Court Opinion

ID: 3219717
Source: CourtListenerOpinion
Date Created: 2016-07-05 13:04:02.102038+00
Date Added: 2024-06-11T08:39:53.387262
License: Public Domain

IN THE SUPERIOR COURT

OF THE STATE OF DELAWARE

ABRAHAM KOROTKI, SALEENA
KOROTKI, RESERVES
DEVELOPMENT, LLC, STL
DEVELOPMENT LLC, STZK, LLC,
THE RESERVES RESORT, SPA &
COUNTRY CLUB, LLC, and THE
RESERVES MANAGEMENT, LLC,

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Plaintiffs, )
V., ) C.A. No. Nl5C-07-l64 CCLD WCC

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HILLER & ARBAN, LLC, ADAM
HILLER, ESQ., BRIAN ARBAN,
ESQ., SCHWARTZ & SCHWARTZ,
ATTORNEYS AT LAW, P.A., and
STEVEN SCHWARTZ, ESQ.

Defendants.-.-

Submitted: February 24, 2016
Decided: July 1, 2016

Defendants Hiller & Arban, LLC, Adam Hiller, Esquire, and
Brian Arban, Esquire’s Motion to Dismiss Count V - GRANTED

MEMORANDUM OPINION

Anth0ny M. Saccullo, Esquire, Th0mas H. Kovach, Esquire, A.M. Saccull0 Legal,
LLC, 27 Crirnson King Drive, Bear, Delaware l970l. Attorneys for Plaintiffs.

David L. Braverrnan, Esquire, Benj amin A. Garber, Esquire, John E. Kaskey,
Esquire, Braverman Kaskey, P.C., One Liberty Place, 1650 Market Street,
Philadelphia, PA 19103. Attorneys for Plaintiffs.

John A. E1zuf0n, Esquire, Loren R. Barron, Esquire, Elzuf0n Austin Tarlov &
Mondell, P.A., 300 Delaware Ave., Suite 1700, P.O. Box 1630, Wilmington,
Delaware 19801. Attorneys for Hiller Defendants.

Paul M. Lukoff, Esquire, Andrea Schoch Br00ks, Esquire, Wilks, Lukoff &
Bracegirdle, LLC, 1300 North Grant Avenue, Suite 100, Wilmington, DE 19806.
Attorneys for Schwartz Defendants.

CARPENTER, J.

Further, the Court agrees that Plaintiffs cannot sustain a claim for abuse of
process based on H&A’s initiation of its case against Mr. Korotki and Reserves
Management. Abuse of process "contemplates some overt act done in addition to
the initiating of the suit" such that "the mere filing or maintenance of a lawsuit,
even for an improper purpose, is not a proper basis for an abuse of process
action."” Thus, unlike with a claim for malicious prosecution, Plaintiffs’
allegations that the Hiller Defendants commenced the breach of contract litigation,
primarily, to achieve some improper purpose or with malicious intent are
unavailing.”

To the extent Count V can be read to seek redress for anything other than the
initiation of H&A’s case (aside from the letter, discussed infra), Plaintiffs appear to
attack the merits of the underlying lawsuit.34 For example, Plaintiffs characterize

H&A’s action to recover legal fees and expenses as "patently frivolous" and

 

 se§ Anji\;_zd, Az§use_@:‘}>'}@cess § ii(emphasis added).

” See id. See also Preferrea' Inv. Servs. Inc., 2013 WL 3934992, at *24 ("T&H’s additional
arguments regarding PISI's intention to drive T & H out of business do not support its claim for
abuse of process. Unlike with a claim for malicious prosecution, the fact that PISI allegedly
harbored a hope when it initiated this action against T & H that T & H might fail and PISI then
could use its name in the cash bail business is not relevant to an abuse of process claim.").

