Court Opinion

ID: 4022977
Source: CourtListenerOpinion
Date Created: 2016-08-09 23:10:53.599343+00
Date Added: 2024-06-11T14:37:29.281010
License: Public Domain

J-A15037-16

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

JANE DOE, AS PARENT AND NATURAL                        IN THE SUPERIOR COURT OF
GUARDIAN OF JOHN DOE, A MINOR                                PENNSYLVANIA

                             Appellant

                       v.

THE WOODS SCHOOLS, CRESTWOOD
SERVICES, INC., WOODS SERVICES,
INC. AND WOODS SERVICES
FOUNDATION

                             Appellee                      No. 2700 EDA 2015

                   Appeal from the Order Entered July 21, 2015
             In the Court of Common Pleas of Philadelphia County
             Civil Division at No(s): February Term, 2015 No. 1586

BEFORE: FORD ELLIOTT, P.J.E., DUBOW, J., and JENKINS, J.

MEMORANDUM BY JENKINS, J.:                               FILED AUGUST 09, 2016

       Jane Doe, the parent and natural guardian of John Doe, a minor,

appeals    an    order      sustaining   appellees’1   preliminary   objections   and

transferring venue to the Court of Common Pleas of Bucks County.                  We

affirm.

       On February 12, 2015, Jane Doe filed this civil action in the Court of

Common Pleas of Philadelphia County. Her complaint alleged that she is the

parent of John Doe, a blind and mentally retarded minor who lives at the
____________________________________________

1
  Appellees include the Woods Schools, Crestwood Services, Inc., Woods
Services, Inc. (“WSI”) and Woods Services Foundation (collectively “the
Woods entities”).

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Woods Schools, a full time residential care and treatment center in

Langhorne, Bucks County.

      The complaint alleged that on July 14, 2013, a Woods Schools

employee raped John Doe on school premises. Based on this incident, Jane

Doe sought damages against the Woods entities for negligent supervision

and other torts. All defendants filed preliminary objections alleging improper

venue under Pa.R.Civ.P. 1006. The court ordered discovery on the issue of

venue and subsequently entered an order transferring venue to Bucks

County.   Doe filed a timely appeal, and both Doe and the court complied

with Pa.R.A.P. 1925.

      Doe raises one argument in this appeal:

      Whether the Trial Court erred in sustaining the [Woods Entities’]
      Preliminary Objection and Memorandum of Law in support
      thereof and transferring venue to the Bucks County Court of
      Common Pleas when [Doe’s] Complaint and limited discovery,
      including deposition testimony, educe that [the Woods Entities]
      regularly conduct business in Philadelphia County?

Brief For Appellant, at 3. This argument consists of two subarguments: (1)

the Woods entities’ contacts with Philadelphia are sufficient to establish

venue in Philadelphia; and (2) Tabor Children’s Services, Inc.’s contacts with

WSI are attributable to the Woods Entities for purposes of determining

venue. We address each subargument separately.

      Parties who file preliminary objections to venue bear the burden of

proving that a change of venue is necessary.            Zampana-Barry v.

Donaghue, 921 A.2d 500, 503 (Pa.Super.2007). We review the trial court’s

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decision to transfer venue for abuse of discretion.         Schultz v. MMI

Products, Inc., 30 A.3d 1224, 1230 (Pa.Super.2011). Each case turns on

its individual facts. Id. at 1227.

      Doe’s first subargument is that the Woods entities’ contacts with

Philadelphia are sufficient to establish venue in Philadelphia County.

Pennsylvania Rule of Civil Procedure 1006 provides in pertinent part:

      Rule 1006. Venue. Change of Venue

      (a) Except as otherwise provided by subdivisions (a.1), (b) and
      (c) of this rule, an action against an individual may be brought in
      and only in a county in which

      (1) the individual may be served or in which the cause of action
      arose or where a transaction or occurrence took place out of
      which the cause of action arose or in any other county
      authorized by law, or

      ***

      (b) Actions against the following defendants, except as otherwise
      provided in subdivision (c), may be brought in and only in the
      counties designated by the following rules: political subdivisions,
      Rule    2103;    partnerships,    Rule   2130;     unincorporated
      associations, Rule 2156; corporations and similar entities,
      Rule 2179.

