Court Opinion

ID: 4201151
Source: CourtListenerOpinion
Date Created: 2017-09-05 16:17:03.25777+00
Date Added: 2024-06-11T14:14:06.590544
License: Public Domain

J-S22023-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

ARRO CONSULTING, INC.                             IN THE SUPERIOR COURT OF
                                                        PENNSYLVANIA
                            Appellant

                       v.

BENNETT, BREWER & ASSOCIATES, LLC,
SUCCESSOR-IN-INTEREST TO
COUGHENOUR SURVEYING

                                                      No. 1673 MDA 2016

               Appeal from the Order Entered September 12, 2016
               In the Court of Common Pleas of Lancaster County
                         Civil Division at No(s): 13-09159

BEFORE: SHOGAN, J., MOULTON, J., and PLATT, J.*

MEMORANDUM BY MOULTON, J.:                       FILED SEPTEMBER 05, 2017

       ARRO Consulting, Inc. (“ARRO”) appeals from the September 12, 2016

order entered in the Lancaster County Court of Common Pleas sustaining the

preliminary objection filed by Bennett, Brewer & Associates, LLC (“BBA”) to

ARRO’s complaint based on lack of personal jurisdiction.          We reverse and

remand.

       ARRO is a Pennsylvania-based civil engineering and environmental

consulting firm, which also has an office in Maryland.      BBA is a Maryland-

based land development firm with two offices in Maryland. On July 7, 2008,

____________________________________________

       *
           Retired Senior Judge assigned to the Superior Court.
J-S22023-17

BBA retained ARRO to perform engineering services for a land development

project in Maryland.

       On March 17, 2009, the parties entered into a professional services

agreement (“Agreement”) under which ARRO agreed to perform professional

engineering services for BBA on the Maryland project.        The Agreement

contains the following provision:
           GOVERNING LAW. The laws of the Commonwealth of
           Pennsylvania shall govern the validity of this Agreement,
           its interpretation and performance.       Any litigation
           arising in any way from this Agreement shall be
           brought in the Courts of Common Pleas of
           Pennsylvania having jurisdiction.

Agmt., Std. Terms & Conds., at 3, ¶ 20 (emphasis added).1

       On September 20, 2013, ARRO filed a breach of contract action

against BBA in the Lancaster County Court of Common Pleas. On October

23, 2013, BBA filed a preliminary objection to the complaint, asserting that

the trial court lacked personal jurisdiction over BBA.    On November 13,

2013, ARRO filed a response. BBA filed a reply on November 19, 2013.

       On September 9, 2016,2 the trial court sustained BBA’s preliminary

objection and dismissed ARRO’s complaint. The trial court determined that

____________________________________________

       1
         The Agreement provides that “the attached standard terms and
conditions are incorporated into and a part of this Agreement.” Agmt. at 4
(full capitalization omitted).
       2
        “Although a praecipe for disposition was filed on November 19, 2013,
. . . the Office of the Prothonotary failed to assign the case or forward the
(Footnote Continued Next Page)

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J-S22023-17

the phrase “having jurisdiction” in the forum selection clause means that a

party to the Agreement may file suit only in a Pennsylvania court of common

pleas having personal jurisdiction over the parties.      As a result, the trial

court engaged in a minimum-contacts analysis and concluded that it lacked

personal jurisdiction over BBA:
             Not only does [BBA] lack sufficient contacts for a finding
          of specific personal jurisdiction, neither does [BBA] have
          such continuous and systematic contacts with Pennsylvania
          that would support a finding of general personal
          jurisdiction. [BBA] is a Maryland company with a Maryland
          address.     It has never had a place of business in
          Pennsylvania, owned property in Pennsylvania, or had
          Pennsylvania employees or subcontractors. Other than
          maintaining a passive website, [BBA] does not solicit
          business from Pennsylvania. In fact, [BBA] has performed
          only one project in Pennsylvania, and this occurred after
          the events at issue in this case and under a contract with a
          non-Pennsylvania entity. Simply put, [BBA] does not have
          the minimum contacts necessary for the court to exercise
          personal jurisdiction.

Trial Ct. Order, 9/12/16, at 4.

