Court Opinion

ID: 3167873
Source: CourtListenerOpinion
Date Created: 2016-01-07 18:00:26.859648+00
Date Added: 2024-06-11T12:13:17.190567
License: Public Domain

NOT PRECEDENTIAL

             UNITED STATES COURT OF APPEALS
                  FOR THE THIRD CIRCUIT
                     ________________

                           No. 14-3291
                        ________________

        KAREN SARPOLIS, individually and as administratrix
            Of the Estate of Angela Anastacia Miller,

                                                   Appellant

                                 v.

 ALLAN TERESHKO; HEATHER TERESHKO; POST & SCHELL, P.C.;
       PENNSYLVANIA PROFESSIONAL JOIN LIABILITY
               UNDERWRITING ASSOCIATION;
UNIVERSITY OF PENNSYLVANIA COMMUNITY HEALTH NETWORK;
  COMMUNITY HEALTH SYSTEMS, INC.; CHOP NEWBORN CARE;
 LIVE MESSAGE AMERICA, INC.; CHESTNUT HILL HEALTHCARE
                  MEDICAL ASSOCIATES

                        ________________

            Appeal from the United States District Court
              for the Eastern District of Pennsylvania
             (D.C. Civil Action No. 2-13-cv-005521)
            District Judge: Honorable Petrese B. Tucker
                        ________________

             Submitted Under Third Circuit LAR 34.1(a)
                        November 19, 2015

    Before: AMBRO, HARDIMAN, and NYGAARD, Circuit Judges

                      (Filed: January 7, 2016)
                                     ________________

                                         OPINION*
                                     ________________

AMBRO, Circuit Judge

         Appellant Karen Sarpolis appeals the dismissal with prejudice of her state-law

civil conspiracy and fraud claims. She contends that the District Court erred in

exercising supplemental jurisdiction over those claims rather than remanding them to

state court. Sarpolis also contends that the District Court erred in dismissing her civil

conspiracy claim because the element of malice was adequately pleaded. For the reasons

stated below, we affirm the District Court.1

    I.   Background

         This case stems from a prior medical malpractice action that Sarpolis started in

state court. In 2005, she filed a complaint in the Philadelphia Court of Common Pleas

alleging that her daughter died as a result of medical malpractice at Chestnut Hill

Hospital. In December 2008 and January 2009, certain pretrial motions in the case were

assigned to Judge Allan Tereshko, who ordered the parties to attend a settlement

conference. After the conference, on January 23, 2009, Judge Tereshko entered an order

stating that, as the Court had been informed that the parties had reached a settlement, the

case would no longer be listed for trial save that any party could request that it be

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
         1
        The District Court had jurisdiction pursuant to 28 U.S.C. §§ 1331, 1367, and we
have jurisdiction pursuant to 28 U.S.C. § 1291.

                                               2
returned to the trial list by written motion. Although Sarpolis was represented by counsel

in the malpractice action, no such motion was filed.

       Proceeding pro se, Sarpolis began this action in 2013 by filing a complaint against

Judge Tereshko in the Philadelphia Court of Common Pleas. In an amended complaint,

Sarpolis claimed that Judge Tereshko was part of a wide-ranging conspiracy to defraud

her and devalue her malpractice claim, and also named all of the Appellees as defendants,

including the University of Pennsylvania Community Health Network, Community

Health Systems, Inc., and Post & Schell, P.C.2 Although the basis of her claims is not

altogether clear, Sarpolis appears to make two central allegations: first, that the

University of Pennsylvania and Community Health Systems conspired to avoid liability

for malpractice claims in their acquisition of Chestnut Hill Hospital, and did so by

“tampering with evidence, witnesses and judges in the pending [malpractice] cases.”

Am. Compl. at ¶ 18. Second, “[b]efore Defendant Allan Tereshko … perform[ed] any

judicial acts, he conspired with Post and Schell, [the Pennsylvania Professional Liability

Joint Underwriting Association], and his wife Heather Tereshko to have the case

transferred to his jurisdiction with the intent to obstruct justice and assist in carrying out

the [d]efenses’ objectives for disposition of the case.” Id. at ¶ 45 (emphasis in original).

