ARTICLE: Apellate Courts Disagree on Whether the Discovery Rule Applies in Breach of Contract Actions

 The below article written by myself and my son, Daniel E. Cummins, Jr., who is a second year student at Virginia Law School and a member of the Virginia Law Review, was recently published in the September 25, 2025 edition of the Pennsylvania Law Weekly.

    Daniel E. Cummins, Jr.                                        Daniel E. Cummins, Esq.

Expert Opinion // Discovery

Appellate Courts Disagree on Whether the Discovery Rule Applies in Breach of Contract Actions

September 25, 2025

By

Daniel E. Cummins, Esq.

and

Daniel E. Cummins Jr.

It seems that, with respect to breach of contract actions, there is no meeting of the minds as to whether the discovery rule applies to toll the running of the statute of limitations.

In recent years, Pennsylvania law has remained unsettled over whether the discovery rule is applicable to actions based on an express written contract. The Pennsylvania Supreme Court has not issued any decisions extending the discovery rule to such cases. However, the Commonwealth Court and the Superior Court have taken opposite positions on this issue. The Commonwealth Court has refused to apply the discovery rule to breach of written contract cases, while the Pennsylvania Superior Court has held that the discovery rule applies in all cases.

The Importance of Statutes of Limitations

Pennsylvania courts have repeatedly emphasized the important purposes that statutes of limitations serve. The courts have noted that “statutes of limitations ‘are designed to effectuate three purposes: preservation of evidence; the right of potential defendants to repose; and administrative efficiency and convenience.’” See Lesoon v. Metropolitan Life Insurance, 898 A.2d 620, 626–27 (Pa. Super. Ct. 2006) (quoting Kingston Coal v. Felton Mining, 690 A.2d 284, 288 (Pa. Super. Ct. 1997)). Statutes of limitations also serve to give defendants prompt notice that claims are being made against them, prevent stale claims that may prejudice defendants, and promote finality and stability with respect to civil disputes. See Estate of Gasbarini v. Medical Center of Beaver County, 409 A.2d 343, 346 (Pa. 1979).

As such, a statute of limitations defense is not a mere technicality, but rather a "substantial and meritorious” defense that is “vital to the welfare of society and ... favored in the law." See Schmucker v. Naugle, 231 A.2d 121, 123 (Pa. 1967).

Statute of Limitations in Contract Actions

Under Pennsylvania law, a four-year statute of limitations applies to contract actions. See 42 Pa.C.S. Section 5525.

In Erie Insurance Exchange v. Bristol, 174 A.3d 578, 585–86 (Pa. 2017), the Pennsylvania Supreme Court held that this statute of limitations begins to run when the defendant is alleged to have breached the contract. The court noted that its holding was “in accord with the law across the country.” This decision is consistent with 42 Pa.C.S. Section 5502(a), which provides that “[t]he time within which a matter must be commenced ... shall be computed ... from the time the cause of action accrued.”

The Pennsylvania Supreme Court has also generally held that “the lack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations.” See Rice v. Diocese of Altoona-Johnstown, 255 A.3d 237, 246 (Pa. 2021). However, this article discusses the discovery rule, an equitable exception to this general rule.

The Discovery Rule

The discovery rule is a doctrine that suspends or tolls the running of a statute of limitations until an injured party knows or reasonably should know of their injury, and its cause. See Fine v. Checcio, 870 A.2d 850, 858 (Pa. 2005). This doctrine ensures that, in certain limited circumstances, a plaintiff is not barred from bringing suit simply because they could not discover their injury and its cause in time.

For the discovery rule to apply, a plaintiff must have been unaware of their injury and unable to discover its cause despite the "exercise of reasonable diligence.” See Fine, 870 A.2d at 858. The Pennsylvania Supreme Court has defined “reasonable diligence” in this context as “what is expected from a party who has been given reason to inform himself of the facts upon which his right to recovery is premised.”

Under this standard, “there must be some reason to awaken inquiry and direct diligence in the channel in which it would be successful.” Stated otherwise, “a party fails to exercise reasonable diligence when they fail to make an inquiry when ... information regarding their injury becomes available.” See Mariner Chestnut Partners v. Lenfest, 152 A.3d 265, 279 (Pa. Super. Ct. 2016).

