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August 7, 1978

Malcolm BRICKLIN, John S. Shinn, Fastrack International, Inc., Fastrack Leisure Land, Inc., First Stroudsburg National Bank now known as the First National Bank of Eastern Pennsylvania, Francis R. Drake, Thomas H. Kiley, Joseph A. Lisicky, William R. Mainwaring and John Pentz

The opinion of the court was delivered by: BRODERICK


The plaintiff, Leon Stern, brought this diversity action against defendants Malcolm Bricklin, Fastrack International, Inc., and Fastrack Leisure Land, Inc., (Fastrack defendants), and defendants First Stroudsburg National Bank and five of the Bank's officers (Bank defendants), to recover damages for breach of contract, conversion of personal property, and conspiracy to commit conversion. *fn1" At trial the plaintiff asserted breach of contract and conversion claims against the Fastrack defendants; conversion against First Stroudsburg National Bank (Bank); and conspiracy against the Fastrack defendants, the Bank and the five Bank officers. A seventeen day trial was held before the Court and a jury. At the end of the plaintiff's case the Court directed a verdict in favor of all the defendants in connection with the plaintiff's conspiracy claims, and at the close of all the evidence the Court directed a verdict in favor of the Bank on the conversion claim. In connection with the plaintiff's claims against the Fastrack defendants, the jury answered special interrogatories, *fn2" as a result of which the Court entered a verdict in favor of the plaintiff on both the breach of contract and conversion claims in the amount of $ 2,388,080. The matter is now before the Court on the plaintiff's motion for a new trial against the Bank defendants on the claims of conspiracy and conversion.

 It is well settled that on a motion for a directed verdict the evidence adduced by the plaintiff and all reasonable inferences to be drawn therefrom are to be viewed in a light most favorable to the plaintiff. Sano v. Pennsylvania Railroad Company, 282 F.2d 936 (3d Cir. 1960). On a motion for a new trial alleging the erroneous grant of a directed verdict, the plaintiff is also entitled to have the evidence viewed in the same favorable manner. Clyde v. Hodge, 460 F.2d 532 (3d Cir. 1972); Wiggins v. City of Philadelphia, 331 F.2d 521 (3d Cir. 1964).

 Viewing the plaintiff's evidence and the inferences therefrom in a light most favorable to the plaintiff, the evidence can be summarized as follows. In 1970, the plaintiff became interested in acquiring a Poconos resort hotel called Vacation Valley. He negotiated an agreement to purchase it with Francis and John Shinn, and then formed two wholly owned corporations, Four Seasons Country Club, Inc. (Four Seasons), and LBGS, Inc. (LBGS), for the purpose of buying and operating the resort. (N.T. 2-104) Pursuant to their agreement, the Shinns' corporation transferred Vacation Valley to Four Seasons. (N.T. 2-134) The plaintiff arranged for Four Seasons and LBGS to borrow money from the Bank in order to pay for refurbishing the hotel and to finance the sale of some of the Vacation Valley land. At the same time he borrowed $ 125,000 from the Bank for his personal use. He signed a note in connection with this personal loan, and gave as collateral certain securities. (N.T. 2-138, 3-26) In addition to the money he borrowed from the Bank, the plaintiff also borrowed money from friends to use in running Vacation Valley. (N.T. 3-36)

 Despite the plaintiff's efforts, Vacation Valley did not generate enough money to cover expenses, and Four Seasons and LBGS fell behind in their mortgage payments and payments due other creditors. When this happened, the plaintiff personally obligated himself to repay some of the debts of Four Seasons and LBGS. He also started looking for a buyer for Vacation Valley.

