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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37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