The party seeking to invoke the discovery rule bears the burden of establishing their inability to discover their injury despite the exercise of reasonable diligence. See Dalrymple v. Brown, 701 A.2d 164, 167 (Pa. 1997). In this regard, the courts have noted that “the polestar of the Pennsylvania discovery rule is not a plaintiff's actual acquisition of knowledge but whether the information, through the exercise of due diligence, was knowable to the plaintiff. The failure to make inquiry when information is available is failure to exercise reasonable diligence as a matter of law.” See DiDomizio v. Jefferson Pulmonary Associates, 280 A.3d 1039, 1046 (Pa. Super. Ct. 2022).

Whether an injured party exercised reasonable diligence is typically a question for the jury. See Wilson v. El-Daief, 964 A.2d 354, 362 (Pa. 2009). Nonetheless, because of the objective nature of the test, a court may determine the applicability of the discovery rule as a matter of law where "the facts are so clear that reasonable minds cannot differ." See Schmidt v. Skolas, 770 F.3d 241, 251 (3d Cir. 2014).

The Pennsylvania Supreme Court has applied the discovery rule to a wide variety of tort actions. However, to date the Supreme Court has not yet applied the rule by name to a case involving allegations of a breach of a written contract.

Does the Discovery Rule Apply in Breach of Contract Actions?

In 2019, the Pennsylvania Commonwealth Court noted that, based on its research as of that time, the Pennsylvania Supreme Court had never applied the discovery rule to a breach of contract claim. See Carulli v. North Versailles Township Sanitary Authority, 216 A.3d 564, 580 (Pa. Commw. Ct. 2019) (en banc).

The Commonwealth Court is correct that the Pennsylvania Supreme Court has never applied the discovery rule by name to a breach of contract case. However, in the case of Romeo & Sons v. P.C. Yezback & Son, 652 A.2d 830, 832 (Pa. 1995), the Pennsylvania Supreme Court held that the statute of limitations on a construction contract “will not start to run until the injured party becomes aware, or by the exercise of reasonable diligence should become aware, of the defect.” In this case, the Supreme Court did not adopt a broad rule for breach of contract actions. Given that this decision was limited to “the case of a latent defect in construction,” whether the discovery rule applies to breach of contract actions in general remains an open question.

In one other case, a justice of the Pennsylvania Supreme Court touched upon the issue in a dissenting and concurring opinion. See Crouse v. Cyclops Industries, 745 A.2d 606, 613 n.1 (Pa. 2000) (Saylor, J., dissenting and concurring). In Crouse, then-Justice Thomas Saylor wrote that "although the discovery rule, which evolved in the tort context, has been applied by Pennsylvania courts in some discrete categories of cases involving contractual or quasi-contractual claims ... , its use has not been adopted on a wholesale basis in this area” with regard to breach of contract claims.

In the absence of a concrete ruling from the Pennsylvania Supreme Court, the Commonwealth Court and the Superior Court have taken opposite positions on whether the discovery rule applies to breach of contract actions generally.

The Commonwealth Court’s View

In Carulli, 216 A.3d 564, the en banc Commonwealth Court held that the discovery rule does not apply to breach of contract actions.

The Commonwealth Court in Carulli employed three different rationales to come to this conclusion. First, the Commonwealth Court noted that the Pennsylvania Supreme Court “has neither expressed a blanket prohibition nor has it applied the discovery rule ... to a breach of contract action where a party is seeking to enforce an express written contract that the party negotiated.” See Carulli, 216 A.3d at 583.

Second, the Commonwealth Court asserted that equitable considerations do not require applying the discovery rule to breach of contract claims. In support of this rationale, the Commonwealth Court noted that “parties to a contract are not without recourse.” Rather, parties to a contract have the chance to draft provisions to protect their interests, including provisions requiring inspections along with terms outlining the rights of parties in the event of a breach. Under the Commonwealth Court’s rationale in Carulli, there should be no situation in which contract parties are unable to discover a breach in time to bring suit.

Third, the Commonwealth Court reviewed the substantive differences between tort claims and contract claims. The Commonwealth Court reiterated that parties to a contract can protect themselves from undiscovered injuries or damages in ways that tort plaintiffs cannot. The court also noted that “in a breach of contract action, the injury is ... the breach,” whereas “a tort action cannot be brought until the plaintiff suffers appreciable injury.” The court thus implied that because contract parties presumably have the ability to discover breaches and may bring suit immediately upon a breach, it makes little sense to apply the discovery rule in this context.

The court in Carulli also cited the general rationale behind statutes of limitations, noting that it is unjust to compel a party to defend a lawsuit long after the alleged injury has occurred, when memories have faded, witnesses have died and/or evidence has been lost.

