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Engel v. CBS, Inc. [Certification] |
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Page 2 of 3
On February 8, 1985, Judge Broderick granted Engel's motion for summary judgment in the second action, dismissing the suit as against Engel. Judge Broderick considered awarding attorneys' fees to Engel, stating that he was "outraged by the suggestion here contained in [CBS's] complaint that an attorney can be effectively immobilized from representing a client by naming him as defendant." Judge Broderick, however, ultimately declined to award fees. Judge Broderick also consolidated the second action against the remaining defendants with the first action. Engel continued to represent Scholz in the consolidated actions.
On November 29, 1989, then-Chief Judge of the Southern District Charles L. Brieant issued an order severing trial of the contract claims and related counterclaims from trial of the copyright claims.1 On March 20, 1990, after a five-week trial, a jury returned a verdict in Scholz's favor on the contract claims and related counterclaims. Subsequently, both sides moved for summary judgment on the copyright claims. On July 10, 1990, Judge Brieant ruled in favor of Scholz on both motions and dismissed CBS' copyright infringement claim. Scholz recovered approximately $6,500,000 on his counterclaims. Engel characterized this victory as a "very, very favorable result."
In November 1985 Engel commenced this action in the United States District Court for the Central District of California (A. Wallace Tashima, District Judge) against CBS and its attorneys.2 The complaint alleged malicious prosecution, abuse of process, intentional infliction of emotional distress and tortious interference with business relationships based on the actions of CBS and its attorneys in naming Engel as a defendant in the second action. The defendants-appellees moved to dismiss. On September 15, 1986, applying California law, the district court dismissed all of Engel's claims, except his claim for malicious prosecution. On or about February 8, 1988, the California district court stayed discovery on the remaining claim pending resolution of the first and second actions between Scholz and CBS. On November 4, 1990, after the first and second actions as consolidated were resolved in Scholz's favor, Judge Tashima lifted the stay in this action.
CBS then moved for summary judgment in the malicious prosecution action. On March 18, 1991, Judge Tashima granted CBS's motion, reasoning that the claim was "barred as a matter of law because Defendants . . . possessed probable cause to institute the" second action against Engel. The United States Court of Appeals for the Ninth Circuit reversed. Engel v. CBS Inc., 981 F.2d 1076 (9th Cir. 1993). The Ninth Circuit held that the district court erred in concluding that there was probable cause supporting CBS's action against Engel. Id. at 1079. The court also concluded that the district court erred in applying California, rather than New York, law. Id. at 1080-82. The court noted that unlike California, New York requires a plaintiff alleging malicious civil prosecution to show that he suffered special injury--some "interference with person or property" beyond that normally encountered in defending a lawsuit. Id. at 1080 (internal quotation marks omitted). Since Engel had not alleged such special injury, the Ninth Circuit remanded the case, and directed the district court to "allow Engel to amend his complaint, if he can, to state a claim under New York law." Id. at 1083.
On February 26, 1993, Engel filed an amended complaint in the California district court asserting claims for malicious prosecution and prima facie tort under New York law. The complaint alleged that CBS brought the underlying suit to embarrass and malign Engel, to punish him for representing Scholz, and to dissuade him from representing his client zealously and vigorously. Engel's complaint further alleged that by bringing the second action, CBS interfered with Engel's person and property in the following ways: (1) he lost legal fees when a client sought representation from another attorney; (2) prospective clients were dissuaded from utilizing Engel's services; (3) the services Engel rendered to Scholz were made more difficult and costly as a result of the "conflict of interest problems inherent in the commencement of the Second Action," and Engel did not bill Scholz for these increased expenses; (4) the discovery directed at Engel in the second action interfered with Engel's representation of Scholz, creating additional costs and expenses for which Engel did not bill Scholz; and (5) Engel's reputation was damaged, causing "mental and emotional suffering and distress" as well as financial harm. His amended complaint sought over $400,000 in damages on his malicious prosecution and prima facie tort claims.
Once again, defendants moved to dismiss the complaint. On August 2, 1993, Judge Tashima granted the motion in part and denied it in part, dismissing the claim for prima facie tort but allowing the malicious prosecution claim to go forward. By order entered on May 22, 1995, after the conclusion of discovery, the California district court transferred the instant action sua sponte to the United States District Court for the Southern District of New York (Miriam Goldman Cedarbaum, District Judge) on grounds of forum non conveniens and improper venue.3
The defendants-appellees moved before Judge Cedarbaum for summary judgment on the sole ground that plaintiff could not establish the element of special injury required by New York law. The district court granted this motion. It held that, on Engel's version of the facts, the defendants-appellees' interference with Engel's representation of Scholz, Engel's loss of business, the alleged injury to Engel's reputation, and the emotional distress that Engel experienced as a result of the underlying suit are insufficient as a matter of law to meet the special injury requirement in an action for malicious civil prosecution under New York law. See Engel v. CBS, Inc., 961 F. Supp. 660, 661 (S.D.N.Y. 1997).
