2006 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 3-9-2006 

# K uhnle v . P r ude n t i al P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de n t i al D ocke t N o . 04-4598

F o l lo w thi s a nd a dd it ion al w ork s at : h tt p://d i g it alc ommon s .l a w . v i l l a no va . e du/thir dc ir c uit_2006

Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2006 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m at ion, p le as e c on t a ct Be n j a min . C a rl s on@l a

w . v i l l a no va . e du . Re c omme nde d C it at ion
" K uhnle v . P r ude n t i al " (2006). 2006 D e cisio n s . P ape r 1348. h tt p://d i g it alc ommon s .l a

w . v i l l a no va . e du/thir dc ir c uit_2006/1348P RE CE DE NT I AL I N TH E UN I TED STATES CO UR T OF A PP EALS

F O R T H E T H IR D C IR C U IT
N o. 04- 4598
S VE N AL I KUHNL E , S u c c e s s o r T r u s t e e o f t h e P a t r i c i a A. D re sc h L iv in g T ru st, Appel l ant

v. P R U D E N T IA L S E C U R IT IE S , IN C .; G E L IF E A N D A N N U IT Y A S S U R A N C E C O M P A N Y ;

S ANDR O J
. F RA NC ANI Appel l ees

O n A p p ea l from the U n it ed S tat es D ist ri ct C o u rt f o r th e W e ste rn D istric t o f P e n n sy lv a n ia ( D . C
. N o. 04- cv- 00228) D istric t Ju d g e : H o n o ra b le S e a n J. M c L a u g h lin

A r gued J anuar y 18, 20062 B e f o re : R O T H , F U E N T E S , a n d B E C K E R , C i r cui tJudges
.

( Fi l ed M ar ch 9 2006) P E R C Y L . IS G IT T (A rgu ed ) Is git t & A ssoci at es 4801 W oodw ay Sui t e 222E H ous t on, T X 77056 A t t or ney f

or Appel l ant N I C H O L A S P. V A R I ( A r gued) ERI C R. I . CO TTLE Ki r k p a t r i c k & Lo c k h a r t Ni c h o l s o n Gr a h a m H enr y W . O l i ver B ui l di ng 5 3 5 S m ith f

ield S tre e t Pi t t s bur gh, PA 15222 A t t or neys f

or Appel l ees P r udent i alSecur i t i es , I nc. and S a n d ro J . Fra n c a n i R O G E R H . T A F T (A rgu ed ) M acD onal d, I l l i g, J ones & B r i t t on 1 0 0 S tate S tre e t Sui t e 700 E r i e, PA 16507 A t t or ney f

or Appel l ee G E Li

f e and Annui t

y Ass ur ance C om pany

OPI NI ON O F THE COURT B E C K E R , Ci rc ui t

J udge
.3 Sve n Al i Kuhnl e a

ppe a l s the Di s tr i c t

Court ’ s gr ant

of
su mm ary j u d g m en t ag ain st h im

inh is claim

ag ain st Pr ude nt i a l Se c ur i t i e s , GE Li fe and Annui ty As s ur anc e , and Sand ro J. Francani to re cover pay m ent on a li fe insurance po li cy . This a

pp ea l pre se nts t

he qu es ti on wh ether, un der Penn sylvania

law, a pla inti ff

m ay file a s ec on d act ion after his nearl y identi ca l a ct ion h as been dism is se d w it h p re ju dice by a jud gm ent of n on pros. W e c on cl ud e that where t here has b een a f in d in g o f p rej u d ice, an dth e case is d ism issedw ith pr e judi c e i n awe l l
- c ons i de r e d judi c i a l or de r , s uc h ade c i s i on is “o nth e m erits” an da sub sequ en t actio nis b arred . B ecau se Kuhnl e ’ s c a s e fa l l s unde r thi s r ul e , we wi l l a ffi rm

the j u d g m en t o f

th e D istrict C o u rt.

