civil procedure - writ of summons - duty to diligently try to serve writ of summons in timely manner

Gussom v. Teagle – Pa. Supreme Court – March 25, 2021

 

Held: A trial court has the discretion to dismiss a complaint when a plaintiff fails to offer proof that she diligently attempted to serve process on a defendant in a timely manner and there is no evidence to indicate that the defendant had actual notice of the commencement of the action in the relevant time frame, regardless of whether the plaintiff acted or failed to act intentionally. 

From the opinion:

The Pennsylvania Rules of Civil Procedure allow a plaintiff to commence a civil action by filing either a praecipe for a writ of summons or a complaint. Pa.R.C.P. 1007. The Rules require a plaintiff to serve the defendant with original process within 30 days after the issuance of a writ or the filing of a complaint. Pa.R.C.P. 401(a). If the plaintiff does not effectuate service within that time period, she can praecipe for reissuance of the writ or reinstatement of the complaint. Pa.R.C.P. 401(b)(1). So long as the plaintiff files her writ or complaint before the expiration of the statute of limitations applicable to her cause of action, the original filing, as well as any subsequent reissuances or reinstatements, tolls the statute of limitations. 

“In the seminal case of Lamp v. Heyman, 366 A.2d 882 (Pa. 1976), this Court sought to end abuses of process by plaintiffs who tolled the statute of limitations by filing a writ of summons, had the writ repeatedly reissued, and deliberately failed to notify the defendant of the pending litigation.” McCreesh v. City of Philadelphia, 888 A.2d 664, 665 (Pa. 2005). “This process, while technically compliant with the Rules of Civil Procedure, nonetheless defeated the purpose of the statute of limitations, which is to protect defendants from stale claims.” Id. Thus, in Lamp, this Court held that “a writ of summons shall remain effective to commence an action only if the plaintiff then refrains from a course of conduct which serves to stall in its tracks the legal machinery he has just set in motion.” Lamp, 366 A.2d at 889. This “Lamp rule” applies equally to actions commenced by way of the filing of a complaint. 

We refined the Lamp rule in Farinacci v. Beaver County Industrial Development Authority, 511 A.2d 757, 759 (Pa. 1986), holding that “Lamp requires of plaintiffs a good- faith effort to effectuate notice of commencement of the action.” In addition, Farinacci clarified that: (1) the plaintiff carries an evidentiary burden of proving that she made a good-faith effort to ensure that notice of the commencement of an action was served on the defendant, McCreesh, 888 A.2d at 672; and (2) “[i]n each case, where noncompliance with Lamp is alleged, the [trial] court must determine in its sound discretion whether a good-faith effort to effectuate notice was made[,]” Farinacci, 511 A.2d at 759.

This Court’s most recent decision in the Lamp-line of cases is McCreesh, supra. In McCreesh, the Court expressed that when plaintiffs’ improper actions in serving original process put defendants on actual notice of the commencement of actions, trial courts should “dismiss only those claims where plaintiffs have demonstrated an intent to stall the judicial machinery or where plaintiffs’ failure to comply with the Rules of Civil Procedure has prejudiced defendant.” McCreesh, 888 A.2d at 674. 

In the present matter, the Superior Court affirmed a trial court order that dismissed a plaintiff’s complaint based upon the plaintiff’s failure to serve timely her complaint upon the defendant despite the fact that the plaintiff’s actions did not amount to intentional conduct. This Court granted allowance of appeal to address whether the Superior Court’s decision conflicts with Lamp and its progeny. For the reasons that follow, we answer this question in the negative. More specifically, consistent with the Superior Court’s decision, we hold that a trial court has the discretion to dismiss a complaint when a plaintiff fails to offer proof that she diligently attempted to serve process on a defendant in a timely manner and there is no evidence to indicate that the defendant had actual notice of the commencement of the action in the relevant time frame, regardless of whether the plaintiff acted or failed to act intentionally. Because the Superior Court reached the correct result in this matter, we affirm that court’s judgment. 

 

consumer protection claims not barred by econ. loss or gist of action doctrines - 3d Cir.

Earl v. NVR, Inc. – 3d Cir. – March 5, 2021 – reported decision

 

Held:  Pa. state consumer protection claims about a residence and its condition are not barred either by the economic loss doctrine or the gist of action doctrine, overruling Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002), which “no longer accurately reflects the state of Pennsylvania law with regard to” those doctrines.

 

Economic loss doctrine –

 

“The Pennsylvania Supreme Court has still not weighed in directly on the applicability of the economic loss doctrine to the UTPCPL. It has clarified, however, that though the economic loss doctrine is “well-established” in Pennsylvania, the common law rule gives way if there is a “statutory basis to impose liability for economic losses,” such as when a statute “provide[s] a private cause of action for economic losses.” Excavation Techs., Inc. v. Columbia Gas Co. of Pa., 985 A.2d 840, 842-43 (Pa. 2009). The UTPCPL does just that. It permits plaintiffs to recover for “any ascertainable loss of money or prop- erty, real or personal.” 73 Pa. Cons. Stat. § 201-9.2 (emphasis added). 

