Denenberg v. Am. Family Corp. of Columbus, Ga.

• Decision Date: 29 June 1983
• Docket Number: No. 82-1631.,82-1631.
• Citation: 566 F. Supp. 1242
• Parties: Herbert S. DENENBERG v. AMERICAN FAMILY CORP. OF COLUMBUS, GA., American Family Life Assurance Co. of Columbus and John B. Amos and Anthony K. Dilimetin.
• Court: U.S. District Court — Eastern District of Pennsylvania

566 F. Supp. 1242

Herbert S. DENENBERG v. AMERICAN FAMILY CORP. OF COLUMBUS, GA., American Family Life Assurance Co. of Columbus and John B. Amos and Anthony K. Dilimetin.

No. 82-1631.

United States District Court, E.D. Pennsylvania.

June 29, 1983.

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James E. Beasley, Philadelphia, Pa., for Denenberg.

Thomas N. O'Neill Jr., Philadelphia, Pa., for American Family Corp. of Columbus, American Family Life Assur. Co., Amos and Dilimetin.

Peter Hearn, Philadelphia, Pa., for Anthony K. Dilimetin.

David J. Griffith, Philadelphia, Pa., for American Family Corp. et al.

MEMORANDUM and ORDER

SHAPIRO, District Judge.

I. INTRODUCTION

This lawsuit is the latest episode in the dispute between the plaintiff Herbert S. Denenberg, former professor and Insurance Commissioner of Pennsylvania and present media personality, and American Family Corp. of Columbus, Ga. and its subsidiary, American Family Life Assurance Co. of Columbus, ("AFC") over his publicized criticism of cancer care insurance sold by AFC and others. AFC sued plaintiff for defamation and conspiracy in New York but the suit was dismissed for lack of personal jurisdiction over him there. Denenberg was also a party defendant in a suit transferred from Maryland to Virginia which he claims defendants instigated and financed; that case was dismissed with prejudice by stipulation of counsel to that suit. Now Denenberg as plaintiff sues the former plaintiff in one suit, its Chief Executive Officer and Chairman of the Board, John B. Amos ("Amos") and its attorney, Anthony K. Dilimetin ("Dilimetin") and seeks actual and punitive damages for malicious prosecution, abuse of process, intentional infliction of emotional distress, civil conspiracy and defamation in bringing, publicizing, and negotiating settlement of the prior litigation.

Defendants AFC and Amos have moved to dismiss the complaint.¹ Defendant Dilimetin has joined in that motion. For the reasons discussed below the motion is granted in part and denied in part.²

II. FACTS

The complaint alleges that Denenberg, as Insurance Commissioner of Pennsylvania, professor and reporter, criticized cancer care insurance, which is sold by defendant AFC and others, and expressed an opinion critical of such insurance on several occasions in testifying before committees of Congress and elsewhere. Denenberg claims that defendants commenced two lawsuits against him and defamed him in retaliation for this expression of opinion and in order to harass, intimidate and embarrass him.

The first lawsuit (the Kiplinger/Denenberg suit) was filed by AFC on January 2, 1980 in a New York state court but removed to the United States District Court for the Southern District of New York by Denenberg. This lawsuit arose out of an article which purported to quote Denenberg on the lack of value of cancer insurance policies. According to plaintiff's present complaint, the prior complaint alleged that Denenberg "caused harm to American Family Life Assurance Company of Columbus, and that Denenberg acted in conspiracy with others named as defendants in defaming and otherwise harming said company." Complaint, ¶ 16. The complaint in the Kiplinger/Denenberg lawsuit was dismissed as to Denenberg for lack of jurisdiction on March 18, 1981.

The second lawsuit (the ABC/Denenberg suit) was filed on February 3, 1981 in the United States District Court for the District of Maryland and subsequently transferred to the United States District Court for the Eastern District of Virginia. Although AFC was not the plaintiff in that suit,³ Denenberg alleges that AFC, Amos and Dilimetin financed and directed the litigation. According to Denenberg, that complaint alleged that:

Herbert S. Denenberg was employed by and acted as an advisor to the Select Committee on Aging of the House of Representatives of the United States of the Ninetieth Congress, that Herbert S. Denenberg was an agent, servant, and/or employee of ABC and its television program, `World News Tonight,' and that Herbert S. Denenberg in said capacity conspired, confederated, and agreed to devise and carry out a scheme or plan to do harm to said Glenda C. Brown.

Complaint, ¶ 24. The complaint against Denenberg in the ABC/Denenberg lawsuit was dismissed, with prejudice, by stipulation of counsel, dated December 11, 1981.

