After Insurance Fraud Indictment Dismissed Defendants Sue Police Officer

Contents

EVIDENCE REQUIRED TO SUPPORT MALICIOUS PROSECUTION AGAINST POLICE

Vicki Davis and Robin Trawick filed suit against Defendants State Farm Fire and Casualty Company (“State Farm”), Don Allen, and the Georgia Office of Insurance and Safety Fire Commissioner (“OCI”) because they were arrested for insurance fraud which charges were later dismissed. Defendants Allen and OCI moved the court to dismiss the malicious prosecution action in Vicki H. Davis and Robin R. Trawick v. State Farm Fire and Casualty Company, et al., No. 1:21-cv-2988-MLB, United States District Court, N.D. Georgia, Atlanta Division (December 23, 2021).

BACKGROUND

On December 26, 2016, a fire destroyed Plaintiff Davis’s residence and all her personal belongings. Plaintiff Davis notified Defendant State Farm of the fire and made a claim pursuant to policy she had with it. Defendant State Farm extended coverage and made a payment of $239,200.00 for loss of the residence but did not issue any payment for loss of her personal property.

Defendant Allen, an investigator for OCI, submitted a warrant application to the Magistrate Court for Grady County, Georgia for Plaintiffs’ arrests. The application stated Plaintiff Davis “collected insurance money for living expenses that were not legal. Made false statement to Insurance Company.” Plaintiffs made their first appearance after being arrested and booked.

The Grady County Magistrate Court dismissed the criminal warrants for lack of evidence.

Plaintiffs then sued Defendants Allen and OCI alleging three counts: (1) state law malicious prosecution; (2) federal § 1983 unreasonable seizure of person, and (3) federal § 1983 malicious prosecution. Defendants Allen and OCI moved to dismiss. Since the Plaintiffs did not dispute OCI should be dismissed and their state law claim for malicious prosecution against Defendant Allen should be dismissed. The Court, therefore, dismissed both counts.

DISCUSSION

Eleventh Amendment Immunity

Defendant contended that any claims against him in his official capacity are barred by the Eleventh Amendment and 42 U.S.C. § 1983. Plaintiff, however, represents Defendant “Allen is being sued in his personal capacity.

Federal § 1983 Unreasonable Seizure

Plaintiffs asserted an independent “Fourth Amendment Unreasonable Seizure of Person” claim. Plaintiffs alleged Defendant’s conduct “in causing and facilitating the arrest and detention of Plaintiffs . . . without arguable probable cause constituted an unreasonable seizure of person in violation of the Fourth Amendment.” Although it was not entirely clear from the complaint whether Plaintiffs are trying to plead a freestanding false arrest claim, but, if they are, that claim failed as a matter of law.

A claim of false arrest or imprisonment under the Fourth Amendment concerns seizures without legal process, such as warrantless arrests. The issuance of a warrant-even an invalid-one constitutes legal process, and thus, where an individual has been arrested pursuant to a warrant, his claim is for malicious prosecution rather than false arrest. Regardless of the validity of the warrant, plaintiff’s allegations support a § 1983 malicious prosecution claim rather than a § 1983 false arrest claim.

The Court had no option, therefore, but to dismiss Plaintiffs’ “Fourth Amendment Unreasonable Seizure” claim since the plaintiffs were arrested and detained under the authority of a warrant.

Federal § 1983 Malicious Prosecution

Plaintiffs also bring a federal § 1983 malicious prosecution claim. Plaintiffs claim Defendant caused a felony criminal prosecution to be initiated against them for the offense of insurance fraud and participated and assisted with the continuation of that prosecution for 231 days. They allege Defendant knew or should have known that there was no arguable probable cause to support the prosecution which was based on statements by an insurance company that were either knowingly false or made with reckless disregard for the truth. Plaintiffs contend Defendant knew those statements were false or continued the prosecution of Plaintiffs with reckless disregard for the truth, and thus the prosecution was carried out maliciously, without probable cause, and was ultimately terminated in Plaintiffs’ favor.

