J-A24041-16

2016 PA Super 277 

MARINER CHESTNUT PARTNERS, L.P.

BY ITS COURT APPOINTED RECEIVER, 

DAVIN S. LAMM

IN THE SUPERIOR COURT OF

PENNSYLVANIA

Appellant

v.

BROOK LENFEST, MARINER CHESTNUT 

HOLDINGS, LLC., CHESTNUT PROPERTY 

GP, LLC., CHESTLEN DEVELOPMENT, LP., 

CHESTLEN DEVELOPMENT GP, LLC., 

JOHN E. ROYER, JR., ESQUIRE, AND 

ROYER & ASSOCIATES, LLC.

Appellees No. 3620 EDA 2015

Appeal from the Order Dated October 15, 2015

In the Court of Common Pleas of Philadelphia County

Civil Division at No(s): December Term, 2012, No. 02900

BEFORE: BOWES, J., OTT, J., and SOLANO, J.

OPINION BY SOLANO, J.: FILED DECEMBER 07, 2016

Appellant, Mariner Chestnut Partners, L.P. (“the Partnership”), by its 

court-appointed Receiver, Davin S. Lamm, appeals from an order dated 

October 15, 2015, that dismissed the Receiver’s Amended Complaint. By an 

order dated September 24, 2013, the trial court sustained Appellees’ 

preliminary objections to Counts II, IV, V, and VI of the Amended Complaint, 

and the October 15, 2015, order granted Appellees’ motion for summary 

judgment on the remaining Counts, I and III. For the reasons that follow, we 

affirm.
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The facts giving rise to this case date to May 19, 2000, when the 

Partnership was created as a Pennsylvania limited partnership. The original 

partners included Davin Lamm, Mark Wiser, Brook Lenfest, Timothy 

Mahoney, II, and Mariner Chestnut Holdings, LLC. Mariner Chestnut 

Holdings, LLC, which was owned in equal shares by Lenfest and Mahoney, 

was named General Partner. Lamm, Wiser, Lenfest, and Mahoney were 

limited partners. The Partnership Agreement, as amended in 2003, defined 

the rights and responsibilities of the partners and gave the General Partner 

exclusive authority to manage the Partnership’s business and affairs, with no 

duty to consult with the limited partners. Trial Court Opinion, 7/22/11, at 6-

8.

The purpose of the Partnership was to acquire the real property 

located at the northeast corner of 15th and Chestnut Streets in Philadelphia, 

rent it, and ultimately sell it. The Partnership successfully purchased the 

property on October 16, 2000, for $11,150,000. In 2007, the Partnership 

entered into a letter of intent with Gatehouse Partners and subsequent 

agreements with Hilton Worldwide to develop the property as a mixed-use 

luxury hotel and condominium high-rise building bearing the name WaldorfAstoria. Trial Court Opinion, 7/22/11, at 6-7, 11.

On March 12, 2009, following disagreements among the partners 

regarding the project, Mariner Chestnut Holdings, LLC, was removed as 

General Partner, and Chestnut Property GP, LLC (“Chestnut Property”) a 

company owned wholly by Lenfest, was appointed as the new General 
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Partner. According to the Partnership Agreement, this change constituted a 

“liquidating event” that required the General Partner, now Chestnut 

Property, to liquidate the Partnership within a reasonable time. Shortly 

thereafter, Mahoney sold all of his interests and rights in the Partnership to 

Lenfest. Later that year, Hilton terminated the Waldorf-Astoria agreements 

and the Partnership ceased development of the property. Trial Court 

Opinion, 7/22/11, at 11-15, 29.

In May 2009, Lamm and Wiser brought suit against the Partnership 

and the other current and former partners (Lenfest, Mahoney, Mariner 

Chestnut Holdings, LLC, and Chestnut Property) and their attorneys in an 

action captioned Lamm v. Lenfest, May Term 2009, No. 2232 (C.P. Phila.) 

(“the Lamm litigation”). The fourth and final amended complaint in that 

action, filed January 26, 2010, contained six interrelated causes of action, 

including breach of fiduciary duty and breach of the Partnership Agreement, 

and sought an accounting of the financial affairs of the Partnership and 

court-supervised dissolution. Trial Court Opinion, 7/22/11, at 5-6. The 

Lamm litigation was placed in the Philadelphia Court of Common Pleas’ 

Commerce Program, where it was assigned to the Honorable Mark I. 

Bernstein.

Meanwhile, the General Partner, Chestnut Property, via its sole owner, 

Lenfest, secretly made new plans to develop the property. In April 2010, 

while the Lamm litigation was pending against it, Chestnut Property 

executed a letter of intent (“LOI”) with Starwood Hotels & Resorts Worldwide 
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for a proposed “W” Hotel and Condominiums. The LOI contained a provision 

requiring that it be kept confidential, and Chestnut Property and Lenfest did 

not tell Mariner Chestnut’s limited partners about it or about the new 

development plans. Trial Court Opinion, 7/22/11, at 5-6.

In July 2010, while the limited partners were still in the dark about the 

Starwood development plans, the Partnership contracted with CB Richard 

Ellis, Inc. (“CBRE”) to sell the property at an absolute auction. Trial Court 

Opinion, 7/22/11, at 16. Lenfest made plans to buy the property at that 

action through another entity that he owned. Trial Court Opinion, 10/15/15, 

at 4-5.

On August 4, 2010, Lenfest was deposed in the Lamm litigation by 

counsel representing Lamm and Wiser. During the deposition, Lenfest 

disclosed that he had signed a letter of intent and term sheet for 

development of the property into a project similar to the earlier WaldorfAstoria project. Because of the confidentiality clause, he did not divulge that 

the agreement was with Starwood. Lenfest’s deposition was the first time 

that the other Mariner Chestnut partners learned of the new development 

plans. Trial Court Opinion, 7/22/11, at 5-6.

On October 5, 2010, CBRE auctioned the property. Both Lamm and 

Wiser were present at the auction. The property was sold for $12,000,000 to 

Chestlen Development, LP, an entity owned by Lenfest. Trial Court Opinion, 

7/22/11, at 6; Lamm Revised Trial Court Opinion, 11/5/12, at 2 n.3.
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On October 11, 2010, Lenfest provided a copy of the Starwood LOI to 

Lamm and Wiser. On October 18, 2010, Chestnut Property sent the limited 

partners a letter officially notifying them of the results of the auction sale 

and explaining that, as General Partner, it would be taking actions to 

dissolve, wind up, and liquidate the Partnership. Trial Court Opinion, 

7/22/11, at 6.

In July 2011, Judge Bernstein granted summary judgment to the 

defendants on most counts in the Lamm litigation. With respect to a count 

alleging that Lenfest and the General Partners had breached their fiduciary 

duties by wrongly abandoning the Waldorf-Astoria Project for their personal 

gain and benefit, the court held that the plaintiffs failed to prove that the 

defendants received a personal benefit or that the plaintiffs were harmed. 

Lamm Trial Court Opinion, 7/22/11, at 32. With respect to a breach of 

contract count alleging that Lenfest and Chestnut Property breached the 

Partnership Agreement by continuing operations of the Partnership beyond 

December 31, 2005, the court held that the Agreement did not mandate 

liquidation until March 12, 2009, when Mariner Chestnut Holdings, LLC, was 

removed as General Partner. Id. at 28. The court held further that although 

Chestnut Property breached the Partnership Agreement by not beginning 

liquidation for another fifteen months, the plaintiffs proved no damages to 

them as a result of that breach. Id. at 27-30.

