McLaughlin, J. v. Zook Motors ( 2023 )

J-A02026-23
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JAY R. MCLAUGHLIN INDIVIDUALLY : IN THE SUPERIOR COURT OF
AND D/B/A MCLAUGHLIN LOGGING : PENNSYLVANIA
:
Appellants :
:
:
v. :
:
: No. 182 WDA 2022
ZOOK MOTORS INC. :
Appeal from the Order Entered January 27, 2022
In the Court of Common Pleas of McKean County
Civil Division at No. 918 C.D. 2019
BEFORE: BOWES, J., MURRAY, J., and PELLEGRINI, J.*
MEMORANDUM BY MURRAY, J.: FILED: FEBRUARY 24, 2023
Jay R. McLaughlin (Appellant), individually and d/b/a McLaughlin
Logging, appeals from the order dismissing his complaint against Zook Motors,
Inc. (Zook), for failure to join Laura Turner (Turner) and Sando Ferrucci
(Ferrucci) as indispensable parties.1 We affirm.
The history of this case is long and convoluted. In December 2017,
Appellant and Ferrucci visited Zook to purchase a truck for their future
business. While at Zook, they negotiated the purchase of a truck for
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* Retired Senior Judge assigned to the Superior Court.
1Turner and Ferrucci are now married. See Trial Court Opinion, 3/28/22, at
2 (unnumbered).
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$58,094.40.2 Appellant subsequently wired the purchase funds to Zook’s
account. Zook thereafter transferred sole title and possession of the truck to
Turner. As a result, Appellant filed a civil complaint against Zook alleging
causes of action for (1) breach of contract; (2) civil conspiracy; (3)
conversion; (4) negligence; and (5) punitive damages. Complaint, 3/10/20.
On May 4, 2020, Zook filed an Answer and New Matter.
[Zook] alleged that [Appellant] negotiated the truck purchase along
with another individual, [] Ferrucci, and that the truck was to be
acquired for a joint business venture between [Appellant] and Mr.
Ferrucci. [Zook] further alleged that the vehicle was then
transferred to [] Turner at the express direction of [] Ferrucci, who
acted with the apparent authority of [Appellant], and that [Zook]
acted in good faith and in reliance on the apparent authority of []
Ferrucci.
On May 22, 2020, [Appellant] filed a Response to [Zook’s] New
Matter in which [Appellant] denied that the decision to purchase
the truck was jointly made, and likewise denied that [] Ferrucci
acted with any authority when directing that the truck be
transferred to [] Turner.
Trial Court Opinion, 3/28/22, at 2 (paragraph designations omitted).
On August 20, 2020, Zook filed a complaint to join Ferrucci and Turner
(collectively, Additional Defendants) as defendants (hereafter, complaint to
join). Zook claimed Appellant’s “losses and damages, if any, are the result of
acts or omissions of the Additional Defendants.” Complaint to Join, 8/20/20,
¶ 3. Zook explained:
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2Appellant and Ferrucci intended to use the truck in a wastewater treatment
business.
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Several days after payment of the purchase funds, and with no
company name or business location having been established, []
Ferrucci, acting with apparent authority of [Appellant], advised
Zook … that the truck would be temporarily titled in the name of
[] Turner, an associate of Ferrucci.
Id. ¶ 18. According to Zook, it transferred and titled the vehicle to Turner in
good faith. Id. ¶¶ 19-20. Zook asserts, should it be found liable, Additional
Defendants are jointly and severally liable. See generally id. (Prayers for
Relief).
Appellant responded by filing a motion to quash the complaint to join
and compel discovery. Motion to Quash and Compel, 8/28/20. Appellant
argued Zook untimely filed its complaint to join “242 days after service of the
complaint,” without the consent of Appellant or the trial court. Id. ¶¶ 11, 17.
Appellant maintained Zook failed to show “reasonable justification for the
delay in commencing joinder proceedings.” Id. ¶ 21. Appellant averred that
joinder of Additional Defendants would cause him prejudice. Id. ¶ 20.
On October 2, 2020, Zook moved to dismiss its complaint to join and
discontinue its action against Additional Defendants. Motion to Dismiss,
10/2/20. Zook also notified the court that Additional Defendants filed a
bankruptcy proceeding in New York State. Id. ¶ 24.
