ADELL BROADCASTING CORP V JAMES PANAGOS
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STATE OF MICHIGAN
COURT OF APPEALS
ADELL BROADCASTING CORPORATION and
FRANKLIN ADELL,
UNPUBLISHED
December 17, 2002
Plaintiffs-Appellants,
v
JAMES PANAGOS, RUTH PANAGOS, a/k/a R.
ANTOINETTE RILEY, and JOHN DOES 1-5,
No. 230405
Macomb Circuit Court
LC No. 99-000079-NZ
Defendants-Appellees.
Before: Griffin, P.J., and White and Murray, JJ.
PER CURIAM.
Plaintiffs appeal as of right the circuit court’s order granting defendants’ motion for
summary disposition pursuant to MCR 2.116(C)(10) in this action claiming abuse of process.
We affirm.
The elements of abuse of process are “(1) an ulterior purpose and (2) an act in the use of
process which is improper in the regular prosecution of the proceeding.” Friedman v Dozorc,
412 Mich 1, 30; 312 NW2d 585 (1981). In this case, the circuit court determined that plaintiffs
were unable to show that defendants committed an improper act in their use of process in a prior
action by defendants against plaintiffs.1
Plaintiffs claim that defendants committed an improper act in the use of process in two
ways (1) by offering to dismiss the underlying lawsuit in exchange for a “collateral goal,” i.e.,
proposing a settlement involving redemption of Adell Broadcasting Corporation (“ABC”) stock,
and (2) by abusing discovery in the underlying action.
On appeal, plaintiffs argue that this case is comparable to Three Lakes Ass’n v Whiting,
75 Mich App 564; 255 NW2d 686 (1977). In that case, the plaintiff was a non-profit corporation
that opposed a condominium project by the corporate defendant and filed an action to enjoin the
project. The corporate defendant and individual defendants filed an action (“Action 926”)
1
The facts of the underlying action are set forth in this Court’s opinion in Adell Broadcasting
Corp v Panagos, unpublished opinion per curiam, issued January 16, 2001 (Docket Nos. 216715,
216716).
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against the plaintiff, alleging tortious actions in obstructing the development. The plaintiff filed
an abuse of process claim against the defendants. The plaintiff alleged that the defendants
had no intention of accomplishing the ostensible purpose of the suit (to recover
damages) but rather intended to use Action 926 as a means to coerce plaintiff to
give up entirely all opposition to the condominium project. Thus, it is alleged,
defendants have abused the discovery process by burdening plaintiff with requests
for discovery while at the same time causing delays in complying with legitimate
discovery procedures of plaintiff, that defendants at one point agreed to settle the
case and subsequently refused to comply with that agreement, and that defendants
have conducted that lawsuit in an oppressive manner in various other ways.
It is also claimed that defendants have stated that they would dismiss
Action 926 without receiving any damages if plaintiff would agree not to express
opposition to or otherwise oppose defendants' proposed condominium project.
The gist of plaintiff's complaint thus charges defendants with an abuse of process
because they instituted the action for damages for the malicious and ulterior
purpose of causing plaintiff so much expense and trouble in defending it that
plaintiff would be forced to give up or at least be frustrated in pursuing its
legitimate activities in opposition to defendants' condominium project. [Three
Lakes, supra at 570.]
In Three Lakes, the Court quoted two treatises for an explanation of the nature of an
improper act in the use of process:
“Some definite act or threat not authorized by the process, or aimed at an
objective not legitimate in the use of the process, is required; and there is no
liability where the defendant has done nothing more than carry out the process to
its authorized conclusion, even though with bad intentions. The improper purpose
usually takes the form of coercion to obtain a collateral advantage, not properly
involved in the proceeding itself, such as the surrender of property or the payment
of money, by the use of the process as a threat or a club. There is, in other words,
a form of extortion, and it is what is done in the course of negotiation, rather than
the issuance of any formal use of the process itself, which constitutes the tort.”
[Three Lakes, supra at 573, quoting Prosser, Torts (4th ed) § 121, p 857.
Emphasis added in Three Lakes.]
***
“If the process is employed from a bad or ulterior motive, the gist of the
wrong is to be found in the uses to which the party procuring the process attempts
to put it. If he is content to use the particular machinery of the law for the
immediate purpose for which it was intended, he is not ordinarily liable,
notwithstanding a vicious or vindictive motive. But the moment he attempts to
attain some collateral objective, outside the scope of the operation of the process
employed, a tort has been consummated." [Three Lakes, supra at 573-574,
quoting Harper & James, The Law of Torts, vol 1, § 4.9, p 331. Emphasis added
in Three Lakes.]
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This Court held that the plaintiffs in that case had stated a cause of action for abuse of process:
Reviewing plaintiff's complaint by the appropriate standards for a
summary judgment motion, it is alleged that defendants have actively used Action
926 for the ulterior and collateral purpose of coercing plaintiff to end all
opposition to defendants' condominium project. If a specific allegation of an
identifiable act be necessary, plaintiff's allegation that defendants offered to
dismiss Action 926 in return for an end to all opposition by plaintiff to their
condominium project, would be sufficient. The allegation is not that defendants
simply offered to dismiss the damage action for tortious conduct upon the ending
of such conduct. Rather, the offer was premised on plaintiff ending all opposition
to the project, be it proper or tortious, and may be viewed on this motion for
summary judgment as a use of Action 926 as a club to obtain a purpose collateral
to its proper purpose. [Three Lakes, supra at 570.]
We agree with the circuit court that the present case is distinguishable from Three Lakes.
As noted by the circuit court, there was no evidence of coercive conduct by defendants in regard
to the settlement discussions involving the stock. Rather, the evidence indicates that defendants’
counsel raised the issue of stock in settlement discussions after defendants’ cases had been
resolved unfavorably to defendants. We cannot accept plaintiffs’ position that the dismissed
claims were used to coerce settlement. Even if the discussions occurred before dismissal, the
undisputed evidence indicates that defendants themselves were not interested in selling the stock.
In addition, plaintiffs’ characterization of the sale of the stock as a “collateral objective” is
questionable.
Obtaining monetary recompense from plaintiffs was not “collateral” to
defendants’ claims arising from the termination of James Panagos’ employment. The proposal
by defendants’ counsel that Ruth Panagos relinquish her stock to achieve the objective does not
transform the desire for monetary recompense into a “collateral advantage.” Under the
circumstances, we agree with the circuit court that the evidence concerning the settlement
negotiations did not establish an improper act in the use of process.
We further agree with the circuit court that defendants’ failure to comply with discovery
in the underlying action was inadequate to establish that defendants committed an improper act
in the use of process. As noted in the circuit court’s opinion, plaintiffs did not identify a
collateral purpose for defendants’ obstructing discovery. Although Three Lakes, supra at 564,
Young v Motor City Apts Ltd Dividend Housing Ass’n No 1 & No 2, 133 Mich App 671, 681;
350 NW2d 790 (1984), and Vallance v Brewbaker, 161 Mich App 642, 646; 411 NW2d 808
(1987), leave open the possibility that, under certain circumstances, discovery abuses could
support a cause of action for abuse of process, the facts here do not rise to that level.
Affirmed.
/s/ Richard Allen Griffin
/s/ Helene N. White
/s/ Christopher M. Murray
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