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Tort/Negligence – Malicious Prosecution – Dropped Embezzlement Charges – Institution of Criminal Proceedings – Probable Cause

Tort/Negligence – Malicious Prosecution – Dropped Embezzlement Charges – Institution of Criminal Proceedings – Probable Cause

Mathis v. Dowling (Lawyers Weekly No. 13-07-1075, 12 pp.) (Rick Elmore, J.) Appealed from Haywood County Superior Court (Alan Z. Thornburg, J.) N.C. App.

Holding: As the executive director for the local United Way, defendant Willett had a fiduciary duty to investigate a possible misuse of funds; as such, she met with prosecuting authorities, but only (1) at the request of the (post-hurricane) Unmet Needs Committee, (2) after the Chairman of the Council on Aging’s Board of Directors told her that funds were missing from the Council’s flood relief account, and (3) after personally discerning that plaintiff had made unauthorized transfers. Further, police Detective Trantham conducted an independent and thorough investigation. Willett did not institute criminal proceedings against plaintiff; rather, she rendered honest assistance to law enforcement to aid in the separate police investigation.

We affirm summary judgment for defendants on plaintiff’s malicious prosecution claim.

While defendant Young, plaintiff’s subordinate at the Council on Aging, made a written statement about plaintiff’s failure to deposit employees’ 401(k) contributions in the employees’ accounts, there is no evidence that Young either instituted or participated in the criminal proceeding against plaintiff.

Where vendors reported that invoices had not been paid, plaintiff refused the Unmet Needs Committee access to the flood relief account’s bank statements, and defendant Willett found that plaintiff had authorized the transfer of approximately $100,000 of flood relief funds without Unmet Needs Committee approval, the United Way defendants had reasonable grounds for suspicion. Furthermore, in light of the circumstances evidencing the alleged 401(k) violation, Young also had reasonable grounds for suspicion. Plaintiff failed to raise a genuine issue of material fact as to the element of probable cause.

Since plaintiff seeks punitive damages, she must prove actual malice. However, she does not argue that the United Way acted with malice. She argues but has not provided a reference to misleading statements allegedly made by Willett and/or the United Way’s disaster relief coordinator, and there is no evidence in the record to support her argument. Young became involved in the investigation at Detective Trantham’s request. While Young may not care for plaintiff, her written statement is insufficient evidence of malice.

Even though the embezzlement charges against plaintiff were dropped, she has failed to prove three of the four essential elements of malicious prosecution: initiation of the prior proceeding, probable cause, and malice.




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