Court Opinion

ID: 4289479
Source: CourtListenerOpinion
Date Created: 2018-06-28 18:51:04.186388+00
Date Added: 2024-06-11T07:49:28.849294
License: Public Domain

J-S18029-18

                               2018 Pa. Super. 187

 WEBB-BENJAMIN, LLC, A                   :    IN THE SUPERIOR COURT OF
 PENNSYLVANIA LIMITED LIABILITY          :          PENNSYLVANIA
 COMPANY,                                :
                                         :
                   Appellant             :
                                         :
              v.                         :
                                         :
 INTERNATIONAL RUG GROUP, LLC,           :
 D/B/A INTERNATIONAL RETAIL              :
 GROUP, A CONNECTICUT LIMITED            :
 LIABILITY COMPANY                       :         No. 1514 WDA 2017

             Appeal from the Order Entered September 7, 2017
          in the Court of Common Pleas of Westmoreland County,
                   Civil Division at No(s): 2865 of 2017

BEFORE: STABILE, J., MUSMANNO, J., and FORD ELLIOTT, P.J.E.

OPINION BY MUSMANNO, J.:                              FILED JUNE 28, 2018

     Webb-Benjamin, LLC (“WB”), a Pennsylvania Limited Liability Company,

appeals from the Order sustaining the Preliminary Objections filed by

International Rug Group, LLC, d/b/a International Retail Group (“IRG”), a

Connecticut Limited Liability Company, and dismissing WB’s Complaint. We

reverse and remand for further proceedings.

     WB is a Pennsylvania company that provides assistance and support in

arranging and administering home furnishing sale events.         Complaint,

7/25/17, at ¶ 3. IRG is a Connecticut company, registered to do business in

Pennsylvania, that arranges and administers sales events for sellers of home

furnishings. Id. at ¶ 4. In 2016, WB contracted with IRG to retain a client,

Eisenbergs’ Fine Furniture of Calgary (“Eisenbergs”), for IRG, and to render

services related to a furniture sale for Eisenbergs in Calgary, Canada (the
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“Eisenbergs sale”), in exchange for commissions on the furnishings sold. IRG

agreed to make weekly payments to WB, based on a percentage of gross

sales, and a single payment at the conclusion of the Eisenbergs sale, based

on a percentage of gross profits. In January 2017, the parties “ended their

relationship” and “agreed … that WB would be entitled to its agreed-upon sales

commission for the duration of the Eisenbergs [e]vent.”             Id. at ¶ 8.

Subsequently, on February 25, 2017, IRG registered to do business in

Pennsylvania as a foreign association.           Following the conclusion of the

Eisenbergs sale in May 2017, IRG failed to pay WB for the outstanding agreed

upon commissions from the sale.

       WB filed a Complaint, and subsequently an Amended Complaint, against

IRG in the Court of Common Pleas of Westmoreland County, Pennsylvania,

alleging breach of contract. IRG filed Preliminary Objections, alleging that (1)

Pennsylvania lacked personal jurisdiction over IRG;1 (2) WB’s Complaint

lacked sufficient factual specificity; and (3) WB’s breach of contract claim is

legally deficient. The trial court sustained IRG’s Preliminary Objection as to

lack of jurisdiction, and dismissed the case. The trial court found that 42

____________________________________________

1 “Under 42 Pa.C.S.A. §§ 5301-5329, Pennsylvania courts may exercise two
types of jurisdiction over a non-resident defendant.” Nutrition Mgmt. Servs.
Co. v. Hinchcliff, 926 A.2d 531, 536 n.2 (Pa. Super. 2007). “The first type
is general jurisdiction, which is founded upon the defendant’s general activities
within the forum, as evidenced by systematic contacts with the state.” Id.
“The second type is specific jurisdiction, which is premised upon the particular
acts of the defendant that gave rise to the underlying cause of action.” Id.

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Pa.C.S.A. § 5301 does not provide jurisdiction over claims that are based on

events that occurred prior to a foreign association’s registration in

Pennsylvania. See Trial Court Order, 9/6/17, at 2-3. The trial court held that

because the “incidents forming the basis of [WB’s suit]” occurred prior to IRG’s

registration, the court had no jurisdiction over WB’s claims against IRG. Id.

