Court Opinion

ID: 2791527
Source: CourtListenerOpinion
Date Created: 2015-04-06 19:04:47.180438+00
Date Added: 2024-06-11T11:28:58.669578
License: Public Domain

J-A32021-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

GEORGE KURUVILA,                                 IN THE SUPERIOR COURT OF
                                                       PENNSYLVANIA
                           Appellant

                      v.

ARASU RAJARATNAM,

                           Appellee                     No. 421 EDA 2014

               Appeal from the Judgment Entered March 28, 2014
              In the Court of Common Pleas of Philadelphia County
              Civil Division at No(s): May 2012 Term – No. 000450

BEFORE: PANELLA, OLSON AND FITZGERALD,* JJ.

MEMORANDUM BY OLSON, J.:                               FILED APRIL 06, 2015

        Appellant, George Kuruvila, appeals from the judgment entered on

March 28, 2014. We vacate in part and remand.

        On May 9, 2012, Appellant initiated the current action by filing a

complaint against Arasu Rajaratnam (hereinafter “Defendant Rajaratnam”).

Within his complaint, Appellant averred the following.

        In September 1995, Appellant successfully bid, at a private auction,

upon a seven-unit apartment building that was located at 229 West Harvey

Street, in Philadelphia (hereinafter “the Property”).      Appellant’s Complaint,

5/9/12, at ¶¶ 4-5. Appellant’s winning bid for the Property was $51,500.00.

Id. at ¶ 5.

        “[Appellant] paid a deposit of $5,150[.00], representing 10% of the

winning bid, and was given [approximately] one month to pay the balance of

*
    Former Justice specially assigned to Superior Court.
J-A32021-14

the purchase price.”   Id. at ¶¶ 5-6.   In an attempt to pay the remaining

amount owed, Appellant contacted Defendant Rajaratnam.             Defendant

Rajaratnam obtained the necessary financing and then paid the balance of

the purchase price for the Property. Id. at ¶¶ 6-9.

      On October 27, 1995, Appellant and Defendant Rajaratnam entered

into a written contractual agreement in regards to the Property. Id. at ¶ 10.

The brief contract reads:

        [Defendant Rajaratnam] and [Appellant] agree as follows:

            RE: [The Property]

        1) Name of Corporation to own abovementioned property[]
        is to be called “Raj Villa” Corporation.

        2) Our objective is to minimi[z]e costs, maximi[z]e returns.

        3) [Defendant Rajaratnam] is to hand over 49% of total
        shares to [Appellant] within five [] working days from date
        of initial financing[.]

        4) All decisions should be jointly made and approved jointly:
        major decisions in writing and signed by both parties.

Contract between Appellant and Defendant Rajaratnam, dated 10/20/95, at

1.

      On January 15, 1996, Appellant and Defendant Rajaratnam elected to

form a small business corporation named the “Raj Villa Corporation.”

Appellant’s Complaint, 5/9/12, at ¶ 12.     Defendant Rajaratnam received

51% of the shares of the corporation and was named the president of the

corporation; Appellant received the remaining 49% of the corporate shares.

                                    -2-
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Id. at ¶¶ 10-12.          However, as Appellant averred:    “[Appellant] and

[Defendant Rajaratnam] verbally agreed to share the [corporate] profits

equally notwithstanding that [Defendant Rajaratnam] held 51% of the

shares in the small business corporation.” Id. at ¶ 13. Title to the Property

was apparently transferred to the Raj Villa Corporation – and the Raj Villa

Corporation then began to manage and rent units in the Property.         Id. at

¶ 37; see also id. at “Exhibit 4.”

       As the trial court explained:

         Both parties managed the Property from October 1995 []
         until September 1997, when [Appellant] permanently
         moved back to India.[1] [Id. at ¶¶ 18-19.] Defendant
         Rajaratnam kept all the financial records and books for the
         [Raj Villa] Corporation [and continued to manage] the
         Property after [Appellant’s] departure. [Id. at ¶ 19.]

         Upon suffering losses, the [Raj Villa] Corporation listed the
         Property for sale in November 2005. [Id. at ¶¶ 20-21.] On
         or about February 27, 2006, the Property sold for
         $325,000[.00]. [Id. at ¶ 22.] In [May] 2006, [Appellant]
         first learned the Property was sold. [Id. at ¶ 23.] After the
         sale, Defendant Rajaratnam wire transferred [Appellant]
         $24,577.55[, which, according to Defendant Rajaratnam,
         represented] 49% of the [sale] proceeds. [Id. at ¶ 22; id.
         at “Exhibit 4.” Appellant received this money on May 10,
         2006. Id. at ¶ 23].

         Once [he] receiv[ed] his share of the Property’s sale
         proceeds,  [Appellant]   [e-mailed]    and   [telephoned]
         Defendant Rajaratnam[,] inquiring [as to] why he received
____________________________________________

1
  Appellant, an Indian national, resided in Philadelphia, Pennsylvania for
approximately 18 years before he permanently returned to India in 1997.
Appellant’s Complaint, 5/9/12, at ¶ 1.

