Rellick-Smith, S. v. Rellick, B.

• Court: Superior Court of Pennsylvania
• Decided: March 31, 2020
• Docket: 919 WDA 2019
• Status: Unpublished

Opinion

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37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

MEMORANDUM BY PELLEGRINI, J.: FILED MARCH 31, 2020

Sharleen M. Rellick-Smith (Rellick-Smith) appeals from the March 25,

2019 order of the Court of Common Pleas of Indiana County (trial court)

holding that her cause of action against Betty J. Rellick (Rellick) and Kimberly

V. Vasil (Vasil) (collectively, Defendants) for breach of fiduciary duty was

barred by the statute of limitations. After review, we affirm.

I.

We glean the following facts from the certified record. On August 6,

2006, Rose Rellick (Rose) established two Certificates of Deposit (CDs)

naming herself, Rellick-Smith and the Defendants. According to Rellick-Smith,

Rose intended for Rellick-Smith and the Defendants to divide the CDs equally

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* Retired Senior Judge assigned to the Superior Court. J-S64035-19

after Rose’s death. Before Rose established the CDs, the Defendants each

executed a Power of Attorney (POA) to become Rose’s agents. On July 31,

2009, the Defendants, with Rellick acting as Rose’s POA, each signed

documents to remove Rellick-Smith from the CDs.

Rellick-Smith alleged that after Rose died, the Defendants cashed the

CDs in March 2013 when they were worth approximately $370,000. Rellick-

Smith alleged that the Defendants divided the money among themselves and

did not give any of the proceeds to Rellick-Smith.

On October 10, 2014, Rellick-Smith initiated this action contending that

the Defendants had breached their fiduciary duties to Rose by removing

Rellick-Smith from the CDs and not paying her any of the proceeds. The

Defendants timely filed a response to the complaint but did not raise any

affirmative defenses. However, four months later, the Defendants filed a

motion to dismiss in which they argued that the case should be dismissed

because Rellick-Smith lacked standing to challenge the removal of her name

from the CDs or, in the alternative, that the statute of limitations had expired.

The Honorable Judge Carol Hanna granted the motion to dismiss on the

basis that Rellick-Smith lacked standing, but held that the statute of

limitations defense had been waived for failure to raise it in the answer and

new matter to the complaint. Rellick-Smith appealed to this court and we

reversed and remanded the case for trial, finding that Rellick-Smith had

standing to pursue her claim. Rellick-Smith v. Rellick, 147 A.3d 897, 904

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(Pa. Super. 2016). The Defendants did not challenge Judge Hanna’s finding

of waiver of the statute of limitations defense on appeal.

Following remand and a change in counsel, on July 30, 2018, the

Defendants filed a motion to amend pleading, seeking to raise numerous

affirmative defenses including the statute of limitations. On August 17, 2018,

the trial court granted the motion to amend.1

The case proceeded to a non-jury trial in December 2018. At trial,

Rellick-Smith called Ann Marcoaldi (Marcoaldi), Rose’s secretary and tax

preparer, as a witness. Marcoaldi testified that Rose established the CDs for

estate planning purposes and that she intended for Rellick-Smith and the

Defendants to share the value of the CDs equally following Rose’s death.

Marcoaldi further testified that she and Rellick-Smith learned in September

2009 that the Defendants had removed Rellick-Smith from the CDs and that

they began to investigate the removal around that time. Rellick-Smith

testified that she could not recall when she learned that the Defendants had

removed her name from the CDs.

Not addressing the merits, the trial court subsequently held that the

action was barred by the statute of limitations. The trial court specifically

found that Rellick-Smith learned that the Defendants had removed her name

1 By this point, the case had been reassigned from Judge Hanna to the Honorable Judge Thomas M. Bianco, who presided over all subsequent proceedings.

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from the CDs in September 2009 and the two-year statute of limitations

commenced at that time. Rellick-Smith timely filed a notice of appeal, and

Rellick-Smith and the trial court have complied with Pa.R.A.P. 1925.

II.

