PHILADELPHIA – A federal judge ruled that a motion for summary judgment as to a charge of breach of contract/good faith and fair dealing in a personal injury action would not prevail.
Judge Thomas N. O’Neill Jr. of the U.S. District Court for the Eastern District of Pennsylvania decided March 15 that Lee Mauger, Esq. and his firm, Mauger & Meter, Attorneys at Law, would not be granted their summary judgment motion against plaintiff Daryl Hemingway, doing business as International Realty Solutions.
According to amended complaint, Hemingway alleges in November 2007 he retained defendant Mauger to “record a mortgage and send a letter of demand for payment to the borrower East Parkside Community Revitalization Corp. (EPCRC), and that Mauger sent EPCRC a demand letter but did not record the mortgage.”
In 2011, a Brenda Armstrong, who was granted judgment against EPCRC, sued Hemingway to quiet title, at which point Hemingway discovered that his mortgage was never recorded. Hemingway recorded the mortgage in 2011, just one day before a Sheriff’s foreclosure sale occurred.
On May 13, 2013, a final judgment in quiet title was entered against Hemingway in the Philadelphia County Court of Common Pleas, and Hemingway alleges that due to Mauger’s not recording the mortgage, he was divested of his mortgage and suffered significant damages.
Hemingway filed suit against Mauger and his firm for professional negligence-malpractice-negligence (Count I); breach of contract-covenant of good faith and fair dealing (Count II); and breach of fiduciary duty (Count III).
In contrast, Mauger argued he was never asked by Hemingway to record the mortgage but merely directed to send a demand letter, that Counts I and III are both time-barred by the statute of limitations, and Hemingway had not established he suffered any harm as a result of Count II.
“The statute of limitations applicable to claims for professional negligence and breach of fiduciary duty is two years,” O’Neill said. “Plaintiff does not dispute that he learned that the mortgage had never been recorded on May 31, 2011, and this suit was commenced on Dec. 11, 2014. The statute begins to run when plaintiff knows or should have known of defendant’s negligence. Accordingly, Counts I and III will be dismissed as barred by the statute of limitations.”
O’Neill said Hemingway’s argument was based on Pennsylvania state law, where all deeds created are to be recorded within 90 days and ones not recorded are deemed fraudulent and void of consideration. Mauger argued Hemingway asked him to record the deed after the 90-day time period had passed, and thus it was fraudulent, leaving Hemingway without proof he suffered financial harm.
O’Neill disagreed.
“However, as plaintiff points out, Armstrong’s claim arose in the year 2011 and plaintiff allegedly instructed defendant to record the mortgage in 2007. Therefore, if defendant had followed the alleged instruction plaintiff’s mortgage would have prevailed over Armstrong’s claim,” O’Neill said.
“Since there is an issue of material fact as to whether plaintiff instructed defendant to record the mortgage, defendant’s motion for summary judgment as to Count II will be denied,” O’Neill added.
O’Neill further ruled the case would be scheduled for a future arbitration hearing.
The plaintiff is represented by Matthew B. Weisberg of Weisberg Law in Morton, and Graham F. Baird of the Law Offices of Eric A. Shore, in Philadelphia.
The defendants are represented by Gary M. Samms and Mark J. Hermanovich of Obermayer Rebmannn Maxwell & Hippell, in Philadelphia.
U.S. District Court for the Eastern District of Pennsylvania case 2:14-cv-07036
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com