“ See Citizens Bank ofPenn. v. Exec. Car Buying Servs., Inc., 2010 WL 4687922, at *5 (D.N.J.
Nov. l0, 20l0) ("Even if adequately plead. . .abuse of process claim. . .would be dismissed as
premature. . ..‘By definition, a lawsuit in its entirety cannot constitute an abuse of process when it
has not yet been concluded. "’ (quoting Access Fin. Lending Corp. v. Keystone State Mortg.
Corp., l996 WL 544425 (W.D. Pa. Sept. 4, 1996) (citing Giora’ano v. Claudio, 2010 WL
2034691 (E.D.Pa. May 13, 20l0) (dismissing a counterclaim for abuse of process "‘refer[ring]
only to Giordano's initiation of the lawsuit’ . . .because the court could not ‘adjudicate [the] abuse
of process claim until the completion of Giordano's lawsuit"’))).

ll

devoid of legal or factual basis. Plaintiffs claim the lawsuit is aimed at H&A’s
"illegitimate" objective of collecting compensation to which the firm is not
entitled.” Plaintiffs attempt to support this characterization, essentially, by
denying the existence of an enforceable obligation on behalf of Mr. Korotki and/or
Reserves Management to pay H&A the amounts sought in the pending litigation.
These are the very issues in dispute in the pending litigation.” Plaintiffs’ logic
therefore assumes the outcome of H&A’s case, which has yet to be decided.”
Plaintiffs also argue for the first time in their response brief that the Hiller
Defendants’ improper conduct extends beyond "merely initiating" the action

because they have "dragged out" the litigation "by filing two amended complaints

 

35 Pls.’ Compl. 11 179.
“ See Larobz`na v. McDonald, 876 A.2d 522, 531 (Conn. 2005). At the hearing on the Motion,
Defendants raised Larobina in support of their position argument. ln Laborina, the Connecticut
Supreme Court discussed certain concerns relevant to its finding that an abuse of process claim
was premature:
Although we do not suggest that success in the first action would be a prerequisite for an
abuse of process claim by the plaintiff, it is apparent that the eventual outcome of that
action and the evidence presented by the parties therein would be relevant in litigating an
abuse of process claim. The plaintiff has not yet established that First Union is not legally
entitled to the money that he claims the defendants are attempting to extort from him by
their allegedly oppressive litigation tactics, or that First Union has no good faith reason to
believe that it is entitled to the money. Those very issues are in dispute in the first action.
If this abuse of process claim were allowed, the trial court would be required to litigate
the issues twice. Moreover, allowing the claim could subject the courts to a flood of
similarly duplicative claims and effectively chill the vigorous representation of clients by

their attorneys.

See id.
37 See id. Mr. Korotki and Reserves Management did not, in their recent Motion to Dismiss

H&A’s Second Amended Complaint, move to dismiss H&A’s breach of contract claim against
them.

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(seeking fees that they have no entitlement to)."” Plaintiffs contend the
amendments were "frivolous" and sought only to prolong the litigation and gain a
collateral advantage. Not only does this argument again rely, prematurely, on the
assumption that H&A will not be able to prove its pending claims, but it also
appears conclusory and without merit. 39 H&A amended its initial complaint to
clarify the relief sought with respect to Mr. Korotki in order to eliminate concerns
relating to the automatic stay and the opportunity to amend a second time was
procured with permission from the Court and sought to add a claim for estoppel
and address ambiguities raised by Plaintiffs at the August 2015 hearing.
Moreover, Plaintiffs employ the term "collateral advantage" in conclusory fashion
and without further elaboration. There is simply no indication the amendments
were sought for any other purpose than to increase H&A’s likelihood of recovering
the fees and expenses to which it believes the firm is entitled."°

Finally, regarding the letter extending notice of H&A’s intention to file the
lawsuit, Hiller Defendants maintain their conduct was "a regular component of the

litigation process" and not in any way improper or threatening.‘" The Court agrees.

1¢- -__=._.-,=.

"“‘ Pls.’ Br. in Opp’n to Defs.’ Mot. to Dismiss Count V, 1[ 3.

39 See Preferrea' Inv. Servs. Inc., 2013 WL 3934992, at *10, 23 (fmding only "colorable claim"
asserted by plaintiff in abuse of process action was that alleging "falsifying accounting records,"
to the rejection of claims including "unnecessarily prolonging the litigation").

"° See z`d. at *26 (rejecting abuse of process claim but allowing attomeys fees, noting "PISI's
actions were improper, but they were undertaken to strengthen its case in this litigation, not to

gain a collateral advantage").
"‘ Defs.’ Mot. to Dismiss Count V, 1[ l0.