      In its Pennsylvania Rule of Appellate Procedure 1925(a) opinion, the

trial court further explained its ruling:
          In ruling on [BBA’s] preliminary objections, the court found
          no ambiguity in the words of the Agreement. In order to
          give effect to the words “having jurisdiction,” the court
          determined that they limited the reach of the provision.
          The provision is not a blanket consent to Pennsylvania’s
          jurisdiction. Such an interpretation would fail to give effect
          to the words “having jurisdiction.” Instead, the provision
          is the consent of the parties that if Pennsylvania courts
                       _______________________
(Footnote Continued)

file [to the trial judge] until August 11, 2016.” Trial Ct. Order, 9/12/16, at 2
n.1.

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J-S22023-17

           have jurisdiction, then any litigation arising from the
           [A]greement must be brought in Pennsylvania.

Trial Ct. Order, 11/7/16, at 3.

        On appeal, ARRO raises the following issue: “Did the trial court err in

dismissing the complaint by failing to give effect to the forum selection

clause set forth in the written agreement between the parties?” ARRO’s Br.

at 4.

        Our standard of review is as follows:
           In determining whether the trial court properly sustained
           preliminary objections, the appellate court must examine
           the averments in the complaint, together with the
           documents and exhibits attached thereto, in order to
           evaluate the sufficiency of the facts averred.           When
           sustaining the trial court’s ruling will result in the denial of
           claim or a dismissal of suit, preliminary objections will be
           sustained only where the case is free and clear of doubt,
           and this Court will reverse the trial court’s decision
           regarding preliminary objections only where there has
           been an error of law or an abuse of discretion.

Haas v. Four Seasons Campground, Inc., 952 A.2d 688, 691 (Pa.Super.

2008) (quoting Rambo v. Greene, 906 A.2d 1232, 1235 (Pa.Super. 2006)).

Moreover, “the burden of proof initially rests upon the party contesting

personal jurisdiction; once that party has provided proof, the burden then

shifts to the non-moving party to adduce evidence demonstrating there is a

basis for asserting jurisdiction over the moving party.” Id.

        ARRO asserts that the “Governing Law” provision in the Agreement

contains a binding forum selection clause by which BBA consented to the

exercise of personal jurisdiction by Pennsylvania courts.             Thus, ARRO

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contends that the trial court erred in conducting a minimum-contacts

analysis and dismissing the complaint for lack of personal jurisdiction. We

agree.

      It is well settled that the “parties to a contract may agree in advance

to submit to the jurisdiction of a given court.”          Cont’l Bank v. Brodsky,

311 A.2d 676, 677-78 (Pa.Super. 1973). This Court has stated:

               Personal jurisdiction can be established by consent of
            the parties; when such consent is established, the famous
            “minimum contacts” framework developed by the United
            States Supreme Court in International Shoe Co. v.
            Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95
            (1945), is inapplicable. See e.g., Ins. Corp. of Ireland
            v. Compagnie des Bauxites de Guinee, 456 U.S. 694,
            703, 102 S. Ct. 2099, 72 L. Ed. 2d 492 (1982) (“Because the
            requirement of personal jurisdiction represents first of all
            an individual right, it can, like other such rights, be
            waived.”) . . . .

Frontier Leasing Corp. v. Shah, 931 A.2d 676, 680 (Pa.Super. 2007); see

also Provident Mut. Life Ins. Co. v. Bickerstaff, 818 F. Supp. 116, 118

(E.D.Pa. 1993) (stating that although usually “the plaintiff must show that

the defendant has sufficient minimum contacts with the forum state” to

establish     personal   jurisdiction,   “in   actions   involving   forum   selection

clauses[,] analysis of the contacts with the forum state is inappropriate”).

“Instead, the court must consider the validity and effect of the forum

selection clause to determine if” the defendant consented to personal

jurisdiction in the chosen forum. Provident, 818 F. Supp. at 118.

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      Our court has stated that “the modern trend is to uphold the

enforceability of forum selection clauses where those clauses are clear and

unambiguous.”      Patriot Comm. Leasing Co. v. Kremer Rest. Enters.,

LLC, 915 A.2d 647, 650 (Pa.Super. 2006).         A forum selection clause is

subject to principles of contract interpretation and is generally enforceable

“when the parties have freely agreed that litigation shall be conducted in

another forum and where such agreement is not unreasonable at the time of

litigation.”   Autochoice Unlimited, Inc. v. Avangard Auto Fin., Inc., 9
A.3d 1207, 1215 (Pa.Super. 2010) (quoting Cent. Contracting Co. v. C.E.