                                           -3-
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         only $24,577.55 [given that] the Property [] sold for
         $325,000[.00].     [Id. at ¶ 25.]    Defendant Rajaratnam
         provided [Appellant] with a Settlement Statement[, which]
         referenc[ed] three deductions [that were] taken from the
         gross amount of $325,000[.00]: (a) settlement charges to
         the seller in the amount of $157,966.03; (b) payoff of [the]
         existing loan to First Penn Bank in the amount of
         $118,238.05; and[,] (c) payoff of [the] existing loan to First
         Penn Bank in the amount of $150[.00]. [Id. at ¶ 25-26.]
         [However, “despite repeated requests from Appellant,
         Defendant Rajaratnam did not provide Appellant with any
         explanation or documents which evidenced how and why
         these deductions related to the management of the
         property nor did he explain why such a large amount of
         financing was obtained that had to be paid off at
         settlement.” Id. at ¶ 27.] . . .

         [Appellant] also requested Defendant Rajaratnam to provide
         a detailed and accurate written accounting of the sale
         proceeds and the income and operating expenses from the
         period the Property was owned and managed by the [Raj
         Villa] Corporation. [Id. at ¶¶ 28 and 36. In response,
         Defendant Rajaratnam supplied Appellant with a “purported
         balance sheet,” which provided “only one line representing
         rental and other income for each year between 1995
         through 2006 and [failed] to list the monthly income for
         each of the seven apartments during those years despite
         [Appellant’s] repeated requests to Defendant [Rajaratnam]
         to provide this information.” Id. at ¶ 38.]

Trial Court Opinion, 7/11/14, at 2-3.

       On May 9, 2012 – which was approximately six years after Appellant

first learned that the building was sold – Appellant initiated the current

action by filing a complaint against Defendant Rajaratnam. The complaint

listed the following six counts:

      Count 1: Accounting (claiming that Appellant is entitled to an equitable

       accounting, directing Defendant Rajaratnam to “account to [Appellant]

       [] all monies received from the management of the property, including

                                     -4-
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        but not limited to monthly income and expense statements for the

        years 1995-2006, and for any deductions that were made from the

        $325,000[.00] sales proceeds in 2006”);

       2) Count 2: Breach of Fiduciary Duty (claiming that Defendant

        Rajaratnam breached the fiduciary duties he owed to Appellant under

        “Pennsylvania’s     Uniform     Partnership   Act”   and   as   “a   majority

        shareholder,” to “account for and hold any and all [] profits from

        October 27, 1995 until the property was sold in 2006, at which time

        [Defendant Rajaratnam] was required to pay [Appellant] half of the

        sales proceeds and half of the net rental income generated before the

        property was sold”);

       3) Count 3: Commingling and Diversion of Assets2 (claiming that

        Defendant Rajaratnam commingled and diverted “the net operating

        income and sales proceeds” of the corporation the Property for his own

        benefit);

       4) Count 4: Breach of Contract (claiming that Appellant and Defendant

        Rajaratnam “had a verbal agreement to share the profits equally” and

        that Defendant Rajaratnam breached this contract when he failed to
____________________________________________

2
  With respect to the third count in Appellant’s complaint, the full title of this
count is: “Defendant’s apparent co-mingling [sic] and diversion of net
operating income and sales proceeds with his own or other accounts instead
of maintaining separate accounts related solely to the management and/or
sale of the property and not paying [Appellant] his 50% share.” Appellant’s
Complaint, 5/9/12, at Count 3.

                                           -5-
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       pay Appellant “half of the $325,000[.00] sales proceeds” and “half of

       the net operating income earned during the years 1995-2006”);

      5) Count 5: Unjust Enrichment (claiming that, from 1995 until 1997,

       Appellant “provided services to Defendant [Rajaratnam],” which

       enriched the business and that it would be inequitable for Defendant

       Rajaratnam to retain the benefits without proper compensation to

       Appellant); and,

      6) Count 6: Constructive Fraud (claiming that Defendant Rajaratnam

       breached his fiduciary duty to Appellant by failing to provide Appellant

       with an accounting and by concealing, destroying, falsifying, and

       failing   to   keep   documents which   could allow   for   an accurate

       accounting).

