North Carolina Farm Bureau Mutual Insurance v. Cully's Motorcross Park, Inc.
742 S.E.2d 781
N.C.2013Background
- Fire at 314 Hill Street owned by Cully’s; Volpe was president and sole shareholder of Cully’s; Farm Bureau investigated and denied the claim after suspecting arson; Volpe failed to disclose a deed of trust on the insured property on the insurance application and on the proof of loss; a quitclaim deed transferred the property to Giron while a balloon payment remained; police and Farm Bureau pursued a criminal case against Volpe which was later dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Farm Bureau initiated the prior proceeding against Volpe. | Volpe was prosecuted due to Loftin's report. | Lucas independently initiated charges using Loftin's information. | No; initiation rests on officer discretion. |
| What standard governs whether a private party initiates a prior proceeding. | Restatement approach favored by Farm Bureau. | Officer discretion should govern. | Restatement (Second) of Torts § 653 cmt. g governs. |
| Did Investigator Loftin's reporting to Sergeant Lucas amount to initiation of a criminal action? | Loftin's report started the prosecution. | Lucas exercised independent discretion. | No; Lucas independently decided to prosecute. |
| Is remand required to apply the Restatement-based standard to factual findings? | Findings should be treated as law under the new standard. | Findings may need adjustment under new test. | Remand to develop proper fact-finding under the new standard. |
Key Cases Cited
- Best v. Duke Univ., 337 N.C. 742 (1994) (malicious prosecution elements; initiation element)
- State v. Sparks, 362 N.C. 181 (2008) (de novo review of legal conclusions; mixed questions of fact and law)
- Restatement (Second) of Torts § 653 cmt. g, — (1977) (private reporting to officials does not procure prosecution when official has discretion)
- Stanback v. Stanback, 297 N.C. 181 (1979) (restatement-based approach cited for malicious prosecution)
- Whitacre P’ship v. Biosignia, Inc., 358 N.C. 1 (2004) (remand when doctrinal formulation unavailable to trial court)