Court Opinion

ID: 4404659
Source: CourtListenerOpinion
Date Created: 2019-06-07 16:46:34.966636+00
Date Added: 2024-06-11T14:52:34.669582
License: Public Domain

J-A09013-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 JAMES J. CAMPBELL                       :   IN THE SUPERIOR COURT OF
                                         :        PENNSYLVANIA
                                         :
              v.                         :
                                         :
                                         :
 ANDREW S. DREGER, JAN DREGER            :
 AND ARTHUR F. DREGER, JR.               :
                                         :   No. 1210 EDA 2018
                                         :
              v.                         :
                                         :
                                         :
 ROBERT CAMPBELL                         :
                                         :
                                         :
 APPEAL OF: ANDREW S. DREGER             :
 AND ARTHUR F. DREGER, JR.               :

              Appeal from the Judgment Entered, April 16, 2016,
              in the Court of Common Pleas of Delaware County,
                     Civil Division at No(s): 2016-006579.

BEFORE:    KUNSELMAN, J., MURRAY, J., and PELLEGRINI*, J.

MEMORANDUM BY KUNSELMAN, J.:                          FILED JUNE 07, 2019

      Andrew S. Dreger and Arthur F. Dreger, Jr. (son and father) appeal from

the entry of judgment in favor of Robert Campbell (Andrew’s ex-father-in-

law). The court of common pleas held, as a matter of law, that the statute of

limitations time barred all of Andrew’s and Arthur’s causes of action against

Robert.   Andrew and Arthur argue that they offered sufficient evidence to

create a question of fact as to whether Robert fraudulently concealed his

failure to transfer certain real estate to Andrew. Because there is no evidence

____________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A09013-19

that Robert concealed his alleged breaches of promise or his alleged fraud

from the Dregers (much less conduct that would lead a reasonable person to

believe that Robert had transferred the property in question), we affirm.

      The trial court related the facts from the Dregers’ case-in-chief as

follows:

                 Prior to 2004, brothers James and Robert Campbell
           managed a bar and restaurant known as Campbell’s Boat
           House[.] The Campbell brothers owned equal shares of
           Campbell’s Boat House, Inc. (“CBH”), the corporate entity
           which operated Campbell’s Boat House. At that time, James
           and Robert also owned the real estate on which CBH
           stood[.]

                 In 2004, [James] sold his interest in CBH to [Andrew.]
           At the time, [Andrew] and [Robert’s] daughter, [Jan,] were
           husband and wife. On April 10, 2004, [Andrew, Jan, and
           James] signed a letter of intent which confirmed “in
           principal” the purchase of [James’] portion of CBH.

                 On October 27, 2004, [Andrew] executed a Sale
           Agreement for the purchase of shares of CBH from [James].
           In the Sale Agreement, [Robert] authorized the sale of the
           shares in CBH to [Andrew by James] and also executed a
           Guaranty of [Andrew’s] debt for the purchase of the shares.
           As part of the Sale Agreement, [James] transferred his
           interest in the [property] to [Robert] and executed a Deed
           to memorialize the transfer. [Arthur] executed a Guaranty
           as surety for [Andrew’s] financial obligations under the Sale
           Agreement.

                 In addition, on October 27, 2004, [Andrew and
           Robert] executed a Side Agreement “. . . for the purpose of
           setting forth their understanding as to certain matters
           between them and as relate to [CBH and the property]”.
           The Side Agreement further contained a buy/sell agreement
           as to the transfer of the [property to Andrew by Robert’s
           widow] or estate should [Robert’s] wife predecease him.
           The Side Agreement did not provide for the transfer of the
           property to [Andrew].

                                       -2-
J-A09013-19

               The instant matter was instituted on August 1, 2016
         by [James] seeking to collect on a Note against [Andrew and
         Jan], who were divorcing. [Andrew and Arthur] filed cross-
         claims and joined [Robert] as an additional defendant. In
         their Answer and Counter/Cross-claims, [Andrew and
         Arthur] asserted claims for fraud, promissory estoppel, and
         unjust enrichment.

