author: SIBUM, J.,

text:
    Ezrin v. Campbell

      Larry W Miller, for plaintiffs.

      Marshall E. Anders, for defendant.
    March 17, 2011
   SIBUM, J.,

This matter comes before the court on defendant Hank Campbell’s preliminary objections to plaintiffs’ second amended complaint. Plaintiffs commenced this action against defendant Campbell Installations, Inc. (“Campbell Installations”) and Hank Campbell, individually (“Campbell”), for breach of contract and negligence, respectively. Plaintiffs filed a complaint on May 18,2010 and an amended complaint on September 28, 2010. A second amended complaint was filed on November 23, 2010. Campbell Installations filed an answer to plaintiffs’ second amended complaint while Campbell filed the instant preliminaiy objections in the form of a demurrer as to the negligence claim. Plaintiffs filed a response to Campbell’s preliminary objections on December 23, 2010. Both parties filed briefs yet only counsel for defendant appeared for oral argument held on February 7, 2011. We are now prepared to decide this matter.

DISCUSSION

In considering preliminary objections, “all well-pleaded allegations and material facts averred in the complaint, as well as all reasonable inferences deducible therefrom, must be accepted as true.” Wurth by Wurth v. City of Philadelphia, 584 A.2d 403, 407 (Pa. Cmwlth. 1990). Facts appearing in documents appended to and made a part of the complaint may be considered by the court in determining the sufficiency of the complaint or claim. Pleet v. Valley Greene Associates, 538 A.2d 567, 569 (Pa. Super. 1988). The “court need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion.” Penn Title Ins. Co. v. Deshler, 661 A.2d 481, 483 (Pa. Cmwlth. 1995).

Preliminary objections in the nature of demurrers should be sustained where facts averred in a pleading are clearly insufficient to establish the pleader’s right to relief. See HCB Contractors v. Liberty Place Hotel Associates, 539 Pa. 395, 397, 652 A.2d 1278, 1279 (Pa. 1995). When ruling on a preliminary objection that would dismiss the action, we are mindful to sustain the objection only in the cases which are clear and free from doubt. King v. Detroit Tool Co., 682 A.2d 313, 314 (Pa. Super. 1996).

Defendant Campbell requests this court to dismiss the second claim of plaintiffs’ second amended complaint for legal insufficiency of a pleading (demurrer.) The purpose of a demurrer is to test the legal sufficiency of a complaint or other pleading. In determining whether the factual averments of a complaint are sufficient to state a cause of action, all doubts must be resolved in favor of the sufficiency of the complaint. Slaybaugh v. Newman, 479 A.2d 517,519 (Pa. Super. 1984). A demurrer will be sustained only where the complaint demonstrates with certainty that under the facts averred within, the law will not permit a recovery. Id.; see also Cianfrani v. Commonwealth, State Employees’ Retirement Bd., 505 Pa. 294, 297, 479 A.2d 468, 469 (Pa. 1984). If any theory of law will support the claim raised by the complaint, dismissal is improper. Slaybaugh, 479 A.2d at 519; Cianfrani at 297, 479 A.2d at 469.

The relevant facts of this case as alleged by plaintiffs in the second amended complaint are as follows. InDecember 2008, plaintiffs hired Campbell Installations to perform roof work at their residence in Stroudsburg, Pennsylvania. [Second amended complaint, ¶4; Campbell Installations’ answer, ¶4.] On December 2,2008, Campbell Installations provided plaintiffs with a proposal of the anticipated work to be completed, including an estimated cost of $3,750.00. Id. at 5. On February 10, 2009, Campbell Installations provided plaintiffs with an invoice in the amount of $5,550.00. Id. at 6. The invoice guaranteed defendant’s workmanship for one year from the date of the invoice. Id. at 12. Plaintiffs paid Campbell Installations a deposit in the amount of $3,600.00 on March 9, 2009, and the second half of the balance in the amount of $2,100.00 upon completion of the work on March 12, 2009. Id. at 7, 9. Campbell Installations completed the roof work utilizing mostly Campbell as the laborer. Id. at 8.

On July 14, 2009, four months after the work had been completed, plaintiffs informed defendant that the work was poor and needed repair. [Second amended complaint, ¶14; Campbell Installations’ answer, ¶14.] Plaintiffs argued that defendant inadequately, insufficiently, negligently, and poorly performed the work on plaintiffs’ roof which caused latent defects that had not manifested until July 2009. [Second amended complaint, ¶10.] Specifically, plaintiffs aver that defendant negligently left nails exposed in the roof, failed to leave the required gaps between sheeting, and caused overall buckling of the roof panels. Id. Defendant promised to conduct the repairs yet did not do so. [Second amended complaint, ¶15-17; Campbell Installations’ answer, ¶15-17.] On August 18, 2009, plaintiffs hired Dale Johnson to make some of the repairs at the expense of $100.00. Id. at 18. Plaintiffs then hired J.M. Shinn Roofing to replace the entire roof, costing $6,400.00. Id. at 19. Plaintiff also hired Cory Drozal to repair the ventilation system and ledger board, to reinstall soffit and ledger board wrap, and to wire attic fans, all things which plaintiffs claim defendant should have done as part of the agreement between the parties. Id. at 20.

Plaintiffs then instituted the current action by filing a complaint on May 18, 2010. As the case progressed, plaintiffs ultimately filed a second amended complaint on November 23, 2010. In that complaint, plaintiffs brought a breach of contract claim against Campbell Installations alleging it had failed to complete the work it was obligated to do under the contract. Id. at 25. Plaintiffs also brought a negligence claim specifically against Campbell, individually, arguing that he personally performed the work contracted to be done between plaintiffs and Campbell Installations. [Second amended complaint, ¶29, 30.]

Campbell then filed preliminary objections arguing that the instant action is based upon the performance of a contractual obligation between plaintiffs and Campbell Installations. [Preliminary objections, ¶4.] Consequently, Campbell argues that plaintiffs’ claim is for improper performance pursuant to a contractual relationship and not a claim for negligence, and thus, plaintiffs’ claim is limited to breach of contract against the corporate defendant as opposed to a claim for negligence against Campbell. Id. at 6-8. Therefore, Campbell seeks dismissal of the claim against him as improper and failing to set forth a cause of action against him individually. Id. at 9. We agree.

As a general rule, courts are hesitant in permitting tort recovery for breach of contract. Yocca v. Pittsburgh Steelers Sports. Inc., 806 A.2d 936, 943 (Pa. Cmwlth. 2002); rev’d on other grounds, 854 A.2d 425 (Pa. 2004). This reluctance stems from the idea that:

Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals....To permit a promisee to sue his [or her] promisor in tort for breaches of contract inter se would erode the usual rules of contractual recovery and inject confusion into our well-settled forms of actions. Yocca, 806 A.2d at 944, citing Bash v. Bell Telephone Co. of Pennsylvania, 601 A.2d 825, 829 (Pa. Super. 1992), superseded by rule on other grounds as stated in Keefer v. Keefer, 741 A.2d 808, 812 (Pa. Super. 1999).

However, limited circumstances exist in which a plaintiff may have an actionable tort claim despite having a contractual relationship with the defendant. Id. “Some cases, particularly those decided in federal courts but based on Pennsylvania law, apply the ‘gist of the action’ test... [while o]ther cases employ a misfeasance/nonfeasance test.” Id.

Two distinct lines of cases exist relating to this issue. Our Superior Court, in Phico Insurance Co. v. Presbyterian Medical Services Corp., 663 A.2d 753 (Pa. Super. 1995), has elaborated as follows:

The first line arose with Raab v. Keystone Insurance Co., 271 Pa.Super. 185, 412 A.2d 638 (1979).... The test used to determine if there exists a cause of action in tort growing out of a breach of contract is whether there was an improper performance of a contractual obligation (misfeasance) rather than the mere failure to perform (nonfeasance).
Later in Hirsh v. Mount Carmel District Industrial Fund, 363 Pa.Super. 433, 526 A.2d 422 (1987), we considered the correctness of the manner in which a trial court applied the principles of Raab. However, in a footnote, we noted that Raab technically possessed no precedential authority since it represented the viewpoint of only one member of a three-judge panel.
We believe the simple rule expressed in Raab is inadequate to determine the true character of a claim. Although the rule certainly sets forth a bright and easily discernable line for considering the nature of a claim, it is not difficult to imagine many agreement-based complaints which may be characterized as sounding in tort when they more properly should be seen as contractual. Consequently, since Raab possesses no precedential authority, we do not follow it. Therefore, we turn to the second line of cases, which we believe more appropriately addresses the characterization issue.
In Bash v. Bell Telephone Co., 411 Pa.Super. 347, 601 A.2d 825(1992), we took a somewhat different approach to the issue....[W]e examined federal authority and indicated that to be construed as a tort action, the wrong ascribed to the defendant must be the gist of the action with the contract being collateral. Phico Insurance Co. v. Presbyterian Medical Services Corp., 663 A.2d 753 (Pa.Super. 1995).