Denenberg also alleges that on September 15, 1980, at a Philadelphia meeting initiated by Dilimetin regarding settlement of the Kiplinger/Denenberg lawsuit, Dilimetin made the following threatening and intimidating statements to Denenberg:

a. That American Family Life was considering `suing' Denenberg in London and Japan (meaning that Denenberg would be forced to defend lawsuits in foreign countries) b. That American Family Life knew that Denenberg had recently purchased a house (implying that American Family Life would place Plaintiff's assets in jeopardy);

c. That Denenberg would have to undergo `educational treatment' from American Family Life to learn about the merits of cancer insurance;

d. That American Family Life had fully investigated Denenberg, knew everything about Denenberg and had even gone to the point of reading Denenberg's doctoral dissertation (implying that American Family Life would go to any lengths to cause harm to Denenberg);

e. That if Denenberg would agree to stop criticizing cancer insurance and American Family Life, the Kiplinger/Denenberg suit against him would be dismissed.

Complaint, ¶ 37.

III. DISCUSSION

A. Counts I and III — Malicious Prosecution and Wrongful Use of Civil Proceedings

Although plaintiff has brought suit for both malicious prosecution and malicious or wrongful use of civil proceedings under separate counts, they constitute one cause of action and will be considered together.⁴ The action for wrongful use of civil proceedings was brought under Pennsylvania law, pursuant to 42 Pa.C.S.A. § 8351, which is a codification of the prior common law of malicious prosecution, or malicious use of process, with certain modifications. Blumenfeld v. RM Shoemaker Co., 286 Pa.Super. 540, 429 A.2d 654 (1981).

The first issue is the substantive law to be applied. Plaintiff asserts that Pennsylvania law governs while defendants contend that New York law should apply although either Maryland or Virginia law might be applicable. To resolve the choice of law issue, this court, sitting in a diversity action, must first determine whether a conflict exists between these states' laws and if so, apply the choice of law rules of the forum state, Pennsylvania. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Pennsylvania now applies a flexible choice of law rule that requires analysis of the policies and interests underlying the issue before the court and application of the law of the state with the most significant relationship to the cause of action. Griffith v. United Airlines, 416 Pa. 1, 203 A.2d 796 (1964).

After reviewing the laws of Pennsylvania, New York, Maryland and Virginia on malicious prosecution, the court concludes that a conflict of law does exist. The parties agree that if Pennsylvania law were to govern, then § 8351 would apply.⁵ Section 8351 provides:

(a) Elements of action. — A person who takes part in the procurement, initiation or continuation of civil proceedings against another is subject to liability to the other for wrongful use of civil proceedings:

(1) He acts in a grossly negligent manner or without probable cause and primarily for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claim in which the proceedings are based; and

(2) The proceedings have terminated in favor of the person against whom they are brought.

(b) Arrest or seizure of person or property not required. — The arrest or seizure of the person or property of the plaintiff shall not be a necessary element for an action brought pursuant to this subchapter.

New York, Maryland and Virginia laws, however, all require in addition to the two elements set forth in § 8351(a)(1) and (2) that the plaintiff establish an arrest of his person or a seizure of his property. See, Williams v. Williams, 23 N.Y.2d 592, 298 N.Y.S.2d 473, 246 N.E.2d 333 (1969); Siegman v. Equitable Trust Co., 267 Md. 309, 297 A.2d 758 (1972); Ayyildiz v. Kidd, 220 Va. 1080, 266 S.E.2d 108 (1980). This element, which previously was an element of a cause of action for malicious prosecution in Pennsylvania as well, was abolished by the passage of § 8351. Blumenfeld, supra, 286 Pa.Super. at 545 n. 6, 429 A.2d 576. Because plaintiff has not alleged the existence of this "seizure" element, the complaint fails to state a cause of action under the law of New York, Maryland or Virginia. Therefore, the court must determine which substantive law is properly applicable to this cause of action.⁶

We believe that the Supreme Court of Pennsylvania would adopt the view of the Restatement (Second) of Conflicts of Law (1977) which provides:

§ 155. Malicious Prosecution and Abuse of Process

The rights and liabilities of the parties for malicious prosecution or abuse of process are determined by the local law of the state where the proceeding complained of occurred, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the occurrence and the parties, in which event the local law of the other state will be applied.

See, Simkins Ind. Inc. v. Fuld & Co., 392 F.Supp. 126 (E.D.Pa.1975). Because the allegations of malicious prosecution relate to two lawsuits, each filed in a different forum, the choice of law issue must be analyzed separately for each action.

The Kiplinger/Denenberg lawsuit was commenced in New York. Although we agree with plaintiff that Pennsylvania has an interest in protecting its citizens from being subjected to the malicious use of the process of another state, this interest...