SWZ Financial v. Wonders, S. ( 2015 )

J-A32017-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SWZ FINANCIAL, LLC, A DELAWARE IN THE SUPERIOR COURT OF
LIMITED LIABILITY COMPANY, AP PENNSYLVANIA
STUDENT LOAN RELIEF, LLC, A
DELAWARE LIMITED LIABILITY
COMPANY, PAYLESS FINANCIAL GROUP,
LLC, A FLORIDA LIMITED LIABILITY
COMPANY AND EDWARD C. WELKE, AN
INDIVIDUAL
Appellants
v.
SARAH WONDERS, AN INDIVIDUAL
Appellee No. 64 WDA 2015
Appeal from the Order Dated December 9, 2014
In the Court of Common Pleas of Westmoreland County
Civil Division at No(s): 1647 of 2014
BEFORE: SHOGAN, J., OTT, J., and STABILE, J.
MEMORANDUM BY OTT, J.: FILED DECEMBER 30, 2015
SWZ Financial, LLC, a Delaware Limited Liability Company, AP Student
Loan Relief, LLC, a Delaware Limited Liability Company, Payless Financial
Group, LLC, a Florida Limited Liability Company, and Edward C. Welke, an
Individual (collectively, “SWZ Financial”), appeal the order of the trial court,
entered December 9, 2014, in the Court of Common Pleas of Westmoreland
County, sustaining preliminary objections filed by appellee, Sarah Wonders,
an Individual (Wonders), and dismissing SWZ Financial’s complaint on the
grounds of improper venue. SWZ Financial contends the trial court erred in
granting Wonders’ preliminary objection for improper venue and dismissing
J-A32017-15
SWZ Financial’s complaint. Based upon the following, we reverse and
remand to the trial court for further proceedings to address the remaining
preliminary objections.
This appeal arises from the complaint filed by SWZ Financial against
Wonders on May 16, 2014, in the Court of Common Pleas of Westmoreland
County, alleging abuse of process.1 For purposes of this appeal, we
summarize the allegations of SWZ Financial’s complaint, as follows.
____________________________________________
1
To establish a claim for abuse of process, the plaintiff must show the
defendant
(1) used a legal process against the plaintiff, (2) primarily to
accomplish a purpose for which the process was not designed;
and (3) harm has been caused to the plaintiff. Abuse of process
is, in essence, the use of legal process as a tactical weapon to
coerce a desired result that is not the legitimate object of the
process. Thus, the gravaman of this tort is the perversion of
legal process to benefit someone in achieving a purpose which is
not an authorized goal of the procedure in question.
Harris v. Brill, 844 A.2d 567, 572 (Pa. Super. 2004)(citation omitted). We
note that an action for abuse of process differs from an action for wrongful
use of civil proceedings (“Dragonetti action”). Pennsylvania’s Dragonetti Act
provides, in part:
A person who takes part in the procurement, initiation or
continuation of civil proceedings against another is subject to
liability to the other for wrongful use of civil proceedings:
(1) he acts in a grossly negligent manner or without probable
cause and primarily for a purpose other than that of securing the
proper discovery, joinder of parties or adjudication of the claim
in which the proceedings are based; and
(Footnote Continued Next Page)
-2-
J-A32017-15
SWZ Financial plaintiffs each have an address in Florida. Wonders
resides in Export, Westmoreland County, Pennsylvania. Wonders is a former
employee of United Tax Group, LLC (UTG), a Delaware limited liability
company that, until November 27, 2013, maintained its principal place of
business in Jupiter, Florida. On February 11, 2013, Wonders filed an action
against UTG in the United States District Court for the Southern District
Court of Florida, alleging, inter alia, a “hostile work environment” under Title
VII of The Civil Rights Act and a similar statute, the Florida Civil Rights Act.
The action proceeded to a jury trial on November 12 and 13, 2013, and the
jury awarded Wonders $70,000.00.
