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Kuhnle v. Prudential Securities

March 9, 2006

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.

The opinion of the court was delivered by: Becker, Circuit Judge.

PRECEDENTIAL

Argued January 18, 2006

Before: ROTH, FUENTES, and BECKER, Circuit Judges.

OPINION OF THE COURT

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 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 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 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 ...


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