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The Pennsylvania Supreme Court reversed a lower court decision that found an insurance company and its law firm’s guardianship petition regarding a child whose parents would not accept a $7 million settlement offer was not an abuse of process. In May of 2007, a seven-judge majority of an en banc Superior Court panel ruled in Cruz v. Princeton Insurance Co. that Princeton Insurance and the insurer’s attorney, Alan S. Gold of Gold Butkovitz & Robins, were not subject to an abuse of process claim brought by the parents of a boy litigating a medical malpractice claim. The parents brought their abuse of process claim because the defendants had sought the appointment of a guardian for their son to compel consideration of the $7 million settlement offer. A lower court judge, Philadelphia Common Pleas Judge Esther R. Sylvester, had granted summary judgment in favor of Princeton Insurance and Gold in the abuse of process action Jacqueline Nieves Cruz and Oscar Cruz brought. A divided 2-1 Superior Court panel reversed summary judgment, but the en banc Superior Court panel reversed their colleagues. According to the Supreme Court’s May 29 per curiam order, “the Superior Court’s decision is reversed in part to the extent it holds that there was no genuine issue of material fact regarding whether the use of the [guardian ad litem] process was primarily used for a purpose for which it was not designed.” The three elements that a plaintiff must prove to establish a valid claim for abuse of process is if the legal process is brought against the plaintiff, whether the process was undertaken “primarily to accomplish a purpose for which the process was not designed,” and if harm has been caused to the plaintiff, according to court papers. The Cruzes brought their abuse of process action because they argued Princeton Insurance, Gold and his firm had caused them emotional distress from the fear their parental rights could be terminated. “This cut them too close to their hearts: the fact that somebody else could be appointed to make decisions for [their son] Adam,” said the Cruzes’ trial attorney, Jamie L. Sheller of the Sheller law firm. It was “very scary that somebody would be judging them as parents making decisions for this boy.” According to the Cruzes’ petition for allowance of appeal, the case involved a question of first impression if an insurance company can be sued for abuse of process after using a guardian ad litem proceeding “to pressure the minor’s parents to settle the litigation for less money” because such action used the guardian ad litem process to accomplish a purpose for which the guardian ad litem process was not designed. The Cruzes and their attorneys were concerned that if the Superior Court’s ruling was allowed to stand that it would be a green light for other insurance companies and their law firms to use guardian ad litem proceedings as an acceptable procedure to intimidate the parents or guardians of injured children litigating lawsuits into accepting settlement offers. “We view the development as one that is very positive from a parental rights perspective,” said Howard J. Bashman, a Willow Grove solo practitioner who represented the Cruzes in their Supreme Court appeal. Gold’s counsel, Jeffrey B. McCarron of Swartz Campbell, said the Cruzes’ premise incorrectly assumes that there is something inappropriate about an insurance company seeking the appointment of a guardian ad litem for the “special purpose of making decisions in litigation.” Other jurisdictions often appoint guardians ad litem to make decisions for minors in litigation, McCarron said. While the Cruzes were fearful that the guardian ad litem petition meant the termination of their parental rights, that was not the goal of this narrow request to appoint someone knowledgeable about litigation to make a decision in the best interest of Adam Cruz regarding the settlement offer, McCarron said. “The possibility that a petition for appointment of a guardian ad litem will be used in another proceeding is no basis from which to make it actionable and would chill the proper use of process . . . nobody every tried to take this child from his parents,” McCarron said. “This was not to terminate parental rights. The petitioners didn’t seek that. The relief was to have a guardian ad litem appointed for the special purpose of making decisions in litigation.” Princeton Insurance’s counsel, Lawrence M. Silverman of Silverman Burns Kasmer & Krawitz, did not respond to a request for comment. Gold also did not respond to a request for comment. The underlying case involved a medical malpractice action the Cruzes brought against Northeastern Hospital and two physicians, Dr. Myung Hyo Shin and Dr. Robert Cogan, because their son