The opinion of the court was delivered by: Hon. Gene E.K. Pratter U.S. District Court Judge
Arthur Hudson and Francis Zysk purchased Rapid Circuits, Inc., a Pennsylvania company that manufactures printed circuit boards, in January 2006. To complete this purchase, Messrs. Hudson and Zysk secured two loans from Sun National Bank, guarantees for which were signed by their wives, Theresa Hudson and Lorraine Zysk. In this litigation, the Hudsons, the Zysks, and Rapid Circuits (hereinafter referred to together as "Rapid Circuits" unless otherwise appropriate) collectively have sued Sun National Bank ("Sun"), its parent company Sun Bancorp, Inc., and Sun's attorneys, the law firm Deeb, Petrakis, Blum & Murphy and a partner at that firm, Inez Markovich, in her individual capacity (hereinafter referred to together as "Attorneys") as a result of actions taken by Sun and the Attorneys after Rapid Circuits began to have troubles handling the indebtedness.
In its Amended Complaint, Rapid Circuits asserts that Sun breached its duty of good faith and fair dealing, that it intentionally interfered with Rapid Circuits' current and prospective business and contractual relations, that Sun should be required to restructure the loans pursuant to promissory estoppel principles, that Sun converted the Plaintiffs' property, that Sun engaged in fraud and misrepresentation, that Sun violated the constitutional rights of Plaintiffs by seizing their property without notice, and that Sun defamed Plaintiffs and invaded their privacy. Rapid Circuits further contends that it deserves injunctive relief, and that Sun Bancorp should be held vicariously liable for the actions of Sun. Rapid Circuits also asserts that the Attorneys should be liable for several of the above-described claims, as well as for violating the Racketeer Influenced and Corrupt Organizations Act ("RICO").
Sun and the Attorneys each filed a Motion to Dismiss, both of which are now addressed by the Court.*fn1
Factual and Procedural Background*fn2
In January 2006, Sun made two loans to Rapid Circuits, Arthur Hudson, and Francis Zysk: a commercial mortgage of $1,650,000 and a line of credit for $350,000. Am. Compl. ¶¶ 17, 18, ECF No. 23; see SBA Notes, attached as Exs. 1 and 3 to Sun Mot. to Dismiss, ECF No. 24 ("SBA Notes"). Representatives of Sun and Messrs. Zysk and Hudson signed the loan documents. See SBA Notes. Ms. Zysk and Ms. Hudson, in turn, guaranteed the loans. See Commercial Pledge and Security Agreements, attached as Exs. 7 and 8 to Sun Mot. to Dismiss.
Rapid Circuits had cash flow difficulties in 2010. Am. Compl. ¶ 19. In the first half of 2010, and before June 29, 2010, J.W. Brehm, a vice president at Sun, told Rapid Circuits that he would "attempt to restructure the SBA Loans." Id. On June 29, Mr. Brehm sent a letter stating that the loans were in default, and that Rapid Circuits had to repay them in full or work out an acceptable payment plan, or else Sun would commence debt collection actions. Id. ¶ 20. Approximately five weeks later, "on behalf of and authorized by the Bank", the Attorneys sent letters to clients of Rapid Circuits that may or may not have then owed money to Rapid Circuits, seeking to recover Rapid Circuits' accounts receivable for the benefit of the Bank on account of the defaulted loans. Id. ¶¶ 21, 38. The Attorneys provided no advance notice to the debtors of the intent to send these letters, and no copy of the list of recipients or of the letter was provided to Rapid Circuits by the Defendants. Id. ¶¶ 24, 34, 39. Included with the letters was a copy of the UCC-1 Financing Statement that was filed, pursuant to the Pennsylvania Uniform Commercial Code, with the Commonwealth of Pennsylvania in 2006, when the loans originated. Id. ¶¶ 25, 27; see also UCC-1 Financing Statement, attached as Ex. 1 to Compl., ECF No. 1. Rapid Circuits was not provided an advance opportunity to object to these actual collection efforts. See Am. Compl. ¶ 93. As discussed below, a provision regarding this potential self-help technique is included in the loan documents, but there is no discussion in the papers presented to the Court to date, other than an argument that loan contracts between a bank and a small business are inherently unconscionable in light of the power differential between the parties, as to whether there was any objection to the self-help provisions at the time the loan papers were presented for signature.