Separately, Zook moved to dismiss Appellant’s complaint for failure to
join Additional Defendants as indispensable parties. Id. ¶ 27. Zook explained
that in an unrelated civil action, McLaughlin had identified Ferrucci and Turner
as participants in the wastewater treatment business. Id. at ¶¶ 18-20
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(referencing Advanced Water Services, LLC et al. v. Ferrucci and Turner,
No. 2019-10918).
The trial court scheduled a hearing on Zook’s motion to dismiss its
complaint to join for November 13, 2020. On November 9, 2020, however,
the trial court deemed Zook’s motion to dismiss uncontested and granted the
motion with prejudice. Order, 11/9/20.
On November 12, 2020, Appellant requested reconsideration of the
court’s November 9, 2020, order. The trial court granted reconsideration and
amended its November 9, 2020, order to provide, in part:
It appearing that [Zook’s] Motion to Discontinue as to Additional
Defendants would result in the exclusion of indispensable
parties, that motion is DENIED without prejudice.
Trial Court Order, 12/7/20, at 3 (unnumbered) (emphasis added).
On December 23, 2020, Appellant filed a motion to amend his complaint.
Appellant’s proposed amended complaint omitted the counts for conspiracy
and conversion. See generally Amended Complaint, 12/23/20. Importantly,
Appellant again failed to name Turner or Ferrucci as parties. See id.
Appellant also filed a motion to quash Zook’s complaint to join. Motion to
Quash, 12/23/20.
On January 27, 2021, the trial court granted Appellant’s motion to
amend complaint. Order, 1/27/21. The court scheduled a hearing on
Appellant’s motion to quash the complaint to join for March 5, 2021. In the
interim, on February 5, 2021, Zook petitioned to withdraw its motion to
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discontinue the complaint to join. Petition to Withdraw (Discontinuance),
2/5/21.
On February 12, 2021, after a hearing, the trial court addressed the
pending motions. The court ordered:
[Zook’s] Motion to Dismiss [Appellant’s] Complaint is DISMISSED
without prejudice. As the parties have agreed to conduct limited
discovery as to the question of indispensable parties, dismissal of
the Complaint would be inappropriate.
… [Zook’s] Complaint to Join Additional Defendants shall be
deferred while the parties conduct limited discovery as to the issue
of indispensable parties. Upon completion of limited discovery,
the parties shall be prepared to argue this issue before the Court.
… [Zook’s] Petition to Withdraw Motion to Discontinue Action
Against Additional Defendants is moot. This Court, in its Order
dated December 7, 2020, denied said motion without prejudice.
Therefore, a withdrawal of the Motion is unnecessary. Despite the
fact that said Motion was already denied, [Zook] may withdraw
the Motion if they so choose. To the extent that any confusion
exists, [Zook’s] Complaint to Join Additional Defendants has not
been discontinued and remains outstanding.
At this time, two (2) motions remain outstanding: (1)
[Appellant’s] Motion to Quash [Zook’s] Complaint to Join
Additional Defendants and (2) [Zook’s] Complaint to Join
Additional Defendants. Decision on these motions shall be
deferred until the conclusion of the parties’ limited discovery or
until further hearing before the Court.
Order, 2/12/21, at 2 (unnumbered).
The trial court ordered Zook to schedule depositions of the Additional
Defendants. Order, 3/5/21. A few days later, the trial court scheduled a
status conference for June 11, 2021. On April 15, 2021, without objection,
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the trial court permitted Appellant to again amend his complaint. The parties
stipulated to the completion of discovery by July 15, 2021. Order, 5/14/21.
On August 26, 2021, Zook filed a motion to dismiss Appellant’s
complaint for nonjoinder of indispensable parties, along with a brief in support
of its motion. Motion to Dismiss, 8/26/21. Zook’s motion alleged:
At the time of the transaction for the vehicle in question,
[Appellant] and his wife were involved in a business venture with
[] Ferrucci and [] Turner, namely a partnership involving water
treatment services.
• In December, 2017, [Appellant] and [] Ferrucci went together
to meet a sales representative at [a] Zook [] dealership regarding
the purchase of the vehicle.
• The Zook [] representative understood the vehicle was being
purchased as part of the business venture, and that an agency
relationship existed between [Appellant] and Ferrucci.
• Funds were wired from [Appellant’s] bank account to Zook [] to
pay for the vehicle.
• Title to the 2016 Ford F-350 was transferred by Zook [] to []
Turner.
Id. ¶ 6.
