Deffenbaugh, S. v. Giancola, R.

J-A20027-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
STEVEN DEFFENBAUGH IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
RANDY GIANCOLA, CLEM’S TRAILER
SALES, INC., A PENNSYLVANIA
CORPORATION, AND CLEM’S RV AND
TRAILER SALES OF VIRGINIA, INC., A
VIRGINIA CORPORATION
Appellees No. 1755 WDA 2015
Appeal from the Order Entered October 14, 2015
In the Court of Common Pleas of Butler County
Civil Division at No: 2015-10559
BEFORE: BOWES, STABILE, and MUSMANNO, JJ.
MEMORANDUM BY STABILE, J.: FILED JANUARY 23, 2017
Appellant, Steven Deffenbaugh (“Deffenbaugh”), appeals from the
October 14, 2015 order of the Court of Common Pleas of Butler County
(“trial court”) sustaining Appellees’, Randy Giancola (“Giancola”), Clem’s
Trailer Sales, Inc., (“Clem’s PA”), and Clem’s RV and Trailer Sales of
Virginia, Inc. (“Clem’s VA”), preliminary objections as to venue. Upon
review, we affirm.
The trial court summarized the factual and procedural background as
follows.
This case arises from a Forbearance Agreement, entered
into by [Deffenbaugh] and [Appellees] on June 22, 2015.
[Deffenbaugh] avers that he began working for [Clem’s PA] in
January 2011, as General Manager. He alleges that, following
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his successful management of [Clem’s PA], he and [] Giancola
began to discuss the possibility of opening a new business,
[Clem’s VA], as co-owners. [Deffenbaugh] alleges that, on
August 5, 2013, [Clem’s VA] was formed, and he owned
nineteen percent of [Clem’s VA] stock. [Deffenbaugh] alleges
that, in May 2015, he was approached by representatives of a
competing company, Camping World, to manage one of their
Florida locations. He alleges that, although he declined the
Florida position, he discussed other possible opportunities with
the company, and communicated with the company several
times by telephone and email. [Deffenbaugh] further alleges
that [Appellees] installed surveillance software on his computer
that permitted them to monitor and retrieve his personal emails.
[Deffenbaugh] further avers that, on June 22, 2015, [] Giancola
contacted him and invited him to a meeting, to be held that
same afternoon, in Cranberry Township, Butler County,
Pennsylvania. [Deffenbaugh] alleges that he was ambushed by
[]Giancola, []Giancola’s wife, a man named “Ron,” and two
attorneys who represented []Giancola. [Deffenbaugh] alleges
that the attorneys informed him that they had proof that
[Deffenbaugh] gave confidential financial information to Camping
World; and when [Deffenbaugh] indicated that he had not done
so, []Giancola and one of the attorneys shouted profanities at
him, threatened to bankrupt him, and to expose him to financial
ruin. They also allegedly stated that [Deffenbaugh] would never
work in the industry again. [Deffenbaugh] alleges that one of
the attorneys then presented him with two options: sign the
aforementioned Forbearance Agreement or suffer financial ruin.
[Deffenbaugh] alleges that he expressed concern about his
ability to provide for his family if he was prohibited from working
in the industry for three years, whereupon [Appellees] agreed to
permit [Deffenbaugh] to work for Camping World in Toledo,
Ohio, and they all signed an Addendum to that effect.
[Deffenbaugh] further alleges that the Forbearance Agreement
required him to transfer all of his ownership interest in [Clem’s
VA] to [Clem’s VA], without him receiving any payment or
compensation. [Deffenbaugh] alleges that he signed the
Forbearance Agreement and Addendum under duress and
economic compulsion.
[Deffenbaugh] also alleges that, three weeks after he
signed the Forbearance Agreement, an article appeared in
RVBusiness, announcing []Giancola’s sale of [Clem’s VA] and
[Clem’s PA] to Camper Inn RV. [Deffenbaugh] alleges that the
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article quotes []Giancola as stating that he had been negotiating
the sale with Campers Inn RV for seven months. [Deffenbaugh]
alleges that []Giancola contrived the aforementioned allegations
against [Deffenbaugh] and ambushed him at the June 22, 2015
meeting for the sole purpose of depriving [Deffenbaugh] of his
share of the sale proceeds.
On July 17, 2015, [Deffenbaugh] filed his [c]omplaint in
[c]ivil [a]ction. In [c]ount I, [Deffenbaugh] alleges fraud against
all [Appellees]. [Deffenbaugh] alleges that [Appellees] made
various illusory, unfounded, and pretextual representations to
him in order to induce him to relinquish his ownership interest in
[Clem’s VA], and that [Appellees] fraudulently omitted to inform
[Deffenbaugh] of the impending sale. In [c]ount II,
[Deffenbaugh] alleges [b]reach of [f]iduciary [d]uty, against
[]Giancola and [Clem’s PA], for their alleged failure to exercise
good faith and care and to protect his interests and remit to him
his proportion of the proceeds from the sale of [Clem’s VA]. In
[c]ount III, [Deffenbaugh] requests [d]eclaratory [j]udgment
against all [Appellees], and he repudiates the Forbearance
Agreement and Addendum. In [c]ount IV, [Deffenbaugh] alleges
breach of the Pennsylvania Wage Payment and Collection Law
against all [Appellees], averring that [Appellees] have failed to
pay him approximately $120,000 in commissions, bonuses, per
diem, and other earned payments. In [c]ount V, [Deffenbaugh]
raises a count for [s]tatutory [a]ppraisal regarding his shares of
[Clem’s VA] stock.
