Court Opinion

ID: 9297919
Source: CourtListenerOpinion
Date Created: 2022-12-01 17:09:22.448016+00
Date Added: 2024-06-11T17:13:31.053671
License: Public Domain

J-A21001-22

                               2022 PA Super 205

 ESTATE OF RITA QUIGLEY, BY ITS          :   IN THE SUPERIOR COURT OF
 REPRESENTATIVE EDWARD                   :        PENNSYLVANIA
 CLEMSON, EXECUTOR                       :
                                         :
                   Appellant             :
                                         :
                                         :
              v.                         :
                                         :   No. 1022 EDA 2022
                                         :
 POTTSTOWN HOSPITAL, LLC, TOWER          :
 HEALTH, JOHN DOES 1-10                  :

               Appeal from the Order Entered April 7, 2022
   In the Court of Common Pleas of Philadelphia County Civil Division at
                          No(s): 2107-01389

BEFORE: LAZARUS, J., MURRAY, J., and McCAFFERY, J.

OPINION BY LAZARUS, J.:                        FILED DECEMBER 01, 2022

     The Estate of Rita Quigley (Decedent), by its representative Edward

Clemson, Executor (Plaintiff), appeals from the order of the Court of Common

Pleas Philadelphia County sustaining the preliminary objections of Pottstown

Hospital, LLC, Tower Health, and John Does 1-10 (collectively, Defendants) to

Plaintiff’s first amended complaint and transferring venue of the matter to

Montgomery County. Because Defendant Tower Health’s acts are more than

sufficient to establish venue in Philadelphia County, we reverse and remand.

     Decedent was a resident of Chestnut Knoll, an assisted living facility

located in Boyertown, Berks County, Pennsylvania. Decedent suffered from

dementia and cognitive impairment.      On October 28, 2020, Decedent was

admitted to Pottstown Hospital. Pottstown Hospital is located in Montgomery

County, Pennsylvania, and is owned by Tower Health.          Tower Health’s
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registered office and principal place of business are located in West Reading,

Berks County, Pennsylvania.           On November 1, 2020, the Decedent was

discharged     and    transported      from      Pottstown    Hospital   to    PowerBack

Rehabilitation Center, which is located in the Phoenixville area.               Upon the

Decedent’s arrival at PowerBack, PowerBack’s medical staff conducted a

routine physical exam and discovered Decedent had significant injuries

consistent with a sexual assault.1 Unable to admit Decedent based upon those

injuries,   PowerBack      immediately         transferred   Decedent    to   Phoenixville

Hospital, a facility also owned by Tower Health, where medical personnel

performed a medical examination of Decedent and made notes about her

physical condition.2

       On July 23, 2021, Plaintiff filed a complaint against Defendant Tower

Health in Philadelphia County, at 8835 Germantown Avenue, Philadelphia,3

alleging that the Decedent was raped and sexually assaulted while she was a

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1 Decedent passed away on January 2, 2021.                   Letters Testamentary were
granted to Plaintiff on March 2, 2021.

2 The complaint alleges that Phoenixville Hospital contacted Pottstown Hospital
to inquire about Decedent’s injuries, but Pottstown Hospital denied ever
observing any of the alleged injuries sustained by Decedent. Plaintiff’s
Complaint, 7/19/21, at ¶ 24.

3  This is the address of Chestnut Hill Hospital, another hospital ----a
subsidiary--owned by parent company, Tower Health. Chestnut Hill Hospital
is not a defendant in the matter.

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patient at Pottstown Hospital.4         Specifically, the complaint included three

counts:    negligence (Count I); premises liability (Count II); assault/rape—

respondeat superior (Count III). The complaint alleges that “Defendant Tower

Health is a Pennsylvania non-profit corporation that operates the Pottstown

Hospital with a registered address of 420 S. Fifth Avenue[,] West Reading[,]

PA 19611 and a Philadelphia address, where it regularly conducts business, of

8835 Germantown Ave[nue], Philadelphia, PA 19118.” Plaintiff’s Complaint,

7/19/21, at ¶ 3. On August 30, 2021, Plaintiff filed an amended complaint

supplementing the original complaint with two additional counts: negligent

supervision (Count IV) and negligent hiring (Count V).             The amended

complaint also attached various 2019-2020 financial statements for Tower

Health to support Plaintiff’s allegation that Tower Health regularly conducts

business in Philadelphia.

