Court Opinion

ID: 4258243
Source: CourtListenerOpinion
Date Created: 2018-03-26 18:51:00.356355+00
Date Added: 2024-06-11T14:26:19.644055
License: Public Domain

J-A01042-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    CARMEN ENTERPRISES, INC., AND              :   IN THE SUPERIOR COURT OF
    BRUCE J. CHASAN                            :        PENNSYLVANIA
                                               :
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :
                                               :   No. 1213 EDA 2017
    MURPENTER, LLC, ROBERT                     :
    DOUGLAS CARPENTER, JR.,                    :
    KATHLEEN MURPHY, ELY GOLDIN,               :
    FOX ROTHCHILD, LLP, AND                    :
    EDWARD J. DIDONATO                         :

                 Appeal from the Order Entered March 10, 2017
              In the Court of Common Pleas of Philadelphia County
              Civil Division at No(s): March Term, 2016 No. 00402

BEFORE:      LAZARUS, J., OTT, J., and PLATT, J.

MEMORANDUM BY OTT, J.:                                   FILED MARCH 26, 2018

        Carmen Enterprises, Inc. and Bruce J. Chasan (collectively, “Carmen”)

appeal from the order entered March 10, 2017, sustaining the preliminary

objections of defendants, Murpenter, LLC, Robert Douglas Carpenter, Jr., and

Kathleen Murphy (collectively, “Murpenter”). Included in this appeal, Carmen

also challenges the court’s order, entered on November 4, 2016,1 denying its

motion to disqualify Jeff Goldin as counsel for Murpenter.         Based on the

following, we quash this appeal.

____________________________________________

   Retired Senior Judge assigned to the Superior Court.

1   The order was subsequently docketed on November 7, 2017.
J-A01042-18

      With respect to the preliminary objections, the trial court set forth the

facts and procedural history as follows:

      I.        Background

             This action for wrongful use of civil process stems from an
      earlier lawsuit in Montgomery County captioned Carmen
      Enterprises, Inc. v. Murpenter, LLC, Montgomery County
      C.C.P. No. 2002-07223 (“underlying action”).           Plaintiffs are
      Carmen Enterprises, Inc. (“Carmen”) and Bruce J. Chasan
      (“Chasan”) (collectively referred to as [Carmen]). Carmen was a
      travel agency that operated as a franchisee of Cruise Holidays
      International, Inc., Cruise Holidays International, Inc. and
      ByeByeNow.com Travel Agency. Chasan, an attorney, was the
      founding director, officer and shareholder of Carmen along with
      his former wife Carmen McLeod who relinquished her shares to
      Chasan in a divorce settlement. The defendants are Murpenter,
      LLC and its owners Robert Douglas Carpenter and Kathleen
      Murphy … and the attorneys the Murpenter defendants hired to
      represent them in the underlying action, Fox Rothschild, LLP, Ely
      Goldin, Esquire and Edward DiDonato, Esquire (collectively
      referred to as “Attorney Defendants”).

      II.       The Underlying Action

            On October 31, 2001, Carmen and Murpenter entered into
      a Purchase and Sale Agreement wherein the travel agency
      business was sold to Murpenter. In April 2002, Chasan instituted
      suit against Murpenter in Montgomery County for breach of
      contract and other claims.        Chas[a]n represented Carmen
      throughout the litigation. The Murpenter[s] were represented by
      Ely Gold[i]n, Esquire. During the litigation of the underlying
      action, [Murpenter] and their attorneys filed a fraud counterclaim,
      a motion for leave to amend to add a fourth counterclaim for
      alleged breach of contract, and a bankruptcy petition.1

      ______________________

            1  [Carmen] allege[d] in the second amended complaint that
            defendants’ filings were baseless and solely made to delay
            trial and cause plaintiffs to withdraw the litigation.

