J. A24041/18


NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

ANDREW JOHN KELLY                  :      IN THE SUPERIOR COURT OF
                                   :            PENNSYLVANIA
                 v.                :
                                   :
REPSOL OIL & GAS USA, LLC,         :
AS SUCC. BY CONVERSION TO          :
TALISMAN ENERGY USA, INC.          :
AND NICHOLAS HALKIAS               :
                                   :
                 v.                :
                                   :
PAUL A. KELLY, INDIVIDUALLY AND AS :
AGENT FOR ANDREW JOHN KELLY        :           No. 37 MDA 2018
                                   :
APPEAL OF: ANDREW JOHN KELLY       :


           Appeal from the Judgment Entered February 7, 2017,
          in the Court of Common Pleas of Susquehanna County
                       Civil Division at No. 2013-584


ANDREW JOHN KELLY                  :      IN THE SUPERIOR COURT OF
                                   :            PENNSYLVANIA
                 v.                :
                                   :
REPSOL OIL & GAS USA, LLC,         :
AS SUCC. BY CONVERSION TO          :
TALISMAN ENERGY USA, INC.          :
AND NICHOLAS HALKIAS               :
                                   :
                 v.                :
                                   :
PAUL A. KELLY, INDIVIDUALLY AND AS :
AGENT FOR ANDREW JOHN KELLY        :           No. 38 MDA 2018
                                   :
APPEAL OF: PAUL A. KELLY           :


           Appeal from the Judgment Entered February 7, 2017,
          In the Court of Common Pleas of Susquehanna County
                     Civil Division at No. 2013-584 CP
J. A24041/18




BEFORE: OTT, J., McLAUGHLIN, J., AND FORD ELLIOTT, P.J.E.


MEMORANDUM BY FORD ELLIOTT, P.J.E.:                   FILED: MAY 1, 2019

        Andrew John Kelly and Paul A. Kelly,1 individually and as agent for

Andrew John Kelly (collectively, “appellants”), appeal the February 7, 2018

judgment2 that resulted from the June 12, 2017 order of the Court of Common

Pleas of Susquehanna County that (1) entered judgment in favor of Paul Kelly,

individually and as agent for Andrew Kelly, and Andrew Kelly against

Nicholas Halkias with respect to Count I of the Interpleader Complaint, Void

Assignment – Failure of Consideration; (2) entered judgment in favor of

Nicholas Halkias and against appellants with respect to Count II – Void

Assignment – Violation of Fiduciary Duty/Fraud/Self-Dealing, Count III – Void

Assignment – Improper Notarization, Count IV – Void Assignment –

Vagueness/Assignment Personal to Grantors, and Count V – Misappropriation

of Royalties; and (3) with respect to Andrew Kelly’s complaint against

Repsol Oil & Gas USA, LLC (“Repsol”), as successor by conversion to Talisman

Energy USA, Inc. (“Talisman”), judgment was entered in favor of Repsol and




1   Paul Kelly is the father of Andrew Kelly.

2The captions originally stated that appellants appealed from an order entered
December 6, 2017. However, in the December 6, 2017 order, the trial court
denied post-trial motions. Appellants are actually appealing the February 7,
2018 judgment. The captions have been amended accordingly.


                                        -2-
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against Andrew Kelly as to Count I, Conversion, and Count II, Defamation of

Title. After careful review, we affirm.

      The trial court also declared void the assignment executed on June 24,

2007, by James P. Halkias and Kerry Halkias, recorded at Instrument

No. 200817634 in the Office of the Register of Wills and Recorder of Deeds for

Susquehanna County; and the Recorder of Deeds was ordered to strike the

document from the records of Susquehanna County.                  Similarly, the

assignment executed on June 24, 2007 by James Halkias and Kerry Halkias,

recorded at Instrument Number 201309151 in the Office of the Register of

Wills and the Recorder of Deeds for Susquehanna County was declared void,

and the Recorder of Deeds for Susquehanna County was ordered to strike the

document from the records of Susquehanna County.

      Andrew Kelly was ordered to disgorge any and all royalty payments,

made pursuant to either assignment to Nicholas Halkias. Repsol was ordered

to furnish any and all royalty payments held in suspense pursuant to this

matter to Nicholas Halkias, to cease any and all royalty payments made to

Andrew Kelly under either assignment, and to furnish all future royalty

payments to Nicholas Halkias. The trial court also scheduled a hearing for

consideration of Respol’s petition for counsel fees and costs.3




3The issue of counsel fees is not before this court in either of these appeals.
However, appellants appealed the trial court’s award of counsel fees at
Nos. 420 and 421 MDA 2018.


                                     -3-
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      The facts and procedural history, as gleaned from the extensive trial

court opinion, are as follows: On May 8, 2013, Andrew Kelly filed a complaint

against Talisman and sought royalty payments for oil and natural gas

extracted from a parcel of real estate in Susquehanna County. According to

the   complaint,    James Halkias   purchased   real   estate   (“Property”)   in

Susquehanna County in early 2006. On June 24, 2007, James Halkias and his

wife, Kerry, executed an oil and gas lease with Fortuna Energy Company

(“Fortuna”) where Fortuna would pay to extract oil and gas from the property.

