Rosenberg, M. v. North Penn Pediatric

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MARC ROSENBERG, D.M.D., P.C., : IN THE SUPERIOR COURT OF
AND MARC ROSENBERG, D.M.D. : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 1150 EDA 2020
NORTH PENN PEDIATRIC DENTAL :
ASSOCIATES, LLC; MICHAEL WONG, :
DDS AND RICHARD J. GALEONE, :
DDS
Appeal from the Order Entered March 6, 2020
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 190801032
BEFORE: OLSON, J., NICHOLS, J., and STEVENS, P.J.E.*
MEMORANDUM BY OLSON, J.: FILED APRIL 27, 2021
Appellants, Marc Rosenberg, D.M.D., P.C. and Marc Rosenberg, D.M.D.,
(collectively, “Appellants”) appeal from the March 6, 2020 order sustaining, in
part, the preliminary objections filed by North Penn Pediatric Dental
Associates, LLC, Michael Wong, DDS (“Dr. Wong”), and Richard J. Galeone,
DDS (“Dr. Galeone”) (collectively, “Dental Associates”) and dismissing
Appellants’ complaint without prejudice. The trial court sustained Dental
Associates’ preliminary objections as to venue only and transferred Appellants’
complaint to the Court of Common Pleas of Montgomery County,
Pennsylvania. We affirm, in part, the order as it pertains to sustaining the
preliminary objections and transferring the complaint to the Court of Common
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* Former Justice specially assigned to the Superior Court.
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Pleas of Montgomery County, and vacate, in part, the order as it pertains to
dismissing the complaint without prejudice.
The record demonstrates that on August 9, 2019, Appellants filed a
praecipe for writ of summons in the Court of Common Pleas of Philadelphia
County, Pennsylvania. Appellants subsequently filed a complaint on
November 23, 2019, against Dental Associates for breach of contract (4
counts). Dental Associates filed preliminary objections challenging venue as
improper, to which Appellants filed a response. On March 4, 2020, the trial
court entertained argument on the parties’ respective positions and thereafter
sustained Dental Associates’ preliminary objections on the grounds that venue
in Philadelphia County was improper. The trial court dismissed Appellants’
complaint without prejudice and transferred the matter to the Court of
Common Pleas of Montgomery County. This appeal followed.1
Appellants raise the following issues for our review:
[1.] Did Appellants properly initiate the underlying action in
Philadelphia County, Pennsylvania where the parties
consented in writing to venue in Pennsylvania?
[2.] Did the trial court commit an error of law in its interpretation
[or] application of the contractual venue selection clause?
[3.] Is venue in Philadelphia County, Pennsylvania reasonable?
Appellants’ Brief at 4.
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1 Both Appellants and the trial court complied with Pa.R.A.P. 1925.
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In sum, Appellants challenge the trial court’s order sustaining Dental
Associates’ preliminary objections on the grounds that venue in Philadelphia
County was improper. Id. at 14-32.
Generally, this Court reviews a trial court order sustaining
preliminary objections based upon improper venue for an abuse
of discretion or legal error. Further, the construction of a statute
raises a question of law. 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) (citations
omitted), appeal denied, 980 A.2d 609 (Pa. 2009).
A plaintiff's choice of forum is to be given great weight, and the
burden is on the party challenging the choice to show it was
improper. However, a plaintiff's choice of venue is not absolute
or unassailable. Indeed, if there exists any proper basis for the
trial court's decision to [sustain the preliminary objections and] to
transfer venue, the decision must stand.
Anthony v. Parx Casino, 190 A.3d 605, 607 (Pa. Super. 2018) (citation and
original brackets omitted). “[T]he 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, 1293 (Pa. Super. 2014) (citation omitted). The “question of
improper venue is answered by taking a snapshot of the case at the time it is
initiated: if it is ‘proper’ at that time, it remains ‘proper’ throughout the
litigation.” Zappala v. Bandolini Property Management, Inc., 909 A.2d
1272, 1281 (Pa. 2006).
