J-A33012-14


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

DAVID W. FISHER AND SELECTIVE                    IN THE SUPERIOR COURT OF
INSURANCE COMPANY OF SOUTH                             PENNSYLVANIA
CAROLINA

                            Appellants

                       v.

SCOTT A. EXLEY, BURSICH
ASSOCIATES, INC., FRANK P. MURPHY
AND MURPHY & DENGLER

                            Appellees                No. 1170 EDA 2014


                     Appeal from the Order March 20, 2014
             In the Court of Common Pleas of Montgomery County
                      Civil Division at No(s): 2013-11954


BEFORE: LAZARUS, J., WECHT, J., and STRASSBURGER, J.*

MEMORANDUM BY LAZARUS, J.:                        FILED JANUARY 16, 2015

        David W. Fisher and Selective Insurance Company of South Carolina

(collectively Appellants) appeal from the trial court’s order sustaining, with

prejudice, Frank P. Murphy and Murphy & Dengler’s (collectively Appellees)

preliminary objections1 and striking Appellants’ amended complaint with


____________________________________________


*
    Retired Senior Judge assigned to the Superior Court.
1
  In reviewing an order granting preliminary objections in the nature of a
demurrer, the appellate court is presented with a purely legal question:
whether the law says with certainty that no recovery is possible. Hess v.
Fox, Rothschild, LLP, 925 A.2d 789 (Pa. Super. 2007). In determining
whether the trial court properly sustained preliminary objections:

(Footnote Continued Next Page)
J-A33012-14



prejudice in this Dragonetti Act2 case. After careful review, we affirm on

the well-reasoned opinion authored by the Honorable Bernard Moore.

        In April 2006, Fisher, an insurance broker, allegedly disseminated

defamatory statements to numerous third parties about Appellees in the

Pottstown community.            The statements were contained in a one-page

newsletter entitled “The Pottstown Merky.”                 The newsletter accused

Appellees Exley and Bursich Associates “of being involved in illegal

transactions    in     dealings    with    various   municipalities   and   non-profit

businesses” and contained accusations that Exley and Bursich conspired with

others to commit theft while engaged in “classic quid-pro-quo deals.”

        At the time of the publication, Exley was part-owner of Bursich

Associates, a company that provided engineering and land surveying

services, often for municipalities.         On November 8, 2006, Appellees Exley

                       _______________________
(Footnote Continued)

        The appellate court must examine the averments in the
        complaint, together with the documents and exhibits attached
        thereto, in order to evaluate the sufficiency of the facts averred.
        The impetus of the appellate court's inquiry is to determine the
        legal sufficiency of the complaint and whether the pleading
        would permit recovery if ultimately proven. The appellate court
        will reverse the trial court's decision regarding preliminary
        objections only where there has been an error of law or abuse of
        discretion. When sustaining the trial court's ruling will result in
        the denial of claim or a dismissal of suit, preliminary objections
        will be sustained only where the case if free and clear of doubt.

Id. at 806.
2
    42 Pa.C.S.A. §§ 8351-8355.



                                            -2-
J-A33012-14



and Bursich filed a lawsuit3 against Fisher alleging that he defamed4 them by

distributing the article to third persons.            Appellees, Frank Murphy and

Murphy & Dengler, were Exley and Bursich Associates’ legal counsel in the

underlying defamation action.

       Fisher   unsuccessfully      moved      for   summary   judgment;   the   case

proceeded to trial before a jury. At trial Fisher’s deposition testimony was

read into evidence; Fisher denied authoring the article, but admitted that he

distributed a copy of it to his attorney and business partner and also posted

a copy of it on a bulletin board in the local bank. Fisher also conceded that

he did not know the truth of the article’s central allegations and, in fact,

admitted that a particular accusation was indeed false.           Fisher moved for

nonsuit at the close of plaintiff’s case, which was denied. The jury ultimately

returned a defense verdict.

____________________________________________


3
  Exley et al. v. Fisher, No. 2006-28018, Montgomery County Court of
Common Pleas.
4
  In an action for defamation, the plaintiff has the burden of proving: (1)
the defamatory character of the communication; (2) its publication by
defendant; (3) its application to plaintiff; (4) the understanding by the
recipient of its defamatory meaning; (5) the understanding by the recipient
of it as intended to be applied to plaintiff; (6) special harm resulting to
plaintiff from its publication; (7) abuse of a conditionally privileged occasion.
Agriss v. Roadway Express, Inc., 483 A.2d 456, 461 (Pa. Super. 1984),
citing 42 Pa.C.S. § 8343(a). Moreover, a publication is defamatory if it
tends to blacken a person's reputation or expose him to public hatred,
contempt, or ridicule, or injure him in his business or profession. Cosgrove
Studio and Camera Shop, Inc. v. Pane, 182 A.2d 751 (Pa. 1962);




