O'CONNOR v. Tice

Present: All the Justices

JAMES P. O’CONNOR, ET AL.
OPINION BY
v. Record No. 091941 JUSTICE LAWRENCE L. KOONTZ, JR.
January 13, 2011
JAMES C. TICE

FROM THE CIRCUIT COURT OF NORTHUMBERLAND COUNTY
E. Preston Grissom, Jr., Judge

In this appeal of a judgment entered in favor of the

plaintiff in a malicious prosecution action, we consider

whether the evidence was sufficient to support the jury’s

verdict. In doing so, we focus on whether the defendants

initiated a criminal prosecution against the plaintiff without

probable cause.

BACKGROUND

In 2006, James P. O’Connor and Vickie L. O’Connor,

through their closely-held limited liability company Viocon

Enterprises, LLC (collectively “the O’Connors”), purchased a

commercial building in Lottsburg. In April of that year, the

O’Connors began renovating the building in anticipation of

opening a restaurant and housing Mr. O’Connor’s surveying

business. Following two unsuccessful attempts to hire a

suitable painter, the O’Connors hired James C. Tice’s

business, T & N Painting, to paint the exterior of their

building for $6,872.
 After receiving a one-third advance of $2,290.67, Tice

was supposed to start work on June 5, 2006. However, because

of rain, Tice and his crew did not begin working until June 6,

2006. It rained off and on during the time they were on the

job. At one point, the flat roof on the right side of the

building sustained storm damage. Because Tice and his crew

had to stand on that roof to paint a portion of the second

story of the building, repairs to the roof prevented them from

working for a few days. When the repairs to the roof were

complete, Tice’s employees resumed their work and placed down

“walk boards,” drop cloths and tarps, and wore soft-soled

tennis shoes while working from the roof. According to Tice,

the roof was in “perfect shape” the last time they worked on

the building.

On June 19, 2006, Mrs. O’Connor discovered “gouges and

footprints in the new roof.” The next day, Mr. O’Connor

called Tice and left a message for him to stop work

immediately and not to come back to the job because Tice had

damaged the roof. A few days later, when Tice and Mr.

O’Connor talked on the telephone, Tice denied Mr. O’Connor’s

accusation that he had damaged the roof. In an effort to

“calm [Mr. O’Connor] down,” Tice proposed that since he had

performed more than one-third of the work, he would keep his

advance and they would “part amicably.” According to Tice,

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Mr. O’Connor replied “fine” and hung up. The O’Connors

testified that they did not agree to those terms. According

to them, Tice denied damaging the roof and told Mr. O’Connor

that he was keeping his deposit and quitting the job.

Due to weather and roof repair delays, Tice and his crew

were only able to work on the building for five days in a two-

week span. During that time, Tice bought materials for the

job, including paint remover, sanding pads, and primer. Tice

and his crew used these materials to strip, sand, and prime

the building for painting. In total, Tice estimated that he

completed 75% of the “prep work,” which was 60-65% of the

entire job. Mrs. O’Connor, on the other hand, testified that

Tice completed roughly 20% of the job. And Mr. O’Connor

testified that Tice only finished about 5% of the job.

On September 29, 2006, the O’Connors filed a warrant in

debt against Tice in the Lancaster County General District

Court seeking to recover their deposit and money for damage

done to the roof. The O’Connors, however, listed the wrong

address for Tice on the warrant in debt. When the case

subsequently was dismissed for no service, the presiding judge

recommended that the O’Connors go to the Lancaster County

Sheriff’s Office to obtain Tice’s correct address. The

O’Connors went there and were told that because their building

was located in Northumberland County they should go to the

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Northumberland County Sheriff’s Office to obtain Tice’s

address.

At the Northumberland County Sheriff’s Office, the

O’Connors asked to “speak to someone about serving a warrant

in debt or getting an address.” They were introduced to

Sheriff’s Deputy Anthony Darby. The O’Connors gave Darby

their “whole packet,” which included Tice’s written estimate,

photographs of the work done, the warrant in debt, a timeline

of their recollection of the work performed each day, and

Tice’s business card. The O’Connors explained that they had

paid Tice a partial amount for an unfinished job, but they

never discussed with Darby that Tice had completed a portion

of that job. Based on the information presented to him, Darby

told the O’Connors that it looked like Tice may have committed

construction fraud. Darby then told them that he would find

Tice’s correct address and that if they wished to pursue a

criminal prosecution for construction fraud they needed to

send a certified letter to Tice demanding return of the

deposit within 15 days of receipt as required by the

construction fraud statute. See Code § 18.2-200.1.

