### J - A33012 - 14

NON - PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 DAVID W. FISHER AND SELECTIVE INSURANCE COMPANY OF SOUTH CAROLINA IN THE SUPERIOR COURT OF PENNSYLVANIA Appellants v. SCOTT A. EXLEY, BURS ICH 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.: FILE D 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 objections 1 

### 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

- 2 -

prejudice in this Dragonetti Act 2 

### case. After careful review, we affirm on th e 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, ofte n 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 decis ion 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 t he case if free and clear of doubt. Id. at 806. 2 

### 42 Pa.C.S.A. §§ 8351 - 8355.

### J - A33012 - 14

- 3 -

and Bursich filed a lawsuit 3 

### against Fisher alleging that he defamed 4 

### them by distributing the article to third persons. Appellees, Frank Murphy and Murphy & Dengler, were Exley and Bursich Assoc iates’ 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, b ut 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, ad mitted 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 c haracter 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) sp ecial 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);

### J - A33012 - 14

- 4 -

Appellants filed the instant wrongful use of civil proceedings action agai nst Appellants in connection with the underlying defamation lawsuit. 5 

### In their amended complaint, Appellants 6 

### alleged that Appellees wrongfully instituted the defamation action against Fisher in an effort to harass and injure him without having a reasonab le 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 la ck 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 wi ll 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 m ade 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.

### J - A33012 - 14

- 5 - Dragonetti Act, 42 Pa.C.S.A. § 8351, et seq. , where their Amended Complaint alleged that Defendants lacked probable cause and acted with an improp er 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 an d 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 Fis her’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 Defendan ts’ 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 i n 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 procee dings (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]:

### J - A33012 - 14

- 6 - (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 o f 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 fa cts 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. Mil ler, 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, th at 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

### J - A33012 - 14

- 7 -

with the trial court that Appellees did not institute the und erlying 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 reaso n 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 int entionally or by a negligent act

### J - A33012 - 14

- 8 -

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 ca se 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 p arties 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.

### J - A33012 - 14

- 9 -

Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 1/16/2015Circulated 12/18/2014 09:31 AM
(1' .0 '1" I ot '1) 

# '"



# . '
I NT I'I E C O U R T O F CO MMON PL E A S OF MON TG OMERY C OUNTY , PE NNS Y L VANIA C I V I L DI V I SIO N
DAVID W
. FI S H E R : md SE L EC TIV E I NSU RAN C E C OMPANY OF S O UT II C AROLI N A 

### v. SC OTT A
. EXLEV , B U R S I C H ASS O C IATES, I N C., F RANK P. M Un r l - I V 

### a nd M U RPHY & 

### D ENG LE R 

# ..

OP I N IO N M o ore . 

### J
. I. 

### FA CTS AND PRO C ED URA L Hl ST OR V S up . C I. No
. 11 7 0 E DA 2 014 

### Co mm. PI. O. No
. 2 013

- 1 19 54 

# IIII**f.:t~~~'~~11111** "l/IIJoI I !H4.ooS0**{oIll1l/1l~** 'I:l4M1**'98409 ~**  0,.....**Ft.""1..2I~21}9** r.-.:;sooll**M,~t** t,.n-. -**M"""01I'~.'"**
JU li e 18 , 2014

This mall(';r i n vo lve." a cla i m for wro ngful use o f civi l proceed i ngs ("Drago n elli action" 42. Pa.C.S.A , 

### § 835 1 ct seq.), arising t rom a de f ense ve rdi ct in an u nde r ly i ng defnmruion lawsuit. David W. Fisher, who \ws thc defendant in t h e undc rlying def.'lmillion action, and Selectivc I n surance Company ofSoulh Caroli n a appea l th i s court's orde r s that sus t ained t he preli m inary objec tio n s of the de f enda n ts and dis m issed with preju di ce the Amended Comp laint of Fisher a nd Select i ve J nsu r ance. TIle defendants in thi s mail er are Scott A Ex l cy and Burs ich Associates, In c., who were the two plain tilTs in the underl ying dc f ama t ion nClio n , a n d also Fra nk Murphy and Murphy & De n glcr, who were their legal counsel. AI the time of the underly ing dera m ation lawsuit, Scott Exley was part-owner of Bu r s ich Associates, which was a company th at prov i ded engineer i ng and land surveying services, oftc n f or mumcipalilies Exlcy nnd Bursich Associates a ll egcd that David Fishl.:r, who was an i ns u rance broker,