               At trial, [Andrew and Arthur] claimed that oral
         assurances were made prior to the execution of the Sale
         Agreement and Side Agreement.          Specifically, [they]
         asserted that, sometime in July 2004, [Robert] promised to
         transfer [James’] interest in the [property to Andrew and
         Jan] within “one and one and one-half years” of the
         execution of the Sale Agreement. It was claimed the
         agreement was made to avoid the payment of Pennsylvania
         realty transfer tax. This Agreement was never placed in
         writing.

               At all relevant times between the execution of the
         Letter of Intent and the execution of the Sale Agreement
         and Side Agreement, [Andrew] was represented by counsel,
         Christine Berry, Esquire. On July 26, 2004, [Andrew] had a
         telephone consultation with [Ms. Berry], during which [she]
         informed [Andrew] that, to assure the [property] would be
         transferred to him, an additional written and executed “Side
         Agreement” setting forth the terms of the alleged real estate
         transfer agreement [was] required. Ms. Berry counselled
         [Andrew] not to execute the Sale Agreement and Side
         Agreement absent a memorialization of the alleged promise
         to transfer the [property to Andrew].          [Arthur] also
         recommended [Andrew] not execute the Sale Agreement or
         Side Agreement prior to the closing of the transaction.
         Despite the recommendation of counsel and his father,
         [Andrew] voluntarily executed the Sale Agreement and Side
         Agreement.

               At trial, following the close of [Andrew and Arthur’s]
         case-in-chief, [Robert moved] for compulsory nonsuit,
         pursuant to Pa.R.C.P. 230.1.

Trial Court Opinion, 7/9/18, at 1-4 (citations omitted).

                                     -3-
J-A09013-19

      Applying the statute of limitations and finding all of Andrew and Arthur’s

claims untimely, the trial court granted that motion. Andrew and Arthur filed

a post-trial motion to remove the nonsuit, which the trial court did not rule

upon. After 120 days, the prothonotary entered judgment in favor of Robert,

and this timely appeal followed. Andrew and Arthur and the trial court have

complied with Pennsylvania Rule of Appellate Procedure 1925.

      Andrew and Arthur raise one issue on appeal. They ask:

          Did the trial court err in granting a compulsory nonsuit,
          where the evidence, construed in the light most favorable
          to Andrew, demonstrates that the statute of limitations did
          not begin running until the fall of 2015, less than two years
          before Andrew’s counterclaims, thus making Andrew’s
          counterclaims timely?

See Andrew and Arthur’s Brief at 6.

      Andrew and Arthur believe that Robert is equitably estopped from

asserting the statute of limitations as a defense in this action, because he

fraudulently concealed the fact that he did not transfer the CBH property to

Andrew.    See id. at 19.     They argue that Robert made oral admissions

between 2004 and 2015 indicating that he (a) should have and (b) would

eventually transfer the property to Andrew. “Robert promised to carry it out

and said that he simply had never got around to it.” Id. at 21. Andrew and

Arthur claim that the evidence of record, when viewed in their favor, can

establish that these statements amounted to fraudulent concealment.

      In reviewing a grant of compulsory nonsuit our scope of review is all the

evidence adduced at trial, “giving the appellant the benefit of every reasonable

                                      -4-
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inference and resolving all evidentiary conflicts in his favor. . . .” Agnew v.

Dupler, 717 A.2d 519, 523 (Pa. 1998). Also, we afford the trial court’s award

of judgment as a matter of law no deference; thus, our standard of review is

de novo. See Id. We must decide whether Robert deserved judgment as a

matter of law, because no genuine issues of material fact remained in dispute

at the close of Andrew and Arthur’s case.

