Frost, M. v. Zeff, G. ( 2015 )


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  • J. A25041/15
    NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
    MARK FROST,                                 :     IN THE SUPERIOR COURT OF
    MARK B. FROST & ASSOCIATES,                 :          PENNSYLVANIA
    :
    Appellants        :
    :
    v.                      :
    :
    GREGG L. ZEFF                               :
    THE ZEFF LAW FIRM                           :
    THE LAW FIRM OF GREGG L. ZEFF               :
    :     No. 827 EDA 2015
    Appeal from the Order Entered February 12, 2015
    In the Court of Common Pleas of Philadelphia County
    Civil Division No(s).: 003279 Feb. Term, 2013
    MARK FROST,                         :             IN THE SUPERIOR COURT OF
    MARK B. FROST & ASSOCIATES,         :                  PENNSYLVANIA
    :
    v.                   :
    :
    GREGG L. ZEFF                       :
    THE ZEFF LAW FIRM, LLC,             :
    THE LAW FIRM OF GREGG L. ZEFF       :
    AND FROST & ZEFF, P.C.,             :
    :
    Appellants :             No. 829 EDA 2015
    Appeal from the Order Entered February 12, 2015
    In the Court of Common Pleas of Philadelphia County
    Civil Division No(s).: 130203279 Feb. Term, 2013
    BEFORE: DONOHUE, MUNDY, and FITZGERALD,* JJ.
    MEMORANDUM BY FITZGERALD, J.:                     FILED DECEMBER 11, 2015
    *
    Former Justice specially assigned to the Superior Court.
    J.A25041/15
    Appellants/Cross-Appellees (“Appellants”), Mark Frost and Mark B.
    Frost & Associates, appeal from the order entered on September 24, 2014,1
    in the Philadelphia County Court of Common Pleas granting Appellees/Cross-
    Appellants (“Appellees”), Gregg L. Zeff’s and The Law Firm of Gregg L.
    Zeff’s, motion for summary judgment which dismissed all claims against
    Appellees with prejudice and dismissed Appellees’ crossclaims against co-
    defendant Frost & Zeff, P.C. Appellees filed a cross-appeal from the order
    entered February 12, 2015 which provided as follows:
    [U]pon consideration of [Appellants’] Motion for Summary
    Judgment on [Appellees’] counterclaims and any
    responsive pleadings, it is ORDERED as follows:
    1. [Appellants’] Motion for summary Judgment on all
    claims is GRANTED.
    2. All claims against [Appellants] are DISMISSED WITH
    PREJUDICE.
    Order, 2/12/15.
    Appellants contend that they (1) have standing to sue Appellees, (2) in
    the alternative, they should have been granted leave to amend their
    complaint and (3) the applicable statute of limitations has not run.
    Appellees contend they have standing to seek reinstatement of their
    counterclaims against Appellants and their claims are not barred by the
    statute of limitations. We affirm.
    1
    We note that the September 24, 2014 order was not a final order because
    there were claims remaining that had not been disposed of by the trial court.
    See Levitt v. Patrick, 
    976 A.2d 581
    , 588 (Pa. Super. 2009).
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    On March 1, 2013, Appellants filed a writ of summons against
    Appellees, and on July 1, 2013, they filed a complaint. Appellant Mark Frost
    was a majority shareholder of the law firm Frost & Zeff, P.C., a lawfirm and
    professional corporation, from approximately 1996 to March of 2009.
    Appellants’ Compl., 7/1/13, at ¶ 1, 2. Appellee Gregg L. Zeff was a minority
    shareholder of Frost & Zeff, P.C. Id. at ¶ 3. “Frost & Zeff is, at all times
    material since approximately 1996, a professional corporation . . . .”
    Id. at ¶ 5 (emphasis added). “Frost and Zeff has not conducted business
    since approximately March of 2009.” Id.
    “From the years 1997-2008, there were insufficient funds to pay Frost
    his salary due to Zeff’s failure to provide revenues and work diligently on
    cases pursuant to the agreements entered into for the firm.” Id. at ¶ 13.