The “gist of the action” doctrine is designed to maintain the conceptual yet distinct differences between civil actions for tort and breach of contract. Pennsylvania Manufacturers’ Assoc. Ins. Co. v. L.B. Smith, Inc., 831 A.2d 1178, 1182 (Pa. Super. 2003); Bash, 601 A.2d at 829. It precludes a plaintiff from “recasting ordinary breach of contract claims into tort claims.” L.B. Smith, Inc., 831 A.2d at 1182. “When a plaintiff alleges that the defendant committed a tort in the course of carrying out a contractual agreement, Pennsylvania courts examine the claim and determine whether the ‘gist’ or gravamen of it sounds in contract or tort.” Id. However, the test is not limited to discrete instances of conduct but rather is concerned with the nature of the action as a whole. Id. A tort claim is therefore maintainable but only if the contract is collateral to conduct that is primarily tortuous. Yocca, 806 at 944; see Bash, 601 A.2d at 829 (holding that to be construed as a tort, the wrong ascribed to defendant must be the gist of the action, the contract being collateral).

In this case, Campbell Installations was contracted by plaintiffs to perform roofing repairs to plaintiffs’ home. Campbell Installations completed the work utilizing Hank Campbell as the primary laborer. Plaintiffs now claim in their second amended complaint that Campbell performed his work in a negligent manner, causing damages to the roof and requiring plaintiffs to incur costs to fix the roof negligently completed by Campbell.

However, under the “gist of the action” doctrine, the facts of record in this case establish that plaintiffs’ claim for negligence against Campbell arises out of Campbell’s alleged failure to perform the contract between plaintiffs’ and Campbell Installations, not out of a duty imposed on Campbell as a member of society. Here, the parties’ obligations are defined by the terms of the contract and not by the larger social policies embodied in the law of torts.

Although plaintiffs contend that the claims asserted in their second amended complaint were both contractual and tortuous in nature, their contention must fail. Our review of the complaint in question demonstrates that the wrong attributed to Campbell is solely a breach of his duty to perform under the terms of the contract. Plaintiffs specifically averred that Campbell negligently left nails exposed in the roof, failed to leave the required gaps between sheeting, and caused overall buckling of the roof panels. Yet in its breach of contract claim against Campbell Installations, plaintiffs asserted that Campbell Installations failed to complete the work it was obligated to do in a manner consistent with the industry standards of roofing, thereby failing to complete the obligations of the contract. The “gist” of plaintiffs’ action sounds in contract, not tort, because the tort claim is based on precisely the same conduct that plaintiffs assert is a breach of the contract, and the duties that Campbell is accused of violating arise, if at all, only because the parties entered into a contract. Consequently, while plaintiffs’ second amended complaint included allegations that Campbell engaged in negligence, the contract was not collateral to any of its claims. Therefore, plaintiffs do not have a cause of action for negligence against Campbell, since, but for the contract, plaintiffs would not have a claim.

Accordingly, we enter the following order.

ORDER

And now, March 17, 2011, after argument held in this matter, defendant Hank Campbell’s preliminary objections are sustained. Plaintiffs’ second claim sounding in negligence against defendant, Hank Campbell, individually is hereby dismissed.

      . Counsel for plaintiffs complained to the court via letter dated January 31, 2011 that he was dissatisfied with the untimely filing of defendant Campbell’s brief and that he did not have sufficient time to file a well-reasoned reply brief. However, plaintiffs’ counsel has also failed to follow the local rules of court in that he failed to appear for oral argument. Had he done so, the court would have considered a request by plaintiff for an extension of time to file a supplemental brief.
      Furthermore, although it may have been counsel’s intent for the court to consider its January 31 letter as plaintiffs’ motion or request to continue oral arguments until a later term, as stated in the letter, counsel failed to file a formal motion with this court in accordance with local rules. Therefore, plaintiffs’ request could not be considered.

      . Reference to defendant Campbell Installations’ answer filed on 12/27/10 will be cited as [Campbell Installations’ answer, ¶_.] Defendant Campbell, individually, filed preliminary objections to plaintiffs’ second amended complaint, and thus did not file an answer.


source: Caselaw Access Project

author: MINORA, J,

license: Public Domain

text:
    Gentex Corp. v. Crew Systems Corp.

      Daniel T. Brier and Donna A. Walsh, for plaintiff.

      Marianne J. Gilmartin, for defendant.
    June 21, 2011
   MINORA, J,

Defendant in this commercial dispute has filed a number of preliminary objections to the amended complaint of plaintiff. This in turn has fueled numerous preliminary objections to the preliminary objections noted above. Plaintiff has also filed objections to defendant’s amended counterclaim resulting in more preliminary objections to plaintiff’s preliminary obj ections. They are now all ripe for disposition. Defendant Crew System, Inc. (hereinafter “Crew”) was employed by plaintiff Gentex Corporation (hereinafter “Gentex”) as a sub-contractor in anticipation of submitting a competitive proposal for the design and manufacture of air masks for the United States Air Force (hereinafter “USAF”).

FACTUAL BACKGROUND

The proposal for the USAF involved air masks to be used by the USAF for their Joint Services Aircrew Mask (hereinafter “JS AM”) project. In furtherance of their goal, Gentex, Crew and a third company, ILC Dover, entered into a Teaming Agreement on or about May of 2000. This agreement was attached to Gentex’s Complaint as Exhibit “A.”

The allegation is that this teaming agreement bound these three parties, Gentex, Crew and ILC Dover, to be exclusive members of the Gentex team not participating with any other competitor during the JSAM proposal and program.

The rationale for this exclusivity was that Gentex anticipated sharing highly proprietary information with Crew and therefore there was an expectation of confidentiality and exclusivity among all team members.

The JSAM program had three distinct phases, which were:

(1) Program definition and risk reduction (hereinafter “PDRR”)
(2) System development and demonstration (hereinafter “SDD”)
(3) Production which wouldbe awarded to the successful SDD contractor.

Additionally, Gentex alleges that all parties to this teaming agreement also agreed that they would keep in confidence all proprietary information belonging to any other team members and neither disclose the confidential information to any third party nor use such information for their own competitive benefit.

Ultimately, the parties worked together to create an initial proposal for the JSAM program. Gentex claimed it shared their highly proprietary and confidential information with Crew and other team members in the formulation of this proposal.

The initial Gentex/Crew team proposal to the USAF was unsuccessful and in 2002 the USAF chose to select another competing contractor named Scott. In 2005, the USAF, unhappy with Scott, again sought proposals from manufacturers interested in replacing Scott for the fixed wing portion of the JSAM program.

In response to this second call for JSAM proposals from the USAF, Gentex alleges that Crew elected to improperly partner with another manufacturer known as BAE Systems (hereinafter “BAE”) in pursuit of the 2005 JSAM program. Accordingly, Gentex commenced this suit on May 5, 2005 to enjoin Crew from pursuing the 2005 JSAM program on its own or in collaboration with BAE or any other potential partner/competitor of Gentex. Gentex further sought to prevent Crew from disclosing any proprietary information, trade secrets or confidential information belonging to Gentex and/or other team members from the original teaming agreements.

Crew argues that the initial contract award by the USAF to Scott effectively terminated the teaming agreement. Crew further argues that the conduct of the parties between 2002, the time of the first USAF contract award to Scott, and the time of the second bid in 2005 verifies that the original teaming agreement is no longer valid. This argument ignores the time duration language in the original teaming agreement which binds the parties, “... during the JSAM proposal and program” (See clause 1(a) of the teaming agreement).

Gentex pursued the 2005 USAF request for proposals and submitted a proposal in November 2005. On April 13, 2006, the Air Force announced its decision to award the JSAM contract to the Gentex team. SSD work on the awarded contract began immediately and was anticipated to last multiple years.

On or about May of 2006, Vision System International (hereinafter “Vision”) announced its intention to solicit proposals from members of the industry who had an interest in supplying a chemical/biological respirator for use in connection with the joint strike fighter (hereinafter “JSF”) being developed by Lockheed Martin for the USAF.

