J. A 24 0 41 /18

NON

- PRECEDENTIAL DECISION

– SEE SUPERIOR COURT I.O.P. 65.37

ANDREW JOHN KELLY :

: IN THE SUPERIOR COURT OF

PENNSYLVANIA

v. :

: REPSOL OIL & GAS USA, LLC, AS SUCC . BY CONVERSION TO TALISMAN ENERGY USA, INC. AND NICHOLAS HA LKI AS :

:

:

:

:

v. :

: PAUL A. KELLY, INDIVIDUALLY AND AS AGENT FOR ANDREW JOHN KELLY :

: No. 37 MDA 2018

: APPEAL OF: ANDREW JOHN KELLY :

Appeal from the Judgment Entered February 7 , 2017,
i n the Court of Com mon Pleas of Susquehanna County

Civil Division at No

. 2013

- 584

ANDREW JOHN KELLY :

: IN THE SUPERIOR COURT OF

PENNSYLVANIA

v. :

: REPSOL OIL & GAS USA, LLC, AS SUCC. BY CONVERSION TO TALISMAN ENERGY USA, INC. AND NICHOLAS HA LKI AS :

:

:

:

:

v. :

: PAUL A. KELLY, INDIVIDUALLY AND AS AGENT FOR ANDREW JOHN KELLY :

: No. 38 MDA 2018

: APPEAL OF: PAUL A. KELLY :

Appeal from the Judgment Entered February 7 , 2017, In the Court of Com mon Pleas of Susquehanna County

Civil Division at No

. 2013

- 584 CPJ. A 24 0 41 /18

- 2

-

BEFORE: OTT, J.

, McLAUGHLIN , J., AND FORD ELLIOTT, P.J.E.

MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED: MAY 1, 2019

Andrew John Kelly and Paul A. Kelly

, 1 individually and as agent for

Andrew John Kelly (collectively, “ appellants ” )

, appeal the February 7, 2018

judgment 2 that resulted from the June 12, 2017 order of the Court of Common

Pleas of Susquehanna County that (1) entered judgment in favor of Paul Kelly

,

individually and as agent for Andrew Kelly , and Andrew Kelly against

Nicholas Ha lki as with respect to Count I of the Interpleader Complaint, Void

Assignment

– Failure of Consideration; (2) entered judgment in favor of

Nicholas Ha lki as and against appellants with respect to Count II

– Void

Assignment

– Violation of Fiduciary Duty/Fraud/Self

- Dealing, Count III

– Void

Assignment

– Improper Notarizati o n, Count IV

– Void Assignment

–

Vagueness/Assignment Personal to Grantors , and Count V

– Misappropriation

of Royalties ; and (3) with respect to Andrew Kelly ’ s complaint ag ainst

Repsol Oil & Gas USA, LLC ( “ Repsol ” ) , as successor by conversion to Talisman

Energy USA, Inc. ( “ Talisman ” ) , judgment was entered in favor of Repsol and

1 Paul Kelly is the father of Andrew Kelly

.

2 The caption s originally stated that appellants appealed from an order entered December 6, 2017. However, in the December 6, 2017 order, the trial court denied post

- trial motions. Appellants are actually appealing the February 7, 2018 judgment. The caption s ha ve bee n amended accordingly.J. A 24 0 41 /18

- 3

-

against Andrew Kelly as to Count I, Conversion, and Count II, Defamation of

Title

. After careful review, we affirm.

The trial court also declared void the assignment executed on June 24,

2007

, by James P. Ha lki as and Kerry Ha lki as, recorded at Instrument

N o. 200817634 in the Office of the Register of Wills and Recorder of Deeds for

Su squehanna County ; and the Recorder of Deeds was ordered to strike the

document from the records of Susquehanna County

. Similarly, the

assignment executed on June 24, 2007 by James Ha lki as and Kerry Ha lki as,

recorded at Instrument Number 201309151 in the O ffice of the Register of

Wills and the Recorder of Deeds for Susquehanna C ounty was declared void,

and the Recorder of Deeds for Susquehanna County was ordered to strike the

document from the records of Susquehanna County

.

Andrew Kelly was ordered to di sgorge any and all royalty payments,

made pursuant to either assign ment to Nicholas Ha lki as

. Repsol was ordered

to furnish any and all royalty payments held in suspense pursuant to this

matter to Nicholas Ha lki as , to cease any and all royalty payments made to

Andrew Kelly under either assignment, and to furnish all future royalty

payments to Nicholas Ha lki as

. The trial court also scheduled a hearing for

consideration of Respol ’ s petition for counsel fees and cost s. 3

3 The issue of counsel fees is not before this court in either of th e s e appeal s

. However, appellants appealed the trial court ’ s award of counsel fees at
No s

. 420 and 421 MDA 2018.J. A 24 0 41 /18

- 4

-

The facts and procedural history

, as gleaned from the extensive trial

court opinion , are as follows: On May 8, 2013, Andrew Kelly filed a complaint

against Talisman and sought royalty payments for oil and natural gas

extracted from a parcel of real e state in Susquehanna County. According to

the complaint, James Ha lki as purchased real estate ( “ Property ” ) in

Susquehanna County in early 2006. On June 24, 2007, James Ha lki as and his

wife, Kerry, executed an oil and gas lease with Fortuna Energy Company

( “ Fortuna ” ) where Fortuna would pay to extract oil and gas from the pr operty.

