NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P

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1 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P CONTEMPORARY MOTORCAR LTD AND GEORGE LYONS, IN THE SUPERIOR COURT OF PENNSYLVANIA Appellants MACDONALD ILLIG JONES & BRITTON LLP, W. PATRICK DELANEY, JAMES E. SPODEN, MATTHEW W. MCCULLOUGH, BRENT DOOLITTLE, AND CARTER DOOLITTLE, v. Appellees No. 783 WDA 2012 Appeal from the Order Entered April 18, 2012 In the Court of Common Pleas of Erie County Civil Division at No(s): BEFORE: BOWES, DONOHUE, and MUNDY, JJ. MEMORANDUM BY BOWES, J.: FILED SEPTEMBER 19, 2013 Contemporary Motorcar Ltd ( Contemporary ) and George Lyons appeal from the April 18, 2012 order sustaining preliminary objections to their first amended complaint and dismissing Appellants count of wrongful use of civil proceedings, 42 Pa.C.S Section 8351, et seq. is known as the Dragonetti Act. We affirm. Appellants instituted this action against MacDonald Illig Jones & Britton, LLP, W. Patrick Delaney, James E. Spoden, Matthew W. McCullough, Brent Doolittle, and Carter Doolittle ( Appellees ). The complaint raised a Dragonetti Act count as well as an abuse of process count, which was pled

2 solely against the Doolittles. Mr. Delaney, Mr. Spoden, and Mr. McCullough are attorneys employed by MacDonald Illig Jones & Britton, LLP. The law firm and three named lawyers will be collectively referred to as the attorneys. The underlying litigation that forms the basis of the present action involved the following facts. The Doolittles owned a minority interest in a business known as Gary Miller Dodge. The attorneys instituted an action on behalf of the Doolittles in the Court of Common Pleas of Erie County. That lawsuit involved claims that they were being improperly excluded from the management and operation of Gary Miller Dodge. Gary Miller sold a franchise to Appellant Contemporary. Appellant Lyons and Gary Miller have an ownership interest in Appellant Contemporary. Gary Miller as well as the two Appellants herein were named as defendants in the underlying action instituted by the attorneys on behalf of the Doolittles. After the conduct of some discovery, Appellants filed preliminary objections in that case. Before the court ruled upon those objections, Appellees voluntarily discontinued the action against Appellants, and Appellants consented to their dismissal therein. Appellants thereafter brought the present Dragonetti Act case against Appellees based upon Appellants joinder in the underlying litigation, which remains pending against other defendants. Before filing an answer, Appellees presented preliminary objections to the complaint. The trial court - 2 -

3 herein concluded that, since Appellants consented to their dismissal from the underlying lawsuit almost immediately after it was instituted, that litigation was not terminated in Appellants favor. Thus, the trial court held that Appellants could not pursue a Dragonetti Act claim against Appellees, granted Appellees preliminary objections, and dismissed the Dragonett Act count. Appellants then voluntarily discontinued the abuse-of-process cause of action pled against the Doolittles, and appealed the grant of the preliminary objections. Appellants raise these contentions: I. Whether or not the lower court erred in sustaining Appellees' preliminary objections to the "Dragon[e]tti Act" (42 Pa.C.S.A. 8351) claim and dismissing Appellants' complaint with prejudice by holding that Appellees' voluntary dismissal did not constitute a "termination in favor" of Appellants for purposes of a claim made under the Dragonetti Act. II. Whether or not the lower court erred in sustaining Appellees' preliminary objections to plaintiffs' punitive damages claim and dismissing plaintiffs' complaint with prejudice as the "Dragonetti Act" (42 Pa.C.S.A. 8353) specifically provides for recovery of punitive damages. III. Whether or not the lower court erred in sustaining Appellees' preliminary objections to the Appellants' claim for attorney's fees and dismissing appellant's complaint with prejudice as the Dragonetti Act (42 Pa.C.S.A. 8353) specifically provides for recovery of attorney's fees. Appellants brief at Throughout their statement of issues, Appellants improperly refer to both themselves and the Appellees in the singular form, even though there are (Footnote Continued Next Page) - 3 -

