In a malicious prosecution case where the underlying case was criminal rather than civil, a plaintiff “can pursue a claim for malicious prosecution only if an objective examination, limited to the documents disposing of the proceeding or the applicable procedural rules, indicates the termination of the underlying criminal proceeding reflects on the merits of the case and was due to the innocence of the accused.”
In Mynatt v. National Treasury Employees Union, Chapter 39, — S.W.3d —, No. M2020-01285-SC-R11-CV (Tenn. Oct. 5, 2023), plaintiff filed a malicious prosecution claim based on an underlying criminal case. Plaintiff alleged that after he criticized defendant union, defendant accused him of misusing union funds and caused him to be charged with two state felonies. In the criminal case, the prosecutor retired the charges against plaintiff for one year and never revived them, such that the charges were formally dismissed when the year passed.
Defendants filed a motion to dismiss the malicious prosecution claim, arguing that “plaintiff could not show that the retirement and dismissal constituted a favorable termination on the merits, which is an essential element of a malicious prosecution claim.” The trial court agreed and dismissed the case, but the Court of Appeals reversed dismissal, ruling that “there are outcomes other than acquittal following trial that can constitute a favorable termination and it is plausible that the charges were dismissed due to a lack of evidence.” (internal citation omitted). In this opinion, the Supreme Court ruled that the trial court was correct to dismiss the case.
The Court began its analysis by noting that “actions for malicious prosecution…ought not to be favored but managed with great caution.” (internal citation and quotation omitted). Whether the underlying case was criminal or civil, a plaintiff asserting a malicious prosecution claim “must show that the defendant (1) instituted a proceeding against him ‘without probable cause,’ (2) ‘with malice,’ and (3) that the proceeding ‘terminated in the plaintiff’s favor.’” (internal citation omitted). In this case, only the third element was at issue.
In determining what standard to apply here, the Court looked to cases considering favorable terminations in the civil context. In Parrish v. Marquis, 172 S.W.3d 526 (Tenn. 2005), the Supreme Court “established that a favorable termination must ‘reflect on the merits,’ which seemingly shirted toward a requirement that the circumstances of the underlying case affirmatively indicate innocence—a requirement that [a previous case] had declined.” Later, in Himmelfarb v. Allain, 380 S.W.3d 35 (Tenn. 2012), the Supreme Court “reiterated that to satisfy the favorable termination element of a malicious prosecution claim, the dismissal must be ‘a reflection on the merits of the underlying case,’” but it also rejected the approach that allows a court to “examine the circumstances under which a voluntary nonsuit is taken.” Considering these cases together, the Supreme Court wrote that “it is clear that a favorable termination must relate to the merits—reflecting on…either the innocence or responsibility for the alleged misconduct,” and that “by prohibiting courts from delving into the circumstances of a voluntary dismissal,” the Court had “set a high standard for a court to find a favorable termination where there is no order expressly stating a ruling on the merits.” (internal citations omitted).
After considering the arguments made by both parties regarding what the standard for a favorable termination should be in the criminal context, the Court concluded that “a heightened barrier to bringing a successful claim of malicious prosecution is also appropriate in the criminal context and that the favorable termination standard articulated in Parrish and Himmelfarb should be extended to apply where the underlying proceeding was criminal.” The Court explained:
We conclude that, regardless of whether the underlying action was civil or criminal, a fact-intensive and subjective inquiry into the reasons for and circumstances leading to the disposition is not permissible. …We now clarify that the favorable termination standard provided in Himmelfarb and Parrish applies regardless of whether the underlying dismissal involves a criminal or civil action. A plaintiff can pursue a claim for malicious prosecution only if an objective examination, limited to the documents disposing of the proceeding or the applicable procedural rules, indicates the termination of the underlying criminal proceeding reflects on the merits of the case and was due to the innocence of the accused.
(internal citations omitted).
Applying that standard to the present situation where the underlying case involved a criminal matter that was voluntarily retired by the prosecutor, the Court explained that when a case is retired by a prosecutor, the parties “rights are not adjudicated.” Nothing in the dismissal documents here “specifically discussed] the merits or indicate[d] Plaintiff’s innocence.” The Court ruled that determining that the retirement and dismissal was a favorable termination would have required discovery, which is “not permissible under the Himmelfarb and Parrish standard,” and that plaintiff could therefore not prove an essential element of his claim. The Court of Appeals was accordingly overturned, and the trial court’s dismissal of the case was affirmed.
This case is incredibly important to litigants seeking to pursue malicious prosecution claims based on underlying criminal cases. Under this standard, showing a favorable termination outside of an acquittal will be more difficult, as courts are prohibited from looking beyond the documents disposing of the case or the applicable rules in determining whether any other type of dismissal reflected on the merits.
This opinion was released seven months after oral arguments in this case.
Note: A new section has been added to Day on Torts: Leading Cases in Tennessee Tort Law to include this decision at Chapter 78, Section 6.
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