Kelly-Springfield Tire Co. v. D'Ambro

• Decision Date: 06 September 1991
• Docket Number: KELLY-SPRINGFIELD
• Parties: TIRE COMPANY, Appellant, v. Dominic D'AMBRO and Stradley, Ronon, Stevens & Young, Appellees.
• Court: Pennsylvania Superior Court

Page 867

596 A.2d 867

408 Pa.Super. 301

KELLY-SPRINGFIELD TIRE COMPANY, Appellant, v. Dominic D'AMBRO and Stradley, Ronon, Stevens & Young, Appellees.

Superior Court of Pennsylvania.

Argued April 3, 1991.

Filed Sept. 6, 1991.

Francis L. White, Jr., Philadelphia, for appellant.

David H. Marion, Philadelphia, for appellee.

Before WIEAND, OLSZEWSKI and BROSKY, JJ.

WIEAND, Judge:

This appeal requires that we review the averments of an amended complaint to determine whether they are sufficient to state causes of action against a lawyer for wrongful use of civil process and intentional interference with a prospective contractual relationship. ¹ After careful review, we conclude that causes of action have been adequately stated; and, therefore, we reverse the order of the trial court which sustained preliminary objections in the nature of a demurrer.

A preliminary objection in the nature of a demurrer admits every well-pleaded fact and all inferences reasonably deducible therefrom. McGaha v. Matter, 365 Pa.Super. 6, 8, 528 A.2d 988, 989 (1987); Pike County Hotels, Corp. v. Kiefer, 262 Pa.Super. 126, 133, 396 A.2d 677, 681 (1978). It tests the legal sufficiency of the challenged complaint and will be sustained only in cases where the pleader has clearly failed to state a claim for which relief may be granted. Mudd v. Hoffman Homes for Youths, Inc., 374 Pa.Super. 522, 524, 543 A.2d 1092, 1093 (1988). If there is any doubt as to whether a claim for relief has been stated, the trial court should resolve it in favor of overruling the demurrer. Mull v. Kerstetter, 373 Pa.Super. 228, 229-230, 540 A.2d 951, 951 (1988).

Creeger Brick v. Mid-State Bank, 385 Pa.Super. 30, 32-33, 560 A.2d 151, 152 (1989).

The following facts can be discerned from the amended complaint. By agreement dated January 4, 1988, Kelly-Springfield Tire Company agreed to sell and Dominic D'Ambro agreed to buy a warehouse and thirty acres of land situated on Lee Boulevard in Frazer, Chester County. A consideration of ten million ($10,000,000) dollars was payable on or before April 4, 1988. On April 8, 1988, the closing date was extended to May 5, 1988, in exchange for the agreed payment of an additional eighty thousand ($80,000) dollars. The transaction was not closed, however, and on May 26, 1988, Kelly-Springfield notified D'Ambro and his lawyers, Stradley, Ronon, Stevens and Young, that the agreement was in default, that a down payment of one hundred thousand ($100,000) dollars would be retained as liquidated damages, and that the additional consideration of eighty thousand ($80,000) dollars was due and owing.

On July 20, 1988, Stradley, Ronon filed an action on behalf of the buyer and caused the same to be listed as lis pendens in Chester County. The suit requested specific performance of the sales agreement and/or money damages. Kelly-Springfield moved to strike the lis pendens, and a hearing thereon was set. On August 3, 1988, two weeks before hearing, the pending action and lis pendens were voluntarily withdrawn.

On the following day, Stradley, Ronon filed a new complaint, containing substantially the same averments, in the United States District Court for the Eastern District of Pennsylvania and again caused the action to be marked lis pendens. This action was finally terminated on November 17, 1988, when the court granted summary judgment in favor of Kelly-Springfield.

The present action by Kelly-Springfield against D'Ambro and Stradley, Ronon followed. The amended complaint now before this Court contains five counts. Three of the five counts are against D'Ambro and assert a breach of contract. The third and fourth counts of the amended complaint are against D'Ambro and Stradley, Ronon and allege causes of action for wrongful use of civil process and intentional interference with prospective contractual relationships. Preliminary objections in the nature of a demurrer to Counts 3 and 4 were filed by Stradley, Ronon and sustained by the trial court. ²

Wrongful use of civil process is a cause of action which is defined by statute in Pennsylvania. The elements thereof are stated at 42 Pa.C.S. § 8351(a) as follows:

§ 8351. Wrongful use of civil proceedings

(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 [if]:

(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.

