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

Appellant

v.

GENISYS CREDIT UNION, CUMIS INSURANCE SOCIETY, INC., LARRY S. EISMAN, KANTROWITZ & PHILLIPPI, LLC, STEVEN B. KANTROWITZ : : : : : : : : : : : : IN THE SUPERIOR COURT OF

PENNSYLVANIA

No. 1196 EDA 2019

Appeal from the Order Entered March 20, 2019 In the Court of Common Pleas of Montgomery County Civil Division at No(s): No. 2016

- 29578

BEFORE: LAZARUS, J., NICHOLS, J., and McLAUGHLIN, J. MEMORANDUM BY McLAUGHLIN, J.: FILED MARCH 0 6 , 2020 Kathryn S. Garges appeals from the entry of summary judgment in favor of Genisys Credit Union, Cumis Insurance Society, Inc., Larry S. Eisman, Kantrowitz & Phillippi, LLC, and Steven B. Kantrowitz (“Appellees”) . Garges claims the court erred in granting Appellees’ motions for summary judgment on her Dragonetti Act 1 and abuse of process claims. We affirm. Garges ’ claims arise from a pr ior action that USA Federal Credit Union (“Credit Union”) 2 filed against her (“Underlying Action”)

. Garges had three accounts with the Credit Union

— a Credit Card Account, a “ Kwik Draw Line of

_________________ __________ ______ ____ _______ 1 42 Pa.C.S. A. §§ 8351

– 55.

2 Gen isys Cr edit Union is the successor in i nterest to USA Federal Credit Union.J

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Credit, ” and a vehicle loan. In 2002, after Garges missed payments on the credit card and Kwik Draw Line of Credit, Garges and the Credit Union exchanged communications in an effort to reach an agreement underwhich Garges could pay off the two accounts

. In the 2002 communications, Garges admi tted that she was unable to repay the loans, and sought alternate payment schedules. See, e.g., Motio n for Summary Judgment of Defendant Credit Union at Exh. G , Letter from Garges to Eisman dated Dec. 13, 2002 (stating that Garges’ accounts had been past d ue for a “year or so”). Also in 2002, the Credit Union repossessed Garges’ vehicle. Answer with New Matter of Credit Union, filed Aug. 10, 2017, at ¶ 15. In 2005, the Credit Union filed a C omplaint, asserting Garges was delinquent in payment on the two cre dit obligations. The Complaint sought $11,156.14. Larry S. Eisman, Esquire, represented the Credit Union and signed the Complaint. Garges filed an A nswer with New Matter and Counterclaim. Steven B. Kantrowitz, of the firm Kantrowitz & Phillippi, LLC, ent ered an appearance on be half of the Credit U nion on the Counterclaim. In the A nswer, Garges stated that she “made many timely payments” but admitted that she “did not repay the entire ending balance on either” account

. USA Fed. Cred. Union v. Garges , No. 2 005

- 02231, Defendant’s Answer to Plaintiff’s Complaint , New Matter, and Counterclaim, at ¶ 4. In her New Matter, Garges averred that she had not r eceived any correspondence or telephone calls from the Credit Union since December 2002, and had not receive d any statements since FebruaryJ

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2003. She further asserted counterclaims against the Credit Union claiming that the Credit Union’s conduct : violate d the commercial standard of fair dealing applicable to contract s involving secured transactions under the
Pen ns ylvania Uniform Commercial Code; constituted unfair or deceptive debt collection practices in violation of the Pennsylvania Fair Credit Extension Uniformity Act; and violated the Pennsylvania Unfair Trade Practices and
Consumer Protection Law. Both sides filed dispositive motions. In July 2008, the trial court granted the Credit Union’s motion for summary judgment on Garges ’ Counterclaim s and denied Garges ’ cross motion for summary judgment. The docket for the Underlying Action contains some discove ry motion practice in the summer of 2009, but then no activity from October 2009 through October 2014. Trial Court Opinion, filed July 2, 2019, at 2 (“1925(a) Op.”). In October 2014, the trial court issued a Notice to Terminate pursuant to Local Rule 1901 of the Montgomery County Local Rules of Judicial Administration. The Notice informed the parties that the court intended to
terminat e the case for lack of docket activity for at least two years, but that it would not terminate the case if any party filed a statement of intention to proceed within 60 days. No party filed a stat ement of intention to proceed.
O n January 5, 2015, the court marked the case “ terminated ” on the docket. On January 20, 2015, Garges filed a petition to reinstate, seeking to
reinstat e her counterclaim or, in the alternative, all claims. The trial courtJ