(Trial court opinion, 6/19/17 at 2.)

      According to the complaint, that same day, James Halkias allegedly

executed an assignment that would give Andrew Kelly a 15% share of any oil

and gas royalties from the property. The typed text of the assignment stated:

            The undersigned, Grantors, do hereby assign
            TO
            Andrew John Kelly, Grantee, his heirs or assigns
            Fifteen percent of any accrued royalties which may
            become due from any energy company as a result of
            oil or gas production concerning our lands.

            For example: Royalty = $1,000 Kelly receives = $150
            Witness our hands and seals this  day of May, 2007
            intending to be legally bound.

Id. at 2-3. The assignment contained handwritten portions that included the

names “James P. Halkias & Kerry Halkias (w)” written above the identification

of the grantors.       To the right side of the page is the notation:

“Halkias 431.24.”    (Id. at 2 n.2.)    At some point, either Fortuna or its




                                       -4-
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successor, Talisman, voided the lease and it is not the subject of this litigation.

(Id. at 3.)

        On August 7, 2008, James Halkias entered into a second oil and gas

lease with Alta Resources, LLC (“Alta”). At some point, Alta came under the

control of Talisman. On September 22, 2010, James Halkias executed a fee

simple warranty deed and deeded the property to his father, Nicholas Halkias.

(Id.)

        Late in 2012, Talisman paid 15% of royalties to Andrew Kelly in

accordance with the assignment. In February 2013, Talisman received notice

that the Halkias family questioned the validity of the assignment. Talisman

then placed all future royalty payments in suspense. Because of this action,

Andrew Kelly filed the complaint on May 8, 2013, and pled causes of action

for conversion and defamation of title. (Id.)

        On August 12, 2013, Talisman filed a petition for interpleader and

asserted that it did not intend to keep the royalty payments but placed the

funds in suspense until the trial court determined who was entitled to the

royalties. On October 28, 2013, the trial court granted Talisman’s interpleader

complaint and ordered Nicholas Halkias to file a complaint. On December 23,

2013, Nicholas Halkias filed an interpleader complaint against appellants. In

the interpleader complaint, Nicholas Halkias alleged that the assignment was

invalid for various reasons, including contract law, tort, and misappropriation

of royalties. Nicholas Halkias asked the trial court to strike the assignment



                                       -5-
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from the Office of the Register of Wills and the Recorder of Deeds of

Susquehanna County and that royalties that had been paid to Andrew Kelly

be paid to Nicholas Halkias. Each appellant filed answers with new matter.

(Id. at 3-4.)

        The trial court conducted a non-jury trial on January 18-19, 2017.

Andrew Kelly testified that he had seen the assignment before and that

handwriting on the document, which read “Halkias 431.24,” referred to the

Property. Andrew Kelly further testified that even though he was listed as the

grantee on the assignment and James Halkias was the grantor, Andrew Kelly

had never met either Halkias. Andrew Kelly recognized the handwriting on

the assignment as that of his father, Paul Kelly. Andrew Kelly also testified

that he was to receive the royalties for estate planning purposes and the

payments were Paul Kelly’s fees for legal work for James Halkias. (Id. at 8-

9.)

        Paul Kelly testified that James Halkias hired him, when Paul Kelly was a

practicing attorney,4 to quiet title on two pieces of property that James Halkias

and a friend had purchased at a tax sale.         Paul Kelly also testified that

James Halkias asked Paul Kelly to assist James Halkias in getting an oil and

gas lease for the property and that the assignment was Paul Kelly’s fee for

doing the work on the oil and gas lease. Paul Kelly testified that he drafted

the assignment at the direction of James Halkias even though Paul Kelly had


4   Paul Kelly was later suspended from the practice of law.


                                      -6-
J. A24041/18

no documentary evidence of the instructions. Paul Kelly also testified that the

phrase “our lands” in the assignment referred to the Property.       Paul Kelly

testified that James Halkias was aware that the fee was 15% of any royalties

for securing an oil and gas lease and that James Halkias agreed to it.

Paul Kelly further testified that the handwriting on the assignment was already

present at the time James Halkias executed it. (Id. at 9-12.)

      James Halkias testified that he and a friend purchased the property at a

tax sale in 2005, but that his father, Nicholas Halkias, actually paid the

purchase price. James Halkias hired Paul Kelly to quiet title to the Property

and paid him approximately $5,000. While the quiet title action was pending,

Paul Kelly telephoned James Halkias on July 24, 2007.        When they met,

Paul Kelly presented James Halkias with an oil and gas lease and the

assignment in a packet of documents. According, to James Halkias, Paul Kelly

told him that if James Halkias signed the documents, James Halkias would

receive $43,000 from an energy company even though the energy companies

never drilled when these types of leases were signed. James Halkias testified

that the assignment did not have any handwriting on it at the time

James Halkias signed it.      James Halkias believed that Paul Kelly was

representing him in the quiet title action and not concerning an oil and gas

lease. James Halkias never received the promised money from the energy

company. At some point, James Halkias received copies of the documents

used to secure the oil and gas lease with Fortuna from Paul Kelly that were



                                     -7-
J. A24041/18

marked void. Included in the packet was a copy of the assignment marked

void. On August 7, 2008, James Halkias entered into an oil and gas lease with

Alta. James Halkias later deeded the property to his father for $50,000. (Id.

at 13-15.)

