Court Opinion

ID: 4382969
Source: CourtListenerOpinion
Date Created: 2019-04-01 19:39:57.980678+00
Date Added: 2024-06-11T13:31:19.625993
License: Public Domain

J-A21023-18

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 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, J., OLSON, J., and McLAUGHLIN, J.

DISSENTING MEMORANDUM BY OLSON, J.:                     FILED APRIL 01, 2019

      I agree with the bulk of the learned majority’s thorough and well-written

memorandum.        Indeed, I agree with the majority’s factual and procedural

recitation, with much of its able summary of our law and precedent, and with

its acknowledgement that we review the trial court’s venue decision under an

abuse of discretion standard. See Majority Memorandum at *5; see also

Krosnowski v. Ward, 836 A.2d 143, 146 (Pa. Super. 2003) (en banc) (“[a]

trial court's ruling on venue will not be disturbed if the decision is reasonable

in light of the facts. A decision to transfer venue will not be reversed unless

the trial court abused its discretion. . . . [I]f there exists any proper basis for
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the trial court's decision to grant the petition to transfer venue, the decision

must stand”) (quotations and citations omitted). Nevertheless, I respectfully

disagree with the majority’s conclusion that the trial court abused its discretion

in this case. I believe that the trial court’s determination – that the qualitative

acts Defendant Husqvarna Professional Products, Inc. (hereinafter “HPP”)

performed in Philadelphia County were not “so continuous and sufficient to be

termed general or habitual” – was reasonable in light of our fairly muddled

precedent and the facts of this case. Therefore, I would affirm the trial court

and must respectfully dissent from the learned majority’s decision.

      As the majority notes, the key issue on appeal is whether venue in

Philadelphia may be laid against HPP, as HPP is the only remaining defendant

that could arguably be deemed to “regularly conduct business” in Philadelphia

County. See Trial Court Opinion, 3/2/18, at 2; see also Appellants’ Brief at

16.   If venue in Philadelphia County is proper as to HPP, Appellants may

maintain their “action to enforce . . . joint and several liability against”

Defendants HPP, Husqvarna Group, and Trumbauer’s Lawn and Recreation,

Inc. in Philadelphia. See 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”).

      Pennsylvania Rule of Civil Procedure 2179 prescribes venue for personal

actions against corporations. See Pa.R.C.P. 1006(b) (“[a]ctions against the

following defendants, except as otherwise provided in subdivision (c), may be

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brought in and only in the counties designated by the following rules: . . .

corporations and similar entities, Rule 2179”). As is relevant to the current

appeal, Rule 2179(a)(2) declares: “a personal action against a corporation or

similar entity may be brought in and only in . . . a county where it regularly

conducts business.” Pa.R.C.P. 2179(a)(2).1

       Our Supreme Court has held that the determination of whether a

corporation “regularly conducts business” in a particular county depends upon

the “quality” and “quantity” of the business conducted within the county.

Thus, for a corporation to “regularly conduct business” in a county:

         the business engaged in must be sufficient in quantity and
         quality. The term “quality of acts” means those directly,
         furthering, or essential to, corporate objects; they do not
         include incidental acts. By “quantity of acts” is meant those
         which are so continuous and sufficient to be termed general
         or habitual. A single act is not enough.

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

and some quotations omitted), quoting Shambe v. Delaware & H.R. Co.,

135 A. 755, 757 (Pa. 1927).

       In essence, the venue criteria found at Rule 2179(a)(2) “provide[] a

theory of transient jurisdiction by counties in which the corporation is present

by virtue of its business activities or contacts.   In this circumstance, and

provided that the business contacts are more than incidental, a corporation

____________________________________________

1Rule 2179 lists other circumstances in which a plaintiff may properly bring a
personal action against a corporation in a certain county. See Pa.R.C.P. 2179.
However, no other circumstance is applicable to the current appeal. See
Appellants’ Brief at 16.

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can be compelled to defend itself.” Purcell v. Bryn Mawr Hosp., 579 A.2d
1282, 1284 (Pa. 1990). The rationale and purpose of the rule is to “permit a

plaintiff to institute suit against the defendant in the county most convenient

for him and his witnesses” while, at the same time, assuring that “the

corporation which has been sued ha[s] sufficient connection to the county.”

Burdett Oxygen Co. v. I.R. Wolfe & Sons, Inc., 249 A.2d 299, 302 (Pa.

1969) (quotations and citations omitted); Purcell, 579 A.2d at 1286.