Judge Bernstein granted the Lamm plaintiffs’ request for an order 

requiring dissolution of the Partnership because, “after adamantly insisting 
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dissolution should not occur . . . Defendants sold the property [at the 

October 5, 2010, auction sale] and passed resolutions that retroactively 

ended the Partnership without informing either the Court or the plaintiffs.” 

Lamm Trial Court Opinion, 7/22/11, at 33-34. Judge Bernstein removed 

Chestnut Property as General Partner and appointed a Liquidating Trustee to 

“review the sale, accumulate all assets, dissolve the Partnership and wind up 

its affairs.” Id. at 36. Judge Bernstein’s order stated that the Liquidating 

Trustee had the power “to continue to prosecute or to institute in the name 

of [the Partnership] any and all suits and other legal proceedings, in this 

Commonwealth or elsewhere, and to abandon the prosecution of claims he 

deems unprofitable to pursue.” Lamm Order, 4/5/11, at ¶ 6(j). Judge 

Bernstein denied plaintiffs’ request for an accounting, however, explaining: 

“Plaintiffs had the opportunity to discover all Partnership books and records 

through discovery. The court-appointed liquidator must necessarily 

determine the propriety of all activities by the [G]eneral [P]artner and the 

propriety of the ‘absolute auction’ sale in order to compile all assets for 

dissolution.” Lamm Trial Court Opinion, 7/22/11, at 38.1

The plaintiffs appealed the parts of the judgment adverse to them on 

May 3, 2011, and the defendants filed a cross-appeal on May 16, 2011, that 

____________________________________________

1

Judge Bernstein’s dispositions of the other Lamm causes of action and 

requests for relief are not relevant to issues presented by this appeal and 

therefore are not discussed here.
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contested the court’s findings in support of its decision to appoint a 

Liquidating Trustee.2 This Court affirmed the judgment of the trial court in 

an unpublished memorandum dated October 16, 2012, that held that the 

plaintiffs either abandoned or waived most of their issues. We also held that 

the defendants’ cross-appeal did not merit relief, as the issues raised by the 

defendants challenged only specific findings of the trial court, but not the 

actual appointment of the Liquidating Trustee. See Lamm Superior Court 

Opinion at 16, 21-22, 25, 27, 32, 34-36. 

In March 2012, while awaiting the results of the appeal, Judge 

Bernstein ordered the Liquidating Trustee to submit a report stating the 

value of any potential lawsuits that could be brought on behalf of the 

Partnership. The Liquidating Trustee filed that report on July 31, 2012. 

The Report disclosed that between April and September 2010, the 

Partnership paid over $1.1 million to develop the Starwood project prior to 

the auction, including payments totaling $712,993 to an architectural firm, 

Cope Linder. See Liquidating Trustee’s Final Report of Findings with Regard 

to General Partner Activities and Auction Sale of Assets (“Report”), 7/31/12, 

____________________________________________

2

The appeal was docketed in this Court as Lamm v. Lenfest, Nos. 1203 

EDA 2011, 1394 EDA 2011. The defendants disagreed with the trial court’s 

statements that the property was sold without the knowledge of the limited 

partners, that Lenfest concealed his intent to sell the property from the 

limited partners, and that Lenfest “blurred or ignored the lines between his 

individual interests and those of the general and limited partnerships.” See 

Lamm Superior Court Opinion at 34.
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at 11. The Liquidating Trustee stated that Chestnut Property, as General 

Partner, had concealed these payments and plans from the limited partners 

through creative ledger entries and the use of third parties, and, when asked 

by the Liquidating Trustee, would acknowledge only that project 

expenditures amounted to $225,000 in Partnership funds. Id. 11-13, 17-19. 

The Report said that the last time the plaintiffs reviewed the Partnership’s 

books was in 2009, although discovery in the case extended until October 

2010. Id. at 10, 12.

The Report stated that employees of CBRE, the auction company, told 

the Liquidating Trustee that they had had no knowledge of the Partnership’s 

LOI with Starwood and that had they known of it, they would have disclosed 

this information to potential buyers at the auction. Report at 20, 22. 

However, CBRE could not state with certainty whether or how the Starwood 

development plans would have affected the auction sale price. Id.

The Report identified several potential causes of action against 

Chestnut Property and against Lenfest individually. First, it said a claim for 

breach of fiduciary duty could be based on concealment of the Starwood LOI 

from the limited partners and Chestnut Property’s use of Partnership funds 

to develop the Starwood project. The Report stated:

Lenfest was the control[ling] limited partner of the Subsequent 

General Partner, and in that capacity he owed a fiduciary duty to 

the Partnership, as well as to its limited partners, Lamm and 

Wiser. Pursuant to the Amended and Restated Partnership 

Agreement, his fiduciary duties precluded him from having any 

concealed or hidden earnings from the Partnership. 

Notwithstanding those duties, Lenfest appears to have 
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intentionally concealed from the Partnership and his limited 

partners the existence of the Starwood LOI and the potential 

upside to them if the Project succeeded. Lenfest also concealed 

from his partners the fact that Partnership funds were being 

used to pay Cope Linder, Starwood, and his advisors for their 

work on the Project. Without disclosure of these facts, Lenfest 

caused the Partnership to act in his own self-interest, by selling 

its principal asset to his wholly-owned company at what may 

have been less than fair market value. The acts described in this 

Report clearly constitute breaches of fiduciary duty owed to the 

Partnership by the Subsequent General Partner under 

Pennsylvania law.

Report at 27 (footnote omitted). However, the Report also stated that for a 

variety of reasons — not the least of which was Lenfest’s contractual 

entitlement to payments based on his capital investment in the Partnership 

(the “Lenfest Priority Return”)3 — it would be difficult to prove damages for 

the claim:

Based on Lenfest’s conduct, the Liquidating Trustee believes that 

Lenfest breached his fiduciary duties to the Partnership. 

However, it is speculative and beyond the scope of the 

Liquidating Trustee’s investigation to conclude that the 

Partnership, and derivatively, Lamm and Wiser, suffered a loss 

under a possible scenario where either the Property at auction 

would have generated sufficient funds to fully satisfy the Lenfest 

Priority Return[,] leaving funds for distribution to the Limited 

Partners, or that if Lenfest had disclosed the Starwood LOI to 

Lamm and Wiser, they would have been able to access funds to 

contribute to the Partnership, thereby reducing Lenfest’s Priority 

Return and increasing their interest. Even if that were true, the 

____________________________________________

3 The Report explained: “Because Lenfest contributed the capital to fund the 

Partnership, he was entitled to receive a 7.5% priority (investment) return 

on his capital contributions, together with the capital contributions 

themselves (collectively the ‘Lenfest Priority Return’), payable upon the 

Partnership’s winding up and termination, prior to distributions to Lenfest, 

Mahoney, Lamm, or Wiser in their status as Partners.” Report at 6.
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Liquidating Trustee has been denied the ability to confirm the 

status of the Project and Lenfest’s relationship with Starwood as 

of this date. Notwithstanding what the Liquidating Trustee 

concludes is egregious conduct by Lenfest, it could be that the 

Project does not offer much prospect of return on investment 

and the Partnership, if it had retained the Property, would only 

be deeper in debt.