       On June 18, 2012, Defendant Rajaratnam filed preliminary objections

to Appellant’s complaint. The preliminary objections claimed that: 1) but

for Appellant’s breach of contract claim, all of Appellant’s claims were barred

by the gist of the action doctrine; 2) Appellant’s claim for commingling and

diversion of assets (Count 3) failed to state a claim upon which relief may be

granted, as it “is not a recognized cause of action in Pennsylvania;” 3)

Appellant’s claim for unjust enrichment (Count 5) fails as a matter of law

because Appellant alleged the existence of a written and an oral contract and

because Appellant failed to “specify the type of work, the amount of labor

involved, the character and nature of the work performed the skill and

experience called for in providing the work, or the value of the services

                                      -6-
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rendered in connection with the [c]ontract;” and, 4) Appellant’s claim for

breach of fiduciary duty (Count 2) and Appellant’s claim for constructive

fraud (Count 6) failed as a matter of law because Appellant alleged that the

fiduciary duty arose out of Pennsylvania’s Uniform Partnership Act – yet

Appellant    and   Defendant   Rajaratnam   were   not   partners,   but   were

shareholders in a closely held corporation.         Defendant Rajaratnam’s

Preliminary Objections, 6/18/12, at 1-6.

        On June 27, 2012, Appellant filed a lengthy response to Defendant

Rajaratnam’s preliminary objections and, within this response, Appellant

claimed that the trial court should overrule all of Defendant Rajaratnam’s

preliminary objections.    Appellant’s Response to Preliminary Objections,

6/27/12, at 1-17.    Further, within Appellant’s response, Appellant claimed

that the trial court should dismiss Defendant Rajaratnam’s preliminary

objections because they were untimely. Id. at 11. However, Appellant did

not file preliminary objections to Defendant Rajaratnam’s preliminary

objections, Appellant’s response did not contain a notice to plead, and,

within Appellant’s response, Appellant did not claim that the untimely filing

caused him prejudice. See id. at 1-17.

        On September 5, 2012, following oral argument, the trial court

sustained Defendant Rajaratnam’s preliminary objections and dismissed

Counts 1, 2, 3, 5, and 6 of Appellant’s complaint. Trial Court Order, 9/5/12,

at 1.    Therefore, the only claim that survived the pleading stage of the

proceedings was the breach of contract claim.

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      The trial court summarized the ensuing procedural history of this

matter as follows:

        Defendant [Rajaratnam filed an answer and new matter
        and, within this filing, Defendant Rajaratnam], raised the
        defense of statute of limitations. The defense was the basis
        for Defendant [Rajaratnam’s] motion for judgment on the
        pleadings and motion for summary judgment; both
        [motions] were summarily denied without testimony or
        argument on September 28, 2012 and October 4, 2013,
        respectively.

        A trial date certain of December 16, 2013 was ordered. . . .
        Following a conference with counsel and [an] extensive
        review of the docket and pleadings, [the trial] court ordered
        the matter bifurcated on December 11, 2013, scheduling a
        bench trial on the statute of limitations issue and if need be,
        jury selection to commence immediately thereafter on the
        breach of contract claim. The bench trial was conducted
        from Monday, December 16, 2013 through Wednesday,
        December 18, 2013. At the conclusion of the bench trial,
        the [trial] court found that [Appellant’s] breach of contract
        action had not been filed within the requisite four year
        statute of limitations period and judgment was entered in
        favor of [Defendant Rajaratnam.            As the trial court
        concluded: “at the very least[, Appellant] was aware that
        [Defendant Rajaratnam] was not abiding by the terms of
        their agreement as of June 19, 2006. Accordingly, an
        action against [Defendant Rajaratnam] should have been
        initiated no later than June 19, 2010. The [c]omplaint in
        this matter was not filed until May 9, 2012, nearly two years
        after the limitation period had expired.”]

Trial Court Opinion, 6/18/14, at 4 (some internal capitalization omitted).

      Following the denial of Appellant’s timely post-trial motion, Appellant

filed a timely notice of appeal to this Court.      Appellant now raises the

following claims on appeal:

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       1(a). Did [the trial court] err in ordering a bifurcated bench
       trial for the sole purpose of determining whether to dismiss
       [Appellant’s] case based on the statute of limitations where
       this issue had already been litigated and decided in favor of
       [Appellant] by two other judges of the same level court?

       1(b). Did [the trial court] err in reversing the two prior
       decisions of Judge Allen and Judge Robbins-New where they
       had found in [Appellant’s] favor when they denied
       [Appellant’s] motion for judgment on the pleadings and
       motion for summary judgment, both motions based solely
       on the statute of limitations?

       2(a). Did [the trial court] err in ruling that the testimony of
       [Appellant’s] witnesses is not relevant to any issue
       concerning the statute of limitations but, rather, their
       testimony is only relevant to damages?

       2(b). Did [the trial court] deprive [Appellant] of a fair trial
       by not allowing his witnesses to testify?

       3. Did [the trial court] err in ordering a bifurcated bench
       trial on the statute of limitations only two days before
       [Appellant] was scheduled to pick a jury and five days
       before the jury trial was scheduled to begin, depriving
       [Appellant] of his right to a fair trial, where [Appellant] did
       not have sufficient time to prepare simultaneously for both
       the bifurcated bench trial and the jury trial?

