Heldring, J. v. Lundy Beldecos & Milby ( 2018 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JAMES HELDRING, INDIVIDUALLY : IN THE SUPERIOR COURT OF
AND ON BEHALF OF PENCOYD IRON : PENNSYLVANIA
WORKS, INC. :
:
Appellant :
:
:
v. :
: No. 1731 EDA 2017
:
LUNDY, BELDECOS & MILBY, P.C., :
F/K/A LUNDY, FLITTER, BELDECOS :
& BERGER, P.C., ERIC C. MILBY, :
ESQ.
Appeal from the Order Entered April 24, 2017
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): May Term, 2015 No. 2532
BEFORE: LAZARUS, J., OTT, J., and PLATT*, J.
MEMORANDUM BY LAZARUS, J.: FILED APRIL 27, 2018
Pencoyd Iron Works, Inc. (“Plaintiff”),1 appeals from the order entered
in the Court of Common Pleas of Philadelphia County, granting the motion for
judgment on the pleadings filed by Lundy, Beldecos & Milby, P.C., and Eric C.
Milby, Esquire (collectively, “Defendants”). Upon review, we reverse and
remand for further proceedings.
This case involves a malpractice suit instituted by Plaintiff Pencoyd Iron
Works against Defendants stemming from Attorney Milby’s stewardship of an
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1Although the caption in this matter also names James Heldring as a party,
he was dismissed as a plaintiff by the trial court, and that ruling was affirmed
by this Court in a prior appeal. See Heldring v. Lundy Beldecos & Milby,
P.C., 151 A.3d 634 (Pa. Super. 2016).
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* Retired Senior Judge assigned to the Superior Court.
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underlying collection action. Although Plaintiff successfully obtained a
judgment in that matter, it has been unable to collect it because Attorney
Milby sued a “trade name” company, “Grasso Holdings,” which Plaintiff claims
has no assets.2
The procedural history of this matter is complicated, to say the least.
On May 21, 2015, Plaintiff commenced the instant action by writ of summons
against Defendants. Plaintiff alleged that Defendants were “negligent and
careless in their pre-litigation investigation and due diligence because they did
not name the correct Grasso entity or any of the various legal entities owned
or controlled by David Grasso.” Amended Complaint, 11/30/15, at ¶ 31.
Plaintiff asserted that a search via the internet or Dun & Bradstreet would
have been sufficient to alert Defendants as to the identity of the correct legal
entity. Plaintiff alleged that Defendants’ actions have impaired its ability to
collect on its judgment and sought damages for legal malpractice and unjust
enrichment.
On December 1, 2015, Defendants filed preliminary objections in the
nature of a demurrer. In those preliminary objections, Defendants asserted
that the trial court in the underlying matter had determined as a matter of law
and fact that Grasso Holdings was the contracting party with Plaintiff and was
the party responsible for payment of all amounts due. See Preliminary
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2The trial court in the underlying action denied a motion for “clarification” filed
by Attorney Milby in the underlying action seeking to apply the judgment to
various other Grasso entities.
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Objections, 12/1/15, at ¶ 20. As such, the correct party was sued and
Defendants could not be deemed to have breached a duty of care owed to
Plaintiff. By order dated January 13, 2016, the trial court sustained
Defendants’ preliminary objections and dismissed Plaintiff’s amended
complaint with prejudice.
Plaintiff appealed the trial court’s dismissal to this Court, which reversed
the dismissal of Plaintiff’s legal malpractice claim and remanded for further
proceedings. Heldring, 151 A.3d at 646. Upon remand, Defendants filed an
answer with new matter on January 26, 2017, raising as a defense the statute
of limitations. Specifically, Defendants averred that Plaintiff became aware of
the identities of the underlying defendants on or about March 4, 2010. As
Plaintiff filed its complaint in the instant matter over five years later, on May
21, 2015, Defendants asserted Plaintiff’s claims are barred by the two year
statute of limitations on negligence claims3 and the four year statute of
limitations on breach of contract claims.4
Plaintiff having failed to respond to Defendants’ new matter within 20
days, see Pa.R.C.P. 1026(a), Defendants filed a motion for judgment on the
pleadings on February 22, 2017, on the basis that Plaintiff’s action was barred
by the statute of limitations. Thereafter, on February 23, 2017, Plaintiff filed
a response to Defendants’ new matter in which it generally denied Defendants’
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3 42 Pa.C.S.A. § 5524.
