Malicious Prosecution Tort Supported by Fabricated Evidence
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Sarah Steinmetz filed a five-count complaint against Lindsey Pickholtz and Steven Gordon, alleging malicious prosecution, abuse of process, intentional infliction of emotional distress, and conspiracy to commit malicious prosecution because the defendants reported her to the Division of Insurance with making false statements and being arrested by the State in connection with those charges. The complaint detailed events spanning two-and-a-half years, beginning with the sale of Steinmetz’s condominium to Pickholtz and Gordon. The relationship between the parties deteriorated after a prank call incident, leading to fabricated evidence and legal actions against Steinmetz.
In Sarah Steinmetz v. Lindsey Pickholtz, et al., No. 3D24-0417, Florida Court of Appeals, Third District (June 11, 2025) most of the issues raised on appeal were resolved.
Background:
The trial court dismissed Steinmetz’s complaint with prejudice. Steinmetz appealed, arguing that the trial court erred in its decision and in denying her leave to amend.
Appeal Court Decision:
The Florida Court of Appeals affirmed the dismissal of the abuse of process and intentional infliction of emotional distress claims but reversed the “with prejudice” designation and the dismissal of the remaining counts. The court concluded that Steinmetz’s allegations were sufficient to overcome a motion to dismiss for malicious prosecution and civil conspiracy .
Key Points:
1 Malicious Prosecution: Steinmetz’s allegations of fabricated evidence and lack of probable cause were deemed sufficient to support a claim for malicious prosecution .
2 Civil Conspiracy: The court found that Steinmetz’s detailed allegations of an agreement between Pickholtz and Gordon to fabricate evidence and make false reports were adequate to support a civil conspiracy claim .
3 Abuse of Process: The court affirmed the dismissal of this claim but noted that Steinmetz should have been granted leave to amend .
4 Intentional Infliction of Emotional Distress: The court affirmed the dismissal of this claim, finding the allegations insufficient to meet the required standard .
ANALYSIS
A bona fide termination is a critical element to proof of the tort of malicious prosecution since a very early date and has been described as a pre-condition to the later action. As Justice Scalia explained in the seminal case of Heck v. Humphrey, 512 U.S. 477 (1994) one element that must be alleged and proved in a malicious prosecution action is termination of the prior criminal proceeding in favor of the accused.
Steinmetz failed to sufficiently allege that the voluntary dismissal of the civil injunction and the nolle prosequi of the criminal aggravated stalking case constituted “bona fide terminations” of the earlier proceedings, as is required to support malicious prosecution claims. Generally, whether a voluntary dismissal or nolle prosequi constitutes a bona fide termination sufficient to support a claim for malicious prosecution presents a factually dependent question, and therefore the issue is best suited for the jury as the factfinder.
Steinmetz alleged that Pickholtz, with Gordon’s assistance, instigated the former proceedings with improper purpose and without probable cause. Intentional infliction of emotional distress requires the following elements:
1. intentional or reckless conduct;
2. outrageousness beyond all bounds of decency;
3. causation; and
4. severe distress.
The second prong is the gravamen of the tort.
CONCLUSION
While the anxiety and stress of being charged by the Division of Insurance Fraud with making false statements and being arrested by the State in connection with those charges is understandable, the appellees’ behavior in investigating and then allegedly falsely reporting to the Division of Insurance that fraud was committed. However, the Court of Appeals concluded the action is not the type of conduct that is so outrageous in character and extreme in degree as to go beyond the bounds of decency and be deemed utterly intolerable in a civilized society.
ZALMA OPINION
If an insurer or a citizen learns of an attempt at insurance fraud they are obligated to report that suspicion to the Florida Division of Insurance Fraud. However, it is a tort to make such a report maliciously or in bad faith. Steinmetz claimed that she was falsely accused of fraud, was arrested by the Division of Insurance Fraud who dismissed the charge and refused to prosecute. She then claimed, but was unable to establish malicious prosecution and the Court of Appeal concluded that the accusations were not outrageousness beyond all bounds of decency.
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On September 25, 2025, Leisz tendered a conditional admission and affidavit of consent. Leisz acknowledged the material facts of the complaint were true and she had violated the Montana Rules of Professional Conduct as alleged by ODC.
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The plaintiff, Pankaj Merchia, is a physician, scientist, engineer, and entrepreneur, proceeding pro se. Merchia sued United Healthcare Services, Inc., a Minnesota-based medical insurance company, for defamation and related claims. The core allegation is that United Healthcare falsely accused Merchia of healthcare fraud, which led to his indictment and arrest in Massachusetts, causing reputational and business harm in the District of Columbia and nationwide.
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Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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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/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
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