       On September 17, 2021, Defendants filed preliminary objections 5

alleging that venue of the matter properly lies in Montgomery County because

Philadelphia County “has no relationship, let alone a substantial relationship,

to the alleged controversy.”        Defendants’ Supplemental Brief in Support of
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4 Following an investigation into the matter, police were unable to definitively
conclude that Decedent was the victim of sexual assault. However, a rape
kit/examination conducted on Decedent by Phoenixville Hospital concluded
that the findings were consistent with Decedent having been the victim of a
sexual assault. Plaintiff’s Complaint, 7/19/21, at ¶ 26.
5 See Pa.R.C.P. 1028(a)(1) (providing, in relevant part, preliminary objections
may be filed by any party to any pleading on following bases: lack of
jurisdiction over subject matter of action or defendant; improper venue; or
improper forum or service of writ of summons or complaint).

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Preliminary Objection to Plaintiff’s First Amended Complaint, 1/13/22, at 6

(emphasis in original). To support their preliminary objections, Defendants

averred that:   Decedent was never treated in Philadelphia County at any

relevant time; Decedent was not alleged to have been raped or sexually

assaulted in Philadelphia County; Plaintiff’s allegations centered exclusively

around events purported to have occurred at Pottstown Hospital in

Montgomery County; Tower Health does not have its principal place of

business or registered office in Philadelphia; Tower Health does not regularly

conduct business in Philadelphia County; only one of five non-profit hospitals

that is a part of the Tower Health network is located within Philadelphia

County; Chestnut Hill Hospital and Pottstown Hospital are mere subsidiaries

of their parent corporation, Tower Health; Tower Health is a “separate and

distinct legal entity from either Defendant Pottstown Hospital or non-party

Chestnut Hill Hospital;” the alleged cause of action arose exclusively in

Montgomery County; and, the alleged occurrence out of which the alleged

cause of action arose occurred exclusively in Montgomery County. Id. at 5-

7.

      Plaintiff filed an answer to Defendants’ preliminary objections claiming

that Tower Health owns Pottstown Hospital and “the two are inextricably

intertwined.”   Plaintiff’s Memorandum of Law in Opposition to Defendants’

Preliminary Objections, 10/7/21, at 5.    Specifically, Plaintiff averred that:

Tower Health’s financial statements group its five Montgomery, Philadelphia,

and Chester County hospitals together; Chestnut Hill Hospital, located in

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Philadelphia, is one of the five hospitals owned by Tower Health; Tower

Health’s website states “Chester/Montgomery/Philadelphia hospitals are tax-

exempt not-for-profit corporations providing acute and post[-]acute care;”

Chester/Montgomery/Philadelphia clinics and practices are part of Tower

Health Medical Group (THMG);6 THMG “recruits physicians and provides

administrative services for [Reading] Hospital, including supervision and

instruction for medical students completing their residency training;” and

Chestnut Hill Hospital is located in and regularly conducts business in

Philadelphia County. Id. at 5-6.

       The trial court permitted the parties to file supplemental briefs and to

submit affidavits, deposition testimony, as well as documentary evidence to

support their positions on the venue issue. See Pa.R.C.P. 1028 (preliminary

objections raising improper venue cannot be determined from facts of record;

evidence, by deposition or otherwise, must be presented to court deciding

objections). On November 3, 2021, Tower Health filed a motion to have itself

dismissed from the underlying case, attesting to its “non-involvement in the

care and/or treatment rendered to [Decedent].”          Tower Health Motion to

Dismiss, 11/2/21, at 1-2.         See Pa.R.C.P. 1036.   Plaintiff filed an answer

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6 THMG is a tax-exempt entity established to assure access to high quality
primary care physicians and specialty physicians in sufficient numbers to meet
community needs. Tower Health and Subsidiaries, Notes to Consolidated
Financial Statements (June 30, 2020 and 2019) (Statements), at 8.

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opposing Tower Health’s motion to dismiss. On February 14, 2022, the trial

court denied Tower Health’s motion to dismiss.

