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An attorney who sent a letter critical of a court reporter to opposing counsel was personally liable for tortious interference with the business relationship between the reporter and that law firm, the Pennsylvania Superior Court has ruled in an unpublished opinion. Court reporter Kathleen Gallagher, the sole proprietor of Gallagher Court Reporting Services, claimed in court papers that a letter that attorney Craig Thor Kimmel of Ambler, Pa.-based Kimmel & Silverman sent to the White & Williams firm in 1999 resulted in the interference of her business relationship with White & Williams, which had routinely hired Gallagher since 1988. White & Williams frequently represented defendants in lemon law cases opposite Kimmel & Silverman. Partially reversing the trial court’s decision, the panel said the evidence presented at trial was “more than sufficient to conclude” that Kimmel “actively participated in the claimed tortious interference with a contractual relationship” between Gallagher and Philadelphia-based White & Williams, which justified piercing the corporate veil to find Kimmel personally liable for damages. The panel said Kimmel’s demurrer to Gallagher’s claims for tortious interference “was improperly sustained” by the trial court. Gallagher v. Kimmel & Silverman was heard by Judges Justin M. Johnson and Senior Judges John G. Brosky and Frank J. Montemuro Jr. The January 1999 letter was faxed and circulated to three White & Williams attorneys: Raymond T. LeBon, Bryan McElvaine and Michael Rausch. According to the opinion, Kimmel’s letter read in part: “As you know … my firm has been sued by Kathy Gallagher in the past and … since that time, in my opinion, she has proven in subsequent cases to be totally uncooperative, dilatory, unreliable and extremely hostile to work with. “I am not necessarily referring to the court reporters themselves, but it is my opinion that she and her firm cannot be impartial in executing the responsibilities required of such a service,” the letter said. “To protect our clients’ interest I have invited you and your firm to select any court reporting service other than Gallagher Court Reporters.” LeBon, McElvaine and Rausch all testified at trial that they would have used Gallagher’s services, said Joel I. Fishbein of Philadelphia’s Abrahams, Loewenstein & Bushman, who represented Gallagher. Gallagher and Kimmel also took the stand. In her complaint, Gallagher said that following the letter, White & Williams canceled several depositions that it had contracted with her firm to report. She also claimed that White & Williams did not engage her for other depositions that she ordinarily would have taken, the opinion said. Gallagher sued Kimmel for defamation and asked for actual and punitive damages, but the trial court denied her request for punitives. The court, however, approved her motion for an injunction to stop Kimmel & Silverman from further interfering with her business relationships. The trial court ruled in favor of Gallagher on her tortious interference claim, awarding her damages of $26,325, according to Fishbein. Kimmel & Silverman demurred to Gallagher’s complaint, and Kimmel was individually dismissed as a party. PIERCING THE VEIL Under Pennsylvania case law, an individual may be found liable for a tortious act committed on behalf of a corporation where the record establishes the individual’s participation in the tortious activity, the court said. The so-called participation theory is not predicated on finding that the corporation is a sham or alter ego of the individual corporate officer, the court said. “We conclude that there were sufficient allegations of wrongdoing by Mr. Kimmel individually as an actor, rather than as an owner, such that the trial court erred in finding no recovery against him was possible,” the court said. APPEAL Kimmel & Silverman sought a j.n.o.v. on the tortious interference claim and the claim for injunctive relief and asserted that the damage award to Gallagher was excessive. The court denied all post-trial motions, and the parties cross-appealed. The Superior Court panel rejected Kimmel & Silverman’s j.n.o.v. motion, stating that it found “no error of law nor abuse of discretion in the trial court’s conclusion that [Kimmel & Silverman] was not privileged to interfere with Ms. Gallagher’s relationship with White & Williams as it did.” In considering a tortious interference claim, the court said, a court must look at “the nature of the conduct, the actor’s motive, the relations between the parties, the interests which are affected … [and] the ‘propriety of the defendant’s conduct considering the factual scenario as a whole.’” Although the trial court concluded that the letter was “general in nature” and didn’t apply to a specific case, it still found that evidence of tortious interference “went well beyond that letter” and that White & Williams attorneys were “dissuaded from continuing to use Ms. Gallagher’s