June 10, 1994
HUGH KENWORTHY, III and W. THOMAS TITHER, JR., individually; and HUGH KENWORTHY, III, W. THOMAS TITHER, JR., WILLIAM DIMELING and JOHN C. TUTEN, JR., trading and doing business as TOBIAS KNOBLAUCH PRIVATE BANK, Plaintiffs,
SARAH W. HARGROVE, Secretary of Banking of the Commonwealth of Pennsylvania; JOHN BRINE, PETER SMITH, ELENI POURNARAS, MAUREEN McCULLOUGH, JOHN WHITE, individually and in their capacities as officers of KNOBLAUCH STATE BANK; THOMAS FOLEY, Secretary of Labor and Industry of the Commonwealth of Pennsylvania; and RONALD E. CHRONISTER, former Acting Insurance Commissioner of the Commonwealth of Pennsylvania and former Acting Director of the State Workman's Insurance Fund, Defendants. ANTHONY N. DINNOCENTI, RONALD N. DINNOCENTI, GEORGE CONNELL, C. MEADE GEISEL, THOMAS J. KEAVENEY, PENNMARK GROUP, INC., T. BRANDON WEIDNER, W. PHELPS RILEY, HENRY L. SERRA, and FRANK A. SERRA, Plaintiffs, v. SARAH W. HARGROVE, individually and in her Capacity as Secretary of Banking, SARAH W. HARGROVE, acting in her Capacity as Receiver for the Pennsylvania Deposit Insurance Corporation, SARAH W. HARGROVE, acting in her Capacity as Receiver for Tobias Knoblauch Private Bank, DEPARTMENT OF BANKING OF THE COMMONWEALTH OF PENNSYLVANIA, KNOBLAUCH STATE BANK, MAUREEN H. McCULLOUGH, JOHN F. WHITE, JR., ELENI A. POURNARAS, PETER J. SMITH, JOHN J. BRINE, STATE WORKER'S INSURANCE FUND, MARIAN STATE BANK, and THOMAS J. FOLEY, Defendants.
The opinion of the court was delivered by: FRANKLIN S. VAN ANTWERPEN
This 42 U.S.C. § 1983 action arises out of the summary seizure and subsequent reconstitution of the Tobias Knoblauch Private Bank. In an Order dated June 29, 1993 in Dinnocenti v. Hargrove, Civ. No. 93-1699 (E.D. Pa. 1993), this court consolidated the above-captioned matters pursuant to Federal Rule of Civil Procedure 42(a). Defendant Sarah W. Hargrove has now moved for partial summary judgment against the plaintiffs in the Dinnocenti case (hereinafter "Limited Partners") on all but one Count of their Complaint.
We first review the facts that gave rise to the underlying dispute and present a concise outline of the already extensive procedural history of this litigation.
I. FACTUAL AND PROCEDURAL HISTORY
The plaintiffs in the action originally docketed as Dinnocenti v. Hargrove, Civil No. 93-1699 (E.D. Pa. 1993), which has since been consolidated with Kenworthy v. Hargrove, Civil No. 92-7416 (E.D. Pa. 1992), are ten limited partners of the Tobias Knoblauch Private Bank ("Private Bank"), a limited partnership which operated formerly as a private bank
in Pennsylvania. Limited Partners' Complaint, PP 1, 20. On April 17, 1992, Pennsylvania's Secretary of Banking, Sarah W. Hargrove ("Secretary Hargrove"), seized the Private Bank, its assets, and its deposits.
Limited Partners' Complaint, P 62. On that same day, Secretary Hargrove filed a certificate of possession on the Private Bank, thereby becoming its statutory receiver.
Limited Partners' Complaint, P 63. Also on April 17, 1992, the Court of Common Pleas of Berks County, Pennsylvania entered two Orders confirming Secretary Hargrove as receiver of the Private Bank and approving the sale of the Private Bank's assets and the transfer of its liabilities to a newly chartered institution, defendant Knoblauch State Bank. Limited Partners' Complaint, P 67.
The Limited Partner Plaintiffs now challenge the propriety of Secretary Hargrove's seizure of the Private Bank and her subsequent transfer of certain assets and deposit liabilities to Knoblauch State Bank. In addition to Secretary Hargrove, the Limited Partners also bring claims against the Department of Banking; Knoblauch State Bank and its directors; Marian State Bank; the State Workmen's Insurance Fund ("SWIF"); and Thomas Foley, the Director of SWIF at times relevant to the activities alleged in Limited Partners' Complaint. Limited Partners' Complaint, PP 8-18.
The Limited Partners also have brought a state court action against these same defendants over the same perceived misconduct with regard to the seizure of the Private Bank. This state court action, begun by writ of summons, was filed on October 16, 1992 in the Court of Common Pleas of Berks County, Pennsylvania, and remains pending.
The Limited Partner Plaintiffs filed their Complaint in this court on March 31, 1993. The Complaint sets forth ten causes of action listed in separate Counts numbered I through X. In short, the Counts include:
Count I -- Violation of Civil Rights under 42 U.S.C. § 1983 (procedural due process);
Count II -- Violation of Civil Rights under 42 U.S.C. § 1983 (substantive due process);
Count III -- Violation of Pennsylvania's Banking Code;
Count IV -- Taking of Property;
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