Future Horizons PA-LTD. v. Hoegen, F.

• Court: Superior Court of Pennsylvania
• Decided: April 1, 2022
• Docket: 1064 MDA 2021
• Status: Unpublished

Opinion

J-S05019-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

FUTURE HORIZONS PA-LTD.; FUTURE IN THE SUPERIOR COURT HORIZONS-HANOVER, LTD.; MOUNTAIN OF PENNSYLVANIA TERRACE PROPERTIES, INC.; FUTURE HORIZONS, INC.

Appellants

v.

FRANCIS J. HOEGEN, ESQ., AND HOEGEN & ASSOCIATES, P.C

Appellees No. 1064 MDA 2021

Appeal from the Order Entered June 29, 2021 In the Court of Common Pleas of Luzerne County Civil Division at No: 2016-11729

BEFORE: PANELLA, P.J., STABILE, J., and DUBOW, J.

MEMORANDUM BY STABILE, J.: FILED APRIL 01, 2022

Appellants, Future Horizons PA-LTD.; Future Horizons-Hanover, LTD.;

Mountain Terrace Properties, Inc.; Future Horizons, Inc., appeal from the June

29 2021 order sustaining the preliminary objection of Appellees, Francis J.

Hoegen, Esq., and Hoegen & Associates, P.C. pursuant to Pa.R.C.P. No.

1028(a)(1),1 and dismissing their complaint with prejudice. We affirm.

____________________________________________

1 The Rule Provides:

(a) Preliminary objections may be filed by any party to any pleading and are limited to the following grounds:

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The trial court summarized the pertinent facts in its Pa.R.A.P. 1925(a)

opinion:

1. The action was “commenced” on November 17, 2016, by virtue of a “Praecipe for Issuance of a Writ of Summons” which lists four corporations as Plaintiffs, and was filed by a non- attorney, non-party identified on the Writ as “Alex Zbinovsky, its President”’

2. There is no indication on the docket that the 11/17/2016 Writ was delivered to the Luzerne County Sheriff or that any attempt to serve it was made;

3. On December 15, 2016, a “Praecipe to Re-Issue Writ of Summons” was filed by “Alex Zbinovsky, individually and as President” in which “Alex Zbinovsky” was added as a Plaintiff together with the four original corporate Plaintiffs;

4. There is no indication on the docket that the 12/15/2016 Writ was delivered to the Luzerne County Sheriff for service;

5. On January 25, 2017, a “Certificate of Service” was filed which states:

I, Alex Zbinovsky, the undersigned, hereby certify that a true and correct filed stamped copy of the Amended Summons in Civil Action & Praecipe to Re-Issue Writ of Summons was sent to the above captioned Defendants at the above captioned address by U.S. Certified mail, return receipt requested on January 14, 2017.

6. No USPS certified mail sender’s receipt, USPS return receipt (i.e., “green card”), or USPS Form 3817 (“Certificate of Mailing”) is attached to the 1/25/2017 Certificate of Service and none have ever been filed of record in this matter;

(1) lack of jurisdiction over the subject matter of the action or the person of the defendant, improper venue or improper form or service of a writ of summons or a complaint[.]

Pa.R.C.P. No. 1028(a)(1).

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7. The next docket entry is “Notice of Proposed Termination of Court Case” filed by the Luzerne County Court Administrator on October 23, 2019, nearly 33 months after the 1/25/2017 Certificate of Service;

8. On December 17, 2019, “Alex Zbinovsky, individually and as President” filed a “Statement of Intention to Proceed”;

9. On February 3, 2020, Christian W. Francis, Esquire, entered his appearance for the corporate Plaintiffs named in the original Writ;

10. On February 4, 2020, Attorney Francis filed a “Praecipe to Reissue Writ of Summons”;

11. On February 12, 2020, a “Sheriff’s Return of Service” was filed by the Sheriff’s Office of Luzerne County which indicates that the Defendants were served on February 11, 2020;

12. After two Court Orders (2/06/2020 and 7/13/2020) compelling them to do so, Plaintiffs finally filed a complaint on August 24, 2020;

13. On September 11, 2020, Defendants filed Preliminary Objections to Plaintiffs’ Complaint and a Brief in support thereof; and

14. On October 2, 2020, Plaintiffs filed a Response to Defendants’ Preliminary Objections and a Brief in support thereof.

Trial Court Opinion, 9/27/21, at 1-3.

Appellants’ claim they retained Appellees to file tax assessment appeals

for three properties Appellants purchased at tax sales. Appellants’ complaint

asserts causes of action for professional negligence, breach of fiduciary duty,

and breach of contract arising from Appellees’ alleged mishandling of the tax

appeals. The trial court conducted a hearing on December 15, 2020, and

sustained Appellees’ preliminary objection by order of June 29, 2021. Our

standard of review is as follows:

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In determining whether the trial court properly sustained preliminary objections, the appellate court must examine the averments in the complaint, together with the documents and exhibits attached thereto, in order to evaluate the sufficiency of the facts averred. The impetus of our inquiry is to determine the legal sufficiency of the complaint and whether the pleading would permit recovery if ultimately proven. This Court will reverse the trial court’s decision regarding preliminary objections only where there has been an error of law or abuse of discretion. When sustaining the trial court's ruling will result in the denial of claim or a dismissal of suit, preliminary objections will be sustained only where the case is free and clear of doubt.