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denied the petition to reinstate , and this Court affirmed. The Pennsylvania Supreme Court denied a petition for allowance of appeal. In December 2016, Garges filed a C omplaint in the present acti on. In July 2017, she filed an Amended C omplaint, in which she asserted various claims including a wrong ful initiation of civil proceedings claim under the Dragonetti Act against Genisys and E is man, a wrongful continuation and use of legal proc eedings under the Dra g onetti Act against all Appellees, and a common law abuse of process claim against all Appellees. 3 In support of her Dragonetti Act claim against the Credit Union and Eisman, Garges claimed the Credit Union filed the U nderlying L awsuit for the improper purpose of obtaining money f rom Garges that she did not owe. She also contended that the suit was in retaliation for her 2002 objections to allegedly unlawful conduct , and that Eisman knew or should have known the lawsuit was initiated fo r an improper purpose. In support of her Dragonetti Act claim against all Appellees, Garges claimed, inter alia , that Appellees knew or should have known within a reasonable t ime of the filing of her Answer with New Matter and Counterclaim that the Credit Union lacked probable cause for its claim s and Appellees acted with gross negligence and without probable cause in continuing the lawsuit. Garges further claimed that Appellees ’ actions constituted an abuse of process.

_________________ __________ ______ ____ _______ 3 Garges also asserted claims of malicious misuse of civil proceedings, libel, slander, and false light publicity. See Amended Complaint, at ¶¶ 80

- 103. The trial court granted summary judgment as to these claims, and Garges does n ot challenge the summary judgment order as to these claims on appeal.J

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Her Amended Complaint al so included allegations that Appellees refused to dismiss or withdraw their claims in 2015 , asserting that if they had done so she could have appealed the order g rant ing summary judgment as to her counterclaims. She further claims that the parties entered settlement discussions in 2015, but tha t a claim’s adjuster for Kantrowit z “insisted that Garges resubmit her complete evidence and legal arguments in the Lawsuit to the claims adjuster.” Amended Complaint at ¶ 43. In January 2019, Appellees filed motio ns for summary judgment and Garges filed a partial motion for summary judgment. In March 2019, the trial court granted Appellees’ motions and denied Garges’s motion, and entered summary judgment in favor of Appellees on all claims. Garges filed a timely

no tice of appeal. Garges raises the following issues on appeal: 1. Did the court err, as a matter of law or because there were genuine contested material is sues of fact, in denying Garges’ s partial motions for summary judgment under the Dragonetti Act agai nst the Credit Union for procurement and initiation of the underlying action and against Eisman for initiation of the underlying action, and in granting each of [Appellees’] motions for summary judgment on the same claims? 2. Did the court err, as a matter of law or because there were genuine contested material is sues of fact, in denying Garges’ s partial motions for summary judgment against each of the Credit Union, Eisman, the Insurance Company, the Kantrowitz firm, and Kantrowitz for continuation and use of the underlying action in violation of the Dragonetti Act, and in granting each of [Appellees’] motions for summary judgment on the same claims?J

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- 3. Did the court err, as a matter of law or because there were genuine contested material issues of fact, in granting the motions for summary judgment of each of the Credit Union, Eisman, the Insurance Company, the Kantrowitz firm, and Kantrowitz against Garges ’ s claims for common law abuse of process in the underlying action? Garges’ Br. at 3

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. Garges challeng es the grant of summary judgment. “[S]ummary judgment is only appropriate in cases where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.” Nicolaou v. Martin , 195 A.3d 880, 891 (Pa. 2018) (citing Pa.R.Civ.P. 1035.2(1)) . “When considering a motion for summary judgment, the trial court must take all facts of record and reasonable inferences therefrom in a light most favorable to the non

