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W. Graham Arader v. Valentin I. Dimitrov

October 7, 2011


The opinion of the court was delivered by: Robert F. Kelly, Sr. J.


Presently before the Court are Defendants, Valentin I. Dimitrov, as Personal Representative of the Estate of John E. Du Pont, Deceased ("Dimitrov"), Taras M. Wochok, as co-trustee of the John E. Du Pont Deed of Trust ("Wochok"), and Diane Hazen Brady, individually and as co-trustee of the John E. Du Pont Deed of Trust's ("Brady") (collectively, "Defendants"), Motion to Dismiss the Complaint submitted by Plaintiff, W. Graham Arader ("Plaintiff"). For the following reasons, Defendants' motion will be granted.


Plaintiff owns an art gallery in New York and sells rare books, photographic plates, and like items and materials on a consignment basis. (Compl. ¶ 4.) John E. Du Pont ("Du Pont") was a billionaire and a member of the prominent Du Pont family. (Id. ¶ 6.) Defendant, Dimitrov, is the personal representative of Du Pont's Estate, which was probated on January 18, 2011 in the Delaware County Register of Wills. (Id. ¶ 7.) Defendants Wochok and Brady are co- trustees of Du Pont's Deed of Trust, dated April 6, 1984, as amended ("Trust") with a business address in Paoli, Pennsylvania. (Id. ¶ 8.) Du Pont was also a co-trustee until his death. (Id. ¶ 9.) In 1996, Du Pont shot and killed Olympic gold medal wrestler Dave Schultz on his 800 acre estate in Delaware County, Pennsylvania. (Id.) In 1997 Du Pont was convicted of third degree murder and sentenced to 13-40 years in prison. (Id.) Du Pont died while incarcerated on December 9, 2010. (Id.)*fn1

Plaintiff alleges that, in the 1980's he and Du Pont had a business relationship whereby Du Pont consigned rare books, watercolors, and plates to Plaintiff for sale at his art gallery. (Id. ¶ 10.) Plaintiff further alleges that the business relationship between Du Pont and himself ended in the late 1980's. According to Plaintiff, in 2005, nine years after Du Pont was incarcerated and fifteen years after Plaintiff and Du Pont terminated their business relationship, Du Pont and Wochok contacted Plaintiff and demanded payment for the value of certain consigned goods. (Id. ¶ 13.) Plaintiff informed Du Pont and Wochok that he had either returned the consigned goods to Du Pont or had paid Du Pont for such goods prior to Du Pont's imprisonment in 1996. (Id. ¶ 14.) Plaintiff's position is that Du Pont and the Defendants demanded payment knowing that their demand was grossly untimely. (Id. ¶ 15.)

A. The State Court Action

On September 4, 2007, three individuals filed a two-count complaint against Plaintiff in the Delaware County Action: (1) Du Pont, both in his individual capacity and in his capacity as co-trustee of the Trust; (2) Wochok, in his capacity as co-trustee of the Trust; and (3) Brady in her capacity as co-trustee of the Trust (collectively, "Du Pont parties"). (Id. ¶ 18.) The Du Pont parties claimed that Plaintiff committed the tort of conversion and that he was unjustly enriched by failing to pay Du Pont for the goods. (Id. ¶¶ 20-21.) Plaintiff alleges that these actions have statutes of limitations of two and four years, respectively. (Id.)

Plaintiff alleges that, despite the fact that the statute of limitations for both counts had well expired, he was forced to defend the Delaware County Action through defense counsel throughout all phases of the litigation. (Id. ¶ 23.) On August 28, 2008, Plaintiff filed a motion for summary judgment on the grounds that the Du Pont parties' claims were barred by the statute of limitations. (Defs.'s Mot. Summ. J., Ex. A at 2.) On October 24, 2008, the Honorable George