      ______________________

                                        -2-
J-A01042-18

           The underlying action was tried before the Honorable
     Richard P. Haaz as a bench trial in April 2013. On July 9, 2013,
     Judge Haaz rendered a decision in favor of Carmen on all counts
     that were tried. On March 13, 2014, Judge Haaz molded the
     decision to add certain attorney’s fees, costs and expenses as well
     as prejudgment interest in the amount of $160,833.34, plus post-
     judgment interest. On March 26, 2014, judgment was entered in
     favor of Carmen by the Montgomery County Prothonotary.
     Carmen appealed that portion of the pretrial order that excluded
     certain of its claims for contractual attorney’s fees, and also
     appealed a post-trial order that denied two post-trial motions for
     sanctions against Goldin and Fox Rothschild. Murpenter also filed
     a cross appeal based on the denial of post-trial motions.

           On August 12, 2015, the Pennsylvania Superior Court
     reversed the trial court’s order that had excluded some of
     Carmen’s claims for contractual attorney’s fees as related to
     Murpenter but upheld denial as related to Gold[i]n and Fox
     Rothschild, and ordered a remand for a hearing on reasonable
     attorney’s fees. The Superior Court remanded to Judge Haaz for
     a hearing on attorney’s fees against Murpenter demanded by
     Carmen.

           On November 10, 2015, Carmen filed a petition for
     allowance of appeal in the Pennsylvania Supreme Court seeking
     review, hoping to reverse the Superior Court’s denial of sanctions
     directed at Goldin and Fox Rothschild. On November 12, 2015,
     Murpenter filed a Petition for Allowance of Appeal in the
     Pennsylvania Supreme Court, seeking review of the Superior
     Court’s reversal of the trial court’s order. The effect of the
     Superior Court’s decision is to permit Carmen to continue litigating
     its demand in the trial court for certain contractual attorney fees
     as to Murpenter, but not as to Ely Gold[i]n and Fox Rothschild.
     Murpenter’s allocator has been denied.

          The only issue therefore remaining before Judge Haaz in
     Montgomery County is the attorney fees issue from Murpenter.

     III.   Instant Action

                                    -3-
J-A01042-18

              On March 9, 2016, [Carmen] instituted this Dragonetti[2]
       action for wrongful use of civil process by writ of summons against
       Murpenter and the attorney defendants. After a Rule, [Carmen]
       filed their complaint on May 19, 2016. Following preliminary
       objections, the complaint was then amended on three occasions,
       June 20, 2016, August 1, 2016 and September 12, 2016. The
       second amended complaint alleged that [Murpenter] engaged in
       wrongful use of civil process by filing counterclaims for fraud
       (count I), breach of contract (count II), conversion (count IV) and
       procuring and filing a bad faith chapter 7 bankruptcy petition to
       avoid and/or delay trial (count III)2. [Murpenter] filed preliminary
       objections to the second amended complaint seeking to dismiss
       the entire action. On December 12, 2016, after an evidentiary
       hearing on plaintiffs’ motion to disqualify counsel for the attorney
       defendants, we heard oral argument on the pending preliminary
       objections.

       ______________________

          2   Defendant Edward DiDonato, Esquire was the filing
          attorney for the Bankruptcy petition.

Trial Court Opinion, 3/10/2017, at 2-5.

       Subsequently, on March 10, 2017, the trial court sustained Murpenter’s

preliminary objections as follows:

       1. Counts I, II, and IV are dismissed without prejudice as unripe;

       2. Count III is dismissed as preempted by federal law; and

       3. Bruce J. Chasan is dismissed as a plaintiff for lack of standing.

Order, 3/10/2017. This appeal followed.3

____________________________________________

2   See 42 Pa.C.S. §§ 8351-8354.

3  The court did not order Carmen to file a concise statement of errors
complained of on appeal under Pa.R.A.P. 1925(b). Nevertheless, it filed a
concise statement on May 1, 2017. The trial court issued an opinion under
Pa.R.A.P. 1925(a) on May 8, 2017.

