Court Opinion

ID: 4521068
Source: CourtListenerOpinion
Date Created: 2020-03-31 17:11:03.088755+00
Date Added: 2024-06-11T09:25:13.057791
License: Public Domain

J-S64035-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    SHARLEEN M. RELLICK-SMITH                  :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                         Appellant             :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    BETTY J. RELLICK AND KIMBERLY V.           :   No. 919 WDA 2019
    VASIL                                      :

                Appeal from the Order Entered March 25, 2019
      In the Court of Common Pleas of Indiana County Orphans' Court at
                             No(s): 32-14-0490

BEFORE:      BOWES, J., LAZARUS, J., and PELLEGRINI, J.*

DISSENTING MEMORANDUM BY BOWES, J.:                     FILED MARCH 31, 2020

       I respectfully dissent because I believe the law of the case doctrine,

specifically the coordinate jurisdiction rule, precluded the amendment of new

matter to assert the statute of limitations defense on the facts herein. 1     I

would vacate the judgment and remand for the trial court to rule on the merits

of Plaintiff’s claims.

       In Zane v. Friends Hospital, 836 A.2d 25, 29 (Pa. 2003), our Supreme

Court reiterated the law of the case doctrine. It is composed of three canons:

       (1)    upon remand for further proceedings, a trial court may not
              alter the resolution of a legal question previously decided by
              the appellate court in the matter; (2) upon a second appeal,
____________________________________________

* Retired Senior Judge assigned to the Superior Court.
1 I acknowledge that, if the statute of limitations defense had not been waived,
there was some evidence that could support a finding that Plaintiff’s claims
were time-barred.
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            an appellate court may not alter the resolution of a legal
            question previously decided by the same appellate court;
            and (3) upon transfer of a matter between trial judges of
            coordinate jurisdiction, the transferee trial court may not
            alter the resolution of a legal question previously decided by
            the transferor trial court.
Id. (quoting Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa. 1995).

      Implicated herein with regard to the propriety of the amendment of new

matter is the third rule, commonly referred to as the “coordinate jurisdiction

rule.” Simply stated, it means that judges of coordinate jurisdiction should

not overrule each other’s decisions. Id. The rule is “based on a policy of

fostering the finality of pre-trial applications in an effort to maintain judicial

economy and efficiency.” Starr, supra at 1331. Consistent with the law of

the case doctrine generally, it “serves to protect the expectations of the

parties, to insure uniformity of decisions, to maintain consistency in

proceedings, to effectuate the administration of justice, and to bring finality

to the litigation.” Id.

      The “prohibition against revisiting the prior holding of a judge of

coordinate jurisdiction, however, is not absolute.” Id. We recognize that a

departure from the rule is warranted in “exceptional circumstances” where

there has been a change in controlling law, a substantial change in the facts

or evidence, or where “the prior holding was clearly erroneous and would

create a manifest injustice if followed.” Id.

      Moreover, a ruling at one stage of the proceedings might be revisited

later when a different legal standard governs.      For instance, a preliminary

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objection in the nature of a demurrer may be overruled based on the operative

legal standard, while the issue may merit different treatment at the summary

judgment stage when a different legal standard applies.        See Neidert v.

Charlie, 143 A.3d 384, 391 (Pa.Super. 2016) (holding coordinate jurisdiction

rule does not apply where the motions are different in kind, such as

preliminary objections and a motion for summary judgment).            See also

Kroptavich v. Pa. Power & Light Co., 795 A.2d 1048, 1054 (Pa.Super.

2002) (finding no violation of the coordinate jurisdiction rule where the first

trial court denied summary judgment on a constructive discharge count

finding that it was not preempted as matter of law, and after transfer of the

case to a second judge, a second motion for summary judgment was filed on

both the age discrimination claim and the constructive discharge claim,

alleging insufficient facts were established to sustain each cause of action, as

the courts addressed different legal questions, and the second judge did not

reopen questions or alter earlier decisions).