In its Amended Complaint, Rapid Circuits asserts that these letters hurt its business and its business reputation, and provided competitors leverage in their efforts to lure Rapid Circuits' customers away. Id. ¶¶ 38-50. Rapid Circuits contends that Sun had these letters sent in an effort to drive Rapid Circuits out of business so that the Bank could liquidate Rapid Circuits' assets. Id. ¶ 51. Shortly after the sending of letters to Rapid Circuits' clients, Sun seized and liquidated personal investment accounts of the individual plaintiffs. Id. ¶ 54. Sun had previously prevented Plaintiffs from using the funds contained in these investment accounts to improve the business operations and finances of the company. Id. ¶ 58. Plaintiffs contend that "[b]ut for the Bank's ongoing actions, [Rapid Circuits] would be able to continue as a viable business, continue as gainful employment for the multiple employees of the company, and repay the SBA loans." Id. ¶ 77. Rapid Circuits also takes on the Commonwealth of Pennsylvania and contends that 13 Pa. C.S.A. § 9607 is unconstitutional because it permits creditors to seize a debtor's accounts receivable without notice to the debtor and without a hearing or opportunity to respond. Id. ¶ 99. Thus, Rapid Circuits claims that the actions taken by Sun and the Attorneys pursuant to this statute violated Rapid Circuits' "federally protected rights". Id. ¶¶ 99-100, 197-201.
As a result of the above-described actions and associated harms, Rapid Circuits alleges 11 counts against the defendants. Id. ¶¶ 110-253.*fn3 Rapid Circuits contends that Sun is liable for Breach of Duty of Good Faith and Fair Dealing (Count I), for Intentional Interference with Existing and Prospective Business and Contractual Relations (Count II), Promissory Estoppel (Count III), Conversion (Count IV), Fraud and Misrepresentation (Count V), violations of 42 U.S.C. § 1983 (Count VI), Defamation (Count IX), and Invasion of Privacy (Count X). Rapid Circuits also seeks injunctive relief (Count VIII) and seeks to hold Sun Bancorp vicariously liable for the actions alleged (Count XI).
Rapid Circuits similarly asserts that the Attorney Defendants are liable for Intentional Interference with Existing and Prospective Business and Contractual Relations (Count II), Conversion (Count IV), Fraud and Misrepresentation (Count V), violations of 42 U.S.C. § 1983 (Count VI), violations of RICO (Count VII), Defamation (Count IX), and Invasion of Privacy (Count X).
Rapid Circuits also seeks injunctive relief (Count VIII).
Between them, the Motions to Dismiss challenge each of the various counts.
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Although Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests," Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007) (quoting Conley, 355 U.S. at 47), the plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citations omitted). The question is, briefly stated, has the claimant presented a "plausible" claim for relief? Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level . . . ." Id. at 1965 (citations omitted). The question is not whether the claimant will ultimately prevail but whether the complaint is "sufficient to cross the federal court's threshold." Skinner v. Switzer, 131 S.Ct. 1289, 1296 (2011) (citations omitted); see also Matrixx Initiatives, Inc. v. Siracusano, - - S.Ct. - -, No. 09-1156, 2011 WL 977060, at *12 (Mar. 22, 2011). Nonetheless, to survive a motion to dismiss, a civil complaint must allege "factual content [that] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (confirming that Twombly applies to all civil cases).
The Court "must only consider those facts alleged in the complaint and accept all of those allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994) (citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Twombly, 127 S. Ct. at 1965 (stating that courts must assume that "all the allegations in the complaint are true (even if doubtful in fact)"). The Court must also accept as true all reasonable inferences that may be drawn from the allegations, and view those facts and inferences in the light most favorable to the non-moving party. Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). The Court, however, need not accept as true "unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000) (citing City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 n.13 (3d Cir. 1998)), or the plaintiff's "bald assertions" or "legal conclusions," Morse v. Lower Merion Sch. Dist., 132 F.3d. 902, 906 (3d Cir. 1997).
