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Travelers Indemnity Company v. Stengel et al.

December 22, 2011

TRAVELERS INDEMNITY COMPANY PLAINTIFF,
v.
STENGEL ET AL. DEFENDANTS.



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

MEMORANDUM

December ___, 2011

Presently before this Court is Defendants' Ledgewood Law Firm and Kevin Berry, Esq. Motion for Summary Judgment (Doc. 67), Defendant Stengel's Motion for Summary Judgment (Doc. 68), Plaintiff's Responses (Docs. 72, 73), Defendant Stengel's Reply (Doc. 78), Plaintiff's Sur-Reply (Doc. 81), Defendants' Ledgewood Law Firm and Kevin Berry, Esq. Reply (Doc. 82), Defendants' Supplemental Replies (Docs. 88, 89), and the oral arguments presented before the Court on Tuesday, July 19, 2011. Upon consideration of the parties' motions with exhibits and declarations, this Court will grant Defendants' Motions for Summary Judgment.

I. BACKGROUND

This case arises out of an underlying legal malpractice suit. Plaintiff, Travelers Indemnity Company ("Travelers"), as subrogee of Daniel de Luca and Nelson Levine, brings this action for contribution under Pa. C.S.A. § 8321 et seq. against Defendants Robert M. Stengel, Kevin Berry, and The Ledgewood Law Firm, P.C. ("Defendants"). Plaintiff is an insurance company incorporated in Connecticut, and licensed to do business in Pennsylvania. Defendants Stengel and Berry are both licensed attorneys in Pennsylvania. Defendant Ledgewood Law Firm, P.C. is a Pennsylvania professional corporation, and is the employer of Defendant Berry. (Compl. ¶¶ 1-9.)

Representation provided by Defendants Stengel and Berry to Craig and Mary Jo Sanford (the "Sanfords") constitute the subject of the legal malpractice suit underlying this action. Defendant Stengel represented the Sanfords in 1998, advising them about a zoning appeal for their property located in Monroeville Borough, Falls Township, Bucks County. Defendant Stengel, on behalf of the Sanfords, drafted a federal RICO claim against Falls Township, the Township Solicitor, the Zoning Hearing Board, and members of the Township's Board of Supervisors. The Sanfords filed the complaint pro se in this Court.

Immediately thereafter, in 1999, the Sanfords retained Defendants Berry and the Ledgewood Law Firm, P.C. to file an amended complaint in the RICO action (the "RICO suit"), with the amended complaint updated to include substantive due process claims. In September 2000, the amended complaint was dismissed. Thereafter, Defendants Berry and the Ledgewood Law Firm, P.C. filed an appeal of the dismissal to the United States Court of Appeals for the Third Circuit. In December 2001, the Third Circuit affirmed the dismissal of the federal RICO action. (Compl. ¶¶ 21-31.)

In November 2001, two of the members of the Township's Board of Supervisors (the "Supervisors"), who were defendants in the federal RICO suit, filed a Dragonetti action against the Sanfords, alleging the Sanfords' wrongful use of civil proceedings in filing the RICO suit. On November 20, 2001, Shelby Mutual Insurance Company, the Sanfords' homeowner's insurance company, retained attorney Daniel de Luca and Nelson, Levine, de Luca and Horst, LLP (the "Nelson firm") to defend the Sanfords in the Dragonetti Act proceedings. De Luca failed to file an answer to the Supervisors' complaint. Additionally, despite receiving a ten-day notice of the Supervisors' intent to file for default judgment, de Luca failed to file for an extension of time to file an answer on the Sanfords' behalf. Following entry of default judgment in 2002, in a 2007 bench trial in this matter, held by the Court of Common Pleas of Bucks County, a verdict against the Sanfords and in favor of the Supervisors was entered in the total amount of $3,030,000. (Compl. ¶¶ 32-35.)

In February 2008, the Sanfords brought a legal professional liability action against attorney de Luca and the Nelson firm in the Court of Common Pleas of Bucks County. The Sanfords alleged that these attorneys were negligent in defending the Sanfords in the Dragonetti suit, which resulted in the $3,030,000 verdict.

