Court Opinion

ID: 4367966
Source: CourtListenerOpinion
Date Created: 2019-02-14 17:35:37.748046+00
Date Added: 2024-06-11T14:48:39.954248
License: Public Domain

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    ALEXANDER MALOFIY                          :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    MEDIA REAL ESTATE COMPANY                  :   No. 12 EDA 2018

                Appeal from the Order Dated November 1, 2017
      In the Court of Common Pleas of Philadelphia County Civil Division at
                              No(s): 170300759

BEFORE:      BENDER, P.J.E., NICHOLS, J., and STEVENS, P.J.E.*

MEMORANDUM BY NICHOLS, J.:                           FILED FEBRUARY 14, 2019

        Appellant Alexander Malofiy appeals from the order sustaining, in part,

Appellee Media Real Estate Company’s preliminary objections to venue and

transferring this matter from Philadelphia to Delaware County.1        Appellant

claims that the trial court erred in failing to compel disclosure of Appellee’s

Philadelphia taxes and in transferring venue to Delaware County. We affirm.

        The trial court set forth the background of this matter as follows:

        This case arises out of a slip-and-fall incident that occurred in
        Media, Delaware County, Pennsylvania.          According to the
____________________________________________

*   Former Justice specially assigned to the Superior Court.

1 See Pa.R.A.P. 311(c) (“An appeal may be taken as of right from an order in
a civil action or proceeding changing venue, transferring the matter to another
court of coordinate jurisdiction, or declining to proceed in the matter on the
basis of forum non conveniens or analogous principles.”).
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       Complaint, [Appellant] Alexander M[a]lofiy rented an accounting
       office in a building owned by [Appellee] Media Real Estate
       Company, a Pennsylvania [limited2] partnership. On March 9,
       2015, [Appellant] slipped on black ice as he was exiting the
       building, sustaining injuries.

       On March 9, 2017, [Appellant] instituted this action in Philadelphia
       County by writ of summons. [Appellant] filed a Complaint on July
       10, 2017. Paragraph 50 of the Complaint averred that “[v]enue
       is proper in the Philadelphia County Court of Common Pleas under
       Pennsylvania Rules of Civil Procedure 2130, 2179, and 1006
       inasmuch, on information and belief, [Appellee] is an entity that
       regularly conducts business in Philadelphia.”

       [Appellee] filed preliminary objections as to improper venue, inter
       alia, on July 31, 2017, requesting a transfer to Delaware County.
       An oral argument and evidentiary hearing was held on October
       25, 2017.

       [Appellee] argued it had no residence, place of business, or
       registered office in Philadelphia, and no employees or agents did
       business in Philadelphia. As evidence, [Appellee] offered a July
       31, 2017 affidavit of [Strine], general partner of [Appellee], which
       affirmed the same.

       In response, [Appellant] contended [that Appellee] did regularly
       conduct business in Philadelphia. As proof, [Appellant] offered
       screenshots           of         [Appellee]’s           website,
       mediarealestate.com/featured-shortterm-listings.asp.         The
       website included multiple rental listings for properties located
       within Philadelphia County.

Trial Ct. Op., 3/19/18, at 1-2.

       On August 28, 2017, the trial court issued a rule to show cause as to

why Appellee’s preliminary objections should be granted on the issue of venue.

____________________________________________

2 See Appellee’s Preliminary Objections, 7/31/17, at ¶ 3; Aff. of Walter M.
Strine, Jr. (Strine), 7/31/17, at ¶ 2.

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Order, 8/28/17.      The order further scheduled an evidentiary hearing,

providing, in relevant part:

         An argument and evidentiary proceeding, limited solely to
         the issue of venue, is scheduled for October 25, 2017 . . . .

         The [c]ourt will accept affidavits or deposition
         evidence and upon application for good cause shown,
         live testimony, relevant to the issue of venue. All
         affidavits must be submitted to opposing counsel no later
         than thirty (30) days from the docketing of this Order. If
         the party receiving an affidavit wishes to depose the affiant
         on venue related issues, said deposition must occur between
         the date the affidavit is produced and the hearing date.
         Nothing in this Rule shall prevent the parties from taking
         venue-related depositions prior to the production of an
         affidavit.

Id. (emphasis added).

      On September 21, 2017, Appellant filed a motion for sanctions claiming

that Appellee failed to withdraw false statements in its preliminary objection

to venue and Strine’s supporting affidavit.     Specifically, Appellant asserted

that Appellee’s denial that it regularly conducted business in Philadelphia was

contradicted by its listings of rental properties in Philadelphia on its website.

