Jacobs v. Halloran

• Decision Date: 02 April 1998
• Parties: Lisa R. JACOBS, Appellant, v. Harry HALLORAN, Patricia Halloran, Lynda Fyffe-McFadden, General Motors Acceptance Corporation, Appellees.
• Court: Pennsylvania Supreme Court

Page 1098

710 A.2d 1098

551 Pa. 350

Lisa R. JACOBS, Appellant, v. Harry HALLORAN, Patricia Halloran, Lynda Fyffe-McFadden General Motors Acceptance Corporation, Appellees.

Supreme Court of Pennsylvania.

Submitted Dec. 2, 1997.

Decided April 2, 1998.

[551 Pa. 352] Richard A. Sprague, Thomas A. Sprague, Denise Pallante, Joseph R. Podraza, Jr., Philadelphia, for Lisa R. Jacobs.

Peter C. Gardner, Philadelphia, for Amicus-Pennsylvania Trial Lawyers Ass'n.

Jonathan F. Ball, Philadelphia, for Lynda Fyffe-McFadden.

Edward J. Tuite, Wayne, for Harry & Patricia Halloran.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN and SAYLOR, JJ.

OPINION

ZAPPALA, Justice.

This appeal raises significant issues regarding the standard applicable to the dismissal of a case for inactivity pursuant to a defendant's motion for non pros. ¹ For the reasons set forth herein, we hold that the equitable principles underlying the entry of a judgment of non pros must be recognized and the presumption of prejudice first enunciated in Penn Piping, Inc., v. Insurance Company of North America, 529 Pa. 350, 603 A.2d 1006 (1992), must be abandoned.

Appellant, Lisa Jacobs, was injured in an automobile collision involving a vehicle owned by Appellees, Harry and Patricia Halloran. When Appellant filed her complaint in August of 1987, she believed that the vehicle had been driven by Appellee, Lynda Fyffe-McFadden, with the permission of the Hallorans.

On November 16, 1989, almost two years and three months after the complaint was filed, Fyffe-McFadden testified at a deposition that she was not driving the vehicle at the time of the accident. Instead, she stated that a friend was driving the Hallorans' vehicle without their consent. This admission created a possible uninsured motorist claim against the insurer of the vehicle in which Appellant was a passenger at the time of the collision.

In September of 1991, the docket reflected the withdrawal of Appellant's counsel and the appearance of her new counsel. Entries were also made on the docket through October 3, 1991. No docket activity occurred thereafter until October 26, 1993, when the common pleas court issued a notice that it would terminate the case for lack of activity. Appellant filed an active status certification on November 5, 1993.

On April 15, 1994, Fyffe-McFadden filed a petition for entry of a judgment of non pros in which the Hallorans later joined. On or about June 23, 1994, Appellant provided Appellees with an expert witness report on damages and requested them to sign a praecipe certifying the case as ready for trial.

The court entered judgments of non pros for Appellees by orders dated September 26, 1994. These orders were subsequently vacated pending reconsideration and on January 17, 1995, the orders were reinstated. Appellant filed a motion for reconsideration wherein she requested that the court open the judgments.

The court refused to open the judgments, holding that docket inactivity of two years and six months ² established a lack of due diligence in pursuing the claim; that the exchange of correspondence regarding the status of the uninsured motorist claim and the change of counsel did not constitute compelling reasons for the delay; ³ and that prejudice to Appellees resulting from the delay is presumed. It rejected Appellant's claim that Appellees suffered no actual prejudice because the case was ready for trial. The court further refused to consider an affidavit of Appellant's prior counsel which alleged that the Hallorans' counsel orally agreed to allow the case to be delayed while Appellant pursued the uninsured motorist claim. The court noted that the alleged oral agreement was not raised in the response to the petition for judgment of non pros, in the supplemental response or at oral argument. It further stated that Appellant failed to take discovery regarding the agreement.

The Superior Court affirmed on the basis of the common pleas court opinion. ⁴ Judge Kelly dissented, finding that the common pleas court abused its discretion in entering the judgments of non pros. He concluded that, considering the equitable principles underlying the entry of a judgment of non pros, Appellees should not benefit from any delay in prosecution which they, in part, created.

The question of granting a non pros due to the failure of the plaintiff to prosecute his action within a reasonable time rests within the discretion of the trial court and will not be disturbed absent an abuse of discretion. Gallagher v. Jewish Hospital Ass'n, 425 Pa. 112, 113, 228 A.2d 732, 733 (1967). ⁵

The lower courts applied the standard for entering a judgment of non pros announced in Penn Piping. We began our analysis in Penn Piping by restating the three part test set forth in James Brothers Co. v. Union Banking and Trust Co. of DuBois, 432 Pa. 129, 132, 247 A.2d 587, 589 (1968).

