SHARLEEN M. RELLICK-SMITH v. BETTY J. RELLICK AND KIMBERLY V. VASIL
No. 23 WAP 2020
IN THE SUPREME COURT OF PENNSYLVANIA WESTERN DISTRICT
DECIDED: OCTOBER 20, 2021
BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ. ARGUED: April 14, 2021
JUSTICE TODD
[J-25-2021]
JUSTICE TODD
In this appeal by allowance, we consider whether the Superior Court erred in affirming an order of the trial court that permitted the appellees to file an amended answer to include the affirmative defense of statute of limitations, which a different trial court judge previously ruled was waived. As we conclude that the second trial judge‘s order violated the coordinate jurisdiction rule in this regard, we hold that the Superior Court erred in affirming his order, and, accordingly, we reverse the Superior Court‘s decision, vacate in part the trial judge‘s order, and remand the matter to the trial court for further proceedings consistent with this opinion.
On August 6, 2006, Rose Rellick (hereinafter, “Decedent“),1 purchased two Certificates of Deposit (“CDs“), listing as co-owners herself; her sister, Betty J. Rellick; and the daughters of her deceased brother George - Kimberly Vasil and Sharleen M. Rellick-Smith (hereinafter, “Appellant“). Prior to purchasing the CDs, Decedent executed powers of attorney designating Betty and Kimberly (hereinafter, “Appellees“) as her attorneys-in-fact. It purportedly was Decedent‘s intention that, upon her death, the proceeds of the CDs be divided equally among Appellant and Appellees. However, on July 31, 2009, prior to Decedent‘s death, Appellees removed Appellant‘s name from the CDs. In March 2013, subsequent to Decedent‘s death, Appellees cashed the CDs, which were worth approximately $370,000, and divided the money between the two of them.
On October 10, 2014, Appellant filed an action against Appellees, claiming they breached their fiduciary duties to Decedent by removing Appellant‘s name from the CDs and refusing to pay her any of the proceeds. Appellees filed a timely response to the complaint, but, relevant to the instant appeal, did not raise any affirmative defenses therein. Four months later, on February 11, 2015, Appellees filed a “motion to dismiss,” arguing that Appellant lacked standing and that her claim was barred by the statute of limitations.2 The case was assigned to the Honorable Carol Hanna, who granted Appellees’ motion on the basis that Appellant lacked standing. Notably, however, Judge Hanna determined that Appellees waived the statute of limitations defense by failing to raise it as a new matter in their answer, as required
Appellant appealed Judge Hanna‘s order, and the Superior Court reversed and remanded the case to the trial court, holding that Appellant, in fact, did have standing to pursue her claim. Rellick-Smith v. Rellick, 147 A.3d 897, 904 (Pa. Super. 2016). In its opinion, the Superior Court observed that neither party challenged Judge Hanna‘s finding that Appellees waived the statute of limitations defense. Id. at 901 n.12 (“Neither party addresses on appeal the statute of limitations issue raised in [Appellees‘] Motion to Dismiss.“).
On remand, the case initially was assigned to the Honorable William Martin, as Judge Hanna had retired from the court on June 6, 2016. On May 16, 2017, Appellees filed a motion for summary judgment wherein they made no mention of the statute of limitations defense. Judge Martin denied the motion for summary judgment, finding there were outstanding issues of material fact. Thereafter, the case was reassigned to the Honorable Thomas M. Bianco, who presided over all remaining proceedings.
On July 30, 2018, Appellees filed a motion to amend their pleading to include numerous affirmative defenses, including a statute of limitations defense. Acknowledging Judge Hanna‘s finding that Appellees waived the statute of limitations defense by failing to raise it in their answer to Appellant‘s complaint, Judge Bianco nevertheless granted Appellees’ motion to amend based on the Superior Court‘s decision in Horowitz v. Universal Underwriters Insurance Co., 580 A.2d 395 (Pa. Super. 1990) (holding that trial court should have allowed party to amend its answer to affirmatively plead statute of limitations defense despite the fact that amendment was sought more than four years after original answer was filed), which, in his view, supports the liberal amendment of pleadings. Judge Bianco reasoned, inter alia, that Appellant would not be prejudiced if Appellees were permitted to amend their pleading, as Appellees’ assertion of the statute of limitations defense did not come as a surprise to Appellant, given that Appellees raised it in their February 2015 motion for judgment on the pleadings before Judge Hanna. Judge Bianco further determined that Appellant failed to establish that material evidence was lost due to Appellees’ delay in raising the statute of limitations defense.
