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SAFEGUARD MUT. INS. CO. v. MILLER

May 2, 1979

SAFEGUARD MUTUAL INSURANCE COMPANY
v.
ROBERT A. MILLER, WILLIAM J. KUNTZ, CHARLES D. COWLEY, DAVID P. TRULLI, FREDERIC G. ANTOUN and GLENN A. WENRICH and C. M. CLARK INSURANCE AGENCY, INC. vs. ROBERT A. MILLER, WILLIAM J. KUNTZ, CHARLES D. COWLEY, DAVID P. TRULLI, FREDERIC G. ANTOUN and GLENN A. WENRICH



The opinion of the court was delivered by: DITTER

The defendants in this case were employed by the Insurance Department of the Commonwealth of Pennsylvania in the respective capacities of deputy insurance commissioner, deputy attorney general, assistant attorney general, and insurance company examiner. They each played a significant role in the unsuccessful prosecution of the plaintiff insurance company for improper practices. In this civil rights action, plaintiffs seek redress for violations of their constitutional rights that allegedly occurred during that proceeding and the investigation which preceded it. The complaint *fn1" charges the defendants with various acts, including Inter alia, defamation, harassment, trespass, misfeasance and malfeasance. These acts, and many more, were allegedly committed in furtherance of a scheme to deprive plaintiffs of their property without due process of law.

The conflict between the Safeguard company and various Insurance Department officials has now produced at least twelve reported opinions, issued by four different federal courts. See C. M. Clark Insurance Agency, Inc. v. Maxwell, 156 U.S.App.D.C. 240, 479 F.2d 1223 (1973); Safeguard Mutual Insurance Co. v. Maxwell, 53 F.R.D. 116 (E.D.Pa.1971); Safeguard Mutual Insurance Co. v. Miller, 333 F. Supp. 822 (E.D.Pa.1971), rev'd, 472 F.2d 732 (3d Cir. 1973), on remand 68 F.R.D. 239 (E.D.Pa.1975), 456 F. Supp. 682 (E.D.Pa.1978); C. M. Clark Insurance Agency, Inc. v. Reed, 390 F. Supp. 1056 (S.D.Tex.1975); Safeguard Mutual Insurance Co. v. Pennsylvania, 329 F. Supp. 315 (E.D.Pa.1971), 372 F. Supp. 939 (E.D.Pa.1974); Safeguard Mutual Insurance Co. v. Pennsylvania ex rel. Maxwell, 313 F. Supp. 888 (E.D.Pa.1970), 321 F. Supp. 996 (E.D.Pa.1970). The history and facts of this litigation are explained fully in my earlier opinion at 456 F. Supp. 682, 684-85.

 On a previous motion for summary judgment, defendants argued that they were entitled to absolute immunity as to all their activities in connection with this case. For the purposes of that motion, I divided the acts charged against the defendants into various categories of conduct. I then granted summary judgment on the ground of absolute immunity as to each category that fell within the ambit of traditional prosecutorial activity. 456 F. Supp. at 692-93.

 As to the remaining eight categories, however, I concluded that the defendants were entitled, at most, to a qualified immunity. The conduct charged in each of these categories was administrative or investigative in nature, and the defendants would be entitled to immunity only if their acts had been taken in good faith, a determination best made at trial. Summary judgment as to these acts was therefore denied. 456 F. Supp. at 693-94.

 Defendants have now renewed their motion for summary judgment on the dual ground that the complaint, buttressed by the existing factual record, fails to state a cause of action under the civil rights laws, and that certain aspects of the complaint are also barred by the applicable statute of limitations. *fn2" For the reasons that follow, this motion will be granted in part and denied in part.