54 5 :1Circulated 12/18/2014 09:31 AM
IPa ""**~** of IJ)



### d id know i ng l y, inle n lionally, vol u n tn ri ly B nd ma li ciously dis tribute, pub li s h an d 

### disse l'll iml.le defamaiulY :.IiHements €lgainst {hem in the Po ttstown 

### colYl l llu niiy. Speci fi ca l ly. the a ll ega tion s s t em m ed fro m n o n e- p age n ews le t te r , da ted April 28, 2006, enti tl ed " T he P b u sto wn Me rky," an appa rent p i nyon words of t he loca l newspaper

" Th e Po tt s town Me rcury." T he n ews l etter co n taine d on ly o n e art i cle. Tha t art icle accused Ex l ey and Bursich Associa t es of bei n g i nvo l ved in ill egal transac ti o n s in the ir deal i ngs w it h vur i o u s mun icipa l ities an d non- profit businesses. No author o r so u rce is
na m e d in the news l et t er. The art icle nppe, 1r S under th e head li nes "Troubles on Boro u gh Co un cil" a nd "V lahos in it for perso n a l ga ;n ," re f err in g to Potls town Boroug h Counci l and one ofils m embe r s nt t h e ti me, James V lahos : The art i c l e r eads in ful l, as f o l lows: I l ow wou ld you fee l if you were J ack Wo lf wh il e wa tch ing all your effoMS these past scveral years r en de r ed mcaning less by t he actio n s o f "BIG" Jim Vl ahos
. In j us t a few sho rt mo nth s, B i g Ji m h as wreaked havoc i n the boroug h
. As he h as done ill th e p as t at New I "mover, he is p lan ni ng 1 0 

### tu m o v er t he co d e enfo rcemen t dep ar tment 10 

### Burs ich Assoc iates. In t his c l assic qu id pro q uo deal. Vlahos receives the i ns ur ance business at Bu r sich and Creative Hea lth. Scott Exley of Uurs'ich Associates, and Potts town's eng ineer, persona l l y a war de d Vl a h os thi s bu siness t o V l ahos in ret u rn fo r New H anove r 's engineeri n g work. N ow they're a t i t aga i n D n d 

### this tim e B ig J im is maneuve r ing Exley into a lu c rat i ve con tracl lo t ake over an d pe r fonn the dulies of the code e nforce m en t depil r1 ment. Remem be r these t wo are be h ind the debacle at t he R i cke tt s Center
. Every t hing they to u ch tu rns SO l,l r. Fo r ex a mp le, th e rece n t lllbor/manageme nt t r o u bles have been i ns ti g a ted by B i g Ji m in a p loy 10 t 3ke over the borough's hea lt h insurance bus iness . He p lans t o give Ihe insu rance busine:;;s 10 h i s pa rtn er in crime, Davc Bultaro. They s h are i n the proceeds of thei r jo int scruns nil conducted l oc3 11 y and perpetrated aga i nst not for p ro fi ts. T he i r vict im s in cl u dc Creat i ve H ealth, the YM CA, B rookside Country Cl u b. PAL and many ot h er o r ga ni zat ions. llow do (hey do i l ? ihrough accomplic<:s l i ke J im K on n ick, Jeff**B~'!;!!g O!1.**  

### Bob Om!"!!**!!!~d** 

### T om D'11"' _'1 The '!!O!!'!y ! h.'!)' 

### s!e!!.! i!l 

### the



### 2

546uCirculated 12/18/2014 09:31 AM

backrooms of P otts t OW il i s sha r ed by a ll and distrib u ted t o the othel members of their organizat i on. A ll th at's left i s a p mh of d estruc tion th a t i nclu d es th e mess called t he R icketts Ce n ter, a P o tt stown govenunent i n s h ambles, unab le to timc t ;on from one day t o the nex t , and th ese money grabb in g politicians usi n g t heir posi ti ons and in fl uence to line t he ir pockets. V lahos, 