- moving party and must resolve all doubts as to the exis tence of a genuine issue of material fact against the moving party.” Id. We reverse a grant of summary judgment if there has been an error of law or an abuse of discretion. Id. at 892. Because the issue of whether there is a genuine issue of material fact is a question of law, our standard of review
is de novo and our scope of review is plenary. Id. In her first two issues, Garges claims that the court erred in granting summary judgment as to her Dragonetti claim s . The Dragonetti Act provides as follows: (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]: (1) he acts in a grossly negligent manner o r without probable cause and primarily for a purpose other thanJ

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- 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 agains t whom they are brought. 42 Pa.C.S.A. § 8351 (a)

. To establish a claim under the Drag o netti Act, a plaintiff must prove all of the following :

(1) The defendant has procured, initiated, or continued the civil proceedings against him. (2) The proceedings were terminated in his favor. (3) The defendant did not have probable cause for his action. (4) The primary purpose for which the proceedings were brought was not that of securing the proper discovery, joinder of parties or adjudication of the claim on which t he proceedings were based. (5) The plaintiff has suffered damages as set forth in section 8353. Perelman v. Perelman , 125 A.3d 1259 , 1263

- 64 (Pa.Super. 2015 ) (quoting
42 Pa.C.S. A. § 8354). Probable c ause for the procurement, initiation , or continuation of civil proceedings exists if the defendant “reasonably believe[d] 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) belie ves 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; orJ

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- (3) believes as an attorney of record, in good faith that his procurement, initia tion or continuation of a civil cause is not intended to merely harass or maliciously injure the opposite party. Id. at 1264 (quoting 42 Pa.C.S. A. § 8352). Further, “an action for wrongful use of civil proceedings pursuant to the Dragonetti Act does not re quire a prima facie showing of actual malice, but such action requires proof that the defendant acted in a grossly negligent manner.” Id. (quoting Hart v. O'Malley , 781 A.2d 1211, 1218 (Pa.Super. 2001)). In her first issue, Garges claims the trial court erred in granting summary judgment as to her Dragonetti Act claim against the Credit Union and Eisman . She argues that although she admitted she owed debt in 2002, she did not admit that she owed debt in 2005. She claims the Credit Union and Eisman filed w ith the complaint, and produced in discovery, falsified versions of the card terms and conditions. She further claims tha t her car was damaged during re possession and, although she had not know n it had been damaged, Appellees should have been aware. She further claims the Credit
Union “waived by laches and estoppel all amounts it claimed were owing by deliberately ceasing collection activity and communications with Garges other than sending Garges quarterly statements which showed no balances owing and pu rporting to be statements of all her accounts.” Garges ’ Br. at 22. Garges states Eisman’s actions did not have a reasonable basis in law or fact because they included making a record of false documents, and he verified the Complaint and discovery on his ow n knowledge, not on good faith belief that he relied on his client. Garges notes that the Credit Union failed to withdrawJ

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or proceed with the case, and did not attempt to meet its burden of proof in arbitration. Garges further claims the trial court opinio n “implicitly credits [Appellees’] stated defense” that they decided not to proceed because it became apparent any judgment would be uncollectible due to lack of assets. Id. at 25. She claims there was no evidence to support this defense. The trial court concluded Garges failed to come forward with evidence sufficient to create a genuine dispute as to whether Appellees , including the Credit Union and Eisman, acted in a grossly negligent manner or without probable cause. It found that the Credit Union’s co llection complaint was supported by probable cause, noting Garges admitted she had outstanding accounts with the Credit Union and never asserted she paid them in full. 1925(a) Op. at 6. The court noted that Garges “contended she was relieved of any obligat ion to pay them, primarily for three reasons

— that [the Credit Union] was unable to produce documentation related to the accounts , that Ms. Garges debts were fully satisfied because her vehicle was damaged dur ing repossession by [the Credit Union], and that [the Credit Union] had waived its right to collect the balances due by discontinuing the sending of periodic statements and/or by sending statements showing zero balances.” Id. at 6

