Benjamin Riggs, Jr. v. AHP Settlement Trust , 421 F. App'x 136 ( 2011 )

GLD-145 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 10-4157
___________
BENJAMIN C. RIGGS, JR.,
d/b/a RESOURCE MANAGAMENT COMPANY,
Appellant
v.
AHP SETTLEMENT TRUST
____________________________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 10-cv-02824)
District Judge: Honorable Harvey Bartle III
____________________________________
Submitted for Possible Summary Action Pursuant to
Third Circuit LAR 27.4 and I.O.P. 10.6(a)
March 24, 2011
Before: AMBRO, CHAGARES and GRENBERG, Circuit Judges
(Opinion filed March 30, 2011)
_________
OPINION
_________
PER CURIAM
Benjamin Riggs appeals from the order of the United States District Court for the
Eastern District of Pennsylvania dismissing his diversity action for failure to state a claim
pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, we
will summarily affirm. See I.O.P. 10.6.
I.
In June 2010, Riggs, a Rhode Island citizen,1 filed a complaint in the District
Court against AHP Settlement Trust (“Trust”), a Pennsylvania citizen, raising claims of
fraud, negligence, conspiracy, breach of fiduciary duty, and tortuous interference with
business relationships.
As background, in 1999, Wyeth reached a Nationwide Class Action Settlement
Agreement (“Settlement Agreement”) in connection with claims arising from the
purchase and use of the diet drug known as Fen-Phen. Under the Settlement Agreement,
the Trust was established to receive funds from Wyeth and distribute benefits to
qualifying class members.
According to Riggs‟ complaint, he entered into an agreement with the late Frank
Gregory, Esq. (“Gregory”) on January 31, 2003. Under the agreement, Resource
financed Gregory‟s prosecution of certain Fen-Phen claims. Riggs contends that
Resource had a lien on Gregory‟s contingent fee receivables in return.
Riggs alleges that instead of paying Resource, the Trust wrongfully paid fees to
Gregory and another company financing Gregory‟s litigation, American Asset Finance
1
Riggs is also the sole proprietor of Resource Management Company
(“Resource”), a New Hampshire company.
2
(“American Asset”). On August 25, 2006, Riggs wrote to the Trust. In his letter, Riggs
asserted a “valid and continuing security interest and lien” on attorney‟s fees payable to
Gregory. On September 11, 2006, the Trust orally responded to Riggs‟ letter by stating
that it did not recognize Resource‟s lien. The Trust also sent Riggs letters in October and
November of that same year, again stating that it would not recognize Riggs‟ claims.
Riggs subsequently sued Gregory‟s Estate in the District of New Hampshire and obtained
a judgment in his favor. During the course of the litigation, Riggs received a letter from
the Trust dated June 15, 2007, which stated that the Trust had paid over $500,000 to
Gregory and American Asset. Of that amount, over $300,000 was paid after the Trust
received Riggs‟ letter asserting a lien.
On May 29, 2009, Riggs filed a lawsuit against the Trust and Wyeth in the United
States District Court for the District of Rhode Island. By order of the Judicial Panel on
Multidistrict Litigation, that action was transferred to the United States District Court for
the Eastern District of Pennsylvania on December 15, 2009 as part of the Diet Drug
Multidistrict Litigation. The District Court then dismissed the complaint against the
Trust for lack of personal jurisdiction pursuant to Rule 12(b)(2). See Riggs v. Wyeth,
Inc., et al., No. 09-20008 (E.D. Pa.). Riggs did not appeal that determination to this
Court and, on June 10, 2010, he filed the complaint at issue here in the District Court.
The Trust filed a motion to dismiss the complaint, arguing that Riggs‟ claims are barred
by the statute of limitations. The District Court granted the motion and Riggs timely
appealed.
3
II.
We have jurisdiction over this appeal under 28 U.S.C. § 1291. We review de novo
a district court‟s decision to dismiss a complaint for failure to state a claim upon which
relief may be granted. See Dique v. New Jersey State Police, 603 F.3d 181, 188 (3d Cir.
2010). “In deciding a motion to dismiss all well-pleaded allegations of the complaint
must be taken as true and interpreted in the light most favorable to the plaintiff[], and all
inferences must be drawn in favor of [him].” McTernan v. City of York, 577 F.3d 521,
526 (3d Cir. 2009) (internal citation and quotation marks omitted). To withstand a Rule
12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted
as true, to „state a claim to relief that is plausible on its face.‟” Ashcroft v. Iqbal, 129
S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly 550 U.S. 544, 570 (2007)).
