Wasielewski, T. v. Goebel Insurance Agency

J-A17036-24

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

THUONG ERIN WASIELEWSKI, : IN THE SUPERIOR COURT OF

INDIVIDUALLY AND AS : PENNSYLVANIA

ADMINISTRATRIX OF THE ESTATE OF :

THUONG D. NGUYEN, DECEASED :

:

Appellant :

:

:

v. : No. 2021 EDA 2023

:

:

GOEBEL INSURANCE AGENCY, INC., :

AND CHRISTOPHER GOEBEL :

Appeal from the Order Entered July 13, 2023

In the Court of Common Pleas of Philadelphia County

Civil Division at No(s): 220702372

BEFORE: BOWES, J., NICHOLS, J., and SULLIVAN, J.

MEMORANDUM BY SULLIVAN, J.: FILED JANUARY 10, 2025

Thuong Erin Wasielewski (“Appellant”), both individually and as

administratrix of the Estate of Thuong D. Nguyen (“Nguyen” or “the

decedent”), appeals from the order granting the motion of Goebel Insurance

Agency, Inc. and Christopher Goebel (collectively, “Appellees”) for judgment

on the pleadings. Following our review, we affirm.

The trial court set forth the following factual and procedural history:

In December 2014, Oanh Kim Chung [(“Chung”)], sole

owner and operator of Lee’s Café [referred to interchangeably with

“Chung”)], contacted [Appellees] about acquiring insurance for

her restaurant. [Appellees] procured an Ultrapack Plus Policy for

Lee’s Café from Erie Insurance Exchange ([“]Erie[”]), effective

December 12, 2014 to December 12, 2015, which was renewed

for the policy period of December 25, 2015 to December 25, 2016.

Although Chung sought and was allegedly assured by [Appellees]

that the Erie policy would cover her employees, the policy

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contained an employer’s liability exclusion and did not provide for

worker’s compensation coverage.

On March 3, 2016, Lee’s Café employee [] Nguyen was

murdered while at work. After receiving Lee’s Café’s notice of

claim, Erie issued two reservation of rights letters dated April 22,

2016 and May 16, 2016, both informing Chung it was disclaiming

coverage and stating that injuries to employees were excluded

under the policy. On March 2, 2018[,] suit was brought [by

Appellant] against Lee’s Café, alleging wrongful death, premises

liability, and negligent security.

Erie issued a denial letter on April 20, 2018, citing the

policy’s employer’s liability exclusion and disclaiming coverage for

the claims brought in the wrongful death action and

recommending Chung contact her worker’s compensation insurer

about coverage. Erie then filed a declaratory judgment action on

June 13, 2018 for a declaration that it did not owe Lee’s Café a

defense or indemnity in the wrongful death action[, though, while

the declaratory action was pending, Erie defended Lee’s Café,]

and was granted summary judgment on November 15, 2019.

Prior to trial in the wrongful death action, Chung entered a

settlement agreement with [Appellant], settling the claims and

assigning her rights against [Appellees] to [Appellant].

[Appellant] initiated this suit on July 27, 2022[,] and filed a first

amended complaint on November 22, 2022. In the first amended

complaint, [Appellant brought] claims for breach of oral and

written contract. [Appellant] allege[d] that [Appellees] failed to

secure the proper premises liability and worker’s compensation

insurance that would have provided employee coverage in the

wake of Nguyen’s murder and shielded Chung from liability. The

pleadings [were then] closed. [Appellees moved for judgment on

the pleadings, which the trial court granted based on the running

of the statute of limitations.]

Trial Court Opinion, 7/13/23, at 1-3 (footnotes and unnecessary capitalization

omitted). Appellant timely appealed, and both she and the trial court complied

with Pa.R.A.P. 1925.

Appellant raises the following issues for our review:

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1. Whether the trial court erred in granting judgment in favor of

[Appellees] because the statute of limitations period did not

begin to run until the assignors sustained an actual injury, i.e.,

when the insurance carrier stopped providing the assignors

with a defense in the underlying personal injury action.

2. Whether the trial court erred in granting judgment in favor of

[Appellees] because there were questions of fact as to when

the assignors reasonably should have become aware that they

had a claim against [Appellees] that precluded judgment being

entered pursuant to the discovery rule.

3. Whether, even if this Court chooses to adopt the argument put

forward by [Appellees], barring [Appellant’s] claims against

[Appellees] as a matter of law would be a harsh and unfair

result, because this would be a case of first impression and

[Appellant’s] understanding of the relevant statute of

limitations period was reasonable and made in good faith, and

therefore it would be proper for this Court in such event to

apply its holding only prospectively, as, for example, the

Supreme Court did in Lamp v. Heyman, [366 A.2d 882 (Pa.

