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IN THE COURT OF APPEALS OF MARYLAND No. 135 September Term, 1994 ________________________________________

MONTGOMERY WARD et al.

v.

FRANCES WILSON ________________________________________

Murphy, C.J. Eldridge Rodowsky Chasanow Karwacki Bell Raker, JJ. ________________________________________ Opinion by Eldridge, J. ________________________________________ Filed:

We issued a writ of certiorari in this case to review the rulings by the courts below concerning the torts of malicious prosecution and false imprisonment, as well as the requirements for the allowability of punitive damages in malicious prosecution and false imprisonment actions. I. Frances Wilson filed a complaint in the Circuit Court for Prince George's County against Montgomery Ward Stores and one of its "Loss Prevention Managers," Jeffrey Bresnahan, alleging false imprisonment and malicious prosecution, and seeking both compensatory damages and punitive damages. On March 5, 1992, the de-

fendants filed a motion for partial summary judgment with respect to punitive damages. They argued that, in light of Owens-Illinois

v. Zenobia, 325 Md. 420, 601 A.2d 633 (1992), which had been decided a few weeks earlier, no award of punitive damages could be recovered in Maryland absent clear and convincing evidence of tortious conduct characterized by actual malice. Contending that

"the Complaint fails to state any facts which would amount to evil motive, intent to injure, ill will or fraud by [Montgomery Ward] or its employees," the defendants argued that punitive damages were

- 2 not recoverable in the case as a matter of law. after a hearing, denied the defendants' motion. The case was tried before a jury in May 1993. The evidence The circuit court,

established that during the summer of 1987 several customers of the Montgomery Ward store in Temple Hills, Maryland, had complained of unauthorized credit charges for women's clothing which had appeared on their monthly statements, and that Jeffrey Bresnahan, a loss prevention manager with Montgomery Ward, had investigated the unauthorized charges. Frances Wilson had become a target of

Montgomery Ward's investigation, and Wilson was ultimately arrested for credit card fraud as a result of information given to a District Court commissioner by Bresnahan on behalf of Montgomery Ward. The plaintiff and the defendants presented entirely

different versions of the facts underlying Bresnahan's investigation of Wilson. the jury The defendants' version of events was presented to through the testimony of the defendant

principally

Bresnahan and of two other Montgomery Ward employees, Sandra Fuller and Lisa Holmes. Bresnahan testified that he used personnel

records and register receipts to establish that Fuller had operated the register in the women's clothing department when the unauthorized transactions were made. Bresnahan interviewed Fuller.

According to both Bresnahan and Fuller, Fuller told Bresnahan that she had rung up credit charges for a co-employee, Wilson, although Wilson had not produced a charge card. According to Fuller, Wilson

- 3 had on several occasions asked Fuller to charge purchases to a charge account number which was handwritten on a piece of paper. Sometimes Wilson told Fuller that the account number was her cousin's, and at other times that it was her sister's. Although

company policy required employees to check the identification of customers charging purchases without producing a credit card, Fuller stated that she permitted Wilson to charge the goods without showing identification. According to Fuller, Wilson later told

Fuller that nobody could get in trouble for making the unauthorized charge purchases because the store would be unable to prove what had been done. Bresnahan testified at trial that he had found Fuller to be forthright and cooperative in her interview with him. He went on

to testify that, after the interview, he had tried to verify Fuller's story. Bresnahan checked additional personnel records and

established that Wilson had indeed been working in the women's clothing department when the unauthorized purchases had been made. Bresnahan interviewed Fuller again, and then told his superiors of the status of his investigation. Next, he interviewed Wilson.

Wilson told Bresnahan that she knew nothing about the fraudulent credit charges, and she refused to give a written statement. Bresnahan testified at trial that Wilson had been curt and

unhelpful during the interview.

