Pennsylvania Supreme Court Rejects Constitutional Challenge to the Dragonetti Act

Defense Digest, Vol. 23, No. 2, June 2017

By Aaron E. Moore, Esq.*

In 1980, the Pennsylvania General Assembly created a statutory cause of action for “wrongful use of civil proceedings,” commonly referred to as the Dragonetti Act. 42 Pa. C.S. 8351, et seq. The Dragonetti Act is designed to curtail frivolous litigation by holding attorneys and clients who engage in frivolous litigation liable to wrongfully sued parties. Under the Act, an attorney who participates in civil proceedings can be held liable to a prevailing opposing party if he, in prosecuting the underlying action, acts in a grossly negligent manner or without probable cause and primarily for an improper purpose. 42 Pa. C.S. §8351(a)(1). An attorney has probable cause if he reasonably believes that, under the facts upon which the underlying claim was based, the claim may be valid under existing or developing law. 42 Pa. C.S. §8352(1).

For many years, professional liability defense attorneys have argued that the Dragonetti Act seeks to regulate the conduct of attorneys in violation of Pennsylvania’s Constitution. Specifically, the Pennsylvania Constitution, Art. V, §10(c), provides, “The Supreme Court shall have the power to prescribe general rules governing practice, procedure and the conduct of all courts.... All laws shall be suspended to the extent that they are inconsistent with rules prescribed under these provisions.” This issue was recently presented to the Pennsylvania Supreme Court in Villani v. Seibert, 2017 Pa. LEXIS 939 (Pa. Apr. 26, 2017), where the court held that the Dragonetti Act did not violate Pennsylvania’s Constitution.

In the underlying civil proceedings, the Villanis, represented by Attorney Thomas D. Schneider, commenced an action to quiet title, claiming ownership of a 15’-wide strip of land that was part of a lot owned by Mary Seibert. When it was determined that Mrs. Seibert was in possession of the disputed land, the Villanis filed an action in ejectment. The Seiberts prevailed in the ejectment action on a motion for summary judgment, which was upheld by the Superior Court. Subsequently, the Seiberts filed suit against the Villanis and their attorney, Mr. Schneider, claiming that they were liable to them for wrongful use of civil proceedings.

Mr. Schneider filed preliminary objections to the Seibert’s Dragonetti claim, arguing that he could not be held liable under the Act because the Act violates Pennsylvania’s Constitution by encroaching the Pennsylvania Supreme Court’s exclusive power to regulate the conduct of attorneys. The trial court agreed with Mr. Schneider and dismissed the Dragonetti claim. Specifically, the trial court held that “[t]he Dragonetti Act is a legislative attempt to intrude upon the Supreme Court’s exclusive authority to regulate the conduct of attorneys in the practice of law.” Villani v. Seibert, 2015 Pa. Dist. & Cnty. Dec. LEXIS 13784 (C.P.Ches. Aug. 27, 2015)(citing Beyers v. Richmond, 937 A.2d 1082 (Pa. 2007)). The trial court further stated, “It is for the judiciary to sanction lawyers for bringing actions that are baseless or for otherwise engaging in inappropriate conduct. The Dragonetti Act, as it pertains to lawyers, is unconstitutional and unenforceable.”

The Seiberts appealed, and given the constitutional implications, the issue was presented to the Pennsylvania Supreme Court. The Supreme Court reversed the trial court and held that the Dragonetti Act was not unconstitutional. The Supreme Court disagreed with Mr. Schneider’s contention that the power to regulate the conduct of attorneys is exclusively vested with the Judiciary, stating, “The separation of powers doctrine contemplates a degree of interdependence and reciprocity between the various branches.” Villani, 2017 Pa. LEXIS 939 at *28. The court further concluded that the Dragonetti Act was not designed to regulate the conduct of attorneys; rather, its “[p]urpose to compensate victims of frivolous and abusive litigation and, therefore, has a strong substantive, remedial thrust.”

The Supreme Court’s opinion in Villani appears to contradict its own holding in Beyers v. Richmond, 937 A.2d 1082 (Pa. 2007), where the Supreme Court held that Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) is unconstitutional under Art. V, §10(c), to the extent it purports to regulate an attorney’s conduct because it constituted an encroachment upon the Pennsylvania Supreme Court’s “exclusive” power to regulate attorney conduct under Pennsylvania’s Constitution. Although the trial court relied on Beyers in dismissing the Dragonetti claim asserted against Mr. Schneider, the Supreme Court offered no analysis of the Beyers opinion. As Beyers and Villani both involve the issue of whether a statute that purports to regulate the conduct of attorneys violates Pennsylvania’s Constitution, one might have expected some sort of analysis of the Beyers holding. It should not go unnoticed, however, that Chief Justice Saylor, who authored the Villani opinion, offered a dissenting opinion in Beyers.

*Aaron is a shareholder in our Philadelphia, Pennsylvania office who can be reached at 215.575.2899 or aemoore@mdwcg.com.

^{Defense Digest, Vol. 23, No. 2, June 2017. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2017 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}