       On April 7, 2022, the trial court granted Defendants’ preliminary

objections and transferred venue of the matter to Montgomery County.

Plaintiff filed a timely notice of appeal7 and court-ordered Pa.R.A.P. 1925(b)

concise statement of errors complained of on appeal.         On appeal, Plaintiff

presents the following issues for our consideration:

       (1)    Did the trial court err and/or abuse its discretion by giving
              undue consideration to Tower Health’s relationships with its
              subsidiaries, as Tower Health is a named party, giving
              insufficient consideration to Tower Health’s direct and
              uncontradicted contacts in Philadelphia County, and failing
              to conduct any quality-quantity analysis when considering
              whether venue was proper in Philadelphia County?

       (2)    Did the trial court err and/or abuse its discretion by failing
              to apply the proper burden of proof for preliminary
              objections as to improper venue and failing to give proper
              weight to Plaintiff’s preferred venue of Philadelphia County,
              as well as the presumption in retaining Plaintiff’ choice of
              venue, when considering whether venue was proper in
              Philadelphia County?

       (3)    Did the trial court err and/or abuse its discretion by failing
              hold an evidentiary hearing on venue prior to transferring
              the matter from Philadelphia County to Montgomery County
              and failing to state in its order or opinion the reasons why
              the [c]ourt did not hold any evidentiary hearing on venue in
              this matter?

Plaintiff’s Brief, at 4 (renumbered for ease of disposition).

____________________________________________

7 Although interlocutory, a trial court’s order changing venue in a civil action
is immediately appealable as of right. See Pa.R.A.P. 311(c).

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       It is well-established that “a plaintiff’s forum selection is given great

weight.    Nevertheless, the trial court is vested with broad discretion in

determining whether the original choice of forum was proper.           When any

proper basis exists for the trial court’s decision to change venue, that decision

must stand.”      Masel v. Glassman, 689 A.2d 314, 320 (Pa. Super. 1997)

(citations omitted).

       When reviewing a trial court’s decision to transfer venue, the
       appellate court’s standard of review is as follows: A trial court’s
       decision to transfer venue will not be disturbed absent an abuse
       of discretion. An abuse of discretion occurs when the trial judge
       overrides or misapplies the law, or exercises judgment in a
       manifestly unreasonable manner, or renders a decision based on
       partiality, prejudice, bias[,] or ill-will.

Sehl v. Neff, 26 A.3d 1130, 1132 (Pa. Super. 2011) (citation and quotation

marks omitted).         When venue is challenged, “the burden of proving

jurisdiction is upon the party asserting it.” Deyarmin v. Consol. Rail Corp.,

931 A.2d 1, 9 (Pa. Super. 2007). See County Constr. Co. v. Livengood

Constr. Corp., 142 A.2d 9, 13 (Pa. 1958) (“for procedural purposes,

objections to venue are treated as raising a question of jurisdiction”).

       The venue rules of this Commonwealth provide, in part, that a personal

action against a corporation8 may be brought in the county where its

registered office or principal place of business is located or a county where

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8In addition, “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
under the general rules.” Pa.R.C.P. 1006(c)(1).

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it regularly conducts business. See Pa.R.C.P. 2179(a)(1)-(2) (emphasis

added).9 But cf. Pa.R.C.P. 1006(a) (a) (in claim involving individual, venue

is only appropriate where “a transaction or occurrence took place out of which

the cause of action arose” or where “the property . . . which is subject matter

of the action is located”).

       In determining where a corporation “regularly conducts business,”
       a court must focus on the nature of the acts the corporation
       allegedly performs in that county; those acts must be assessed
       both as to their quantity and quality.

          “Quality of acts” means “those directly, furthering or
          essential to, corporate objects; they do not include
          incidental acts.” Quantity means those acts that are “so
          continuous and sufficient to be termed general or
          habitual.”     The acts of the corporation must be
          distinguished:   those in “aid of a main purpose” are
          collateral and incidental, while “those necessary to its
          existence” are “direct.”