                                           -4-
J-A01042-18

     Carmen raises the following arguments:

     1. Whether the trial court erred as a matter of law in holding that
     Chasan does not have standing as a Dragonetti Act plaintiff, per
     the exception pronounced in Hart v. O’Malley, 676 A.2d 222, 225
     (Pa. 1996), where: (a) the meritless counterclaims filed by
     Murpenter, LLC and Attorney Ely Goldin against Carmen
     Enterprises, Inc. in the underlying action alleged that Carmen,
     through actions of its CEO Chasan, had committed fraud (and
     Chasan also happens to be an attorney), in light of the direct and
     substantial effect on Chasan; and (b) Chasan was attorney of
     record for Carmen in the underlying action, and had a direct and
     substantial interest in light of the contractual attorney’s fees
     provision in the underlying action.

     2. Whether the court erred as a matter of law in holding that
     [Carmen] could not seek tort damages for wrongful use of civil
     proceedings (Dragonetti) due to the bad faith Chapter 7
     bankruptcy petition filed by Murpenter’s attorneys (as determined
     by the bankruptcy court under Bankruptcy Rule 9011), due to
     preemption under the Bankruptcy Code, where: (a) the 1993
     advisory committee note to Fed.R.Civ.P. 11 expressly states “[I]t
     should be noted that Rule 11 does not preclude a party from
     initiating an independent action for malicious prosecution or abuse
     of process,” and Rule 11 is applicable to Bankruptcy Rule 9011;
     and (b) the Pennsylvania Supreme Court has held that sanctions
     under Rule 9011 may be insufficient to serve as compensation, as
     expressed in Stone Crushed Partnership v. Kassab Archbold
     Jackson & O’Brien, 908 A.2d 875, 886-887 (Pa. 2006).

     3. Whether the court erred as [a] matter of law in holding that
     [Carmen] could not seek tort damages from Attorney Ely Goldin
     for wrongful procurement of civil proceedings (Dragonetti) due
     to the bad faith Chapter 7 bankruptcy petition filed by Murpenter’s
     attorneys (as determined by the bankruptcy court under
     Bankruptcy Rule 9011), due to preemption under the Bankruptcy
     Code, where Goldin did not file the bad faith petition himself, but
     procured its filing.

     4. Whether the court erred as a matter of law in denying
     [Carmen’s] motion to disqualify attorney Jeffery Goldin from
     representing the Murpenter parties in this wrongful use of civil
     proceedings (Dragonetti) case, where the Murpenter parties
     were represented in the underlying action by attorney Ely Goldin

                                    -5-
J-A01042-18

      (Jeffrey Goldin’s older brother), because the blood relationship
      between Ely Goldin and Jeffrey Goldin creates a non-waivable
      conflict of interest.

      5. Whether the court erred as a matter of law in dismissing Counts
      I, II, and IV without prejudice, where Carmen was the prevailing
      party in the underlying action, and all liability issues as to
      Murpenter had been resolved with finality, and the Superior Court
      remand to the trial court was solely concerned with augmenting
      Carmen’s costs and attorney’s fees per the terms of the contract
      in the underlying action.

Carmen’s Brief at 3-4 (some capitalization removed). Based on the nature of

the claims, we will address Carmen’s final claim first.

      In its fifth issue, Carmen contends the trial court erred in granting

Murpenter’s preliminary objections with respect to Counts I, II, and IV and

dismissing its complaint for wrongful use of civil proceedings without prejudice

as unripe. See Carmen’s Brief at 57-60.

      We begin with our well-settled standard of review:

      In determining whether the trial court properly sustained
      preliminary objections, 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 our inquiry is to determine the
      legal sufficiency of the complaint and whether the pleading would
      permit recovery if ultimately proven. This 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 is free and clear of doubt.

Clausi v. Stuck, 74 A.3d 242, 246 (Pa. Super. 2013), quoting Conway v.

The Cutler Group, Inc., 57 A.3d 155, 157-158 (Pa. Super. 2012) (citation

omitted).

                                      -6-
J-A01042-18

      The wrongful use of civil proceedings statute, provides, in relevant part,

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:

         (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. § 8351(a).