       4. Did [the trial court] err in dismissing [Appellant’s] case
       based on the statute of limitations where [Appellant] as a
       matter of law acted reasonably or, minimally, reasonable
       jurors could differ on the issue and the matter, therefore,
       should have been decided by a jury?

       5. Did [the trial court] err in ruling that the statute of
       limitations began to run from 2006 when the property was
       sold where [Appellant] acted reasonably and could not have
       known about his breach of contract action by that date?

       6(a). Did [the trial court] err in ignoring that [Defendant
       Rajaratnam’s] fraud tolled the statute of limitations until
       [Appellant’s] discovery of [Defendant Rajaratnam’s] fraud,
       which only occurred since after the initiation of this lawsuit,

                                    -9-
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       within the four-year statute of limitations for breach of
       contract?

       6(b). Did [the trial court] err in not submitting to the jury
       the question of whether Defendant [Rajaratnam] had made
       false statements to [Appellant] and whether [Appellant] was
       reasonable in relying on them?

       6(c). Did [the trial court] err in not finding that [Defendant
       Rajaratnam] breached his duty of disclosure which existed
       by virtue of his being the majority managing shareholder
       and sole maintainer of the Raj Villa corporate books and
       records, and in not finding that said breach constitutes
       fraud as should toll the statute of limitations until actual
       discovery of [Defendant Rajaratnam’s] fraud?

       6(d). Did [the trial court] err in not finding that [Defendant
       Rajaratnam] both breached his fiduciary duty to [Appellant]
       which existed by virtue of [Appellant] being the majority
       managing shareholder and sole maintainer of the corporate
       books and records, and committed fraud, and that
       [Defendant Rajaratnam’s] fraud and self-dealing should
       have tolled the statute of limitations?

       7(a). Did [the trial court] err in dismissing [Appellant’s]
       count for an accounting based on the gist of the action and
       economic loss doctrines where [Appellant’s] accounting
       count is not a tort remedy?

       7(b). Did [the trial court] err in dismissing [Appellant’s]
       counts for an accounting, breach of fiduciary duty[,] and
       fraud based on the gist of the action and economic loss
       doctrines?

       7(c). Did [the trial court] err in not finding that [Appellant’s]
       claims against [Defendant Rajaratnam] sounded in tort, that
       [Defendant Rajaratnam] owed duties to [Appellant] which
       existed independent of the parties’ contract, and that
       parties to a contract can recover for breach of fiduciary duty
       and fraud if the contract is collateral to the tort remedies
       that arise by virtue of social policies rather than by virtue of
       mutual consensus?

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       7(d). Did [the trial court] err as a matter of law in not
       recognizing that the gist of [Appellant’s] action is his action
       for an accounting, without which he could not determine
       whether [Defendant Rajaratnam] breached the contract,
       and that the breach of contract count was collateral
       thereto?

       7(e). Did [the trial court] err in concluding that [Appellant’s]
       counts for an accounting, breach of fiduciary duty[,] and
       fraud are contract based where they, in fact, are
       relationship based related to [Defendant Rajaratnam’s]
       breach    of    duties    that    arise   from    the   parties’
       majority/minority shareholder relationship?

       8. Did [the trial court] err in dismissing [Appellant’s] count
       for an accounting which has a six-year statute of limitations
       where this resulted in [the trial court] dismissing
       [Appellant’s] case based on the four-year statute of
       limitations for breach of contract?

       9. Did [the trial court] err in dismissing [Appellant’s] breach
       of fiduciary duty count based on [Appellant] purportedly not
       alleging that the parties entered into a partnership?

       10. Did [the trial court] err in dismissing [Appellant’s]
       wrongful commingling count?

       11. Did [the trial court] err in not enforcing the 20-day
       deadline proscribed by the Rules of Civil Procedure when he
       failed to dismiss [Defendant Rajaratnam’s] late filed
       preliminary objections where [Defendant Rajaratnam] did
       not provide any explanation for his delay and where
       [Appellant] was extremely prejudiced by the granting of
       [Defendant Rajaratnam’s] untimely preliminary objections?

       12. Did [the trial court] err in denying [Appellant’s] motion
       to amend the pleadings to conform to the evidence made at
       the trial in accordance with Pennsylvania Code § 35.49?

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Appellant’s Brief at 7-10 (some internal capitalization omitted).3

       According to Appellant’s claims “1(a)” and “1(b),” the trial court

violated the coordinate jurisdiction rule when – following a bench trial – it

concluded that Appellant’s breach of contract claim was barred by the

statute of limitations. As Appellant contends, Defendant Rajaratnam raised

the identical statute of limitations defense in his motion for judgment on the

pleadings and motion for summary judgment – and the respective trial

judges denied Defendant Rajaratnam’s claims for relief. Appellant’s Brief at

31. Appellant claims that, following a trial, the coordinate jurisdiction rule

prevented the trial court from concluding that the statute of limitations

barred Appellant’s claims – when two prior judges from the same court

already ruled on the issue and arrived at a contrary conclusion.             Id.