(Trial court opinion, 6/19/17 at 2

. )

According to the complaint, that same day, James Ha lki as allegedly

executed an assignment that would give Andrew Kelly a 15% share of any oil

and gas royalties from the property. The typed text of the assignment stated:

The undersigned, Grantors, do hereby assign
TO Andrew John Kelly, Grantee, his heirs or assigns Fifteen percent of any accrued royalties which may become due from any energy company as a result of oil or gas pr oduction concerning our lands.

For example: Royalty = $1,000 Kelly receives = $150 Witness our hands and seals this day of May, 2007 intending to be legally bound.

Id. at 2

- 3. The assignment contained handwritten portions that included the

names “ James P. Ha lki as & Kerry Ha lki as (w) ” written above the identification

of the grantors. To the right side of the page is the notation:

“ Ha lki as 431.24. ” ( Id. at 2 n.2 .) At some poin t, either Fortuna or itsJ. A 24 0 41 /18

- 5

-

successor , Talisman

, voided the lease and it is not the subject of this litigation.

( Id. at 3.)

On August 7, 2008, James Ha lki as entered into a second oil and gas

lease with Alta Resources, LLC ( “ Alta ” ). At some point, Alta came under the

control of Talisman. On September 22, 2010, James Ha lki as executed a fee

simple warranty deed and deeded the property to his father, Nicholas Ha lki as

.

( Id. )

Late in 2012, Talisman paid 15 % of royalties to Andrew Ke lly in

accordance with the assignment. In February 2013, Talisman received notice

that the Ha lki as family questioned the validity of the assignment. Talisman

then placed all future royalty payments in suspense. Because of this action,

Andrew Kelly filed the complaint on May 8, 2013

, and pled causes of action

for conversion and defamation of title. ( Id. )

On August 12, 2013, Talisman filed a petition for interpleader and

asserted that it did not intend to keep the royalty payments but placed the

funds in suspense until the trial court determined who was entitled to the

royalties. On October 28, 2013, the trial court granted Talisman ’ s interpleader

complaint and ordered Nicholas Ha lki as to file a complaint. On December 23,

2013, Nicholas Ha lki as filed an interpleader complaint aga inst appellants. In

the interpleader complaint, Nicholas Ha lki as alleged that the assignment was

invalid for various reasons, including contract law, tort, and misappropriation

of royalties. Nicholas Ha lki as asked the trial court to strike the assignmentJ. A 24 0 41 /18

- 6

-

from the Office of the Register of Wills and the Recorder of Deeds of

Susquehanna County and that royalties that had been paid to Andrew Kelly

be paid to Nicholas Ha lki as . Each appellant filed answers with n ew matter.

( Id. at 3

- 4.)

The trial court conducted a non

- jury trial on January 18

- 19, 2017.

Andrew Kelly testified that he had seen the assignment before and that

handwriting on the document, which read “ Ha lki as 431.24

, ” referred to the

P roperty. Andre w Kelly further testified that even though he was listed as the

grantee on the assignment and James Ha lki as was the grantor, Andrew Kelly

had never met either Ha lki as. Andrew Kelly recognized the handwriting on

the assignment as that of his father, Paul Kelly

. Andrew Kelly also t estified

that he was to receive the royalties for estate planning purposes and the

payments were Paul Kelly ’ s fees for legal work for James Ha lki as

. ( Id. at 8

-

9. )

Paul Kelly testified that James Ha lki as hired him , when Pau l Kelly was a

practicing attorney

, 4 to quiet title on two pieces of property that James Ha lki as

and a friend had purchased at a tax sale. Paul Kelly also testified that

James Ha lki as asked Paul Kelly to assist James Ha lki as in getting an oil and

gas lease for the property and that the assignment was Paul Kelly’s fee for

doing the work on the oil and gas lease. Paul Kelly testified that he drafted

the assignment at the direction of James Ha lki as even though Paul Kelly had

4 Paul Kelly was later suspended from the practice of law.J. A 24 0 41 /18

- 7

-

no documentary evidence of the instructions. Paul Kelly also testified that the

phrase “ our lands ” in the assignment referred to the P roperty. Paul Kelly

testified that James Ha lki as was aware that the fee was 15 % of any royalties

for securing an oil and gas lease and that James Ha lki as agreed to it.

Paul Kelly further testified that the handwriting on the assignment was already

present at the time James Ha lki as executed it. ( Id. at 9

- 12.)

