Bauer v. Damon
| Docket Number | 1613 MDA 2022,J-A23017-23 |
| Decision Date | 25 January 2024 |
| Parties | JAY BAUER, KEVIN CHOWNS, & THE CHOWNS GROUP, LLC. Appellants v. JEFF DAMON, BERKS TRANSFER, INC., ROBERT T. MILLS, DAVID R. DAUTRICH, ESQ., P.C., AND SHAWN WATSON |
| Court | Pennsylvania Superior Court |
Jay Bauer, Kevin Chowns, and The Chowns Group, LLC (collectively, "Plaintiffs") were defendants in a prior action. In this action, they asserted the prior action was a wrongful use of civil proceedings and sued Jeff Damon, Berks Transfer, Inc. ("Berks Transfer"), Robert T. Mills ("Attorney Mills"), David R. Dautrich, Esq., P.C. ("the Dautrich Law Firm"), and Shawn Watson (collectively, "Defendants"). Defendants demurred to the complaint, and the trial court sustained the demurrer and dismissed the complaint. We affirm that order. One of Defendants, the Dautrich Law Firm, has sought an award of attorneys' fees on appeal. We deny that request.
In the underlying action, Berks Transfer brought claims of breach of contract, unjust enrichment, and fraud against Keystone Waste Disposal, LLC ("Keystone Waste Disposal"). Berks Transfer alleged Keystone Waste Disposal owed it money for accepting trash that Keystone Waste Disposal had collected. In addition to naming Keystone Waste Disposal as a defendant, Berks Transfer named as defendants Keystone Waste Disposal's individual owners-Bauer, Watson, and Chowns-as well as a company owned by Chowns-The Chowns Group, LLC.
Bauer, Chowns, and The Chowns Group filed preliminary objections on the basis that they could not be held liable for Keystone Waste Disposal's breach of contract, because they were not owners of Keystone Waste Disposal when it had done business with Berks Transfer. The court denied the preliminary objections as to Bauer and Chowns, who remained defendants throughout the proceedings. The claims against The Chowns Group were discontinued.
The matter went to compulsory arbitration. A $28,115.80 award was entered in favor of Berks Transfer and against Keystone Waste. A defense verdict was entered in favor of Bauer, Watson, and Chowns.
Plaintiffs initiated the instant action by filing a complaint bringing three counts of wrongful use of civil proceedings.[1] In addition to naming Berks Transfer as defendant, Plaintiffs also named as defendants Damon (as general manager of Berks Transfer), Attorney Mills (as counsel for Berks Transfer), the Dautrich Law Firm (as counsel for Berks Transfer), and Watson (as principal of Keystone Waste).
The complaint alleged that Defendants had brought the underlying action in a grossly negligent manner, without probable cause, and with the intent of harming Plaintiffs' business and reputations. The complaint asserted that Defendants had no reason to name Bauer, Chowns, and The Chowns Group as defendants in the underlying action because Berks Transfer had contracted with Keystone Waste Disposal before Bauer and Chowns became owners. It further alleged that the principal of Berks Transfer told the trial court, on the telephone, during a status conference, that Berks Transfer had named the individual owners of Keystone Waste Disposal as defendants "to provide additional 'leverage' to aid [Berks Transfer] in its efforts to collect the alleged debt." Complaint, 5/31/22, at ¶ 37. The complaint also contended Defendants brought the underlying action to force Plaintiffs to settle other litigation. Id. at ¶ 62 n.2 (citing nine unrelated cases).
The complaint also alleged Watson had engaged in unscrupulous business practices; deceived Bauer and Chowns as investors in Keystone Waste Disposal; defrauded investors in other companies he owned; filed a frivolous shareholder derivative action against Bauer and Chowns; and colluded with Damon to offer false evidence in the underlying action. Id. at ¶¶ 22-25, 28-32. The complaint stated that Keystone Waste Disposal was insolvent both before and after Bauer and Chowns became owners. Id. at ¶¶ 20, 27.