      “Generally, when considering the question of ‘favorable
      termination’ in a wrongful use of civil proceedings case, whether
      a withdrawal or abandonment constitutes a favorable, final
      termination of the case against who [sic] the proceedings are
      brought initially depends on the circumstances under which the
      proceedings are withdrawn.” D'Elia v. Folino, 2007 Pa. Super.
286, 933 A.2d 117, 122 (Pa. Super. 2007), appeal denied, 597
Pa. 706, 948 A.2d 804 (Pa. 2008), citing Bannar v. Miller, 701
A.2d 242, 247 (Pa. Super. 1997), appeal denied, 555 Pa. 706, 723
A.2d 1024 (Pa. 1998). Our Supreme Court has also commented
      on when a cause of action under the Dragonetti Act has accrued.

         The elements required to successfully pursue a cause of
         action under the Act are the initiation of a lawsuit without
         probable cause or in a grossly and negligent manner and a
         favorable outcome in that lawsuit. Although the initiation of
         a lawsuit is one element of the cause of action, the cause of
         action does not accrue until all the requirements have been
         met which includes obtaining a favorable outcome.

      Ludmer v. Nernberg, 520 Pa. 218, 553 A.2d 924, 926 (Pa.
      1989). “[A plaintiff]’s [Dragonetti] cause of action d[oes] not

                                      -7-
J-A01042-18

     accrue until such time as he successfully defeat[s] the [defendant]
     in his attempts to have the [plaintiff] held legally liable.” Id. This
     does not occur until the lawsuit is resolved in the trial court and
     “is final, meaning that [said resolution] has been upheld by the
     highest appellate court having jurisdiction over the case or that
     the [resolution] has not been appealed.” D’Elia, supra, citing
     Ludmer, supra.

Clausi, 74 A.3d at 246-247.

     Turning to the present matter, the trial court found the following:

     [T]he underlying action is not resolved. Currently pending before
     the trial court is the issue of attorney’s fees. Although, the trial
     court in the underlying action scheduled a hearing for October
     2016, the matter has yet to be resolved.6 Termination of an
     underlying action for wrongful use purposes does not occur until
     the judgment is final.7 Since the issue of attorney fees is still
     being litigated in the underlying action, judgment is not final and
     the claims for wrongful use of process is not ripe.
     ______________________

        6  Judicial notice can be taken of pleadings and judgments
        in other proceedings where appropriate. See, Pa.R.E. 201.

        7   D’Elia v. Folino, 933 A.2d 117, 122 (Pa. Super. 2007).

Trial Court Opinion, 3/10/2017, at 6.

     We agree with the trial court’s determination.      It is evident that the

underlying action has not been determined because attorney’s fees, a source

of the underlying fraud, breach of contract, and conversion claims, are

presently on cross-appeals before a separate panel of this Court.             See

Carmen Enterprises, Inc., f/d/b/a Cruise Holidays of Norristown &

ByeByeNow.com Travel Store v. Murpenter, LLC, d/b/a Uniglobe

Wings Travel, Docket Nos. 2241 EDA 2017 and 2341 EDA 2017. As such,

Carmen’s underlying lawsuit has not been resolved and is not considered final,

                                     -8-
J-A01042-18

because said resolution has not been upheld by the highest appellate court

having jurisdiction over the case. See D'Elia v. Folino, 933 A.2d at 122.

Carmen’s argument does not persuade us otherwise. Therefore, “we conclude

that [Carmen]’s ‘[Dragonetti] cause of action [has] not accrue[d] ....’” Clausi,
74 A.3d at 247 (citations omitted). Consequently, we also find the trial court

did not legally err or abuse its discretion when its sustained Murpenter’s

preliminary objections and dismissed, without prejudice, the Dragonetti Act

complaint with respect to Counts I, II, and IV. Accordingly, we are compelled

to quash this appeal as not ripe for review.

      Because we have quashed this appeal, we will not review Carmen’s

remaining claims, including a challenge to the court’s November 4, 2016,

order, which denied its motion to disqualify Jeff Goldin as counsel for

Murpenter, nor address the merits thereof.

      Appeal quashed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/26/18

                                     -9-