James Ha lki as testified that he and a friend purchased the property at a

tax sale in 2005, but that his father, Nicholas Ha lki as , actually paid the

purchase price. James Ha lki as hired Paul Kelly to quiet title to the Property

and paid him approximately $5,000. While the quiet title acti o n was pending,

Paul Kelly telephoned James Ha lk i as on July 24, 2007. When they met,

Paul Kelly presented James Ha lki as with an oil and gas lease and the

assignment in a p acket of documents. According, to James Ha lki as , Paul Kelly

told him that if James Ha lki as signed the documents, James Ha lki as would

receive $43,000 from an energy company even though the energy companies

never drilled when these types of leases were signed. James Ha lki as testified

that the assignment did not have any handwriting on it at the time

James Ha lki as signed it. James Ha lki as b elieve d that Paul Kelly was

representing him in the quiet title action and not concerning an oil and gas

lease. James Ha lki as never received the promised money from the energy

company. At some point, James Ha lki as received copies of the documents

used to secure the oil and gas lease with Fortuna from Paul Kelly that wereJ. A 24 0 41 /18

- 8

-

marked void. Included in the packet was a copy of the assignment marked

void. On August 7, 2008, James Ha lki as entered into an oil and gas lease with

Alta

. James Ha lki as later deeded the property to his father for $50,000. ( Id.

at 13

- 15.)

At the close of the trial, appellants moved for compulsory non

- suit

. The

trial court denied the motion. Following trial, the trial court issued the order

from which th e s e appeal s arise . Appellants moved for post

- trial relief. The

trial court denied the motion for post

- trial relief.

On January 5, 2018, appellants each appealed. By order filed

January 19, 2018, the trial court directed Paul Kelly to fi l e a concise statement

of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b). The same

date, the trial court also directed Andrew Kelly to file a concise statement of

errors complained of on appeal. Each appellant complied with the order on

Febr uary 2, 2018. On February 26, 2018, the trial court issued a statement

pursuant to Pa.R.A.P. 1925(a) in which it stated that it had addressed the

issues in the June 19, 2017 opinion and order. By per curiam order dated

January 26, 2018, this court consol idated the appeals sua sponte

.

Appellants 5 raise the following issues 6 for this court ’ s review:

[ 1. ] Whether it was reversible error for the trial court
to sua sponte raise the application of the

5 Although each appellant filed a separate brief, the issues contained in each respective brief are identical.

6 Appellants have not numbered the issues in the briefs. However, this court will do so.J. A 24 0 41 /18

- 9

- discovery rule and fraudulent concealment doctrine when those defenses/doctrines were not properly plead [sic] in any of the pleadings of Nicholas Ha lki as ?

[ 2. ] Whether it was reversible error for the trial court to apply the discovery rule and fraudulent concealment doctrines to invalidate the Ha lki as to Kelly Assignment when those doctrines were not applicable to the facts of this case?

[ 3. ] Whether it was reversible error for the trial court to enter judgment in favor of Nicholas Ha lki as on all counts except for Count 1 of his Interpleader Complaint when [appellants] properly raised the defense of the statute of limitations in their responsive pleadings and the applicable statutes of limitations bar all of the claim s of [ Nicholas ] Ha lki as?

[ 4. ] Whether it was reversible error for the trial court to enter judgment in favor of [ Nicholas ] Ha lki as when [appellants] properly raised the defense that in Pennsylvania fraud is a personal action and therefore all of Nicholas Ha lki as ’ s fraud based claims are barre d as a matter of law?

[ 5. ] Whether it was reversible error for the trial court to enter judgment in favor of [ Nicholas ] Ha lki as when [ Nicholas ] Ha lki as lacked standing and the capacity to sue to bring claims that challenged the enforceability of the Ha lki as to Kelly Assignment?

[ 6. ] Whether it was reversible error for the trial court to enter judgment in favor of [ Nicholas ] Ha lki as and determine that the assignment from
James Ha lki as to Andrew John Kelly, which was the subject of the lawsuit below, when
J ames Ha lki as never attempted to timely revoke/rescind the assignment as is required pursuant to applicable Pennsylvania law?J. A 24 0 41 /18

- 10

- [ 7. ] Whether it was reversible error [for] the trial court to enter judgment in favor of Nicholas Ha lki as when the Ha lki as to Kelly [A] ssignment was sufficiently specific and met all legal requirements to be enforceable and to be binding upon [ James ] Ha lki as, his heirs, successors, and assigns?

[ 8. ] Whether it was reversible error for the trial court to determine that improper notarization was a basis to invalidate the Ha lki as to Kelly [A] ssignment when the notarization of the assignment was not required for the assignment to be valid and enforceable and [ Nicholas ] Ha lki as did not establish that any improper notarizatio n had occurred and did not have standing to challenge the purported improper notarization?

[ 9. ] Whether it was reversible error for the trial court to enter judgment in favor of [ Nicholas ] Ha lki as when [ Nicholas ] Ha lki as failed to state any claim upon whi ch relief could be granted and [appellants] proved their cases as a matter of law such that they were entitled to the relief requested by them?

[ 10. ] Whether it was reversible error for the trial court to deny [appellants ’ ] Joint Motion for Post Trial Rel ief when for the reasons stated in the Motion, all of which are incorporated herein by reference, [appellants] were entitled to the relief requested in the Motion as a matter of law?

Andrew Kelly ’ s brief at 7

- 8.