      At the close of the trial, appellants moved for compulsory non-suit. The

trial court denied the motion. Following trial, the trial court issued the order

from which these appeals arise. Appellants moved for post-trial relief. The

trial court denied the motion for post-trial relief.

      On January 5, 2018, appellants each appealed.                By order filed

January 19, 2018, the trial court directed Paul Kelly to file a concise statement

of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b). The same

date, the trial court also directed Andrew Kelly to file a concise statement of

errors complained of on appeal. Each appellant complied with the order on

February 2, 2018. On February 26, 2018, the trial court issued a statement

pursuant to Pa.R.A.P. 1925(a) in which it stated that it had addressed the

issues in the June 19, 2017 opinion and order. By per curiam order dated

January 26, 2018, this court consolidated the appeals sua sponte.

      Appellants5 raise the following issues6 for this court’s review:

             [1.]   Whether it was reversible error for the trial court
                    to sua sponte raise the application of the

5 Although each appellant filed a separate brief, the issues contained in each
respective brief are identical.

6Appellants have not numbered the issues in the briefs. However, this court
will do so.


                                       -8-
J. A24041/18


                 discovery rule and fraudulent concealment
                 doctrine when those defenses/doctrines were
                 not properly plead [sic] in any of the pleadings
                 of Nicholas Halkias?

          [2.]   Whether it was reversible error for the trial court
                 to apply the discovery rule and fraudulent
                 concealment doctrines to invalidate the Halkias
                 to Kelly Assignment when those doctrines were
                 not applicable to the facts of this case?

          [3.]   Whether it was reversible error for the trial court
                 to enter judgment in favor of Nicholas Halkias
                 on all counts except for Count 1 of his
                 Interpleader Complaint when [appellants]
                 properly raised the defense of the statute of
                 limitations in their responsive pleadings and the
                 applicable statutes of limitations bar all of the
                 claims of [Nicholas] Halkias?

          [4.]   Whether it was reversible error for the trial court
                 to enter judgment in favor of [Nicholas] Halkias
                 when [appellants] properly raised the defense
                 that in Pennsylvania fraud is a personal action
                 and therefore all of Nicholas Halkias’s fraud
                 based claims are barred as a matter of law?

          [5.]   Whether it was reversible error for the trial court
                 to enter judgment in favor of [Nicholas] Halkias
                 when [Nicholas] Halkias lacked standing and the
                 capacity to sue to bring claims that challenged
                 the enforceability of the Halkias to Kelly
                 Assignment?

          [6.]   Whether it was reversible error for the trial court
                 to enter judgment in favor of [Nicholas] Halkias
                 and determine that the assignment from
                 James Halkias to Andrew John Kelly, which was
                 the subject of the lawsuit below, when
                 James Halkias never attempted to timely
                 revoke/rescind the assignment as is required
                 pursuant to applicable Pennsylvania law?




                                    -9-
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            [7.]   Whether it was reversible error [for] the trial
                   court to enter judgment in favor of
                   Nicholas Halkias when the Halkias to Kelly
                   [A]ssignment was sufficiently specific and met
                   all legal requirements to be enforceable and to
                   be binding upon [James] Halkias, his heirs,
                   successors, and assigns?

            [8.]   Whether it was reversible error for the trial court
                   to determine that improper notarization was a
                   basis to invalidate the Halkias to Kelly
                   [A]ssignment when the notarization of the
                   assignment was not required for the assignment
                   to    be    valid   and      enforceable       and
                   [Nicholas] Halkias did not establish that any
                   improper notarization had occurred and did not
                   have standing to challenge the purported
                   improper notarization?

            [9.]   Whether it was reversible error for the trial court
                   to enter judgment in favor of [Nicholas] Halkias
                   when [Nicholas] Halkias failed to state any claim
                   upon which relief could be granted and
                   [appellants] proved their cases as a matter of
                   law such that they were entitled to the relief
                   requested by them?

            [10.] Whether it was reversible error for the trial court
                  to deny [appellants’] Joint Motion for Post Trial
                  Relief when for the reasons stated in the Motion,
                  all of which are incorporated herein by
                  reference, [appellants] were entitled to the
                  relief requested in the Motion as a matter of
                  law?

Andrew Kelly’s brief at 7-8.

      This court must apply the following standard of review:

            Our appellate role in cases arising from non-jury trial
            verdicts is to determine whether the findings of the
            trial court are supported by competent evidence and
            whether the trial court committed error in any
            application of the law. The findings of the trial judge


                                      - 10 -
J. A24041/18


            in a non-jury case must be given the same weight and
            effect on appeal as the verdict of a jury, and the
            findings will not be disturbed on appeal unless
            predicated upon errors of law or unsupported by
            competent evidence in the record. Furthermore, our
            standard of review demands that we consider the
            evidence in a light most favorable to the verdict
            winner.

