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.
7
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
13
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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