Paul McArdle v. Verizon Communications Inc

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 13-4207
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PAUL J. McARDLE,
Appellant
v.
VERIZON COMMUNICATIONS INC.
______________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 13-cv-1233)
District Judge: Hon. Cathy Bissoon
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Submitted Under Third Circuit LAR 34.1(a)
May 16, 2014
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Before: SMITH, VANASKIE and SHWARTZ, Circuit Judges.
(Opinion Filed: May 23, 2014)
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OPINION
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SHWARTZ, Circuit Judge.
Paul J. McArdle appeals the District Court’s dismissal of his case on statute of
limitations grounds. Because McArdle filed his Complaint after the limitations period
expired, we will affirm.
I.
As we write principally for the benefit of the parties, we recite only the essential
facts and procedural history. 1 McArdle, a Pittsburgh-based attorney, filed a complaint
against Verizon Pennsylvania in the Court of Common Pleas of Allegheny County,
Pennsylvania on May 29, 2007, claiming that Verizon Pennsylvania negligently
“misplaced” listings and advertisements he purchased for publication in the 2006 and
2007 editions of the company’s telephone directories. App. 14-16. In his amended
complaint, McArdle sought to add Verizon Pennsylvania’s parent company, Verizon
Communications Inc., as a defendant but in fact named a different entity. In its answer
filed on July 14, 2008, Verizon Pennsylvania informed McArdle that he had named
Verizon Communications, Inc., another subsidiary of Verizon Communications Inc.,
whose name differed from that of the parent company by a single comma. 2
Despite this disclosure, McArdle did not seek leave to correct his complaint.
Eventually, summary judgment was entered in favor of Verizon Communications, Inc.
The Superior Court affirmed, and on December 27, 2012, the Supreme Court of
Pennsylvania denied McArdle’s petition for review.
On August 27, 2013, McArdle filed this federal Complaint against the parent
1
The facts recounted here are drawn from the Complaint, and because we are
reviewing an order that dismissed a case pursuant to Fed. R. Civ. P. 12(b)(6), we accept
all facts in the Complaint as true. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d
Cir. 2008).
2
Specifically, Verizon Pennsylvania pleaded that “plaintiff appears to have
confused defendant, Verizon Communications, Inc., with a non-party with a very similar
name, Verizon Communications Inc.” App. 19.
2
company, Verizon Communications Inc., in the Western District of Pennsylvania,
alleging it engaged in common law fraud. McArdle asserted that Verizon
Communications Inc. registered with the Commonwealth of Pennsylvania “a plethora of
fictitious names, wholly-owned subsidiary business corporations, and wholly-owned
subsidiary limited liability corporations so as to confuse its customers and the authorities
as to whom they were dealing with.” 3 App. 6. He also alleged that sales representatives
operating out of Verizon Communication Inc.’s office used disingenuous business cards
bearing the names of various unregistered companies. He also claimed that Verizon
Communications Inc., acting through its subsidiaries, made misrepresentations in state
court and sought to inject other businesses into the litigation “for the purpose of
distracting liability away from the Verizon named entity . . . .” App. 18.
On September 3, 2013, Verizon Communications Inc. moved to dismiss the
Complaint on the ground that McArdle’s claim was barred by the statute of limitations. 4
3
Between 2000 and 2013, Verizon Communications Inc. had registered at least 66
such names and registered and subsequently cancelled or withdrawn an additional 26
names.
4
Fed. R. Civ. P. 12(b) allows certain defenses to be raised by motion, but the rule
does not include a statute of limitations defense among them. In this Circuit, however, a
limitations defense may be asserted in a motion under Rule 12(b)(6) if “the time alleged
in the statement of a claim shows that the cause of action has not been brought within the
statute of limitations.” Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002) (internal
quotation marks and citations omitted). However, “[i]f the bar is not apparent on the face
of the complaint, then it may not afford the basis for a dismissal of the complaint under
Rule 12(b)(6).” Id. (internal quotation marks and citations omitted). As discussed
herein, the allegations contained in the Complaint demonstrate that McArdle’s claim was
brought after the limitations period expired. Therefore, the District Court did not err in
considering Verizon Communication Inc.’s limitations defense in a Rule 12(b)(6) motion.
3
At the Court’s direction, the parties then submitted forms, in which McArdle declined to
consent to magistrate judge jurisdiction and elected instead to have the case assigned to a
district judge. Following assignment of the case to the District Judge but absent a referral
order on the docket, the Magistrate Judge issued a Report and Recommendation, in which
he recommended that the District Court grant Verizon Communication Inc.’s motion to
dismiss on statute of limitations grounds. 5 Over McArdle’s objections, the District Judge
adopted the Magistrate Judge’s Report and Recommendation and granted Verizon
Communication Inc.’s motion to dismiss. McArdle now appeals.
II.