Rellick-Smith first argues that the trial court erred in granting the

Defendants’ motion to amend pleading to raise the statute of limitations as a

defense to this action.2 The Defendants’ motion to amend pleading was filed

on July 30, 2018, nearly four years after Rellick-Smith filed her complaint in

this matter.3 Rellick-Smith contends that the Defendants waived the statute

of limitations defense by failing to raise it in their initial response to her

complaint. She argues that the amendment should have been precluded

under the law of the case doctrine because in 2015, Judge Hanna held that

that the defense had been waived and the Defendants did not appeal that

decision to this court. Finally, she argues that she was prejudiced by the

2We review such a claim for an abuse of discretion. Horowitz v. Univ. Underwriters Ins. Co., 580 A.2d 395, 398 (Pa. Super. 1990).

3 The Defendants argue that Rellick-Smith waived her challenge to the trial court’s order granting the motion to amend pleading by failing to raise the issue in front of the trial court. Defendants’ Brief at 3-5. While Rellick-Smith did not file a written response to the motion to amend pleading, the trial court’s order following the August 17, 2018 pretrial conference states that it “heard argument from counsel with regard to the Motion [to amend pleading].” Order, 8/17/18, at 1. In addition, the trial court addressed the issue on the merits in its opinion pursuant to Pa.R.A.P. 1925(a). Trial Court Opinion, 3/25/19, at 5-8. As such, we decline to find waiver.

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Defendant’s delay because her witness’s memory had diminished by the time

the case proceeded to trial.

“As a general rule, a statute of limitations defense must be raised in new

matter or else it is waived.” Croyle v. Dellape, 832 A.2d 466, 476 (Pa.

Super. 2003). However, “amendments to pleadings are liberally granted to

secure a determination of cases on their merits whenever possible.” Beckner

v. Copeland Corp., 785 A.2d 1003, 1006 (Pa. Super. 2001). Leave to amend

should be granted unless the amendment would prejudice the non-moving

party or violate a positive rule of law. Horowitz v. Univ. Underwriters Ins.

Co., 580 A.2d 395, 398 (Pa. Super. 1990). Mere delay in filing, without more,

is insufficient to deny a motion to amend pleading. Id. at 399. Rather, the

prejudice “must stem from the fact that the new allegations are offered late

rather than in the original pleading, and not from the fact that the opponent

may lose his case on the merits if the pleading is allowed.” Id. (quotations

and citation omitted).

In Horowitz, we held that the trial court abused its discretion when it

denied the appellants’ request to amend their pleading to raise the statute of

limitations defense four-and-a-half years after they filed their original answer.

Despite that lengthy delay in raising the defense, we found “no record facts

to support the appellee’s assertion that witnesses’ memories have faded over

time in a way that would prejudice appellee.” Id. at 400. Without actual

prejudice to the appellee as a result of the delay, the law required that the

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appellants be permitted to amend their pleading to raise the statute of

limitations defense.

Rellick-Smith argues that this case is distinguishable from Horowitz

because the trial court was bound under the law of the case doctrine to honor

Judge Hanna’s determination in 2015 that the Defendants had waived the

statute of limitations defense by failing to assert it in their new matter to the

complaint.

“The ‘law of the case doctrine’ is simply that a court involved in later

phases of a litigated matter should not reopen questions decided by another

judge of the same court or by a higher court in earlier phases.” Melley v.

Pioneer Bank, N.A., 834 A.2d 1191, 1204 (Pa. Super. 2003) (internal

quotations and citation omitted). However,

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 has 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.

Riccio v. Am. Republic Ins. Co., 705 A.2d 422, 425 (Pa. 1997) (citation

omitted). Thus, whether the doctrine applies depends upon the procedural

posture of the case at the time of the rulings at issue. Mariner Chestnut

Partners, L.P. v. Lenfest, 152 A.3d 265, 283 (Pa. Super. 2016).

Judge Hanna held that the Defendants could not raise the statute of

limitations for the first time in their motion to dismiss because it had not been

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properly pleaded in new matter. On appeal from the motion to dismiss, this

court did not address the substance of the statute of limitations argument as

it had not been raised by either party. See Rellick-Smith, supra, at 901

n.12. In the later motion to amend pleading, the trial court was faced with

an entirely different procedural question: whether Rellick-Smith would be

prejudiced by the delay in raising the statute of limitations defense. 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.

