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2021 PA Super 37
RONALD SCOTT HANGEY AND : IN THE SUPERIOR COURT OF
ROSEMARY HANGEY H/W : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 3298 EDA 2017
HUSQVARNA PROFESSIONAL :
PRODUCTS, INC., HUSQVARNA :
GROUP, HUSQVARNA U.S. HOLDING, :
INC., HUSQVARNA AB, AND :
TRUMBAUER'S LAWN AND :
RECREATION, INC. :
Appeal from the Order September 7, 2017
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 1015 March Term, 2017
BEFORE: PANELLA, P.J., STABILE, J., DUBOW, J., KUNSELMAN, J.,
NICHOLS, J., MURRAY, J., McLAUGHLIN, J., KING, J., and
McCAFFERY, J.
OPINION BY McLAUGHLIN, J.: FILED: MARCH 8, 2021
Ronald Scott Hangey and Rosemary Hangey, husband and wife, appeal
from the order sustaining preliminary objections to venue in Philadelphia
County and transferring the case to Bucks County. We conclude the trial court
abused its discretion in finding that the contacts of Husqvarna Professional
Products, Inc. (“HPP”) with Philadelphia did not satisfy the quantity prong of
the venue analysis. We therefore reverse.
The trial court summarized the factual and procedural history of the
case:
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[The Hangeys] commenced this action on March 13,
2017 by filing a Complaint. The Amended Complaint, filed
April 10, 2017, alleges that in May 2013, Plaintiff Ronald
Hangey purchased a Husqvarna riding lawnmower from
Defendant Trumbauer’s Lawn and Recreation, Inc. in
Quakertown, Bucks County. On August 5, 2016, Ronald
Hangey was maimed when he fell off his lawnmower and the
lawnmower ran over his legs while the blades were still
engaged; the accident occurred at [the Hangeys’] property
in Wayne County. The Amended Complaint named five
defendants—Husqvarna Professional Products, Inc. [“HPP”],
Husqvarna Group, Husqvarna U.S. Holding, Inc., Husqvarna
AB, and Trumbauer’s Lawn and Recreation, Inc.—and
sounds in negligence, strict liability, and loss of consortium.
All Defendants filed Preliminary Objections. Defendants
Husqvarna U.S. Holdings, Inc. and Husqvarna AB filed
Preliminary Objections which, inter alia, challenged personal
jurisdiction. Defendants [HPP], Husqvarna Group, and
Trumbauer’s Lawn and Recreation, Inc., filed Preliminary
Objections arguing, inter alia, improper venue. [The trial
court] permitted the parties to take discovery relevant to
the issues of personal jurisdiction and venue.
[The Hangeys’] venue-related discovery revealed the
following. Husqvarna Group is a nonexistent entity that acts
as a marketing device for a number of Husqvarna-branded
corporate entities, including [HPP]. Deposition of John
Stanfield, 55:14-56:9 (August 30, 2017). John Trumbauer,
sole shareholder of Defendant Trumbauer’s Lawn and
Recreation, Inc., produced an affidavit in which he averred
Defendant Trumbauer’s Lawn and Recreation, Inc.’s
principal place of business was in Quakertown, PA, that
Philadelphia did not fall within their target market area, and
they did not regularly conduct business in Philadelphia.
Defendant Trumbauer’s Lawn and Recreation, Inc.’s
Preliminary Objection at Ex. “B.” [HPP] is a Delaware
corporation with a principal place of business located in
Charlotte, North Carolina. See Defendants’ Ex. “C” Affidavit
of Jordan Baucom. In 2016, [HPP] had approximately $1.4
billion in sales revenue in the United States, of which
$75,310.00 came from direct sales in Philadelphia County.
See [HPP’s] monetary sales data from 2014-2016,
submitted to the Court under Seal pursuant to the Order
dated September 12, 2017. Of the $75,000 in sales made
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in Philadelphia in 2016, roughly $69,700 came from a single
Husqvarna authorized dealer, DL Electronics, Inc. Id.
Approximately 0.005% of [HPP’s] 2016 United States sales
revenue resulted from direct sales in Philadelphia County.
