Wrongful Use of Civil Proceedings: Dragonetti

In keeping with this author's monthly column on attorney liability, one would be remiss in not discussing Pennsylvania's wrongful use of civil proceedings cause of action more commonly known as: Dragonetti. Few if any plaintiff's civil litigators can claim having escaped a defense Dragonetti threat. In fact, as, attorney liability vis-à-vis sanctions litigation soars, so does it appear "Dragonetti actions" are also on the rise. In order to protect yourself, an attorney facing either a wrongful use of civil proceedings threat or action must understand this complex and evolving statute.

First and foremost, if you have received a Dragonetti threat (let alone been subject to such an action), you should immediately notify your insurer. There is no anecdotal evidence to indicate that the over-reporting of "occurrences" to a legal malpractice insurer in and of itself increases premiums. On the contrary, failure to report upon first notice will likely lead to an ultimate "reservation of rights" if not disclaimer of coverage. As this author has cautioned before, report! report! report! While most such actions are disposed on summary judgment given the Act's unique evidentiary requirements, self-protection must be maintained as these type of actions have led to rather large verdicts (this author need not cite specific verdicts because one need only imagine a jury's visceral reaction to the prima facie claim of so-called frivolous litigation causing damages in this conservative climate of anti-litigation public opinion if not tort reform legislation).

1n 1980, the Pennsylvania legislature codified at 42 Pa. C.S.A. § 8351 the tort of "wrongful use of civil proceedings":

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 [if]:

  1. he acts in a grossly negligent manner or without probable cause and primarily for the purpose other than that of securing the proper discovery [sic], 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.

At common law, Pennsylvania provided a cause of action for "malicious use of process" or "malicious prosecution" (not to be confused with "abuse of process"). Prior to theDragonetti Act, in order to prevail against someone who had wrongfully pursued civil or criminal process, the plaintiff had to establish malicious motive as well as an arrest or seizure of property. Relaxing the standards, in part, of the common law tort, the Act statutorily does not require an arrest or seizure.

Dragonetti action cannot begin until the termination of the underlying action in favor of the underlying action's defendant. One not a party to the underlying action cannot be a party to the Dragonetti action. While it is easy to comprehend the underlying action's termination in favor of the underlying action's defendant arising from a final judgment in favor of that defendant, some courts have held the voluntary termination of the underlying action as likewise constituting an "abandonment" vis-à-vis termination in favor of the Dragonetti plaintiff.

The next prong has been held to require the underlying action having been prosecuted in a "grossly negligent manner or without probable cause." Strict statutory construction, however, could lead to the Act's poor drafting being interpreted as requiring either: (1) gross negligence; or (2) without probable cause and for an ulterior purpose - that is, because of the absence of a comma after "without probable cause," a strict statutory construction could lead to the belief that the ulterior purpose element need not be established if the underlying action was prosecuted in a grossly negligent manner. That reading has been widely disavowed as undermining the legislative intent and as illogical notwithstanding the poor draftsmanship of the statute.

As to the gross negligence or without probable cause element, it is a defense for a party to rely upon the advice of counsel or for counsel to rely upon the representations made to them by their clients. § 8352. Owing to the sanctity of the attorney-client relationship between attorneys and clients with regards to their ultimate work product vis-à-vis litigation, neither need distrust each other and both can be wrong with both still maintaining an absolute defense.

The last prong, improper purpose, requires proof of an ulterior motive. By all accounts, this element is what renders Dragonetti actions so susceptible to summary judgment. While one could imagine a so-called SLAPP (strategic lawsuit against public participation) defamation action as evidencing an improper purpose (to silence by litigation a citizen's public complaint), or likewise with a vindictive divorce ending in countervailing litigation, it is not so easy to envision many other types of lawsuits being brought for an ulterior purpose. Certainly, the garden variety personal injury, commercial, or consumer protection lawsuit would not, at least from the attorney's perspective, seem to fit well within Dragonetti's scope.

Dragonetti successful plaintiff may recover for the "harm normally resulting from any arrest or imprisonment, or any disposition or interference with the advantageous use" of his property, the harm to reputation by any defamatory matter alleged as the basis of the proceedings, attorney's fees, other pecuniary loss, emotional distress and, in appropriate cases, punitive damages. § 8353. Under the Supreme Court's somewhat recent case law regarding defamation, it would appear that the underlying action, in and of itself, cannot be used as a basis for defamation damages against a Dragonetti attorney defendant (as opposed to the underlying action's publication to a third-party news media).

In Beyers v. Richmond, the Pennsylvania Supreme Court held attorneys cannot normally be liable under the Unfair Trade Practices and Consumer Protection Law ("UTPCPL"). In so holding, the Supreme Court opined that attorney misconduct is solely the purview of the judiciary and cannot be legislated. Likewise, there has been growing arguments that the Dragonetti Act is similarly unconstitutional as likewise attempting to control attorney conduct. There has been no precedential opinion issued on this point.

Similar to the unconstitutionality of the Dragonetti Act as regards attorney defendants, the burden of proof as to Dragonetti is also open for argument-Does the improper purpose prong need be established by clear and convincing evidence? Likewise, can ulterior motive be inferred from the abject failure of probable cause? Does the statutory poor construction make it void for vagueness. These are all questions remaining to be answered.

While "frivolous" litigation has become a catch-phrase for quite sometime, regardless of the open questions, the Dragonetti Act is not intended to codify a tort cause of action for the mere filing of a purported frivolous or losing lawsuit. Explained in this column last month, frivolous pleadings are, instead, governed by rules of procedure (i.e., Pa.R.C.P. 1023.1; F.R.C.P. 11, Pa.R.A.P. 2744; F.R.A.P. 38) as well as statutes precluding the vexatious multiplication of proceedings (i.e., 42 U.S.C. § 1927; 42 Pa.C.S.A. § 2503). Dragonetti truly regards actions having no basis in fact or law by any estimation or under any circumstance and knowingly initiated despite same for a purpose other than settlement, judgment, reasonable extension of the law, or other such belief. To that end, while a baseless "Dragonetti letter" has not, in and of itself, been held sanctionable, in conjunction with truly sanctionable conduct that letter has been held evidence of that conduct's improper motive. While there is perhaps a time and place for Dragonetti (and sanctions) litigation, its unfortunate over-use has robbed it of its ability to prevent that which it provides a remedy.

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