Baney v. Eoute, 784 A.2d 132, 135 (Pa.Super. 2001) (citation omitted).

      We will first address appellants’ contention that the trial court committed

reversible errors of law by failing to enter judgment in their favor because the

applicable statute of limitations barred each and every claim and cause of

action of Nicholas Halkias. (Andrew Kelly’s brief at 25.)7

      Appellants assert that the original assignment was recorded in 2008,

and therefore James Halkias and then Nicholas Halkias were on notice of the

terms of the assignment from no later than the recording of the assignment

forward as a matter of law. Appellants assert that first James Halkias and

then Nicholas Halkias were on constructive notice that their property was

subject to the assignment. Appellants argue that the trial court erroneously

relied on the discovery rule and fraudulent concealment doctrine to estop

appellants from raising the affirmative defense of the statute of limitations

and to hold that the statute of limitations did not begin to run until the end of




7 The sections in the argument section of the briefs of each appellant do not
directly correspond to the enumerated issues in the statement of questions
involved. As a result, this court has reordered the arguments to reflect more
accurately the order presented in the statement of questions involved.
Appellants essentially address their first three issues together.


                                     - 11 -
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2012 or the beginning of 2013, which contradicted the trial court’s

December 22, 2016 order and opinion.            Appellants further argue that

Nicholas Halkias did not properly raise the fraudulent concealment doctrine

and the discovery rule in replies to new matters of each appellant. Appellants

assert that neither Halkias exercised due diligence to discover that the

assignment had been recorded. Further, appellants argue that the trial court’s

ruling violated the law of the case doctrine as it reversed its earlier ruling.

      The trial court addressed these issues in its opinion:

            In Pennsylvania, actions based upon fraud have a
            two-year statute of limitations, while actions for
            declaratory relief or actions sounding in contract law
            have a four-year statute of limitations. 42 Pa.C.S.[A.]
            §§ 5524-5525. . . . It is the duty of the party
            asserting a cause of action to use all reasonable
            diligence to properly inform themselves of the facts
            and circumstances upon which the right of recovery is
            based and to institute suit within the prescribed
            period. Schaffer v. Larzelere, 189 A.2d 267, 269
            (Pa. 1963). “Thus, the statute of limitations begins to
            run as soon as the right to institute and maintain a
            suit arises; lack of knowledge, mistake or
            misunderstanding do not toll the running of the
            statute of limitations.”      Pocono International
            Raceway, Inc. v. Pocono Produce, Inc., 468 A.2d
            468, 471 (Pa. 1983). Generally, once the prescribed
            statutory period has expired, the complaining party is
            barred from bringing suit. Colonna v. Rice, 664 A.2d
            979, 980-81 (Pa. Super. 1995) (citing Hayward v.
            Medical Center of Beaver County, 608 A.2d 1040,
            1042-43 (Pa. 1992)).

            However, the statute of limitations doctrine is not
            absolute. Two exceptions are germane to this matter:
            the doctrine of fraudulent concealment and the
            discovery rule.      The doctrine of fraudulent
            concealment is based on a theory of estoppel, and


                                      - 12 -
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          provides that the defendant may not invoke the
          statute of limitations, if through fraud or concealment,
          he causes the plaintiff to relax his vigilance or deviate
          from his right of inquiry into the facts. Fine v.
          Checcio, 870 A.2d 850, 860 (Pa. 2005) (citation
          omitted). Fraudulent concealment does not require
          fraud in the strictest sense encompassing an intent to
          deceive, but rather, fraud in the broadest sense,
          which includes an unintentional deception. “It is clear
          that a ‘defendant’s conduct need not rise to fraud or
          concealment in the strictest sense, that is, with an
          intent to deceive; unintentional fraud or concealment
          is sufficient.’” Krapf v. St. Luke’s Hosp., 4 A.3d
          642, 650 (Pa.Super. 2010) (quoting Molineux v.
          Reed, 532 A.2d 792, 794 (Pa. 1987)). Our Supreme
          Court has held that a “statute of limitations that is
          tolled by virtue of fraudulent concealment begins to
          run when the injured party knows or reasonably
          should know of his injury and its cause.” Fine, 870
          A.2d at 861.

          If through fraud or concealment the defendant causes
          the plaintiff to relax his or her vigilance or deviate
          from his or her right of inquiry, the defendant is
          estopped from invoking the bar of the statute of
          limitations. Lange v. Burd, 800 A.2d 336, 339
          (Pa.Super. 2002) (citing Molineux, 532 A.2d at 794).
          For the doctrine of fraudulent concealment to be
          applicable, “[a] defendant must have committed some
          affirmative independent act of concealment upon
          which [a] plaintiff[] justifiably relied.” Krapf, 4 A.3d
          at 650 (citing Lange, 800 A.2d at 339); see also
          Kingston Coal Co. v. Felton Mining Co. Inc., 690
          A.2d 284, 291 (Pa. Super. 1997). Mere mistake or
          misunderstanding is insufficient. Molineux, 532 A.2d
          at 794. Also, mere silence in the absence of a duty to
          speak cannot suffice to prove fraudulent concealment.
          Lange, 800 A.2d at 339 (citing Sevin v. Kelshaw,
          611 A.2d 1232, 1236 (Pa. Super. 1992); see also
          Krapf, 4 A.3d at 650. The burden of proving such
          fraud or concealment, by evidence which is clear,
          precise and convincing, is upon the asserting party.
          Lange, 800 A.2d at 339 (citing Nesbitt v. Erie
          Coach Company, 204 A.2d 473 (Pa. 1964)).