The majority of the counts alleged by Rapid Circuits sound in state, rather than in federal, law. The Attorneys assert that they are immune from liability under state law because their actions were taken on behalf of their client, Sun National, and because they owed no duty to Rapid Circuits. Because a finding of attorney immunity would dispose of the state law claims asserted by Rapid Circuits against the Attorneys, the Court will first address whether the Attorneys can invoke immunity in response to the claims against them.
A discussion of the motions to dismiss the individual state law claims follows.
1. Attorney Immunity from State Law Claims
Rapid Circuits alleges that the Attorneys are liable for intentional interference with contractual relations, conversion, fraud and misrepresentation, defamation, and invasion of privacy, all of which are intentional torts.
The Attorneys argue that these five intentional tort claims should be dismissed because the Attorneys are immune from suit pursuant to Pennsylvania law on attorney immunity. The Attorneys further assert that because Rapid Circuits acknowledges the Attorneys' actions were taken on behalf of the Attorneys' client and were authorized by state law, the Attorneys cannot be held liable for any state law claims asserted by Rapid Circuits. Specifically, the Attorneys contend that because Rapid Circuits acknowledges 13 Pa. C.S.A. § 9607 "permits creditors . . . to seize, under color of state law, accounts receivable of a debtor prior to entry of any judgment", Rapid Circuits has admitted that the Attorneys' actions were not only taken on behalf of their clients, but also were legal.
In opposition, Rapid Circuits argues that the Attorneys are not immune from suit because, while attorneys are immune from non-client suits alleging that their actions were negligent, the "attorney immunity" doctrine "does not provide any defense to claims against attorneys for intentional torts." Rapid Circuits contends that where attorneys have allegedly committed intentional interference with contractual relations, conversion, fraud and misrepresentation, defamation, and invasion of privacy, i.e., the kinds of claims leveled against the Attorneys here, such attorneys cannot be legally immune from liability for the harm intentionally caused by their actions. To justify the argument that intentional tortious conduct is at the root of the claims here, Rapid Circuits avers in the pleadings that the Attorneys sent collection letters to Rapid Circuits' clients because the Attorneys knew such letters would have an adverse effect on Rapid Circuits' business. See Am. Compl. ¶ 76.
As suggested above, in Pennsylvania, an attorney "will be held liable for negligence only to his client. In the absence of special circumstances, he will not be held liable to anyone else." Smith v. Griffiths, 476 A.2d 22, 26 (Pa. Super. Ct. 1984) (affirming order sustaining preliminary objections where an individual sued opposing counsel for defamation on account of statements made to the court about the individual while the parties were involved in active litigation, and where the individual contended he was harmed by advice given by opposing counsel to that counsel's client but the complaint contained no allegations that the advice was intentionally erroneous in order to injure the individual). "Where an attorney represents a client in litigation or during arms length negotiations, the public interest demands that attorneys, in the proper exercise of their functions as such, not be liable to adverse parties for acts performed in good faith and for the honest purpose of protecting the interests of their clients." Id. (emphasis added); see also Brown v. Delaware Valley Transplant Program, 539 A.2d 1372, 1375 (Pa. Super. Ct. 1988) (affirming the dismissal of claims against an attorney because counsel has immunity from suit related to actions "undertaken in connection with representation of a client in a judicial proceeding"). Furthermore, to pursue their claim against the attorneys, a party must allege "more than that [an attorney] acted according to the instructions of" his client. Krank v. Barber, No. 89-2871, 1989 WL 107140, at *1 (E.D. Pa. Sept. 18, 1989) (dismissing a claim where plaintiff sought to hold attorney liable for refusing to release a lien where attorney had no authority to do so).