Nevertheless, he also stated that

he had wanted to investigate the matter further before concluding that Wilson had been responsible for the unauthorized credit

- 4 charges. Bresnahan arranged for a security assistant to interview another employee, Lisa Holmes. According to Holmes's trial

testimony, she told the security assistant that she had once seen Wilson give Fuller a credit card number handwritten on a piece of white paper, and had seen Fuller charge goods for Wilson using the number. In addition, Holmes stated that Wilson had explained that Holmes also said

the handwritten account number was her cousin's.

that Wilson had told her not to say anything about the transaction to members of the loss prevention department during the investigation. Bresnahan testified that he took no immediate action against Wilson. Bresnahan stated that he wanted to see whether additional

complaints about unauthorized transactions would be forthcoming, and that he also had to "go through the trail of command" at Montgomery Ward before he could proceed further. Bresnahan

testified that at a meeting attended by Bresnahan, two senior loss prevention managers, the Personnel Manager, and the Store Manager of the Temple Hills store, a "group consensus" was reached "that we had enough evidence to press charges." In addition, Bresnahan

testified that he had not known Wilson personally before he began his investigation and that he had no feelings of ill will towards her. The plaintiff's theory of the case at trial was, primarily, that Bresnahan had not performed an adequate investigation before

- 5 he brought the charges against Wilson. Bresnahan testified during

cross-examination that he had not compared Wilson's signature with the signatures on the unauthorized charge slips and that he had not sought expert handwriting analysis of the signatures. In addition,

Bresnahan stated that, although the unauthorized purchases included "full-figure" sweaters and a "maternity bra," he nonetheless

continued to suspect that Wilson, who apparently was of slight build, was responsible for them. Wilson's testimony at trial was inconsistent with the

testimony of Fuller and Holmes.

Wilson testified that she had She

never made any credit purchases at the Montgomery Ward store.

specifically denied ever having made any credit card purchases in which Fuller was the cashier, or any credit card purchases on behalf of another person. In addition, Wilson stated that she had

never asked Holmes and Fuller not to answer the loss prevention department's questions about unauthorized credit card transactions. As earlier indicated, Bresnahan prepared an application for a statement of charges and presented the application to a District Court commissioner in Prince George's County. issued a warrant for Wilson's arrest. The commissioner

Two members of the Prince

George's County Police Department subsequently arrested Wilson at the Temple Hills store. Wilson testified at trial that customers

and fellow employees saw her being handcuffed and removed from the store, and that she felt "scared, nervous, humiliated and embarrassed." Wilson's mother told the jury that Wilson had been

- 6 nervous and upset after the incident, but that she had eventually recovered. Both Wilson and her mother stated that Wilson had no

criminal record and had never previously been arrested. Only limited evidence was introduced at trial with respect to the disposition of the criminal prosecution for credit card fraud against Wilson. defendants had filed Before the trial in the present case, the a motion in limine to "preclud[e] the

Plaintiff from raising the issue of an erroneous entry in her criminal prosecution marked `not guilty.'" According to the

defendants, the criminal charges against Wilson were dismissed because several witnesses failed to appear for the trial, which had already been rescheduled three times. accuracy of the assertion. limited evidence of Wilson did not challenge the

In this civil action, the circuit court of the criminal case to

the disposition

statements that the charges against Wilson had been dismissed. Both parties acquiesced in the circuit court's ruling. After the plaintiff had presented her case, the defendants moved for judgment on the ground that the evidence showed, as a matter of law, probable cause for Wilson's arrest. The defendants

also argued that the plaintiff had failed to establish either false imprisonment or malicious prosecution. the motion. The circuit court denied

At the conclusion of all the evidence, the defendants They renewed their contentions that, as

again moved for judgment.

a matter of law, the evidence demonstrated probable cause and failed to establish either false imprisonment or malicious

- 7 prosecution. With respect to a possible award of punitive damages,

the defendants renewed their argument that an award of punitive damages could not be based on implied malice and that the plaintiff had presented no evidence of actual malice. In addition, the

defendants contended that, under Maryland law, evidence of the defendants' financial worth was required to be submitted to the jury before an award of punitive damages could be assessed. circuit court denied the defendants' motion. The trial judge instructed the jury that, under the The

circumstances of the case, the defendants would not be liable for false imprisonment or malicious prosecution if they had probable cause to believe that Wilson had committed a theft offense.1 The

circuit court instructed the jury at length on the meaning of probable cause, elaborating upon an initial definition which the This instruction presumably was based upon Maryland Code (1973, 1995 Repl. Vol.),

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