Richman, A. v. Perelman, M. ( 2015 )

J-A25038-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
AARON RICHMAN, INDIVIDUALLY AND IN THE SUPERIOR COURT OF
DERIVATIVELY ON BEHALF OF PENNSYLVANIA
INSTITUTE OF TERRORISM RESEARCH
AND RESPONSE, INC.,
Appellant
v.
MICHAEL PERELMAN,
Appellee No. 953 EDA 2014
Appeal from the Order Entered February 27, 2014
in the Court of Common Pleas of Philadelphia County
Civil Division at No.: 4321, July Term 2013
BEFORE: DONOHUE, J., WECHT, J., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED APRIL 21, 2015
Appellant, Aaron Richman, appeals, for himself and derivatively, from
the order sustaining the preliminary objection of Appellee, Michael Perelman,
to improper venue, and transferring venue to York County, Pennsylvania,
with costs and fees to be paid by Appellant.1 Appellant argues venue in
Philadelphia was proper. Under our standard of review, we affirm.
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*
Retired Senior Judge assigned to the Superior Court.
1
Appellant refers to himself in both the singular and the plural. For
convenience and simplicity we will refer to Appellant in the singular
throughout, while continuing to recognize that he appeals in a dual capacity.
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Appellant Richman and Appellee Perelman are each fifty per-cent
owners and co-directors of the Institute of Terrorism Research and
Response, Inc. (ITRR), a Pennsylvania corporation with a registered office at
33 Kershaw Street, in York, Pennsylvania.
Appellant Richman is a resident of Israel, and “while in the United
States” resides at an apartment in Elkins Park, Pennsylvania. (Complaint,
7/31/13, at 2). He functions as the public “face of the company,” while
Appellee Perelman, residing in York, manages the “back-office” operations,
and does writing and research. (Trial Court Opinion, dated 2/27/14, and
filed 2/28/14, at 2; see also Complaint, at 3 ¶ 9, ¶ 11).
ITRR has no physical place of business in Philadelphia. It maintains a
Philadelphia post office box which it displays on its web site, corporate
brochure, agreements, invoices, letter head, and email signatures. (See
Trial Ct. Op., 2/28/14, at 1). The firm also maintains listed emergency
response telephone numbers in Philadelphia, Washington, D.C., and
Jerusalem, Israel. (See id.). There is no dispute that both parties
“tout[ed]” ITRR as “a Philadelphia company,” referencing the Philadelphia
post office box as its address in an apparent belief that Philadelphia as a
“larger city” projects a more suitable metropolitan image than does York for
marketing purposes. ([Appellants’] Response in Opposition to [Appellee’s]
Preliminary Objections, 12/27/13, at 2; Appellee’s Brief, at 12).
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On occasion, when ITRR required office space in Philadelphia for
meetings, etc. it “lease[d] temporary office [suite] space” from a temporary
office operation, Regus business center, “on an as-needed basis.” (Trial Ct.
Op., 2/28/14, at 1; Appellant’s Brief, at 5; see also [Appellant’s] Response
in Opposition to [Appellee’s] Preliminary Objections, 12/27/13, at 2
(Appellant’s Response to Preliminary Objections)).2
When Perelman announced plans in February, 2013, to leave ITRR and
start his own competing organization, disagreements arose. Perelman
apparently filed a writ of summons in York County on July 23, 2013. (See
Appellee’s Brief, at 7). About a week later, Richman filed the complaint
underlying this appeal in Philadelphia County for himself and “derivatively on
behalf of ITRR” alleging conversion, theft, and breach of fiduciary duty,
including a motion for preliminary injunction and seeking an accounting and
a declaratory judgment. (Complaint, at 2; see also Appellant’s Brief, at 3-
4; Appellee’s Brief, at 7).3
Appellee filed preliminary objections, alleging improper venue, on
October 30, 2013. Appellants opposed the preliminary objections, arguing
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2
We observe that the Regus center is in the Clothespin Building, across from
City Hall in Center City, Philadelphia’s downtown office district, while ITRR’s
mailbox is in zip code 19111. (See Appellants’ Response to Preliminary
Objections, at 5, 7-8). We take judicial notice that zip code 19111 is miles
away in the Northeastern section of the city.
3
Specifically, the complaint also alleged, inter alia, that Perelman diverted
$200,000 of ITRR funds for his personal or family use.
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that “venue is proper . . . because ITRR’s principal place of business in the
United States is located in Philadelphia County, [it] regularly conducts
business within Philadelphia County, and because transactions and
occurrences related to [Appellant’s] claims against Perelman were and are in
Philadelphia County[.]” (Appellant’s Response to Preliminary Objections, at
1).