    “From the year 2000 through February, 2009, Frost generated 75%-80% of
    all fees. . . .” Id. at ¶ 15. “During the years 2001 and 2002, Zeff was not
    generating revenue to the firm in accordance with the oral agreement[2] in
    2000 that he would generate 1/3 of the fees.”       Id. at ¶ 16 (emphasis
    added). “In 2004, Frost once again generated over 80% of fees for the firm.
    Frost & Zeff was still in debt at the end of the 2004 year due to Zeff not
    2
    Our review of the record does not reveal a written contract. Appellants
    aver, incorporating paragraphs one through eighty-seven of the complaint,
    that “[Appellant”] Frost and [Appellee] Zeff agreed to make payments and
    take other action as set forth above.” Id. at ¶ 88-89. Appellants contend
    “Zeff has breached said agreement.” Id. at ¶ 90.
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    generating the 1/3 revenue that was agreed upon.” Id. at ¶ 24. “During
    2007 and 2008, Frost & Zeff continued to have . . . debts from vendors . . .
    .” Id. at ¶ 35.
    “In March 2009, Zeff told Frost that he was leaving the firm without
    any agreements to settle the remaining debts . . . .” Id. at ¶ 42. “At the
    time Zeff stated that he would leave the firm, there were multiple legal
    malpractice cases instituted against Zeff and Frost & Zeff [i.e., F&Z]. All of
    these cases were matters Zeff had handled as a shareholder of Frost & Zeff.”
    Id. at ¶ 65. “[Appellee] Zeff has further refused to contribute monies not
    only to pay Frost for monies expended to pay F&Z debt, but also to pay
    creditors to the detriment of Frost & Zeff which will cause other vendors to
    sue Frost & Zeff . . . .” Id. at ¶ 83. “Zeff’s failure to use monies from the
    firm’s cases wherein he has collected fees that should have been used to pay
    F&Z debt will further cause the firm to go into debt . . . .”    Id. at ¶ 84.
    “Since leaving Frost & Zeff and taking F&Z’s clients to his new law firms, Zeff
    has not provided an accounting of the cases that he took with him.” Id. at ¶
    86.   In the complaint, Appellants alleged claims for breach of contract,
    unjust enrichment, conversion and breach of fiduciary duty.3 Id. at ¶¶ 90-
    91, 95, 99, 104.
    3
    We note that Appellants concede that the claims for which the applicable
    statute of limitations is two years, viz., breach of fiduciary duty and
    conversion, are barred: ”Admittedly, the break-up of Frost & Zeff occurred
    outside of the two-year window from the filing of the instant action.”
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    On July 22, 2013, Appellees filed an answer with new matter,
    counterclaims and crossclaim.    Appellees raised the affirmative defense of
    the statute of limitations in their new matter.   Answer with New Matter,
    Countercl. and Pa.R.C.P. 1031.1 Cross-cl. on Behalf of [Appellees], 7/22/13,
    at ¶ 107.    The counterclaims stated claims for fraud, constructive fraud,
    conversion, unjust enrichment, misrepresentation, breach of fiduciary duty,
    accounting, negligence, breach of fiduciary duty, and accounting.4 Id. at ¶¶
    100, 105, 108, 111, 114, 117, 122, 124, 145, 148.         In the crossclaim,
    Appellees incorporated their counterclaims and averred that Frost & Zeff,
    P.C. were alone liable on the causes of action set forth in Appellants’
    complaint. Id. at ¶ 151.
    On August 12, 2013, Appellants filed preliminary objections to
    Appellees’ counterclaims. On October 31, 2013, Appellants filed an answer
    to Appellees’ new matter, counterclaims and crossclaim.     Appellees filed a
    motion for summary judgment on June 2, 2014.         Appellees contend that
    Appellants lack standing to bring suit. Appellees’ Mot. for Summ. J., 6/2/14,
    at ¶ 15.    Appellees aver that “the applicable statutes of limitations have
    Appellants’ Mem. of Law in Opp’n to Appellees’ Mot. for Summ. J., 7/3/14, at
    16 n.3. In the argument section of their brief, Appellants aver only that
    their breach of contract and unjust enrichment claims are not barred by the
    statute of limitations. Appellants’ Brief at 34.