The JSF was identified as a fixed wing aircraft on which the JSAM platform may be employed. Accordingly, Gentex alleges that the JSF program became essentially a continuation of the original JSAM program and thus is encompassed by the original teaming agreement from 2000.

Despite the Gentex position that the JSF represented a continuation of the JSAM program and was thus covered under the original teaming agreement on June 26, 2006 officials from Crew attended a bidders conference either on its own or in conjunction with a bidder who is a Gentex competitor and not within the teaming agreement.

PROCEDURAL BACKGROUND

Gentex Complaint/Amended Complaint

This multiyear protracted and tortuous factual history resulted in Gentex filing a four-count complaint. Count I alleged a breach of contract essentially alleging that the teaming agreement remained in full force and effect and that it was never terminated. It further alleged that Crew materially breached the teaming agreement in its collaboration with BAE or any other Gentex competitor on either the JSAM or JSF projects.

Court II of the complaint alleged a violation of the Uniform Trade S ecrets Act (12Pa.C.S.A.§5301).F actually, it stated that Crew has access to Gentex’s information and drawings and improperly misappropriated these Gentexowned trade secrets for Crew’s own benefit. It seeks injunctive relief as well as counsel fees and damages as allowed by statute.

Count III seeks a permanent injunction against Crew to enjoin Crew from any pursuit of the ISAM program technology alone or with others. Further, it seeks declaratory relief that the original teaming agreements’ non-disclosure provisions remain valid and enforceable.

Count IV alleges a violation of the State of California’s Uniform Trade Secrets Act explaining that the teaming agreement includes their choice of law provisions and alleging violations similar to those summarized at counts I, II and III above.

Gentex later filed an amended complaint consisting of substantially similar allegations to those outlined above on November 20, 2006; however, it factually updated the complaint to the 2005 contract lawsuit.

Crew’s Amended Counterclaim

Not to be outdone in making allegations of misconduct, Crew has filed amended counterclaims to Gentex’s pleadings outlined above.

Crew alleges in its counterclaim that during the initial collaboration with Gentex and ILC Dover during the PDRR and SDD phases of the first USAF proposal, Crew solely designed and developed highly technical components without either technical or financial assistance from either Gentex or ILC Dover.

Crew alleges that these three components are their sole and exclusive intellectual property and that Gentex continued to improperly use these technical components in pursuit of its ISAM and JSF business with the USAF.

Those technical components are alleged to be:

(1) T-connector
(2) Emergency Demist Value
(3) Checked Bladder Control

Crew also argues, using its own findings and without any technical contribution from Gentex and ILC Dover, it invented and developed a high-performance fixed wing solution contained in the original SDD proposal to the USAF. This solution is called “Adjustable OFR Handshell Concept.”

Crew claims this concept and the three technical concepts noted above are their trade secrets and their intellectual property arising during the time that they collaborated with Gentex and ILC Dover.

Crew goes on to assume the legal position that once that original work was lost by awarding the SDD contract to Scott, the teaming agreement terminated. A further argument that the original teaming agreement terminated is that Gentex and Crew could never agree on a subcontractor’s statement of work before the SDD award to Scott as was alleged to be required by the teaming agreement.

In furtherance of Crew’s position that the teaming agreement expired in November 2002, Crew alleges Gentex directed its employees to cease and desist all business discussions with Crew in January of 2003.

Crew says yet a further indication that the original teaming agreement was no longer in effect arose in September of 2004 when Gentex and ILC Dover met to discuss their plan to respond to an anticipated new solicitation by the USAF for a JSAM respirator. Crew says they were never invited into this new round of USAF solicitations nor did they submit a 2005 proposal. Once again clause 1(a) of the teaming agreement says that the agreement lasts “...during the JSAM propseal and program.”

In addressing the issues of the JSF and Vision, Crew posits that VST is a subcontractor to Lockheed Martin Aeronautical Company in the JSF program. VSI submitted a proposal to the USAF in May of 2006 to develop a respirator compatible with the current JSF helmet and optical system for the JSF aircraft. Crew says that this JSF program is totally distinct and unrelated from any past JSAM request for proposals from the USAF including especially the request for proposals that gave rise to the original teaming agreement. Crew argues that the VSI JSF solicitation is essentially totally unrelated to JSAM.

The court finds it difficult to discern Crew’s contradictory position that these matters are totally unrelated to the original JSAM proposal when at the same time Crew asserts the continued use of their three proprietary components from JSAM as well as the OFR Handshell concepts which allegedly arose out of JSAM. Crew asserts these components still remain viable in Gentex’s present contractual relationship with the USAR

Crew says that the three technical components and the adjustable OFR Flardshell Concepts are their sole and exclusive intellectual property that has been maliciously and willfully misappropriated by Gentex in violation of Pennsylvania and California Uniform Trade Secrets Acts. Crew too is seeking injunctive relief against Gentex.

Making allegations that mirror image Gentex’s allegations, Crew alleges breach of contract — restraint of trade under California Law Cal. Bus. and Professional Code §16600. They seek unfair competition relief under California Code §§17000 and 17200. They seek relief for unjust enrichment; intentional interference with prospective economic advantages and declaratory and injunctive relief as well as all damages allowed by law.

Gentex Preliminary Objections to Crew’s Amended Counterclaim

Gentex, in response to Crew’s counterclaim, has filed preliminary obj ections demurring under Pa. R. C .P. 1028(a) (4) to count III, the California Uniform Trade Secrets Act. Gentex also demurs to count IV pursuant to Pa.R.C.P. 1028(a) alleging that disclosure of all to the USAF was authorized and contemplated by the teaming agreement and since this was Gentex’s only disclosure, it cannot be the basis for a breach of contract cause of action. They further allege that such a claim by Crew against Gentex is time barred by California Code of Civil Procedure §337 which sets a four-year statute of limitations. They go on to allege that since Crew knew this in September of 2002 and did not raise it within four years, it is barred.

Gentex also demurred to count V under California Business and Professional Code § 16600; count VI unfair competition; count VII unjust enrichment; and count VIII intentional interference.

Finally, Gentex files a motion to strike count IX and raises the affirmative defense of statute of limitations in Crew’s counterclaim for a violation of the Uniform Trade Secrets Act.

Crew’s Preliminary Objections to the Gentex Preliminary Objections

Gentex also raises what it improperly calls the affirmative defense of statute of limitations against Crew’s amended counterclaim allegations of breach of contract.

In response, Crew properly states that raising as a defense, the bar of statute of limitations must be done as new matter under Pa.R.C.P. 1030 and cites Superior Court case law in Devine v. Hutt, 863 A.2d 1160 (Pa. Super. 2004), for this proposition unless the particular statute of limitations is non-waivable.

A limitation period is unwaivable when it implicates the court’s fundamental jurisdiction to entertain a claim. Neither statute under which Crew raised its amended counterclaims are jurisdictional in nature. Therefore, Gentex must raise the statute of limitations as new matter. See Pa.RC.P. 1030.

Crew’s Preliminary Objections to Gentex’s Amended Complaint

Crew generically claims that Gentex’s amended complaint fails to state a legally sufficient claim for breach of contract in violation of Pa.R.C.P. 1028(a)(4), essentially stating that Gentex will never be able to show actual damages because it ultimately obtained the JSAM from the USAR Crew says damages are an essential element of the cause action for breach of contract which Gentex cannot claim. Therefore, Gentex cannot legally state a claim.

Crew’s next objection states that since Gentex now has been awarded the JSAM contract, there is nothing to enjoin and count I shoud be dismissed.

Crew’s next objection is the failure to attach a writing to the breach of contract claim in violation of Pa.R.C.P. 1019(i). First, it is presumed that since both Crew and Gentex signed the original teaming agreement along with ILC Dover in 2000, they must have a copy of this document which represents their contract forming the basis of this suit. No one has denied that they possess the teaming agreement contract.

The 2000, 2002 and 2005 systems requirements can be acquired in discovery.

The next Crew obj ectionto Gentex’s amended complaint is that count II under the Pennsylvania Uniform Trade Secrets Act fails to state a legally sufficient cause of action because only choice of California law is an option under the teaming agreement. Even assuming Pennsylvania law applied, no misappropriation has been shown.

Crew objections to count III cannot apply, it is alleged, because the US AF awarded the contract to Gentex on April 13, 2006 and, therefore, there is nothing left to enjoin. Crew also once again raises the systems requirements writing arguments of 2000, 2002 and 2005 noted above.