The Superior Court’s View

In sharp contrast, in Morgan v. Petroleum Products Equipment, 92 A.3d 823, 828 (Pa. Super. Ct. 2014), the Pennsylvania Superior Court held that “the discovery rule in Pennsylvania applies to all causes of action, including breach of contract.” In support of this contention, the Superior Court cited its previous decision in Sadtler v. Jackson-Cross, 587 A.2d 727, 731 (Pa. Super. Ct. 1991) in which the court also applied the discovery rule to a breach of contract claim. However, neither case contained any detailed discussion of the rationale for applying the discovery rule to contract actions; rather, the courts simply held that the discovery rule did apply.

In two recent cases over the past year and a half, the Superior Court has again held that the discovery rule applies to breach of contract actions. See Spiritrust Lutheran v. Wagman Construction, 314 A.3d 894, 907 (Pa. Super. Ct. 2024); Wasielewski v. Goebel Insurance Agency, 334 A.3d 372, 372 (Pa. Super. Ct. 2025) (unpublished table decision). No Superior Court decision has strayed from that court’s repeated application of the discovery rule to contract cases.

A number of Pennsylvania federal court judges from each of the districts have also followed the Superior Court’s decision in Morgan, holding that the discovery rule applies to all actions, including breach of contract actions. See Handy v. Delaware River Surgical Suites, 2024 U.S. Dist. LEXIS 174030, at *12 (E.D. Pa. Aug. 29, 2024); Walden v. Bank of N.Y. Mellon, 2024 U.S. Dist. LEXIS 65250, at *49 (W.D. Pa. Apr. 10, 2024); see also Canfield v. Statoil USA Onshore Properties, 2017 U.S. Dist. LEXIS 40870, at *40 (M.D. Pa. Mar. 22, 2017) [other citations omitted].

Grounds for Varying Arguments

The review of the above jurisprudence confirms that there remains a split of authority on whether the discovery rule applies to toll the statute of limitations in breach of written contract actions. Given the unsettled nature of the law, there remains grounds for the defense to oppose the application of the rule as well as grounds for plaintiffs to press for the application of the doctrine.

Until this matter proceeds back up the appellate ladder to the Pennsylvania Supreme Court, it appears that, for the time being, both the bench and the bar will have to continue to grapple with the issue of whether the discovery rule applies to breach of written contract actions.



Daniel E. Cummins is the managing partner at Cummins Law in Clarks Summit, Pennsylvania. Contact him at dancummins@cumminslaw.net. Daniel E. Cummins Jr. is a second-year law student at the University of Virginia School of Law, where he is a member of the Virginia Law Review. He is also the director of operations for the Virginia Law Moot Court Team and a member of the Virginia Law Mock Trial Team.

Reprinted with permission from the September 25, 2025 edition of the Pennsylvania Law Weekly © 2025 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.

Trial Court Addresses Validity of Claims Against a Drugstore

In the case of Burke v. Hoffman Health Partners, P.C., No. 2024-CV-8753 (C.P. Lacka. Co. Aug. 4, 2025 Powell, J.), the court addressed various Preliminary Objections filed in a medical malpractice case.

In this matter, the Plaintiff alleged that she sustained severe injuries after being prescribed and dispensed a medication inappropriately. 

The Plaintiff sued the medical providers relative to the prescription of the medication. She also sued CVS, who allegedly filled the prescription without providing the required counseling, verifying the safety of the prescription, or reconciling what the Plaintiff alleged were inadequacies on the face of the prescription with the prescribing physician.

With regards to the claims against CVS, the court found that the Plaintiff had sufficiently alleged both vicarious and direct liability claims.

According to the Opinion, the Plaintiff’s Complaint alleged that the CVS agents failed to counsel the Plaintiff, ignored dosage red flags, and did not consult with the prescribing physician. The Plaintiff additionally alleged ischemic failures in the training, policy enforcement, and prescription review within CVS.

The court ruled that, under the facts alleged, such claims could rise to the level of reckless indifference and could warrant a claim for punitive damages. Accordingly, CVS’ Preliminary Objections were overruled.

The court otherwise overruled the preliminary objections asserted against by the medical Defendants against the punitive damages claims as well. The court held that the Plaintiff’s claims of misdiagnosis, discharged despite warning signs, and inadequate supervision of the Plaintiff as a patient, all supported direct claims and warranted the consideration of punitive damages.