Id. at 26.

Similarly, the Liquidating Trustee found that a cause of action for 

breach of the Partnership Agreement could be based on Chestnut Property’s 

concealment and mischaracterization of expenses. Report at 29. Again, 

however, the Liquidating Trustee determined that it would be difficult to 

prove damages sustained by the Partnership from this breach. Id. at 30.

The Report concluded that because damages could not be proven, 

there was no concrete basis for a suit against Lenfest or Chestnut Property:

[D]ue to the fact that the Project with Starwood has not been 

built, and in recognition of the Lenfest Priority Return, it appears 

that Lenfest’s conduct, however reprehensible, has resulted in no 

quantifiable damages to the partnership itself. Unless a court or 

jury were to determine that the conduct described in this Report 

supports the subordination or wiping out of the Lenfest Priority 

Return and Lenfest’s capital contribution, the Liquidating Trustee 

sees no basis for initiating any legal action on behalf of the 

Partnership against Lenfest.

Report at 31. However, the report also stated that it did not have access to 

all of the information necessary to reach a definitive conclusion. Id. at 25 

n.34.

On September 20, 2012, Judge Bernstein entered an order accepting 

the Liquidating Trustee’s Report and appointing Lamm as Receiver for the 

Partnership. As Receiver, Lamm was allowed “to pursue litigation on behalf 
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of the Partnership based on the claims identified in the Trustee’s Report.” 

Lamm Order, 9/20/12. Judge Bernstein explained the basis for appointing 

the Receiver as follows:

The Liquidating Trustee determined that at the same time the 

general partner represented to the limited partners and the 

public that the property located at 1441 Chestnut Street, the 

only partnership asset, was to be auctioned for use as a parking 

lot, the general partner had in fact secured an agreement or 

agreement in principle to develop that property as a luxury 

Starwood Hotel. Accordingly, the partnership has the potential 

claim that the general partner in breach of his duties arranged to 

transfer the only partnership asset for inadequate consideration 

to a different entity he controlled, for the exact purposes for 

which Mariner Chestnut Partners, L.P. had been created.

Lamm Trial Court Revised Opinion, 11/5/12, at 2. The order clarified that 

“The Report was not the result or subject of any adversary proceeding. The 

court makes no factual findings based on the Report.” Lamm Order, 

9/20/12, at n.1.

Judge Bernstein required Lamm, as Receiver, to dissolve the 

Partnership if no litigation was filed within ninety days. Lamm Order, 

9/20/12, ¶¶ 3-4. He gave this explanation for why he set that time limit:

So that this matter, which has already been in litigation for three 

and one half years, not remain interminably dormant, the Court 

ordered that litigation based on the potential claims identified in 

the Liquidating Trustee’s final report must be filed within 90 days 

or the partnership shall be immediately dissolved and all 

remaining assets distributed in accord with the partnership 

agreement.

Trial Court Revised Opinion, 11/5/12, at 3. 
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Lamm, as Receiver, then brought this new action (Mariner Chestnut 

Partners, L.P. ex rel. Lamm v. Lenfest, Dec. Term 2012, No. 2900 (C.P. 

Phila.)) against defendants Brook Lenfest, Mariner Chestnut Holdings, 

Chestnut Property, Chestlen Development, LP, Chestlen Development GP, 

LLC,4John E. Royer, Esquire, and Royer and Associates, LLC,5on December 

20, 2012 — just ninety days after the date of Judge Bernstein’s order. The 

case was placed in the Philadelphia Court of Common Pleas’ Commerce 

Program and assigned to the Honorable Gary S. Glazer. The Receiver’s First 

Amended Complaint, filed April 9, 2013, set forth six claims: breach of 

fiduciary duty (I), fraud (II), usurpation of a corporate opportunity (III), 

conversion (IV), violation of the Pennsylvania Uniform Fraudulent Transfer 

Act (V), and equitable subordination (VI). The claims were based largely on 

the findings in the Liquidating Trustee’s Report. See First Amended 

Complaint, 4/9/13, at 5-10.

On September 24, 2013, Judge Glazer sustained Defendants’ 

preliminary objections to Counts II (fraud), IV (conversion), V (violation of 

____________________________________________

4 Chestlen Development GP, LLC, a company owned by Lenfest, is the 

general partner of Chestlen Development, LP, the company that bought the 

Chestnut Street property at the 2010 auction sale. See Plaintiff’s 

Memorandum of Law in Opposition to Defendant’s Preliminary Objections to 

Plaintiff’s Amended Complaint at 6.

5

John E. Royer and Royer and Associates were Lenfest’s attorneys at the 

time of the alleged wrongdoing described in the Liquidating Trustee’s Report.
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the Fraudulent Transfer Act), and VI (equitable subordination). The court 

explained:

Under Pennsylvania law, the specific elements of fraud are: 

(1) a representation; (2) which is material to the transaction at 

hand; (3) made falsely, with knowledge of its falsity or 

recklessness as to whether it is true or false; (4) with the intent 

of misleading another into relying on it; (5) justifiable reliance 

on the misrepresentation at hand; and (6) the resulting injury 

was proximately caused by the reliance. Gibbs v. Ernst, 538 Pa. 

193, 647 A.2d 882, 889 (1994). Defendant, Brook Lenfest 

(hereinafter “Lenfest”), was the sole owner of the corporate 

general partner of plaintiff. Defendants did not make 

representations or omit representations to the partnership as 

Lenfest was the general partner and Lenfest allegedly knew of 

the opportunity. 

Further, “a plaintiff has a cause of action in conversion if 

he or she had actual or constructive possession of a chattel at 

the time of alleged conversion.” Chrysler Credit Corporation v. 

Smith, 434 Pa. Super. 429, 643 A.2d 1098, 1100 (Pa. Super. 

1994), appeal denied, 539 Pa. 664, 652 A.2d (1994). Plaintiff did 

not have constructive possession over future profits as they are 

still unascertainable at this point. Additionally, under the 

Pennsylvania Uniform Fraudulent Transfer Act, “[a] transfer 

made . . . by a debtor is fraudulent as to a creditor, whether the 

creditor’s claims arose before or after the transfer was made . . . 

if the debtor made the transfer . . . with actual intent to hinder, 

delay or defraud any creditor of the debtor.” 12 Pa. C.S.A. §§ 

5104, 5105. In the instant case, plaintiff made the transfer. 

Plaintiff cannot allege that it is the creditor and the debtor. 

Therefore, Count V is dismissed.

Order, 9/24/13, at n.1.

On October 15, 2015, Judge Glazer granted Defendants’ motion for 

summary judgment on remaining Counts I (breach of fiduciary duty) and III 

(usurpation of a corporate opportunity), and dismissed the amended 

complaint in its entirety. In an opinion, Judge Glazer explained that those 
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tort claims were barred by the applicable two-year statute of limitations. 

