Court Opinion

ID: 4665717
Source: CourtListenerOpinion
Date Created: 2021-03-08 19:12:18.097859+00
Date Added: 2024-06-11T08:02:44.839300
License: Public Domain

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                                 2021 PA Super 37

 RONALD SCOTT HANGEY AND                   :   IN THE SUPERIOR COURT OF
 ROSEMARY HANGEY H/W                       :        PENNSYLVANIA
                                           :
                     Appellant             :
                                           :
                                           :
               v.                          :
                                           :
                                           :   No. 3298 EDA 2017
 HUSQVARNA PROFESSIONAL                    :
 PRODUCTS, INC., HUSQVARNA                 :
 GROUP, HUSQVARNA U.S. HOLDING,            :
 INC., HUSQVARNA AB, AND                   :
 TRUMBAUER'S LAWN AND                      :
 RECREATION, INC.                          :

                 Appeal from the Order September 7, 2017
    In the Court of Common Pleas of Philadelphia County Civil Division at
                     No(s): No. 1015 March Term, 2017

BEFORE: PANELLA, P.J., STABILE, J., DUBOW, J., KUNSELMAN, J.,
        NICHOLS, J., MURRAY, J., McLAUGHLIN, J., KING, J., and
        McCAFFERY, J.

OPINION BY McLAUGHLIN, J.:                          FILED: MARCH 8, 2021

        Ronald Scott Hangey and Rosemary Hangey, husband and wife, appeal

from the order sustaining preliminary objections to venue in Philadelphia

County and transferring the case to Bucks County. We conclude the trial court

abused its discretion in finding that the contacts of Husqvarna Professional

Products, Inc. (“HPP”) with Philadelphia did not satisfy the quantity prong of

the venue analysis. We therefore reverse.

        The trial court summarized the factual and procedural history of the

case:
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          [The Hangeys] commenced this action on March 13,
       2017 by filing a Complaint. The Amended Complaint, filed
       April 10, 2017, alleges that in May 2013, Plaintiff Ronald
       Hangey purchased a Husqvarna riding lawnmower from
       Defendant Trumbauer’s Lawn and Recreation, Inc. in
       Quakertown, Bucks County. On August 5, 2016, Ronald
       Hangey was maimed when he fell off his lawnmower and the
       lawnmower ran over his legs while the blades were still
       engaged; the accident occurred at [the Hangeys’] property
       in Wayne County. The Amended Complaint named five
       defendants—Husqvarna Professional Products, Inc. [“HPP”],
       Husqvarna Group, Husqvarna U.S. Holding, Inc., Husqvarna
       AB, and Trumbauer’s Lawn and Recreation, Inc.—and
       sounds in negligence, strict liability, and loss of consortium.

          All Defendants filed Preliminary Objections. Defendants
       Husqvarna U.S. Holdings, Inc. and Husqvarna AB filed
       Preliminary Objections which, inter alia, challenged personal
       jurisdiction. Defendants [HPP], Husqvarna Group, and
       Trumbauer’s Lawn and Recreation, Inc., filed Preliminary
       Objections arguing, inter alia, improper venue. [The trial
       court] permitted the parties to take discovery relevant to
       the issues of personal jurisdiction and venue.

           [The Hangeys’] venue-related discovery revealed the
       following. Husqvarna Group is a nonexistent entity that acts
       as a marketing device for a number of Husqvarna-branded
       corporate entities, including [HPP]. Deposition of John
       Stanfield, 55:14-56:9 (August 30, 2017). John Trumbauer,
       sole shareholder of Defendant Trumbauer’s Lawn and
       Recreation, Inc., produced an affidavit in which he averred
       Defendant Trumbauer’s Lawn and Recreation, Inc.’s
       principal place of business was in Quakertown, PA, that
       Philadelphia did not fall within their target market area, and
       they did not regularly conduct business in Philadelphia.
       Defendant Trumbauer’s Lawn and Recreation, Inc.’s
       Preliminary Objection at Ex. “B.” [HPP] is a Delaware
       corporation with a principal place of business located in
       Charlotte, North Carolina. See Defendants’ Ex. “C” Affidavit
       of Jordan Baucom. In 2016, [HPP] had approximately $1.4
       billion in sales revenue in the United States, of which
       $75,310.00 came from direct sales in Philadelphia County.
       See [HPP’s] monetary sales data from 2014-2016,
       submitted to the Court under Seal pursuant to the Order
       dated September 12, 2017. Of the $75,000 in sales made