On October 19, 2006, the O’Connors sent the “15-day

letter” to Tice, informing him that they attempted to serve a

warrant in debt against him, but were unsuccessful because the

address they had for him did not exist. The letter further

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demanded that he return the $2,290.67 deposit and pay an

additional $1000 for roof damage and $55 for court costs. The

letter then provided, “If we do not receive the debt of

$3,345.67 within 15 days of this letter we will file a

criminal complaint for construction fraud in Northumberland

County.”

Upon receiving the letter, Tice took it to his attorney,

Paul Christian Stamm, Jr. Stamm called Mr. O’Connor and

informed him that Tice had received the letter. Stamm gave

Mr. O’Connor Tice’s correct address and told him that Tice

could be served with a warrant in debt at that address or at

Stamm’s office. Stamm then sent a letter to the O’Connors on

November 3, 2006, which also informed them of Tice’s correct

address and explained that a warrant in debt could be served

at that address or at Stamm’s office. In the letter, Stamm

wrote, “[i]t appears to me that this is a civil matter and not

a criminal matter.”

The O’Connors turned over their certified letter, the

mail receipt, and their materials to Darby at the end of the

15-day period without telling Darby of Mr. Connor’s phone

conversation with Stamm or about Stamm’s letter. Darby, who

testified that he would not have sought criminal charges

against Tice if the O’Connors had not come back to him after

the 15-day period, took their information to then-

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Commonwealth’s Attorney R. Michael McKenney to see if there

was enough information to obtain a warrant. McKenney

concluded that the information presented to him constituted

probable cause to believe that Tice had committed construction

fraud.

Darby then presented to the magistrate the information

the O’Connors had provided him. On November 21, 2006, the

magistrate issued a warrant for Tice’s arrest, charging him

with construction fraud in violation of Code § 18.2-200.1.

Tice was arrested the next day.

On January 22, 2007, a preliminary hearing on the

criminal warrant was held in the Northumberland County General

District Court. At the end of the Commonwealth’s case-in-

chief, Tice’s counsel moved to strike the evidence. The judge

granted the motion and dismissed the case for lack of probable

cause.

On January 23, 2008, Tice filed in the Circuit Court of

Northumberland County a malicious prosecution action against

the O’Connors and Darby. Darby settled with Tice prior to

trial and was dismissed from the case.

The case proceeded to trial against the O’Connors with

the jury returning a verdict for Tice in the amount of

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$200,000 in compensatory damages. 1 Thereafter, the O’Connors

made a motion for judgment notwithstanding the jury’s verdict

on the grounds that as a matter of law they had probable cause

to believe that Tice committed construction fraud, and

additionally that there was insufficient evidence that they

initiated the prosecution of Tice. Following a hearing, the

circuit court denied the motion, finding that the facts with

respect to these issues were in dispute and were therefore

questions for the jury. We awarded the O’Connors this appeal.

DISCUSSION

Malicious prosecution actions arising from criminal

proceedings are not favored in Virginia and the requirements

for maintaining such actions are more stringent than those

applied to other tort cases. Reilly v. Shepherd, 273 Va. 728,

733, 643 S.E.2d 216, 218 (2007); Ayyildiz v. Kidd, 220 Va.

1080, 1082, 266 S.E.2d 108, 110 (1980); Lee v. Southland

Corp., 219 Va. 23, 26, 244 S.E.2d 756, 758 (1978). The reason

for this disfavor is that criminal prosecutions are essential

for maintaining an orderly society and people should not be

discouraged from bringing such actions out of fear of

subsequent civil proceedings against them. Reilly, 273 Va. at

1
The O’Connors made a post-trial motion pursuant to Code
§ 8.01-35.1 for the circuit court to reduce the jury’s verdict
by $15,000, the amount for which Darby settled with Tice
before trial. The court granted this motion and entered
judgment against the O’Connors in the amount of $185,000.

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733, 643 S.E.2d at 218-19; Ayyildiz, 220 Va. at 1082-83, 266

S.E.2d at 110-11; Lee, 219 Va. at 26, 244 S.E.2d at 758.

