Waiver of Statute of Limitations Defense; Law of the Case/Coordinate Jurisdiction Rule

Rellick-Smith v. Rellick, 2020 WL 1528126 (Pa. Super. 2020) (unreported), allocatur granted Oct. 13, 2020, appeal docket 23 WAP 2020

The issue presented involves application of the coordinate jurisdiction rule where one trial court judge found the statute of limitations defense waived, but a second trial judge in the same case allowed the defendants to amend their pleadings to include a statute of limitations defense, resulting in dismissal of the case on statute of limitations grounds.

Rose Rellick purchased certificates of deposit (CDs) in 2006 as an estate planning device, and named herself and three heirs as owners, Sharleen Rellick-Smith, Betty Rellick, and Kimberly Vasil. Betty and Kimberly also were Rose’s agents under powers of attorney. In 2009, Betty and Kimberly, using the power of attorney to act for Rose, removed Sharleen from the CDs. Sharleen learned of the action removing her from the CDs in 2009. Rose later died, and Betty and Kimberly cashed the CDs and divided the proceeds in 2013, with no distribution to Sharleen. Sharleen sued Betty and Kimberly (Defendants) in 2014, claiming breach of fiduciary duty.  Defendants answered the complaint but failed to raise statute of limitations or other affirmative defenses. Defendants then filed a motion to dismiss arguing that Sharleen lacked standing to sue, or in the alternative, her action was barred by the statute of limitations.  Judge Hanna of the court of common pleas of Indiana County ruled that Sharleen lacked standing but that Defendants had waived the statute of limitations defense by failing to raise it by way of new matter in their answer to the complaint.  On appeal, the Superior Court in 2016 reversed the dismissal of the complaint on the basis of standing; the Defendants never challenged the trial court’s ruling as to waiver of the statute of limitations claim. On remand, another judge of the Indiana County court allowed Defendants to amend their answer to plead the statute of limitations as a defense, and the trial court ultimately ruled that Sharleen’s action was barred by the two-year statute of limitations, finding that the action should have been brought, if at all, by September 2011.  On Sharleen’s appeal from this second dismissal, the Superior Court affirmed, rejecting her argument that the amendment on remand to allow pleading of the statute of limitations defense was precluded under the law of the case doctrine.

The Superior Court majority, per Senior Judge Pellegrini, observed that the applicability of the law of the case doctrine, which provides that “a court involved in later phases of a litigated matter should not reopen questions decided by another judge of the same court or by a higher court in earlier phases,” is dependent upon the procedural posture of the case at the time of the ruling at issue, and that the procedural posture was different on remand, because the Superior Court had not addressed the statute of limitations issue in the first appeal, and on remand the issue presented was different, namely: whether Sharleen “would be prejudiced by the delay in raising the statute of limitations defense. The law of the case doctrine did not bar the trial court from addressing this question which had not been presented to Judge Hanna or our court in the earlier proceedings.”  

Judge Bowes, in dissent, argued that the law of the case doctrine, and specifically, the coordinate jurisdiction rule – “that judges of coordinate jurisdiction should not overrule each other’s decisions” – was implicated and violated by the ruling on remand allowing Defendants to amend their answer to raise the statute of limitations defense. As she explained:

In my view, the ruling permitting the amendment violated the coordinate jurisdiction rule as a subsequent trial judge altered the resolution of a legal question decided by a prior trial judge. While the majority maintains that granting leave to amend to assert a statute of limitations defense does not overrule an earlier trial court order that the defense was waived, I respectfully disagree. It is beyond cavil that the subsequent ruling altered the legal effect of the first trial court’s ruling. Moreover, while there are limited exceptions to the coordinate jurisdiction rule, they are inapplicable ….

Dissent at 8.

The Supreme Court has granted allocatur to decide:

Whether the Superior Court erred in affirming the Trial Court’s decision to allow the Respondents to file an amended answer to include the [affirmative] defense that the action was barred by the statute of limitations due to the issue having already been determined to be waived by the Trial Court.

For more information, contact Kevin McKeon or Dennis Whitaker.