Brosovic v. Nationwide Mut. Ins., 841 A.2d 1071, 1073 (Pa. Super. 2004).

In their preliminary objection, Appellees alleged improper service of the

writ of summons and resulting lack of personal jurisdiction. Notably, there is

no dispute that the applicable statute of limitations for all Appellants’ causes

of action expired before the service of the February 2020 writ of summons.

Appellants argue, however, that Appellees were on actual notice of this action

much earlier. Appellants further argue that the technical deficiencies in their

service of the writ of summons does not warrant dismissal of this action.

We observe that Rule of Procedure 1007 authorizes commencement of

an action by writ of summons. Pa.R.C.P. No. 1007(1). Rule 400 mandates

that original process be served by a sheriff. Pa.R.C.P. No. 400(a). Rule 401

requires service of a writ within thirty days of its filling. Pa.R.C.P. No. 401.

We must determine whether the trial court erred in determining that

Appellants wholly failed to comply with these service requirements, and that

Appellants’ failure was a valid basis for dismissal of the claim under Rule

1028(a)(1).

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Our Supreme Court addressed this issue in McCreesh v. City of

Philadelphia, 888 A.2d 664 (Pa. 2005). The McCreesh Court wrote that

“rules relating to service of process must be strictly followed, and jurisdiction

of the court over the person of the defendant is dependent upon proper service

having been made.” Id. at 666 n.1 (quoting Sharp v. Valley Forge Med.

Ctr. & Heart Hosp., Inc., 221 A2d 185, 187 (Pa. 1966)). Nonetheless, the

McCreesh Court adopted a “flexible approach, concluding that it sufficiently

protects defendants from defending against stale claims without the draconian

action of dismissing claims based on technical failings that do not prejudice

the defendant.” Id. at 666.

Neither our cases nor our rules contemplate punishing a plaintiff for technical missteps where he has satisfied the purpose of the statute of limitations by supplying a defendant with actual notice. Therefore, we embrace the logic of [prior cases which] would dismiss only those claims where the plaintiffs have demonstrated an intent to stall the judicial machinery or where plaintiff’s failure to comply with the Rules of Civil Procedure has prejudiced defendant.

Id. at 674.

In McCreesh, the plaintiff was injured on August 14, 2000 and filed a

praecipe to issue a writ of summons on August 12, 2002, just within the

applicable two-year limitations period. Id. The plaintiff served the writ by

certified mail and the defendant municipality signed for it on August 13, 2002.

Id. The plaintiff filed a complaint sounding in negligence on November 8,

2002. Id. The defendant filed preliminary objections, claiming that service

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of the writ by certified mail did not comply with Pa.R.C.P. No. 400.1,2 which

required service by a sheriff or competent adult. Id. at 667. Because the writ

was defective, the defendant argued the plaintiff failed to comply with the

statute of limitations. Id. The trial court overruled the defendant’s

preliminary objection, but the Commonwealth Court granted interlocutory

review and reversed, finding that the plaintiff did not act in good faith because

service of the writ by certified mail was not a good faith attempt to comply

with the applicable procedural rules. Id. at 669. Because the plaintiff in

McCreesh provided the defendant with actual, albeit technically deficient,

notice, the Supreme Court reversed the Commonwealth and reinstated the

order overruling the defendant’s preliminary objections.

Appellants also cite Hoeke v. Mercy Hosp. of Pittsburgh, 386 A.2d

71 (Pa. Super. 1978), wherein the plaintiff commenced an action by writ of

summons but never had it served, then sought to have the writ reissued

approximately one year later after the original was lost. The prothonotary

erroneously issued a new original writ rather than a substituted writ and the

writ, if original, would have rendered one of the plaintiff’s causes of action

untimely under the applicable limitations period. Citing Civil Rule of Procedure

2 “In an action commenced in the First Judicial District [Philadelphia County], original process may be served within the county by the sheriff or a competent adult[.]” Pa.R.C.P. No. 400.1(a)(1).

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126,3 the Hoeke Court declined a rigid application of the service rules, finding

it “impossible to conclude that the defect in service in the instant case affected

any substantial rights of the defendants.” Id. at 77.

Appellants also cite this Court’s recent opinion in American Interior

Constr. & Blinds, Inc. v. Benjamin’s Desk, LLC, 206 A.3d 509 (Pa. Super.