Appellant’s claim is frivolous.

       Our Supreme Court has held that, “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

____________________________________________

3
  We remind Appellant that the better practice on appeal is to distill one’s
claims down to those with a meaningful likelihood of success.           See
Commonwealth v. Robinson, 864 A.2d 460, 480 n.28 (Pa. 2004), quoting
Ruggero J. Aldisert, The Appellate Bar: Professional Competence and
Professional Responsibility–A View From the Jaundiced Eye of the Appellate
Judge, 11 Cap. U.L. Rev. 445, 458 (1982) (emphasis in original) (“when I
read an appellant’s brief that contains ten or twelve points, a presumption
arises that there is no merit to any of them.”).

                                          - 12 -
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court.” Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa. 1995). Yet,

as our Supreme Court explained:

        When determining whether the coordinate jurisdiction rule
        applies . . . [the court] looks to where the rulings occurred
        in the context of the procedural posture of the case. . . .
        Where the motions differ in kind, as preliminary objections
        differ from motions for judgment on the pleadings, which
        differ from motions for summary judgment, a judge ruling
        on a later motion is not precluded from granting relief
        although another judge has denied an earlier motion.
        However, a later motion should not be entertained or
        granted when a motion of the same kind has previously
        been denied, unless intervening changes in the facts or the
        law clearly warrant a new look at the question.

Riccio v. Am. Republic Ins. Co., 705 A.2d 422, 425 (Pa. 1997) (internal

quotations and citations omitted).

      In this case, the coordinate jurisdiction rule obviously did not prevent

the trial court from concluding that Appellant’s breach of contract claim was

barred by the statute of limitations: the trial court’s conclusion followed a

trial and was based upon the factual determinations the trial court made

during the trial. This is in contrast to the two prior rulings, which were made

in response to a motion for judgment on the pleadings and a motion for

summary judgment – where no fact-finding occurred or was permitted.

      Therefore, since the trial court’s final statute of limitations ruling

“occurred in the context of [a different] procedural posture of the case,” the

trial court’s ruling did not violate the coordinate jurisdiction rule. Appellant’s

claim to the contrary is frivolous.

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      Appellant’s claims “2(a)” and “2(b)” contend that the trial court erred

when it precluded his proposed witnesses from testifying at the statute of

limitations bench trial because, Appellant claims, the witnesses would have

provided rebuttal testimony and would have “given testimony relevant to the

issue of fraud as tolls [sic] the statute of limitations.”    Appellant’s Brief at

35-36.   However, within Appellant’s brief to this Court, Appellant has not:

explained the substance of his proposed witnesses’ testimony; explained

how the proposed witnesses would have qualified as rebuttal witnesses; or

explained how their testimony would have been “relevant to the issue of

fraud as tolls [sic] the statute of limitations.”   See id.   Instead, Appellant

simply refers this Court to pages in the reproduced record, which, Appellant

declares, constitute a summary of his witnesses’ proposed testimony. Id.

      In essence, Appellant requests this Court to construct his appellate

argument for him. We will not do so. Appellant’s second numbered claim is

thus waived. See Rabatin v. Allied Glove Corp., 24 A.3d 388, 396 (Pa.

Super. 2011) (the Superior Court “may not act as counsel for an appellant

and develop arguments on his behalf”).

      Third, Appellant claims that the trial court erred in ordering a

bifurcated bench trial “only two days before [Appellant] was scheduled to

pick a jury.”   According to Appellant, the trial court’s scheduling order did

not provide Appellant with “sufficient time to adequately prepare for either

the bench trial or the jury trial” and the trial court thus “depriv[ed Appellant]

of his right to a fair trial.” Appellant’s Brief at 37. This claim is waived, as

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Appellant did not request a continuance from the trial court. Appellant thus

did not provide the trial court with any notice that the scheduling order failed

to provide Appellant with sufficient time to prepare for trial.       Pa.R.A.P.

302(a) (“[i]ssues not raised in the lower court are waived and cannot be

raised for the first time on appeal”); see also Commonwealth v.

Kennedy, 959 A.2d 916, 924-925 (Pa. 2008) (holding that counsel’s failure

to request a continuance waives the issue on appeal).

      Within Appellant’s fourth, fifth, and sixth numbered claims on appeal,

Appellant contends that the trial court erred when it determined that the

statute of limitations barred Appellant’s breach of contract claim; determined

that Defendant Rajaratnam’s fraud did not toll the statute of limitations;

and, refused to allow a jury to consider the statute of limitations and fraud

issues. Appellant’s Brief at 38-48. These claims fail.