The District Court had jurisdiction in this case pursuant to 28 U.S.C. § 1332, and
we have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review of a
district court’s order dismissing a complaint. Burtch v. Milberg Factors, Inc., 662 F.3d
212, 220 (3d Cir. 2011). We “accept all factual allegations as true, construe the
5
We find no error in the Magistrate Judge’s issuance of the Report and
Recommendation following McArdle’s election to have the case assigned to a District
Judge. The Federal Magistrates Act, 28 U.S.C. § 636, requires neither the consent of the
parties nor an order that refers a matter to a magistrate judge for a report and
recommendation. In re U.S. Healthcare, 159 F.3d 142, 145 (3d Cir. 1998). Moreover,
the Local Rules of the United States District Court for the Western District of
Pennsylvania provide that “[i]f a party elects to have the case assigned to a District Judge,
the Magistrate Judge shall continue to manage the case by deciding non-dispositive
motions and submitting reports and recommendations on dispositive motions, unless
otherwise directed by the District Judge.” LCvR 72(G). Thus, the issuance of the Report
and Recommendation was permissible under our precedent and the local rules of the
District Court. Furthermore, 28 U.S.C. § 636(b)(1)(B) does not require a magistrate
judge to hold a hearing prior to issuing a report and recommendation. Garcia v. City of
Albuquerque, 232 F.3d 760, 766 (10th Cir. 2000).
4
complaint in the light most favorable to the plaintiff, and determine whether, under any
reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v.
Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotation marks omitted).
III.
McArdle argues that the District Court erred in dismissing his Complaint based
upon the statute of limitations. In Pennsylvania, the statute of limitations for fraud claims
is two years. 42 Pa. Cons. Stat. § 5524(7). “[T]he statute of limitations begins to run as
soon as the right to institute and maintain a suit arises . . . .” Pocono Int’l Raceway, Inc.
v. Pocono Produce, Inc., 468 A.2d 468, 471 (Pa. 1983). It is tolled, however, “until the
plaintiff knew, or through the exercise of reasonable diligence should have known, of the
injury and its cause.” Beauty Time, Inc. v. VU Skin Sys., Inc., 118 F.3d 140, 144 (3d
Cir. 1997) (internal quotation marks and citations omitted). “[L]ack of knowledge,
mistake or misunderstanding do not toll the statute of limitations, even though a person
may not discover his injury until it is too late to take advantage of the appropriate remedy
. . . .” Pocono, 468 A.2d at 471 (citation omitted).
Here, the alleged misrepresentations concerning the identity of Verizon
Communications Inc., namely the registration of numerous subsidiaries and the
distribution of business cards bearing the names of unregistered businesses, occurred
before McArdle filed his state court action in 2007. McArdle was informed on July 14,
2008 that he had named the wrong defendant, and so he knew, or through the exercise of
reasonable diligence should have known, the identity of the party allegedly responsible
5
for his injury no later than that date. The two year limitations period, therefore, began no
later than July 14, 2008, and expired two years later. Because McArdle’s fraud claim
was not filed until August 27, 2013, it is barred by the statute of limitations.
McArdle’s argument that damages did not “become certain,” and the limitations
period did not begin to run, until the Supreme Court of Pennsylvania denied his petition
for review on December 27, 2012, fails. McArdle seems to contend that Verizon
Communications Inc. defrauded him by its alleged failure to reveal the true wrongdoer
and that it was only when the courts in Pennsylvania told him that he had no claim
against the party he chose to sue that he was injured. As previously discussed, McArdle
learned that he had pursued his claim against the wrong party in 2008. Neither his failure
to take advantage of the opportunity to amend the state complaint to name the proper
defendant nor the decision of a court concerning the improper defendant changes the date
on which he knew of the alleged wrongful act. See Pocono, 468 A.2d at 471. His mistake
concerning the proper party and his decision to nonetheless proceed against a different
defendant despite being told of his error do not toll the statute of limitations. Therefore,
the District Court correctly dismissed the Complaint on the ground that his claim accrued
in 2008 and the present action was filed beyond the two year statute of limitations. 6
6
McArdle also argues that the District Court erred in its evaluation of the
sufficiency of the pleadings under Twombly and Iqbal. As the District Court properly
dismissed the Complaint on statute of limitations grounds, we need not consider
McArdle’s arguments regarding the sufficiency of the pleadings.
6
McArdle’s argument that the dismissal of the Complaint violates his Seventh
Amendment right to jury trial is also without merit. The Seventh Amendment preserves
the right to a jury trial in cases where there are issues of fact to be determined. Parklane
Hosiery Co. v. Shore, 439 U.S. 322, 336 (1979). Where, as here, a district court
concludes as a matter of law that the plaintiff cannot succeed on his claim, the district
court’s legal determination does not invade the province of the jury and, therefore, does
not violate his Seventh Amendment rights. See, e.g., Christensen v. Ward, 916 F.2d
1462, 1466 (10th Cir. 1990) (“[The] Seventh Amendment right to a jury trial was not
abridged, because . . . the complaints failed as a matter of law to present an issue for
trial.”); see also Tellabs, Inc. v. Major Issues & Rights, Ltd., 551 U.S. 308, 327 n.9
(2007) (“In recognizing Congress’ or the Federal Rule makers’ authority to adopt special
pleading rules, we have detected no Seventh Amendment impediment.”); Walker v. N.M.
& S. P. R. Co., 165 U.S. 593, 596 (1897) (“The seventh amendment . . . does not attempt
to regulate matters of pleading or practice . . . .”).
IV.
For the foregoing reasons, we will affirm.
7