Court Opinion

ID: 2742117
Source: CourtListenerOpinion
Date Created: 2014-10-14 19:09:53.1668+00
Date Added: 2024-06-11T09:55:15.926497
License: Public Domain

J-S49043-14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

GUNITE SPECIALIST, INC.                             IN THE SUPERIOR COURT OF
                                                          PENNSYLVANIA
                          Appellee

                    v.

OUTDOOR SPACES DESIGN GROUP, AND
ROBERT KAYE

                          Appellants                       No. 522 EDA 2014

             Appeal from the Order Entered February 12, 2014
           In the Court of Common Pleas of Montgomery County
                      Civil Division at No: 2009-31844

BEFORE: OLSON, OTT, and STABILE, JJ.

MEMORANDUM BY STABILE, J.:                            FILED OCTOBER 14, 2014

     Appellants/defendants, Outdoor Spaces Design Group (“Outdoor”) and

Robert Kaye (“Kaye”), appeal the February 12, 2014 order overruling their

preliminary objections asserting lack of personal jurisdiction.         We reverse

and remand.

     On   October    6,    2009,     Appellee/plaintiff,   Gunite   Specialist,   Inc.

(“Gunite”), filed a complaint against Appellants alleging breach of contract

and unjust enrichment. The complaint alleges the parties engaged in three

oral agreements for Gunite to “perform pool related services” at several of

Appellants’ properties in New Jersey. Complaint, 10/06/09, at ¶¶ 4-5. The

complaint further alleges Gunite performed its obligations and Appellants

failed to pay in accordance with the parties’ oral agreements. Id. at ¶¶ 7-
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10. Gunite is a Pennsylvania Corporation based in Norristown, Montgomery

County. ¶ 1. Outdoor is an unincorporated entity with an office in Marlboro,

New Jersey and Kaye is the president of Outdoor, also living in Marlboro,

New Jersey.     Id. at ¶¶ 2-3.   The complaint alleges Appellants contacted

Gunite by telephone at Gunite’s Norristown office to arrange for Gunite’s

services. Id. at ¶ 6-16.

      Appellants responded with preliminary objections, dated October 26,

2009, alleging the trial court lacked personal jurisdiction over them.

Pa.R.C.P. 1028(a)(1).      Specifically, Appellants alleged Outdoor operates

exclusively in New Jersey and that Kaye is a New Jersey resident.

Preliminary Objections, 10/26/09, at ¶ 10.      Appellants allege that Outdoor

“did not advertise its services in Pennsylvania, did not avail itself of the

privilege of acting within Pennsylvania and could not reasonably anticipate

being called to defend itself in this forum.”    Id. at ¶ 21.   Appellants also

allege Outdoor took no action in Pennsylvania with respect to Gunite’s

claims. Id. at ¶ 23. In addition, Kaye filed an affidavit stating that Outdoor

never conducted business or advertised its services in Pennsylvania. Id. at

Exhibit B.    In its response to Appellants’ preliminary objections, Gunite

asserts the parties exchanged correspondence in furtherance of their oral

agreement and that Appellants’ availed themselves of this state’s jurisdiction

by seeking the services of an entity incorporated and conducting business in

Pennsylvania.   Response to Preliminary Objections, 11/12/09, at ¶¶ 2, 6.,

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10, 21-25.      Gunite’s response also alleges Kaye acted in his individual

capacity at the time of the parties’ agreement and did not incorporate

Outdoor until 2006. Id. at ¶ 7.

       After a lengthy delay, the reasons for which are not apparent from the

record, the trial court issued a notice of intent to terminate the case for

inactivity dated August 13, 2013. See Pa.R.C.P. 230.2(a) (“The Court may

initiate proceedings to terminate a case in which there has been no activity

of record for two years or more by serving a notice of proposed dismissal of

court case.”). Gunite filed a statement of intention to proceed the next day.

On December 24, 2013 the trial court entered an order overruling

Appellants’ preliminary objections.1           On February 12, 2014, the trial court

amended its order to indicate, pursuant to Pa.R.A.P. 311(b)(2), that this

matter presents a substantial issue of personal jurisdiction.              Pa.R.A.P.

311(b)(2).2      As such, the February 12, 2014 order was immediately

____________________________________________

1
   In addition to the objection for lack of personal jurisdiction, Appellants
objected to venue and alleged Gunite failed to state a claim. The trial court
overruled all three of Appellants’ preliminary objections. Only personal
jurisdiction is at issue in this appeal.
2
    Pa.R.A.P. 311(b)(2) provides:

              (b) Order sustaining venue or personal or in rem
       jurisdiction. An appeal may be taken as of right from an order
       in a civil action or proceeding sustaining the venue of the matter
       or jurisdiction over the person or over real or personal property
       if:

(Footnote Continued Next Page)

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appealable as of right. Id. Appellants filed this timely appeal on February

14, 2014. They raise a single issue for our review:

              Whether the lower court abused its discretion and/or
       committed an error of law by overruling defendants’ preliminary
       objections based upon lack of personal jurisdiction where: (1)
       plaintiff failed to produce evidence that disputed defendants’
       evidence challenging jurisdiction, and (2) the lower court
       improperly accepted the bare allegations contained in the
       complaint as evidence when overruling defendants’ preliminary
       objections?

Appellants’ Brief at 6.3

       We conduct our review according to the following:

              [O]ur standard of review of an order of the trial court
       overruling or granting preliminary objections is to determine
       whether the trial court committed an error of law.           When
       considering the appropriateness of a ruling on preliminary
       objections, the appellate court must apply the same standard as
       the trial court. When considering preliminary objections, all
       material facts set forth in the challenged pleadings are admitted
       as true, as well as all inferences reasonably deducible therefrom.
       Preliminary objections which seek the dismissal of a cause of
       action should be sustained only in cases in which it is clear and
       free from doubt[.]

