The opinion of the court was delivered by: McCLURE, District Judge.
Plaintiffs Tudor Development Group, Inc. ("Tudor"), Sidney
Cohen, Dorothy Cohen and Marc Cohen, collectively trading as
Green Hill Associates ("GH Associates"), initially filed this
action against United States Fidelity & Guaranty Corporation
(USF & G).*fn1 USF & G was the performance bond surety for
certain phases of a real estate development (the "Green Hill
Project"), being constructed for GH Associates by Susquehanna
Construction Company ("Susquehanna"). GH Associates settled
its claims against USF & G on November 20, 1989 and the
settlement proceeds of $594,000.00 were paid into court.*fn2
GHP Investors and GH Associates (hereafter collectively
"movants") contend that York's claim is barred by laches. York
asserts a subrogation claim against the escrowed funds. A
right of subrogation is one based on considerations of equity
and good conscience. Even if it is contractually based, it is,
nevertheless, regarded as based upon and governed by equitable
principles. Allstate Insurance Co. v. Clarke, 364 Pa. Super. 196,
527 A.2d 1021, 1023-1024 (1987).
Laches is an equitable doctrine which provides that if a
plaintiff in equity has failed to exercise due diligence in
prosecuting his claim, to the detriment of the other party,
the claim is barred. Siegel v. Engstrom, 427 Pa. 381, 385,
235 A.2d 365, 367 (1967) and Hankin v. Mintz, 276 Pa. Super. 538,
542, 419 A.2d 588, 590 (1980). In determining whether a
party exercised due diligence, the focus is on what the party
reasonably should have known "`by the use of the means of
information within his reach, with the vigilance the law
requires'", not on what he or she actually knew. Sprague v.
Casey, 520 Pa. 38, 46, 550 A.2d 184, 188 (1988), quoting Taylor
v. Coggins, 244 Pa. 228, 231, 90 A. 633, 634 (1914). "What the
law requires of . . . [a claimant] is to discover those facts
which were discoverable through the exercise of reasonable
diligence." Sprague, supra, 550 A.2d at 188. "[L]aches entails
an inquiry into whether the party is deserving of the court's
relief." Waddell v. Small Tube Products, Inc., 799 F.2d 69, 76
(3d Cir. 1986).
The Pennsylvania courts have held that a claim is barred by
laches if the following conditions exist:
Patten v. Vose, ___ Pa.Super. ___, 590 A.2d 1307 (1991).
Prejudice may, for example, be shown if relevant records
have disappeared, if a key witness is now deceased, or cannot
be located, or if the defendant changed his position based on
the expectation that plaintiff did not intend to pursue the
claim. See: Del-Val Electrical Inspection Service, Inc. v.
Stroudsburg-East Stroudsburg Zoning and Codes Office,
100 Pa. Commw. 429, 515 A.2d 75, 76 (1986), citing Class
of Two Hundred Administrative Faculty Members v. Scanlon,
502 Pa. 275, 466 A.2d 103 (1983).
The burden of establishing laches is on the party asserting
it as a defense, unless the analogous statute of limitations
has expired. In that case, the burden is on the claimant to
show why his claim should not be barred by laches. Wheeler v.
Nationwide Mutual Insurance Co., 749 F. Supp. 660, 662 (E.D.Pa.
Whether laches applies is a factual question, making it an
inappropriate basis for summary judgment or judgment on the
pleadings, unless the relevant facts are not in dispute. See
generally: Waddell, supra, 799 F.2d 69, 74 n. 2 and Sandvik v.
Alaska Packers Ass'n, 609 F.2d 969, 974 (9th Cir. 1979).
Additionally, "even if the . . . court finds that the elements
of laches have been proven, . . . in the exercise of its
discretion [it] `must take into account whether or not a less
drastic form of equitable relief than a complete dismissal of
the action' would be appropriate." Waddell, supra, 799 F.2d at
79, quoting E.E.O.C. v. Great Atlantic & Pacific Tea Co.,
735 F.2d 69, 81 (3d Cir. 1984).
Returning to the case before us, we find that none of the
relevant facts are in dispute. The relevant dates, listed
chronologically, are as follows.*fn8 The general construction
contract between Susquehanna and Green Hill Associates
terminated in August, 1987 due to a disagreement between the
parties. If the contract had not been terminated, Susquehanna
was scheduled to complete work on the project by December 31,
1987. York performed corrective work at the project site from
August 13, 1987 through November 5, 1987 for which it has not
Green Hill Associates filed this action on May 15, 1988
against Susquehanna's surety, USF & G. Thereafter, Dauphin
Bank and Deposit and GHP Investors filed petitions to
intervene. Both parties' petitions were granted. Dauphin
Deposit filed a complaint on February 10, 1989, and GHP
Investors filed a complaint on March 13, 1989. The claim
against USF & G was settled on November 20, 1989, leaving GH
Associates, Dauphin Deposit and GHP Investors as competing
claimants for the settlement proceeds which were paid into
York filed a petition to intervene in this action on May 23,
1990. Leave was granted, and its complaint was filed January
28, 1991.*fn9 Summary judgment was entered against Dauphin
Deposit on January 7, 1991.