      At the outset, Appellant’s claim that the trial court erred when it

refused to allow a jury to consider the statute of limitations and fraud issues

is waived, as Appellant did not object to the trial court’s decision to act as

the fact-finder on those issues. Pa.R.A.P. 302(a) (“[i]ssues not raised in the

lower court are waived and cannot be raised for the first time on appeal”).

      Appellant also contends that the evidence was insufficient to support

the trial court’s determinations that the statute of limitations barred

Appellant’s breach of contract claim and that Defendant Rajaratnam’s fraud

did not toll the statute of limitations. Appellant’s contentions are meritless.

As the trial court thoroughly explained:

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       Despite the numerous filings by [Appellant], the crux of this
       case is whether or not [Appellant] timely filed a breach of
       contract action against [Defendant Rajaratnam].          The
       statute of limitations for a contract action is [four] years.
       42 Pa.C.S.A. § 5525. [Appellant] failed to bring his cause of
       action within the requisite time period and no action or
       inaction on the part of [Defendant Rajaratnam] tolled the
       limitation period.

       The record reveals that although it may have been earlier,
       at the very least [Appellant] was aware that [Defendant
       Rajaratnam] was not abiding by the terms of their
       agreement as of June 19, 2006. Accordingly, an action
       against [Defendant Rajaratnam] should have been initiated
       no later than June 19, 2010. The complaint in this matter
       was not filed until May 9, 2012, nearly two years after the
       limitation period had expired.

                                   ...

       Per the testimony and documentary evidence presented at
       trial, the parties entered into an agreement in October []
       1995 and managed the [P]roperty jointly until [Appellant]
       returned to India in 1997. Once [Appellant] returned to
       India, he did not receive rental income and was advised that
       the [P]roperty was operating at a loss.          [Appellant]
       repeatedly e-mailed [Defendant Rajaratnam] for an
       accounting and updates regarding the [P]roperty and
       received sporadic responses from [Defendant Rajaratnam]
       until the sale of the [P]roperty.

       According to [Appellant’s] evidence, he e-mailed [Defendant
       Rajaratnam] approximately [20] times between June 28,
       2002 and July 13, 2006.             The majority of the
       communications were requesting rental and expenditure
       information on the [P]roperty.

       The [P]roperty was sold on February 27, 2006, for
       $325,000[.00]. [Defendant Rajaratnam] wired [Appellant’s]
       account in India $24,577.55 on May 10, 2006. On June 16,
       2006,    [Appellant   e-mailed  Defendant    Rajaratnam,]
       challenging the amount that had been wired, but confirming
       its receipt. In the e-mail, [Appellant] states that “This

                                  - 16 -
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        amount is too little considering the large equity after
        purchase and rehabilitation of the property.”[fn.1]

            [fn.1.] At this point, [Appellant] had received his initial
            investment with 12% interest, had been reimbursed for
            his costs in rehabbing the [P]roperty, had not paid any
            additional funds to maintain the [P]roperty[,] and had
            received $24,577.55 from the sale proceeds.

        [Appellant] again e-mailed [Defendant Rajaratnam] on June
        19, 2006, asserting that at a minimum, he was entitled to
        approximately $130,000[.00] from the sale.         He also
        contested that the sale was undertaken without his written
        authorization as required by the contract. During this same
        time frame, [Appellant] made an inquiry to a friend who
        was a lawyer since he was concerned about his status as an
        officer of the corporation. He was told he was not listed as
        one.

        [The trial court] finds that the statute of limitations ran on
        June 19, 2010, four years from the date that [Appellant]
        first challenged the amount of proceeds that he had
        received from the sale of his property.

                                     ...

        [Appellant’s] insistence that without an accounting he could
        not know that he was injured and that actual knowledge of
        [Defendant Rajaratnam’s] fraud was required before he was
        bound to pursue his claim is both disingenuous and contrary
        to what the law requires of [Appellant].          [Defendant
        Rajaratnam’s] failure to provide an accounting only
        addresses the extent of [Appellant’s] damages[,] not the
        fact that a breach had occurred.

Trial Court Opinion, 6/18/14, at 7 and 13-14 (emphasis in original) (some

internal capitalization omitted).

      The evidence thoroughly supports the trial court’s factual conclusion

that “at the very least [Appellant] was aware that [Defendant Rajaratnam]

was not abiding by the terms of their agreement as of June 19, 2006.” Trial

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Court Opinion, 6/18/14, at 7.        Moreover, since the evidence supports the

trial court’s conclusion that Appellant knew, on June 19, 2006, that

Defendant Rajaratnam breached the contract, breached the duties he owed

to Appellant, and did not pay Appellant what was owed, the evidence also

supports the trial court’s conclusion that Defendant Rajaratnam’s alleged

fraud did not toll the running of the statute of limitations beyond June 19,

2010. See Fine v. Checcio, 870 A.2d 850, 861 (Pa. 2005) (“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”) (emphasis added). Appellant’s claims fail.

