Morrison Informatics, Inc. v. Members 1ST Fed. Credit Union

• Decision Date: 12 August 2014
• Citation: 97 A.3d 1233,2014 PA Super 166
• Court: Pennsylvania Superior Court
• Parties: MORRISON INFORMATICS, INC., Anthony M. Grigonis, and Malcolm H. Morrison, Appellants v. MEMBERS 1ST FEDERAL CREDIT UNION, Mark Zampelli, and Scott Douglass, Appellees.

97 A.3d 1233

2014 PA Super 166

MORRISON INFORMATICS, INC., Anthony M. Grigonis, and Malcolm H. Morrison, Appellants

v.MEMBERS 1ST FEDERAL CREDIT UNION, Mark Zampelli, and Scott Douglass, Appellees.

Superior Court of Pennsylvania.

Argued May 14, 2014.

Filed Aug. 12, 2014.

Darryl J. Liguori, Harrisburg, for appellants.

Ellen H. Kueny, Philadelphia, for Members 1st, appellee.

BEFORE: FORD ELLIOTT, P.J.E, OLSON, and STRASSBURGER,^* JJ.

OPINION BY STRASSBURGER, J.:

Appellants Morrison Informatics, Inc. Anthony M. Grigonis, and Malcolm H. Morrison (Plaintiffs, collectively) appeal from the February 20, 2013 order sustaining the preliminary objections of Members 1st Credit Union and dismissing Plaintiffs' amended complaint. We affirm in part, vacate in part, and remand for further proceedings consistent with this opinion.

The trial court summarized the history of this case as follows.

I. Introduction

[Plaintiffs] filed a complaint on May 7, 2012 arising from the embezzlement of funds by Defendant Mark Zampelli (Zampelli). On June 19, 2012, Plaintiffs filed an amended complaint. In the amended complaint, Plaintiffs allege conversion and fraud against Zampelli, negligence and fraud against Scott Douglass (Douglass), civil conspiracy against Zampelli and Douglass, and respondeat superior, negligence, negligent supervision and breach of contract against Members 1st Federal Credit Union (Members 1st). On June 19, 2012, Plaintiffs also filed a motion to amend caption to add Leon P. Haller, Chapter 7 Trustee for Morrison Informatics[,] as a Plaintiff in the action.

Members 1st filed timely preliminary objections to both Plaintiffs' original complaint and Plaintiffs' amended complaint. Defendant's objections to Plaintiffs' amended complaint are as follows: 1) Plaintiffs failed to conform to Pennsylvania Rules of Civil Procedure because they filed an amended complaint without leave of court or consent of the adverse party; 2) Plaintiffs Morrison and Grigonis lack standing as shareholders and owners of Morrison Informatics because all injuries they suffered were indirect injuries suffered through the corporation Morrison Informatics; 3) Morrison Informatics lacks standing because it filed for bankruptcy prior to initiating this action; ... 5) the complaint cannot be amended to add a new party such as Leon P. Haller when the statute of limitations has expired on the causes of action[.] ...

II. Facts

Morrison Informatics is a Pennsylvania corporation. Grigonis and Morrison are shareholders of Morrison Informatics. Morrison Informatics employed [ ] Zampelli as a Finance Manager. [ ] Douglass was a business banker at PNC Bank and was responsible for Morrison Informatics' accounts.

In January 2005, Douglass became employed by Members 1st as a business loan officer. At some point following Douglass's transfer to Members 1st, Zampelli initiated and finalized a transfer of Morrison Informatics' banking relationship to Members 1st. Douglass served as the relationship manager between Members 1st and Morrison Informatics during this time, aiding Morrison Informatics with opening a business checking account and a business line of credit, and with obtaining a Visa business credit card.

Zampelli was at no time authorized as a signer on Morrison Informatics' accounts or as a user of the Visa credit card. However, Zampelli opened a business savings account in the name of Morrison Informatics and listed himself as the sole authorized signer without the permission of Morrison Informatics.

During this time, Zampelli and Douglass engaged in “ongoing, and substantial sports betting activities....” Zampelli supported his gambling by taking money from Morrison Informatics by utilizing Morrison Informatics' banking relationship with Members 1st without authority. Specifically, Zampelli obtained unauthorized cash withdrawals from checks payable to Morrison Informatics, cashed checks payable to Morrison Informatics by third parties and himself, made unauthorized cash withdrawals from Morrison Informatics' business checking account, and made unauthorized purchases with Morrison Informatics' Visa business credit card.

Plaintiffs became aware of Zampelli's conduct on June 9, 2009. On September 17, 2009, Morrison Informatics filed a Voluntary Petition under Chapter 7 of the United States Bankruptcy Code. On September 22, 2009, Leon P. Haller was assigned as the Chapter 7 Trustee for Morrison Informatics. This action was initiated by a Praecipe for [w]rit of [s]ummons that was filed on May 27, 2011. The original [c]omplaint in this action was filed on May 7, 2012, to which Members 1st filed [p]reliminary [o]bjections on May 25, 2012.