      As the trial court and the parties agree, “there is no question Defendant

[HPP’s] activities in Philadelphia satisfy the ‘quality’ prong” of the “regularly

conducts business” test.      Trial Court Opinion, 3/2/18, at 5; see also

Appellants’ Brief at 19; Appellees’ Brief at 22. This is because:

        Defendant [HPP] is in the business of distributing consumer
        outdoor products, such as lawnmowers, to retailers, who in
        turn sell the products to consumers. The uncontroverted
        evidence shows Defendant [HPP] furthers this business
        objective by distributing products to two Philadelphia
        retailers, predominantly DL Electronics, Inc. For this reason,
        the activities of [HPP] satisfy the “quality” prong of the [test].

Trial Court Opinion, 3/2/18, at 5 (citations and footnote omitted).

      The dispute in the case at bar centers upon the “quantity” prong of the

test. As the trial court explained, Appellants failed to demonstrate that HPP’s

qualitative acts were “so continuous and sufficient to be termed general or

habitual”:

        Here, the evidence of record shows that in 2016, only
        $75,310.00 out of Defendant [HPP’s] $1.393 billion national
        revenue came from direct sales in Philadelphia County; this
        amounts to 0.005% of Defendant [HPP’s] annual revenue

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         that is attributable to direct sales in Philadelphia County. The
         figures from 2014 and 2015 are similar. This de minimis
         amount of business . . . is not general and habitual. . . .

Trial Court Opinion, 3/2/18, at 6.

       On appeal, Appellants claim that the trial court erred in concluding that

HPP’s qualitative acts in Philadelphia do not satisfy the “quantity” prong of the

test. In particular, Appellants claim, the record evidence demonstrates that

“[HPP’s] consumer outdoor products are continuously offered for sale in

Philadelphia County, and because the sales of those products in Philadelphia

County are occurring on a frequent and recurring basis,” HPP’s qualitative acts

are “so continuous and sufficient to be termed general or habitual.”

Appellants’ Brief at 28.2 Moreover, Appellants claim that the trial court erred

____________________________________________

2 Appellants also claim that the trial court erred when it failed to take into
consideration the “[HPP’s] products sold at big box retailers such as Lowe’s.”
Appellants’ Brief at 26. However, as the trial court explained, HPP does not
sell its products to the “big box retailers” in Philadelphia:

         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. Once the [HPP] 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.

Trial Court Opinion, 3/2/18, at 3 (emphasis added).

Moreover, and regardless, even if these sales could be considered “direct” –
and not “incidental” – acts of HPP in Philadelphia, Appellants’ claim of error
immediately fails because the record contains no evidence regarding the
quantity of the “big box retailer” sales. Therefore, Appellants cannot establish

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when, in concluding that HPP’s acts did not satisfy the “quantity” prong, the

trial court “focus[ed] exclusively on the numerical result obtained from

dividing the supposed total amount of sales in Philadelphia County by the total

amount of sales nationwide.” Id. at 20. The majority agrees with Appellants

and concludes that the trial court abused its discretion in this case. I disagree.

I believe that the trial court was well within its discretion when it sustained

the preliminary objections to venue.

       As noted, for purposes of establishing venue, our Supreme Court has

defined the term “quantity of acts” as acts that “are so continuous and

sufficient to be termed general or habitual.      A single act is not enough.”

____________________________________________

that any alleged trial court error caused them prejudice. See Richmond v.
Otter, 70 A.2d 314, 316 (Pa. 1950) (“[h]armful error is requisite to a reversal
upon appellate review”).

On appeal, Appellants fault HPP and, strangely, the trial court for the absence
of this evidence. Appellants’ Reply Brief at 11-12. However, the trial court’s
July 7, 2017 rule to show cause did not limit the scope of the discovery
applicable to the issue of venue; Appellants did not file a motion to compel
the data; and, Appellants do not claim that any trial court ruling caused the
evidence to be absent from the record. Instead, Appellants apparently blame
the trial court for its later determination – in its Rule 1925(a) opinion – that
the “big box retailer” sales were “legally irrelevant to determining whether
[HPP] regularly conducted business in Philadelphia County.” See id. at 11.
The trial court’s determination that the “big box retailer” sales did not satisfy
the “quality” prong of the test came after the completion of discovery and
after the September 6, 2017 oral argument – and, thus, after Appellants were
given the opportunity, and failed, to demand additional discovery to establish
the quantity of sales of HPP products by big box retailers in Philadelphia
County. Therefore, I would conclude that Appellants cannot obtain relief on
this claim.