As already noted, the registered address of ITRR was and remains 33
South Kershaw Street, in York. (See Trial Ct. Op., 2/28/14, at 1). Appellee
Perelman resides in York, PA and in fact was served in York. (See id., at 4).
ITRR’s bank account was opened at the Sovereign Bank in York (now
Santander Bank). Appellants assert that “monies received . . . at the post
office box . . . in Philadelphia . . . are deposited via Philadelphia local banks.”
(Complaint, at 3 ¶ 8).4
The trial court sustained the preliminary objections on February 27,
2014. This timely appeal followed.5
Appellant raises one multi-issued omnibus question for our review:
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4
Appellee asserts that checks are occasionally sent to the post office box
and deposited by Richman’s mother, who lives in Philadelphia. (See
Preliminary Objections, at unnumbered page 4 ¶ 15). Other funds are
transferred by wire. (See id.).
5
The trial court did not order a statement of errors. See Pa.R.A.P. 1925(b).
The court issued an opinion on April 8, 2014, adopting and incorporating the
order of February 27, 2014, and the supporting opinion docketed on
February 28, 2014. See Pa.R.A.P. 1925(a).
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Whether the commerce court in Philadelphia committed
reversible error by its determination that Philadelphia venue was
improper in a civil action which included derivative claims of a
corporation headquartered and located in Philadelphia against
one of its owners and co-directors — a York County resident —
relating to the corporation’s internal affairs, governance, rights
and obligations of its owners and directors, and where the [trial]
court (a) did not accept as true [Appellant’s] verified evidence in
response to [Appellee’s] unverified Preliminary Objection
(including as to the past receipt of monies in Philadelphia which
were converted by [Appellee], and the anticipated future receipt
of monies in Philadelphia exposed to further conversion by
[Appellee]), (b) improperly shifted the burden of proof to
[Appellant], and (c) neither ordered the parties to conduct
discovery on the venue issue if it had been required nor provided
an opportunity to amend the complaint to easily cure the venue
challenge[?]
(Appellant’s Brief, at 2).6
Appellant argues in essence that venue in Philadelphia was proper
because “ITRR’s principal place of business in the United States is located in
Philadelphia County, ITRR regularly conducts business within Philadelphia
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6
Appellant’s lengthy and convoluted question, which intermingles at least
three issues, facially fails to comply with Pennsylvania Rule of Appellate
Procedure 2116, which in pertinent part provides that “[t]he statement of
the questions involved must state concisely the issues to be resolved,
expressed in the terms and circumstances of the case but without
unnecessary detail.” Pa.R.A.P. 2116(a) (emphasis added). Similarly,
Appellant’s argument fails to comply with Pa.R.A.P. 2119(a), which in
pertinent part provides that “[t]he argument shall be divided into as many
parts as there are questions to be argued; and shall have at the head of
each part─in distinctive type or in type distinctively displayed─the particular
point treated therein, followed by such discussion and citation of authorities
as are deemed pertinent.” Pa.R.A.P. 2119(a). Although we could waive
Appellant’s question on this basis, we will review it on the merits in the
interest of judicial economy.
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County, and because transactions and occurrences related to [Appellant’s]
claims were and are in Philadelphia County[.]” (Appellant’s Brief, at 3). We
disagree.
“Generally, this Court reviews a trial court order sustaining preliminary
objections based upon improper venue for an abuse of discretion or legal
error. . . . On questions of law, our standard of review is de novo, and our
scope of review is plenary.” Lugo v. Farmers Pride, Inc., 967 A.2d 963,
970 (Pa. Super. 2009), appeal denied, 980 A.2d 609 (Pa. 2009) (citations
omitted). Similarly,
[O]ur standard of review for a challenge to an order transferring
venue 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.
However, if there exists any proper basis for the trial
court’s decision to grant the petition to transfer venue, the
decision must stand.
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.
Schultz v. MMI Products, Inc., 30 A.3d 1224, 1228 (Pa. Super. 2011)
(emphasis in original) (citations and internal quotation marks omitted).
The Rules of Civil Procedure address venue in pertinent part as follows.
Rule 1006. Venue. Change of Venue
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(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[;]
* * *
(e) Improper venue shall be raised by preliminary
objection and if not so raised shall be waived. If a preliminary
objection to venue is sustained and there is a county of proper
venue within the State the action shall not be dismissed but shall
be transferred to the appropriate court of that county. The costs
and fees for transfer and removal of the record shall be paid by
the plaintiff.