1976)].

Appellant’s Brief at 3-4.

Our standard of review for appeals from orders granting motions for

judgment on the pleadings is as follows:

[O]ur standard of review is de novo and our scope of review is

plenary. Judgment on the pleadings should be granted where

there are no disputed issues of material fact, and the defendant is

entitled to judgment as a matter of law. See[, e.g.,] Pa.R.Civ.P.

1034. All well-pleaded allegations in the [Appellant’s] operative

complaint are accepted as true.

SpiriTrust Lutheran v. Wagman Constr., Inc., 314 A.3d 894, 904 (Pa.

Super. 2024) (some internal citations omitted).

In all three of her issues, Appellant argues the trial court erred in

granting Appellees’ motion for judgment on the pleadings because the statute

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of limitations did not begin to run until the insurer stopped providing Chung

with a defense in the action between Appellant and Chung. Because the issues

arise from related facts and law, we address them together.

It is uncontested that the applicable statute of limitations is codified at

42 Pa.C.S.A. § 5525, which provides that breach of contract actions must be

commenced within four years. This Court has explained that it is “well-settled

that the statute of limitations begins to run as soon as the right to institute

and maintain a suit arises. Thus, once a cause of action has accrued and the

prescribed statutory period has run, an injured party is prohibited from

bringing his or her cause of action.” Morgan v. Petroleum Products Equip.

Co., 92 A.3d 823, 828 (Pa. Super. 2014) (internal citations and footnote

omitted). The purpose of the statute of limitations is to “expedite litigation

and thus discourage delay and the presentation of stale claims which may

greatly prejudice the defense of such claims,” and, accordingly, “[i]n light of

the important purpose served by limitations periods, this Court has held that

statutes of limitation[s] are to be strictly construed.” Wachovia Bank, N.A.

v. Ferretti, 935 A.2d 565, 575 (Pa. Super. 2007) (internal citation and

quotations omitted). “Mistake, misunderstanding, or lack of knowledge in

themselves do not toll the running of the limitations period.” Id. at 828 n.8.

“In a contract case, a cause of action accrues when there is an existing right

to sue forthwith on the breach of contract.” Kowalski v. TOA PA V, L.P.,

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206 A.3d 1148, 1158 (Pa. Super. 2019) (internal citations and quotations

omitted).

Relevant to this case,

[a] plaintiff acquires a cause of action against his broker or agent

where the broker neglects to procure insurance, or does not follow

instructions, or if the policy is void or materially defective through

the agent’s fault. The broker . . . is liable to the same extent as

the insurer would have been liable had the insurance been

properly effected.

Laventhol & Horwath v. Dependable Ins. Associates, Inc., 579 A.2d

388, 391 (Pa. Super. 1990) (internal citation, quotations, ellipses, and

brackets omitted). Where a plaintiff suffers losses and the insurer denies

coverage due to the broker’s actions, the necessary elements for a cause of

action against the broker are satisfied. See id.1

This Court has explained that there is an exception that tolls the statute

of limitations called the “discovery rule,” which we explained as follows:

There are, however, exceptions to this general rule which

act to toll the running of the statute. One of these exceptions is

the discovery rule, which we have described as a judicially created

device which tolls the running of the applicable statute of

limitations until the point where the complaining party knows or

reasonably should know that he has been injured and that his

injury has been caused by another party’s conduct.

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1 A plaintiff may maintain separate causes of action against different

defendants for the same losses, though the plaintiff may have “but one

satisfaction of its claim for those losses.” Laventhol & Horwath, 579 A.2d

at 391.

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Morgan, 92 A.3d at 828 (internal citation and quotations omitted). The

purpose of the discovery rule is:

to exclude from the running of the statute of limitations that

period of time during which a party who has not suffered an

immediately ascertainable injury is reasonably unaware he or she

has been injured, so that he or she essentially has the same rights

as those who have suffered such an injury.

Id. at 828 n.9 (internal citation omitted).

This Court has explained how a plaintiff may assert the discovery rule:

There are two ways for a plaintiff to assert the discovery

rule: (1) by pleading sufficient facts in the complaint, or (2) by

raising the discovery rule in response to the defendant’s statute

of limitations defense. Either way, the plaintiff must allege

facts showing plaintiff’s lack of prior knowledge regarding

the nature of the alleged injury, and why plaintiff could not

have learned of it at an earlier point.