4 Initially, we outline our standard of review. [O]ur standard of review of an order of the trial court overruling or granting preliminary objections is to determine whether the trial court committed an error of law. When considering the appropriateness of a ruling on preliminary objections, the appellate court must apply the same standard as the trial court. Preliminary objections in the nature of a demurrer test the legal sufficiency of the complaint. When considering preliminary objections, all material facts set forth in the challenged pleadings are admitted as true, as well as all inferences reasonably deducible therefrom. Preliminary objections which seek the dismissal of a cause of action should be sustained only in cases in which it is clear and free from doubt that the pleader will be unable to prove facts legally sufficient to establish the right to relief. If any doubt exists as to whether a demurrer should be sustained, it should be resolved in favor of overruling the preliminary objections. Feingold v. Hendrzak, 15 A.3d 937, 941 (Pa.Super. 2011) (quoting Haun v. Community Health Systems, Inc., 14 A.3d 120, 123 (Pa.Super. 2011)). Section 8351 provides in pertinent part: (a) Elements of action. A person who takes part in the procurement, initiation or continuation of civil proceedings against another is subject to liability to the other for wrongful use of civil proceedings: (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 (Footnote Continued) two Appellants and six Appellees. We have corrected all the grammatical errors contained therein

5 (2) The proceedings have terminated in favor of the person against whom they are brought. The first and crucial issue on appeal pertains to whether Appellant s satisfied 8351(a)(2), i.e., whether the underlying action was terminated in favor of Appellants for purposes of the Dragonetti Act. If it was not, then all of Appellants issues fail because they are premised upon the viability of a Dragonetti Act cause of action. The determinative question in the instant case revolves around an interpretation of Section 8351(a)(2) of the Dragonetti Act. Questions of statutory construction are questions of law; therefore, our review is de novo. The Betts Industries, Inc. v. Heelan, 33 A.3d 1262 (Pa.Super. 2011). Appellees attached two documents as exhibits to their preliminary objections to establish the manner in which the underlying action was terminated with respect to Appellants. The Doolittles voluntarily discontinued the underlying action against Appellants: PRAECIPE TO DISCONTINUE WITHOUT PREJUDICE AS TO DEFENDANTS BARBARA MILLER, CONTEMPORARY MOTOR CARS, LTD. AND GEORGE LYONS To: Patrick L. Fetzner, Clerk of Records Prothonotary (Civil) Division Please discontinue the above-captioned civil action as to Defendants Barbara Miller, Contemporary Motor Cars, Ltd., and George Lyons only, WITHOUT PREJUDICE. Pursuant to Pa.R.C.P. 229(b)(1), the consents of John F. Mizner, Esq. and Charles V. Longo, Esq. to a discontinuance as to less than all defendants are attached hereto

6 Additionally, counsel for Appellants consented to the voluntary discontinuance of that case by the Doolittles (emphasis added): CONSENT TO DISCONTINUE AS TO LESS THAN ALL DEFENDANTS The undersigned, counsel for Defendants Contemporary Motor Cars, Ltd. and George Lyons, does hereby consent, pursuant to Pa.R.C.P. 229(b)(1), to the discontinuance without prejudice as to Barbara Miller, contemporary Motor Cars, Ltd., and George Lyons, as defendants in the above-referenced civil action. 4/26/2011 /s/ Date CHARLES V. LONGO (61642) Charles V. Longo Co., L.P.A..... Attorney for Defendants Contemporary Motor Cars and George Lyons The voluntary discontinuance was filed after Appellants filed preliminary objections but before the court ruled upon those objections. In this case, the trial court concluded that (a)(2) of Appellants Dragonetti Act claim was not established by the pleadings. We agree with that assessment. D'Elia v. Folino, 933 A.2d 117 (Pa.Super. 2007), is dispositive. Therein, the trial court granted the defendants preliminary objections in a Dragonetti Act case based on a finding that the prior action at issue was not terminated in the plaintiff s favor. The defendants in the Dragonetti Act case represented a woman in a medical malpractice lawsuit instituted against the Dragonetti Act plaintiff. The Dragonetti Act plaintiff - 6 -

