Court Opinion

ID: 4171484
Source: CourtListenerOpinion
Date Created: 2017-05-24 19:16:46.368681+00
Date Added: 2024-06-11T14:39:12.750909
License: Public Domain

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

MAX FAUST                                         IN THE SUPERIOR COURT OF
                                                        PENNSYLVANIA
                            Appellant

                       v.

BAYERISCHE MOTOREN WERKE AG AND
BMW OF NORTH AMERICA, LLC A/K/A
“BMW, NA’ AND/OR “BMW” AND TAKATA
CORPORATION AND TK HOLDINGS, INC
AND N&H, LLC D/B/A HANNA MOTORS

                                                      No. 3468 EDA 2015

                 Appeal from the Order Entered October 15, 2015
              In the Court of Common Pleas of Philadelphia County
           Civil Division at No(s): November Term, 2014, No. 000656

BEFORE: PANELLA, J., LAZARUS, J., and FITZGERALD, J.*

DISSENTING MEMORANDUM BY PANELLA, J.                     FILED MAY 24, 2017

        In reviewing cases where the trial court has received evidence and

made findings of fact, we, as an appellate court, are not tasked with

determining how we weigh the facts of record. Rather, our task is to review

the trial court’s finding to see if it is supported by the record. If so, we must

accept it, even if we would have found differently. See, e.g., Richards v.

Ameriprise Financial, Inc., 152 A.3d 1027, 1034 (Pa. Super. 2016).

        Here, the trial court found that “BMW NA’s primary business purpose is

to sell or lease its vehicles to individual consumers,” Trial Court Opinion,
____________________________________________

*
    Former Justice specially assigned to the Superior Court.
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12/2/15, at 6. Furthermore, as the trial court notes, BMW NA cannot, as a

matter of law, actually consummate any sales of BMW vehicles in the state

of Pennsylvania, and most other states as well. See id., at nn. 8, 11. These

findings are well supported by the record. My esteemed colleagues in the

Majority disregard these findings. Accordingly, I respectfully dissent. A full

discussion follows.

      Jerry Matthews, Area Manager for BMW, NA, testified in his deposition

that he is “responsible for a group of dealers with the purpose of helping

them improve their … sales of cars, sales of service and parts.” N.T.,

Deposition, 2/19/15, at 8. When asked to detail this responsibility, Matthews

testified, “I work with the dealers on their marketing plans, I work with the

dealers in communicating our sales support efforts. I work with the dealers

on training issues … I work with the dealers on customer satisfaction issues.”

Id., at 15.

      The one possible exception is BMW, NA’s transactions with the

independently owned dealerships it covers. BMW, NA generates a certain

amount of revenue when it transfers a vehicle to a BMW dealership. See id.,

at 20, 103. The Majority seizes upon this portion of BMW, NA’s functions and

elevates it above all other evidence of record. I find this laser-like focus

inappropriate.

      Importantly, it is not clear from this record where else BMW, NA

derives revenue, but according to Matthews, all the revenue from the

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transfer of a vehicle to a dealership is then turned over to a local dealer

group for marketing purposes, with BMW adding to the amount. See id., at

20-21.1 Transfers of vehicles from BMW, NA to these dealers are described

as “an extremely detailed allocation of cars process.” Id., at 105. While this

is certainly an activity that should not be classified as marketing, there is no

evidence that allocating these vehicles to the dealerships is anything other

than an incidental function that supports the primary goal of BMW, NA,

which, as the trial court found, is to “sell or lease its vehicles to individual

consumers.”

       It most certainly does not constitute “sales” in a traditional sense

where a consumer is sold a requested number of goods at an agreed upon

price. Rather, it is an internal mechanism whereby BMW, NA evaluates which

dealerships to award vehicles to based upon their individual performances

and overall market needs.

       Thus, we are presented with a record that reveals a company whose

primary, if not sole, business objective is solicitation. While the Majority may

disagree with the trial court’s factual finding on BMW, NA’s primary business

objective, it should not usurp the fact-finding function by substituting its

judgment over the trial court’s well-supported finding.
____________________________________________

1
  Although the parties have not explicitly requested it of this Court, Iam
summarizing the testimony due to the parties’ agreement that this
testimony constitutes trade secrets and should be protected from
dissemination to the public. See id., at 19-20.

