SUPREME COURT OF ARIZONA
En Banc
ALEX GONZALES, a married man, ) Supreme Court
) No. CV-01-0170-PR
Plaintiff/Appellee, )
) Court of Appeals
) Division One
) No. 1CA-CV98-0700
)
) Maricopa County
v. ) Superior Court
) No. CV-95-14110
CITY OF PHOENIX, a municipal )
corporation; JAMES J. FINNERTY, )
) O P I N I O N
Defendants/Appellants. )
)
_________________________________ )
Appeal from the Superior Court of Maricopa County
No. CV-95-14110
The Honorable Christopher M. Skelly, Judge
AFFIRMED AND REMANDED WITH INSTRUCTIONS
_________________________________________________________________
Court of Appeals, Division One
Memorandum Decision
VACATED
_________________________________________________________________
DEBUS, KAZAN & WESTERHAUSEN, LTD. Phoenix
by Larry L. Debus
Tracey Westerhausen
and
Leslie O’Hara
Attorneys for Appellee
JONES, SKELTON & HOCHULI Phoenix
by William R. Jones, Jr.
Randall H. Warner
Attorneys for Appellants
_________________________________________________________________
J O N E S, Chief Justice
INTRODUCTION
¶1 Alex Gonzales, manager of the Central Pawn Store in
Phoenix, was charged with one count of trafficking in stolen
property and one count of theft. The trial court dismissed both
counts with prejudice after the state determined there was no
reasonable likelihood of conviction. Gonzales sued the City of
Phoenix and James Finnerty, a detective with the Phoenix Police
Department, alleging malicious prosecution. The jury returned a
verdict in favor of Gonzales for $1.4 million. The trial court
denied defendants’ motion for judgment notwithstanding the verdict
(JNOV).1 In a split memorandum decision, the court of appeals
reversed, holding as a matter of law that the defendants had
probable cause to believe Gonzales committed the underlying
criminal offenses. We granted review to decide whether the court
of appeals applied the correct legal standard.
STANDARD OF REVIEW
¶2 A trial court's denial of a motion for JNOV will be
reversed only if it reflects a manifest abuse of discretion. See
1
A Motion for Judgment Notwithstanding the Verdict (JNOV) is
referred to under the current rule as a motion for judgment as a
matter of law (JMOL). Ariz. R. Civ. P. 50. Counsel for the
parties, as well as the trial court and the court of appeals, use
the old terminology. Accordingly, for purposes of uniformity, this
court elects to use the old terminology – judgment notwithstanding
the verdict.
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Hutcherson v. City of Phoenix, 192 Ariz. 51, 53, 961 P.2d 449, 451,
¶¶12-13 (1998); Blakely Oil, Inc. v. Wells Truckways, Ltd., 83
Ariz. 274, 278, 320 P.2d 464, 466 (1958). In reviewing a jury
verdict, we view the evidence in the light most favorable to
sustaining the verdict, and if any substantial evidence could lead
reasonable persons to find the ultimate facts sufficient to support
the verdict, we will affirm the judgment. Hutcherson, 192 Ariz. at
53, 961 P.2d at 451, ¶13. We have jurisdiction pursuant to article
VI, § 5(3) of the Arizona Constitution and Arizona Revised Statutes
(A.R.S.) section 12-2102 (2001).
FACTUAL AND PROCEDURAL HISTORY
A. Facts
¶3 On January 11, 1994, Robert Dovilla offered to sell a set
of Ping golf clubs to Central Pawn. Dovilla was quoted a price of
$160.00, but, before proceeding with the proposed transaction, a
store clerk identified Dovilla as a person who had previously sold
a stolen generator to the store. The clerk notified another
employee who called the Phoenix Police Department’s pawn detail to
report the situation and to determine if the clubs were stolen. A
detective at the pawn detail ran the serial numbers through its
database, but the clubs were not listed as stolen; therefore, the
employee was told that the store could purchase the clubs.
¶4 While the employee was on the phone, the clerk began
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filling out a transaction ticket. In order to have sufficient time
to obtain relevant police information on stolen property, store
policy was to stall a questionable customer by beginning routine
paperwork and obtaining the seller’s signature on the ticket.
After obtaining Dovilla’s signature, the employee confronted him
about the stolen generator transaction. Initially, Dovilla denied
any knowledge of the generator. He then changed his story and
asked the employee if he was going to get paid. The employee
replied that the store needed to sort everything out before
finalizing the purchase. Dovilla then talked to Gonzales.
Gonzales testified that Dovilla asked to speak with the owner, but
when he was told that the owner was unavailable, Dovilla left the
store, leaving the clubs behind. As a result, Gonzales told the
employee to place a ten-day hold ticket on the golf clubs pursuant
to A.R.S. section 44-1624(F),2 and to store them in a secure
location.
¶5 Later the same day, Dovilla returned to the store to
reclaim the clubs. Gonzales refused his request and invited him to
call the shop owner or the police pawn shop detail to discuss the
situation. Later in the week, the store sent the original
transaction ticket with Dovilla’s signature to the pawn shop
2
The applicable statute provided: “The pawnbroker shall
retain any property obtained by good faith outright purchase in its
original form for ten days after the original transaction date.”
