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Logan v. Salem Baptist Church of Jenkintown

August 17, 2010

WALTER J. LOGAN, JR. AND THE DELTA ALLIANCE, LLC, PLAINTIFFS,
v.
SALEM BAPTIST CHURCH OF JENKINTOWN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM AND ORDER

This case is before the Court on Defendant Salem Baptist Church's Motion to Dismiss (Doc. No. 30) and Defendants Eastburn & Gray, Leopold-Leventhal, and Jonas's Motion to Dismiss (Doc. No. 32). For the reasons set forth in the attached Memorandum the Motions will be GRANTED in part and DENIED in part.

Factual Background*fn1

Many of the facts of this case have already been presented in this Court's Memorandum addressing Defendants Anders and Ferman's Motion to Dismiss, and we will only provide a brief summary of the facts here. Plaintiffs are Walter J. Logan and his company, The Delta Alliance ("Delta"). Defendants are the following: Salem Baptist Church of Jenkintown ("Salem"); the law firm Eastburn & Gray; Jane Leopold-Leventhal, who is an attorney at Eastburn & Gray and who represented Salem in its arbitration with Delta; Marc Jonas, who also is an attorney at Eastburn & Gray and who served as Salem's attorney for purposes of obtaining land use approvals from the Borough of Jenkintown; Mary Anders, who is a detective with the Montgomery County District Attorney's Office; and Risa Vetri Ferman, who is the Montgomery County District Attorney.

In October of 2003, Salem entered into a contract with Delta under which Delta agreed to act as an at-risk construction manager that would negotiate multiple contracts with subcontractors for both labor and materials to construct two buildings in Jenkintown, Pennsylvania. The parties' relationship did not go smoothly, however, as the construction experienced substantial delays and Salem fell behind in its payments to Delta by June 2007. In response to Delta's requests for payment, Salem terminated the contract. As a result, Delta filed a claim with the American Arbitration Association ("AAA") in July 2007, seeking to recover the payments owed as well as damages for wrongful termination of the contract. Salem cross-claimed that Delta had misappropriated payments received from Salem.

In the summer of 2008, Leopold-Leventhal and the Steering Committee for Salem met with detectives of the Montgomery County Detective Bureau, including Defendant Anders, to discuss the possibility of criminally prosecuting Logan for his conduct in connection with the termination of Delta's contract with Salem. Following this meeting, Defendant Anders allegedly undertook a criminal investigation of Delta and Logan with respect to their performance of the contract. This investigation resulted in Logan being charged with theft by unlawful taking, theft by deception, theft by failure to make required disposition, deceptive business practices, misapplication of entrusted property, and securing the execution of documents by deception. Plaintiffs assert that this decision was based solely on the allegations made by the Steering Committee and Leopold-Leventhal and the pressure placed on the detectives by these parties. Plaintiffs further assert that Defendant Leopold-Leventhal drafted parts of the affidavit of probable cause that led to the issuance of Logan's arrest warrant on January 13, 2009. Finally, Plaintiffs allege that the criminal charges were orchestrated by the moving Defendants to pressure Plaintiffs into settling their claims in arbitration as well as to punish Plaintiffs for the project failure and the initiation of arbitration.

Plaintiffs bring a series of claims against Defendants in relation to the aftermath of the cancelled contract. Counts I, II, V, VIII, XI, and XII are brought against Defendants Anders and Ferman, whose Motion to Dismiss has already been considered by this Court. In Counts III and IV, Plaintiffs charge the moving Defendants with common law malicious prosecution for their role in allegedly procuring the criminal prosecution of Logan. Counts VI and VII are brought for common law malicious abuse of process for the moving Defendants' role in using judicial proceedings for means other than that for which they were intended. Count IX is a claim for civil conspiracy, and is premised on Plaintiffs' claims for malicious prosecution and malicious abuse of process. Count X charges Defendants with defamation, and Count XIII brings charges of commercial disparagement. Count XIV accuses Defendants of negligence in relation to their conduct that led to the prosecution of Logan. Finally, Count XV brings a claim under the Dragonetti Act that substantially mirrors Plaintiffs' claims in Counts III and IV.