                                           -3-
J-A33012-14



       Appellants filed the instant wrongful use of civil proceedings action

against Appellants in connection with the underlying defamation lawsuit. 5 In

their amended complaint, Appellants6 alleged that Appellees wrongfully

instituted the defamation action against Fisher in an effort to harass and

injure him without having a reasonable belief that Fisher was responsible for

any allegedly defamatory comments made in the article or that Fisher

distributed the article to the Pottstown community. Appellants also alleged

that Appellees Murphy and Murphy & Dengler knew of their client’s lack of

such reasonable belief in the facts against Fisher, yet refused to withdraw

and continued to prosecute the defamation action.        Finally, Fisher alleged

that as a result of the defamation lawsuit, he suffered damage to his

reputation and to the good will of his business.

       In the Dragonetti action, Judge Moore granted Appellees’ preliminary

objections and dismissed Appellants’ complaint with prejudice.        Appellants

filed the instant appeal, raising the following issues for our consideration:

       (1)    Did Fisher and Selective state a claim against the
              Defendants for wrongful use of civil proceedings under the
____________________________________________


5
  Selective, Fisher’s insurance carrier, tendered a defense to Fisher in the
defamation lawsuit and retained a law firm to defend Fisher subject to a
reservations of rights. Selective also provided a defense to allegations of
non-covered punitive damages made by Appellees Exley and Bursich against
Fisher in the defamation action.
6
  Selective was a named plaintiff on the Dragonetti action as a result of the
attorneys’ fees and costs it paid to defend Fisher in the underlying matter.




                                           -4-
J-A33012-14


           Dragonetti Act, 42 Pa.C.S.A. § 8351, et seq., where their
           Amended Complaint alleged that Defendants lacked
           probable cause and acted with an improper purpose in
           initiating and continuing the underlying Defamation Action
           against David Fisher in Exley et al. v. Fisher, No. 06-
           28018 (Montgomery Ct. Comm. Pl.)?

     (2)   Did the trial court commit an error of law in sustaining
           preliminary objections in the nature of a demurrer as to
           Plaintiff-Appellants’ Dragonetti claim where the trial court
           took judicial notice of extraneous facts from the notes of
           testimony in Exley et al. v. Fisher, No. 06-28018
           (Montgomery Ct. Comm. Pl.), which were neither pled in
           Fisher’s and Selective’s Amended Complaint or raised in
           Defendants’ Preliminary Objections?

     (3)   Did Plaintiff Selective Insurance Company of South
           Carolina (“Selective”) have standing to pursue its
           Dragonetti Act claims against Defendants where Selective
           paid most of Fisher’s defenses costs and possessed an
           equitable right of subrogation arising out of the express
           language of Selective’s insurance contract with Fisher?

     (4)   Did Plaintiff David Fisher appropriately plead damages for
           losses incurred by his business from Defendants’
           underlying defamation lawsuit, where the alleged damages
           were incurred by him while operating as a sole
           proprietorship?

     Wrongful use of civil proceedings is a tort arising when a person

institutes civil proceedings with a malicious motive and lacking in probable

cause. Rosen v. American Bank of Rolla, 627 A.2d 190, 191 (Pa. Super.

1993). Pennsylvania codified this tort at 42 Pa.C.S.A. §§ 8351-55 (known

as Dragonetti Act). Section 8351 of the Act reads as follows:

     § 8351. Wrongful use of civil proceedings

     (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 [if]:


                                   -5-
J-A33012-14



         (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.A. § 8351(a).      An individual has probable cause under the Act

when 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;

      (2)    Believes to this effect in reliance upon the advice of
             counsel, sought in good faith and given after full disclosure
             of all relevant facts within his knowledge and information;
             or

      (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.A. § 8352 (Existence of probable cause).       See also Bannar v.

Miller, 701 A.2d 232, 238 (Pa. Super. 1997) (wrongful use of civil

proceedings’ plaintiff must prove that defendant initiated or continued civil

proceedings against plaintiff without probable cause or in grossly negligent

manner, for improper purpose, and, that proceedings were terminated in

favor of plaintiff).

      Examining the averments in Appellants’ amended complaint, together

with the documents and exhibits attached thereto, Hess, supra, we agree

                                      -6-
J-A33012-14


with the trial court that Appellees did not institute the underlying defamation

action without probable cause or in a grossly negligent manner.             42

Pa.C.S.A. § 8352. Specifically, Appellants aver in their amended complaint

that Exley denied any knowledge that Fisher published the article to anyone.