Sales data from 2014 and 2015 is substantially similar, with
approximately 0.005% of Husqvarna’s annual United States
sale revenue resulting from direct sales within Philadelphia
County. Id. These sales figures do not include the revenue
generated by selling Husqvarna products at “big box”
retailers such as Home Depot, Lowe’s, or Sears. In the case
of “big box” retailers, John Stanfield, the corporate
representative for [HPP], testified that [HPP] delivers its
products to the retailers’ distribution centers, none of which
are located in Philadelphia County. See e.g. Stanfield Dep.
31:17-34:20 (testifying that sales to Lowe’s would be
delivered to the Lowe’s distribution center in either Pottsville
or Pittstown, Pennsylvania). Once the Husqvarna products
are delivered to the retailers’ distribution centers, the
retailers retain sole discretion as to where the products will
be offered for sale, including stores located in Philadelphia
County. See Affidavit of John Stanfield at 19.
Following oral argument, [the trial court] dismissed
Defendants Husqvarna U.S. Holdings, Inc. and Husqvarna
AB due to want of personal jurisdiction and transferred the
case against Defendants [HPP], Husqvarna Group, and
Trumbauer’s Lawn and Recreation, Inc. to Bucks County
because venue was improper in Philadelphia County. [The
Hangeys] filed a timely notice of appeal challenging this
Court’s finding of improper venue; however, they did not
appeal the dismissal of Defendants Husqvarna U.S.
Holdings, Inc. and Husqvarna AB. See Notice of Appeal,
docketed September 26, 2017 (stating Plaintiffs appeal from
the orders “transferring venue of this matter to the Court of
Common Pleas of Bucks County, Pennsylvania”).
Trial Court Opinion, filed Mar. 2, 2018, at 1-3 (“1925(a) Op.”).
In finding venue in Philadelphia was not proper, the trial court found
HPP’s contacts satisfied the quality prong of the venue analysis, but did not
satisfy the quantity prong. The court reasoned that only 0.005% of HPP’s
national revenue came from sales in Philadelphia and concluded that because
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this amount was “de minimis,” HPP’s contact with Philadelphia was not general
and habitual. Id. at 6.
The Hangeys raise the following issue on appeal:
Did the trial court err as a matter of law, and thereby abuse
its discretion, in holding that [HPP] does not regularly
conduct business in Philadelphia County, merely because
the overwhelming majority of its sales in the United States
have occurred elsewhere, thereby overlooking the
undisputed continuous, ongoing, and regularly recurring
sales of Husqvarna consumer products in Philadelphia
County?
Hangeys’ Br. at 8.
A panel of this court reversed the trial court’s order. We granted
Husqvarna’s petition for re-argument and ordered the parties to brief an
additional issue: “Whether the en banc Panel should specifically adopt or
overrule prior appellate decisions involving the quantity prong of the venue
analysis?” Order, filed July 9, 2019.
We review an order granting or denying preliminary objections asserting
improper venue for abuse of discretion. Zampana-Barry v. Donaghue, 921
A.2d 500, 503 (Pa.Super. 2007). “A [p]laintiff’s choice of forum is to be given
great weight, and the burden is on the party challenging the choice to show it
was improper.” Fritz v. Glen Mills Schools, 840 A.2d 1021, 1023 (Pa.Super.
2003) (quoting Jackson v. Laidlaw Transit, Inc. & Laidlaw Transit PA,
Inc., 822 A.2d 56, 57 (Pa.Super. 2003)). “However, a plaintiff’s choice of
venue is not absolute or unassailable.” Id. (quoting Jackson, 822 A.2d at
57). “[I]f there exists any proper basis for the trial court’s decision to grant
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the petition to transfer venue, the decision must stand.” Krosnowski v.
Ward, 836 A.2d 143, 146 (Pa.Super. 2003) (en banc) (quoting Estate of
Werner v. Werner, 781 A.2d 188, 190 (Pa.Super. 2001)).
We must determine whether the trial court abused its discretion in
finding that venue as to HPP was improper in Philadelphia.1 If venue is proper
as to HPP, then the Hangeys may maintain their “action to enforce . . . joint
and several liability against” not only HPP, but also Husqvarna Group and
Trumbauer’s Lawn and Recreation, Inc. Pa.R.C.P. 1006(c)(1) (“an action to
enforce a joint or joint and several liability against two or more defendants . .
