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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
MAX FAUST IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
BAYERISCHE MOTOREN WERKE AG AND
BMW OF NORTH AMERICA, LLC A/K/A
“BMW, NA’ AND/OR “BMW” AND TAKATA
CORPORATION AND TK HOLDINGS, INC
AND N&H, LLC D/B/A HANNA MOTORS
No. 3468 EDA 2015
Appeal from the Order Entered October 15, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): November Term, 2014, No. 000656
BEFORE: PANELLA, J., LAZARUS, J., and FITZGERALD, J.*
DISSENTING MEMORANDUM BY PANELLA, J. FILED MAY 24, 2017
In reviewing cases where the trial court has received evidence and
made findings of fact, we, as an appellate court, are not tasked with
determining how we weigh the facts of record. Rather, our task is to review
the trial court’s finding to see if it is supported by the record. If so, we must
accept it, even if we would have found differently. See, e.g., Richards v.
Ameriprise Financial, Inc., 152 A.3d 1027, 1034 (Pa. Super. 2016).
Here, the trial court found that “BMW NA’s primary business purpose is
to sell or lease its vehicles to individual consumers,” Trial Court Opinion,
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*
Former Justice specially assigned to the Superior Court.
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12/2/15, at 6. Furthermore, as the trial court notes, BMW NA cannot, as a
matter of law, actually consummate any sales of BMW vehicles in the state
of Pennsylvania, and most other states as well. See id., at nn. 8, 11. These
findings are well supported by the record. My esteemed colleagues in the
Majority disregard these findings. Accordingly, I respectfully dissent. A full
discussion follows.
Jerry Matthews, Area Manager for BMW, NA, testified in his deposition
that he is “responsible for a group of dealers with the purpose of helping
them improve their … sales of cars, sales of service and parts.” N.T.,
Deposition, 2/19/15, at 8. When asked to detail this responsibility, Matthews
testified, “I work with the dealers on their marketing plans, I work with the
dealers in communicating our sales support efforts. I work with the dealers
on training issues … I work with the dealers on customer satisfaction issues.”
Id., at 15.
The one possible exception is BMW, NA’s transactions with the
independently owned dealerships it covers. BMW, NA generates a certain
amount of revenue when it transfers a vehicle to a BMW dealership. See id.,
at 20, 103. The Majority seizes upon this portion of BMW, NA’s functions and
elevates it above all other evidence of record. I find this laser-like focus
inappropriate.
Importantly, it is not clear from this record where else BMW, NA
derives revenue, but according to Matthews, all the revenue from the
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transfer of a vehicle to a dealership is then turned over to a local dealer
group for marketing purposes, with BMW adding to the amount. See id., at
20-21.1 Transfers of vehicles from BMW, NA to these dealers are described
as “an extremely detailed allocation of cars process.” Id., at 105. While this
is certainly an activity that should not be classified as marketing, there is no
evidence that allocating these vehicles to the dealerships is anything other
than an incidental function that supports the primary goal of BMW, NA,
which, as the trial court found, is to “sell or lease its vehicles to individual
consumers.”
It most certainly does not constitute “sales” in a traditional sense
where a consumer is sold a requested number of goods at an agreed upon
price. Rather, it is an internal mechanism whereby BMW, NA evaluates which
dealerships to award vehicles to based upon their individual performances
and overall market needs.
Thus, we are presented with a record that reveals a company whose
primary, if not sole, business objective is solicitation. While the Majority may
disagree with the trial court’s factual finding on BMW, NA’s primary business
objective, it should not usurp the fact-finding function by substituting its
judgment over the trial court’s well-supported finding.
____________________________________________
1
Although the parties have not explicitly requested it of this Court, Iam
summarizing the testimony due to the parties’ agreement that this
testimony constitutes trade secrets and should be protected from
dissemination to the public. See id., at 19-20.