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Monaco, 208 A.2d at 256 (corrections and some quotations omitted).

Further, with respect to the “quantity” prong, our Supreme Court has held:

        It must be remembered that it is the word “regularly” which
        we are construing and not “principally.” A corporation may
        perform acts “regularly” even though these acts make up a
        small part of its total activities. . . . The question is whether
        the acts are being “regularly” performed within the context
        of the particular business.

Id. (citations omitted).

      In applying the above language, both our Supreme Court and this Court

have held that the “quantity” prong of the test is satisfied where even one to

two percent of a corporation’s total business is consummated in a particular

county. See Canter v. Am. Honda Motor Corp., 231 A.2d 140 (Pa. 1967)

(the foreign defendant “regularly conducted business” in Philadelphia County

where the defendant admitted that “1 or 2 percent [of its total business] was

consummated in Philadelphia;” as to the “quantity” prong of the test, “1 to 2

percent of the total business was sufficient to satisfy the test . . . as to

quantity”); see also Monaco, 208 A.2d at 252 (a taxi cab company “regularly

conducted business” in Philadelphia County, where “[f]rom five to ten percent

of [the company’s] gross business . . . [in] fares [were] collected in

Philadelphia County at the end of rides which involve[d] driving a cab” into

Philadelphia); Zampana-Barry v. Donaghue, 921 A.2d 500, 503 (Pa. Super.

2007) (“quantity” prong of the test satisfied as to Philadelphia County, where

the Delaware County law firm “consistently [] generated approximately three

to five percent of its gross business revenue from cases in Philadelphia

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County”); Lugo v. Farmers Pride, Inc., 967 A.2d 963 (Pa. Super. 2009)

(concluding that the Lebanon County corporation “regularly conducted

business” in Philadelphia County; as to the “quantity” prong of the test, it was

satisfied because “appellee admits that it sells its products to brokers in

Philadelphia County and that the amount constituted less than 0.5% of its

total premium chicken sales and approximately 1.9% of its total B grade

product sales as of July 2006, when appellants first filed suit;” the percentages

of total sales “approximate[] the[] amounts” that our Supreme Court

confronted in Cantor and, thus, “we likewise find that [the defendant]

regularly conducted business in Philadelphia County”).

      Nevertheless, this Court has also held that the “quantity” prong of the

“regularly conducts business” test is not satisfied where a corporation

conducts an “extremely small” percentage of its total business in a county –

even if it conducts that business regularly.    Battuello v. Camelback Ski

Corp., 598 A.2d 1027, 1029-1030 (Pa. Super. 1991).             For example, in

Singley v. Flier, 851 A.2d 200 (Pa. Super. 2004), the plaintiff sued Villanova

University in Philadelphia County, for personal injuries she sustained while on

Villanova’s Delaware County campus.       The trial court sustained Villanova’s

preliminary objections to venue and held that Villanova did not “regularly

conduct business” in Philadelphia County. Id. at 201.

      On appeal, the plaintiff cited to evidence that Villanova “offers three

graduate level courses in its Electrical and Computer Engineering (ECE)

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Department at the Philadelphia Naval Yard” – and that it had “offered these

courses for many years.” Id. at 202-203. Plaintiff thus claimed:

        because the instruction of students and “transmission of
        knowledge” is essential to Villanova's corporate object, the
        classes that the University offers in Philadelphia County are
        of sufficient “quality” to satisfy the regularly conducts
        business test. [Further, these classes] . . . satisfy the
        “quantity” test “because Villanova has offered these courses
        for many years.”

Id. (citations omitted).

      This Court held that the plaintiff’s claim failed. Of importance to the

case at bar, we explicitly held:

        even if we credit [plaintiff’s] unsupported contention [that]
        these courses have been offered for “many years,” we would
        still find that the quantity of these contacts – three graduate
        level courses – is lacking when viewed in light of the
        University's entire academic program, which includes several
        graduate degrees, as well as a law school.

Id. at 203 (citations omitted).

      Therefore,   the     Singley   Court   held   that   even   consistent   and

longstanding business activity in a particular county is not enough to satisfy

the “quantity” prong of the test. Instead, as we held, to satisfy the “quantity”

prong, the qualitative acts must be “so continuous and sufficient to be termed

general or habitual” – and, to determine whether the qualitative acts are

sufficient, an important consideration is the percentage of total business

consummated in the county. See id.; see also Monaco, 208 A.2d at 256

(emphasis added).     Similar results were obtained in PECO Energy Co. v.

