Gillespie v. Dring

MARJORIE M. GILLESPIE, ET AL., Plaintiffs, v. LORI DRING AND NANCY ASARO, Defendants.

CIVIL ACTION NO. 3:15-CV-0950

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' Complaint filed by Defendants Lori Dring and Nancy Asaro ("Defendants") (Doc. 6). Plaintiffs seek to enforce a Settlement Agreement entered into by the two parties to resolve a previous action, which requires Defendants to convey an easement right to Plaintiffs over a parcel known as the West Shore Strip. Defendants argue that they have no obligation to Plaintiffs under the Agreement because certain conditions precedent to their obligation have not yet been satisfied. Plaintiffs also seek an order declaring that they have the easement right based on their status as bona fide purchasers and in the alternative, by virtue of adverse possession. Because this Court finds that there were no conditions precedent to Defendants' obligation to Plaintiffs under the Settlement Agreement, the motion to dismiss Count I will be denied. However, because this Court finds that Plaintiffs cannot establish that they were bona fide purchasers and because Plaintiffs have failed to adequately allege a claim for a prescriptive easement, Defendants' motion to dismiss the remaining claims will be granted. Plaintiffs shall have twenty-one (21) days from the date of entry of this Memorandum to file an 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 and their predecessors in title identify themselves as the owners of real property on the western shore of Lake Ariel and Mud Pond, a body of water in Lake Township, Lackawanna County, Pennsylvania ("Lake Ariel"). Plaintiffs, hereinafter referred to as the "West Shore Property Owners," are all citizens of states other than New Jersey. Defendants Lori Dring and Nancy Asaro are citizens of New Jersey. This matter has its genesis in prior litigation adjudicated by this Court, Ariel Land Owners, Inc. v. Lori Dring & Nancy Asaro, No. 3:01-CV-0294 (M.D. Pa.) (the "Prior Action"). The plaintiff in that litigation was a Pennsylvania business corporation known as Ariel Land Owners ("ALO"). Dring and Asaro were the defendants and the West Shore Property Owners were the counterclaim defendants. Before the completion of trial in the Prior Action, the parties resolved some of their issues through a Settlement Agreement that imposed requirements on all of the parties involved. (See Doc. 6-1, Defs.' Ex. A, Settlement Agreement.)

In the Prior Action, ALO sought a determination that ALO owned certain land, including land covered by the waters of Lake Ariel. Defendants Lori Dring and Nancy Asaro filed an Answer and Counterclaim, followed by a Third Amended Counterclaim. Count V of the Third Amended Counterclaim was asserted against ALO and the West Shore Property Owners.¹ 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 "West Shore Strip"), the West Shore Property 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. The claims against the West Shore Property Owners were resolved in the context of the prior federal litigation pursuant to the terms of the Settlement Agreement. Other issues were resolved at trial, which commenced on August 14, 2006, and was completed on August 29, 2006.

Section 6 of the Settlement Agreement is a "mutual release" provision, which requires both Plaintiffs and Defendants in this action to release each other from any and all claims arising out of or relating to the Prior Action and the West 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. 6-1, Defs.' Ex. A, Settlement Agreement § 6.)

However, Plaintiffs claim that Defendants breached the Settlement Agreement by failing to provide Plaintiffs an easement right over a portion of the West Shore Strip designated as the "North Strip" pursuant to Section 3 of the 2006 Settlement Agreement. 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.

(Id. § 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' Complaint seeks damages and specific enforcement of the Settlement Agreement, including an order directing Defendants to grant Plaintiffs the easement right outlined in Section 3 of the Settlement Agreement. Count II seeks the same relief pursuant to a promissory estoppel theory. Count III seeks declaratory relief in the form of an order declaring that Plaintiffs have an easement right to use the West Shore Strip pursuant to their deeds from their predecessors in title, their leases from the owners of Lake Ariel, and their status as bona fide purchasers. Count IV seeks declaratory relief in the form of an order declaring that Plaintiffs have a prescriptive easement over the West Shore Strip by virtue of the doctrine of adverse possession.

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 statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The statement required by Rule 8(a)(2) must "'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Detailed factual allegations are not required. Twombly, 550 U.S. at 555. However, mere conclusory statements will not do; "a complaint must do more than allege the plaintiff's entitlement to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Instead, a complaint must "show" this entitlement by alleging sufficient facts. Id. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). As such, "[t]he touchstone of the pleading standard is plausability." Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012).

The inquiry at the motion to dismiss stage is "normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

Dismissal is appropriate only if, accepting as true all the facts alleged in the complaint, a plaintiff has not pleaded ...