Rellick-Smith v. Rellick

• Decision Date: 20 October 2021
• Docket Number: No. 23 WAP 2020,23 WAP 2020
• Citation: 261 A.3d 506
• Parties: Sharleen M. RELLICK-SMITH, Appellant v. Betty J. RELLICK and Kimberly V. Vasil, Appellees
• Court: Pennsylvania Supreme Court

261 A.3d 506

Sharleen M. RELLICK-SMITH, Appellant

v.Betty J. RELLICK and Kimberly V. Vasil, Appellees

No. 23 WAP 2020

Supreme Court of Pennsylvania.

Argued: April 14, 2021

Decided: October 20, 2021

William James Carmella, Esq., James D. Carmella, Attorney at Law, for Appellant.

Jesse David Daniel, Esq., The Daniel Law Group, PLLC, for Appellees.

BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

JUSTICE TODD

In this appeal by allowance, we consider whether the Superior Court erred in affirming an order of the trial court that permitted the appellees to file an amended answer to include the affirmative defense of statute of limitations, which a different trial court judge previously ruled was waived. As we conclude that the second trial judge's order violated the coordinate jurisdiction rule in this regard, we hold that the Superior Court erred in affirming his order, and, accordingly, we reverse the Superior Court's decision, vacate in part the trial judge's order, and remand the matter to the trial court for further proceedings consistent with this opinion.

On August 6, 2006, Rose Rellick (hereinafter, "Decedent"),¹ purchased two Certificates of Deposit ("CDs"), listing as co-owners herself; her sister, Betty J. Rellick; and the daughters of her deceased brother George - Kimberly Vasil and Sharleen M. Rellick-Smith (hereinafter, "Appellant"). Prior to purchasing the CDs, Decedent executed powers of attorney designating Betty and Kimberly (hereinafter, "Appellees") as her attorneys-in-fact. It purportedly was Decedent's intention that, upon her death, the proceeds of the CDs be divided equally among Appellant and Appellees. However, on July 31, 2009, prior to Decedent's death, Appellees removed Appellant's name from the CDs. In March 2013, subsequent to Decedent's death, Appellees cashed the CDs, which were worth approximately $370,000, and divided the money between the two of them.

On October 10, 2014, Appellant filed an action against Appellees, claiming they breached their fiduciary duties to Decedent by removing Appellant's name from the CDs and refusing to pay her any of the proceeds. Appellees filed a timely response to the complaint, but, relevant to the instant appeal, did not raise any affirmative defenses therein. Four months later, on February 11, 2015, Appellees filed a "motion to dismiss," arguing that Appellant lacked standing and that her claim was barred by the statute of limitations.² The case was assigned to the Honorable Carol Hanna, who granted Appellees’ motion on the basis that Appellant lacked standing. Notably, however, Judge Hanna determined that Appellees waived the statute of limitations defense by failing to raise it as a new matter in their answer, as required by Pa.R.C.P. 1030(a) ("[A]ll affirmative defenses including ... statute of limitations ... shall be pleaded in a responsive pleading under the heading ‘New Matter.’ ").

Appellant appealed Judge Hanna's order, and the Superior Court reversed and remanded the case to the trial court, holding that Appellant, in fact, did have standing to pursue her claim. Rellick-Smith v. Rellick , 147 A.3d 897, 904 (Pa. Super. 2016). In its opinion, the Superior Court observed that neither party challenged Judge Hanna's finding that Appellees waived the statute of limitations defense. Id. at 901 n.12 ("Neither party addresses on appeal the statute of limitations issue raised in [Appellees’] Motion to Dismiss.").

On remand, the case initially was assigned to the Honorable William Martin, as Judge Hanna had retired from the court on June 6, 2016. On May 16, 2017, Appellees filed a motion for summary judgment wherein they made no mention of the statute of limitations defense. Judge Martin denied the motion for summary judgment, finding there were outstanding issues of material fact. Thereafter, the case was reassigned to the Honorable Thomas M. Bianco, who presided over all remaining proceedings.