Following the grant of Appellees’ motion to amend, the case proceeded to a non-jury trial, at which Appellant testified to the facts set forth above. Appellant stated that she could not recall when she learned that Appellees removed her name from the CDs. Appellant also presented the testimony of Ann Marcoaldi, Decedent‘s secretary and tax preparer. Marcoaldi testified that Decedent purchased the CDs for estate planning purposes, and that Decedent intended that the proceeds of the CDs be divided equally between Appellant and Appellees following her death. Marcoaldi stated that she and Appellant learned in September 2009 that Appellees removed Appellant‘s name from the CDs, and that they began to “investigate the removal around that time.” Rellick-Smith v. Rellick, No. 919 WDA 2019, at 3 (Pa. Super. filed March 31, 2020). Ultimately, Judge Bianco determined that Appellant learned that Appellees removed her name from the CDs in September 2009, at which point the two-year statute of limitations began to run. As a result, he concluded that Appellant‘s action, filed on October 10, 2014, was barred by the statute
Appellant appealed Judge Bianco‘s order to the Superior Court, arguing, inter alia, that he erred in granting Appellees’ motion to amend their pleading to include a statute of limitations defense because Appellees waived that defense by failing to raise it in their initial response to her complaint. Furthermore, Appellant alleged that, in light of Judge Hanna‘s prior determination that Appellees waived the statute of limitations defense, Judge Bianco was precluded from granting Appellees’ motion to amend their pleading to include that defense under the coordinate jurisdiction rule, which generally prohibits a judge from altering the resolution of legal questions previously decided by another judge of coordinate jurisdiction. See Commonwealth v. Starr, 664 A.2d 1326, 1331 (Pa. 1995).3 Finally, Appellant claimed she was prejudiced by Appellees’ delay in raising a statute of limitations defense because her witness‘s memory had diminished by the time the matter finally proceeded to trial.
The Superior Court affirmed Judge Bianco‘s order in a divided, unpublished memorandum opinion authored by Senior Judge Pellegrini. Rellick-Smith, supra. The court rejected Appellant‘s contention that, under the coordinate jurisdiction rule, Judge Bianco was required to hold that Appellees waived the statute of limitations defense by failing to raise it in new matter. It recounted that, in Riccio v. American Republic Insurance Co., 705 A.2d 422 (Pa. 1997), this Court explained that, when determining whether the coordinate jurisdiction rule applies, we “look[] to where the rulings occurred in the context of the procedural posture of the case,” and stated:
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 had 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.
Id. at 425 (citation omitted).
The Superior Court suggested that Appellees, in their motion to amend their pleading, did not ask Judge Bianco to overturn Judge Hanna‘s waiver ruling, but, rather, presented an “entirely different procedural question: whether [Appellant] would be prejudiced by the delay in raising the statute of limitations defense.” Rellick-Smith, 919 WDA 2019, at 7. For this reason, the Superior Court determined that “[t]he law of the case doctrine did not bar [Judge Bianco] from addressing this question which had not been presented to Judge Hanna” or raised in the previous appeal. Id.4 Additionally, the Superior Court concluded that Appellant was not prejudiced by Appellees’ delayed invocation of the statute of limitations defense, given that Appellees initially attempted to raise it in their February 2015 motion for judgment on the pleadings, which was filed
The Honorable Mary Jane Bowes authored a dissenting opinion in which she opined that, under the coordinate jurisdiction rule, Judge Hanna‘s finding that Appellees waived the statute of limitations defense was binding on Judge Bianco, and, therefore, precluded him from granting Appellees’ motion to amend their pleadings to include a statute of limitations defense. First, Judge Bowes disagreed with Judge Bianco‘s reliance on Horowitz, noting that the coordinate jurisdiction rule was not implicated in that case. She further suggested that Judge Bianco‘s focus on the absence of prejudice to Appellant was improper, as a showing of prejudice is unnecessary when an order allowing a proposed amendment to a pleading violates the law of the case doctrine. Judge Bowes concluded that Appellant had a right to rely upon Judge Hanna‘s waiver determination, reiterating that “[t]he 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.” Rellick-Smith, 919 WDA 2019, at 9 (Bowes, J., dissenting).
