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Gerald Kohn, et al v. School District of the City of Harrisburg

May 7, 2012

GERALD KOHN, ET AL., PLAINTIFFS
v.
SCHOOL DISTRICT OF THE CITY OF HARRISBURG, ET AL., DEFENDANTS



The opinion of the court was delivered by: William W. Caldwell United States District Judge

MEMORANDUM

I. Introduction and Procedural History

We are considering the validity of a third-party complaint and two cross- claims. This action was initiated by the plaintiffs, Gerald Kohn, Julie Botel, and Rebecca Hostetler. Plaintiffs are the former superintendent of the Harrisburg School District, the deputy superintendent, and the assistant superintendent, respectively. They are contesting the termination of their employment, accomplished without notice or a hearing. There are two main claims. One is under 42 U.S.C. § 1983, alleging the terminations violated Plaintiffs' Fourteenth Amendment right to due process. The other is under state law, alleging breach of contract because Plaintiffs' employment agreements allowed termination only for good cause and only after notice and a hearing.

Plaintiffs named the following defendants: the School District; the District's Board of Control and its members, Gloria Martin-Roberts, Herbert Goldstein, Autumn Cooper, Sanford Long, Jennifer Smallwood, Roy E. Christ, and Esther E. Edwards; the "Elected School Board" and its members, Lola D. Lawson, Lionel Gonzalez, Wayne L. Henry, Randy King, Jeffrey Moore, Tiffiney Penn, Patricia Whitehead-Myers, Roy E. Christ, and Esther E. Edwards. Also named as a defendant was Linda D. Thompson, the Mayor of the City of Harrisburg.

Plaintiffs filed an amended complaint, and several motions to dismiss were filed. In pertinent part, upon consideration of those motions, we dismissed a due-process stigma-plus claim against Mayor Thomson and dismissed her from the action as that was the only claim made against her. We also decided that the due-process and breach-of-contract claims could proceed. See 817 F. Supp. 2d 487 (M.D. Pa. 2011).

In the wake of our decision, the defendant School District filed a third-party complaint adding as defendants James E. Ellison, Esq., and Rhoads & Sinon, LLP, the law firm where he practices, and bringing Mayor Thompson back into the case as a third-party defendant. At the same time, the School District also filed a cross-claim against the members of the Board of Control who had been appointed by the Mayor: Gloria Martin-Roberts, Herbert Goldstein, Autumn Cooper, Sanford Long, and Jennifer Smallwood. In turn, the Board of Control and its mayor-appointed members filed a cross-claim against Ellison and Rhoads & Sinon.

The parties against whom these pleadings were filed have filed motions to dismiss them. The reasons urged for dismissal are procedural as well as substantive.

II. Background

Familiarity with the background of this litigation as set forth in our previous memorandum is assumed. 817 F. Supp. 2d at 493-97. As noted, the School District's third-party complaint is against attorney Ellison, his law firm, and Mayor Thompson.*fn1 It alleges the following.*fn2

The mayor-appointed members of the Board of Control voted to terminate Kohn's and Botel's employment agreements on March 15, 2010, and to terminate Hostetler's agreement on May 17, 2010. (Doc. 83, Third-Party Compl. ¶¶ 13 and 17). Rhoads & Sinon began its formal representation of the Board of Control on May 17, 2010, (id. ¶¶ 39 and 40), but before then Ellison's "legal advice, if any, in regard to the due process rights owed to Plaintiffs Kohn[,] Botel [and Hostetler] and potential liability of the School District, fell below the appropriate standard of care." (Id. ¶¶ 16 and 20). The terminations were accomplished by the adoption of resolutions. (Id. ¶¶ 14 an 18). Ellison is believed to have advised about, or even prepared, the resolutions terminating Plaintiffs. (Id. ¶ 21). These resolutions fell below the appropriate standard of care. (Id. ¶ 22). Ellison also gave legal advice about the terminations, saying "that the School District would be subject to little or no liability for the rescission and/or termination of Plaintiffs' Employment Agreements; that such actions were iron clad and bombproof." (Id. ¶ 44). Further, "Ellison advised the Board of Control that no due process was required prior to the rescission and/or termination of Plaintiffs' Employment Agreements." (Id. ¶ 45).