Counsel for UTG had advised Wonders’ counsel that UTG would be
unable to pay a substantial judgment due to its poor financial situation. On
December 23, 2013, following the entry of judgment, Wonders filed an
action in the 15th Judicial Circuit in Palm Beach County, Florida, seeking
injunctive relief and damages pursuant to the Uniform Fraudulent Transfer
Act (UFTA) against UTG and SWZ Financial, and two other defendants,
claiming the party defendants had conspired in the fraudulent transfer of
UTG assets.
_______________________
(Footnote Continued)
(2) the proceedings have terminated in favor of the person
against whom they are brought.
42 Pa.C.S. § 8351(a).
-3-
J-A32017-15
On January 21, 2014, counsel for SWZ Financial sent documents to
Wonders that conclusively demonstrated that none of SWZ Financial
plaintiffs were members of UTG or ever received any of UTG’s assets.
Wonders refused to discontinue the UFTA case against SWZ Financial
notwithstanding receipt of the documents. Because UTG has filed for
bankruptcy, the Florida action has been stayed. See SWZ Financial’s
Complaint, 5/16/2014, at ¶¶1–24.
SWZ Financial alleges Wonders has “perverted and abused the legal
process for the purpose of obtaining a benefit for [Wonders] to which she is
not entitled.” Id. at ¶30. SWZ Financial further alleges that “[Wonders’]
sole purpose in instituting the action against SWZ Financial is to coerce SWZ
Financial, who clearly are not liable for the debts of UTG, to pay money to
[Wonders] in satisfaction of her claims against UTG,” and that “[Wonders]
willfully and intentionally made illegal, improper or perverted use of the
process, as set forth above, with the actual knowledge of the wrongfulness
of her conduct and the high probability of causing damages to [SWZ
Financial].” Id. at ¶¶32–33. SWZ Financial claims damages for being
required to incur substantial legal fees and other damages, including
damages to reputation. See id. at ¶34.
In response to SWZ Financial’s complaint, Wonders filed preliminary
objections, including “Pa.R.C.P. 1028(a)—Improper Venue/forum non
-4-
J-A32017-15
conveniens.”2, 3
Wonders’ Preliminary Objections, 6/19/2014, at 5–8, § III.
The court sustained Wonders’ preliminary objection for improper venue and
dismissed SWZ Financial’s complaint, stating “Florida is the appropriate
venue for an abuse of process claim such as this one, because underlying
litigation is taking place in Palm Beach County, Florida, Florida law applies to
____________________________________________
2
Pennsylvania Rule of Civil Procedure 1028, which limits preliminary
objections to certain specified grounds, permits “improper venue” to be
raised by preliminary objection. See Pa.R.C.P. 1028(a)(1). Furthermore,
Rule 1006, governing venue, states, in relevant part, that “[i]mproper venue
shall be raised by preliminary objection and if not so raised shall be waived.”
Pa.R.C.P. 1006(e).
3
Wonders’ preliminary objections regarding forum non conveniens cite 42
Pa.C.S. § 5322(e). See Wonders’ Preliminary Objections, 6/19/2014, at
¶26. Section 5322(e) of the Judicial Code “controls when the alternative
venue is out-of-state. When the alternative venue is in-state, Pa.R.C.P.
1006(d)(1) controls.” Pisieczko v. Children’s Hosp., 73 A.3d 1260, 1262
n.3 (Pa. Super. 2013).
We note that “a petition, not preliminary objections, is the proper
vehicle in which to raise a forum non conveniens challenge.” Aerospace
Fin. Leasing v. New Hampshire Ins. Co., 696 A.2d 810, 813 n.11 (Pa.
Super. 1997). See also Zappala v. Brandolini Prop. Mgmt., 909 A.2d
1272, 1282 (Pa. 2006) (“The Note to Rule 1028 provides that ‘[o]f the three
grounds available to challenge venue, only improper venue may be raised by
preliminary objection as provided by Rule 1006(e). Forum non conveniens
and inability to hold a fair and impartial trial are raised by petition as
provided by Rule 1006(d)(1) and (2).’”).