 Defendants argue essentially that plaintiffs have charged them with a series of common law torts, and that such allegations do not state a claim for relief under the federal civil rights laws. It is true that as to the categories of conduct that remain a part of this case, the complaint sounds primarily in tort. The following language from my opinion on the previous summary judgment motion explains the substance of the allegations in each of the eight categories:

 
First, plaintiffs assert that their rights were violated by the defendants' acts in preparing the report of examination of the Safeguard Mutual Insurance Company. The report is alleged to contain numerous errors and misstatements. . . . Secondly, plaintiffs claim that their rights were violated by the defendants' actions in posting insurance company investigators on the plaintiffs' premises for an unreasonably long period of time and directing the activities of these investigators in such a way as to vex and harass the plaintiffs. . . . Third, it is charged that defendants contacted banks and other financial institutions in order to freeze Safeguard's funds and prevent the company from managing its own financial affairs, all without authority or just cause. . . . Fourth, (plaintiffs) charge that the plaintiffs' rights were violated by the defendants' issuance of press releases and communications with media representatives regarding the suspension and injunction orders. Fifth, (plaintiffs) allege that defendants unreasonably refused to authorize certain expenditures on the company's behalf. These included the payment of salaries and credit card bills, as well as various administrative expenses. Sixth, (plaintiffs) charge that defendants directed uniformed police officers of the City of Philadelphia to position themselves on the plaintiffs' premises and to search persons entering or leaving the building, all in an alleged effort to harass plaintiffs and impede their business operations. (Seventh, plaintiffs) charge that the defendants communicated with agents, brokers, and creditors of Safeguard, as well as with other insurance companies, for the purpose of informing these third parties that the company had been suspended because it was insolvent. This is said to have resulted in a loss of insurance protection as well as revenue.
 
(Finally, plaintiffs) charge the defendants with intimidating and threatening witnesses, as well as misleading the court through false or irrelevant information.

 456 F. Supp. at 693-94.

 It is defendants' position that while these allegations might present a sufficient claim for relief under state law, they do not rise to the level of federal constitutional violations. Moreover, defendants argue that the Pennsylvania limitation periods applicable to defamation, 12 P.S. §§ 31 and 32, and to personal injury, 12 P.S. § 34, bar any cause of action based on some, if not all, of the above allegations.

 Plaintiffs respond that defendants have misconstrued the complaint. Safeguard says that its prayer for relief is based on a theory of civil conspiracy. It is argued that, together with other persons, the present defendants conspired to deprive plaintiffs of their property without due process of law by depleting their resources and destroying their business. The alleged torts enumerated above are said to be merely overt acts in furtherance of the conspiracy. The plaintiffs contend that this states a cause of action under both 42 U.S.C. § 1983 and 42 U.S.C. § 1985(3). Surprisingly, plaintiffs offer no suggestion as to the proper resolution of the statute of limitations issue beyond the following statement: "It is irrelevant that the complaints for defamation, illegal search of plaintiffs' employees and customers, or the false arrest of plaintiffs' officers were not brought within the statute of limitations." Plaintiffs' Memorandum in Opposition to Defendants' Motion to Reconsider Motion for Summary Judgment, at 4.

 I. Section 1985(3)

 At the outset, it is clear that 42 U.S.C. § 1985(3) has no relevance whatever to this litigation. Plaintiffs' reliance on this statute is totally misplaced. It is firmly established that in order to state a cause of action under section 1985(3), plaintiffs must show a conspiracy motivated by an invidious, discriminatory, class-based animus. Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S. Ct. 1790, 1798, 29 L. Ed. 2d 338 (1971); Novotny v. Great American Federal Savings & Loan Association, 584 F.2d 1235, 1240-41 (3d Cir. 1978); Jennings v. Shuman, 567 F.2d 1213, 1221 (3d Cir. 1977); Robinson v. McCorkle, 462 F.2d 111, 113 (3d Cir.), Cert. denied, 409 U.S. 1042, 93 S. Ct. 529, 34 L. Ed. 2d 492 (1972). Even under the most strained interpretation, the complaint in this case could not fairly be read as suggesting any class-based, discriminatory motive behind defendants' alleged conspiracy. Similarly, no such charge can be found in plaintiffs' brief or proposed findings of fact. Indeed, from the factual record already developed, I am quite satisfied that "the actions which form the basis for this case" most definitely are not "the offspring of a "class-based invidiously discriminatory animus' within the meaning of the Griffin test." Novotny, Supra, 584 F.2d at 1241. Summary judgment will therefore be granted to defendants on all claims brought under 42 U.S.C. § 1985(3).

 II. Section 1983

 A very different result obtains as to 42 U.S.C. § 1983. It is with reference to this statute that I must decide the issues posed by defendants, viz., whether plaintiffs have adequately stated a cause of action under the federal civil rights laws, and whether the ...


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