Schnelle v. Cantafio

548 P.3d 1171

2024 COA 17

Kaylee SCHNELLE, Plaintiff-Appellee,

v.Ralph CANTAFIO, David Feeder, Lilly Lentz, Mike Lazar, Cantafio & Song PLLC, Mark Fischer, and Patricia Ann Scott, Defendants-Appellants.

Court of Appeals No. 23CA1333

Colorado Court of Appeals, Div. A.

Announced February 15, 2024

Routt County District Court No. 22CV30074, Honorable Michael A. O’Hara III, Judge

Clark L. Davidson, Steamboat Springs, Colorado, for Plaintiff-Appellee

Gordon Rees Scully Mansukhani, LLP, John M. Palmeri, John R. Mann, William G. Dewey, Denver, Colorado, for Defendants-Appellants Ralph Cantafio, David Feeder, Lilly Lentz, Mike Lazar, Cantafio & Song PLLC, Mark Fischer,

Coan, Payton & Payne, LLC, Brett Payton, Greeley, Colorado, for Defendant-Appellant Patricia Ann Scott

Opinion by JUDGE GOMEZ

¶ 1 In this interlocutory appeal, which we accepted under C.A.R. 4.2, we consider whether the denial of a defense motion for summary judgment or a directed verdict establishes probable cause for bringing a claim as a matter of law, thus automatically defeating a later malicious prosecution claim. We conclude that it does not. Accordingly, we affirm the trial court’s decision denying a motion to dismiss the malicious prosecution claim that plaintiff, Kaylee Schnelle (formerly Kaylee Maykranz), brought against defendants, Ralph Cantafio, David Feeder, Lilly Lentz, Mike Lazar, Mark Fischer, Patricia Ann Scott, and Cantafio & Song PLLC.

I. Background

[1] ¶ 2 In a previous case, Scott sued Schnelle for professional negligence, alleging that Schnelle mishandled her responsibilities as the listing broker for the sale of Scott’s commercial property, causing the property to be sold for less than its fair market value.¹ The other defendants are the attorneys who represented Scott in that case, their law firm, and other members of the law firm.

¶ 3 In that previous case, Schnelle moved for summary judgment on the basis that Scott couldn’t establish the necessary elements of breach of the professional duty of care, damages, or causation to support her claim. The trial court denied the motion, concluding that "[g]enuine issues of material fact exist about whether [Schnelle] was professionally competent and properly marketed the [p]roperty" and "whether [Scott] would have obtained a more favorable result but for [Schnelle’s] alleged professional negligence." The case proceeded to a jury trial. At the close of Scott’s case, Schnelle made an oral motion for a directed verdict, which the court denied. The jury returned a verdict for Schnelle.

¶ 4 Schnelle then brought this case, initially asserting claims for malicious prosecution, civil conspiracy, intentional interference with economic advantage, and outrageous conduct. In response to defendants’ C.R.C.P. 12(b)(5) motion to dismiss, Schnelle voluntarily dismissed the intentional interference with economic advantage claim and the trial court dismissed the civil conspiracy and outrageous conduct claims. But the court denied the motion as it related to the malicious prosecution claim. In doing so, the court rejected defendants’ argument that the denial of Schnelle’s motions for summary judgment and a directed verdict in the previous case prevented her from establishing the probable cause element of her malicious prosecution claim in this case.

¶ 5 Pursuant to C.A.R. 4.2(c), defendants timely sought certification of the trial court’s ruling on the malicious prosecution claim. The trial court ordered the certification over Schnelle’s objection. Defendants then filed a petition in this court to allow the interlocutory appeal under C.A.R. 4.2(d), and we granted it.

II. Jurisdiction

¶ 6 Before we turn to the merits, we first explain why we have jurisdiction over this interlocutory appeal.

[2] ¶ 7 With limited exceptions, this court has jurisdiction only over final judgments — that is, judgments that end an action, leaving nothing further for the ruling court to do in order to completely determine the parties’ rights. See Wilson v. Kennedy, 2020 COA 122, ¶¶ 5-7, 490 P.3d 855. One such exception lies in section 13-4-102.1(1), C.R.S. 2023, and C.A.R. 4.2. Under these provisions, this court, in its discretion, may review a non-final order in a civil case where the trial court certifies and we agree that (1) immediate review may promote a more orderly disposition or establish a final disposition of the litigation; (2) the order involves a controlling question of law; and (3) that question of law is unresolved. S. Conejos Sch. Dist. RE-10 v. Wold Architects Inc., 2023 COA 85, ¶ 11, 541 P.3d 17.

[3] ¶ 8 We conclude that these three requirements are satisfied here. First, our immediate review of the question presented to us — whether the denial of a motion for summary judgment or a directed verdict establishes probable cause for bringing a claim as a matter of law — may establish a final disposition of the litigation. If we were to answer this question in the affirmative, then Schnelle’s malicious prosecution claim would fail as a matter of law. See Montgomery Ward & Co. v. Pherson, 129 Colo. 502, 507, 272 P.2d 643, 645 (1954) ("The existence of probable cause is alone sufficient to relieve a defendant of a charge of malicious prosecution."). And the rest of Schnelle’s claims have already been dismissed. Thus, resolution of the question could end this litigation. See Indep. Bank v. Pandy, 2015 COA 3, ¶ 10, 383 P.3d 64 (finding the first requirement satisfied in similar circumstances), aff’d, 2016 CO 49, 372 P.3d 1047.

