Schroeder v. Accelleration Life Insurance

DEL SOLE, Judge: This is an appeal from a trial court order which denied Appellant the right to amend its New Matter to assert as an affirmative defense a three year contractual limitation period.1 [523] The underlying action was initiated on April 18, 1986 when a complaint was filed by Robert E. Schroeder, on behalf of himself and all others similarly situated, against Appellant, Acceleration Life Insurance Company of Pennsylvania. Mr. Schroeder had purchased Credit Life and Disability Insurance from Appellant and had attached a copy of the disability insurance policy to his Complaint. Contained within the policy was language limiting the time in which an action may be brought to “3 years after the time written proof of loss is required to be furnished.” On July 14, 1986, Appellant filed an Answer, New Matter and Counterclaim. The contractual limitation period was not referred to in Appellant’s pleadings. Appellee replied to Appellant’s New Matter and Counterclaim and interrogatories were filed. In December a hearing was held on the Motion for Class Certification. The court granted the certification and identified the class as insureds who made payments to their creditors after April 17, 1980. In accordance with the court’s order Appellee filed a proposed form of notice. Appellant filed objections to the proposed notice to class members on February 13, 1987. These objections to the proposed notice made reference to the restriction contained in the contractual limitation. However, it was not until July 10, 1987, when Appellant presented to the court its Motion for Leave to File Amendment to Answer and New Matter which sought to include as an affirmative defense the contractual limitation. The trial court’s denial of this motion is the subject of the instant appeal. A decision to grant a motion to amend a pleading is a matter for the exercise of judicial discretion in the trial court. Kilian v. Allegheny County Distributors, 409 Pa. 344, 347, 185 A.2d 517, (1962). However, amendments to pleadings should be liberally allowed in order to secure a determination of cases on their merits, except in those [524] instances where surprise or prejudice to the other party would result, or where the proposed amendment is against a positive rule of law. Posternack v. American Casualty Company of Reading, 421 Pa. 21, 218 A.2d 350 (1966). Although not dispositive of the issue, long unexplained delay between the original pleading and the motion to amend will be considered as a factor in deciding whether to permit the amendment. Tanner v. Allstate Ins. Co., 321 Pa.Super. 132, 467 A.2d 1164, 1169 (1983). In denying Appellant’s motion to amend the trial court stated: Counsel for the defendant, as evidenced by the total record in this case, has vigorously resisted the claims asserted herein, both substantively and procedurally, not only in this court but also in the Superior Court, and, in so doing, has proven what Janicik, supra, presumes; this coupled with the defendant’s long-time knowledge of the contractual limitation as well as its counsel’s acquiring knowledge thereof prior to the filing of the Answer and New Matter evidences a deliberate choice not to raise the defense of the contractual limitation. Having done so we will not permit the defendant to change its position for its sole profit and to the detriment of the identified six (6) year class; to do so would also further- burden the representative plaintiff and the orderly procedures of the court. (Trial court opinion at 11-12 citing Janicik v. Prudential Ins. Co. of America, 305 Pa.Super. 120, 451 A.2d 451 (1982)). Concluding that Appellant had by its actions evidenced a waiver of this affirmative defense the trial court denied Appellant’s motion. Although limitations on the time to commence suit contained in a contract of insurance have been held to be valid and enforceable, the courts of this jurisdiction have held that a provision of this nature may be extended or waived where the actions of the insurer leads the insured to believe the limitation period will not be relied upon. Commonwealth v. Transamerica Insurance Co., 462 Pa. 268, 274, 341 A.2d 74 (1975). As noted the by [525] trial court, Appellant was obviously aware of the contractual limitation since it drafted the contract in question, a copy of which was attached to plaintiffs complaint. Nevertheless, Appellant chose to wait nearly one year after filing of its original Answer and New Matter to seek an amendment to assert this affirmative defense. The only justification offered by Appellant for its oversight in failing to include the defense in its original pleadings was that it did not anticipate such a broad class definition. Appellant did not maintain, nor could it, that it was unaware of this defense, or that it was not legally entitled to assert this defense at the time it filed its original pleading. Contrast: Tanner v. Allstate Ins. Co. Supra, (where amendment sought to assert certain defenses in light of the Supreme Court’s pronouncement in a related case which occurred after the original pleadings were filed.); Carpitella by Carpitella v. Consolidated Rail Corporation, 368 Pa.Super. 153, 533 A.2d 762 (1987), (where party seeking amendment asserted that it did not know of defenses at earlier date). Kilian v. Allegheny County Distributors, supra, (where amendment sought on basis of recent Supreme Court decision which impacted on jurisdictional question.) In view of Appellant’s actions and Appellee’s reliance thereon, it cannot be said the the trial court committed an abuse of discretion in ruling that Appellant waived its newly asserted defense and in therefore denying Appellant’s petition to amend. Order affirmed. ROWLEY, J., files a dissenting opinion. Footnotes [1] In Hull v. Tolentino, 517 Pa. 328, 536 A.2d 797 (1988) and Mineo v. Tancini, 517 Pa. 335, 536 A.2d 1323 (1988) the Supreme Court has recently reaffirmed its holding in Adcox v. Pennsylvania Manufactures Association Casualty Insurance Co., 419 Pa. 170, 213 A.2d 366 (1965): "a pre-trial order precluding the assertion of an affirmative defense which raised pure questions of law is interlocutory and therefore unappealable; whereas a pre-trial order precluding the assertion of an affirmative defense which 'prevented factual proof of matters which the trier of fact could have determined in favor of the pleader so as to provide him with a complete factual defense,’ is final." Hull v. Tolentino, 536 A.2d at 798. In the case at bar we are presented with a pre-trial order precluding the assertion of a defense based upon a contractual limitation period. We see no difference between a limitation based upon contract from one based upon statute, and we note that a determination regarding the applicability of a statute of limitations often raises both factual and legal questions. Cathcart v. Keene Indus. Insulation, 324 Pa.Super. 123, 471 A.2d 493 (1984). An en banc panel of this court has found that the refusal to allow an appellant "an opportunity to present the proposed affirmative defense of the statute of limitations put appellant ‘out of court’ as to that defense" and was final and appealable. Joyce v. Safeguard Mutual Ins. Co., 362 Pa.Super. 522, 524 A.2d 1362, 1363 (1987). Following the precedent of Joyce v. Safeguard Mutual Ins. Co., Id., we find the instant order constitutes a final order for purposes of appeal. However, we again note that the law in this area is not clear and often it is dangerous to [523] litigants and lawyers. We call upon the Appellate Rules Committee to undertake a total “re-examination and re-evaluation” in an effort to clearly define the parameters of final and appealable orders. See: Zarnecki v. Shepegi, 367 Pa.Super. 230, 532 A.2d 873 (1987) (Dissent by Del Sole, J. 532 A.2d at 881).