Kuhnle v. Prudential , 439 F.3d 187 ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
3-9-2006
Kuhnle v. Prudential
Precedential or Non-Precedential: Precedential
Docket No. 04-4598
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Recommended Citation
"Kuhnle v. Prudential" (2006). 2006 Decisions. Paper 1348.
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PRECEDENTIAL
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-4598
SVEN ALI KUHNLE, Successor Trustee of the Patricia A.
Dresch Living Trust,
Appellant
v.
PRUDENTIAL SECURITIES, INC.;
GE LIFE AND ANNUITY ASSURANCE COMPANY;
SANDRO J. FRANCANI
Appellees
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 04-cv-00228)
District Judge: Honorable Sean J. McLaughlin
Argued January 18, 2006
Before: ROTH, FUENTES, and BECKER, Circuit Judges.
(Filed March 9 2006)
PERCY L. ISGITT (Argued)
Isgitt & Associates
4801 Woodway
Suite 222E
Houston, TX 77056
Attorney for Appellant
NICHOLAS P. VARI (Argued)
ERIC R.I. COTTLE
Kirkpatrick & Lockhart Nicholson Graham
Henry W. Oliver Building
535 Smithfield Street
Pittsburgh, PA 15222
Attorneys for Appellees Prudential Securities, Inc. and
Sandro J. Francani
ROGER H. TAFT (Argued)
MacDonald, Illig, Jones & Britton
100 State Street
Suite 700
Erie, PA 16507
Attorney for Appellee GE Life and Annuity Assurance
Company
OPINION OF THE COURT
BECKER, Circuit Judge.
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Sven Ali Kuhnle appeals the District Court’s grant of
summary judgment against him in his claim against
Prudential Securities, GE Life and Annuity Assurance, and
Sandro J. Francani to recover payment on a life insurance
policy. This appeal presents the question whether, under
Pennsylvania law, a plaintiff may file a second action after
his nearly identical action has been dismissed with prejudice
by a judgment of non pros. We conclude that where there has
been a finding of prejudice, and the case is dismissed with
prejudice in a well-considered judicial order, such a decision
is “on the merits” and a subsequent action is barred. Because
Kuhnle’s case falls under this rule, we will affirm the
judgment of the District Court.
I.
The facts are quite sad. In 1994, Patricia Dresch took
out a $1,000,000 life insurance policy from a company that
later became GE Life and Annuity Assurance Company (“GE
Life”). The policy required that a premium payment be made
each year. The payments appear to have been timely made
until the 2000 payment became due. At that point, Dresch was
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in poor health – she was declared incompetent on or about
December 16, 2000 and passed away on January 11, 2001.
On January 4, 2001, the original trustee of the Patricia
A. Dresch Living Trust, along with Dresch’s daughter,
attempted to discover the status of the life insurance policy.
They discussed the matter with Sandro Francani, an advisor
and broker for Prudential Securities who had provided
financial planning and advice to Mrs. Dresch. Francani stated
that he could not determine whether the premium had been
paid. However, on January 12, 2001, Francani learned that the
insurance policy had lapsed on January 4, 2001 due to non-
payment. Therefore, no death benefit was paid. It has been
alleged that Francani agreed to monitor the policy but failed
to do so.
Sven Ali Kuhnle is the Plaintiff in this case – and
Successor Trustee of the Patricia A. Dresch Living Trust. The
Defendants are Prudential Securities (“Prudential”), GE Life,
and Francani. The first action against the Defendants was
filed on March 26, 2002, in the Court of Common Pleas of
Erie County, Pennsylvania. No measures were taken to
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advance the lawsuit for some time.
Petitions for a judgment of non pros were then filed.
Information about the Defendants’ petitions and a court order
to show cause why the petitions should not be granted were
forwarded to Kuhnle’s attorney. The Court of Common Pleas
considered the matter and, on November 10, 2003, entered a
judgment of non pros. The Court dismissed the action with
prejudice, stating that the Plaintiff “failed to exercise due
diligence in proceeding with reasonable promptitude, that
Plaintiff ha[d] no compelling reason for the delay, and that
Defendants ha[d] suffered actual prejudice.” The Court noted
that a crucial witness had left the jurisdiction and that at least
one Defendant had suffered prejudice to his reputation.
Several months later, the Court denied a petition, made on
behalf of Kuhnle, to strike the judgment of non pros. The
Court did so in a lengthy opinion after briefing by the parties.
On October 31, 2003, the same day as the scheduled
hearing on the petitions for non pros, Kuhnle filed a nearly
identical lawsuit in the District Court of Harris County,
Texas. The case, however, was removed to federal court and
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transferred to the District Court for the Western District of
Pennsylvania. The Defendants moved for summary judgment
on the grounds that the second suit was barred by res judicata
or by the order denying the petition to open the judgment of
non pros.
The District Court granted the Defendants’ summary
judgment motions, applying the case of Schuylkill Navy v.