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         in Philadelphia in 2016, roughly $69,700 came from a single
         Husqvarna authorized dealer, DL Electronics, Inc. Id.
         Approximately 0.005% of [HPP’s] 2016 United States sales
         revenue resulted from direct sales in Philadelphia County.
         Sales data from 2014 and 2015 is substantially similar, with
         approximately 0.005% of Husqvarna’s annual United States
         sale revenue resulting from direct sales within Philadelphia
         County. Id. These sales figures do not include the revenue
         generated by selling Husqvarna products at “big box”
         retailers such as Home Depot, Lowe’s, or Sears. In the case
         of “big box” retailers, John Stanfield, the corporate
         representative for [HPP], testified that [HPP] delivers its
         products to the retailers’ distribution centers, none of which
         are located in Philadelphia County. See e.g. Stanfield Dep.
         31:17-34:20 (testifying that sales to Lowe’s would be
         delivered to the Lowe’s distribution center in either Pottsville
         or Pittstown, Pennsylvania). Once the Husqvarna products
         are delivered to the retailers’ distribution centers, the
         retailers retain sole discretion as to where the products will
         be offered for sale, including stores located in Philadelphia
         County. See Affidavit of John Stanfield at 19.

            Following oral argument, [the trial court] dismissed
         Defendants Husqvarna U.S. Holdings, Inc. and Husqvarna
         AB due to want of personal jurisdiction and transferred the
         case against Defendants [HPP], Husqvarna Group, and
         Trumbauer’s Lawn and Recreation, Inc. to Bucks County
         because venue was improper in Philadelphia County. [The
         Hangeys] filed a timely notice of appeal challenging this
         Court’s finding of improper venue; however, they did not
         appeal the dismissal of Defendants Husqvarna U.S.
         Holdings, Inc. and Husqvarna AB. See Notice of Appeal,
         docketed September 26, 2017 (stating Plaintiffs appeal from
         the orders “transferring venue of this matter to the Court of
         Common Pleas of Bucks County, Pennsylvania”).

Trial Court Opinion, filed Mar. 2, 2018, at 1-3 (“1925(a) Op.”).

      In finding venue in Philadelphia was not proper, the trial court found

HPP’s contacts satisfied the quality prong of the venue analysis, but did not

satisfy the quantity prong. The court reasoned that only 0.005% of HPP’s

national revenue came from sales in Philadelphia and concluded that because

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this amount was “de minimis,” HPP’s contact with Philadelphia was not general

and habitual. Id. at 6.

      The Hangeys raise the following issue on appeal:

         Did the trial court err as a matter of law, and thereby abuse
         its discretion, in holding that [HPP] does not regularly
         conduct business in Philadelphia County, merely because
         the overwhelming majority of its sales in the United States
         have occurred elsewhere, thereby overlooking the
         undisputed continuous, ongoing, and regularly recurring
         sales of Husqvarna consumer products in Philadelphia
         County?

Hangeys’ Br. at 8.

      A panel of this court reversed the trial court’s order. We granted

Husqvarna’s petition for re-argument and ordered the parties to brief an

additional issue: “Whether the en banc Panel should specifically adopt or

overrule prior appellate decisions involving the quantity prong of the venue

analysis?” Order, filed July 9, 2019.

      We review an order granting or denying preliminary objections asserting

improper venue for abuse of discretion. Zampana-Barry v. Donaghue, 921

A.2d 500, 503 (Pa.Super. 2007). “A [p]laintiff’s choice of forum is to be given

great weight, and the burden is on the party challenging the choice to show it

was improper.” Fritz v. Glen Mills Schools, 840 A.2d 1021, 1023 (Pa.Super.

2003) (quoting Jackson v. Laidlaw Transit, Inc. & Laidlaw Transit PA,

Inc., 822 A.2d 56, 57 (Pa.Super. 2003)). “However, a plaintiff’s choice of

venue is not absolute or unassailable.” Id. (quoting Jackson, 822 A.2d at

57). “[I]f there exists any proper basis for the trial court’s decision to grant

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the petition to transfer venue, the decision must stand.” Krosnowski v.

Ward, 836 A.2d 143, 146 (Pa.Super. 2003) (en banc) (quoting Estate of

Werner v. Werner, 781 A.2d 188, 190 (Pa.Super. 2001)).

