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GLENN v. HOERNER BOXES

November 19, 1962

WAYNE E. GLENN, GEORGE L. WOODS, JAMES SLANKARD AND TOM HARRIS, PLAINTIFFS,
v.
HOERNER BOXES, INC., DEFENDANT.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

On September 24, 1962, the defendant, Hoerner Boxes, Inc., filed its motion to dismiss the complaint of plaintiffs on the ground that the complaint fails to state a claim upon which relief can be granted. It was specifically alleged in the motion:

(1) That the original complaint of the defendant herein filed by it as plaintiff in the Sebastian Chancery Court, Fort Smith District, on March 7, 1962, was against the defendants therein, plaintiffs in the instant action, only for the purpose of securing an injunction against the International Brotherhood of Pulp, Sulphite & Paper Mill Workers, which union the defendants in said action represented; that the suit was a class action brought against the individuals as representatives of the members of the union in the manner provided by Arkansas law;

(2) That in the "Application for Contempt Citation" filed in the said Chancery Court, the individuals named as defendants therein (plaintiffs in the instant action) were named for the reason that they were the defendants in the complaint referred to in (1) above and in the decree entered by the Chancery Court on March 8, 1962, and because of their being representatives of the union and for no other reason, and that such procedure was based on the Arkansas law pertaining to class actions; and

(3) That the plaintiffs in the instant action, being representatives of a class and having been proceeded against in such capacity, have no individual claim or cause of action against the defendant.

On October 4, 1962, the defendant filed an amendment to its motion of September 24, 1962, in which it reaffirmed the allegations contained in the original motion, and further alleged:

(1) That the decree of the Chancery Court issued on the original complaint granted injunctive relief against the defendants therein (plaintiffs here) individually and as representatives of the International Brotherhood of Pulp, Sulphite & Paper Mill Workers Union;

(2) That in response to the "Application for Contempt Citation," the Chancery Court held nine individual members of the class against which the proceedings were instituted to be in contempt of court; that the action taken by the Chancery Court is a bar to the instant suit; and

(3) That the defendant based its action in the Chancery Court entirely on the advice of counsel, which advice was rendered to the defendant after a full disclosure by defendant of all facts available to it in connection with the situation that then existed at its factory in Fort Smith, Arkansas.

On October 27, 1962, the plaintiffs responded to the motion and amendment thereto of the defendant and attached thereto certain exhibits, which will be discussed hereinafter. In addition to attaching the exhibits, the plaintiffs in their response alleged:

    "The affidavits and counter-affidavits show the
  existence of a question of fact, and the motion for
  summary judgment should be denied."

The complaint of the plaintiffs was filed on September 12, 1962, in which they alleged that on April 12, 1962, the defendant, acting through its representatives, filed in the Sebastian Chancery Court, Fort Smith District, in case numbered 1121, a pleading entitled "Application for Contempt Citation" against all four of the plaintiffs; that the plaintiffs had flagrantly and repeatedly violated an order or decree entered by the Chancery Court on March 8, 1962; that the plaintiffs and each of them should be punished for contempt of the orders and the decree of said Chancery Court, and in addition be directed to pay certain damages which the defendant alleged to have been caused by the plaintiffs to the property of the defendant and certain employees of the defendant; that the allegations of defendant contained in the "Application for Contempt Citation" were in fact untrue; that following a trial in the Chancery Court of the issues raised by the "Application for Contempt Citation," the Chancery Court on September 11, 1962, entered its order in which it found and decreed that the plaintiffs herein were not guilty of contempt and that they were discharged and acquitted.

The plaintiffs further alleged that the defendant herein instituted the suit or proceedings (that is, filed the "Application for Contempt Citation") maliciously without any probable cause therefor, and that after the institution of said proceeding, the defendant, "well knowing that no probable cause existed for the same, maliciously continued to prosecute the same" against the plaintiffs herein.

Following such allegations, the plaintiffs alleged that they had been damaged by reason of such action and prayed for the recovery from defendant of $200,000 each for such damage.

On September 25, 1962, the day after the motion had been filed, the court sent a letter to the attorneys for the defendant and to the attorneys for the plaintiffs, in which it was stated:

    "A casual reading of the motion indicates that it
  is based upon matters outside the allegations of the
  complaint, and therefore can best be treated as one
  for summary judgment and disposed of as provided in
  Rule 56, Fed.R.Civ.P. Therefore, I suggest that all
  parties present any and all pertinent material as
  provided by Rule 56."

The motion and amendment of defendant to dismiss, in effect, allege that the complaint of plaintiffs fails to state a claim upon which relief can be granted. Rule 12(b), Fed.R.Civ.P., provides:

    "* * * If, on a motion asserting the defense
  numbered (6) to dismiss for failure of the pleading
  to state a claim upon which relief can be granted,
  matters outside the pleading are presented to and not
  excluded by the court, the motion shall be treated as
  one for summary judgment and disposed of as provided
  in Rule 56, and all parties shall be given reasonable
  opportunity to present all material made pertinent to
  such a motion by Rule 56."

Rule 56(c) provides that when a motion for summary judgment is filed and the opposing party has responded thereto that:

    "* * * The judgment sought shall be rendered
  forthwith if the pleadings, depositions, and
  admissions on file, together with the affidavits, if
  any, show that there is no genuine issue as to any
  material fact and that the moving party is entitled
  to a judgment as a matter of law."

Thus, the first question which the court must determine is whether there is any genuine issue as to any material fact within the meaning of Rule 56, and, if not, then whether the defendant is entitled to a judgment as a matter of law.