4 42 Pa.C.S.A. § 5525.
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averments as to the statute of limitations. On March 14, 2017, Plaintiff
answered Defendants’ motion for judgment on the pleadings. On March 16,
2017, Defendants filed a reply to Plaintiff’s answer and, on March 17, 2017,
Plaintiff filed a sur-reply brief.
By order dated April 24, 2017, the trial court granted Defendants’
motion for judgment on the pleadings and dismissed Plaintiff’s complaint with
prejudice on the basis that the complaint was not filed within the time allowed
by the applicable statutes of limitations. Plaintiff filed a motion for
reconsideration, which was denied, followed by a timely notice of appeal to
this Court. On appeal, Plaintiff raises the following claims for our review:
1. Did the [trial] court below err when it held that Plaintiff’s failure
to file a timely [r]eply to [n]ew [m]atter resulted in admissions,
thus permitting the entry of judgment on the pleadings,
because:
a. Defendant’s [n]otice to [p]lead was in the incorrect form?
b. Plaintiff’s reply was only eight days late, a delay that
should have been disregarded in the interest of justice?
c. Said admissions were insufficient for a grant of the
motion for judgment on the pleadings?
2. Did the [trial] court below abuse its discretion when it denied
Plaintiff’s request to file an [a]mended [r]eply to [n]ew
[m]atter?
3. Did the [trial] court below err by granting a motion for
judgment on the pleadings when an issue of fact exists as to
when Plaintiff, a client, knew or should have known that its
attorneys committed malpractice by naming the incorrect party
as a defendant in a lawsuit?
Brief of Appellant, at 5-6 (issues renumbered for ease of disposition).
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Pennsylvania Rule of Civil Procedure 1034 governs motions for judgment
on the pleadings and provides that “[a]fter the pleadings are closed, but within
such time as not to unreasonably delay trial, any party may move for
judgment on the pleadings.” Pa.R.C.P. 1034(a). On appeal from the grant of
a motion for judgment on the pleadings, our scope and standard of review are
as follows:
Appellate review of an order granting a motion for judgment
on the pleadings is plenary. The appellate court will apply
the same standard employed by the trial court. A trial court
must confine its consideration to the pleadings and relevant
documents. The court must accept as true all well[-]
pleaded statements of fact, admissions, and any documents
properly attached to the pleadings presented by the party
against whom the motion is filed, considering only those
facts which were specifically admitted.
Lewis v. Erie Ins. Exchange, 753 A.2d 839, 842 (Pa. Super.
2000) (quotation omitted). “We will affirm the grant of such a
motion only when the moving party’s right to succeed is certain
and the case is so free from doubt that the trial would clearly be
a fruitless exercise.” Holt v. Lenko, 791 A.2d 1212, 1214 (Pa.
Super. 2002) (quotation omitted).
Wachovia Bank, N.A. v. Ferretti, 935 A.2d 565, 570 (Pa. Super. 2007),
quoting Aquilino v. Philadelphia Catholic Archdiocese, 884 A.2d 1269,
1275 (Pa. Super. 2005). In other words, “[a] motion for judgment on the
pleadings is similar to a demurrer. It may be entered when there are no
disputed issues of fact and the moving party is entitled to judgment as a
matter of law.” Id., quoting Consolidation Coal Co. v. White, 875 A.2d
318, 325 (Pa. Super. 2005) (citations omitted).
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Plaintiff first argues that it was not required to respond to Defendants’
new matter, as the notice to plead was not in substantial compliance with
Pa.R.C.P. 1361.5 This claim is waived.