On August 12, 2015, [Appellees] filed [p]reliminary
[o]bjections and a [b]rief in [s]upport. [Appellees] argue that
venue is improper in Butler County, because the Forbearance
Agreement provides that any dispute relating to the Forbearance
Agreement shall be heard in the Beaver County, Pennsylvania,
court system.
On August 31, 2015, [Deffenbaugh] filed his [a]nswer to
[Appellees’] [p]reliminary [o]bjections and [b]rief in
[o]pposition.
Trial Court Opinion, 10/14/2015, at 1-4. The trial court sustained the
preliminary objection as to venue on October 14, 2015. Deffenbaugh filed a
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timely notice of appeal on November 5, 2015. Deffenbaugh and the trial
court complied with Pa.R.A.P. 1925.
Deffenbaugh raises three issues on appeal.
I. Did the trial court err in applying a forum selection clause
that was not the product of free negotiation and
agreement?
II. Was the forum selection clause in the so-called
“Forbearance Agreement” vitiated by fraud?
III. Was the forum selection clause in the so-called
“Forbearance Agreement” vitiated by duress or economic
compulsion?
Appellant’s Brief at 4.
Our standard of review is well established. “Generally, this Court
reviews a trial court order sustaining preliminary objections based upon
improper venue for an abuse of discretion or legal error.” Autochoice
Unlimited Inc. v. Avangard Auto Fin., Inc., 9 A.3d 1207, 1211 (Pa.
Super. 2010) (quotation and citation marks omitted). Deffenbaugh’s three
arguments are essentially intertwined. Specifically, Deffenbaugh argues the
forum selection clause is unenforceable because the clause and the contract
as a whole were entered into fraudulently and under duress.
“A forum selection clause can be avoided for fraud only when the fraud
relates to procurement of the forum selection clause itself, standing
independently from the remainder of the agreement.” Patriot Commercial
Leasing Co., Inc., v. Kremer Rest. Ent., LLC, 915 A.2d 647, 653 (Pa
Super. 2006). In Patriot, this Court held that even when a party alleges
fraud in the inducement of a contract the
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forum selection clause in a commercial contract between
business entities is presumptively valid and will be deemed
unenforceable only when: 1) the clause itself was induced by
fraud or overreaching; 2) the forum selected in the clause is so
unfair or inconvenient that a party, for all practical purposes, will
be deprived of an opportunity to be heard; or 3) the clause is
found to violate public policy.
Id. at 651. Moreover, in O’Hara v. First Liberty Ins. Corp, 984 A.2d 938(Pa. Super. 2009) this Court noted that while Patriot involved a contract
between two commercial entities, it does not suggest that the holding should
be limited to such context. O’Hara 984 A.2d at 942.
The forum selection clause in the matter sub judice states that
[j]urisdiction covering any dispute, interpretation, claim or
lawsuit arising under, related to, and/or concerning this
Agreement, any of the acts to be taken thereunder, and/or any
related matters, is in the state or federal courts for Beaver
County, Pennsylvania, subject to ordinary rights of appeal, with
any Order of Judgment enforceable in any competent
jurisdiction.
Complaint, 7/17/2015, at Ex. B. In his complaint, Deffenbaugh does not
allege the forum selection clause was induced by fraud or overreaching,
instead he alleges the entire Forbearance Agreement was. Similarly, on
appeal, Deffenbaugh’s argument fails to develop his argument on the forum
selection clause itself having been procured by fraud; rather, Deffenbaugh
focuses his argument on the formation of the Forbearance Agreement as a
whole. Deffenbaugh’s argument is flawed as we look to the formation of the
forum selection clause itself, rather than formation of the contract as a
whole. See Patriot, 915 A.2d at 652. We find that the trial court did not
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commit an abuse of discretion or legal error when it found the forum
selection clause was enforceable. See Trial Court Opinion, 10/14/2015, at
6.
Additionally, the Forbearance Agreement provides for venue to lie in
Beaver County, Pennsylvania. In his brief, Deffenbaugh fails to develop the
argument that “the forum selected in the clause is so unfair or inconvenient
that a party, for all practical purposes, will be deprived of an opportunity to
be heard.” Patriot, 915 A.2d at 652. Instead, Deffenbaugh argues that
venue would be more appropriate in Butler County because both he and
Giancola parties are residents of Butler County and the formation of the
Forbearance Agreement took place in Butler County. Deffenbaugh filed his
action in Butler County, Pennsylvania, a neighboring county. Deffenbaugh
admits that the offices of Clem’s PA are located in Beaver County. See
Answer to Preliminary Objections Raising Issues of Fact, 8/31/2015, at ¶5.
Deffenbaugh failed to present evidence that Beaver County could not provide
a full and fair consideration of the suit or that such forum would result in
additional prohibitive costs; therefore, this argument fails. See Autochoice
Unlimited, Inc., 9 A.3d at 1215-16 (affirmed enforceability of a forum
selection clause where appellant failed to produce evidence of the
unavailability/capability of a selected forum and whether there would be
additional costs of litigating in the selected forum).
Furthermore, Deffenbaugh fails to develop an argument that the forum
selection clause violates public policy. Therefore, Deffenbaugh’s claim fails.
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In conclusion, the trial court did not abuse its discretion or commit an
error of law when it sustained Appellees’ preliminary objections as to venue.
Order affirmed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/23/2017
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