Crew objects to count IV, the California Uniform Trade Secrets Act section pursuant to Pa. R.C.P. 1028(a)(3). It generally alleges lack of sufficient specificity and failure to adequately state a claim. The essence of this objection is that the pleading tracks the statutory language but never identifies what specific trade secrets Crew’s supposed to have taken from Gentex. Absent that, Gentex cannot show a “misappropriation” by Crew.

Gentex’s Preliminary Objections to Crew’s Preliminary Objections to Gentex’s Amended Complaint

Gentex argues that Crew’s preliminary objections to Gentex’s amended complaint are essentially improper attempts to challenge the evidence rather than challenging the sufficiency of the allegations pled in Gentex’s amended complaint. Gentex alleges that this defective approach by Crew is a patent violation of the directives of Pa.R.C.P. 1028(a)(4).

STANDARDS FOR PRELIMINARY OBJECTIONS

My colleague Judge Terrence R. Nealon has recently visited the standards for preliminary objections in the case of Sparrow et al. v. Pace et al., 2010 CV 5086, filed February 11, 2011 at page 8. In that authoritative opinion he ruled:

[A] preliminary objection in the nature of a demurrer is properly granted where the contested pleading is legally insufficient. Jones v. Nationwide Property and Cas. Ins. Co., 995 A.2d 1233, 1237 (Pa. Super. 2010). In making that determination, all material facts set forth in the challenged pleading and all inferences reasonably deducible therefrom are accepted as true. Foster v. UPMC South Side Hospital, 2 A.2d 655, 662 (Pa. Super. 2010). Preliminary objections may be sustained only in cases that are clear and free from doubt, and to be deemed clear and free from doubt, “it must appear with certainty that the law would not permit recovery by the plaintiff upon the facts averred.” Ira G. Steffy & Son, Inc. v. Citizens Bank of Pennsylvania, 7 A.3d 278, 282-283 (Pa. Super. 2010).

We ruled similarly in the case of Menichello v. The Borough of Clarks Summit, 09 CV 6251, at pages 3 and 4.

Preliminary objections are governed by Pa.R.C.P. 1028. “Preliminary objections in the nature of [a] demurrer test the legal sufficiency of the plaintiff’s complaint.” State Farm Mut. Auto. Ins. Co. v. Ware’s Van Storage, 953 A.2d 568, 571 (Pa. Super. 2008) (quoting Sexton v. PNC Bank, 792 A.2d 602, 604 (Pa. Super. 2002)). It is not necessary that the plaintiff identify the specific legal theory underlying the complaint, as it is the court’s duty to discover from the facts alleged in a complaint the cause of action, if any, stated therein. Cardenas v. Schober, 783 A.2d 317, 325 (Pa. Super. 2001). Accordingly, the court must examine the complaint to determine whether it sets forth a cause of action that, if proven, would vest the plaintiff with a right to relief. State Farm Mut. Auto. Ins. Co., 953 A.2d at 571.
The Commonwealth Court provided the guidelines for examining legal insufficiency of a pleading (demurrer) in Richardson v. Beard, 942 A.2d 911, 913 (Pa. Cmwlth. 2008) (citations omitted):
In considering preliminary objections, we must consider as true all well-pleaded material facts set forth in the petition and all reasonable inferences that may be drawn from those facts. Preliminary objections will be sustained only where it is clear and free from doubt that the facts pleaded are legally insufficient to establish a right to relief. We need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations or expressions of opinion, (emphasis added).
“The question presented by the demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible.” Mistick Inc. v. Northwestern Nat'l Cas. Co., 806 A.2d 39, 42 (Pa. Super. 2002) (citation omitted). Preliminary objections in the nature of a demurrer require the court to resolve the issues solely on the basis of the pleadings; no testimony or other evidence outside the complaint may be considered to dispose of the legal issues presented by the demurrer. Cooper v. Frankford Health Care System, Inc., 2008 WL 4615714, 6 (Pa. Super. 2008). (citation omitted) Any doubt as to the legal sufficiency of the complaint should be resolved in favor of overruling the demurrer. Kane v. State Farm Fire & Gas Co., 841 A.2d 1038 (Pa. Super. 2003). Further, the rules of civil procedure are to be liberally interpreted. See, Pa.R.C.P. 126.

Insufficient Specificity Pa. R.C.P. §1028(a)3.

In Sparrow, supra, Judge Nealon at pages 8 and 9 also addressed the issue of insufficient specificity. In that authoritative opinion he stated:

Defendants also raise preliminary objections pursuant to Pa. R.C.P. 1028(a)(3) and seek to strike certain averments on the grounds of insufficient specificity. The purpose of a complaint is to place the defendant on notice of the claims upon which [s]he will have to defend. Carlson v. Community Ambulance Services, Inc., 824 A.2d 1228, 1232 (Pa. Super. 2003); Lavelle Murray v. Haggerty, 2 D.&C. 5th 338, 346-347 (Lacka. Co. 2006); Mulderig v. Allstate Insurance Company, 105 Lacka. Jur. 1,8 (2003). “Under Pennsylvania’s fact pleading system, the complaint need only state the material facts upon which a cause of action is based.” Grossman v. Burke, 868 A.2d 561, 569 (Pa. Super. 2005), app. denied, 585 Pa. 697, 889 A.2d 89 (2005); Lavelle Murray, 2 D.&C. 5th at 347.
“To determine if a pleading is sufficiently specific, a court must ascertain whether the facts alleged are sufficiently specific to enable a defendant to prepare his defense.” Unified Sportsman of Pennsylvania v. Pennsylvania Game Commission, 950 A.2d 1120, 1134 (Pa. Cmwlth. 2008). Accord, Rambo v. Greene, 906 A.2d 1232, 1236 (Pa. Super. 2006). When considering whether the allegations of the complaint have been stated with adequate specificity, one portion of the complaint should not be examined in isolation and should instead “be read in context with all other allegations in that complaint.” Rachlin v. Edmission, 813 A.2d 862, 870 (PA. Super. 2002); Yacoub v. Lehigh Valley Medical Associates, 805 A.2d 579, 589 (Pa. Super. 2003), app. denied, 573 PA. 692, 825 A.2d 639 (2003); Mulderig, supra. “Only then can the court determine whether the defendant has been put upon adequate notice of the claim against which [s]he must defend.” Grossman, 868 A.2d at 569; Lavelle Murray, supra.”

Failure to Attach a Writing Pa.R.C.P. 1019(i)

Again, we refer to Sparrow, supra, at page 31 wherein Pa.R.C.P. 1019(i) is authoritatively referenced by Judge Nealon.

Pennsylvania Rule of Civil Procedure 1019(i) states that “[w]hen any claim...is based upon a writing, the pleader shall attach a copy of the writing or that material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing.” Pa. R.C.P. 1019(i). The failure to attach a relevant writing to a pleading is generally considered to be a fatal defect, see, Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340, 345 (Pa. Super. 2003), app. denied, 577 Pa. 676, 843 A.2d 1236 (2004), and “[o] rdinarily, a complaint should be stricken for failure to attach an essential document.” Adamo v. Cini, 656 A.2d 576, 579 (Pa. Cmwlth. 1995). If the pleader avers that the writing is already in the possession of the defendant and the pleader sets forth the relevant substance of that document, preliminary objections based upon the failure to attach a copy of the document should be overruled. See, McClellan v. HMO of Pennsylvania, 413 Pa. Super. 128, 145 n. 10, 604 A.2d 1053, 1061 n. 10 (1992), app. denied, 532 PA. 664, 616 A.2d 985 (1992): Petty v. Scranton School District, 101 Laclca. Jur. 137, 145 n. 4(1999).

New Matter Pa.RC.P. 1030

Gentex in their preliminary objections to Crew’s amended counterclaim raises what they have referred to as the affirmative defense of statute of limitations. Pa.R.C.P. 1030(a) entitled “New Matter” states that, “(a) Except as provided by subdivision (b), all affirmative defense including but not limited to the defenses of...statute of limitations...shall be pleaded in a responsive pleading under the heading ‘new matter.’” Emphasis added.

At volume 3 Goodrich-Amram section 1030(a):5 that treatise states that, “All affirmative defenses both those specifically listed at Pa.R.C.P. 1030(a) and those not included on the list those set forth must be pleaded under the heading ‘New Matter.’” Pa. R.C.P. 1030. Emphasis added.

The language of the Rule (1030) is clear and unambiguous and it may not be disregarded. Evans to the Use of Reading Exp., Inc. v. D’lorio, 519 A.2d 983 (Pa. Super. 1987). It is therefore improper to raise any affirmative defenses, in an ordinary case, by demurrer or through the use of other preliminary objections. Morris v. Hanover Two. Brd. of Supervisors, 4 D.&C. 3rd 245, 1977 WL 366 (CP 1977).