Pa.R.C.P. 1006(a)(1), (e).
Here, the trial court properly found that “the allegations in the
complaint make it clear that Perelman’s office or usual place of business is
York.” (Trial Ct. Op., at 4). The trial court’s finding is supported by the
record. Accordingly, the trial court correctly decided that under Pa.R.C.P.
1006(a)(1) venue was proper in York, where Appellee Perelman could be,
and was in fact, served. Furthermore, the trial court reasoned, in effect,
that if the allegation against Perelman is that he converted ITRR funds to his
personal use, those alleged transactions would have had to occur in York
County, and pertinent records would be located in York. (See id., at 5). We
agree.
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Appellant’s reliance on Pa.R.C.P. 2179 is misplaced. (See Appellant’s
Brief, at 17-19). That rule only applies to corporations or similar entities.
Appellee Perelman is a natural person, not a corporation or similar entity.
Appellant’s argument that Appellee failed to meet his burden of proof
is unsupported by the record and unpersuasive. (See id. at 11-12). To the
contrary, Appellant fails to establish that any of the transactions or
occurrences by Appellee Perelman asserted in the complaint occurred in
Philadelphia County.
Appellant also argues that the trial court should have ordered
discovery or an evidentiary hearing. (See id. at 12-13). We disagree. “A
trial court has discretion to determine the lack of need for further discovery
on the issue of venue, and we review its decision in that regard for abuse of
discretion.” Schultz, supra at 1228 (citation omitted); accord, Wimble v.
Parx Casino and Greenwood Gaming & Entertainment, Inc., 40 A.3d
174, 179 (Pa. Super. 2012). Here, the trial court’s conclusion is supported
by the facts of record. We decline to disturb its proper exercise of
discretion.
Moreover, Appellant’s repeated bald allegation that ITRR had a
principal place of business in Philadelphia by virtue of a post office box and
the occasional rental of temporary office space is unsupported by reference
to authority. “A business entity must perform acts in a county of sufficient
quality and quantity before venue in that county will be established.”
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Zampana-Barry v. Donaghue, 921 A.2d 500, 503 (Pa. Super. 2007),
appeal denied, 940 A.2d 366 (Pa. 2007) (citing Purcell v. Bryn Mawr
Hosp., 579 A.2d 1282, 1285 (Pa. 1990)). Here, Appellant’s vague
assertions of the occasional deposit of checks, or intermittent rental of
temporary office space, do not meet the quantity/quality test. They do not
establish Philadelphia “most certainly” as a “principal place of ITRR’s
business” under any controlling authority. (Appellant’s Brief, at 18). Aside
from citing generally to one case, without further discussion, Appellant offers
none.7 (See id.).
Nor does Appellant establish that the transactions and occurrences
complained of would have occurred in Philadelphia. The original deposit of a
check received in a mail-drop is not the transaction of which Appellants
complain. Any alleged conversion would necessarily be by Appellee
Perelman. There is no evidence of record that Perelman came to
Philadelphia to effect any such alleged conversion. (See Appellant’s Brief, at
16-17).
To the contrary, Appellant maintains that a transaction occurred in
Philadelphia even if “Perelman[ ] act[ed] while in his bathrobe sitting in his
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7
See Gale v. Mercy Catholic Medical Center Eastwick, Inc., Fitzgerald
Mercy Div., 698 A.2d 647 (Pa. Super. 1997), appeal denied, 716 A.2d 1249
(Pa. 1998). Procedurally, Gale does not apply, because it addresses
Pa.R.C.P. 2179, involving actions against a corporate entity, not at issue
here. See id. at 650-51.
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armchair in York.” (Id. at 16). Appellants’ hypothesis is entirely
unsupported by any controlling authority or the facts of record. (See id.).
Appellants’ assertion is legally frivolous.
The trial court’s decision is supported by the facts of record.
Appellant’s vague, generalized and unsupported assertions that Philadelphia
is ITRR’s principal place of business do not make it so, or even address the
pertinent quality/quantity test.
We discern no abuse of discretion or error of law in the trial court’s
determination that Appellee is a resident of York County, and any alleged
transactions complained of would have occurred in York. “[I]f there exists
any proper basis for the trial court’s decision to grant the petition to
transfer venue, the decision must stand.” Schultz, supra at 1228.
Order affirmed.
Judge Donohue joins the Memorandum.
Judge Wecht files a Concurring Memorandum in which Judge Donohue
joins.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/21/2015
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