I. T h e f acts are qu ite sad
. I n 1994, Pat r i ci a D r es ch t ook out a $1, 000, 000 l i fe i ns ur ance pol i cyfr om a company t hat l a t e r b e c a me GE L i f

e a n d An n u i t y As s u r a n c e Co mp a n y ( “ GE L i fe” )
. T he pol i cyr equi r ed t hat a pr emi um pay m ent be made
eac h y ear . T he pay m ent s appea r t o have be en t i m el y m ade unt i l t he 2000 pay m ent beca m e due. A t t hat poi nt , D r es ch w as4 i n poor heal t h – s he w as decl ar ed i ncompet ent on or about D ece m ber 16, 2000 and pas s ed aw ayon J anuar y 11, 2001. O n Ja n u a ry 4 , 2 0 0 1 , the o rig in a l tru ste e o f th e P a tricia A
. D resc h L iving T rust, alon g w it h D resc h ’s da u g h ter,
a t t e m p t e d t o d i s c o v e r t h e s t a t u s o f t h e l i f e i n s u r a n c e p o l i c y. T heydi s cus s ed t he mat t er w i t h Sandr o Fr anca ni , an advi s or and br oker for Pr udent i al Secur i t i es w ho had pr ovi ded fi nanci al pl anni ng and advi ce t o M r s . D r es ch. Fr anca ni s t at ed t hat he coul d not det er m i ne w het her t he pr emi um had bee n pai d. H ow ever , on J anuar y 12, 2001, Fr anca ni l ear ned t hat t he i ns ur ance pol i cyhad l aps ed on J anuar y 4, 2001 due t o nonpay m ent . T her efor e, no deat h benef i t w as pai d. I t has been al l eged t hat Fr anca ni agr eed t o m oni t or t he pol i cybut fai l ed t o do s o. Sve n Al i Kuhnl e i s the Pl a i nt i ff i n thi s c a s e – and Suc c e s s or Tr us t e e of the Patr i c i aA. Dr e s c h Li vi ng Tr us t . The Defend ants ar e Prudentia l Sec urit ie s ( “Prudentia l” ), GE Life, and F rancani. Th e fir st

ac ti on agai nst t

he Defend ants was fi l e d on Mar c h 26, 2002, i n the Court of Comm on Pl e a s of E rie C o u n ty , P en n sylv an ia. N o m easu res w ere tak en to5 ad v an ce th e law su it f

o r so m e tim e. Pe t i t i ons for

ajudgm e nt

of non pr os we r e the n fi l e d. Info rm at ion abo ut the Defendants’ pet it ions and a court order to show ca

use why the pet it ions shou ld no t be granted were fo rwar ded to Kuh nle’ s att orney . The Co urt of C omm on Plea s c ons i de r e d the m att e r

and, on Nove m

be r 10, 2003, e nt e r e d a j u d g m en t o f

n o np ro s. T h e C o u rt d ism issedth e actio nw ith pr e judi c e , s t at i ng that

the Pl a i nt i ff “ fa i l e d t o e xe r c i s e due dili gence i n p roce eding w it h rea sonable prom

ptit ud e, that Plai ntiff h a[d] no com

pell ing rea son f

or the del ay , andthat D ef en d an ts h a[ d ] su f

f eredactu al p rej u d ice.” Th e Cou rt no te d th at a cru cial w itn ess h adlef t th e j u risd ictio nan dth at at least
one De fe ndant

ha d s uffe r e d pr e

judi c e t o hi s r e put at i on. Se ve r a l m onths l at e r , the Court de ni e d ape t i t i on, m a de on be ha l f of Kuhnl e , t o s tr i ke the judgm e nt of non pr os . The C o u rt d idso ina len g th y

o p in io naf

ter b rief in g b y th e p arties. On October 31, 20 03 , the sam e day as the s cheduled h earin g o nth e p etitio n s f o r n o np ro s, Ku h n le f

ileda n early i d e n t i c a l l aw s u i t

i nth e D i s tr i c t

C o u rt o f H arr i s C o u n ty, Te xa s . The c a s e , howe ve r , wa s r e m ove d t o fe de r a l c ourt and6 tr ans fe rr e d t o the Di s tr i c t Court for the W e s t e rn Di s tr i c t

of Pe nns yl vani a . The De fe ndant s m ove d for s umm ary judgm e nt o nth e g ro u n d s th at th e seco n dsu it w as b arredb y res j u d icata
or by the or de r de nyi ng the pe t i t i on t o ope n the judgm e nt of
n o np ro s. Th e Dis tr ic t Cou rt

grante d the Defend ants ’ s umm ar y ju dg m e nt m ot i on s , a

pp l yi ng the c a s e of Schu

yl ki ll Na vyv. L a n g b o rd , 728 A. 2d 964 ( Pa . Supe r . 1999) , and de t e rm i ni ng that Pe nns yl vani al aw doe s not a l l ow al i t i gant

