Statute of Limitations applicable to accounting claim by a tenant in-common of real property
KEM Resources, L.P. v. Deer Park Lumber, Inc., 2022 WL 2717774 (Pa. Super. 2022) (unreported), allocatur granted Feb. 6, 2023, appeal docket 10 MAP 2023
The issue in this case is whether the six-year catch-all statute of limitations applies to a claim for an accounting by a tenant in common that is not in possession of real property against the co-tenant that is in possession.
On July 21, 2008, an oil and gas exploration company paid Ryvamat, Inc., the purported landowner, $12.6 million for a paid-up oil and gas lease. Thereafter, KEM Resources, LP and Endless Mountains Hunting Club claimed one-half ownership interest in the mineral rights conveyed by Ryvamat. On July 18, 2014, KEM Resources and Endless Mountains filed a complaint against Ryvamat, seeking an accounting and one-half of the payment Ryvamat received from the oil and gas lessee in 2008. In 2015, Endless Mountains conveyed its interest to KEM Resources. KEM Resources then filed an amended complaint against Ryvamat seeking an accounting based on its status as a tenant in common. The parties filed cross motions for summary judgment. Ryvamat argued that KEM Resources’ claim was barred by the statute of limitations, asserting that the claim was subject to either a two-year statute of limitations for fraud or a four-year statute of limitations for unjust enrichment, and that under either assumption, the complaint was filed after the statute ran. The trial court rejected Ryvamat’s statute of limitations claim, reasoning that the six-year statute applies, and ordered an accounting, ultimately entering judgment for KEM Resources.
The Superior Court on appeal affirmed the trial court’s statute of limitations ruling that the six-year statute of limitations applies, and that is the issue as to which the Supreme Court has granted allocatur. In reaching its decision, the Superior Court relied on 68 P.S. § 101 (providing for any “tenants in common, not in possession, to sue for and recover from such tenants in possession his or their proportionate part of the rental value of said real estate”), reasoning that the statute provided a statutory cause of action that is not covered by any other limitations period, such that the six-year catch-all statute is the only applicable limitations period:
Ryvamat argues the six-year catch-all limitation does not apply because the only cause of action that KEM could have would be a claim for fraud or breach of fiduciary duty, subject to a two-year limitation period, 42 Pa.C.S. § 5524(7), or a claim for unjust enrichment that it contends is subject to the four-year statute of limitation. We do not agree. Ryvamat is correct that common law unjust enrichment actions are subject to the four-year statute of limitations for contracts implied in law. 42 Pa.C.S. § 5525(a)(4); Sevast v. Kakouras, 915 A.2d 1147, 1153 (Pa. 2007); Cole v. Lawrence, 701 A.2d 987, 989 (Pa. Super. 1997). However, KEM’s cause of action here is not a common law unjust enrichment claim. Rather, KEM’s claim is a statutory cause of action to enforce its rights as a co-tenant in-common of real property. 68 P.S. § 101 (providing for any “tenants in common, not in possession, to sue for and recover from such tenants in possession his or their proportionate part of the rental value of said real estate”); Sheridan v. Coughlin, 42 A.2d 618, 620 (Pa. 1945). In Sheridan, our Supreme Court held that such a co-tenant of real property who is not in possession has a cause of action under 68 P.S. § 101 to obtain an accounting of its share of income received by the other tenant-in-common from the jointly owned property. 42 A.2d at 620.
The four-year statute of limitations, 42 Pa.C.S. § 5525, does not refer to actions seeking an accounting or actions concerning the rights of co-owners of real property. In addition, no other provision of Pennsylvania’s statutes of limitations provides a limitation period for seeking an accounting or for actions between co-owners of real property for income received from the property. Because it is not a cause of action covered by any other limitation period, the statute of limitations applicable to a cause of action between co-tenants-in-common under 68 P.S. § 101 is the six-year limitation of 42 Pa.C.S. § 5527(b). See Bednar v. Bednar, 688 A.2d 1200, 1204 (Pa. Super. 1997); Quarello v. Clinger, No. 544 WDA 2020, at 10 (Pa. Super. March 10, 2021) (unpublished memorandum). The trial court therefore correctly concluded that this action, commenced less than six years after the Lease payment was received by Ryvamat, was not barred by the statute of limitations.
Slip op. at 9-11.
The issue for Supreme Court review, as stated by Petitioner is:
Did the lower court err as a matter of law in holding that KEM’s accounting claim is subject to a six-year statute of limitations, which is a matter of first impression, and based its opinion, in part, on a statutory cause of action not pled or argued by KEM?