Gunite Specialist v. Outdoor Spaces

J-S49043-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GUNITE SPECIALIST, INC. IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
OUTDOOR SPACES DESIGN GROUP, AND
ROBERT KAYE
Appellants No. 522 EDA 2014
Appeal from the Order Entered February 12, 2014
In the Court of Common Pleas of Montgomery County
Civil Division at No: 2009-31844
BEFORE: OLSON, OTT, and STABILE, JJ.
MEMORANDUM BY STABILE, J.: FILED OCTOBER 14, 2014
Appellants/defendants, Outdoor Spaces Design Group (“Outdoor”) and
Robert Kaye (“Kaye”), appeal the February 12, 2014 order overruling their
preliminary objections asserting lack of personal jurisdiction. We reverse
and remand.
On October 6, 2009, Appellee/plaintiff, Gunite Specialist, Inc.
(“Gunite”), filed a complaint against Appellants alleging breach of contract
and unjust enrichment. The complaint alleges the parties engaged in three
oral agreements for Gunite to “perform pool related services” at several of
Appellants’ properties in New Jersey. Complaint, 10/06/09, at ¶¶ 4-5. The
complaint further alleges Gunite performed its obligations and Appellants
failed to pay in accordance with the parties’ oral agreements. Id. at ¶¶ 7-
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10. Gunite is a Pennsylvania Corporation based in Norristown, Montgomery
County. ¶ 1. Outdoor is an unincorporated entity with an office in Marlboro,
New Jersey and Kaye is the president of Outdoor, also living in Marlboro,
New Jersey. Id. at ¶¶ 2-3. The complaint alleges Appellants contacted
Gunite by telephone at Gunite’s Norristown office to arrange for Gunite’s
services. Id. at ¶ 6-16.
Appellants responded with preliminary objections, dated October 26,
2009, alleging the trial court lacked personal jurisdiction over them.
Pa.R.C.P. 1028(a)(1). Specifically, Appellants alleged Outdoor operates
exclusively in New Jersey and that Kaye is a New Jersey resident.
Preliminary Objections, 10/26/09, at ¶ 10. Appellants allege that Outdoor
“did not advertise its services in Pennsylvania, did not avail itself of the
privilege of acting within Pennsylvania and could not reasonably anticipate
being called to defend itself in this forum.” Id. at ¶ 21. Appellants also
allege Outdoor took no action in Pennsylvania with respect to Gunite’s
claims. Id. at ¶ 23. In addition, Kaye filed an affidavit stating that Outdoor
never conducted business or advertised its services in Pennsylvania. Id. at
Exhibit B. In its response to Appellants’ preliminary objections, Gunite
asserts the parties exchanged correspondence in furtherance of their oral
agreement and that Appellants’ availed themselves of this state’s jurisdiction
by seeking the services of an entity incorporated and conducting business in
Pennsylvania. Response to Preliminary Objections, 11/12/09, at ¶¶ 2, 6.,
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10, 21-25. Gunite’s response also alleges Kaye acted in his individual
capacity at the time of the parties’ agreement and did not incorporate
Outdoor until 2006. Id. at ¶ 7.
After a lengthy delay, the reasons for which are not apparent from the
record, the trial court issued a notice of intent to terminate the case for
inactivity dated August 13, 2013. See Pa.R.C.P. 230.2(a) (“The Court may
initiate proceedings to terminate a case in which there has been no activity
of record for two years or more by serving a notice of proposed dismissal of
court case.”). Gunite filed a statement of intention to proceed the next day.
On December 24, 2013 the trial court entered an order overruling
Appellants’ preliminary objections.1 On February 12, 2014, the trial court
amended its order to indicate, pursuant to Pa.R.A.P. 311(b)(2), that this
matter presents a substantial issue of personal jurisdiction. Pa.R.A.P.
311(b)(2).2 As such, the February 12, 2014 order was immediately
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1
In addition to the objection for lack of personal jurisdiction, Appellants
objected to venue and alleged Gunite failed to state a claim. The trial court
overruled all three of Appellants’ preliminary objections. Only personal
jurisdiction is at issue in this appeal.
2
Pa.R.A.P. 311(b)(2) provides:
(b) Order sustaining venue or personal or in rem
jurisdiction. An appeal may be taken as of right from an order
in a civil action or proceeding sustaining the venue of the matter
or jurisdiction over the person or over real or personal property
if:
(Footnote Continued Next Page)
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appealable as of right. Id. Appellants filed this timely appeal on February
14, 2014. They raise a single issue for our review:
Whether the lower court abused its discretion and/or
committed an error of law by overruling defendants’ preliminary
objections based upon lack of personal jurisdiction where: (1)
plaintiff failed to produce evidence that disputed defendants’
evidence challenging jurisdiction, and (2) the lower court
improperly accepted the bare allegations contained in the
complaint as evidence when overruling defendants’ preliminary
objections?
Appellants’ Brief at 6.3
We conduct our review according to the following:
[O]ur standard of review of an order of the trial court
overruling or granting preliminary objections is to determine
whether the trial court committed an error of law. When
considering the appropriateness of a ruling on preliminary
objections, the appellate court must apply the same standard as
the trial court. When considering preliminary objections, all
material facts set forth in the challenged pleadings are admitted
as true, as well as all inferences reasonably deducible therefrom.
Preliminary objections which seek the dismissal of a cause of
action should be sustained only in cases in which it is clear and
free from doubt[.]