Adam suffered permanent injuries during his problematic delivery Aug. 14, 1992, according to the en banc Superior Court opinion of May 30, 2007. Adam, now a teenager, is an excellent student in a special class at a public school but still needs assistance in all physical activities because of his cerebral palsy, Sheller said. A jury rendered a $10.8 million verdict against the hospital but found the doctors were not negligent; with delay damages, the verdict was molded to more than $15 million, the opinion said. During post-trial settlement negotiations, the Cruzes rejected Princeton’s $7 million settlement offer, according to court papers. Gold filed a guardian ad litem petition in Family Court, arguing that a guardian be appointed to represent Adam Cruz’s interests and to evaluate the settlement on the grounds the verdict could be reversed on appeal and because the Cruzes allegedly were in disagreement about accepting the settlement. Philadelphia Common Pleas Judge Carolyn E. Temin denied the petition, but the Cruzes accepted the settlement offer of $7.1 million. The Superior Court majority of President Judge Kate Ford Elliott and Judges John T. Bender, Mary Jane Bowes, Maureen Lally-Green, John L. Musmanno and Jack A. Panella, determined that Common Pleas Judge Sylvester did not commit an error of law or abuse of discretion by granting the defendants’ motions for summary judgment. “While appellees might have had motives other than the appointment of a guardian ad litem to protect Adam’s interest, the petition did seek the appointment of a guardian and under the instant factual situation, such action was not inappropriate,” Bender wrote for the majority. “The petition sought the appointment of a guardian ad litem to evaluate the settlement. While appellees might have hoped that this would help resolve the case, the petition was not used to accomplish a purpose for which the process was not designed.” Supreme Court Justice Debra M. Todd, then a Superior Court judge, said in a dissent that she believed a jury could reasonably conclude “that appellees were seeking a guardian ad litem not for the primary benefit of Adam, a guardianship’s undeniable aim, but for the primary benefit of orchestrating a settlement.” Todd also found that there was a question to put to the jury regarding the issue of harm. Judge Correale F. Stevens joined Todd’s opinion. Judge Joan Orie Melvin in a concurrence with the majority said that summary judgment should be affirmed because the Cruzes failed to offer evidence to prove harm, the third element of the abuse of process claim. She said the Cruzes established the filing of a petition to appoint a guardian upset them, but that was not enough to satisfy the harm requirement. The Superior Court majority did find that the Cruzes satisfied the first element of an abuse of process claim that the legal process was used against them individually. The Supreme Court also remanded the case for the Superior Court to consider the harm element it set out in the 2006 McNeil v. Jordan decision. The defendants had moved for summary judgment on additional grounds over whether the Cruzes have proven the separate element of harm, so on remand the Superior Court will likely address the issue of harm, Bashman and McCarron said. Of the 11 appellate judges, six have looked at the harm element, and four found sufficient evidence to let the harm element survive summary judgment, Bashman said. The plaintiffs are optimistic that on remand the Superior Court will agree with the view of the majority of their colleagues and allow the case to move to trial, Bashman said. During the en banc Superior Court oral argument, the court was “keenly interested” in whether the plaintiffs’ presented evidence was enough to establish there was any harm for which the plaintiffs could recover, McCarron said. McCarron said the standard of harm in abuse of process claims is not well-established. The petition for allowance of appeal was decided on the papers without a briefing schedule and without oral argument, Bashman and McCarron said. “Here they skipped a step and did not provide us the opportunity for briefing,” McCarron said. Bashman in his experience said this was an unusual step “that indicates to me that [the court] viewed the issue of whether summary judgment was properly granted, on what I call the improper purpose prong, to be clearly incorrect.” Todd recused herself from the Supreme Court’s consideration of the case, according to the Supreme Court’s per curiam order. It appears that Justice Seamus P. McCaffery, also a Superior Court judge until recently and who was part of the three-judge panel reversed by the en banc Superior Court panel, participated in the Supreme Court’s reversal.

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