Count I of the third-party complaint is a federal civil-rights conspiracy claim against third-party defendants Thompson and Ellison. The School District alleges that these parties, along with the mayor-appointed members of the Board of Control, conspired to terminate Plaintiffs' employment agreements in violation of 42 U.S.C. § 1985 and Plaintiffs' right to due process under the Fourteenth Amendment. (Id. ¶¶ 50, 55). Thompson, Ellison and the mayor-appointed members of the Board of Control acted "to injure Plaintiffs and advance the political position of Third-Party Defendant Thompson." (Id. ¶ 57).*fn3 Ellison furthered the conspiracy by giving "insufficient and incompetent advice" that the termination of the agreements "was without recourse or potential liability for the School District." (Id. ¶ 52).

Defendant School District alleges that if it is found that Plaintiffs' due-process rights were violated when their employment agreements were terminated, then third-party defendants Thompson, Ellison and the mayor-appointed members of the Board of Control "are solely liable to Plaintiffs for any and all damages . . . ." (Id. ¶ 61). Alternatively, if the School District is held liable to Plaintiffs for any damages, then third-party defendants Thompson, Ellison, and the mayor-appointed members of the Board of Control are liable over to the School District by way of contribution and/or indemnification . . . ." (Id. ¶ 62). The School District also alleges that these parties are "jointly and severally liable with the School District." (Id. ¶ 63).

Count II of the third-party complaint is a state-law claim for tortious interference with contract. Defendant School District alleges that Mayor Thompson, Ellison, and the mayor-appointed members of the Board of Control tortiously interfered with the employment contracts between Plaintiffs and the School District, resulting in termination of the agreements without justification. (Id. ¶¶ 67 and 69). These parties acted with the intent of harming the parties to the employment agreements, (id. ¶ 67), and have injured the School District by denying the District "the benefit of Plaintiffs' contract[s], . . . forc[ing] it to pay alternative employees to fulfill Plaintiffs' positions," causing it to "incur[ ] substantial fees for legal defense," and exposing it to the "risk of liability to Plaintiffs." (Id. ¶ 70). On this count, the School District seeks damages in its favor in excess of $75,000. It also reiterates its claims that Mayor Thompson, Ellison, and the mayor-appointed members of the Board of Control "are solely liable to Plaintiffs for any and all damages," (id. ¶ 73), or liable to the School District for contribution or indemnity, (id. ¶ 74), or "jointly and severally liable with the School District." (Id. ¶ 75).

Count III of the third-party complaint is a state-law claim for legal malpractice against attorney Ellison. The defendant School District alleges that it had an attorney-client relationship with Ellison and that he breached the professional standard of care by giving incompetent advice that the termination of Plaintiffs' employment agreements "was ironclad and/or bombproof." (Id. ¶¶ 77, 79 and 80). As a result, Ellison injured the School District by denying the District "the benefit of Plaintiffs' contract[s], . . . forc[ing] it to pay alternative employees to fulfill Plaintiffs' positions," causing it to "incur[ ] substantial fees for legal defense," and exposing it to the "risk of liability to Plaintiffs." (Id. ¶ 85). On this count, the School District seeks damages against Ellison in its favor in excess of $75,000. It also reiterates its claim that Ellison "is solely liable to Plaintiffs for any and all damages," (id. ¶ 87), or liable to the School District for contribution or indemnity, (id. ¶ 88), or "jointly and severally liable with the School District." (Id. ¶ 89).

Count IV is a claim against Rhoads & Sinon based on its vicarious liability for the advice of Ellison. This count also asserts that Rhoads & Sinon "is solely liable to Plaintiffs for any and all damages . . . ." (Id. ¶ 96). Alternatively, if the School District is held liable to Plaintiffs for any damages, then Rhoads & Sinon "is liable over to the School District by way of contribution and/or indemnification . . . ." (Id. ¶ 97). The School District also alleges that Rhoads & Sinon is "jointly and severally liable" with the School District. (Id. ¶ 98).

