Court Opinion

ID: 9487324
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:14:04.465584+00
Date Added: 2024-06-11T17:51:11.135116
License: Public Domain

ROSENN, Circuit Judge,
concurring and dissenting.
I agree with the majority’s conclusion that the district court did not err by granting summary judgment in favor of the defendants on Schulman’s claim for intentional interference with existing contractual relations. However, I part company with the majority’s characterization of J.P. Morgan’s counterclaim and its decision to sustain the district court’s ruling on the amended counterclaim involving the existence of a lease between Schulman and Widener Associates Limited Partnership (WALP). I therefore respectfully concur and dissent.
I.
This is an action by Schulman against the defendants for intentional interference in contractual relations. Before Schulman initiated this action, WALP filed an ejectment action in the Philadelphia County Court of Common Pleas to evict Schulman. That action, which was pending at the time Schul-man filed this suit, inevitably must test the existence of a lease between the Schulman and WALP. There was no point, therefore, for the district court to decide an issue already pending in the state court and which was not essential to the disposition of the matter before it. In this federal action, the issue is limited to whether the defendants intentionally interfered with Schulman’s contractual rights.
The majority concedes that the district court could have disposed of this case by assuming, without deciding, that WALP and Schulman had agreed upon the terms of the lease. Moreover, as discussed by the majority in Part III, the defendants acted in good faith pursuant to their contractual rights to protect their legal interests. Therefore, even assuming the existence of a lease, the defendants’ actions were privileged and did not constitute intentional interference.
The district court should not have decided the question of whether Schulman had a valid lease to any space at the Widener Building because that issue was pending in the state court action, essentially involves a matter of state law, and the elements for a declaratory judgment were not present.1 The Declaratory Judgment Act, 28 U.S.C. § 2201, calls for the federal courts to exercise discretion in determining whether to involve themselves in a declaratory judgment action. As set forth most recently by this court in United States v. Pennsylvania, Dep’t of Envtl. Resources, 923 F.2d 1071 (3d Cir.1991), this court considers the following- factors when determining whether the federal forum is appropriate for a declaratory action: (1) the likelihood that a federal court declaration,will resolve the uncertainty of obligation which gave rise to the controversy; (2) the convenience of the parties; (3) the public interest in settlement of the uncertainty of obligation; and (4) the availability of and relative convenience of other remedies. Id. at 1075 (citations omitted).
The Pennsylvania, Dep’t of Envtl. Resources court also discussed Terra Nova Ins. Co. v. 900 Bar, Inc., 887 F.2d 1213 (3d Cir.1989), in which the court upheld the district court’s stay of an insured’s claim in light of a pending state tort action because of the general policy of restraint when the same issues are pending in'a state court and an avoidance of duplicative litigation. 923 F.2d at 1075-76; see also Brillhart v. Excess Ins. Co., 316 U.S. 491, 495, 62 S.Ct. 1173, 1175-76, 86 L.Ed. 1620 (1942) (federal court should consider whether state court suit “present[s] the same *812issues, not governed by federal law, between the same parties” and whether state court is better able to settle controversy). “[E]ven if a declaratory judgment would clarify the parties’ legal rights, it should ordinarily not be granted unless ‘the parties’ plans of actions are likely to be affected by a declaratory judgment.’ ” Armstrong World Industries, Inc. v. Adams, 961 F.2d 405, 412 (3d Cir.1992) (citation omitted).
The district court’s decision to resolve the declaratory action raised by the counterclaim substantially ignores these factors. The federal action can be resolved without deciding the essential issue in the pending state court ejectment action. There is no public interest involved in either action and the state action provides an available and convenient forum for the disposition of a contractual suit arising under state law. The declaratory judgment did not serve any useful purpose because the declaration was not necessary for the settlement of obligations between the parties in this case or for the disposal of this action.
The declaration of the district court improperly encroaches upon the state court, which is currently addressing the issue of the existence of a lease between Schulman and •WALP. The district court acknowledged that its declaration that there was not a valid contract between Schulman and WALP “may not resolve the question still pending ... in state court regarding what rights Schulman has against a landlord who allegedly represents it can freely enter into a lease, when in fact it cannot.” The district court’s declaration will have the effect of either binding the state court in its decision making or requiring Schulman to undertake duplicative litigation. In any event, it can only serve to complicate or confuse the state court proceedings. The majority’s ruling on the lease is not necessary to this action and relies on a matter in which a key figure to the lease is not a party to the proceedings before this court. Finally, the parties would not be inconvenienced by deference to the state court because the federal action properly granted the defendants’ motion for summary judgment on Schulman’s claims against them, and the state court could resolve in timely fashion the issue of the existence of a lease. Thus, I believe this court should reverse the district court’s grant of summary judgment for the defendants on their counterclaim.
II.
Additionally, the majority’s extensive discussion of Rule 19 is not necessary or relevant to the disposition of this appeal. As the majority concedes, the district court had ancillary jurisdiction over the issue raised in the counterclaim without regard to diversity under 28 U.S.C.A. § 1367 (West 1993). (Maj. Op. at 804-05). I further disagree with the majority’s characterization of J.P. Morgan’s counterclaim as a redundant defense. This issue has never been raised by the parties and there is no indication that J.P. Morgan did not intend to file a counterclaim for a declaratory judgment.
As authority for its “relabeling” the counterclaim as a defense, the majority cites Fed. R.Civ.P. 8(c). Rule 8(c), however, empowers a trial court at the pleading stage to correct a party’s mistaken designation of a counterclaim as a defense if justice so requires. The rule does not provide any authority for this court to do so on appeal. Rather, our review is constrained by the district court’s treatment of the pleading as a counterclaim. Therefore, I see no justification to relabel J.P. Morgan’s counterclaim as a defense, and no need to discuss Rule 19 in light of the district court’s ancillary jurisdiction over the counterclaim.
Moreover, the majority concludes that the equities favor WALP and the defendants, and not Schulman, because Schulman chose to divide this dispute between two independent forums and then rejected WALP’s proposal to stipulate that any decision in the district court would be binding in the state court. (Maj. Op. at 807). However, WALP, not Schulman, chose to file the ejectment action in the Philadelphia County Court of Common Pleas. Moreover, there was no reason for Schulman to stipulate to a binding resolution by the district court because that court was not the appropriate forum for resolution of an issue essentially involving state law pending in a prior action instituted by WALP in state court. Finally, the equities *813may fall in favor of Schulman in the ejectment action because Kelter, the principal acting on WALP’s behalf, sought out Schul-man to discuss plans to operate Maxi’s food establishment in the lobby of the Widener Building. “It is undisputed that both, Kelter and Schulman anticipated that a lease would be executed” and Schulman invested $35,000 of his own money toward construction costs. (Maj. Op. at 802). .
III.
In conclusion, the district court should not have decided the question presented by the defendants’ counterclaim as to whether there was in fact a lease because the elements for a declaratory judgment were not present. Furthermore, the declaration of the district court improperly encroaches upon the litigation then pending in the state court. Accordingly, I respectfully dissent from' the majority’s opinion.
Present: SLOVITER, Chief Judge, BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS, McKEE and ROSENN *, Circuit Judges.

. The defendants contend that this court does not have jurisdiction to decide whether the district court erred in granting summary judgment for them on their counterclaim because Schulman only appealed from the August 11, 1993 Order granting summary judgment in favor of the defendants, and not from the April 27, 1993 Order granting the defendants leave to amend their answer to include the counterclaim. However, the August 11, 1993 Order from which Schulman appealed specifically granted the defendants' motion for summary judgment on their counterclaim and declared that Schulman had no legally enforceable lease.