Morrison Info. v. Members 1st FCU

[J-10-2016] [MO: Saylor, C.J.]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
MORRISON INFORMATICS, INC., : No. 18 MAP 2015
ANTHONY M. GRIGONIS, AND :
MALCOLM H. MORRISON : Appeal from the Order of the Superior
: Court at No. 467 MDA 2013 dated
: August 12, 2014 Affirming in Part and
v. : Vacating in Part the Order entered
: February 20, 2013 in the Cumberland
: County Court of Common Pleas, Civil
MEMBERS 1ST FEDERAL CREDIT : Division, at No. 2011-04636 and
UNION, MARK ZAMPELLI, AND SCOTT : remanding with instructions.
DOUGLASS :
:
: ARGUED: November 17, 2015
APPEAL OF: MEMBERS 1ST FEDERAL : RESUBMITTED: January 20, 2016
CREDIT UNION :
CONCURRING OPINION
JUSTICE WECHT Decided: May 25, 2016
Stare decisis, a principle as old as the common law itself, embodies the idea that,
“for the sake of certainty, a conclusion reached in one case should be applied to those
[that] follow, if the facts are substantially the same, even though the parties may be
different.” Estate of Fridenberg v. Commonwealth, 33 A.3d 581, 589 (Pa. 2011)
(quoting Commonwealth v. Tilghman, 673 A.2d 898, 903 n.9 (Pa. 1996)). Stare decisis
“promotes the evenhanded, predictable, and consistent development of legal principles,
fosters reliance on judicial decisions, and contributes to the actual and perceived
integrity of the judicial process.” Buckwalter v. Borough of Phoenixville, 985 A.2d 728,
730-31 (Pa. 2009) (quoting Stilp v. Commonwealth, 905 A.2d 918, 954 n.31 (Pa. 2006)).
Still, this Court and innumerable others have remained mindful of Justice Louis
Brandeis’ admonition that stare decisis “is not a universal, inexorable command.” State
of Washington v. W.C. Dawson & Co., 264 U.S. 219, 237 (1924) (Brandeis, J.,
dissenting). Stare decisis is not “a vehicle for perpetuating error, but rather a legal
concept [that] responds to the demands of justice and, thus, permits the orderly growth
processes of the law to flourish.” Buckwalter, 985 A.2d at 731 (quoting Estate of
Grossman, 406 A.2d 726, 731 (Pa. 1979)). As the United States Supreme Court
recently observed, “[w]hat we decide, we can undecide. But stare decisis teaches that
we should exercise that authority sparingly.” Kimbel v. Marvel Entm’t, LLC, 135 S. Ct.
2401, 2415 (U.S. 2015).1 “When precedent is examined in the light of modern reality
and it is evident that the reason for the precedent no longer exists, the abandonment of
the precedent is not a destruction of stare decisis but rather a fulfillment of its proper
function.” Fridenberg, 33 A.3d at 590 (quoting Ayala v. Phila. Bd. of Pub. Educ., 305
A.2d 877, 886-87 (Pa. 1973)). Among appropriate considerations in assessing the
wisdom of departing from precedent are “workability,” Payne v. Tennessee, 501 U.S.
808, 827 (1991), “the antiquity of the precedent, the reliance interests at stake, and . . .
whether the decision [or decisions were] well[-]reasoned.” Citizens United v. Fed.
Election Comm’n, 558 U.S. 310, 363 (2010) (quoting Montejo v. Louisiana, 556 U.S.
778, 792-93 (2009)).
I join the majority. I write separately to disavow any suggestion that the decision
we reach today squares with our precedent. See, e.g., Maj. Op. at 11 (acknowledging
“tension” between its approach and a number of our prior precedents but opining that
“there simply is no precedent controlling substitution in a scenario involving a
1
In mapping the boundaries of a jurisprudential matter like stare decisis as applied
to state law, the United States Supreme Court’s practices and precedents do not bind
this Court. However, the precept is honored more or less universally in the Anglo-
American legal tradition, and the High Court’s interpretation of the principle has
persuasive value.
[J-10-2016] [MO: Saylor, C.J.] - 2
bankruptcy trustee”).2 I perceive in today’s ruling a significant abrogation or
modification of the predominant body of our most on-point case law. To leave that
aspect of this case unacknowledged is to risk confusion. Lawyers and judges might
read today’s decision as forcing them to strive mightily in an attempt to reconcile
disparate precedents, including this one. They need not do so. No principled
reconciliation is available. Today, the Court departs from our prior, formalistic
decisions. The interests of justice provide ample warrant for doing so.
This case hinges upon whether the trustee is a “new party” as that term has been
employed in Pennsylvania.3 The weight of Pennsylvania precedent leaves it difficult to
conclude that the trustee is anything but a new party as we have defined that term
previously. The majority does not suggest otherwise. In heretofore undisturbed
precedent going back more than a century, “new party” status, and the consequent
preclusion of party substitution after the running of the statute of limitations, was found
despite the fact that the party in question was merely seeking to substitute herself in a
representative capacity for herself as an individual.