This court must apply the following standa rd of review:

Our appellate role in cases arising from non

- jury trial verdicts is to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. The findi ngs of the trial judgeJ. A 24 0 41 /18

- 11

- in a non

- jury case must be given the same weight and effect on appeal as the verdict of a jury, and the findings will not be disturbed on appeal unless predicated upon errors of law or unsupported by competent evidence in the record. Furthermore, our standard of review demands that we consider the evidence in a light most favorable to the verdict
winner.

Baney v. Eoute , 784 A.2d 132, 135 (Pa.Super. 2001) (citation omitted).

We will first address appellants ’ contention that the trial court committed

reversible errors of law by failing to enter judgment in their favor because the

applicable statute of limitations barred each and every claim and cause of

action of Nicholas Ha lki as . ( Andrew Kelly ’ s brief at 25. ) 7

Appellants assert that the original assignment was recorded in 2008,

and therefore James Ha lki as and then Nicholas Ha lki as were on notice of the

terms of the assignment from no later than the recording of the assignment

forward as a matter of law. A ppellants assert that first James Ha lki as and

then Nicholas Ha lki as were on constructive notice that their property was

subject to the assignment. Appellants argue that the trial court erroneously

relied on the discovery rule and fraudulent concealment do ctrine to estop

appellants from raising the affirmative defense of the statute of limitations

and to hold that the statute of limitations did not begin to run until the end of

7 The sections in the argum ent section of the briefs of each appellant do not directly correspond to the enumerated issues in the statement of questions involved. As a result, this court has reordered the arguments to reflect more accurately the order presented in the statement of questions involved. Appellants essentially address their first three issues together.J. A 24 0 41 /18

- 12

-

2012 or the beginning of 2013

, which contradicted the trial court ’ s

December 22, 2016 order and opinion. Appellants further argue that

Nicholas Ha lki as did not properly raise the fraudulent concealment doctrine

and the discovery rule in replies to new matters of each appella nt. Appellants

assert that neither Ha lki as exercised due di ligence to discover that the

assignment had been recorded. Further, appellants argue that the trial court ’ s

ruling violated the law of the case doctrine as it reversed its earlier ruling.

The trial court addressed these issues in its opinion:

In Pennsy lvania, actions based upon fraud have a
two

- year statute of limitations, while actions for declaratory relief or actions sounding in contract law have a four

- year statute of limitations. 42 Pa.C.S. [A.] §§ 5524

- 5525.

. . . It is the duty of the party asserting a cause of action to use all reasonable diligence to properly inform themselves of the facts and circumstances upon which the right of recovery is based and to institute suit within the prescribed period. Schaffer v. Larzelere , 189 A.2d 267, 269 (Pa. 1963). “ Thus, the statute of limitations begins to run as soon as the right to institute and maintain a suit arises; lack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations. ” Pocono International Raceway, Inc. v. Pocono Produce, Inc. , 468 A.2d 468, 471 (Pa. 1983). Generally, once the prescribed statutory period has expired, the complaining party is barred from bringing suit. Colonna v. Rice , 664 A.2d 979, 980

- 81 (Pa. Super. 1995) (citing Hayward v. Medical Center of Beaver County , 608 A.2d 1040, 1042

- 43 (Pa. 1992)).

However, the statute of limitations doctrine is not absolute. Two exceptions are germane to this matter : the doctrine of fraudulent concealment and the discovery rule. The doctrine of fraudulent concealment is based on a theory of estoppel, andJ. A 24 0 41 /18

- 13

- 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 v. Checcio , 870 A.2d 850, 860 (Pa. 2005) (citation omitted). Fraudulent concealment does not require fraud in the strictest sense encompassing an intent to dec eive, but rather, fraud in the broadest sense, which includes an unintentional deception. “ It is clear that a ‘ defendant ’ s conduct need not rise to fraud or concealment in the strictest sense, that is, with an intent to deceive; unintentional fraud or con cealment is sufficient. ’” Krapf v. St. Luke ’ s Hosp. , 4 A.3d 642, 650 (Pa.Super. 2010) (quoting Molineux v. Reed , 532 A.2d 792, 794 (Pa. 1987)). Our Supreme Court has held that a “ statute of limitations that is tolled by virtue of fraudulent concealment b egins to run when the injured party knows or reasonably should know of his injury and its cause. ” Fine , 870 A.2d at 861.