Plaintiff did not raise the Rule 1361 issue before the trial court, either in
its response in opposition to Defendants’ motion for judgment on the pleadings
or in its motion for reconsideration. It has long been settled that issues not
raised in the lower court cannot be raised for the first time on appeal and are,
therefore, waived. Pa.R.A.P. 302(a); Milicic v. Basketball Mktg. Co., Inc.,
857 A.2d 689, 693 (Pa. Super. 2004), citing ABG Promotions v. Parkway
Publishing, Inc., 834 A.2d 613, 619 (Pa. Super. 2003) (en banc). Because
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5 Pennsylvania Rule of Civil Procedure 1026 requires that “every pleading
subsequent to the complaint shall be filed within twenty days after service of
the preceding pleading, but no pleading need be filed unless the preceding
pleading contains a notice to defend or is endorsed with a notice to plead.”
Pa.R.C.P. 1026. Pennsylvania Rule of Civil Procedure 1361 sets forth the form
of a notice to plead and provides that such notice be in substantially the
following form:
You are hereby notified to file a written response to the enclosed
(name of pleading) within twenty (20) days from service hereof
or a judgment may be entered against you.
Pa.R.C.P. 1361.
Plaintiff asserts that, because the notice to plead affixed to Defendants’ new
matter did not contain the language “or a judgment may be entered against
you” it was not in “substantial compliance” with the Rule 1361. Accordingly,
no responsive pleading was required and all averments contained in
Defendants’ new matter were deemed denied.
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Plaintiff did not raise the issue of Defendants’ failure to comply with Rule 1361
before the trial court, it has waived this argument on appeal.
Plaintiff next claims that the trial court erred in refusing to grant it leave
to file an amended answer to Defendants’ new matter to properly raise the
issue of the application of the discovery rule.6 In support of its contention,
Plaintiff cites Puleo v. Broad Street Hospital, 407 A.2d 394 (Pa. Super.
1979). There, plaintiff filed an action in trespass against defendants. In new
matter, defendants asserted that plaintiff’s claim was barred by the statute of
limitations. In its reply to new matter, plaintiff generally averred that his
action had been commenced within the time allowed therefor. The court
granted judgment on the pleadings in favor of the defendants. Plaintiff filed
a motion for reconsideration containing a request to file an amended reply to
new matter, accompanied by an affidavit averring that plaintiff’s injury was
first discovered on May 16, 1974. Using this date, under the discovery rule,
plaintiff’s complaint would have been within the statute of limitations. The
trial court denied reconsideration, as well as plaintiff’s request to amend.
On appeal, this Court held that, while the trial court had properly
granted judgment based on the pleadings before it, the court should
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6 Under the discovery rule, the statute of limitations is tolled until the date an
injured party is aware, or reasonably should be aware, of its injury and its
cause. See Ford v. Oliver, 176 A.3d 891, 904 (Pa. Super. 2017) (citation
omitted). Plaintiff argues that, in this case, that date is June 2014, when the
Defendants provided its president, James Heldring, with a copy of the trial
court’s order in the underlying matter denying the motion for clarification filed
by Attorney Milby on Plaintiff’s behalf. The trial court correctly found that
Plaintiff failed to plead the discovery rule in its answer to new matter.
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nonetheless have granted plaintiff leave to amend its answer to new matter,
where plaintiff’s application for reconsideration was accompanied by an
affidavit averring that plaintiff did not become aware of his injury until May
16, 1974. The Court stated:
“[I]t is well settled in this Commonwealth that while the right to
amend pleadings is ordinarily a matter resting in the sound
discretion of the trial court, amendments should be allowed with
great liberality at any stage of the case, unless, of course, they
violate the law or prejudice the rights of the opposing party.”
Arzinger v. Baughman, [] 34 A.2d 64, 65 ([Pa.] 1943). See
also: Bogert v. Allentown Housing Authority, [] 231 A.2d 147([Pa.] 1967). Where a defect in the pleadings can be cured by
amendment, the opportunity to do so will as a general rule be
provided. Lehner v. Montgomery, [] 119 A.2d 626, 630 ([Pa.
Super.] 1956). The reason is a strong reluctance to foreclose a
party because of the failure or neglect of his counsel. McFadden
v. Pennzoil Company, [] 191 A. 584, 585 ([Pa.] 1937).
