Loading...
HomeMy WebLinkAbout93-3913 Civil JOHN WAIDLICH, Executor : IN THE COURT OF COMMON PLEAS OF of the Estate of MARY H. : CUMBERLAND COUNTY, PENNSYLVANIA DROLSBAUGH, Deceased, : Plaintiff : : v. : CIVIL ACTION - LAW : JOAN SINGER, : Defendant : NO. 3913 CIVIL 1993 IN RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT BEFORE SHEELY, P.J., and OLER, J. ORDER OF COURT day of December, 1994, after careful consideration of Defendant's motion for summary judgment, the motion is DENIED. BY THE COURT, J~Wesley Oler,~., j. Leslie B. Handler, Esq. 319 Market Street P.O. Box 1177 Harrisburg, PA 17108-1177 Attorney for Plaintiff Kenneth A. Wise, Esq.. 126 Locust Street P.O. Box 11489 Harrisburg, PA 17108-1489 Attorney for Defendant :rc JOHN WAIDLICH, Executor : IN THE COURT OF COMMON PLEAS OF of the Estate of MARY H. : CUMBERLAND COUNTY, PENNSYLVANIA DROLSBAUGH, Deceased, : Plaintiff : : v. : CIVIL ACTION - LAW : JOAN SINGER, : Defendant : NO. 3913 CIVIL 1993 IN RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT BEFORE SHEELY, P.J., and OLER, J. OPINION and ORDER OF COURT Oler, J. The present action was brought by the executor of a decedent's estate and involves a dispute as to whether a certain transaction between Plaintiff's decedent and the defendant was a loan or a gift. Defendant has filed a motion for summary judgment based upon the following contentions: (1) that Plaintiff cannot present sufficient competent evidence to establish his claim, by virtue of Pennsylvania's dead man's act;~ (2) that Plaintiff's claim is barred by the Pennsylvania statute of frauds;2 and (3) that Plaintiff's claim is barred by the applicable statute of limitations.3 For the reasons stated in this Opinion, Defendant's motion for summary judgment will be denied. FACTS AND PROCEDURAL HISTORY Facts. Plaintiff is John Waidlich~.executor of the estate of Motion of Defendant for Summary Judgment, paragraph i(D). Motion of Defendant for Summary Judgment, paragraph i(C). Motion of Defendant for Summary Judgment, paragraph i(B). NO. 3913 CIVIL 1993 Mary H. Drolsbaugh (Decedent), who died on February 17, 1993.4 Defendant is Joan Singer, a niece of Decedent, who resides at 25 Highland Drive, Camp Hill, Cumberland County, Pennsylvania.5 According to Plaintiff, Decedent, during her lifetime, borrowed $18,000.00 from Harris Savings Association for the benefit of Defendant.6 As collateral for the loan from Harris Savings Association, Decedent pledged a certificate of deposit in the amount of $20,000.00.7 During the lifetime of Decedent, interest on the loan taken out by Decedent was paid by Defendant.8 Insofar as Plaintiff knows, any arrangements made between Decedent and Defendant with regard to the money borrowed and repayment thereof were oral in nature.9 On the date Decedent died, the loan balance was $18,074.62, and the pledged certificate of deposit in her estate was liquidated in order to satisfy the loan.~° At no time did Decedent transfer title of the pledged certificate of deposit to Defendant, and 4 Plaintiff's Amended Complaint, paragraph 1. 5 Plaintiff's Amended Complaint, paragraph 2; Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 10. Plaintiff's Amended Complaint, paragraph 3; Exhibit 1. Plaintiff's Amended Complaint, paragraph 5; Exhibit 3. Plaintiff's Amended Complaint, paragraph 4. Plaintiff's Amended Complaint, paragraph 7. Plaintiff's Amended Complaint, paragraph 6. 2 NO. 3913 CIVIL 1993 Decedent did not provide in her will for Defendant to receive the certificate of deposit.~ Plaintiff has demanded payment by Defendant of the outstanding balance of the loan, $18,074.52, into Decedent's estate, and Defendant has thus far not made such a payment.~2 plaintiff has also demanded interest from February 17, 1993.TM Defendant does not deny that Decedent, during her lifetime, borrowed $18,000.00, which she provided to Defendant, and that she pledged a $20,000.00 certificate of deposit as security for the loan.TM However, according to Defendant, there was no promise by Defendant to repay the $18,000.00 that Decedent provided to her, since this was part of a gift and bequest arrangement between Decedent and Defendant.~s Defendant maintains that, during the lifetime of Decedent, the two developed a close relationship as niece and aunt.~6 Sometime during November of 1982, Defendant claims, Decedent told her that Plaintiff's Reply to New Matter and Counterclaim, paragraph 14. Plaintiff's Amended Complaint, paragraph 8. Plaintiff's Amended Complaint, see Demand Clause. See Defendant's Answer to Amended'Complaint with New Matter and Counterclaim. ~s Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 7. ~6 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 11. 