If through fraud or concealment the defendant causes the plaintiff to relax his or her vigilance or deviate from his or her right of inquiry, the defendant is estopped from invoking the bar of the statute of limitations. Lange v. Burd , 800 A.2d 336, 339 (Pa.Super. 2002) (citing Molineux , 532 A.2d at 794). For the doctrine of fraudulent concealment to be applicable, “ [a] defendant must have committed some affirmative independent act of concealment upon which [a ] plaintiff[] justifiably relied. ” Krapf , 4 A.3d at 650 (citing Lange , 800 A.2d at 339); see also Kingston Coal Co. v. Felton Mining Co. Inc. , 690 A.2d 284, 291 (Pa. Super. 1997). Mere mistake or misunderstanding is insufficient. Molineux , 532 A.2d at 794. Also, mere silence in the absence of a duty to speak cannot suffice to prove fraudulent concealment. Lange
, 800 A.2d at 339 (citing Sevin v. Kelshaw

, 611 A.2d 1232, 1236 (Pa. Super. 1992); see also Krapf , 4 A.3d at 650. The burden of proving such fraud or concealment, by evidence which is clear, precise and convincing, is upon the asserting party. Lange
, 800 A.2d at 339 (citing Nesbitt v. Erie Coach Company , 204 A.2d 473 (Pa. 1964)).J. A 24 0 41 /18

- 14

- At trial, James Ha lki as presented testimony regarding alleged concealment of the Assignment by Paul Kelly

, which we find credible. Indeed, James Ha lki as testified that during the execution of the Assignment and the Fortuna lease, Paul Kelly state d he would
receive “ free money ” in the amount of $43,000.00, and that energy companies never drill. Further,
James Ha lki as testified that he simply signed the documents where Paul Kelly , his then counsel

- of

record in a pending quiet title action, told him to sign.
James Ha lki as never received the promised “ free

money ” from the energy companies, and instead received “ void ” copies of the Fortuna lease and Assignment from Paul Kelly

. James Ha lki as testified that upon receiving the “ void ” documents, he believed the Fortuna lease situation was over, and blocked it
out of his mind. Unbeknownst to he [sic] and his father, however, Paul Kelly recorded the Assignment. Thereafter, royalties were paid by Talisman to Andrew Kelly pursuant to the Assignment and the Alta lease, despite James Ha lki as having no dealings with Paul Kelly in regards to the Alta lease. Finally, the discovery of the royalties being paid to Andrew Kelly was not known to the Ha lki ases until late 2012 or early
2013.

Based upon our review of the testimony presented at trial, we find the doctrine of fraudulent concealment serves to estop [appellants] from invoking the statute of limitations as a bar to Nicholas Ha lki as ’ [s] claims. Indeed, credible trial testimony from James H a lki as presents an “ affirmative independent act of concealment ” upon which he and his father justifiably relied. Krapf

, 4 A.3d at 650 (citing Lange , 800 A.2d
at 339). Based upon Paul Kelly ’ s statements, James Ha lki as believed he was entitled to “ free

money ” which he never received, and believed that energy companies never drilled upon lands. Further,
James Ha lki as believed that the Fortuna lease
situation [w] as over due to the “ void ” documents received from Paul Kelly , despite Paul Kelly ’ s recordation of the Assignment

.J. A 24 0 41 /18

- 15

- These are clear affirmative acts by Paul Kelly upon which James Ha lki as justifiably relied to relax his vigilance into inquiry of any injury, under Krapf

, Lange
, Kingston Coal , and Fine

. Indeed, Paul Kelly ’ s actions rise above the “ unintentional fraud or concealment ” which would invoke the doctrine of fraudulent concealment. Krapf , 4 A.3d at 650 (citing Molineux , 532 A.2d at 794). It is “ clear, precise and convincing ” that Paul Kelly committed these acts and that they were relied u pon by James Ha lki as

. Lange
, 800 A.2d at 339 (citing Nesbitt , 204 A.2d at 473). Accordingly, we find the doctrine of fraudulent concealment estops [appellants] from invoking the statute of limitations as a bar to Nicholas Ha lki as ’ [s] claims.

A second exc eption to the statute of limitations doctrine is the discovery rule. The discovery rule provides that where the existence of the injury is not known to the complaining party and such knowledge cannot reasonably be ascertained within the prescribed statutory period, the limitations period does not begin to run until the discovery of the injury is reasonably possible. Schaffer , 189 A.2d at 270. The discovery rule arises from the inability of the injured party, despite the exercise of reasonable dili gence, to know of the injury or its cause. Pocono International , 468 A.2d at 471. Its purpose is to exclude the period of time during which the injured party is reasonably unaware that an injury has been sustained so that people in that class have essent ially the same rights as those who suffer an immediately ascertainable injury. Pounds v. Lehman , 558 A.2d 872, 874 (Pa. Super. 1989). “ The standard of reasonable diligence is an objective or external one that is the same for all individuals. It is not a subjective standard

. ” Colonna , 664 A.2d at 980

- 81 (citation omitted). Further, the level of reasonable knowledge required is 1) knowledge that one has been injured; and 2) that his injury has been caused by another party ’ s conduct. Id. (citing Cathcart v. Keene I

ndustrial Insulation , 471 A.2d 493, 500 (Pa. Super. 1984) ( en banc )). The failure to make inquiry when information is available is failure toJ. A 24 0 41 /18

- 16

- exercise reasonable diligence as a matter of law. Baumgart v. Keene Building Products Corporation , 633 A.2d 1189, 1193 (Pa. Super. 1993), allocatur denied , 645 A.2d 1311 (Pa. 1994).

