibits you're gonna have. I encourage you to read it. Read it, and see if there's anything in there about a deal. See if there's anything in there about an agreement. See if there's anything in there about paying back money as a condition precedent to dismissing it. See if it's in there. It's not in there. Please read that because it's not in there. There was no plea agreement. Now, they've argued that this is not a favorable resolution of a criminal case in my client's favor. If you have criminal charges against you and they get dismissed, like this, that's in your favor. There's no question about it.
Contrary to what Anderson insinuated, however, it is not enough to merely take a perfunctory order of dismissal in a vacuum--particularly a dismissal without prejudice--and call it "favorable." A malicious prosecution plaintiff has the burden of proving that the underlying criminal proceedings terminated in a manner that is inconsistent with guilt. And, absent a material, factual dispute relative to the circumstances of the dismissal, the determination of whether a termination is sufficiently favorable is not a jury issue; it is a legal issue for the court. See Davidson v. Castner-Knott Dry Goods Co., Inc., 202 S.W.3d 597 (Ky. App. 2006).
See Restatement (Second) of Torts § 660, cmt. a.
As Anderson indicated in his closing argument, where the circumstances demonstrate the termination resulted from the accused's acceptance of a compromise, the termination is not inconsistent with the accused's guilt and cannot thereafter support a claim of malicious prosecution:
Although the accused by his acceptance of a compromise does not admit his guilt, the fact of compromise indicates that the question of his guilt or innocence is left open. Having bought peace the accused may not thereafter assert that the proceedings have terminated in his favor.Broaddus v. Campbell, 911 S.W.2d 281, 284 (Ky. App. 1995) (quoting Restatement (Second) of Torts § 660, cmt c.).
For example, in Broaddus the plaintiff agreed, in exchange for the dismissal of a charge of theft, to stipulate that his charge was supported by probable cause. When he thereafter sued for malicious prosecution based upon the dismissed charge of theft, the Court dismissed his claim as a matter of law, explaining the proceedings had not terminated in his favor because "[t]he dismissal was not the unilateral act of the prosecutor; Broaddus gave up something to secure the dismissal of the charges." Id.
This rule was likewise observed in Singer Sewing Mach. Co. v. Dyer, 156 Ky. 156, 160 S.W. 917 (1913). There, the Court explained a suit for malicious prosecution could not be based upon the dismissal of a charge of obtaining money by false pretenses where the charge in question was dismissed by virtue of a compromise that had required the plaintiff to repay the money that the plaintiff had been accused of stealing. Id. at 919. See also Ohnemus v. Thompson, 594 F. App'x 864 (6th Cir. 2014) (explaining that under Kentucky law, termination of theft proceedings were not favorable, for purposes of an ensuing malicious prosecution claim, where the termination was the result of a compromise which had required the plaintiff to pay $22,980 in restitution in exchange for the dismissal of the criminal charges).
As the appellees point out, Anderson's theft charge was only dismissed after Anderson, by and through his attorney, agreed to pay $4,528.85 (the full amount Anderson was accused of stealing from NMWD) to WV2020 (the entity that effectively reimbursed NMWD for Anderson's alleged theft). In his deposition (which was read into evidence at trial), Anderson admitted:
COUNSEL: Well, did you ever pay $4,528.85 to anyone?
ANDERSON: Yeah, I ended up paying it to Water Vision 2020 for some reason.
COUNSEL: You paid it to Water Vision 2020?
ANDERSON: Correct.
COUNSEL: When did you make that payment?
ANDERSON: Right before my charge was dismissed. David Hargrove, the special prosecutor in my criminal case, said that's what he wanted done. We couldn't really understand why because Water Vision 2020 couldn't show where they were out to need reimbursement for that money. So we were confused on why we were making that payment, but we did anyway under the advisement of Charlie Brien [Anderson's criminal defense attorney].
Anderson had no direct knowledge of what was negotiated between Charlie Brien (his criminal defense attorney) and Special Prosecutor David Hargrove that ultimately led to the dismissal of his theft charge. But, Hargrove testified regarding those negotiations at trial. Hargrove's testimony, which Anderson referenced and characterized as "backpedaling" in his closing argument, was as follows:
COUNSEL: Did you reach an agreement with Mr. Anderson's defense lawyer in connection with that case?