      On October 12, 2017, Appellee filed an answer to Appellant’s motion for

sanctions denying that it conducted adequate business in Philadelphia to

establish venue.     Appellee asserted that the motion for sanctions was

premature in light of its attempts to depose Jeffrey Cadorette (Cadorette),

Appellee’s executive vice president, as a fact witness on venue.             See

Appellee’s Mem. of Law in Support of its Answer to Appellant’s Mot. for

Sanctions, 10/12/17, at 2. Appellee indicated that it previously attempted to

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schedule a deposition of Cadorette by a letter dated September 21, 2017, and

issued its notice to depose Cadorette on September 28, 2017. According to

Appellee, Appellant failed to respond to its requests to depose Cadorette.

Appellee’s Answer to Appellant’s Mot. for Sanctions, 10/12/17, at ¶ 31.

       On October 12, 2017, the parties deposed Cadorette, and the trial court

summarized Cadorette’s testimony as follows;

       [Cadorette] explained that some of the listings on the websites
       are listed as part of a partnership agreement with another real
       estate company[, Regus]. The agreement allowed the other
       company to place ads for short-term furnished rentals on
       [Appellee]’s website in exchange for a ten percent commission.
       [Appellee] acted solely as a referral source and was otherwise not
       in the business of short-term furnished leasing.

       . . . Mr. Cadorette testified there was one sale of a warehouse
       property in Philadelphia in 2014 that netted a commission of
       $42,000, split evenly between Mr. Cadorette and [Appellee]. The
       commission was the only revenue generated by [Appellee] arising
       from business in Philadelphia since 2014. [Appellee] has not
       earned a commission on any other Philadelphia listing on the
       website.

Trial Ct. Op., 3/19/18, at 2. Cadorette identified Amanda Iacavino as a contact

at Regus. Cadorette Dep., 10/12/17, at 105. He also identified Appellee’s tax

accountant as Wipfli. Id. at 41.

       On October 17, 2017, Appellant issued an amended notice to depose

Strine, which included a request for Appellee’s Philadelphia taxes from 2012

to 2017.3     Two days later, on October 19, 2017, Appellant deposed Strine.

____________________________________________

3The record does not establish when Appellant issued his original notice to
depose Strine.

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See Strine Dep., 10/19/17.      During Strine’s deposition, Appellee’s counsel

objected to

      the production of any federal, state, and non-Philadelphia County
      local tax returns, as they may be in an unredacted fashion, used
      to calculate and contemplate [Appellee]’s net worth in violation of
      the discovery rules requiring such production until leave of Court
      is granted.

Id. at 101. Strine identified Appellee’s tax accountant at Wipfli as Kelly Fisher

(Fisher). Strine did not produce Appellee’ Philadelphia tax returns based on

Strine’s testimony that Appellee did not conduct business in Philadelphia and

did not file Philadelphia tax returns. See id. at 101-02.

      On October 20, 2017, Appellant filed an application for the live

testimony of Regus’s general manager Iacavino and Appellee’s accountant

Fisher.   See Appellant’s Appl. for Live Testimony, 10/20/17.        Appellant’s

subpoena to Fisher requested that she appear at the courthouse on October

25, 2017, the day the evidentiary hearing was scheduled. Id. at Ex. 4. The

subpoena also requested that she provide Appellee’s Philadelphia tax returns

from 2012 to 2017. Id.

      At the evidentiary hearing, on October 25, 2017, the following relevant

exchange occurred:

      [Fisher’s Counsel]: Good morning, Your Honor, Jason Sweet on
      behalf of Kelly Fisher. She was a subpoenaed witness for this
      matter. We filed a motion to quash yesterday. It hasn’t been
      docketed yet.

      THE COURT: My written permission permitting you to present live
      testimony?

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     [Appellant’s Counsel]: You did not rule on that yet, Your Honor,
     and it might be resolved, because I think there’s ample evidence
     that we’ve established through deposition testimony.

     THE COURT: So if it’s resolved, can we send [Fisher] home?

     [Appellant’s Counsel]: It might be resolved pending the hearing
     today without further live testimony.

     THE COURT: No.

     [Appellant’s Counsel]: Okay.

     THE COURT: No. There is a reason I don’t permit live testimony.
     Turn around and look at this courtroom.

     [Appellant’s Counsel]: Yes, Your Honor.

                                    ***

     THE COURT: All 60 [attorneys] wish to present live testimony. It
     is why I permit only deposition testimony.

     [Appellant’s Counsel]: I understand, Your Honor. It was in the
     order for application.

     THE COURT: So start off by telling me what made this one special
     . . . that you could not depose or move the deposition.

