Suit for Malicious Prosecution Requires Favorable Termination of Prosecution
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Post 4809
Mrs. Marty Spann alleged that Defendants Asurion Insurance Services, Inc. (“Asurion”); former District Attorney General Bruce Griffey; and Tennessee Wildlife Resource Agency (“TWRA”) employees Ed Carter, Mitchell Bailey, Dale Grandstaff, Brad Jackson, and Shawn Karns (collectively with Griffey, the “State Defendants”) maliciously prosecuted her for evidence tampering and insurance fraud. The court was faced with two Motions to Dismiss filed by the State Defendants and Asurion.
In Marty Spann v. Ed Carter, et al., No. 3:23-cv-01028, United States District Court, M.D. Tennessee, Nashville Division (May 17, 2024) the USDC resolved the issue of malicious prosecution against an insurer and the state.
FACTUAL ALLEGATIONS
Although the operative Amended Complaint reads like a potential blockbuster movie the Court only needed to recite a few allegations to resolve the pending motions. That is, on February 21, 2014, Mrs. Spann was arrested and charged with tampering with her husband’s cellphone-which she allegedly knew was potential evidence in a TWRA investigation-and filing a false insurance claim with Asurion reporting that the cellphone was missing. On September 13, 2022, more than eight years after the arrest, the State of Tennessee dismissed the charges against Mrs. Spann under Tennessee Rule of Criminal Procedure 48(a).
Mrs. Spann then brought this lawsuit against the State Defendants and Asurion for malicious prosecution, alleging that each Defendant played a role in “bringing the baseless action [against her] to begin with” and “continuing to prosecute the action without probable cause.” Asurion and the State Defendants moved to dismiss the Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
ANALYSIS
Malicious Prosecution Under Tennessee Law
To establish a malicious prosecution claim under Tennessee law, a plaintiff must show that:
1. A prior suit or judicial proceeding was instituted without probable cause,
2. Defendant brought such prior action with malice, and
3. The prior action was finally terminated in plaintiff’s favor.
The State Defendants and Asurion argued that Mrs. Spann’s state malicious prosecution claim failed under the third element because the criminal proceeding at issue did not terminate in her favor. They based the argument on the fact that the Tennessee Supreme Court recently clarified that, for purposes of malicious prosecution, an action is terminated in a plaintiff’s favor only if the termination of the underlying criminal proceeding reflects on the merits of the case and was due to the innocence of the accused. There is no language in the Order or Rule 48(a) that reflects on the merits of the case or indicates that the case was terminated due to Mrs. Spann’s innocence.
Accordingly, the Court dismissed Mrs. Spann’s state malicious prosecution claim because she did not allege facts sufficient to show that the dismissal of her criminal charges constituted a favorable termination.
Malicious Prosecution Under Federal Law
The federal claim, 42 U.S.C. § 1983, provides that an individual may bring a private cause of action against anyone who, acting under color of state law, deprives a person of rights, privileges, or immunities secured by the Constitution or conferred by federal statute. To successfully bring a § 1983 malicious prosecution claim under the Fourth Amendment, a plaintiff must plausibly allege four elements:
1. the defendant made, influenced, or participated in the decision to prosecute the plaintiff;
2. there was no probable cause for the prosecution;
3. as a consequence of the legal proceedings, the plaintiff suffered a deprivation of liberty apart from the initial arrest; and
3. the criminal proceeding was resolved in the plaintiff’s favor.
Because the September 13, 2022 Order of Dismissal establishes that Mrs. Spann’s criminal prosecution ended without a conviction, she has plausibly alleged that the criminal proceeding was resolved in her favor.
Although the Complaint does not specify or indicate how Asurion, a private insurance company, acted with state-given authority. Conclusory allegations are insufficient to show that Asurion is a state actor. Accordingly, the Court dismissed Mrs. Spann’s federal malicious prosecution claim against Asurion because the Complaint failed to allege Asurion acted under color of state law.
The grand jury indictment provides a presumption of probable cause for Mrs. Spann’s prosecution and defeats the claim of malicious prosecution.
Mrs. Spann has not come close to rebutting the probable cause presumption because she has not alleged that any State Defendant provided false testimony to the grand jury to secure an indictment. Accordingly, the Court dismissed Mrs. Spann’s remaining federal malicious prosecution claims for failing to rebut the probable cause presumption created by the February 20, 2014 grand jury indictment.
ZALMA OPINION
Mrs. Spann was arrested, based on probable cause, on two crimes including the crime of insurance fraud. The basis of the claim was the dismissal of the prosecution without a finding of fact, a trial or an acquittal. The state just decided they did not want to try Mrs. Spann for the crime. Proving that no good deed goes unpunished Mrs. Spann took the dismissal and decided to try to profit from the good deed of dismissing her criminal prosecution. Her attempt failed because there was no evidence of malicious prosecution.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.
Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
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ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...