    4
    We note that the claims for breach of fiduciary duty and accounting were
    averred against both “Frost and Mark B. Frost & Associates” and “Frost &
    Zeff, P.C.”
    -5-
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    expired on all claims.”    Id. at ¶ 51.     Appellants filed a response to the
    motion for summary judgment on July 3, 2014. In the memorandum of law
    in opposition to the motion for summary judgment, Appellants averred “[t]o
    the extent that the [c]ourt rules that [Appellants] do not have standing,
    [Appellants] seek leave to file an Amended Complaint to indicate that
    [Appellant] Frost’s claims are being brought on behalf of the corporation
    Frost & Zeff, PC.” Appellants’ Mem. of Law in Opp’n to [Appellees’] Mot. for
    Summ. J., 7/3/14, at 2.
    On September 24, 2014, the trial court granted Appellees’ motion for
    summary judgment and dismissed all claims against Appellees with
    prejudice. Appellee Zeff’s crossclaim was dismissed with prejudice. Order,
    9/24/14.     The trial court denied the request for leave to file an amended
    complaint.     Trial Ct. Op., 9/24/14, at 7 n.32.       On October 21, 2014,
    Appellants filed a petition for determination of finality.   On November 20,
    2014, the trial court denied the petition for determination of finality.
    On November 26, 2014, Appellants filed a motion for summary
    judgment to dismiss Appellees’ counterclaims.5           Appellants contended
    5
    The docket indicates that the motion for summary judgment is in the
    certified record as document number 54. Our review of the record indicates
    that it is not included in the certified record on appeal. However, our
    Supreme Court held “that where the accuracy of a pertinent document is
    undisputed, the Court could consider that document if it was in the
    Reproduced Record, even though it was not in the record that had been
    transmitted to the Court.” Pa.R.A.P. 1921 note (citing Commonwealth v.
    Brown, 
    52 A.3d 1139
    , 1145 n.4 (Pa. 2012)). In this case, because the
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    “Appellees lacked standing because all of the compensable harms alleged
    were suffered by Frost & Zeff PC.” Appellant’s Mot. for Summ. J., 11/26/14,
    at ¶ 26. Appellants averred “[i]n the alternative, even if [Appellees] have
    standing, the applicable statutes of limitations have expired on all claims.”
    Id. at ¶ 34.       On December 2, 2014, Appellants filed a praecipe to
    supplement the motion. On January 9, 2015, Appellees filed an answer in
    opposition to the motion for summary judgment. On February 12, 2015, the
    court granted Appellants’ motion for summary judgment. Appellants filed a
    timely appeal6 and Appellees filed a timely cross appeal. The parties were
    not ordered to file Pa.R.A.P. 1925(b) statements of errors complained of on
    appeal. The trial court filed a Pa.R.A.P. 1925(a) opinion.
    Appellants raise the following issues for our review:
    1. Do [Appellants] have standing to sue [Appellees], and
    therefore should [Appellees’] Motion for Summary
    Judgment be Denied?
    2. Even if [Appellants] lacked standing to bring certain
    claims individually, should Frost have been granted leave
    to amend his Complaint in Order to bring claims on behalf
    of Frost & Zeff, PC?
    3. Do [Appellants’] claims satisfy the applicable statutes of
    limitation, and therefore should [Appellees’] Motion for
    Summary Judgment be Denied?
    Appellants’ Brief at 5.
    motion for summary judgment is part of the reproduced record and neither
    party has disputed its accuracy, we can consider it.
    6
    See note 1 supra.
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    In their cross-appeal, Appellees raise the following issues:
    1. Whether the trial court erred in failing to find that
    [Appellees’] Counter-claimants had standing.
    2. Whether the trial court erred in failing to find that
    [Appellees’] Counter-claimants’ claims were within the
    statute of limitations?
