McLaughlin v. Zook Motors Inc.

JAY R. MCLAUGHLIN INDIVIDUALLY AND D/B/A MCLAUGHLIN LOGGING Appellants v. ZOOK MOTORS INC.

No. 182 WDA 2022

Superior Court of Pennsylvania

February 24, 2023

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

Appeal from the Order Entered January 27, 2022 In the Court of Common Pleas of McKean County Civil Division at No. 918 C.D 2019.

Joseph D. Seletyn, Esq.

BEFORE: BOWES, J., MURRAY, J., and PELLEGRINI J.^[*]

MEMORANDUM

MURRAY, J.:

Jay R. McLaughlin (Appellant), individually and d/b/a McLaughlin Logging, appeals from the order dismissing his complaint against Zook Motors, Inc. (Zook), for failure to join Laura Turner (Turner) and Sando Ferrucci (Ferrucci) as indispensable parties.^[1] We affirm.

The history of this case is long and convoluted. In December 2017, Appellant and Ferrucci visited Zook to purchase a truck for their future business. While at Zook, they negotiated the purchase of a truck for $58,094.40.^[2] Appellant subsequently wired the purchase funds to Zook's account. Zook thereafter transferred sole title and possession of the truck to Turner. As a result, Appellant filed a civil complaint against Zook alleging causes of action for (1) breach of contract; (2) civil conspiracy; (3) conversion; (4) negligence; and (5) punitive damages. Complaint, 3/10/20.

On May 4, 2020, Zook filed an Answer and New Matter.

[Zook] alleged that [Appellant] negotiated the truck purchase along with another individual, [] Ferrucci, and that the truck was to be acquired for a joint business venture between [Appellant] and Mr. Ferrucci. [Zook] further alleged that the vehicle was then transferred to [] Turner at the express direction of [] Ferrucci, who acted with the apparent authority of [Appellant], and that [Zook] acted in good faith and in reliance on the apparent authority of [] Ferrucci.

On May 22, 2020, [Appellant] filed a Response to [Zook's] New Matter in which [Appellant] denied that the decision to purchase the truck was jointly made, and likewise denied that [] Ferrucci acted with any authority when directing that the truck be transferred to [] Turner.

Trial Court Opinion, 3/28/22, at 2 (paragraph designations omitted).

On August 20, 2020, Zook filed a complaint to join Ferrucci and Turner (collectively, Additional Defendants) as defendants (hereafter, complaint to join). Zook claimed Appellant's "losses and damages, if any, are the result of acts or omissions of the Additional Defendants." Complaint to Join, 8/20/20, ¶ 3. Zook explained:

Several days after payment of the purchase funds, and with no company name or business location having been established, [] Ferrucci, acting with apparent authority of [Appellant], advised Zook … that the truck would be temporarily titled in the name of [] Turner, an associate of Ferrucci.

Id. ¶ 18. According to Zook, it transferred and titled the vehicle to Turner in good faith. Id. ¶¶ 19-20. Zook asserts, should it be found liable, Additional Defendants are jointly and severally liable. See generally id. (Prayers for Relief).

Appellant responded by filing a motion to quash the complaint to join and compel discovery. Motion to Quash and Compel, 8/28/20. Appellant argued Zook untimely filed its complaint to join "242 days after service of the complaint," without the consent of Appellant or the trial court. Id. ¶¶ 11, 17. Appellant maintained Zook failed to show "reasonable justification for the delay in commencing joinder proceedings." Id. ¶ 21. Appellant averred that joinder of Additional Defendants would cause him prejudice. Id. ¶ 20.

On October 2, 2020, Zook moved to dismiss its complaint to join and discontinue its action against Additional Defendants. Motion to Dismiss, 10/2/20. Zook also notified the court that Additional Defendants filed a bankruptcy proceeding in New York State. Id. ¶ 24.

Separately, Zook moved to dismiss Appellant's complaint for failure to join Additional Defendants as indispensable parties. Id. ¶ 27. Zook explained that in an unrelated civil action, McLaughlin had identified Ferrucci and Turner as participants in the wastewater treatment business. Id. at ¶¶ 18-20 (referencing Advanced Water Services, LLC et al. v. Ferrucci and Turner, No. 2019-10918).

The trial court scheduled a hearing on Zook's motion to dismiss its complaint to join for November 13, 2020. On November 9, 2020, however, the trial court deemed Zook's motion to dismiss uncontested and granted the motion with prejudice. Order, 11/9/20.

On November 12, 2020, Appellant requested reconsideration of the court's November 9, 2020, order. The trial court granted reconsideration and amended its November 9, 2020, order to provide, in part:

It appearing that [Zook's] Motion to Discontinue as to Additional Defendants would result in the exclusion of indispensable parties, that motion is DENIED without prejudice.