          However, Appellant’s next claim on appeal does entitle Appellant to

relief.    According to Appellant, the trial court erred when it dismissed his

accounting claim at the pleading stage, based upon the gist of the action

doctrine. We agree. Moreover, since our Supreme Court has held that the

statute of limitations for an accounting claim is six years – and since

Appellant filed his complaint within six years of June 19, 2006 – we conclude

that the trial court’s error in dismissing the accounting claim cannot be

considered harmless.        Therefore, we must vacate the trial court’s order in

part and remand for further proceedings.

          We have stated:

            A preliminary objection in the nature of a demurrer is
            properly [sustained] where the contested pleading is legally
            insufficient.  Preliminary objections in the nature of a
            demurrer require the court to resolve the issues solely on
            the basis of the pleadings; no testimony or other evidence

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        outside of the complaint may be considered to dispose of
        the legal issues presented by the demurrer. All material
        facts set forth in the pleading and all inferences reasonably
        deducible therefrom must be admitted as true.

        In determining whether the trial court properly sustained
        preliminary objections, the appellate court must examine
        the averments in the complaint, together with the
        documents and exhibits attached thereto, in order to
        evaluate the sufficiency of the facts averred. The impetus
        of our inquiry is to determine the legal sufficiency of the
        complaint and whether the pleading would permit recovery
        if ultimately proven. This Court will reverse the trial court’s
        decision regarding preliminary objections only where there
        has been an error of law or abuse of discretion. When
        sustaining the [preliminary objections] will result in the
        denial of claim or a dismissal of suit, [the preliminary
        objections may be sustained] only where the case [is] free
        and clear of doubt.

Lugo v. Farmers Pride, Inc., 967 A.2d 963, 966 (Pa. Super. 2009)

(internal citations, quotations, and corrections omitted).

      Here, the trial court sustained Defendant Rajaratnam’s preliminary

objection in the nature of a demurrer, and dismissed Appellant’s accounting

claim based upon the “gist of the action” doctrine.

      The gist of the action doctrine “is designed to maintain the conceptual

distinction between breach of contract claims and tort claims.” eToll Inc. v.

Elias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. 2002).          It

does so by “preclud[ing] plaintiffs from recasting ordinary breach of contract

claims into tort claims.”   Id.   Thus, “[w]hen a plaintiff alleges that the

defendant committed a tort in the course of carrying out a contractual

agreement, Pennsylvania courts examine the claim and determine whether

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the ‘gist’ or gravamen of [the action] sounds in contract or tort.” Erie Ins.

Exch. v. Abbott Furnace Co., 972 A.2d 1232, 1238 (Pa. Super. 2009).

      This Court has explained:

        Although they derive from a common origin, distinct
        differences between civil actions for tort and contractual
        breach have been developed at common law. Tort actions
        lie for breaches of duties imposed by law as a matter of
        social policy, while contract actions lie only for breaches of
        duties imposed by mutual consensus agreements between
        particular individuals. To permit a promisee to sue his
        promisor in tort for breaches of contract inter se would
        erode the usual rules of contractual recovery and inject
        confusion into our well-settled forms of actions.

        However, a breach of contract may give rise to an
        actionable tort where the wrong ascribed to the defendant is
        the gist of the action, the contract being collateral. The
        important difference between contract and tort claims is
        that the latter lie from the breach of duties imposed as a
        matter of social policy while the former lie from the breach
        of duties imposed by mutual consensus. In other words, a
        claim should be limited to a contract claim when the parties’
        obligations are defined by the terms of the contracts, and
        not by the larger social policies embodied by the law of
        torts.

Hart v. Arnold, 884 A.2d 316, 339-340 (Pa. Super. 2005) (internal

quotations, citations, corrections, and emphasis omitted).

      However, an action for an accounting does not sound in tort. Rather,

as pleaded in Appellant’s complaint, an accounting is an equitable action that

is “defined as an adjustment of the accounts of the parties and a rendering

of a judgment for the balance ascertained to be due.”         1 Am. Jur. 2d

Accounts & Accounting § 52; 14 Standard Pennsylvania Practice 2d § 81:1.

Therefore, by definition, the gist of the action doctrine cannot preclude

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Appellant’s claim for an accounting – and, on this basis alone, the trial court

should have overruled Defendant Rajaratnam’s preliminary objections to the

accounting claim.       Further, since Defendant Rajaratnam did not seek the

dismissal of Appellant’s accounting claim on any basis other than the gist of

the action doctrine, the trial court erred when it dismissed Appellant’s

accounting claim.

       Further, as our Supreme Court held, an action for an equitable

accounting “is subject to the six-year [statute of] limitation.”    Ebbert v.

