Stokes v. Southern States Cooperative, Inc., 651 F.3d 911

Stokes guaranteed two SSC notes for Roberts totaling $430,000; Roberts paid largely via crop proceeds which SSC misapplied to Statesman’s cash note; the guaranty was for payment to SSC, not to Statesman; state court found the guaranty valid but Stokes not liable due to misapplied payments; SSC sued Stokes for $249,854.03 in state court; Stokes learned of misapplication only through discovery in 2001; district court granted summary judgment to SSC on malicious-prosecution claim; on appeal the Eighth Circuit reversed and remanded.”,

Issue	Plaintiff's Argument	Defendant's Argument	Held
Probable cause lacking for the guaranty suit	Stokes argues SSC lacked objective probable cause to sue on the guaranty	Stokes contends SSC reasonably believed the guaranty was enforceable	Yes; probable cause lacking; district court erred in granting summary judgment on this element
Malice in prosecuting the guaranty suit	Stokes contends SSC acted with improper motive to pressure settlement	SSC asserts actions were based on a legitimate claim and business practices	Yes; issue for jury to determine whether motive was improper

Lemay v. Williams, 32 Ark. 166 (1877) (probable cause and malice may be inferred from lack of a valid cause of action)
Foster v. Pitts, 63 Ark. 387 (1897) (belief and reasonable grounds must unite to constitute probable cause; malice is improper motive)
Kable v. Carey, 204 S.W. 748 (Ark. 1918) (probable cause is an objective standard involving facts and law)
Milton Hambrice, Inc. v. State Farm Fire & Cas. Co., 114 F.3d 722 (8th Cir. 1997) (probable cause is reasonableness by ordinary caution; facts and law)
Goshen Farms, Inc. v. Farm Serv. Co-op., 590 S.W.2d 861 (1979) (malice defined as improper purpose in prosecution)
Carmical v. McAfee, 7 S.W.3d 350 (1999) (probable-cause standard; Restatement guidance cited)