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Causing a Criminal Prosecution Can Be a Basis for a Malicious Prosecution Claim; Hall v. Shaw

When Melvin Hall left his employment at the Central Indiana Protection Agency, Inc. (“CIPA”) and started a competing company, the owners of CIPA (Shaw and Narducci) were not happy and allegedly engaged in a coordinated campaign to defame Hall and drive him out of business. Hall subsequently sued Shaw, Narducci and CIPA for defamation, abuse of process, malicious prosecution and intentional infliction of emotional distress.

After Hall filed his lawsuit, Narducci left a voicemail for Hall in which he allegedly said:

“Guess what dumb*** you and your f****** probation license is going down the drain! Straight up. You suing me! I don’t give a f***! You know why because you engaged us into this bull****! You mother******* are done! For real. . . So when you play this f****** tape for your f****** lawyer, you let your lawyer know that this s*** ain’t going to be easy! Remember that.... If you think you mother******* know who I am you better go down to that city-county building and keep checking mother******...”

Hall’s claim for malicious prosecution was based on the allegation that Narducci and his associates reported to the prosecutor’s office that Hall had impersonated a police officer. Hall was charged and subsequently acquitted in the criminal trial.

The trial court dismissed Hall’s malicious prosecution claim, apparently relying on recent cases that suggested an intervening investigation by law enforcement authorities is the proximate cause for the filing of criminal charges and precludes a malicious prosecution claim against the party that initially alerted authorities.

When Hall appealed, defendants argued that claims of malicious prosecution based on a criminal charge are absolutely barred. The Court of Appeals disagreed:

Hall alleges that “Shaw and Narducci, individually, and in their capacity as agents of CIPA, maliciously caused the Marion County Prosecutor’s office to initiate a felony prosecution against Hall by conspiring with Alexander, Lolla-Martinez, and others to provide false testimony to try to incriminate Hall for impersonating a public servant.” If this claim is true— and we stress that we must assume as much at this stage—it is sufficient to allow a finding that Defendants were the “proximate and efficient cause” of Hall’s prosecution. We therefore conclude that the trial court erred in dismissing Hall’s malicious prosecution complaint.

Some of Hall’s other claims did not survive. He had asserted claims for defamation and abuse of process based on a consumer complaint made by Narducci to the Attorney General’s Office. The Court held that such complaints are protected by the absolute privilege applicable to judicial proceedings, concluding that the “evaluation of a consumer complaint with the Attorney General’s office qualifies as a quasi-judicial proceeding.”

The Court also rejected Hall’s attempt to use the continuing wrong doctrine to assert claims for defendants’ false communications that occurred more than two years before suit was filed. Although there was a continuing course of wrongful conduct, the Court found that it “led to several distinct injuries. Because Hall has not pled a course of conduct that led to a single injury, we conclude that the continuing wrong doctrine will not benefit him here.”

The Court also clarified the law with respect to the specificity that must be provided in alleging defamation. Prior case law had referenced hornbook law that “stresses the necessity of including the alleged defamatory statement in the complaint.” Defendants argued that the complaint must provide a verbatim statement of the alleged defamatory language. The Court of Appeals disagreed, concluding that “a paraphrased statement—if it is sufficiently specific” will pass muster and found that Hall’s defamation claim provided the required specificity when it stated that defendants had communicated that “Hall had impersonated a police officer” which clearly imputes criminal conduct.

Finally, the Court also addressed Hall’s claim of a civil conspiracy, seeking to hold Narducci and Shaw liable for defamation communicated by two of their cohorts who were allegedly acting at their direction. In upholding this claim, the Court explained:

Indiana has no separate civil cause of action for conspiracy; however, there is a civil cause of action for damages resulting from a conspiracy. In other words, allegations of a civil conspiracy are just another way of asserting a concerted action in the commission of a tort.

The Indiana Supreme Court has summarized the evidentiary requirements as follows: “It is not necessary in order to establish a conspiracy that there be direct evidence of an agreement. Rather, a civil conspiracy may be asserted through circumstantial evidence or by averment of isolated or independent facts susceptible of an inference of concurrence of sentiment.”

We conclude that Hall’s allegations are sufficient to support claims of a civil conspiracy to defame Hall based on Alexander’s and Lolla-Martinez’s allegedly false out-of-court statements.... Hall alleges that Alexander and Lolla-Martinez made their out-of-court statements at the direction of Defendants as part of a conspiracy to defame him and destroy his business.

Lessons:
1. Malicious prosecution may be available when a defendant instigates criminal charges.
2. Consumer complaints to the AG’s office are protected by absolute immunity.
3. A defamation allegation must be specific but not verbatim.
4. A continuing wrong must lead to a single injury to extend running of the statute of limitations.
5. Alleging a civil conspiracy is the way to assert concerted action in the commission of a tort.
6. Clients should be advised not to leave threatening voicemails that will come back to haunt them.