The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
DONALD G. ABBEY, No. 4:24-CV-01953
Plaintiff, (Chief Judge Brann)
v.
THE PENNSYLVANIA STATE
UNIVERSITY, a Pennsylvania
nonprofit corporation; and DOES 1-50,
inclusive,
Defendants.
MEMORANDUM OPINION
APRIL 16, 2025
I. BACKGROUND
On April 9, 2024, Donald G. Abbey commenced this action against The
Pennsylvania State University (“Penn State” or “the University”) and John Does 1 –
50 in the Superior Court of Orange County, California.1 Penn State then removed
this action to the United States District Court for the Central District of California
on June 6, 2024, and the Central District of California subsequently transferred this
case to the Middle District of Pennsylvania on November 13, 2024.2 Pending before
the Court is Penn State’s Motion to Dismiss under Federal Rule of Civil Procedure
1 Notice of Removal, Doc. 1.
12(b)(6).3 That motion is now ripe for disposition; for the reasons that follow, it is
granted.
II. STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), courts dismiss a complaint,
in whole or in part, if the plaintiff fails to “state a claim upon which relief can be
granted.” Following the landmark decisions of Bell Atlantic Corp. v. Twombly4 and
Ashcroft v. Iqbal,5 “[t]o survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.”6 The United States Court of Appeals for the Third Circuit has
instructed that “[u]nder the pleading regime established by Twombly and Iqbal, a
court reviewing the sufficiency of a complaint must take three steps”: (1) “take
note of the elements the plaintiff must plead to state a claim”; (2) “identify
allegations that, because they are no more than conclusions, are not entitled to the
assumption of truth”; and (3) “assume the[] veracity” of all “well-pleaded
allegations” and then “determine whether they plausibly give rise to an entitlement
to relief.”7
3 Motion to Dismiss (“MTD”), Doc. 30.
4 550 U.S. 544 (2007).
5 556 U.S. 662 (2009).
6 Id. at 678 (quoting Twombly, 550 U.S. at 570).
7 Connelly v. Lane Construction Corp., 809 F.3d 780, 787 (3d Cir. 2016) (internal quotations
and citations omitted).
III. FACTUAL BACKGROUND
A. The Parties
Donald G. Abbey enrolled at Penn State in 1966; during his time at the
University, Abbey joined the Alpha Upsilon Chapter (“Alpha Upsilon”) of the Beta
Theta Pi fraternity.8 Alpha Upsilon owns real property at 220 North Burrowes Road,
State College, PA, “which served as the chapter’s fraternity house (the “Beta
House”).”9 Penn State is a nonprofit corporation organized in the State of
Pennsylvania; Does 1 – 50 are “unknown to Abbey” and are therefore sued in this
“fictitious designation[].”10
B. Abbey Loans $10 million to Alpha Upsilon
Abbey began to consider loaning Alpha Upsilon money to repair and improve
the Beta House in 2004.11 Before he did so, Abbey contacted Penn State executives
Rodney Kirsch, Senior Vice President for Development and Alumni Relations, and
Vicky Triponey, Vice President for Student Affairs on January 19, 2005.12 Abbey
wrote:
How does the University remove the Chapter from the Campus, if
[Alpha Upsilon] owns the land and building if it fails to keep at 2.5
grade point or adhere to any of the first level of standards, and why
would anyone agree to give you that right. If the University was
offering financial grants to the house and became equity investors in
8 Notice of Removal, Doc. 1, Compl., Ex. 1 ¶¶ 7-8.
9 Id. ¶ 10.
10 Id. ¶ 4.
11 Id. ¶ 11.
12 Id. ¶ 12.
the future, it might get the right to be repaid[], but to lose the ability to
use the house is too severe for any benefits offered. You can’t really
think that anyone is going to sign such a document. It amounts to a
quitclaim deed for right of occupancy unilaterally triggered by the
University. This is a deal killer for me.13
Abbey further advised these executives that he would not “invest money in
PSU’s newest dorm” if “the chapter did sign over its rights to you.”14 In his view,
“[t]his right of removal from Campus is aggressive beyond belief . . . .”15
On January 20, 2005, Triponey responded while copying Kirsch, Stuart
Spisak, Penn State’s Special Assistant to the Vice President for Student Affairs, and
Brad Palmer, Alpha Upsilon’s alumni representative. Triponey wrote:
Don’t break any deals yet . . . We have no intention of taking over your
house (we have no authority to do so!) Your interpretation is not at all
what we intend or envison. We really are on the same page/heading in
the same direction!16
Triponey “further assured Abbey” on January 27, 2005 in an email copying
Kirsch, Spisak, Palmer, and Stanley Latta, Penn State’s Assistant Vice President for
Housing, Food Services and Residence Life:
We are NOT proposing we have the right to take over a chapter’s land
or building . . . that is certainly not possible or desirable. But presently
a chapter (the fraternal organization) does exist at the University at the
invitation of the University and the IFC (or appropriate governing
council) and if after a certain period of time and after an effort to help
a chapter to correct their shortcomings relative to the minimum and
reasonable expectations, they still fail to meet the minimums, we could
13 Id. ¶ 12.
14 Id. ¶ 13.
15 Id.
16 Id. ¶ 14.
and would rescind our invitation to that specific chapter (but you would
still own the house) . . . but our intent here is to help all of the chapters
live up to these basic expectations (our authority is over the
organization not the property).17
That same day, Triponey sent an email to Palmer, with Latta and Spisak
copied; this email was later forwarded to Abbey and said, in relevant part:
I did some checking on the terms of the deed with the houses on campus
. . . and it is our understanding that the university has 1st right of refusal
on the property should you (the fraternity/alumni/house corp.)
CHOOSE to sell the property but we cannot force you to sell it. Even if
– worst case scenario – your chapter was uninvited/told they could no
longer exist at Penn State, we have no authority to take over your
house.18
Based on these assurances, Abbey made a series of loans to Alpha Upsilon for
the purpose of repairing and improving the Beta House, eventually totaling over $10
million.19 On June 6, 2009, Abbey and Alpha Upsilon “entered into a written
agreement related to past and future loans from Abbey (“the Funding
Agreement”).”20 The Funding Agreement established “two categories of loans:” (1)
Abbey Funds and (2) Home Improvement Funds. Abbey Funds are provided “to, for
or on behalf of” Alpha Upsilon “from and including June 6, 2009.”21 House
Improvement Funds were provided by Abbey to Alpha Upsilon for “the repair,
17 Id. ¶ 15.
18 Id. ¶ 16.
19 Id. ¶ 17.
20 Id. ¶ 19.
21 Id. ¶ 21.
reconstruction and improvement of the [Beta House]’ prior to June 6, 2009.”22 The
Funding Agreement identified $7.7 million in House Improvement Funds.23
If any of the following events occur, Alpha Upsilon is to repay the Abbey
Funds within sixty days: (1) Alpha Upsilon “decides not to follow the Men of
Principle initiative or is determined to be out of compliance by the General
Fraternity;” (2) Alpha Upsilon “permits, allows or otherwise fails to prevent
excessive damage to the” Beta House; (3) the Beta House “is sold or otherwise
acquired by any third party unless agreed to by Abbey, with repayment to Abbey
limited to available net proceeds from the transaction;”24 or (4) Alpha Upsilon
“ceases to be a chapter of the General Fraternity and the [Beta House] is utilized for
a purpose other than Alpha Upsilon of Beta Theta Pi unless agreed to by Abbey.”25
Triggering any of these conditions, along with a failure to repay Abbey for the Abbey
Funds within sixty days, would result in a lien on the Beta House “in favor of Abbey
until the Abbey Funds are repaid.”26
If the Beta House “is sold or otherwise acquired by any third party unless
agreed to by Abbey with repayment to Abbey limited to available net proceeds from
the transaction” or Alpha Upsilon “ceases to be a chapter of the General Fraternity
22 Id. ¶ 22.
23 Id.
24 This section provided Alpha Upsilon the opportunity to avoid the repayment obligation if
Abbey agreed to the sale or acquisition of the Beta House. Id. Any sale without his agreement
would trigger the repayment obligation. Id.
