Ismail, A. v. Volvo Group North ( 2018 )

J-A03025-18
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
AHMED ISMAIL AND LISA BURROW, : IN THE SUPERIOR COURT OF
HUSBAND AND WIFE : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 1231 EDA 2017
VOLVO GROUP NORTH AMERICA, LLC :
AND NUSS TRUCK GROUP INC. :
Appeal from the Order Entered March 30, 2017
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 161004541
BEFORE: GANTMAN, P.J., McLAUGHLIN, J., and PLATT*, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED MARCH 02, 2018
In this appeal, Ahmed Ismail and Lisa Burrow (Appellants) appeal from
an Order sustaining Preliminary Objections to the exercise of personal
jurisdiction over Appellee Volvo Group North America, LLC (Volvo LLC). We
affirm.
The trial court aptly summarized the factual and procedural history of
this case in its Pennsylvania Rule of Appellate Procedure 1925(a) Opinion.
See Trial Court Opinion, filed Oct. 10, 2017 (1925(a) Op.), at 1-3.
Appellants raise one issue in this appeal: “Whether the trial court erred in
finding it lacked personal jurisdiction over the Defendant, Volvo, even
though Volvo is a sole member LLC and its sole member is a citizen of
Pennsylvania[.]” Appellants’ Brief at 9. They argue that because Volvo LLC’s
sole member, Mack Trucks, Inc., is a Pennsylvania corporation, Volvo LLC is
____________________________________
* Retired Senior Judge assigned to the Superior Court.
J-A03025-18
essentially at home in Pennsylvania such that general personal jurisdiction is
proper here. See Appellants’ Brief at 5.
The trial court rejected Appellants’ argument. It first reviewed
constitutional limitations on the exercise of personal jurisdiction and the
presumption against piercing the corporate veil. See 1925(a) Op. at 3-4. It
then explained that in order for a limited liability company (LLC) to be
subject to personal jurisdiction based on its members’ contacts with the
forum, a plaintiff would have to present sufficient evidence to merit
disregarding the corporate form and treating the LLC and its members as
one. Id. at 5-6. Because Appellants had not produced any such evidence,
and had instead relied on the mere fact that Mack Trucks, Inc. is a citizen of
Pennsylvania to argue that general personal jurisdiction over Volvo LLC was
proper, the trial court sustained Volvo LLC’s Preliminary Objections and
dismissed Appellants’ claims against Volvo LLC. Id. at 6.
Our standard of review on appeal from an order sustaining preliminary
objections is de novo and our scope of review is plenary. Jones v. Bd. of
Dirs. of Valor Credit Union, 169 A.3d 632, 635 (Pa.Super. 2017). We will
affirm an order sustaining preliminary objections that results in the denial of
a claim or a dismissal of a suit only if the case is free and clear of doubt. Id.
After review of the record, the parties’ briefs, and the relevant law, we
affirm on the basis of the well-reasoned opinion of the Honorable Ellen H.
Ceisler, which we adopt and incorporate herein. See 1925(a) Op. at 3-6.
Order affirmed.
-2-
J-A03025-18
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/2/18
-3-
Circulated 02/14/2018 03:21 PM
IN .THE COURT OF COMMON PLEAS
FIRST JUDICIAL DISTRICT OF PENNSYLVANIA
CIVIL TRIALDIVISION
AHMED ISMAIL, et al. SUPERIOR COURT
Plaintiffs-Appellants 1231 EDA 2017 �-, '· :'·,
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V, 'COMMON PLEAS
.·., 16104541
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VOLVO GROUP NORTH AMERICA,
INC.
Defendant-Appellee
OPINION
ELLEN CEISLER, J. DATE: October 10, 2017
I. FACTS AND PROCEDURAL HISTORY
This appeal, filed by Plaintiffs-Appellants Ahmed Ismail and Lisa Burrow (''Mr. Ismail"
and "Ms. Burrow,'' individually, and "Appellants," collectively), stems from this Court's March
29, 2017 order sustaining Defendant-Appellee Volvo Group North America, LLC's ("Volvo")
preliminary objections, thereby determining that this Court could not exercise personal jurisdiction
over Volvo and dismissing all of Appellants' claims. against that entity. As will be fully discussed
. infra, App.cllnnts not cnt.itl,.;.d co "ppc!Hitc rcuct; therefore, this Coun respectfully requests that
U-rC
their appeal be denied.
