Horowitz v. Universal Underwriters Ins.

• Decision Date: 10 September 1990
• Citation: 580 A.2d 395,397 Pa.Super. 473
• Parties: Lawrence HOROWITZ, Alan Horowitz, and Bertram M. Horowitz, Co-Partners, T/A Young Adjustment Company, Appellant, v. UNIVERSAL UNDERWRITERS INSURANCE CO. and John's Chevrolet, Inc.
• Court: Pennsylvania Superior Court

Page 395

580 A.2d 395

397 Pa.Super. 473

Lawrence HOROWITZ, Alan Horowitz, and Bertram M. Horowitz Co-Partners, T/A Young Adjustment Company, Appellant, v. UNIVERSAL UNDERWRITERS INSURANCE CO. and John's Chevrolet, Inc.

Superior Court of Pennsylvania.

Argued March 28, 1990.

Decided Sept. 10, 1990.

Marck C. Rifkin, Bryn Mawr, for appellants.

Patricia A. Heenan, Elkins Park, for appellee.

Before WIEAND, BECK and POPOVICH, JJ.

BECK, Judge:

In this appeal we consider whether the trial court erred in denying the appellant's petition to amend its answer to the appellee's counterclaim to assert the statute of limitations as an affirmative defense, more than four and a half years after the appellant filed its original answer.

On April 22, 1981, fire damaged the premises of John's Chevrolet ("John's") on Frankford Avenue in Philadelphia. Several days later, John's engaged the services of Lawrence Horowitz, Alan Horowitz and Bertram Horowitz, co-partners t/a Young Adjustment Company ("Young"), to aid them in adjusting their insurance claims which resulted from the fire. Thereafter, John's insurance carrier, Universal Underwriters Insurance Company ("Universal"), John's alleges, failed to perform on its insurance contract with John's based upon Young's failure to complete a sworn proof of loss statement as required by the policy Universal had issued to John's.

Thereafter, on June 18, 1984, Young filed a complaint against John's in the Court of Common Pleas of Philadelphia County for unpaid commissions Young alleged it was due from the adjustment of the aforementioned fire loss. On August 31, 1984, John's filed its Answer to Plaintiffs' complaint with a new matter and a counterclaim, seeking damages it alleged resulted from Young's negligence and breach of contract in performing its duties as an adjuster.

On October 18, 1984, Young filed its answer to Johns' counterclaim, in substance denying the allegations. On June 1, 1989, more than four and a half years later, Young petitioned for leave of court to amend its answer to the counterclaim to add the bar of the statute of limitations as an affirmative defense. The trial court denied Young's request to amend its answer. Thereafter, Young filed a petition for reconsideration. After granting this reconsideration petition, the trial court again rejected Young's amendment request. Young appeals from both trial court orders denying its amendment request.

The appellee filed a motion to quash in response to the appellant's filing of its notice of appeal. In a per curiam decision, this court entered the following order: "appellee's motion to quash the appeal ... is denied without prejudice to the parties rights to brief and argue the jurisdictional propriety of this appeal before the panel that will hear argument on the merits of this matter." Per Curiam Order, October 24, 1989. While in their briefs to this court neither party has raised the appealability of the trial court's denial of the appellant's amendment petition, we note that we may consider appealability issues sua sponte. Richards v. Trimbur, 374 Pa.Super. 352, 356, 543 A.2d 116, 118 (1988), allocatur denied, 522 Pa. 620, 563 A.2d 888 (1989).

At the outset, therefore, we must consider whether the trial court's denial of the appellant's petition to amend its answer to plead the statute of limitations as an affirmative defense is either final and, therefore, appealable, or interlocutory and, therefore, not immediately appealable.

Generally, appeals are permitted from final orders only, unless a special right to appeal is statutorily delineated. James A. Mann, Inc. v. Upper Darby School Dist., 99 Pa.Commw. 276, 280, 513 A.2d 528, 530 (1986). "A final order is one which usually ends the litigation, or alternately, disposes of the entire case." Pugar v. Greco, 483 Pa. 68, 73, 394 A.2d 542, 544-45 (1978). In general, orders which deny or grant a party's request to amend the pleadings are interlocutory and, therefore, not immediately appealable. However, an order which denies a party's request to amend an answer to plead an affirmative defense is considered final and is, therefore, immediately appealable. Soxman v. Goodge, 372 Pa.Super. 343, 345, 539 A.2d 826, 828 n. 1, appeal denied sub nom. Petition of Goodge, 520 Pa. 575, 549 A.2d 136 and 520 Pa. 577, 549 A.2d 137 (1988); James A. Mann, 99 Pa.Commw. at 278, 513 A.2d at 530. This is so because denial of a motion to amend to plead an affirmative defense precludes the introduction of proof at trial of what might constitute a complete defense, effectively putting the pleading party "out of court". Posternack v. American Casualty Co. of Reading, 421 Pa. 21, 24, 218 A.2d 350, 352 (1966). See Shaffer v. Pullman Trailmobile, Div. of M.W. Kellogg Co., 368 Pa.Super. 199, 209, 533 A.2d 1023, 1028 (1987). More specifically, because a statute of limitations defense may control the outcome of an entire case, an order denying a motion to amend a pleading to plead the statute of limitations as an affirmative defense is final and appealable. Pellegrine v. Home Ins. Co., 200 Pa.Super. 48, 52, 186 A.2d 662, 665, (1962). See Hughes v. Pron, 286 Pa.Super. 419, 422, 429 A.2d 9, 11 (1981). We conclude, therefore, that the trial court's denial of the appellant's motion to amend its answer to affirmatively plead the statute of limitations was a final order and is properly on appeal to this court.