In May 2008, Plaintiff Travelers Indemnity ("Travelers"), on behalf of its insureds attorney de Luca and the Nelson law firm, settled the claims of the Sanfords against attorney de Luca, the Nelson firm, and the Supervisors, and paid $1,500,000 to the Supervisors to resolve both the Dragonetti and legal malpractice lawsuits. In addition, Travelers obtained a settlement and release from the Sanfords regarding their claims against Stengel, Berry, and the Ledgewood firm. The settlement among Travelers Indemnity, attorney de Luca, the Nelson firm, the Sanfords, and the Supervisors, was a joint tortfeasor release that extinguished the liability of the defendants in this action from liability to the Sanfords, but otherwise preserved this claim on behalf of Plaintiff Travelers Indemnity and its subrogees. (Compl. ¶¶ 36-39.)

In June 2008, Plaintiff filed this suit in the United States District Court of the Eastern District of Pennsylvania against the Defendants for contribution in the amount of Defendants' "proportionate share of the liability for the conduct resulting in the judgment against the Sanfords and in favor of the supervisors." (Compl. ¶ 52.) Plaintiff, in settling the case involving de Luca, the Nelson firm, the Sanfords, and the Supervisors, allegedly paid "more than their proportional share of the liability." (Compl. ¶¶ 36, 51 52.) Plaintiff seeks damages in excess of $75,000, in addition to interest, costs, and other relief deemed appropriate by the Court. (Compl. ¶¶ 6, 25, 28.)

II. STANDARD OF REVIEW

Summary judgment is appropriate where the moving party establishes that "there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Fed R. Civ P. 56©. See Levy v. Sterling Holding Co., LLC, 544 F.3d 493, 501 (3d Cir. 2008). A factual dispute between the parties will not defeat a motion for summary judgment unless it is both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Dee v. Borough of Dunmore, 549 F.3d 225, 229 (3d Cir. 2008). A factual dispute is genuine if a reasonable jury could return a verdict for the non-movant, and it is material if, under the substantive law, it would affect the outcome of the suit. See Anderson, 477 U.S. at 248; Fakete v. Aetna, Inc., 308 F.3d 335, 337 (3d Cir. 2002).

The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the non-moving party to carry its burden of proof. See Celotex v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has carried its burden under Rule 56, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). Under Fed. R. Civ. P. 56(e), the opposing party must set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations or denials of its pleadings. See Martin v. Godwin, 499 F.3d 290, 295 (3d Cir. 2007).

At the summary judgment stage the court's function is not to weigh the evidence and determine the truth of the matter, but rather to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249; Jiminez v. All American Rathskeller, Inc., 503 F.3d 247, 253 (3d Cir. 2007). In doing so, the court must construe the facts and inferences in the light most favorable to the non-moving party. See Horsehead Indus., Inc. v. Paramount Communications, Inc., 258 F.3d 132 (3d Cir. 2001). The court must award summary judgment on all claims unless the non-moving party shows through affidavits or admissible evidence that an issue of material fact remains. See, e.g., Love v. Rancocas Hosp., 270 F.Supp.2d 576, 579 (D.N.J. 2003); Koch Materials Co. v. Shore Slurry Seal, Inc., 205 F.Supp.2d 324, 330 (D.N.J. 2002).

III. DISCUSSION

A. Defendant 's Robert M. Stengel, Esquire's Motion for Summary Judgment Defendant Stengel seeks summary judgment, pursuant to Fed R. Civ P. 56, and contends that Plaintiff's claim for contribution must fail because: (1) under the standard set forth by Pennsylvania's Uniform Contribution Among Tort-Feasors Act, 42 Pa. C.S. ยง 8321 ("UCATA"), Plaintiff did not prove that de Luca and Defendant Stengel are joint tortfeasors, and (2) as a matter of law, Plaintiff is unable to show that Defendant Stengel ...


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