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J-A30008-11 2011 PA Super 265 BETTS INDUSTRIES, INC., Appellant v. RAYMOND V. HEELAN, JR. AND CAIRN L. BISHOP, Appellees : : : : : : : : : : IN THE SUPERIOR COURT OF PENNSYLVANIA

No. 328 WDA 2011

Appeal from the Order Entered January 7, 2011, in the Court of Common Pleas of Warren County, Civil Division, at No: AD 276 of 2010. BEFORE: BOWES, DONOHUE, and FREEDBERG, JJ. OPINION BY BOWES, J.: Filed: December 12, 2011

Betts Industries, Inc., ("Betts") appeals from the trial court's decision to grant Raymond V. Heelan, Jr. and Cairn L. Bishop's ("Appellees") preliminary objection in the nature of a demurrer and to dismiss Betts's cause of action for wrongful use of civil proceedings. remand for proceedings consistent with this opinion. Betts manufactures products for the highway cargo tank industry. Appellees are president and vice president of Allegheny Valve and Coupling Inc. Allegheny Valve and Coupling Inc. previously comprised two separate entities, Allegheny Valve and Allegheny Coupling, which were formed by the same individual and subsequently merged. Betts and Allegheny Coupling We reverse and

and Allegheny Valve were engaged in a business relationship whereby the

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two Allegheny companies sold manufacturing products to Betts. Allegheny Coupling was a purchaser of industrial couplings and fittings and would resell those products. Similarly, its sister company, Allegheny Valve, In 2006, Allegheny Coupling filed a federal

marketed and resold valves.

cause of action against Betts asserting violations of the federal Lanham Trademark Act. The claims included allegations of federal trademark and

trade dress violations as well as state law violations for theft of product, unjust enrichment, misappropriation of trade secrets, and breach of confidential relationship. dress claims. Ultimately, the federal court granted Betts's motion for summary judgment relative to Allegheny's federal trademark claim, dismissing it with prejudice. However, the federal court declined to address the state issues. Instead, the federal court dismissed the state claims without prejudice. Accordingly, Allegheny filed a complaint in state court raising the state law causes of action. Betts responded by simultaneously filing a counterclaim for wrongful use of civil proceedings, commonly known as a Dragonetti Act violation, against the corporate entity, and a separate cause of action against Appellees pursuant to the Dragonetti Act. the one at issue herein. This separate action is Allegheny eventually withdrew its federal trade

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Appellees countered by filing a preliminary objection in the nature of a demurrer, arguing that the Dragonetti action was premature. The trial

court, relying on Robinson v. Robinson, 525 A.2d 367 (Pa.Super. 1987), held that the federal action was not terminated in favor of Betts because Allegheny had been permitted to file its state claims in state court. Betts timely appealed and raises the following issues for our consideration. 1. Whether the Trial Court erred in granting Defendant's demurrer and dismissing Plaintiff's action for wrongful use of civil proceedings pursuant to 42 Pa. Cons. Stat.

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