Even though, under the discovery rule, the statute of limitations is tolled 

until the plaintiff discovers (or reasonably should discover) the injury and its 

cause, Judge Glazer concluded that the Partnership knew about the 

Starwood LOI and the sale of the property in October 2010, over two years 

before the suit was initiated, when Chestnut Property sent the limited 

partners a formal letter notifying them of the sale:

While more evidence surrounding the evolution of the W 

Hotel/Condo project involving Lenfest and Starwood was 

subsequently unearthed, plaintiff was aware of the general facts 

giving rise to the alleged injuries no later than October 18, 2010. 

Since these dates are inscribed on the documents themselves, 

issues of credibility do not come into play. No reasonable mind 

could hold that plaintiff did not know — or should not have 

known — of its injury until after October 18, 2010. Therefore, 

the two year statute of limitations period expired on October 18, 

2012, two months prior to plaintiff filing its writ of summons on 

December 19, 2012.

Trial Court Opinion, 10/15/15, at 7-10. The court added that although, at 

the time of the discovery, the Partnership had been under the control of 

Lenfest, “Lamm could have filed a derivative action pursuant to 15 Pa.C.S.A. 

§ 8591. He chose not to do so.” Id. at 10 (footnote omitted).

Judge Glazer held that the September 20, 2012, order entered by 

Judge Bernstein that gave the Receiver 90 days to file claims did not extend 

the statute of limitations. He explained:

The [September 20, 2012] order permitted the receiver to file 

litigation on behalf of the partnership within ninety days, or else 

the partnership would have been dissolved immediately. The 

order did not authorize plaintiff to assert claims that fail as a 
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matter of law. Any claim filed within the ninety day time period 

was still required to conform to the rules of civil procedure; this 

includes the statute of limitations.

Trial Court Opinion, 10/15/15, at 10. In a footnote, Judge Glazer added:

Assuming arguendo that plaintiffs’ claims were not barred by the 

statute of limitations, defendants’ motion still would have been 

granted due to collateral estoppel and res judicata. Based upon 

J. Bernstein’s and the Superior Court’s holdings in the related 

underlying litigation, the fundamental issues raised by plaintiff 

have already been litigated, decided and affirmed on appeal.

Id. at 10 n.10.

Lamm, as Receiver, filed a timely notice of appeal on November 12, 

2015. In his brief, he raises the following issues:

1. Where: (i) Appellant’s claims for breach of fiduciary duty 

and usurpation of a partnership opportunity had been timely 

raised originally in a predecessor action, Lamm, et al v. Brook 

Lenfest, et al, May Term 2012, No. 2232 (“Original Action”); (ii) 

Judge Bernstein in the Original Action appointed a Liquidating 

Trustee; (iii) Upon receipt of the Liquidating Trustee’s Report 

that found multiple acts of wrongdoing by Appellee (“Lenfest”), 

Judge Bernstein appointed Appellant as Receiver to sue for 

damages in a new case, which became the instant action; and 

(iv) The instant action is based on the wrongdoing found by the 

Liquidating Trustee, and was filed timely in accordance with 

Judge Bernstein’s Order, did the trial court err and abuse its 

discretion in granting summary judgment based on the statute 

of limitations and res judicata?

2. Where the Statute of Limitations was tolled when Judge 

Bernstein accepted the Liquidating Trustee’s Report in the 

Original Action, and instead of adjudicating the damages in that 

Original Action, Judge Bernstein elected to appoint the Receiver 

with instructions to institute the instant action to recover 

damages, did the trial court err and abuse its discretion in 

granting summary judgment based on the statute of limitations 

and res judicata?
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3. Where Judge Bernstein, in the Original Action, considered 

the pleadings filed there to put before the Court the issues of 

wrongdoing by the General Partner and Lenfest, as well as the 

potential remedies of appointing a receiver and dissolution of the 

partnership, did Judge Glazer err in the instant case when he 

ruled that Appellant should have filed a separate derivative 

action in addition to the actions that had already been filed?

4. Did the Trial Court err by holding that the discovery rule 

did not apply and extend the Statute of Limitations until after 

the Report was issued where the Report expressly found that 

Lenfest and his counsel misled Judge Bernstein and Appellant by 

duplicitous and intentional conduct calculated to deceive 

Appellant about what Lenfest was doing?

5. Where new instances of violations by Lenfest that had 

occurred during the litigation in the Original Action, but were 

kept secret by Lenfest until discovered by the Liquidating 

Trustee, and where Judge Bernstein expressly included these 

violations in his Order requiring the Receiver to start a new suit, 

and where the new violations occurred after the original Order 

and affirmance were entered, did the trial court err when it ruled 

the claims on the new violations were barred by collateral 

estoppel and res judicata?

6. Did the trial court err and abuse its discretion in granting 

Appellees’ Preliminary Objections for Appellant’s claims for fraud, 

conversion, and equitable subordination where the wrongdoing 

and acts supporting these claims were described in the Report of 

the Liquidating Trustee and validated and accepted by Judge 

Bernstein in the Original Action?

7. Where Judge Bernstein ruled Appellant was appointed “to 

pursue litigation on behalf of the Partnership based on the claims 

identified in the Trustee’s Report,” and where Appellant alleged 

in the Amended Complaint that Appellees deprived Appellant of 

rights, profit and caused damages that grew out of the 

wrongdoing described in the Liquidating Trustee’s Report, did the 

trial court err, and abuse its discretion in granting Appellees’ 

Preliminary Objections for Appellants’ claims?

Appellant’s Brief at 5-6. 
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The Receiver does not organize his brief according to the above 

questions.6 Therefore, we will address the issues as they are presented in 

the Receiver’s brief: (1) whether the discovery rule tolled the statute of 

limitations, (2) whether the Law of the Case doctrine extended the statute of 

limitations, and (3) whether the statute of limitations does not apply 

because this case is a continuation of the former timely action and is not 

barred by res judicata or collateral estoppel. 

We affirm the trial court’s entry of summary judgment on Counts I 

(breach of fiduciary duty) and III (usurpation of a corporate opportunity) on 

the ground that those counts are barred by the two-year statute of 

limitations.7 Because the statute of limitations applicable to Counts II (fraud) 

and IV (conversion) also is two years, see 42 Pa.C.S §§ 5524(7) (two-year 

statute of limitations for an action in fraud), 5524(3) (same for conversion), 

and because the discovery, tolling, and other timeliness issues regarding 

those counts are the same as those for Counts I and III, we affirm the 

dismissal of those counts for that same reason. See Sw. Energy Prod. Co. 

____________________________________________

6 See Pa.R.A.P. 2119(a) (“The argument shall be divided into as many parts 

as there are questions to be argued, and shall have at the head of each part 

. . . the particular point treated therein . . . .”).

7 Appellant mistakenly argues against the trial court’s grant of “preliminary 

objections” on count III (usurpation of a corporate opportunity). See 

Appellant’s Brief at 42-44. In fact, the trial court denied Defendants’ 

preliminary objections on this count and then later entered summary 

judgment.
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v. Forest Res., LLC, 83 A.3d 177, 184 (Pa. Super. 2013) (an appellate 

court is “not bound by the rationale of the trial court and may affirm on any 

basis”). The Receiver presents no argument regarding the trial court’s 

disposition of Counts V (violation of the Fraudulent Transfer Act) and VI 

(equitable subordination), and any issues relating to those dismissals 

therefore are waived. See Commonwealth v. Furrer, 48 A.3d 1279, 1281 

n.3 (Pa. Super. 2012) (issues not developed in an appellate brief with 

pertinent authority are waived, citing Pa.R.A.P. 2119(a)).

