Diefenderfer v. Dring

JOHN P. DIEFENDERFER AND HEIDI B. DIEFENDERFER, Plaintiffs, v. LORI DRING AND NANCY ASARO, Defendants.

CIVIL ACTION NO. 3:15-CV-0500

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

October 6, 2015

(JUDGE CAPUTO)

MEMORANDUM

Presently before the Court is a Motion to Dismiss Plaintiffs' Amended Complaint filed by Defendants Lori Dring and Nancy Asaro ("Defendants") (Doc. 8). Count I of the Amended Complaint seeks an order directing Defendants to grant Plaintiffs a permanent easement right pursuant to a Settlement Agreement that the two parties entered into to resolve a prior action. Count II sets forth an alternative claim for declaratory relief regarding the ownership of certain property, including an order that Plaintiffs have a prescriptive easement over Defendants' property. Count III is pled in the alternative to Count I, and seeks damages instead of specific performance. Defendants argue that Counts I and III should be dismissed because there are conditions precedent to Defendants' obligation to Plaintiffs under the Settlement Agreement that have not yet been satisfied. Defendants also argue that there has been a material breach of the Settlement Agreement, which excuses them from further performance to Plaintiffs under the Agreement. Furthermore, Defendants argue that Count II is barred by res judicata and collateral estoppel. Because this Court finds that there were no conditions precedent to Defendants' obligation to Plaintiffs under the Settlement Agreement, the motion to dismiss Counts I and III will be denied. However, because this Court finds that Count II is barred by res judicata and collateral estoppel, and further, that Plaintiffs have failed to adequately plead a prescriptiveeasement claim, the motion to dismiss Count II will be granted. Plaintiffs shall have twenty-one (21) days from the date of entry of this Memorandum to file a Second Amended Complaint to properly plead their claim for a prescriptive easement against Defendants. Otherwise, the claim will be dismissed with prejudice.

I. Background

The facts as set forth in the Complaint are as follows:

Plaintiffs John P. Diefenderfer and Heidi B. Diefenderfer ("Plaintiffs" or "Diefenderfers"), husband and wife, are both citizens of the Commonwealth of Pennsylvania. (Doc. 4, Am. Compl. ¶ 1.) Defendants Lori Dring and Nancy Asaro are both citizens of the State of New Jersey. (Id. ¶¶ 2, 3.) At all relevant times, Plaintiffs were the owners of certain real property in Wayne County, Pennsylvania, as described in Exhibit A of Plaintiffs' Amended Complaint. (Id. ¶ 7; see also Doc. 4-1, Pls.' Ex. A, Description of Plaintiffs' Premises.) Plaintiffs and Defendants in this action, by and through their respective counsel, executed a Settlement Agreement dated August 28, 2006 (the "2006 Settlement Agreement") and thereafter executed an Amendment to the Settlement Agreement dated August of 2007 (the "2007 Amendment," the 2006 Settlement Agreement and the 2007 Amendment being referred to collectively herein as the "Settlement Agreement"). (Doc. 4, Am. Compl. ¶ 8; see also Doc. 4-2, Pls.' Ex. B, Settlement Agreement.) The parties entered into the Settlement Agreement to resolve a prior action entitled Ariel Land Owners, Inc. v. Lori Dring & Nancy Asaro, No. 3:01-cv-0294 (M.D. Pa.) (the "Prior Action").

In the Prior Action, Ariel Land Owners, Inc. ("ALO") sought a determination that ALO owned certain land, including land covered by the waters of Lake Ariel. (Doc. 4, Am. Compl. ¶ 9.) Defendants Lori Dring and Nancy Asaro filed an Answer and Counterclaim, followed by a Third Amended Counterclaim against ALO and others, including theDiefenderfers. (Id.) Count V of the Third Amended Counterclaim was asserted against ALO and certain property owners¹ along the western shore of Lake Ariel, including the Diefenderfers. (Id.; see also Doc. 4-3, Pls.' Ex. C, Prior Action's Amended Complaint, Answer and Third Amended Counterclaim.) Defendants alleged that since they own a narrow strip of land between the land of the cottagers along the western shore and the waters of Lake Ariel (the "Western Shore Strip"), the west shore owners (and ALO) have no right to cross this strip to reach the waters of Lake Ariel or to use this strip of land for boat houses, docks, or other purposes. (Doc. 4, Am. Compl. ¶ 9.) The claims against the west shore owners, including the Diefenderfers, were resolved in the context of the prior federal litigation pursuant to the terms of the Settlement Agreement. (Id.) Other issues, not involving the Diefenderfers, were resolved at trial. (Id.)