However, "[i]f an attorney's conduct is motivated by malice or if he commits an intentional tort, . . . he may become personally liable for damage suffered by a third person." Smith, 476 A.2d at 26 (emphasis added); see also Pelagatti v. Cohen, 536 A.2d 1337, 1344-46 (Pa. Super. Ct. 1987) (reversing the dismissal of defamation claims against attorneys where those attorneys made statements about a plaintiff to the press because, as alleged, the identified statements could support a jury finding of defamation). "Absent an intent to harm a third person by using a client unjustifiably as an instrument to inflict harm, we will not impose liability upon an attorney for advice which he has given in good faith to a client for the purpose of serving a justifiable and proper interest of the client." Smith, 476 A.2d at 27 (emphasis added). To this end, where a "complaint does not contain averments that counsel committed an intentional tort designed maliciously to cause harm", that complaint fails to state a claim on which relief may be granted. Aetna Electroplating Co., Inc. v. Jenkins, 484 A.2d 134, 136 (Pa. Super. Ct. 1984) (emphasis added) (affirming the dismissal of claims against an attorney for including information in pleadings that he "knew or should have known" were incorrect because the attorney's actions during the course of a litigation were in good faith for the purpose of serving a justifiable and proper interest of his client).
Notwithstanding the arguably more restrictive language detailed above, notably regarding the immunity from liability for attorneys unless a complaint contains averments that counsel committed an intentional tort designed maliciously to cause harm, some Pennsylvania courts have permitted suits for defamation and for tortious interference with contractual relations to proceed against attorneys acting on behalf of, or in furtherance of interests related to those of, their clients. See, e.g., Bochetto v. Gibson, 860 A.2d 67 (Pa. 2004) (reversing a grant of summary judgment as to a defamation claim where attorneys conveyed a malpractice complaint to reporters, because absolute immunity does not attach to extra-judicial actions of an attorney); Remick v. Manfredy, 238 F.3d 248, 263-64 (3d Cir. 2001) (reversing district court dismissal of a tortious interference with contract claim brought against attorneys without discussing attorney immunity). Other Pennsylvania courts have noted that suits could proceed against attorneys for fraud and for intentional infliction of emotional distress. See, e.g., Adelman v. Rosenbaum, 3 A.2d 15, 18 (Pa. Super. Ct. 1938) (stating "[a]n attorney is personally liable to a third party when he is guilty of fraud, collusion, or a malicious or tortious act, and he is liable, as anyone else, when he encourages and induces another to commit a trespass."); Legion Ins., Co. v. Doeff, 2001 WL 1807398, at *6 fn.13 (Pa. Com. Pl. Ct. June 6, 2001) (sustaining preliminary objections because a joinder complaint did not contain sufficient allegations to sustain a claim for intentional infliction of emotional distress, but noting that such a claim, appropriately pled, could be sustained). In short, "[i]f an attorney is actuated by malicious motives or shares the illegal motives of his client, he may be personally liable with the client for damages suffered by a third person as a result of the attorney's actions." Naughton v. Mercy Hospital, 4 Pa. D. & C.4th 628, 636 (C.P. 1989).
In the Amended Complaint, Rapid Circuits contends that the Attorneys sent letters in which they stated that they represented Sun in "proceedings" against Rapid Circuits and did not provide notice to Rapid Circuits that such letters would be sent. Am. Compl. ¶¶ 21-23, 34. Rapid Circuits believes that some of these letters were sent to businesses that did not in fact owe any payment to Rapid Circuits. Id. ¶ 38. The Attorneys have never provided a list of the recipients of the letters, and refused to provide such a list. Id. ¶¶ 39, 134. The Attorneys used allegedly fraudulent misrepresentations in the letters to demand accounts receivable from Rapid Circuits' customers. Id. ¶ 102. The letters implied that Rapid Circuits was out of business and that customers should take their business elsewhere. Id. ¶¶ 49-50. Rapid Circuits claims that the Attorneys' actions have severely damaged the business operations of Rapid Circuits, and that the Attorneys have intentionally blocked the ability of Rapid Circuits to make payments on its loans. Id. ¶¶ 63, 138. The Attorneys allegedly acted with a purpose to facilitate Sun's exertion of total control over Rapid Circuits' business and property and to facilitate the liquidation of all Plaintiffs' assets. See id. ¶¶ 75, 76, 217. The Attorneys are said to have acted willfully, knowingly and with reckless indifference to the rights and interests of Rapid Circuits, id. ¶ 81, and their actions were supposedly wanton, outrageous, intentional and/or malicious, id. ¶¶ 143, 159, 229, 230, 238.