                                   - 13 -
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          At trial, James Halkias presented testimony regarding
          alleged concealment of the Assignment by Paul Kelly,
          which we find credible.         Indeed, James Halkias
          testified that during the execution of the Assignment
          and the Fortuna lease, Paul Kelly stated he would
          receive “free money” in the amount of $43,000.00,
          and that energy companies never drill. Further,
          James Halkias testified that he simply signed the
          documents where Paul Kelly, his then counsel-of-
          record in a pending quiet title action, told him to sign.
          James Halkias never received the promised “free
          money” from the energy companies, and instead
          received “void” copies of the Fortuna lease and
          Assignment from Paul Kelly. James Halkias testified
          that upon receiving the “void” documents, he believed
          the Fortuna lease situation was over, and blocked it
          out of his mind. Unbeknownst to he [sic] and his
          father, however, Paul Kelly recorded the Assignment.
          Thereafter, royalties were paid by Talisman to Andrew
          Kelly pursuant to the Assignment and the Alta lease,
          despite James Halkias having no dealings with
          Paul Kelly in regards to the Alta lease. Finally, the
          discovery of the royalties being paid to Andrew Kelly
          was not known to the Halkiases until late 2012 or early
          2013.

          Based upon our review of the testimony presented at
          trial, we find the doctrine of fraudulent concealment
          serves to estop [appellants] from invoking the statute
          of limitations as a bar to Nicholas Halkias’[s] claims.
          Indeed, credible trial testimony from James Halkias
          presents an “affirmative independent act of
          concealment” upon which he and his father justifiably
          relied. Krapf, 4 A.3d at 650 (citing Lange, 800 A.2d
          at 339).      Based upon Paul Kelly’s statements,
          James Halkias believed he was entitled to “free
          money” which he never received, and believed that
          energy companies never drilled upon lands. Further,
          James Halkias believed that the Fortuna lease
          situation [w]as over due to the “void” documents
          received from Paul Kelly, despite Paul Kelly’s
          recordation of the Assignment.



                                   - 14 -
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          These are clear affirmative acts by Paul Kelly upon
          which James Halkias justifiably relied to relax his
          vigilance into inquiry of any injury, under Krapf,
          Lange, Kingston Coal, and Fine.                 Indeed,
          Paul Kelly’s actions rise above the “unintentional fraud
          or concealment” which would invoke the doctrine of
          fraudulent concealment. Krapf, 4 A.3d at 650 (citing
          Molineux, 532 A.2d at 794). It is “clear, precise and
          convincing” that Paul Kelly committed these acts and
          that they were relied upon by James Halkias. Lange,
          800 A.2d at 339 (citing Nesbitt, 204 A.2d at 473).
          Accordingly, we find the doctrine of fraudulent
          concealment estops [appellants] from invoking the
          statute of limitations as a bar to Nicholas Halkias’[s]
          claims.

          A second exception to the statute of limitations
          doctrine is the discovery rule. The discovery rule
          provides that where the existence of the injury is not
          known to the complaining party and such knowledge
          cannot reasonably be ascertained within the
          prescribed statutory period, the limitations period
          does not begin to run until the discovery of the injury
          is reasonably possible. Schaffer, 189 A.2d at 270.
          The discovery rule arises from the inability of the
          injured party, despite the exercise of reasonable
          diligence, to know of the injury or its cause. Pocono
          International, 468 A.2d at 471. Its purpose is to
          exclude the period of time during which the injured
          party is reasonably unaware that an injury has been
          sustained so that people in that class have essentially
          the same rights as those who suffer an immediately
          ascertainable injury. Pounds v. Lehman, 558 A.2d
          872, 874 (Pa. Super. 1989).          “The standard of
          reasonable diligence is an objective or external one
          that is the same for all individuals. It is not a
          subjective standard.” Colonna, 664 A.2d at 980-81
          (citation omitted). Further, the level of reasonable
          knowledge required is 1) knowledge that one has been
          injured; and 2) that his injury has been caused by
          another party’s conduct. Id. (citing Cathcart v.
          Keene Industrial Insulation, 471 A.2d 493, 500
          (Pa. Super. 1984) (en banc)). The failure to make
          inquiry when information is available is failure to


                                   - 15 -
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          exercise reasonable diligence as a matter of law.
          Baumgart      v.   Keene     Building   Products
          Corporation, 633 A.2d 1189, 1193 (Pa.Super. 1993),
          allocatur denied, 645 A.2d 1311 (Pa. 1994).