Our standard of review of an appeal from an order granting summary 

judgment is well settled: “Summary [j]udgment may be granted only in 

those cases where the record clearly shows that there are no genuine issues 

of material fact and that the moving party is entitled to judgment as a 

matter of law.” P.J.S. v. Pa. State Ethics Comm’n, 723 A.2d 174, 176 (Pa. 

1999) (citation omitted). Whether there is a genuine issue of material fact is 

a question of law, and therefore our standard of review is de novo and our 

scope of review is plenary. Chanceford Aviation Props, L.L.P. v. 

Chanceford Twp. Bd. of Supervisors, 923 A.2d 1099, 1103 (Pa. 2007). 

When reviewing a grant of summary judgment, we must examine the record 

in a light most favorable to the non-moving party. Id.
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The Statute of Limitations

The Discovery Rule and Tolling

The Receiver’s primary argument is that the trial court erred by 

dismissing the complaint on statute of limitations grounds because the twoyear period was tolled by the discovery rule. See Appellant’s Brief at 27-40. 

The Receiver claims that he exercised due diligence in bringing the original 

action in 2009, but could not have recognized the nature and severity of the 

later acts of Defendants that occurred during the pendency of that action 

until the release of the Liquidating Trustee’s Report. Id. at 34. He asserts 

that this is due in large part to efforts taken by Lenfest to conceal these very 

same actions from the limited partners. See, e.g., id. at 20. The Receiver 

states:

As the Trustee’s Report found, Defendants hid the truth about 

the auction, and Appellant had no reasonable means of 

discovering the wrongdoing until the Trustee’s Report was 

published. The injuries that Defendants caused to the 

Partnership were not known (i.e., discovered) until, at the very 

earliest, the Liquidating Trustee’s issuance of his Final Report on 

July 31, 2012. This is less than six months before the 

Partnership commenced this lawsuit.

Id. at 28. 

To support this argument, the Receiver invokes the doctrine of adverse 

domination. Appellant’s Brief at 31-35. He explains that under that doctrine, 

“a statute of limitations is tolled against director/officer misconduct so long 

as a majority of the board is controlled by the alleged wrongdoers.” Id. at 

33 (citing Clark v. Milam, 847 F. Supp. 409, 421 (S.D. W. Va. 1994), 
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quoting Fed. Deposit Ins. Corp. v. Cocke, 7 F.3d 396, 402 (4th Cir. 

1993)). The Receiver also relies on In re CitX Corp., No. 01-19604, 2004 

WL 2850046, *4 (E.D. Pa., Dec. 8, 2004), in which a federal court held that 

applying a strict statute of limitations against an appointed bankruptcy 

trustee would be inequitable because the trustee was not in a position prior 

to the filing of the bankruptcy to be fully aware of all potential claims to be 

made.8

Here, according to the Receiver, because Lenfest controlled Chestnut 

Property, the General Partner, “it is reasonable that litigation could not be 

filed by Appellant until he was appointed Receiver. Otherwise, Appellant had 

no standing.” Appellant’s Brief at 34. Moreover, the Receiver asserts that 

Lamm, as a limited partner, could not have filed a new derivative action in 

or around October 2010 based on his preliminary knowledge of the Starwood 

LOI and the auction sale for two reasons. First, dissolution following the 

original action was still pending. Second, the new action “would have 

multiplied the proceedings seeking a remedy for the identical wrongdoing by 

____________________________________________

8 The case actually cited in the Receiver’s brief, In re CitX Corp., No. 03-

727, 2005 WL 1388963 (E.D. Pa., June 7, 2005), aff’d sub nom In re CitX 

Corp., 448 F.3d 672 (3d Cir. 2006), does not address a statute of limitations 

issue, but we understand that the Receiver intended to cite the decision set 

forth in the text of this opinion. We find CitX unpersuasive for the reasons 

explained by the court in In re National Forge Co., 344 B.R. 340, 373-75 

(W.D. Pa. 2006) (explaining that the interaction of the statute of limitations 

and the filing of a bankruptcy petition is governed by special provisions of 

the Bankruptcy Code, 11 U.S.C. § 108(a), and not by a common law tolling 

doctrine).
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defendants to three separate lawsuits, presumably before three Judges; and 

all of this would be an outgrowth of an original action brought in equity —

where all the issues should have been decided.” Appellant’s Brief at 37; see 

also id. at 35 n.4. Finally, the Reciever contends that the question whether 

there was an exercise of due diligence in discovering the wrongdoing is a 

factual inquiry appropriate for a jury, and therefore the court erred in 

granting summary judgment on that issue. Appellant’s Brief at 29-31.

We are unpersuaded by the Receiver’s arguments. First, we observe 

that the fact that this action is brought on behalf of the Partnership by a 

court-appointed Receiver does not excuse the plaintiff from compliance with 

the applicable statute of limitations. The Revised Uniform Limited 

Partnership Act, 15 Pa.C.S. § 8575(b), gives “a receiver appointed by the 

court” the authority “to prosecute actions in the name of the limited 

partnership.” The Act provides that even after a partnership is dissolved, 

remedies “against the limited partnership or its partners” may still be 

pursued “if an action . . . is brought on behalf of . . . the limited partnership 

within the time otherwise limited by law.” Id. § 8575(a) (emphasis 

added). It follows that where, as here, an action is brought on behalf of the 

Partnership prior to dissolution, the case also must be brought within the 

applicable statute of limitations (“the time otherwise limited by law”). The 

Receiver provides no reason to distinguish between pre- and post-dissolution 

actions in this respect, and we know of none.
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Generally, actions for torts must be brought within two years of when 

an injury is inflicted and the right to institute a suit arises. See 42 Pa.C.S. 

§ 5524; Gleason v. Borough of Moosic, 15 A.3d 479, 483 n.1 (Pa. 2011). 

However, “where the complaining party is reasonably unaware that his or 

her injury has been caused by another party’s conduct, the discovery rule 

suspends, or tolls, the running of the statute of limitations.” Id. To 

successfully invoke the discovery rule, a party must show “the inability of 

the injured, despite the exercise of due diligence, to know of the injury or its 

cause.” Pocono Int’l Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d 

468, 471 (Pa. 1983) (emphasis omitted). A party fails to exercise reasonable 

diligence when it fails to make an inquiry when the information regarding the 

injury becomes available. Fine v. Checcio, 870 A.2d 850, 858 (Pa. 2005). 

“Mistake, misunderstanding, or lack of knowledge in themselves do not toll 

the running of the statute.” Id. at 857 (citation omitted). 

Whether the statute of limitations has run on a claim is a question of 

law for the trial court to determine; however, application of the discovery 

rule involves a factual determination as to whether a party was able, in the 

exercise of reasonable diligence, to know of his injury and its cause. Fine, 

870 A.2d at 859. Therefore, application of the rule ordinarily must be 

decided by a jury. Id. “Where, however, reasonable minds would not differ 

in finding that a party knew or should have known on the exercise of 

reasonable diligence of his injury and its cause, the court determines that 

the discovery rule does not apply as a matter of law.” Id. at 858-59 (citation 
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omitted). The standard of reasonable diligence is an objective one. Morgan 

v. Petroleum Products Equip. Co., 92 A.3d 823, 829 (Pa. Super. 2014).