Engel appeals to this court arguing that 1) New York law does not require a showing of special injury as an element of a malicious prosecution action; and that 2) even if New York law does require a showing of special injury, he has presented sufficient evidence to raise genuine issues of fact for trial.
DISCUSSION
In order to prevail in an action for malicious prosecution in New York, a plaintiff must show: "1) the initiation of an action by the defendant against [him], 2) begun with malice, 3) without probable cause to believe it can succeed, 4) that ends in failure or, in other words, terminates in favor of the plaintiff." O'Brien v. Alexander, 101 F.3d 1479, 1484 (2d Cir. 1996)(citing Broughton v. State of New York, 37 N.Y.2d 451, 457, 335 N.E.2d 310, 314, 373 N.Y.S.2d 87, 94 (1975)). In addition, if the proceeding of which plaintiff complains was a civil action, the plaintiff must prove special injury--"some interference with [the] plaintiff's person or property . . . beyond the ordinary burden of defending a lawsuit." Id.; see Campion Funeral Home, Inc. v. State, 166 A.D.2d 32, 36-37, 569 N.Y.S.2d 518, 521 (App. Div. 1991); Belsky v. Lowenthal, 62 A.D.2d 319, 321, 405 N.Y.S.2d 62, 64 (App. Div. 1978), aff'd, 47 N.Y.2d 820, 392 N.E.2d 560, 418 N.Y.S.2d 573 (1979)(mem).
Engel claims that New York does not require a showing of special injury. In making this claim, he relies primarily on Burt v. Smith, 181 N.Y. 1, 73 N.E. 495 (1905). In Burt, the Court of Appeals held that "[d]amages are rarely recovered . . . for the malicious prosecution of a civil action, unless person or property is interfered with by some incidental remedy, such as arrest, attachment or injunction." 181 N.Y. at 5, 73 N.E. at 496 (emphasis added). Engel contends that Burt did not express a flat rule requiring a showing of special injury. He argues that the court's statement that damages are "rarely recovered" absent such injury opened the door to recovery absent special injury in some, albeit rare, circumstances. Engel also points to a dissenting opinion written by Chief Judge Fuld in Williams v. Williams, 23 N.Y.2d 592, 609, 246 N.E.2d 333, 343, 298 N.Y.S.2d 473, 488 (1969) (internal citations omitted):
Nor may such a cause of action [for malicious prosecution] be ruled out on the ground, advanced by the court, that there must be "interference with plaintiff's person or property." Although language in lower court cases may be found to such effect, the Court of Appeals has never so Decided.
The problem with Engel's reliance on Chief Judge Fuld's opinion is that it is a dissent. See Belsky, 62 A.D.2d at 321, 405 N.Y.S.2d at 64 (expressing sympathy for Chief Judge Fuld's dissent in Williams, but concluding that "we are constrained to honor the majority holding of the high court"). The majority in Williams noted that New York adheres to the minority rule and requires a malicious civil prosecution plaintiff to demonstrate special injury. See Williams, 23 N.Y.2d at 596 n.2, 246 N.E.2d at 335 n.2, 298 N.Y.S.2d at 477 n.2. Subsequent cases from the Court of Appeals affirm that the Williams majority accurately stated the current New York law of malicious prosecution. See Curiano v. Suozzi, 63 N.Y.2d 113, 118, 469 N.E.2d 1324, 1327, 480 N.Y.S.2d 466, 469 (1984); Belsky v. Lowenthal, 47 N.Y.2d 820, 392 N.E.2d 560, 418 N.Y.S.2d 573 (1979)(mem), aff'g, 62 A.D.2d 319, 321, 405 N.Y.S.2d 62, 64 (App. Div. 1978).
Engel argues further that even if a showing of special injury is required, it is met in this case by CBS's pursuit of the second action. In most cases, special injury has been demonstrated through the use of provisional remedies, such as arrest, attachment, replevin, or injunction. See Chrysler Corp. v. Fedders Corp., 540 F. Supp. 706, 720 (S.D.N.Y. 1982). However, it is undisputed that no provisional remedy was imposed upon Engel here. Therefore, this case raises the threshold inquiry whether special injury may be proved in an action for malicious prosecution of a civil action without imposition of a provisional remedy.
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