The Attorneys' actions were not taken in the context of actual ongoing litigation and Plaintiffs specifically allege that the Attorneys acted with an intent to harm Rapid Circuits. Consistent with the law as described above, with an arguably indulgent reading of the allegations of the Amended Complaint, and notwithstanding a serious appreciation for the potential ultimate application of immunity to lawyers appropriately pursing their clients' interests, the Court finds it would be premature to conclude now that the Attorneys are immune from suit and/or liability for the intentional torts alleged in the Amended Complaint. Whether these claims are otherwise alleged with sufficient particularity to survive a motion to dismiss is addressed below.
2. State Law Claims Asserted Against both the Attorneys and Sun The Court first addresses Rapid Circuits' state law claims asserted against both the Attorneys and Sun: Intentional Interference with Contractual Relations (Count II), Conversion (Count IV), Fraud and Misrepresentation (Count V), Defamation (Count IX), and Invasion of Privacy (Count X).
i. Intentional Interference with Contractual Relations In Pennsylvania, the elements of a cause of action for intentional interference with a contractual relation are: (1) the existence of a contractual relation between the complainant and a third party; (2) purposeful action on the part of the defendant, specifically intended to harm the existing relation; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct. Ira G. Steffy & Son, Inc. v. Citizens Bank of Pennsylvania, 7 A.3d 278, 288-289 (Pa. Super. Ct. 2010) (quoting Strickland v. Univ. of Scranton, 700 A.2d 979, 985 (Pa. Super. Ct. 1997)).
"[I]n a complaint for interference with present contractual relations, a plaintiff must allege with whom it had the contractual relations and identify the alleged relationships." T.H. Services Group, Inc. v. Independence Blue Cross, No. 98-4835, 1999 WL 124408, at *4 (E.D. Pa. Mar. 4, 1999). Further, "[t]he presence of a privilege is not an affirmative defense, rather, the absence of such a privilege is an element of the cause of action which must be pleaded and proven by the plaintiff." Bahleda v. Hankinson Corp., 323 A.2d 121, 122-23 (Pa. Super. Ct. 1974). The absence-of-privilege element "requires proof that the defendant's actions were improper under the circumstances presented[.]" Walnut Street Assocs., Inc. v. Brokerage Concepts, Inc., 982 A.2d 94, 98 (Pa. Super. Ct. 2009) (emphasis in original) (reversing the denial of JNOV because the trial court should have found truthful statements were not improper as a matter of law and thus could not form the basis for a tortious interference with contract claim).
The Restatement (Second) of Torts supplies many of the underpinnings for this cause of action. Under Pennsylvania law:
[T]he court must look to section 767 of the Restatement (Second) of Torts, [which] provides the following factors for consideration [in determining the propriety of a defendant's conduct]: 1) the nature of the actor's conduct; 2) the actor's motive; 3) the interests of the other with which the actor's conduct interferes; 4) the interests sought to be advanced by the actor; 5) the proximity or remoteness of the actor's conduct to interference, and 6) the relationship between the parties.
Steffy, 7 A.3d at 289 (quoting Strickland, 700 A.2d at 985). Under certain circumstances, harmful conduct should be permitted without liability. Walnut Street Assocs., 982 A.2d at 98. This decision depends on "a judgment and choice of values in each situation." Id. (quoting Restatement (Second) of Torts § 767 cmt. b (1979)).
In Count II of the Amended Complaint here, Rapid Circuits alleges that commercially unreasonable collections letters which falsely implied that Rapid Circuits was currently involved in litigation (presumably by use of the familiar "v" used as an abbreviation for "versus") with its lender were sent to present and/or former customers that neither Sun nor the Attorneys knew for sure actually owed payments to Rapid Circuits at the time the letters were sent. Am. Compl. ¶¶ 131-36. Rapid Circuits was not provided a list of recipients of the letters. Id. ¶ 120. Rapid Circuits contends that these actions were taken in an attempt to assert total control over its business and property for the purpose of then liquidating it. Id. ¶ 76.