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The letter clearly communicates a last-rninute settlement offer, a practice both
authorized and encouraged by the legal process. Plaintiffs were not amenable to
the terms of the offer and refused it, as they were free to do. Thus, despite
Plaintiffs’ conclusory allegations to the contrary, there was no coercion, force, or
extortion here. The Hiller Defendants’ Motion to Dismiss Count V is therefore
GRANTED.
CONCLUSION

The Court has attempted, by its decision, to place this matter in the proper
context of what is really in dispute among the parties to this litigation. Plaintiffs
assert the legal advice they received from Defendants was so deficient as to rise to
the level of legal malpractice. Defendants assert they are entitled to legal fees for
the work they performed for Plaintiffs. The Court would ask that the parties
refrain from trying to gain an advantage in this litigation with further attempts at
characterizing this dispute as something more. While the Court appreciates that
the parties do not like each other, it expects counsel to divorce themselves from

any personal animosity and litigate this matter in a professional manner.

/ jr

Judge William C. Carpenter, Jr.

IT IS SO ORDERED.

 
  

 

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Before the Court is a Motion to Dismiss filed by Defendants, Hiller &
Arban, LLC ("H&A"), Adam Hiller, Esquire ("Attorney Hiller"), and Brian Arban,
Esquire ("Attorney Arban") (collectively, the "Hiller Defendants"), pursuant to
Delaware Superior Court Civil Rule l2(b)(6). The Hiller Defendants ask the Court
to dismiss Count V of the Complaint for failure to state a claim for abuse of
process. In accordance with the foregoing Opinion, the Motion is GRANTED.

BACKGROUND

This Motion to Dismiss arises in the context of legal malpractice litigation
filed against the Hiller Defendants, Schwartz & S'chwartz, P.A., and Steven
Schwartz, Esquire (together, "Defendants"). The plaintiffs in this nutter consist
of former clients Abraham Korotki ("Mr. Korotki"), Saleena Korotl466 A.2d 407, 410 (Del. Super. l983) (citing Dz`amond State Tel. C0. v. Univ. of

Del., 269 A.2d 52 (Del. 1970)).
’° See Beck v. Brady, 2004 WL 2154284, at *l (Del. Supr. Sept. 20, 2004) (citing Precz'sion Air v.

Standard Chlorz`ne ofDel., 654 A.Zd 403, 406 (Del.l995) and Ramunno v. Cawley,705 A.2d
l029, 1034 (Del.l998)).

 

however, blindly accept conclusory allegations unaccompanied by "specific
supporting factual allegations."zl
DISCUSSION

Unlike malicious prosecution claims, which focus on a party’s initiation of
the legal process, abuse of process concerns "perversion[s] of the process after it
has been issued."” To establish a claim of abuse of process, two elements must be
present: "1) an ulterior purpose; and 2) a willful act in the use of the process not
proper in the regular conduct of the proceedings."” While satisfaction of the first
element, ulterior purpose, may be "inferred from the fact that the process [was]
misused, the reverse is not true; if the act of the prosecutor is in itself regular, his

motive, ulterior or otherwise, is immaterial."z" Rather, there must be a "definite

1;_¢_¢:_11:_

" See, e.g., Grunstez`n v. Sz`lva.,.2009 WL 4698541, at *5 (Del. Ch. Dec. 8, 2009).
" See Preferred Inv. Servs., Inc. v. T& HBaz`l Bonds, Inc., 2013 WL 3934992, at *23 (Del. Ch.

July 24, 2013) (quoting Pfeijj‘er v. State Farm Mut. Auto. Ins. Co., 2011 WL 7062498, at *5 (Del_:;

Super. Dec. 20, 2011)), ajj"d sub nom, 108 A.3d 1225 (Del. 2015). See also Spence v. Spence,
2012 WL 1495324, at *3 (Del. Super. Apr. 20, 2012) ("Abuse of process is concemed with a
perversion of the process after it is issued. However, it is very similar to a claim for malicious
prosecution in that both address the same wrong, abusive litigation; and it is only a matter of
timing between the two."); Toll Bros. v. Gen. Acc. Ins. Co., 1999 WL 744426, at *6, 8 (Del.
Super. Aug. 4, 1999) ("[A]buse of process was created to plug the holes left open by malicious
prosecution. . ..Both torts, however, address. . .abusive litigation. lt appears that the only reason
they are separate and distinct torts is that abuse of process was created after malicious
prosecution was established."), ayj"d, 765 A.2d 953 (Del. 2000); Nix, 466 A.2d at 411 ("With
respect to the cause of action for malicious prosecution, such a claim is viewed with disfavor by
the Delaware courts, and, therefore, assessed with careful scrutiny.").