### I3crry, Exley, B r a nt, Kormick. Dev i ngton, Du tt aro. Marste ll er aoo th e ot h ers d o th ei r bus in ess in t he s h' adows behind th e re pu b l ican par t y and quas i legi ti ma t e businesses. M r . Wo lf : lum th e li g h t O il the.sc guys and expose them for w h ut and wh o tbey arc, You h avc been a n d hones t and hurd 

### worki n g c i vi l servant. Evcryonc 

### i n Potts t own knows tha i you 

### will do the ri ght thi ng. T his i s the first edition oflhe lIew and improved P oustown Merky. We p ub l is h th e news thai th e Mercury d oesn' t.**Se~** U n derlying Actio n , Trial 

### Ex, P ·I. 1 I n sum, the artic le accused Exley and l3ursic h Associotcs ofbc in g i nyo l ved in ill ega l quid p r o quo deuls w i th V la h os, w h om 

### it a ll eged abused h i s bo r oug h council powers . The article speci fi ca ll y a l lege d tha t V l ahos gave l3ursich Associates the work i n th e borollgh ' s code enforcement departmen t, and Ou r sich Associates in return gave V lahos, nn in sumnce brok:er, the insurance business at B u rsieh Associates. fis her was a compe ti t or of Vlahos' in the i n sura nce buslOcss
. (N
. T
. 

### 817/12. pp . 

### 83-92).' Thereancr, Exley and Bu r sieh Associates filed a lawsu i t against Fisher here i n th e Mon t gomery County Court of CommO n Pl eas . a ll eg i ng that F'i s her de f amed th em by dist ributing t he article to third persons, No prel i mi n ary**objection~** or mO t ion for judgment on th e p leadings was ever filed by Fis h er. Discovery \.ws co nd UCted, and

The Underlymg ActiOn in tl iis ease refe r s t o SCOll A. Ex ley and Butslc h Associa t es. Inc
. 

### v. David W
. Fisher, w hi ch is dock:cted at 2006-28018 in t he Mo n tgomery County Co urt of COmmon Pi ca:;. 1 1)le ci t ations t o the Notes ofTes timo ny f ro m 

### 8/6/ 1 2, 87112, MI/12, and 

### 819/12 all refer t o the fOllr days of trial in Ihe underlying defama ti on ac ti on, No. 2006·28018 3

547:1Circulated 12/18/2014 09:31 AM

Fisher filed a mot jon for sum m ary judgment, argui ng therein th at the defamation claim fr

o iled as a maHI!i' of taw because (1) the article did not have a defamatory clmra c lcr, (2) there was no publication o f t he article t o a third person; (3) Ex ley and Bursich Associates could not present sufficient evidence of ac tu al 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 t o establish actual ha rm . The Ho no r able William J
. Furber, Jr. denied Fisher's motion for summary judgment by an orde r dated November 10,2010, and allowed Ex ley and Bur sic h Associa t es' case 10 proceed. Before the trial, Fisher filed tw o mo ti ons in l imine, one arguing Ihal the article was nol defamatory under Pennsylvania law, and I he second arguing that Exley and l3ursich Associates were public official s or public figures for purposes o f de fa mali on analys i s. Th e Hon orab l e Enunanuel A
. Bertin, who was the trial judge , denied bolh these motions
. (N
. T
. 

### 8/6112, p. 12 ; N.T
. 

### 8 1 8112, p . 66)
. A t trial, Fi sher ' s deposition te stimony was read into evidence. At his deposition. while F i sher denied aUlhoring the article, he did admi t that he d i str ibu ted a copy o f it t o his allomey and his rosiness partner. (N
. T
. 

### 8/6/ 1 2, pp. 10 8-09)
. Fisher admitted thaI he posted a copy of the article on a bulletin board of a local bank , 

### (N
. T. 

### 81 6112, p . 1 10)
. He also con ceded that he did no t know the truth of one of the article ' s central alle ga ti ons : thaI Ex ley and Bursich Associates had p reviously engaged in a similar illegal qu i d pro quo deal when Vlahos had previously se r ved as township supervisor in New Hanover Townsh i p . (N.T
. 