     [Appellant’s Counsel]: Well, we did depose both Mr. Walter Strine,
     Jr., as well as one of the two general partners of Media Real
     Estate, as well as the senior or the executive vice-president of
     Media Real Estate. We do have those depositions, and we do have
     them to hand up to Your Honor. The issue at the deposition was
     the general partner who was responsible for taxes said he did
     absolutely no investigation whatsoever, did not ask his accountant
     whether or not there was any business done in Philadelphia, did
     no investigation or ask the person who aggregates and compiles
     the business records.

     THE COURT: So why don’t we have the deposition of anybody
     else that you may have wished to [depose] as opposed to bringing
     somebody in live, which again . . . I was very specific in my order
     stating not permitted without my permission?

     [Appellant’s Counsel]: Right, Your Honor. And the reason is that
     we presume[d] that the general partner, one of two general
     partners would have his actual Philadelphia tax returns when he

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     did actually receive income in Philadelphia. Those records were
     indicated by opposing counsel to be produced, but then he said he
     didn’t want to reveal the net worth. We’re not interested in net
     worth. We’re interested in income, which is different than net
     worth. So they say they have the records or they say there are
     records, but they’re not going to produce them. We asked the
     general partner for those records who is in charge of that. He
     doesn’t produce them. We have a notice of deposition, amended
     notice. We ask for business records relating to income, business
     income receipts tax, net profits tax, BPT tax, things that are
     standard in any business. We’ve established that there was sales
     in Philadelphia of about $700,000 mere months away. We
     established that there’s multiple listings in Philadelphia for leased
     property in Philadelphia. We established that there’s ongoing
     contracts for commissions in Philadelphia properties.             We
     established they received $42,000 in commissions. Yet they put
     an affidavit together saying they did no business whatsoever.

     THE COURT: Okay.

     [Appellant’s Counsel]: So that’s why we deposed Mr. Walter
     Strine, believing we were going to get all these documents, and
     opposing counsel represented that he doesn’t see there would be
     an issue producing them, but then at the deposition, he qualified
     that, saying there’s an objection, “We’re producing nothing,
     because we don’t want to reveal the net worth of the business.” I
     would like to get the Philadelphia taxes, the income in
     Philadelphia, the revenues from Philadelphia, and so at that point,
     we had to subpoena the accountant who said he’s his accountant
     for 50 years.

     THE COURT: Got you. [Fisher] is excused.

See N.T., 10/25/17, at 4-8. The trial court denied Appellant’s application for

live testimony. Id. a 4.

     On November 1, 2017, the trial court sustained Appellee’s preliminary

objection as to venue. The trial court transferred the case to the Delaware

County Court of Common Pleas without deciding the remainder of Appellee’s

preliminary objections.

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       Appellant filed a timely notice of appeal4 and a court-ordered Pa.R.A.P.

1925(b) statement.          The trial court filed a Pa.R.A.P. 1925(a) opinion

suggesting that Appellant failed to demonstrate that Appellee regularly

conducted business in Philadelphia. Id. at 4. The court, however, did not

address Appellant’s further assertion that the court erred by failing to compel

Appellee’s production of tax documents.

       Appellant raises two issues on appeal, which we have reordered as

follows:

       1. Whether the [trial c]ourt committed reversible error when it
          failed to compel [Appellee] to produce discovery related to its
          Philadelphia income, including its tax filings[.]

                                          ***

       2. Whether [Appellee] does regular and continuous business in
          Philadelphia that allows suit in Philadelphia forum and was it
          reversible error for the [trial] court to transfer venue to
          Delaware County[.]

                                          ***

Appellant’s Brief at 6-7 (some capitalization omitted).

       In his first issue, Appellant argues that the trial court erred in failing to

compel disclosure of Appellee’s Philadelphia tax returns from 2012 to 2017.

____________________________________________

4 Appellant filed a notice of appeal on December 6, 2017. However, the docket
indicated that notice of the order was not issued until November 6, 2017.
Therefore, Appellant’s notice of appeal was timely. See Pa.R.A.P. 108(b);
Pa.R.C.P. 236; see also In re L.M., 923 A.2d 505, 509 (Pa. Super. 2007)
(stating that “an order is not appealable until it is entered on the docket with
the required notation that appropriate notice has been given”
(emphasis in original) (citing Frazier v. City of Philadelphia, 735 A.2d 113,
115 (Pa. 1999)).

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Id. at 27. Appellant maintains that he served document requests on Strine,

Appellee’s general partner, who agreed to produce the Philadelphia tax returns

at his deposition. Id. at 23. Appellant continues that Strine reneged and

refused to produce the documents. Id.