Youngdahl & Co., 209 A.2d 810, 816 (Pa. 1965)). Furthermore:

          [A] forum selection clause in a commercial contract
          between business entities is presumptively valid and will
          be deemed unenforceable only when: 1) the clause itself
          was induced by fraud or overreaching; 2) the forum
          selected in the clause is so unfair or inconvenient that a
          party, for all practical purposes, will be deprived of an
          opportunity to be heard; or 3) the clause is found to
          violate public policy.

Midwest Fin. Acceptance Corp. v. Lopez, 78 A.3d 614, 629 (Pa.Super.

2013) (quoting Autochoice, 9 A.3d at 1215).

      Here, ARRO and BBA included a forum selection clause within the

“Governing Law” provision of their Agreement, which states: “Any litigation

arising in any way from this Agreement shall be brought in the Courts of

Common Pleas of Pennsylvania having jurisdiction.”      Agmt., Std. Terms &

Conds., at 3, ¶ 20. Thus, our first task it to consider the validity and effect

of the forum selection clause. See Provident, 818 F. Supp. at 118.

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      In determining the parties’ intent, we must construe “all provisions in

the agreement” together so that “each will be given effect.” LJL Transp.,

Inc. v. Pilot Air Freight Corp., 962 A.2d 639, 647-48 (Pa. 2009). “Thus,

we will not interpret one provision of a contract in a manner which results in

another portion being annulled.” Id. at 648.

      We conclude that the mandatory           language “shall be brought”

evidences the parties’ intent to choose Pennsylvania, as opposed to

Maryland, as the forum for resolving         legal disputes.     Despite this

unambiguous language, the trial court found that BBA did not consent to

personal jurisdiction in Pennsylvania. This interpretation, however, renders

the remainder of the forum selection clause meaningless.       By interpreting

the phrase “having jurisdiction” as meaning “having personal jurisdiction,”

the trial court failed to give effect to the words immediately preceding

“having jurisdiction” – “shall be brought in the Courts of Common Pleas of

Pennsylvania.”

      The only interpretation that gives effect to all words in the forum

selection clause is that “having jurisdiction” means having subject matter

jurisdiction over the dispute.   Because the courts of common pleas have

subject matter jurisdiction over breach of contract claims, see 42 Pa.C.S.

§ 931(a), the trial court is a “Court[] of Common Pleas of Pennsylvania

having jurisdiction” over the parties’ dispute. Therefore, we conclude that,

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J-S22023-17

by signing the Agreement containing the forum selection clause, BBA

consented to personal jurisdiction in the trial court.3

       We also reject BBA’s contention that the forum selection clause is

unenforceable because it would be unreasonable for BBA to litigate this

matter in Pennsylvania. Not only do Maryland and Pennsylvania border one

another, but BBA intentionally retained ARRO for its project knowing that

ARRO was a Pennsylvania company.               BBA claims that it would be “unduly

burdensome” to defend itself in Pennsylvania because the project at issue is

located in Maryland and ARRO would not be prejudiced by litigating the case

in Maryland. BBA’s Br. at 24. That, however, is not the standard. BBA has

not alleged, let alone proven, that the forum selection clause was induced by

fraud, that Pennsylvania is so inconvenient that BBA will be deprived of an

opportunity to be heard, or that the clause violates public policy.           See

Midwest, 78 A.3d at 629.                 Nor has BBA alleged any change in

circumstances between the time it signed the Agreement and the time of

this litigation.   Therefore, BBA failed to meet its burden of proving that

litigating this action in Pennsylvania would be unreasonable.

       Accordingly, because the Agreement contains a valid and enforceable

forum selection clause, and the trial court has subject matter jurisdiction
____________________________________________

       3
       To conclude otherwise would mean that BBA consented to jurisdiction
in Pennsylvania, but only if ARRO could establish personal jurisdiction over
BBA in Pennsylvania. As explained above, such an interpretation would
render the forum selection clause largely meaningless.

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over this matter, we conclude that the trial court erred in sustaining BBA’s

preliminary objection.

      Order reversed. Case remanded for further proceedings. Jurisdiction

relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/5/2017

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