Masel, 689 A.2d at 317 (emphasis added), citing Purcell v. Bryn Mawr

Hospital, 550 A.3d 1320, 1325 (Pa. Super. 1988). “Courts must consider all

of the evidence in context to determine whether the defendant’s business

activities in the county were regular, continuous, and habitual.” Hangey v.

Husqvarna Prof’l Prods., 247 A.3d 1136 (Pa. Super. 2021) (en banc).

Finally, “[a] corporation may perform acts ‘regularly’ even though these acts

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9 Under Rule 2179(a), an action may also be brought against a corporation in:
“a county where the cause of action arose; a county where a transaction or
occurrence took place out of which the cause of action arose[;] or a 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.” Id. at (3)-(5).

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make up a small part of its total activities.” Canter v. American Honda

Motor Corp., 231 A.2d 140, 142 (Pa. 1967).

      Here, Plaintiffs claim that they have established venue in Philadelphia

County based upon the fact that Tower Health, a named Defendant in the

underlying action, regularly conducts business there in accordance with Rule

2179(a)(2).    Defendants cite to Wimble v. Parx Casino & Greenwood

Gaming & Entm’t, Inc., 40 A.3d 174 (Pa. Super. 2012), for the proposition

that “venue cannot be established against one corporation based on the

activities of a related, but legally distinct and separate, corporation.”

Appellee’s Brief, at 33. However, while Wimble does recognize that a parent

and wholly-owned subsidiary are separate and legal entities, Wimble, supra

at 178, the holding of that case does not categorically prevent a plaintiff from

establishing venue based on a parent corporation’s contacts in a given

jurisdiction. Specifically, where a parent company is a named defendant in

an action and has both the quality and quantity of contacts to prove that it

regularly conducts business in plaintiff’s chosen forum, venue may properly

lie under Rule 2179.

     Plaintiff is not attempting to establish venue based solely on the business

activities of one of its sister hospitals, Chestnut Hill Hospital, that is located in

Philadelphia. See Share Communications Servs of 1800-80 JFK Blvd.

Inc. v. Bell Atl. Props. Inc., 692 A.3d 570, 573 (Pa. Super. 1997)

(advancing proposition that corporation may not be subject to venue based

solely upon business activities of sister corporation); see also Krosnowski

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v. Ward, 836 A.2d 143 (Pa. Super. 2003) (en banc) (no quantity and quality

of corporate contacts between hospital and sister hospital sufficient to

establish venue in Philadelphia County).

      Additionally, Plaintiff does not claim that venue is proper in Philadelphia

County because Pottstown Hospital, where Decedent’s alleged sexual assault

occurred, regularly conducts business there.      Cf. Purcell, supra at 1287

(plaintiffs’ wrongful death action alleged negligence solely against Bryn Mawr

Hospital and hospital’s doctors and nurses, situs of alleged negligence where

deceased infant was treated; Philadelphia County not proper venue under Rule

2179(a)(2) where any arrangements Philadelphia-based medical schools had

with Bryn Mawr Hospital did not “go beyond mere incidental contacts rather

than being essential to Bryn Mawr”); Krosnowski, supra at 147 (in wrongful

death and survival action, alleging professional negligence based on failure to

diagnose and treat decedent, sole basis for determining whether venue proper

in Philadelphia County “depends on whether Abington Memorial Hospital[,

where decedent treated,] regularly conducts business there”).            Rather,

Plaintiff claims venue is established in Philadelphia County because Defendant

Tower Health, Pottstown Hospital’s parent company, regularly conducts

business in Philadelphia through exercising control and authority over its

Philadelphia subsidiaries.   In contrast to Purcell and Krosnowski, Tower

Health, the parent company of the hospital where the alleged negligence took

place, is a named defendant in the action and several of the five counts

forming the basis of Plaintiff’s action—negligent hiring, respondeat superior

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and negligent supervision—directly implicate Tower Health. See Appellant’s

Brief, at 39 (“[Plaintiff’s] claims against Tower Health are related to its

negligence in its business practices in overseeing the staffing at Pottstown

Hospital and negligence in allowing a dangerous condition to exist on the

premises of Pottstown Hospital leading to the [alleged] sexual assault of

[decedent].”).