      Herein, Defendants filed an answer to Plaintiff’s complaint and did not

plead any affirmative defenses as new matter. They subsequently sought to

dismiss the action based on Plaintiff’s alleged lack of standing and the statute

of limitations.   The Honorable Carol Hanna denied dismissal based on the

statute of limitations, finding the defense waived for failure to plead it as new

matter. See Opinion and Order of Court, 6/22/15, at 3. However, the court

granted the motion to dismiss based on a lack of standing.

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       Plaintiff appealed the dismissal for lack of standing, and this Court

vacated the order, and remanded the case for further proceedings.2 We noted

therein that the ruling on the statute of limitations had not been broached by

the parties.      See Rellick-Smith v. Rellick, 147 A.3d 897, 901 n.12

(Pa.Super. 2016).

       Upon remand, discovery was undertaken and completed. On May 16,

2017, Defendants filed a motion for summary judgment that did not mention

the statute of limitations.        Summary judgment was denied because the

Honorable William Martin concluded that there were issues of material fact.

Thereafter Plaintiff filed her certificate of readiness for trial and counsel for

defendants moved to withdraw. Six months later, in late 2017, new counsel

entered an appearance for Defendants, and Plaintiff filed her pretrial

statement. Thereafter, Defendants filed two motions for continuance, both of

which were granted.

       On June 30, 2018, almost four years after the complaint was filed,

Defendants filed a motion styled “Motion to Amend a Pleading,” seeking court

____________________________________________

2 In our prior opinion in this case, we held that a beneficiary of a Totten Trust
named by the principal during the principal’s lifetime had standing to challenge
a change of beneficiary designation by the principal’s agents. See Rellick-
Smith v. Rellick, 147 A.3d 897 (Pa.Super. 2016). As we noted therein, that
ruling was premised on the facts as pled, specifically, averments in the
Complaint that the CDs were “in trust for” accounts owned and created by
Rose, which upon her death, would become the property of Defendants and
Plaintiff, in equal shares. However, there was evidence adduced at trial that
the CDs were held jointly among Rose, Defendants, and Plaintiff, and not
Totten Trust accounts.

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permission to file new matter raising lack of standing and a request for an

accounting to establish that the funds used to create the CDs were not Rose’s

funds, but Defendant Betty Rellick’s funds.         Defendants attached their

proposed New Matter, which contained a catchall paragraph alleging “the

affirmative defense of statute of limitations, accord and satisfaction, collateral

estoppel, equitable estoppel, release, res judicata, statute of limitation, and

waiver.” Proposed New Matter to Complaint, 6/30/18, at ¶44.

       At the August 17, 2018 pretrial conference, the Honorable Thomas M.

Bianco heard argument on the motion to amend the pleading, and issued an

order that same day granting Defendants leave to amend.3               The court

determined that the amendment did not unduly prejudice Plaintiff and

dismissed any notion that it violated the coordinate jurisdiction rule. Following

a bench trial, the court entered judgment in favor of Defendants based on the

statute of limitations. My colleagues in the majority affirm the trial court’s

ruling.

       I believe the issue herein is whether the coordinate jurisdiction rule was

violated by the 2018 amendment. This is a question of law, and our standard

of review is de novo. Zane, supra at 30 n.8. Departure from the law of the

case doctrine is permitted “only in exceptional circumstances such as where

____________________________________________

3  The initial trial judge was the Honorable Carol Hanna. Following remand
from this Court, the case was assigned to the Honorable William Martin, who
presided, inter alia, over the denial of summary judgment. The case was
subsequently assigned to the Honorable Thomas M. Bianco.

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there has been an intervening change in the controlling law, a substantial

change in the facts or evidence giving rise to the dispute in the matter, or

where the prior holding was clearly erroneous and would create a manifest

injustice if followed.”   Commonwealth v. Viglione, 842 A.2d 454, 464

(Pa.Super. 2004) (quoting Starr, supra at 1332).