Judge Bowes further noted that Judge Hanna‘s finding of waiver was consistent with both
Appellant filed a petition for allowance of appeal, and we granted review to consider whether the Superior Court erred in affirming Judge Bianco‘s decision allowing Appellees to file an amended answer to include the affirmative defense of statute of limitations, notwithstanding Judge Hanna‘s prior determination that Appellees waived the statute of limitations defense. Specifically, we must determine whether Judge Bianco‘s order violated the coordinate jurisdiction rule. This question presents an issue of law, over which our standard of review is de novo, and our scope of review is plenary. Zane, 836 A.2d at 30 n.8.
Appellant argues that Judge Bianco‘s grant of Appellees’ motion to amend their pleadings to add a statute of limitations defense, after Judge Hanna held that Appellees waived the statute of limitations defense, was a clear violation of the coordinate jurisdiction rule. Appellant further asserts that there were no exceptional circumstances to support Judge Bianco‘s departure from the rule, as Judge Hanna‘s finding of waiver was consistent with
Appellant, as did Judge Bowes in her dissent, challenges Judge Bianco‘s reliance on Horowitz, emphasizing that Horowitz did not involve the law of the case doctrine or the coordinate jurisdiction rule. Appellant maintains that Horowitz is also distinguishable because, in that case, the Superior Court concluded that there was no evidence to suggest that the opposing party would be prejudiced by the amendment, whereas, in the instant case, there was clear prejudice because her memory,
Appellees respond by arguing, in the first instance, that Judge Bianco‘s order granting their petition to amend their pleading did not violate the coordinate jurisdiction rule because his order was not actually inconsistent with Judge Hanna‘s previous finding of waiver. In this regard, Appellees note that, while Rule 1030 requires that affirmative defenses, including a statute of limitations defense, be raised in an answer and new matter upon pain of waiver under Rule 1032(a), Rule 1033(a) specifically allows for the amendment of a pleading to “aver transactions or occurrences which have happened before or after the filing of the original pleading, even though they give rise to a new cause of action or defense.” Appellees’ Brief at 6 (quoting
Thus, Appellees submit that:
[t]he waiver of those affirmative defenses that automatically occur upon a failure to plead them cannot serve as a basis to deny a subsequent request to amend a pleading to add that waived affirmative defense, because then a party could never amend a pleading to add an affirmative defense, as all unpled affirmative defenses are automatically waived the instant they are not pled. Such a result would be absurd and disfavored in the law.
Id. at 6-7. In support of their interpretation, Appellees cite this Court‘s decision in Martin v. Wilson, 92 A.2d 193 (Pa. 1952), wherein we stated that, under Rule 1030, a failure to plead an affirmative defense “renders the defense unavailable at the trial of the issue,” id. at 195 (emphasis added), positing that this Court‘s use of the emphasized language suggests that waiver does not immediately occur upon a failure to plead the affirmative defense.