Langbord, 728 A.2d 964 (Pa. Super. 1999), and determining
that Pennsylvania law does not allow a litigant “to do an end
run around a judgment of non pros simply by filing another
complaint.” Kuhnle appeals, claiming that his second suit
should have been permitted because the judgment of non pros
entered by the Court of Common Pleas of Erie County was
not a judgment “on the merits.” We disagree and find that the
second suit is indeed barred by res judicata or claim
preclusion.
II.
We find a series of Pennsylvania cases and a Third
Circuit case dispositive. In Gates v. Servicemaster
Commercial Service, 631 A.2d 677, 679 (Pa. Super. Ct.
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1993), a motion for a judgment of non pros was entered after
the defendant argued that the “plaintiff had failed to
prosecute her cause with reasonable diligence.” Id. at 679. A
petition to open the judgment was denied and the Superior
Court held that a second and nearly identical action could not
be filed unless the plaintiff successfully petitioned the court
to open the judgment of non pros. Id. at 680, 682. The
rationale of Gates was reinforced in Schuylkill Navy v.
Langbord. See 728 A.2d at 969. There the Superior Court
held that “where a cause of action is subject to a judgment of
non pros, a subsequent complaint on the same cause of action
may not be filed without permission of the court pursuant to
Pennsylvania Rules of Civil Procedure Rule 3051.”1 Id. at
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That rule states:
Rule 3051. Relief from Judgment of Non Pros
(a) Relief from a judgment of non pros shall
be sought by petition. All grounds for relief,
whether to strike off the judgment or to open it,
must be asserted in a single petition.
(b) If the relief sought includes the opening of
the judgment, the petition shall allege facts
showing that
(1) the petition is timely filed,
(2) there is a reasonable explanation or
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965.
McCarter v. Mitcham, 883 F.2d 196 (3d Cir. 1989),
decided prior to Gates and Schuylkill Navy, is also relevant
here. In McCarter, the plaintiffs’ state court action was
dismissed with prejudice because the complaint was not filed
within the time limit set by the court. Id. at 198. The plaintiffs
subsequently filed a nearly identical complaint in the District
Court for the Western District of Pennsylvania. The district
court granted the defendants’ motion to dismiss on the
grounds that the claims were barred by res judicata. Id. at
198. This Court affirmed.
We noted that for litigation to be barred by res
judicata, the prior determination must be “on the merits.” Id.
at 199. We found that the order to dismiss with prejudice
“was an order ‘on the merits’ within the meaning set forth by
the Pennsylvania courts.” Id. at 200. Although we first stated
that “[w]here the prior dismissal was based on a judgment of
legitimate excuse for the
inactivity or delay, and
(3) there is a meritorious cause of action.
Pa. R.C.P. No. 3051.
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non pros, Pennsylvania courts will not give preclusive effect
to the judgment,” id. at 199, we went on to opine that the
Pennsylvania courts interpret the phrase “on the merits”
expansively. Id. at 200. We reasoned that the dismissal before
the Court, made with prejudice, was in fact on the merits
because the dismissal was a “sanction for . . . untoward
delay.” Id. at 201. We also noted it to be of significance that
the dismissal was not entered automatically by the
Prothonotary, but rather was issued by the court with a well-
considered order.2 Id. at 200.
We conclude that Gates, Schuylkill Navy, and
McCarter support the conclusion that Kuhnle’s second action
is barred under Pennsylvania law. Specifically, we note two
important factors. First, the initial action was dismissed by
the Court of Common Pleas with prejudice. Even Helfrick v.
UPMC Shadyside Hospital, 65 Pa. D. & C.4th 420, 437
(Allegheny County, 2003), relied on by Kuhnle, distinguishes
cases involving prejudice. Second, we note that this is not a
case where the judgment of non pros was entered routinely by
2
In Pennsylvania, the Prothonotary is the Clerk of Court.
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a Prothonotary. Rather, Judge Anthony of the Court of
Common Pleas carefully considered the question before the
Court and issued a comprehensive order. He later issued a
very lengthy opinion denying Kuhnle’s Petition to Open or
Strike Judgment. All these factors weigh in favor of a finding
that Kuhnle is now barred from filing another suit in a
separate jurisdiction.
Kuhnle argues that, even if Gates and Schuylkill Navy
are good law, there are two distinguishing circumstances here:
(1) the second suit was filed in a separate jurisdiction than the
one where the judgment of non pros was entered; and (2) the
second suit was technically filed before the judgment of non
pros was entered. We are not persuaded by either argument. It
would be pointless to allow a litigant to sidestep a judgment
of non pros – and Rule 3051 – by simply filing in another
jurisdiction. Also, we note that state court judgments, once
rendered, are binding. See 28 U.S.C. § 1738.
III.
This is a sad case. But, given the procedural history,
we cannot grant relief under the governing laws. As the
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Supreme Court stated more than two hundred years ago:
“[M]otives of commiseration, from whatever source they
flow, must not mingle in the administration of justice. Judges,
in the exercise of their functions, have frequent occasions to
exclaim, ‘durum valde durum, sed sic lex est.’” See
Penhallow v. Doane’s Adm’rs, 3 U.S. (3 Dall.) 54, 89 (1795)
(“Hard very hard, but such is the law.”).
The judgment of the District Court will be affirmed.
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