A. Pagano denied the motion without opinion. On July 23, 2010, after a bench trial, before the Honorable James. F. Proud, the court entered a verdict in favor of Plaintiff on the merits of the claims and on the statute of limitations issue. (Id., Ex. D at 1-2.) The Du Pont parties then appealed to the Pennsylvania Superior Court without first filing post-trial motions, resulting in the trial court quashing the appeal on September 28, 2010. (Compl. ¶ 25.) The trial court granted the Du Pont parties leave to file untimely post-trial motions, including a motion for reconsideration on the statute of limitations issue, but then denied them. (Id. ¶ 26; Defs.' Mot. Summ. J., Ex. E at 2.) The Du Pont parties then appealed the court's denial of their motion for reconsideration on the statute of limitations issue. (Defs.' Mot. Summ. J., Ex. E at 2-3.) On January 28, 2011, the court issued an opinion holding that both counts in the Complaint were time-barred because the last contact between the parties was found to have been in 1986. (Id.) Accordingly, the court opined that the Du Pont parties were required to bring their claim for conversion by 1988 and their claim for unjust enrichment by 1990. (Id. at 3.) On March 18, 2011, the Du Pont parties voluntarily discontinued their Superior Court appeal. (Compl. ¶ 29.) Plaintiff alleges, here, that, between 2007 and 2011, he was forced to expend $46,221.67 in fees and costs to defend the action brought against him in Delaware County. (Id. ¶ 38.)

B. The Federal Court Action

On June 3, 2011, Plaintiff filed the subject Complaint comprised of a single count for wrongful use of civil proceedings. Therein, Plaintiff alleges that the Defendants*fn2 wrongfully instituted civil proceedings against him in the Delaware County Court of Common Pleas because they knew that the statute of limitations had expired. On August 5, 2011, the Defendants filed the instant Motion to Dismiss arguing that Plaintiff has failed to state a claim as a matter of law because there were genuine factual and legal questions relating to when the business relationship between Du Pont and Arader terminated. In support of this contention, the Defendants reference Plaintiff's inability to produce inventory lists, receipts, or documentation showing that Plaintiff made payment to Du Pont. The Defendants also cite to Maloney v. Madrid Motor Corp., 122 A.2d 694 (Pa. 1956), which, they allege, stands for the proposition that the termination of an oral consignment contract must be clear and unambiguous. According to the Defendants, Maloney supports their position that they had "probable cause"*fn3 to believe that the statute of limitations for both claims did not begin to run until 2005 as did the state court's denial of Plaintiff's motion for summary judgment. The Defendants further argue that Plaintiff's claim fails as a matter of law because he cannot prove that the primary purpose for which the proceedings were brought was not that of securing the proper discovery, joinder of the parties or adjudication of the claim on which the proceedings were based. (Defs.' Mot. to Dismiss Br. at 6.)

On the other hand, Plaintiff argues that his business relationship with Du Pont terminated in the 1980's and that the law is clear that the statute of limitations for conversion and unjust enrichment began to run at the time Plaintiff received the goods in 1986. Moreover, Plaintiff argues that improper purpose may be inferred from a lack of "probable cause." Finally, Plaintiff argues that the state court's denial of his summary judgment motion is not conclusive evidence that the suit was supported by probable cause.


A. Motion to Dismiss

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of a complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). Under Rule 12(b)(6), the defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed. R. CIV. P. 12(b)(6); see also Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atl. Corp. v. Twombly, the Supreme Court stated that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 550 U.S. 544, 555 (2007). Following Twombly, the Third Circuit has explained that the factual allegations in the complaint may not be "so undeveloped that it does not provide a defendant the type of notice which is contemplated by Rule 8." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Moreover, "it is no longer sufficient to allege mere elements of a cause of action; instead 'a complaint must allege facts suggestive of [the proscribed] conduct.'" Id. (alteration in original) (quoting Twombly, 550 U.S. at 563 n.8). Furthermore, the complaint's "factual allegations must be enough to raise a right to relief above the speculative level." Id. at 234 (quoting Twombly, 550 U.S. at 555). "This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'" Id. (quoting Twombly, 550 U.S. at 556).

Notwithstanding Twombly, the basic tenets of the Rule 12(b)(6) have not changed. The Knit With v. Knitting Fever, Inc., No. 08-4221, 2009 U.S. Dist. LEXIS 30230, at *6 (E.D. Pa. Apr. 8, 2009). The general rules of pleading still require only a short and plain statement of the claim showing that the pleader is entitled to relief, not detailed factual allegations. Phillips, 515 F.3d at 231. Moreover, when evaluating a motion to dismiss, the court must accept as true all well-pleaded allegations of fact in the plaintiff's complaint, and must view any reasonable inferences that may be drawn therefrom in the light most favorable to the plaintiff. Id.; Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the ...

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