See Appellants’ Amended Complaint, 7/30/13, at ¶16.             However, the

testimony cited to support this averment only references whether Fisher

placed copies of the article in a local bank branch.          See Deposition

Transcript of Scott A. Exley, 5/7/08, at 28:1-14.     The complaint mentions

nothing about whether Fisher disseminated or published the article to other

third persons personally, as alleged in the underlying defamation action and

testified to at trial.   The complaint also avers that Exley admitted that he

knew of no reason why Fisher would even want to defame him, however,

this again does not demonstrate that he filed the action without probable

cause or in a grossly negligent manner. 42 Pa.C.S.A § 8351(a)(1).

      Moreover, the averments do not support the conclusion that Appellees

commenced the defamation action to harass and/or injure Fisher or for some

other improper purpose.       Merely because Exley testified at his deposition

that he did not claim that Fisher ever lied, Deposition Transcript of Schott A.

Exley, 5/7/08, at 89:4-20, or that Exley had information that Fisher said or

wrote any of the comments, id. at 89:21-23, does not mean that he did not

disseminate the article to third persons.    All that is necessary to “publish”

defamatory material is its communication intentionally or by a negligent act


                                      -7-
J-A33012-14


to one other than the person defamed.       Gaetano v. Sharon Herald Co.,

231 A.2d 753 (Pa. 1967).

       Finally, the fact that Appellants were unsuccessful in moving for

summary judgment and non-suit, as well as the fact that the case was

submitted to the jury for a determination on factual issues, further supports

the concision that probable cause existed for Appellees to file the underlying

defamation action.    See Meiksin v. Howard Hanna Co., 590 A.2d 1303

(Pa.   Super.   1991)    (where   Dragonetti     plaintiffs   in   prior   lawsuit

unsuccessfully moved pre-trial for summary judgment and had compulsory

non-suit denied, probable cause existed as matter of law in prior lawsuit to

defeat Dragonetti action).

       After a review of the parties’ briefs, the relevant case law, and record

on appeal, we affirm the trial court’s order sustaining Appellees’ preliminary

objections and dismissing, with prejudice, Appellants’ amended complaint

based upon Judge Moore’s Pa.R.A.P. 1925(a) opinion.            We instruct the

parties to attach a copy of Judge Moore’s decision in the event of further

proceeding in the matter.

       Order affirmed.

       WECHT, J. joins the Memorandum.

       STRASSBURGER, J. files a Dissenting Memorandum.




                                     -8-
J-A33012-14




Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 1/16/2015




                          -9-
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(1'.0'1"   I   ot   '1)




               '"
      .'
                                               INTI'IE COURT O F COMMON PLE AS OF
                                              MONTG OMERY COUNTY, PENNSYLVANIA
                                                          CIVIL DIVISION


                          DAVID W. FISH ER :md SEL ECTIVE                        S up . C I. No. 11 70 E DA 2014
                          INSURANCE COMPANY OF SOUT II
                          CAROLI NA
                                                                         .       Comm. PI. O. No. 2013-11954


                                         v.
                          SCOTT A. EXLEV, BURSIC H
                                                                                          IIII f.:t~~~'~~11111
                                                                                          "l/IIJoI I!H4.ooS0 {oIll1l/1l~ 'I:l4M1
                                                                                                                    0,.....
                                                                                                                                   '98409" ~
                          ASSOCIATES, INC., FRANK P.                                      Ft.""1..2I~21}9   r.-.:;sooll
                          M Unr l-I V and M URPHY & DENG LER                                         M,~t t,.n-. - M"""01I'~.'"


                                                                   OPINION

                          M oore. J.                                                               JUli e 18, 2014


                          I.      FA CTS AND PROCEDURA L Hl STORV

                                 This mall(';r involve." a claim for wrongful use o f civi l proceedings ("Drago nelli

                          action" 42. Pa.C.S.A , § 835 1 ct seq.), arising trom a de fense verdict in an underlying

                          defnmruion lawsuit. David W. Fisher, who \ws thc defendant in the undcrlying

                          def.'lmillion action, and Selectivc Insurance Company ofSoulh Carolina appeal this

                          court's orders that sustained the preliminary objec tions of the defendants and dism issed

                          with prejudice the Amended Comp laint of Fisher a nd Selective Jnsurance.