Plymouth Oil Co., 34 A.2d 493, 495-496 (Pa. 1943).4 Therefore, since the

trial court concluded that, “at the very least [Appellant] was aware that

____________________________________________

4
  In Ebbert, our Supreme Court expressly held that an equitable accounting
action is subject to a six-year statute of limitations. Ebbert, 34 A.2d at
495-496. The Ebbert Court reached this conclusion by first recognizing the
legal principle that “equity will frequently adopt and apply the statute of
limitations which controls analogous proceedings at law.” Id. at 495. The
Ebbert Court then held that, since an action for an accounting at law is “on
the same plane, in practice, as an action in assumpsit,” and since an action
in assumpsit was subject to the six-year statute of limitations, an equitable
account action was also subject to the six-year statute of limitations. Id. at
495-496.

Obviously, much has changed since Ebbert was decided. This includes the
fact that, today, the vast majority of contractual claims are subject to the
four-year statute of limitations, which is set forth in 42 Pa.C.S.A. § 5525.
Nevertheless, since the Ebbert Court expressly held that an equitable
accounting claim is subject to a six-year statute of limitations, we must
conclude that Appellant’s current equitable accounting claim is subject to a
six-year statute of limitations. See Fiore v. White, 757 A.2d 842, 847 (Pa.
2000) (“[u]ntil a court of greater jurisdiction reverses a decision of a lower
court, or a court of equal jurisdiction overrules a decision, the law emanating
from the decision remains law”).

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[Defendant Rajaratnam] was not abiding by the terms of their agreement as

of June 19, 2006” – and since Appellant initiated the current action within six

years of that date – Appellant’s accounting claim is not time-barred.       The

trial court’s error in this case was thus not harmless. We must, therefore,

vacate the portion of the trial court’s order that dismissed Appellant’s

accounting claim and remand for further proceedings.

      Next, Appellant claims that the trial court erred when it dismissed his

claims for breach of fiduciary duty, fraud, and commingling at the pleading

stage. Appellant’s Brief at 50-63. Yet, even if we were to assume that the

trial court erred when it dismissed these claims, the trial court’s error would

be harmless. This is because the trial court already arrived at the factual

conclusion that Appellant knew – as of June 19, 2006 – that Defendant

Rajaratnam wronged him by breaching the duties he owed to Appellant and

refusing to pay to Appellant what was owed.       Since Appellant’s breach of

fiduciary duty claim is subject to the two-year statute of limitations set forth

in 42 Pa.C.S.A. § 5524(7) – and since Appellant’s separately-stated claims

for “fraud” and “commingling” are mere subcategories of Appellant’s breach

of fiduciary duty claim – Appellant’s claims are all barred by the applicable,

two-year statute of limitations. Therefore, even if the trial court erred when

it dismissed Appellant’s claims for breach of fiduciary duty, fraud, and

commingling, the error is harmless and does not entitle Appellant to relief.

Appellant’s claims thus fail.   See Donnelly v. Bauer, 720 A.2d 447, 454

(Pa. 1998) (an appellate court “may affirm [the] decision [of the] court

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below on any ground, without regard to [the] ground[] which the court

below relied”).

      For Appellant’s eleventh numbered clam on appeal, Appellant argues

that the trial court erred when it refused to strike Defendant Rajaratnam’s

untimely preliminary objections.    Appellant’s Brief at 65-67.    This claim is

waived, since Appellant did not file preliminary objections to Defendant

Rajaratnam’s preliminary objections.          Instead, Appellant simply filed a

“response” to the preliminary objections – and Appellant’s “response”

neither contained a notice to plead nor asserted that Appellant was

prejudiced by Defendant Rajaratnam’s untimely filing. Appellant’s clam on

appeal is thus waived.     See Button v. Button, 548 A.2d 316, 318 (Pa.

Super. 1988) (the failure of an opposing party to file preliminary objections

to improper or faulty preliminary objections waives the defect); see also

Peters Creek Sanitary Auth. v. Welch, 681 A.2d 167, 170 (Pa. 1996)

(holding that Pennsylvania Rule of Civil Procedure 1026 “is not mandatory

but permissive. [The Supreme Court] has held that late pleadings may be

filed if the opposite party is not prejudiced and justice requires. Much must

be left to the discretion of the lower court”) (internal quotations and citations

omitted).

      Finally, Appellant claims that the trial court erred when – following the

trial – the trial court denied Appellant’s “motion to amend the pleadings” so

that Appellant could re-plead his claims for breach of fiduciary duty, fraud,

and commingling (which were the claims that the trial court dismissed in

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response to Defendant Rajaratnam’s preliminary objections).         This Court

already held that the trial court erred when it dismissed Appellant’s claim for

an accounting. Further, this Court also held that, even if the trial court erred

in dismissing Appellant’s claims for breach of fiduciary duty, fraud, and

commingling, the error is harmless, as the claims are barred by the two-year

statute of limitations. Therefore, Appellant’s final claim on appeal does not

entitle Appellant to relief.

      Judgment vacated in part. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/6/2015

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