The trial court did not address the remaining Preliminary Objections. WB filed

a timely appeal.

      WB’s issues on appeal are as follows:

      1. Where a foreign entity is registered to do business in
      Pennsylvania when the plaintiff files its complaint, whether the
      trial court can assert general, personal jurisdiction over such
      entity under the foreign registration provisions of 42 Pa.C.S.A.
      §[]5301(a)(2)(i) with respect to acts, transactions or omissions
      occurring prior to such foreign registration?

      2. Where a foreign entity is registered to do business in
      Pennsylvania when the plaintiff’s cause of action arose, whether
      the trial court has sufficient basis to assert general, personal
      jurisdiction over such entity[,] under the foreign registration
      provisions of 42 Pa.C.S.A. §[]5301(a)(2)(i)[,] where such cause
      of action is related to transactions occurring prior to such foreign
      registration?

      3. Where a foreign entity is registered to do business in
      Pennsylvania, whether the trial court has sufficient basis to assert
      general, personal jurisdiction over such entity under the foreign
      registration provisions of 42 Pa.C.S.A. §[]5301(a)(2)(i) with
      respect to a cause of action arising [out] of acts, transactions or
      omissions occurring both before and after such foreign
      registration?

Brief for Appellant at 4-5.

             When deciding a motion to dismiss for lack of personal
      jurisdiction[,] the court must consider the evidence in the light
      most favorable to the non-moving party. This Court will reverse

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       the trial court’s decision regarding preliminary objections only
       where there has been an error of law or an abuse of discretion.
       Once the moving party supports its objections to personal
       jurisdiction, the burden of proving personal jurisdiction is upon
       the party asserting it. Courts must resolve the question of
       personal jurisdiction based on the circumstances of each particular
       case.

Mendel v. Williams, 53 A.3d 810, 816–17 (Pa. Super. 2012) (citation

omitted).

       WB    asserts    that   the   Pennsylvania   court   has   general   personal

jurisdiction, pursuant to 42 Pa.C.S.A. § 5301,2 based on IRG’s registration as

a foreign association in Pennsylvania. Brief for Appellant at 9-11. WB argues

that the text of 42 Pa.C.S.A. § 5301 makes no mention of precluding claims

that are based on events that occurred prior to the foreign association’s

registration in Pennsylvania. See Brief for Appellant at 9-19. Further, WB

argues that following IRG’s registration in Pennsylvania, (1) the Eisenbergs

sale continued for several months, (2) IRG breached its agreement to pay the

commissions owed to WB, and (3) the Complaint was filed. See id. at 13.

       Initially, we observe that

       [t]he objective of all interpretation and construction of statutes is
       to ascertain and effectuate the intention of the legislature.
       Generally, the best indication of the General Assembly's intent is
       the plain language of the statute. When the words of a statute
       are clear and free from all ambiguity, they are presumed to be the
       best indication of legislative intent. When, however, the words of
       a statute are ambiguous, a number of factors are used in
____________________________________________

2 While WB cites to section 5301(a)(2) in support of its argument, IRG
registered in Pennsylvania as a Limited Liability Company. Thus, section
5301(a)(3) is the applicable statute.

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     determining legislative intent. Furthermore, it is axiomatic that in
     determining legislative intent, all sections of a statute must be
     read together and in conjunction with each other, and construed
     with reference to the entire statute. Moreover, statutes are
     considered to be in pari materia when they relate to the same
     persons or things, and statutes or parts of statutes in pari materia
     shall be construed together, if possible. Courts are required, if
     possible, to give effect to each provision or subsection of the
     statute.

Allstate Life Ins. Co. v. Commonwealth, 52 A.3d 1077, 1080–81 (Pa.

2012) (quotation marks, citations and brackets omitted).

