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P. LIEDTKA TRUCKING, INC. v. JAMES H. HARTMAN & SO

January 11, 1982

P. LIEDTKA TRUCKING, INC. and Bankers and Shippers Insurance Company of New York, Plaintiffs,
v.
JAMES H. HARTMAN AND SON, INC. and Dennis L. Townsend, Defendants, Third-Party Plaintiffs, v. CAROLINA CASUALTY INSURANCE COMPANY, Third-Party Defendant, Third-Party Plaintiff, v. FRUEHAUF CORPORATION, Third-Party Defendant



The opinion of the court was delivered by: WEINER

MEMORANDUM OPINION AND ORDER

Plaintiff Bankers and Shippers Insurance Company of New York, insurer of P. Liedtka Trucking, Inc., brought this action against James H. Hartman and Son, Inc., ("Hartman") and Dennis L. Townsend ("Townsend") to recover a payment made by plaintiff in settlement of an injury claim arising out of a two vehicle accident. The tractor-trailer involved in the accident was owned by Hartman, leased to Liedtka, and operated by Townsend. Townsend filed a third-party complaint against Carolina Casualty Insurance Company ("Carolina"), insurer of Hartman. On July 24, 1981, the third-party plaintiff, Carolina, filed a third-party complaint against Fruehauf Corporation ("Fruehauf") alleging that Fruehauf was liable to Carolina for contribution or indemnity under Section 402(a) of the Restatement 2d of Torts. Carolina alleged that the accident involved a new trailer whose separate brakes failed immediately prior to the accident.

 Prior to the filing of the third-party complaint against Fruehauf, an independent expert, Herbert Hill, was hired to perform an inspection of the tractor-trailer brakes on the vehicle owned by Hartman and leased to Liedtka. The report states that the investigation was conducted for Bankers and for Carolina, and the report is dated June 22, 1979.

 Hill's report states that the condition of the brakes on the tractor was quite poor because the linings were thin. The report goes on to state that the brakes on the trailer would have operated either in the antiskid mode or in the normal mode if the brakes had been so actuated by the driver. One of the conclusions reached in the report was that the antiskid function of the braking system in the Hartman trailer appeared to be intermittent. However, the report stated that when the antiskid system did not function, the system reverted back to the normal braking system, which allowed the trailer brakes to lock up when air was applied. Another conclusion reached in the report was that the most likely cause of the accident was error on the part of the driver, Townsend, in managing the brake control on the downgrade prior to the accident or in his failure to apply his brakes at all. The final conclusion reached in the report was that there was always the possibility that the antiskid system on the trailer could have rendered the trailer brakes nonfunctional at the time of the accident, but the brakes did not fail to function during the tests performed for the report.

 On September 24, 1981 the deposition of Townsend was taken. Although Townsend testified that the braking system on the tractor-trailer failed, he could not determine whether it was the failure of the trailer's brakes or of the tractor's brakes which caused the problem in stopping the vehicle.

 On October 16, 1981, counsel for Fruehauf wrote to counsel for Carolina offering to forego its claim for counsel fees if the third-party case against Fruehauf was dropped. Carolina elected to proceed to trial.

 At the trial, no testimony was offered by Carolina against Fruehauf. At the close of Carolina's case, this court granted Fruehauf's motion for a directed verdict. *fn1"

 Where state law provides such a right, attorneys fees may be assessed by a federal court in a diversity case. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 258-259, 95 S. Ct. 1612, 1622, 44 L. Ed. 2d 141 (1975). In Pennsylvania, a statute became effective on June 27, 1978, providing:

 
The following participants shall be entitled to a reasonable counsel fee as part of the taxable costs of the matter:
 
(9) Any participant who is awarded counsel fees because of the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith.
 
42 Pa.C.S.A. Judiciary and Judicial Procedure § 2503(9) (Purdon 1981).

 Thus, under Pennsylvania law, a litigant is entitled to attorneys fees if he can establish that an action was brought arbitrarily, vexatiously, or in bad faith.

 Carolina denies that it acted in bad faith by refusing to dismiss its claim against Fruehauf prior to trial. It argues that it was the conduct of Bankers, and not of Carolina, which was in bad faith. Carolina contends that Bankers sued Fruehauf, demanded contribution from Fruehauf, and kept insisting that Fruehauf was liable to it. Carolina concludes that the decision of Fruehauf to move for attorneys fees against Carolina while refraining from filing a similar motion against Bankers is itself evidence of bad faith on the part of Fruehauf. Carolina is attempting to cloud the issue with these allegations. There is no issue before the court as to whether Bankers acted in good faith, or the decision of Fruehauf not to move for attorneys fees against Bankers. The only issues before the court are whether Carolina acted arbitrarily, vexatiously or in bad faith in filing a third party complaint against Fruehauf, and, later, refusing to agree to the dismissal of Fruehauf before trial.

 The only argument of Carolina that it did not act in bad faith was Carolina's averment that it had evidence which supported its action against Fruehauf. ...


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