Specifically, Judge Tereshko allegedly failed to disclose that his wife was employed by

Post & Schell and to recuse himself on that basis, pressured Sarpolis to accept a low

       2
         Sarpolis’ claims against the remaining Appellees are no longer at issue, as by
order dated June 29, 2015, we granted motions to affirm the District Court’s dismissal of
all claims against the Pennsylvania Professional Liability Joint Underwriting Association,
Heather Tereshko, and the Children’s Hospital of Philadelphia Newborn Care.

                                               3
settlement offer, and made the false promise that the case could be easily reinstated if the

settlement were not finalized.3 Sarpolis does not deny that she accepted a tentative

settlement in the malpractice action, but she alleges that the settlement never became

final because opposing counsel from Post & Schell insisted on unreasonable settlement

terms.

         Based on these allegations, the amended complaint alleged one count of civil

conspiracy and three counts for violation of the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. § 1961, et seq. (“RICO”). The defendants removed the

case to the Eastern District of Pennsylvania and filed motions to dismiss. In

Pennsylvania, a civil conspiracy claim requires allegations sufficient to state an

independent cause of action underlying the conspiracy, see McKeeman v. Corestates

Bank, N.A., 751 A.2d 655, 660 (Pa. Super. Ct. 2000), and the District Court liberally

construed the amended complaint to allege fraud and fraudulent inducement as the

objects of the conspiracy (although the latter claim was first raised in Sarpolis’ briefing).

The Court analyzed the fraud claims in conjunction with the civil conspiracy claim and

determined that it should be dismissed for four reasons:

         (1) [Sarpolis’] underlying claim of fraud is barred by the applicable statute
         of limitations;
         (2) [She] is not entitled to the equitable remedy of statutory tolling because
         [she] did not exercise due diligence in bringing this action;
         (3) to the extent [she] seeks to assert a claim for fraud in the inducement in
         entering the settlement agreement, [the District Court] is not the proper
         forum for [her] to bring such a claim; and

         3
         While these allegations arise from judicial acts by Judge Tereshko, the parties do
not raise the issue of judicial immunity, and because we affirm the dismissal of all claims
on other grounds, it is not necessary for us to address it.
                                               4
       (4) [She] has not, and cannot, allege that [the] [d]efendants’ sole motivation
       was to cause her harm.

J.A. at 35A. The District Court dismissed all of Sarpolis’ claims, including her federal

RICO claims, but did not explain its decision to exercise supplemental jurisdiction over

the state-law civil conspiracy and fraud claims.

       Sarpolis then moved for reconsideration and requested remand of her state-law

claims for the first time. Without waiting for the District Court to decide her motion for

reconsideration, however, she filed a notice of appeal. One day after that was filed, the

District Court summarily denied the motion for reconsideration. Sarpolis later retained

counsel who represents her in this appeal.

II.    Discussion

       We begin by addressing Sarpolis’ argument that the District Court erred in

exercising supplemental jurisdiction over her civil conspiracy and fraud claims. Federal

courts may exercise supplemental jurisdiction over claims that share “a common nucleus

of operative fact” with claims over which the district court has original jurisdiction.

Sinclair v. Soniform, Inc., 935 F.2d 599, 603 (3d Cir. 1991) (quoting United Mine

Workers v. Gibbs, 383 U.S. 715, 725 (1966)). 28 U.S.C. § 1367(c)(3) confers discretion

on federal district courts to decline to exercise supplemental jurisdiction if “the district

court has dismissed all claims over which it has original jurisdiction.” When exercising

this discretion, a district court should not retain supplemental jurisdiction over any

remaining state-law claims “unless considerations of judicial economy, convenience, and

fairness to the parties provide an affirmative justification for doing so.” Hedges v.

                                               5
Musco, 204 F.3d 109, 123 (3d Cir. 2000) (citation omitted). We review a district court’s

decision to exercise supplemental jurisdiction for abuse of discretion. De Ascensio v.

Tyson Foods, Inc., 342 F.3d 301, 311 (3d Cir. 2003).