Philadelphia Suburban Water Co., 802 A.2d 666 (Pa. Super. 2002) and in

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Battuello, 598 A.2d at 1027. See PECO Energy Co., 802 A.2d at 666 (venue

in Philadelphia held improper because Philadelphia Suburban Water Co.

(“PSWC”) did not “regularly conduct business” in the county; specifically,

PSWC’s contacts with Philadelphia did not satisfy either the “quality” or

“quantity” prong of the test, where “approximately one mile of PSWC's

transmission pipeline runs through Philadelphia County, although it provides

no water to Philadelphia County residents and accounts for only .036% of

PSWC's overall piping system. Furthermore, [PSWC made] a one-time

purchase in the year 2000 of 300,000 gallons of water from the City of

Philadelphia in Philadelphia County, which accounted for only .0007% of

PSWC's overall water purchases over the last ten years”); Battuello, 598 A.2d

at 1027 (in plaintiffs’ personal injury lawsuit filed in Philadelphia County

against Camelback, a Monroe County ski area, venue was not proper in

Philadelphia, even though “a Philadelphia tour company regularly sends its

customers to Camelback and . . . Philadelphia residents ski at Camelback;”

the contacts with Philadelphia failed the “quantity” prong of the test because

“the number of Philadelphia season pass holders is extremely small in relation

to the total number of season passes sold” and “less than one percent of

Camelback's business consists of skiers sent by [the tour company, which] ...

is far too small to qualify as ‘general or habitual’”).

      In the case at bar, the only record evidence of HPP’s direct acts in

Philadelphia is that HPP derives approximately $75,000.00 of revenue per year

in direct, Philadelphia sales to two authorized dealers, and that these sales

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account for a mere 0.005% of HPP’s annual national revenue.3 The trial court

considered this evidence and concluded that HPP’s qualitative acts in

Philadelphia were “de minimis” and, thus, were not “so continuous and

sufficient to be termed general or habitual.” Trial Court Opinion, 3/2/18, at

6.

       In this case, the majority holds that the trial court abused its discretion

when, in concluding that HPP’s acts did not satisfy the “quantity” prong, it

focused upon the percentage of HPP’s total business consummated in

Philadelphia County. According to the majority, it would have placed more

emphasis on the fact that HPP is a large, multi-billion dollar corporation that

had “at least one authorized dealer [] in Philadelphia to which it delivered

products for sale” – and that it sold approximately $75,000.00 in product per

year in Philadelphia. See Majority Memorandum at *9.

____________________________________________

3 At oral argument, Appellants requested that we remand the case so that
additional discovery may be conducted regarding the quantity of Husqvarna
products sold at Philadelphia “big box retailers.” Appellants did not request
this relief either at the trial court level or in their brief on appeal. Therefore,
the claim is waived. Pa.R.A.P. 302(a) (“[i]ssues not raised in the lower court
are waived and cannot be raised for the first time on appeal”);
Commonwealth v. Spotz, 716 A.2d 580, 585 n.5 (Pa. 1999) (“[the
Pennsylvania Supreme Court] has held that an issue will be deemed to be
waived when an appellant fails to properly explain or develop it in his brief”).

Even if not waived, remand would not be appropriate under the facts of this
case. As previously noted, Appellants were given an opportunity to conduct
discovery relevant to the issue of venue. Appellants failed to take action at
the trial court level to obtain this information; therefore, remand would not
be proper, as Appellants are not entitled to a second bite at the proverbial
apple.

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      However, and respectfully, in rendering its decision, the trial court did

not consider irrelevant the dollar figure of HPP’s direct Philadelphia sales or

the fact that HPP is a large, multi-billion dollar corporation and it did not rely

solely on the percentage of HPP’s total sales conducted in Philadelphia.

Rather, the trial court’s opinion demonstrates that it considered the totality of

the evidence, but concluded that evidence of HPP’s de minimis percentage of

total business conducted in Philadelphia was important and weighty enough

to carry the day and to render venue in Philadelphia improper. See Trial Court

Opinion, 3/2/18, at 1-6 (trial court notes all of the evidence the majority cites,

but concludes that venue in Philadelphia is not proper because “in 2016, only

$75,310.00 out of [HPP’s] $1.393 billion national revenue came from direct

sales in Philadelphia County; this amounts to 0.005% of [HPP’s] annual

revenue that is attributable to direct sales in Philadelphia County. The figures

from 2014 and 2015 are similar. This de minimis amount of business . . . is

not general and habitual”).

