Plaintiffs filed this action in the Circuit Court of Crittenden County, Arkansas alleging that the arrest and prosecution of Ralph Puckett was without probable causes. Defendant Kenesaw Leasing, Inc. ("Kenesaw") removed the action on the basis of diversity jursidiction. Kenesaw has filed two motions for summary judgment. In the first it requests judgment on plaitniffs' claim for malicious prosecution. In the second, it requests judgment on its counterclaim for breach of the lease agreement.
The facts, according to the record, are as follows:*fn1 On January 28, 2002, NKP Trucking, Inc., Ralph W. Puckett and Emma K. Puckett entered into a Lease Agreement whereby the Pucketts signed as principals and personal guaranators of the lease of ten Kenworth dump trucks and two Dorsey dump trailers to to the company. Paragraph 14 of the Lease Agreement requires that all leased equipment be returned to Kenesaw's Memphis facility upon the end of the lease. The lease ran through July, 2005.
On December 2, 2002, Ralph Puckett called Wade West of Kenesaw and advised West that he could not continue payment under the lease. West declared Puckett in default of the lease and so advised Puckett. On or about December 4, 2002, West traveled to NKP's facility to discuss return of the leased equipment to Kenesaw's Memphis facility. Based on his discussion with Puckett, West retained the services of Mark Harkness to pick up all of the leased equipment from NKP's yard in West Memphis and return it to Kenesaw's Memphis facility.
On December 7 and 8, 2002, Harkness and his assistant John Tatum moved a number of pieces of equipment to Memphis. Kenesaw states that three pieces of equipment under the lease were not found at the NKP facility. Puckett later told West where two pieces of equipment could be found. A missing tractor was found in Jonesboro and a missing trailer was found in the possession of Fowler Concrete in West Memphis.
The last piece of equipment, the Dorsey trailer, was not found. Plaintiffs contend that the Dorsey trailer was on the lot behind a locked gate at the time plaintiffs turned the only key to the gate over to Harkness. Plaintiffs state that they left, and upon their return, did not see the Dorsey trailer. Harkness claims that he saw the Dorsey trailer the first day he was on the lot. The next time he was on the lot, the gate was locked and the Dorsey trailer was no longer on the lot.
West states that he had several discussions with Puckett in a continuing effort to locate the missing trailer. Puckett states that he told Harkness that he didn't have the trailer and that he would help West and Harkness find the trailer. Puckett says he drove around looking for the trailer. Puckett told West and/or Harkness of several locations where the trailer might be. Wade and Harkness claim that they followed each of these "leads" in an effort to find the missing trailer, but that the trailer was not at any of the locations. Both West and Harkness asked Puckett to report the Dorsey trailer as stolen. Puckett would not do so but stated he would help find the trailer.
On March 14, 2003, West sought the advise of Sgt. Will Smith, a detective with the West Memphis Police Department, about what he viewed as plaintiffs' failure to return the leased Dorsey trailer. Sgt. Smith and his superior Lt. Ken Mitchell reviewed and concluded that Ark. Code Ann. § 5-36-115 was applicable.*fn2 Smith informed West that the statute required the lessor, i.e., Kenesaw, to give five days' written notice to the lessee, i.e., the Pucketts, and the opportunity to return the leased equipment or pay for it.
On March 14, 2003, West sent five-day notice letters to the Pucketts, notifying each of them that they had five business days to return the missing trailer to Kenesaw or pay its value under the lease.*fn3 Ralph Puckett received the letter. Emma Puckett did not claim her letter but was aware of it and discussed it with Ralph.
On April 8, 2003, West returned to the West Memphis Police Department and reported to Smith that he had not been contacted by either of the Pucketts. He gave Smith a copy of the five-day notice letter and the Pucketts' return receipts. Smith prepared an Affidavit for Warrant of Arrest of Ralph Puckett, and West signed it. The Affidavit for Warrant of Arrest stated the following:
Pursuant to Rule 7.1 of the Arkansas Rule of Criminal Procedures[sic], the undersigned affiant(s) being duly sworn, deposes and says that he has reason to believe that the above-named person [Ralph William Puckett] committed the offense of: (5-36-115) THEFT OF LEASED, RENTED OR ENTRUSTED PERSONAL PROPERTY (CLASS B FELONY) on or about the 25th DAY OF MARCH, 2003. Any person is guilty of theft who shall intentionally, fraudulently, or by false pretense take, carry, lead, drive away, destroy, sell, secrete, covert, or appropriate in any wrongful manner any personal property which is leased, rented, or entrusted to the person, or reports falsely of his wealth or mercantile credit and thereby fraudulently obtains possession of that personal property (PROPERTY BEING A 1992 DORSEY 28 FOOT ALUMINUM DUMP TRAILER VALUED AT APPROXIMATELY $13,000.00) in the City of West Memphis in Crittenden County, Arkansas, against the peace and dignity of the state of Arkansas.
Smith also prepared an NIBRS Incident Report Form.*fn4
We have recovered all of the equipment under the lease, at least that which is worth recovering, with the exception of the following trailer:
One(1) 1992 Dorsey 28" Aluminum End Dump; VIN # 1DTD18A28NP03410 Today, our flexibility ends and we have not [sic] choice but to issue the following ultimatum.
You have five (5) business days to return the aforementioned trailer to a location of Kenesaw's choosing or make restitution of such equipment in the amount of $13,000 in certified funds. Failure to either return the equipment or make restitution within 5 days of your receipt of this letter constitutes evidence to ...