At trial, testimony was presented regarding the discovery of the alleged injury sustained by Nicholas Ha lki as. James Ha lki as testified he assists his father with the managemen t of his financial affairs. He testified he and his father did not discover that funds were missing from royalty payments until late 2012 or early 2013. He also testified that he believed the Subject Property was not subject to any other document other t han the Alta lease, as he had received a voided copy of the Fortuna lease and the Assignment in the mail from Paul Kelly

. We find this testimony credible based upon our impression of
James Ha lki as on the witness stand during trial. Further, his testimony is supported by the fact that Talisman did not pay royalties to Andrew Kelly until late 2012, as only then did Talisman begin to extract natural gas from the Subject Property. Also, Talisman stopped the payments in early 2013, when it was notified by the Ha lki as family that the Assignment by which Andrew Kelly was being paid was being contested.

Based upon the testimony and evidence at trial, we find the statute of limitations on Nicholas Ha lki as ’ [s] claims did not begin to run unti l late 2012 or early 2013, when James Ha lki as found his father was not receiving all royalties from oil or gas extracted from the Subject Property. We credit the testimony of
James Ha lki as , who testified he believed the Fortuna lease and the accompanying Assignment were inoperative sometime prior to 2010. We find the existence of this economic injury was not known to Nicholas Ha lki as until he began to receive royalty payments, which did not occur until Talisman began to extract natural gas from the Subjec t Property. We find Nicholas and James Ha lki as exercised reasonable diligence in discovering this economic injury under our Commonwealth ’ s case [ ] law, as they had no way ofJ. A 24 0 41 /18

- 17

- knowing of any injury unless and until they began to receive royalty payments they could verify.

We note our conclusion on statute of limitations grounds herein, based upon the doctrine of fraudulent concealment and the discovery rule, comports with

our December 22, 2016 Opinion and Order, where we addressed statute of limitations in the context of Nicholas Ha lki as ’ [s] proposed amendment and
James Ha lki as ’ [s] proposed joinder to the Interpleader Complaint. In that Opinion, we utilized September 22, 2010 as the latest date the statute of limitations could have begun to run, based on th e facts available to us in the pleadings and motions.
See generally December 22, 2016 Opinion and Order (Harlacher Sibum, J.) (Specially Presiding). In that Opinion, we found that based on this date, Nicholas Ha lki as ’ [s] Proposed Amendments to the Interpleader Complaint were barred by Pennsylvania

case [ ] law and the statute of limitations. We stated,

“ Most importantly, however, each of the Proposed Amendments is time barred under the statute of limitations by at least two years. ” Further, we found that James Ha lki as ’ [s] proposed joinder to this action

was barred, where we stated, ‘ Were we to permit his joinder, [appellants] would enjoy a complete defense
to James Ha lki as ’ [s] claims on statute of limitations grounds. ’ We reiterate that this conclus ion was based on our use of September 22, 2010 as the latest date the statute of limitations began to run. Our December 22, 2016 Opinion and Order did not, however, address the statute of limitations in the context of an affirmative defense to Nicholas Ha lki as ’ [s] case

- in

- chief asserted by [appellants] , but rather solely in the context of Nicholas Ha lki as ’ [s] proposed amendment and
James Ha lki as ’ [s] proposed joinder to the lnterpleader Complaint.

Notwithstanding our December 22, 2016 Opinion and Order, the testimony and evidence presented at trial shows the doctrine of fraudulent concealment serves
to estop [appellants] from invoking the statute of limitations as a bar to Nicholas Ha lki as ’ [s] claims, andJ. A 24 0 41 /18

- 18

- discovery of the economic injury did not occur unt il late 2012 or early 2013. I n short, our December 22, 2016 Opinion and Order was not based upon the testimony and evidence at trial, but rather upon the pleadings and motions available to us at that time, due to the parties ’ failure to provide evidence a t the November 14 , 2016 hearing. By contrast, under our Commonwealth ’ s discovery rule, the trial testimony and evidence establishes a discovery date of the economic injury in late 2012 or early 2013, while the doctrine of fraudulent concealment serves to estop [appellants] from invoking the statute of limitations as a defense to Nicholas Ha lki as ’ [s] claims.

Trial court opinion, 6/19/17 at 23

- 30 ( footnote and citations to record

omitted)

.

The trial court clearly and ably explained its reasoning for determining

that under the discovery rule, the trial testimony and evidence established a

discovery date of economic injury in late 2012 or early 2013 while the doctrine

of fraudulent concealment estopped appellants from invoking the statute of

limitations as a defense to the claims of Nicholas Ha lki as

.

The trial court opinion did not address at all or, at least in any detail,

appellants ’ claim that the trial court erred when it raised the appl ication of the

discovery rule and the fraudulent concealment doctrine when those defenses

were not properly pled in any of the pleadings of Nicholas Ha lki as

. Appellants

refer to Rule 1032(a) of the Pennsylvania Rules of Civil Procedure which

provides that a party waives all defenses and objections which are not

presented by preliminary objection, answer

, or reply, subject to some

objections which are not applicable here. Pa.R.C.P. 1032(a). Appellants argueJ. A 24 0 41 /18

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-

that Nicholas Ha lki as did not properly raise the defenses to the applicability of

the statute of limitations such as the fraudulent concealment doctrine and the

discovery rule in replies to the new matters of appellants in that no facts were

pled to trigger the discovery rule and fraudulent concealment doctrine.

