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Martik Brothers, Inc. v. Huntington National Bank

April 23, 2010

MARTIK BROTHERS, INC., PLAINTIFF,
v.
HUNTINGTON NATIONAL BANK, DEFENDANT.



The opinion of the court was delivered by: Arthur J. Schwab United States District Judge

ELECTRONICALLY FILED

MEMORANDUM OPINION DENYING PLAINTIFF'S MOTION FOR ATTORNEYS FEES OR, IN THE ALTERNATIVE, TO ALTER OR AMEND THE VERDICT (DOC. NO. 161)

I. INTRODUCTION

Before this Court is Plaintiff, Martik Brothers, Inc.'s ("Martik") Motion for Attorneys Fees, or in the alternative, to Alter or Amend the Verdict. (Doc. No. 161). The Court is quite familiar with this litigation and, after careful consideration of said motion and memorandum of law in support, Defendant Huntington National Bank's ("Huntington") Response to Plaintiff's Motion for Attorneys Fees (Doc. No. 165), and the entire record, this Court declines to exercise its discretion to award Plaintiff attorneys fees and will deny Plaintiff's motion. (Doc. No. 161).

II. PROCEDURAL BACKGROUND

Plaintiff instituted the present action by filing a complaint alleging three theories of liability: Third-Party Beneficiary of the Construction Loan Agreement between Kiebler Slippery Rock, LLC and Huntington, Misrepresentation, and Detrimental Reliance/ Unjust Enrichment. (Doc. No. 1.) Following discovery, Huntington filed a motion for summary judgment on all claims, which this Court granted on January 14, 2009. Martik appealed the Court's Order to the United States Court of Appeals for the Third Circuit, arguing this Court erred in granting summary judgment on Martik's third-party beneficiary, fraudulent misrepresentation, and detrimental reliance/unjust enrichment claims.

On December 8, 2009, the Court of Appeals reversed and remanded this Court's judgment as to the intentional misrepresentation claim, but affirmed the Court's judgment on the other claims. Martik Brothers, Inc. v. The HNB National Bank, 2009 WL 4639661 (3d Cir. 2009). In its opinion, the Court of Appeals noted that this Court addressed only an intentional misrepresentation claim - and not negligent misrepresentation - in granting summary judgment for Huntington, and indicated that upon remand, Martik could amend its complaint to add a claim for negligent misrepresentation. Id. at *3, n. 7. Two months later, on February 4, 2010, Martik filed a Motion to Amend and/or Clarify its Misrepresentation Claim, (Doc. No. 69), which this Court granted.

At trial, Martik sought damages in the amount of $2.1 million on its intentional and negligent misrepresentation claims. The jury returned a verdict in favor of Martik on its negligent misrepresentation claim only, for an amount in excess of $2.4 million. The parties in the present action stipulated before trial that "all issues and defenses relating to attorneys fees [are] preserved pending the outcome of trial." (Doc. No. 148).

III. LEGAL STANDARD

In diversity cases, District Courts apply state rules concerning the award of attorneys fees. Montgomery Ward & Co. v. Pacific Indem. Co., 557 F.2d 51, 56 (3d Cir. 1977). Pennsylvania follows the American Rule for attorneys fees, which proscribes that a litigant cannot recover attorneys fees from an adverse party absent express statutory authority, clear agreement between the parties, or another established exception. See Trizechahn Gateway, LLC v. Titus, 976 A.2d 474, 482-83 (Pa. 2009). Denial or award of attorneys fees is within the sound discretion of trial courts and will be reversed on appeal only for an abuse of discretion. Security Mut. Life Ins. Co. of New York v. Contemporary Real Estate Associates, 979 F.2d 329 (Pa. 1992).

A. Attorneys Fees as Sanctions

Counsel fees may be awarded as a sanction for "dilatory, obdurate, or vexatious conduct during the pendency of a matter." 42 Pa.C.S. § 2503(7). "Dilatory" has been interpreted as tending to or having the intent to delay and "obdurate" as unyielding or resistant to persuasion. McDade v. Garland, 10 Pa. D. & C. 4th 198, 1991 WL 330900 (C.P. 1991). "Vextatious" has been construed as causing or creating a source of annoyance or irritation. See Cummins v. Atlas Railroad Construction Co., 814 A.2d 742 (Pa.Super.Ct. 2002). "An award of counsel fees pursuant to § 2503(7) must be supported by a trial court's specific finding of dilatory, obdurate or vexatious conduct." Yeager v. Kavic, 765 A.2d 812, 815 (Pa.Super.Ct. 2000).

B. Attorneys Fees as Punitive Damages

Punitive damages are available under Pennsylvania law only when the defendant's conduct is "outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others." Logue v. Logano Trucking Co., 921 F.Supp. 1425, 1427 (E.D.Pa. 1996). Moreover, the defendant's conduct must be "intentional, willful, wanton or reckless." Castetter v. Mr. "B" Storage, 699 A.2d 1268, 1271-72 (Pa.Super.Ct. 1997). To justify an award of punitive ...


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