Mudd v. Nosker Lumber, Inc. , 443 Pa. Super. 483 ( 1995 )

KELLY, Judge:

In this opinion, we are called upon to determine whether the presumption of prejudice which arises from a delay in the prosecution of a civil complaint in excess of two years may be rebutted by the conduct of the defendant seeking a judgment of non pros. We hold that where the circumstances indicate that the party seeking non pros has come to the court of equity with unclean hands, that party is estopped from obtaining this equitable remedy. Accordingly, we hold that the trial court erred as a matter of law in granting appellee’s motion for a judgment non pros, and therefore reverse the judgment of the trial court and remand for further proceedings consistent "with this opinion.

This appeal arises out of the trial court’s grant of appellees’, Nosker Lumber, Inc.’s (“Nosker”) and Jode R. Delp’s (“Delp”), motion for a judgment non pros. Accordingly, the relevant facts and procedural history of this case are as follows. On July 16,1990, the Mudds filed a complaint against Nosker Lumber, Inc. to recover damages for breach of a written contract for the sale of timber located on a tract of land owned by the Mudds. On September 7, 1990, Nosker filed its answer and new matter. The Mudds filed a reply to Nosker’s new matter on October 4, 1990. On January 31, 1991, Nosker filed a complaint to join Delp as an additional defendant, alleging that Delp was an independent contractor hired by Nosker for the actual cutting and removal of the timber from the appellant’s property. Delp did not respond to the complaint nor did anyone enter an appearance on the court docket. Delp was insured by Rockwood Insurance Company.

On August 27, 1991, the appellants received a notice from the Pennsylvania Insurance Department stating that the Rockwood Insurance Company was liquidated and directing that all claims be filed with the appointed liquidator by August 28, 1992. On July 8, 1992, the Mudds filed their claim with the Insurance Department and awaited further direction from the liquidator regarding settlement negotiations.

There was no further docket activity until August 31, 1993, when the Armstrong County Prothonotary mailed notice to the Mudds that their case was listed for possible termination due to docket inactivity. On October 13, 1993, the Mudds’ counsel filed a praecipe to list the case for trial and the case was placed on the civil trial list, which was scheduled to be called on November 12, 1993.

On the eve of trial, November 11, 1993, according to the Mudds, Nosker’s attorney asked the Mudds’ counsel to continue the case to the next trial list so that there could be additional time to negotiate settlement.¹ On December 13, 1993, Nosker filed its motion for judgment of non pros, seeking dismissal of the suit for lack of docket activity in excess of two years. By order dated December 15, 1993, the trial court issued a rule upon the Mudds to show cause why the motion should not be granted and scheduled a hearing for January 31, 1994. After the hearing, the court entered judgment in favor of the appellees. On February 24, 1994, the Mudds sought reconsideration and requested that the trial court remove the judgment of non pros. On October 7, 1994, the trial court denied the request making the judgment of non pros a final, appealable order. This timely appeal followed.

On appeal, the Mudds raise the following issue:

WHETHER THE LOWER COURT ERRED BY GRANTING A JUDGMENT OF NON PROS AGAINST APPELLANTS FOR THE LACK OF DOCKET ACTIVITY.

Appellants’ Brief at 4.

The Mudds argue that the trial court abused its discretion in three ways. First, the Mudds contend that the trial court erred in holding that the liquidation of appellee’s insurer was not a compelling reason to excuse further pursuit of the action. Second, the Mudds assert that in determining the length of the “delay,” the trial court erred by using as its benchmark the last docket entry rather than the filing of the proof of claim, which occurred on July 8, 1992 and would not have appeared as a docket entry. Third, the Mudds aver that neither Nosker nor Delp has been prejudiced by the delay.

At the outset, we note that the question of whether to enter a judgment of non pros because of the plaintiffs failure to prosecute his action within a reasonable time rests within the discretion of the trial court and will not be disturbed on appeal unless there is proof of a manifest abuse of that discretion. Penn Piping, Inc. v. Insurance Co. of North America, 529 Pa. 350, 354, 603 A.2d 1006, 1008 (1992). In order to dismiss a case for lack of activity, the movant must show: 1) a party has failed to diligently proceed with reasonable promptitude; 2) there was no compelling reason for the delay; and 3) the delay has caused some prejudice to the adverse party, which will be presumed in actions in which the delay exceeds two years. Id. at 355, 603 A.2d at 1008; Pine Township Water Company v. Felmont Oil, 425 Pa.Super. 473, 476, 625 A.2d 703, 706 (1993), appeal denied, 537 Pa. 665, 644 A.2d 1202 (1994); Pennridge Electric, Inc. v. Souderton Area Joint School Authority, 419 Pa.Super. 201, 204, 615 A.2d 95, 98 (1992). The analysis is the same whether the motion for a judgment of non pros is brought sua sponte by the court or by the defendant.² Penn Piping v. Insurance Co. of North America, supra at 356, 603 A.2d at 1009.

We begin with appellant’s third argument. In Penn Piping v. Insurance Co. of North America, supra, our Supreme Court held that in the absence of a compelling reason, a two year delay in the prosecution of a claim is presumptively prejudicial. Penn Piping v. Insurance Co. of North America, supra at 356, 603 A.2d at 1009. A defendant is not required to make any specific showing of prejudice. Id. The Supreme Court listed a number of reasons for establishing such a presumption. For one, after a significant lapse in time, defendants may have a difficult time defending themselves. Witnesses may disappear. Evidence may go stale or become unavailable. Plaintiffs may gain an unfair bargaining chip in negotiations for settlement. Id. at 354, 603 A.2d at 1008. Additionally, defendants who are kept in the dark regarding the status of a lawsuit may be subjected to needless anxiety. Id.

