The opinion of the court was delivered by: GREEN
Now before the court is defendant's motion for judgment on the pleadings, pursuant to Fed. R. Civ. P. 12(c). The question for determination is whether triable issues, sufficient to defeat this motion, exist in plaintiffs' claims for malicious prosecution and tortious interference with prospective business relations. Because I conclude that plaintiffs have failed to state a claim for malicious prosecution, I will grant judgment for defendant as to that portion of the complaint. However, I conclude that plaintiffs have stated a claim for tortious interference with prospective business relations. Accordingly, I will deny defendant's motion as to that claim.
Plaintiffs allege that defendant instituted an action in the Philadelphia Court of Common Pleas aimed at stopping the development by plaintiffs of a shopping center, to be known as Whitman Plaza. This action was removed to the Federal Court for the Eastern District of Pennsylvania on October 26, 1979. Nevertheless, on November 2, 1979, defendant indexed a lis pendens in the Court of Common Pleas against the real estate on which the shopping center was to be developed.
When filing the lis pendens, defendant asserted that it had entered into an oral contract with plaintiff Breslin No. 3 Corp. whereby the defendant would purchase a portion of the real estate and construct a Two Guys department store thereon. After the lis pendens was stricken for being filed in the wrong court, defendant reindexed the lis pendens in the federal court. On January 22, 1980, the Honorable Edward N. Cahn entered summary judgment for plaintiff Breslin No. 3 Corporation on the ground that the alleged oral agreement failed to satisfy the statute of frauds. Accordingly, Judge Cahn ordered the striking of the lis pendens.
When adjudicating a case on the pleadings, the court must apply strict standards. First, "[a] court may not dismiss a claim on the pleadings unless no set of facts could be adduced to support the plaintiff's claim for relief." Bryson v. Brand Insulations, Inc., 621 F.2d 556, 559 (3d Cir. 1980), citing Conley v. Gibson, 355 U.S. 41, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). Second, a court must "view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the non-moving party." Grant v. Erie Insurance Exchange, 542 F. Supp. 457, 467 (M.D. Pa. 1982); Alken v. Lerner, 485 F. Supp. 871, 873 (D.N.J. 1980), citing 5 C. Wright and A. Miller, Federal Practice and Procedure § 1368 (1969). We must analyze the parties' contentions from this perspective.
Where, as here, a federal court exercises diversity jurisdiction, it must apply the substantive law that the forum state would follow. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 82 L. Ed. 1188, 58 S. Ct. 817 (1938). Under Pennsylvania law, the elements of an action for wrongful use of civil proceedings are the initiation by defendant of prior legal proceedings without probable cause, which resulted in the seizure of plaintiffs' property and terminated in plaintiffs' favor. See Publix Drug Co. v. Breyer Ice Cream Co., 347 Pa. 346, 32 A.2d 413 (1943). The disputed elements in this case are whether plaintiffs Breslin, Hantgan and Center Associates have standing to bring the action and whether plaintiffs' property was seized.
Defendant contends that Breslin, Hantgan and Center Associates lack standing to bring this action because Breslin No. 3 Corp. was the only defendant in the 1976 breach of contract action. Plaintiffs, on the other hand, argue that they are Breslin No. 3 Corp. Defendant relies on cases from other jurisdictions which establish that only the original, named defendant has standing to bring an action for malicious prosecution.
While plaintiffs do not advance any case support, they contend that they were injured by defendant's action and that they transacted business with defendant interchangeably as individuals, as agents for Breslin No. 3 Corp., and as a partnership. They cite their complaint and portions of defendant's answer which acknowledge their personal participation in the joint venture which formed the basis of the breach of contract suit.
I believe that entry of judgment for defendant on this theory would be improper. Material factual issues remain which are sufficient to defeat defendant's motion on this ground. E.g., to what extent did the former action involve allegations against plaintiffs as individuals versus agents for the corporation? And to what extent are all plaintiffs in fact identical?
In support of its motion for judgment on the pleadings, defendant also asserts that plaintiffs failed to allege a necessary element of a malicious prosecution action: i.e., that a seizure of property or arrest of the person occurred in the prior action.
Specifically, it contends that the filing of a lis pendens is not a seizure of property. Plaintiffs disagree and argue that a loss of dominion and control over property, real or personal, is a sufficient seizure for purposes of an action for malicious use of process.
Plaintiffs cite Shannon v. Barrett where the court held that the filing of a lis pendens constitutes a seizure for purposes of malicious prosecution. 65 Pa. D. & C. 2d 446 (Del. Co. 1974). Plaintiffs, however, fail to appreciate the significance of the recent decision in Blumenfeld v. R.M. Shoemaker Co., 286 Pa. Super. 540, 429 A.2d 654 (Pa. Super. 1981), where the court rejected the minority rule stated in Shannon.3 In Blumenfeld, plaintiff filed a malicious prosecution action arising out of a lis pendens indexed against its property. In reversing the judgment of the lower court against defendant, the court stated:
Although a lis pendens may temporarily cloud someone's title and therefore make encumbrancing or conveyancing difficult, it is nevertheless clear that it does not even establish a lien upon the effected property. A fortiori, a lis pendens does not constitute a seizure of property within the purview of the English rule. Consequently, appellees ...