25 Id. ¶ 23.
26 Id.
and the [Beta House] is utilized for a purpose other than Alpha Upsilon of Beta Theta
Pi unless agreed to by Abbey,” Alpha Upsilon has sixty days to repay the House
Improvement Funds.27 If the second event occurred, “meaning that Alpha Upsilon
ceases to be a chapter of the General Fraternity and the [Beta House] is utilized for
a purpose other than Alpha Upsilon of Beta Theta without Abbey’s agreement” and
Alpha Upsilon lacks sufficient funds for repayment, “a lien will be placed on the
[Beta House] in favor of Abbey until the Abbey Funds are repaid.”28
As evidenced by these provisions of the Funding Agreement, “[i]t was
Abbey[‘s] and Alpha Upsilon’s intention that the Property would serve as security
for the performance of Alpha Upsilon’s repayment obligation under the Funding
Agreement.”29
C. The Repayment Provisions are Triggered
On February 4, 2017, alcohol-related hazing activities resulted in the death of
a student member of Alpha Upsilon.30 The General Fraternity subsequently
disbanded Alpha Upsilon on February 15, 2017, and the University revoked its
recognition of Alpha Upsilon as a student organization on March 30, 2017.31
Consequently, the Beta House could no longer be used to house Alpha Upsilon.32
27 Id. ¶ 25.
28 Id.
29 Id. ¶ 26.
30 Id. ¶ 27.
31 Id. ¶ 28.
32 Id. ¶ 29.
Abbey did not provide permission “to allow the Beta House to be used for any
purpose other than housing Alpha Upsilon,” and the General Fraternity concluded
that the February 4, 2017 incident “violate[d] the General Fraternity’s Men of
Principle initiative.”33 “Alpha Upsilon has also failed to prevent excessive damage
to the Property.”34
Abbey proceeded to sue Alpha Upsilon on March 10, 2017 given the
occurrences of these events; “Alpha Upsilon did not repay the Abbey Funds or the
House Improvement Funds in connection” with this suit.35 Nor does Alpha Upsilon
“have sufficient funds to repay Abbey within” the sixty day window.36 As a result,
“the Funding Agreement requires that a lien be placed on the Beta House in favor of
Abbey until the Abbey Funds and the House Improvement Funds are repaid.”37
D. The Court Ordered Sale of the Beta House
On December 21, 2021, the Court of Common Pleas of Centre County,
Pennsylvania “ordered that ownership of the Beta House shall be transferred to Penn
State in accordance with the following” (“the 2021 Verdict”):
“2. Once this verdict becomes final, the parties shall have six (6)
months to attempt to negotiate a transfer price for the subject property.
For these purposes, Defendant shall afford Plaintiff, and any necessary
designee of Plaintiff, reasonable access to the subject premises for
purposes of appraising the fair market value of the property. The parties
33 Id. ¶¶ 30-31.
34 Id. ¶ 32.
35 Id. ¶ 33-34.
36 Id. ¶ 34.
37 Id.
may waive the six (6) month period for negotiation by written
agreement and proceed as they may agree, or in the absence of an
agreement as to how to proceed, as set forth hereinafter.
3. Following the expiration of the period described in paragraph 2
above, whether by the lapse of time or upon the agreement of the
parties, the parties shall have two (2) months to agree upon the number
of and identity of the members of a Board of Arbitrators to determine
the transfer price of the subject property.
