Court Opinion

ID: 4117750
Source: CourtListenerOpinion
Date Created: 2017-01-23 20:12:29.613941+00
Date Added: 2024-06-11T14:34:58.563184
License: Public Domain

J-A20027-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

STEVEN DEFFENBAUGH                           IN THE SUPERIOR COURT OF
                                                   PENNSYLVANIA
                          Appellant

                     v.

RANDY GIANCOLA, CLEM’S TRAILER
SALES, INC., A PENNSYLVANIA
CORPORATION, AND CLEM’S RV AND
TRAILER SALES OF VIRGINIA, INC., A
VIRGINIA CORPORATION

                          Appellees              No. 1755 WDA 2015

              Appeal from the Order Entered October 14, 2015
               In the Court of Common Pleas of Butler County
                      Civil Division at No: 2015-10559

BEFORE: BOWES, STABILE, and MUSMANNO, JJ.

MEMORANDUM BY STABILE, J.:                    FILED JANUARY 23, 2017

      Appellant, Steven Deffenbaugh (“Deffenbaugh”), appeals from the

October 14, 2015 order of the Court of Common Pleas of Butler County

(“trial court”) sustaining Appellees’, Randy Giancola (“Giancola”), Clem’s

Trailer Sales, Inc., (“Clem’s PA”), and Clem’s RV and Trailer Sales of

Virginia, Inc. (“Clem’s VA”), preliminary objections as to venue.    Upon

review, we affirm.

      The trial court summarized the factual and procedural background as

follows.

            This case arises from a Forbearance Agreement, entered
      into by [Deffenbaugh] and [Appellees] on June 22, 2015.
      [Deffenbaugh] avers that he began working for [Clem’s PA] in
      January 2011, as General Manager. He alleges that, following
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     his successful management of [Clem’s PA], he and [] Giancola
     began to discuss the possibility of opening a new business,
     [Clem’s VA], as co-owners. [Deffenbaugh] alleges that, on
     August 5, 2013, [Clem’s VA] was formed, and he owned
     nineteen percent of [Clem’s VA] stock. [Deffenbaugh] alleges
     that, in May 2015, he was approached by representatives of a
     competing company, Camping World, to manage one of their
     Florida locations. He alleges that, although he declined the
     Florida position, he discussed other possible opportunities with
     the company, and communicated with the company several
     times by telephone and email. [Deffenbaugh] further alleges
     that [Appellees] installed surveillance software on his computer
     that permitted them to monitor and retrieve his personal emails.
     [Deffenbaugh] further avers that, on June 22, 2015, [] Giancola
     contacted him and invited him to a meeting, to be held that
     same afternoon, in Cranberry Township, Butler County,
     Pennsylvania. [Deffenbaugh] alleges that he was ambushed by
     []Giancola, []Giancola’s wife, a man named “Ron,” and two
     attorneys who represented []Giancola. [Deffenbaugh] alleges
     that the attorneys informed him that they had proof that
     [Deffenbaugh] gave confidential financial information to Camping
     World; and when [Deffenbaugh] indicated that he had not done
     so, []Giancola and one of the attorneys shouted profanities at
     him, threatened to bankrupt him, and to expose him to financial
     ruin. They also allegedly stated that [Deffenbaugh] would never
     work in the industry again. [Deffenbaugh] alleges that one of
     the attorneys then presented him with two options: sign the
     aforementioned Forbearance Agreement or suffer financial ruin.
     [Deffenbaugh] alleges that he expressed concern about his
     ability to provide for his family if he was prohibited from working
     in the industry for three years, whereupon [Appellees] agreed to
     permit [Deffenbaugh] to work for Camping World in Toledo,
     Ohio, and they all signed an Addendum to that effect.
     [Deffenbaugh] further alleges that the Forbearance Agreement
     required him to transfer all of his ownership interest in [Clem’s
     VA] to [Clem’s VA], without him receiving any payment or
     compensation.       [Deffenbaugh] alleges that he signed the
     Forbearance Agreement and Addendum under duress and
     economic compulsion.

           [Deffenbaugh] also alleges that, three weeks after he
     signed the Forbearance Agreement, an article appeared in
     RVBusiness, announcing []Giancola’s sale of [Clem’s VA] and
     [Clem’s PA] to Camper Inn RV. [Deffenbaugh] alleges that the

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     article quotes []Giancola as stating that he had been negotiating
     the sale with Campers Inn RV for seven months. [Deffenbaugh]
     alleges that []Giancola contrived the aforementioned allegations
     against [Deffenbaugh] and ambushed him at the June 22, 2015
     meeting for the sole purpose of depriving [Deffenbaugh] of his
     share of the sale proceeds.

            On July 17, 2015, [Deffenbaugh] filed his [c]omplaint in
     [c]ivil [a]ction. In [c]ount I, [Deffenbaugh] alleges fraud against
     all [Appellees]. [Deffenbaugh] alleges that [Appellees] made
     various illusory, unfounded, and pretextual representations to
     him in order to induce him to relinquish his ownership interest in
     [Clem’s VA], and that [Appellees] fraudulently omitted to inform
     [Deffenbaugh] of the impending sale.               In [c]ount II,
     [Deffenbaugh] alleges [b]reach of [f]iduciary [d]uty, against
     []Giancola and [Clem’s PA], for their alleged failure to exercise
     good faith and care and to protect his interests and remit to him
     his proportion of the proceeds from the sale of [Clem’s VA]. In
     [c]ount III, [Deffenbaugh] requests [d]eclaratory [j]udgment
     against all [Appellees], and he repudiates the Forbearance
     Agreement and Addendum. In [c]ount IV, [Deffenbaugh] alleges
     breach of the Pennsylvania Wage Payment and Collection Law
     against all [Appellees], averring that [Appellees] have failed to
     pay him approximately $120,000 in commissions, bonuses, per
     diem, and other earned payments. In [c]ount V, [Deffenbaugh]
     raises a count for [s]tatutory [a]ppraisal regarding his shares of
     [Clem’s VA] stock.