2
In tandem with this observation, the majority alludes to the time-honored principle
that, in deriving rules from past precedents, we must read the prior holdings “against
their facts.” Maj. Op. at 11. This is true as far as it goes. However, it does not cure the
complicating factor that few rules can be extracted when comparisons of the facts in
one case to the next are conducted at a microscopic level, because any two cases
rarely will be factually identical. Hence, merely citing this principle does not justify
distinguishing cases on factual differences that are immaterial to the legal question
presented. Were it so, stare decisis would be of no service whatsoever in promoting the
“predictable, and consistent development of legal principles.” Buckwalter, 985 A.2d at
731. To the contrary, an overly particular parsing of prior precedents in search of
esoteric distinctions of fact confounds that objective. See Benjamin N. Cardozo, The
Nature of the Judicial Process 149 (1921) (“The labor of judges would be increased
almost to the breaking point if every past decision could be reopened in every case, and
one could not lay one’s own course of bricks on the secure foundation of the courses
laid by others who had gone before him.”).
3
The parties’ arguments indicate that this view of the case is not inconsistent with
their own, although they pursue numerous other lines of analysis.
[J-10-2016] [MO: Saylor, C.J.] - 3
In La Bar v. N.Y., S. & W. R. Co., 67 A. 413 (Pa. 1907), the case that is most
relevant, a widow sued her late husband’s employer in her individual capacity after her
husband was killed in a work-related accident in New Jersey. At or near the time of
trial, after the statute of limitations had run, the widow sought to amend the caption to
identify herself as administratrix for the decedent’s estate. The trial court declined the
amendment on the basis that it introduced a new party and, thus, a new cause of action
after the limitations period had run. Id. at 413.
On review, this Court found that it must apply New Jersey law, which required
that suit be brought in the name of the administratrix of the decedent’s estate for the
benefit of the widow and the decedent’s children. Thus, suit originally had been filed by
the wrong party. This Court held that, when the widow tried to amend the caption, she
had commenced a new action with a new party-plaintiff after the running of the statute
of limitations. We deemed this impermissible:
Unless the amendment is allowed the right of action does not exist in the
plaintiff. The answer to this question depends upon whether a new cause
of action was introduced or new parties were permitted to intervene. It
has been many times decided that a new cause of action cannot be
introduced, or new parties brought in, or a new subject-matter presented,
or a vital and material defect in the pleadings be corrected, after the
statute of limitations has become a bar.
La Bar, 67 A. at 414 (citing cases). Thus, even where the embodiment of the plaintiff
lay in the same woman, a material change in her capacity rendered her a new claimant
bringing a new cause of action. Her suit was barred by the statute of limitations.
In light of this undisturbed precedent, I struggle to discern how we would not be
obligated to reach the same conclusion with regard to the trustee in this matter were we
to apply stare decisis, notwithstanding the outlying cases characterized briefly by the
majority as existing “in tension” with the above-cited precedents and others. See Maj.
Op. at 11. If substituting the widow as administratrix in a “representative capacity” for
[J-10-2016] [MO: Saylor, C.J.] - 4
the widow in her individual capacity (in both incarnations for her own benefit as widow
and ostensibly for the benefit of her children) was impermissible, then the substitution in
this case of an entirely different albeit representative party on behalf of a debtor in
bankruptcy4 necessarily would seem to entail the insertion of a new party, and
consequently a new cause of action under the dictates of La Bar and numerous other
cases.5
This brings us to the larger question: Is a departure warranted in this case? In
my view—and implicitly in the majority’s—justice is disserved by the strict application of
the rule that the addition of a “new party,” so defined, triggers a “new cause of action”
that is precluded by the limitations period when it has run before the attempted
substitution. Over time and in this case, the rule has lacked the flexibility necessary to
maximize the likelihood that the outcome of litigation will be resolved justly on the merits
rather than expediently based upon rigid application of a formalistic rule. Many other
jurisdictions have eschewed this formalism, in deference to equitable principles that we,
too, generally honor. As noted by the majority, in some instances our precedents have
4
It is telling, perhaps, that we commonly refer to the collective assets of a debtor
in bankruptcy as an “estate.”
5
See, e.g., Kille v. Ege, 82 Pa. 102, 110 (1876) (denying substitution after the
limitations period of parties with title to the property in an ejection action for parties
without title upon the basis that the amendment “depriv[ed] the opposite party of [a]
valuable right” but without suggesting that new substantive claims were raised or the
identification of any prejudice); Garman v. Glass, 46 A. 923, 925-26 (Pa. 1900) (“Rights
of action in different capacities, even though in the same individual, cannot be mixed
and interchanged.”); cf. Mumma v. Phila. & Reading Ry. Co., 119 A. 287, 288
(Pa. 1922) (citing La Bar for the proposition that a change in party from individual to
representative cause of action “is a change in the cause of action, and will not be
allowed after the statute of limitations has become a bar”); Holmes v. Penna. R.R. Co.,
69 A. 597, 598 (Pa. 1908) (same). But see Usner v. Duersmith, 31 A.2d 149, 150
(Pa. 1943) (distinguishing La Bar on narrow grounds and allowing post-limitations
substitution from individual to representative status).
