Berwin McCurdy, Jr. v. Rowan Drilling Co., Inc.

Opinion issued June 10, 2004

In The

Court of Appeals

For The

First District of Texas

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NO. 01-03-00399-CV

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BERWIN MCCURDY JR., Appellant

V.

ROWAN DRILLING COMPANY, INC. and EDWARD THIELE, Appellees

On Appeal from the 80th District Court

Harris County, Texas

Trial Court Cause No. 2001-28805

MEMORANDUM OPINION

Appellant, Berwin McCurdy Jr., appeals from a take-nothing judgment

rendered upon the summary judgment motion of appellees, Rowan Drilling Company,

Inc. (“RDC”) and Edward Thiele (together, “the RDC parties”). We determine

whether genuine issues of material fact precluded summary judgment for the RDC

parties on McCurdy’s claim for malicious prosecution. We affirm.

Background

In January 1996, Texas Ranger Matt Andrews met with Wayne Wicks, an

investigator whom RDC had hired to perform an audit at RDC’s yard in Odessa,

Texas; appellee Edward Thiele, who was RDC’s Chief Financial Officer; and Bill

Person, who was RDC’s Vice-President, about investigating the Odessa yard. The

reason for requesting the Texas Rangers’ investigation was that Wicks’s audit had

uncovered suspected irregularities at, and significant amounts of property missing

from, the Odessa yard . Wicks’s initial audit indicated that retired drilling

superintendent, Ernest Doyle Robinson, and a former vice-president and current tool

pusher, Paul Warren Hopkins, might have sold or stolen a large amount of the

missing property. McCurdy was one of the workers at RDC’s Odessa yard when

Robinson and Hopkins were there.

The Texas Rangers conducted an approximately 18-month-long investigation,

toward the end of which they conferred with the Ector County District Attorney. A

grand jury eventually indicted several individuals, including Robinson, Hopkins, and

McCurdy, for offenses including misapplication of fiduciary property, theft of

property in varying amounts, and engaging in organized crime. McCurdy, along with

four others, was indicted for organized criminal activity in the theft of paint, lumber,

a welding machine, and certain bolts, nuts, and washers. The indictments were later

dismissed because Robinson, whom the Assistant District Attorney considered to be

“pivotal” and “necessary” to the cases, had died.

In June 2001, McCurdy sued the RDC parties for malicious prosecution.

The

RDC parties moved jointly for both traditional and no-evidence summary judgment.

The trial court granted their motion without specifying grounds or indicating whether

the motion was granted on traditional or no-evidence grounds and dismissed

McCurdy’s claims with prejudice. McCurdy moved for new trial, which motion was

denied by operation of law.

Standard of Review and Burden of Proof

Traditional summary judgment under Rule of Civil Procedure 166a(c) is proper

only when a movant establishes that there is no genuine issue of material fact and that

he is entitled to judgment as a matter of law. Randall’s Food Mkts., Inc. v. Johnson ,

891 S.W.2d 640, 644 (Tex. 1995); see Tex. R. Civ. P. 166a(c) . A defendant is

entitled to a traditional summary judgment if the evidence disproves as a matter of

law at least one element of each of the plaintiff’s causes of action or if the evidence

conclusively establishes all elements of an affirmative defense. Johnson , 891 S.W.2d

at 644 .

A party may move for a “no-evidence” summary judgment under Rule of Civil

Procedure 166a(i) “if there is no evidence of one or more essential elements of a

claim or defense on which an adverse party would have the burden of proof at trial.”

Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp. , 994 S.W.2d 830,

834 (Tex. App.—Houston [1st Dist.] 1999, no pet.); see Tex. R. Civ. P. 166a(i) . A

no-evidence summary judgment is, therefore, like a directed verdict. See Flameout

Design , 994 S.W.2d at 834 . “The trial court must grant the motion unless the

nonmovant produces more than a scintilla of evidence raising a genuine issue of

material fact on the challenged elements.” Id.

In reviewing either type of summary judgment, we indulge every reasonable

inference in favor of the nonmovant, resolve any doubts in its favor, and take as true

all evidence favorable to it. Johnson , 891 S.W.2d at 644 ; Flameout Design , 994

S.W.2d at 834 . When, as here, an order granting summary judgment does not specify

the grounds upon which the trial court ruled, we must affirm to the extent that any of

the summary judgment grounds is meritorious. See Star-Telegram, Inc. v. Doe , 915

S.W.2d 471, 473 (Tex. 1995).