    Appellees Brief at 5.7
    First, Appellants contend that they have standing to sue Appellees and
    therefore the court erred in granting Appellees’ motion for summary
    judgment. Appellants aver
    First, the gravamen of [Appellants’] complaint is that Zeff’s
    actions after the break─up of Frost & Zeff, PC were
    improper and caused injury not only to Mark Frost
    individually, but also to Mark B. Frost & Associates. This is
    not a situation where a shareholder is injured simply by
    the loss of value or assets due to the corporation, unlike in
    Hill,[8] which pertained exclusively to conduct undertaken
    during the existence of the corporation and to loss in value
    of and assets due to the company.
    *    *    *
    . . . Frost and his current firm Mark B. Frost & Associates
    have directly expended monies and time in defending
    various lawsuits against Frost & Zeff, where it was agreed
    upon between Frost and Zeff after the break-up of the
    firm that Frost would be reimbursed.
    *    *    *
    7
    Appellees denominate their brief as “Brief of Defendants-Appellants.”
    8
    Appellants refer to Hill v. Ofalt, 
    85 A.3d 540
     (Pa. Super. 2014).         See
    discussion, infra.
    -8-
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    Further, [Appellant] Frost individually and his firm have
    made agreements with Zeff regarding the payment of
    certain   monies    from    cases     and    regarding   the
    reimbursement of monies for Frost and Mark B. Frost &
    Associates’ defense of lawsuits involving the former firm.
    *    *    *
    Finally, even if the court rules that some or all of the
    injuries suffered are not sufficiently independent of the
    corporation Frost & Zeff, this should not affect the standing
    of Mark B. Frost & Associates. For all practical purposes,
    Mark B. Frost & Associates─owned solely by Mark Frost
    himself─has served as the successor law firm to Frost &
    Zeff, PC.
    *    *    *
    Further, even if this Court finds that [Appellants] do not
    have standing to enforce a breach of contract claim against
    [Appellees], [Appellants] still nonetheless must have
    standing to enforce the unjust enrichment claim against
    them. As noted above, the Court in Hill found that the
    shareholder of a corporation could not have a claim based
    on actions taking during the operation of the corporation.
    Here, however, [Appellant] claims that Zeff took certain
    improper actions after the break-up of Frost & Zeff, PC in
    March of 2009.
    *    *    *
    In sum, there exist several instances in which Frost and
    Mark B. Frost & Associates─after the breakup of Frost &
    Zeff─have expended time and money in defending the
    firm’s interest in litigation, and where Zeff has improperly
    retained monies. . . .
    Appellants’ Brief at 22-23, 25-29 (emphasis in original).
    Our review is governed by the following principles:
    [O]ur standard of review of an order granting summary
    judgment requires us to determine whether the trial court
    abused its discretion or committed an error of law[,] and
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    our scope of review is plenary. We view the record in the
    light most favorable to the nonmoving party, and all
    doubts as to the existence of a genuine issue of material
    fact must be resolved against the moving party. Only
    where there is no genuine issue as to any material fact and
    it is clear that the moving party is entitled to a judgment
    as a matter of law will summary judgment be entered.
    Clausi v. Stuck, 
    74 A.3d 242
    , 247-48 (Pa. Super. 2013) (quotation marks
    and citations omitted).
    In Hill, this Court opined:
    In Pennsylvania, only the corporation and “a
    shareholder . . . by an action in the right of the
    corporation” may bring a lawsuit and claim that a director
    breached the standard of care owed to the corporation. 15
    Pa.C.S.A. § 1717. 15 Pa.C.S.A. § 1717, entitled
    “[l]imitation on standing,” provides in relevant part:
    The duty of the board of directors, committees of the
    board and individual directors under [15 Pa.C.S.A. §]
    1712 (relating to standard of care and justifiable
    reliance) is solely to the business corporation and
    may be enforced directly by the corporation or may
    be enforced by a shareholder, as such, by an action
    in the right of the corporation, and may not be
    enforced directly by a shareholder or by any other
    person or group.
    15 Pa.C.S.A. § 1717.            Further, under established
    Pennsylvania law, a shareholder does not have standing to
    institute a direct suit for “a harm [that is] peculiar to the
    corporation and [that is] only [ ] indirectly injurious to
    [the] shareholder.” Reifsnyder v. Pgh. Outdoor Adver.