SpiriTrust Lutheran, 314 A.3d at 906 (internal citation omitted; emphasis

added).

Appellant argues the trial court erred in granting Appellees’ motion for

judgment on the pleadings because the statute of limitations did not begin to

run until judgment was entered against Chung in favor of Erie in the

declaratory judgment action. See Appellant’s Brief at 16. Appellant argues

Chung suffered no actual damages until November 15, 2019, when the insurer

stopped defending Chung in the tort action brought by Appellant. See id. at

17-19. Appellant argues that this Court’s decision in Kelly v. Carman Corp.,

229 A.3d 634, 647-48 (Pa. Super. 2020), stands for the proposition that there

must be “a significant injury as a direct result of the absence of promised

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insurance coverage,” which, in this case, would be the judgment in favor of

Erie. See Appellant’s Brief at 15. Appellant further argues the trial court

erred in granting the motion for judgment on the pleadings because there is

a question of fact about whether the discovery rule tolled the running of the

statute of limitations, more specifically, whether Chung, the assignor, “should

reasonably have understood [herself] to have suffered real damage in

consequence of [Appellees’] conduct prior to November 15, 2019,” i.e., before

judgment was granted in favor of Erie in the declaratory judgment action.

See id. at 23.

The trial court considered Appellant’s issues and concluded they merit

no relief:2

An action for breach of contract is subject to a four-year

statute of limitations in Pennsylvania. The limitations period

begins to run as soon as the right to institute and maintain suit

arises. . .. All of [Appellant’s] allegations stem from the

procurement of the insurance and the policy clearly states the

coverage types and limits, does not include worker’s

compensation insurance coverage, and clearly delineates the

employer’s liability exclusion.

. . . [March 3, 2016 was the date of the decedent’s death,

and] appellate court[s have] held that a denial [of coverage] letter

can also count as the . . . harm triggering the start of the

limitations period[. I]n this case, Erie sent the denial letter on

April 20, 2018[,] and filed the declaratory judgment action on

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2 The trial court concluded the statute could have begun to run on several

dates, but concluded that even taking the latest possible date, which is June

14, 2018, the limitations period had run before Appellant brought suit, and,

consequently, Appellant’s contract claims were barred. We excerpt the trial

court’s opinion insofar as it pertains to this date.

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June 1[4], 2018, meaning the limitations period would have run

on . . . June [14], 2022.

Regardless [of the triggering event], all of these dates are

weeks, months, or years prior to when [Appellant] filed [her]

complaint on July 27, 2022. [Appellant’s] argument that

[Chung’s] claims against [Appellees] did not begin to accrue until

after Erie won summary judgment ignores the numerous times

Chung and the restaurant were put on notice that employees were

not covered under the policy. And [Appellant’s] main argument,

that Chung could not bring the suit against [Appellees] while Erie

was providing her defense in the wrongful death action,

substitutes considerations of legal strategy for the applicable

black-letter law. . ..

After summary judgment was granted to Erie, on November

15, 2019, [Appellant] waited another two[-]and[-a-]half years to

file suit, when doing so at any time [after June 14, 2018 or even

November 15, 2019 and] prior to June [14], 2022 (the end of the

four-year limitations period running from the filing of Erie’s

declaratory judgment action) would have satisfied the outermost

boundary of the limitations period. [Appellant] chose not to and

now their claims are time-barred.

Trial Court Opinion, 7/13/23, at 3-5 (footnotes and unnecessary capitalization

omitted).

Following our review, we discern no error by the trial court. Appellant

asserted the following in her complaint: Chung engaged Appellees to serve as

insurance brokers for Lee’s Café, and Appellees procured for Chung an

insurance policy for December 25, 2015 to December 12, 2016, which

Appellees represented “provided liability coverage for the employees of Lee’s

Café.” Am. Compl., 11/22/22, at ¶¶ 10, 12-14. However, notwithstanding

Appellees assurances to Chung about the scope of coverage, the policy

“provided no worker’s compensation insurance[,] and[,] moreover[,]

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contained specific exclusions that precluded coverage for the employees of

Lee’s Café.” Id. at 14. Thus, the breach of Appellees’ contractual duty

occurred when Appellees procured the defective policy, i.e., December 25,

2015.