The relevant facts are as follows: Mr. Ismail, an independent contractor who worked as a
tractor-trailer driver, leased a 2016 Volvo VN780 "truck-tractor" at some point from non-party
Anderson Trucking Services, Inc. Amended Complaint at 4. This vehicle make arid model was,
according to Appellants, subject to ail "Urgent Volvo Safety Recall" of an unspecified nature. Id.1
On February 22, 2016, Mr. Ismail was driving this truck-tractor near Corpus Christi, Texas,
I Appellants did not articulate in their Amended Complaint the
re'ason_ or reasons for this recall, nor did they explain
what the, relationship was between the recall and the harm they allegedly suffered.
lsrnan Etal Vs Volvo Group North America. ln-OPFLD
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when [the vehicle's] steer axle became dislodged from the suspension mounting interface
on the left side. This caused the steer axle to move rearward, forcing the truck to turn left;
and rendering it incapable of being controlled.i. [The vehicle careened] across two
eastbound travel lanes, through a grass median, became airborne, landed and passed
through two westbound travel lanes before striking a power pole and coming to rest in a
farm field.
On November 2, 2016, Mr. Ismail and his wife, Ms. Burrow, filed suit againstVolvo and
Nuss Truck and Equipment ("Nuss''),2 docketing a substantially similar Amended Complaint on
January 18., 2017. Therein, Mr. Ismail maintained that he had suffered a traumatic brain injury as
a result of the accident, the effects of whichhave prevented him from working ever since, stating
negligence and strict liability claims against Volvo, and a negligence claim against Nuss; m
addition, Ms. Burrow articulated loss of consortium claims again�t both Volvo and Nuss. Id.
On March J, 2017, both Volvo and Nuss filed respective sets of preliminary objections, in
which each party argued that this Court could not exert personal jurisdiction over them in this
matter, and that Appellants' Amended Complaint should thus be dismissed. See Nuss' Pre'liminary
Objections at 7-15; Volvo's Preliminary Objections at7-16. While Appellants did not respond to
Nuss' preliminary objections, they did reply in opposition to Volvo's preliminary objections on
March 20, 2017, arguing therein that general personal jurisdiction existed regarding Volvo because
Mack Trucking, Inc., the sole member of that LLC, was "a corporation whose principal place of
business is in Pennsylvania." Appellants' Bi'ief in Support of Response to Volvo's Preliminary
Objections ("Appellants' Brief') at 4-5. This prompted Volvo to submit a sur-reply on March 24,
2017.
On March 30, 2017, after thorough considerationof the case-record, the parties' respective
briefs, and the relevant case law, this Court sustained Volvo's preliminary objections and
2
Appellants asserted that "Nuss was responsible for pre-delivery service of the truck-tractor." Amended Complaint
at 4.
2
dismissed all of Appellants' claims against them. Ceisler Order, 3/29/17 at 1.3 In response;
Appellants appealed this Court's decision to the Superior Court of Pennsylvaniaon April 5, 2017.
II. DISCUSSION
This Court respectfully requests that the instant appeal be denied forthe following reason:
l. This Court could not exert personal jurisdiction over Volvo in this matter, as that entity
does not have "continuous and systematic" contacts with this Commonwealth, and
Appellants failed to establish that it would be proper to find that such jurisdiction
existed solely on the basis of the Pennsylvania contacts of Mack Trucking, Inc.,
Volvo's sole member.
As noted above, the question before this Court was whether, by virtue of Mack Trucking,
Inc. 's connections with the Commonwealth of Pennsylvania, Volvo was subject to general
personal jurisdiction in this matter. "When preliminary objections, if sustained, would result in the
dismissal of an action, such objections should be sustained only in cases which are clear and free
from doubt... Moreover, when deciding a motion to dismiss for lack of personal jurisdiction the
court must consider the evidence in the light most favorable to the non-moving party." Nutrition
Mgmt. Servs. Co. v. Hinchcliff, 926 A.2d 531, 535 (Pa. Super. Ct. 2007) (quoting King v. Detroit
Tool Co., 682 A.2d 313, 314 (Pa, Super. Ct. 1996)}
"A court may assert general jurisdiction over foreign (sister-state or foreign-country)
corporations to hear any
and all claims .against them when their affiliations with the State are so
'continuous and systematic' as to render them essentially at home in the forum State." Goodyear
Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct 2846, 2851 (2011) (citing International Shoe
Co. v. Washington, 66 S. Ct. 154, 158-59 (1945)).4
With respect to a corporation, the place of'incorporation and principal place of business are
paradigm bases for general jurisdiction. Those affiliations have the. virtue of being
3
The Honorable Denis Cohen sustained Nuss' unopposed preliminary objections via an order docketed on March
30, 2017. Cohen Order, 3/29/17 at 1.