3 NO. 3913 CIVIL 1993 she had a certain certificate of deposit from Harris Savings Association in the amount of $20,000.00 which she wanted to give Defendant.~7 According to Defendant's husband, Donald Singer, Decedent stated that she did not know how much longer she would live, and she wanted to see that Defendant received something from her in case her assets were totally depleted by the time she died.~8 According to Defendant, because of concern that Decedent, who was on a fixed income, would not get the benefit of the regular interest payments from the certificate of deposit, Defendant's husband proposed an alternate arrangement.~9 Defendant's husband proposed that Decedent go to the bank and borrow the money she wished to give Defendant, in turn pledging the certificate of deposit as collateral.2° Defendant claims that she agreed to pay the interest expense on the loan for as long as Decedent lived, and that Decedent agreed to provide in her will that Defendant would receive the certificate of deposit, with the proceeds from cashing said certificate to be used to pay off the loan and with any ~7 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 12; Affidavit of Donald Singer, paragraph 4. Affidavit of Donald Singer, paragraph 5. Affidavit of Donald Singer, paragraphs 5, 6. Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 13; Affidavit of Donald Singer, paragraph 6. 4 NO. 3913 CIVIL 1993 balance to be paid to Defendant.2~ Decedent agreed to this arrangement, according to Defendant, and to date Defendant has paid over $18,600.00 in interest on the amount borrowed.22 However, Decedent did not provide in her will for the certificate of deposit to be transferred to Defendant.23 Procedural History. Plaintiff initiated this action by filing a complaint on December 10, 1993. This was followed by preliminary objections filed by Defendant on December 23, 1993. Thereafter, Plaintiff filed an amended complaint on February 10, 1994, to which Defendant filed an answer with new matter and counterclaim on March 3, 1994. A reply to the new matter and counterclaim was filed by Plaintiff on April 2, 1994. On May 11, 1994, the parties entered into a stipulation whereby Defendant was permitted to amend her new matter and counterclaim to assert defenses relating to the dead man's act, the statute of frauds, and the statute of limitations.24 2~ Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 13; Affidavit of Donald Singer, paragraph 6. 22 Affidavit of Donald Singer, paragraph 7. 23 Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim, paragraph 14. _. 2~ See Stipulation, Exhibit A, paragraphs 15, 16, 17. Paragraph 1 of the Stipulation inadvertently states that "Plaintiff may file an Amended Response as attached hereto as Exhibit A," when, in reality, the pleading attached as Exhibit A is Defendant's Amended Answer to Amended Complaint with New Matter and Counterclaim. See Stipulation, paragraph 1, and attached Exhibit A. 5 NO. 3913 CIVIL 1993 On June 17, 1994, Defendant filed a motion for summary judgment and an affidavit of Donald Singer. The issues raised in the motion for summary judgment were argued on July 13, 1994. STATEMENT OF LAW Summary judqment. Pennsylvania Rule of Civil Procedure 1035(b) provides that summary judgment "shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In this regard, "[t]he moving party has the burden of proving the nonexistence of any genuine issue of fact." Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 204, 412 A.2d 466, 468-69 (1979). "The record must be examined in the light most favorable to the non-moving party." Schacter v. Albert, 212 Pa. Super. 58, 62, 239 A.2d 841, 843 (1968). Additionally, "[a]ll doubts as to the existence of a genuine issue of a material fact must be resolved against the moving party." Thompson Coal Co. v. Pike Coal Co., 488 Pa. 198, 204, 412 A.2d 466, 469 (1979). A court should grant summary judgment "only in the clearest of cases, where the right is clear and free from doubt." Id. at 204, 412 A.2d at 468. The dead man's act. The dead man's act provides, in pertinent part, as follows: [I]n any civil action or proceeding, where any party to a thing or contract in action is dead 6 NO. 3913 CIVIL 1993 · .. and his right thereto or therein has passed ... to a party on the record who represents his interests in the subject in