Hangey v. Husqvarna Prof'l Prods., Inc.

247 A.3d 1136

Ronald Scott HANGEY and Rosemary Hangey H/W, Appellant

v.HUSQVARNA PROFESSIONAL PRODUCTS, INC., Husqvarna Group, Husqvarna U.S. Holding, Inc., Husqvarna AB, and Trumbauer's Lawn and Recreation, Inc.

No. 3298 EDA 2017

Superior Court of Pennsylvania.

Argued: June 3, 2020

Filed: March 8, 2021

Howard Jonathan Bashman, Willow Grove, for appellant.

Frederick William Bode III, Pittsburgh, for appellee.

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.:

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:

[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 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 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 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. , 525 Pa. 237, 579 A.2d 1282, 1286 (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. , 417 Pa. 135, 208 A.2d 252, 256 (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 small part of its total activities." Canter v. Am. Honda Motor Corp. , 426 Pa. 38, 231 A.2d 140, 142 (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. Delaware & Hudson R.R. Co. , 288 Pa. 240, 135 A. 755, 757 (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...