In a memorandum opinion issued May 10, the Superior Court held that a defendant was entitled to recover sanctions under Rule 1023, Pennsylvania’s equivalent of Rule 11. Tomalonis v. Levant, No. 731 EDA 2004 (Pa. Super., May 10, 2005).
The underlying suit had resulted in a verdict of $11,000 for Joseph Tomalonis. Tomalonis v. Equity One, Inc., No. 99-22665, verdict (C.P. Montgomery Cty., Feb. 2003), reported in 21 Pennsylvania Jury Verdict Review & Analysis (Issue No. 8, July 2003). According to Tomalonis’ estate, after the verdict was reduced to judgment by defendant’s counsel, counsel for the defendant called the IRS — allegedly as a way of “saying thanks” to Tomalonis’ counsel for his conduct in the litigation — and advised it of the judgment. Exercising its lien for unpaid taxes, the IRS then swooped in and collected all but $72.42 of the judgment before it ever reached Tomalonis’ pocket. (Tomalonis, at p. 2, quoting Trial Court Opinion 6/30/04.)
This act of justice for taxpayers resulted in an action for abuse of process against the defendant in the prior action and its attorneys. Tomalonis’ complaint was that the action taken in contacting the IRS was done for purposes other than defending the claim, arising from a personal vendetta against Tomalonis himself. The Court of Common Pleas dismissed the complaint on preliminary objections, finding that there was no consequential harm.
The Superior Court panel agreed, stating that “[t]he fact that he did not actually receive the entire proceeds of the award due to his own indebtedness does not translate to the type of harm necessary to support a claim of abuse of process.” (Tomalonis, at p. 8)
The trial court, however, rejected defendants’ motion to impose Rule 1023.1 sanctions, stating that, “[w]hile the case ultimately did not pass muster, the stench of [defendants’] motivations was sufficient to pass the initial ‘smell test’ in bringing an action to test the waters. The complaint was not so unreasonable that this Court’s denial of the … motion for sanctions constituted an abuse of discretion.” (Tomalonis, at p. 9, quoting from Trial Court Opinion, 6/30/04, at 8)
The Superior Court panel’s “smell test” went 180 degrees in the other direction, stating that “[t]he absolute inability of Tomalonis to establish compensable harm demonstrates that the impossibility that his complaint would ‘test the waters’ of otherwise well established Black letter law regarding the tort of abuse of process.” (Id.)
Therefore, at least in the view of one appellate panel, the fact that one aspect of the case may in a trial court’s view indicate that there was “stench” to be remedied is no excuse: If there is any one critical element of a case that simply cannot be supported, Rule 1023.1(c) sanctions must be imposed. (Id. at 10.)
Beware: When you are out “testing the waters,” your paddle may be taken away.
Jeffrey B. Albert is a shareholder of the Philadelphia-based law firm of McKissock & Hoffman P.C., with offices also in Harrisburg, Doylestown, West Chester and Westmont, N.J. He serves as co-chair of the PBA Task Force on Law Practice Management and Legal Technology and as chair of a PBA Professional Liability Committee subcommittee.