United States District Court, Western District of Pennsylvania
MATTHEW E. JACKSON, JR. and VELMA L. JACKSON, Plaintiffs,
FRANCES E. JACKSON, Defendant.
Cathy Bisson, District Judge.
REPORT AND RECOMMENDATION
ROBERT C. MITCHELL, United States Magistrate Judge.
On March 3, 2014, plaintiffs, Matthew E. Jackson, Jr. and Velma L. Jackson, filed a motion for summary judgment [ECF No. 25]. Defendant, Frances E. Jackson, responded thereto on March 31, 2014 [ECF No. 31]. Plaintiffs claim that there is no issue of material fact and they are entitled to judgment as a matter of law as to all claims asserted. This Court ordered supplemental briefing on the applicable statute of limitations, to which the parties submitted briefs on May 8, 2014. See [ECF Nos. 34, 35]. Plaintiffs responded to defendant’s brief on May 15, 2014 [ECF No. 36].
After careful review of the plaintiffs’ motion for summary judgment, brief in support, and defendant’s response, and upon independent review of the evidence of record, for the following reasons, it is respectfully recommended that plaintiffs’ motion for summary judgment [ECF No. 25] be granted in part and denied in part. It is specifically recommended that plaintiffs be granted summary judgment to their claim for an imposition of a constructive trust and that an accounting be completed to determine the scope of expenditures made in connection to the property and the tax status of the property. It is further respectfully recommended that plaintiffs be denied summary judgment as to all other counts and that defendant be granted summary judgment on Counts 1, 3, 4, 5, 6, 7, 8, 9 and 10.
Generally, this action is centered upon a sibling dispute over their late mother’s real property. Plaintiffs, Matthew and Velma Jackson, are brother and sister and initiated this action pro se against their oldest sister, Frances, for an array of claims in connection with defendant’s alleged failure to transfer real property located in Sewickley, Allegheny County, Pennsylvania equally between the siblings after their mother’s death. Compl. [ECF No. 1] at ¶ 13. Plaintiffs have lived in the house located on the property in question since 2002, and continue to inhabit the house. Pls.’ Concise Statement of Material Fact [ECF No. 27] at ¶ 10. Before her death, their mother executed a warranty deed conveying the real property to defendant on February 10, 2000. Id. at ¶ 19; Pls.’ Concise Statement of Material Fact [ECF No. 27] at ¶ 5. The reasons for the transfer of real property are in great disagreement, as is the case with most sibling disputes. Plaintiffs claim that defendant exploited her mother’s rapidly deteriorating health and used her “status” as the eldest child to persuade her mother and siblings to temporarily transfer the property to her until their mother’s death, upon which she agreed to transfer the property equally among her siblings, and that she subsequently reneged on that promise. Id. at ¶ 19. Contrarily, defendant claims that the whole scheme of transferring their mother’s property to defendant was plaintiff Velma Jackson’s idea in order to avoid estate taxes upon their mother’s death and avoid possible judgments and liens against the siblings individually that may have encumbered the property if they gained title to it. Def.’s Resp. to Mot. for Summ. J. [ECF No. 31] at 2-3.
In any event, the deed to the property was recorded on July 26, 2002. Compl. [ECF No. 1] at ¶ 20. Approximately one month later, on August 29, 2002, their mother passed away. Id. While plaintiffs and defendant spend a considerable amount of time squabbling about conversations they had with each other regarding the property after their mother’s death, it is not necessary for this Court to delve into this mishmash of proverbial “he-said/she-said, ” as it does nothing to enhance the Court’s analysis and seriously distracts this Court from the legal issues at hand. Defendant did not transfer the property to her siblings after their mother’s death, and is still the record owner of the property as of this date. Pls.’ Concise Statement of Material Facts [ECF No. 27] at ¶ 11. Plaintiffs claim that they made considerable improvements to the house from November 2011 to March 2011 and expended approximately $20, 000 in doing so. Id. at ¶ 21. Plaintiffs fail to detail in their briefs what improvements were made to the property. At some point, defendant stopped paying the taxes on the property and in or around 2012, due to said delinquent taxes, Quaker Valley School District filed a Writ of Scire Facias Sur Tax Claim and Statement against defendant for her failure to pay the property taxes on the property. Id. at ¶ 33.