A Court may properly enter a judgment of non pros when a party to the proceeding has shown a want of due diligence in failing to proceed with reasonable promptitude, and there has been no compelling reason for the delay, and the delay has caused some prejudice to the adverse party, such as the death of or unexplained absence of material witnesses.

In Penn Piping, where six years had lapsed after the filing of the complaint, the lower courts had agreed that (1) there was an absence of due diligence in prosecuting the case and (2) there was no compelling reason for the delay. At issue, then, was the prejudice prong. Citing Shrum v. Pennsylvania Electric Co., 440 Pa. 383, 269 A.2d 502 (1970), our Court found that the delay was "presumptively prejudicial" and went on to hold that "in cases involving a delay of two years or more, the delay will be presumed prejudicial for purposes of any proceeding to dismiss for lack of activity on the docket." Id. at 356, 603 A.2d at 1009. We also discussed whether the presumption of prejudice was successfully rebutted. We concluded that because an unexplained delay of four years existed, which exceeded the two year period after which prejudice is presumed, the presumption was not rebutted.

Appellant contends that our decision in Penn Piping was not meant to allow a defendant to enjoy the benefits of a judgment of non pros when the period of delay was chargeable to or caused by the defendant. She further argues that it is inherently unfair to dismiss the case when no actual prejudice was established since the case was ready for trial. These arguments essentially challenge the propriety of the concept of presumed prejudice.

After an extensive review of the historical rationale underlying the entry of a judgment of non pros along with the current practical dilemmas which have resulted from application of the presumption, we conclude that the two year presumption of prejudice must be abandoned.

The courts of Pennsylvania have long recognized the existence of the power of the court to enter a judgment of non pros in consequence of long delay of prosecution of a cause. Waring v. The Pennsylvania Railroad Company, 176 Pa. 172, 35 A. 106 (1896). This power originated in common law, prior to the passage of any statute. Id. The grant of non pros was traditionally based not upon a statute of limitations, but rather upon the equitable principle of laches which does not involve the passage of a specific amount of time. Manson v. First National Bank, 366 Pa. 211, 77 A.2d 399 (1951). "Laches arises when a defendant's position or rights are so prejudiced by length of time and inexcusable delay, plus attendant facts and circumstances, that it would be an injustice to permit presently the assertion of a claim against him." Bach's Estate, 426 Pa. 350, 359, 231 A.2d 125, 130 (1967), quoting, Grote Trust, 390 Pa. 261, 269-270, 135 A.2d 383, 387 (1957) (emphasis added). ⁶

Consistent with this notion, early cases held that if delays in prosecution are to a great extent due to the defendant's own procurement it would be an injustice to allow the defendant to impute laches. Wingert v. Anderson, 309 Pa. 402, 164 A. 333 (1932). More importantly, we also held that the plaintiff will not be penalized for laches if his delay has not resulted in injury to his adversary. Manson v. First National Bank, 366 Pa. at 215, 77 A.2d at 401-402 (1951), citing Montgomery Brothers, Inc., v. Montgomery, 269 Pa. 332, 112 A. 474 (1921); Selmer v. Smith, 285 Pa. 67, 70, 131 A. 663, 665 (1926); Quinn v. American Spiral Spring & Manufacturing Co., 293 Pa. 152, 160, 141 A. 855, 858 (1928); Potter Title & Trust Co., Administrator v. Frank, 298 Pa. 137, 141, 148 A. 50, 52 (1929); Schireson v. Shafer, 354 Pa. 458, 463, 47 A.2d 665, 668 (1946); Lutherland, Inc. v. Dahlen, 357 Pa. 143, 157, 53 A.2d 143, 150 (1947); Joseph Melnick Building & Loan Association v. Melnick, 361 Pa. 328, 339, 64 A.2d 773, 778 (1949).

Considering these equitable principles that underlie the entry of a judgment of non pros, we find that our adoption of a presumption of prejudice in Penn Piping was erroneous. ⁷ Simply put, the presumption is inconsistent with the well-established notion that the adversary must suffer harm before a case is dismissed for lack of prosecution. Such harm or prejudice to the adversary is the very basis upon which a claim of laches is founded.

We recognize that defendants may be prejudiced by undue delays in litigation--memories fade, witnesses disappear and documents become lost or are destroyed. Additionally, pending lawsuits often cause undue stress and anxiety. However, the rules concerning the dismissal of cases for inactivity reflect policy concerns which implicate the interests of both plaintiffs and defendants. It is unnecessary to presume prejudice because the defendant is free to present evidence of actual prejudice. In cases where no activity has occurred for a period of two years, but the defendant has not lost his ability to adequately prepare a defense, it serves no equitable purpose ...