4 ''The Due. Process Clause of the Fourteenth Amendment to the United States Constitution limits the authority of a
state to exercise in personam jurisdiction over non-resident .defendants." Mendel v. Williams, 53 A.3d 810, 817 (Pa.
Super. Ct. 2012) (citing Burger King Corp. v. Ru.dzewic.Z, I 05 S,Ct. 21.74, 218 l -82 (l98S)).
3
unique-that is, each ordinarily indicates only one place- as•well as easily ascertainable.
These bases afford plaintiffs recourse to at least one cleat and certain forum in which a
corporate defendant may be sued on any and all claims.
Daimler AG v, Bauman, 134 S. Ct. 746, 760 {2014) (citations and some punctuation omitted). This
is not to say that these two types of locations are the only places where a corporation may be
subject to general personal jurisdiction; however, theUnited States Supreme Court has. emphasized
the continued vitality of the "at home" rubric; thereby establishing an extremely high bar for a
plaintiff who .claims that general personaljurisdiction exists in a state that is neither the corporate
defendant's place of incorporation, nor its principal place of business. See id. at 760-61 (finding a
corporation could be haled into court anywhere it regularly did a significant amount of business
would be an "unacceptably grasping" interpretation of the concept of general jurisdiction). These
rules extend beyond suits against corporate entities, and are also applicable to cases involving
limited liability companies. See Finn v. Great Plains Lending, LLC, No. CV 15-4658, 2016 WL
705242; at *3 n.3 (E.D. Pa. Feb.23, 2016).5
Of similar import is the «strong presumption in Pennsylvania against piercing the corporate
veil. .. [as well as] the general rule is that a corporation shall be regarded as an independent entity
even if its stock is owned entirely by one person;" Lumax Indus;, Inc. v. Aultman, 669 A.2d 893>
895 (Pa. 1995) (citing College Watercolor Group, Inc. v. William H. Newbauer, Inc., 360 A.2d
200, 207 (Pa. 1976) and Wedner v. Unemployment Bd., 296 A.2d 792; 794 (Pa. 1972)). These
prcecpse .�1·c appHco.ble to limited liability cornoarries as well. See °MisSs:it.__y,__l{ub__Jnt:J
Pennsylvania. LLC, 6 A.3d 530, 537 (Pa. Super. Ct. 201 O) ("A 'membership. interest' is an
ownership interest in a limited liability company and is akin to an interest in stock of a
corporation."); Advanced Tel.. Sys., Inc. v. Com-Net Prof! Mobile Radio, LLC, 846 A.2d 1264,
1277-78 (Pa. Super. Ct, 2004) (discussing veil-piercing in the context of limited liability
s "Although the language of Daimler speaks onlyin terms of-corporations, the subsidiary at issue in Daimler was
Mercedes-Benz USA, LLC ("MB USA''). See Daimler, 134 S. Ct. at.751. In determining whether the United States
District Court for the Northern District of California could exercise general jurisdiction over Daimler-Chrysler
Aktiengesellschaft ("Daimler"), the Supreme Court concluded that. the district courtcould not exercise general
jurisdiction over Daimler because 'neither Daimler nor MB USA is incorporated in California, nor does either entity
have its principal place of business there.' Id. at76 l-62. Even though MBUSA is an LLC, the Court looked to
MBUSA's place of incorporation and principal place of business to determine whether it was essentially at home in
California and thus subject to general jurisdiction in the State."
4
companies); 6 Del.C. § 18-701 (''A limited liability company interest is personal property.i'j."
Consequently, in order to solve thejurisdictional question regarding a limited liability company, a
litigant cannot simply rely on the fact that the LLC's member is subject to general personal
jurisdiction in a particular state, as the LLC's form "will be disregarded only when the entity is
used to defeat public convenience, justify wrong, protect fraud or defend crime." Sams v.