[J-10-2016] [MO: Saylor, C.J.] - 5
led to results that fly in the face of the liberal allowance of amendment and substitution
prescribed by Pa.R.C.P. 1033, our case law thereunder, and Pennsylvania precedents
antedating that Rule. See, e.g., Maj. Op. at 11 (acknowledging that “the Court’s
precedent has taken a hard line relative to proceedings errantly initiated against
deceased persons”). Furthermore, while Rule 1033 does not expressly allow post-
limitations period substitution, that Rule conspicuously does not preclude it. See id. at
10. As well, our former precedents dealing with the broader question regarding when a
substitution entails the addition of a “new party,” at least in this court, are quite old, have
not recently been reaffirmed, and are arguably “unworkable,” at least in some cases, as
the confusion and surfeit of legal theories characterizing the instant case’s path through
the courts aptly demonstrates. See Fridenberg; Citizens United, supra.
I join the majority’s reasoning based upon the sound policy concerns that it
identifies. I share the majority’s view that those jurisdictions employing more liberal
rules than we have recognized in the past have found that their approach serves the
interests of justice. See Maj. Op. at 10-11 & n.5. I do not perceive that our ruling
reflects an unwise or unduly precipitous departure from prior precedent. Rather, it
embraces a degree of jurisprudential housekeeping that is consistent with the letter and
spirit of our procedural rules and statutes of limitations and that fits well with the criteria
we have cited in the past as warranting departures from stare decisis.
I write separately in the hope of sparing the bench and bar from a futile search
for harmony amongst our precedents. There is little to be found. This decision marks a
departure. It is informed most by the desuetude and unfortunate formalism of a strict,
[J-10-2016] [MO: Saylor, C.J.] - 6
circumstance-indifferent limitation upon the substitution of representative parties once
the statute of limitations has run. Cessante ratione legis, cessat ipsa lex.6
The liberal, case-specific rubric that appears to reflect something approaching a
consensus in other jurisdictions7 comports with our procedural rules’ stated objective of
ensuring the just resolution of cases upon their merits. See Pa.R.C.P. 126 (“The rules
shall be liberally construed to secure the just, speedy and inexpensive determination of
every action or proceeding to which they are applicable.”).8 Today’s decision protects
parties innocent of whatever misstep created the circumstance requiring substitution,
such as the creditors in bankruptcy in the instant matter, from the unjust consequences
of that error. The law of this Commonwealth is the better for it.9 “Wisdom too often
6
Where stops the reason, there stops the rule. See Duhaime’s Law Dictionary,
www.duhaime.org/LegalDictionary/C/CessanteRationeLegisCessatIpsaLex.aspx (last
reviewed April 22, 2016) (“[T]he reason for a law ceasing, the law itself ceases.”); see
also Commonwealth v. Ladd, 166 A.2d 501, 506 (Pa. 1960) (“A rule becomes dry when
its supporting reason evaporates: cessante ratione legis cessat lex.”); Beardsley v. City
of Hartford, 50 Conn. 529, 542 (1883) (“[N]o law can survive the reasons on which it is
founded. It needs no statute to change it; it abrogates itself. If the reasons on which a
law rests are overborne by opposing reasons, which in the progress of society gain a
controlling force, the old law, though still good as an abstract principle, and good in its
application to some circumstances, must cease to apply as a controlling principle to the
new circumstances.”).
7
But see, e,g., Bibbs v. Cmty. Bank, 278 S.W.3d 564 (Ark. 2008) (denying post-
statute of limitations substitution of bankruptcy trustee because original suit brought in
the name of the debtor in bankruptcy was void ab initio).
8
To that end, Rule 126 further provides that “[t]he court at every stage of any such
action or proceeding may disregard any error or defect of procedure which does not
affect the substantial rights of the parties.”
9
Even courts applying F.R.C.P. 17 and its state analogs do not allow amendment
in all cases, even when to do so would not change the claims raised or prejudice the
adverse party. See Gardner v. State Farm Fire & Cas. Co., 544 F.3d 553, 563 (3d Cir.
2008) (holding that substitution may not be warranted where, e.g., the omitted plaintiff
was readily ascertainable before the end of the limitations period and no basis for the
mistake is ventured and noting that Rule 17(a)(3) seeks to “prevent forfeiture of an
action when determination of the right party to sue is difficult or when an understandable
(continuedN)
[J-10-2016] [MO: Saylor, C.J.] - 7
never comes,” wrote Justice Felix Frankfurter, “and so one ought not to reject it merely
because it comes late.” Henslee v. Union Planters Nat. Bank & Trust Co., 335 U.S.
595, 600 (U.S. 1949) (Frankfurter, J., dissenting).
(Ncontinued)
mistake has been made” but “is not a provision to be distorted by parties to circumvent
the limitations period”). While such a circumstance may lurk in the instant matter, the
issue has not been raised and, thus, has no place in our analysis. Nonetheless, I would
leave the door open to the application of such a limitation in a future case as a hedge
against vexatious conduct.
[J-10-2016] [MO: Saylor, C.J.] - 8