### 8/6/12, pp . III , 118). In closing argumen t ,**Fisl~r's** counsel conceded



### 4Circulated 12/18/2014 09:31 AM**!P~9"** 5**~r** 111

Ihat Ihis panicular accusation in the article Was false, in that Dursich Associates had
never ob t<lin ed work for New Hano ver 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 s t ore, Fisher said that 

### he "put (the llJ1icles] up ... land) sent them and faxed them 1 0 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, wh o worked at Dursich Associates as an emp l oyee of Exley's at the time Ihe article appeared, leslified at Irial that 

### he picked up a copy o f th e 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· 1 27). Fisher th en pr oceeded 10 presen t his defense. The trial l asted !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 hi s favor, Fisher and Selec ti ve lnsuf<mce com m enced the in s t an t Dragon e Hi action, vin an A m ended Complaint, claimin g Iha t Exley and**Bursic~** Associates, thr ough their l egal counsel of Frank Murp hy from the 1 8w finn Murphy 

### & Dengler, comme n ced the defamation litigation t o harass and IIljure Fisher, and without hav in g a reasonable belief tha t Fisher de r amed them
. Ex ley and Bursich Associates, and Murphy 

### & Dengler , both 

### filed preliminary objectio n s, which this court susI;\incd. David Fisher and Selective Insurance Company now appeallhi s courl's determination
.



### 5

549aCirculated 12/18/2014 09:31 AM

c Pa.,., G o r J1I



### Il. DISCUSSION 

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

### Dragonclli case., th c co nrl m u s t take judi c i al noticc of a nd a n al yzc co mp rehensive l y the complete record of the underlying action and evaluate th c merits or that claim
. 

### See e.g , Keystone Freight Corp. 

### v . Stricker, 

### 3 1 A.3d 967 (Pa. Super. Ct. 2011). Furthcnnore, it is ripe f o r thi s court to reso l ve a Drdgonetti case on preliminary objec tions. See Lerner 

### v . Lerner, 

### 954 A.2d 1229 (Pa Super. CI. 2008). Pederai Co url S, when applying P

ennsylvania l aw, have routine l y stric ken Dragonetti claims on th e basis of a demllrrer contained in motions to dismiss. See. e . g . , Bobrick Corp 

### v . San/Gila 

### Products, IIlC
. , 698 

### P
. S upp .2d 479 (M
.D
. Pa. 2010) ; Villari Brandes &
. Giannone. PC 

### v . Wells Fargo Fin 

### Leasing. Inc., No
. 13-297,2013 WL 

### 5468491 (E.D

_ P a Sept 30 , 20 1 3); Arnder 

### v . Dimit r oIJ, 

### No. 11-3626. 2011 

### WL 4801924 (E
. D.Pa. Oc t 7, 20 1I). T he plaintiff's Amended Complaint is so l e l y predicated upon what occurred in the underlying action and makes specific. reference 1 0 

### that litigation
. Any procedural obJcctio n to this courI ' s determ in atio n of issues of probable causc , improper purpose and gross negligence have been waived since Ihese issues were raised by Ihe defense in preliminary ofijcc 1i ons Wi lh

- supponl n g - ex1ii6ils attached anCldie plamtifI di d not h1 ' • --- - ---- preliminary objections 1 0 

### th e defendant s' preliminary objection s. 

### See Richmond 

### v . McHale, 

### 35 A.3d, 782-83 (P a. Super. CI. 20 12), quoting Preiser 

### v Rosenzwej'g. 

### 615 A.2d 303,305 (Pa Super ; CI. 1992). Accordingly, any possible challenge by th e plainlifr OIl procedu r al g r ounds 10 

### the preliminary objections of the dcfendanls is waived
.

6

550 11Circulated 12/18/2014 09:31 AM

"[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 re l evant part: 

### § 835 1 W ro n g rul u sc o r c i v H proece d i n gs 

### (a) E l e m e n t s o r ac.t i o n .-A person who takes part i n the procurement. in itiatiO n 

### or continua t ion of civil proceedings agn i 

### nSI another 

### is s u bjec t 

### to l iubility to the other for wrongfu l u sc of civi l proceed i ngs: ( I ) He acts in a grossly negligent ma nne r or without probable ca u se 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 n gs have term i nated in favor of l he pe r soll against whom they arc brou ght. 42 

