Ancora Corporation v. Stein

• Decision Date: 14 June 1971
• Docket Number: No. 30327.,30327.
• Citation: 445 F.2d 431
• Parties: ANCORA CORPORATION et al., Plaintiffs-Appellees, v. John E. STEIN et al., Defendants, Bart B. Chamberlain, Jr., Defendant-Appellant, Cornwall Trading Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

445 F.2d 431 (1971)

ANCORA CORPORATION et al., Plaintiffs-Appellees, v. John E. STEIN et al., Defendants Bart B. Chamberlain, Jr., Defendant-Appellant Cornwall Trading Corporation, Defendant-Appellant.

No. 30327.

United States Court of Appeals, Fifth Circuit.

June 14, 1971.

Lester M. Bridgeman, Washington, D. C., Lewis G. Odom, Jr., Montgomery, Ala., John V. Long, Washington, D. C., John C. H. Miller, Jr., Montgomery, Ala., for appellant Bart B. Chamberlain, Jr.

Champ Lyons, Jr., Montgomery, Ala., for appellant, Cornwall Trading Corporation; Capell, Howard, Knabe & Cobbs, Montgomery, Ala., of counsel.

Willis C. Darby, Jr., Robert E. Gibney, Mobile, Ala., for plaintiffs-appellees.

Before TUTTLE, WISDOM and INGRAHAM, Circuit Judges.

TUTTLE, Circuit Judge.

On March 31st, 1966, appellees, Ancora Corporation, et al., filed an original suit in the United States district court for the Southern District of Alabama against one, Stein, as unit manager, Citronelle Unit, for an injunction to prohibit Stein from taking possession of eight oil wells owned and operated by Ancora in the Citronelle Field, Mobile County, Alabama. On March 27th, 1967, Ancora, with leave of court, amended its complaint to add Chamberlain, Cornwall and others as party defendants, alleging for the first time three counts for an injunction and damages under the federal antitrust laws. Chamberlain and Cornwall filed their answers denying the material allegations of Ancora's amended complaint on May 15th, 1967. On September 4th, 1968, and September 27th, 1968, Chamberlain and Cornwall, respectively, pursuant to rule 15(d) of the Federal Rules of Civil Procedure, moved the district court for leave to amend and supplement their defensive pleadings by adding a counterclaim.

In their tendered counterclaim, Chamberlain and Cornwall alleged that Ancora, for the ulterior motive of extortion, to delay the effective benefits that would otherwise have flowed to Chamberlain and Cornwall for the purpose of requiring an agreement from other members of the Citronelle Unit from an enlargement proceeding decided by the State Oil and Gas board of Alabama relating to the establishment of a "lease line arrangement" between or among the secondary recovery units in the Citronelle Field, "filed and prosecuted and utilized", the suit with the intent and effect of delaying effectuation of the enlargement order; that the filing of the anti-trust complaints against them was neither "filed or prosecuted in good faith to obtain the relief ostensibly sought thereby." It was alleged that "Ancora intended, and attempted to utilize, those actions for the ulterior objective of extorting from the operators of the Citronelle unit, including Chamberlain, benefits and concessions to the counterclaim defendants, including but not limited to, a lease line agreement then and now the subject of a different proceeding pending before the board. That objective was not one properly obtainable by way of relief in any of the said judicial proceedings."

The trial court denied the motion to permit Chamberlain and Cornwall to file the counterclaim, determining that the tendered counterclaim failed to allege facts upon which relief could be granted. The court based its decision upon its determination that "the defendants the counterclaimants contend their respective counterclaims state a cause of action for `abuse of process'". The trial court then stated "it is the conclusion of the court that if the defendants have a cause of action, construing the pleadings most strongly in favor of them, it is for malicious prosecution, and they have failed to state a cause of action for abuse of process."

A careful reading of the counterclaim filed by the appellants, leaves this court in no doubt that the counterclaim was posited on a much broader basis than either for "abuse of process" or for "malicious prosecution" (or its civil counterpart), and that the trial court, having focused too closely on a theory of recovery that was not expressly asserted by the counterclaimants, and that would not, in any event, be binding under the liberal pleadings rules of the federal rules, failed to apprehend that the counterclaims did, in fact, allege a state of facts that went beyond either of the two formally described causes of action mentioned by the trial court.

It is true that the counterclaimants here, take issue with the trial court's legal determination that they could not, in fact, proceed on the theory of "abuse of process" as defined under the Alabama decisions. They contend, stated briefly, that their counterclaim falls strictly within the purview of Clikos v. Long, 231 Ala. 424, 165 So. 394, an Alabama case describing the difference between abuse of process and malicious prosecution They also say that they meet requirements set out in Dickerson v. Schwabacher, 177 Ala. 371, 58 So. 986, where the Alabama Supreme Court said:

"One essential difference between the actions is that malicious prosecution refers to malice and wrong in the issuance of the process, while abuse of the process refers to the malicious and wrongful use of process which is regular and rightful in its issuance. * * A malicious abuse of legal process consists in the malicious misuse or misapplication of that process to accomplish some purpose not warranted or commanded by the writ. In brief, it is the malicious perversion. * * *"

We are not convinced that the counterclaim sets out a clear case of abuse of process, as recognized under the Alabama decisions. These cases seem to hold that for such an action to be sustained, the complaint must allege that the action causing damages to the plaintiff must allege that a suit had been legally filed for a proper purpose, but that, once filed, the process of the court, such as a writ of attachment or the like, had been improperly used. In other words, the Alabama courts appear not to have recognized, as the basis of an abuse of process suit an allegation that the suit was originated out of an improper motive and solely for the purpose of harassment of the complaining party.

So, too, we are not convinced by appellant's arguments that the...