O'Donnell v. Hovnanian Enters., 29 A.3d 1183, 1186 (Pa. Super. 2011)
(citations omitted). Where personal jurisdiction is at issue, the party
_______________________
(Footnote Continued)
[. . .]
(2) the court states in the order that a substantial issue of
venue or jurisdiction is presented.
Pa.R.A.P. 311(b)(2).
3
We note with disapproval that Appellee has not filed a brief.
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challenging the court’s jurisdiction bears the burden of supporting its
objection with evidence. De Lage Landen Fin. Servs. v. The Urban
P’ship, LLC, 903 A.2d 586, 589-90 (Pa. Super. 2006). The burden shifts to
the plaintiff after the defendant presents “affidavits or other evidence” in
support of its jurisdictional objection. Id. at 590 (citing Holt Hauling and
Warehousing Sys. Inc. v. Aronow Roofing Co., 454 A.2d 1131 (Pa.
1983)). “[W]hen a fact issue is raised by preliminary objections regarding in
personam jurisdiction, the court is to take evidence and may not reach a
determination based upon controverted facts, even if the parties fail to
provide such evidence themselves.” Id. (quoting Gall v. Hammer, 617
A.2d 23, 24 (Pa. Super. 1992)). Ultimately the trial court must consider the
evidence in the light most favorable to the nonmoving party. Id. at 589.
A Pennsylvania court can obtain jurisdiction over an unincorporated
entity where the entity is qualified as a foreign entity under Pennsylvania
law, where the entity consents, or where the entity carries on a “continuous
and systematic part of its general business within this Commonwealth.” 42
Pa.C.S.A. § 5301(a)(3). Kaye’s affidavit expressly disavows all three of
these circumstances. Preliminary Objections, 10/26/09, at Exhibit B. Gunite
offers no evidence to refute the Kaye affidavit.4 Concerning a person, a
Pennsylvania court can exercise jurisdiction where the person is present or
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4
Other than its August 14, 2014 statement of intent to proceed, Gunite has
done almost nothing in this case since 2009.
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domiciled within this Commonwealth, or where the person consents. 42
Pa.C.S.A. § 5301(a)(1). Gunite’s complaint contains no allegations to
support personal jurisdiction over Kaye. Thus, § 5301, governing general
personal jurisdiction, does not apply here.
Next, we consider 42 Pa.C.S.A. § 5322, known as the long-arm
statute, which lists circumstances under which a court may exercise personal
jurisdiction over a party outside the Commonwealth. Among the appropriate
bases for jurisdiction under § 5322 are the defendant’s transacting business
in this Commonwealth or causing harm in this Commonwealth by an act or
omission outside of this Commonwealth. 42 Pa.C.S.A. § 5322(a)(1), (4).
Jurisdiction is appropriate under the long arm statute and the United States
Constitution if the defendant’s contacts with the foreign state are “such that
the defendant could reasonably anticipate being called to defend itself in the
forum.” Hall-Woolford Tank Co., Inc. v. R. F. Kilns, Inc., 698 A.2d 80,
82 (Pa. Super. 1997) (citing Kubik v. Letteri, 614 A.2d 1110, 1115 (Pa.
1992)).5
Random, fortuitous and attenuated contacts cannot
reasonably notify a party that it may be called to defend itself in
a foreign forum and, thus, cannot support the exercise of
personal jurisdiction. That is, the defendant must have
purposefully directed its activities to the forum and conducted
itself in a manner indicating that it has availed itself of the
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5
The Kubik Court adopted the United Supreme Court’s analysis set forth in
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985).
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forum’s privileges and benefits such that it should also be
subject to the forum state’s [jurisdiction].
Id. at 82-83. Thus, “the totality of the parties’ dealings, including the
contract negotiations, contemplated future consequences of the contract,
and actual course of dealing must be evaluated in order to determine
whether the foreign defendant is subject to suit in the plaintiff’s chosen
forum.” Id. at 83.
The Hall-Woolford Court found the following evidence insufficient to
support personal jurisdiction:
By merely entering into a contract with a Pennsylvania
corporation, making several follow-up telephone calls and
sending a payment invoice, it cannot be said that Kilns
purposefully availed itself of our state’s benefits and protections
such that it could reason -- ably anticipate being called to defend
itself in our courts. If contacts such as these were the
benchmark for jurisdiction, our courts could require foreign
defendants to defend themselves in Pennsylvania based upon
minimal, rather than minimum, contacts.
Id. at 84.
Instantly, the trial court reasoned that Appellants’ entry into an
agreement with Gunite by telephoning Gunite at its Norristown offices gave
rise to personal jurisdiction. On the state of the record before us, we cannot
agree. As explained above, the burden shifted to Gunite to support its
jurisdictional allegations after Appellants’ objected to the court’s jurisdiction
and filed an affidavit. Gunite did nothing other than offer vague allegations
in its response to Appellants’ preliminary objections. The case then sat idle
for several years, during which Gunite made no effort to take discovery. As
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a result, the trial court’s order rests on bare allegations in paragraphs 6 and
16 of Gunite’s complaint. The record therefore is not sufficient to permit the
trial court to conduct the required constitutional analysis set forth by our
Supreme Court in Kubik and this Court in Hall-Woolford. The deficient
record is a result of Gunite’s prolonged failure to support its jurisdictional
allegations. We therefore reverse the trial court’s order and remand for
entry of an order sustaining Appellants’ preliminary objections under Rule
1028(a)(1).
Order reversed. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/14/2014
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