- 7. The court concluded that “these arguments are no t so clearly dispositi ve as to establish that [Appellees] acted in a grossly negligent manner or without probable cause in pursuing and continuing” the collection action. Id. at 7. The trial court stated the following as to the defenses:J

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- First, Ms. Garges argues that [Appelle es] lacked probable cause or were grossly negligent because they failed to produce in the Underlying Action certain documentation relating to the credit accounts. This fail ure does not establish that [the Credit Union’s] claims were wholly lacking in merit

. Ms. Garges did not deny the existence of the accounts and did not assert that she had paid them in full. [The Credit Union] could readily have established its claim without such documentation

— for example, by showing that Ms. Garges made periodic charges on her credit card account or specific draws on her line of credit. Next, Ms. Garges argues that [Appellees] lacked probable cause to pursue the Underlying Lawsuit because of alleged damage caused to her car when [the Credit Union] repossessed it. Specific ally, Ms. Garges cont ends that [the Appellees] were aware that ther e was possible damage to Garges’ s car caused in course of the repossession but did not pursue this information and therefore never met [their] legal obligation to obtain the true value on sale of the car, which created an unrebutted presumption under applicable law that nullified any legal right to claim amounts owing on [their collection] claim." [Pl. Garges's Br. in Supp. of Her Mot. for Partial Summ. it. Against Def Genisys Credit Union [hereinafter, "Garges Br."], at 20.] Despite this contention, Ms. Garges failed to present evidence, in either the Underlying Action or the present case, that her car was damaged during its repossession. More importantly, the conte ntion that any such damage would create a "presumption" that all debts owed by her to USA were somehow “nullified” lacks any legal support and is contrary to common sense. 5

5 While Ms. Garges could have plausibly argued that her indebtedness was reduced by the monetary amount of any damage caused to the vehicle, that is not the argument that she made in the Underlying Action or the present case. Fin ally, Ms. Garges argues that [the Credit Union] "deliberately ceased collection activity and communications wi th Garges after January, 2003, other than sending GargesJ

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- quarterly statements which showed no balances owing and purported to be statements of all her accounts, which waived any rights by laches and estoppel." (Garges Br., at 20

- 21.) As noted [above] , Ms. Garges acknowledged in the Underlying Action that she had not paid her accounts with [the Credit Union] in full. She thu s does not assert that the zero - balance statements sent by [the Credit Union] were accurate. Rather, she contends that by sending such s tatements, [the Credit Union] waived its right to collect the unpaid amounts. Ms. Garges cites no authority to support her waiver argument. To the contrary, if Ms. Garges was aware, as she apparently acknowledges, that the statements were not accurate, the n there is no basis for her to argue that she was somehow l ulled into complacency or that [the Credit Union] otherwise waived its right to collect the balance actually owed. In short, this defense, like Ms. Garges' other defenses, is not so clearly disposi tive as to support a claim of gross negligence or lack of probable cause on the part of [Appellees]

. It is also relevant that Ms. Garges filed a Cross

- Motion for Summary Judgment in the Underlying Action, seeking dismissal of [the Credit Union’s] claims ag ainst her, and that the Cross

- Motion was denied. (Genisys Mot., Ex. J, L.) Although it is not clear wh ether the denial of a defendant’ s motion for summary judgment establishes per se that there was probable cause to pursue the claim against the defendant, the Superior Court has made clear that such denial of summary judgment is an importan t factor in making the probable

- cause determination. See Meiskin v. Howard Hanna Co. , 590 A.2d 1303, 1307 (Pa. Super 1991) (holding that existence of probable cause was “c onfirmed” by denial of summary judgment in the underlying action). 1925(a) Op. at 7

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. We agree with the trial court’s analysis and its finding that no genuine issues of material fact exists, and conclude t he trial court did not err or abuse
its discretion

. As outlined by the trial court, the evidence establishes AppelleesJ

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did not act in a grossly negligent manner or without probable cause in initiating the underlying lawsuit