Puleo, 407 A.2d at 396.
We agree with Plaintiff that the trial court should have granted it leave
to amend its answer to new matter to plead the discovery rule. As in Puleo,
Plaintiff’s request to amend was accompanied by an affidavit from its
president, James Heldring, stating that he did not discover Defendants’
negligence until June 2014. This Court has previously stated its preference
for allowing amendment of pleadings, even after the opposing party has
moved for judgment on the pleadings.
[W]here there is any uncertainty or doubt, it should not be
assumed that a party cannot plead with more specificity. The
court should consider the advisability of directing a party to
amend. Moreover, in close cases, it would seem that the
preferable approach is to await the filing of affidavits and
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depositions and then to consider the issue on a motion for
summary judgment.
Pilotti v. Mobil Oil Corp., 565 A.2d 1227, 1229 (Pa. Super. 1989), quoting
Del Quadro v. City of Philadelphia, 437 A.2d 1262, 1263 (Pa. Super. 1981)
(citations omitted). Only where there is no apparent possibility that plaintiff
will be able to set forth a better case by amendment, is there no abuse of the
court’s discretion in refusing the amendment. Williams By & Through
Williams v. Lewis, 466 A.2d 682, 685 (Pa. Super. 1983). Additionally,
[a] court may disallow leave to amend the pleadings only where
prejudice to the other party would result. Gallo v. Yamaha
Motor Corp. U.S.A., [] 484 A.2d 148, 150 ([Pa. Super.] 1984).
Prejudice must amount to something more than the removal of
the procedural defect that the amendment is intended to cure. Cf.
W.I. Snyder Corp. v. Caracciolo, [] 541 A.2d 775, 778 ([Pa.
Super.] 1988). Rather, a trial court may not deny a party leave
to amend unless unfair surprise or some comparable prejudice will
result from the amendment. Robinson Protective Alarm Co. v.
Bolger and Picker, [] 516 A.2d 299 ([Pa.] 1986). The timeliness
of the request to amend is a factor to be considered, but it is to
be considered only insofar as it presents a question of prejudice
to the opposing party, as by loss of witnesses or eleventh hour
surprise. See Brooks v. McMenamin, [] 503 A.2d 446 ([Pa.
Super.] 1986).
Pilotti, 565 A.2d at 1229.
Here, the trial court's entry of judgment on the pleadings was an abuse
of discretion, contrary to the policy of the law of this Commonwealth. This
Court has already held that Plaintiff has stated a viable cause of action for
professional malpractice based on Defendants’ failure to name the proper
defendants in the underlying collections action. See Heldring, supra. In its
motion for reconsideration and request for leave to amend, as well as in its
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proposed amended answer to new matter,7 Plaintiff sets forth facts which
could, if proven, satisfy the discovery rule and render its claims timely under
the applicable statutes of limitations. Moreover, no prejudice has been
suggested in this case to warrant denial of Plaintiff’s prompt request to amend
its answer to correct inadequacies.8
In sum, because there exists a reasonable possibility that Plaintiff will
be able to set forth a legal theory and facts which, if proven, could toll the
relevant statutes of limitations, we conclude that the trial court abused its
discretion in refusing to grant Plaintiff’s timely request to amend its answer to
new matter. Accordingly, we remand the case to the trial court to allow
Plaintiff to file an amended answer to new matter.9
Order reversed. Case remanded for proceedings consistent with the
dictates of this memorandum. Jurisdiction relinquished.
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7 The trial court concluded that, even if Plaintiff had properly raised the
discovery rule, its negligence claim would still be barred because it should
have known of Defendants’ alleged negligent conduct not later than May 17,
2013, the date on which Attorney Milby filed the motion to clarify judgment.
However, Plaintiff’s proposed amended answer raises sufficient questions of
fact so as to call that conclusion into question.
8The trial court granted Defendants’ motion for judgment on the pleadings
by order dated April 24, 2017. Plaintiff filed its motion for reconsideration,
containing a request to amend its answer to new matter, ten days later, on
May 4, 2017.
9 Because of our disposition, we need not address Plaintiff’s remaining issues.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/27/18
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