Malicious Prosecution

In his sole issue, McCurdy argues that the trial court erred in rendering

summary judgment for the RDC parties on his claim for malicious prosecution

because genuine issues of material fact existed.

A. The Cause of Action

The elements of a malicious-prosecution claim are as follows:

1.the commencement of a criminal prosecution against the plaintiff,

2.initiation or procurement (causation) of the action by the

defendant,

3.termination of the prosecution in the plaintiff’s favor,

4.the plaintiff’s innocence,

5.the absence of probable cause for the proceedings,

6.malice in filing the charge, and

7.damage to the plaintiff.

Richey v. Brookshire Grocery Co. , 952 S.W.2d 515, 517 (Tex. 1997).

The RDC parties’ summary judgment motion attacked only the elements of

causation, probable cause, and malice. Specifically, they asserted that (1) they did not

initiate or procure the criminal investigation against McCurdy, (2) probable cause

existed to support McCurdy’s indictment, and (3) the existence of probable cause

negated the malice element of McCurdy’s claim.

B. Probable Cause

1. The Summary Judgment Grounds

The RDC parties moved for rule 166a(c) summary judgment on the ground that

probable cause existed. Specifically, they argued, among other things, that the

objective evidence available to Assistant District Attorney Cadra fully supported the

decision to charge McCurdy. The RDC parties also moved for rule 166a(i) summary

judgment on the ground that “McCurdy has produced no evidence negating the

existence of probable cause against him.”

2. The Law

“Malicious prosecution actions involve a delicate balance between society’s

interest in the efficient enforcement of the criminal law and the individual’s interest

in freedom from unjustifiable and oppressive criminal prosecution.” Id . Accordingly,

in these types of cases, “there is little room for error in applying the law” because

“even a small departure from the exact prerequisites for liability may threaten the

delicate balance” noted above. Browning-Ferris v. Lieck , 881 S.W.2d 288, 291 (Tex.

1994). “To encourage reporting of crimes, and to ensure that citizens who do so in

good faith will not suffer for their actions, plaintiffs must present clear, positive, and

satisfactory proof in order to succeed.” Digby v. Tex. Bank , 943 S.W.2d 914, 919

(Tex. App.—El Paso 1997, writ denied) .

Because of the “delicate balance” involved in malicious-prosecution cases,

“there is an initial presumption . . . that the defendant acted reasonably and in good

faith and had probable cause to initiate the proceedings.” Richey , 952 S.W.2d at 517 .

“This presumption disappears once a plaintiff produces evidence that the motives,

grounds, beliefs, and other evidence upon which the defendant acted did not

constitute probable cause.” Id. at 518 . “The burden then shifts to the defendant to

offer proof of probable cause.” Id.

“The probable-cause determination asks whether a reasonable person would

believe that a crime had been committed given the facts as the complainant honestly

and reasonably believed them to be before the criminal proceedings were instituted.”

Id. at 517 . Probable cause is a mixed question of law and fact if the underlying facts

are disputed; the determination is a question of law if there is no factual dispute. Id.

at 518 . “Texas courts have consistently held that probable cause should be evaluated

from the perspective of the person or entity who made the report to law enforcement

authorities, at the time that the report was made. After-the-fact judgments made by

third parties cannot serve to confirm or deny the existence of probable cause.” Digby ,

943 S.W.2d at 920 .

3. Discussion of McCurdy’s Appellate Challenges

We need consider only the portion of the RDC parties’ summary judgment

motion that asserted that McCurdy could produce no evidence of the lack of probable

cause.

McCurdy first argues that a fact issue concerning lack of probable cause exists

because the RDC parties “did not disclose very much information at all regarding

McCurdy, but rather stood by and watched as he was wrongly arrested.” The

information that McCurdy claims that the RDC parties failed to disclose to law

enforcement personnel was the “lack of inventory control at [RDC],” which was

allegedly a “material omission.”

By not having expressly raised it in his summary judgment responses ,

McCurdy waived any argument that probable cause was lacking because the RDC

parties withheld material information from or did not disclose all material facts to the

authorities . See McConnell v. Southside Indep. Sch. Dist. , 858 S.W.2d 337, 341, 343

(Tex. 1993) (requiring that non-movant present issues defeating summary judgment

in answer or response, with sole exception’s being that non-movant may always argue

on appeal that movant’s grounds were legally insufficient to support summary

judgment) . Even if this appellate argument could somehow be implied in McCurdy’s

summary judgment responses, we note that whether a malicious-prosecution

defendant did not disclose all known material facts in good faith to law enforcement

officials has no bearing on probable cause. See Richey , 952 S.W.2d at 519 . Rather,

these matters are relevant to the malice and causation elements of a malicious-prosecution cause of action.

