M. Glassic v. Stillwater Lakes Civic Association, Inc. ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Michael Glassic and Noreen Gorka, :
individually and as h/w, :
Appellants :
:
v. : No. 1973 C.D. 2015
: Submitted: June 3, 2016
Stillwater Lakes Civic Association, Inc., :
Nicholas C. Haros, Esquire, Young and :
Haros, LLC, and Gregory Malaska, :
Esquire :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE SIMPSON FILED: September 14, 2016
Michael Glassic and Noreen Gorka, individually and as husband and
wife (Appellants), appeal from the order of the Lehigh County Court of Common
Pleas (trial court)1 sustaining the preliminary objection filed by attorneys for Young
and Haros, LLC, (Firm), Nicholas C. Haros, Esquire, and Gregory Malaska, Esquire
(collectively, Counsel), and Stillwater Lakes Civic Association, Inc. (Association)
(collectively, Appellees) as to venue. The trial court determined venue in Lehigh
County (Chosen Forum) was improper, and transferred the matter to the Monroe
County Court of Common Pleas. Appellants argue venue is proper because the
Firm regularly conducts business in the Chosen Forum. Appellants also assert
Counsel’s contacts in the Chosen Forum meet the quantity and quality test for
sufficient contacts. Upon review, we affirm.
1
The Honorable J. Brian Johnson presided.
I. Background
The Association owns a planned resort community in Monroe County
known as Stillwater Lakes Estates (Community). Appellants, who reside within
the Community, operated a website and a message board for Community news at
the web addresses www.stillwaterlakes.net and www.stillwaterlakes.com. On
behalf of the Association, Counsel sued Appellants in federal court on a trademark
infringement claim involving their use of the Association’s web domain.
Thereafter, in June 2014 Appellants filed a complaint against
Appellees in the trial court alleging wrongful use of civil proceedings. This is the
lawsuit with which we are concerned. In their complaint, Appellants represented
Counsel and the Firm conducted business in the Chosen Forum. After various
pleadings, Appellees filed a preliminary objection to Appellants’ second amended
complaint, challenging venue in the Chosen Forum. In support of their venue
objection, Appellees appended an affidavit executed by Nicholas Haros, a principal
of the Firm (Affidavit). See Reproduced Record (R.R.) at 19a. In the Affidavit,
Haros attests the Firm does not have offices located in the Chosen Forum, and it
does not regularly conduct business there. Specifically, he states:
During the past [12] months, [the Firm] has provided over
[4,000] hours of service to its clients. Out of that time, the
services provided to clients living [in] or with offices in [the
Chosen Forum] consisted of the following:
(a) 0.5 Attorney Hours and 3.6 Paralegal hours spent preparing
and recording two deeds for properties located in Monroe
County for a couple who reside in Coopersburg; and[,]
(b) 1.2 Attorney Hours advising a small nonprofit corporation
located in Coopersburg.
2
Id. (emphasis in original).
The parties argued the preliminary objections. After argument, the
trial court granted jurisdictional discovery. Appellants conducted depositions of
Counsel as to the Firm’s business contacts with the Chosen Forum.
Malaska testified he represented Presidential Village Community
Association (PVCA), based in the Chosen Forum, by filing 125 deeds and assisting
it with terminating the planned community. PVCA was the primary revenue
generator from the Chosen Forum. Malaska also represented clients in litigation
filed in the Chosen Forum. In particular, after obtaining judgments in Monroe
County, the judgments were transferred to the Chosen Forum for execution. He
provided legal services for 10 clients from the Chosen Forum in the past 14 years.
Haros testified regarding the Firm’s income attributable to clients
located in and business contacts with the Chosen Forum. The Firm, founded in
2003, is comprised of three attorneys. As of April 2015, the Firm did not have any
clients located in the Chosen Forum, and it had no ongoing matters in the trial
court. Haros believes the Firm represented six or seven clients from the Chosen
Forum over the past five years. The largest client among them was PVCA. Over
the course of that representation, from 2005 to 2013, PVCA may have paid the
Firm $25,000, which may have included filing costs for the deeds.
Haros’ representation of clients in the Chosen Forum was minimal. In
the last 15 years, he did not litigate any cases in the Chosen Forum. On the
transactional side, he advised a community association near Trexlertown for
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approximately three years, ending in April 2013. While at the Firm, Haros met
with one client in the Chosen Forum for 3.5 hours.