The loss in this case is that for which coverage was sought, i.e., the

claim which would have been covered under the insurance policy had the

broker procured the appropriate or requested insurance. See Laventhol &

Horwath, 579 A.2d at 391 (stating that a plaintiff acquires a cause of action

against her broker where the broker does not follow instructions, and the

broker is liable for the loss to the same extent as the insurer had insurance

been properly effected). Here, Appellant pleaded in her amended complaint

that the loss for which coverage was sought, was the death of the decedent

on March 3, 2016. See Am. Compl., 11/22/22, at ¶ 16. Appellant filed a

wrongful death suit against Lee’s Café on March 2, 2018. See id. at ¶ 15. In

the wrongful death suit, the asserted amount of the loss, i.e., damages flowing

from the decedent’s death, was in excess of $50,000. See id. at Ex. D

(wrongful death complaint) at pp. 9-13. Thus, a loss occurred on March 3,

2016.

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Finally, while Appellees alleged that Erie denied coverage in April 2018, 3

Appellant pleaded in her complaint that Erie filed for declaratory judgment

against Lee’s Café on June 14, 2018, and in that complaint, Erie asserted it

was not obliged to cover losses stemming from the decedent’s death. See,

e.g., id. at Ex. E (Erie’s declaratory judgment complaint) at ¶¶ 38-40.

Accordingly, as of June 14, 2018, all of the necessary elements were

present to trigger a breach of contract action against Appellees as brokers

who failed to procure the requested insurance. The breach occurred in

December 2015, when Appellees failed to follow instructions and procured a

policy other than that which they had been contracted to procure. The loss

occurred when the decedent died, i.e., in March 2016. Erie definitively denied

coverage in June 2018 when it filed for the declaratory judgment and forced

Chung into separate litigation over the policy. At the time Erie denied

coverage and sought declaratory judgment, Appellees became liable to Chung

for breach of contract. See Laventhol & Horwath, 579 A.2d at 391 (where

a plaintiff suffers losses and the insurer denies coverage due to the broker’s

actions, the necessary elements for a cause of action against the broker are

satisfied); Kowalski, 206 A.3d at 1158 (in a contract case, a cause of action

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3 Appellees in their motion for judgment on the pleadings asserted that Erie

issued a denial letter on April 20, 2018, see Mot. for Judgment on the

Pleadings, 5/9/23, at ¶ 25. Appellant, in a single paragraph in her answer,

denied paragraphs 21-26 of the motion as being “both immaterial and

improper.” See Pl.’s Resp., 5/24/23, at ¶ 21-26.

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accrues when there is an existing right to sue forthwith on the breach of

contract).4 Therefore, we agree with the trial court that Appellant’s cause of

action against Appellees accrued on, or no later than, June 14, 2018.

Appellant counters that Kelly, among other cases, supports her

argument that a breach of contract claim against Appellees did not accrue

until Erie won the declaratory judgment action. See Appellant’s Brief at 15-

16. Appellant insists that Kelly reflects a basic common law rule, and long-

standing precedent, requiring an insured suffer “real damage” before bringing

a breach of contract claim against the insurance broker for failing to procure

appropriate or requested coverage. Appellant contends that before Erie

obtained the declaratory judgment, Chung only suffered theoretical and

speculative losses due to the wrongful death case, namely, the cost of defense

in the wrongful death action, which Erie theretofore provided. Appellant adds

that the court could have found Erie had a duty to indemnify Chung, which

would have negated any right to sue Appellees. Kelly, however, is

distinguishable.

In Kelly, a broker failed to timely notify an insurer of an action against

an insured, and, consequently, the insurer did not defend the insured,

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4 Following Erie’s denial of coverage, Chung could have brought suit against

Appellees. See Laventhol & Horwath, 579 A.2d at 391 (a party may

maintain separate causes of action for the same losses though only one

satisfaction is possible).

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resulting in a default judgment against the insured. See 229 A.3d at 641-42.

Later, the insurer denied coverage and won a declaratory judgment action to

that effect. See id. at 641. The earlier default judgment against the insured

gave rise to negligence and breach of contract claims on the part of the insured

against the broker. The insured assigned these claims to the plaintiffs from

the default judgment case, the Kellys. See id. at 641.

In Kelly, while the case concerned an assignee’s action against a broker

based on an insurer’s ultimate failure to defend, the statute of limitations issue

there pertained to the negligence action against the broker, and the statute

of limitations was therefore the two-year period applicable to torts. See id.

at 647-48. Crucially, for torts, the statute of limitations begins to run at the

time of the injury, which in Kelly, this Court described as the “real damage,”

i.e., the judgment in the underlying tort action by the Kellys against the

insured. Id. For purposes of the tort action, the Kelly Court concluded the

damage occurred at the time of the default judgment against the insured,

which occurred prior to the insurer’s denial of coverage and also its favorable

verdict in the declaratory judgment action. See id. at 646-48. Kelly thus

stands for the proposition that—in a tort case—an injury is inflicted, and thus

the right to commence a lawsuit arises, when the insured party is subject to

a judgment based on an insurer’s failure to defend due to the negligent actions

of a broker, notwithstanding that the insurer has not yet denied the

claim or obtained a declaratory judgment confirming its denial of

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coverage. The facts of Kelly are inapposite to the situation here, where the

insurer has denied coverage and commenced a declaratory judgment action,

allegedly due to the broker’s actions, prior to the insured’s settlement with a

plaintiff in an underlying action. As discussed above, all of the elements for a

breach of contract action were satisfied by June 14, 2018. 5 However, this

does not end our inquiry, as Appellant has also invoked the discovery rule.