On June 11, 2012, [ ] Douglass filed a Suggestion of Bankruptcy to stay the action as to Defendant Douglass pursuant to 11 U.S.C. § 362.¹ On June 19, 2012, Plaintiffs filed an Amended Complaint and a Motion to Amend Caption to add Leon P. Haller, Trustee as Plaintiff. The [a]mended [c]omplaint added a count for implied breach of contract. On July 5, 2012, Defendant, Members 1st, filed [p]reliminary [o]bjections to Plaintiffs' Amended Complaint.

Trial Court Opinion, 2/20/2013, at 1–4 (citations omitted).

The trial court sustained the preliminary objections and dismissed Plaintiffs' amended complaint by order of February 20, 2013. Plaintiffs timely filed a notice of appeal. Both Plaintiffs and the trial court have complied with Pa.R.A.P. 1925.

Plaintiffs raise the following questions on appeal, which we have renumbered for ease of disposition.

[I]. Whether the trial court erred in ordering that Anthony M. Grigonis and Malcolm H. Morrison do not have standing in their separate and distinct claims?

[II.] Whether the trial court erred in ordering that Morrison Informatics, Inc. could not amend [its] caption and therefore did not have standing?

[A]. Should Morrison Informatics, Inc. been granted leave to amend the caption to substitute Chapter 7 Trustee, Leon P. Haller, for Morrison Informatics, Inc.?

[B]. Whether Morrison Informatics, Inc. has standing to bring the case at issue?

Plaintiffs' Brief at 4 (suggested answers and unnecessary capitalization omitted).

Our standard of review in an appeal from an order sustaining preliminary objections is as follows.

In reviewing a trial court's grant of preliminary objections, the standard of review is de novo and the scope of review is plenary. The salient facts are derived solely from the complaint and pursuant to that standard of review, the court accepts all well-pleaded material facts in the complaint, and all inferences reasonably deduced therefrom must be accepted as true.

Martin v. Rite Aid of Pennsylvania, Inc., 80 A.3d 813, 814 (Pa.Super.2013) (quoting Keller v. Scranton City Treasurer, 29 A.3d 436, 443 n. 12 (Pa.Cmwlth.2011)).

We first examine whether the trial court erred in holding that Morrison and Grigonis lacked standing to bring the claims stated in the amended complaint.

“To have standing to sue individually, the shareholder must allege a direct, personal injury—that is independent of any injury to the corporation—and the shareholder must be entitled to receive the benefit of any recovery.” Hill v. Ofalt, 85 A.3d 540, 548 (Pa.Super.2014) (citing, inter alia, Burdon v. Erskine, 264 Pa.Super. 584, 401 A.2d 369, 370 (1979) ( en banc ) (“An injury to a corporation may ... resultin injury to the corporation's stockholders. Such injury, however, is regarded as ‘indirect,’ and insufficient to give rise to a direct cause of action by the stockholder.”)).

If the injury is one to the plaintiff as a shareholder as an individual, and not to the corporation, for example, where the action is based on a contract to which the shareholder is a party, or on a right belonging severally to the shareholder, or on a fraud affecting the shareholder directly, or where there is a duty owed to the individual independent of the person's status as a shareholder, it is an individual action. If the wrong is primarily against the corporation, the redress for it must be sought by the corporation, except where a derivative action by a shareholder is allowable, and a shareholder cannot sue as an individual.... Whether a cause of action is individual or derivative must be determined from the nature of the wrong alleged and the relief, if any, that could result if the plaintiff were to prevail.

In determining the nature of the wrong alleged, the court must look to the body of the complaint, not to the plaintiff's designation or stated intention. The action is derivative if the gravamen of the complaint is injury to the corporation, or to the whole body of its stock or property without any severance or distribution among individual holders, or if it seeks to recover assets for the corporation or to prevent dissipation of its assets.... If damages to a shareholder result indirectly, as the result of an injury to the corporation, and not directly, the shareholder cannot sue as an individual.

Hill, 85 A.3d at 549. (quoting 12B Fletcher Cyclopedia of the LAW of CORPORATIONS § 5911 (2013)).

The trial court held that all of the injuries alleged by Morrison and Grigonis were indirect results of the harm suffered by Morrison Informatics, rather than individual wrongs suffered separately from their status as shareholders.

In the present case, according to Plaintiffs' complaint and amended complaint, the loss of employment, livelihood, goodwill and the embarrassment and shame suffered by Grigonis and Morrison all resulted from the financial collapse and bankruptcy of Morrison Informatics. Consequently, the injuries suffered by Grigonis and Morrison did not arise from a contract to which they were a party or from a duty owed by Defendants directly to Grigonis and Morrison. Rather, the injuries suffered by Grigonis and Morrison were indirect injuries that resulted from the collapse of the corporation in which they were shareholders and owners. Therefore, Grigonis and Morrison lack standing to bring an...