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I conclude that such an entity is not immune to venue under Rule
2179(a)(2). In such cases, marketing efforts are necessary to the entity’s
existence and therefore qualify as directly furthering the entity’s business
objective. This is especially true where, as here, the entity does not
consummate any sales on its own, nor does it manufacture the goods it
markets.
Our cases consistently emphasize that “each [venue] case rests on its
own facts.” Purcell, 579 A.2d at 246 (citation omitted). There are therefore
no bright line rules other than the distinction between those actions that are
necessary to the entity’s business objective and those that are merely
incidental.
Thus, I believe that a business entity, whose primary, if not sole,
business objective is marketing, is not immune to venue under Rule
2179(a)(2). In such cases, marketing efforts are necessary to the entity’s
existence and therefore qualify as directly furthering the entity’s business
objective. This is especially true where, as here, the entity does not
consummate any sales on its own, nor does it manufacture the goods it
markets.
While I can sympathize with Appellee’s argument that the most
appropriate forum for this case is Lancaster County, that is not the standard
that we must apply. Rather, we must give deference to the plaintiff’s choice
of forum, so long as venue is established under Rule 2179.
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Furthermore, it is important to remember that the plaintiff does not
bear the burden of proof on this issue; it is the objecting party’s burden to
establish that the plaintiff’s choice does not satisfy Rule 2179. Any deficiency
in the evidence is to the detriment of the objecting party, not vice versa.
Under these particular circumstances, I must conclude that the trial
court abused its discretion in finding that BMW, NA had met its burden in
establishing that the quality of its business contacts with Philadelphia County
were insufficient to establish venue. However, I do not reach the second
prong of the test, as the trial court has not yet rendered a finding on this
issue.
Faust argues that it should be allowed to finish discovery on this issue
and requests a remand for this purpose. Specifically, on August 10, 2015,
the trial court ordered the parties to provide evidence on the issue of the
quantity of BMW, NA’s gross business revenue arising from sales of BMW
vehicles to Philadelphia County residents. The trial court acknowledges that
BMW, NA has failed to comply with this order. See Trial Court Opinion,
12/2/15, at 7, n. 9. However, it excuses this breach by concluding that the
quality of BMW, NA’s contacts were insufficient no matter the quantity.
I conclude that the gross business revenues of BMW, NA derived from
Philadelphia County residents is irrelevant to the issue at hand. As noted, it
is uncontested, for purposes of this appeal, that BMW, NA does not engage
in sales of vehicles to the public. The record supports the conclusion that
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BMW, NA has no direct control over the sales activities of dealerships, which
are independent business entities.
The current record is unclear concerning where BMW, NA derives all of
its income. Importantly, it is BMW, NA’s burden to establish that the
quantity of contacts is insufficient in order for its request for venue to be
transferred to be granted. It is unclear whether BMW, NA derives any
income directly from Philadelphia residents. Evidence may show that it does
not. However, since the trial court found that BMW, NA’s primary business
purpose is to sell or lease BMW vehicles to individuals, this is not the only
relevant factor. As I have noted, BMW, NA’s primary business purpose based
upon the record before us is marketing. Thus, a relevant consideration is the
quantity of marketing contacts BMW, NA has with Philadelphia County.
However, I agree with BMW, NA that its actions in promoting national
marketing campaigns that penetrate the Philadelphia market are not
relevant contacts under this analysis. Rather, the analysis should focus on
any marketing activities that are based in Philadelphia County. For example,
procuring advertisements with Philadelphia County media outlets or direct
mailers that BMW, NA may have sent to Philadelphia residents.
As I conclude that the trial court abused its discretion on the issue of
quality of contacts, I would remand this case to the trial court for an
examination of the quantity of BMW, NA’s marketing contacts in Philadelphia
County. Our standard of review requires deference to the trial court’s
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findings and conclusions. We cannot review a finding that the trial court has
not yet made. I would therefore vacate and remand for further proceedings.
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Faust, M. v. Bayerische Motoren Werke AG
Combined Opinion