As to revenue generated from clients located in the Chosen Forum,
Haros testified as follows:
Date % of Firm Revenue
2009 (1/1/09 to 12/31/09) 0.89
2010 (1/1/10 to 12/31/10) 0.44
2011 (1/1/11 to 12/31/11) 0.53
2012 (1/1/12 to 12/31/12) 0.04
2013 (1/1/13 to 12/31/13) 0.29
2014 (1/1/14 to 12/31/14) 0.20
2015 (1/1/15 to 4/6/15) 0.12
Based on the depositions, which were entered into the record, the trial
court sustained Appellees’ preliminary objection as to improper venue.
Specifically, the trial court reasoned Appellees’ contacts with the forum were of an
“insufficient ‘quantity’ to establish jurisdiction.” See Tr. Ct. Order, 5/13/15, n.1
(citing Zampana-Barry v. Donaghue, 921 A.2d 500 (Pa. Super. 2007)).
In response to Appellants’ concise statement of the errors complained
of on appeal, the trial court issued its opinion pursuant to Pa. R.A.P. 1925(a). See
Tr. Ct., Slip Op., 7/22/15. The trial court found: “[Counsel and the Firm] rarely,
and in recent years[,] have not at all, entered [the Chosen Forum] to perform any
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part of [the] transactional representation [to 10 clients over the past 14 years].” Id.
at 3. It further found, both as to activities performed in the Chosen Forum, and
legal services performed on behalf of clients located in the Chosen Forum, “that 17
representations over the course of [14] years, which account for only 0.39% of [the
Firm’s] income over the last five (5) years, falls short of demonstrating conduct
sufficiently regular to be considered habitual.” Id. at 4. As a result, the trial court
concluded venue did not properly lie in the Chosen Forum.
Appellants appealed the trial court’s order to the Superior Court. The
Superior Court transferred the matter to this Court pursuant to Pa. R.A.P. 751.
II. Discussion
Appellants argue the Firm’s contacts are of both sufficient quality and
quantity to support venue in the Chosen Forum. They also contend the trial court
disregarded Malaska’s testimony that the Firm continuously provided legal
services to clients located in, or by practicing in the Chosen Forum.
This Court reviews the trial court’s decision to transfer venue for an
abuse of discretion or legal error. Purcell v. Bryn Mawr Hosp., 579 A.2d 1282 (Pa.
1990). A trial court’s decision to transfer a case for improper venue will not be
disturbed if the decision is reasonable in light of the facts. McMillan v. First Nat’l
Bank of Berwick, 978 A.2d 370 (Pa. Super. 2009). If any proper basis exists for
the trial court’s decision to transfer venue, that decision must stand. Schultz v.
MMI Prods., Inc., 30 A.3d 1224 (Pa. Super. 2011).
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A plaintiff’s choice of forum is given great weight. Singley v. Flier,
851 A.2d 200 (Pa. Super. 2004). However, “the presumption in favor of a
plaintiff’s choice of forum has no application to the question of whether venue is
proper in the plaintiff’s chosen forum; venue either is or is not proper.” Scarlett v.
Mason, 89 A.3d 1290, 1292 (Pa. Super. 2014). Under Pa. R.C.P. No. 1006, the
party challenging venue bears the burden to show venue is improper. Applying
these standards, we consider whether the trial court erred in transferring venue
from the Chosen Forum to Monroe County here.
Appellants reside in Monroe County. Their cause of action arises
from activities that occurred in Monroe County, and the property involved in the
action is located in Monroe County. The Association is located in Monroe County,
and its principal place of business is in Monroe County. The Firm is located in
Monroe County, and Counsel primarily practices in Monroe County.
Venue as to Counsel, as individuals, is only proper where “(1) the
cause of action arose or where a transaction or occurrence took place out of which
the cause of action arose … or (2) the property or part of the property which is the
subject matter of the action is located ….” Pa.R.C.P. No. 1006. Therefore, venue
is not proper against Counsel as individuals.
Pursuant to Pa.R.C.P. No. 1006(c)(1), in cases involving joint and
several liability of multiple defendants, when venue is proper as to one defendant, it
is proper as to all defendants. Bradley v. O’Donoghue, 823 A.2d 1038 (Pa. Cmwlth.
2003). Thus, as long as venue is proper as to the Firm, it is also proper as to Counsel.