      (c)(1) Except as otherwise provided by paragraph (2), an action
      to enforce a joint or joint and several liability against two or
      more defendants, except actions in which the Commonwealth is
      a party defendant, may be brought against all defendants in any
      county in which the venue may be laid against any one of the
      defendants under the general rules of subdivisions (a) or (b) …

      (e) Improper venue shall be raised by preliminary objection and
      if not so raised shall be waived. If a preliminary objection to
      venue is sustained and there is a county of proper venue within
      the State the action shall not be dismissed but shall be
      transferred to the appropriate court of that county. The costs

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      and fees for transfer and removal of the record shall be paid by
      the plaintiff.

In turn, Pennsylvania Rule of Civil Procedure 2179 provides, with exceptions

not relevant here, that a personal action against a corporation or similar

entity may be brought in and only in:

      (1) the county where its registered office or principal place of
      business is located;
      (2) a county where it regularly conducts business;
      (3) the county where the cause of action arose; or
      (4) a county where a transaction or occurrence took place out of
      which the cause of action arose.

Pa.R.C.P. 2179(a).

      During a deposition on the venue question, Scott Spreat, WSI’s chief

executive officer, testified that the Woods Schools are located in Bucks

County and are operated by WSI. The schools accept residents from across

the Commonwealth and beyond, but Philadelphia is the largest provider of

residents. Approximately 23% of the residents come from Philadelphia, and

5% of WSI’s total income comes from contracts with Philadelphia agencies.

WSI has a contract with the Philadelphia School District under which the

School District transports students to the Woods Schools for classes. Spreat

admitted that the contracts with Philadelphia agencies are a necessary

component to WSI’s business.        WSI also accepts residents from the

Philadelphia Department of Human Services and CBH, which handles mental

health issues for children in Philadelphia. When deciding whether to accept

an applicant, WSI sends a representative to his home, whether it be in

Philadelphia or elsewhere, to evaluate him and determine if he is a good fit.

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       A business entity must perform acts in a county of sufficient quality

and quantity to establish venue in that county. Zampana-Barry, 921 A.2d

at 503. In this case, there is a sufficient quantity of acts to establish venue

in Philadelphia in this case, but the quality of acts is insufficient.

       The quality of a business entity’s acts is sufficient

       if [it] performs acts in a county that directly further or are
       essential to [its] business objective; incidental acts in the county
       are not sufficient to meet the quality aspect of the test.
       [Purcell v. Bryn Mawr Hospital, 579 A.2d 1282, 1284 (1990)]
       Acts that aid a main purpose are collateral and incidental while
       those necessary to an entity’s existence are direct. Id.
       (incidental acts include advertising, solicitation of business from
       a county, education programs for personnel in county, hiring of
       personnel from the county, and purchase of supplies from
       county); see also Krosnowski v. Ward, 836 A.2d 143, 147
       (Pa.Super.2003) (en banc) (business referrals to and from an
       independently operated business entity in another county do not
       establish venue in that county as referrals were in aid of main
       business purpose and not actual conduct of business in that
       county).