As an initial matter, we agree with the District Court that Pennsylvania‟s two-year
statute of limitations applied, 42 Pa. Cons. Stat. Ann. § 5524.2 Riggs argued that the
proper statute of limitations is either New Hampshire‟s, which is three years, N.H. Rev.
Stat. § 508:4, or Rhode Island‟s, which is ten years, R.I. Gen. Laws § 9-1-13(a).
A federal court sitting in diversity must apply the choice of law rules of the forum
state, which is Pennsylvania in the instant case. See Kruzits v. Okuma Mach. Tool, Inc.,
2
Claims based on fraud, breach of fiduciary duty, and negligence are subject to a
two-year limitations period. See 42 Pa. Cons. Stat. Ann. § 5524(7); Maillie v.
Greater Del. Valley Healthcare, Inc., 628 A.2d 528, 532 (Pa. Commw. Ct. 1993).
Claims for tortious interference are also subject to a two-year limitations period.
42 Pa. Cons. Stat. Ann. § 5524(3); CGB Occupational Therapy, Inc. v. RNA
Health Servs., Inc., 357 F.3d 375, 383 (3d Cir. 2004).
4
40 F.3d 52, 54-55 (3d Cir. 1994) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S.
487, 497 (1941)) (federal court exercising diversity jurisdiction must apply choice of law
rules of forum state). Under Pennsylvania‟s Uniform Statute of Limitations on Foreign
Claims Act (the Borrowing Act), “[t]he period of limitation applicable to a claim
accruing outside this Commonwealth shall be either that provided or prescribed by the
law of the place where the claim accrued or by the law of the Commonwealth, whichever
first bars the claim.” See 42 Pa. Cons. Stat. Ann. § 5521(b). Accordingly, we need not
decide whether the claims accrued in Pennsylvania, Rhode Island or New Hampshire
because the Commonwealth‟s two-year statute applies in any case.
Riggs also disputes when the statute of limitations began to run on his claims. In
Pennsylvania, the two-year period begins as soon as the injury is sustained. Bohus v.
Beloff, 950 F.2d 919, 932 (3d Cir. 1991). However, the discovery rule provides that “the
statute is tolled, and does not begin to run until the injured party discovers or reasonably
should discover that he has been injured and that his injury has been caused by another
party‟s conduct.” See Fine v. Checcio, 870 A.2d 850, 859 (Pa. 2005).
Riggs argues that he did not discover his injury until 2007. However, we agree
with the District Court that Riggs acknowledged in his complaint that he received a
response from the Trust, as early as September 2006, that the Trust did not recognize his
asserted lien. Riggs did not file his complaint until June 2010, nearly four years later.
Although Riggs may not have known the extent of the payments that had been made to
Gregory directly, as the District Court noted, he was on notice that the Trust did not
5
recognize his asserted lien, and that the it would not be remitting payment to Resource.3
See Ackler v. Raymark Indus., Inc., 551 A.2d 291, 293 (Pa. Super Ct. 1998) (a plaintiff
need not know the exact nature of his injury, as long as it objectively appears that the
plaintiff “is reasonably charged with the knowledge that he has an injury caused by
another.”) Thus, we agree with the District Court that based on the pleadings, Riggs
discovered that he had been harmed no later than September 2006. His claims are
therefore time-barred.
We further agree with the District Court‟s conclusion that Riggs‟ complaint
eliminates any basis for tolling the limitations period on the grounds of fraudulent
concealment. “[I]n order for fraudulent concealment to toll the statute of limitations, the
defendant must have committed some affirmative independent act of concealment upon
which the plaintiff [ ] justifiably relied.” Lazarski v. Archdiocese of Phila., 926 A.2d
459, 465 (Pa. Super. Ct. 2007). Again, Riggs stated in his complaint that the Trust
openly declared, as early as September 2006, that it did not recognize the asserted lien.
In light of that, any failure of the Trust to notify Riggs before continuing to make
payments to Gregory is not an affirmative act of concealment.
In sum, because this appeal presents “no substantial question,” 3d Cir. LAR 27.4
and I.O.P. 10.6, we will summarily affirm the District Court‟s judgment.
3
Even assuming that the statute was tolled by the filing of his complaint in the
District Court in Rhode Island on May 29, 2009, Riggs‟ claims would still be
time-barred based on his pleading which stated that he discovered the harm in
September 2006.
6