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Pursuant to Pennsylvania Rule of Civil Procedure 1006(a), an action
against an individual may be brought 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,
or
(2) the property or a part of the property which is the subject
matter of the action is located provided that equitable relief is
sought with respect to the property.
Pa.R.Civ.P. 1006(a)(1) and (2).
When the action is against a corporation or a similar entity,2 the action
may be brought in:
(1) the county where its 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 with respect to the property.
Pa.R.Civ.P. 2179(a)(1-5); see also Pa.R.Civ.P. 1006(b) (stating, that actions
against corporations or similar entities may be brought only in counties
designated by Rule 2179). If the action seeks to enforce joint or joint and
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2 A limited liability company (LLC) is included within the definition of a
“corporation or similar entity” for purposes of Rule 2179. See Pa.R.Civ.P.
2176.
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several liability against two or more defendants, whether the defendants are
individuals, corporate entities, or a combination of both, the action may be
brought against “all defendants in any county in which the venue may be laid
against any one of the defendants[.]” Pa.R.Civ.P. 1006(c)(1).
A forum selection clause in a commercial contract “limits the place or
court in which an action may be brought.” Midwest Fin. Acceptance Corp.
v. Lopez, 78 A.3d 614, 628 (Pa. Super. 2013). Pennsylvania courts have
long held that,
while private parties may not by contract prevent a court from
asserting its jurisdiction or change the rules of venue,
nevertheless, a court in which venue is proper and which has
jurisdiction should decline to proceed with the cause when the
parties have freely agreed that litigation shall be conducted in
another forum and where such agreement is not unreasonable at
the time of litigation. Such an agreement is unreasonable only
where its enforcement would, under all circumstances existing at
the time of litigation, seriously impair plaintiff's ability to pursue
his cause of action. Mere inconvenience or additional expense is
not the test of unreasonableness since it may be assumed that
the plaintiff received under the contract consideration for these
things. If the agreed upon forum is available to plaintiff and said
forum can do substantial justice to the cause of action[,] then
plaintiff should be bound by his agreement. Moreover, the party
seeking to obviate the agreement has the burden of proving its
unreasonableness.
Central Contracting Co. v. C.E. Youngdahl & Co., 209 A.2d 810, 816 (Pa.
1965). Forum selection clauses in commercial contracts will be upheld where
those clauses are clear and unambiguous. Patriot Commercial Leasing Co.,
Inc. V. Kremer Restaurant Enters., LLC, 915 A.2d 647, 650 (Pa. Super.
2006), relying on Central Contracting, supra.
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The venue selection clause at issue in the case sub judice states,
10.6 Relief – In the event that [Dental Associates] or [Appellants]
seek judicial enforcement of this agreement, the prevailing parties
shall be entitled to recover from the other party the reasonable
attorney’s fees and costs of the [prevailing] party, and both
parties consent and agree to venue and service [of]
process in Pennsylvania.
Complaint, 11/23/19, at Exhibit A (emphasis added).3
Appellants assert that because the venue selection clause in the
agreement designated Pennsylvania as the proper place for venue, the parties
agreed that venue would be proper within any county in Pennsylvania.
Appellants’ Brief at 14-15. Appellants contend that, “[b]y agreeing to venue
in Pennsylvania, the parties waived the right to challenge venue as improper
for a lawsuit filed within the geographic region of Pennsylvania.” Id. at 15.
Appellants argue that the venue selection clause in the instant agreement
“operate[s] as a waiver of objection to venue clause such that the parties
waive the procedural right to object to venue as improper in Pennsylvania.”
Id. at 22. Appellants assert that “[i]mposing [Rule 1006 and Rule 2179] to
overrule [the] contractual venue clause [of the subject agreement] goes
against the [rule of law] set forth [in Central Contracting, supra.]” Id. at
26.
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3 Under the agreement with Dental Associates, Appellants were considered
“an independent contractor providing orthodontic services for [Dental
Associates’] dental practice.” See Complaint, 11/23/19, at ¶18 and Exhibit A.
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In sustaining Dental Associates’ preliminary objections on the grounds
that venue in Philadelphia County was improper, the trial court stated,
the parties' forum-selection clause was clear and unambiguous.