O'Donnell v. Hovnanian Enters., 29 A.3d 1183, 1186 (Pa. Super. 2011)

(citations omitted).        Where personal jurisdiction is at issue, the party

                       _______________________
(Footnote Continued)

                                           [. . .]

            (2) the court states in the order that a substantial issue of
       venue or jurisdiction is presented.

Pa.R.A.P. 311(b)(2).
3
    We note with disapproval that Appellee has not filed a brief.

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challenging the court’s jurisdiction bears the burden of supporting its

objection with evidence.         De Lage Landen Fin. Servs. v. The Urban

P’ship, LLC, 903 A.2d 586, 589-90 (Pa. Super. 2006). The burden shifts to

the plaintiff after the defendant presents “affidavits or other evidence” in

support of its jurisdictional objection. Id. at 590 (citing Holt Hauling and

Warehousing Sys. Inc. v. Aronow Roofing Co., 454 A.2d 1131 (Pa.

1983)). “[W]hen a fact issue is raised by preliminary objections regarding in

personam jurisdiction, the court is to take evidence and may not reach a

determination based upon controverted facts, even if the parties fail to

provide such evidence themselves.”             Id. (quoting Gall v. Hammer, 617
A.2d 23, 24 (Pa. Super. 1992)). Ultimately the trial court must consider the

evidence in the light most favorable to the nonmoving party. Id. at 589.

       A Pennsylvania court can obtain jurisdiction over an unincorporated

entity where the entity is qualified as a foreign entity under Pennsylvania

law, where the entity consents, or where the entity carries on a “continuous

and systematic part of its general business within this Commonwealth.” 42

Pa.C.S.A. § 5301(a)(3).         Kaye’s affidavit expressly disavows all three of

these circumstances. Preliminary Objections, 10/26/09, at Exhibit B. Gunite

offers no evidence to refute the Kaye affidavit.4         Concerning a person, a

Pennsylvania court can exercise jurisdiction where the person is present or
____________________________________________

4
  Other than its August 14, 2014 statement of intent to proceed, Gunite has
done almost nothing in this case since 2009.

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domiciled within this Commonwealth, or where the person consents.            42

Pa.C.S.A. § 5301(a)(1).          Gunite’s complaint contains no allegations to

support personal jurisdiction over Kaye.         Thus, § 5301, governing general

personal jurisdiction, does not apply here.

       Next, we consider 42 Pa.C.S.A. § 5322, known as the long-arm

statute, which lists circumstances under which a court may exercise personal

jurisdiction over a party outside the Commonwealth. Among the appropriate

bases for jurisdiction under § 5322 are the defendant’s transacting business

in this Commonwealth or causing harm in this Commonwealth by an act or

omission outside of this Commonwealth.           42 Pa.C.S.A. § 5322(a)(1), (4).

Jurisdiction is appropriate under the long arm statute and the United States

Constitution if the defendant’s contacts with the foreign state are “such that

the defendant could reasonably anticipate being called to defend itself in the

forum.” Hall-Woolford Tank Co., Inc. v. R. F. Kilns, Inc., 698 A.2d 80,

82 (Pa. Super. 1997) (citing Kubik v. Letteri, 614 A.2d 1110, 1115 (Pa.

1992)).5

              Random, fortuitous and attenuated contacts cannot
       reasonably notify a party that it may be called to defend itself in
       a foreign forum and, thus, cannot support the exercise of
       personal jurisdiction.    That is, the defendant must have
       purposefully directed its activities to the forum and conducted
       itself in a manner indicating that it has availed itself of the

____________________________________________

5
  The Kubik Court adopted the United Supreme Court’s analysis set forth in
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).

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      forum’s privileges and benefits such that it should also be
      subject to the forum state’s [jurisdiction].

Id. at 82-83.    Thus, “the totality of the parties’ dealings, including the

contract negotiations, contemplated future consequences of the contract,

and actual course of dealing must be evaluated in order to determine

whether the foreign defendant is subject to suit in the plaintiff’s chosen

forum.” Id. at 83.

      The Hall-Woolford Court found the following evidence insufficient to

support personal jurisdiction:

             By merely entering into a contract with a Pennsylvania
      corporation, making several follow-up telephone calls and
      sending a payment invoice, it cannot be said that Kilns
      purposefully availed itself of our state’s benefits and protections
      such that it could reason -- ably anticipate being called to defend
      itself in our courts.     If contacts such as these were the
      benchmark for jurisdiction, our courts could require foreign
      defendants to defend themselves in Pennsylvania based upon
      minimal, rather than minimum, contacts.

Id. at 84.

      Instantly, the trial court reasoned that Appellants’ entry into an

agreement with Gunite by telephoning Gunite at its Norristown offices gave

rise to personal jurisdiction. On the state of the record before us, we cannot

agree.   As explained above, the burden shifted to Gunite to support its

jurisdictional allegations after Appellants’ objected to the court’s jurisdiction

and filed an affidavit. Gunite did nothing other than offer vague allegations

in its response to Appellants’ preliminary objections. The case then sat idle

for several years, during which Gunite made no effort to take discovery. As

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a result, the trial court’s order rests on bare allegations in paragraphs 6 and

16 of Gunite’s complaint. The record therefore is not sufficient to permit the

trial court to conduct the required constitutional analysis set forth by our

Supreme Court in Kubik and this Court in Hall-Woolford.          The deficient

record is a result of Gunite’s prolonged failure to support its jurisdictional

allegations.   We therefore reverse the trial court’s order and remand for

entry of an order sustaining Appellants’ preliminary objections under Rule

1028(a)(1).

      Order reversed. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 10/14/2014

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