The court did, however, sustain the Preliminary Objection filed by Geisinger Clinic to a claim for vicarious liability for punitive damages because the court found that the Complaint failed to allege that the clinic had actual knowledge of its agents’ conduct as required under §505(c) of the MCARE Act.

Anyone wishing to review a copy of this decision may click this LINK.


Source: Lackawanna Jurist Case Summary (Aug. 15, 2025).

Source of image:  Photo by Marques Thomas on www.unsplash.com.

Court Rejects Medical Malpractice Defendants' Efforts To Have Lawsuit Transferred to Arbitration

In the case of O’Shea v. Loyalsock Rehab Center, LLC, No. 2023-CV-01142 (C.P. Lyc. Co. 2025 Carlucci, J.), the court addressed Preliminary Objections asserted by a Defendant in a nursing home case in which the Defendants, in part, sought to have the matter remanded to arbitration based upon an arbitration clause.

The court overruled the Defendant’s Preliminary Objections in this regard after finding that the arbitration clause was not obvious or conspicuous in the documents.

The court also rejected the request to transfer the case to arbitration givent that the parties had engaged in discovery in two (2) years of litigation before the Defendants ever raised this issue.  The issue was raised when the Defendant's filed Preliminary Objections to a Second Amended Complaint. 

The court noted that it would prejudice the Plaintiff to have to start the entire litigation over in an arbitration proceeding.

The court otherwise noted that the record lacked any evidence to show that the Plaintiff had the authority or any intention to enter into an arbitration agreement.

The court otherwise struck the Plaintiff’s count alleging res ipsa loquitur given that that doctrine was a rule of circumstantial evidence, not a cause of action.

Anyone wishing to review a copy of this decision may click this LINK.


I send thanks to Attorney Thomas J. Foley, III of The Foley Law Firm in Scranton, PA for bringing this case to my attention.

Court Refuses to Open Non Pros Judgment Where Plaintiff Repeatedly Failed To Abide By Court's Orders

In the case of Harrison v. Pinnacle Exteriors, No. 6493-CV-2023 (C.P. Monroe Co. July 21, 2025 Zulick, J.), the court denied a Plaintiff’s Motion to Open a Judgment of Non Pros.

The court denied the Plaintiff’s Petition, holding that the Plaintiff was not entitled to relief where the Plaintiff failed to comply with certain Court Orders.

More specifically, the Plaintiff failed to comply with the Court Order to file a Fourth Amended Complaint. The Plaintiff also failed to comply with another Order requiring the Plaintiff to show cause why the action should not be dismissed due to failure to prosecute the claim.

The court noted that the resulting three (3) months of delay in the proceedings caused by the Plaintiff’s failure to act supported the denial of the Petition to Open the Non Pros Judgment.

Anyone wishing to review a copy of this decision may click this LINK.


Source: The Legal Intelligencer Common Pleas Case Alert, www.Law.com (Sept. 5, 2025).

 

Court Rules that Plaintiff's Claim Barred By Prior Settlement Agreement

In the case of West v. Abington Memorial Hospital, No. 1723 EDA 2023 (Pa. Super. Aug. 28, 2025 Bowes, J., Olson, J., and McLaughlin, J.) (Op. by Bowes, J.) (dissenting Opinion by McLaughlin, J.), the Superior Court affirmed a trial court’s granting of a medical malpractice Defendant’s Motion for Judgment on the Pleadings based on a conclusion that the Plaintiff’s lawsuit was barred by a Release executed in the parties’ previous settlement.

According to the Opinion, the Plaintiffs had previously filed a medical malpractice action against certain Defendants alleging that the Defendants were negligent during the Plaintiff’s labor and delivery that resulted in injuries to the Plaintiff’s child.

In the midst of the malpractice trial in the previous matter, the parties reached a settlement for the full insurance policy limits.

The Plaintiffs executed a Settlement and a Release that was approved by the trial court.

Several years later, the Plaintiffs filed the present lawsuit, alleging that they were fraudulently induced to enter into the settlement due to the hospital’s failure to produce a memo from one of the Defendant doctors that was responsive to the Plaintiff’s discovery requests in the previous case and which addressed one of the primary issues in the malpractice trial.

The Plaintiffs have discovered the memo when the hospital produced it in an unrelated case involving the Plaintiff’s attorney.

The Plaintiffs claimed in the new lawsuit that, had the memo been produced in their previous malpractice action, they would have obtained a settlement or jury verdict above the settlement that they actually negotiated.

In this new case, the Defendants filed a Motion for Judgment on the Pleadings based upon the Release previously entered into between the parties.

