Opinion
44315 Record No. 791731.
April 30, 1982
Present: All the Justices
Advice of counsel defense to malicious prosecution for larceny ineffective when counsel's advice given before alleged theft and defendant-prosecutor failed to make reasonable investigation before swearing out warrant for plaintiff's arrest; other issues.
(1) Malicious Prosecution — Requirements to Maintain Action.
(2) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — When Indicates Probable Cause.
(3) Malicious Prosecution Probable Cause as Defense — Advice of Counsel — Complete Defense Even Though Attorney Gives Incorrect Advice.
(4) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — If Reasonable Minds Can Differ Court Decides Question as Matter of Law.
(5) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — Defendant Could Not Have Disclosed All Material Facts to Attorney, Theft Not Having Occurred at Time of Disclosure.
(6) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — Reasonably Careful Investigation into Guilt of Party Accused Required and Defendant Charged With Information He Could Have Obtained — Reasonably Careful Investigation Not Conducted.
(7) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — Improper to Infer Guilt Through Business Association.
(8) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — In Testing Probable Cause Court Must Look to Time Action Complained of Took Place.
(9) Malicious Prosecution — Probable Cause as Defense — Advice of Counsel — Attorney's Advice Contingent Upon Future Events.
(10) Pleading and Practice — Questions by Attorney During Trial — Counsel May Not Ask One Witness to Comment on Testimony of Another Witness.
Defendant leased a restaurant to certain individuals and the Aire 'N Earth Corporation. Plaintiff was a cook in the restaurant and, according to defendant, represented himself as "one of the principal partners" of Aire 'N Earth, which he was not. In 1976, the lessees failed to pay their rent, and defendant obtained a judgment for possession of the premises. Fearing theft by the lessees, defendant sought advice from his attorney, who said if they did take his property he could or should swear out a warrant against all of them. On June 30, while visiting the restaurant, defendant discovered a stained glass panel missing. He called the police, who explained they needed a warrant to stop the taking. Unable to reach his attorney, he swore out a warrant against the principals of Aire 'N Earth, and plaintiff. At trial, the felony warrant against plaintiff was dismissed as he had been out of town and did not know of the eviction. Plaintiff then brought the present suit for malicious prosecution. The Trial Court ruled that, on the basis of advice of counsel, defendant had probable cause for swearing out the warrant and entered summary judgment for him.
1. In an action for malicious prosecution, a plaintiff must allege and prove (a) that the prosecution was set on foot by the defendant and that it terminated in a manner not unfavorable to the plaintiff; (b) that it was instituted or procured by the cooperation of the defendant; (c) that it was without probable cause; and (d) that it was malicious.
2. A defendant in an action for malicious prosecution may establish a probable cause defense when he acted on advice of counsel. He must prove (a) that he sought the advice of a reputable counsel because he wished to be informed of his legal opinions: (b) that he fully and correctly disclosed all material facts that he knew or should have known upon a reasonably careful investigation as to the guilt of the party accused; and (c) in good faith he followed his counsel's advice.
3. The advice-of-counsel defense is a complete defense even though the attorney gives incorrect advice.
4. The defense of advice-of-counsel usually presents a jury question but, if reasonable minds cannot differ, the Court decides the question as a matter of law.
5. The defendant could not have disclosed all the material facts to the attorney, the theft not then having occurred, the defendant having no way to know who would be involved or the extent of their involvement, and larceny being a crime of personal involvement requiring identification of the perpetrator.
6. The disclosure by the defendant to the attorney, in addition to covering all relevant facts within the defendant's knowledge, must include all material facts which would have been within his knowledge if he had made a reasonably careful investigation as to the guilt of the party accused. Here, warrants were sworn out without making a reasonably careful investigation.
7. The defendant could not properly infer Chipouras' guilt from Mikedes' presence on the premises, the only thread of liability lying in the existence of a business association.
8. In testing probable cause, a Court must look only to the time when the action complained of took place.
9. The attorney's advice was not a blanket immunity extending ad infinitum, but was contingent upon future events. When circumstances changed, defendant had a duty to update the advice. Probable cause is tested by what actually happened, not by what was predicted.
10. Counsel may not ask one witness to comment on the testimony of another. The witness was testifying about what he had heard earlier from another witness and the question was argumentative, assuming the truth of the earlier testimony.
Appeal from a judgment of the Circuit Court of the City of Williamsburg and the County of James City. Hon. Dixon I. Foster, judge designate presiding.
Reversed and remanded.
Milton Paul Miller (Horwitz and Miller, P.C., on briefs), for appellant.
Stuart Bateman (H. Vincent Conway, Jr.; Bateman, Downing Conway, P.C., on brief), for appellees.