Standard

Federal Rule of Civil Procedure 12(b)(6) requires a court to dismiss a complaint if the plaintiff has failed to "state a claim on which relief can be granted." In evaluating a motion to dismiss, the court must take all well-pleaded factual allegations as true, but it is not required to blindly accept "a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 283, 286 (1986). Although a plaintiff is not required to plead detailed factual allegations, the complaint must include enough facts to "raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Discussion

Malicious Prosecution

Common law malicious prosecution requires that the plaintiff demonstrate that proceedings were instituted against him without probable cause and with malice, and that the proceedings terminated in his favor. Kelley v. Gen. Teamsters, Chauffers, and Helpers, Local Union 249, 544 A.2d 940, 941 (Pa. 1988); see also Doherty v. Haverford Twp., 513 F. Supp. 2d 399, 409 (E.D. Pa. 2007). As a general matter, malice may be inferred from a lack of probable cause. Kelley, 544 A.2d at 941. The issue of probable cause is one for the court to decide, and it should be found to exist if there was a "reasonable ground of suspicion supported by circumstances sufficient to warrant an ordinary prudent man in the same situation in believing that the party is guilty of the offense." Miller v. Pa. R.R. Co., 89 A.2d 809, 809, 811-12 (Pa. 1952). A private citizen can only be liable for malicious prosecution if he procured the prosecution, which can be done in two ways: first, by giving knowingly false information to a public official that leads to the initiation of proceedings; and second, by requesting or pressuring a public official in such a way that the desire of the private individual is the determining factor in the initiation of the proceedings. Hess v. Lancaster County, 514 A.2d 681, 683 (Pa. Commw. Ct. 1986). Importantly, this cause of action is not regarded with favor by the Pennsylvania courts, and is generally narrowly construed. Kelley, 544 A.2d at 942.

First, all of the moving Defendants are private citizens, and can only be held liable for malicious prosecution if they procured the initiation of proceedings. Although Plaintiffs have met that burden with respect to Defendants Salem, Leopold-Leventhal, and Eastburn & Gray, they have failed to do so for Defendant Jonas. Plaintiffs' Amended Complaint states that it was due to the pressure placed on Defendant Anders at the meeting between Anders, Salem's Steering Committee, and Leopold-Leventhal that Plaintiff was charged in a criminal case. The Amended Complaint also states that at this meeting at least some of Defendants provided erroneous information to Defendant Anders. Although at trial Plaintiffs will be required to prove either that this pressure was the determining factor in the filing of charges or that the information that was provided was knowingly false, at this stage of the proceedings Plaintiffs have adequately pled that the Steering Committee and Leopold-Leventhal, acting as agents for Salem and Eastburn & Gray respectively, procured Plaintiff's prosecution. The Amended Complaint, however, makes no mention of Defendant Jonas in relation to this charge, other than that he represented Delta in a tangentially related matter. As he is not a public official and there are no allegations in the Amended Complaint that he either pressured any public official or provided any false information, Plaintiffs have failed to state a claim against Defendant Jonas for malicious prosecution.

Turning to the remaining elements of malicious prosecution, Plaintiffs have pled that a suit was instituted against Logan and that the suit was terminated in his favor. The central issue at this point is whether the prosecution was procured without probable cause, as a lack of probable cause will allow this Court to infer the existence of malice. Although much of the discussion of probable cause, or lack thereof, is focused on Defendant Anders, for the purposes of the present Motion, we must examine whether Salem and Leopold-Leventhal had probable cause to procure the prosecution. Plaintiffs' Amended Complaint is rather sparse on this issue, but it does allege that Defendants made knowingly false statements to procure Logan's prosecution, and if the accusations were known to be false, then Defendants simply cannot be described as acting with probable cause. Further, it is a reasonable inference from Plaintiffs' Amended Complaint that any pressure that was placed on Anders to initiate prosecution was done without probable cause to believe that any criminal violation had actually occurred; according to Plaintiffs' Amended Complaint the reason for this pressure was not ...


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