### PaC
. SA § 835 1 (a)(1 )-(2).**Th~** AI;I t1efiJles prC!bableca u se as follows: 

### § 8352. Ex i sle n ce o f probabl e ca u se A person who takes 

### part in the procure m ent, in i tiation or continuat ion of civil proceedings against another has probable cau s e for do i ng so ifhe reasonably be l ieves III the existence of Ihe fae ls u p ou wh ich lhe claim is based , and e i th er ; ( I ) Reasonab l y believes that under those facts t he 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 w i thin his knowledge and information; or (3) Believes as an attorney ofrccord. in good faith that his procurement , init i at i on or continuation of a civi l cause is nO{ 1Il1ended 10 merely harass or maliciously 

### i 1uure Inc opposite party . 42 

### PD
. C
. S
. § 8352(1)·(3)
.



### 7

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t "-9'!' or II I

To prevail in a Dragoneni claim. a plaintifTmust s h ow th at the defendan t

" mali ciu u slY il lSlilulcd prI.lcee<lings agilinsl!him]. that {the**defendant1l ac~ed**  probable
cause 10 insl ilute th e proceedings, and th aI the proceedings terminated in favor 

### of {I h e p laintlfT]
. " 

### Keystone Freight Carp. 31 A.3d at 972 (citations omi tt cd)
. 

### A Dragonett i 

### Act plaintiff"l>ears t he burden of proving thaI the primary purpose for which the proceed ings
were brought was nOI t hat of securing th e proper d isco very, j o ind er of partie s, Or adjudica tion ofl h e claim on which the proceed ings were based ." 

### ld
. 

### at 972, 

### citing 42 Pa.C.S. 

### § 8354(4). Likewise, "re]ven if 

### an a tt orney lacke d probable cause 

### in fil i ng 

### a lawsuit on be h al f of 

### a c l ient , he is no t liable for wrongful use o f c i vi l ilroceedings unJe ss he filed the lawsuit wi th 

### an im prop er purpose . 

### Morris Y
. 

### DiPaolo, 930 .A.2d 500, 504 (Pa Super
. C t. 2007). "[A] term ina ti on of c i vil p r oceed i ngs by a compe t en t t r ib unal 3dverse " to t he person i ni t ial in g t h em is no l evidence that th ey wen; urought Witllo ut probable cause ." Rcs t 3teme nt (Second) of Torts 

### § 675. cmt. 

### b; Ludmer v. Nernberg, 6 40 A.2d 939 , 944 (P •. S up« . C t. 1994)
. 

### Wilb regard to attorney liabili ty on 

### a Dra go nen i action, "as long as 

### an 3U omcy believes Ih a t there is 

### a s light chance 

### that his client's claims w ill be success ful , it 

### is n ot 

### th e 3tlOmey's dut y to prejudge th e case ." 

### Keys/one Freigh r Corp. 3 1 A.3d 

### at. 973, 

### ciling Morris, 930 A
. 2d lit 505
. "Lawye r s can oct safe ly ac t upon t h e f3C IS staled by their clie nt s." 

### Meiksin v 

### J/o wa rd Hanna Co, Inc ., 

### 590 A,2d 1303 (Pa
. Super
. CI. 1991). Upon review or the unde rl ying action, the lens t that can be sai d is t hat Ex ley nnd Bu r si<; h Associa tes had a vi able cause of ac t ion, and there is n o l egal ba s i s to s ustain a Dragonetli nellon 

### m thi S case agai n s t them and th e d efen dant l aw firm
. Here. there was



### 8

552;'\Circulated 12/18/2014 09:31 AM

. , ..**~** 'I 

# o. IJ )

Whi le the proceedings underlying the instant action did ter m inate with ajury verdict in favor of Fisher, it is clear that Ex l ey . Dursich Associates and their l o't'l)'er believed in the existence of the facts upon whic h their claim was based and reasonably believed Ihnl under 

### those facts their clai m was cognizable under existing t on law. Indeed , the underlyiflg ac ti 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 Bursic h Associates' defamation action was founded upon the testimony of multiple witnesses, including Fisher him se lf
. fisher admitted that he distributed the article to 01 least IWO persons and a lso admit te d that he posted the ar ticl e on a b ull e ti n 

### boa r d at a Icc
. a! bank
. 

### (N.T. 

### 8/6/12. pp. 108-09). Furthermore, 

### George Berry testified th at Fisher sta led to him that he inlemlt'!(\ In**~lrihllte** the art icle hy f axing it to everyOne he knew. (N
. T. 