      I submit that Judge Hanna’s finding that the statute of limitations

defense was waived was in accord with Pa.R.C.P. 1030, which states that the

“statute of limitations . . . shall be pleaded in a responsive pleading under the

heading New Matter.” Rule 1032(a) provides further that,

      A party waives all defenses and objections which are not
      presented either by preliminary objection, answer or reply, except
      a defense which is not required to be pleaded under Rule 1030(b),
      the defense of failure to state a claim upon which relief can be
      granted, the defense of failure to join an indispensable party, the
      objection of failure to state a legal defense to a claim, the defenses
      of failure to exercise or exhaust a statutory remedy and an
      adequate remedy at law and any other nonwaivable defense or
      objection.

Pa.R.C.P. 1032(a). Based on the applicable rules, Judge Hanna’s ruling that

the statute of limitations defense was waived was not “clearly erroneous.” Nor

was there an intervening change in the law or a substantial change in the facts

or evidence that would warrant a different ruling by a successor court.

      Although Defendants were undoubtedly aware within months of the

filing of the complaint that the statute of limitations was a potentially viable

defense, they neglected to seek leave to amend their Answer to assert it.

Rather, they filed a motion to dismiss in 2015 based in part on the unpled

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statute of limitations defense, and Judge Hanna ruled that the defense was

waived as they failed to plead it. Defendants did not challenge that ruling on

appeal.4

       Instead, almost four years after the complaint was filed, after dismissal

was granted and then vacated by this Court, discovery was closed,

Defendants’ motion for summary judgment had been denied, numerous

continuances granted, and two reassignments of trial judges, Defendants filed

their motion to amend seeking permission to raise, inter alia, the defense of

the statute of limitations. Although the successor trial court acknowledged

that its predecessor had ruled that the statute of limitations defense was

waived, it relied upon Horowitz v. Universal Underwriters Insurance Co.,

580 A.2d 395 (Pa.Super. 1990), and Pennsylvania’s liberal policy of

amendment of pleadings, in granting the motion to resurrect the waived

____________________________________________

4 We note that Defendants, as appellees in the first appeal, were not required
to file a cross-appeal to preserve their right to challenge the trial court’s
adverse ruling of waiver on the statute of limitations issue. They were not
aggrieved parties as the judgment of dismissal was in their favor. See Note
to Pa.R.A.P. 511 (citing Lebanon Valley Farmers Bank v. Commonwealth,
83 A.3d 107 (Pa. 2013); see also Meyer, Darragh, Buckler, Bebenek &
Eck, P.L.L.C. v. Law Firm of Malone Middleman, P.C., 137 A.3d 1247,
1259-60 (Pa. 2016) (concurring opinion, Saylor, C.J.) (citing Lebanon Valley
Farmers Bank, supra, for proposition that Meyer Darragh was not required
to file a protective cross-appeal where it prevailed below on its quantum
meruit claim, as “a successful litigant need not file a protective cross-appeal
on pain of waiver”). Accord Richards v. Ameriprise Fin., Inc., 217 A.3d
854, 863, (Pa.Super. 2019). The exception to that rule, which is inapplicable
herein, is where the judgment did not grant the appellee the relief it sought.
Pittsburgh Constr. Co. v. Griffith, 834 A.2d 572, 588 (Pa.Super. 2003)
(quoting Pa.R.A.P. 511 note).

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defense. The trial court viewed the request to amend as “an entirely different

procedural question[,]” and found that “the law of the case doctrine did not

bar the trial court from addressing this question which had not been presented

to Judge Hanna or our court in the earlier proceedings.”                Majority

Memorandum at 7.

      In my view, the ruling permitting the amendment violated the

coordinate jurisdiction rule as a subsequent trial judge altered the resolution

of a legal question decided by a prior trial judge. While the majority maintains

that granting leave to amend to assert a statute of limitations defense does

not overrule an earlier trial court order that the defense was waived, I

respectfully disagree. It is beyond cavil that the subsequent ruling altered the

legal effect of the first trial court’s ruling. Moreover, while there are limited

exceptions to the coordinate jurisdiction rule, they are inapplicable herein for

the reasons that follow.

