Court Opinion

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Date Created: 2015-10-13 22:28:12.767457+00
Date Added: 2024-06-11T11:47:35.895859
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Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

3-9-2006

Kuhnle v. Prudential
Precedential or Non-Precedential: Precedential

Docket No. 04-4598

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Recommended Citation
"Kuhnle v. Prudential" (2006). 2006 Decisions. Paper 1348.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1348

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                                      PRECEDENTIAL

   IN THE UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT

                     No. 04-4598

SVEN ALI KUHNLE, Successor Trustee of the Patricia A.
             Dresch Living Trust,
                                  Appellant

                          v.

        PRUDENTIAL SECURITIES, INC.;
GE LIFE AND ANNUITY ASSURANCE COMPANY;
            SANDRO J. FRANCANI
                             Appellees

    On Appeal from the United States District Court
        for the Western District of Pennsylvania
                 (D.C. No. 04-cv-00228)
     District Judge: Honorable Sean J. McLaughlin

               Argued January 18, 2006
 Before: ROTH, FUENTES, and BECKER, Circuit Judges.

                    (Filed March 9 2006)

PERCY L. ISGITT (Argued)
Isgitt & Associates
4801 Woodway
Suite 222E
Houston, TX 77056
      Attorney for Appellant

NICHOLAS P. VARI (Argued)
ERIC R.I. COTTLE
Kirkpatrick & Lockhart Nicholson Graham
Henry W. Oliver Building
535 Smithfield Street
Pittsburgh, PA 15222
       Attorneys for Appellees Prudential Securities, Inc. and
Sandro J. Francani

ROGER H. TAFT (Argued)
MacDonald, Illig, Jones & Britton
100 State Street
Suite 700
Erie, PA 16507
       Attorney for Appellee GE Life and Annuity Assurance
Company

                 OPINION OF THE COURT

BECKER, Circuit Judge.

                               2
       Sven Ali Kuhnle appeals the District Court’s grant of

summary judgment against him in his claim against

Prudential Securities, GE Life and Annuity Assurance, and

Sandro J. Francani to recover payment on a life insurance

policy. This appeal presents the question whether, under

Pennsylvania law, a plaintiff may file a second action after

his nearly identical action has been dismissed with prejudice

by a judgment of non pros. We conclude that where there has

been a finding of prejudice, and the case is dismissed with

prejudice in a well-considered judicial order, such a decision

is “on the merits” and a subsequent action is barred. Because

Kuhnle’s case falls under this rule, we will affirm the

judgment of the District Court.

                               I.

       The facts are quite sad. In 1994, Patricia Dresch took

out a $1,000,000 life insurance policy from a company that

later became GE Life and Annuity Assurance Company (“GE

Life”). The policy required that a premium payment be made

each year. The payments appear to have been timely made

until the 2000 payment became due. At that point, Dresch was

                               3
in poor health – she was declared incompetent on or about

December 16, 2000 and passed away on January 11, 2001.

       On January 4, 2001, the original trustee of the Patricia

A. Dresch Living Trust, along with Dresch’s daughter,

attempted to discover the status of the life insurance policy.

They discussed the matter with Sandro Francani, an advisor

and broker for Prudential Securities who had provided

financial planning and advice to Mrs. Dresch. Francani stated

that he could not determine whether the premium had been

paid. However, on January 12, 2001, Francani learned that the

insurance policy had lapsed on January 4, 2001 due to non-

payment. Therefore, no death benefit was paid. It has been

alleged that Francani agreed to monitor the policy but failed

to do so.

       Sven Ali Kuhnle is the Plaintiff in this case – and

Successor Trustee of the Patricia A. Dresch Living Trust. The

Defendants are Prudential Securities (“Prudential”), GE Life,

and Francani. The first action against the Defendants was

filed on March 26, 2002, in the Court of Common Pleas of

Erie County, Pennsylvania. No measures were taken to

                               4
advance the lawsuit for some time.

       Petitions for a judgment of non pros were then filed.

Information about the Defendants’ petitions and a court order

to show cause why the petitions should not be granted were

forwarded to Kuhnle’s attorney. The Court of Common Pleas

considered the matter and, on November 10, 2003, entered a

judgment of non pros. The Court dismissed the action with

prejudice, stating that the Plaintiff “failed to exercise due

diligence in proceeding with reasonable promptitude, that

Plaintiff ha[d] no compelling reason for the delay, and that

Defendants ha[d] suffered actual prejudice.” The Court noted

that a crucial witness had left the jurisdiction and that at least

one Defendant had suffered prejudice to his reputation.

Several months later, the Court denied a petition, made on

behalf of Kuhnle, to strike the judgment of non pros. The

Court did so in a lengthy opinion after briefing by the parties.

       On October 31, 2003, the same day as the scheduled

hearing on the petitions for non pros, Kuhnle filed a nearly

identical lawsuit in the District Court of Harris County,

Texas. The case, however, was removed to federal court and

                                5
transferred to the District Court for the Western District of

Pennsylvania. The Defendants moved for summary judgment

on the grounds that the second suit was barred by res judicata

or by the order denying the petition to open the judgment of

non pros.

       The District Court granted the Defendants’ summary

judgment motions, applying the case of Schuylkill Navy v.