Defendants filed preliminary objections in the nature of demurrer. The objections were considered by the same trial judge as had presided over the underlying action.
The court heard argument and sustained the preliminary objections. The court found the complaint did not adequately allege that Defendants had brought the underlying action for an illegitimate purpose or without probable cause because the relationships between the individual defendants and Keystone Waste Disposal had been "sufficiently complicated" to warrant their inclusion in the underlying action:
The instant underlying collection action involved corporate and individual defendants whose interrelationships are sufficiently complicated to cast great doubt on any assertion of malicious intent to explain any errors of inclusion of parties. Although the arbitrators in the collection case entered the award in favor of [Berks Transfer] against only [Keystone Waste Disposal] but in favor of all the individual [d]efendants, the entry of a substantial award by the arbitrators and the absence of any appeal from it indicates legitimacy of the action against the corporate defendants with whom some relationship existed with the named individuals. One thing all the parties agreed upon is that these complicated relationships are the subject of litigation in other counties regarding issues and evidence not before this [c]ourt. The instant Complaint fails to establish any of the necessary elements of an abuse-of-process claim for wrongful use of civil proceedings. Consisting of more than 50 paragraphs, the Complaint is largely comprised of factual allegations, many of which are scandalous and impertinent, legal conclusions and background information related to the prior collection dispute and cases pending in other jurisdictions but having little if any relevance to the instant action, particularly the requisite elements of illegitimate purpose or lack of probable cause to support the underlying case.
Trial Court Opinion, 1/10/23, at 6-7.
Plaintiffs filed a motion for reconsideration, which was denied as a matter of law. Plaintiffs timely appealed. They raise the following issues:
Plaintiffs' Br. at 3-4 (suggested answers omitted).[2]
Turning to Plaintiffs' second issue first, Plaintiffs make no argument in the body of their brief challenging the trial court's consideration of the record of the underlying action. We therefore find this issue waived. See Commonwealth v. Woodard, 129 A.3d 480, 502 (Pa. 2015).
As for Plaintiffs' first issue, Defendants argue that Plaintiffs waived it because it is not included in their Pa.R.A.P. 1925(b) concise statement of errors complained of on appeal. Defendants assert the Rule 1925(b) statement does not raise the specific issue of whether Plaintiffs adequately pleaded the improper purpose and probable cause elements of a wrongful use of civil proceedings claim.
In its opinion, the trial court stated it "had a difficult time ascertaining the nature of Plaintiffs' claims of error" from their Rule 1925(b) statement and that the claims the court did not address had been pleaded "with such vagueness as to warrant waiver." Trial Ct. Op. at 3. However, the court "analyze[d] the core issue of whether it committed an abuse of discretion or an error of law by sustaining Defendant's Preliminary Objections in the Nature of Demurrer and dismissing Plaintiffs' Complaint." Id. at 3-4. The court explained its reasons for finding that Plaintiffs had failed to plead the elements of a wrongful use of civil proceedings claim, including the elements of improper purpose and lack of probable cause.
We decline to find waiver. Plaintiffs raised seven issues in their concise statement, the bulk of which they have abandoned on appeal.[3] Plaintiffs now pursue only whether the complaint sufficiently alleged the elements of a wrongful use claim. This issue was sufficiently suggested by and subsidiary to the first two issues in Plaintiffs' Rule 1925(b) statement. See Pa.R.A.P. 1925(b)(4)(v). Indeed, the trial court addressed that issue. We will not find Rule 1925(b) waiver.
Substantively Plaintiffs argue in their first issue that the court erred by failing to accept the complaint's allegations as true, as required on preliminary objections. Plaintiffs argue their complaint sets forth a claim for wrongful use of civil proceedings, because it alleges Defendants either brought or prolonged the underlying action without probable cause or in a grossly negligent manner, and for the purpose of harassing or injuring Plaintiffs. Plaintiffs point out the complaint alleges that Berks Transfer had a contract with Keystone Waste, not Pla...
To continue reading
Request your trial