### 816/12, 

### p. 8 1 ). Exley and Uursich Associates did not 

### Jleed to show that Fis h er authored the article himself to establish defamation. only that he pub l i s hed it 10 0. third perso ll
. h, addition, Edward l'anzeler testified to Ihe defamatory nature ofthe art ic l e by stating he found it to be " m alicious." (NT 

### 816/12, 

### p . 70). Such test i mony 

### -------o am=o"u
..**n" ·Od"'lo=IX"~** **6iilile** 

### cause, anasucn proOii61c cause 

### was cOllltrrned by 

### the friar 

### coUi'fs

--- denial of Fi sher'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 s t ake" in post in g th e article atl he bank. 

### (N.T. 

### 8/9112, p . 44). FurthemlOte
. fishe r 's
counse l conceded in a post-lrial memoraudum that the "court concluded the publication
was capable of defama tory meaning but properly left to the detcrmillation of the jury the question of whethe r (he ar t icle actual l y 

### dcrume..:! 

## U Exley o r 13ursich U." 

### See 

### 9

553aCirculated 12/18/2014 09:31 AM

!h'1" 1 0 o. II)



### Memorandum of Law in Opposition to P laintifT's Motion for Post- T rial Relief, pp. 3·4, No. 2006-280 1 8, Docket Emry 74
. Furt h e rmore . Exley and Bursich Associat es did not act wit h gross negligence
. "The presence of probab le cause ... does not necessarily defea t the en tire cause of action for wrongful l L<;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 (q uotations omitted). TIle Supe rior Court ha s d efined gross neg li gence as "the want of eve n scant care and t h e failure 10 exerci se even th at car e which a careless person would use." /1arl l'
. 

### O'Malley. 781 A.2d 121'1, 1 2 18 (Pa
. Super. CI. 200 1 )
. A court is "p recluded from considering any conclusions oflaw o r inferences
w h ich ate not supported by t h e factual allega tions contained;n th e compla in t." 

### Hart v . O'Malley, 647 A ,2 d 542, 5 53 (Po , Supe.
. CI. 1994), 

### aff'd676 A
. 2d 222 (Pa
. 1 99 6). A pl aintiff , theref o re , c;mnot main t ain a cause of action for wrongful usc o f civil p roceed i ng; by mere l y s tating "con clusion s oflaw. unwarranted inferenc es from facts,
a rgum e ntative a ll egations, and expressions of opinion
. " Neill 

### v. Eberly, 

### 620 A.2d 673, 675 ( P a . CO m mw. Ct. 198 3 ). FurtlletlllOrC , th e co u rt "must no t sup ply a fac t miss i ng in the complaint" in order to cure a defect i n the p l eading. 

### Hart, 647 A.2d at 553. Plaintiffs h ave not set f o rth th e facts that are esscn l ia lto s uppol11hei r claim
. Exley and Bursich Associates' factu al and l ega l pr esen tation s i n the underl y ing l itigation preclude a findin g that the y acted with gross negligence or an improper purpose in i nitiating and co ntinuing the underlying defamation laws u it. As d iscusse d 

### .supra, Ex ley and Bursich A ss ocia t es p rc se nted carefully reaso ned argum e nt s s up po rted by

10

554:1Circulated 12/18/2014 09:31 AM 

## ''''IJC' II of U)

w it ness testimQ ny. Accord i ng l y, Exley and B ur sich Associa t es, a nd Mu rp hy an d M u rphy 

### & D engler, did not act wilh g ross n eg l igence o r an impro p e r pu rpose. This in s tan t c a se i s co nt r o ll ed by 

### Meiksin v. 

### lfow a rd H a lln a Co., I nc. , 59 0 A.2 d 1 303 ( Pa . S u pe r . C L 1 99 1 ), whe re the S u perio r Co urt uphe l d the tria l co urt's fird in g that t h ere was prob able ca u se as a malle r o f l aw i n the u nd erl in g ac t io n . 