What is not clear either from Penn Piping v. Insurance Co. of North America, supra or its progeny is whether the presumption of prejudice may be rebutted by defendant’s own conduct. Based on the following, we conclude that any presumption of prejudice arising from the delay in pursuit of the claim may be rebutted by other circumstances. See Van Loon v. Smith, 103 Pa. 238 (1883).

Instantly, the record indicates that prior to praeciping their case for trial, the last docket activity initiated by the Mudds occurred on January 31, 1991. On November 11, 1993, the day before the trial was due to begin, Nosker’s attorney requested that the trial be postponed for another month, ostensibly so that the parties could pursue a settlement. Four weeks later, and several weeks shy of the continued trial date, Nosker moved for non pros on December 13, 1994.³

These circumstances suggest that the appellees used this additional time to draft a motion for a judgment of non pros. It is simply unreasonable to accept the proposition that the appellees were somehow prejudiced by the delay in prosecution when they themselves requested additional delays. Our Supreme Court’s decision in Penn Piping v. Insurance Co. of North America, supra, was meant to protect defendants from the unfairness, anxiety and prejudice that can result from a plaintiffs failure to pursue a threatened lawsuit. Id. at 354, 603 A.2d at 1008. We are hard-pressed to accept the notion that our Supreme Court, in establishing the “presumption of prejudice” in that case envisioned a situation in which defendants, through their own subterfuge, are able to avoid a final determination of liability. Therefore, we are of the opinion that Nosker and Delp should be estopped from utilizing this equitable remedy.⁴

Moreover, to accept the proposition that the appellees have been prejudiced by the delay would stand the principle underlying the grant of non pros on its head. The grant of non pros has evolved as a mechanism to ensure that plaintiffs do not take advantage of defendants through dilatory tactics. Id. at 354, 603 A.2d at 1008. This principle should apply equally to defendants. If a plaintiff cannot delay a lawsuit to achieve a desired result, then neither should a defendant.

Additionally, a party seeking equitable relief, as Nosker is doing in this case, must come before the court with clean hands. In re Francis Edward McGillick Foundation, 406 Pa.Super. 249, 263, 594 A.2d 322, 329 (1991), affirmed in part, reversed in part on other grounds, 537 Pa. 194, 642 A.2d 467 (1994).⁵ One guilty of wrongdoing should be denied access to the court. Id.; Sprague v. Casey, 520 Pa. 38, 46, 550 A.2d 184, 188 (1988) (“he who seeks equity must do equity”). It is our determination that Nosker has come before the court with unclean hands. Nosker’s request for a continuance was apparently made in bad faith. The appellees misled the Mudds into believing they wished to negotiate a settlement and now ask that this Court reward them for their tactics by affirming the grant of non pros. We cannot, in good faith, affirm a judgment based on principles of equity when Nosker’s own behavior raises fundamental questions of fairness.

Therefore, under these circumstances, it is our determination that the presumption of prejudice has been rebutted. Accordingly, we conclude that the trial court misapplied the law of Penn Piping v. Insurance Co. of North America, supra, to justify non pros in the instant case. Because the court’s erroneous application of the law to these facts effectively denied the Mudds their day in court, we hold that this error constitutes a manifest abuse of the trial court’s equitable discretion. Therefore, we vacate the judgment of non pros, and remand this case to the trial court to be listed for a trial on the merits.

Order reversed; case remanded. Jurisdiction relinquished.

1 . The motion for continuance was apparently made orally. The trial record contains no written motion for a continuance. Nosker does not deny that it made the request.

2 . Under section 1901(c) of the Pennsylvania Rules of Judicial Administration, a court can motion for a judgment of non pros sua sponte if the plaintiff has failed to take any steps that would constitute docket activity in the previous two years. Pa.RJ.A. 1901(c).

3 . Appellee Delp was granted permission to join Nosker’s motion on January 18, 1994.

4 . Although Nosker and Delp's behavior in this case clearly raises questions of fairness, the doctrine of equitable estoppel is not strictly applicable here. Equitable estoppel arises when "one by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief so that he will be prejudiced if the former is permitted to deny the existence of such fact.” Zitelli v. Dermatology Educ. and Research Foundation, 534 Pa. 360, 370, 633 A.2d 134, 139 (1993) (quoting In re Estate of Tallarico, 425 Pa. 280, 288, 228 A.2d 736, 741 (1967)). When estoppel is established, "The person inducing the belief in the existence of a certain state of facts is estopped to deny that the state of facts does in truth exist, over a different or contrary state of facts or deny or repudiate his acts, conduct, or statements.” Id., 425 Pa. at 288, 228 A.2d at 741. In the instant case, although Nosker and Delp, by asking for a continuance have acted in such a way as to prejudice the Mudds, they are not attempting to deny their request for a continuance. They are not denying the existence of a set of facts. Strictly speaking, equitable estoppel is not a remedy. In this case, we are using the term "estoppel” in its dictionary sense, i.e., “That [a] party is prevented by his own acts from claiming a right to the detriment of the other party who was entitled to rely on such conduct and has acted accordingly.” Black’s Law Dictionary, 5th Ed. at 494.

5 . The doctrine of unclean hands applies when the wrongdoing directly relates to the matter in controversy and affects the relationship between the parties. In re Francis Edward McGillick Foundation, supra at 263, 594 A.2d at 329. Further, it may be raised by an appellate court sua sponte. In re Estate of Pedrick, 505 Pa. 530, 482 A.2d 215 (1984); see also Jackman v. Pelusi, 379 Pa.Super. 361, 550 A.2d 199 (1988), superceded by statute on other grounds as stated in Benjamin v. Benjamin, 408 Pa.Super. 320, 596 A.2d 877 (1991) (same).