                                 TIle defendants in this mailer are Scott A Ex lcy and Bursich Associates, Inc.,

                          who were the two plain tilTs in the underlying dc fama tion nClion, and also Frank Murphy

                          and Murphy & Denglcr, who were their legal counsel. AI the time of the underlying

                          deramation lawsuit, Scott Exley was part-owner of Bursich Associates, which was a

                          company that provided engineering and land surveying services, oftcn for mumcipalilies

                          Exlcy nnd Bursich Associates a llegcd that David Fishl.:r, who was an insurance broker,




                                                                                                                                                    545:1
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                       did knowingly, inlenlionally, voluntnri ly Bnd maliciously distribute, publish and

                       dissel'lliml.le defamaiulY :.IiHements €lgainst {hem in the Pottstown colYlllluniiy.

                               Speci fi ca lly. the all egations stemmed from n one-page news letter, dated April 28,

                       2006, entitled "The Pbustown Merky," an apparent pinyon words of the local newspaper

                       "The Pottstown Mercury." T he newsletter contained only one article. That art icle

                       accused Ex ley and Bursich Associates of being invo lved in illegal transactions in their

                       dealings with vurious mun icipalities and non-profit businesses. No author or source is

                       named in the newslet ter. The article nppe,1rS under th e headlines "Troubles on Borough

                       Council" and "V lahos in it for personal ga;n," referring to Potlstown Borough Counci l

                       and one ofils members nt the ti me, James Vlahos: The article reads in ful l, as follows:

                               I low would you fee l if you were Jack Wolf while watch ing all your effoMS
                               these past scveral years rendered mcaningless by the actions of "BIG" Jim
                               Vlahos.

                               In just a few short months, Big Jim has wreaked havoc in the borough. As
                               he has done ill the past at New I "mover, he is planni ng 10 tum over the
                               code enforcement department 10 Bursich Assoc iates. In this classic quid
                               pro quo deal. Vlahos receives the insurance business at Bursich and
                               Creative Hea lth. Scott Exley of Uurs'ich Associates, and Pottstown's
                               engineer, personally awarded Vlahos thi s business to Vlahos in return fo r
                               New Hanover's engineering work. Now they're at it again Dnd this time
                               Big Jim is maneuvering Exley into a lucrative con tracl lo take over and
                               perfonn the dulies of the code enforcement depilr1 ment.

                               Remember these two are behind the debacle at the Ricketts Center.
                               Everything they touch turns SOl,lr. For example, the recent
                               lllbor/management t roubles have been ins ti gated by Big Jim in a ploy 10
                               t3ke over the borough's health insurance business. He plans to give Ihe
                               insurance busine:;;s 10 his partner in crime, Davc Bultaro. They share in the
                               proceeds of their jo int scruns nil conducted loc311y and perpetrated against
                               not for profi ts. Their vict ims incl udc Creative Health, the YMCA,
                               Brookside Country Cl ub. PAL and many other organizat ions.

                               llow do (hey do il? ihrough accomplic<:s like Jim Konnick, Jeff
                               B~'!;!!g! O!1. Bob Om!"!! !!!~d Tom D'11"'_'1 The '!!O!!'!y !h.'!)' s!e!!.! i!l the



                                                                             2




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        backrooms of PottstOWil is shared by all and distributed to the othel
        members of their organization.

        A ll that's left is a p mh of d estruction that includ es the mess called the
        Ricketts Center, a Po ttstown govenunent in shambles, unable to timct ;on
        from one day to the next, and these money grabbing politicians using their
        posi ti ons and infl uence to line their pockets.

        Vlahos, I3crry, Exley, Br ant, Kormick. Devington, Du ttaro. Marsteller aoo
        the others d o their business in the sh'adows behind the re publican party and
        quasi legi ti mate businesses. Mr. Wo lf: lum the ligh t Oil the.sc guys and
        expose them for whut and who tbey arc, You havc been and honest and
        hurd worki ng civi l servant. Evcryonc in Pottstown knows thai you will do
        the right thi ng.

        T his is the first edition oflhe lIew and improved Poustown Merky. We
        pub lish the news thai the Mercury d oesn' t.

Se~ Underlying Actio n, Trial Ex, P·I. 1 In sum, the article accused Exley and l3ursich

Associotcs ofbcing inyolved in illegal quid pro quo deuls w ith V lahos, w hom it alleged

abused his borough council powers. The article speci fi call y a lleged that Vlahos gave

l3ursich Associates the work in the borollgh' s code enforcement departmen t, and Oursich

Associates in return gave Vlahos, nn insumnce brok:er, the insurance business at Bursieh

Associates. fis her was a competitor of Vlahos' in the insura nce buslOcss. (N.T. 817/12.

pp. 83-92).'