The Superior Court affirmed the trial court’s granting of the judgment on the pleadings. The appellate court agreed that the Release covered all claims arising from or connected to the Plaintiff’s malpractice action. The court found that the new lawsuit fell within the scope of the Release given that the new lawsuit sought to recover the difference between the parties’ settlement in the amount of compensation the Plaintiffs claimed that they could have obtained had the Defendants produced the memo at issue.

The appellate court ruled that the Plaintiffs were unable to avoid the effect of the integration clause in the Release, which precluded the Plaintiffs from introducing parol evidence to prove fraud in the inducement.

Anyone wishing to review a copy of the Majority Opinion for this decision may click this LINK.  The Dissenting Opinion may be reviewed HERE.

Source of image:  Photo by Solange Brenis on www.unsplash.com.

Superior Court Addresses Discoverability of Hospital Patient Safety Review Records

In the case of Boyle v. Main Line Health, Inc., No. 2454 EDA 2023 (Pa. Super. Aug. 10, 2025 King, J., Lazarus, J., and Lane, J.) (Op. by King, J.) (Lane, J. concurring and dissenting), the appellate court affirmed in part and reversed in part a trial court discovery Order relative to the discoverability of hospital patient safety review records in a medical malpractice action.

The court noted that discovery Orders involving claims of privilege are immediately appealable a collateral Orders.

The Superior Court noted that hospital patient safety review records that are actually used to make MCARE mandatory reports are protected from disclosure in litigation by the Act.

In this case, the Defendant hospital had an MCARE patient safety plan and a patient safety officer. The MCARE safety patient plan established a patient safety committee pursuant to MCARE and also set forth requirements for both internal and external reporting.

The Superior Court noted that MCARE confidentiality extends to all documents, materials, or information solely prepared or created for the purpose of reporting compliance.

However, the court noted that, without evidence that the event at issue was actually submitted to a patient safety committee or governing board, the MCARE privilege cannot be established. 

The court noted that a general assertion of a particular privilege as to all documents is sufficient to preserve the privilege as to any portion of the documents.

The court also noted that, under the federal Patient Safety and Quality Improvement Act privilege, “patient safety work product” is not subject to state-law discovery. The court noted that documents produced solely in accordance with the Patient Safety Evaluation System and reported to the patient safety organization are protected under the PSQIA.

Anyone wishing to review a copy of this decision may click this LINK.  The Concurring and Dissenting Opinion by Judge Lane can be reviewed HERE.


I send thanks to Attorney James M. Beck of the Philadelphia office of the Reed Smith law firm for bringing this case to my attention.

Court Punts On Summary Judgment in Football Stadium Trip and Fall Case

In the case of DeLuca v. Scranton School District, No. 2021-CV-3506 (C.P. Lacka. Co. Aug. 19, 2025 Powell, J.), the court denied Motions for Summary Judgment filed by the Scranton School District and Scranton Preparatory School relative to a trip and fall action brought by the Plaintiff after the Plaintiff tripped on an alleged uneven slab of sidewalk at the Scranton Memorial Stadium during a football game.

According to the Opinion, the stadium is owned by the Scranton School District and was leased to the Scranton Preparatory School under an oral agreement.

The Plaintiff alleged negligence against both Defendants.

The Scranton School District argued that it was immune from liability under the Pennsylvania Political Subdivision Tort Claims Act given that it allegedly lacked notice of the defect and given that the Plaintiff had not suffered a “permanent injury” as required by law to proceed with such a claim in this context.

The court found that the Plaintiff had produced liability and medical expert evidence on the claim presented such that issues of fact precluded the entry of summary judgment.

More specifically, on the liability issues, the Plaintiff produced an expert who asserted that the walkway’s 1.5 inch uneven slab not only constituted a trip hazard, but had also existed for years and allegedly remained unaddressed despite safety inspections.

Regarding the Plaintiff’s injuries, the Plaintiff’s medical experts reported ongoing hand dysfunction and other chronic conditions. The court noted that genuine issues of fact existed for a jury to decide on the alleged permanence of the Plaintiff’s injuries.

The Co-Defendant, Scranton Prep, asserted that it did not bear any responsibility for maintaining the stadium given that it was a lessee without possession or control premises. The court found issues of fact regarding control and responsibility over the premises. As such, summary judgment was denied in this regard as well.

Anyone wishing to review a copy of this decision may click this LINK.


Source: Lackawanna Jurist (Aug. 29, 2025).