Appellant responded, filing a “Rule to Show Cause”3 why Zook should
not be held in contempt for failing to comply with the trial court’s discovery
deadline, and for filing its motion to dismiss beyond the deadline. Rule to
Show Cause, 8/27/21. The trial court dismissed Zook’s untimely filed motion
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3Appellant did not petition for a rule to show cause as provided in Pa.R.C.P.
206.4 – 206.6.
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on September 1, 2021. The court also scheduled a hearing on Appellant’s rule
to show cause for October 8, 2021, the same day as its status conference.
Zook filed a motion for reconsideration, which the trial court granted. Order,
9/28/21. The trial court advised that on October 8, 2021, the court would
hear argument on all outstanding motions. Id.
After the October 22, 2021, hearing, the trial court filed a memorandum
and order deeming Additional Defendants indispensable parties and directing
that Appellant join them as parties. Trial Court Order, 10/22/21, ¶¶ 1-2.
However, the memorandum and order were not served on the parties.
On December 7, 2021, Appellant moved for reconsideration of the trial
court’s October 22, 2021, order. The trial court granted relief:
[Appellant’s] counsel having averred in a motion filed this date
that he did not receive a copy of the [c]ourt’s Memorandum and
Order dated October 22, 2021, directing [Appellant] to join []
Turner and [] Ferrucci as additional parties, and it appearing that
[Zook’s] counsel likewise did not receive a copy of the [c]ourt’s
said Memorandum and Order, and that the date for [Appellant’s]
compliance has long passed and [Appellant] has been unduly
prejudiced, it is ORDERED that [Appellant] shall not later
than January 6, 2022 comply with this [c]ourt’s earlier
directive to join [Additional Defendants].
Order, 12/8/21 (emphasis added). The trial court attached and filed its
October 22, 2021, memorandum and order deeming Turner and Ferrucci
indispensable parties. See id. (attachment).
Appellant filed a Motion for Clarification on December 29, 2021.
Appellant claimed there was no proof “why [Additional Defendants] are
indispensable or as to what cause of action [Appellant] has against either
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Ferrucci or Turner.” Motion for Clarification, 12/29/21, ¶ 10. The trial court
granted clarification, and directed Appellant to its October 22, 2021,
memorandum and order. Order, 1/12/22, ¶ 3. The court expressly warned:
The [c]ourt has found Ferrucci and Turner to be indispensable
parties to this action. Failure to join indispensable parties is a
jurisdictional defect. See Pilchesky v. Doherty, 941 A.2d 95,
101 (Pa. Commw. Ct. 2003). When a court finds that there has
been a failure to join indispensable parties, they must either be
joined or the action dismissed. See Pa.R.C.P. No. 1032(b). The
[c]ourt shall not advise [Appellant] on how best to litigate this
case; the indispensable parties must be joined or the action
will be dismissed.
Id. ¶ 4 (emphasis added).4
On January 27, 2022, the trial court dismissed Appellant’s amended
complaint for failure to join indispensable parties. Order, 1/27/22. Appellant
timely filed a notice of appeal. Appellant and the trial court have complied
with Pa.R.A.P. 1925.
Appellant presents the following issue for our review:
Whether the lower court erred as a matter of law and/or
committed an abuse of discretion when it granted [Zook’s] Motion
to Dismiss [Appellant’s] Complaint for failure to join indispensable
parties?
Appellant’s Brief at 4 (capitalization modified).
Initially, we observe that the trial court dismissed Appellant’s complaint
for lack of subject matter jurisdiction, based upon the nonjoinder of
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4Counsel for Additional Defendants entered his appearance on January 24,
2022.
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indispensable parties. “The failure to join an indispensable party is a non-
waivable defect that implicates the trial court’s subject matter jurisdiction.”
Turner v. Estate of Baird, 270 A.3d 556, 560 (Pa. Super. 2022) (citation
omitted). “Subject matter jurisdiction raises a question of law for which our
standard of review is de novo and our scope of review is plenary.” Id. (citation
omitted). “[A] judgment or decree rendered by a court which lacks jurisdiction
of the subject matter or of the person is null and void.” Id.Appellant first explains:
It is not the purpose of this Brief to challenge the lower court’s
finding that [] Ferrucci and [] Turner are indispensable parties.
They are. It is the unfortunate purpose of this Brief to
demonstrate that the lower court abused its discretion in ordering
the Appellant to join them, as additional defendants, not later than
January 6, 2021.