        Thereancr, Exley and Bursieh Associates filed a lawsuit against Fisher here in the

Montgomery County Court of CommOn Pleas. a lleging that F'is her defamed them by

distributing t he article to third persons, No prel imi nary objection~ or mOtion for

judgment on the pleadings was ever filed by Fisher. Discovery \.ws condUCted, and



        The Underlymg ActiOn in tliis ease refers to SCOll A. Ex ley and Butslch
Associa tes. Inc. v. David W. Fisher, which is dock:cted at 2006-28018 in the Montgomery
County Court of COmmon Pica:;.
1       1)le citations to the Notes of Testimony from 8/6/ 12, 87112, MI/12, and 819/12 all
refer to the fOllr days of trial in Ihe underlying defamati on action, No. 2006·28018
                                                 3




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Fisher filed a mot jon for summary judgment, arguing therein that the defamation claim

froiled as a maHI!i' of taw because (1) the article did not have a defamatory clmraclcr, (2)

there was no publication of the article to a third person; (3) Ex ley and Bursich Associates

could not present sufficient evidence of actual malice on the part of Fisher, which Fisher

alleged they were required to show since, as Fisher argued, they were public ligures; and

(4) Exley and Bursich Associates could not present sufficient ev iden ce to establish actual

harm.

        The Honorable William J. Furber, Jr. denied Fisher's motion for summary

judgment by an order dated November 10,2010, and allowed Ex ley and Bursich

Associates' case 10 proceed. Before the trial, Fisher filed two motions in limine, one

arguing Ihal the article was nol defamatory under Pennsylvania law, and Ihe second

arguing that Exley and l3ursich Associates were public official s or public figures for

purposes of de fa mali on analysis. The Honorable Enunanuel A. Bertin, who was the trial

judge, denied bolh these motions. (N .T. 8/6112, p. 12; N.T. 818112, p. 66).

        At trial, Fisher' s deposition testimony was read into evidence. At his deposition.

while Fisher denied aUlhoring the article, he did admi t that he distributed a copy of it to

his allomey and his rosiness partner. (N.T. 8/6/ 12, pp. 108-09). Fisher admitted thaI he

posted a copy of the article on a bulletin board of a local bank , (N.T. 816112, p. 110). He

also conceded that he did not know the truth of one of the article' s central allegations :

thaI Exley and Bursich Associates had previously engaged in a similar illegal quid pro

quo deal when Vlahos had previously served as township supervisor in New Hanover

Township. (N.T. 8/6/12, pp . III , 118). In closing argument, Fisl~r's counsel conceded




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                       Ihat Ihis panicular accusation in the article Was false, in that Dursich Associates had

                       never obt<lined work for New Hanover Township. (N.T. 8/9/12, p. 39).

                               During Ihe defa11lalioll trial, Gregory Berry testified that, in a convcrsation with

                       David Fisher al a local 7·1 1 store, Fisher said that he "put (the llJ1icles] up ... land) sent

                       them and faxed them 10 everyone" he knew. (N.T. 8/6/12, p. 81). Indeed, Fisher added,

                       according 10 Berry, Ihal he "would do .it again if another one CItme QU L" (N.T. 8/6112, p.

                       81). FUr1hermore, Edward E. Panzeter, III, who worked at Dursich Associates as an

                       employee of Exley's at the time Ihe article appeared, leslified at Irial that he picked up a

                       copy o f the article althe bank and found It to be "malicious." (N.T. 8/6/12, p. 70).

                               AI the conclusion of the plaintiffs' case, ~isher moved for II nonsuit, which Judge

                       l3ertin denied. (NT. 817/ 12, pp. 119·127). Fisher then proceeded 10 present his defense.

                       The trial lasted   !l   totnl of fOllr lotal dllYs, and the jury returned 8 defense verdict in favor

                       of Fisher.

                               ARcr the defamation action had lJeen resolved in his favor, Fisher and Selective

                       lnsuf<mce comm enced the ins tant DragoneHi action, vin an Amended Complaint,

                       claiming Ihat Exley and Bursic~ Associates, through their legal counsel of Frank Murp hy

                       from the 18w finn Murphy & Dengler, commenced the defamation litigation to harass and

                       IIljure Fisher, and without having a reasonable belief that Fisher de ramed them . Ex ley

                       and Bursich Associates, and Murphy & Dengler, both filed preliminary objections, which

                       this court susI;\incd. David Fisher and Selective Insurance Company now appeallhi s

                       courl's determination.




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                      Il.    DISCUSSION

                             In order rut the Iriai court 10 adjudicate preliminary objections filed in   D.