It stated that "both parties consent and agree to venue and
service [of] process in Pennsylvania." The fact that the parties'
forum-selection clause did not expressly state: (1) which
particular county [] is [] proper venue for resolving contractual
disputes, or (2) which party to the agreement has the right to
choose which county [] is [] proper venue for resolving contractual
dispute[s] (as would [be found in] a typical forum-selection
clause) does not render the forum-selection clause unclear or
ambiguous. When there is no such specific language in a
forum-selection cause [regarding which county is proper venue in
which to bring a cause of action], courts apply the standard venue
rules under Pa.R.C[iv].P. 1006[ and Pa.R.Civ.P. 2179].
...
[T]he parties only agreed to venue in Pennsylvania. Under [the
terms of this] forum-selection clause, the trial court recognizes
that [Dental Associates] cannot challenge through preliminary
objection[,] or otherwise[,] that venue was not proper in
Pennsylvania but[,] rather[,] that venue is proper in another
state. [However], the parties' forum selection clause does
not - as urged by [Appellants] - state that the parties agreed that
venue was appropriate in whatever county [] in Pennsylvania that
[Appellants] chose to file their complaint. Instead, [] under their
limited agreement, the standard venue rules under [Rule] 1006[
and Rule 2179] apply to any other objection to venue by [Dental
Associates].
Trial Court Opinion, 8/27/20, at 3-4 (extraneous capitalization and footnote
omitted).
Upon review, we concur with the trial court that pursuant to the
agreement, the parties clearly and unambiguously agreed that Pennsylvania
would be the proper venue for bringing a cause of action stemming from the
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agreement.4 As the trial court noted, the agreement is silent as to the specific
Pennsylvania county, or counties, in which an action may be brought and
whether any party has an absolute right to select the Pennsylvania county in
which to file an action. The parties agreed, however, that the “agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.” See Agreement at §10.5 (Situs). We find
no error of law or abuse of discretion in the trial court’s reliance on Rule 1006
and Rule 2179 to determine that Montgomery County is the proper venue in
which to bring Appellants’ cause of action.5
The trial court found that, pursuant to Rule 1006, venue was proper in
Montgomery County, and not in Philadelphia County, as to Dr. Wong and Dr.
Galeone because:
(1) the rules of civil procedure do not allow [Appellants] to serve
[Dr.] Wong [or Dr.]Galeone in Philadelphia County; (2) the
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4 We find no merit to Appellants’ argument that the parties’ forum-selection
clause limiting proper venue to Pennsylvania constitutes a complete waiver of
all objections to venue. Appellants’ Brief at 22. Provided that Appellants filed
suit within Pennsylvania, we concur with the trial court that, under the express
terms of the parties’ agreement, Dental Associates waived only an objection
to venue on grounds that the suit should have been filed in a state other than
Pennsylvania.
5 When attempting to interpret a contract, a “court may find it necessary to
supply a term which is reasonable under the circumstances to rectify the
parties[’] omissions.” Banks Eng’g Co., Inc. v. Polons, 752 A.2d 883,
886 n.4 (Pa. 2000), citing Restatement (Second) of Contracts § 204 (1979)
and Murray on Contracts § 90. Here, the trial court relied on Rule 1006 and
Rule 2179 in order to “supply” the omitted term of which county constituted
proper venue for Appellants’ cause of action.
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[breach of contract] cause of action arose in Montgomery County,
not Philadelphia County; (3) the transaction or occurrence, out of
which the cause of action arose, took place in Montgomery
County, not Philadelphia County; (4) the law does not otherwise
authorize Philadelphia County as a proper venue for [Dr.] Wong
[or Dr.] Galeone; and (5) the property that is the subject matter
of the action is located in Montgomery County, not Philadelphia
County.
Trial Court Opinion, 8/27/20, at 7, citing Appellants’ Complaint at ¶¶46-49.