Zampana-Barry, 921 A.2d at 503-04.2
____________________________________________

2
  For decisions in which contacts were sufficient in quality, see Zampana-
Barry, 921 A.2d at 505 (in legal malpractice action against law firm, firm’s
acts in Philadelphia were of sufficient quality to show that firm regularly
conducted business in Philadelphia; firm’s sole objective was to represent
clients in legal actions, such representation was essential to firm’s existence,
and firm did work in Philadelphia to further this sole business objective);
Monaco v. Montgomery Cab Co., 208 A.2d 252, 256 (Pa.1965) (taxi
company regularly conducted business in Philadelphia County by dropping
off customers there, since “acts of driving into Philadelphia County at the
request of customers and collecting fares there were … directly essential to
and in furtherance of corporate objects and, therefore, were of sufficient
quality”). For cases holding that contacts were insufficient in quality, see
Fritz v. Glen Mills Schools, 840 A.2d 1021, 1024 (Pa.Super.2003) (fact
that students from Philadelphia County attended school in Delaware County
(Footnote Continued Next Page)

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      Acts are sufficient in quantity when they are sufficiently continuous so

as to be considered habitual. Purcell, 579 A.2d at 1284. For example, we

held in Zampana-Barry that a law firm’s acts were of sufficient quantity for

purposes of establishing venue in Philadelphia County where the firm

conducted 3-5% of its legal services in Philadelphia for many years.3

                       _______________________
(Footnote Continued)

did not mean that school performed acts in furtherance of its main purpose
in Philadelphia); Masel v. Glassman, 689 A.2d 314, 318 (Pa.Super.1997)
(venue not proper in Philadelphia where hospital provided all of its medical
services in Bucks County, and patients from Philadelphia traveled to hospital
facilities in Bucks County).
3
  For other decisions that acts were sufficient in quantity, see Canter v.
American Honda Motor Corp., 231 A.2d 140 (Pa.1967) (venue proper in
Philadelphia where Delaware County car dealership regularly conducted 1-
2% of business in Philadelphia by traveling into Philadelphia to demonstrate
cars and complete sales); Monaco, supra (although taxi company was
prohibited from picking up customers in Philadelphia, venue was proper in
Philadelphia because it obtained 5-10% of gross revenue from picking
customers up in Montgomery County and dropping them off in Philadelphia).
For decisions that the quantity of acts were insufficient, see Singley v.
Flier, 851 A.2d 200, 203 (Pa.Super.2004) (quantity of Villanova University’s
acts insufficient to establish venue in Philadelphia, even though it held three
courses in Philadelphia and many Philadelphia residents attend Villanova,
because Villanova did not have Philadelphia campus or own or operate real
estate there); Mathues v. Tim-Bar Corp., 652 A.2d 349, 351
(Pa.Super.1994) (venue improper in employee’s action against employer in
Montgomery County, where employer’s offices were in York and Adams
Counties, and employer had “isolated and limited” acts in Montgomery
County and only 2-3 sales transactions there); Battuello v. Camelback Ski
Corp., 598 A.2d 1027, 1029-30 (Pa.Super.1991) (venue in Philadelphia
improper in personal injury action against Monroe County ski resort, despite
plaintiff’s claim that Philadelphia-based tour company regularly sent
customers to ski resort, where only 5% of resort’s customers were from
Philadelphia, less than 1% of resort’s business came from tour company,
(Footnote Continued Next Page)

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      Here, 23% of the residents at the Woods Schools come from

Philadelphia, and 5% of WSI’s total income comes from contracts with

Philadelphia agencies. Thus, the quantity of acts in Philadelphia is sufficient

to establish venue there.          On the other hand, the quality of the Woods

entities’ contacts with Philadelphia is insufficient. The purpose of the schools

is to provide residential care and educational opportunities to individuals

with disabilities. This core function takes place in Bucks County, where

school residents receive the full panoply of services, including housing,

education and healthcare, such as doctors’ visits and mental health

treatment. Similar to Fritz and Masel, the fact that many individuals from

Philadelphia obtain services from the Woods Schools in Bucks County is not

sufficient to establish venue in Philadelphia.

      Doe’s second subargument is that the contacts of Tabor Children’s

Services, Inc. with WSI should be attributable to the Woods Entities for

purposes of establishing venue in Philadelphia. We disagree.