     Section 5301, in pertinent part, provides as follows:

     (a) General rule.--The existence of any of the following
     relationships between a person and this Commonwealth shall
     constitute a sufficient basis of jurisdiction to enable the tribunals
     of this Commonwealth to exercise general personal jurisdiction
     over such person, or his personal representative in the case of an
     individual, and to enable such tribunals to render personal orders
     against such person or representative:

                                  ***

            (3) Partnerships, limited partnerships, partnership
           associations, professional associations, unincorporated
           associations and similar entities.—

                 (i) Formation under or qualification as a foreign entity
                 under the laws of this Commonwealth.

                 (ii) Consent, to the extent authorized by the consent.

                 (iii) The carrying on of a continuous and systematic
                 part    of    its  general   business   within  this
                 Commonwealth.

     (b) Scope of jurisdiction.--When jurisdiction over a person is
     based upon this section any cause of action may be asserted
     against him, whether or not arising from acts enumerated in this
     section. Discontinuance of the acts enumerated in subsection
     (a)(2)(i) and (iii) and (3)(i) and (iii) shall not affect jurisdiction

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       with respect to any act, transaction or omission occurring during
       the period such status existed.

42 Pa.C.S.A. § 5301.

       The plain language of 42 Pa.C.S.A. § 5301 does not expressly limit

jurisdiction to only those events that occur during a foreign association’s

registration in Pennsylvania. Although section 5301(b) contains a temporal

provision allowing for jurisdiction over a foreign association that has

withdrawn its registration in Pennsylvania, see 42 Pa.C.S.A. § 5301(b),

section 5301(a) does not preclude jurisdiction for acts committed prior to

registration.    Lacking any ambiguity in the text, we cannot disregard its

express language. See Allstate Life Insurance Co., 52 A.3d at 1080-81.

Thus, general personal jurisdiction under 42 Pa.C.S.A. § 5301(a)(3) does not

preclude claims against foreign associations registered in Pennsylvania arising

from events that occurred prior to registration.3

       However, IRG alleges that even if section 42 Pa.C.S.A. § 5301 provides

a basis for jurisdiction, the court may not exercise jurisdiction because IRG’s

registration as a foreign association in Pennsylvania does not satisfy the Due

____________________________________________

3 We are not persuaded by the holdings of the United States District Court for
the Western District of Pennsylvania in Enterprise Rent-A-Car Wage &
Hour Practices Litig., 735 F. Supp. 2d. 277 (W.D. Pa. 2010), and George
v. A.W. Chesterton Co., 2016 WL 4945331 (W.D. Pa. 2016). Enterprise is
a direct application of section 5301(b), and is inapplicable to the case sub
judice. The court in George applied Enterprise’s analysis of section 5301(b)
to section 5301(a), despite there being no language in the statute for that
assertion. For the aforementioned reasons, we decline to follow suit.

                                           -6-
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Process Clause of the Fourteenth Amendment, following the United States

Supreme Court’s ruling in Daimler AG v. Bauman, 571 U.S. 117, 138 (2014).

See Brief for Appellee at 10-17.

      In   Daimler,   residents    of   Argentina   brought   a   claim   against

DaimlerChrysler Aktiengesellschaft (“Daimler”), a German company, in

California Federal District Court. Daimler, 571 U.S. at 120. The plaintiffs

asserted that the California court had personal jurisdiction over Daimler, under

California’s long-arm statute, based on a subsidiary of Daimler having contacts

with California. Id. at 121. The Court disagreed, holding that in order for a

court to pass Due Process muster in its exercise of personal jurisdiction over

a nonresident, the nonresident’s “affiliations with the state [must be] so

continuous and systematic as to render it essentially at home in the forum

state.”    Daimler, 571 U.S. at 138-39 (quotation marks, brackets and

capitalizations omitted).

      IRG contends that its registration         as a foreign association      in

Pennsylvania is not sufficient to “render [it] essentially at home” in

Pennsylvania, and therefore, Pennsylvania may not exercise personal

jurisdiction. See Brief for Appellee at 15-17.

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       Daimler, however, makes a clear distinction between jurisdiction by

consent,4 and the method of establishing personal jurisdiction that forms the

basis of its analysis and holding.         See Daimler, 571 U.S. at 129.   While

Pennsylvania courts have not discussed this distinction following the Daimler

decision, federal courts in Pennsylvania have analyzed 42 Pa.C.S.A. § 5301,

in light of Daimler, and determined that it has no effect on jurisdiction by

consent.