From this it is apparent that a cause of action for wrongful use of civil proceedings requires a plaintiff to allege and prove the following three elements: (1) that the underlying proceedings were terminated in favor of the plaintiff; (2) that the defendant caused those proceedings to be instituted without probable cause; and (3) that the proceedings were instituted primarily for an improper purpose. Shaffer v. Stewart, 326 Pa.Super. 135, 140, 473 A.2d 1017, 1020 (1984); Junod v. Bader, 312 Pa.Super. 92, 95, 458 A.2d 251, 253 (1983).

A lawyer of record has probable cause for initiating a civil action if he believes "in good faith that his ... initiation ... of a civil cause is not intended to merely harass or maliciously injure the opposite party." 42 Pa.C.S. § 8352(3). The potential liability of the lawyer is discussed in the comment to Section 674 of the Restatement (Second) of Torts as follows:

"An attorney who initiates a civil proceeding on behalf of his client[,] ... even if he has no probable cause and is convinced that his client's claim is unfounded, ... is still not liable if he acts primarily for the purpose of aiding his client in obtaining a proper adjudication of his claim. (See § 676). An attorney is not required or expected to prejudge his client's claim, and although he is fully aware that its chances of success are comparatively slight, it is his responsibility to present it to the court for adjudication if his client so insists after he has explained to the client the nature of the chances.

If, however, the attorney acts without probable cause for belief in the possibility that the claim will succeed, and for an improper purpose, as, for example, to put pressure upon the person proceeded against in order to compel payment of another claim of his own or solely to harass the person proceeded against by bringing a claim known to be invalid, he is subject to the same liability as any other person."

In the instant case it is clear that all civil proceedings instituted by Stradley, Ronon were terminated in favor of Kelly-Springfield. Indeed, when one examines the facts surrounding D'Ambro's default in performing his contract to buy Kelly-Springfield's warehouse property, it is readily apparent that D'Ambro had no cause of action for specific performance of the contract or for damages resulting from the termination thereof. Our review of the instant complaint for wrongful use of civil process, therefore, must focus upon the sufficiency of averments that Stradley, Ronon acted without probable cause and for an improper purpose.

Paragraph 37 of the Amended Complaint is as follows:

37. Defendants initiated and continued the Chester County and Federal proceedings primarily for a purpose other than that of securing the proper adjudication of D'Ambro's rights under the Agreement. Defendants initiated and continued the Chester County and Federal proceedings against Kelly with malice, i.e. with the improper motive of blocking Kelly from transferring the property to a third party and of attempting to force Kelly to transfer the property to D'Ambro despite the fact that Defendants knew that D'Ambro had defaulted and had no rights to ownership in the property.

On its face, this would seem to be an adequate averment that Stradley, Ronon acted without probable cause and for an improper purpose. The allegation is not merely that the lawyers acted to obtain a good faith adjudication of D'Ambro's rights, as appellees argue and the trial court found. Rather, the charge is that, with knowledge that their client had defaulted in his agreement to purchase, the lawyers acted to prevent Kelly-Springfield from selling to a third person and to force Kelly-Springfield to deal with D'Ambro by subjecting the property to encumbering litigation. This is an averment which is sufficient to state a cause of action for wrongful use of civil process.

In addition, the complaint contains averments of fact from which an intent to harass can be inferred. Thus, when the Chester County action was about to be heard, Stradley, Ronon and D'Ambro discontinued the action and started a new action in the federal courts and again caused it to be marked as lis pendens. If this was done without probable cause to bring the underlying action, an intent to harass can be inferred from the facts asserted. This is recognized by Section 679 of the Restatement (Second) of Torts where, in a special application of Section 674, the American Law Institute has stated:

One who repeatedly initiates civil proceedings against another for the same cause of action is subject to liability for the harm caused thereby, if

(a) the proceedings are initiated without probable cause, and primarily for a purpose other than that of securing the proper adjudication of the claim on which the proceedings are based, and

(b) except when they are ex parte, the proceedings have terminated in favor of the person against whom they are brought.

The liability contemplated by this section of the Restatement includes the situation "when the plaintiff in the original action, having brought the action, abandons it and thereafter begins a second or further action for the same cause." Restatement (Second) of...