In Gotwalt v. Dellinger

, 577 A.2d 623 (Pa.Super. 1990), this court

stated that Rule 1029(d) of the Pennsylvania Rules of Civil Procedure :

governs when a party must file a responsive pleading
to an averment contained in a new matter or other pleading. Rule 1029(d) provides that averments in a pleading to which no responsive pleading is required shall be deemed to be denied. If a party ’ s new matter does not contain facts supporting an affirmative de fense, but rather contains merely conclusions of law, no denial is required because such averments are deemed to be denied. Because such averments are deemed to be denied, they are, therefore, in issue, and no judgment may be entered based upon a party ’ s failure to respond to those averments.

Gotwalt , 577 A.2d at 626.

Here, each appellant in new matter merely stated that the action was

barred by the applicable statute of limitations. As this was a conclusion of law

with out facts supporting the affirmati ve defense, Nicholas Ha lki as was not

required to respond under Pa.R.C.P. 1029(d). Because he did not have to

respond, Nicholas Ha lki as cannot be precluded from presenting evidence at

trial regarding the discovery rule and the fraudulent concealment doctrine on

the basis that he did not raise those issues in response to each appellant ’ s

new matter.J. A 24 0 41 /18

- 20

-

Appellants next contend that the trial court erred when it entered

judgment in favor of Nicholas Ha lki as when appellants properly raised the

defense that fraud was a personal action such that Nicholas Ha lki as ’ s claims

based on fraud were barred as a matter of law.

The trial court found that appellants waived this issue because neither

appellant raised the issue in preliminary objections. Challenges to a litigant ’ s

capacity to sue must be raised either in an answer or in preliminary objections.

In re Estate of Alexander , 758 A.2d 182, 189 (Pa.Super. 2000).

Here, appellants did not raise the issue of standing in either an answer

o r preliminary objections, though each appellant raised standing in new

matter. Technically, appellants did waive the issue.

Assuming arguendo that appellants preserved this issue, this court

determines that the trial court did not err or abuse its discretion, when it

determined that Nicholas Ha lki as had standing to bring the fraud

- based

actions.

We have stated as a general policy that “ [a] part y

seeking judicial resolution of a controversy in this Commonwealth must, as a prerequisite, establish that he has standing to maintain the action. ” Bergdoll v.
Kane , 557 Pa. 72, 731 A.2d 1261, 1268 (1999) (citation omitted). Our Commonwealth ’ s standing doctrine is not a senseless restriction on the utilization of judicial resources; rather, it is a prudential, judicially

- created tool meant to winnow out those matters in which the litigants have no direct interest in pursuing the matter. Such a requireme nt is critical because only when “ parties have sufficient interest in a matter [is it] ensure[d] that there is a legitimateJ. A 24 0 41 /18

- 21

- controversy before the court. ” In re T.J. , 559 Pa. 118, 739 A.2d 478, 481 (1999).

In re Hickson , 821 A.2d 1238, 1243 ( Pa. 2003) (f ootnote omitted).

In practical terms, we are assured that there is a legitimate controversy if the proponent of a legal action has somehow been “ aggrieved ” by the matter he seeks to challenge. Independent State Store Union v. Pennsylvania Liquor Control B oard , 495 Pa. 145, 432 A.2d 1375 (1981). A litigant can establish that he has been “ aggrieved ” if he can show that he has a substantial, direct and immediate interest in the outcome of the litigation in order to be deemed to have standing. Bergdoll [, sup ra ].

Id. at 136, 821 A.2d at 1243.

Here, Nicholas Ha lki as acquired the property from his son,

James Ha lki as . Under the applicable lease, Respol agreed to pay royalties to

James Ha lki as for the extraction of oil and/or gas from the property.

As the trial court stated in its opinion, a covenant to pay royalties runs

with the land. Nigro v. Don

- Mar Corp. , 85 A.2d 21, 22 (Pa. 1951). In

addition, when a grantor, after entering into such a royalty agreement,

conveys his interest in the property

, the grantee receives the right to receive

the royalty unless the grantor expressly reserves such royalty. Appeal of

Baird , 6 A.2d 306, 312 (Pa. 1939).

The trial court concluded:

Applying our Supreme Court ’ s longstanding case [ ] law, as embodied in Nigro a nd Baird

, Nicholas Ha lki as took possession of the right to receive royalty payments from the Subject Property upon execution of the deed. The deed shows no express reservation for any oil and gas royalty interestJ. A 24 0 41 /18

- 22

- from the grantor. Therefore, Nicholas Ha l ki as is entitled to bring suit concerning any royalty payments from the Subject Property not paid to him since that deed was executed, as he would be “ aggrieved ” by not receiving a royalty payment he would be entitled to as record owner of the Subject Property. Finally, Nicholas Ha lki as continues to own the Subject Property, as evidenced by Interpleader Defendant ’ s Exhibit 2 and other testimony at trial. In short, the deed from which Nicholas Ha lki as took ownership of the Subject Property gives him c apacity to bring suit for recovery of oil and gas royalties from the Subject Property under our Commonwealth ’ s standing doctrine.