On June 3, 2013, plaintiffs, proceeding pro se, set forth a litany of claims against their sister including: (1) unjust enrichment; (2) “defendant as a constructive trustee;” (3) “breach of duty to keep informed;” (4) “breach of duty of loyalty and to avoid self-dealing;” (5) “breach of duty to exercise reasonable care and prudence;” (6) promissory estoppel; (7) intentional infliction of emotional distress; (8) “fraud and conversion of property and funds of plaintiff Velma Jackson;” (9) fraud; and (10) invasion of privacy. Compl. [ECF No. 1] at 23-33. Plaintiffs additionally request that this Court exercise its equitable powers and establish a constructive trust for the real property and name all of the siblings as trustees to the property. See Compl. [ECF No. 1] at 34.
On March 3, 2014, plaintiffs filed a motion for summary judgment, to which defendant responded on March 31, 2014. On April 17, 2014, this Court directed the parties to submit briefing addressing the applicable statute of limitations for all claims set forth by plaintiffs. Both parties filed their supplemental briefing on May 8, 2014, and plaintiffs responded to defendant’s brief on May 15, 2014. Therefore, as all of the issues have been addressed and the period for discovery has closed, the present motion is ripe for disposition. For the following reasons, it is respectfully recommended that plaintiffs’ motion for summary judgment be granted in part and denied in part, that an accounting be completed to ascertain the tax liabilities and other expenditures made in connection with the property and this Court enter summary judgment in favor of defendant for Counts 1, 3, 4, 5, 6, 7, 8, 9, and 10.
This Court has jurisdiction over this matter pursuant to diversity jurisdiction, 28 U.S.C. § 1332, as plaintiffs are residents of the Commonwealth of Pennsylvania and defendant is a resident of the state of Georgia, and the amount in controversy exceeds the statutory limit.
C. Standard of Review
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate if “there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A moving party is entitled to summary judgment if he demonstrates that “the nonmoving party has failed to make a sufficient showing of an essential element of [his] case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The nonmoving party bears the burden of adducing palpable evidence “establishing that there is a genuine factual dispute for trial” and may not merely rely upon “bare assertions or conclusory allegations” to survive summary judgment. Hogan v. Twp. of Haddon, 278 F.App’x 98, 101 (3d Cir. 2008) (citing Fireman’s Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982)). “A motion for summary judgment will not be defeated by ‘the mere existence’ of some disputed facts, but will be denied [only] 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, 247-48 (1986)). “Speculation, conclusory allegations, and mere denials are insufficient to raise genuine issues of material fact.” Boykins v. Lucent Techs., Inc., 78 F.Supp.2d 402, 407 (E.D.Pa. 2000). The court should draw inferences “in the light most favorable to the non-moving party, and where the non-moving party’s evidence contradicts the movant’s, then the non-movant’s must be taken as true.” Big Apple BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992) cert. denied 507 U.S. 912 (1993).
Moreover, “district courts are widely acknowledged to possess the power to enter summary judgment sua sponte, so long as the losing party was on notice that she had to come forward with all of her evidence.” Celotex Corp., 477 U.S. at 326. In line with this rule, a district court may also enter summary judgment sua sponte in a non-moving party’s favor when there is no genuine issue of material fact and the non-moving party is entitled to judgment as a matter of law. See Gibson v. Mayor and Council of City of Wilmington, 355 F.3d 215, 222 (3d Cir. 2004). However, summary judgment “will not be granted to a non-moving party without ‘first placing the adversarial party on notice that the court is considering a sua sponte summary judgment motion.’” Id. (quoting Chambers Dev. Co. v. Passaic Cnty. Utils. Auth., 62 F.3d 582, 584 n.5 (3d Cir. 1995)). In the instant case, defendant did not move for summary judgment. However, in light of the statute of limitations issues presented in this case, this Court required supplemental briefing on this issue, to which both parties complied. Because plaintiffs have been put on notice and were given an opportunity to rebut any statute of limitations argument, in addition to submitting their original briefing, it is proper for this Court to recommend that summary judgment be granted in favor of defendant.
Plaintiffs set forth the following claims against defendant: (1) unjust enrichment; (2) “defendant as a constructive trustee;” (3) “breach of duty to keep informed;” (4) “breach of duty of loyalty and to avoid self-dealing;” (5) “breach of duty to exercise reasonable care and prudence;” (6) promissory estoppel; (7) intentional infliction of emotional distress; (8) “fraud and conversion of property and funds of plaintiff Velma Jackson;” (9) fraud; and (10) invasion of privacy. Compl. [ECF No. 1] at 23-33.
Each argument will be addressed in turn, with the exception of counts 2 through 5 which will be discussed together, and we conclude that summary judgment in favor of defendant is appropriate on all but a very limited claim.