 In early 1971, he met the defendant Malcolm Bricklin, who expressed an interest in purchasing Vacation Valley. The two men met on several occasions, and in late July 1971 they arrived at an agreement which the plaintiff outlined at trial as follows: 1) the plaintiff would exchange all his stock in Four Seasons and LBGS for $ 1.25 million worth of stock in Fastrack International, Inc. (International), and Fastrack Leisure Land, Inc. (Leisure Land); 2) the Fastrack defendants would repay all the debts of plaintiff; 3) the Fastrack defendants would return the securities that the plaintiff had given to the Bank as collateral for the $ 125,000 personal loan, which the plaintiff had obtained from the Bank; and 4) the Fastrack defendants would employ the plaintiff for one year at a salary of $ 1000 per week. (N.T. 3-152, 4-4, 4-65, 4-141)

 In order to finance this transaction, a mortgage had to be arranged. (N.T. 4-8, 4-9) The plaintiff testified that he called the loan officer at the Bank who handled his accounts and told him that he had found a buyer for Vacation Valley, who would be contacting him shortly to arrange financing. (N.T. 4-9, 4-54, 4-99) The plaintiff testified that he was not involved in the negotiations which culminated in the mortgage agreement, and that the only action he took in furtherance of this transaction was to call the loan officer in order to introduce Malcolm Bricklin to the Bank. (N.T. 4-54, 4-134, 7-21, 7-104, 8-15)

 In September 1971 a Bank meeting was held which was attended by the plaintiff, the defendant Malcolm Bricklin, and the five Bank officers named as defendants in this action. The plaintiff testified that Malcolm Bricklin spoke at this meeting for about twenty minutes and outlined the provisions of their July 1971 agreement. (N.T. 4-104)

 The closing for Vacation Valley was held on or about November 22, 1971. At the closing the plaintiff executed documents transferring Vacation Valley from Four Seasons to Leisure Land, the Bank loaned Leisure Land $ 1.25 million pursuant to its mortgage agreement, and the debts the plaintiff and his corporations owed the Bank were satisfied out of the mortgage proceeds. (N.T. 4-149, 5-20, 8-115) The plaintiff testified that one of the Bank's conditions for the mortgage was the repayment of the plaintiff's corporate and personal loans to the Bank. (N.T. 8-117)

 At the November 22, 1971 closing Malcolm Bricklin gave the plaintiff a contract to sign which was intended to embody their July 1971 agreement. The plaintiff refused to sign it on the ground that it did not provide for the return of his collateral securities or for the assumption of his debts. (N.T. 6-8) Bricklin told him that he would send him another contract, but according to the plaintiff this was never done, and therefore a written contract was never executed by them.

 In January 1972 the Bank gave the securities it held as collateral to the Fastrack defendants. (N.T. 11-109) The back of the plaintiff's note reflects that an assignment of the note was made to the Fastrack defendants by the Bank. (N.T. 11-109) The plaintiff's signature does not appear on the back of this note, and the plaintiff testified that prior to the commencement of this lawsuit in the spring of 1972, he never saw the writing which now appears on the back of the note. (N.T. 3-27)

 In his motion for a new trial the plaintiff first contends that he presented sufficient evidence that there was a conspiracy among all the defendants to convert his collateral securities. *fn3" As the Pennsylvania Supreme Court stated in Fife v. Great Atlantic & Pacific Tea Company, 356 Pa. 265, 267, 52 A.2d 24, 27 (1947), the leading case on civil conspiracy in Pennsylvania:

Conspiracy is a combination or agreement between two or more persons to do an unlawful thing, or to do a lawful thing in an unlawful manner. There must be a common purpose supported by a concerted action, and each must have the intent to do the unlawful thing. That intent must be common to all, and each must understand that the other has that purpose. A conspiracy may be proved by acts and circumstances sufficient to warrant an inference that the unlawful combination had been in point of fact formed for the purpose charged. Ballantine v. Cummings, 220 Pa. 621, 70 A. 546 (1908).
While conspiracy may be proved by circumstantial evidence, the evidence must be full, clear and satisfactory. The mere fact that several parties happened to exercise independent rights at or about the same time does not constitute an actionable conspiracy. Mere suspicion or the possibility of guilty connection ...

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