2019), wherein we held that service of notice intent to file a mechanic’s lien

by FedEx, while not technically compliant with applicable statute,4 was not a

basis for dismissing the plaintiff’s action. Citing McCreesh, this Court

reasoned that the defendant received actual notice of the action, and that the

trial court erred in sustaining a preliminary objection based on the plaintiff’s

technical noncompliance with service requirements. Id. at 514-15.

In American Interior, this Court relied on Lin v. Unemploy. Comp.

Bd. of Review, 735 A.2d 697 (Pa. 1999), wherein the Supreme Court held

an appeal untimely because the only proof of the date of filing came from a

private postage meter, and the “date on a private postage meter can be

readily changed to any date by the user; therefore, it lacks the inherent

reliability of the official United States postmark.” Id. at 700.

3 “The rules shall be liberally construed to secure the just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties.” Pa.R.C.P. No. 126. 4 Section 1501(d) of the Mechanic’s Lien Law requires service by first class, registered or certified mail. 49 P.S. § 1501(d).

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With the foregoing precedents in mind, we turn to the facts before us.

The record supports the trial court’s finding that there is no evidence that the

November 17, 2016 writ was served on Appellees. Likewise, the only evidence

of service of the December 15, 2016 re-issued writ is a January 25, 2017

certificate of service filed by Appellants. The certificate of service references

the use of certified mail but attached no documentation from the United States

Postal Service (“USPS”) to substantiate that claim. Appellants took no further

action until after they received the October 23, 2019 termination notice.

Finally, on February 4, 2020, Appellants’ counsel filed a praecipe to reissue

the writ, and the Luzerne County Sheriff’s office filed a return of service on

February 12, 2020. As noted above, Appellants do not dispute that the statute

of limitations expired prior to February of 2020.

Appellants argue the trial court erred under McCreesh, inasmuch as the

January 25, 2017 service put Appellees on actual notice of this action.

Appellants claim their technical noncompliance with the requirements of

service are not fatal to this action because Appellees were not prejudiced and

because Appellants exhibited no intent to stall the judicial machinery. We

disagree. First, the only record evidence of Appellees’ actual notice is

Appellants’ unsubstantiated claim in their January 25, 2017 certificate of

service. On this point, we find Lin instructive. Although it arose in the context

of an appeal from the denial of unemployment compensation benefits, Lin

teaches that a date stamp from a private postage meter was suspect because

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it was subject to falsification by the user. Similarly, a claim of service by

certified mail, without substantiating USPS documentation, is subject to

falsification by the party filing the certificate of service. In this case, unlike

McCreesh and American Interior, there is no evidence that Appellees

received actual notice of the pending action until years after Appellants

procured the original writ. We therefore conclude the trial court did not abuse

its discretion in finding that Appellants failed to put Appellees on actual notice

of this litigation until February of 2020, more than three years after the

original writ and after the expiration of the statute of limitations.

This is significant, as actual notice was critical to the outcome in

McCreesh, as the McCreesh Court cited with approval several cases

overlooking technically deficient service of process where the deficiency did

not deprive the target of actual notice. McCreesh, 888 A.2d at 674 (citing

Hoeke; Fulco v. Shaffer, 686 A.2d 1330 (Pa. Super. 1996), appeal denied,

698 A.2d 594 (Pa .1997); Leidich v. Franklin, 575 A.2d 914 (Pa. Super.

1990), appeal denied, 584 A.2d 319 (Pa. 1990); Big Beaver Falls Area

School Dist. v. Big Beaver Falls Area Educ. Assoc., 492 A.2d 87 (Pa.

Commw. 1985)).

Moreover, the McCreesh Court noted that the “purpose of any statute

of limitations is to expedite litigation and thus discourage delay and the

presentation of stale claims which may greatly prejudice the defense of such

claims.” Id. at 671 (quoting Insurance Co. of N. Amer. v. Carnahan, 284

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A.2d 728, 729 (Pa. 1971)). The record supports the trial court’s finding that

Appellants did nothing for more than three years following their original

praecipe for a writ of summons other than file an unsubstantiated “self-

serving” certificate of service. Trial Court Opinion, 9/27/21, at 4. In other

words, Appellants’ unexplained failure to provide Appellees with actual notice

of this action deprived Appellees of the ability to begin to prepare their defense

within the applicable limitations period.5

Finally, we observe that it took a notice of termination followed by two

orders from the trial court before Appellants finally filed their complaint. We

further observe that the complaint was filed approximately three years and

nine months after the original writ. Appellants, therefore, cannot credibly

argue that there is no evidence of their intent to stall the judicial process.

For all the reasons explained above, we discern no error or abuse of

discretion in the order sustaining Appellees’ preliminary objection and

dismissing this case with prejudice.

Order affirmed.

5 We are cognizant that the statute of limitations is grounds for an affirmative defense, rather than a preliminary objection. As explained in McCreesh, however, the failure to put a defendant on actual notice of the limitations period can be prejudicial to the defendant, and therefore the running of the limitations period is relevant to the prejudice analysis under McCreesh.

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Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 04/01/2022

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