Appellees additionally contend that Judge Bianco‘s order did not violate the coordinate jurisdiction rule because, at the time he issued his ruling, the procedural posture of the case was different than it was when Judge Hanna issued her decision concluding that Appellees waived the statute of limitations defense. In this regard, Appellees emphasize that Judge Hanna‘s ruling was issued in response to Appellees’ motion for judgment on the pleadings, “which required [Judge Hanna] to consider and accept all well-pled allegations of the complaint as true, and determine whether on the facts averred, the law concludes that no recovery is possible, with any doubts on whether to grant [Appellees’ motion]” being resolved in favor of Appellant, whereas Judge Bianco‘s ruling was rendered following the close of discovery, and was based on “completely different facts and law; specifically, whether given Pennsylvania‘s liberal standard for granting amendments to the pleadings, would allowing the amendment prejudice [Appellant] or be against a positive rule of law.” Appellees’ Brief at 20 (citing Horowitz, supra).
To support their contention that the procedural posture of the instant case was different at the time Judge Hanna and Judge Bianco issued their rulings, Appellees rely on, inter alia, this Court‘s decisions in Riccio, supra, Ryan v. Berman, 813 A.2d 792 (Pa. 2002) (holding coordinate jurisdiction rule did not prevent trial judge from allowing defendants, who were doctors, to amend their pleadings to include a release that the plaintiff had entered into in a separate lawsuit, despite a prior trial judge‘s denial of the defendants’ previous request to amend their pleadings), and Gerrow v. John Royle & Sons, 813 A.2d 778 (Pa. 2002) (holding coordinate jurisdiction rule did not bar second trial judge, in ruling on a motion for summary judgment, from considering an expert report that was attached to the response to the motion, even though prior judge had denied joint motion to extend discovery deadline).
Finally, Appellees argue that, even if the coordinate jurisdiction rule is implicated in the instant case, there are exceptional circumstances that justified Judge Bianco‘s departure from the rule, i.e., the fact that Judge Hanna‘s decision was, in their view, “clearly incorrect,” and their belief that adherence thereto would “work a manifest injustice.” Appellees’ Brief at 24. In this respect, Appellees contend that a determination that Judge Hanna‘s ruling was binding on Judge Bianco would conflict with the rule that amendments should be liberally permitted, and prevent them “from asserting their legal right to allege a meritorious defense.” Id. at 27.
This Court previously has explained that, under the coordinate jurisdiction rule, “[j]udges of coordinate jurisdiction sitting in the same case should not overrule each others’ decisions.” Ryan, 813 A.2d at 795 (quoting Starr, 664 A.2d at 1331). Beyond promoting the goal of judicial economy, the coordinate jurisdiction rule serves “(1) to protect the settled expectations of the parties; (2) to insure [sic] uniformity of decisions; (3) to maintain consistency during the course of a single case; (4) to effectuate the proper and streamlined administration of justice; and (5) to bring litigation to an end.” Id. (quoting Starr, 664 A.2d at 1331).
We have further cautioned that departure from the coordinate jurisdiction rule “is allowed only in exceptional circumstances such as where 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.” Id. (quoting Starr, 664 A.2d at 1332).
Preliminarily, we reject Appellees’ argument that Judge Bianco‘s order was not “inconsistent” with Judge Hanna‘s prior ruling, and, therefore, that the coordinate jurisdiction rule is not implicated in this case. Appellees’ Brief at 4. Prior to Judge Bianco‘s grant of Appellees’ petition to amend their pleadings to include a statute of limitations defense, Judge Hanna, a judge of coordinate jurisdiction, held that Appellees waived the statute of limitations defense by failing to raise it in accordance with Rule 1030. Judge Bianco‘s decision, which allowed Appellees to amend their pleading to raise the precise defense Judge Hanna held was waived, unquestionably conflicted with Judge Hanna‘s prior ruling on the same issue.56 The fact that
We similarly reject Appellees’ contention that the coordinate jurisdiction rule is not implicated in this case because, at the time the two rulings were issued, the case was at a different procedural posture.7 As noted above, Appellees rely on, inter alia, this Court‘s decisions in Riccio, Ryan, and Gerrow. In Riccio, the plaintiff sued his medical insurer to recover medical expenses incurred for the treatment of a herniated spinal disc. The insurer filed an answer asserting that coverage was precluded under a policy exclusion. After a one-day nonjury trial, the trial judge ruled in favor of the insurer. The plaintiff filed a motion for post-trial relief, and the trial judge recused himself due to scheduling conflicts; accordingly, the plaintiff‘s post-trial motions were assigned to a different judge. The post-trial motions judge concluded that the trial judge had applied an incorrect definition for the term “spine” contained in the policy exclusion, found the exclusion did not apply, and granted the
On appeal, this Court explained that, although courts generally should not overrule each other‘s decisions, in order to determine whether the coordinate jurisdiction rule applies, courts should look to the procedural posture where the conflicting rulings were made. Noting that, under
[W]e hold that the coordinate jurisdiction rule does not apply to bar a substituted judge hearing post-trial motions from correcting a mistake made by the trial judge during the trial process. To hold otherwise and not allow a judge deciding post-trial motions to overrule legal errors made during the trial process (whether made by the reviewing judge or another judge who presided over the trial) would render the post-trial motion rules meaningless and the post-trial motion process would become nothing more than an exercise in futility.
