October 1, 2013
WALTER E. SMITH Appellant
WALTER A. MCCLATCHY, JR. Appellee
Appeal from the Order September 10, 2012 In the Court of Common Pleas of Delaware County Civil Division at No(s): No. 10-9071
BEFORE: BOWES, J., OTT, J., and STRASSBURGER, J.[*]
MEMORANDUM BY OTT, J.
Walter E. Smith appeals from the order entered September 10, 2012, granting summary judgment in favor of Walter A. McClatchy, Jr., Esquire, . and against Smith, in this action seeking damages for the wrongful use of civil proceedings. Smith contends that the trial court erred in granting the motion for summary judgment because a genuine issue of material fact exists as to whether McClatchy instituted a collection action against him without probable cause. Based on the following, we affirm.
This case arises from a prior custody matter in which Smith's former wife, Ellen E. Smith, hired McClatchy to assist her in seeking custody of Smith's and her grandson. On May 6, 2003, Smith's ex-wife signed a retainer agreement with McClatchy. It is undisputed that Smith did not sign the retainer agreement, was neither a named party nor participant in the custody proceedings, and did not speak with McClatchy regarding the custody matter. However, Smith's ex-wife paid McClatchy from the parties' joint checking account, and sought to have the child removed from his mother's home to live with her and Smith. At some point, Smith's ex-wife failed to pay her attorney fees. Ultimately, on March 13, 2006, McClatchy instituted a collection action against both Smith and his ex-wife. After an appeal from an arbitration award, the case proceeded to a nonjury trial in the Delaware County Court of Common Pleas. On June 25, 2009, the Honorable Kathrynann Durham entered a verdict in favor of Smith and against McClatchy.
Thereafter, on July 16, 2010, Smith filed the complaint in the present case against McClatchy, seeking damages based upon the wrongful use of civil proceedings. On July 27, 2012, McClatchy filed a motion for summary judgment, arguing that undisputed facts demonstrated that Smith could not prevail on his claim. Smith filed an answer to McClatchy's motion, and McClatchy filed a reply. On September 10, 2012, the trial court entered an order granting McClatchy's motion for summary judgment. This appeal followed.
On appeal, Smith challenges the order of the trial court granting McClatchy's motion for summary judgment, and, specifically, the court's finding that McClatchy had probable cause to initiate the collection action. When reviewing a motion for summary judgment, we "may disturb the order of the trial court only where it is established that the court committed an error of law or abused its discretion." Murphy v. Duquesne U. Of The Holy Ghost, 777 A.2d 418, 429 (Pa. 2001), citing Capek v. Devito, 767 A.2d 1047, 1048, n.1 (Pa. 2001).
As with all questions of law, our review is plenary. In evaluating the trial court's decision to enter summary judgment, we focus on the legal standard articulated in Pa.R.C.P. 1035.2. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the nonmoving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. "Failure of a non-moving party to adduce sufficient evidence on an issue essential to its case and on which it bears the burden of proof ... establishes the entitlement of the moving party to judgment as a matter of law." Lastly, we will view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.
Keystone Freight Corp. v. Stricker, 31 A.3d 967, 971 (Pa. Super. 2011) (citations omitted).
The Dragonetti Act provides that a person who initiates or continues civil proceedings against another may be liable to that other person if:
(1) He acts in a grossly negligent manner or without probable cause and primarily for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claim in which the proceedings are based; and
(2) The proceedings have terminated in favor of the person against whom they are brought.
42 Pa.C.S. § 8351(a). Pursuant to Section 8352, a person has probable cause to initiate civil proceedings, in pertinent part, as follows:
he reasonably believes in the existence of the facts upon which the claim is based, and either:
(1) Reasonably believes that under those facts the claim may be valid under the existing or developing law;
* * *
(3) Believes as an attorney of record, in good faith that his procurement, initiation or continuation of a civil cause is not intended to merely harass or maliciously injure the opposite party.
42 Pa.C.S. § 8352. Therefore, in order to succeed on his claim of wrongful use of civil proceedings, Smith, must prove that: (1) McClatchy initiated civil proceedings against him; (2) those proceedings were terminated in Smith's favor; (3) McClatchy lacked probable cause to initiate those proceedings; (4) McClatchy's primary purpose was "not that of securing the proper discovery, joinder of parties or adjudication of the claim on which the proceedings were based[;]" and (5) Smith has suffered damages. 42 Pa.C.S. § 8354.
There is no dispute that McClatchy initiated a collection action against Smith, the collection action terminated in Smith's favor, and Smith suffered damages in the form of attorney's fees. See 42 Pa.C.S. § 8353(3) (including reasonable attorney fees that were incurred in defense in the prior action as recoverable in a Dragonetti action).
