The opinion of the court was delivered by: ARTHUR SCHWAB, District Judge
MEMORANDUM OPINION ON SUMMARY JUDGMENT
Factual Background and Procedure
Before the Court are separate motions for summary judgment
filed by defendants Royal Sun Alliance Insurance Company
("Royal") and Patrick J. Loughney, Esquire. After careful
consideration of the motions for summary judgment and plaintiff
Daniel R. Finney's responses, the memoranda of law in support and
in opposition, and the voluminous materials produced by the
parties in support and in opposition, the Court will grant
summary judgment for defendants.
This Court withdrew the automatic reference to Bankruptcy Court
on October 21, 2004 of Plaintiff/debtor's amended adversary
complaint stating claims under Pennsylvania's Dragonetti Act, 42
Pa.C.S. § 8351, "Wrongful use of civil proceedings" against Royal
(Count I) and Loughney (Count II), and for common law abuse of
process against both defendants (Count III). The Second Amended
Complaint sets forth the following.
On June 1, 2000, a fire destroyed Daniel Finney's house and
barn in Elizabeth Pennsylvania. Finney had a policy of
homeowner's insurance with Royal for over one million dollars, including personal property coverage, and he made a
claim immediately after the fire. Mr. Finney, a general
contractor by trade, had a $410,000 mortgage on the property,
which he had taken out in March 2000 to pay for his home
remodeling project, which he had just completed.
On advice of counsel, Dennis Spyra, Esquire, plaintiff did not
make his mortgage payments while the claim was being
investigated, and declared bankruptcy given the impending
mortgage foreclosure on September 13, 2000. Eventually, on March
23, 2001, Royal paid off the mortgage, but refused to pay
anything else on plaintiff's claim. Royal's investigation
indicated the June 1st fire had been intentional, and that
plaintiff had made a claim against another insurance company in
November 1996 for a fire at his previous residence that Royal
learned had been caused by arson. Plaintiff did not disclose that
previous claim on his application for insurance with Royal, and
defendants deemed that to be fraud in the application.
Attorney Spyra filed an adversary action in the bankruptcy
proceeding against Royal for breach of contract and bad faith
under Pennsylvania's insurance bad faith statute, 42 Pa.C.S. §
8371, and another member of this Court granted Royal's motion to
withdraw the automatic reference on January 17, 2001. Finney v.
Royal Sun Alliance Insurance Company, Civil Action No. 01-120.
Defendant Loughney drafted and filed a counterclaim on Royal's
behalf, asserting that plaintiff had committed fraud in his
application for insurance and had caused the fire intentionally,
and seeking costs and expenses, including refund of the payments
it already had made.
A jury in a trial before Chief Judge Donetta Ambrose of this
Court found on April 12, 2002 that defendant had breached its
contractual obligations to plaintiff by refusing to pay additional amounts on the claim, and awarded damages in the
amount of $147,225.54 (as modified by the Court which added
prejudgment interest in the amount of $38,584.08). The jury
returned a verdict for Royal on the bad faith claim, however, and
for plaintiff on Royal's counterclaim.
Plaintiff alleges in his Second Amended Complaint that Royal
and attorney Loughney acted without probable cause and for an
improper motive in filing and prosecuting the counterclaim
alleging he committed arson and fraud, primarily for the purpose
of "coercing, intimidating and dissuading Mr. Finney from
pursuing his claim against Royal thereby saving a substantial
amount of money by not paying the claim." Second Amended
Complaint at ¶ 38. Both defendants filed motions for summary
judgment asserting that the record evidence shows as a matter of
law that there was probable cause to file their ultimately
unsuccessful counterclaim and that they acted for legitimate
business and strategic reasons, and that plaintiff has not
produced sufficient contradictory evidence to support his claims.
The Court agrees and will grant summary judgment for defendants.
Summary Judgment Standards
Summary judgment under Fed.R.Civ.P. 56(c) is appropriate "`if
the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of
law."Woodside v. School Dist. of Philadelphia Bd. of Educ.,
248 F.3d 129, 130 (3d Cir. 2001), quoting Foehl v. United States,
238 F.3d 474, 477 (3d Cir. 2001) (citations omitted). An issue of
material fact is genuine only if the evidence is such that a reasonable jury could return a verdict for the non-moving
party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). "A factual dispute is material if it `bear[s] on an
essential element of the plaintiff's claim,' and is genuine if `a
reasonable jury could find in favor of the nonmoving party.'"
Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd.,
298 F.3d 201, 210 (3d Cir. 2002) (quoting Abraham v. Raso,
183 F.3d 279, 287 (3d Cir. 1999)) (alteration in original). "The
substantive law governing the dispute will determine which facts
are material, and only disputes over those facts `that might
affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment.'" DeHart v.
Horn, 390 F.3d 262, 267-68 (3d Cir. 2004), quoting Anderson,
477 U.S. at 248.
When the non-moving party will bear the burden of proof at
trial, the moving party's burden can be "discharged by `showing'
that is, pointing out to the District Court that there is an
absence of evidence to support the non-moving party's case."
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the
moving party has carried this burden, the burden shifts to the
non-moving party who cannot rest on the allegations of the
pleadings and must "do more than simply show that there is some
metaphysical doubt as to the material facts." Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986);
Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co.,
998 F.2d 1224, 1230 (3d Cir. 1993).
In deciding a summary judgment motion, a court must take the
facts in the light most favorable to the nonmoving party, and
must draw all reasonable inferences and resolve all doubts in
their favor. Doe v. County of Centre, PA, 242 F.3d 437, 446 (3d
Cir. 2001); Woodside, 248 F.3d at 130; Heller v. Shaw Indus.,
Inc., 167 F.3d 146, 151 (3d Cir. 1999). Moreover, a district
court may not make credibility determinations or engage in any
weighing of the evidence at the summary judgment stage; instead, the non-moving party's evidence
"is to be believed and all justifiable inferences are to be drawn
in his favor." Marino v. ...