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detail. The words “stolen property” were crossed out based on the
information furnished by the police detail that the clubs were not
listed as stolen.
¶6 The following week, James Finnerty, a detective with the
Phoenix Police Department, went to the pawn shop after being
notified that a portion of the transaction ticket had been crossed
out. He questioned the employee about the clubs and asked to see
a copy of the ticket. Finnerty told store employees, including
Gonzales, that the golf clubs had not been placed on an official
police hold. Other events on that day are disputed. Gonzales
testified that Finnerty tore the tag off the clubs and told him he
could proceed to sell them. This testimony was corroborated by
other store employees who noticed the tag was missing after
Finnerty left the store. Finnerty denied this, but a fellow police
officer, contradicting Finnerty, testified that Finnerty had in
fact admitted to him that he told Gonzales to sell the clubs.
¶7 Finnerty later called the store and asked why the store
had purchased golf clubs they suspected were stolen. Gonzales
informed Finnerty that the store did not purchase the clubs, even
though the ticket indicated a purchase price of $160. Finnerty
told Gonzales that he was placing a ninety-day police hold on the
clubs. Finnerty then ran a second check on the clubs and
discovered that a set of Ping clubs had been reported stolen the
day Dovilla attempted to make his sale.
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¶8 Finnerty later interviewed Dovilla, who admitted
involvement in the generator and golf club transactions but denied
knowing the items were stolen. Dovilla told Finnerty the store had
indicated it would offset the value of the golf clubs against the
loss for the stolen generator. He also stated that three employees
had a conference behind the counter before quoting him the price of
$160.
¶9 Two days later, Finnerty returned to the store with his
partner. Finnerty questioned Gonzales about the earlier generator
transaction and whether the store intended to offset the loss.
Gonzales told Finnerty that he was not present when the generator
incident took place and that the store would attempt to sell the
clubs only if they were not stolen. However, when Finnerty
appeared before the grand jury, he testified to the contrary, that
during the interview, he told Gonzales that he, Gonzales, “had
every reason in the world to believe those golf clubs . . . were
stolen,” to which Gonzales allegedly responded,“absolutely.”
¶10 Based on Finnerty’s testimony, the grand jury indicted
Gonzales on one count of reckless trafficking in stolen property
and one count of theft. A person who recklessly traffics in stolen
property commits second degree trafficking. A.R.S. § 13-2307(A).
Theft can occur in various ways. A person who “knowingly controls
the property of another with the intent to deprive the other person
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of such property” commits theft, as does a person who controls
another’s property “knowing or having reason to know” that it was
stolen. A.R.S. § 13-1802(A)(1) and (5). After certain evidentiary
rulings by the trial judge in the criminal prosecution, the state
moved for dismissal. On April 3, 1995, the trial court dismissed
both counts with prejudice.
B. The Malicious Prosecution Action
¶11 Gonzales brought the instant civil complaint against the
City of Phoenix and Finnerty, alleging malicious prosecution. The
court submitted the issue of probable cause to a jury, which
awarded Gonzales $1.4 million. After the judgment was entered,
defendants filed the motion for JNOV, asserting that probable cause
existed as a matter of law to support the initiation of criminal
proceedings against Gonzales. The trial judge denied the motion
and defendants appealed.
C. Opinion of the Court of Appeals
¶12 The court of appeals reversed the judgment. A majority
of the panel concluded as a matter of law that the underlying
criminal action was supported by sufficient evidence of probable
cause. The majority determined that the issue whether defendants’
JNOV motion was properly denied would best be resolved under a
probable cause analysis, ruling that the existence of probable
cause is a question of law to be determined de novo by the
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reviewing court without deferring to the findings of the trial
court. Relying on a few discrete facts, the majority held that
evidence of probable cause was sufficient to support the underlying
criminal charges. In dissent, Judge Garbarino argued that the
majority ignored the requirement that the facts must be viewed in
the light most favorable to Gonzales, the non-moving party.
DISCUSSION
A. Probable Cause -- The Standard
¶13 To prevail on a malicious prosecution claim, a plaintiff
must prove that the underlying criminal action was brought without
probable cause. In the context of malicious prosecution, probable
cause is defined as “a reasonable ground of suspicion, supported by
circumstances sufficient to warrant an ordinarily prudent man in
believing the accused is guilty of the offense. . . . The test
generally applied is: upon the appearances presented to the
defendant, would a reasonably prudent man have instituted or
continued the proceeding?” McClinton v. Rice, 76 Ariz. 358, 367,
265 P.2d 425, 431 (1953) (citations omitted).
¶14 Generally, the court decides as a matter of law whether
the facts are sufficient to establish probable cause. However,
when conflicting probable cause evidence exists, the court may
submit the issue to the jury in the form of a hypothetical
question. Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz.
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411, 419, 758 P.2d 1313, 1321 (1988) ("[T]he court may instruct the
jury hypothetically, telling them what facts will constitute
probable cause.") (citations omitted); Sarwark Motor Sales, Inc. v.