. may be brought against all defendants in any county in which the venue may
be laid against any one of the defendants”).
Rule 2179 of the Pennsylvania Rules of Civil Procedure provides that
venue is proper against a corporation or similar entity in a county where it
“regularly conducts business.” Pa.R.C.P. 2179(a)(2). When determining
whether venue is proper, “each case rests on its own facts,” Purcell v. Bryn
Mawr Hosp., 579 A.2d 1282, 1286 (Pa. 1990), and “[t]he question is whether
the acts are being ‘regularly’ performed within the context of the particular
business.” Monaco v. Montgomery Cab Co., 208 A.2d 252, 256 (Pa. 1965).
Further, in the venue context, “regularly” does not mean “principally,” and a
defendant “may perform acts ‘regularly’ even though these acts make up a
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1 The Hangeys do not challenge the trial court finding that venue in
Philadelphia is not proper as to Husqvarna Group and Trumbauer’s Lawn and
Recreation, Inc.
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small part of its total activities.” Canter v. Am. Honda Motor Corp., 231
A.2d 140, 142 (Pa. 1967).
In determining whether venue is proper under this rule, courts “employ
a quality-quantity analysis.” Zampana-Barry, 921 A.2d at 503. “The term
‘quality of acts’ means those directly, furthering, or essential to, corporate
objects; they do not include incidental acts.” Monaco, 208 A.2d at 256
(quoting Shambe v. Delaare & Hudson R.R. Co., 135 A. 755, 757 (Pa.
1927)). To satisfy the quantity prong of this analysis, acts must be “sufficiently
continuous so as to be considered habitual.” Zampana-Barry, 921 A.2d at
504.
Pennsylvania appellate courts have often considered the percentage of
overall business a defendant company conducts in a county to determine if
the quantity prong was met. In Canter, the Supreme Court found that a
company whose employees drove cars into Philadelphia “to demonstrate cars
and to consummate sales” met the quality test for venue, and that the
contacts also met the quantity test where one to two percent of the company’s
gross sales occurred in Philadelphia. 231 A.2d at 143. In Canter, the company
had gross sales of 3.7 million in 1964 and 4.1 million in 1965. Id. at 141. In
Monaco, the Supreme Court found that a taxicab company based in
Montgomery County conducted regular business in Philadelphia where five to
ten percent of its business was from passengers it took into Philadelphia. 208
A.2d at 256. It reasoned that the cab company’s acts of driving into
Philadelphia and collecting fares were regularly performed. Id. Further, in
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Zampana-Barry, this Court found venue proper in Philadelphia where a law
firm based in Delaware County derived three to five percent of its income from
cases litigated in Philadelphia. 921 A.2d at 506.
As these cases establish, courts often consider whether the percentage
of a defendant’s business is sufficient to constitute “habitual” contact.
However, no court has stated that the percentage of a defendant’s business
is the sole evidence relevant to the “quantity” analysis. Rather, courts must
determine whether all the evidence presented, including the scope of the
defendant’s business, viewed in the context of the facts of the case, establish
that a defendant’s contacts with the venue satisfy the quantity prong. See
Mathues v. Tim-Bar Corp., 652 A.2d 349, 351 (Pa.Super. 1994) (finding
trial court did not abuse discretion in finding quantity prong not satisfied where
evidence established only one or two sales occurred in county); Monaco, 208
A.2d at 256 (noting “[t]he question is whether the acts are being ‘regularly’
performed within the context of the particular business”).
Where this Court concluded that conducting a small percentage of a
business in a venue did not satisfy the quantity prong, the Court’s core
finding was that the contacts failed the quality prong of the venue test and
the cases often addressed defendants who were small and/or local companies,
not multi-billion-dollar corporations. For example, in Singley v. Flier, 851
A.2d 200, 202-03 (Pa.Super. 2004), we found that the contacts that the
plaintiff alleged Villanova University had with Philadelphia—three graduate
courses offered in Philadelphia, practical experience for nursing students in
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Philadelphia hospitals, a history course entitled “Tours of Philadelphia,” and
volunteer and athletic opportunities—did not satisfy the quality prong of the
venue analysis. We also found that the three graduate courses also failed the
quantity prong “when viewed in light of the University’s entire academic
program, which includes several graduate degrees, as well as a law school.”