          At trial, testimony was presented regarding the
          discovery of the alleged injury sustained by
          Nicholas Halkias. James Halkias testified he assists
          his father with the management of his financial affairs.
          He testified he and his father did not discover that
          funds were missing from royalty payments until late
          2012 or early 2013. He also testified that he believed
          the Subject Property was not subject to any other
          document other than the Alta lease, as he had
          received a voided copy of the Fortuna lease and the
          Assignment in the mail from Paul Kelly. We find this
          testimony credible based upon our impression of
          James Halkias on the witness stand during trial.
          Further, his testimony is supported by the fact that
          Talisman did not pay royalties to Andrew Kelly until
          late 2012, as only then did Talisman begin to extract
          natural gas from the Subject Property. Also, Talisman
          stopped the payments in early 2013, when it was
          notified by the Halkias family that the Assignment by
          which Andrew Kelly was being paid was being
          contested.

          Based upon the testimony and evidence at trial, we
          find the statute of limitations on Nicholas Halkias’[s]
          claims did not begin to run until late 2012 or early
          2013, when James Halkias found his father was not
          receiving all royalties from oil or gas extracted from
          the Subject Property. We credit the testimony of
          James Halkias, who testified he believed the Fortuna
          lease and the accompanying Assignment were
          inoperative sometime prior to 2010. We find the
          existence of this economic injury was not known to
          Nicholas Halkias until he began to receive royalty
          payments, which did not occur until Talisman began
          to extract natural gas from the Subject Property. We
          find Nicholas and James Halkias exercised reasonable
          diligence in discovering this economic injury under our
          Commonwealth’s case[ ]law, as they had no way of



                                   - 16 -
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          knowing of any injury unless and until they began to
          receive royalty payments they could verify.

          We note our conclusion on statute of limitations
          grounds herein, based upon the doctrine of fraudulent
          concealment and the discovery rule, comports with
          our December 22, 2016 Opinion and Order, where we
          addressed statute of limitations in the context of
          Nicholas Halkias’[s]    proposed     amendment     and
          James Halkias’[s]     proposed      joinder   to   the
          Interpleader Complaint. In that Opinion, we utilized
          September 22, 2010 as the latest date the statute of
          limitations could have begun to run, based on the
          facts available to us in the pleadings and motions.
          See generally December 22, 2016 Opinion and Order
          (Harlacher Sibum, J.) (Specially Presiding). In that
          Opinion, we found that based on this date,
          Nicholas Halkias’[s] Proposed Amendments to the
          Interpleader Complaint were barred by Pennsylvania
          case[ ]law and the statute of limitations. We stated,
          “Most importantly, however, each of the Proposed
          Amendments is time barred under the statute of
          limitations by at least two years.” Further, we found
          that James Halkias’[s] proposed joinder to this action
          was barred, where we stated, ‘Were we to permit his
          joinder, [appellants] would enjoy a complete defense
          to James Halkias’[s] claims on statute of limitations
          grounds.’ We reiterate that this conclusion was based
          on our use of September 22, 2010 as the latest date
          the statute of limitations began to run.           Our
          December 22, 2016 Opinion and Order did not,
          however, address the statute of limitations in the
          context     of     an     affirmative    defense    to
          Nicholas Halkias’[s]     case-in-chief   asserted   by
          [appellants], but rather solely in the context of
          Nicholas Halkias’[s]    proposed     amendment     and
          James Halkias’[s] proposed joinder to the lnterpleader
          Complaint.

          Notwithstanding our December 22, 2016 Opinion and
          Order, the testimony and evidence presented at trial
          shows the doctrine of fraudulent concealment serves
          to estop [appellants] from invoking the statute of
          limitations as a bar to Nicholas Halkias’[s] claims, and


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J. A24041/18


            discovery of the economic injury did not occur until
            late 2012 or early 2013. In short, our December 22,
            2016 Opinion and Order was not based upon the
            testimony and evidence at trial, but rather upon the
            pleadings and motions available to us at that time,
            due to the parties’ failure to provide evidence at the
            November 14, 2016 hearing. By contrast, under our
            Commonwealth’s discovery rule, the trial testimony
            and evidence establishes a discovery date of the
            economic injury in late 2012 or early 2013, while the
            doctrine of fraudulent concealment serves to estop
            [appellants] from invoking the statute of limitations
            as a defense to Nicholas Halkias’[s] claims.

Trial court opinion, 6/19/17 at 23-30 (footnote and citations to record

omitted).

      The trial court clearly and ably explained its reasoning for determining

that under the discovery rule, the trial testimony and evidence established a

discovery date of economic injury in late 2012 or early 2013 while the doctrine

of fraudulent concealment estopped appellants from invoking the statute of

limitations as a defense to the claims of Nicholas Halkias.

      The trial court opinion did not address at all or, at least in any detail,

appellants’ claim that the trial court erred when it raised the application of the

discovery rule and the fraudulent concealment doctrine when those defenses

were not properly pled in any of the pleadings of Nicholas Halkias. Appellants

refer to Rule 1032(a) of the Pennsylvania Rules of Civil Procedure which

provides that a party waives all defenses and objections which are not

presented by preliminary objection, answer, or reply, subject to some

objections which are not applicable here. Pa.R.C.P. 1032(a). Appellants argue



                                     - 18 -
J. A24041/18

that Nicholas Halkias did not properly raise the defenses to the applicability of

the statute of limitations such as the fraudulent concealment doctrine and the

discovery rule in replies to the new matters of appellants in that no facts were

pled to trigger the discovery rule and fraudulent concealment doctrine.