      In sum, Appellant contends that Appellee’s failure to produce the tax

records is proof that said records are damaging to Appellee’s position. Id.

According to Appellant, Appellant asked the trial court to compel Appellee to

produce its Philadelphia tax returns and commissions due to Appellee’s failure

to answer questions or produce the requested documents.              Id. at 27.

Appellant maintains that the court’s failure to order Appellee to produce its

tax returns constitutes reversible error. Id. According to Appellant, “[i]f these

tax returns showed income in Philadelphia, then that would prove beyond any

doubt regular and continuous business in Philadelphia sufficient to establish

venue.” Id. at 22.

      Appellee counters that Appellant “failed to properly preserve and raise

his objection to any alleged failure by [Appellee] to produce local Philadelphia

tax returns it may have filed.” Appellee’s Brief at 15. Appellee argues that

after the trial court scheduled an evidentiary hearing on the issue of venue,

Appellant conducted extensive depositions of Strine and Cadorette. Id. at 16.

Appellant’s notice of deposition to Strine included a request to produce

Appellee’s Philadelphia tax returns.    Id.   At Strine’s deposition, however,

Appellee objected to the production of the tax returns “as discovery of

unredacted tax returns could be used to calculate [Appellee]’s wealth in

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violation of Pa.R.C.P. 4003.7.”5 Id. Appellee continues that Appellant did not

seek to depose, or serve a subpoena duces tecum, on Fisher, Appellee’s

accountant. Id. at 16. Rather, prior to the evidentiary hearing, Appellant

filed an application to present the live testimony of Fisher, which the court

denied. Id. at 17. Therefore, Appellee contends, Appellant should not be able

to pursue his discovery issue because he never filed a motion to compel

discovery. Id.

       We review a trial court’s determination regarding discovery requests for

an abuse of discretion. PECO Energy Co. v. Ins. Co. of N. Am., 852 A.2d

1230, 1233 (Pa. Super. 2004); Kerns v. Methodist Hosp., 574 A.2d 1068,

1073 (Pa. Super. 1990).          “The trial court is responsible for [overseeing]

discovery between the parties and therefore it is within that court’s discretion

to determine the appropriate measure necessary to insure adequate and

prompt discovering of matters allowed by the Rules of Civil Procedure.” PECO

Energy Co., 852 A.2d at 1233 (citation and quotation marks omitted).

       Instantly, the order scheduling an evidentiary hearing allowed for

sufficient time to take depositions regarding the issue of venue. See Order,

8/28/17.     Rather than deposing Fisher prior to the date of the hearing,

Appellant sought to present her live testimony at the evidentiary hearing. See

____________________________________________

5 Pennsylvania Rule of Civil Procedure 4003.7 provides that “[a] party may
obtain information concerning the wealth of a defendant in a claim for punitive
damages only upon order of court setting forth appropriate restrictions as to
the time of the discovery, the scope of the discovery, and the dissemination
of the material discovered.” Pa.R.C.P. 4003.7.

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Appellant’s Appl. for Live Testimony, 10/20/17, at Ex. 4. The trial court did

not find that Appellant had good cause to present the live testimony of Fisher

as required in its August 28, 2017 order.          See N.T., 10/25/17, at 4-8.

Moreover, because Appellant did not file a motion to compel the production of

documents, namely, any Philadelphia tax returns that Appellee might have

filed from 2012 to 2017, the court did not abuse its discretion in failing to

order that Appellee produce such documents.6 Accordingly, we conclude the

court did not abuse its discretion in denying Appellant’s application.     See

PECO Energy Co., 852 A.2d at 1233.

       Next, Appellant contends that the trial court erred in transferring venue

to Delaware County because Appellee did “regular and continuing business in

Philadelphia.” Appellant’s Brief at 13-14. Appellant provides a list of reasons

that he claims demonstrate that Appellee conducts regular and continuous

business in Philadelphia:

       1. [Appellee] brokered the sale of a commercial/industrial
          Philadelphia property in 2014 for $700,000 and received a 6%
          commission ($42,000),

       2. [Appellee] has active contracts with the real estate company
          Regus for the lease of Philadelphia office space under which
          [Appellee] receives commissions for customers it refers to
          Regus,

____________________________________________

6 We acknowledge that Appellant apparently learned about Fisher and the
purported refusal to produce the requested documents a few days before the
scheduled hearing. Appellant, however, has not explained why he could not
have sought Appellee’s financial information, deposed Strine, or moved to
reschedule the hearing pending the disposition of any motion to compel in a
timely fashion.