The defense of state of limitations is specifically listed at Pa.R.C.P. 1030(a) as an affirmative defense that may only be raised in a responsive pleading under the heading “new matter” and conversely not as a preliminary objection. Kyle v. McNamara & Criste, 506 Pa. 631, 487 A.2d 814 (1985).

When the statute of limitations is properly raised as new matter in the answer and it appears from the allegations on the face of the complaint that the statute of limitations clearly bars the cause of action and there is no theory upon review of the plaintiff’s complaint to avoid this bar, then a motion for judgment on the pleadings may be properly brought to assert such a ground. Giangiordano v. Allstate Ins., Co., 482 A.2d 1005 (Pa. Super. 1984).

DISPOSITIONS

The first series of objections previously outlined in detail above arose from Gentex in response to Crew’s amended counterclaim. Initially, Gentex raises a series of preliminary objections in the form of demurrers to Crew’s counterclaim at counts III, IV, V, VI, VII and VIII.

As noted earlier, preliminary objections in the nature of demurrers should be sustained only if, “....assuming the averments of the complaint to be true, the plaintiff has failed to assert a legally cognizable cause of action.” Lerner v. Lerner, 954 A.2d 1299 (Pa. Super. 2008).

On a preliminary objection in the nature of a demurrer, the material facts set forth in the pleading and all inferences reasonably deductible therefrom, must be admitted as true. Cooper v. Frankford Healthcare System, Inc., 960 A.2d 134 (Pa. Super. 2008), app. denied, 601 Pa. 679, 970 A.2d 431

After a review of the Gentex demurrers in the legal context noted above and earlier, it is clear that Crew’s amended counterclaim at counts III, IV, V, VI, VII and VIII, on their face, state legally cognizable causes of action and therefore each of the those six demurrers by Gentex are dismissed and denied.

As to count IX, Gentex raised a motion to strike. Count IX is essentially an action for equitable relief in the form of declaratory judgment and injunctive relief. The core of this portion of the dispute revolves around the impact of the USAF awarding the original SDD to Scott on or about November 26, 2002.

Crew argues that this USAF award to Scott acted to terminate the teaming agreement. Due to the agreement’s termination, Crew argues Gentex was required to cease use of all of Crew’s proprietary information, intellectual property and trade secrets in its possession.

Crew contends any continued use by Gentex of Crew’s intellectual property is a breach of contract, unfair competition, restraint of trade and interference with the contractual relations and these alleged misdeeds must be enjoined.

Gentex moves to strike these allegations pursuant to Pa.R.C.P. 1028(a)(2) and (8).

Essentially Gentex argues that Crew’s count IX does not confirm to law or rules of court and/or it includes scandalous and impertinent matter. Gentex further argues that Crew has a full, complete and adequate non-statutory remedy at law.

We disagree. The parties’ disagreement in the context of count IX comes down to differing views of the impact of the USAF awarding the first SDD to Scott on November 26, 2002. This disagreement does not make the assertions improper, legally deficient or impertinent.

Accordingly, we find the motion to strike filed to count IX by Gentex is dismissed and denied. Since we have dénied and dismissed Gentex’s six demurrers and their motion to strike and thus, denied all of their preliminary objections, Crew’s preliminary objections to Gentex’s initial preliminaiy objections are now rendered moot by these decisions.

Gentex subsequently filed an amended complaint which drew similar preliminary objections from Crew.

First, Crew filed general generic preliminary objections in the nature of a demurrer pursuant to Pa.R.C.P. 1028(a) (4). These objections alleged generally Gentex failed to allege the essential elements of a cause of action for breach of contract.

The gravamen of these objections seems to be that since Gentex was subsequently awarded a contract from the USAF, they can have no damages.

This argument is disingenuous and devoid of merit. The terms of a new award to Gentex by the USAF may be more unfavorable than originally anticipated in 2002. Crew did not conceive of this as a possibility.

This initial general demurrer by Crew against Gentex is dismissed and denied.

The next objection by Crew to Gentex’s amended complaint deals with count I and states that since the USAF has already awarded JSAM to Gentex there is nothing to enjoin. The past facts of this case upset this argument. The USAF awarded a contract to Scott on 2002 and it had to be rebid. Could this happen here? It already has; therefore, this objection by Crew to count I of Gentex’s amended complaint is also dismissed and denied.

Crew’s next objection goes to the failure of Gentex to attach writings upon which it explicitly bases its breach of contract claim is based in violation of Pa.R.C.P. 1019(i). The allegations by Crew is that Gentex’s claim fails to attach a copy of the 2000, 2002 and 2005 JSAM system requirements which is the basis for Gentex’s claim not the teaming agreement.

First, this is a breach of contract claim and the contract alleged to be breached is the teaming agreement. Pa.R.C.P. 1019(i) allows for a writing not to be attached if it is already in possession of both parties. See McClellan v. HMO of Pennsylvania, 413 Pa. Super. 128, 145 n. 10, 604 A.2d 1053, 1061 n. 10(1992, app. denied, 532 Pa. Super. 664, 616 A.2d 985 (1992).

Crew has never denied not having their copy of the teaming agreement. The system requirements for 2000, 2002 and 2005 have no bearing on the bilateral relationship between Crew and Gentex. Objection dismissed and denied.

Next is Crew’s objection to count II alleging a violation of the Pennsylvania Uniform Trade Secrets Act pursuant to 1028(a)(4). The allegation is Gentex fails to state a legally sufficient substantive claim because the contract’s choice of law provision designates the trade secrets law of the State of California to govern. We agree. This objection thus is granted. It has previously been determined by this court that substantive California law governs and that represents the law of the case.

Crew’s next objection is to count III of Gentex’s amended complaint and it is redundant. It mirrors the general and generic objection Crew originally made saying there is nothing left to enjoin. It is similarly dismissed and denied for the same reasons originally noted.

Crew’s next three preliminary objections address three counts dealing with the California Uniform Trade Secrets Act. They are all denied as an improper attempt to challenge the evidence underlying the claims rather than the sufficiency of the allegations comprising the amended complaint. All three objections are dismissed and denied.

These dispositions render and make moot most of Gentex’s preliminary objections to Crew’s preliminary objections. The only exception being an objection granted to preclude use of Pennsylvania’s trade secrets law. Since this has already been ruled upon and is now the law of this case, Gentex’s preliminary objection to Crew’s preliminary objection is dismissed and denied.

A comprehensive order consistent with this memorandum will follow.

ORDER

And now, March 25, 2011, upon due consideration to all preliminary objections filed, the responses thereto, all supporting briefs and the able verbal and written arguments of counsel, and the court’s own independent research as reflected in the forgoing memorandum, it is hereby ordered and decreed as follows:

(1) Gentex’s six demurrers to counts III, IV, V, VI, VII and VIII of Crew’s amended counterclaim are all in total dismissed and denied.
(2) Gentex’s motion to strike count IX of Crew’s amended counterclaim is dismissed and denied.
(3) Crew’s preliminary objections to Gentex’s preliminary obj ections to Crew’s amended counterclaim are all now rendered moot by the court’s decision at paragraphs 1 and 2 above.
(4) Crew has filed eight preliminary objections to Gentex’s amended complaint. All are dismissed and denied in total with the exception to the objections to applying Pennsylvania’s Uniform Trade Secrets Act which was granted since the court had previously determined that the choice of law proviso in the teaming agreement required that California substantive law be applied.
(5) All of Gentex’s preliminary objections to Crew’s preliminary objections were rendered moot by the court’s decision of denial noted at paragraph 4 above. Their one remaining preliminary objection to the use of California substantive law is dismissed and denied for the reasons stated at paragraph 4 above.
(6) Crew is to answer Gentex’s amended complaint within twenty (20) days of the date of this order.
(7) Gentex is to answer Crew’s amended counterclaim within twenty (20) days of the date of this order.

It is so ordered.


author: TERESHKO, J.,

text:
    McGuigan v. Brookside Manor

      William J. Coppol, for appellant.

      Thomas E. Tyler and M. Scott Gemberling, for appellees.
    March 23, 2011
   TERESHKO, J.,

Plaintiffs, Dennis McGuigan and Diana McGuigan, h/w, appeal from the order dated November 15, 2010, wherein this court granted defendants’ motion to transfer venue to Bucks County Pennsylvania and dismissed all allegations of gross negligence and recklessness against defendants.