      As our Supreme Court has emphasized:

        When a court comes to a conclusion through the exercise of
        its discretion, there is a heavy burden to show that this
        discretion has been abused. It is not sufficient to persuade
        the appellate court that it might have reached a different
        conclusion, it is necessary to show an actual abuse of the
        discretionary power. An abuse of discretion will not be found
        based on a mere error of judgment, but rather exists where
        the court has reached a conclusion which overrides or
        misapplies the law, or where the judgment exercised is
        manifestly unreasonable, or the result of partiality, prejudice,
        bias or ill-will. Absent an abuse of that discretion, we will
        not disturb the ruling of the trial court.

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Commonwealth v. Eichinger, 915 A.2d 1122, 1140 (Pa. 2007) (citations

omitted).

      From a review of our case law, it is apparent that, in determining

whether a corporation’s qualitative acts satisfy the “quantity” prong, our

Supreme Court and this Court have consistently looked at the percentage of

a corporation’s total business consummated within the county. Given this, I

believe that the majority is incorrect to assail the trial court’s method of

analysis.   Further, given the facts of this case and our chaotic precedent

regarding the specific metrics that suffice to fulfil the “quantity” prong, I

believe that the majority is incorrect to find that the trial court abused its

discretion in transferring venue. Specifically, in light of our precedent and the

facts of this case, it cannot be said that the trial court’s determination was

“manifestly unreasonable”     and   it   certainly cannot   be   said that   the

determination was “the result of partiality, prejudice, bias or ill-will.”   See

Nat’l Penn Bank, 672 A.2d at 328.

      In conclusion, I quote from Judge Klein’s concurring opinion in

Zampana-Barry, which I find particularly apt:

        in my opinion, there are no clear standards to guide the trial
        court in determining whether or not the “quantity” test has
        been met. Our case law is inconsistent and lacks specific
        guidelines for determining the appropriate quantity of
        contacts necessary to obtain venue over a corporation under
        Pa.R.C.P. 2179(a)(2). Whether or not the “quantity” test has
        been met is determined more by the gut feeling of the trial
        judge rather than by any objective standard. I note this
        because I believe that the matter at least merits clarification
        by a Court en banc, if possible.

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                                           ...

         As our case law has developed, it would be the rare case
         where we could say that the trial court erred no matter which
         way it ruled on the “quantity” test. I do not believe it serves
         justice to have such a loose standard. In many of these cases,
         it would be just as easy to achieve justice by going to the
         Atlantic City casinos and betting “red” or “black” on roulette
         as by having a judicial determination.

         As the majority notes, “quantity of acts” means those that
         are so continuous and sufficient as to be considered habitual.
         A single act is not enough. The determination of what
         quantity is sufficient to confer venue must be made on a
         case-by-case basis. See Purcell [579 A.2d at 1285]. The
         only problem is that there is no guidance in a close case. Is
         it 2%? 4%? 6%? 8%? It seems to depend less on the type of
         business than on the attitude of the trial judge.

                                           ...

         In my view, none of the cases offers any clear guidance for
         trial courts in determining what quantity of contacts is
         sufficient to confer venue over a corporation under Rule
         2179(a)(2). It appears that a plaintiff can file suit against a
         corporate defendant in any county where it conducts any
         amount of business, even if it is as little as 1 or 2%. I am
         concerned about the precedent we are setting by allowing
         venue to stand in Philadelphia County against a
         [corporation], where it is undisputed that none of the
         activities giving rise to the litigation arose in Philadelphia. We
         may be giving plaintiffs too much leeway in selecting a forum
         in which to litigate their claims against a corporation.

Zampana-Barry, 921 A.2d at 506-509 (Klein, J. concurring) (some citations

omitted).4
____________________________________________

4 Respectfully, Rule 2179(a)(2) and the majority’s decision today open the
Philadelphia County courts up to hearing and deciding cases that have no
factual relationship to Philadelphia – and to which Philadelphia has little

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       I respectfully dissent.

____________________________________________

interest. To be sure, HPP has no physical store, office, or employees in
Philadelphia; Appellants’ cause of action did not arise out of and is not related
to HPP’s activities in Philadelphia; no part of the “transaction or occurrence”
that led to Appellants’ injuries happened in Philadelphia; and, HPP’s
Philadelphia revenue accounts for a mere five-thousandths of one percent of
its national revenue. Yet, Philadelphia must bear the public costs associated
with hearing and deciding this case and those like it, including increased court
congestion, the consumption of judicial and staff resources, and the
expenditure of juror time.

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