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SMITH v. FIDELITY MUT. LIFE INS. CO.

January 31, 1978

JOHN ANTHONY SMITH, Plaintiff,
v.
THE FIDELITY MUTUAL LIFE INSURANCE COMPANY, RICHARD H. HOLLENBERG, G. GLAY VON SELDENICK and ROY D. KENT, Defendants


Tenney, District Judge.


The opinion of the court was delivered by: TENNEY

TENNEY, District Judge.

In the aftermath of a ten-year litigational history, the plaintiff, John Anthony Smith ("Smith"), an attorney, is suing defendants The Fidelity Mutual Life Insurance Company ("Fidelity") and Richard H. Hollenberg, G. Clay Von Seldenick and Roy D. Kent ("the individual defendants") on three counts. The action is before this Court on diversity grounds. Smith charges Fidelity with commission of prima facie tort; in the alternative he claims damages for breach of a covenant between himself and Fidelity. In the third count the individual defendants, who are officers of Fidelity, are sued alternatively to Fidelity, the claim resting on a theory of tortious interference with the contractual relationship between Smith and Fidelity. All of the defendants have moved pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the two counts which rest on the theories of prima facie tort and tortious interference with contractual relationships. *fn1" For the reasons stated below the motion addressed to the theory of prima facie tort is denied; that in respect of tortious interference with contract is granted.

 Relationship Between the Parties

 The three alternative claims for relief are rooted in a suit commenced by Fidelity in 1973 in which Smith was named as a defendant. Smith had represented two clients who, in 1968, settled actions then pending between themselves and Fidelity. As part of the settlement, Smith acquired "mere record title," Plaintiff's Memorandum of Law, Preliminary Statement, of an undivided one-sixth interest in a parcel of New York real property mortgaged to Fidelity. In 1970 Fidelity entered into an agreement with the owners of the property, including Smith as a nominal owner, to extend the debt and mortgage. That agreement contained a paragraph, the full text of which is set out in the margin, *fn2" which Smith contends was a covenant not to sue him in any action concerning the property. Nevertheless, Fidelity did institute suit on the debt and mortgage and on other claims related to the property and named Smith as one of the defendants, although he had by then ceased to have any interest, nominal or otherwise, in the property. *fn3"

 Smith defended himself pro se in this 1973 action, and on December 23, 1976 judgment was entered in his favor exonerating him from any liability vis-a-vis Fidelity's claims. Smith is now suing for the cost of defending himself and for punitive damages, alleging that the defendants conspired to name him as a party to their suit despite their knowledge of the covenant not to sue and of Smith's original status as a mere title holder of record. He charges that in so conspiring the defendants were either:

 
A. grossly negligent; or
 
B. motivated by both:
 
(i) a disinterested malice; and
 
(ii) a desire and intent to intimidate plaintiff and to thereby disable him from assisting, or to disincline him to assist, other defendants in the Foreclosure Action on whose behalf he had previously acted and to obtain his support in said action for Fidelity Mutual;
 
or all of these.

 Amended Complaint para. 26. Defendants maintain that Smith has not stated a legally sufficient claim in either prima facie tort or tortious interference by the individual defendants with a contractual relationship.

 Prima Facie Tort

 In 1946 the New York Court of Appeals reaffirmed its commitment to the common law principle that the intentional infliction of temporal damage, without justification, is a tort cognizable at law whether or not it fits classical tort categories, Advance Music Corp. v. American Tobacco Co., 296 N.Y. 79, 70 N.E.2d 401 (1946), and adopted the phrase "prima facie tort" as a convenient rubric for this essentially amorphous "noncategory" of intentional wrong. However, the doctrine of prima facie tort quickly began to develop formal boundaries, and its use was carefully limited and delineated by New York courts. In a leading New York case the theory was expounded as follows:

 
The key to prima facie tort is the infliction of intentional harm, resulting in damage, without excuse or justification, by an act or a series of acts which would otherwise be lawful. The need for the doctrine of prima facie tort arises only because the specific acts relied upon -- and which it is asserted caused the injury -- are not, in ...

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