Angelo Mageras swore to a criminal warrant charging Louis Chipouras with the offense of grand larceny. The police arrested Chipouras, but at the preliminary hearing, the court dismissed the felony warrant. Chipouras then sued Mageras and AJL Corporation (AJL) for malicious prosecution. After a two-day trial, the lower court struck Chipouras' evidence and entered summary judgment for the defendants on the ground that Mageras had probable cause for swearing out the warrant. Advice of counsel formed the basis of the probable cause defense. We reverse the judgment of the trial court and remand for a new trial.
The facts reveal that in 1975, Mageras, president of AJL, leased a restaurant facility in Williamsburg to three brothers, Louis, George, and Peter Mikedes, and the Aire 'N Earth Corporation (Aire 'N Earth). During the restaurant's renovation, AJL hired Chipouras, a cousin of the Mikedes brothers, to install drywall. When the restaurant, called the Green Leafe Cafe, opened in September, 1975, Chipouras remained as a cook. The relationship between Chipouras and Mageras became very hostile.
In 1976, Aire 'N Earth suffered financial difficulties and could not pay its rent. Mageras met with the Mikedes brothers and Chipouras. Mageras testified that Chipouras held himself out as an officer, director, or "one of the principal partners," of Aire 'N Earth. Both Louis and George Mikedes denied that Chipouras was an officer, director, or stockholder of Aire 'N Earth.
On June 29, Mageras obtained a judgment for possession of the premises. The judgment permitted Aire 'N Earth 24 hours to post bond or to vacate. Fearing that the Mikedes brothers or Chipouras might "go in there and tear the place up and take everything away overnight," Mageras called his attorney, A. B. Smith, Jr. Smith had represented Mageras as a client for 25 years and was thoroughly familiar with Aire 'N Earth's financial problems. Mageras asked Smith what he should do if "they" were to take AJL property. Smith testified that he remembered discussing the possibility of theft with Mageras, but could not remember the number of phone calls or sequence of the information he received. He remembered advising Mageras that if "they" took AJL property, he "could . . . or should" swear out a criminal warrant "against all of them." He explained that "all of them" included "the three Mikedeses and the one other individual whose name I don't think ever came up in our conversation, but of whose existence I knew." Mageras had inquired if it made any difference that one or more of "them" were in or en route to Baltimore. Smith replied that it did not. Smith most clearly recalled the conversation concerning an item which had already been taken.
The next day, June 30, Mageras visited the restaurant and discovered a stained glass panel missing. Seeing Louis Mikedes, he demanded "who's got my stuff here?" Louis replied, "we got our stuff." Mageras tried to call Smith or one of his partners. Unable to reach the attorneys, he accompanied the police officer to the magistrate's office. Mageras testified that he swore out a warrant against the four principals of Aire 'N Earth — the Mikedes brothers and Chipouras — according to Smith's advice. An attorney from Smith's firm reached Mageras at the magistrate's office before the warrants were executed. Mageras told the attorney "you [are] fired for this case."
Chipouras testified that he was in Silver Spring, Maryland, visiting when the alleged theft occurred. He did not know of the eviction or the removal of the stained glass until he returned after issuance of the warrant. The Mikedes brothers corroborated Chipouras' testimony.
[1-4] In Pallas v. Zaharopoulos, 219 Va. 751, 754, 250 S.E.2d 357, 359 (1979), we set forth the elements of an action for malicious prosecution in Virginia:
[A] plaintiff must allege and prove (1) that the prosecution was set on foot by the defendant and that it terminated in a manner not unfavorable to the plaintiff; (2) that it was instituted [by], or procured by the cooperation of, the defendant; (3) that it was without probable cause; and (4) that it was malicious.
If a defendant proves that he had probable cause to institute the criminal prosecution, he is immune from an action for malicious prosecution. He acts with probable cause when he acts on advice of counsel. To establish the defense, he must prove (1) that he sought the advice of reputable counsel because he wished to be informed of the law; (2) that he fully, correctly, and honestly disclosed all material facts which he knew — or should have known upon a reasonably careful investigation — about the guilt of the party accused; and (3) that in good faith he followed his counsel's advice in causing the plaintiffs arrest. Pallas, supra at 755, 250 S.E.2d at 359-60. Noell v. Angle, 217 Va. 656, 660, 231 S.E.2d 330, 333 (1977); Bain v. Phillips, 217 Va. 387, 394, 228 S.E.2d 576, 581 (1976). The advice-of-counsel defense is a complete defense even though the attorney gives incorrect advice. Spitzer v. Clatterbuck, 202 Va. 1001, 1004, 121 S.E.2d 466, 468 (1961). Usually, this defense presents a jury question, but if reasonable minds cannot differ, then the court decides the question as a matter of law. Pallas, supra at 755, 250 S.E.2d at 360; Noell, supra at 661, 231 S.E.2d at 333.