      Doe argues: (1) Tabor Children’s Services, Inc. (“Tabor”), a non-party

which operates in Philadelphia, is a subsidiary of Woods Resources, another

non-party; (2) Woods Resources and WSI are “essentially the same entity”

(i.e., alter egos); (3) therefore, Tabor is effectively a subsidiary of WSI; and

(4) Tabor’s activities establish venue in Philadelphia.
                       _______________________
(Footnote Continued)

and number of Philadelphia season pass holders was extremely small in
relation to total number of season passes).

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       To elaborate, Woods Resources, a non-party, is a corporation affiliated

with WSI.      Woods Resources and WSI each have their own boards of

directors, which nominally operate independently of one another. In reality,

there is more than a little overlap, because Woods Resources’ board

members are also members of WSI’s board, and WSI and Woods Resources

share the same office complex.           Doe also contends that WSI and Woods

Resources share the same bank account.4           As recently as February 2015,

Woods Resources’ and WSI’s boards had identical membership. On at least

one occasion, Woods Resources’ board adjourned and then immediately

convened as WSI’s board, substituting one hat for another.

       Woods Resources has an affiliate agreement with Tabor, which

operates Tabor House in the Germantown section of Philadelphia. Although

Tabor has a separate board of directors and separate employees from Woods

Resources, Doe claims that Woods Resources pays Tabor’s operation costs

from a bank account that Woods Resources shares with WSI.            Thus, Doe

concludes, Tabor is a subsidiary of Woods Resources, which makes Tabor a

subsidiary of Woods Resources’ alter ego, WSI.

____________________________________________

4
  Doe’s claim that that Woods Resources and WSI share a bank account is
questionable. As support for this claim, Doe cites to page 24 of the
transcript of oral argument on the Woods entities’ preliminary objections. In
this excerpt, counsel for the Woods entities described the overall structure of
the Woods entities, but she did not explicitly state that Woods Resources
and WSI share a bank account. Nevertheless, for purposes of this appeal
only, we will assume that WSI and Woods Resources share a bank account.

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      Although Doe’s argument has some intuitive appeal, it is not in

harmony with the law. Corporations and their subsidiaries are separate and

distinct legal entities.   Shared Communication Services of 1800 JFK

Boulevard, Inc. v. Bell Atlantic Properties, Inc., 692 A.2d 570, 573

(Pa.Super.1997).     The subsidiary’s acts are not imputed to the parent

corporation for the purpose of establishing venue against the parent.

Wimble v. Parx Casino and Greenwood Gaming & Entertainment,

Inc., 40 A.3d 174, 178-79 (Pa.Super.2012). In Wimble, a personal injury

action against a Bucks County casino (Greenwood Gaming), we affirmed the

transfer of venue from Philadelphia to Bucks County despite evidence of acts

in Philadelphia by the casino’s sister corporations. We reasoned:

      The entirety of Greenwood Gaming’s corporate activities occur in
      Bucks County. The underlying incident happened in Bucks
      County on the premises of Greenwood Gaming’s only business
      location. Greenwood Gaming’s advertising activities in
      Philadelphia do not amount to conducting business in that county
      …

      Like the trial court, we reject [the plaintiff’s] argument that the
      Philadelphia    operations    of   Greenwood       Gaming’s   sister
      corporations should be attributed to Greenwood Gaming itself for
      purposes of determining venue. Although a parent and a wholly-
      owned subsidiary share common goals, they are still recognized
      as    separate    and    distinct   legal    entities.     [Shared
      Communication, supra] [The plaintiff] does not cite, and we
      have not found, any case law supporting the notion that a
      corporation may be subject to venue based solely upon the
      business activities of a sister corporation in the jurisdiction in
      question.

Id. at 178-79. The same state of affairs exists today. Doe cites no caselaw,

state or federal, which subjects a corporation to venue based on the

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activities of its subsidiary.   Nor can we find any.   Thus, we decline to

attribute Tabor’s activities in Philadelphia to the Woods entities for the

purpose of deciding venue.

      For these reasons, we affirm the order sustaining the Woods entities’

preliminary objections and transferring venue to Bucks County.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/9/2016

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