    Co., [ ] 
    173 A.2d 319
    , 321 ([Pa.] 1961). Rather, such a
    claim belongs to, and is an asset of, the corporation.
    To have standing to sue individually, the
    shareholder must allege a direct, personal injury—
    that is independent of any injury to the corporation—
    and the shareholder must be entitled to receive the benefit
    of any recovery.   See id.; Burdon v. Erskine, [ ] 401
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    15 A.2d 369
    , 370 ([Pa. Super.] 1979) (en banc ) (“[a]n injury
    to a corporation may . . . result in injury to the
    corporation’s stockholders.         Such injury, however, is
    regarded as ‘indirect’, and insufficient to give rise to a
    direct cause of action by the stockholder”); Fishkin v. Hi–
    Acres, Inc., [ ] 
    341 A.2d 95
    , 98 n.4 ([Pa.] 1975) (“[i]f the
    injury is one to the plaintiff as a stockholder and to him
    individually, and not to the corporation, it is an individual
    action”) (internal quotations and citations omitted); White
    v. First Nat'l Bank, [ ] 
    97 A. 403
    , 405 ([Pa.] 1916) (“a
    stockholder can maintain a[ direct] action where the act of
    which complaint is made is not only a wrong against the
    corporation, but is also in violation of duties arising from
    contract or otherwise, and owing to him directly. . . . But
    the difficulty with the plaintiff’s case is that he has failed to
    show any injury to himself apart from the injury to the
    corporation, in which he is a stockholder”); Tooley v.
    Donaldson, Lufkin, & Jenrette, Inc., 
    845 A.2d 1031
    ,
    1039 (Del. 2004) (holding that, to determine whether a
    shareholder’s claim is direct or derivative, “a court should
    look to the nature of the wrong and to whom the relief
    should go. The stockholder’s claimed direct injury
    must be independent of any alleged injury to the
    corporation. The stockholder must demonstrate that the
    duty breached was owed to the stockholder and that he or
    she can prevail without showing an injury to the
    corporation”). As is hornbook law:
    If the injury is one to the plaintiff as a shareholder as
    an individual, and not to the corporation, for
    example, where the action is based on a contract to
    which the shareholder is a party, or on a right
    belonging severally to the shareholder, or on a fraud
    affecting the shareholder directly, or where there is a
    duty owed to the individual independent of the
    person’s status as a shareholder, it is an
    individual action. If the wrong is primarily against
    the corporation, the redress for it must be sought by
    the corporation, except where a derivative action by
    a shareholder is allowable, and a shareholder cannot
    sue as an individual. . . . Whether a cause of action
    is individual or derivative must be determined from
    the nature of the wrong alleged and the relief, if any,
    that could result if the plaintiff were to prevail.
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    In determining the nature of the wrong alleged,
    the court must look to the body of the
    complaint, not to the plaintiff’s designation or
    stated intention.    The action is derivative if the
    gravamen of the complaint is injury to the
    corporation, or to the whole body of its stock or
    property without any severance or distribution
    among individual holders, or if it seeks to recover
    assets for the corporation or to prevent dissipation of
    its assets. . . . If damages to a shareholder result
    indirectly, as the result of an injury to the
    corporation, and not directly, the shareholder cannot
    sue as an individual.
    12B     FLETCHER     CYCLOPEDIA     of   the    LAW    of
    CORPORATIONS § 5911 (2013); see also ALI Principles of
    Corporate Governance § 7.01(a) (“[a]n action in which the
    holder can prevail only by showing an injury or breach of
    duty to the corporation should be treated as a derivative
    action”).
    Id. at 548-49 (emphases added).
    The trial court opined:
    Upon review, this court finds [Appellants] lack standing
    to assert breach of contract and unjust enrichment
    because any breach of contract and unjust enrichment
    claims belong to Frost & Zeff as a professional corporation
    rather than to [Appellants] individually.        [Appellees’]
    alleged failure to pay debts due to the firm is an injury
    suffered by the firm rather than [Appellants] individually. .