      In Gotwalt v. Dellinger, 577 A.2d 623 (Pa.Super. 1990), this court

stated that Rule 1029(d) of the Pennsylvania Rules of Civil Procedure:

            governs when a party must file a responsive pleading
            to an averment contained in a new matter or other
            pleading. Rule 1029(d) provides that averments in a
            pleading to which no responsive pleading is required
            shall be deemed to be denied. If a party’s new matter
            does not contain facts supporting an affirmative
            defense, but rather contains merely conclusions of
            law, no denial is required because such averments are
            deemed to be denied. Because such averments are
            deemed to be denied, they are, therefore, in issue,
            and no judgment may be entered based upon a
            party’s failure to respond to those averments.

Gotwalt, 577 A.2d at 626.

      Here, each appellant in new matter merely stated that the action was

barred by the applicable statute of limitations. As this was a conclusion of law

without facts supporting the affirmative defense, Nicholas Halkias was not

required to respond under Pa.R.C.P. 1029(d). Because he did not have to

respond, Nicholas Halkias cannot be precluded from presenting evidence at

trial regarding the discovery rule and the fraudulent concealment doctrine on

the basis that he did not raise those issues in response to each appellant’s

new matter.




                                     - 19 -
J. A24041/18

      Appellants next contend that the trial court erred when it entered

judgment in favor of Nicholas Halkias when appellants properly raised the

defense that fraud was a personal action such that Nicholas Halkias’s claims

based on fraud were barred as a matter of law.

      The trial court found that appellants waived this issue because neither

appellant raised the issue in preliminary objections. Challenges to a litigant’s

capacity to sue must be raised either in an answer or in preliminary objections.

In re Estate of Alexander, 758 A.2d 182, 189 (Pa.Super. 2000).

      Here, appellants did not raise the issue of standing in either an answer

or preliminary objections, though each appellant raised standing in new

matter. Technically, appellants did waive the issue.

      Assuming arguendo that appellants preserved this issue, this court

determines that the trial court did not err or abuse its discretion, when it

determined that Nicholas Halkias had standing to bring the fraud-based

actions.

            We have stated as a general policy that “[a] party
            seeking judicial resolution of a controversy in this
            Commonwealth must, as a prerequisite, establish that
            he has standing to maintain the action.” Bergdoll v.
            Kane, 557 Pa. 72, 731 A.2d 1261, 1268 (1999)
            (citation omitted). Our Commonwealth’s standing
            doctrine is not a senseless restriction on the utilization
            of judicial resources; rather, it is a prudential,
            judicially-created tool meant to winnow out those
            matters in which the litigants have no direct interest
            in pursuing the matter. Such a requirement is critical
            because only when “parties have sufficient interest in
            a matter [is it] ensure[d] that there is a legitimate



                                     - 20 -
J. A24041/18


              controversy before the court.” In re T.J., 559 Pa.
              118, 739 A.2d 478, 481 (1999).

In re Hickson, 821 A.2d 1238, 1243 (Pa. 2003) (footnote omitted).

              In practical terms, we are assured that there is a
              legitimate controversy if the proponent of a legal
              action has somehow been “aggrieved” by the matter
              he seeks to challenge. Independent State Store
              Union v. Pennsylvania Liquor Control Board, 495
              Pa. 145, 432 A.2d 1375 (1981). A litigant can
              establish that he has been “aggrieved” if he can show
              that he has a substantial, direct and immediate
              interest in the outcome of the litigation in order to be
              deemed to have standing. Bergdoll[, supra].

Id. at 136, 821 A.2d at 1243.

      Here,     Nicholas Halkias   acquired     the   property   from    his   son,

James Halkias. Under the applicable lease, Respol agreed to pay royalties to

James Halkias for the extraction of oil and/or gas from the property.

      As the trial court stated in its opinion, a covenant to pay royalties runs

with the land.    Nigro v. Don-Mar Corp., 85 A.2d 21, 22 (Pa. 1951).             In

addition, when a grantor, after entering into such a royalty agreement,

conveys his interest in the property, the grantee receives the right to receive

the royalty unless the grantor expressly reserves such royalty. Appeal of

Baird, 6 A.2d 306, 312 (Pa. 1939).

      The trial court concluded:

              Applying our Supreme Court’s longstanding case[
              ]law,   as   embodied     in     Nigro    and    Baird,
              Nicholas Halkias took possession of the right to
              receive royalty payments from the Subject Property
              upon execution of the deed. The deed shows no
              express reservation for any oil and gas royalty interest


                                       - 21 -
J. A24041/18


            from the grantor.        Therefore, Nicholas Halkias is
            entitled to bring suit concerning any royalty payments
            from the Subject Property not paid to him since that
            deed was executed, as he would be “aggrieved” by not
            receiving a royalty payment he would be entitled to as
            record owner of the Subject Property.           Finally,
            Nicholas Halkias continues to own the Subject
            Property, as evidenced by Interpleader Defendant’s
            Exhibit 2 and other testimony at trial. In short, the
            deed from which Nicholas Halkias took ownership of
            the Subject Property gives him capacity to bring suit
            for recovery of oil and gas royalties from the Subject
            Property under our Commonwealth’s standing
            doctrine.

