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09/04/97 FIRST LEHIGH BANK v. RICHARD COWEN AND

September 4, 1997

FIRST LEHIGH BANK, FIRST LEHIGH CORPORATION, JAMES L. LEUTHE AND LARRY ZIEGENFUSS, APPELLANTS
v.
RICHARD COWEN AND THE MORNING CALL, INC., APPELLEES



Appeal from the Order of the Court of Common Pleas of Northampton County Civil Division, No. 1995-C04690. Before JUDGESLA, J.

Before: Beck, Kelly, and Schiller, JJ. Opinion BY Kelly, J.

The opinion of the court was delivered by: Kelly

OPINION BY KELLY, J.:

Filed: September 4, 1997

In this appeal we are asked to determine whether the fair report privilege applies to a media account of an initial pleading in the absence of judicial action upon the pleading. Specifically, we must decide whether the appellee newspaper possessed a qualified privilege to report information contained in a private civil complaint filed against appellants in federal court but upon which no judicial action had been taken. We hold that the fair report privilege applied and that the newspaper fairly and accurately reported the information contained in the complaint. Accordingly, we affirm the trial court's order granting summary judgment in favor of the appellees, Richard Cowen and The Morning Call, Inc.

The salient facts and procedural history of this appeal have been aptly set forth in the trial court opinion as follows:

On May 17, 1995, Kenneth M. Kucharz and Katie Company, II ("Kucharz") filed a complaint against First Lehigh Bank, First Lehigh Corporation and Larry R. Ziegenfuss in the United State District Court, Eastern District of Pennsylvania. On May 23, 1995, Kucharz's attorney sent a copy of the complaint to Richard Cowen, a reporter for the Morning Call newspaper. Cowen then wrote a story about the lawsuit which appeared in the June 9, 1995 edition. Prior to writing the story, he did not contact any of the [appellants]. It is undisputed that between the date of the filing of the Kucharz complaint and the June 9th article ("Cowen Article"), there was no judicial action taken with respect to the case. The article was based solely on the Kucharz complaint itself.

On June 15, 1995, [appellants] filed this instant lawsuit alleging that the Cowen article was defamatory. Specifically, they allege that it did not accurately report the federal action. Pleadings are now closed and the extensive discovery conducted in this case, depositions, interrogatories, requests for production, and requests for admission, have been completed.

On April 25, 1996, [appellees] filed a motion for summary judgment on the basis that the Cowen article is privileged under the Fair Report Privilege and that there is no genuine issue of material fact. Both parties filed briefs on this motion.

Subsequently, on May 8, 1996, [appellants] filed a cross motion for partial summary judgment contending that the Fair Report Privilege does not apply because no judicial action occurred on the Kucharz complaint prior to the Cowen Article. Both parties have also briefed this motion.

This matter is before the court by way of the May 28, 1996 argument list and is now ready for Disposition.

(Trial Court Opinion at 1-2). On July 30, 1996, the trial court granted appellees' motion for summary judgment and denied appellants' cross-motion for partial summary judgment. This timely appeal followed.

On appeal, appellants raise the following issues for our review:

1. SHOULD THE FAIR REPORT PRIVILEGE APPLY AS TO ALLEGATIONS CONTAINED IN A JUST-FILED CIVIL COMPLAINT, AS TO WHICH NO ACTION HAS BEEN TAKEN, AND NO RESPONSIVE PLEADING FILED?

2. DID THE LOWER COURT ERR IN CONCLUDING THERE WAS NO ISSUE OF FACT FOR THE JURY AS TO WHETHER THE JUNE 9, 1995 NEWSPAPER ARTICLE PUBLISHED BY THE ALLENTOWN MORNING CALL WAS A FAIR AND ACCURATE ACCOUNT OF THE ALLEGATIONS CONTAINED IN THE FEDERAL COMPLAINT FILED AGAINST THESE DEFAMATION PLAINTIFFS?

(Appellants' Brief at 4).

At the outset, we note that our scope of review from a grant of summary judgment is plenary. Lebanon Coach Company v. Carolina Casualty Insurance Company, 450 Pa. Super. 1, 8, 675 A.2d 279, 282 (1996).

Summary judgment is properly entered where the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits demonstrate that no genuine, triable issue of fact exists and that the moving party is entitled to judgment as a matter of law. The court must examine the record in the light most favorable to the non-moving party and resolve all doubts against the moving party. Moreover, the burden is on the moving party to prove that no genuine issue of material fact exists.... We are not bound by the trial court's Conclusions of law, but may draw our own inferences and reach our own Conclusions. We will reverse a grant of summary judgment only when the trial court has committed an error of law or abused its discretion.

Id. at 8, 675 A.2d at 283 (quoting Butterfield v. Giuntoli, 448 Pa. Super. 1, 10-11, 670 A.2d 646, 650 (1995), allocatur denied, 546 Pa. 635, 683 A.2d 875 (1996) (citations omitted)). After a thorough review of the record, the briefs of the parties, the applicable law, and the well-reasoned opinion of the Honorable Jack Anthony Panella, we affirm on the basis of the trial court opinion as set forth below.

A court may properly grant a summary judgment motion where the pleadings, depositions, answers to interrogatories, admissions and affidavits, and appropriate reports, show either that 1) there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or 2) after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. Pa.R.C.P. 1035.2.

