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
In this action, four parties associated with the Green Hill
Project*fn3 asserted claims against the escrowed funds: GH
Associates, Green Hill Project Investors, Inc. ("GHP
Investors")*fn4, Dauphin Deposit Bank and Trust Company
("Dauphin Deposit"), and York Excavating Company, Inc.
("York").*fn5 Summary judgment was entered against Dauphin
Deposit on January 7, 1991. York, GH Associates and GHP
Investors remain parties to the action.
GHP Investors and GH Associates have filed motions for
judgment on the pleadings against York (Record Document Nos.
103 and 106). After considering the arguments raised by the
parties, we find that judgment on the pleadings against York
is appropriate and will enter an order to that effect.
A. Motion for judgment on the pleadings standard
Judgment on the pleadings is appropriate only if there is no
issue of material fact and if the pleadings demonstrate that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 12(c). "The trial court is required `to view the
facts presented in the pleadings and inferences to be drawn
therefrom in the light most favorable to the non-moving
party.'" Hayes v. Community General Osteopathic Hospital,
730 F. Supp. 1333, 1334 n. 1 (M.D.Pa. 1990), (Caldwell, J.), citing
Society Hill Civic Ass'n v. Harris, 632 F.2d 1045, 1058 (3d
Cir. 1980). This requires the court to accept plaintiff's
allegations in the complaint, even if they conflict with the
defendant's answer. Hayes, supra, 730 F. Supp. at 1334 n. 1.
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:
The party asserting laches must show, first, a
delay arising from the other party's failure to
exercise due diligence, and second, prejudice
from the delay. . . . It is not enough to show
delay arising from failure to exercise due
diligence; for `laches will not be imputed where
no injury has resulted to the other party by
reason of the delay.'. . . . (Citations
omitted.). . . . Laches requires not only a
passage of time, but also a resultant prejudice
to the party asserting the doctrine. . . .
(Citations omitted.). . . . [and] is based on
`some change in the condition or relations of the
parties which occurs during the period the
complainant unreasonably failed to act.'. . . .
(Citations omitted.). . . . `[T]he burden of
proof with respect to the doctrine [of laches] is
upon the party asserting the defense; in order to