       We must determine whether the trial court abused its discretion in

finding that venue as to HPP was improper in Philadelphia.1 If venue is proper

as to HPP, then the Hangeys may maintain their “action to enforce . . . joint

and several liability against” not only HPP, but also Husqvarna Group and

Trumbauer’s Lawn and Recreation, Inc. Pa.R.C.P. 1006(c)(1) (“an action to

enforce a joint or joint and several liability against two or more defendants . .

. may be brought against all defendants in any county in which the venue may

be laid against any one of the defendants”).

       Rule 2179 of the Pennsylvania Rules of Civil Procedure provides that

venue is proper against a corporation or similar entity in a county where it

“regularly conducts business.” Pa.R.C.P. 2179(a)(2). When determining

whether venue is proper, “each case rests on its own facts,” Purcell v. Bryn

Mawr Hosp., 579 A.2d 1282, 1286 (Pa. 1990), and “[t]he question is whether

the acts are being ‘regularly’ performed within the context of the particular

business.” Monaco v. Montgomery Cab Co., 208 A.2d 252, 256 (Pa. 1965).

Further, in the venue context, “regularly” does not mean “principally,” and a

defendant “may perform acts ‘regularly’ even though these acts make up a

____________________________________________

1 The Hangeys do not challenge the trial court finding that venue in
Philadelphia is not proper as to Husqvarna Group and Trumbauer’s Lawn and
Recreation, Inc.

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small part of its total activities.” Canter v. Am. Honda Motor Corp., 231

A.2d 140, 142 (Pa. 1967).

       In determining whether venue is proper under this rule, courts “employ

a quality-quantity analysis.” Zampana-Barry, 921 A.2d at 503. “The term

‘quality of acts’ means those directly, furthering, or essential to, corporate

objects; they do not include incidental acts.” Monaco, 208 A.2d at 256

(quoting Shambe v. Delaare & Hudson R.R. Co., 135 A. 755, 757 (Pa.

1927)). To satisfy the quantity prong of this analysis, acts must be “sufficiently

continuous so as to be considered habitual.” Zampana-Barry, 921 A.2d at

504.

       Pennsylvania appellate courts have often considered the percentage of

overall business a defendant company conducts in a county to determine if

the quantity prong was met. In Canter, the Supreme Court found that a

company whose employees drove cars into Philadelphia “to demonstrate cars

and to consummate sales” met the quality test for venue, and that the

contacts also met the quantity test where one to two percent of the company’s

gross sales occurred in Philadelphia. 231 A.2d at 143. In Canter, the company

had gross sales of 3.7 million in 1964 and 4.1 million in 1965. Id. at 141. In

Monaco, the Supreme Court found that a taxicab company based in

Montgomery County conducted regular business in Philadelphia where five to

ten percent of its business was from passengers it took into Philadelphia. 208

A.2d at 256. It reasoned that the cab company’s acts of driving into

Philadelphia and collecting fares were regularly performed. Id. Further, in

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Zampana-Barry, this Court found venue proper in Philadelphia where a law

firm based in Delaware County derived three to five percent of its income from

cases litigated in Philadelphia. 921 A.2d at 506.

      As these cases establish, courts often consider whether the percentage

of a defendant’s business is sufficient to constitute “habitual” contact.

However, no court has stated that the percentage of a defendant’s business

is the sole evidence relevant to the “quantity” analysis. Rather, courts must

determine whether all the evidence presented, including the scope of the

defendant’s business, viewed in the context of the facts of the case, establish

that a defendant’s contacts with the venue satisfy the quantity prong. See

Mathues v. Tim-Bar Corp., 652 A.2d 349, 351 (Pa.Super. 1994) (finding

trial court did not abuse discretion in finding quantity prong not satisfied where

evidence established only one or two sales occurred in county); Monaco, 208

A.2d at 256 (noting “[t]he question is whether the acts are being ‘regularly’

performed within the context of the particular business”).

      Where this Court concluded that conducting a small percentage of a

business in a venue did not satisfy the quantity prong, the Court’s core

finding was that the contacts failed the quality prong of the venue test and

the cases often addressed defendants who were small and/or local companies,

not multi-billion-dollar corporations. For example, in Singley v. Flier, 851

A.2d 200, 202-03 (Pa.Super. 2004), we found that the contacts that the

plaintiff alleged Villanova University had with Philadelphia—three graduate

courses offered in Philadelphia, practical experience for nursing students in

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Philadelphia hospitals, a history course entitled “Tours of Philadelphia,” and

volunteer and athletic opportunities—did not satisfy the quality prong of the

venue analysis. We also found that the three graduate courses also failed the

quantity prong “when viewed in light of the University’s entire academic

program, which includes several graduate degrees, as well as a law school.”