Here, the Partnership’s limited partners, including Lamm, were aware 

of the existence of the LOI and plans for development of the property as 

early as Lenfest’s deposition in August 2010. They were aware of the sale of 

the property (and that it was purchased by an entity owned by Lenfest) as 

early as October 5, 2010; Lamm himself was present at that auction. They 

were aware that the other party to the LOI was Starwood no later than 

October 11, 2010, when a copy of the LOI was produced by Lenfest. The 

General Partner sent a formal letter to the limited partners regarding the 

sale on October 18, 2010. The partners therefore should have sued with 

respect to these alleged wrongdoings within two years of October 18, 2010, 

if not earlier. As stated by the trial court:

At that point, plaintiff was informed that defendants acquired the 

property, and the W Hotel/Condo LOI attached with it, which had 

been developed by the partnership. 

The culmination of this information — then in plaintiff’s 

possession — alerted or should have alerted, plaintiff as to the 

alleged injury and the party who allegedly caused the injury. As 

a matter of law, the statute of limitations period had been 

triggered. 

Trial Court Opinion, 10/15/15, at 9. We agree with the trial court and hold 

that reasonable minds could not differ on these facts. Because the 

Partnership, by its Receiver, did not file suit until December 19, 2012, it 

missed the mark by two months.
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To the extent the Receiver argues that he did not appreciate the full 

magnitude of Defendants’ wrongdoing until the Liquidating Trustee issued its 

Report in 2012, the discovery rule does not provide relief. A plaintiff is 

required to exercise reasonable diligence. Had the plaintiffs in the original 

action conducted an appropriate investigation, they could have uncovered 

the same facts that were later exposed by the report of the Liquidating 

Trustee. For example, despite having knowledge of the secretive 

development plans and the auction sale in 2010, the partners did not take 

the opportunity, as was their right, to review the Partnership’s books at any 

time after 2009. They had a duty to investigate the dubious actions by 

Defendants and commence action in a timely manner, and they failed to do 

so.9

The Receiver correctly argues that although no Pennsylvania appellate 

court has recognized the adverse domination doctrine, some other courts, 

including some federal courts in Pennsylvania, have adopted that doctrine to 

ameliorate the adverse effects of the statute of limitations in selected 

____________________________________________

9

For this same reason, the Receiver may not rely on the fraudulent 

concealment doctrine to escape the statute of limitations. That doctrine 

“provides that the defendant may not invoke the statute of limitations, if 

through fraud or concealment, he causes the plaintiff to relax his vigilance or 

deviate from his right of inquiry into the facts.” Fine, 870 A.2d at 861 

(citation omitted). To prevail, however, a plaintiff must show reasonable 

diligence; “a statute of limitations that is tolled by virtue of fraudulent 

concealment begins to run when the injured party knows or reasonably 

should know of his injury and its cause.” Id.
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business situations. See Appellant’s Brief at 31-34; Resolution Trust Corp. 

v. Farmer, 865 F. Supp. 1143, 1158-59 (E.D. Pa. 1994) (applying adverse 

domination doctrine to claims brought by receiver for a failed financial 

institution alleging negligence by former directors). Some federal courts view 

“adverse domination” as the corporate equivalent of the discovery rule. See 

In re O.E.M./Erie, Inc., 405 B.R. 779, 785–86 (Bankr. W.D. Pa. 2009) 

(citing Farmer, 865 F. Supp. at 1154 n.11). Like the discovery rule, adverse 

domination is based on the principle of an “inherently unknowable character 

of the injury.” See Farmer, 865 F. Supp. at 1155 (internal quotation marks 

omitted). 

However, insofar as we have been able to determine, all of the federal 

decisions that have applied the adverse domination doctrine have relied on 

the fact that no non-culpable party could have brought suit before the 

receiver or trustee was appointed because of the control the defendants 

exerted over the organization and others’ lack of sufficient knowledge of the 

wrongdoing. See, e.g., Hecht v. Malvern Preparatory Sch., 716 F. Supp. 

2d 395, 399 (E.D. Pa. 2010) (finding receiver’s filing timely where “it would 

have been impossible for the defrauded investors to have asserted their 

legal rights before the [r]eceiver’s appointment” (citation and brackets 

omitted)). As one court explained: 

Allowing adverse domination to toll the statute of limitations 

makes particular sense in a closely held corporation context . . . 

where there may only be a few shareholders who also act as the 

corporate entity’s officers and directors. If all the shareholders/

officers and directors in the closely held corporation engaged in 
J-A24041-16

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some activity that harmed the corporate entity, there would be 

no one left to protect the interests of the corporation. The 

culpable individuals may then be able to continuously engage in 

activities that harm not only the corporation, but also the 

corporation’s creditors while escaping liability.

In re O.E.M., 405 B.R. at 785–86; see also Farmer, 865 F. Supp. at 1157 

(predicting that Pennsylvania would employ a “complete domination” test 

and require plaintiffs to prove that there was no informed but not culpable 

person who could have previously induced the corporation to initiate suit); 

In re Petters Co., 495 B.R. 887, 904 (Bankr. D. Minn., July 12, 2013, 

revised Aug. 30, 2013) (trustee must plead that his predicate creditor did 

not and could not have discovered the injury). These decisions hold that 

equity demands in such instances that the limitations period begin anew.

With this understanding of the way courts have applied the adverse 

domination doctrine, we conclude that even if the doctrine were adopted in 

Pennsylvania, it would not be applicable to this case. The Receiver here, 

Lamm, was a limited partner, involved since 2000, and a named plaintiff in 

the prior litigation. He knew about the October 2010 actions of Defendants 

and could have learned any details regarding their alleged misconduct by 

conducting a diligent investigation. It would not be inequitable to apply the 

normal statute of limitations rules to these facts.

Lamm does not provide a satisfactory explanation of why he could not 

have brought these claims earlier. He learned about the auction sale and the 

Starwood project in October 2010, while his original action before Judge 

Bernstein was still pending, and he could have sought to add claims based 
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on those matters to that case by an amendment of his complaint. See Pa.R. 

Civ.P. 1033 (an “amended pleading may aver transactions or occurrences 

which have happened before or after the filing of the original pleading, even 

though they give rise to a new cause of action or defense”). Or, as Judge 

Glazer noted, he could have filed a separate derivative action under the 

Revised Uniform Limited Partnership Act, 15 Pa. C.S. § 8591.

10 Lamm claims 

he would not have had standing to bring such an action, but he cites no legal 

authority to support his argument. The Act provides that to bring the action, 

a plaintiff “must be a partner at the time of bringing the action and . . . at 

the time of the transaction of which he complains,” 15 Pa.C.S. § 8592(a)(1), 

and Lamm met those criteria. We note that derivative actions exist as a 

practical check against abuse for personal gain by management,11 the type 

of misconduct that Lamm and the limited partners claim here. 

____________________________________________

10 Section 8591 provides: “A limited partner may bring an action in the right 

of a limited partnership to recover a judgment in its favor if general partners 

with authority to do so have refused to bring the action or if an effort to 

cause those general partners to bring the action is not likely to succeed. The 

derivative action may not be maintained if it appears that the plaintiff cannot 

fairly and adequately represent the interests of the limited partners in 

enforcing the rights of the partnership.” 

