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Articles Posted in Business Torts

In the October 17, 2019 edition of The Legal Intelligencer Edward T. Kang, managing member of Kang Haggerty wrote “A Piece of the Tort(e): Tortious Interference With Expectancy of Inheritance.”

While recently gaining traction in both the public eye and the legal field, the claim of tortious interference with expectancy of inheritance is actually quite old and its interpretations vary among different jurisdictions, including in Pennsylvania.

Recently, a potential client came to me with the claim that his sibling was guilty of tortious interference with expectancy of inheritance. Although I decided not to take on the client for several reasons, his correspondence brought to my attention a twist in the traditional tortious interference claim. While recently gaining traction in both the public eye and the legal field, the claim of tortious interference with expectancy of inheritance is actually quite old and its interpretations vary among different jurisdictions, including in Pennsylvania. Continue reading ›

In the June 20, 2019 edition of The Legal Intelligencer, Edward Kang, Managing Member of Kang Haggerty wrote “Piercing the Corporate Veil Under Pennsylvania Law.”

In its simplest form, the piercing of the corporate veil is an equitable remedy available to the creditors of corporate entities to request the court to hold their owners liable for the corporate debts. The underlying cause of action against the corporate entity could be a contract or tort action, none of which is attributable to its owners. For the creditors, the veil-piercing is desirable as their last resort to recover their damages while for the owners, it is detrimental as it exposes them to the type of liability that they wished to exonerate themselves from by forming a company in the first place. These two competing interests drive the forces behind the state laws on substantive elements and procedural requirements for veil-piercing: the more favorable the state policy is toward preserving limited liability, the harder it is under the state law for the court to disregard corporate entity, and the other way around. Pennsylvania law adopted a “strong presumption” against veil-piercing, see Stephen B. Presser, “Section 2:42.Pennsylvania, in Piercing the Corporate Veil,” (last updated July 2018).

Substantive Elements

Pennsylvania state and federal courts applying Pennsylvania law has long listed a vast set of factors that the court may consider in its decision to disregard the corporate shield, including, among others, using the corporate form as a sham to pursue fraudulent or illegal activities or to cause injustice, ignoring corporate formalities, undercapitalizing the company and exerting control to influence the corporate decisions and actions for personal interests. Continue reading ›

Gregory H. Mathews, EsquireKang Haggerty & Fetbroyt is pleased to announce that Gregory H. Mathews, Of Counsel, has been selected for inclusion in the 2018 edition of The Best Lawyers in America one of the most respected peer-review publications in the profession.

Mathews is named to the list for his distinguished contributions to the practice area of commercial litigation. Commercial litigation involves any type of dispute that can arise in the business context, including breach of contract cases, SEC and NASD claims, class actions, business torts, civil RICO claims, breach of fiduciary duty allegations, and shareholder issues. Successful commercial litigators, such as Mathews, are able to assess the merits of a dispute and scale either a prosecution or defense that fits the legal and business needs of their clients.

Best Lawyers was founded in 1983 and is published in 70 countries and all 50 states. Its methodology employs a sophisticated, conscientious, rational, and transparent survey process designed to elicit meaningful and substantive evaluations of the quality of legal services. The 24th edition of The Best Lawyers in America highlights the top 5% of practicing attorneys in the United States, based on more than 7.4 million evaluations, recognizing attorneys in 140 practice areas.

On March 22, 2016, Kang Haggerty client Vizant Technologies received a $2.25 million judgment in the United States District Court for the Eastern District of Pennsylvania.

In the case, Vizant Technologies, LLC, et al. v. Julie P. Whitechurch, et al., Vizant asserted claims for breach of contract, defamation, and tortious interference with existing and prospective business relationships.

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In its August 11, 2014 decision in Griswold v. Coventry First, LLC, et al. the Third Circuit affirmed the District Court’s decision that denied Defendant’s motion to compel arbitration, and held that Plaintiff, Lincoln T. Griswold, was not estopped from pursuing his fraud claim by rejecting arbitration.

Griswold purchased an $8.4 million life insurance policy in January of 2006, establishing a Lincoln T. Griswold Irrevocable Trust for the “sole and exclusive purpose” of maintaining ownership of the policy. Shortly thereafter the formation of the Trust, Griswold formed a limited liability partnership in Georgia, Griswold LLP, as the sole beneficiary of the policy. Upon the receipt of the proceeds from the life insurance policy, this limited liability partnership would be dissolved, and the trustee would then liquidate the property, satisfy the claims of creditors, and distribute remaining property to the partners. At the completion of this task, the trustee would file a “Cancellation of the Election to Become a Limited Liability Partnership” to terminate the partnership.

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The economic loss doctrine prevents a plaintiff from recovering purely economic losses via a tort action (i.e., a negligence claim) in the absence of personal injury or damage to “other property.”  One court has described the economic loss doctrine as “prohibit[ing] plaintiffs from recovering in tort economic losses to which their entitlement flows only from a contract.”  Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 618 (3d Cir. 1995).  In other words, a plaintiff should be limited to a contract claim “when loss of the benefit of a bargain is the plaintiff’s sole loss.”  Id.

To illustrate, if a property owner hires a contractor to build a wall, which subsequently collapses due to the contractor’s negligence in constructing the wall, the property owner cannot sue the contractor for negligence.  The property owner’s redress is confined to the terms of the contract.  Given that the wall collapsed, it is likely that the contractor breached the contract with the property owner, who presumably bargained for a wall that should not collapse.  Since nothing other than the wall was damaged, and no one was injured, however, the property owner’s relief is restricted to what was specifically bargained for – the wall.  Thus, the property owner will only be able to recover the cost of the wall, or the cost of repairing the wall (i.e., he should only get what he bargained for: a wall).

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