Langbord, 728 A.2d 964 (Pa. Super. 1999), and determining

that Pennsylvania law does not allow a litigant “to do an end

run around a judgment of non pros simply by filing another

complaint.” Kuhnle appeals, claiming that his second suit

should have been permitted because the judgment of non pros

entered by the Court of Common Pleas of Erie County was

not a judgment “on the merits.” We disagree and find that the

second suit is indeed barred by res judicata or claim

preclusion.

                               II.

       We find a series of Pennsylvania cases and a Third

Circuit case dispositive. In Gates v. Servicemaster

Commercial Service, 631 A.2d 677, 679 (Pa. Super. Ct.

                               6
1993), a motion for a judgment of non pros was entered after

the defendant argued that the “plaintiff had failed to

prosecute her cause with reasonable diligence.” Id. at 679. A

petition to open the judgment was denied and the Superior

Court held that a second and nearly identical action could not

be filed unless the plaintiff successfully petitioned the court

to open the judgment of non pros. Id. at 680, 682. The

rationale of Gates was reinforced in Schuylkill Navy v.

Langbord. See 728 A.2d at 969. There the Superior Court

held that “where a cause of action is subject to a judgment of

non pros, a subsequent complaint on the same cause of action

may not be filed without permission of the court pursuant to

Pennsylvania Rules of Civil Procedure Rule 3051.”1 Id. at

1
    That rule states:

         Rule 3051. Relief from Judgment of Non Pros

           (a) Relief from a judgment of non pros shall
         be sought by petition. All grounds for relief,
         whether to strike off the judgment or to open it,
         must be asserted in a single petition.
           (b) If the relief sought includes the opening of
         the judgment, the petition shall allege facts
         showing that
           (1) the petition is timely filed,
           (2) there is a reasonable explanation or

                                 7
965.

       McCarter v. Mitcham, 883 F.2d 196 (3d Cir. 1989),

decided prior to Gates and Schuylkill Navy, is also relevant

here. In McCarter, the plaintiffs’ state court action was

dismissed with prejudice because the complaint was not filed

within the time limit set by the court. Id. at 198. The plaintiffs

subsequently filed a nearly identical complaint in the District

Court for the Western District of Pennsylvania. The district

court granted the defendants’ motion to dismiss on the

grounds that the claims were barred by res judicata. Id. at

198. This Court affirmed.

       We noted that for litigation to be barred by res

judicata, the prior determination must be “on the merits.” Id.

at 199. We found that the order to dismiss with prejudice

“was an order ‘on the merits’ within the meaning set forth by

the Pennsylvania courts.” Id. at 200. Although we first stated

that “[w]here the prior dismissal was based on a judgment of

       legitimate excuse for the
         inactivity or delay, and
         (3) there is a meritorious cause of action.

Pa. R.C.P. No. 3051.

                                8
non pros, Pennsylvania courts will not give preclusive effect

to the judgment,” id. at 199, we went on to opine that the

Pennsylvania courts interpret the phrase “on the merits”

expansively. Id. at 200. We reasoned that the dismissal before

the Court, made with prejudice, was in fact on the merits

because the dismissal was a “sanction for . . . untoward

delay.” Id. at 201. We also noted it to be of significance that

the dismissal was not entered automatically by the

Prothonotary, but rather was issued by the court with a well-

considered order.2 Id. at 200.

         We conclude that Gates, Schuylkill Navy, and

McCarter support the conclusion that Kuhnle’s second action

is barred under Pennsylvania law. Specifically, we note two

important factors. First, the initial action was dismissed by

the Court of Common Pleas with prejudice. Even Helfrick v.

UPMC Shadyside Hospital, 65 Pa. D. & C.4th 420, 437

(Allegheny County, 2003), relied on by Kuhnle, distinguishes

cases involving prejudice. Second, we note that this is not a

case where the judgment of non pros was entered routinely by

2
    In Pennsylvania, the Prothonotary is the Clerk of Court.

                                 9
a Prothonotary. Rather, Judge Anthony of the Court of

Common Pleas carefully considered the question before the

Court and issued a comprehensive order. He later issued a

very lengthy opinion denying Kuhnle’s Petition to Open or

Strike Judgment. All these factors weigh in favor of a finding

that Kuhnle is now barred from filing another suit in a

separate jurisdiction.

       Kuhnle argues that, even if Gates and Schuylkill Navy

are good law, there are two distinguishing circumstances here:

(1) the second suit was filed in a separate jurisdiction than the

one where the judgment of non pros was entered; and (2) the

second suit was technically filed before the judgment of non

pros was entered. We are not persuaded by either argument. It

would be pointless to allow a litigant to sidestep a judgment

of non pros – and Rule 3051 – by simply filing in another

jurisdiction. Also, we note that state court judgments, once

rendered, are binding. See 28 U.S.C. § 1738.

                               III.

       This is a sad case. But, given the procedural history,

we cannot grant relief under the governing laws. As the

                               10
Supreme Court stated more than two hundred years ago:

“[M]otives of commiseration, from whatever source they

flow, must not mingle in the administration of justice. Judges,

in the exercise of their functions, have frequent occasions to

exclaim, ‘durum valde durum, sed sic lex est.’” See

Penhallow v. Doane’s Adm’rs, 3 U.S. (3 Dall.) 54, 89 (1795)

(“Hard very hard, but such is the law.”).

       The judgment of the District Court will be affirmed.

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