See id. Therefore, such evidence would be no evidence

of the lack of probable cause. Additionally, we note that McCurdy’s own summary

judgment response below relied on evidence showing that Assistant District Attorney

Cadra knew of the lack of inventory control at RDC, and McCurdy does not point, in

his appellate brief’s probable-cause discussion, to any summary judgment evidence

showing that that information was ever hidden from Cadra.

McCurdy also argues that the RDC parties made material misrepresentations

to law enforcement personnel, raising a fact issue on lack of probable cause.

Specifically, McCurdy claims that the RDC parties misled prosecutors by claiming

that an “executive privilege” (discussed below) did not exist and by making

“significant misrepresentations to the Texas Rangers.” Again, by not having raised

it in his summary judgment responses, McCurdy waived any argument that the RDC

parties’ material misrepresentations to prosecutors or to the Texas Rangers

demonstrated a lack of probable cause. See McConnell , 858 S.W.2d at 341, 343 .

Additionally, even if we could somehow construe McCurdy’s summary judgment

pleadings to include this argument, we note that whether the RDC parties made a

material misrepresentation to law enforcement personnel, like whether they failed in

good faith to disclose all material facts to the authorities, has no bearing on probable

cause. See Richey , 952 S.W.2d at 519 . Moreover, with respect to his claim that his

deposition testimony raised a fact issue concerning the RDC parties’ “significant

misrepresentations to the Texas Rangers ,” McCurdy provides no record references

in support within his brief’s probable-cause discussion, despite the fact that his

deposition was approximately 133 pages long. We also note that the few pages of his

deposition to which McCurdy cited in his summary judgment responses do not

support his appellate claim of misrepresentation, either.

McCurdy next argues, in a footnote in his brief, that deposition testimony

showed the existence of what he describes as an “executive privilege,” which he

claims was an informal, unwritten policy at RDC allowing supervisors like Hopkins

to sell themselves RDC property with only informal, verbal authorization.

McCurdy

argues that, because executive privilege would have allowed Hopkins to buy the

property that McCurdy transported to Colorado, McCurdy would not necessarily have

known that Hopkins was stealing and thus McCurdy’s guilt cannot be assumed

simply because he helped move this property. McCurdy’s argument concerns his

state of mind. However, RDC’s failure to investigate further into McCurdy’s mental

state would not preclude probable cause if all of the objective elements of a crime

reasonably appeared to have been completed. See Richey , 952 S.W.2d at 518.

Therefore, this evidence is no evidence of the lack of probable cause.

Finally, McCurdy asserts that the Texas Rangers’ reports mention him “only

a few times,” instead focusing on Robinson and Hopkins, and that, after having

contacted McCurdy once, the investigators did not contact him again for about three

months and then did not interview him for another month still.

McCurdy comments,

“This does not sound like the hot pursuit of a hardened criminal,” and he argues that

the “[l]ack of references to [McCurdy] by interviewees and lack of references to him

in documents collected by the law enforcement officials, raise serious doubts as to

what information Rowan executives could have possibly had as early as the year 1996

[when] they contacted the Texas Rangers.”

Once again, McCurdy did not make these arguments below and has thus

waived them. See McConnell , 858 S.W.2d at 341, 343 . Even had the arguments been

preserved, we would nonetheless conclude that they are without merit and that the

evidence on which McCurdy relies in support is no evidence of the lack of probable

cause. First, the Texas Rangers’ reports expressly mentioned McCurdy or his

participation in the Colorado trip 13 times, even though Robinson and Hopkins

appear to have been the investigation’s main targets.

Contrary to McCurdy’s view,

this is not a “lack” of references to him. Accordingly, one cannot reasonably infer

from the reports’ discussion of McCurdy that, as he claims, there were “doubts as to

what information Rowan executives could have possibly had as early as the year 1996

they contacted the Texas Rangers .”

On appeal, McCurdy points to no evidence other than that discussed above to

support his argument that the RDC parties lacked probable cause to report him to the

Texas Rangers.

Accordingly, we hold that the trial court did not err if it rendered summary

judgment on the ground that, as a matter of law, probable cause was not lacking.

Because of our disposition of this issue, we need not reach McCurdy’s remaining

arguments concerning the other elements of his claim.

We overrule McCurdy’s sole issue.

Conclusion

We affirm the judgment of the trial court.

Tim Taft

Justice

Panel consists of Justices Taft, Hanks, and Higley.