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Under Pa.R.C.P. No. 2179(a), venue is appropriate as to the Firm only
in:
(1) the county where [the] 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;
(4) a county where a transaction or occurrence took place out
of which the cause of action arose; or
(5) 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 ….
Id. (emphasis added).
We analyze whether the Firm “regularly conducts business” based on
the quantity and quality of business contacts with the Chosen Forum. Purcell. Our
Supreme Court explained:
Quality of acts means those directly furthering, or essential to,
corporate objects; they do not include incidental acts.
Quantity means those acts which are so continuous and
sufficient to be general or habitual .... [T]he 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.
Id. at 1285 (emphasis added) (quotation omitted). See also Donaghue, 921 A.2d at
503. Both the quality and the quantity of acts must be sufficient to confer proper
venue. Purcell.
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“Regularly conducting business” does not include incidental acts or
acts that are not essential to the business. Gale v. Mercy Cath. Med. Ctr. Eastwick,
Inc., 698 A.2d 314 (Pa. Super. 1997). For example, marketing and advertising in a
chosen forum are insufficient contacts to confer venue. Purcell. Additionally,
website activities are not sufficient because such contact with the chosen forum is
merely incidental to a business’s activities. Kubik v. Rte. 252 Inc., 762 A.2d 1119(Pa. Super. 2000).
The Firm is engaged in the business of representing clients and
providing legal services. Thus, lawsuits filed in the Chosen Forum are direct
contacts of sufficient quality to confer venue. Further, performing services for
clients located in the Chosen Forum for various legal transactions are also quality
contacts. However, the contacts must also meet quantity thresholds. Purcell.
One objective measure of sufficient quantity of contacts is the
percentage of revenue comprised by income generated in the chosen forum.
Donaghue.
Our Superior Court considered the quantity and quality of a law firm’s
contacts with the chosen forum in Donaghue. There, the plaintiffs filed a negligent
representation suit in Philadelphia County. The law firm objected to venue in
Philadelphia County when it was based in Delaware County. However, the trial
court overruled the objection, finding the law firm regularly conducted business in
the chosen forum. Specifically, the trial court found that generating approximately
three to five percent of gross revenue from litigation in Philadelphia was of
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sufficient quantity to confer venue. Significant here, in so holding, the Superior
Court upheld the trial court’s determination that venue was proper.
By contrast, here, the cause of action arose in Monroe County.
Further, the parties involved in the litigation reside in or have a principal place of
business in Monroe County. The trial court found the Firm did not regularly
conduct business in the Chosen Forum because its contacts were minimal, and
many did not meet the qualitative threshold. Importantly, the trial court found the
amount of revenue, at approximately one third of one percent, did not meet the
quantitative threshold for sufficient business contacts. Like the Superior Court in
Donaghue, we uphold the trial court’s determination.
Regarding the quantity of contacts, we agree the Firm’s representation
of 10 clients over 14 years on a piecemeal basis does not constitute such continuous
contact as to be habitual. Based on Haros’ testimony, the Firm’s revenue stream
from clients located in the Chosen Forum was consistently less than 1%, and, for
the past five years, generally less than approximately one half of one percent.
Further, venue is determined from a “snapshot [taken] at the time [the
litigation] is initiated.” Wilson v. Levine, 963 A.2d 479, 485 (Pa. Super. 2008).
At the time Appellants filed the underlying litigation, in June 2014, there is no
record of any contacts between the Firm and the Chosen Forum. The Firm ceased
representing its primary client in the Chosen Forum, PVCA, in 2013, when PVCA
terminated its existence as a community association. Also in 2014, only 0.20% of
the Firm’s income was generated by clients in the Chosen Forum.
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Therefore, we discern no abuse of discretion or legal error in the trial
court finding venue in the Chosen Forum improper, and transferring venue to the
Monroe County Court of Common Pleas.
III. Conclusion
For the foregoing reasons, we affirm the trial court’s order.
ROBERT SIMPSON, Judge
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IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Michael Glassic and Noreen Gorka, :
individually and as h/w, :
Appellants :
:
v. : No. 1973 C.D. 2015
:
Stillwater Lakes Civic Association, Inc., :
Nicholas C. Haros, Esquire, Young and :
Haros, LLC, and Gregory Malaska, :
Esquire :
ORDER
AND NOW, this 14th day of September, 2016, the order of the Lehigh
County Court of Common Pleas is AFFIRMED.
ROBERT SIMPSON, Judge