Court Opinion

ID: 6308750
Source: CourtListenerOpinion
Date Created: 2022-02-18 18:24:35.318477+00
Date Added: 2024-06-11T08:59:01.221152
License: Public Domain

BECK, Judge,
dissenting.
Because I believe that the Monroe County and Philadelphia County actions involve common questions of law and fact, and therefore were properly coordinated, I must dissent.
In March 1988, the parties entered into an Acquisition Agreement through which appellants purchased the assets of Outdoor World Corporation (“OWC”) from its shareholders, Henry A. Ahnert, Jr., Robert M. Ahnert, W. Peter Ahnert, Harry F. Lee, Henry A. Ahnert, III, Robert M. Ahnert and Henry F. Lee, Trustees U/I/T of Henry A. Ahnert, Jr., Henry A. Ahnert, Jr. and Harry F. Lee, Trustees U/I/T of Robert M. Ahnert and Green Pen, Inc. (“appellees”). The Acquisition Agreement included provisions which require the appellees to indemnify the appellants against certain claims which might be lodged against OWC as the result of activities pre-dating the Agreement. Several such claims were pending against OWC at the time of the Acquisition Agreement, and were listed and described in Section 12 of the Agreement, relating to the appellees’ indemnification obligations. R. 617a-621a.
Eventually, appellants sought indemnification under the Acquisition Agreement for losses arising out of the “Maryland Claim.” At the time of the Acquisition Agreement, OWC was under investigation by Maryland’s Attorney General for al*512leged unfair or deceptive practices prohibited by Maryland law. By May 1989, the Attorney General had filed a statement of charges against OWC. Pursuant to the indemnification provisions of the Acquisition Agreement, in March 1990, appellants demanded indemnification from appellees for losses “in connection with the proceeding commenced by the Maryland Attorney General concerning allegations regarding marketing practices.” R. 349a. The parties compromised the claim for indemnification pursuant to a July 1990 Settlement Agreement.
By March 18, 1991, however, the appellants notified appellees that they would consider the Settlement Agreement to be null and void, due to appellees’ alleged fraud and breach of fiduciary obligation. Appellants then reinstated their demand for indemnification under the Acquisition Agreement. In response, appellees filed a declaratory judgment action in Monroe County to enforce the July 1990 Settlement Agreement.
Thereafter, on May 7, 1992, appellants' filed their own declaratory judgment action in Philadelphia County, again asserting their right to indemnification under the Acquisition Agreement. The complaint sought indemnification for losses which could arise out of a class action lawsuit filed by Maryland residents against OWC in Dauphin County. Like the proceedings initiated by the Maryland Attorney General, this class action apparently included allegations of unfair and deceptive trade practices. In their Philadelphia County action, appellants alleged that appellees had misrepresented the legality of OWC’s business practices, and the nature of the Maryland proceeding, and that these misrepresentations constituted breaches of contract and warranty under the Acquisition Agreement.
In addition, in their Answer/New Matter and Counterclaim filed in the Monroe County action, the appellants alleged that the Settlement Agreement was void due to appellees’ fraud and breaches, and that appellants were entitled to indemnification under the Acquisition Agreement.
*513Appellees filed a motion to coordinate the Monroe and Philadelphia County actions in Monroe County pursuant to Pa.R.Civ.P. 213.1. The Rule provides, in pertinent part:
(a) In actions pending in different counties which involve a common question of law or fact or which arise from the same transaction or occurrence, any party, with notice to all other parties, may file a motion requesting the court in which a complaint was first filed to order coordination of the actions. Any party may file an answer to the motion and the court may hold a hearing.
(c) In determining whether to order coordination and which location is appropriate for the coordinated proceedings, the court shall consider, among other matters:
(1) whether the common question of fact or law is predominating and significant to the litigation;
(2) the convenience of the parties, witnesses and counsel;
(3) whether coordination will result in unreasonable delay or expense to a party or otherwise prejudice a party in an action which would be subject to coordination;
(4) the efficient utilization of judicial facilities and personnel and the just and efficient conduct of the actions;
(5) the disadvantages of duplicative and inconsistent rulings, orders or judgments;
(6) the likelihood of settlement of the actions without further litigation should coordination be denied____
The comment to Rule 213.1 explains that its purpose is to avoid multiple trials and proceedings, to provide economy to the parties and the judicial system and to avoid the possibility of inconsistent rulings and orders. See also Lincoln General Ins. Co. v. Donahue, 151 Pa.Cmwlth. 297, 616 A.2d 1076 (1992).
The trial court in Monroe County granted appellees’ motion to coordinate, finding that the two actions involved predominant common questions of law and fact, and arose out of the same transaction or occurrence, i.e., the original Acquisition *514Agreement. The appellants timely filed their appeal to this court.1
We may reverse the trial court’s order of coordination if there was an abuse of discretion. Richardson Brands, Inc. v. Pennsylvania Dutch Co., 405 Pa.Super. 202, 592 A.2d 77 (1991). I agree that the two actions involve common questions of law and fact which predominate, and that the cases properly may be coordinated. However, I would reverse the trial court’s order coordinating the actions in Monroe County, because the parties previously agreed to submit to the exclusive jurisdiction of the courts in Philadelphia County.