Trial court opinion, 6/19/17 at 22

- 23 ( c itation omitted)

.

Appellants next contend that it was reversible error for the tri al court to

enter judgment in favor of Nicholas Ha lki as and determine that the

assignment from James Ha lki as to Andrew Kelly when James Ha lki as never

attempted to revoke the assignment.

However, in making this argument, appellants ignore the credibility

determinations of the trial court. The trial court explicitly found James Ha lki as

to be credible and credited his testimony over that of Paul Kelly

. In a non

- jury

trial, the fact

- finder is free to believe all, part, or none of the evidence, and

this court will not disturb the credibility determinations of the trial court.

Assessments of credibility and conflicts of evidence are for the trial court to

resolve. Gutteridge v. J3 Ene rgy Group , Inc. , 165 A.3d 908, 916

(Pa.Super. 2017). Because of these credibility determinations, the trial court

found that there was no agreement for Paul Kelly to secure an oil and gas

lease for James Ha lki as , and consequently, there was no agreement f orJ. A 24 0 41 /18

- 23

-

James Ha lki as to sign the assignment. (Trial court opinion, 6/19/17 at 36.)

Because there was no valid assignment, James Ha lki as did not have to revoke

the assignment

.

Appellants next contend that it was reversible error for the trial court to

enter judgment in favor of Nicholas Ha lki as when the assignment was

sufficiently specific and met all legal requirements to be enforceable and

binding upon James Ha lki as , his heirs, successors, and assigns.

The objective in interpreting instruments relating to oil and gas interests

is to determine the intention of the parties. Syzmanowski v. Brace , 987

A.2d 717, 720 (Pa.Super. 2009), appeal denied , 997 A.2d 1179 (Pa. 2010).

Once again, appellants ignore the credibility determinations of the trial

court . Appellants argue that the assignment clearly describes the Property to

consist of 431.24 acres. However, the trial court found credible

James Ha lki as ’ s testimony that the handwriting including this designation of

th e size of the Property was not presen t on the assignment form when

James Halkias signed it. (Trial court opinion, 6/19/17 at 37

- 38 .) The trial

court concluded that the handwriting was added after the execution of the

assignment. ( Id. at 39.)

In the alternative, appellants argue that if th is court determines that the

documents do not sufficiently identify the interest conveyed, there is sufficient

parol evidence to establish both the interest conveyed and the lands from

which the interest derives because the 431.24

- acre parcel was the onlyJ. A 24 0 41 /18

- 24

-

property of its kind owned a t the time of the conveyance, and the only

property owned by James Ha lki as individually at any time in Susquehanna

County. However, there is nothing on the assignment to indicate that the

property was located in Susquehanna Cou nty
, and the trial court found that

James Ha lki as owned 100 pieces of property, which made a reference to

“ our lands ” in the assignment ambiguous. (Trial court opinion

, 6/19/17

at 45.) Once again, appellants ignore the trial court ’ s credibility

determinations which led it to conclude that there was no intent to assign

royalties from James Ha lki as to Andrew Kelly

.

Appellants next contend that it was reversible error for the trial court to

determine that improper notarization was a basis to invali date the assignment

when the notarization of the assignment was not required for the assignment

to be valid and enforceable and Nicholas Ha lki as did not establish that any

improper notarization had occurred. 8

In Count III of his interpleader complaint, Ni cholas Ha lki as asserted that

the assignment should be void on grounds of improper notarization. The trial

court found that the assignment was the result of fraud. Furthermore, the

trial court found that James Ha lki as credibly testified that no other person was

present when he executed the assignment. The trial court found that the

assignment was not notarized at the time of execution but after the fact.

8 Appellants also allege that Nicholas Ha lki as lacked standing. However, we have already determined that Nicholas Ha lki as did have standing.J. A 24 0 41 /18

- 25

-

In challenging this determination, appellants essentially raise

arguments that we have already discounted, such as the standing of

Nicholas Ha lki as , the lack of a timely effort to rescind the assignment, and the

running of the statute of limitations. The trial court did not err or abuse its

discretion when it ordered that the assignment be struck.

Appellants next contend that the trial court committed reversible error

when it entered judgment in favor of Nicholas Ha lki as when Nicholas Ha lki as

failed to st ate any claim upon which relief could be granted and appellants

proved their cases as a matter of law such that they were entitled to the relief

they requested. As we hav e already determined that the trial court did not

err, we need not address this issue

. 9

Judgment affirmed.

Ott, J. joins this Memorandum.

McLaughlin, J. concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 5 /1/2019

9 Appellant s w aive their last issue, whether it was reversible error for the trial court to deny appellants ’ joint motion for post

- trial relief when appellants do not address the issue in the argument section of their brief. See Commonwealth v. J.F. , 800 A.2d 942, 946 n.10 (Pa.Super. 2002).