Woolridge, 88 Ariz. 173, 177-78, 354 P.2d 34, 36-37 (1960) (setting
forth two methods of instructing the jury).3
¶15 The probable cause evidence in the present case was
disputed. Gonzales and Finnerty offered conflicting versions of
what had actually taken place during various exchanges among
Finnerty, Gonzales, and Central Pawn’s other employees. Given this
dispute, the trial court properly submitted the issue to the jury.
In reaching the verdict, the jury necessarily found the probable
cause evidence insufficient to support the underlying criminal
charges. Following the jury’s determination, the trial court
effectively sustained the verdict when it denied the defendants’
motion for JNOV. See Hutcherson, 192 Ariz. at 53, 961 P.2d at 451,
¶¶12-13.
¶16 The majority of the court of appeals utilized a de novo
3
The trial court did not frame the issue in the form of a
hypothetical; instead, the court instructed the jury as to probable
cause, in general terms. Neither party objected to the final form
of the instructions given to the jury. Rule 51(a), Ariz. R. Civ.
P. Because neither party objected, any error is waived unless the
instruction constituted fundamental error. State v. Schrock, 149
Ariz. 433, 440, 719 P.2d 1049, 1056 (1986). There is no
fundamental error here, however, because the instruction did not
misstate the applicable law, and the instructions were not
misleading or confusing. See State v. Bass, 198 Ariz. 571, 576-77,
12 P.3d 796, 801-02, ¶17-18(2000); State v. Gallegos, 178 Ariz. 1,
10, 870 P.2d 1097, 1106 (1994).
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standard of review to determine the existence of probable cause as
a matter of law. Use of the de novo standard was improper inasmuch
as the facts presented to the jury were in dispute. As suggested
by the court of appeals dissent, the majority presumed incorrectly
on this record that probable cause is a legal issue solely for the
court to decide. Bradshaw, 157 Ariz. at 419, 758 P.2d at 1321.
Thus, the majority improperly substituted its view of the evidence
for that of the jury. In considering whether sufficient proof
exists to support a jury verdict, an appellate court looks to the
broad scope of the trial and does not re-weigh the evidence on
review. City of Glendale v. Bradshaw, 114 Ariz. 236, 238, 560 P.2d
420, 422 (1977).
B. The Jury Verdict Was Supported By Substantial Evidence
¶17 The record reflects that at the time Gonzales was
indicted, he may have suspected the goods were stolen. Gonzales
testified, however, that he acted upon his suspicion by following
all protocols set by statute, by the police pawn shop detail, and
by the pawn shop. He also testified that he was told by police to
sell the clubs because the clubs were not listed as stolen.
Importantly, this testimony was corroborated by Finnerty’s fellow
officer, who testified that Finnerty admitted that he had in fact
told Gonzales to sell the clubs. Presumably, this testimony
weighed heavily on the “no probable cause” verdict. Evidence was
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also presented that during the hold period the clubs were not
offered for sale by any employee, that Gonzales refused two
different offers to buy them, and that he did not attempt to sell
the clubs even after he was told he could do so by Finnerty.
¶18 The evidence was also disputed regarding Dovilla’s
attempted sale of the clubs to the pawn shop. Dovilla had claimed
earlier that the employees had a conference behind the counter,
quoted the selling price of $160, and then purchased the clubs. In
contrast, Gonzales testified that at the time the price was quoted,
he did not suspect the clubs were stolen, did not know Dovilla’s
history, and did not know the true value of the clubs. There was
also conflicting evidence regarding Gonzales’ knowledge as to
whether the golf clubs were stolen, that is, whether Finnerty
actually told the store to sell the clubs, whether the employees
had a conference before quoting the price, and whether the store
would sell the clubs to offset the generator loss.
¶19 The jury could reasonably infer from this evidence that
while Gonzales may have suspected that the clubs were stolen, he
nevertheless did not recklessly traffic or knowingly control stolen
goods. In addition, the jury apparently found Gonzales’ testimony
more credible than Finnerty’s. By its verdict, the jury rejected
the assertion that there was probable cause to charge Gonzales.
Ample evidence supports the jury’s determination on this issue.
Therefore, applying the correct standard, we view the evidence in
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the light most favorable to upholding the verdict. So viewed, the
evidence was legally sufficient for a jury determination of no
probable cause. Accordingly, the trial judge did not abuse his
discretion in denying the Motion for JNOV.
CONCLUSION
¶20 We find no reversible error in the trial court
proceedings. We vacate the memorandum decision of the court of
appeals and affirm the judgment of the trial court. This case is
remanded to the trial court with instructions to reinstate the jury
verdict and to enter judgment thereon.
___________________________________
Charles E. Jones
Chief Justice
CONCURRING:
____________________________________
Ruth V. McGregor, Vice Chief Justice
____________________________________
Stanley G. Feldman, Justice
____________________________________
Thomas A. Zlaket, Justice
____________________________________
William E. Druke, Judge, Court of
Appeals, Division Two
NOTE: By the recusal of Justice Frederick J. Martone,
William E. Druke, a judge of the Court of Appeals,
Division Two, was designated to sit in his stead.
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