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      3. [Appellee] lists the same Philadelphia office space on its
         website for the purpose of targeting customers in Philadelphia
         and earning money in the city, and

      4. Regus and [Appellee] have referred each other customers and
         have an ongoing mutually beneficial business partnership.

Id. at 15 (record citations omitted). Appellant claims that these contacts are

“central and not tangential to [Appellee]’s purpose,” which is to sell and lease

real estate. Id. at 19. Therefore, Appellant maintains these contacts are

sufficient to establish venue in Philadelphia. Id.

      This Court has set forth our standard of review as follows:

      It is well established that a trial court’s decision to transfer venue
      will not be disturbed absent an abuse of discretion. A [p]laintiff’s
      choice of forum is to be given great weight, and the burden is on
      the party challenging the choice to show it was improper.
      However, a plaintiff’s choice of venue is not absolute or
      unassailable. Indeed, if there exists any proper basis for the trial
      court’s decision to grant a petition to transfer venue, the decision
      must stand.

Wimble v. Parx Casino and Greenwood Gaming & Entm’t, Inc., 40 A.3d

174, 177 (Pa. Super. 2012) (citation omitted).

      Rule 2130 of the Pennsylvania Rules of Civil Procedure provides that

      an action against a partnership may be brought in and only in a
      county where the partnership regularly conducts business,
      or in the county where the cause of action arose or in a county
      where a transaction or occurrence took place out of which the
      cause of actions arose or in the county where the property or a
      part of the property which is the subject matter of the action is
      located provided that equitable relief is sought with respect to the
      property.

Pa.R.C.P. 2130(a) (emphasis added).

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      “In determining whether a corporation or partnership regularly conducts

business in a county, we employ a quality-quantity analysis.”          Zampana-

Barry v. Donaghue, 921 A.2d 500 (Pa. Super. 2007).              We explained the

quality-quantity analysis test as follows:

      A business entity must perform acts in a county of sufficient
      quality and quantity before venue in that county will be
      established. Purcell[v. Bryn Mawr Hosp., 579 A.2d 1282, 1284
      (Pa. 1990)]. Quality of acts will be found if an entity performs
      acts in a county that directly further or are essential to the entity’s
      business objective; incidental acts in the county are not sufficient
      to meet the quality aspect of the test. Id. 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). Quantity of acts means
      those that are sufficiently continuous so as to be considered
      habitual. Purcell, supra. Each case must be based upon its own
      individual facts. Id.

Id. at 503-04.

      Instantly, the trial court found that venue was improper in Philadelphia,

as Appellee did not regularly conduct business within Philadelphia County.

See Trial Ct. Op. at 4. The court reasoned:

      [Appellee] met its burden of proving it does not regularly conduct
      business in Philadelphia. [Appellee]’s connection with Philadelphia
      was neither qualitatively nor quantitatively sufficient to show that
      they regularly conducted business in Philadelphia.

      In terms of quantity, [Appellee]’s only income from Philadelphia
      business was the commission on the 2014 sale, and that

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      commission was split between [Appellee] and Mr. Cadorette. A
      single commission is hardly “habitual,” especially one which
      occurred one year prior to the incident and three years prior to
      the filing of the instant lawsuit.

      Regarding quality, even though [Appellee] listed Philadelphia
      properties on its website, the fact that [Appellee] has not actually
      earned any revenue from its short-term lease listings is proof the
      postings were not essential to [Appellee]’s business objective but
      merely incidental. The mere fact a business website solicits in a
      particular county does not necessarily mean that venue is proper
      therein. See Kubik v. Route 252, Inc., 762 A.2d 1119, 1126
      (Pa. Super. Ct. 2000) (holding that a business website that
      provided driving directions from Philadelphia, sent out a
      newsletter to solicit business, and sold gift certificates did not
      constitute regularly conducting business in Philadelphia);
      Shambe[ v. Delaware and Hudson Railroad Co., 135 A. 755,
      758 (Pa. 1927)] (holding solicitation on its own is not the same as
      “doing business”).

Id. at 3-4.

      Following our review, we see no basis to disturb the court’s sound

reasoning. See Purcell, 579 A.2d at 1284; Zampana-Barry, 921 A.2d at

503-04; Krosnowski, 836 A.2d at 147. We agree with and adopt the trial

court’s conclusion that Appellee was not “regularly conducting business” in

Philadelphia. See Trial Ct. Op. at 3-4. Accordingly, Appellant’s claim that the

court abused its discretion in concluding that venue should be transferred to

Delaware County warrants no relief. See Wimble, 40 A.3d at 177.

      Order affirmed.

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Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/14/19

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