11 See Daniel P. Dwyer, The Rights of Shareholders, Limited Partners and 

Non-Managing Limited Liability Company Members in Corporate Governance 

Disputes: Derivative Actions in Pennsylvania, 84 Pa. Bar Ass’n Q. 47, 48 n.1 

(2013) (citing Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 

547-48 (1949)).
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For these reasons, we hold that the Receiver may not use the adverse 

domination doctrine to excuse his failure to bring suit within the limitations 

period. In light of this holding, we state no view as to whether the adverse 

domination doctrine should be adopted as the law of Pennsylvania in an 

appropriate case. Because the statute of limitations was not tolled, the trial 

court did not err in dismissing Appellant’s claims as filed outside of the time 

prescribed by law.

The Law of the Case

The Receiver next argues that because Judge Bernstein ordered him to 

file suit within ninety days of September 20, 2012, Judge Glazer was 

precluded by the law of the case doctrine from dismissing this action on 

statute of limitations grounds. Appellant’s Brief at 35-37. He claims “it was 

the height of unfairness for Judge Glazer to punish Appellant for being 

obedient to the ruling of Judge Bernstein.” Id. at 35 n.4. We do not agree 

with this characterization of Judge Glazer’s decision.

The law of the case doctrine is comprised of three rules: 

(1) upon remand for further proceedings, a trial court may not 

alter the resolution of a legal question previously decided by the 

appellate court in the matter; (2) upon a second appeal, an 

appellate court may not alter the resolution of a legal question 

previously decided by the same appellate court; and (3) upon 

transfer of a matter between trial judges of coordinate 

jurisdiction, the transferee trial court may not alter the 

resolution of a legal question previously decided by the 

transferor trial court.
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Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa. 1995); accord Zane 

v. Friends Hosp., 836 A.2d 25, 29 (Pa. 2003). Within this doctrine lies the 

directive that “judges sitting on the same court in the same case should not 

overrule each other’s decisions,” otherwise known as the “coordinate 

jurisdiction rule.” Commonwealth v. Daniels, 104 A.3d 267, 278 (Pa. 

2014). 

The purposes behind the law of the case doctrine and the coordinate 

jurisdiction rule are “(1) to protect the settled expectations of the parties; 

(2) to insure uniformity of decisions; (3) to maintain consistency during the 

course of a single case; (4) to effectuate the proper and streamlined 

administration of justice; and (5) to bring litigation to an end.” Starr, 664 

A.2d at 1331 (citation omitted). Only in exceptional circumstances, such as 

“an intervening change in the controlling law, a substantial change in the 

facts or evidence giving rise to the dispute in the matter, or where the prior 

holding was clearly erroneous and would create a manifest injustice if 

followed,” may the doctrine be disregarded. Id. at 1332.

To determine whether the law of the case doctrine applies, a court 

must examine the rulings at issue in the context of the procedural posture of 

the case. Stein v. Magarity, 102 A.3d 1010, 1017 (Pa. Super. 2014). The 

coordinate jurisdiction rule does not apply where the motions ruled upon are 
J-A24041-16

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of a different type. Hunter v. City of Phila., 80 A.3d 533, 536 (Pa. Cmwlth. 

2013).12

Judge Glazer did not violate the law of the case doctrine. The order of 

September 20, 2012, which was entered by Judge Bernstein during the 

original Lamm litigation, reads in relevant part as follows:

1. The Motion to Accept the [Liquidating Trustee’s] Final Report 

is GRANTED.1

2. Eric D. Freed is removed as Liquidating Trustee and David S. 

Lamm is appointed Receiver for Mariner Chestnut Partners, L.P. 

(the “Partnership”) to pursue litigation on behalf of the 

Partnership based on the claims identified in the Trustee’s 

Report.

3. The Receiver shall file any such litigation on behalf of the 

Partnership within ninety (90) days of the date of entry of this 

Order

4. If the Receiver fails to timely file such litigation, the 

Partnership shall be dissolved immediately by the Receiver and 

all assets distributed in accord with the Partnership Agreement. 

5. If the Receiver timely files such litigation, upon termination of 

the litigation, the Receiver’s attorneys’ fees and costs shall be 

paid first out of any damages awarded. The remainder of the 

damages, if any, shall be distributed to the partners in accord 

with the Partnership Agreement, or as ordered by the court in 

which the litigation is filed, and immediately thereafter the 

Partnership shall be dissolved by the Receiver. 

____________________________________________

12 “Although decisions of the Commonwealth Court are not binding on this 

Court, we may rely on them if we are persuaded by their reasoning.” 

NASDAQ OMX PHLX, Inc. v. PennMont Secs., 52 A.3d 296, 308 n.7 (Pa. 

Super. 2012) (citation omitted).
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_______________

1 The Report was not the result or subject of any adversary 

proceeding. The court makes no factual findings based on the 

Report. The court notes that certain information was not 

voluntarily provided by a non–party corporate entity which 

could not be subpoenaed.

Lamm Order, 9/24/12. Judge Bernstein explained that he appointed the 

Receiver specifically to allow for litigation based on the claims discussed in 

the Report of the Liquidating Trustee. Lamm Revised Opinion, 11/5/12, at 

2.13 The pursuit (or abandonment) of all litigation regarding the Partnership 

was a necessary step to accumulating all assets of the Partnership prior to 

its dissolution. The court stated:

So that this matter, which has already been in litigation for three 

and one half years, not remain interminably dormant, the Court 

ordered that litigation based on the potential claims identified in 

the Liquidating Trustee’s final report must be filed within 90 days 

or the partnership shall be immediately dissolved and all 

remaining assets distributed in accord with the partnership 

agreement.

Id. at 3.

To prevail on his law-of-the-case argument, the Receiver must 

interpret Judge Bernstein’s order as setting forth a requirement that the 

statute of limitations be extended so that it could not expire until after the 

____________________________________________

13 “Based on the report of the liquidating trustee a reasonable basis exists 

for litigation to be pursued. The Court reasonably appointed a limited partner 

who feels aggrieved and is willing to personally fund and pursue this 

litigation on behalf of the partnership.” Lamm Revised Opinion, 11/5/12, at 

3.
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end of the 90 days that Judge Bernstein gave the Receiver to file suit. But 

Judge Bernstein had no authority to do that. The Judicial Code provides:

(a) General rule.—Except as provided in section 1722(c) 

(relating to time limitations) or in subsection (b) of this section, 

the time limited by this chapter shall not be extended by 

order, rule or otherwise.

(b) Fraud.—The time limited by this chapter may be extended 

to relieve fraud or its equivalent, but there shall be no extension 

of time as a matter of indulgence or with respect to any criminal

proceeding.

42 Pa.C.S. § 5504 (emphasis added). This section expressly prohibits judicial 

extensions of the time to commence an action. Aivazoglou v. Drever 

Furnaces, 613 A.2d 595, 598 (Pa. Super. 1992). Although Judge Bernstein 

acknowledged that Lenfest and Chestnut Property concealed wrongdoings in 

2010, he did not make any finding of fraud under Section 5504(b) that 

would allow him to extend the statute of limitations. 

