Betts Industries, Inc. v. Heelan

33 A.3d 1262, 2011 Pa. Super. 265, 2011 Pa. Super. LEXIS 4300
CourtSuperior Court of Pennsylvania
DecidedDecember 12, 2011
StatusPublished
Cited by10 cases

This text of 33 A.3d 1262 (Betts Industries, Inc. v. Heelan) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Betts Industries, Inc. v. Heelan, 33 A.3d 1262, 2011 Pa. Super. 265, 2011 Pa. Super. LEXIS 4300 (Pa. Ct. App. 2011).

Opinion

OPINION BY

BOWES, J.:

Betts Industries, Inc., (“Betts”) appeals from the trial court’s decision to grant Raymond V. Heelan, Jr. and Cairn L. Bishop’s (“Appellees”) preliminary objection in the nature of a demurrer and to dismiss Betts’s cause of action for wrongful use of civil proceedings. We reverse and remand for proceedings consistent with this opinion.

Betts manufactures products for the highway cargo tank industry. Appellees are president and vice president of Allegheny Valve and Coupling Inc. Allegheny Valve and Coupling Inc. previously comprised two separate entities, Allegheny Valve and Allegheny Coupling, which were formed by the same individual and subsequently merged. Betts and Allegheny Coupling and Allegheny Valve were engaged in a business relationship whereby the two Allegheny companies sold manufacturing products to Betts. Allegheny Coupling was a purchaser of industrial couplings and fittings and would resell those products. Similarly, its sister company, Allegheny Valve, marketed and resold valves. In 2006, Allegheny Coupling filed a federal cause of action against Betts asserting violations of the federal Lanham Trademark Act. The claims included allegations of federal trademark and trade [1264]*1264dress violations as well as state law violations for theft of product, unjust enrichment, misappropriation of trade secrets, and breach of confidential relationship. Allegheny eventually withdrew its federal trade dress claims.

Ultimately, the federal court granted Betts’s motion for summary judgment relative to Allegheny’s federal trademark claim, dismissing it with prejudice. However, the federal court declined to address the state issues. Instead, the federal court dismissed the state claims without prejudice. Accordingly, Allegheny filed a complaint in state court raising the state law causes of action. Betts responded by simultaneously filing a counterclaim for wrongful use of civil proceedings, commonly known as a Dragonetti Act violation, against the corporate entity, and a separate cause of action against Appellees pursuant to the Dragonetti Act. This separate action is the one at issue herein.

Appellees countered by filing a preliminary objection in the nature of a demurrer, arguing that the Dragonetti action was premature. The trial court, relying on Robinson v. Robinson, 362 Pa.Super. 568, 525 A.2d 367 (1987), held that the federal action was not terminated in favor of Betts because Allegheny had been permitted to file its state claims in state court. Betts timely appealed and raises the following issues for our consideration.

1. Whether the Trial Court erred in granting Defendant’s demurrer and dismissing Plaintiffs action for wrongful use of civil proceedings pursuant to 42 Pa. Cons.Stat. § 8351.
2. Whether the Trial Court erred in holding that the lawsuit filed by Allegheny Coupling Company (“Allegheny”) against Betts Industries, Inc. (“Betts”) in the United States District Court for the Western District of Pennsylvania, at Docket No. 06-00076E, had not terminated in favor of Betts within the meaning of 42 Pa. Cons.Stat. § 8351(a)(2), where the District Court entered summary judgment on the merits in favor of Betts on all claims asserted by Allegheny within its federal subject matter jurisdiction and dismissed these claims with prejudice.
3.Whether the Trial Court erred in holding that the lawsuit commenced by Allegheny against Betts in the United States District Court for the Western District of Pennsylvania, at Docket No. 06-00076E, had not terminated in favor of Betts where the federal trademark and trade dress infringement claims that the District Court dismissed with prejudice were separate and distinct from the state law claims concerning which the District Court declined to exercise supplemental jurisdiction.

Betts’ brief at 3.

Preliminarily, we note that although Betts sets forth three issues, they each pertain to the sole position of whether the trial court properly dismissed its Drago-netti action based on its finding that a proceeding had not yet terminated in favor of Betts. Hence, we address Betts’s claims together.

Our standard and scope of review for evaluating a trial court’s grant of preliminary objections is well established.

When an appeal arises from an order sustaining preliminary objections in the nature of a demurrer, which results in the dismissal of a complaint, the Superi- or Court’s scope of review is plenary. DeMary v. Latrobe Printing and Publishing Co., 762 A.2d 758, 761 (Pa.Super.2000) (en banc).
When reviewing an order granting preliminary objections in the nature of a demurrer, an appellate court applies [1265]*1265the same standard employed by the trial court: all material facts set forth in the complaint as well as all inferences reasonably deducible therefrom are admitted as true for the purposes of review.
Id. (emphasis removed). We need not consider the pleader’s legal conclusions, unwarranted inferences from facts, opinions, or argumentative allegations. Wiernik v. PHH U.S. Mortgage Corp., 736 A.2d 616, 619 (Pa.Super.1999), appeal denied, 561 Pa. 700, 751 A.2d 193 (2000).
The question presented by a demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. DeMary, 762 A.2d at 761. Where affirmance of the trial court’s order sustaining preliminary objections would result in the dismissal of an action, we may do so only when the case is clear and free from doubt. Id.
To be clear and free from doubt that dismissal is appropriate, it must appear with certainty that the law would not permit recovery by the plaintiff upon the facts averred. Any doubt should be resolved by a refusal to sustain the objections. We review the trial court’s decision for an abuse of discretion or an error of law.
Id. (citations and quotations omitted). A demurrer tests the sufficiency of challenged pleadings. Composition Roofers Local 30/30B v. Katz, 398 Pa.Super. 564, 581 A.2d 607, 609 (1990). Fact-based defenses, even those which might ultimately inure to the defendant’s benefit, are thus irrelevant on demurrer. Orner v. Mallick, 515 Pa. 132, 135, 527 A.2d 521, 523 (1987).
In the context of reviewing preliminary objections in the nature of a demurrer, an abuse of discretion is not merely an error of judgment. Ellenbogen v. PNC Bank, N.A., 731 A.2d 175, 181 n. 11 (Pa.Super.1999).

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Bluebook (online)
33 A.3d 1262, 2011 Pa. Super. 265, 2011 Pa. Super. LEXIS 4300, Counsel Stack Legal Research, https://law.counselstack.com/opinion/betts-industries-inc-v-heelan-pasuperct-2011.