                      Dragonclli case., thc conrl must take judicial noticc of and analyzc comprehensively the

                      complete record of the underlying action and evaluate thc merits or that claim. See e.g ,

                      Keystone Freight Corp. v. Stricker, 31 A.3d 967 (Pa. Super. Ct. 2011). Furthcnnore, it is

                      ripe for this court to resolve a Drdgonetti case on preliminary objections. See Lerner v.

                      Lerner, 954 A.2d 1229 (Pa Super. CI. 2008). Pederai Courl S, when applying

                      Pennsylvania law, have routinely stricken Dragonetti claims on the basis of a demllrrer

                      contained in motions to dismiss. See. e.g., Bobrick Corp v. San/Gila Products, IIlC., 698

                      P.Supp.2d 479 (M .D.Pa. 2010) ; Villari Brandes & .Giannone. PC v. Wells Fargo Fin

                      Leasing. Inc., No. 13-297,2013 WL 5468491 (E.D_Pa Sept 30, 2013); Arnder v.

                      DimitroIJ, No. 11-3626. 2011 WL 4801924 (E.D.Pa. Oct 7, 201I).

                             T he plaintiff's Amended Complaint is solely predicated upon what occurred in

                      the underlying action and makes specific. reference 10 that litigation. Any procedural

                      obJcction to this courI 's determ in ation of issues of probable causc, improper purpose and

                      gross negligence have been waived since Ihese issues were raised by Ihe defense in

                      preliminary ofijcc1ions Wilh- supponlng-ex1ii6ils attached anCldie plamtifI did not h1• - - -- - - - -
                                                                                                            '
                      preliminary objections 10 the defendants' preliminary objections. See Richmond v.

                      McHale, 35 A.3d, 782-83 (Pa. Super. CI. 20 12), quoting Preiser v Rosenzwej'g. 615 A.2d

                      303,305 (Pa Super; CI. 1992). Accordingly, any possible challenge by the plainlifr OIl

                      procedural grounds 10 the preliminary objections of the dcfendanls is waived .




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         "[AJ party seckiue, redress under Dragonctti bears a heavy burden."        Us. Express
Lines, Ltd. V. Niggi1l.f, 281 F.3d 383, 394 (3d Cir. 2002). The Dragonelti Act provides,

ill relevant part:

        § 8351 W rong rul usc o r civH proeced ings

         (a) Elem en ts o r ac.t ion .-A person who takes part in the procurement.
        in itiatiOn or continuation of civil proceedings agni nSI another is subject to
        liubility to the other for wrongfu l usc of civi l proceed ings:

           ( I) 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 c laim in which the proceedings
           are based; and

            (2) The proceedi ngs have term inated in favor of lhe persoll against
            whom they arc brou ght.

42 PaC.SA § 835 1(a)(1 )-(2).

        Th~   AI;I t1efiJles prC!bablecause as follows:

        § 8352. Ex islen ce of probable ca use

           A person who takes part in the procurement, in itiation or continuation
        of civil proceedings against another has probable cause for doing so ifhe
        reasonably believes III the existence of Ihe fae ls upou wh ich lhe claim is
        based, and either;

            ( I) Reasonably believes that under those facts the claim may be
            valid under the existing or developing law;

           (2) Believes to this effect in reliance upon the advice of counsel,
           sought in good faith und given nner fuJI disclosure of all relevant
           racts within his knowledge and information; or

           (3) Believes as an attorney ofrccord. in good faith that his
           procurement, initiation or continuation of a civi l cause is nO{
           1Il1ended 10 merely harass or maliciously i1uure Inc opposite party.

42 PD .C.S. § 8352(1)·(3).




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                          To prevail in a Dragoneni claim. a plaintifTmust show that the defendant

                   "maliciuuslY illSlilulcd prI.lcee<lings agilinsl!him]. that {the defendant1l ac~ed probable

                   cause 10 inslilute the proceedings, and thaI the proceedings terminated in favor of {Ihe

                   plaintlfT]." Keystone Freight Carp. 31 A.3d at 972 (citations omi ttcd). A Dragonetti Act

                   plaintiff"l>ears the burden of proving thaI the primary purpose for which the proceed ings

                   were brought was nOI that of securing the proper discovery, j oinder of parties, Or

                   adjudica tion oflhe claim on which the proceedings were based." ld. at 972, citing 42

                   Pa.C.S. § 8354(4). Likewise, "re]ven if an attorney lacked probable cause in fil ing a

                   lawsuit on behalf of a client, he is not liable for wrongful use of civi l ilroceedings unJess

                   he filed the lawsuit wi th an improper purpose . Morris      Y.   DiPaolo, 930 .A.2d 500, 504

                   (Pa Super. Ct. 2007). "[A] term inati on of civil proceedings by a competen t tribunal

                   3dverse"to the person initial ing them is nol evidence that they wen; urought Witllout

                   probable cause." Rcst3tement (Second) of Torts § 675. cmt. b; Ludmer v. Nernberg, 640

                   A.2d 939, 944 (P•. Sup«. Ct. 1994).