In fact, Judge Bernstein’s order did not address the statute of 

limitations at all. It merely set an outside deadline within which to file viable 

new claims. Plaintiffs were still constrained by the rules of law under which it 

would be determined whether those claims would be viable, including any 

applicable statutes of limitations. Judge Bernstein did say he thought there 

was a “reasonable basis” for the Receiver to pursue further litigation, but he 

did not make any factual finding based on the Liquidating Trustee’s report, a 

legal ruling on the merits of the potential claims, or an assessment of the 

timeliness of any claims. 
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Judge Bernstein’s actual rulings were limited to the following: the 

Lamm plaintiffs’ claims for damages were dismissed, a receiver was 

appointed, and dissolution of the Partnership was ordered to occur. Nothing 

in Judge Glazer’s later decisions disturbed those rulings. Accordingly, the 

Receiver’s argument based on the law of the case doctrine is without merit. 

Continued or Separate Case, and Issue or Claim Preclusion

The Receiver’s final argument is that the issues in the instant case 

were timely raised in the first Lamm action, and that this case is a 

continuation of that earlier one and therefore should not be subject to a new 

limitations period. Appellant’s Brief 37-40. 

With respect to the instant action, the Receiver points to the footnote 

in Judge Glazer’s opinion stating —

Assuming arguendo that plaintiff’s claims were not barred by the 

statute of limitations, [D]efendants’ motion still would have been 

granted due to collateral estoppel and res judicata. Based on J. 

Bernstein’s and the Superior Court’s holdings in the related 

underlying litigation, the fundamental issues raised by plaintiff 

have already been litigated, decided, and affirmed on appeal.

Trial Court Opinion, 10/15/15, at 10 n.10. The Receiver agrees with the trial 

court that “the fundamental issues” of the instant case were raised in the 

previous Lamm litigation, and he therefore concludes that they are not 

barred by the statute of limitations. But the Receiver disagrees with the trial 

court’s statement that the issues in the instant case were decided in the first 

Lamm action and that the Receiver’s claims therefore are barred by 

collateral estoppel or res judicata. Appellant’s Brief at 37-40.
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At the outset, we note that the Receiver cannot have it both ways. As 

discussed above, if this is a new case then the statute of limitations bars the 

Receiver’s claims. The mere fact that this new case may somehow be an 

outgrowth of litigation that preceded it does not make the statute of 

limitations inapplicable. See Daley v. A.W. Chesterton, Inc., 37 A.3d 

1175, 1190 (Pa. 2012) (holding plaintiff may file second or subsequent 

action for asbestos-related disease, as long as that action “is based on a 

separate and distinct [asbestos-related] disease which was not known to 

plaintiff at the time of his first action, and is filed within the applicable 

statute of limitations period” (emphasis added)); Royal-Globe Ins. Cos. 

v. Hauck Mfg. Co., 335 A.2d 460, 462 (Pa. Super. 1975) (“if a plaintiff 

mistakes his remedy . . . and, during the pendency of the action, the 

limitation runs, the remedy is barred” (citation omitted)); see also 

Williams Studio Div. v. Nationwide Mut. Fire Ins. Co., 550 A.2d 1333, 

1335-37 (Pa. Super. 1988), appeal denied, 588 A.2d 510 (Pa. 1990).14

This case either presents new claims subject to a new limitations 

period, or it does not. In much of his briefing, the Receiver argues that this 

case is truly new because he filed it pursuant to Judge Bernstein’s directive. 

____________________________________________

14 As discussed in the text, the first Lamm action ended with a judgment on 

the merits that was affirmed by this Court. Therefore, the Pennsylvania 

savings statute, which removes a limitations defense if an action is refiled 

within one year after its termination by a disposition other than “a final 

judgment on the merits” has no application here. See 42 Pa. C.S. 

§ 5535(a)(1). 
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See, e.g., Appellant’s Brief at 28 (claiming plaintiffs did not discover the 

wrongdoing that forms the basis of their new suit until the Liquidating 

Trustee’s Report was published in July 2012), 34 (referring to a 

“requirement that a new action was needed”). That should be the end of the 

matter. The Receiver’s concomitant argument that this case is merely a 

“bifurcated” continuation of the original Lamm litigation that was litigated to 

judgment in 2012 (and, therefore, is not subject to a new limitations 

period), see, e.g., id. at 37-40, contradicts the Receiver’s other arguments 

that this is a new case. 

In our view, the Receiver did indeed file this action as a new case. As 

he emphasizes, Judge Bernstein appointed him to pursue litigation based on 

the claims identified by the Liquidating Trustee’s Report. The wrongdoing 

identified in that Report related to the secret Starwood development plans 

and the sale of the Chestnut Street property in 2010, all of which took place 

well after the initiation of the original Lamm suit. No one amended the 

complaint in that original suit to add claims based on that wrongdoing. Judge 

Bernstein did not consider this alleged new wrongdoing as a factual basis for 

potential relief on the tort claims in the original Lamm litigation; instead, he 

referenced it only when granting the request for dissolution. In his order 

appointing the Receiver, Judge Bernstein specified that he was not making a 

factual finding based on the Liquidating Trustee’s Report, and therefore was 

not resolving the merits of these issues. Thus, to the extent that the facts 
J-A24041-16

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supporting the instant case are new and were not used as the basis for 

substantive relief in the original Lamm action, this is a new case and not 

part of the old one, and the statute of limitations bars it.

We recognize that there is some overlap between the facts and claims 

in the two cases. But this overlap cannot save the Receiver’s claims. Rather, 

as Judge Glazer pointed out, to the extent any part of this new litigation may 

be considered a reassertion of parts of the earlier Lamm case, it is barred 

by the judgment entered in that earlier action. 

Under the doctrine of res judicata, or claim preclusion, “a final 

judgment on the merits by a court of competent jurisdiction will bar any 

future action on the same cause of action between the parties and their 

privies.” Hopewell Estates, Inc. v. Kent, 646 A.2d 1192, 1194 (Pa. Super. 

1994). The doctrine therefore forbids further litigation on “all matters which 

might have been raised and decided in the former suit, as well as those 

which were actually raised therein.” Id. (citation and brackets omitted). 

Similarly, “The doctrine of collateral estoppel or issue preclusion prevents a 

question of law or an issue of fact that has once been litigated and fully 

adjudicated in a court of competent jurisdiction from being relitigated in a 

subsequent suit.” Meridian Oil & Gas Enters., Inc. v. Penn Cent. Corp., 

614 A.2d 246, 250 (Pa. Super. 1992) (citation omitted). 

In the original Lamm action, all claims were litigated to a final 

judgment that was affirmed by this Court on appeal. Lenfest and Chestnut 
J-A24041-16

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Property prevailed in that case on the claims brought against them for 

breach of fiduciary duties and breach of the Partnership Agreement. 

Therefore, to the extent that the Receiver now argues that the instant claims 

are the same as those in the original Lamm action or are part of the same 

cause of action as what was litigated in that case, the doctrines of claim and 

issue preclusion apply and the Receiver can no longer recover on these 

claims. See Hopewell Estates, 646 A.2d at 1194. 

Accordingly, for all of these reasons, we affirm the trial court’s grant of 

summary judgment.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 12/7/2016