Thursday, February 8, 2007

Runkle v. O'Neil (Maryland U.S.D.C.) (Not Approved for Publication)

Memorandum and Order issued February 7, 2007. Opinion by Judge Catherine C. Blake. Not approved for publication.

This is a ruling on a motion to dismiss under Fed.R.Civ.Proc. 12(b)(6). The issue is whether the doctrine of "public official immunity" bars a cause of action against a town commissioner for tortious interference with prospective advantage, malicious use of process, and civil conspiracy where the plaintiff alleged that the defendant maliciously interfered in the plaintiff's bankruptcy proceeding to oppose plaintiff's discharge and interfered with the plaintiff's procurement of a business permit for the purpose of gaining a competitive advantage for a rival business.

The plaintiffs, husband and wife, had purchased a printing business. The seller took the plaintiffs' promissory note in exchange for the business and he covenanted to remain and run the business for the plaintiffs. The business subsequently failed. The seller demanded payment in full of the promissory note. He then threatened to foreclose on the business and sell it. The plaintiffs then opened a different printing business, and the plaintiff husband filed for bankruptcy.

When the plaintiffs applied for a permit for their new company, the defendant, a town commissioner and friend of the seller, inserted himself into the permit process. He pushed the town planner to investigate the plaintiffs for alleged permit violations, urging him to take measures such as "unannounced inspections," referring to the plaintiff husband as a "sleeze" who needed to be "'shut down.'"

After the plaintiffs obtained the permit, the defendant wrote or caused the filing of a complaint with the U.S. Trustee's office requesting reversal of the plaintiff husband's bankruptcy discharge for fraud. The filing was part of a plan between the defendant and his friend, the seller, to force the closure of the plaintiffs' business.

Held: Sitting in diversity and applying Maryland law, the Court held that the doctrine of public official immunity affords immunity to officials 1) acting in their official capacity and 2) in the absence of malice. The complaint, however, alleged conduct that did not clearly fall within the defendant's official governmental duties. In addition, the complaint sufficiently alleged that the defendant acted with malice. Viewing the allegations in a light most favorable to the plaintiff, the complaint asserted a cause of action. Accordingly, the Motion to Dismiss was denied.

A copy of the opinion is available in PDF.

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