                           Wilb regard to attorney liabili ty on a Dragoneni action, "as long as an 3Uomcy

                   believes Ihat there is a slight chance that his client's claims will be success ful , it is not the

                   3tlOmey's duty to prejudge the case." Keys/one Freigh r Corp. 3 1 A.3d at. 973, ciling

                   Morris, 930 A.2d    lit   505 . "Lawyers can oct safely act upon the f3CIS staled by their

                   clients." Meiksin v J/oward Hanna Co, Inc., 590 A,2d 1303 (Pa. Super. CI. 1991).

                           Upon review or the underlying action, the lenst that can be said is that Ex ley nnd

                   Bursi<;h Associates had a viable cause of action, and there is no legal basis to sustain a

                   Dragonetli nellon   m thi S case against them and the defendant law firm . Here. there was



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                           Whi le the proceedings underlying the instant action did terminate with ajury verdict in

                           favor of Fisher, it is clear that Exley. Dursich Associates and their lo't'l)'er believed in the

                           existence of the facts upon which their claim was based and reasonably believed Ihnl

                           under those facts their claim was cognizable under existing ton law. Indeed, the

                           underlyiflg acti on proceeded all the way 10 a jury verdict. Fisher /lever filed preliminary

                           objections. nor did he fi le a motion for judgment on the pleadings. His motion for

                           summary judgment was denied, as was his motion for nonsuit al trinl.

                                   Exley and Bursich Associates' defamation action was founded upon the testimony

                           of multiple witnesses, including Fisher himse lf. fisher admitted that he distributed the

                           article to 01 least   IWO   persons and also admit ted that he posted the article on a bulle ti n

                           board at a Icc.a! bank . (N.T. 8/6/12. pp. 108-09). Furthermore, George Berry testified

                           that Fisher staled to him that he inlemlt'!(\ In d i ~lrihllte the article hy faxing it to everyOne

                           he knew. (N.T. 816/12, p. 8 1). Exley and Uursich Associates did not Jleed to show that

                           Fisher authored the article himself to establish defamation. only that he pub lished it 10 0.

                           third persoll . h, addition, Edward l'anzeler testified to Ihe defamatory nature ofthe

                           art icle by stating he found it to be " malicious." (NT 816/12, p. 70). Such testimony

- - - - - - - oam=o"u..n"'·Od"'lo=IX"~·6iilile cause, anasucn proOii61c cause was cOllltrrned by the friar coUi'fs- - -

                           denial of Fisher's motion fo r s ummary judgment and motion for nonsuit

                                   Indeed, Fisher's counsel conceded in his closing argument that FIsher made             1I


                           " mi stake" in posting the article atl he bank. (N.T. 8/9112, p. 44). FurthemlOte. fisher's

                           counsel conceded in a post-lrial memoraudum that the "court concluded the publication

                           was capable of defamatory meaning but properly left to the detcrmillation of the jury the

                           question of whethe r (he article actual ly dcrume..:!    U Exley or 13ursich   U." See


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                       Memorandum of Law in Opposition to PlaintifT's Motion for Post-Trial Relief, pp. 3·4,

                       No. 2006-28018, Docket Emry 74 .

                              Furthermore. Exley and Bursich Associates did not act with gross negligence.

                       "The presence of probable cause ... does not necessarily defeat the entire cause of action

                       for wrongful lL<;e of civil proceedings, as the clear language of Section 8351 penuits a

                       cause of action to be based on gross negligence or lack of probable cause." Keystone

                       Freight Corp. 3 1 1\.3d at 973 (quotations omitted). TIle Superior Court has defined gross

                       negligence as "the want of even scant care and the failure 10 exercise even that care

                       which a careless person would use." /1arl   l'.   O'Malley. 781 A.2d 121'1, 12 18 (Pa. Super.

                       CI. 200 1). A court is "precluded from considering any conclusions oflaw or inferences

                       which ate not supported by the factual allegations contained;n th e complaint." Hart v.

