Opening up wrongful use of civil proceedings

/ 30.Dec, 2011

The Superior Court has issued an opinion which could spell big trouble for Pennsylvania attorneys.  The court’s decision in Betts Industries, Inc. v. Heelan, Pa. Super. No 328 WDA 2011, suggests that a wrongful use of civil proceedings claim can be brought when an action originally brought in Federal Court was dismissed as to federal claims, even though state law claims remain.  The court stated that a plaintiff can succeed in a Dragonetti (wrongful use of civil proceedings) action based on federal claims without a legitimate basis even if the same action includes “entirely legitimate state causes of action.”

The holding in Betts Industries is contradictory to a well established line of cases which state that wrongful use of civil proceedings will be judged by an action as a whole, not be individual claims.  In Laventhol & Horwath v. First Pennsylvania Bank, 18 Phila. 580, 583 (1988), aff’d. 573 A.2d 626 (Pa. Super. ), appeal denied, 593 A.2d 420 (Pa. 1990) the plaintiffs also premised their case on specific fraud counts in the underlying suit lacking probable cause even in light of the existence of probable cause for the remaining counts.   Judge Prattis identified the primary issue as “whether the fact that one element of a pleading may have been alleged without sufficient probable cause, may be used as a basis for initiating a suit against the attorney, of a party, under 42 Pa. C.S.A. § 8351 et seq., where the other elements and theories of that pleading, alleged by the party are supported by probable cause?”  The court determined it could not be.  The opinion in Laventhol & Horwath was cited with approval by the Eastern District of Pennsylvania in Rosen v. Tabby, No. Civ. A. 95-2968, 1997 WL 667147*7 (E.D. Pa. 1997).  The court in Rosen stated: “[U]nder Pennsylvania law, it is clear and certain that the probable cause to bring the underlying litigation relates to the entirety of the lawsuit, and not to some specific claim or claims within that suit.”

The decision in Betts Industries opens up the possibility of wrongful use of civil proceedings cases being brought even where the underlying action was ultimately won on the basis that a single claim among many was brought without probable cause.  Professional liability avoidance and defense just became a little more difficult.   As the man used to say: “Let’s be careful out there.

Josh J.T. Byrne, Esquire