Appellant’s Brief at 21 (capitalization modified). Appellant argues “the right
to join additional defendants is available only to a defendant, or to an
additional defendant; it is not available to a plaintiff.” Id. at 25. According
to Appellant, Pa.R.C.P. 2253 required Zook to file its complaint to join
additional defendants no later than 60 days after Appellant’s initial pleading.5
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5 Rule 2253 provides, in relevant part:
[N]either a praecipe for a writ to join an additional defendant nor
a complaint if the joinder is commenced by complaint, shall be
filed later than … sixty days after the service upon the original
defendant of the initial pleading of the plaintiff or any amendment
thereof ….
Pa.R.C.P. 2253(a)(1).
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Appellant’s Brief at 22. Appellant claims Zook’s complaint to join was filed
four months late. Id. Thus, Appellant concludes the trial court improperly
determined that Zook’s complaint to join “has not been discontinued and
remains outstanding.” Id. at 24 (emphasis omitted).
Appellant points out that Additional Defendants filed a motion to
continue a scheduled status conference, prior to being pled into the action.
Id. at 25. According to Appellant, the trial court granted their motion,
referring to Ferrucci and Turner as “additional defendants” both in the caption
and body of the order. Id. Appellant asserts the term “additional defendants”
refers only to persons who may be joined as defendants in a 3rd –
party complaint filed in the action by a defendant, or another
defendant, in accordance with the Joinder Rules.
Id. at 24 (citing Lower Frederick Twp. v. Clemmer, 543 A.2d 502 (Pa.
1988)). Appellant argues the trial court’s order required he “do something,
as plaintiff, that he could not do – join an additional defendant.” Id. at 26
(capitalization modified). Appellant insists:
All the lower court had to do to resolve the matter was to permit
the late filing of [Zook’s] Complaint to Join Additional Defendants.
In that event, indispensable parties would have been properly
joined, as additional defendants, in August 2020. The way the
lower court handled it, the joinder of Ferrucci and Turner, as
additional defendants, was not even directed until over a year
later.
Id. at 27.
Appellant also argues the trial court’s December 7, 2021, order did not
afford him 30 days to comply with its joinder directive. Id. According to
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Appellant, the four-year statute of limitation for the breach of contract action
as to Additional Defendants, expired on December 21, 2021. Id. As a result,
Appellant had only two weeks to effect joinder. Id. at 27-28. Finally,
Appellant claims the trial court never expressly dismissed or nullified Zook’s
complaint to join additional defendants. Id. at 29.
Zook counters that it filed its complaint to join to Appellant’s first
complaint. Appellee’s Brief at 13. Since then, Zooks asserts, Appellant
amended its complaint three times. Id. Zook contends the filing of amended
complaints rendered its complaint to join moot. Id. at 13-14.
Additionally, Zook emphasizes Appellant repeatedly moved to quash the
complaint to join. Id. at 14. According to Zook, Appellant
should be estopped from now asserting the lower court abused its
discretion in not permitting [Zook] to complete the joinder of
“Additional Defendants.”
Id. Zook agrees with the trial court that Appellant’s failure to join
indispensable parties deprived the court of subject matter jurisdiction. Id. at
15. Zook further disputes Appellant’s characterization of the trial court’s order
as referencing Turner and Ferrucci as “additional defendants.” Id. at 17.
Rather, Zook claims the trial court referred “to the need for [Appellant] to add
indispensable parties as defendants.” Id.
Our review is guided by the Rules of Civil Procedure. Rule of Civil
Procedure 2232(c) provides:
At any stage of an action, the court may order the joinder
of any additional person who could have joined or who
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could have been joined in the action and may stay all
proceedings until such person has been joined. The court in its
discretion may proceed in the action although such person has not
been made a party if jurisdiction over him cannot be obtained and
he is not an indispensable party to the action.
Pa.R.C.P. 2232(c) (emphasis added).
Appellant relies on Rule 2553 to argue that a plaintiff may not join
additional defendants. However, in Clemmer, our Supreme Court contrasted
Rule 2232(c) with Rules 2251 – 2257, which prescribe the procedures by
which a defendant may join additional defendants:
These rules, however, do not speak to the situation of the instant
case where a plaintiff is ordered to add another person as a party
defendant because that other person is an indispensable party. A
reading of Rules 2251 to 2274 reveals that they are intended to
apply to defendants who wish to join an additional defendant. To
illustrate this intent, we quote from Rules 2252, 2253, 2254, 2255
and 2256.
Rule 2252 sets forth who may join an additional defendant in a
lawsuit. Rule 2252(a) begins: “In any action the defendant or any
additional defendant may, as the joining party, join as an
additional defendant any person ….” (Emphasis supplied.)