       At the outset, Appellees contend that Sarpolis waived the issue of supplemental

jurisdiction by failing to raise it until she moved for reconsideration. Although they are

unable to cite any case from this Circuit to the effect that issues raised for the first time

on reconsideration are waived, Appellees argue that we should nonetheless find waiver

based on the well-settled rule that reconsideration is improper when a party should have

raised an argument earlier. See, e.g., United States v. Dupree, 617 F.3d 724, 732 (3d Cir.

2010). This rule applies only to the merits of a motion for reconsideration, however, and

does not determine whether an issue is waived on appeal.

       Seizing on Sarpolis’ failure to comply with Federal Rule of Appellate Procedure

4(a)(4)(B)(ii) by filing an amended notice of appeal after the District Court denied

reconsideration, Post & Schell makes two further arguments that the issue of

supplemental jurisdiction was waived. First, the firm contends that Sarpolis’ failure to

file an amended notice of appeal deprives us of jurisdiction over the District Court’s

order denying reconsideration. Whether an issue has been waived on appeal is a distinct

inquiry from our jurisdiction to review a particular order, however, and Post & Schell

cites no authority showing that failure to file an amended notice of appeal waives any

claims first raised on reconsideration.

       Second, relying on Carrascosa v. McGuire, 520 F.3d 249 (3d Cir. 2008), Post &

Schell argues that Sarpolis’ failure to file an amended notice of appeal deprives us of

                                               6
jurisdiction to review any arguments first raised on reconsideration. Although in

Carrascosa the appellant failed to file an amended notice of appeal and the Court stated

that we “d[id] not have jurisdiction to review any arguments raised for the first time in

Carrascosa’s Motion for Reconsideration,” id. at 254, this statement simply set out the

limits of our jurisdiction in a case where the appellant sought to challenge both the denial

of reconsideration and the underlying order. In this case, however, Sarpolis challenges

only the District Court’s exercise of supplemental jurisdiction in the order dismissing her

claims. As we are mindful that she was proceeding pro se in the District Court, we thus

decline to treat as waived the issue of supplemental jurisdiction.

       As for that issue, Sarpolis’ primary argument is that the District Court erred in

exercising supplemental jurisdiction and dismissing her claims without addressing the

merits of her claims for fraudulent misrepresentation and fraud in the inducement.

Although Sarpolis asserts that the District Court should have ruled on a claim that the

University of Pennsylvania and Community Health Services fraudulently misrepresented

the funds available to pay malpractice claims against Chestnut Hill Hospital, the amended

complaint does not list any counts of fraudulent misrepresentation. The Court liberally

construed the amended complaint to state claims of fraud and fraud in the inducement as

objects of the conspiracy, and held that the fraud claim was time-barred. Sarpolis does

not explain how her purported claim of fraudulent misrepresentation is different from the

                                             7
general claim of fraud decided by the District Court, and hence we see no error in the

lack of a separate ruling on fraudulent misrepresentation.4

         Sarpolis also contends that the District Court erred in exercising supplemental

jurisdiction over a claim that she was fraudulently induced to accept the settlement

agreement and withdraw her malpractice claim. The Court dismissed the fraudulent

inducement claim because it was not the proper forum to hear the claim, as only the

Philadelphia Court of Common Pleas could grant Sarpolis relief from a settlement

reached in that Court. Although this reasoning does not explain why the District Court

chose to exercise supplemental jurisdiction, as Sarpolis had not yet raised the issue, the

Court was not required to give a supplemental jurisdiction analysis before dismissing the

fraudulent inducement claim. See Acri v. Varian Assocs., 114 F.3d 999, 1000 (9th Cir.

1997).

         An affirmative justification for exercising supplemental jurisdiction, however, is

apparent in the District Court’s analysis of the statute-of-limitations defense to Sarpolis’

closely related civil conspiracy claim. The Court reasoned that Sarpolis had failed to

state a claim for civil conspiracy because the underlying tort of fraud was time-barred.