“ t o do an e nd
run aroun d a ju dg m ent of n on pros si m ply by fili ng another
co m p lain t.” Ku h n le ap p eals, claim in g th at h is seco n dsu it
s houl d have be e n pe rm i tt e d be c aus e the judgm e nt of non pr os ente re d b y

the Cou rt

of Co mm on Plea s of E ri e Cou nty was not ajudgm e nt

“ on the m e r i t s . ” W e di s a gr e e and fi nd that the
seco n dsu it is in d eedb arredb y res j u d icata o r claim p reclu sio n . II . We finda s er ie s of P ennsylvania ca se s anda Third Ci r c ui t c a s e di s pos i t i ve . I n Ga tes v . Servi ce ma ster Co mm erci al Serv ic e , 6 3 1 A .2 d6 7 7 , 6 7 9 (P a. S up er. C t.T h a t ru le s tate s: 1 R ul e 3051. R el i ef f r om J udgm ent of N on Pr os (a ) R e lief

f ro m a ju d g m e n t o f

n o n p ro s s h a ll be s ought by pet i t i on. A l l gr ounds for r el i ef, w h e th e r to strik e o f

f th e ju d g m e n t o r to o p e n it, m us t be as s er t ed i n a s i ngl e pet i t i on. ( b) I f t he r el i ef s ought i ncl udes t he openi ng of th e ju d g m e n t, t h e p e tit io n sh a ll alle g e f a c ts s how i ng t hat ( 1) t he pet i t i on i s t i m el y fi l ed, ( 2) t her e i s a r eas onabl e expl anat i on or

7 19 93 ), a m otion f

or a jud gm ent of n on pros was e nter ed afte r th e d ef en d an t arg u edth at th e “p lain tif f h adf ailedto prosec ute her

ca use with rea sonable dil igence .” I d. at 6 7 9 . A pe t i t i on t o ope n the judgm e nt wa s de ni e d and the Supe r i or Court he l d that as e c ond and ne ar l y

i de nt i c a l a c t i on c oul d not be file d u nles s the plai ntiff succe ss fu ll y peti ti on ed the c ou rt to o p en th e j u d g m en t o f

n o np ro s. I

d. at 680, 682. The
r at i on a l e of G a tes wa s r e i nfor c e d i n Schu yl ki ll Na vyv. L a n g b o rd
. See 72 8 A .2d at 969 . There the Sup er ior Cou rt he l d that “ whe r e ac aus e of a c t i on i s s ubje c t t o ajudgm e nt

of non pros , as ubs e que nt

c om pl a i nt on the s am e c aus e of a c t i on m ay n o t b e f iledw ith o u t p erm issio no f th e co u rt p u rsu an t to P en n sylv an ia Ru les o f

C iv il P ro cedu re Ru le 3 0 5 1 .” I d. at 1l egi t i m at e exc us e for t he i nact i vi t y or del ay , and ( 3) t her e i s a mer i t or i ous caus e of a ct i on. Pa. R . C
. P. N o. 3051. 8 965. Mc Car te r

v . Mi tc ham , 883 F.2d19 6 (3dCir. 19 89 ), de c i de d pr i or

t o G a tes andSchu

yl ki ll Na vy , i s a l s o r e l e vant here
. I n McCa rter , the plai ntiffs’ s tate court a ct ion w as dism is se d w it

h p re ju dice beca

use the com

plai nt was not file d
w ith inth e tim e lim it set b y th e co u rt. I

d. at 19 8. Th e pl a i nt i ff

s subsequently

file d a nearl y

identi ca l c om

plai nt in the Dis tr ic t Co urt for the W es te rn Distri ct of Penn sylvania . The distri ct c ourt gr ant e d the de fe ndant s ’ m ot i on t o di s m i s s on the g ro u n d s th at th e claim s w ere b arredb y res j u d icata. I

d. at 1 9 8 . T h is C o u rt af

f irm ed
. We no te d that for li ti gati on to be barr ed by re s ju dicata , the prior det er

m inat ion m

ust be “ on the m er it s. ” I

d. at 19 9. We fo un d that the order t o d is m is s with p re ju dice

“ wa s an or de r

‘ on the m e r i t s ’ wi thi n the m e ani ng s e t forth by the Pennsylvania

courts .” I

d. at 20 0. Althou gh we firs t s tate d that “ [w]he r e the pr i or

di s m i s s a l wa s ba s e d on ajudgm e nt ofIn P e n n s y lv a n ia , th e P ro th o n o ta ry is th e C le rk o f C o u rt . 2 9 no n p ros, Penn sylvania