4. If an impasse should arise regarding the number of and/or identity of
arbitrators, either party may file a Praecipe for a hearing before the
Court where the Court will set the number of arbitrators and/or
determine the identity of said arbitrators, as may be necessary. In the
event of a future hearing to set the identities of the members of a Board
of Arbitrators, each party shall nominate two (2) arbitrators by filing
the same with the Prothonotary of Centre County at least ten (10) days
before the scheduled hearing and serve a copy of said filing on the
Court.”38
Not only does this trigger “an additional [repayment] basis” under the Funding
Agreement, but Abbey contends the 2021 Verdict also “gave rise to the claims
alleged . . . by informing” him that “Penn State’s prior representations to him were
false.”39
IV. DISCUSSION
A. Statute of Limitations
The Third Circuit allows “a limitations defense to be raised by a motion under
Rule 12(b)(6) ‘only if the time alleged in the statement of a claim shows that the
38 Id. ¶ 35.
39 Id. ¶¶ 37-38.
cause of action has not been brought within the statute of limitations.’”40 “However,
‘[i]f the bar is not apparent on the face of the complaint, then it may not afford the
basis for a dismissal of the complaint under Rule 12(b)(6).’”41 When deciding a
motion to dismiss, I “generally consider only the allegations contained in the
complaint, exhibits attached to the complaint, and matters of public record.”42 But if
a ”document [is] integral to or explicitly relied upon in the complaint,” the Court
may consider it “without converting the motion to dismiss into one for summary
judgment.”43
Penn State argues that Count I (Fraudulent Misrepresentation), Count II
(Negligent Misrepresentation), Count IV (Unjust Enrichment), Count V (Promissory
Estoppel), and Count VI (Declaratory Relief) are untimely under their respective
limitations periods. To make this argument, Penn State relies on Abbey’s initial 2017
Complaint and an April 11, 2019 joint motion in the case of Abbey v. Alpha Upsilon.
Federal Rule of Evidence 201(b) allows the Court “to take judicial notice of
facts that are not subject to reasonable dispute in that they are either: (1) generally
known within the territorial jurisdiction of the court; or (2) capable of accurate and
ready determination by resort to sources whose accuracy cannot reasonably be
40 Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (quoting Robinson v. Johnson, 313 F.3d
128, 134-35 (3d Cir. 2002)).
41 Id.
42 Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1996 (3d Cir. 1993).
43 In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (quoting Shaw
v. Digital Equip. Corp., 82 F.3d 1194, 1220 (1st Cir. 1996)).
questioned.”44 Considering these “matters of public record” does not improperly
convert this motion into one for summary judgment.45 The Court “may take judicial
notice of other legal proceedings and documents filed therein, though not for their
truth, in considering a motion to dismiss.”46 As a result, the Court is able to take
judicial notice of both the 2017 Complaint and its accompanying exhibits and the
2019 joint motion. In doing so, I remain cognizant that “a court that examines
[evidence from] a prior proceeding to find facts converts a motion to dismiss into a
motion for summary judgment.”47 Instead of considering these filings “for the truth
of the facts recited therein,” I use them to establish “the existence of the” document.48
Given this limitation, it is inappropriate at this juncture to conclude that Abbey’s
claims are time barred on this basis. To do so would require the Court to improperly
infer facts from the judicially noticed documents.49
Be that as it may, Count I (Fraudulent Misrepresentation) and Count II
(Negligent Misrepresentation) are still untimely. Abbey specifically alleged that the
44 In re Synchronoss Sec. Litig., 705 F. Supp. 2d 367, 390 (D.N.J. 2010) (quoting In re NAHC,
Inc. Sec. Litig., 306 F.3d 1314, 1331 (3d Cir. 2002)).
45 Beverly Enters., Inc. v. Trump, 182 F.3d 183, 190 n.3 (3d Cir. 1999). See also Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 323 (2007).
46 Rigollet v. Kassoff, 570 F. Supp. 3d 246, 248 n.1 (D.N.J. 2021) (citing Southern Cross
Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d 410, 426-27 (3d Cir.
1999)).
47 Kauffman v. Moss, 420 F.2d 1270, 1274-75 (3d Cir. 1970).
48 S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d 410, 426-27 (3d
Cir. 1999).