" See Pfeiffer, 2011 WL 7062498, at *5 (quoting Nz`x, 466 A.2d at 411).

"‘ See Stevens v. Indep. Newspapers, Inc., 1988 WL 25377, at *8 (Del. Super. Mar. 10, 1988)
(citing 1 Am. Jur. 2d, Abuse of Process § 4 (1962)).

.” See Pr_eferre_;d  Se

act or threat not authorized by the process, or aimed at an objective not legitimate
in the use of the process."” As Delaware Courts have made clear:

Some fonn of coercion to obtain collateral advantage, not properly involved
in the proceeding itself, must be shown, such as obtaining the surrender of
property or the payment of money by the use of the process as a threat or
club. In other words, a form of extortion is required.%

Here, Plaintiffs’ Complaint alleges the Hiller Defendants abused the legal
process by (l) filing "retaliatory" and "patently frivolous" litigation against l\/lr.
Korotki and Reserves Management and (2) issuing the February 24, 2015 "demand

letter."” While H&A’s case was purportedly motivated by the firm’s desire to

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recover unpaid fees and expenses, Plaintiffs insist the Hiller Defendants primary

purpose" for filing the action was (l) to interfere with the bankruptcy sale, (2) to
"coerce" Plaintiffs to withdraw their "legitimate objections" to the firm’s pending
fee application in the bankruptcy proceeding, (3) to "extort[] a dismissal of this

action," and (4) to "obfuscat[e] their own unlawful conduct."zg Ultimately,

-1_-¢

rvs., Inc., 2013 WL 3934992, at *23.

'° Id. ("Merely carrying out the process to its authorized conclusions, even though with bad
intentions, will not result in liability."). See also Sz‘evens, 1988 WL 25 377, at *8 (discussing
"[d]ifferent kinds of process [that] have lent themselves to such coercion," including
"attachment, execution, garnishment, sequestration proceedings, arrest of the person and criminal
prosecution" as well as certain discovery devices such as depositions and interrogatories).

" Pls.’ Compl. 1111 173-76; Pls.’ Br. in Opp’n to Defs.’ Mot. to Dismiss Count V, 1[1] l-3. As the
Court addresses later in the opinion, Plaintiffs have also advanced the argument for the first time
in their opposition brief that the Hiller Defendants improperly filed "frivolous amendments" to
their Complaint "to prolong the litigation and gain a collateral advantage." Pls.’ Br. in Opp’n to

Defs.’ Mot. to Dismiss Count V, 1[ 2.
" Pls.’ Compl. 1[1] 177-78; Pls.’ Br. in Opp’n to Defs.’ Mot. to Dismiss Count V, 11 5.

Plaintiffs contend the Hiller Defendants "misused the legal process" to accomplish
"illegitimate ends"” in "conscious disregard of [Plaintiffs’] rights" and with an
"intent to vex, and injure them to such degree as to constitute malice justifying an
award of punitive and exemplary damages.’”° The Hiller Defendants respond that
dismissal is warranted because Plaintiffs failed to "plead a willful improper act in
the use of the process. . .aimed at an illegitimate objective."“

To the Court, the commonsense answer to this Motion can be found in the
underlying basis of the lawsuits between the parties. There appears to be no
dispute that the Hiller Defendants performed legal services on Plaintiffs’ behalf
and they assert they are still owed money for the services they provided. Now
Plaintiffs may believe the services were of little or no value and dispute whether
they owe any attomeys’ fees to the Hiller Defendants, but that does not make
H&A’s lawsuit retaliatory or an abuse of what appears to the Court to be a
legitimate dispute over legal fees. Count V is simply an outgrowth of the parties’

contentious relationship and an attempt to raise the stakes of the litigation by

inserting punitive damages.

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”Pls.’ Compl. 11 l80. The "illegitimate ends" referred to in the Complaint are the "extort[ion of]
a settlement in [the Hiller Defendants’] favor and collect[ion of] monies to which they are not
entitled."

’° Id. 11 18 l.
"Defs.’ Mot. to Dismiss Count V, 11 6.

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