To prevail in a malicious prosecution action, Tice had to

prove by a preponderance of the evidence that the prosecution

was (1) malicious, (2) instituted by or with the cooperation

of the O’Connors, (3) without probable cause, and (4)

terminated in a manner not unfavorable to him. Reilly, 273

Va. at 732, 643 S.E.2d at 218; Baker v. Elmendorf, 271 Va.

474, 476, 628 S.E.2d 358, 359 (2006). The first and fourth of

these elements are not at issue in this appeal. Rather, the

O’Connors contend that the evidence was insufficient as a

matter of law for the jury to find that probable cause to

believe that Tice committed construction fraud did not exist

at the time the criminal warrant was issued. The O’Connors

further contend that the evidence was insufficient as a matter

of law for the jury to find that the O’Connors initiated the

prosecution of Tice. As a threshold matter, we will address

this latter contention first.

The O’Connors assert that they merely assisted and

cooperated with law enforcement in the investigation of Tice

for construction fraud. They maintain that it was Darby who

first “raised the specter” of construction fraud, it was Darby

who advised them to write the 15-day letter to Tice, and it

was Darby who after receiving the 15-day letter return receipt

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took control of the criminal prosecution by seeking the advice

of McKenney and obtaining the issuance of the criminal

warrant. The O’Connors assert that their only involvement was

reporting suspected wrongdoing and appearing as witnesses at

Tice’s preliminary hearing. They argue that this type of

involvement cannot constitute “initiating” a criminal

prosecution as a matter of law.

Tice acknowledges that Darby may have “initially raised

the specter of a criminal charge for construction fraud

against Tice,” but the O’Connors were the ones who executed

the 15-day letter containing a clear warning that they would

file “a criminal complaint for construction fraud” if Tice

failed to comply. Tice points out that after the 15-day

period had expired, the O’Connors, despite having Tice’s

correct address to serve a warrant in debt, decided instead to

turn over their information to Darby with the understanding he

would seek criminal charges against Tice. Moreover, Darby

testified that he would not have sought criminal charges

against Tice if the O’Connors had not come back to him after

the 15-day period. Tice argues that these circumstances

clearly show that the O’Connors initiated the prosecution of

Tice. We agree.

By writing the 15-day letter, warning Tice of criminal

consequences should he fail to pay them the money they had

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sought by their warrant in debt, the O’Connors clearly availed

themselves of a criminal process in order to collect a civil

debt. See Lee, 219 Va. at 27, 244 S.E.2d at 759 (“The

institution of a criminal prosecution not for the purpose of

bringing an offender to justice, but for the primary purpose

of using it as a means to collect a debt, is for an improper

purpose and therefore malicious.”) We find no merit to the

O’Connors’ contention that they were “merely” cooperating in a

criminal investigation. They unmistakably authorized Darby to

proceed criminally against Tice, providing him with all the

information used to obtain the issuance of the criminal

warrant. We therefore hold that the evidence was sufficient

for the jury to find that the O’Connors initiated the

prosecution of Tice.

Turning now to the issue of probable cause, in the

context of a malicious prosecution action, probable cause is

defined as knowledge of such facts and circumstances to raise

the belief in a reasonable mind, acting on those facts and

circumstances, that the plaintiff is guilty of the crime of

which he is suspected. Reilly, 273 Va. at 733, 643 S.E.2d at

219; Commissary Concepts Mgmt. Corp. v. Mziguir, 267 Va. 586,

589-90, 594 S.E.2d 915, 917 (2004); Stanley v. Webber, 260 Va.

90, 95-96, 531 S.E.2d 311, 314 (2000). Whether probable cause

existed is determined at the time the defendant took the

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action initiating the criminal charges. Reilly, 273 Va. at

733, 643 S.E.2d at 219; Mziguir, 267 Va. at 590, 594 S.E.2d at

917; Stanley, 260 Va. at 96, 531 S.E.2d at 314-15. When the

facts relating to the question of probable cause are in

dispute, the issue is one of fact to be resolved by the trier

of fact. Stanley, 260 Va. at 96, 531 S.E.2d at 315; Lee, 219

Va. at 27, 244 S.E.2d at 759; Brodie v. Huck, 187 Va. 485,

488, 47 S.E.2d 310, 312 (1948).