We will begin our Discussion, for coherency, with [appellants]' cross-motion for partial summary judgment alleging that the fair report privilege does not apply to a press account of an initial pleading upon which no judicial action has been taken.

As is evident from the briefs of the parties, there is a scarcity of case law and consensus on this issue. In Oweida v. Tribune-Review Pub. Co., 410 Pa. Super. 112, 599 A.2d 230 (1991), appeal denied, 529 Pa. 670, 605 A.2d 334 (1992), the court addressed the applicability of the fair report privilege to an article written from a civil complaint. However, the court remarked in a footnote that because the issue was not raised by the parties, it would express no opinion on the subject. Id. at 120, 599 A.2d at 234. Additionally, in Medico v. Time, Inc., 643 F.2d 134 (3rd Cir.1981), cert. denied, 454 U.S. 836, 102 S. Ct. 139, 70 L. Ed. 2d 116 (1981), which interpreted Pennsylvania law on the privilege, the United States Court of Appeals Stated:

Considerable controversy surrounds republication of defamations contained in pleadings on which no official action has been taken. Although Comment e to Section 611 of the Restatement (Second) of Torts excludes such pleadings from the scope of the privilege, Professor Eldredge writes that "the weight of authority is contrary to the [Restatement] rule, and is that the report of pleadings filed in court which have not yet come before a judicial officer and upon which no judicial action has been taken comes within the privilege." L. Eldredge, The Law of Defamation, Section 79(b)(1), at 430 (1978).

Id. at 140 n.21.

Further, in Hanish v. Westinghouse Broadcasting Company, 487 F. Supp. 397 (1980), the District Court for the Eastern District of Pennsylvania considered, but did not decide, the applicability of the privilege to reports based on pleadings. It reviewed Prosser's Handbook of the Law of Torts (4th ed., 1971), which states in section 118 at page 831 that "it is the prevailing view, with some few courts to the contrary, that a pleading or deposition filed in a case but not yet acted upon may not be reported under the claim of privilege". Id. at 401. It also reviewed the Restatement (Second) of Torts which provides in comment e to section 611:

Necessity of official action in judicial proceedings. A report of a judicial proceeding implies that some official action has been taken by the officer or body whose proceedings are thus reported. The publication, therefore, of the contents of preliminary pleadings such as complaint or petition before any judicial action has been taken is not within the rule stated in this Section.

Id.

However, it also remarked that Professor Eldredge, an advisor to the Restatement (Second) of Torts, has written in his recent book:

Whether the privilege to report a "judicial proceeding" extends to reporting defamatory statements contained in pleadings or other papers filed in court, which have not yet been taken, is a question upon which the cases are in sharp conflict.

It is perfectly clear, with respect to cases decided since 1972, that the heavy weight of authority is contrary to the earlier rule, and is that the report of pleadings filed in court which have not yet come before the judicial officer and upon which no judicial action has been taken comes within the privilege to report "judicial proceedings". The trend is strongly in this direction. Eldredge, The Law of Defamation, section 79(b) (1) at 427, 430 (1978).

Id.

The Hanish court then went on to state that it was not impressed with the so-called majority rule as stated in Prosser and the Restatement. Id. at 402. Instead, although it did not make an ultimate determination, it clearly favored what it termed the "enlightened reasoning" of Judge Pound in Campbell v. New York Evening Post, 245 N.Y. 320, 157 N.E. 153, 155 (1927) where he stated that:

the incongruous result follows that a newspaper may freely ... publish the contents of a complaint, if it has been read and filed on an ex parte application for an injunction, an order of arrest, an attachment, or an order of publication, yet, if the complaint has merely been filed as a public document in a public office, the newspaper which publishes its contents runs the risk of repeating a libel.

To say that the newspapers may freely publish the entire proceedings in a case from an ex parte application for an order of arrest or other remedial process under the protection of privilege, but may speak only at their own risk before the case actually comes before a court or Judge in some form, is to, make a distinction to which publishers give little heed.

487 F. Supp. at 401-402.

The case of Mengel v. Reading Eagle, 241 Pa. 367, 88 A. 660 (1913) is the closest that we have been able to find that gives guidance on the issue. In that case, Mengel was in real estate, loan and insurance business. Kornacki gave Mengel money to invest. After a period of time, Kornacki became unhappy with how the money was being managed. Therefore, Kornacki commenced an action in trespass, alleging deceit. Before the complaint was filed, however, a reporter from the defendant obtained a copy of the complaint from Kornacki's attorney. The defendant then published an article describing the allegations set forth in the complaint which was filed eleven days later. Judgment was entered in favor of the defendant and plaintiff appealed.

In affirming the judgment, the court stated:

While there is nothing in the body of the publication which would have justified the court in pronouncing it libelous as a matter of law, it must be viewed as a whole, including its headlines, in which deceit is said to be charged in the action brought by Kornacki against the appellants and the trust company. If such a charge was made in that action, it was a matter of public record, and as such the appellee was privileged to publish it. Though no declaration had been filed in the action against the appellants at the time the appellee published the account of it, it appeared by competent testimony that the praecipe directed the prothonotary to issue a 'Summons in an action of trespass for deceit'; and the praecipe was part of the record. The jury were properly instructed that among publications which a ...


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