Court Opinion

ID: 9733664
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:13:23.86757+00
Date Added: 2024-06-11T18:26:43.371600
License: Public Domain

TAMILIA, Judge,
concurring and dissenting:
Although I join much of the majority Opinion, I dissent to the holdings that there is neither legal authority to award punitive damages nor counsel fees in the amount of $25,000.
The majority found the determination by the trial court that Rumbaugh should share in the profits of the corporation was erroneous because the federal action resulted in a transfer of his share of the stocks to appellees, for which he must be compensated, but eliminates him as a shareholder *242for purposes of participating in the profits. I fully agree in this analysis and finding.
I disagree with the majority that an award of counsel fees and/or punitive damages is not legally permissible because the facts of this case and legal conclusions therefrom drawn by the majority fully justify such an award. The majority states: “we conclude that Rumbaugh produced enough evidence at the trial in this case to prove the existence of an unlawful conspiracy.” (Montemuro, J., p. 325.) The majority further states:
We also disagree with Chandler that the trial court’s finding of conspiracy rested upon the findings of the Bankruptcy Court. The evidentiary basis for the conspiracy, that is, Joan Beck’s unlawful conversion of corporate funds, the relationship between the Becks and Chandler, and Chandler’s unlawful involvement with the Florida condominium, was established at the trial....
Rumbaugh proved that rental income from the condominium was diverted from the Corporation; that Chandler caused a fraudulent mortgage to be placed against the Florida condominium; and that the actions of Chandler and the Becks resulted in the Maryland Bank’s foreclosure on the condominiums, thereby precipitating the bankruptcy proceeding and the subsequent sale of the condominium and depletion of corporate assets. ... On remand the court should determine the amount of damages in light of Rumbaugh’s status as a defrauded creditor of Beck and the Corporation in accordance with the principles set forth above.
(At 327-328.) I believe the findings above clearly support the award of counsel fees and would also justify Rum-baugh’s requests for punitive damages.
As to counsel fees, it is provided by 42 Pa.C.S. § 2503, Right of participants to receive counsel fees:
*243The following participants shall be entitled to a reasonable counsel fee as part of the taxable costs of the matter:
(9) Any participant who is awarded counsel fees because of the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith.
Id. (emphasis added). I believe the actions of the Chandlers and the Becks was “otherwise arbitrary, vexatious and in bad faith.” Their conspiracy to defeat a judicial determination by the federal court, thereby forcing this litigation, fulfills all the requirements of arbitrary, vexatious and bad faith conduct and fully justifies the award of counsel fees necessary for Rumbaugh to pursue rights already won in a court of law. To require relitigation because of conspirational and unlawful action without compensation for legal costs diminishes the rightful recovery and inflicts further damages on Rumbaugh. Punitive damages should also be considered because of the unlawful, cynical and outrageous actions of the Becks and Chandler. That behavior certainly fulfills the requirements for awarding punitive damages detailed in SHV Coal, Inc. v. Continental Grain Co., 526 Pa. 489, 587 A.2d 702 (1991), cited by the majority.
I, therefore, concur with the majority’s decision to remand to recalculate damages in view of its finding on divestiture of Rumbaugh in the Corporation by the federal district court adjudication. I would affirm the trial court’s award of $25,000 in counsel fees and remand for a determination of punitive damages.