[4, 5] ¶ 9 Second, the question presented to us is a controlling question of law. It is a question of law concerning the effect of rulings under C.R.C.P. 56 and 50. See Boudette v. State, 2018 COA 109, ¶ 20, 425 P.3d 1228 (interpretation of procedural rules presents a question of law). And whether the question may be dispositive of the case is one factor we may consider in deciding whether the question is controlling. See Affiniti Colo., LLC v. Kissinger & Fellman, P.C., 2019 COA 147, ¶ 17, 461 P.3d 606. For the same reasons, the question presented is potentially case dispositive; thus, it is controlling. See Indep. Bank, ¶ 11 (finding the second requirement satisfied in similar circumstances).

[6] ¶ 10 And third, the question presented is unresolved. While many other jurisdictions have considered this question, no published appellate court case in Colorado has addressed it. See C.A.R. 4.2(b)(2) (for state law issues, a question is unresolved if it hasn’t been resolved by our state supreme court or determined in a published decision of this court). And while a division of this court has addressed a similar question in a decision concerning an abuse of process claim, our supreme court reversed the decision without addressing that question. See Health Grades, Inc. v. Boyer, 2012 COA 196M, 369 P.3d 613, rev’d, 2015 CO 40, 359 P.3d 25. Accordingly, the third requirement is satisfied. See S. Conejos Sch. Dist. RE-10, ¶ 15 (finding this requirement satisfied where no published Colorado case had addressed the question).

III. Standard of Review and Legal Standards

¶ 11 We review de novo a trial court’s ruling on a Rule 12(b)(5) motion to dismiss for failure to state a claim. Alderman v. Bd. of Governors of Colo. State Univ., 2023 COA 61, ¶ 11, 536 P.3d 831. To survive such a motion, a plaintiff must plead sufficient facts to suggest plausible grounds to support a claim for relief. Warne v. Hall, 2016 CO 50, ¶¶ 9, 24, 373 P.3d 588; Coyle v. State, 2021 COA 54, ¶ 25, 492 P.3d 366.

[7, 8] ¶ 12 Malicious prosecution provides a remedy when "a person knowingly initiates baseless litigation," including, among other things, a baseless criminal prosecution or civil proceeding. Parks v. Edward Dale Parrish LLC, 2019 COA 19, ¶ 11 n.3, 452 P.3d 141 (quoting Mintz v. Accident & Injury Med. Specialists, PC, 284 P.3d 62, 66 (Colo. App. 2010)); see also Walford v. Blinder, Robinson & Co., Inc., 793 P.2d 620, 623 (Colo. App. 1990). To prevail on a claim for malicious prosecution, a plaintiff must establish five elements: (1) the defendant’s contribution to bringing a previous case against the plaintiff; (2) the ending of the previous case in favor of the plaintiff; (3) lack of probable cause; (4) malice; and (5) damages. Hewitt v. Rice, 154 P.3d 408, 411 (Colo. 2007). Only the third element — lack of probable cause — is at issue in this appeal.

[9] ¶ 13 Probable cause generally requires that there be "a belief held in good faith by the [claimant in the previous case] in the guilt of the [defendant]" and that the belief be "reasonable and prudent." Montgomery Ward, 129 Colo. at 508, 272 P.2d at 646; accord Salazar v. Pub. Tr. Inst., 2022 COA 109M, ¶ 27, 522 P.3d 242. Our supreme court has described probable cause in this context in various ways — for instance, as an "honest belief in guilt supported by facts sufficiently strong to warrant that belief in a cautious [person]," Smith v. Hensley, 107 Colo. 180, 184, 109 P.2d 909, 911 (1941); an "honest and reasonable belief that [someone] committed [a particular act]," O'Malley-Kelley Oil & Auto Supply Co. v. Gates Oil Co., 73 Colo. 140, 143, 214 P. 398, 399 (1923); and "a state of facts and circumstances as would lead a [person] of ordinary caution and prudence and good conscience, impartially, reasonably, and without prejudice, upon the facts within his knowledge, to believe that the person accused is guilty," Clement v. Major, 1 Colo. App. 297, 301, 29 P. 19, 20 (1892) (citations omitted).

IV. Malicious Prosecution

¶ 14 In analyzing Schnelle’s malicious prosecution claim, the trial court noted that cases from other jurisdictions generally fall into two camps on the question of how the denial of a defense summary judgment or directed verdict motion affects a later determination of probable cause for a malicious prosecution or similar claim.

¶ 15 In one camp, several courts have held that the denial of such a motion creates a presumption of probable cause. See, e.g., Porous...