Id.
Further, in PECO Energy Co. v. Philadelphia Suburban Water Co.,
this Court found that Philadelphia Suburban Water Company’s contacts with
Philadelphia, which included approximately one mile of pipeline running
through Philadelphia and a one-time purchase of water from Philadelphia,
were “minimal and incidental, at best.” 802 A.2d 666, 670 (Pa.Super. 2002).
We concluded that the contacts were not essential to defendant’s business
and were “far less in quantity, as well as quality, than the contacts cited” in
prior cases. Id. at 671. Further, in Battuello v. Camelback Ski Corp., 598
A.2d 1027, 1029-30 (Pa.Super. 1991), this Court discussed the plaintiff’s
claim that venue in Philadelphia was proper due to Camelback Ski
Corporation’s relationship with eastern Tours, which transported
Philadelphians to Camelback. We concluded the relationship was “tenuous,”
noting that Cambelback’s sending of brochures and quoting prices did not
meet the quality prong of the venue analysis, Philadelphians purchased tickets
only after they arrived at Camelback, and the business generated, which was
less than one percent of Cambelback’s business, was “far too small to qualify
as ‘general or habitual.’” Id. at 1030.
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The percentage of a company’s overall business that it conducts in a
given county, standing alone, is not meaningful and is not determinative of
the “quantity” prong. Each case turns on its own facts, and we must evaluate
evidence of the extent of a defendant’s business against the nature of the
business at issue. A small or local business may do all of its work in just a few
counties or even a single one, while a large business may span the entire
nation. Indeed, the percentage of sales a multi-billion-dollar company makes
in a particular county will almost always be a tiny percentage of its total sales.
Courts thus should not consider percentages in isolation. Rather, courts must
consider all of the evidence in context to determine whether the defendant’s
business activities in the county were regular, continuous, and habitual.
Here, HPP is a multi-billion-dollar corporation. It had at least one
authorized dealer located in Philadelphia to which it delivered products for
sale. Although HPP’s sales through authorized dealers in Philadelphia
constituted only 0.005% of HPP’s national sales, the dollar figure of those
Philadelphia sales in 2016 was $75,310.2 The number and dollar figure of sales
in Philadelphia, and the fact that HPP has an authorized dealer in Philadelphia
to sell its products, is relevant to the determination of whether HPP’s contacts
with Philadelphia satisfied the “quantity” prong of the venue analysis.
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2 Ronald and Rosemary Hangey presented evidence that additional sales
occurred through Lowe’s stores located in Philadelphia. Although there was no
evidence as to the quantity of sales at Lowe’s, there was evidence that such
sales occurred. However, as we conclude that venue is proper without
reference to the sales from Lowe’s or similar stores, we need not determine
whether such sales can be considered here.
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Therefore, we conclude the trial court erred in relying almost exclusively on
evidence of the percentage of defendant’s business that occurred in
Philadelphia when addressing the quantity prong.
Further, based on the totality of the evidence, HPP’s contacts satisfied
the quantity prong of the venue test. Its contacts with Philadelphia – including
having an authorized dealer in Philadelphia, and selling $75,310 worth of
products through that dealer in 2016 in Philadelphia – were “sufficiently
continuous so as to be considered habitual.” See Zampana-Barry, 921 A.2d
at 504.
In reaching this conclusion, we do not find it necessary to approve or
disapprove of any of our prior decisions. Rather, our conclusion is based on
the prior precedents of the Pennsylvania Supreme Court and consistent with
those of our Court. However, as discussed above, we clarify that the
percentage of sales of a corporation in a venue is but one factor to consider
when determining whether the quantity prong of the venue analysis is
satisfied, and such evidence must be viewed within the context of the business
at issue in each case.
As for the quality prong, the trial court found there was “no question”
that it was met. See 1925(a) Op. at 5. The Hangeys do not dispute that
conclusion and we will not address it further.
Order reversed. Case remanded. Jurisdiction relinquished.
President Judge Panella, Judge Dubow, Judge Murray and Judge
McCaffery join the opinion.
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Judge Kunselman and Judge Nichols concur in the result.
Judge Stabile files a dissenting opinion in which Judge King joins.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/8/21
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