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DAVIS v. CHUBB/PACIFIC INDEM. GROUP

June 17, 1980

HARRY DAVIS V. CHUBB/PACIFIC INDEMNITY GROUP; FEDERAL INSURANCE COMPANY; INSURANCE CRIME PREVENTION INSTITUTE; JOSEPH McCARTHY, Individually and as Agent for Insurance Crime Prevention Institute


The opinion of the court was delivered by: BECHTLE

MEMORANDUM AND ORDER

Presently before the Court is the defendants' motion for partial summary judgment. For the reasons stated below, the motion will be granted in part and denied in part.

 This is a diversity action based on a claim of malicious prosecution and defamation arising out of the prosecution of plaintiff Harry Davis ("Davis") for what the Court will refer to as insurance fraud. *fn1" It is sufficient to note for the purpose of the instant motion that Davis alleges that the defendants insurance companies, an insurance industry crime prevention organization and an employee of that organization (collectively, "the defendants") instituted criminal proceedings against him, charging complicity in a scheme to file claims under automobile accident policies for accidents which, in fact, did not occur. In addition, Davis alleges that the defendants caused certain defamatory statements to be disseminated to prosecutorial authorities and to the media in general.

 Following the institution of criminal charges against Davis in the Common Pleas Court of Philadelphia, a motion to quash the information was denied, the court holding that a prima facie case had been established. In early December, 1978, Davis entered the Accelerated Rehabilitative Disposition Program ("A.R.D."), as authorized by Rules 175-185 of the Pennsylvania Rules of Criminal Procedure. Although A.R.D. is not an adjudication of guilt per se, Davis was placed on three months' non-reporting probation, upon the successful completion of which the charges were dismissed. *fn2" The difficulty with Davis' malicious prosecution claim is that he must prove that the underlying criminal proceedings were "terminated in his favor." Pennsylvania Legal Encyclopedia, Malicious Prosecution § 5 at 287; Restatement of Torts (2d) § 658; 52 Am.Jr.2d, Malicious Prosecution § 29 at 204. Although the matter is not entirely free from doubt, the Court finds that disposition through A.R.D. is not sufficiently favorable to Davis, as a matter of law, *fn3" to support his claim for malicious prosecution.

 Various reasons have been offered in support of the requirement in such claims that the criminal proceedings be terminated favorably for the plaintiff. It has been said that a conviction is sufficient to negate the element of a lack of probable cause. W. Prosser, Law of Torts, § 119 at p. 838 (4th ed. 1971). Similarly, to permit a convicted criminal defendant to proceed with a malicious prosecution claim would permit a collateral attack on the conviction through the vehicle of a civil suit. Id. Perhaps most importantly, it has been noted that courts will simply not tolerate inconsistent judgments. 52 Am.Jr.2d, Malicious Prosecution § 29 at 205.

 The confusion arises, however, when the underlying criminal action is disposed of in some manner short of a judgment of guilty or not guilty. It is clear that the civil plaintiff need not demonstrate that the charges were disposed of on the merits, but only that the disposition was "consistent with innocence" or, in other words, in a manner that is "inconsistent with guilt." Thomas v. E. J. Korvette, Inc., 329 F. Supp. 1163, 1168 (E.D.Pa.1971), rev'd on other grounds, 476 F.2d 471 (3d Cir. 1973); Restatement of Torts (2d) § 660. Several examples of terminations which are short of "determinations on the merits" but which are nonetheless sufficiently favorable to allow the claim to move ahead are:

 (1) a discharge by a magistrate at a preliminary hearing;

 (2) the refusal of a grand jury to indict;

 (3) the formal abandonment of the proceedings by the public prosecutor; or,

 (4) the quashing of an indictment. Restatement of Torts (2d) § 659.

 A termination which is "indecisive" will not support the malicious prosecution claim. Id., § 660. Several examples of indecisive terminations are:

 (1) a charge that is withdrawn pursuant to an agreement with the accused (Restatement of Torts (2d) § 660);

 (2) a charge that is withdrawn out of mercy requested or accepted by ...


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