Redevelopment Auth. of City of New Kensington, 244 A.2d 779, 781 (Pa. 1968) (citations
omitted);' cf Com. ex rel. Pappert v. TAP Phann. Prod., Inc., 868 A,2d 624, 632 (Pa. Cm with. Ct.
2005) (personal jurisdiction could not be exerted over parent company based upon subsidiary's
contacts with Pennsylvania via alter ego theory or veil piercing).
Here, it is undisputed that "Volvo is a limited liability company formed and existing under
the laws of the. State of Delaware, with its principal place of business in Greensboro, North
Carolina," whose "sole member is Mack Truck Inc., a Pennsylvania corporation." Volvo's
Preliminary Objections at 3; Amended Complaint at 3; see Appellants' Brief at 2-3. Appellants
claim that, because of the nature ofMack Truck, Inc. 's relationships with both this Commonwealth
and with Volvo, its "principal place ofbusiness" should essentially be imputed to Volvo, and that
Volvo shouldthus be deemed "a citizen of Pennsylvania.'' Appellants' Brief at 4-5. According to
Appellants, this means that Volvo would be subject to general personal jurisdiction in this. State,
and that Volvo's Preliminary Objections should have been overruled. Id.8
6
Asdiscussed infra, Volvo is an LLC established under Delaware state law. Of note is Pennsylvania's even more
explicit statutory declarations about the separate natures of an LLC and its members. See 15 Pa. C.S. § 8818 ("A
J,i'mited p0bil ity company- Tr. ah entity diStinCt' f\:'t>m_ it$ merr,bc.r or mambc�.s ...); ·id_. nt ·� ("(a)" No nseocy power
of member as member.v-A member is not an agent of a limited liability company solely by reason of being a
member.").
1
"[T[he factors to be considered in disregarding the corporate form [are] as follows: [Ujndercapitalization, failure to
adhere to corporate formalities, substantial intermingling of corporate and personal affairs and use of the corporate
form to perpetrate a fraud." Lumax, 669 A.2d at 895 (citation omitted).
8
Confusingly, Appellants spent a significant portion of their fairly short Brief discussing LLC citizenship in the
context of diversity jurisdiction, which is an issue of federal Ia\-Y that is completely inapplicable to this dispute, See
Appellants' Brief at4-5; 28 U.S.C. § 1332 ("Diversity of citizenship; amount in controversy; costs ... (a) The district
courts. shall have original jurisdiction of all civil actions where the matter in controversy exceedsthe sum or value of
$75,000., exclusive of interest and costs, and is between--
( I) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state, except thatthe district courts shall nothave original
jurisdiction under this subsection of an action between citizens of a State and citizens or subjects of a foreign state
who are lawfully admitted for permanent residence in the United States and are domiciled in the same State;
(3) citizens of different States and in which citizens or subjects of a foreign state are additionalparties; and
{ 4) a foreign state, defined in section l 60J(a} of this title, as plaintiff and citizens of a State· or of different States.").
5
However, Appellants' argument completely disregards all of the aforementioned case and
statutory law, as wel1 as the facts of this matter. While this Court can envision extremely rare
circumstances where there is some sort of abuse of the LLC form, thereby collapsing the legal
distinctions between a given limited, liability company and its members, and the combined entity
is essentially "at home" in Pennsylvania, a litigant cannot simply rest his whole jurisdictional
argument regarding an LLC on its member or members' contacts with this Commonwealth. See
Daimler, 13,4 S. Ct. at 760.9 Absent grounds for piercing the corporate veil, or applying an alter
ego theory, a litigant must establish that the LLC itself is subjectto general jurisdiction, by virtue
of the LLC 's Pennsylvania activities, rather than those of its.members. Thus, given that Appellants
based their entire line of jurisdictional. reasoning on the conclusory presumption that Mack Truck,
Inc.'s connections with Pennsylvania were chargeable to Volvo through, in essence, some form of
the transitive property, there was no basis for finding that general jurisdiction could be asserted
over Volvo. Consequently, this Court properly chose to sustain Volvo's Preliminary Objections
and dismiss Appellants'. claims against that party,
III. CONCLUSION
For the aforementioned reasons, this Court respectfully requests that the instant appeal be
denied.
�----
BY THE COURT·
J.
9
"Even if we were lo assume that MB USA is at home in California, and further to assume MB USA 's [California]
contacts are imputable to Daimler, there would still be no basis to subject Daimler to general jurisdiction in
California, for :Daimler's slim contacts with the State hardly render it at home there."
6
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