       In Bors v. Johnson & Johnson, 208 F. Supp. 3d 648 (E.D. Pa. 2016),

Nancy Bors (“Bors”), a Pennsylvania resident, sued Imerys Talc America, Inc.

(“Imerys”), and Johnson and Johnson in the United States District Court for

the Eastern District of Pennsylvania. Id. at 650-51. Imerys filed preliminary

objections alleging, in part, a lack of personal jurisdiction pursuant to

Daimler. Id. at 651. Imerys argued that it had no contact with Pennsylvania

outside of its registration to do business in Pennsylvania. Id. Bors argued

____________________________________________

4 Prior to Daimler, the United States Supreme Court consistently “upheld
state procedures which find constructive consent to the personal jurisdiction
of the state court in the voluntary use of certain state procedures.” Ins. Corp.
of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 704
(1982). Pennsylvania established 42 Pa.C.S.A. § 5301, which provides that a
non-resident of Pennsylvania consents to general personal jurisdiction in
Pennsylvania by registering to do business there. See Simmers v. Am.
Cyanamid Corp., 576 A.2d 376, 382 (Pa. Super. 1990) (stating that “[w]hen
jurisdiction is based upon a foreign corporation's … consent, i.e., when the
corporation … has voluntarily registered itself to do business here, the courts
of this Commonwealth may exercise [general personal] jurisdiction over the
foreign corporation….”).

                                           -8-
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that Imerys consented to Pennsylvania’s exercise of personal jurisdiction,

pursuant to 42 Pa.C.S.A. § 5301, by registering to do business in

Pennsylvania. Id. at 651-52. The federal district court agreed with Bors,

holding that

      [c]onsent remains a valid form of establishing personal
      jurisdiction under [42 Pa.C.S.A. § 5301] after Daimler. The
      Supreme Court did not eliminate consent. Parties can agree to
      waive challenges to personal jurisdiction by … registering to do
      business under a statute which specifically advises the registrant
      of its consent by registration.

Id. at 655 (emphasis added).

      In Gorton v. Air & Liquid Sys. Corp., 2018 WL 1385531, at *12 (M.D.

Pa. 2018), Thomas Gorton (“Gorton”) filed suit against numerous defendants,

alleging that he contracted mesothelioma as a result of his exposure to

asbestos   while   working   for,    or   coming    into   contact   with   products

manufactured, supplied, or distributed by, the defendants. Gorton, 2018 WL
1385531, at *2. The defendants filed a motion to dismiss alleging, in part, a

lack of personal jurisdiction.      Id. at *1.     They argued that pursuant to

Daimler, consent by registration was no longer a valid method of obtaining

personal jurisdiction. Id. at *10. The Court, citing Bors, disagreed, holding

that “under section 5301[,] a corporation that applies for and receives a

certificate of authority to do business in Pennsylvania consents to the general

jurisdiction of state and federal courts in Pennsylvania.” Id. at *11.

      Guided by the reasoning in Bors and Gorton, we conclude that Daimler

does not eliminate consent as a method of obtaining personal jurisdiction.

                                          -9-
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Accordingly, pursuant to 42 Pa.C.S.A. § 5301, Pennsylvania may exercise

general personal jurisdiction over WB’s claims against IRG.5 Thus, we reverse

the Order and remand for further proceedings.6

       Order reversed. Case remanded for further proceedings consistent with

this Opinion. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/28/2018

____________________________________________

5 See United Farm Bureau Mut. Ins. Co. v. U.S. Fid. & Guar. Co., 462
A.2d 1300, 1304 (Pa. 1983) (stating that “[j]urisdiction over corporations can
be exercised if the corporation is incorporated or qualifies as a foreign
corporation under the laws of Pennsylvania, or has consented to the exercise
of jurisdiction, or carries on a continuous and systematic part of its general
business within the Commonwealth.”).

6 The trial court must dispose of the remaining Preliminary Objections on
remand.

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