To be guilty of construction fraud, the defendant must

have the intent to defraud at the time the advance of money is

received. See Bottoms v. Commonwealth, 281 Va. ___, ___, ___

S.E.2d ___, ___ (2011) (this day decided). As evidence of

probable cause to believe that Tice committed construction

fraud as a matter of law, the O’Connors point to “three

separate law enforcement officials” – McKenney, the

magistrate, and Elizabeth A. Trible, the Assistant

Commonwealth Attorney assigned to prosecute the case – who

independently concluded that probable cause existed.

Additionally, since McKenney made the decision to prosecute

Tice, and Darby, acting on the advice of McKenney, obtained

the issuance of the criminal warrant, the O’Connors argue that

this Court must find that probable cause to initiate the

prosecution existed as a matter of law.

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 The determinations of probable cause by McKenney and the

magistrate were based exclusively on the information Darby

received from the O’Connors. 2 In attempting to rely on these

determinations as evidence of probable cause as a matter of

law, the O’Connors seem to suggest an “advice of counsel

defense.” That defense is not applicable in this case since

the O’Connors only spoke to Darby, and McKenney was not acting

as the O’Connors’ attorney when he made his determination of

probable cause. Even if the defense were available, it would

not have been established in this case as a matter of law.

We have said the following about the advice of counsel

defense in malicious prosecution actions:

“[W]hen a defendant, in initiating a prosecution,
acts in good faith upon the advice of reputable
counsel, after a full disclosure of all material
facts, he has probable cause to support his action.
Probable cause serves as a complete defense to an
action for malicious prosecution, even if the advice
given by the attorney is wrong. The defendant must
prove that he sought advice of counsel with an
honest purpose of being informed of the law, that he
made a full, correct and honest disclosure of all
material facts known to him or which he should
reasonably have known, and that he acted in good
faith guided by the advice given by counsel. This

2
We will not consider the O’Connors’ attempt to rely on
the determinations made by Trible. The jury was properly
instructed that it “shall consider the facts and circumstances
as they appeared to the defendants at the time the criminal
proceedings were instituted by the issuance of the criminal
warrant.” Thus, any determinations following the issuance of
the warrant were not relevant to whether the O’Connors had
probable cause to believe that Tice committed construction
fraud.

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 defense usually presents a jury question unless
reasonable minds cannot differ that advice of
counsel has been established.”

Andrews v. Ring, 266 Va. 311, 322, 585 S.E.2d 780, 786 (2003)

(quoting Pallas v. Zaharopoulos, 219 Va. 751, 755, 250 S.E.2d

357, 359-60 (1979)) (emphasis added). Here, the O’Connors

never informed Darby that they had been in contact with Tice’s

attorney prior to the issuance of the criminal warrant and

that this attorney had suggested to them that the dispute was

civil in nature. The O’Connors also never discussed with

Darby that Tice had completed a portion of the job. Thus, we

cannot say that the O’Connors would have established an advice

of counsel defense as a matter of law because reasonable minds

could differ on whether they “made a full, correct and honest

disclosure of all material facts.”

Having concluded that the O’Connors initiated the

criminal prosecution of Tice, the issue remains whether the

O’Connors had probable cause to initiate the prosecution.

Unlike the cases relied upon by the O’Connors on brief, the

evidence in the present case was in dispute as to whether the

O’Connors had probable cause to believe that Tice committed

construction fraud. See Bill Edwards Oldsmobile, Inc. v.

Carey, 219 Va. 90, 99, 244 S.E.2d 767, 773 (1978); American

Ry. Express Co. v. Stephens, 148 Va. 1, 17-19, 138 S.E. 496,

501-02 (1927). Tice testified that since the parties could

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not agree on who damaged the O’Connors’ roof, and because Tice

had performed more than one-third of the work on the contract,

Mr. O’Connor agreed with Tice’s proposal to keep his deposit

and leave the job. Conversely, the O’Connors testified that

Tice quit the job after performing very little of the work.

The jury could reasonably infer from this conflicting

testimony that Tice intended to fulfill his contract

obligations and that the “knowledge of such facts and

circumstances” by the O’Connors did not “raise the belief in a

reasonable mind” that Tice defrauded them. We therefore hold

that the evidence was sufficient for the jury to find that the

O’Connors did not have probable cause to believe that Tice

committed construction fraud.

CONCLUSION

For these reasons, we hold that the evidence was

sufficient to support the jury’s determination that the

O’Connors initiated a criminal prosecution against Tice

without probable cause. Accordingly, the judgment of the

circuit court will be affirmed.

Affirmed.

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