Plaintiffs allege that they have "fully performed under the Settlement Agreement" by releasing the Defendants from liability pursuant to Section 6 of the 2006 Settlement Agreement. (Id. ¶ 11.) Section 6 is the "mutual release" provision of the Settlement Agreement, where both Plaintiffs and Defendants in this action agreed to release each other from any and all claims arising out of or relating to the Prior Action and the Western Shore Strip:

6. The Property Owners [Plaintiffs] on the one hand; and Dring/Asaro on the other hand, do hereby release the other party and such party's predecessors in title, successors and assigns from any and all claims arising out of or relating to the Lawsuit and the Western Shore Strip including but not limited to claims for compensatory damages, punitive damages, trespass, attorneys fees, or costs of court.

(Doc. 4-2, Pls.' Ex. B, Settlement Agreement, § 6.)

However, Plaintiffs claim that Defendants have failed to fully perform under the Settlement Agreement, thereby breaching the Agreement, by failing to provide to Plaintiffs an easement right over a portion of the Western Shore Strip designated as the "North Strip" pursuant to Section 3 of the 2006 Settlement Agreement. (Doc. 4, Am. Compl. ¶ 12.) Section 3 of the Settlement Agreement reads, in relevant part, as follows:

3. Dring/Asaro agree to execute and deliver to ALO a quit claim deed of all of their right, title and interest in and to the North Strip, subject to a permanent easement to be granted in favor of the Property Owners [Plaintiffs] for access over the North Strip and to maintain docks and/or boathouses on the North Strip. This permanent easement is not intended to grant the Property Owners [Plaintiffs] any rights in or over any lands owned by ALO, or any interest in Lake Ariel owned by ALO.

(Doc. 4-2, Pls.' Ex. B, Settlement Agreement § 3 (emphasis added).)

Two other provisions of the Settlement Agreement are also worth noting. First, Section 5 of the Settlement Agreement provides that ALO shall execute and deliver four (4) lake rights and a permanent easement to Defendants in recordable form. Section 5 reads, in relevant part, as follows:

5. ALO shall execute and deliver to Dring/Asaro instruments of conveyance, in recordable form, which transfer to Dring/Asaro the following:

(a) Four (4) lake rights which will permit Dring/Asaro to construct and maintain four (4) docks along and into the water at the shore line of the Swingle Tract located within Mud Pond to be used for the launching and docketing of watercraft, however these lake rights will not permit Motorized Boats (as hereafter defined) to be operated on Mud Pond or in the channel, or trolling motors to be operated in the channel.

(b) A permanent easement over the water and a parcel of land at the eastern shore of Lake Ariel, at the end of Cardinal Lane (the "Dock Area") described as a rectangular shape of approximately thirty (30') feet in width along the shoreline, and two hundred (200') feet in depth above the shoreline.

(Id. § 5.) Second, Section 15 provides for a mutual exchange of all deeds referenced in the Settlement Agreement:

15. All Deeds and other instruments referred to herein shall be exchanged by the parties at a mutually convenience [sic] time within 30 days after obtaining the subdivision approval set forth in Section 2 hereof.

(Id. § 15.)

Count I of Plaintiffs' Amended Complaint seeks specific enforcement of the Settlement Agreement, including an order directing Defendants to grant Plaintiffs alleged easement rights as outlined in Section 3 of the Settlement Agreement. Count II sets forth an alternative claim for an order: (1) determining that Defendants acquired no interest in the Western Shore Strip pursuant to quitclaim Deeds from Wells College and from Rennselaer Polytechnic Institute ("RPI"); (2) declaring that Plaintiffs acquired title to Plaintiffs' premises² free and clear of any interest of Defendants therein; and (3) declaring that any interest Defendants might have in the Western Shore Strip is subject to a prescriptive easement in favor of Plaintiffs. Count III, which seeks damages, is pled in the alternative to Counts I and II: Plaintiffs allege that as a result of Defendants' failure to perform their obligations under the Settlement Agreement, the value of Plaintiffs' premises have been diminished.

This Court has jurisdiction under 28 U.S.C. § 1332(a), diversity of citizenship. Therefore, this Court will apply the law of Pennsylvania. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). When considering a Rule 12(b)(6) motion, the Court's role is limited to determining if a plaintiff is entitled to offer evidence in support of their claims. See Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir. 2000). The Court does not consider whether a plaintiff will ultimately prevail. See id. A defendant bears the burden of establishing that a plaintiff's complaint fails to state a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).

"A pleading that states a claim for relief must contain . . . a short and plain statementof the claim showing that the pleader is entitled to relief." Fed. R. Civ. P....