Appellant contends that the trial court erred in denying its motion to amend its answer to affirmatively plead the statute of limitations. ¹ Appellant asserts that the record contained no evidence of the prejudice to the appellee which would result if the court permitted the amendment. Absent a showing of prejudice, appellant argues, the trial court should have granted the amendment petition. We agree and, therefore, reverse.

In its motion to amend, the appellant sought to amend its answer to the appellee's counterclaim by asserting that the counterclaim was barred by the statute of limitations. The appellee opposed this motion, claiming that if the court permitted the amendment, discovery would have to be reopened "to pursue matters of memory, documentation and witnesses which are stale, and more probably than not have faded and/or disappeared." Defendant's Response to Plaintiffs' Petition for Leave to Amend Answer to Defendant's Counterclaim (emphasis added). Based upon this single assertion, the trial court concluded that to allow the amendment would be to force the defendant to rely upon "the faded memories of witnesses to overcome Plaintiffs' affirmative defense to Defendant's Counterclaim." Trial Court op. at 4. We now review the propriety of this ruling.

When reviewing a trial court's ruling on a party's petition to amend we must bear in mind that the trial court is granted broad discretion in evaluating amendment petitions. Newcomer v. Civil Service Comm'n of Fairchance Borough, 100 Pa.Commw. 559, 564-65, 515 A.2d 108, 111 (1986). The sound discretion of the trial court will not be disturbed on appeal absent a showing of an abuse of that discretion. Ecksel v. Orleans Constr. Co., 360 Pa.Super. 119, 131, 519 A.2d 1021, 1027 (1987). With this standard in mind, we review appellant's claim.

Pennsylvania Rule of Civil Procedure 1033 provides that:

[a] party, either by filed consent of the adverse party or by leave of court, may at any time change the form of action, correct the name of a party or amend his pleading. The amended pleading may 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. An amendment may be made to conform the pleading to the evidence offered or admitted.

Pa.R.C.P. 1033 (emphasis added). This rule has repeatedly been interpreted as requiring the liberal evaluation of amendment requests, see Pa.R.C.P. 126 ², in an effort to secure a determination of cases based upon their merits, Gallo v. Yamaha Motor Corp., U.S.A., 335 Pa.Super. 311, 313-14, 484 A.2d 148, 150 (1984), rather than based upon a mere technicality. Thus, Rule 1033 has been interpreted to permit amendments to pleadings at any time, including before, during and after trial. Winterhalter v. West Penn Power Co., 355 Pa.Super. 17, 21, 512 A.2d 1187, 1189 (1986).

Despite this liberal amendment policy, Pennsylvania appellate courts have repeatedly ruled that an amendment will not be permitted where it is against a positive rule of law, or where the amendment will surprise or prejudice the opposing party. Robinson Protective Alarm Co. v. Bolger & Picker, 512 Pa. 116, 119, 516 A.2d 299, 302 n. 6 (1986); Soxman v. Goodge, 372 Pa.Super. at 346-47, 539 A.2d at 828; Ecksel, 360 Pa.Super. at 131, 519 A.2d at 1027. There is no allegation that the proposed amendment violates a positive rule of law. In its answer to the appellant's petition to amend and in its brief to this court, the appellee seems to be contending that it will, in some way, be prejudiced if the amendment is permitted. The appellee and the trial court in its opinion both contend that the four and a half year delay, in conjunction with the prejudice to the appellee provide adequate grounds for rejecting the proposed amendment.

At the outset we note that the lateness of a proposed amendment is only to be considered "insofar as it presents a question of prejudice to the opposing party." Gutierrez v. Pennsylvania Gas & Water Co., 352 Pa.Super. 282, 286, 507 A.2d 1230, 1232 (1986). It has been consistently held that "unreasonable delay", by itself, is an insufficient ground upon which to base a denial of an amendment motion. R.P. Clarke Personnel, Inc. v. Commonwealth Nat'l Bank, 384 Pa.Super. 524, 536, 559 A.2d 560, 566 (1989). See Carpitella by Carpitella v. Consolidated Rail Corp., 368 Pa.Super. 153, 157, 533 A.2d 762, 764 (1987) (party must establish more than undue delay before liberal policy of amendment entrenched in...