On July 30, 2018, Appellees filed a motion to amend their pleading to include numerous affirmative defenses, including a statute of limitations defense. Acknowledging Judge Hanna's finding that Appellees waived the statute of limitations defense by failing to raise it in their answer to Appellant's complaint, Judge Bianco nevertheless granted Appellees’ motion to amend based on the Superior Court's decision in Horowitz v. Universal Underwriters Insurance Co. , 397 Pa.Super. 473, 580 A.2d 395 (1990) (holding that trial court should have allowed party to amend its answer to affirmatively plead statute of limitations defense despite the fact that amendment was sought more than four years after original answer was filed), which, in his view, supports the liberal amendment of pleadings. Judge Bianco reasoned, inter alia , that Appellant would not be prejudiced if Appellees were permitted to amend their pleading, as Appellees’ assertion of the statute of limitations defense did not come as a surprise to Appellant, given that Appellees raised it in their February 2015 motion for judgment on the pleadings before Judge Hanna. Judge Bianco further determined that Appellant failed to establish that material evidence was lost due to Appellees’ delay in raising the statute of limitations defense.

Following the grant of Appellees’ motion to amend, the case proceeded to a non-jury trial, at which Appellant testified to the facts set forth above. Appellant stated that she could not recall when she learned that Appellees removed her name from the CDs. Appellant also presented the testimony of Ann Marcoaldi, Decedent's secretary and tax preparer. Marcoaldi testified that Decedent purchased the CDs for estate planning purposes, and that Decedent intended that the proceeds of the CDs be divided equally between Appellant and Appellees following her death. Marcoaldi stated that she and Appellant learned in September 2009 that Appellees removed Appellant's name from the CDs, and that they began to "investigate the removal around that time." Rellick-Smith v. Rellick , No. 919 WDA 2019, at 3, 2020 WL 1528126 (Pa. Super. filed March 31, 2020). Ultimately, Judge Bianco determined that Appellant learned that Appellees removed her name from the CDs in September 2009, at which point the two-year statute of limitations began to run. As a result, he concluded that Appellant's action, filed on October 10, 2014, was barred by the statute of limitations, and he declined to address the underlying merits of her claim.

Appellant appealed Judge Bianco's order to the Superior Court, arguing, inter alia , that he erred in granting Appellees’ motion to amend their pleading to include a statute of limitations defense because Appellees waived that defense by failing to raise it in their initial response to her complaint. Furthermore, Appellant alleged that, in light of Judge Hanna's prior determination that Appellees waived the statute of limitations defense, Judge Bianco was precluded from granting Appellees’ motion to amend their pleading to include that defense under the coordinate jurisdiction rule, which generally prohibits a judge from altering the resolution of legal questions previously decided by another judge of coordinate jurisdiction. See Commonwealth v. Starr , 541 Pa. 564, 664 A.2d 1326, 1331 (1995).³ Finally, Appellant claimed she was prejudiced by Appellees’ delay in raising a statute of limitations defense because her witness's memory had diminished by the time the matter finally proceeded to trial.

The Superior Court affirmed Judge Bianco's order in a divided, unpublished memorandum opinion authored by Senior Judge Pellegrini. Rellick-Smith, supra. The court rejected Appellant's contention that, under the coordinate jurisdiction rule, Judge Bianco was required to hold that Appellees waived the statute of limitations defense by failing to raise it in new matter. It recounted that, in Riccio v. American Republic Insurance Co. , 550 Pa. 254, 705 A.2d 422 (1997), this Court explained that, when determining whether the coordinate jurisdiction rule applies, we "look[ ] to where the rulings occurred in the context of the procedural posture of the case," and stated:

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 had 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.

Id. at 425 (citation omitted).

The Superior Court suggested that Appellees, in their motion to amend their pleading, did not ask Judge Bianco to overturn Judge Hanna's waiver ruling, but, rather, presented an "entirely different procedural question: whether [Appellant] would be prejudiced by the delay in raising the statute of limitations defense." Rellick-Smith , 919 WDA 2019, at 7. For this reason, the Superior Court determined that "[t]he law of the case doctrine did not bar [Judge Bianco] from addressing this question which had not been presented to Judge Hanna" or raised in the previous appeal. Id.⁴ Additionally, the Superior Court concluded that Appellant was not prejudiced by Appellees’ delayed invocation of the statute of limitations defense, given that Appellees initially attempted to raise it in their February 2015 motion for judgment on the pleadings, which was filed a mere four months after Appellant filed her complaint.

The Honorable Mary Jane Bowes authored a dissenting opinion in which she opined that, under the coordinate jurisdiction rule, Judge Hanna's finding that Appellees waived the statute of limitations defense was binding on Judge Bianco, and, therefore, precluded him from granting Appellees’ motion to amend their pleadings to include a statute of limitations...