The trial court found that, pursuant to Rule 2179, venue was proper in
Montgomery County, and not in Philadelphia County, as to North Penn
Pediatric Dental Associates, LLC because:
(1) its registered office and principal place of business was located
in Montgomery County, not Philadelphia County; (2) it did not
regularly conduct business in Philadelphia County; (3) the [breach
of contract] cause of action arose in Montgomery County, not
Philadelphia County; (4) the transaction or occurrence, out of
which the cause of action arose, took place in Montgomery
County, not Philadelphia County; [and] (5) the property that is
the subject matter of the action is located in Montgomery County,
not Philadelphia County.
Trial Court Opinion, 8/27/20, at 7, citing Affidavit of Darlene Mullen, 12/10/19,
at ¶¶2-4.
A review of the record demonstrates that in their complaint, Appellants
failed to allege facts which establish that venue, pursuant to Rule 1006, was
proper in Philadelphia County with respect to Dr. Wong and Dr. Galeone.
Neither Dr. Wong nor Dr. Galeone resided in or worked in Philadelphia
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County,6 the cause of action (breach of contract) arose from Appellants’
agreement to work as an independent contractor for Dental Associates’
practice in Montgomery Country, and the events or transactions which led to
the cause of action7 occurred in Montgomery County. Therefore, Montgomery
County is the proper venue within Pennsylvania in which to bring the instant
action against Dr. Wong or Dr. Galeone and, conversely, Philadelphia County
is an improper venue.
As to North Penn Pediatric Dental Associates, LLC, the record
demonstrates that its principal place of business was in Montgomery County,
it regularly conducted business in Montgomery County,8 and, as discussed
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6 Dr. Galeone resided in and worked in Montgomery County. Dr. Wong resided
in Bucks County, Pennsylvania and worked in Montgomery County.
7 Appellants allege that Dental Associates breached the agreement by, inter
alia, failing to provide Appellants a right of first refusal to purchase a portion
of the dental practice, using the services of other orthodontists at the practice
without seeking Appellants’ approval, and wrongfully terminating the
agreement. See Appellants’ Complaint, 11/23/19, at ¶¶46-54, 64, 74, 83,
92, 101.
8 In determining proper venue pursuant to Rule 2179, courts employ a
“quality-quantity analysis.” Hangey v. Husqvarna Prof’l Prods., Inc., ___
A.3d ___, 2021 WL 855456, at *3 (Pa. Super. Filed March 8, 2021) (slip
opinion) (en banc). “Quality” refers to acts that directly relate to, further, or
are essential to the business objectives of the defendant company and are not
merely incidental acts. Hangey, 2021 WL 855456, *3. To determine if the
defendant company does a sufficient quantity of business in a particular
county, courts should consider the percentage of business derived from that
county as compared to the over-all business. Id.; see also Canter v. Am.
Motor Corp., 231 A.2d 140, 141, 143 (Pa. 1967) (holding, that one to two
per centum of sales, which ranged from $3.7 million to $4.1 million dollars in
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supra, the cause of action, and the events and transactions which gave rise
to Appellants’ breach of contract cause of action, occurred in Montgomery
County. Pursuant to Rule 2179, the proper venue in which to bring a cause
of action against North Penn Pediatric Dental Associates, LLC is Montgomery
County and, conversely, Philadelphia County is an improper venue.
Appellants aver that venue is nonetheless proper in Philadelphia County
because Dental Associates regularly conducts business in Philadelphia County.
In support of their averment, Appellants allege:
7. When [Appellants] performed work for [Dental Associates],
[Appellants] had ties to Philadelphia County, including
suppliers such as Orthopli Corporation, which is located in
Philadelphia, [Pennsylvania].
8. [Dental Associates] hired other orthodontists who have
significant orthodontic practices in Philadelphia County.
9. [Other] orthodontists who work at [Dental Associates also
perform services as] orthodontists at Center City
Orthodontics, which is located [in Philadelphia County].
Marc Rosenberg Affidavit, 2/27/20, at ¶¶7-9. The averments contained in Dr.
