Flanagan v. Hill

78 Pa. D. & C.4th 487
CourtPennsylvania Court of Common Pleas, Centre County
DecidedMarch 1, 2006
Docketno. 2005-1567
StatusPublished

This text of 78 Pa. D. & C.4th 487 (Flanagan v. Hill) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Centre County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Flanagan v. Hill, 78 Pa. D. & C.4th 487 (Pa. Super. Ct. 2006).

Opinion

KISTLER, J,

Presently before this court are defendants’ preliminary objections to Michael S. Flanagan’s (plaintiff) amended complaint. Plaintiff was the owner and sole stockholder of First Affiliated Insurance Group.

FACTUAL BACKGROUND

In 1998, plaintiff formed First Affiliated to operate as an Erie Insurance agency. First Affiliated is in the business of selling insurance products offered by Erie, including homeowner’s insurance policies and car insurance policies. In 1997, plaintiff had applied to become an Erie agent, but Douglas Fitzgerald, Erie’s then regional vice president, rejected the application. Plaintiff appealed Fitzgerald’s decision to Erie’s Board of Directors. The Board of Directors subsequently approved plaintiff’s application, and plaintiff entered into an agency agreement with Erie. Erie later terminated the agreement due to an audit finding that a check payable to First Affiliated for premiums was deposited in the agency’s operating account rather than the agency’s premium escrow account.

DISCUSSION

Plaintiff argues in his amended complaint that: (1) Erie breached the contract by improperly terminating the agreement; (2) defendants Hill and Fitzgerald intentionally interfered with plaintiff’s contractual relation with Erie as an assignee of First Affiliated; (3) defendants Hill and Fitzgerald intentionally interfered with plaintiff’s contractual relation with Erie as an individual; and (4) [489]*489defendants Hill and Fitzgerald conspired with each other to harm plaintiff by their concerted actions.

Regarding the first issue, plaintiff argues that Erie terminated the agreement based solely on an isolated incident in which a bookkeeper accidentally deposited the premiums into the incorrect account. Plaintiff maintains the bookkeeper acted without his knowledge, and the bookkeeper’s actions did not harm Erie. As such, plaintiff contends Erie terminated the agreement without cause.

With respect to the second and third issues, plaintiff contends defendants Hill and Fitzgerald intentionally interfered with his contractual relations with Erie, both in plaintiff’s official capacity as assignee of First Affiliated and individually. Plaintiff contends Fitzgerald was avenging plaintiff’s appeal of Fitzgerald’s denial of plaintiff’s agency license petition. Plaintiff believes defendants Hill and Fitzgerald initiated an improper and unwarranted investigation into First Affiliated, met privately with employees and disparaged plaintiff, encouraged Erie to terminate plaintiff, and encouraged First Affiliated employees to initiate steps to take over First Affiliated. Plaintiff believes these actions were intended to destroy his insurance business.

Regarding the fourth issue, plaintiff argues defendants Hill and Fitzgerald conspired against him by intentionally interfering with the agreement, disparaging plaintiff and First Affiliated, forcing plaintiff to sell First Affiliated, and by interfering with plaintiff’s sale of First Affiliated that resulted in a below-value sales price.

Plaintiff is also seeking attorney’s fees.

[490]*490Defendants, on the other hand, first argue that plaintiff’s second allegation is improper. Defendants contend Hill and Fitzgerald cannot be regarded as third parties for an intentional interference with contractual relations claim because Erie is a corporation. As a corporate entity, Erie’s employees cannot be regarded as third parties in intentional interference with contractual relations actions. As such, plaintiff lacks capacity to sue Hill and Fitzgerald as individuals.

Defendants also allege that plaintiff’s second allegation fails to comply with Pa.R.C.P. 2002. Rule 2002 states:

“(a) Except as otherwise provided in clauses (b), (c) and (d) of this rule, all actions shall be prosecuted by and in the name of the real party in interest, without distinction between contracts under seal and parol contracts.
“(b) A plaintiff may sue in his or her own name without joining as plaintiff or use plaintiff any person beneficially interested when such plaintiff
“(1) is acting in a fiduciary or representative capacity, which capacity is disclosed in the caption and in the plaintiff’s initial pleading; or
“(2) is a person with whom or in whose name a contract has been made for the benefit of another.
“(c) clause (a) of this rule shall not apply to actions where a statute or other ordinance provides otherwise.
“(d) clause (a) of this rule shall not be mandatory where a subrogee is the real party in interest.”

Defendants argue plaintiff Flanagan is not a real party at interest on the cause of action pled. As such, this Count should be dismissed.

[491]*491Defendants contend there is a legal insufficiency with the pleading regarding plaintiff’s third claim (defendant’s intentional interference with business relations with plaintiff as an individual). Defendants argue the essential elements of such a cause of action are an existing or prospective contractual relationship between the plaintiff and a third party, and the defendant interferes with performance of that contract by inducing a breach or otherwise causing a third party not to perform or enter into a contract. Also, pecuniary loss suffered by plaintiff as a result of the breach is required. Defendants argue Count Three merely restates the cause of action plaintiff states in Count Two. Moreover, defendants contend plaintiff’s claims are mere conclusions, not facts. As such, plaintiff has failed to state a cause of action upon which relief can be granted.

As to plaintiff’s fourth claim, defendants argue an essential element for a civil conspiracy is an agreement between two or more persons. Defendants also argue that, absent a valid claim for intentional interference with business relations, there can be no cause of action for civil conspiracy. Defendant also notes that plaintiff does not identify the other alleged co-conspirators in his amended complaint. As such, defendants maintain plaintiff has failed to state a claim upon which relief can be granted.

Defendants do not address plaintiff’s first claim, improper termination of the agreement by Erie, in their preliminary objections.

Preliminary objections should be sustained when the law will not permit a remedy, “and where any doubt ex[492]*492ists, that doubt should be resolved by a refusal to sustain the preliminary objections.” J.B. Steven Inc. v. Board of Commissioners of Wilkens Township, 164 Pa. Commw. 315, 320, 643 A.2d 142, 144 (1994), appeal denied, 539 Pa. 671, 652 A.2d 841 (1994). In cases where preliminary objections would result in the dismissal of a cause of action, preliminary objections should only be sustained where it is clear and free from doubt that the pleader has not pleaded facts sufficient to establish his right to relief. Bower v. Bower, 531 Pa. 54, 57, 611 A.2d 181, 182 (1992).

A demurrer will not be sustained unless the face of the pleadings shows that the law will not permit recovery, and any doubts should be resolved against sustaining the demurrer. DeHart v.

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Cite This Page — Counsel Stack

Bluebook (online)
78 Pa. D. & C.4th 487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flanagan-v-hill-pactcomplcentre-2006.