      In dismissing the case on statute-of-limitations grounds, the trial court

opined:

          An action to recover damages for injury to person or
          property which sounds in fraud is governed by a two-year
          statute of limitations.     See 42 Pa.C.S.A. § 5524(7).
          Typically, the two-year period begins to run as soon as the
          right to institute and maintain a suit arises. See Crouse v.
          Cyclops Indus., 745 A.2d 606, 611 (Pa. 2000); Toy v.
          Metro. Life Ins. Co., 863 A.2d 1, 7 (Pa. Super. 2004),
          aff’d, 928 A.2d 186 (Pa. 2007).          Actions sounding in
          promissory       estoppel,    which     renders    otherwise
          unenforceable agreements binding, sounds in contract law
          and thus is governed by a four-year limitations period for
          contract actions, rather than the six-year, “catch-all”
          limitations statute. 42 Pa.C.S.A. §§ 5525, 5527; Crouse v.
          Cyclops Indus., 745 A.2d 606 (Pa. 2000). Similarly, the
          statute of limitations on an unjust-enrichment claim is four
          years. See 42 Pa.C.S.A. § 5525(a)(4)[.]

              There is a strong policy in Pennsylvania courts favoring
          the strict application of statutes of limitations. Statutes of
          limitations are designed to effectuate three purposes: (1)
          preservation of evidence; (2) the right of potential
          defendants to repose; and (3) administrative efficiency and
          convenience. Kingston Coal Co. v. Felton Min. Co., 690
          A.2d 284, 288 (Pa. Super. 1997) (internal citations
          omitted). As a matter of general rule, a party asserting a
          cause of action is under a duty to use all reasonable
          diligence to be properly informed of the facts and
          circumstances upon which a potential right of recovery is

                                      -5-
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         based and to institute suit within the prescribed statutory
         period. Id. Thus, the statute of limitations begins to run
         as soon as the right to institute and maintain suit arises;
         lack of knowledge, mistake, or misunderstanding do not toll
         the running of the statute of limitations. Id.

               At trial . . . this Court determined the [Sale
         Agreement] was executed by the parties, including [Andrew
         and Robert on October 27, 2004. The testimony of Christine
         Berry,    Esquire    corroborated    her    notes   made
         contemporaneously with discussions among the parties and
         counsel, stating that, within one and a half (1½) years of
         October 27, 2004, a conveyance would be made by [Robert
         to Andrew].

                One and a half (1½) years following the October 27,
         2004 execution would be April 27, 2006. The applicable
         statute of limitations on a cause of action sounding in fraud
         is two (2) years, and the applicable statute of limitations on
         a cause of action sounding in either promissory estoppel or
         unjust enrichment is four (4) years. Two (2) years after
         April 27, 2006 is April 27, 2008, and correspondingly, four
         (4) years after April 27, 2006 is April 27, 2010. Even in the
         light most favorable to [Andrew and Arthur], the evidence
         admitted in [Andrew and Arthur’s] case-in-chief revealed
         [they] took no action to investigate whether the final
         conveyance of the real estate to [Andrew] occurred until
         November 2015. Moreover, [they] did not bring a cause of
         action related to the ownership of the [property] until 2016.
         Generally, a plaintiff is required to exercise reasonable
         diligence to inform himself of the facts upon which his right
         to recovery is premised. Fine v. Checcio, 870 A.2d 850,
         859 (Pa. 2005).

Trial Court Opinion, 7/9/18, at 6-9 (some citations omitted). Accordingly, the

trial court found that the Andrew and Arthur’s 2016 counter-claims came at

least six years too late.

      Andrew and Arthur have not appealed the trial court’s recitation of the

general rules regarding the statute of limitations or its calculation of the time

                                      -6-
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frames. Instead, they argue that the trial court counted from the wrong date,

because the doctrine of fraudulent concealment allegedly estopped Robert

from relying upon the statute of limitations until no earlier than 2015. Hence,

if Andrew and Arthur did not prove a fraudulent concealment upon which they

could reasonably rely, the trial court’s application of the statute of limitations

must stand.