                       O'Malley, 647 A,2d 542, 553 (Po , Supe.. CI. 1994), aff'd676 A.2d 222 (Pa. 1996). A

                       plaintiff, therefore, c;mnot maintain a cause of action for wrongful usc of civil

                       proceeding; by merely stating "conclusion s oflaw. unwarranted inferences from facts,

                       argumentative allegations, and expressions of opinion." Neill v. Eberly, 620 A.2d 673,

                       675 (Pa. COmmw. Ct. 1983). FurtlletlllOrC, the court "must not supply a fac t missing in

                       the complaint" in order to cure a defect in the pleading. Hart, 647 A.2d at 553. Plaintiffs

                       have not set forth the facts that are esscnlialto suppol11hei r claim.

                               Exley and Bursich Associates' factu al and legal presentations in the underl ying

                       litigation preclude a finding that they acted with gross negligence or an improper purpose

                       in initiating and continuing the underlying defamation lawsuit. As discussed .supra,

                       Exley and Bursich Associates prcsented carefully reaso ned arguments s upported by




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                          witness testimQny. Accordingly, Exley and Bursich Associates, and Murphy and M urphy

                          & Dengler, did not act wilh g ross negligence o r an imprope r purpose.

                                  This instant case is co ntrolled by Meiksin v. lfoward Hallna Co., Inc. , 590 A.2d

                          1303 ( Pa. Super. C L 199 1), whe re the S uperior Court upheld the tria l co urt's fird ing that

                          there was probable cause as a maller of law in the underl ing action. Meiksin involved a

                          D ragonetti Act c laim by propcny owners a gainst the ir real esta te brokers a nd the b rokers'

                          nuom eys for instit uting a lawsui t to recover withheld real estate com missions. Id at

                          1 305~ 06.   At issue in the Meiksin underlyi ng action was the existence of an oral contract

                          extension thai would ent itl e !he brokers to a commission iffo und enforceable. Id. 'Ole

                          brokers were unsuccessfu l in the ir lawsui t. Id. 1lJ(! propeny owners later sued the

                          brokers and their aHomey, alleging that the underlyi ng lawsuit was bro ught without

                          probablt: cause. Id.

                                  In Me i/(sin, the trial court granted summary judgm ent in favor of all the .

                          Dragonelli defendants. Plaintiffs there argued that facmal issues Ihat were s ubmi tted 10

                          the tact fi nder in the underlying action ncedt::d to be reviewed by aj ury inlhe Dragonelti

                          case 10 detem line whether there was probable eause 10 ins titute the lawsuit. Oul lhe

                          S uperior Court rejected this analysis and held:

                                  [T)he existence of probable cause was present as a matter of law in view
                                  of the ex istence of a legitim ate dispute of fact in the prior action for
                                  comm issiOns. This was apparent from the denial of m otions fo r summary
                                  judgment and compu lsory non-su it in the prior action a nd the submission
                                  of disputed factual issues to thejury.

                          Id. al 1306.

                                  T he holding orthe S uperior Court In Meiksin is that the material facls rclevalllto

                          the probable cause detenllillalion are simply whether there was a legitimate factual


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dispute in the underlying action to be determined by the trier of facl. The Superior Court

fun her held:

       The existence of probable cause is also demonstrated by the faclthal there
        was sufficient evidence [to require the factual di spule} be submilted to the
       jury for determination ... This suggests thlli there was competent
       evidence of sufficient quantity and quality to demonstrate probable cause
        for a reasonable belief that the action could be maintained. This be lief was
       confinned also by the court's denia l o f motions in the \lTl derlyi ng aclion
        for summary judgment and compUlsory non·suil, motions which coul d
        have been granted only if there had been nO competent evidence sufficient
        to maintain the action.

Id. at 1 307~ see also Hadden v. Gouldey,   el   af., 25 Montgomery County Law Reporter

149 (20 12). qIJ'd55 A.3d 149 (Pa Super. CI. 2012); Lerner v. Lerner. 954 A.2d 1229

(Pa. Super. Ct. 2008) (sustaining preliminary objections in nature of demurrer to

Dragonelli claim).

       The underlying action was a routine defamation case with legitim ate disputed

factual issues. The defendants presented substantial evidence and well-reasoned

arguments in support of the ir claims.   Accordingl y~   thi s court properly sustained the

defendants' preliminary object ions and dismiSSed the case.




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                           III,   CONCLUS ION

                                  Based upolil he all of the foregoing reasons, this Court's delennination was

                           proper and should be AfFIRMED.



                                                                BY TIlE COURT:



                                                                     ~~w
                                                                BERNARD A MOORE, J.



                           Dale: June 18,2014
                           Cc:   Michael N. Onu fruk, Esq.
                                 Paraskevouln V. Mamounas, Esq.
                                 Josh J.T. Byrne, Esq.




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