She further argues that the Defendants should not have been able to

amend their answer because she was prejudiced by the delay in raising the

statute of limitations defense because the memory of her witness, Marcoaldi,

had deteriorated by the time of trial. Rellick-Smith has not demonstrated that

she was prejudiced by the delay in pleading the statute of limitations defense,

particularly when she was aware that the Defendants had first attempted to

argue the defense in 2015, only four months after she filed her complaint.

Moreover, the trial court’s factual finding that Rellick-Smith knew her name

had been removed from the CDs as early as 2009 was drawn from the

deposition of Marcoaldi that was taken in this case. The deposition testimony

was used to refresh Marcoaldi’s recollection at trial about when she and

Rellick-Smith learned that the Defendants had altered the names on the CDs.

While Marcoaldi’s memory may have diminished by the time of trial, there is

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nothing in the record to suggest that her memory was impaired at the time

she gave her deposition. Without a more specific showing of prejudice arising

from the delay in raising the statute of limitations defense, the trial court did

not abuse its discretion in granting the motion to amend pleading.

III.

Next, Rellick-Smith argues that the trial court erred in holding that her

claim was barred by the statute of limitations.4 Rellick-Smith claims that the

statute of limitations commenced in March 2013 when the Defendants

removed all the money from the CDs from the bank and divided it among

themselves. The Defendants argue that the statute of limitations commenced

on July 31, 2009, when they removed Rellick-Smith from the account with

Rellick acting as Rose’s POA.

Rellick-Smith’s claim for breach of fiduciary duty is subject to a two-year

statute of limitations which began to run when her right to institute the suit

arose. See 42 Pa.C.S. § 5524(7); Mariner Chestnut Partners, L.P., 152

A.3d at 279.

However, where the complaining party is reasonably unaware that his or her injury has been caused by another party’s conduct, the discovery rule suspends, or tolls, the running of the statute of limitations. To successfully invoke the discovery rule, a party must show the inability of the injured, despite the exercise of due diligence, to know of the injury or its cause.

4 The standard of review for issues involving the interpretation of a statute of limitations is de novo and the scope of review is plenary. Erie Ins. Exchange v. Bristol, 174 A.3d 578, 585 n.13 (Pa. 2017).

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Mariner Chestnut Partners, L.P., supra (internal quotations and citations

omitted). While whether the statute of limitations has run is a question of

law, factual determinations regarding tolling and the discovery rule are within

the discretion of the fact-finder. Id.

In her complaint, Rellick-Smith alleged that “the Defendants violated

Pennsylvania laws by using their authority as agents of Rose M. Rellick for

their own financial gain through the removal of the Plaintiff’s name from the

First Commonwealth Bank CDs.” See Plaintiff’s Complaint at ¶ 19. When

Rellick-Smith’s name was listed as one of the joint owners on the CDs, she

would have been permitted to withdraw any or all of the money from the

account. As noted above, the removal of Rellick-Smith’s name from the CDs

occurred on July 31, 2009. After that time, Rellick-Smith had no lawful right

to access the CDs and would have been prevented from withdrawing any

money from the account. Because her claim was explicitly grounded in the

Defendants’ use of their Power of Attorney to remove Rellick-Smith from the

accounts, her injury arose when her lawful access to the CDs was removed in

alleged contravention of Rose’s wishes.

The record supports the trial court’s finding that Rellick-Smith

discovered that her name had been removed from the accounts in September

2009. The trial court found Marcoaldi credible when she confirmed that she

and Rellick-Smith began looking into the changes to the CDs at that time. We

will not disturb the trial court’s credibility and factual determinations on

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appeal. Stokes v. Gary Barbera Enters., Inc., 783 A.2d 296, 297 (Pa.

Super. 2001) (“When the trial court sits as fact finder, the weight to be

assigned the testimony of the witnesses is within its exclusive province as are

credibility determinations.”). Because Rellick-Smith did not file her complaint

until October 2014, well after the two-year statute of limitations expired, the

trial court did not err in dismissing her claim.

Because we hold that the trial court did not abuse its discretion in

holding that Rellick-Smith’s claim was barred, we do not reach her third claim

on appeal that this court should enter a judgment on the merits of her

underlying claim.

Order affirmed.

Judge Lazarus joins the memorandum.

Judge Bowes files a dissenting memorandum.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 3/31/2020

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