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      I conclude that such an entity is not immune to venue under Rule

2179(a)(2). In such cases, marketing efforts are necessary to the entity’s

existence and therefore qualify as directly furthering the entity’s business

objective. This is especially true where, as here, the entity does not

consummate any sales on its own, nor does it manufacture the goods it

markets.

      Our cases consistently emphasize that “each [venue] case rests on its

own facts.” Purcell, 579 A.2d at 246 (citation omitted). There are therefore

no bright line rules other than the distinction between those actions that are

necessary to the entity’s business objective and those that are merely

incidental.

      Thus, I believe that a business entity, whose primary, if not sole,

business objective is marketing, is not immune to venue under Rule

2179(a)(2). In such cases, marketing efforts are necessary to the entity’s

existence and therefore qualify as directly furthering the entity’s business

objective. This is especially true where, as here, the entity does not

consummate any sales on its own, nor does it manufacture the goods it

markets.

      While I can sympathize with Appellee’s argument that the most

appropriate forum for this case is Lancaster County, that is not the standard

that we must apply. Rather, we must give deference to the plaintiff’s choice

of forum, so long as venue is established under Rule 2179.

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         Furthermore, it is important to remember that the plaintiff does not

bear the burden of proof on this issue; it is the objecting party’s burden to

establish that the plaintiff’s choice does not satisfy Rule 2179. Any deficiency

in the evidence is to the detriment of the objecting party, not vice versa.

         Under these particular circumstances, I must conclude that the trial

court abused its discretion in finding that BMW, NA had met its burden in

establishing that the quality of its business contacts with Philadelphia County

were insufficient to establish venue. However, I do not reach the second

prong of the test, as the trial court has not yet rendered a finding on this

issue.

         Faust argues that it should be allowed to finish discovery on this issue

and requests a remand for this purpose. Specifically, on August 10, 2015,

the trial court ordered the parties to provide evidence on the issue of the

quantity of BMW, NA’s gross business revenue arising from sales of BMW

vehicles to Philadelphia County residents. The trial court acknowledges that

BMW, NA has failed to comply with this order. See Trial Court Opinion,

12/2/15, at 7, n. 9. However, it excuses this breach by concluding that the

quality of BMW, NA’s contacts were insufficient no matter the quantity.

         I conclude that the gross business revenues of BMW, NA derived from

Philadelphia County residents is irrelevant to the issue at hand. As noted, it

is uncontested, for purposes of this appeal, that BMW, NA does not engage

in sales of vehicles to the public. The record supports the conclusion that

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BMW, NA has no direct control over the sales activities of dealerships, which

are independent business entities.

     The current record is unclear concerning where BMW, NA derives all of

its income. Importantly, it is BMW, NA’s burden to establish that the

quantity of contacts is insufficient in order for its request for venue to be

transferred to be granted. It is unclear whether BMW, NA derives any

income directly from Philadelphia residents. Evidence may show that it does

not. However, since the trial court found that BMW, NA’s primary business

purpose is to sell or lease BMW vehicles to individuals, this is not the only

relevant factor. As I have noted, BMW, NA’s primary business purpose based

upon the record before us is marketing. Thus, a relevant consideration is the

quantity of marketing contacts BMW, NA has with Philadelphia County.

     However, I agree with BMW, NA that its actions in promoting national

marketing campaigns that penetrate the Philadelphia market are not

relevant contacts under this analysis. Rather, the analysis should focus on

any marketing activities that are based in Philadelphia County. For example,

procuring advertisements with Philadelphia County media outlets or direct

mailers that BMW, NA may have sent to Philadelphia residents.

     As I conclude that the trial court abused its discretion on the issue of

quality of contacts, I would remand this case to the trial court for an

examination of the quantity of BMW, NA’s marketing contacts in Philadelphia

County. Our standard of review requires deference to the trial court’s

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findings and conclusions. We cannot review a finding that the trial court has

not yet made. I would therefore vacate and remand for further proceedings.

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