As noted above, where a plaintiff asserts the discovery rule to toll the

running of a statute of limitations, the plaintiff must allege facts showing

plaintiff’s lack of prior knowledge regarding the nature of the alleged injury,

and why plaintiff could not have learned of it at an earlier point. See

SpiriTrust Lutheran, 314 A.3d at 906. Our review of the pleadings reveals

that Appellant acknowledged the commencement of Erie’s declaratory

judgment action against Lee’s Café, yet failed to allege facts to show that

Chung did not know of the injury on June 14, 2018, when Erie filed a complaint

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5 Moreover, while axiomatic that a party bringing a breach of contract action

must assert damages with reasonable certainty, the test of whether damages

are remote or speculative has nothing to do with the difficulty in calculating

the amount of damages. See Logan v. Mirror Printing Co. of Altoona,

Pa., 600 A.2d 225, 227 (Pa. Super. 1991). Indeed, this Court has

distinguished the fact that damages have occurred with the amount of

damages. The threshold question is thus whether there are identifiable

damages; damages are only speculative if the uncertainty concerns the fact,

not the amount, of damages. See id. Here the loss was decedent’s death,

and the damages would flow from Lee’s Café’s liability for the death following

Erie’s June 2018 denial of coverage for decedent’s death because of Appellees’

asserted breach of contract, i.e., failure to procure the requested insurance.

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against Lee’s Café in which it stated it was not obliged to cover the loss. 6

Because the discovery rule did not toll the statute of limitations, and there is

no dispute of material fact that Erie denied coverage by June 14, 2018 at the

latest, and Chung was aware of this denial, the statute of limitations began to

run as of June 14, 2018. Four years from this date is June 14, 2022. The

four-year statute of limitations thus expired on or about June 14, 2022. See

42 Pa.C.S.A. § 5525; Morgan, 92 A.3d at 828. Appellant filed her complaint

on July 27, 2022. Consequently, this action is barred by the statute of

limitations.

Lastly, Appellant maintains this Court, should it rule in favor of

Appellees, should give the holding prospective effect only, pursuant to Lamp.

In Lamp, our Supreme Court used its “supervisory power” to qualify a Rule

of Civil Procedure, but only prospectively in the interest of fairness to the

plaintiffs who relied on the Rule and the Court’s prior interpretations of it. See

Lamp, 366 A.2d at 888-89. We decline Appellant’s request to apply this

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6 Appellant does not allege Chung did not know that Erie had denied coverage;

rather, Appellant argues that it was prudent for Chung to wait to see whether

summary judgment would be granted in favor of Erie, rather than file suit

against Appellees as soon as Erie denied coverage. See Appellant’s Brief at

24-25. Appellant’s argument misses the mark, however, because though the

cause of action accrued against Appellees once Erie denied coverage, the four-

year statute of limitations did not preclude Chung from filing suit against

Appellees after summary judgment was entered in favor of Erie in November

2019; Chung still had two-and-a-half years after the November 2019

summary judgment grant to file suit against Appellees within the statute of

limitations. Thus, Chung would not necessarily have had to defend in the

declaratory judgment action simultaneously with filing suit against Appellees.

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holding only prospectively, as the circumstances of Lamp are inapplicable

here, given this Court has not presently modified or qualified an established

rule that the parties have relied on. See Kline v. Travelers Pers. Sec. Ins.

Co., 223 A.3d 677, 690 (Pa. Super. 2019) (explaining that judicial discretion

in whether to apply a rule retroactively or prospectively entails consideration

of the purpose to be served by the new rule, the extent of the reliance on the

old rule, and the effect on the administration of justice by the retroactive

application of the new rule); contra Appellant’s Brief at 26.

Accordingly, we affirm the order granting Appellees’ motion for

judgment on the pleadings.

Order affirmed.

Judge Nichols joins this decision.

Judge Bowes concurs in the result.

Date: 1/10/2025

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