III. Discussion

A. Attorney Ellison's and Rhoads & Sinon's Motion to Dismiss

the Third-Party Complaint As Against Them Fed. R. Civ. P. 14(a)(1) provides that a "defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it." Based on this language, the defendant cannot plead a claim that the third-party defendant is directly liable to the plaintiff or a claim that the third-party defendant is solely responsible for the plaintiff's injury. Toberman v. Copas, 800 F. Supp. 1239, 1242 (M.D. Pa. 1992). Instead, the defendant must plead the secondary or derivative liability of the third-party defendant, meaning that if the defendant is found liable to the plaintiff, the third-party defendant is liable to the defendant on a theory of indemnity or contribution, or some other form of derivative liability. Id. See also FDIC v. Bathgate, 27 F.3d 850, 873 (3d Cir. 1994) (Rule 14 allows a defendant (as a third-party plaintiff) to bring a third-party defendant into the case when the third-party defendant is liable to the defendant on all or part of the plaintiff's claim against the defendant).

Rule 14 is only procedural and does not itself create a right to indemnity or contribution. Foulke v. Dugan, 212 F.R.D. 265, 269 (E.D. Pa. 2002). Those rights must come from the applicable substantive law. Id. at 269-70. Here, the defendant School District relies on Pennsylvania law. Under Pennsylvania law, the right to indemnity is contractual or arises when a person not actively at fault has been compelled by a legal obligation to pay damages that have been caused by the tortious conduct of another. Id. at 270 (quoting Builders Supply Co. v. McCabe, 366 Pa. 322, 325, 77 A.2d 368, 370 (1951)).

A right to contribution arises only among joint tortfeasors. Id. Pennsylvania's definition of joint tortfeasors is multifarious. In Lasprogata v. Qualls, 263 Pa. Super. Ct. 174, 179, n.4, 397 A.2d 803, 805 n.4 (1979), the Pennsylvania Superior Court quoted Black's Law Dictionary. The court said that joint tortfeasors "either act together in committing the wrong, or their acts, if independent of each other, must unite in causing a single injury" or they are "two or more persons [who] owe to any other the same duty and by their common neglect such other is injured." In Voyles v. Corwin, 295 Pa. Super. Ct. 126, 130-31, 441 A.2d 381, 383 (1982), the superior court said a number of factors should be considered, identifying them as: the identity of a cause of action against each of two or more defendants; the existence of a common or like duty; whether the same evidence will support an action against each; the single, indivisible nature of the injury to the plaintiffs; identity of the facts as to time, place or result; whether the injury is direct and immediate, rather than consequential, responsibility of the defendants for the same injuria as distinguished from damnum.

Id. at 130-31, 441 A.2d at 383.

Courts cite both Lasprogata and Voyles but rely on the language that seems most appropriate for the case at hand. See, e.g., Smith v. Pulcinella, 440 Pa. Super. Ct. 525, 528-29, 531, 656 A.2d 494, 496-97 (1995) (citing both Lasprogata and Voyles but relying on Lasprogata's language in determining the defendant was a joint tortfeasor); Neal v. Bavarian Motors, Inc., 882 A.2d 1022, 1027-28 (Pa. Super. Ct. 2005) (same); Ariondo v. Munsley, 122 Pa. Commw. Ct. 475, 488, 553 A.2d 94, 100 (1989) (refusing to mechanically run through the Voyles factors and deciding that the defendants were joint tortfeasors because their acts united to cause a single injury), rev'd on other grounds, Conner v. Munsley, 533 Pa. 143, 620 A.2d 1103 (1993).