       Factually, in addition to owning Chestnut Hill Hospital, Tower Health is

also a full or partial owner of multiple properties located in Philadelphia,

including, St. Christopher’s Hospital, two urgent care facilities located on

Roosevelt Boulevard and Bryn Mawr Avenue, and Tower Health Urgent Care.10

Consolidated financial statements (Statements), issued by Tower Health in

June 2019 and 2020, list “Chester/Montgomery/Philadelphia” hospitals as

subsidiaries of Tower, all of which provide acute and post-acute care.

Statements, 6/20/20 & 6/20/19, at 8.

       The Statements also explain that the “Chester/Montgomery/Philadelphia

clinics and practices are part of THMG,” an entity that recruits physicians,

provides administrative services, supervises and instructs medical students

during their residency training, and has “charitable, educational, and scientific

purposes.” Id. Finally, Tower Health Enterprises (THE) is a limited liability

company that was “formed to hold the interest in joint ventures acquired as

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10 Tower Health created Tower Health Urgent Care, which either owns or
leases the Philadelphia properties where its urgent care facilities are operated.

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part of the acquisition of the Chester/Montgomery/Philadelphia Hospitals in

October 2017.” Id.

      Tower Health has also partnered with Philadelphia’s Drexel University,

to create a joint venture called STC Healthcare Partners LLC (STC). STC is

the parent company that owns St. Christopher’s Hospital for Children located

in North Philadelphia. Id. at 9. Tower Health is the managing partner of STC.

N.T. Deposition of Karen Karpovich, 12/9/21, at 68-72. Compare Anthony

v. Parx Casino, 190 A.3d 605 (Pa. Super. 2018) (quality and quantity of acts

necessary to sustain venue in plaintiff’s forum insufficient where: plaintiff’s

accident occurred in transfer venue; corporation operating defendant-casino

only does business in transfer venue; joint venture to obtain license to operate

defendant-casino in plaintiff’s forum had not yet been issued; and, no building,

slot machines, gaming tables, or customers currently existed in relation to

joint venture) with Hangey, supra at 1143 (multi-billion-dollar corporation,

with authorized dealer in Philadelphia, satisfied “quantity” prong of venue

analysis; in transferring venue from Philadelphia, trial court improperly relied

almost exclusively on percentage of company’s Philadelphia business instead

of totality of evidence showing “contacts with Philadelphia . . . were

‘sufficiently continuous as to be considered habitual’”).

      Notably, an itemized statement of the services and care rendered to

Decedent at Pottstown Hospital (from 10/28/20-11/1/20) and Phoenixville

Hospital (from 11/1/20-11/11/20) displays “Tower Health” at the top of the

document, with a Philadelphia Post Office Box address underneath it. See

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Plaintiff’s Exhibits 1-2. Nowhere is Pottstown Hospital, Phoenixville Hospital,

a Pottstown address, or a Phoenixville address listed on the itemized

statement. Id.; see also N.T. Deposition of Karen Karpovich, 12/9/21, at 53-

55. Ms. Karpovich testified that all of the Tower Health acute care facilities

utilize the same medical record system that lists Tower Health and the

Philadelphia P.O. Box address on its itemized care/services statements. Id.

at 56-57. Moreover, each of the tri-county hospital providers can access the

other facilities’ medical records on a central database.     Id. at 57-63.    In

addition, when accessing one of the five different Tower Health hospitals’

website pages, the visitor it taken to a page labeled “Tower Health.” Id. at

66.

       To demonstrate the control and authority that Tower Health has over its

subsidiaries, which includes Philadelphia entities, Plaintiff introduced the

deposition testimony of Richard Newell, the CEO of Pottstown Hospital, from

another unrelated case brought against Pottstown Hospital and Tower Health.

In that case, Estate of Dorothy M. McCampbell, et al. v. Pottstown

Hospital, LLC and Tower Health, et al., No. 2019-21724, Montgomery

County,11 Newell testified that he assumed his role in July 2014, and, in

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11Newell’s deposition is attached as an exhibit to Plaintiff’s Supplemental Brief
on Venue filed in the trial court and included in the certified record on appeal.
See Plaintiff’s Supplemental Brief Regarding Venue, 1/13/22, at Exhibit “C.”
At the time of the underlying fatal accident (October 2018), which formed the
basis for the lawsuit in Estate of McCampbell, supra, Mike Matthews was
the President and CEO of Tower Health. N.T. Deposition of Richard Newell,
11/12/21, at 26.