      Defendants did not assert a change in controlling law, a substantial

change in the facts, or a different legal standard. Nor did they allege that

Judge Hanna’s prior waiver holding was “clearly erroneous.” Instead, they

waited three years, when the case was certified “trial ready,” and did an end

run around the prior ruling of waiver by seeking leave to amend their pleading

to assert the waived defense as new matter. The trial court marginalized the

ruling of the prior judge of coordinate jurisdiction that was the law of the case

throughout discovery and dispositive motions and treated the motion as a

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mere request to amend a pleading governed by Horowitz. It held that the

coordinate jurisdiction rule did not bar the amendment because the motions

were of different types and the case was in a different procedural posture.

      I believe the Majority’s reliance upon Horowitz to affirm the trial court

is misplaced. The coordinate jurisdiction rule was not implicated therein as

there was no prior ruling by a trial court that was effectively overruled by the

proposed amendment. Furthermore, in granting the motion to amend in the

case sub judice, the trial court erred in focusing on prejudice, and concluding

that “Plaintiff could not claim an unfair surprise or an eleventh hour surprise,

as the defense of statute of limitations was set forth as a basis for Defendants’

Motion to Dismiss, which was filed a mere four months after Plaintiff filed her

Complaint.” Trial Court Opinion, 7/16/19, at 8.

      I submit that a showing of prejudice is unnecessary when the issue is

whether a proposed amendment would violate the law of the case, and the

trial court applied the wrong legal standard. Litigants have a right to rely on

legal rulings as they prepare their cases for trial. The law of the case doctrine

recognizes that when later rulings upend earlier rulings, the parties’

expectations are dashed, proceedings are inconsistent, and finality is

undercut. I submit further that the majority ignores the fact that Defendants

knew of a possible statute of limitations defense four months after the

complaint was filed, yet they did not seek leave to amend their new matter to

assert the defense before seeking dismissal on that basis. Instead, they filed

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the motion to dismiss that resulted in the trial court’s order finding the defense

waived.   That finding is the law of the case, and the successor trial court

violated the coordinate jurisdiction rule when it subsequently abrogated that

ruling on the eve of trial by permitting the amendment.

      Absent the statute of limitations issue, the question remains whether

Defendants breached their fiduciary duties under Rose’s power of attorney

(“POA”) when they removed Plaintiff’s name from the CDs. An agent acting

pursuant to a POA has a duty to effectuate the principal’s intent in estate

planning, to the extent known. See 20 Pa.C.S. § 5601.3(b)(1) (obligating

agent acting under POA to “act so as not to create a conflict of interest that

impairs the agent’s ability to act impartially in the principal’s best interest”);

see also 20 Pa.C.S. § 5601.3(b)(2), (6) (imposing duty upon agent to

"[a]ttempt to preserve the principal’s estate plan, to the extent actually known

by the agent, if preserving the plan is actually in the principal’s best interest

based on all relevant factors”).

      Furthermore, evidence was introduced by both Plaintiff and Defendants

that would support a finding that the CDs were joint accounts created by Rose

to minimize the inheritance tax consequences of “in trust for” accounts. If

credited, the accounts may have been multi-party accounts governed by the

Multi-Party Accounts Statute, 20 Pa.C.S.§ 6301 et seq., which applies to CDs.

See 20 Pa.C.S. §§ 6301-6306.        See also In re Falucco, 791 A.2d 1177

(Pa.Super. 2002) (noting that for purposes of the MPAA, “account includes a

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certificate of deposit”).   The MPAA, if applicable, may have an impact on

whether the action taken by Defendants in removing Plaintiff from the CDs

was an abuse of the POA.

      I would vacate the judgment and remand for the trial court to make

findings of fact and conclusions of law regarding, inter alia, the nature of the

CDs, who owned them, whether they were part of Rose’s overall estate plan,

and whether Defendants acted consistently with or in furtherance of Rose’s

estate plan when they removed Plaintiff from the CDs. Hence, I dissent.

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