. In her second issue , Garges argues that the trial court erred because its analysis of the Dragonetti Act did not separate her claims in Count 1 of her Complaint, which dealt with the initiation of the lawsuit, from Count III , which dealt with continuation of the lawsuit. She claims Appellees made “at least four separate deci sions not to withdraw the claims prior to their dismissal.” Garges ’ Br. at 28. Garges claims the Credit Union “knew there was unusual inactivity on its claims and that Eisman was delaying and trying to coerce settlement and tha t the inactivity was tied to Garges’s ability to appeal the interlocutory summary judgment order against her counterclaims.” Id. at 30. She claims the insurance company worked with Kantrowitz to “deliberately deceive Garges and discourage her appeal and attempts to settle the case by ambiguous representations of authority to settle the Dragonetti Act claims, and by requiring that Garges re

- submit all her evidence and legal arguments to the claims adjustor in order to discuss settlement.” Id. at 31.
T his claim is meri tless. As discusse d above, the U nderl ying A ction w as supported by probable cause and Appellees did not act with gross negligence in initiating, and continuing to pursue, the claims. T hat Garges raised affirmative defense s does not alter this. Further , that the Credit Union did not dismiss or withdraw i t s claims does not impact the analysis here, as probable cause supported the initiation and continuation of the proceedings.J

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In her third claim, Garges argues the trial court erred in granting summary jud gment on her common law abuse of process claim. She argues she presented sufficient e vidence to show Appellees violated the legal process standard for an improper purpose, including “coercing [her] into paying money she did not legally owe, harassing and m aliciously injuring Garges, avoiding exposure of falsehoods and false documentation, coercing settlement, and preventing Garges from obtaining consideration of the merits of her counterclaim.” Garges Br. at 35. She claims the Credit Union and its attorneys “refused to withdraw or agree to dismissal of its claims” and “continued to act to achieve its improper purposes by opposing Garges throughout he attempted appeal.” Id. at 36 . She claims that, contrary to the court’s conclusion, she did not have a way to force the case to proceed. She argues Appellees told her that they were going to proceed. She also notes that the Appe llees did not agree to dismiss the case in the settlement conference that occurred after she filed her motion to reinstate. To establish a claim for a buse of process, the plaintiff must show that the defendant “ (1) used a legal process against the plaintiff, (2) primarily to accomplish a purpose for which the process was not designed; and (3) harm has been caused to the plaintiff.” P.J.A. v . H.C.N. , 156 A.3d 284, 288 (Pa.Super. 2017) (quoting Werner v. Plater – Zyberk , 799 A.2d 776, 785 (Pa. Super. 2002) ) . “Abuse of process is, in essence, the use of legal process as a tactical weapon to coerce a desired result that is not the legitimate objec t of the process.” Id. (quoting Werner , 799 A.2d at 785). Further , “theJ

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gravamen of this tort is the perversion of legal process to benefit someone in achieving a purpose which is not an authorized goal of the procedure in question.” Id. (quoting Werner , 7 99 A.2d at 785). The trial court concluded that the Credit Union is not liable for abuse of process where it chose to allow the case “die a natural death through administrative termination,” rather than discontinuing the case. 1925(a) Op.
at 10. It pointed out t hat Garges could have “invoked procedures to achieve an earlier disposition of [the Credit Union’s] claims.” Id. She could have sought consent to the filing of a trial praecipe, and, if the Credit Union refused, could have sought a conference and req uested the case be deemed ready for trial. Id. Alternate ly, she could have sought dismissal for lack of prosecution by filing a motion for non pros . Id. The court concluded that “Garges is not faulted for failing to move the case forward. But she cannot argue that [the Credit Union], in an abuse of legal process, delayed her ability to appeal from a final judgment when she had the means available to move the case forward herself.” Id. at 10

- 11. We agree , and conclude the trial court did not err or abuse its discretion

. Garges has not establ ished a genuine issue of material fact regarding any element of the abuse of process claim. Orde r affirmed.J

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Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 3/6/20