           On August 12, 2015, [Appellees] filed [p]reliminary
     [o]bjections and a [b]rief in [s]upport. [Appellees] argue that
     venue is improper in Butler County, because the Forbearance
     Agreement provides that any dispute relating to the Forbearance
     Agreement shall be heard in the Beaver County, Pennsylvania,
     court system.

          On August 31, 2015, [Deffenbaugh] filed his [a]nswer to
     [Appellees’]  [p]reliminary [o]bjections   and    [b]rief in
     [o]pposition.

Trial Court Opinion, 10/14/2015, at 1-4.      The trial court sustained the

preliminary objection as to venue on October 14, 2015. Deffenbaugh filed a

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timely notice of appeal on November 5, 2015.        Deffenbaugh and the trial

court complied with Pa.R.A.P. 1925.

      Deffenbaugh raises three issues on appeal.

      I.     Did the trial court err in applying a forum selection clause
             that was not the product of free negotiation and
             agreement?
      II.    Was the forum selection clause in the so-called
             “Forbearance Agreement” vitiated by fraud?
      III.   Was the forum selection clause in the so-called
             “Forbearance Agreement” vitiated by duress or economic
             compulsion?

Appellant’s Brief at 4.

      Our standard of review is well established.       “Generally, this Court

reviews a trial court order sustaining preliminary objections based upon

improper venue for an abuse of discretion or legal error.”        Autochoice

Unlimited Inc. v. Avangard Auto Fin., Inc., 9 A.3d 1207, 1211 (Pa.

Super. 2010) (quotation and citation marks omitted). Deffenbaugh’s three

arguments are essentially intertwined. Specifically, Deffenbaugh argues the

forum selection clause is unenforceable because the clause and the contract

as a whole were entered into fraudulently and under duress.

      “A forum selection clause can be avoided for fraud only when the fraud

relates to procurement of the forum selection clause itself, standing

independently from the remainder of the agreement.” Patriot Commercial

Leasing Co., Inc., v. Kremer Rest. Ent., LLC, 915 A.2d 647, 653 (Pa

Super. 2006). In Patriot, this Court held that even when a party alleges

fraud in the inducement of a contract the

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     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.

Id. at 651. Moreover, in O’Hara v. First Liberty Ins. Corp, 984 A.2d 938

(Pa. Super. 2009) this Court noted that while Patriot involved a contract

between two commercial entities, it does not suggest that the holding should

be limited to such context. O’Hara 984 A.2d at 942.

     The forum selection clause in the matter sub judice states that

     [j]urisdiction covering any dispute, interpretation, claim or
     lawsuit arising under, related to, and/or concerning this
     Agreement, any of the acts to be taken thereunder, and/or any
     related matters, is in the state or federal courts for Beaver
     County, Pennsylvania, subject to ordinary rights of appeal, with
     any Order of Judgment enforceable in any competent
     jurisdiction.

Complaint, 7/17/2015, at Ex. B.     In his complaint, Deffenbaugh does not

allege the forum selection clause was induced by fraud or overreaching,

instead he alleges the entire Forbearance Agreement was.          Similarly, on

appeal, Deffenbaugh’s argument fails to develop his argument on the forum

selection clause itself having been procured by fraud; rather, Deffenbaugh

focuses his argument on the formation of the Forbearance Agreement as a

whole. Deffenbaugh’s argument is flawed as we look to the formation of the

forum selection clause itself, rather than formation of the contract as a

whole. See Patriot, 915 A.2d at 652. We find that the trial court did not

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commit an abuse of discretion or legal error when it found the forum

selection clause was enforceable. See Trial Court Opinion, 10/14/2015, at

6.

      Additionally, the Forbearance Agreement provides for venue to lie in

Beaver County, Pennsylvania. In his brief, Deffenbaugh fails to develop the

argument that “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.”    Patriot, 915 A.2d at 652.     Instead, Deffenbaugh argues that

venue would be more appropriate in Butler County because both he and

Giancola parties are residents of Butler County and the formation of the

Forbearance Agreement took place in Butler County. Deffenbaugh filed his

action in Butler County, Pennsylvania, a neighboring county.      Deffenbaugh

admits that the offices of Clem’s PA are located in Beaver County.         See

Answer to Preliminary Objections Raising Issues of Fact, 8/31/2015, at ¶5.

Deffenbaugh failed to present evidence that Beaver County could not provide

a full and fair consideration of the suit or that such forum would result in

additional prohibitive costs; therefore, this argument fails. See Autochoice

Unlimited, Inc., 9 A.3d at 1215-16 (affirmed enforceability of a forum

selection clause    where   appellant failed to     produce   evidence   of the

unavailability/capability of a selected forum and whether there would be

additional costs of litigating in the selected forum).

      Furthermore, Deffenbaugh fails to develop an argument that the forum

selection clause violates public policy. Therefore, Deffenbaugh’s claim fails.

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     In conclusion, the trial court did not abuse its discretion or commit an

error of law when it sustained Appellees’ preliminary objections as to venue.

     Order affirmed. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/23/2017

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