Rule 2253 sets forth the time to file a praecipe for a writ or a
complaint. Rule 2253 provides: “Neither praecipe … nor a
complaint … shall be filed by the original defendant or an
additional defendant later than sixty (60) days ….” (Emphasis
supplied.)
Rule 2254 provides for the service of process in joining an
additional defendant. Rule 2254(a) begins: “If the venue of the
action by the plaintiff against the defendant is properly laid, the
defendant or any additional defendant may serve an additional
defendant in any other county ….” (Emphasis supplied.)
Rule 2255 sets forth the procedure in joining an additional
defendant. Rule 2255(a) merely states that the procedure
between the joining party and the additional defendant “shall be
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the same as though the party joining the additional defendant
were a plaintiff and the additional defendant were a defendant.”
Rule 2256 addresses the question of counterclaims. Rule 2256(c)
provides: “A party against whom a counterclaim is asserted shall
have the same right to join any one as an additional party that is
given to a defendant in Rule 2252.” (Emphasis supplied.)
Rules 2251-2257, by their very terms, are designed to apply to
the situation where a defendant has grounds to add an additional
defendant, or where one added as an additional defendant wants
to add another additional defendant. The only time the rules are
applicable to a plaintiff is where a plaintiff is counter-sued on a
counterclaim and that plaintiff, who becomes a counterclaim
defendant, wishes to join another as an additional defendant in
the counterclaim.
Clemmer, 543 A.2d at 508 (emphasis in original).
Our Supreme Court further observed,
the chancellor acted pursuant to Rule 2232(c) and ordered the
joinder of Dawn Lenore Kratz as an indispensable party. The
Rules of Procedure do not contain specific provisions
outlining a procedure where a plaintiff is required to add
another person as a party defendant. In the absence of a
mandated procedure, trial courts have adopted various methods
to effect a proper joinder of an additional party under
circumstances other than the traditional situation of a defendant
adding an additional defendant which is covered by Rules 2251,
et seq. ….
Id. at 509 (emphasis added). Thus, the Supreme Court recognized a plaintiff
may join “another person as a party defendant.” Id.
In Belle v. Chieppa, 659 A.2d 1035 (Pa. Super. 1995), this Court
approved the plaintiffs’ filing of a petition to amend their complaint to join
additional defendants, quoting the above language in Clemmer. Id. at 1039;
see also Meadows v. Goodman, 993 A.2d 912, 914-15 (Pa. Super. 2010)
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(approving, as a means for joining an additional party, plaintiffs’ motion to
amend the complaint).
In the instant case, the trial court ordered Appellant to join Turner and
Ferrucci as indispensable parties:
Having determined [] Ferrucci and [] Turner to be
indispensable, the [t]rial [c]ourt next considered what impact that
determination had on the case at hand. Failure to join
indispensable parties is a jurisdictional defect. See Pilchesky v.
Doherty, 941 A.2d 95, 101 (Pa. Commw. Ct. 2008). The issue of
indispensable parties may be raised at any point in the
proceedings, and cannot be waived. Id.Whenever it appears by suggestion of the parties or
otherwise that the court lacks jurisdiction of the subject
matter or that there has been a failure to join an
indispensable party, the court shall order that the action
be transferred to a court of the Commonwealth which has
jurisdiction or that the indispensable party be joined, but
if that is not possible, then it shall dismiss the action.
Pa.R.C.P. No. 1032(b). In accordance with this Rule, the [t]rial
[c]ourt [o]rdered that the indispensable parties be joined, and
gave [Appellant] ample opportunity to do so. The parties were
well aware that joinder of indispensable parties was an issue in
this case, as it was initially brought up well over a year ago.
Having ultimately determined the parties to be indispensable, but
knowing that such a finding would likely put [Appellant] out of
court, the [t]rial [c]ourt permitted interlocutory appeal of its
[m]emorandum and [o]rder pursuant to 42 Pa.C.S.A. § 702(b).
[Appellant] chose not to appeal. Therefore, the [t]rial [c]ourt had
no alternative but to dismiss the action, as clearly set forth in
Pa.R.C.P. No. 1032(b).
Trial Court Opinion, 3/28/22, at 7-8 (unnumbered). Discerning no error, we
agree with the trial court’s reasoning and conclusion. See id. We therefore
affirm the trial court’s order dismissing Appellant’s complaint with prejudice.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/24/2023
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