The Pennsylvania Superior Court has extended this logic in considering the eco- nomic loss doctrine’s relationship to the UTPCPL in two decisions that have directly undermined the basis for our holding in Werwinski: Knight v. Springfield Hyundai, 81 A.3d 940 (Pa. Super. Ct. 2013) and Dixon v. Nw. Mut., 146 A.3d 780 (Pa. Super. Ct. 2016). In the absence of binding Pennsylvania Supreme Court authority, “[t]he rulings of intermediate appellate courts must be accorded significant weight and should not be disregarded absent a persuasive indication that the highest state court would rule otherwise.” U.S. Underwriters Ins. Co. v. Liberty Mut. Ins. Co., 80 F.3d 90, 93 (3d Cir. 1996). Both Knight and Dixon must be granted due deference. . . . .

..... We acknowledge and appreciate the concern raised by the Court in Dixon, and in so doing have determined that it is now appropriate to set aside our holding in Werwinski with respect to the economic loss doctrine’s application to UTPCPL claims. 

Gist of action doctrine – 

The gist of the action doctrine provides that “an alleged tort claim against a party to a contract, based on the party’s actions undertaken in the course of carrying out a contractual agreement, is barred when the gist or gravamen of the cause of action stated in the complaint, although sounding in tort, is, in actuality, a claim against the party for breach of its contractual obligations.” Dixon, 146 A.3d at 788 (quoting Bruno v. Erie Ins. Co., 106 A.3d 48, 53 (Pa. 2014) (footnotes omitted)). . . .

If read expansively, the doctrine could plausibly be understood to bar the instant action, given the existence of a contract between Earl and NVR involving the purchase and construction of the Home. Earl’s complaint is not primarily premised upon the terms of the contract, however, but on the marketing and representations that induced her to enter into the contract in the first instance, as well as statements made to her by agents of NVR during the homebuilding process. Knight is once again illustrative for our purposes, as the Court encountered a similar set of facts and determined the gist of the action doctrine did not apply: 

Although she purchased the vehicle pursuant to the contract, the alleged representations by Appellees occurred prior the signing of any contract. Furthermore, the above false advertisements, statements, and assurances are rendered unlawful by sections 201–2(4)(v), (vii), (ix), (xi), and (xxi) of the UTPCPL. These are not masked claims for breach of contract; the gist of the action here is in tort, and the contract is collateral to the matters alleged. As such, the gist of the action doctrine did not warrant the dismissal of Knight's UTPCPL claims. Knight, 81 A.3d at 951 (internal citations omitted). 

While the allegations here and in Knight both sound in fraud rather than negligence, in Dixon the Superior Court determined that even UTPCPL claims grounded in negligence may not be barred by the gist of the action doctrine: 

Deceptive conduct ordinarily can only take one of two forms, either fraudu- lent or negligent. As noted above, the pre–1996 catchall provision covered only fraudulently deceptive practices. The broadening of the UTPCPL so as to not require fraud therefore ipso facto makes negligent deception, e.g., neg- ligent misrepresentations, actionable under the post–1996 catchall provision. Dixon, 146 A.3d at 790. The Dixon Court consequently allowed the plaintiff’s claims there to go forward, and both Dixon and Knight thus suggest that the gist of the action doctrine should not preclude liability under the UTPCPL where the contract is collateral to any allegedly deceptive conduct, as has been alleged in this case. We therefore hold that the gist of the action doctrine does not bar Earl’s UTPCPL claim from going forward. 

 

 

 

 

 

 

 

 

 

 

default judgment - opening - timeless - justifiable excuse for delay - factual dispute - necessity for hearing

City of Philadelphia v. Wake – Cmwlth. Court – March 12, 2021 – reported decision

 

http://www.pacourts.us/assets/opinions/Commonwealth/out/397CD19_3-12-21.pdf?cb=1

Held: Where there is a factual dispute about when a party got notice of judgment execution proceedings on party’s petition to open judgment, a court must hold a hearing to resolve the factual dispute. 

Opening – necessary element of proof -- The party seeking to open a default judgment must establish three elements: (1) the petition to open must be promptly filed; (2) the default can be reasonably explained or excused; and (3) there is a meritorious defense to the underlying claim. McCoy v. Pub. Acceptance Corp., 305 A.2d 698, 700 (Pa. 1973). Failure to satisfy any one element will result in the petition to open default judgment being denied. Id. “[T]he trial court cannot open a default judgment based on the ‘equities’ of the case when [the defendant] has failed to establish all three of the required criteria.” Seeger v. First Union Nat’l Bank, 836 A.2d 163, 167 (Pa. Super. 2003) (some internal quotation marks omitted). 