Sun contends that this claim must be dismissed because Sun's right to Rapid Circuits' accounts receivable in the event of that company's default is unequivocally articulated in the loan documents. Sun argues that it was acting to protect its legitimate interests and that its actions were privileged. Sun states that under the circumstances it cannot be found to harbor the intent to harm Rapid Circuits required for this claim to be viable. Sun further notes that Rapid Circuits has not specifically identified with what contractual relations it allegedly interfered. The Attorneys, without citation to supporting caselaw, contend that where consideration of factual allegations in a complaint and of documents attached or related to that complaint "fail to show that acts done were unjustified, or where they affirmatively show that interference was justified or constituted an exercise of an absolute right," a claim for intentional interference with contractual relations must be dismissed.
Arguing that it properly asserted a claim for "Intentional Interference with Existing and Prospective Contractual Relations", Rapid Circuits counters that because Sun and its counsel sent collection letters to customers who did not owe any money to Rapid Circuits, the sending of these letters was not a privileged action such that Sun could escape liability. Rapid Circuits does not address at all that, for example, the loan documents permit Sun, in the event there is a default, "without notice or demand and without giving up any of its rights" to "take possession of any collateral", or that Sun was granted a security interest in Rapid Circuits' accounts receivable pursuant to the Security Agreement signed by the parties. See SBA Note, attached as Ex. 1 to Sun's Mot. to Dismiss; Security Agreement, § B.2.II, attached as Ex. 5 to Sun's Mot. to Dismiss. Instead, Rapid Circuits simply contends that actions taken by Sun and its counsel were commercially unreasonable, even under the terms of the agreements between the parties.
In looking to the factors identified in Section 767, notably the nature of Sun's conduct, Sun's motive, the relationship between Sun and Rapid Circuits, and the interests sought to be advanced by Sun, the Court recognizes Sun's sensible argument that the terms of the loan agreements permitted the collection actions once Rapid Circuits defaulted and ceased paying its loans, see Security Ag., § B.2.II, and that Rapid Circuits arguably had notice that such actions would be taken, see Am. Compl. ¶ 20. However, Sun does not identify, nor can the Court locate, any provisions of the loan agreements that permit Sun to contact customers that do not actually have outstanding accounts receivable regarding a default by Rapid Circuits, as Rapid Circuits has alleged occurred. Had Rapid Circuits alleged that Sun only contacted actual account debtors, the Court might be more easily persuaded that Sun's actions were proper under the terms of the loan agreements. However, the Court cannot conclude as a matter of law that it is appropriate for a bank to rely upon a dated customer list when initiating actions to collect accounts receivable, allegedly sending collections letters to customers which may not actually be account debtors.
Because Rapid Circuits has alleged that (1) it had contractual relationships with the recipients of the letters; (2) the letters were sent with the purpose of interfering with those relationships so that Rapid Circuits would go out of business; (3) some number of the letter recipients did not actually owe accounts receivable; and (4) Rapid Circuits remains injured in its ability to operate as an ongoing concern by the payment of accounts receivable to Sun, Rapid Circuits has sufficiently alleged a claim for intentional interference with its contractual relations.*fn4
ii. Conversion "Conversion is a tort by which the defendant deprives the plaintiff of his right to a chattel or interferes with the plaintiff's use or possession of a chattel without the plaintiff's consent and without lawful justification." Pittsburgh Const. Co. v. Griffith, 834 A.2d 572, 581 (Pa. Super. Ct. 2003) (citing Chrysler Credit Corp. v. Smith, 643 A.2d 1098, 1100 (Pa. Super. Ct. 1994)).
In a conversion claim, a plaintiff must have had actual or constructive possession of a chattel at the time of the alleged conversion in order to state a cause of action in conversion. Id. The elements of a claim for conversion are: "(1) the deprivation of another's right in, or use or possession of, property, (2) without the owner's consent, and (3) without lawful justification." Joyce v. Alti America, Inc., No. 00-5420, 2001 WL 1251489, at *5 (E.D. Pa. Sept. 27, 2001).
Sun argues that Rapid Circuits' claim of conversion fails because Sun had a lawful justification for collecting the account receivables and for liquidating the investment accounts, notably that Rapid Circuits had defaulted on its loans, that the possible effects of a default were clearly identified by and in the loan documents, and that Rapid Circuits had been informed it was in default and ought to have known that Sun would initiate collection actions as referenced in the loan documents. Sun further contends, without citation to cases supporting the proposition, that Rapid Circuits, having granted security interests to Sun in the loan agreements, was not "in ...