    . . Any injuries suffered by [Appellants] individually were
    as a result of harm done to Frost & Zeff. Therefore, this
    court determines the breach of contract claim and unjust
    enrichment claim is only proper as a derivative action, and
    because [Appellants] sought strategically to bring a direct
    suit alleging injury to the firm, [Appellants] do not have
    proper standing to assert their breach of contract and
    unjust enrichment claim for monies “due to the firm.”
    Trial Ct. Op., 9/24/14, at 6-7 (footnotes omitted).
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    We agree no relief is due. The gravamen of Appellants’ complaint is
    injury to the professional corporation.      See Hill, 
    85 A.3d at 548-49
    .
    Appellants have not alleged an injury that is independent of any alleged
    injury to the professional corporation. See 
    id.
     Therefore, Appellants do not
    have standing to bring the cause of action. See 
    id.
     We discern no abuse of
    discretion of error of law by the trial court in granting Appellees’ motion for
    summary judgment. See Stuck, 
    74 A.3d at 242
    .
    Next, Appellants claim that even if they lacked standing to bring
    certain claims individually, Appellants should have been granted leave to
    amend their complaint in order to bring claims on behalf of Frost & Zeff, P.C.
    Initially, we consider whether counsel followed the proper procedure.
    Appellants requested to amend their complaint in their memorandum of law
    in response to Appellees’ motion for summary judgment.        See Appellants’
    Mem. of Law in Opp’n to [Appellees’] Mot. for Summ. J., 7/3/14, at 2.
    This court has stated:
    [The a]ppellant asserts that the trial judge erred in not
    permitting him to amend his complaint so as to insert
    sufficient particularity. The record reveals no such request
    on his part. Although appellant contends that he sought
    leave to amend at the time appellee filed his Motion for
    Summary Judgment, his “request” was merely an
    argument contained in a Memorandum of Law opposing
    the Summary Judgment. Nowhere was it embodied within
    a formal motion or petition.
    Concededly, a liberal right of amendment is afforded to all
    litigants pursuant to Pa.R.C.P. No. 1033. However, the
    right to amend will be withheld if there does not appear to
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    be a reasonable possibility that amendment will be
    successful.
    Spain v. Vicente, 
    461 A.2d 833
    , 837 (Pa. Super. 1983). In Vicente, this
    Court considered whether the trial court erred in denying the request to
    amend the complaint and found no abuse of discretion because the statute
    of limitations had run on the cause of action. Id. at 837. Analogously, we
    will consider whether Appellants should have been granted leave to file an
    amended complaint. See id.
    Pennsylvania Rule of Civil Procedure 1033 provides that
    a party, by consent or leave of court, “may at any time
    change the form of action, correct the name of a party or
    amend his pleading.”        Pa.R.C.P. 1033.      However,
    amendment of a complaint after the statute of
    limitations has expired will not be permitted where
    the amendment attempts to bring a new party into the
    action. As our Court has stated in a prior case:
    A plaintiff may not add a new defendant after
    the applicable statute of limitations has
    expired.      Thus, in cases where the statute of
    limitations has expired and a party seeks to amend
    its pleading to correct the name of party, the issue is
    whether the proposed amendment adds a new party
    to the litigation or merely corrects a party name. If
    an amendment constitutes a simple correcting of the
    name of a party, it should be allowed, but if the
    amendment in effect adds a new party, it should be
    prohibited.
    If the proper party was sued but under the wrong
    designation, the correction will be allowed.
    However, where the wrong party was sued and the
    amendment is designed to substitute another,
    distinct party, it will be disallowed.
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    Ferraro v. McCarthy-Pascuzzo, 
    777 A.2d 1128
    , 1132-33 (Pa. Super.
    2001) (quotation marks and citations omitted); see also Kincy v. Petro, 
    2 A.3d 490
    , 497 (Pa. 2010).