controversy, neither any surviving or remaining party to such thing or contract, nor any other person whose interest shall be adverse to the said right of such deceased ... shall be a competent witness to any matter occurring before the death of said party .... Act of July 9, 1976, P.L. 986, §2, as amended, 42 Pa. C.S. S5930. "The purpose of the dead man's act is to prevent the injustice that would result from permitting a surviving party to a transaction to testify favorably to himself and adversely to the interest of the decedent when the representative of the decedent would be hampered in attempting to refute the testimony by reason of the death of the decedent." Visscher v. O'Brien, 274 Pa. Super. 375, 382, 418 A.2d 454, 458 (1980). Consistent with the rationale of the dead man's act, it has been held that, where an alleged donee is attempting to prove an inter vivos gift by a decedent, under the dead man's act three conditions must exist before the surviving party or witness is disqualified: "(1) the deceased must have had an actual right or interest in the matter at issue, i.e. an interest in the immediate result of the suit; (2) the interest of the witness -- not simply the testimony -- must be adverse; [and] (3) a right of the deceased must have passed to a party of record who represents the deceased's interest." Weschler v. Carroll, 396 Pa. Super. 41, 45, 578 A.2d 13, 15 (1990). Additionally, it has been held that "spouses of an 7 NO. 3913 CIVIL 1993 interested party to a transaction with a decedent may not be barred from testifying on the basis of marital status alone." Estate of Grossman v. Kesselman, 486 Pa. 460, 474, 406 A.2d 726, 733 (1979). "[A]pplication of the 'Dead Man's Act' is difficult where there are allegations of an inter vivos gift by the decedent to the challenged donee. In such situations, both the alleged donee and the estate have an interest in the property which may be adverse to the interest of the decedent, depending on whether the alleged transfer took place or not." Friedman v. Kinnon, 452 Pa. 365, 368- 69, 305 A.2d 3, 4 (1973). "[T]he court may not admit statements of [the] decedent through testimony of the donee] absent independent testimony establishing prima facie evidence of donative intent and delivery." Hera v. McCormick, 425 Pa. SUPer. 432, 444, 625 A.2d 682, 688 (1993). "[I]f the alleged donee fails to establish prima facie evidence of a gift or transfer by independent testimony before he takes the stand, he is not competent to testify." Id. Nant¥-Glo rule. In Nanty-Glo v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932), our Supreme Court stated: "However clear and indisputable may be the proof when it depends on oral testimony, it is nevertheless the province of the jury to decide, under instructions from the court, as to the law applicable to -~he facts, and subject to the salutary power of the court to award a new trial if they should deem the verdict contrary to the weight of the evidence." Id. at 238, 163 A. at 524 (granting new trial where lower court had NO. 3913 CIVIL 1993 directed verdict in favor of party based on uncontradicted oral testimony), quoting Reel v. Elder, 62 Pa. 308, 316 (1869). The principle that a court should not preempt a jury's role by disposing of a case on the basis of statements, even if uncontradicted, which might not be credited by the fact-finder has been applied to summary judgment determinations. In Curran v. Philadelphia Newspapers, Inc., 497 Pa. 163, 439 A.2d 652 (1981), the Court quoted with approval the proposition that "[t]estimonial affidavits of the moving party or his witnesses, not documentary, even if uncontradicted, will not afford sufficient basis for the entry of summary judgment, since the credibility of the testimony is still a matter for the jury." Id. at 183, 439 A.2d at 662, quoting 2 Goodrich-Amram 2d ~1035(b):4, at 434-35. An application of the Nanty-Glo rule may be part of a three- step process in a determination of whether an award of summary judgment is inappropriate. Initially, it must be determined whether the plaintiff 'has alleged facts sufficient to establish a prima facie case. If so, the second step is to determine whether there is any discrepancy as to any facts material to the case. Finally, it must be determined whether, in granting summary judgment, the trial court has usurped improperly the role of the jury by resolving any material issues of fact. -~ Dudley v. USX Corp., 414 Pa. Super. 