courts will no t give pre cl usive e ff ec t to the jud gm ent, ” i d. at

199, we we nt

on t o opi ne that

the P en n sylv an ia co u rts in terp ret th e p h rase “o nth e m erits”
ex p an siv ely
. I

d. at 20 0. We re as on ed that

the dis m is sa l before the Cou rt , m ade with prej ud ic e , w as in f act o nth e m erits beca use the dism is sa l was a “ sancti on fo r . . . un toward delay .” Id
. at

20 1. We al so no te d it t o b e of significance that the di s m i s s a l wa s not

e nt e r e d aut om at i c a l l y

by the P ro th o n o tary , b u t rath er w as issu edb y th e co u rt w ith a w ellconsider ed order. I

d. at 2 0 0
. 2 We co n clu d e th at Ga tes , Schu yl ki ll Na vy , and McCa rter

s upport the c onc l us i on that

Kuhnl e ’ s s e c ond a c t i on i s barr e d und e r

Pe nn s yl vani al aw. Sp e c i fi c a l l y , we no t e two i m port ant fa c t or s . Fi r s t , the i ni t i a l a c t i on wa s di s m i s s e d by th e C o u rt o f

C o mm o nP leas with prej ud ic e . Eve n Helf ri ck v. UPMC Shady

s i de Hos pi tal , 65 Pa
. D. & C. 4th 420, 437 (All egheny

Co un ty , 200 3), r el ie d o n b y Ku hn le , dis ti ng uishes cases in v o lv in g p rej u d ice. S eco n d , w e n o te th at th is is n o t a c a s e whe r e the judgm e nt

of non pr os wa s e nt e r e d r out i ne l y by10 aPr othonot ary . Rathe r , Judge Anthony of the Court

of Comm on Pl e a s c ar e ful l y

c ons i de r e d the que s t i on be for e the Court and i s s ue d ac om

pr e he ns i ve or de r . He l at e r i s s ue d a
ve ry l e ngthy opi ni on de nyi ng Kuhnl e ’ s Pe t i t i on t o Ope n or Str i ke Judgm e nt . Al l the s e fa c t or s we i gh i n favor of afi ndi ng that Kuhnl e i s now barr e d fr om fi l i ng anothe r

s ui t i n a sep arate j u risd ictio n . K uhnl e ar gues t hat , even i f G ates and Schuylki l lN avy
ar e good l aw , t her e ar e t w o di s t i ngui s hi ng ci r cumst ance s her e: ( 1) t he s econd s ui t w as fi l ed i n a s epar at e j ur i s di ct i on t han t he
one w her e t he j udgm ent of non pr os w as ent er ed; and ( 2) t he
s econd s ui t w as t echni cal l y fi l ed bef or e t he j udgm ent of non p ros w as e n tered
. W e a re n o t persu ad ed b y eit h er a rgu m en t. It
w oul d be poi nt l es s t o al l ow a l i t i gant t o s i des t ep a j udgm ent of non pr os – and R ul e 3051 – bys i m pl y fi l i ng i n anot her j ur i s di ct i on. A l s o, w e not e t hat s t at e cour t j udgm ent s , once
re n d e re d , a re b in d in g . See 2 8 U .S .C . § 1 7 3 8
. II I. T h i s i s as a dc a s e . B u t , g i v e nth e p r o c e du r a l h i s t o ry, we c annot

gr ant r e l i e f unde r

the gove rni ng l aws . As the11 Supr e m e Court

s t at e d m or e than two hundr e d y e ar s a go: “[M] otives of

comm is er at ion, from

wh at ever source they f lo w , m u st n o t m in g le inth e ad m in istratio no f j u stice. Ju d g es, inth e ex ercise o f

th eir f u n ctio n s, h av e f

requ en t o ccasio n s to excl ai m , ‘ du rum

valde durum , s ed si c l ex es t. ’” See P en h a llo w v. D o a n e’s A d m ’rs , 3 U. S. ( 3 Da l l
. ) 54, 89 ( 1795) (“H ardv ery

h ard , b u t su ch is th e law .”). The judgm e nt

of the Di s tr i c t

Court wi l l be a ffi rm e d.