Section 13.13 of the March 1988 Acquisition Agreement provides:
Consent to Jurisdiction. The parties hereby irrevocably consent and submit to the exclusive jurisdiction of any Pennsylvania state court or federal court sitting in the county of [Philadelphia], Pennsylvania, over any suit, action or proceeding which arises out of or relates in any way to this Agreement or any judgment entered in any court in respect hereof, and consents to service of process by registered mail, return receipt requested, or by any other manner provided by Pennsylvania law. The parties hereby waive the right to contest the jurisdiction and venue of the said courts located in Philadelphia, Pennsylvania on the grounds of inconvenience of [sic] otherwise.
R. 32a-33a (emphasis added).
The parties have conceded that both actions arise out of and are related to the Acquisition Agreement. In preliminary objections raising the issue of venue in the Monroe County action, appellants argued that the action “arises out of or relates to the Acquisition Agreement and is therefore subject to the applicable forum selection clause.” R. 35a. In their brief to this court and in their Motion to Coordinate, the appellees also allege that the two lawsuits arise from the same *515transaction and occurrences. Appellees’ Brief at 9, 13; R. 97a. Both actions involve the central question of whether or not the appellees remain obligated under the indemnification provisions of the Acquisition Agreement with respect to the Maryland Claim. A secondary common question is whether the appellees’ alleged fraud or breach has invalidated the July 1990 Settlement Agreement.
Moreover, the Settlement Agreement is directly related to the Acquisition Agreement and provides a specific solution to problems arising under the Acquisition Agreement; the Settlement Agreement purports to compromise a demand for indemnification under the Acquisition Agreement. Conceptually, the Settlement Agreement could be considered an addendum to the Acquisition Agreement. Therefore, a common question in both the Monroe County and Philadelphia County lawsuits relates to the validity and scope of this addendum. Finally, the legal issues of fraud and breach are common to both lawsuits, as are the factual findings necessary to prove each allegation. Therefore, I believe that coordination of the actions by the trial court was proper.
However, this same circumstance compels the conclusion that the actions must be maintained in Philadelphia County, in accordance with the agreement’s forum selection clause.2 I do not see how the effect of the forum selection clause can be ignored. Our supreme court has held that:
The modern and correct rule is that, while private parties may not by contract prevent a court from asserting its jurisdiction or change the rules of venue, nevertheless, a court in which venue is proper and which has jurisdiction should decline to proceed with the cause when the parties have freely agreed that the litigation shall be conducted in *516another forum and where such agreement is not unreasonable at the time of litigation ... The party seeking to obviate the agreement has the burden of proving its unreasonableness.
Central Contracting Co. v. C.E. Youngdahl & Co., 418 Pa. 122, 133-34, 209 A.2d 810 (1965).
The trial court dismissed the forum selection clause by stating that “in view of Philadelphia’s well publicized Court congestion and delay, it would be several years before this civil proceeding would reach trial,” and that it therefore would be “unreasonable” to give effect to the forum selection clause. Opinion on Preliminary Objections at 4. I believe this was an abuse of discretion. If we were to adopt this reasoning, we would be holding that parties could never agree to choose Philadelphia County as the forum for disputes arising out of duly executed contracts. I cannot agree with the trial court’s opinion that any lawsuit filed in Philadelphia County automatically will “seriously impair plaintiffs ability to pursue their [sic] cause of action.” Id.3 I would hold that appellees, who seek to obviate the forum selection clause, did not meet their burden to prove that the clause is unreasonable. Central Contracting, supra.
I note that the Monroe County court, in which the motion to coordinate was filed, had the authority to coordinate the actions and transfer them to Philadelphia County. Pa. R.Civ.P. 213.1(d)(2). I would reverse the trial court’s order insofar as it transferred the Philadelphia County action to Monroe County, and remand for entry of an order transferring both actions to Philadelphia County.

. I note that this interlocutory order is directly appealable as of right under Pa.R.App.P. 311(c), as an order changing venue. See Richardson Brands, Inc. v. Pennsylvania Dutch Co., 405 Pa.Super. 202, 592 A.2d 77, 81 (1991).

. Appellees’ argument that their Monroe County complaint involved only the July 1990 Settlement Agreement, and that the forum selection clause of the Acquisition Agreement therefore should not apply, is just a smokescreen. Appellees’ Brief at 14. Appellees cannot have it both ways. They are correct that the actions involve common questions of law and fact, and may be coordinated. At the same time, however, appellees should not be permitted to escape the application of the forum selection clause where both actions involve the indemnification provisions of the Acquisition Agreement.

. Appellants point out that the Philadelphia County action appeared on the trial list on November 5, 1992. In any event, delay in the Philadelphia courts certainly existed at the time the forum selection clause was agreed upon, in March 1988, and the parties ostensibly considered this fact in making their agreement.