Id.

      Further, in PECO Energy Co. v. Philadelphia Suburban Water Co.,

this Court found that Philadelphia Suburban Water Company’s contacts with

Philadelphia, which included approximately one mile of pipeline running

through Philadelphia and a one-time purchase of water from Philadelphia,

were “minimal and incidental, at best.” 802 A.2d 666, 670 (Pa.Super. 2002).

We concluded that the contacts were not essential to defendant’s business

and were “far less in quantity, as well as quality, than the contacts cited” in

prior cases. Id. at 671. Further, in Battuello v. Camelback Ski Corp., 598

A.2d 1027, 1029-30 (Pa.Super. 1991), this Court discussed the plaintiff’s

claim that venue in Philadelphia was proper due to Camelback Ski

Corporation’s   relationship   with       eastern   Tours,   which   transported

Philadelphians to Camelback. We concluded the relationship was “tenuous,”

noting that Cambelback’s sending of brochures and quoting prices did not

meet the quality prong of the venue analysis, Philadelphians purchased tickets

only after they arrived at Camelback, and the business generated, which was

less than one percent of Cambelback’s business, was “far too small to qualify

as ‘general or habitual.’” Id. at 1030.

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       The percentage of a company’s overall business that it conducts in a

given county, standing alone, is not meaningful and is not determinative of

the “quantity” prong. Each case turns on its own facts, and we must evaluate

evidence of the extent of a defendant’s business against the nature of the

business at issue. A small or local business may do all of its work in just a few

counties or even a single one, while a large business may span the entire

nation. Indeed, the percentage of sales a multi-billion-dollar company makes

in a particular county will almost always be a tiny percentage of its total sales.

Courts thus should not consider percentages in isolation. Rather, courts must

consider all of the evidence in context to determine whether the defendant’s

business activities in the county were regular, continuous, and habitual.

       Here, HPP is a multi-billion-dollar corporation. It had at least one

authorized dealer located in Philadelphia to which it delivered products for

sale. Although HPP’s sales through authorized dealers in Philadelphia

constituted only 0.005% of HPP’s national sales, the dollar figure of those

Philadelphia sales in 2016 was $75,310.2 The number and dollar figure of sales

in Philadelphia, and the fact that HPP has an authorized dealer in Philadelphia

to sell its products, is relevant to the determination of whether HPP’s contacts

with Philadelphia satisfied the “quantity” prong of the venue analysis.
____________________________________________

2 Ronald and Rosemary Hangey presented evidence that additional sales
occurred through Lowe’s stores located in Philadelphia. Although there was no
evidence as to the quantity of sales at Lowe’s, there was evidence that such
sales occurred. However, as we conclude that venue is proper without
reference to the sales from Lowe’s or similar stores, we need not determine
whether such sales can be considered here.

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Therefore, we conclude the trial court erred in relying almost exclusively on

evidence of the percentage of defendant’s business that occurred in

Philadelphia when addressing the quantity prong.

      Further, based on the totality of the evidence, HPP’s contacts satisfied

the quantity prong of the venue test. Its contacts with Philadelphia – including

having an authorized dealer in Philadelphia, and selling $75,310 worth of

products through that dealer in 2016 in Philadelphia – were “sufficiently

continuous so as to be considered habitual.” See Zampana-Barry, 921 A.2d

at 504.

      In reaching this conclusion, we do not find it necessary to approve or

disapprove of any of our prior decisions. Rather, our conclusion is based on

the prior precedents of the Pennsylvania Supreme Court and consistent with

those of our Court. However, as discussed above, we clarify that the

percentage of sales of a corporation in a venue is but one factor to consider

when determining whether the quantity prong of the venue analysis is

satisfied, and such evidence must be viewed within the context of the business

at issue in each case.

      As for the quality prong, the trial court found there was “no question”

that it was met. See 1925(a) Op. at 5. The Hangeys do not dispute that

conclusion and we will not address it further.

      Order reversed. Case remanded. Jurisdiction relinquished.

      President Judge Panella, Judge Dubow, Judge Murray and Judge

McCaffery join the opinion.

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     Judge Kunselman and Judge Nichols concur in the result.

     Judge Stabile files a dissenting opinion in which Judge King joins.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/8/21

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