We consider only whether Mageras established his defense and whether the trial court properly ruled on it as a matter of law. The evidence reveals Mageras made one or two attempts to call Smith on June 29 to find out what his legal remedies were should the Mikedes brothers or Chipouras remove any property other than their own from the Green Leafe Cafe. Although angry with his lessees, Mageras' purpose in asking Smith's advice was to find a legally proper method of protecting his proprietary interest. His actions arguably fulfill the first and third elements of the advice-of-counsel defense.
[5-6] He fails to establish the second. He could not possibly disclose all the material facts of the theft because it had not yet occurred. Mageras had no way of knowing who would be involved or the extent of their involvement. Larceny is a crime of personal involvement requiring the identification of the perpetrator. Our jurisprudence firmly establishes the concept that criminal liability or criminal guilt is personal and not established by kinship or association. In Commander v. Provident Relief Ass'n., 126 Va. 455, 465, 102 S.E. 89, 92 (1920), we held:
[T]he rule in Virginia is that the disclosure required in order that the advice based upon it may constitute a shield against a suit for malicious prosecution must not only cover all the relevant facts within the knowledge of the prosecutor, but must include also material facts which would have been within his knowledge if he had made a reasonably careful investigation as to the guilt of the party accused. [Emphasis added.]
Accord, Evans v. Atlantic Coast Line Ry., 105 Va. 72, 53 S.E. 3 (1906). M. Burks, Common Law and Statutory Pleading and Practice Sec. 150 at 261-62 (4th ed. T. Boyd W. Koontz 1952). A victim cannot indiscriminately seek the arrest of an individual for a crime. He must have some basis for believing that the individual is guilty.
The facts of this case are unusual. When the defendant visited the premises on June 30, he concluded that the alleged crime was then in progress. Mageras never asked Louis Mikedes to explain who he meant when he said "we got our stuff." He never even inquired whether the three brothers and Chipouras were in town on June 29 and 30. Mageras' efforts to contact Smith on June 30 show that he felt unsure about his actions and desired further legal advice. Mageras' refusal to talk to Smith's associate when the attorney returned Mageras' call at the magistrate's office reveals that Mageras had no intention at that point of seeking, obtaining, or following any advice given. Mageras simply swore out warrants against all four men without making a reasonably careful investigation or waiting until he could consult counsel.
[7-8] Mageras could not properly infer Chipouras' guilt from Louis Mikedes' presence on the premises. The only thread of liability lies in the existence of a business association. In testing probable cause, the court must look only to the time when the action complained of occurred. Bain v. Phillips, 217 Va. at 394, 228 S.E.2d at 581; Forbes Allers v. Hagman, 75 Va. 168, 180 (1881).
The advice of counsel given on June 29 was hypothetical and contingent upon future events. It could not be a blanket immunity extending ad infinitum. When the anticipated events began to happen, Mageras was required to test the legal advice given against what was actually taking place. If "all of them were taking his stuff," then he could get warrants against all of them. As a corollary, if one were not taking his stuff, then Mageras was not justified in getting a warrant against that one. When the scenario departed from the script, he could no longer rely upon the outdated advice. The duty of a reasonably careful investigation required him to update the advice in the light of new facts. Apparently, he tried to do so when he telephoned Smith. We test probable cause and its underlying component, advice of counsel, by what actually happened, not by what was predicted. We hold that this defense was unavailable to Mageras and AJL.
Of course, when events transpire as predicted, prospective advice of counsel based upon the predicted facts will constitute probable cause.
Chipouras assigned two further errors. During the cross-examination of Smith, Chipouras' counsel attempted to ask the following question:
If I should tell you that Angelo Mageras says that he did not know, because he didn't inquire, that Mr. Chipouras was out of town until he heard it later in Court, Criminal Court, then can you offer an explanation as to how he could have told you that the night before?
Upon objection, the court ruled that it was improper because counsel may not ask one witness to comment on the testimony of another. We agree with the trial court.
Keeping in mind that examination of witnesses lies within the trial court's sound discretion, we will only interfere when the trial court has plainly abused its discretion. Butler v. Parrocha, 186 Va. 426, 433, 43 S.E.2d 1, 5 (1947). In the case at bar, the court's determination did not constitute abuse. Counsel improperly phrased his question so that he was testifying about what he had heard earlier from Mageras. Rakes v. Fulcher, 210 Va. 542, 548, 172 S.E.2d 751, 757 (1970); Wade v. Peebles, 162 Va. 479, 498, 174 S.E. 769, 776 (1934).
Further, the question assumed the truth of Mageras' testimony, but his testimony was still an issue to be determined by the jury. An argumentative question was improper.
Chipouras argues that the court also erred when it struck the plaintiff's evidence on punitive damages. Our examination of the record convinces us that the trial court never passed on that issue; thus, we do not reach it for decision. Punitive damages remain a viable issue for the next trial.
Reversed and remanded.