1. Count 1: Unjust Enrichment
Under Pennsylvania law, the elements necessary to state a cause of action for unjust enrichment are as follows: (1) benefits must be conferred on the defendant by the plaintiff; (2) the appreciation of such benefits by the defendant; and (3) the acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. Erie Ins. Exchange, 74 A.3d 157, 169 (Pa.Super. 2013) (quoting Stoeckinger v. Presidential Fin. Corp. of Delaware Valley, 948 A.2d 828, 833 (Pa.Super. 2008). Whether a claim for unjust enrichment has been set forth depends on the “unique factual circumstances of each case. In determining if the doctrine applies, we focus not on the intention of the parties, but rather on whether the defendant has been unjustly enriched.” Ibid. The element of most import is whether the “enrichment of the defendant is unjust.” Ibid. (emphasis in original). The cause of action for a claim of unjust enrichment “accrues when the defendant receives and retains the benefits.” Del Collo v. Philadelphia Housing Auth., 2012 WL 8700068, at *6 (Pa. Commw. Nov. 9, 2012) (citing, inter alia, Temple Univ. Hosp., Inc. v. Healthcare Mgmt. Alt., Inc., 832 A.2d 501, 507 (Pa.Super. 2001)); see also Dugan v. Towers, Perrin, Forster & Crosby, Inc., 2012 WL 6194211, at *15 (E.D.Pa. Dec. 11, 2012). “This principal, in addition to bearing upon the timeliness of Plaintiffs’ claims, emphasizes that a claim for unjust enrichment focuses upon the circumstances of a defendant’s receipt of benefits rather that the defendant’s subsequent use of those benefits.” Dugan, 2012 WL 6194211, at *15 n. 11 (emphasis in original).
Where it is found that a defendant has been unjustly enriched, “the law implies a contract, which requires the defendant to pay the plaintiff the value of the benefit conferred.” Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 2 A.3d 526, 532 (Pa. 2010). Therefore, because a claim for unjust enrichment is an implied contract legal theory, it is subject to the four-year statute of limitations under 42 Pa.C.S. § 5525(4). See 42 Pa.C.S. § 5525(4) (“An action upon a contract implied in law, except an action subject to another limitation specified in this subchapter”).
The discovery rule serves to toll a statute of limitations until a plaintiff knows or reasonably should know that he has been injured and by what cause he has been injured. See Wilson v. El-Daief, 964 A.2d 354, 361 (Pa. 2009). A plaintiff’s awareness of his injury is generally fact intensive and therefore ordinarily a jury question. Id. “However, courts may resolve the matter at the summary judgment stage where reasonable mind could not differ on the subject. . . . The party relying on the discovery rule bears the burden of proof.” Id. at 362. (citations omitted). Many Pennsylvania courts apply a “reasonable-diligence requirement” compelling the plaintiffs to establish that they exhibited “those qualities of attention, knowledge, intelligence and judgment which society requires of its members for the protection of their own interests and the interests of others.” Cochran v. GAF Corp., 666 A.2d 245, 249 (Pa. 2005).
While in plaintiffs’ complaint, they argue that a constructive trust should be imposed based on defendant’s unjust enrichment, because they later argue a separate cause of action for a constructive trust, the Court will construe plaintiffs’ complaint as setting forth a separate unjust enrichment claim and will discuss it here. Under their theory of unjust enrichment, plaintiffs claim that their interest in the property was conferred to defendant, defendant accepted such an interest and retained the interest in the property and it would be inequitable for her to retain the property because it was implied that the property would be redistributed to all siblings after their mother’s death. The cause of action accrued upon the death of the parties’ mother, because that was the first time that defendant was able to receive and retain the alleged benefits conferred to her, i.e., her siblings interest in the house, because as under plaintiffs’ theory, the event that giving rise to defendant transferring the property shares was their mother’s death on August 29, 2002. Therefore, it was incumbent upon plaintiffs to bring suit for defendant’s unjust enrichment of their shares of the property within four years of their mother’s death, or August 29, 2006, unless an exclusion, such as the discovery rule, applies. Plaintiffs did not file suit in this Court until June 3, 2013, approximately seven years after the statute of limitations had expired.
Further, plaintiffs have not met their burden of proof that the discovery rule should apply in this case. Plaintiffs knew from the time of their mother’s death that they were injured, as defendant failed to transfer the property interest to them. Reasonable minds could not differ that plaintiffs were unable to discover their injury. Accordingly, because the discovery rule does not apply and plaintiffs brought their claims against defendant seven years after the statute of limitation had expired, ...