FACTUAL BACKGROUND

Plaintiffs commenced this premises liability action following a slip and fall, which allegedly occurred on defendants’ premises. Plaintiffs allege that Dennis McGuigan was injured when he slipped and fell on the premises leased by defendants CDC Catering, Inc. and Brookside Manor, causing him to sustain bodily injuries. (Complaint ¶ 21) Plaintiffs are residents of Philadelphia, Pennsylvania. (Complaint ¶¶ 1,2) Defendant CDC Catering, Inc. is a Pennsylvania corporation engaged in the operation of a banquet business in Feasterville, Bucks County, Pennsylvania. (Complaint^ 4) CDC operates under the trade name Brookside Manor at Somerton Springs, registered as a fictitious name with the Department of State ofthe Commonwealth of Pennsylvania. (Defendants’ preliminary objections ¶ 1)

Plaintiffs commenced this action by filing a writ of summons on April 14, 2010. (Defendants preliminary objections ¶ 1) Defendants filed- a praecipe and rule to file a complaint on May 7, 2010. (See docket) Plaintiffs thereafter commenced a second action by writ of summons on May 14, 2010. (Defendants’ preliminary objections ¶ 4) Plaintiffs filed their complaint in the April term action on September 16,2010. (See docket) Plaintiffs’ complaint alleges that Dennis McGuigan suffered orthopedic, neurological andpsychological injuries as aresult ofthe slip and fall on the premises leased by defendants. (Complaint ¶ 28) Additionally, plaintiff’s wife, Diana McGuigan seeks damages for loss of consortium. (Complaint ¶¶ 36-38)

Defendants, Brookside Manor and CDC Catering, Inc., filed preliminary objections to plaintiffs’ complaint on October 7, 2010 to transfer venue to the Bucks County Court of Common Pleas. (Defendants’ preliminary objections ¶ 13) Defendant also sought to have plaintiffs’ allegations of gross negligence and recklessness in paragraphs 24-25 and 31-33 of the complaint dismissed with prejudice. (Defendants’ preliminary objections ¶¶15-21) After review of the preliminary obj ections to plaintiffs ’ complaint and responses thereto, this court granted and sustained defendants’ preliminary objections, dismissing all allegations of gross negligence and recklessness against defendants and ordering the matter transferred to Bucks County on November 15, 2010. On December 13, 2010, plaintiffs timely filed an appeal from the November 15,2010 order. Plaintiffs then filed their concise statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b) on January 6, 2011. The issues for appeal are as follows:

1. Whether this court erred as a matter of law in transferring this case to Bucks County, where plaintiffs have failed to show that defendants conduct any business in Philadelphia County.
2. Whether this court’s dismissal of allegations of gross negligence and recklessness is a reviewable issue where the order is not final and permission was not given to appeal this order by the court.

LEGAL ANALYSIS

Pennsylvania law vests the trial court with considerable discretion in making determinations whether or not to grant a petition to transfer venue. Purcell v. Bryn Mawr Hospital, 525 Pa. 237, 242, 579 A.2d 1282, 1284 (1990). The standard of review in such cases is abuse of discretion. Id. Provided that the trial court’s decision to transfer venue is a reasonable one in light of the record it will not be overturned. Monaco v. Montgomery Cab Co., 417 Pa. 135, 143, 208 A.2d 252, 256 (1965). It is not enough for an appellant to persuade an appellate court that it might have come to a different result. McCrory v. Abraham, 657 A.2d 499, 501 (Pa. Super. 1995). The burden rests on the appellant to show that the trial court misapplied or overrode the law or the decision was manifestly unreasonable, or resulted from partiality, prejudice, bias or ill will. Id. “If there exists any proper basis for the trial court’s decision to grant the petition to transfer venue, the decision must stand.” Masel v. Glassman, 689 A.2d 314, 316 (Pa. Super. 1997).

Corporations have a constitutional right to petition the court for a change of venue. Purcell v. Bryn Mawr Hospital, 525 Pa. 237, 242, 579 A.2d 1282, 1284 (1990) (citing Felts v. Delaware, Lackawanna and Western R.R., 195 Pa. 21, 45 A. 493 (1900)). Pennsylvania Rule of Civil Procedure 2179 governs where venue may be laid against a corporation. Rule 2179 states in relevant part:

[A] personal action against a corporation or similar entity may be brought in and only 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.C.P. 2179(a) (2008)(emphasis added).

Defendants have their registered office in Feasterville, Bucks County. Defendants’ principal place of business is in Bucks County. The accident occurred in Bucks County, and no evidence exists to show that the accident arose out of any transaction or occurrence outside of Bucks County. Therefore, venue in Philadelphia County can only be established by evidence that defendants “regularly conduct business” in Philadelphia County as provided for under Pa.R.C.P. 2179(a).

“In determining whether venue in an action against a corporation is proper on the ground that the corporate defendant regularly conducts business in the county in which it is sued, we must focus on the nature of the acts the corporate defendant allegedly performs in that county.” Battuello v. Camelback Ski Corp., 598 A.2d 1027, 1029 (Pa. Super. 1991). The “quality” and “quantity” of business contacts the company has with that county must both be sufficient to establish venue. Id. In Purcell v. Bryn Mawr Hospital, 525 Pa. 237, 579 A.2d 1282 (1990), the Pennsylvania Supreme Court elaborated upon the standard:

“A single act is not enough,” while “each case must depend on its own facts.” “Quality of act” means “those directly, furthering or essential to, corporate objects; they do not include incidental acts.” Quantity means those acts which are “so continuous and sufficient to be general or habitual.” In combined form...the acts of the corporation must be distinguished: those in “aid of a main purpose” are collateral and incidental, while “those necessary to its existence” are “direct.” Id. at 1285,244 (citations omitted)(quoting Shambe v. Delaware and Hudson R.R. Co., 135 A. 755 (Pa. 1927)).

The case of Battuello v. Camelback Ski Corp., 598 A.2d 1027 (Pa. Super. 1991), also dealt with insufficient quality and quantity for venue to be brought in Philadelphia County. In that case Camelback, a ski mountain in Monroe County, advertised in Philadelphia, sent promotional brochures and pricing information to a travel company located in Philadelphia, which directed customers to Camelback, and engaged in other promotional activities in Philadelphia. Id. at 1028. These activities were viewed as being in aid of a main purpose and were thus incidental-contacts. Id. at 1029. The quality-quantity test was not met and venue accordingly was not proper in Philadelphia and the case was moved to Monroe County where Camelback is located.

The case of Masel v. Glassman, 689 A.2d 314 (Pa. Super. 1997), provides further clarification concerning acts that are deemed to be of insufficient quality and quantity to establish venue in Philadelphia County, The court in Masel found that advertisements in Philadelphia publications, contracts with Philadelphia hospitals, the purchase of equipment from Philadelphia vendors, and educational affiliations with Philadelphia institutions could not constitute sufficient contacts to establish venue against defendant St. Mary Hospital in Philadelphia County; these contacts were merely incidental to defendants’ main business purpose, the provision of healthcare services. Id. at 47, 317. The Superior Court found the facts in Masel to be indistinguishable from those in Purcell in which the Supreme Court stated,

We find it to be patently evident that the mere purchase of hospital supplies from Philadelphia merchants cannot form a satisfactory rationale for conferring venue. It is equally clear that advertisements in Philadelphia’s phone books and newspapers also fail to meet our standards for the exercise of venue-. Mere solicitation of business in a particular county does not amount to conducting business. Id. at 48, 318 (quoting Purcell v. Bryn Mawr Hospital, 525 Pa. 237, 248, 579 A.2d 1282 1287 (1990).

The court in Masel further concluded that venue was not proper in Philadelphia County against a second defendant, Langhome Physician Services. Plaintiff asserted that venue in Philadelphia was proper because three percent of gross revenues were generated by Philadelphia residents, and defendant received 20 percent of its gross revenues from Philadelphia third-party payors. Masel v. Glassman, 689 A.2d 314, 318 (Pa. Super. 1997). The court found that because all services were provided in Bucks County and because no activities took place in Philadelphia that directly furthered or were essential to the corporate object of defendant, venue was not proper in Philadelphia County. Id.