7 was granted summary judgment in the medical malpractice case, but he subsequently entered into a settlement agreement with the medical malpractice litigant. The malpractice case was voluntarily discontinued against the Dragonetti Act plaintiff pursuant to an agreement whereby the malpractice litigant agreed not to appeal the prior grant of summary judgment in favor of the Dragonetti Act plaintiff, and the Dragonetti Act plaintiff agreed not to pursue the Dragonetti Act action against the malpractice litigant. The lawyers representing the malpractice litigant were excluded from the terms of the Dragonetti Act plaintiff s release. In D'Elia, we first observed that, since the propriety of the grant of summary judgment in favor of the Dragonetti Act plaintiff in the malpractice case was never evaluated on appeal, the grant of summary judgment did not constitute a favorable termination in his favor. Thus, we examined whether the malpractice litigant s voluntary discontinuance entered pursuant to the settlement agreement terminated the malpractice case in favor of the Dragonetti Act plaintiff. We noted, Generally, when considering the question of favorable termination in a wrongful use of civil proceedings case, whether a withdrawal or abandonment constitutes a favorable, final termination of the case against who the proceedings are brought initially depends on the circumstances under which the proceedings are withdrawn. Id. at

8 Nevertheless, we specifically ruled that this general rule is not implicated where the parties to the underlying suit agree jointly to end the underlying suit in a non-litigious nature, because, in that scenario, the liability of the underlying defendant, i.e., the plaintiff in the wrongful use of civil proceedings suit, is never determined with finality. Therefore, the underlying suit is not a favorable termination within the meaning of 42 Pa.C.S.A Id. at (relying upon Electronic Laboratory Supply Co. v. Cullen, 712 A.2d 304 (Pa.Super. 1998)). In a situation where there was a voluntary discontinuance by agreement, and thus the liability of the Dragonetti Act plaintiff in the underlying case was not ruled upon, the Dragonetti Act plaintiff is not considered victorious in the underlying litigation. D Elia, supra. Since the announcement of our decision in D Elia, we have held specifically that, unless the voluntary withdrawal of the prior case was tantamount to [an] unbidden abandonment of a claim brought in bad faith, the discontinuance of the underlying action does not constitute a favorable termination in favor of the Dragonetti Act plaintiff. Majorsky v. Douglas, 58 A.3d 1250, 1270 (Pa.Super. 2012); see also Rosenfield v. Pennsylvania Automobile Insurance Plan, 636 A.2d 1138 (Pa.Super. 1994) (previous litigation was voluntarily discontinued after it became moot and before determination of liability of Dragonetti Act plaintiff; it therefore was not terminated in favor of Dragonetti Act plaintiff). Cf. Buchleitner v

9 Perer, 794 A.2d 366 (Pa.Super. 2002) (summary judgment was entered in favor of the Dragonetti Act plaintiff in the underlying litigation and other defendants in the other lawsuits unilaterally negotiated a universal settlement in which the Dragonetti Act plaintiff never participated); Bannar v. Miller, 701 A.2d 242, 248 (Pa.Super. 1997) (prior lawsuit was withdrawn on the eve of trial and was characterized as a last-second dismissal in the face of imminent defeat ); Robinson v. Robinson, 525 A.2d 367 (Pa.Super. 1987) (no discussion of circumstances under which wife discontinued a prior action against her husband, who filed Dragonetti Act case against her). In the present matter, the pleadings established that Appellees were not faced with imminent defeat when they voluntarily discontinued the underlying action. To the contrary, the litigation was in the very preliminary stage. Additionally, Appellants consented to the voluntary dismissal of the underlying action, and their liability was never adjudicated to any extent. Furthermore, Appellants were under no legal requirement to assent to their dismissal. respect. Instead, Appellees could have obtained court approval in that Pa.R.C.P. 229(b)(1) (emphasis added) ( Except as otherwise provided in subdivision (b)(2), a discontinuance may not be entered as to less than all defendants except upon the written consent of all parties or leave of court after notice to all parties. )

10 There is no doubt that the underlying action was ended by voluntary discontinuance with Appellants consent in a non-litigious manner. Appellants do not have a viable Dragonetti Act action under D Elia and Majorsky because the underlying action was not terminated in their favor. Thus, the trial court properly granted the preliminary objections to the Dragonetti Act claim and must be affirmed. Order affirmed. Judge Donohue files a Dissenting Memorandum. Judgment Entered. Deputy Prothonotary Date: 9/19/