    “An action upon an express contract not founded upon an instrument
    in writing” is four years. 42 Pa.C.S. § 5525(a)(3). In Sevast v. Kakouras,
    
    915 A.2d 1147
     (Pa. 2007), our Pennsylvania Supreme Court opined:
    Generally speaking, the statute of limitations begins to run
    as soon as the right to institute and maintain the suit
    arises. “Whether a complaint is timely filed within the
    limitations period is a matter of law for the court to
    determine.” The cause of action which [the a]ppellee
    brought before the court is based upon a theory of unjust
    enrichment. According to statute, there is a four-year
    statute of limitations for such causes of action. See 42
    Pa.C.S. § 5525(a)(4); Cole v. Lawrence, 
    701 A.2d 987
    ,
    989 (Pa. Super. [ ] 1997) (stating plaintiff’s claim for
    unjust enrichment, an action based on a contract implied
    at law, is subject to a four-year statute of limitations).
    Id. at 1153 (footnotes and some citations omitted).
    Appellants aver that their claims for breach of contract and unjust
    enrichment fall within the applicable statute of limitations.     Appellants
    contend that “all claims from March 1, 2009 onward have been timely filed
    for purposes of the breach of contract and unjust enrichment claims.”
    Appellants’ Mem. of Law in Opp’n to [Appellees’] Mot. for Summ. J., 7/3/14,
    at 17. Appellants conclude that Appellee “Zeff’s actions after he announced
    his intention to leave the firm form the gravamen of [Appellants’] complaint,
    and all clearly took place beginning in March of 2009 and beyond.
    Therefore, [Appellants’] claims for breach of contract and unjust enrichment
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    fall within the applicable statute of limitation . . . .” Id. (footnote omitted).
    Appellants       assert   that   “given   that   claims   are   made   against   Zeff’s
    subsequent firms, the Zeff Law firm and Law Offices of Gregg Zeff, these
    claims obviously pertain to matters occurring during and after the break-up
    of Frost & Zeff, PC in March of 2009.” Appellants’ Brief at 37. We find no
    relief is due.
    Instantly, the trial court opined:
    [Appellants] ask this court to allow leave to amend
    [Appellants’] complaint to name Frost & Zeff as a plaintiff.
    However, given that discovery is complete, the statute of
    limitations has run on all possible breach of contract and
    unjust enrichment claims, and there is no reason that
    [Appellants] could not have asked for leave to amend their
    complaint earlier, this court does not grant leave to
    amend.     In filing direct claims rather than derivative,
    [Appellants] have elected to disassociate themselves from
    the corporation rather than to avail themselves of the
    remedies set forth for individuals in this very situation, i.e.,
    shareholder derivative suits. [Appellant] Frost elected to
    incorporate Frost & Zeff, and must follow the remedies set
    forth within the law for any damages he may have suffered
    as a result. Where the statute of limitations has run,
    amendments will not be allowed which introduce a new
    cause of action or bring in a new party.
    Trial Ct.Op. at 7 n.32 (citations omitted).
    The statute of limitations has run on the claims for breach of contract
    and unjust enrichment. See 42 Pa.C.S. § 5525(a)(3)-(4); Kakouras, 915
    A.2d at 1153.       Frost & Zeff, P.C. dissolved on or about March 2009.           The
    request for leave to amend the complaint was made in the memorandum of
    law filed on July 3, 2014. The amendment would in effect add a new party
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    J.A25041/15
    outside of the statute of limitations, therefore it is prohibited. 9         See
    Ferraro, 
    777 A.2d at 1132-33
    ; Vicente, 461 A.2d at 837
    Order affirmed.
    Judgment Entered.
    Joseph D. Seletyn, Esq.
    Prothonotary
    Date: 12/11/2015
    9
    We note that Appellees aver
    at this time [they] seek a full dismissal of all claims in this
    matter, including the counterclaims, even though the
    counterclaims that are the subject of this appeal are valid.
    Zeff seeks dismissal/affirmance of all claims by Frost and
    his own counterclaims,          because    pursuit of the
    counterclaims appear to be fruitless against the Frost
    parties who are of questionable solvency.
    Appellees’ Brief at 7-8/
    - 17 -
    

Document Info

Docket Number: 827 EDA 2015

Filed Date: 12/11/2015

Precedential Status: Precedential

Modified Date: 12/12/2015