In the case at hand, defendants’ activities in Philadelphia County are incidental to its corporate object and insufficient to. establish venue in Philadelphia County. Plaintiffs have not set forth any evidence that defendants regularly conduct business in Philadelphia County. To the contrary, defendants included the affidavit of David Voltz, the President of CDC Catering, Inc. with their preliminary objections, which states that defendants do not conduct any business or own any property in Philadelphia County. (Exhibit “A” to defendants’ preliminary objections ¶¶ 8-11) Defendants operate a banquet facility in Feasterville, Bucks County, Pennsylvania. (Id. at ¶ 5) Defendants do not conduct any business in Philadelphia, nor do they advertise in Philadelphia-area publications aside from an advertisement in a Philadelphia “Yellow Pages” telephone book published by Verizon. (Id. at ¶ 12) Furthermore, defendant, CDC Catering, Inc., does not have any employees who work in Philadelphia County, nor does the business pay taxes to the City of Philadelphia. (Id. at! 13, 14)

Plaintiffs assert that the quality-quantity test can be met because Philadelphia residents both hosted and attended the event where Dennis McGuigan was injured, which was paid for with funds placed in a Philadelphia bank by Philadelphia residents. (Plaintiffs? response to defendants’ preliminary objections ¶ 11) Additionally, plaintiff argues that various schools located in Philadelphia County have held reunions hosted by defendant CDC Catering, Inc. Id. Moreover, plaintiffs allege that defendant CDC Catering provides offsite catering for Philadelphia events and purchases alcoholic beverages and food products from Philadelphia vendors; however, plaintiffs fail to provide evidence to substantiate these claims. (Plaintiffs’ response to defendants’ preliminary objections pg. 9)

Plaintiffs point solely to contacts that were found to be insufficient to establish venue in both Masel and Battuello, namely advertisements, the purchase of supplies from Philadelphia vendors, contracts with Philadelphia entities, and revenues generated from Philadelphia residents. Additionally, as the Supreme Court in Masel reasoned, mere solicitation of business in Philadelphia County cannot form the basis for venue against a defendant. Based on the aforementioned analysis, this court believes that plaintiffs have not met their burden of proving that Brookside Manor and CDC Catering, Inc. regularly conduct business in Philadelphia.

Thus, plaintiffs have not established sufficient contacts to meet the quality of contacts that are directly further defendants’ objectives, nor have plaintiffs’ proven that defendants quantity of contacts are so continuous and sufficient to be general or habitual. Therefore, venue in Philadelphia County is not proper under Pa.R.C.P. 2179.

Additionally, plaintiffs have appealed the portion of this court’s order dismissing their allegations of gross negligence and recklessness. Plaintiffs’ complaint sets forth allegations of recklessness against defendants, but does not set forth sufficient facts to support a claim for reckless conduct. Allegations of recklessness may form the basis of a punitive damages claim in Pennsylvania. Pennsylvania Rule of Civil Procedure 1028(a)(2) allows a party to move to strike all punitive damage claims of a pleading for lack of conformity to a law or rule of court. This court found there to be insufficient facts to support recklessness by defendants in order to sustain a claim for punitive damages. Plaintiffs now wish to have the dismissal of punitive damages reviewed by the appellate court. However, review of a non-dispositive order is strictly prohibited by the Pennsylvania Rules of Appellate Procedure.

Pennsylvania limits appellate review to four (4) types of orders which are potentially relevant to the case at hand: Interlocutory orders from which an appeal exists as of right (Pa.R.A.P. 311), interlocutory orders which may be appealed by permission (Pa.R.A.P. 312), collateral orders (Pa.R.A.P. 313), and final orders (Pa.R.A.P. 341).

There is no express allowance of appeal for orders dismissing a theory of recovery; therefore, Pennsylvania Rule of Appellate Procedure 311 is not applicable. Additionally, plaintiffs cannot proceed under Pennsylvania Rule of Appellate Procedure 312 because they failed to seek the permission of this court. Moreover, classifying this court’s order as collateral is inappropriate because the court would be compelled to analyze the alleged negligence of defendants in determining whether punitive damages are warranted or whether the claims rest upon negligence; therefore, the requirements of Pennsylvania Rule of Appellate Procedure 313 cannot be met.

Lastly, the order of this trial court is not final as defined under Pennsylvania Rule of Appellate Procedure 341. There is no separate cause of action for punitive damages in Pennsylvania. Nix v. Temple University, 596 A.2d 1132 (Pa. Super. 1991). The portion stricken simply advances an alternate theory of recovery advanced on plaintiffs’ remaining claims for negligence and loss of consortium. Dolan v. Stadium Authority of City of Pittsburgh, 635 A.2d 672 (Pa. Super. 1993).

Therefore, the striking of plaintiff’s punitive damages claims are interlocutory and the review of the transfer of venue is the only reviewable issue before the appellate court.

CONCLUSION

For the foregoing reasons, this court respectfully requests that the November 15, 2010 order granting defendants’ preliminary objections, transferring the case to the Bucks County Court of Common Pleas, be affirmed.

      . The owner ofthe premises is Jay Platt (Exhibit “A” to defendants’ preliminary objections).

      . In addition to Brookside Manor and CDC Catering, Inc., plaintiffs also included Jean Platt, Jay Platt (the owner of the premises), David Voltz (President of CDC Catering, Inc.), Somerton Springs County Club and Vernon Platt as defendants. The second action was later discontinued without prejudice at the request of plaintiffs. (See docket)


author: ZULICK, J.,

text:
    Lemanski v. Genalo

      Geoffrey S. Worthington, for plaintiff.

      Michael A. Ventrella, for defendants.
    February 18, 2011
   ZULICK, J.,

This case arises from a home improvement contract entered into between plaintiff Jeffrey M. Lemanski and defendant Roxanne Genalo, acting for co-defendant Kitchen and Home Design Gallery, Inc.

Plaintiff alleges that by agreement dated September 20, 2009, the parties arranged that Kitchen and Home Design Gallery, Inc. (“Kitchen”) would renovate plaintiff’s kitchen. Amended complaint, exhibit “A.” The parties agreed to a contract price of $10,000, including costs of labor, materials, fixtures and appliances. Id. Plaintiff paid a deposit of $5,000 toward the renovation on the date of contracting. Original complaint, page 2, ¶ 5. Of the remaining balance, $2,500 was due upon delivery of the cabinets, $2,000 due upon installation of the countertop and $500 due upon completion of the project. Amended complaint, exhibit “A.”

Plaintiff commenced this lawsuit on September 21, 2010 seeking compensatory, consequential and treble damages. He alleges that per oral agreements, defendants demanded (and he paid) extra money for extra work. Original complaint, page 2, ¶ 6. He claims that he has paid a total of $22,779 pursuant to the parties’ contract and change orders, but defendants have not fulfilled their contractual obligations. Id., page 2, ¶ 9.

On October 26, 2010 plaintiff filed an amended complaint. Defendant Genalo filed an answer and new matter to the original complaint on November 5, 2010. Kitchen filed preliminary objections to the amended complaint on December 14, 2010.

Genalo filed a motion for judgment on the pleadings (“motion”) on December 6, 2010. Plaintiff filed a motion to dismiss Genalo’s motion for judgment on the pleadings on January 5, 2011. The parties submitted briefs and argument was held on February 7, 2011.

DISCUSSION

I. Judgment on the Pleadings

Rule 1034 of the Pennsylvania Rules of Civil Procedure permits any party to move for judgment on the pleadings after the pleadings are closed and authorizes the court to enter such judgment or order as shall be proper on the pleadings. Pa.R.C.P. 1034.

A motion for judgment on the pleadings is similar to a demurrer, and may be entered where there are no disputed issues of fact and the moving party is entitled to judgment as a matter of law. Kosor v. Harleysville Mutual Insurance Co., 595 A.2d 128,129 (Pa. Super. 1991) (citations omitted). In ruling on such a motion, the court must “confine its consideration to the pleadings and relevant documents.” Id. (citation omitted). If a defendant moves for judgment on the pleadings, the court will consider all of the pleadings in arriving at its decision. Herman v. Stern, 419 pa. 272, 213 A.2d 594 (Pa. 1965).

A. Failure to State a Claim Upon Which Relief can be Granted as to Breach of Contract (Count I)

In her motion, Genalo claims that plaintiff has failed to state a claim against her upon which relief can be granted. She observes that plaintiff “refers to ‘defendants’ in the aggregate” throughout the complaint, and fails to allege that Genalo “acted separately or apart” from Kitchen. Defendant’s brief in support of judgment on the pleadings, page 3. Based on principles of Pennsylvania contract and agency law, Genalo asserts that she cannot be held individually liable for her conduct as corporate agent.