Trial court opinion, 6/19/17 at 22-23 (citation omitted).

      Appellants next contend that it was reversible error for the trial court to

enter judgment in favor of Nicholas Halkias and determine that the

assignment from James Halkias to Andrew Kelly when James Halkias never

attempted to revoke the assignment.

      However, in making this argument, appellants ignore the credibility

determinations of the trial court. The trial court explicitly found James Halkias

to be credible and credited his testimony over that of Paul Kelly. In a non-jury

trial, the fact-finder is free to believe all, part, or none of the evidence, and

this court will not disturb the credibility determinations of the trial court.

Assessments of credibility and conflicts of evidence are for the trial court to

resolve.   Gutteridge v. J3 Energy Group, Inc., 165 A.3d 908, 916

(Pa.Super. 2017). Because of these credibility determinations, the trial court

found that there was no agreement for Paul Kelly to secure an oil and gas

lease for James Halkias, and consequently, there was no agreement for


                                     - 22 -
J. A24041/18

James Halkias to sign the assignment. (Trial court opinion, 6/19/17 at 36.)

Because there was no valid assignment, James Halkias did not have to revoke

the assignment.

      Appellants next contend that it was reversible error for the trial court to

enter judgment in favor of Nicholas Halkias when the assignment was

sufficiently specific and met all legal requirements to be enforceable and

binding upon James Halkias, his heirs, successors, and assigns.

      The objective in interpreting instruments relating to oil and gas interests

is to determine the intention of the parties. Syzmanowski v. Brace, 987

A.2d 717, 720 (Pa.Super. 2009), appeal denied, 997 A.2d 1179 (Pa. 2010).

      Once again, appellants ignore the credibility determinations of the trial

court. Appellants argue that the assignment clearly describes the Property to

consist   of   431.24   acres.   However,     the   trial   court   found   credible

James Halkias’s testimony that the handwriting including this designation of

the size of the Property was not present on the assignment form when

James Halkias signed it. (Trial court opinion, 6/19/17 at 37-38.) The trial

court concluded that the handwriting was added after the execution of the

assignment. (Id. at 39.)

      In the alternative, appellants argue that if this court determines that the

documents do not sufficiently identify the interest conveyed, there is sufficient

parol evidence to establish both the interest conveyed and the lands from

which the interest derives because the 431.24-acre parcel was the only



                                     - 23 -
J. A24041/18

property of its kind owned at the time of the conveyance, and the only

property owned by James Halkias individually at any time in Susquehanna

County. However, there is nothing on the assignment to indicate that the

property was located in Susquehanna County, and the trial court found that

James Halkias owned 100 pieces of property, which made a reference to

“our lands” in the assignment ambiguous.          (Trial court opinion, 6/19/17

at 45.)    Once    again,   appellants   ignore   the   trial   court’s   credibility

determinations which led it to conclude that there was no intent to assign

royalties from James Halkias to Andrew Kelly.

      Appellants next contend that it was reversible error for the trial court to

determine that improper notarization was a basis to invalidate the assignment

when the notarization of the assignment was not required for the assignment

to be valid and enforceable and Nicholas Halkias did not establish that any

improper notarization had occurred.8

      In Count III of his interpleader complaint, Nicholas Halkias asserted that

the assignment should be void on grounds of improper notarization. The trial

court found that the assignment was the result of fraud. Furthermore, the

trial court found that James Halkias credibly testified that no other person was

present when he executed the assignment.          The trial court found that the

assignment was not notarized at the time of execution but after the fact.




8Appellants also allege that Nicholas Halkias lacked standing. However, we
have already determined that Nicholas Halkias did have standing.


                                     - 24 -
J. A24041/18

      In   challenging    this   determination,   appellants   essentially   raise

arguments that we have already discounted, such as the standing of

Nicholas Halkias, the lack of a timely effort to rescind the assignment, and the

running of the statute of limitations. The trial court did not err or abuse its

discretion when it ordered that the assignment be struck.

      Appellants next contend that the trial court committed reversible error

when it entered judgment in favor of Nicholas Halkias when Nicholas Halkias

failed to state any claim upon which relief could be granted and appellants

proved their cases as a matter of law such that they were entitled to the relief

they requested. As we have already determined that the trial court did not

err, we need not address this issue.9

      Judgment affirmed.

      Ott, J. joins this Memorandum.

      McLaughlin, J. concurs in the result.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/1/2019



9Appellants waive their last issue, whether it was reversible error for the trial
court to deny appellants’ joint motion for post-trial relief when appellants do
not address the issue in the argument section of their brief.               See
Commonwealth v. J.F., 800 A.2d 942, 946 n.10 (Pa.Super. 2002).


                                      - 25 -