49 Nor can it be said that these documents are “integral or explicitly relied upon in the Complaint.”
In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997). These
documents are merely “explicitly cited;” they do not form the basis of the claim. Id. (quoting
Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993)).
December 21, 2021 Verdict “gave rise to the claims alleged herein by informing
Abbey that Penn State’s prior representations to him were false.”50 As Plaintiff filed
this Complaint on April 9, 2024, the two-year statute of limitations has run on Counts
I and II.51 Abbey’s attempt to argue otherwise in his briefing cannot overcome these
specific allegations.52 Accordingly, Counts I and II will be dismissed, but Plaintiff
will be provided leave to amend to address this deficiency, if that is at all possible.
B. Purported Creditor
The University also asserts that Plaintiff had constructive notice of the Deed
“as early as 2004” due to his status as “a purported creditor.”53 In making this
proposition, Penn State relied upon the Pennsylvania Supreme Court’s 1869 decision
in Maul v. Rider,54 which observed that recording a deed provides “constructive
notice only to those who are bound to search for it: thus subsequent purchasers and
mortgagees, and perhaps all others who deal with or on the credit of the title, in the
50 Notice of Removal, Doc. 1, Compl., Ex. 1 ¶ 38.
51 BIS, Doc. 36 at 11.
52 Abbey argues at length that the discovery rule and Penn State’s fraudulent concealment toll
the applicable statute of limitations. Neither argument is persuasive under the allegations of
the Complaint for these two counts. Abbey explicitly indicated that the 2021 Verdict “gave
rise to the claims” he brought, thus displaying his awareness of his claims such that the
discovery rule and fraudulent concealment are not applicable. I also note that Abbey asks the
Court to consider the April 19, 2022 Judgment and October 18, 2023 Order in the case between
Penn State and Alpha Upsilon. Even if I were to take judicial notice of these documents at this
time, I may not consider their contents. Instead, I conclude it is more appropriate to grant the
motion to dismiss as to Count I and II on this basis and allow Plaintiff to replead his allegations
to address this issue.
53 BIS, Doc. 36 at 12.
54 Maul v. Rider, 59 Pa. 167 (1869).
line of which the recorded deed belongs.”55 As will be discussed in greater length
below, the Complaint merely establishes Abbey’s ability to become a creditor. Given
that the University fails to explain how this line of reasoning extends to all possible
future creditors, I set aside this argument in favor of addressing the inescapable issue
in Plaintiff’s Complaint: his claim to damages.
C. Abbey’s Purported Damages56
Defendant correctly contends that dismissal is warranted as Abbey cannot
show that he has suffered damages under the allegations of the Complaint for two
reasons.
First, Plaintiff has failed to allege that he is a lienholder. Abbey identified that
it was the fraternity’s “intention that the Property would serve as security for the
performance of Alpha Upsilon’s repayment obligation under the Funding
Agreement.”57 Abbey also described several events that triggered Alpha Upsilon’s
repayment obligations and its inability to repay the entirety of the Abbey Funds and
House Improvement Funds.58 He then simply observes that “the Funding Agreement
requires that a lien be placed on the Beta House in favor of Abbey” and that he
initiated a suit against Alpha Upsilon in 2017 in the Court of Common Pleas of
55 Id. at 171.
56 This section applies to all of Plaintiff’s claims except the declaratory relief cause of action.
57 Notice of Removal, Doc. 1, Compl., Ex. 1 ¶ 26.
58 Id. ¶¶ 26-34.
Centre County, Pennsylvania.59 Plaintiff then improperly asks the Court to infer that
he has a security interest in the Beta House, not merely an intent to establish one.