HARGROVE: I did.
COUNSEL: And what was the agreement?
HARGROVE: I agreed that, you know basically any time that we have a crime or alleged crime that involves money, you know generally what you want to do is give any victims restitution, get the money back, and because of the workings of this case and the way it kind of panned out, um, I told Charlie that basically what I was willing to do is dismiss it, but I definitely wanted the money to be paid back to the right, to make sure there was restitution paid, even though, in this case I thought it was Water Vision 2020 who had been the ultimate victim, if you'd say that, you know, but that's taxpayer money, so.
COUNSEL: And did he agree to those terms?
HARGROVE: He did.
COUNSEL: And to your knowledge was Water Vision 2020 repaid?
HARGROVE: Yes.
COUNSEL: And was that a condition of your agreement, then, to dismiss the case that Water Vision 2020 be paid?
HARGROVE: Yes, yes it was.
COUNSEL: And then once you were satisfied that the money had been paid, is that when you asked for the indictment to be dismissed?
HARGROVE: Let me backtrack on that a little bit. That, honestly it's been a while since the conversation. I think, I really think the way it worked whenever Mr. Brien and I were talking, um, and I, the research and the investigation I'd done, he actually offered, I think, to make the payment back. I didn't say you have to do this right now, I think Mr. Brien on behalf of his client offered, we'll pay the money back and it kind of takes that off the table, a little bit.
COUNSEL: Alright. Would you have agreed to dismiss the indictment had he not offered to pay the money back?
HARGROVE: You know, I honestly can't answer that because I, I don't think so. But, um, certainly it would've been, to dismiss the indictment or not based on my investigation of the evidence, the restitution, even though it comes into play, it's sort of a separate matter.
To the extent Hargrove "backpedaled" in his testimony about a compromise, it was to the extent of whether he offered to dismiss Anderson's charge in exchange for what he regarded as $4,528.85 in restitution to WV2020, or Anderson's attorney offered, in connection with his negotiations with Hargrove, to pay $4,528.85 to WV2020 on Anderson's behalf. But, that distinction is immaterial: In either circumstance, an offer, acceptance, and consideration--the essentials of any contract--were evident. Anderson's attorney understood that the necessity of Anderson paying $4,528.85 to WV2020 was part of an inducement (i.e., on "the table") in his negotiations with Hargrove to have Anderson's theft charge dismissed; Hargrove regarded that type of payment as "restitution," and testified it came "into play" in his decision to dismiss; and, so far as Anderson himself understood from his conversation with his attorney, the prosecutor in his criminal case told his attorney that this was what needed to happen right before his charge was dismissed, and his defense attorney proceeded to do it on his behalf.
It is likewise immaterial, contrary to what Anderson insinuated, that the order of the trial court dismissing his criminal matter did not recite it resulted from a "plea deal" or his payment of "restitution." Anderson presents no authority to the effect that where a prosecution is abandoned pursuant to an agreement of compromise--as illustrated by the testimony in this case--the compromise must be specified in the order. Such a loose reading of what Anderson was required to prove would fly in the face of the well-established rule regarding malicious prosecution claims:
At trial, Anderson also made much of the fact that he did not make his payment of $4,528.85 to WV2020 until a month or two after his charge was dismissed. This is likewise unimportant because it did nothing to negate the existence of the compromise. At most, it would have provided Hargrove grounds to rescind the compromise and, because Anderson's charge was dismissed without prejudice, reinstitute criminal proceedings. See O. P. Link Handle Co. v. Wright, 429 S.W.2d 842, 845 (Ky. 1968) (explaining a substantial failure of consideration ordinarily justifies rescission of a contract). --------
The law generally disfavors the tort of malicious prosecution because "all persons [should] be able to freely resort to the courts for redress of a wrong[.]" Raine v. Drasin, 621 S.W.2d 895, 899 (Ky.1981). As a result, claimants alleging malicious prosecution must
strictly comply with each element of the tort. Id. (citing Davis v. Brady, 218 Ky. 384, 291 S.W. 412 (1927)).Garcia v. Whitaker, 400 S.W.3d 270, 274 (Ky. 2013).