Accordingly, the only questions that remain are whether McClatchy had probable cause to initiate the collection action against Smith, and whether McClatchy did so for an improper purpose. Indeed, this Court has held that "[e]ven if an attorney lacked probable cause in filing a lawsuit …, he is not liable for wrongful use of civil proceedings unless he filed the lawsuit with an improper purpose." Broadwater v. Sentner, 725 A.2d 779, 784 (Pa. Super. 1999), appeal denied, 753 A.2d 814 (Pa. 2000). Examples of an improper purpose are when a lawsuit is filed "for the purpose of forcing a settlement that has no relation to the merits of the claim[, ]" or "to harass the person proceeded against by bringing a claim known to be invalid."
In granting summary judgment in favor of McClatchy, the trial court found, that "the undisputed facts of record fail to demonstrate a viable claim for wrongful use of civil proceedings." Trial Court Opinion, 11/28/2012, at 2-3. Specifically, the court concluded that McClatchy had probable cause to initiate the civil action against Smith since Smith knew, but did not object to, the fact that that his ex-wife was attempting to have his grandson placed in their home, and that she was paying her attorney fees from their joint bank account. Id. at 3-4. Moreover, the court found Smith failed to produce any evidence that McClatchy filed the action for "a purpose other than pursuing discovery and seeking a judgment from the court." Id. at 4.
Smith argues, however, that the relevant facts, viewed in the light most favorable to him, the non-moving party, demonstrate that McClatchy had no probable cause to institute the collection action against him. Specifically, he emphasizes that: (1) McClatchy's retainer agreement was signed only by Smith's ex-wife; (2) Smith did not participate in the custody proceedings and never met or spoke with McClatchy; and (3) the first bill from McClatchy that included Smith's name was sent in February of 2006, over one and one-half years after the custody matter ended and only one month before McClatchy filed the collection action. See Motion for Summary Judgment, 7/27/2012, Exhibit 2 (attachments to underlying Breach of Contract Complaint). Further, he contends that the facts relied upon by the trial court in making its determination, i.e., that Smith's ex-wife paid McClatchy from a joint bank account and that Smith knew his ex-wife was trying to gain custody of his grandchild to live in their marital home, were not raised by McClatchy,  and were gleaned from statements he made in his own deposition taken six years after the collection suit was filed. He argues that his 2012 deposition testimony, upon which the trial court apparently relied,  demonstrates that Smith had no knowledge that his ex-wife was paying her attorney from their joint bank account until shortly before the collection suit was filed. He concludes that the trial court erred in granting summary judgment in favor of McClatchy.
Smith's argument rests heavily upon the fact that he was successful in the collection action, and that Judge Durham "judicially determined" that he was neither a party nor participant in the underlying custody action.Smith's Brief at 12. He claims that, in determining McClatchy had probable cause to institute the prior action, the trial court "has now decided that [Judge Durham's prior] decision was in fact wrong, " and, in doing so, the court incorrectly relied upon information that was not available to McClatchy when he filed the original complaint in 2006, namely Smith's 2012 deposition testimony. Id., at 29.
We conclude that Smith has misinterpreted the trial court's decision on appeal. The trial court did not conclude that Smith should have been liable for the expenses incurred by his ex-wife in her attempt to gain custody of their grandchild. Rather, it found that her attorney, McClatchy, could have "reasonably believe[d]" under the facts that Smith might be liable for those expenses, and that the attorney pursued the claim in good faith without the intent to "merely harass or maliciously injure" Smith. 42 Pa.C.S. § 8352(1), (3). The fact the trial court apparently relied upon Smith's deposition taken in 2012 is of no moment. When McClatchy filed the collection action in 2006, he knew (1) that he had been paid from a bank account in both Smith and his ex-wife's name, and (2) that Smith's ex-wife was attempting to gain custody of their grandchild and intended for that grandchild to live in their marital home. Those facts were sufficient to support McClatchy's reasonable belief that a claim against Smith may be valid under existing or developing law, even though Smith did not sign the retainer agreement or participate in the proceedings. See 42 Pa.C.S. § 8352(1). Therefore, we detect no basis to disturb the finding of the trial court that McClatchy had probable cause to initiate the collection action against Smith.
Moreover, we agree with the trial court's additional finding that "there is no evidence" that McClatchy initiated the collection action against Smith for "for a purpose other than pursuing discovery and seeking a judgment from the court." Trial Court Opinion, 11/28/2012, p. 4. This is a necessary element of a wrongful use of civil proceedings claim. See 42 Pa.C.S. § 8351(a)(1); Broadwater, supra, at 784 ("Even if an attorney lacked probable cause in filing a lawsuit …, he is not liable for wrongful use of civil proceedings unless he filed the lawsuit with an improper purpose."). Smith does not address this issue in his appellate brief. Thus, any challenge to the trial court's finding is waived. See: Lackner v. Glosser, 892 A.2d 21, 29 (Pa. Super. 2006) ("[A]rguments which are not appropriately developed are waived.").
Accordingly, we affirm the order of the trial court granting summary judgment in favor of McClatchy and against Smith.
Strassburger, J., files a concurring and dissenting memorandum.