Second, Abbey has failed to allege how the sale damages any purported lien
he may have. While he contends that “Penn State now seeks to force a discounted
sale of the property and wipe out Abbey’s security interest therein,”60 his allegations
describing the December 2021 Verdict contradict that assertion. In ordering the
transfer of the Beta House to Penn State, the Court of Common Pleas of Centre
County provided Alpha Upsilon and the University six months “to attempt to
negotiate a transfer price” and that “reasonable access” should be provided to allow
for the appraisal of the fair market value of the Beta House.61 If such negotiations
fail, Penn State and Alpha Upsilon must then submit the matter to arbitration “to
determine the transfer price of” the Beta House.62
The process established by the Court of Common Pleas appears to ensure that
Penn State will pay a fair price for the Beta House. Plaintiff failed to discuss at all
how such a sale would damage him beyond asserting that the December 2021
Verdict “does not state or require that Penn State pay Abbey ‘fair market value’ for
the Beta House or his improvements thereon.”63 Although correct, this observation
59 Id.
60 Id. ¶ 1.
61 Id. ¶ 35.
62 Id.
63 BIO, Doc. 37 at 12.
alone does not serve to establish damages. Without more information, it is unclear
why any lien Abbey held would not attach to the proceeds of the sale or whether the
sale would satisfy the full amount of the lien. Given these issues, the Court agrees
that Plaintiff has failed to plead he will suffer any damages.64 But leave to amend
will be provided to allow Abbey to sufficiently detail his alleged damages.
D. Declaratory Relief
The Court has the power “to declare rights, status, and other legal relations
whether or not further relief is or could be claimed.”65 “The court may refuse to
render or enter a declaratory judgment or decree where such judgment or decree, if
rendered or entered, would not terminate the uncertainty or controversy giving rise
to the proceeding, but . . . the existence of an alternative remedy shall not be a ground
for refusal to proceed . . . .”66 But “a plaintiff in a declaratory judgment action must
demonstrate that an actual controversy exists.”67
Plaintiff identified three controversies in his Complaint: (1) “[w]hether Penn
State is precluded from purchasing the Beta House in light of Abbey’s lien on the
Beta House;” (2) “[w]hether Penn State is precluded from purchasing the Beta House
in light of Penn State’s wrongful conduct alleged herein; and” (3) “[i]f Penn State is
64 Due to this conclusion, I do not comment on the remaining substantive arguments put forth by
the parties.
65 42 Pa.C.S.A. § 7532.
66 42 Pa.C.S.A. § 7537.
67 Tri-State Auto Auction, Inc. v. Gleba, Inc., 257 A.3d 172, 184 (Pa. Super. 2021).
allowed to proceed with the purchase of the Beta House, whether Abbey has a right
to participate in: (i) the negotiation of the transfer price for the Beta House; (ii) the
process of deciding the number and identity of the members of a Board of Arbitrators
to determine the transfer price of the Beta House; and (iii) the eventual arbitration
between Penn State and Alpha Upsilon regarding the transfer price for the Beta
House.”68
Plaintiff’s controversies are hampered by the Court’s inability to conclude that
Abbey has a lien on the Beta House, as discussed above. Given this, it appears that
Abbey lacks any basis to prevent the sale of the Beta House or to become involved
in the sale between Alpha Upsilon and Penn State. Instead, under the allegations of
the Complaint, Abbey has seemingly only a breach of contract claim against Alpha
Upsilon. Without any allegations supporting these controversies, the Court agrees
that dismissal is warranted as to this cause of action.69
V. CONCLUSION
Defendant’s motion to dismiss pursuant to Rule 12(b)(6) is granted As the
Third Circuit instructs that leave to amend should be “freely given,”70 Plaintiff will
68 Notice of Removal, Doc. 1, Compl., Ex. 1 ¶ 68.
69 Defendant has raised a compelling argument that the third purported controversy is improperly
before this Court. Due to my conclusion that Plaintiff is unable to proceed with this cause of
action under the current allegations in the Complaint, I need not reach this issue.
70 Shane v. Fauver, 213 F.3d 113, 116 (3d Cir. 2000) (quoting F .R.C .P. 15(a)).
be given fourteen days from today’s date to file an amended complaint. If no
amended complaint is filed, the action will be subject to dismissal with prejudice.
An appropriate Order follows.
BY THE COURT:
s/ Matthew W. Brann
Matthew W. Brann
Chief United States District Judge