services in various facets of their practice,” the opinion said. The trial court also found there was “sufficient evidence of motive [to interfere with Gallagher's business] unrelated to the protection of any particular litigation interests” and that Gallagher’s interests were “clearly adversely affected when White & Williams ceased retaining her services,” the opinion said. The court said the trial court did not err in refusing to grant a j.n.o.v. on the claim for injunctive relief because the trial court “simply enjoined the law firm from interfering with Ms. Gallagher’s contractual relationships” and “did not go further than the requested relief.” The Superior Court refused to disturb the damage award, which Kimmel & Silverman argued should have been reduced because the trial court failed to consider Gallagher’s concession that she would have paid part of her fees to independent contractors. The Superior Court panel concluded that the award “was supported by competent evidence” and didn’t merit adjustment. DEFAMATION Gallagher argued in her appeal that the trial court erred in refusing to remove a nonsuit it granted on her defamation claim, but the Superior Court disagreed. The court said Gallagher failed to establish she was defamed, because Kimmel clearly used the words “in my opinion” in the two sentences in his letter, which formed the basis for the cause of action. “Ms. Gallagher failed to establish that the statement was anything but an opinion, and … she did not prove any special harm or damages,” the opinion said. “It is clear that an action for defamation requires a statement of fact and not merely an expression of opinion.” And it was not error that Gallagher lost her claim of punitive damages because she failed to establish malice, the appeals court said. “The trial court heard all of the evidence and concluded that Mr. Kimmel’s act did not rise to the level of outrageous conduct warranting a punitive damage award,” the panel said. “Our review of the record finds no abuse of the trial court’s sound discretion.” REACTION Kimmel’s attorney, Gerald B. Baldino Jr. of Sacchetta & Baldino in Media, Pa., said Thursday that the ruling “will make it difficult for lawyers to meet their ethical obligations to lodge an objection to a court reporter they feel may not be impartial.” “It was no secret there was bad blood between Mr. Kimmel and Kathleen Gallagher,” Baldino said. “And for that reason, he didn’t think it would be appropriate to use her services at his depositions where he was present.” Baldino said the “bad blood” stemmed from a dispute in the early 1990s over which Gallagher sued Kimmel. From 1992 to 1994, Kimmel & Silverman hired Gallagher to transcribe depositions and ordered transcripts from her business. Gallagher stated in her complaint that Kimmel & Silverman refused to pay her for some copies. She later sued to recover her fee. Gallagher won a default judgment for $1,200 in a local district court and then executed on the judgment, getting the money directly from Kimmel’s accounts, which upset Kimmel, who maintained Gallagher had billed Kimmel for transcripts he didn’t want, Baldino said. “He conceded that he messed up by not showing up, and so she won by default,” Baldino said. “But did she have to execute on the judgment?” Kimmel’s position is that he had an absolute privilege to say what he did in his letter to White & Williams because the statements were made in the course of litigation, Baldino said Thursday. The court said that Kimmel wrongly relied on Pawlowski v. Smorto, a 1991 Superior Court decision, in taking this position, because the discussion of privilege in Pawlowski “related to a defamation claim [not the tort of intentional interference with a contractual relationship]. Even assuming that the same privilege applied to intentional interference claims, the court said, “the statement complained of did not relate directly to a particular legal proceeding.” But Baldino said this would have been impractical, because White & Williams and Kimmel were working on “tens or hundreds” of lemon law cases at any given time, and because White & Williams was using Gallagher regularly as a court reporter. Kimmel’s letter of objection to Gallagher was generally labeled, “re: lemon law cases,” Baldino said. Had the letter referred to a specific case, he said, the court might have viewed it as being covered by what he called the “litigation privilege.” The nature of Kimmel’s practice, Baldino said, is that he is a “consumer advocate,” working on large numbers of lemon law cases at a time. He said he is concerned that the court’s opinion “now means that attorneys cannot raise a blanket objection to a court reporter without worrying they’ll be sued for tortious interference,” he said. “We generally disagree with the result.” Baldino said Kimmel had not yet decided whether to appeal. Laurie Stewart of The Legal Intelligencer staff contributed to this report.

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