160, 168-69, 606 A.2d 916, 920 (1992). Only at the third stage is the Nanty-Glo principle involved, precluding summary judgment "where the moving party 9 NO. 3913 CIVIL 1993 relies solely upon testimonial affidavits and depositions of its witnesses to resolve material issues of fact." Id. at 169, 606 A.2d at 920. Statute of frauds. Defendant asserts Section 1 of Pennsylvania's statute of frauds2~ as an affirmative defense. This provision states, in pertinent part, as follows: No action shall be brought whereby to charge ... the defendant, upon any special promise, to answer for the debt or default of another, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person by him authorized. A judicially-created exception to the statute of frauds is the "leading object" rule. Thomas A. Armbruster, Inc. v. Barron, 341 Pa. Super. 409, 491 A.2d 882 (1988). "Whenever the main purpose and object of the promisor, is, not to answer for [the debt of] another, but to subserve some pecuniary or business purpose of his own ... his promise is not within the statute [of frauds], although it may be in form a provision to pay the debt of another .... " Thomas A. Armbruster, Inc. v. Barron, 341 Pa. Super. 409, 413, 491 A.2d 882, 884, quoting Goodling v. Simon, 54 Pa. Super. 125, 127, a. , (1913). Statute of limitations. The statuteof limitations applicable to the present case is provided for in the Act of July 8, 1976, Act of April 26, 1855, P.L. 308, §1, 33 P.S. S3. 10 NO. 3913 CIVIL 1993 P.L. 586, §2, as amended, 42 Pa. C.S.A. S5525(3). It states, in pertinent part, as follows: The following actions and proceedings must be commenced within four years: ... (3) An action upon an express contract not founded upon an instrument in writing. As a general rule, the running of the statute of limitations on an oral loan is not dependent upon a demand for payment. Gurenlian v. Gurenlian, 407 Pa. Super. 102, 595 A.2d 145 (1991). However, a promise to pay and an acknowledgment of indebtedness may toll the statute. Id. "Payment of interest on a debt will ordinarily take the debt out of the operation of the statute of limitations." In re Estate of Nicolazzo, 414 Pa. 186, 189 n.2, 199 A.2d 455, 457 n.2 (1964). APPLICATION OF LAW TO FACTS With regard to Defendant's contention based on the dead man's act, we find it unavailing. Upon an examination of the record in the light most favorable to Plaintiff, and accepting Plaintiff's theory of the case, one cannot say that Plaintiff's interest in this matter is necessarily adverse to that of Decedent. In his pleading, Plaintiff avers that an oral contract was formed between Decedent and Defendant, with an agreementby Defendant to repay the princiPal of the loan. Thus, in attempting to collect the principal for the estate, Plaintiff's interests would seem to coincide with those of Decedent, and it is difficult to perceive 11 NO. 3913 CIVIL 1993 how an application of the act to the estate's disadvantage would be consistent with its rationale. Moreover, Defendant relies solely on the affidavit of her husband, Donald Singer, in support of her motion for summary judgment. Application of the Nanty-Glo rule to this case precludes the entry of summary judgment in favor of Defendant under such circumstances. With regard to Defendant's claim based on the statute of frauds, we find it equally unavailing. Although an oral contract to answer for the debt of another would normally fall within the purview of the statute and be unenforceable in the absence of a writing, in this case the asserted purpose for the alleged contract between Decedent and Defendant was Defendant's own pecuniary gain - i.e., her receipt of the $18,000.00 principal of the loan. Such a purpose would bring the contract within an exception to the statute of frauds as discussed above. Finally, Defendant's contention based upon the statute of limitations must also fail at this stage of the proceedings. First, the record is not clear as to when the alleged loan was made by Decedent to Defendant. Second, the alleged payment of interest by Defendant would at least arguably con~stitute an acknowledgment of the debt, sufficient to toll the statute. 12 NO. 3913 CIVIL 1993 ORDER OF COURT AND NOW, this ~ ~ day of December, 1994, after careful consideration of Defendant's motion for summary judgment, the motion is DENIED. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. Leslie B. Handler, Esq. 319 Market Street P.O. Box 1177 Harrisburg, PA 17108-1177 Attorney for Plaintiff Kenneth A. Wise, Esq. 126 Locust Street P.O. Box 11489 Harrisburg, PA 17108-1489 Attorney for Defendant 13