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City Electric Co.,Inc v. the Estate of Jerry Riccardo

August 10, 2011

CITY ELECTRIC CO.,INC.,
PLAINTIFF,
v.
THE ESTATE OF JERRY RICCARDO,
ET AL. DEFENDANT.



MEMORANDUM

EDUARDO C. ROBRENO, J.

I. INTRODUCTION

Plaintiff Atlantic City Electric Co. ("ACE" or "Plaintiff") brings this action against Defendants Denise Riccardo and the Estate of Jerry Riccardo ("Riccardos" or "Defendants") seeking to set aside an arbitration award which was allegedly procured by fraud. ACE contends that Defendants knew at the time of the arbitration that Jerry Riccardo was suffering from terminal cancer and that, despite having a duty to do so, Defendants failed to disclose this to ACE. The Riccardos moved for summary judgment arguing that ACE'S fraud and misrepresentation claims are time barred.

II. BACKGROUND

In 2005, the Riccardos filed a claim against ACE in the United States District Court for the District of New Jersey seeking money damages (the "first action") for an accident in which Jerry Ricardo ("Mr. Riccardo") received an electric shock causing him to fall down a ladder and sustain personal injuries. The parties engaged in extensive discovery, especially regarding Mr. Riccardo's health, and later agreed to dismiss the matter and place it in binding arbitration. The parties stipulated that the JAMS Arbitration Administrative Policies would apply to the arbitration. (Stipulation for Arbitration and Selection of Arbitrator, doc. no. 44-1 at 15-16.) After the arbitration hearing, on September 3, 2008, the arbitrator entered an award in favor of Mr. and Mrs. Riccardo in the amount of $750,000, which was paid in full.

As noted, the arbitration award was entered on September 3, 2008. The following events are relevant in determining when Plaintiff knew or should have known of the alleged fraud in the arbitration hearing.

On October 21, 2008, Plaintiff's counsel sent a letter to counsel for Mr. Riccardo noting that counsel for ACE "ha[d] been told" that Mr. Riccardo "may be suffering from brain cancer or another terminal illness" and inquiring as to whether there was any truth to these allegations. According to Plaintiff, no response was ever received. (Pl.'s Resp. at 5.) Mr. Riccardo died on October 25, 2008, less than two (2) months after the arbitration award was entered. On October 31, 2008, counsel for ACE notified Judge Diane Welsh [Ret.], the JAMS arbitrator, that it might be necessary for ACE to file a motion to vacate the arbitration award because of the newly discovered information. On November 6, 2008, JAMS responded that, pursuant to their rules, Judge Welsh no longer had jurisdiction over this matter.

On November 17, 2008, Counsel for ACE wrote to the Judge Joseph Irenas of the United States District Court for the District of New Jersey outlining the events that occurred after the arbitration. This letter resulted in the parties having a telephone conference with Magistrate Judge Ann Marie Donio of the United States District Court for the District of New Jersey. The telephone conference was unsuccessful in resolving the issues relating to the arbitration. Thereafter, on January 29, 2009, ACE filed a motion in the United States District Court for the District of New Jersey asserting that the arbitration award should be vacated based on allegations of fraud in that the Defendants had not disclosed Mr. Riccardo's illness.*fn1 On April 29, 2009, before the court ruled on ACE's Motion to Vacate, ACE filed a new complaint in the United States District Court for the District of New Jersey (the "second action") alleging that Defendants violated the New Jersey Arbitration Act, Common Law Arbitration, and Federal Rule of Civil Procedure 26. On May 1, 2009, Judge Irenas denied the defendants' motion to dismiss, filed in the first action, finding that the court lacked jurisdiction to vacate the award.

On August 4, 2009, Judge Irenas transferred the second action to this Court. On September 2, 2009, ACE filed an amended complaint in this Court, adding a claim for common law fraud and misrepresentation. On September 14, 2009, Defendants filed a motion to dismiss asserting that Plaintiff's claims were barred by the statute of limitations. (Doc. no. 8.)

On February 4, 2010, this Court dismissed Counts I, II, and III of Plaintiff's Complaint. Atlantic City Elec. Co. v. Estate of Riccardo, 682 F. Supp. 2d 498, 507 (E.D. Pa. 2010). This Court denied Defendants' Motion to Dismiss as to Plaintiff's common law fraud and misrepresentation claims because the Riccardos had not addressed why the fraud and misrepresentations claims should be dismissed.

This Court must now determine whether Defendants are entitled to summary judgment as to Plaintiff's common law fraud and misrepresentation claims.

III. DISCUSSION

In their motion for summary judgment, Defendants argue that Plaintiff's fraud and misrepresentation claims are time barred under Pennsylvania law. There are two issues which this Court must address in determining whether Defendants are entitled to summary judgment: (1) whether the thirty (30) day time limit in which a party must challenge an arbitration award in a statutory arbitration applies to common law arbitrations; and (2) if so, whether Plaintiff knew or should have known of the alleged fraud more than thirty (30) days prior to the time that Plaintiff moved to vacate the arbitration award.

A. Legal Standard for Summary Judgment Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "A motion for summary judgment will not be defeated by 'the mere existence' of some disputed facts, but will be denied when there is a genuine issue of material fact." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986)). A fact is "material" if proof of its existence or non-existence might affect the outcome of the ...


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