Id. at 426 (emphasis added).
Thus, while we held in Riccio that the coordinate jurisdiction rule did not bar the post-trial motions judge from overruling the trial judge‘s verdict and granting the plaintiff a new trial, our decision was based on the fact that Rule 227.1(a)(1) specifically allows for the correction of errors made during the trial process.8
In Ryan, the plaintiff filed a medical malpractice action against her doctors and consulting specialists in 1985, alleging that their failure to diagnose her with Cushing‘s Syndrome required surgery in 1984 to remove a kidney and an attached tumor. Her complaint also alleged that the disease prolonged and exacerbated a work-related injury that she had suffered in 1982; notably, the plaintiff filed a products liability action in 1984 based on that injury. In 1989, the plaintiff settled the products liability action, and she executed a release of claims for all damages resulting from her work-place injury.
The defendants, upon learning of the release, sought to amend their answers in the malpractice action to include the release, and moved for summary judgment, arguing that the release barred the malpractice action. The first judge to which the case was assigned denied both motions. The defendants filed a motion for extraordinary relief, again seeking to amend their answers to include the release and moving for summary judgment. A different trial judge granted relief, and the plaintiff appealed. The Superior Court reversed, holding the second trial judge‘s actions were prohibited by the coordinate jurisdiction rule. On remand, the matter was assigned to a third judge for trial. During trial, the defendants again moved to amend their answers to incorporate the release, and the third judge took the matter under advisement. At the close of the plaintiff‘s case-in-chief,
On further appeal by the plaintiff, the Superior Court affirmed the third judge‘s order allowing the defendants to amend their answers to include the release executed in the products liability action. However, the Superior Court held that the release barred the plaintiff‘s malpractice action entirely. We granted review to determine whether the third judge violated the coordinate jurisdiction rule when she overruled the first trial judge‘s order and allowed the defendants to amend their answers to the plaintiff‘s complaint to incorporate the plaintiff‘s release in the products liability case. In holding that she did not, we reasoned:
In this case, as in Riccio, the procedural posture of the case was quite different at the time the two different decisions were made; the [third] judge who presided over the trial was in a superior position to reevaluate the question of the products liability release and its relation to the medical malpractice case than was the [first] pretrial judge who made the initial decision. During the trial of the plaintiff‘s case-in-chief, abundant evidence was presented which established that [the plaintiff] was seeking damages in this case for injuries suffered in a work-related products liability case; this supported the conclusion that the release in the products liability case barred the damages, or some of them, sought in this case. Thus, under the rationale of Riccio, the rule of coordinate jurisdiction did not apply.
Ryan, 813 A.2d at 795 (emphasis added). Thus, in Ryan, our decision was not based solely on the fact that the decisions were issued at different stages of trial. Rather, as the above language indicates, we relied on the fact that there was new evidence presented at trial that justified the third judge‘s departure from the coordinate jurisdiction rule. See Starr, 664 A.2d at 1332 (departure from the coordinate jurisdiction rule is permitted when there has been a substantial change in the facts or evidence giving rise to the dispute).