The Pennsylvania statute of limitations for fraud is two years, 42 Pa. Cons. Stat. Ann. §

         To the extent that Sarpolis contends in a footnote that the District Court’s ruling
         4

on conspiracy to commit fraud is irrelevant to the fraudulent misrepresentation claim
because “[she] did not allege that [the University of Pennsylvania] conspired with [Judge]
Tereshko,” see Reply to Brief for Appellee the University of Pennsylvania at 3 n.1, the
amended complaint establishes that this is not the case. See Am. Compl. at ¶ 58 (alleging
that the University of Pennsylvania and Community Health Systems “conspired” to avoid
malpractice liability through fraud, and did so “[w]ith the assistance of all other
defendants”).
                                               8
5524(7), and although the existence of a conspiracy tolls the statute of limitations, see

Baker v. Rangos, 324 A.2d 498, 510 (Pa. Super. Ct. 1974), Judge Tereshko’s January

2009 order was the last alleged act of the conspiracy. Similarly, no act of fraudulent

inducement is alleged to have occurred after the January 2009 order, and the statute of

limitations therefore expired two years before Sarpolis filed this case in 2013.

       On appeal, Sarpolis argues that the statute of limitations should be tolled because

the alleged insistence of Post & Schell attorneys on unreasonable terms renders the

fraudulent inducement claim a continuing tort. This argument fails because the

continuing tort doctrine is not applicable to claims of ongoing harm from a completed

tort. See Dellape v. Murray, 651 A.2d 638, 640 (Pa. Commw. Ct. 1994). To the extent

that Sarpolis alleges that opposing counsel insisted on unreasonable settlement terms

after she had agreed to settle and to withdraw her malpractice claim, their insistence is

not part of any fraudulent inducement to accept the settlement and withdraw her claim

but rather an ongoing harm to Sarpolis in the form of withholding the promised benefits

of the settlement. The continuing tort doctrine is therefore not in play. Because the

District Court already had before it the statute-of-limitations issue, remand would merely

have wasted judicial resources by requiring the defendants to make substantially the same

arguments in state court. The interest of judicial economy thus justified the District

Court’s retaining jurisdiction over the fraudulent inducement claim. See Blakely v.

United States, 276 F.3d 853, 863 (6th Cir. 2002).

       Sarpolis’ remaining arguments on the issue of supplemental jurisdiction are

unpersuasive. Although Carnegie-Mellon University v. Cohill, 484 U.S. 343 (1988),

                                             9
counsels remand when the statute of limitations prevents a plaintiff from re-filing in state

court, the case does not support remand of Sarpolis’ state-law claims because they were

untimely when filed. The grant of discretion in 28 U.S.C. § 1367(c)(1) to remand claims

that “raise[] a novel or complex issue of State law” also does not support remand because

Sarpolis’ claims do not raise such an issue. Finally, it is simply not the case that most

courts accept that the proper course is to remand whenever all federal claims are

dismissed. We therefore conclude that the District Court did not abuse its discretion in

exercising supplemental jurisdiction.

       Sarpolis also claims that the District Court erred in dismissing her civil conspiracy

claim because the element of malice was adequately pleaded. We exercise plenary

review of the District Court’s decision to grant a motion to dismiss. Connelly v. Steel

Valley Sch. Dist., 706 F.3d 209, 212 (3d Cir. 2013). “Proof of malice is an essential part

of a cause of action for conspiracy,” Goldstein v. Philip Morris, Inc., 854 A.2d 585, 590

(Pa. Super. Ct. 2004), and malice requires that the conspirators act with the sole purpose

of injuring the plaintiff. Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466, 472 (Pa.

1979). Even had Sarpolis sufficiently pleaded that Appellees had the sole purpose of

injuring her, she failed to state a civil conspiracy claim because, as the District Court

held, the underlying claim of fraud is time-barred. See Pelagatti v. Cohen, 536 A.2d
1337, 1342 (Pa. Super. Ct. 1987) (holding that civil conspiracy claim requires availability

of an independent cause of action for the acts alleged).

                                *       *     *      *       *

                                             10
       The District Court therefore did not err in dismissing Sarpolis’ civil conspiracy

claim, and it also did not err in exercising supplemental jurisdiction. Thus, we affirm its

judgment.5

       5
         As we affirm on other grounds, it is not necessary for us to address Post &
Schell’s argument that Sarpolis’ claims are barred by Pennsylvania’s absolute privilege
against liability for libelous or defamatory statements made in the course of judicial
proceedings.
                                             11