We further note that SWZ Financial has objected to Wonders’ improper
use of preliminary objections raising forum non conveniens. See SWZ
Financial’s Response to [Wonder’s] Preliminary Objections, 7/7/2014, at
¶16.
-5-
J-A32017-15
this case, and all Plaintiffs are Florida residents or doing business in Florida.”
Order, 12/9/2014, at 2, ¶3. This appeal followed.4
Our standard of review is well settled:
A trial court’s ruling on venue will not be disturbed if the decision
is reasonable in light of the facts. A decision to transfer venue
will not be reversed unless the trial court abused its discretion. A
plaintiff’s choice of forum is given great weight, and the burden
is on the party challenging that choice to show it is improper.
Wilson v. Levine, 963 A.2d 479, 482 (Pa. Super. 2008) (citation omitted).
SWZ Financial argues that this action was filed in Westmoreland
County, Pennsylvania, in accordance with Pa.R.C.P. 1006, which provides, in
pertinent part:
(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, …
Pa.R.C.P. 1006(a)(1). SWZ Financial asserts “[Wonders] resided in
Westmoreland County and was served in said County and the action was
filed in Westmoreland County. Based on Rule 1006(a)(1) Westmoreland
County is the proper venue.” SWZ Financial’s Brief at 8–9. See also SWZ
Financial’s Response to [Wonders’] Preliminary Objections, at ¶12. (“Rule
____________________________________________
4
The trial court did not issue an order requiring a statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b).
-6-
J-A32017-15
1006 provides that an action against an individual can be brought in a
county in which the individual may be served. [Wonders] is a resident of
Westmoreland County where this action was initiated.”). Furthermore, SWZ
Financial asserts “[v]enue in an abuse of process case is not based on a
transaction or occurrence or in which jurisdiction an underlying action was
filed.” Id. at 9.
Here, the trial judge determined venue was improper in Westmoreland
County, citing Harris v. Brill, 844 A.2d 567 (Pa. Super. 2004), and Kring v.
University of Pittsburgh, 829 A.2d 673 (Pa. Super. 2003). See Order,
12/9/2014, at 4–5. Recently, this Court explained these decisions as
follows:
In Kring, the University of Pittsburgh School of Law’s Health Law
Clinic represented a patient who filed an action against a
Washington County dentist in the U.S. District Court for the
Western District of Pennsylvania, in Pittsburgh. The suit was filed
under the Americans with Disabilities Act, 42 U.S.C. §§ 12101-
12213, and, after trial, the jury ruled in favor of Kring, and
against the patient.
Kring subsequently filed a complaint in the Court of Common
Pleas of Washington County raising a Dragonetti claim against
the University. The University filed preliminary objections
claiming improper venue, which the trial court sustained,
“concluding that venue is improper in Washington County, but
proper in Allegheny County.” Kring, 829 A.2d at 675.
Venue is proper in the county where a transaction or occurrence
took place out of which the cause of action arose. See Pa.R.C.P.
1006(a)(1); Pa.R.C.P. 2179(a)(3), (4). Kring holds that a cause
of action for wrongful use of civil proceedings occurs when the
underlying lawsuit terminates in favor of the Dragonetti Act
plaintiff. In Kring, this occurred in Allegheny County when the
federal district court rendered a verdict in favor of Kring.
-7-
J-A32017-15
Accordingly, the transaction or occurrence requirement could not
serve as a basis for venue in Washington County. Additionally,
this Court rejected Kring’s argument that the University regularly
conducts business in Washington County, thus precluding venue
based on Pa.R.C.P. 2179(a)(2) (action may be brought against
corporation or similar entity where it regularly conducts
business).
Faced with a situation where there was no venue in Washington
County, but there was venue in Allegheny County, the Kring
court properly transferred the matter to Allegheny County.
Kring does not stand for the broad proposition that a plaintiff
may bring a Dragonetti action only in the county where the
underlying action took place. Rather, it stands for the more
limited proposition that venue is proper in that county.