In Marion County Co-Op Ass'n v. Carnation Co. (W.D.Ark. 1953) 114 F. Supp. 58, this court quoted extensively from a number of decisions of the Court of Appeals for the Eighth Circuit relative to various phases of the summary judgment rule. The court will not repeat those quotations here. Suffice it to say that the burden of establishing the nonexistence of any genuine issue of material fact is upon the moving party, and all doubts must be resolved against such party. In affirming the decision above referred to, the Court of Appeals for the Eighth Circuit in 214 F.2d 557 at page 560 said:

    "* * * Our latest expression of the rule was in the
  case of Durasteel v. Great Lakes Steel Corp., 8 Cir.,
  1953, 205 F.2d 438, 441, where it was said, `The
  motion for summary judgment is not a trial of the
  issues but

  for the purpose of determining whether in fact there
  are any genuine issues as to material facts.' In Ford
  v. Luria Steel & Trading Corp., 8 Cir., 1951,
  192 F.2d 880, 882, it was stated, `It has become settled
  law that a genuine issue as to a material fact cannot
  be tried and determined upon affidavits, and that it
  must be conclusively shown that there is no such
  issue in the case and that the moving party is
  entitled to judgment as a matter of law, before a
  summary judgment can lawfully be entered.' We have
  also held that, `The question of the sufficiency of
  the evidence raises an issue of law and if, under the
  facts, the court would be required to direct a
  verdict for the moving party, then a summary judgment
  should be granted.' Hurd v. Sheffield Steel Corp., 8
  Cir., 1950, 181 F.2d 269, 271. For other statements
  on the summary judgment rule, see Dulansky v.
  Iowa-Illinois Gas & Electric Co., 8 Cir., 1951,
  191 F.2d 881; Traylor v. Black, Sivalls & Bryson, Inc., 8
  Cir., 1951, 189 F.2d 213; Sprague v. Vogt, 8 Cir.,
  1945, 150 F.2d 795; Walling v. Fairmont Creamery Co.,
  8 Cir., 1943, 139 F.2d 318."

With the above rules in mind, the court proceeds to examine and consider the record before it.

On October 30, 1962, the court, by order, set the motion and amendment thereto and the response of plaintiffs for oral argument on November 5, 1962, at 9:00 a.m. On that date the plaintiffs appeared by their attorneys and the defendant appeared by its attorneys. Upon the call of the case and following some discussion with the attorneys, it was agreed by the parties that the issues presented should be submitted to the court for its consideration and judgment upon certain documents and agreements, which were enumerated in an order which the court entered following the conference with the attorneys at that time.*fn1

The plaintiffs are citizens of and reside in Arkansas. The defendant is a corporation organized and existing under and by virtue of the laws of the State of Delaware, with its principal place of business in Keokuk, Iowa, but operates a manufacturing establishment in the City of Fort Smith, Arkansas.

The amount involved exceeds $10,000, exclusive of interest and costs.

Since the jurisdiction of the court is based upon diversity of citizenship and the amount involved, and the acts complained of occurred in Fort Smith, Arkansas, the governing law is that of Arkansas.

Before analyzing the facts as reflected by the record, the court believes it would be well to set forth the rules of law applicable to the issues.

In 34 Am.Jur., Malicious Prosecution, Sec. 6, the rule is stated as follows:

    "* * * In general, to authorize the maintenance of
  an action for malicious prosecution, the following
  elements must be shown: (1) the institution or
  continuation of original judicial proceedings, either
  civil or criminal; (2) by, or at the instance of the
  defendant; (3) the termination of such proceedings in
  plaintiff's favor; (4) malice in instituting the
  proceedings; (5) want of probable cause for the
  proceeding; and (6) the suffering of injury or damage
  as a result of the action or prosecution complained
  of."

In Malvern Brick & Tile Co. v. Hill, 232 Ark. 1000, 342 S.W.2d 305 (1961), the court at page 1002 of 232 Ark., at page 307 of 342 S.W.2d said:

    "* * * In an action for malicious prosecution the
  burden is on the plaintiff to establish that the
  defendant acted maliciously and without probable
  cause, in prosecuting the plaintiff. In short, malice
  and want of probable cause are essential elements in
  an action for malicious prosecution. Foster v. Pitts,
  63 Ark. 387, 38 S.W. 1114; Kable v. Carey,
  135 Ark. 137, 204 S.W. 748, 12 A.L.R. 1227; Keebey v. Stifft,
  145 Ark. 8, 224 S.W. 396; Wm. R. Moore D.G. Co. v.
  Mann, 171 Ark. 350, 284 S.W. 42; Gazzola v. New,
  191 Ark. 724, 87 S.W.2d 68."

The relationship of the requisite of malice in instituting the proceedings to that of want of probable cause is stated in the case of Kable v. Carey, 135 Ark. 137, 204 S.W. 748 (1918), where the court at page 142 of 135 Ark., at page 750 of 204 S.W. said:

Practically all of the cases of malicious prosecution considered by the Supreme Court in later years have dealt with the question of whether there was want of probable cause on the part of the defendant. Therefore, the court has not had occasion recently to fully define and develop the requisite of malice on the part of the defendant. Seemingly this requisite has become subsidiary of that of want of probable cause for the reason that if the court finds that there was probable cause, it is not important to find malice, and the action for malicious prosecution could not be maintained. On the other hand, when the courts have found want of probable cause, there is no difficulty to infer malice in order to complete the requisites necessary to support such an action. The last thorough discussion of malice by the Supreme Court of Arkansas appears in the case of Lemay v. Williams, 32 Ark. 166 (1877), in which the court, beginning at page 176, stated:

    "In a legal sense any unlawful act done wilfully
  and purposely to the injury of another, is as against
  that person, malicious; the proof of malice need not
  be ...

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