Malicious prosecution is “a violation of the Fourth Amendment and [a] viable constitutional tort under § 1983.” Blue v. Lopaz, 901 F.3d 1352, 1357 (11th Cir. 2018). To maintain a claim of malicious prosecution, Plaintiffs must overcome two hurdles:

They must prove they suffered a seizure pursuant to legal process that violated the Fourth Amendment. This burden requires them to “establish:

that the legal process justifying their seizure was constitutionally infirm and
that their seizure would not otherwise be justified without legal process.
the elements of the common law tort of malicious prosecution.

To establish common-law malicious prosecution, a plaintiff must show:

a criminal prosecution instituted or continued by the present defendant;
with malice and without probable cause;
that terminated in the plaintiff accused’s favor; and
caused damage to the plaintiff accused.

A warrant violates the Fourth Amendment if the affidavit supporting it contains deliberate falsity or reckless disregard for the truth, which applies to both statements and omissions. Plaintiffs claim Defendant either knew the statements by the insurance company were false or he continued the prosecution with reckless disregard for the truth.

Survival of such claim requires some evidence establishing Defendant’s subjective belief about the veracity of the assertions made in his affidavit. A plaintiff’s attack on an affidavit thus must be more than conclusory and must be supported by more than a mere desire to cross-examine. There must be allegations of deliberate falsehood or of reckless disregard for the truth, and those allegations must be accompanied by an offer of proof. They should point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons

Plaintiff did not identify what false information was put in the reports or why that information was false. Rather, plaintiff presented nothing more than conclusory statements about false evidence, statements, and reports. Plaintiff, therefore, has failed to allege fact demonstrating that the defendant intentionally or recklessly made false statements or omissions in procuring the arrest warrant and that the false statements were necessary to the finding of probable cause.

While including repeated, generic allegations of intentional misconduct, Plaintiffs did not point out specifically the portion of the warrant affidavit they claimed was false or include any statement of supporting reasons as to why it was false or why Defendant knew that. Plaintiffs’ conclusory allegations were insufficient to demonstrate an unconstitutional warrant since they fail to allege facts demonstrating that Defendant intentionally or recklessly made false statements or omissions in procuring the arrest warrant and that the false statements were necessary to the finding of probable cause.

The law states that an arresting officer is required to conduct a reasonable investigation to establish probable cause. In making an arrest affidavit or seeking an arrest warrant, a police officer may not close her or his eyes to facts that would help clarify the circumstances of an arrest. An officer need not “take ‘every conceivable step . . . at whatever cost, to eliminate the possibility of convicting an innocent person.’” [Williams v. City of Homestead, Fla., 206 Fed.Appx. 886, 888 (11th Cir. 2006)]. And not “every failure by an officer to discover ‘easily discoverable facts’ violates the Fourth Amendment.” [Washington v. Rivera, 939 F.3d 1239, 1248 (11th Cir. 2019)] Officers cannot conduct an investigation in a biased fashion, elect not to obtain easily discoverable facts, or choose to ignore information that has been offered to him.

Plaintiffs claim State Farm provided Defendant a statement which was the basis of their prosecution. Plaintiffs contended Defendant was required to verify the information provided by State Farm and did not undertake any reasonable avenues of investigation which would have exonerated Plaintiffs.

However, officers may generally rely on a victim’s statement to support probable cause absent allegations indicating that their reliance was unreasonable.

The factual allegations in the complaint fail to demonstrate a lack of probable cause. The Court, therefore, granted Defendants Don Allen and Georgia Office of Insurance and Safety Fire Commissioner’s Motion to Dismiss.

State Farm was not a party to these motions but will probably bring its own motion since the report to the police was probably made in accordance with the insurer’s obligation to report suspicion of crime by state law or common law and that is why plaintiffs spent their time against the police officer.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

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