Because York's petition to intervene was not filed until
after expiration of the analogous statute of limitation,*fn10
it bears the
burden of proving that laches does not apply, i.e., that there
was no delay arising from its failure to exercise due
diligence, and that movants were not prejudiced by any
delay.*fn11 Patten v. Vose, supra.
In determining whether York's filing was timely, we can look
to the analogous statute of limitations as a guide, although
it is not an absolute standard. Kay v. Kay, 460 Pa. 680,
334 A.2d 585, 587 (1975). The statute of limitations expired a year
and one-half before York filed its petition to intervene. The
two year claims-filing period established by the surety bond
had also expired by the time York's petition was filed. Thus
under either standard, York's petition to intervene was filed
beyond the relevant statutory/contractual deadline.
Additionally, there is no question but that movants were
prejudiced by York's delay in filing. It did not file its
petition to intervene until months after movants had settled
with USF & G, and the claims against USF & G had been
dismissed with prejudice — until it was too late for movants
to take York's claim into account in negotiating the
settlement. They settled with the expectation that the
settlement proceeds would be distributed among the three
competing claimants who had asserted claims as of the date of
settlement:*fn12 Dauphin Deposit, GH Associates, and GHP
Investors. They had no reason to anticipate that additional
claimants, such as York, would seek a share of the settlement
proceeds at a later date. Because movants changed their
position by settling with USF & G and reasonably relied on the
assumption that no additional claims would be asserted, they
were prejudiced by York's delay in filing its petition to
intervene. Cf. Associated Hospital Services of Philadelphia v.
Pustilnik, 262 Pa. Super. 600, 396 A.2d 1332, 1335 n. 1 (1979),
vacated on other grounds, 497 Pa. 221, 439 A.2d 1149 (1981).
Based on that finding, we conclude that York's claim is clearly
barred by laches.
Finally, contrary to York's contentions, our prior order
granting York leave to intervene did not encompass a finding
that its claim is not time-barred. We considered the timeliness
of the petition in terms of the procedural posture of the
case,*fn13 not, as York seems to argue, in anticipation that
York's opponents would raise the defense of laches. We did not
rule at that time on the merits of York's claim (such a ruling
would have been improper), but merely that York would be
afforded an opportunity to plead the claim.
Our ruling that York's claim is barred by laches obviates
the need to consider the other arguments raised by the
For the reasons set forth in the accompanying opinion, IT IS
1. The motion for judgment on the pleadings filed February
28, 1991 by Intervenor Green Hill Project Investors against
York Excavating Company, Inc. ("York"), (Record Document No.
103) is granted.
2. The motion for judgment on the pleadings filed March 22,
1991 by plaintiff Green Hill Associates ("GH Associates"),
(Record Document No. 106) is granted.
3. The motion for judgment on the pleadings filed March 12,
1991 by plaintiff GH Associates (Record Document No. 105) is
deemed withdrawn pursuant to Local Rule 401.5 for failure to
file a supporting brief.
4. The Clerk of Court is directed to defer entry of judgment
against York until disposition of the entire case.
5. The case is placed on the September, 1991 Williamsport
jury trial list.[fn1a]
6. A settlement conference will be held on August 1, 1991,
at a time to be announced, in Room 409, Federal Building, 240
West Third Street, Williamsport, Pennsylvania.
7. All motions in limine shall be filed on or before August
16, 1991, with supporting briefs attached. All opposing briefs
shall be filed on or before August 26, 1991.
8. A final pre-trial conference will be held on August 30,
1991, at a time to be announced, in Room 409, Federal
Building, 240 West Third Street, Williamsport, Pennsylvania.
9. Jury selection will be September 3, 1991 at 9:30 a.m., in
Courtroom No. 1, Federal Building, 240 West Third Street,
10. A status conference by telephone conference call will be
held on July 18, 1991 at 4:30 p.m. Plaintiffs' counsel shall
arrange for the conference call. Counsel shall be ready to
proceed when my office is contacted.