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September 2021, became the President and CEO of Phoenixville Hospital. N.T.

Deposition of Richard Newell, Jr., 11/12/21, at 11.      As CEO of Pottstown

Hospital, Newell testified that he is responsible for the hospital’s clinical,

operational, and financial statuses. Id. at 13. With regard to his involvement

with Tower Health in his capacity as CEO of two of its subsidiary hospitals,

Newell testified that he reports, at least once every two weeks, to Sue

Perrotty, the CEO of Tower Health. Id. at 14. See id. at 26 (Newell referring

to Tower Health CEO as “his boss”). During their meetings, Newell testified

they discuss “strategy, service line development, financial performance, news

in terms of awards or recognitions that [they] receive as a hospital[, and]

projects that [they are] looking to undergo from a service[-]type perspective

to [] create a safe environment for [their] patients and employees.” Id. at

14-15. Newell also testified that he discusses hospital policies with Perrotty,

including call policies for central scheduling. Id. at 15-16. Newell testified

that Perrotty “is responsible to do [his] performance evaluation[s],” id. at 17,

and, if necessary, would handle any disciplinary actions. Newell also testified

that Human Resources would suggest any pay bonuses to Sue Perrotty, who

would then bring the proposal to the Tower Health Board of Directors which

gives final approval for staff increases. Id. at 18.

      Joanne Judge, general counsel for Tower Health, testified that while

Tower Health does not have day-to-day operational involvement with the five

acute-care hospitals it owns, it does have the power to ratify or reject

nominees for each hospital’s board of directors, has a say in its hospitals’

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federal legal mandates, provides infrastructure support services to the

hospitals, including payroll services, and that the hospitals cannot borrow

money without Tower Health’s consent. See N.T. Deposition of Joanne Judge,

11/11/21, at 14, 16, 28, 21. See also id. at 106-07 (Joanne Judge testifying

that depending on scope of land improvement project and total projected cost,

individual hospital would have to “go to Tower Health” to get final approval in

capital budget from its board of directors).    See Hausmann v. Bernd, 271

A.3d 486, 494 (Pa. Super. 2022) (percentage of company’s overall business

conducted in given county, standing alone, not meaningful and not

determinative of “quantity” prong of venue analysis) (citing Hangey, 247

A.3d at 1142-43).

      Bearing in mind that “each case rests on its own facts,” Purcell, supra

at 1286, we conclude that Tower Health regularly conducts business in

Philadelphia County to establish venue. Specifically, Tower Health has the

requisite quality and quantity of contacts with that county where it: (1) wholly

and partially owns multiple Philadelphia properties, including an acute-care

hospital, two urgent care facilities, and a children’s hospital; (2) is the

managing partner of an LLC that owns a Philadelphia children’s hospital; (3)

conducts medical billing of all of its subsidiary hospitals through a Philadelphia

post office box; (4) actively asserts control and authority over its subsidiaries

by:   procuring their insurance policies, providing them general counsel,

conducting hospital CEO performance reviews and disciplinary actions,

ratifying the hospitals’ boards of directors, implementing acute-care hospitals’

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federal mandates, providing infrastructure support to hospitals, and making

final decision on hospitals’ large capital projects. Cf. Battuello v. Camelback

Ski Corp., 598 A.2d 1027 (Pa. Super. 1991) (corporate defendant’s single act

of soliciting business in Philadelphia not enough to confer venue).

       Here, the evidence demonstrates that Tower Health, a parent

corporation and named defendant, regularly conducts business in Philadelphia

County for purposes of establishing venue in Plaintiff’s chosen forum.

Accordingly, we conclude that the trial court abused its discretion when it

granted Defendants’ preliminary objections and transferred the action from

Philadelphia County to Montgomery County.

       Order reversed.       Case remanded.        Venue of matter transferred to

Philadelphia County. Jurisdiction relinquished.12

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/1/2022

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12Having reversed the trial court’s order, we need not address Plaintiff’s
remaining issues.

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