Trial Court Order, 12/7/20, at 3 (unnumbered) (emphasis added).

On December 23, 2020, Appellant filed a motion to amend his complaint. Appellant's proposed amended complaint omitted the counts for conspiracy and conversion. See generally Amended Complaint, 12/23/20. Importantly, Appellant again failed to name Turner or Ferrucci as parties. See id.

Appellant also filed a motion to quash Zook's complaint to join. Motion to Quash, 12/23/20.

On January 27, 2021, the trial court granted Appellant's motion to amend complaint. Order, 1/27/21. The court scheduled a hearing on Appellant's motion to quash the complaint to join for March 5, 2021. In the interim, on February 5, 2021, Zook petitioned to withdraw its motion to discontinue the complaint to join. Petition to Withdraw (Discontinuance), 2/5/21.

On February 12, 2021, after a hearing, the trial court addressed the pending motions. The court ordered:

[Zook's] Motion to Dismiss [Appellant's] Complaint is DISMISSED without prejudice. As the parties have agreed to conduct limited discovery as to the question of indispensable parties, dismissal of the Complaint would be inappropriate.

… [Zook's] Complaint to Join Additional Defendants shall be deferred while the parties conduct limited discovery as to the issue of indispensable parties. Upon completion of limited discovery, the parties shall be prepared to argue this issue before the Court.

… [Zook's] Petition to Withdraw Motion to Discontinue Action Against Additional Defendants is moot. This Court, in its Order dated December 7, 2020, denied said motion without prejudice. Therefore, a withdrawal of the Motion is unnecessary. Despite the fact that said Motion was already denied, [Zook] may withdraw the Motion if they so choose. To the extent that any confusion exists, [Zook's] Complaint to Join Additional Defendants has not been discontinued and remains outstanding.

At this time, two (2) motions remain outstanding: (1) [Appellant's] Motion to Quash [Zook's] Complaint to Join Additional Defendants and (2) [Zook's] Complaint to Join Additional Defendants. Decision on these motions shall be deferred until the conclusion of the parties' limited discovery or until further hearing before the Court.

Order, 2/12/21, at 2 (unnumbered).

The trial court ordered Zook to schedule depositions of the Additional Defendants. Order, 3/5/21. A few days later, the trial court scheduled a status conference for June 11, 2021. On April 15, 2021, without objection, the trial court permitted Appellant to again amend his complaint. The parties stipulated to the completion of discovery by July 15, 2021. Order, 5/14/21.

On August 26, 2021, Zook filed a motion to dismiss Appellant's complaint for nonjoinder of indispensable parties, along with a brief in support of its motion. Motion to Dismiss, 8/26/21. Zook's motion alleged:

At the time of the transaction for the vehicle in question, [Appellant] and his wife were involved in a business venture with [] Ferrucci and [] Turner, namely a partnership involving water treatment services.

• In December, 2017, [Appellant] and [] Ferrucci went together to meet a sales representative at [a] Zook [] dealership regarding the purchase of the vehicle.

• The Zook [] representative understood the vehicle was being purchased as part of the business venture, and that an agency relationship existed between [Appellant] and Ferrucci.

•Funds were wired from [Appellant's] bank account to Zook [] to pay for the vehicle.

• Title to the 2016 Ford F-350 was transferred by Zook [] to [] Turner.

Id. ¶ 6.

Appellant responded, filing a "Rule to Show Cause"^[3] why Zook should not be held in contempt for failing to comply with the trial court's discovery deadline, and for filing its motion to dismiss beyond the deadline. Rule to Show Cause, 8/27/21. The trial court dismissed Zook's untimely filed motion on September 1, 2021. The court also scheduled a hearing on Appellant's rule to show cause for October 8, 2021, the same day as its status conference. Zook filed a motion for reconsideration, which the trial court granted. Order, 9/28/21. The trial court advised that on October 8, 2021, the court would hear argument on all outstanding motions. Id.

After the October 22, 2021, hearing, the trial court filed a memorandum and order deeming Additional Defendants indispensable parties and directing that Appellant join them as parties. Trial Court Order, 10/22/21, ¶¶ 1-2. However, the memorandum and order were not served on the parties.

On December 7, 2021, Appellant moved for reconsideration of the trial court's October 22, 2021, order. The trial court granted relief:

[Appellant's] counsel having averred in a motion filed this date that he did not receive a copy of the [c]ourt's Memorandum and Order dated October 22, 2021, directing [Appellant] to join [] Turner and [] Ferrucci as additional parties, and it appearing that [Zook's] counsel likewise did not receive

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