Gerrow also involved a products liability action. Therein, the plaintiffs filed a complaint against several defendants in 1997, and a judge set December 7, 1998, as the deadline for submission of the plaintiffs’ expert reports. Prior to the expiration of the deadline, all parties joined in a motion to extend the discovery deadline, but the motion was denied by the same judge; nevertheless, the parties continued discovery after the deadline. One of the defendants that had joined in the motion to extend discovery recognized that the judge had set January 4, 1999, as the deadline for filing pre-trial motions, and, in order to protect its position, filed a motion for summary judgment. The motion was based on the plaintiffs’ failure to timely submit their expert reports, without which they could not establish a prima facie case. The plaintiffs filed a response to the motion for summary judgment, attaching several expert reports that apparently were sufficient to establish their prima facie case. The motion for summary judgment was assigned to a second judge, who concluded that the plaintiffs’ attachment of expert reports to their response to the defendant‘s motion was an impermissible attempt to circumvent the discovery deadline. He determined that the rule of coordinate jurisdiction prevented him considering the reports, and he granted the motion for summary judgment.
This Court, in an Opinion Announcing the Judgment of the Court, affirmed the Superior Court‘s decision, concluding, inter alia, that the coordinate jurisdiction rule did not preclude the second trial judge from considering the expert reports which were filed after the case management deadline established by the first judge for two reasons. First, we found that the first judge‘s decision was erroneous and created a manifest injustice. See Starr, 664 A.2d at 1332 (departure from the coordinate jurisdiction rule is permitted “where the prior holding was clearly erroneous and would create a manifest injustice if followed“). In this regard, we stated:
[I]t appears erroneous in the first instance for [the first judge] to deny the November 23, 1998 motion to extend the
discovery deadline. The motion was joined by all parties. It was based on the necessity of extensive traveling to depose witnesses in several states, as well as a financial crisis faced by one corporate defendant. All parties were aware of these difficulties and believed they justified extension of the discovery timetable. [The first judge] did not permit hearing, argument, or conference on the motion and, in summarily denying it, gave no rationale for the denial. There is thus no basis for this Court to review his discretion in denying the motion. What appears to be an unreasonable decision has no explanation in the record, and the decision appears to be unjust. It would have been perfectly proper for [the second judge] to reexamine the discovery timetable in order to correct that error. That would have served the ends of judicial economy and might have corrected a manifest injustice.
We further held that the coordinate jurisdiction rule did not apply because the two judges were presented with different questions:
[The first judge] had been presented with a scheduling issue affecting case management and the court‘s timetable. [The second judge], by contrast, was faced with the ultimate question of whether summary judgment should be granted, ending the litigation entirely. The considerations were entirely different, so the coordinate jurisdiction rule did not apply in the sense of precluding an examination of Appellees’ expert reports to determine whether they established a prima facie case, making summary judgment inappropriate.
As in Ryan, our decision in Gerrow was not based on the mere fact that the conflicting decisions were issued at different stages of trial. Rather, we specifically determined that the decision of the first judge was erroneous, and created a manifest injustice. We additionally noted that the considerations underlying both decisions were entirely distinct.
In the instant case, following Appellees’ February 2015 motion for judgment on the pleadings wherein they asserted that Appellant lacked standing and
First, unlike the first judge‘s order in Gerrow, Judge Hanna‘s ruling was not erroneous.
For the above reasons, we find there was no basis for Judge Bianco to disturb Judge Hanna‘s holding that Appellees waived the
Superior Court decision reversed. Case remanded. Jurisdiction relinquished.
Justices Dougherty and Wecht join the Opinion Announcing the Judgement of the Court.
Justice Donohue files a concurring opinion.
Chief Justice Baer files a dissenting opinion in which Justices Saylor and Mundy join.
Justice Mundy files a dissenting opinion in which Justice Saylor joins.
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