Pennsylvania courts have consistently relied on the principles established by the Restatement of the Law (Second) Agency. “It is a basic tenet of agency law that an individual acting as an agent for a disclosed principle [sic] is not personally liable on a contract between the principle [sic] and a third party unless the agent specifically agrees to assume liability.” In re Estate of Duran, 692 A.2d 176, 179 (Pa. Super. 1997) (quoting Cox and Co., Inc. v. Giles, 406 A.2d 1107, 1110 (Pa. Super. 1979) (citing Restatement (Second) of Agency § 320 (1958))). The Restatement (Second) defines a “disclosed principal” by way of the following framework: “at the time of a transaction conducted by an agent, the other party théreto has notice that the agent is acting for a principal and the principal’s identity, the principal is a disclosed principal.” Restatement (Second) of Agency § 4 (1958). “[A] person has notice of a fact when he has actual knowledge of it, has reason to know it, should know it, or has been given notification of it.” Giles, 406 A.2d at 1110 (citing Restatement (Second) of Agency § 4 (1958)).

Here, plaintiff had notice that Genalo worked in the service of Kitchen. He has admitted that he knew of Kitchen’s existence at the time of contracting and that it employed Genalo and empowered her to act as its agent. Reply to new matter, ¶¶ 8-9. He further acknowledges that the writing signed by plaintiff displays “The Kitchen and Design Gallery, LLC” in the header and that Genalo’s name appears nowhere in the writing. Id. at ¶¶ 9-10. Based on these facts, plaintiff was put on notice that Genalo acted in her capacity as agent for Kitchen and not in her individual capacity. Kitchen, therefore, was a disclosed principal and Genalo is not personally liable on the contract.

Plaintiff argues that by virtue of Genalo’s ownership of Kitchen, the relationship between defendants is indistinguishable and that “Kitchen” essentially is Genalo. He contends that the corporate veil should be pierced on that basis in order to pursue Genalo in her individual capacity. See Miners Inc. v. Alpine Equipment Corp., 722 A.2d 691, 695 (Pa. Super. 1998) (explaining alter-ego theory of liability for piercing the corporate veil). Our appellate courts have set out the factors to be considered in disregarding the corporate form as follows:

undercapitalization, failure to adhere to corporate formalities, substantial intermingling of corporate and personal affairs and use of the corporate form to perpetuate a fraud. Department of Environmental Resources v. Peggs Run Coal Co., 423 A.2d 765 (Pa. Cmwlth.1980), Kaites v. Dept. of Environmental Resources, 529 A.2d 1148, 1151 (Pa.Cmwlth.1987). See also Watercolor Group v. Newbauer, 360 A.2d at 207 (Pa. 1976) (corporate veil may be pierced whenever one in control of a corporation uses that control or corporate assets to further his personal interests). Advanced Telephone Systems, Inc. v. Com-Net Professional Mobile Radio, LLC 846 A.2d 1264, 1278 (Pa. Super. 2004).

However, Lemanski did not plead a claim to pierce the corporate veil so that matter is not properly before the court. Lemanski will be given leave to amend; otherwise the motion will be granted as to Count I, Breach of Contract.

B. Sufficiency of Pleading as to Fraud (Count II)

Genalo asserts in her motion for judgment on the pleadings that count I as pled against her is insufficiently specific, and should therefore be dismissed for failure to state a claim upon which relief can be granted. She also contends that plaintiff’s allegations of misrepresentations pertain to future performance and are also barred by the gist of the action doctrine.

Pennsylvania Rule of Civil Procedure 1019(b) establishes a heightened pleading standard for allegations of fraud. Pa.R.C.P. 1019(b) (“Averments of fraud... shall be averred with particularity.”); see also Martin v. Lancaster Battery Co., 530 Pa. 11, 13, 606 A.2d 444, 448 (Pa. 1992) (an allegation of fraud must “explain the nature of the claim to the opposing party so as to permit the preparation of a defense” and be “sufficient to convince the court that the averments are not merely subterfuge”). In determining whether fraud has been pled with sufficient particularity, a court must “look to the complaint as a whole.” Maleski v. DP Realty Trust, 653 A.2d 54, 65 (Pa. Cmwlth. 1995).

The elements of a cause of action for fraud are:

(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6)...resulting injury [which] was proximately caused by the reliance. Gruenwald v. Advanced Computer Applications, Inc., 730 A.2d 1004, 1014 (Pa. Super. 1999) (citation omitted); Krause v. Great Lakes Holdings, Inc., 563 A.2d 1182, 1187 (Pa. Super. 1989).

Here, plaintiff alleges that defendants made representations to plaintiff “that all work would be performed and completed by a time certain and that all work would be inspected and that all permits would be obtained.” Original complaint, page 4, ¶ 21. These representations had to do with the future performance of the parties’ agreement. However, “(a) promise to do something in the future, which promise is not kept, is not fraud. It is well-established that a cause of action for fraud must allege a misrepresentation of a past or present material fact.” Krause, supra, at 1187. Genalo will be given leave to file a second amended complaint within 20 days to plead misrepresentation of a past or present material fact. Otherwise, Genalo’s motion will be granted as to count II, Fraud.

II. Preliminary Objections

Kitchen raises two preliminary objections. First, it asserts that count I is insufficiently specific, and therefore should be dismissed. Secondly, it contends that as to Count II, Fraud, Lemanski has not stated a claim upon which relief can be granted.

In considering preliminary objections, “all well-pleaded allegations and material facts averred in the complaint, as well as all reasonable inferences deducible therefrom, must be accepted as true.” Wurth by Wurth v. City of Philadelphia, 584 A.2d 403, 407 (Pa. Cmwlth. 1990). Facts appearing in documents appended to and made a part of the complaint may be considered by the court in determining the sufficiency of the complaint or claim. Pleet v. Valley Greene Associates, 538 A.2d 567, 569 (Pa. Super. 1988). The “court need not accept as true conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion.” Penn Title Ins. Co. v. Deshler, 661 A.2d 481, 483 (Pa. Cmwlth. 1995). The “lower court has broad discretion in determining the amount of detail that must be averred since the standard of pleading set forth in Rule 1019(a) is incapable of precise measurement.” United Refrigerator Co. v. Applebaum, 410 Pa. 210, 213, 189 A.2d 253, 255 (Pa. 1963).

A. Sufficiency of Pleading as to Breach of Contract (Count I)

Kitchen contends that some of the allegations against it in Count I, Breach of Contract, “are of such a general nature that defendant KHDG [Kitchen] cannot be said to have sufficient information to prepare a defense...” Defendants’ brief in support of preliminary objections, page 3. -

The plaintiff must state the material facts of a complaint “in a concise and summary form.” Pa.R.C.P. 1019(a). The allegations “must apprise the defendant of the claim being asserted and summarize the essential facts to support the claim.” Estate of Swift v. Ne. Hosp. of Philadelphia, 690 A.3d 719 (Pa. Super. 1996) appeal denied, 701 A.2d 557 (Pa. 1997).

Lemanski’s amended complaint does not give Kitchen sufficient information to respond to the pleading. Lemanski claims that Kitchen has not “complete(d) the work.” Original complaint, page 2, ¶10. He does not specify what work was not completed, what permits and inspections were not obtained, and what work was not done in a good and workmanlike manner. He also does not identify what work was done by others to remedy Kitchen’s breach, and does not itemize the specific damages he sustained as a result of the breach. These would include out of pocket expenses he has incurred to repair damage and the cost to properly complete the job. Accordingly, Kitchen’s preliminary objection will be sustained.

B. Failure to State a Claim Upon Which Relief can be Granted as to Fraud (Count II)

Kitchen argues that count II of plaintiff’s complaint fails to make out a claim of fraud upon which relief can be granted. Plaintiff’s claim for fraud is insufficient for the same reasons discussed above regarding Genalo. Specifically, the misrepresentations plaintiff complains of related to promises to do work in the future. The claim does not meet the heightened pleading requirements for fraud established by Rule 1019(b) of the Pennsylvania Rules of Civil Procedure. Accordingly, I will sustain the preliminary objection.

ORDER

And now, Februaiy 18,2011, upon consideration of the defendant Roxanne Genalo’s motion for judgment on the pleadings and the preliminary objections of defendants Genalo and Kitchen and Home Design Gallery, Inc., it is hereby ordered as follows:

1. Plaintiff Jeffrey Lemanski is given leave to file a second amended complaint if he is able to allege a cause of action for piercing the corporate veil and/ or fraud against defendant Genalo in keeping with the accompanying opinion within twenty (20) days. Otherwise, defendant Genalo’s motion for judgment on the pleadings will be granted.
2. Defendant Kitchen’s preliminary objections are granted. Plaintiff is given leave to file a second amended complaint within twenty (20) days that satisfies the pleading requirements identified in the attached opinion.