Timeliness -- As to the first requirement, “[t]he timeliness of a petition to open judgment is measured from the date that notice of the entry of the default judgment is received. The law does not establish a specific time period within which a petition to open a judgment must be filed to qualify as timely.” Castings Condo. Ass’n, 663 A.2d at 223 (internal citation omitted). “[T]he court must consider the length of time between discovery of entry of the default judgment and the reason for delay.” U.S. Bank Nat’l Ass’n for Pa. Hous. Fin. Agency v. Watters, 163 A.3d 1019, 1028 (Pa. Super. 2017) (emphasis added) (citing Myers v. Wells Fargo Bank, N.A., 986 A.2d 171, 176 (Pa. Super. 2009)). 

Length of delay -- “In cases where the appellate courts have found a ‘prompt’ and timely filing of the petition to open a default judgment, the period of delay has normally been less than one month.” U.S. Bank N.A. v. Mallory, 982 A.2d 986, 995 (Pa. Super. 2009) (holding 82-day delay between notice of default judgment and petition to open default judgment did not constitute prompt filing); see also Pappas v. Stefan, 304 A.2d 143, 146 (Pa. 1973) (holding 55-day delay between notice of default judgment and petition to open default judgment did not constitute prompt filing); Am. Vending Co. v. Brewington, 432 A.2d 1032, 1036 (Pa. Super. 1981) (holding two and one-half-month delay between when defendants notified of default judgment and petition to open default judgment did not constitute prompt filing); Schutte v. Valley Bargain Ctr., Inc., 375 A.2d 368, 371 (Pa. Super. 1977) (holding 47-day delay between resolution of confusion regarding claims and petition to open default judgment did not constitute prompt filing); cf. Alba v. Urology Assocs. of Kingston, 598 A.2d 57, 58 (Pa. Super. 1991) (holding petition to open default judgment filed 14 days after default judgment entered constituted prompt filing). 

Justifiable excuse -- As to the remaining requirements to open a default judgment, a petitioner must establish a justifiable excuse in the delay of filing a responsive pleading leading to the default. Alba, 598 A.2d at 58. “Whether an excuse is legitimate is not easily  answered and depends upon the specific circumstances of the case.” Castings Condo. Ass’n, 663 A.2d at 223-24. The petitioner “must [also] plead an arguable meritorious defense sufficient to justify relief if proven.” Id. at 224. 

Timeliness of Petition in case at bar – There was a factual dispute about when appellants got notice of the default judgment. The trial court determined that 83 days elapsed between when the notice of entry of default judgment was filed and when Appellants filed the Petition to Open.. Appellants submit, however, that they learned of the entry of the default judgment only seven days before they filed the Petition. Without conducting a hearing to resolve the factual dispute as to when Appellants received notice of the default judgment, appears to have disregarded Appellants’ assertions that they did not receive earlier notice of the default judgment and measured the time solely from the date of the entry of the judgment until the filing of the Petition, ultimately concluding that the alleged delay resulted in the filing not being a “prompt” filing. 

Such an analysis is not consistent with the case law discussed above, which requires consideration of when Appellants discovered the filing of the entry of default judgment. Thus, we must conclude that the trial court erred in failing to consider the time between discovery of the entry of judgment and the filing of the Petition when determining whether the Petition was timely. A remand for a hearing to resolve factual disputes regarding Appellants’ discovery of the entry of default judgment, therefore, is necessary. 

Justifiable Excuse for Delay – improper service of writ of execution --  Appellants contend that their delay in responding to the writ of execution was based upon the City’s failure to comply with the rules of service of original process according to Pa. R.C.P. Nos. 402 and 424. Thus, a remand is also necessary to resolve factual disputes regarding the authority of the person who was served to accept service on behalf of Appellants and to consider whether Appellants established a justifiable excuse. 

Where the party seeking to open a judgment asserts that service was improper, a court must address this issue before considering any other factors. Cintas Corp. v. Lee’s Cleaning Servs., Inc., 700 A.2d 915, 919 (Pa. 1997) (citations omitted). “If valid service has not been made, then the judgment should be opened because the court has no jurisdiction over the defendant and is without power to enter a judgment against him or her.”1 Id. 

Generally, “[a] sheriff’s return setting forth that original process was served is conclusive and immune from attack as to the facts stated therein of which the sheriff presumptively has personal knowledge.” In re Monroe Cnty. Tax Claim Bureau, 91 A.3d 265, 272 (Pa. Cmwlth. 2014 Conversely, “whether service was made on an agent or person-in-charge can be challenged because most of the facts regarding the nature of the responsibilities of the person served are not within the sheriff’s personal knowledge.” Id. If a party wishes to challenge the sheriff’s return on this basis, extraneous evidence can be used to challenge the return. Id.