When disaster struck Haywood County, and other mountain communities, in the form of two hurricanes in 2004, donations poured in from public and private sources throughout the state. Certain non-profit entities formed a committee to administer relief funds from several of these sources. The executive director of one of these entities, the Council on Aging, volunteered to hold a portion of these relief funds. However, when the United Way and other committee member organizations began to have questions about the status of the money and asked for its return, that same executive director refused to provide an explanation for why the funds were not immediately surrendered. The Council on Aging later terminated the executive director, and the member organizations decided to turn over their documents to local law enforcement to determine if criminal activity had taken place with respect to the missing money.
Denise Mathis, the former executive director, was later charged with embezzlement by the District Attorney - but the charges were later dropped. She then sued the organizations in question for malicious prosecution. Summary judgment was granted, after which Mathis appealed.
In the case of Mathis v. Dowling, et al., the Court of Appeals affirmed the trial court ruling by finding that the plaintiff had failed to satisfy 3 of the 4 elements of malicious prosecution.
Because the detective testified that he had conducted his own independent investigation, which ultimately led to the charges being filed, the court determined that the defendants had not procured the prosecution but had instead only rendered assistance to the detective and thus were not liable. In addition, the court found that the defendants had probable cause to deliver their investigatory materials to the detective because there was no good explanation for the missing money that would have satisfied the defendants' fiduciary obligation to determine the whereabouts of the money. Finally, the court further held that there was no demonstrated malice on the part of the defendants, as their questions regarding the whereabouts of the money were legitimate and reasonable. The upshot of this case is that just because a criminal proceeding was terminated in the plaintiff's favor does not necessarily give rise to a malicious prosecution claim. Public policy dictates that individuals and organizations cooperate with legitimate law enforcement investigations without fear that they will be hailed into court later for actions taken by the District Attorney over which they have no control.