Rather, to paraphrase Broaddus, 911 S.W.2d at 284, it was enough that the surrounding circumstances unequivocally demonstrated "[t]he dismissal was not the unilateral act of the prosecutor; [Anderson] gave up something to secure the dismissal of the charge[]."
In sum, there exists no basis for reversing the trial court's ultimate decision to dismiss each of Anderson's malicious prosecution claims. Each of those claims was legally untenable.
FREESTANDING PUNITIVE DAMAGES
Lastly, we address the matter of the jury's award to Anderson of freestanding punitive damages. As noted, the jury absolved NMWD, Solomon, and Turner of any liability to Anderson for either defamation or malicious prosecution, but nevertheless determined that NMWD was responsible for paying Anderson $30,000; and that Solomon and Turner were each responsible for paying him $15,000. The trial court vacated these awards shortly thereafter, concluding they reflected an inconsistent verdict and were legally unauthorized. And, due to the result of its decision to vacate, the trial court entered a January 29, 2016 post-judgment order awarding appellees Clark, Solomon, Turner, and NMWD a total of 55% of their claimed court costs against Brad Anderson as prevailing parties.
In Appeal No. 2015-CA-001953-MR, Anderson argues the trial court erred in doing so. He asserts that the members of the jury could have reasonably understood, based upon the instructions that were given to them, that the law allowed them to make freestanding awards of punitive damages to Anderson. In his brief, he also reasons:
[S]everal cases from this jurisdiction have upheld punitive damage awards in the absence of a corresponding award for compensatory damages, at least under certain conditions. The only requirement for punitive damages in this regard is that the injury be the sort for which compensatory damages, even if only nominal, are available.
The subject of Anderson's secondary appeal (Appeal No. 2016-CA-000334-MR) is the January 29, 2016 post-judgment order. There, he argues "[f]or these same reasons, the trial court's decisions to cut Anderson's bill of costs award in half and to permit NMWD, Turner, and Solomon to recover their own costs from Anderson was in error."
Anderson is incorrect. What Anderson's argument lacks is authority favoring the proposition that the law permits a jury to award punitive damages after it has determined no injury has occurred. No such authority exists. To the contrary, "Kentucky law is clear that a plaintiff cannot recover punitive damages against a defendant unless that defendant's conduct was the proximate cause of any injury to the plaintiff." Jackson v. Tullar, 285 S.W.3d 290, 297 (Ky. App. 2007) (citing Fowler v. Mantooth, 683 S.W.2d 250 (Ky. 1984)). Accordingly, the trial court committed no error by vacating Anderson's award of freestanding punitive damages and awarding costs to NMWD, Turner, and Solomon.
CONCLUSION
In Appeal Nos. 2015-CA-001953-MR and 2016-CA-000334-MR, Anderson has presented no basis of reversible error. Accordingly, we AFFIRM.
As to Cross-Appeal No. 2015-CA-001954-MR, we REVERSE. The Marshall Circuit Court is directed to dismiss Anderson's defamation claim against cross-appellant Paula Boling and enter judgment in her favor consistent with this Opinion.
ALL CONCUR. BRIEF AND ORAL ARGUMENT
FOR APPELLANT/CROSS-
APPELLEE, JAMES BRADLEY
ANDERSON: J. Stan Lee
Lexington, Kentucky BRIEF FOR APPELLEES, NORTH
MARSHALL WATER DISTRICT;
GARY CLARK; PATRICIA ANN
DARNELL; SCOTT T. SOLOMON;
ROBERT TURNER; AND
APPELLEE/CROSS-APPELLANT
PAULA BOLING: Stephen E. Smith, Jr.
Whitney J. Denson
Hillary R. Chambers
Paducah, Kentucky ORAL ARGUMENT FOR
APPELLEES/CROSS-APPELLANT: Whitney J. Denson
Paducah, Kentucky