In Harris, supra, three individuals, who were residents of
Crawford County, filed a lawsuit against Harris alleging violations
of the Racketeering Influenced Corrupt Organizations Act
(RICO), 18 U.S.C. §§1961-1968 in the Court of Common Pleas of
Crawford County. Harris removed the action to U.S. District
Court for the Western District of Pennsylvania, in Erie. While the
matter was pending, each plaintiff filed a voluntary dismissal of
his claim.
Subsequently, Harris filed a Dragonetti action [and abuse of
process action] against the three individuals in the Court of
Common Pleas of Erie County. The defendants filed preliminary
objections asserting that venue was improper in Erie County,
and that the case should be transferred to Crawford County
under forum non conveniens pursuant to Pa.R.C.P. 1006(d)(1).
The trial court agreed, and transferred the matter to Crawford
County.
On appeal, this Court reversed, noting that in a claim involving
an individual, venue is appropriate where “a transaction or
occurrence took place out of which the cause of action arose.”
Pa.R.C.P. 1006(a). Consistent with Kring, this Court held that
termination of the federal court litigation in Erie County rendered
Erie County the place where the claim for wrongful use of civil
proceedings arose. Therefore, venue was proper in Erie County.
However, we noted, “this does not mean that venue in this case
is improper in Crawford County.” Harris, supra at 572.
-8-
J-A32017-15
Accordingly, this Court reversed the order of the trial court and
remanded for further proceedings, including the determination of
preliminary objections to venue based on forum non conveniens.
Baylson v. Genetics & IVF Institute, 110 A.3d 187, 189–190 (Pa. Super.
2015) (footnote omitted).5
We find that neither Kring nor Harris support the trial court’s decision
that venue is improper in Westmoreland County. We note that both cases
only dealt with the “transaction or occurrence” portion of Rule 1006(a)(1).
We further note that both cases stand for the proposition that venue in a
Dragonetti action is proper in the county where the underlying lawsuit
terminated in favor of the Dragonetti plaintiff — not that venue is only
proper in such county.
____________________________________________
5
In Baylson, this Court held the trial court erred in transferring the
plaintiffs’ Dragonetti action to Montgomery County based on a belief that
venue was only proper there. This Court explained:
[V]enue is proper in Philadelphia because [defendant] Genetics
had an office in Philadelphia and regularly conducted business
there. See Pa.R.C.P. 2179. Accordingly, under Pa.R.C.P.
1006(c)(2), which governs joint and several liability among
defendants, venue is also proper in Philadelphia with respect to
[defendants] M&C and Clemm. It is equally clear that venue is
proper in Montgomery County because that is where the
underlying suit was decided, leading to the events from which
the wrongful use of civil proceedings arose. See Kring, supra;Harris, supra.Id. at 190. The Baylson Court reversed the orders sustaining the
preliminary objections and remanded for the court to rule on the remaining
preliminary objections. See id.
-9-
J-A32017-15
Here, Wonders does not dispute SWZ Financial’s argument that she
resides in Westmoreland County and was served in Westmoreland County.
See Pa.R.C.P. 1006(a)(1) (“[A]n action against an individual may be brought
in and only in a County in which (1) the individual may be served ….”).
Rather, Wonders contends “Because the Circuit Court in Palm Beach County,
Florida is presiding over the Florida Litigation between the parties, the
[c]ourt in Florida is the appropriate venue for the instant case.” Wonders’
Brief at 5. See also Wonders’ Preliminary Objections, 6/19/2014, at ¶25.
However, “per Rule 1006(a), venue is valid ‘where the individual may be
served.’” Silver v. Thompson, 26 A.3d 514, 517 (Pa. Super. 2011).
Therefore, we conclude the trial court erred in granting Wonders’ preliminary
objection and dismissing SWZ Financial’s complaint on the grounds of
improper venue.
Accordingly, we reverse and remand for the court to address Wonders’
remaining preliminary objections.
Order reversed. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/30/2015
- 10 -