      The doctrine of fraudulent concealment “provides that the defendant

may not invoke the statute of limitations, if through fraud or concealment,

he causes the plaintiff to relax his vigilance or deviate from his right of inquiry

into the facts.” Fine, 870 A.2d at 860. “The plaintiff has the burden of proving

fraudulent concealment by clear, precise, and convincing evidence”, and “it is

for the court to determine whether an estoppel results from established facts”.

Id.

      Moreover, fraudulent concealment and the discovery rule (also explored

in Fine) dovetail; both require plaintiffs to investigate claims based upon what

they know or should reasonably know. The Fine Court said, “the standard of

reasonable diligence, which is applied . . . under the discovery rule, also should

apply when tolling takes place under the doctrine of fraudulent concealment.”

Id. at 861. Thus, even with an affirmative act of concealment, the statute of

limitations starts to run “when the injured party knows or reasonably should

know of his injury and its cause.” Id.

      Here, the Andrew and Arthur’s fraudulent-concealment theory fails on

two grounds.

                                       -7-
J-A09013-19

      First, “in order for fraudulent concealment to toll the statute of

limitations,   the   defendant   must    have   committed   some    affirmative,

independent act of concealment upon which the plaintiffs justifiably relied.”

Kingston Coal, 690 A.2d at 291. Andrew and Arthur point to no evidence of

record showing an affirmative, independent act by Robert concealing anything

from them.      Nor does our review of the record reveal such an act of

concealment.

      In 2015, when Andrew and Arthur confronted Robert about not

transferring the property to Andrew, Robert did not conceal his shortcoming.

He flatly admitted that he had not deeded the property to Andrew. Thus,

rather than hide any unjust enrichment, fraud, or promissory estoppel, Robert

confessed to his inaction. The fact that he said he would make good on the

promise in the future – i.e., after Andrew paid James in full – likewise did not

hide the alleged breach or toll the statute of limitations. It underscores that

a breach (if any) already occurred – on April 27, 2006 – as the trial court

found. Thus, there is no genuine issue of material fact as to whether Robert

committed a fraudulent concealment, because there is no evidence of record

that he kept anything secret.

      Second, even if Robert had attempted to conceal his alleged breach and

fraud by mere words – i.e., if he had said something like, “I transferred the

property to you already; it’s all yours” – that statement would not cause a

reasonable person to relax his or her vigilance in a real estate transaction, as

a matter of law. A reasonable person in Andrew’s place should have known

                                        -8-
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that the transfer had not occurred, because Andrew never attended a closing

or received a deed naming him owner of the property.

      To transfer title to real estate in this Commonwealth certain formalities

must be observed, not the least of which is delivery of a deed. “Delivery of a

deed is necessary to render it legally operative. The general principle of law

is that the formal act of signing, sealing, and delivering is the consummation

of the deed.” In re Estate of Plance, 175 A.3d 249, 260 (Pa. 2017) (citations

omitted). Accordingly, there is no way for a grantor to conceal the fact that

he failed to transfer legal title to land, unless the grantor forged a deed and

tricked the grantee into thinking that a transfer had occurred. None of the

steps for transferring land occurred here, and Andrew and Arthur make no

suggestion that Robert forged a deed or orchestrated a fake closing.

      They had no reasonable basis to believe for ten years that Andrew was

the owner of the property, when clearly he was not. Thus, Robert did not trick

or lull them into believing that he had kept his October 27, 2004 promise to

convey the land, the promise upon which the Dregers’ entire counter-claim is

founded.

      The trial court rightly entered a compulsory nonsuit against Andrew and

Arthur, because they presented absolutely no evidence of a concealment by

Robert.    They also did not produce any evidence from which a reasonable

person could believe that Robert had transferred the property to Andrew. As

such, Robert did nothing of record to conceal his alleged breach of promises

or his alleged fraud from Andrew and Arthur, as a matter of law.

                                     -9-
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     The trial court correctly granted compulsory nonsuit in favor of Robert.

     Judgment affirmed.
Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/7/19

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