Other courts simply cite the most appropriate language. See Harsh v. Petroll, 840 A.2d 404, 441 n.35 (Pa. Commw. Ct. 2004) ("Joint tortfeasors are defined as '[t]hose who act together in committing wrong, or whose acts if independent of each other, unite in causing single injury.'") (quoting Black's Law Dictionary); LaZar v. RUR Indus., Inc., 337 Pa. Super. Ct. 445, 450, 487 A.2d 29, 32 (1985) ("[j]oint tortfeasors exist where 'two or more persons owe to any other the same duty and by their common neglect such other is injured'") (quoting Lasprogata).*fn4

In moving to dismiss the third-party complaint, Ellison and his law firm first point out that it seeks to impose sole liability on them for Plaintiffs' claims when Rule 14 does not permit joinder based on a third-party defendant's sole liability to the plaintiffs. The School District does not oppose this argument, and we agree with Ellison and Rhoads & Sinon. The third-party complaint therefore cannot proceed against these third-party defendants to the extent it is based on their sole liability to Plaintiffs. Toberman, supra, 800 F. Supp. at 1242.

1. The Legal Malpractice Claim

Turning to the malpractice claim, third-party defendants next argue that the School District has no claim for indemnity or contribution against them because the malpractice claim "does not sound in indemnification or contribution or is otherwise derivative of the plaintiffs' claims against the School District." (Doc. 101, Supp'n Br. at p. 7).*fn5 In opposition, the School District asserts that it is entitled to indemnification or contribution for three reasons. First, "[t]hrough no fault of its own," it may be required to pay Plaintiffs damages as a result of Ellison's negligent advice. (Doc. 109, Opp'n Br. at 5). Second, to the extent it is liable to Plaintiffs, Ellison is liable to the School District, regardless of whether he is directly liable to Plaintiffs. (Id.). Third, its legal malpractice claim is "derivative" of Plaintiffs' claims because "Plaintiffs' success in the underlying complaint is a necessity to School District's claim against Attorney Ellison for malpractice." (Id. at p. 6).

We start with whether the defendant School District is entitled to indemnity. As noted, this is a matter of substantive law, and as third-party defendants point out in their reply brief, the School District does not allege any contractual right to indemnity, nor any judicially recognized right to indemnity by virtue of not being actively at fault. In its opposition brief, the School District asserts that it may be liable to Plaintiffs through no fault of its own, but that is not correct, at least in relation to Ellison and Rhoads & Sinon. The mayor-appointed members of the Board of Control, the School District's agents, the voted to terminate Plaintiffs' employment agreements. Granted, they may not have done so if the alleged advice from Ellison was to the contrary, but their votes mean that the School District cannot claim to be passively liable and therefore entitled to indemnity from Ellison and Rhoads & Sinon. The other two reasons advanced have no bearing on an indemnity claim. The third-party legal malpractice claim therefore cannot proceed on a theory of indemnity.

We turn now to whether the School District can assert a claim for contribution. As noted above, a right to contribution arises only among joint tortfeasors, and many factors are considered, alone or in combination, in determining joint-tortfeasor status. At least one of those factors would indicate joint-tortfeasor status between the School District and attorney Ellison. As the School District asserts, Ellison's advice led to the decision of the mayor-appointed members of the Board of Control to terminate Plaintiffs' employment agreements, so it appears that their actions, either performed together, or done independently, united to cause a single injury to each Plaintiff.

The difficulty with this argument is that joint tortfeasors must owe the "same duty" to the plaintiff, at least in the sense that they each owe a duty to the plaintiff, even if the cause of action is different. See Smith v. Kolcraft Products, Inc., 107 F.R.D. 767, 770 (M.D. Pa. 1985) (driver charged with negligence was a joint tortfeasor with the defendant manufacturer of a infant car seat sued under theory of strict liability in tort). The same-duty factor appears in both Lasprogata ("two or more persons [who] owe to any other the same duty") and Voyles ("the existence of a common or like duty").

Here, it cannot be shown that both Ellison and the mayor-appointed Control Board members had a duty to Plaintiffs. The members did, but not Ellison because Plaintiffs cannot establish that he had a duty to them in regard to his professional advice. He was neither in privity with them nor were they third-party beneficiaries of any contract he had with the School District. See Sabella v. Estate of Milides, 992 A.2d 180, 187 (Pa. Super. Ct. 2010). Since Ellison had no duty to Plaintiffs, he cannot be a joint tortfeasor with the School District. See LaZar, supra, 337 Pa. Super. Ct. at 450, 487 A.2d at 32 (labor unions were not joint tortfeasors with the defendant company when ...


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