### Me i ksi n in vo l ved a D r ago n e tti Ac t c l a im by propcny owne r s a ga in s t th e ir rea l es t a te b rokers a nd the b rokers'
nu o m eys for in s tit ut in g a l a wsui t to recover withhel d rea l es t ate com m iss i ons . 

### Id at**305~ 6.**  At i ss u e i n th e Me i ksi n und erlyi n g ac tion w a s the ex i s tence of an ora l co nt rac t
ex tension tha i wou ld e nt itl e ! he b roke r s t o a commissio n i ffo und enfo rceable. 

### Id. ' Ol e brokers were unsuccessfu l in t he i r l aws ui t. 

### Id. 1lJ(! p ropeny owne r s l ater s ue d the b r o k ers and t hei r aH omey, alleg ing that t he unde rl yi n g laws u it was bro u gh t w it ho ut proba b lt: ca u se. 

### I d. I n Me i /(sin, the tria l co urt g r ante d s u m m ary ju d g m ent in favor of all the
. D ragone lli defe nd an t s. Pl a in t i ffs there arg u ed th at facmal i ssues Ihat were s u bmi tt ed 1 0 t he 

### tact fi nd er in th e under l ying action ncedt::d to be rev i ewed b y aj ur y i nlhe Drago ne lti
case 1 0 de te m line wh ether t here w a s p roba b le eause 10 i n s titu te the la w s u i t. Oul lhe S u perio r Court re jected th is a na lysis and held: [T)he existence of probab l e cause was present as a ma tte r of l aw i n v iew of t h e ex i s t ence of a leg itim a te d i s pu te of fac t in the p r io r ac tio n f o r co mm issiO n s. This was appare nt f rom th e denia l of m o tions fo r su mm ary judgmen t an d compu l sory no n -su it in the prior actio n a nd the sub m ission of dispu t ed factual iss u es to thejury. 

### I d. al 1 306. T he ho l d in g orthe S uperior Co urt In Meiksin is that t he ma terial facls rc l evalllto the p robab l e cause de t enllilla l ion a re simply whe t her there was a leg i timate factual
II

USaCirculated 12/18/2014 09:31 AM



### dispute in the underlying action to be determined by the tri e r of facl. The Superior 

### Court fun her held: The existence of probable cause is also demonstrated by the faclthal there was s ufficient evidence [to require th e factual di sp ule} be submilted to 

### the jury for determination
... This s uggests thll i there was competent evidence of sufficient quantity and quality to de m onstrate probable cause for a reasonab l e belief th at the act i on could be maintained. This be li ef was con finn ed a lso by the court's denia l o f m otio n s in 

### t h e \ lTl der l yi n g ac li on 

### for summa r y judgment and compUlsory non· s uil, motions which coul d have 

### been granted on l y if there had been nO competent evidence sufficient to maintain th e action. 

### Id

. at**07 ~**  

### see also Hadden v. Gouldey, el 

### af., 

## 25 Montgomery County Law Reporter 149 (20 12)
. 

### qIJ'd55 A.3d 1 49 (Pa 

### Super. CI. 2012); 

### Lerner 

### v. Lerner. 954 A.2d 1229 

### (Pa. Super. Ct. 2008) (susta ini ng pre l iminary objec t ions in nature of demurrer to Dra go ne ll i claim). The underlying action was a routine defamation case with legitim ate disputed factual issues. The defendants prese nt ed subs t an tial evidence and we ll

- reasoned argu m ents in sup port of th e i r claims.**According y~**  

### thi s court properl y sustained the defendant s' preliminary object i ons a nd dismiS Se d the case.

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!PII.,)<,! Il o r III



### III , CONCLUS I ON Based upolil h e a ll of the foregoing reasons, this Court's delennination was proper and shou ld be AfFIRMED
.


### BY TIlE COURT :

# ~~w BERNARD A MOORE , 

### J
.
Dale : J une 18,2014 Cc: Michael N
. Onu f ruk , Esq. Paraskevouln V. Mamounas, Es q . Josh J
. T. Byrne, E sq.

13

557.1