Rosenberg’s affidavit, namely that Appellants purchased supplies from a
business located in Philadelphia County and that other orthodontists, who
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total sales, that were derived from a particular county equated to regularly
conducting business in that county); Monaco v. Montgomery Cab Co., 208
A.2d 252, 256 (Pa. 1965) (holding, that a taxicab company that collected five
to ten per centum of its fairs from persons in a particular county regularly
conducted business in that county); Zampana-Barry v. Donaghue, 921
A.2d 500, 506 (Pa. Super. 2007) (holding, a law firm regularly conducted
business in a county where it performed three to five per centum of its legal
services), appeal denied, 940 A.2d 366 (Pa. 2007).
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performed work on behalf of Dental Associates in Montgomery County, also
performed work as orthodontists for other dental practices located in
Philadelphia County, do not give rise to the quality of business required to
demonstrate that Dental Associates regularly conducted business in
Philadelphia County. Appellants failed to demonstrate that Dental Associates
performed orthodontic services, which directly related to its business
objectives, in Philadelphia County. Moreover, the record demonstrates that
Dental Associates derived “over 99% of its gross revenues for services
performed in Montgomery County” and of the 12,042 active patients seeking
orthodontic services from Dental Associates, only 25 patients (or less than
0.002% of its active patients’ rooster) were from Philadelphia County. See
Affidavit of Darlene Mullen, 12/10/19, at ¶¶10, 14. Appellants failed to
demonstrate that Dental Associates performs a quantity of its business in
Philadelphia County sufficient to establish that it regularly conducted business
in Philadelphia County.
Finally, Appellants argue that Philadelphia County is a reasonable forum
for Appellants to bring a cause of action against Dental Associates. Appellants’
Brief at 29-32. This reasonableness argument is, however, misplaced. Parties
are free to agree contractually to a particular forum and Pennsylvania courts
will enforce that agreement except when, inter alia, that agreement is
unreasonable for the plaintiff. See Central Contracting, 209 A.2d at 816
(holding, that a court must only look at the reasonableness of the forum
selection clause when determining whether to enforce the terms of the
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clause). Here, the parties agreed that Pennsylvania was a proper forum, but
failed to agree specifically as to which county, or counties, within Pennsylvania
the action could be litigated. Thus, an argument predicated upon the
reasonableness test set forth in Central Contracting, supra, could assert
that Pennsylvania was not a reasonable venue, but that has not occurred in
the case sub judice. Rather, Appellants agreed that Pennsylvania was a
reasonable venue, and the trial court applied our procedural rules to ascertain
a proper common pleas court within Pennsylvania in which the action could
be brought. The trial court was not required to examine the reasonableness
of Appellants’ selection of Philadelphia County as proper venue because the
parties did not agree to Philadelphia County as the proper venue pursuant to
the terms of the agreement. Since the agreement was silent as to which
Pennsylvania county, or counties, constituted the proper venue for a dispute
between the parties, we concur with the trial court’s application of a
rule-based analysis to determine proper venue. Because Montgomery County
was determined to be a place of proper venue pursuant to a rule-based
analysis, and not as the result of an enforcement of the terms of the
agreement, the Central Contracting reasonableness test is not necessary.
In sum, we discern no error of law or abuse of discretion in the trial
court’s order sustaining Dental Associates’ preliminary objections on the basis
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of improper venue and transferring the matter to the Court of Common Pleas
of Montgomery County. 9
Order affirmed, in part, as it pertains to sustaining the preliminary
objections and transferring the complaint to the Court of Common Pleas of
Montgomery County, and vacated, in part, as it pertains to dismissing the
complaint without prejudice.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/27/2021
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9 Pennsylvania Rule of Civil Procedure 1006(e) states that, “[i]f a preliminary
objection to venue is sustained and there is a county of proper venue within
the [Commonwealth of Pennsylvania,] the action shall not be dismissed but
shall be transferred to the appropriate court of that county.” Pa.R.Civ.P.
1006(e). Although a review of the March 6, 2020 order demonstrates that
the trial court’s intent was to transfer this matter to the Court of Common
Pleas of Montgomery County, the trial court erred in dismissing Appellant’s
complaint without prejudice. Id.
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