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HomeMy WebLinkAbout97-5287 CivilMED PLUS MEN'S CENTERS MANAGEMENT, Plaintiff VS. SCOTLAND FAMILY MEDICINE INC., WILLIAM J. KEATING, M.D., and KENNETH W. RICTOR, M.D., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 97-5287 CIVIL JURY TRIAL DEMANDED IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS BEFORE BAYLEY AND HESS, JJ. .ORDER AND NOW, this day of July, 1998, it is directed that this matter be transferred to Franklin County, Pennsylvania. The costs and fees for transfer and removal of the record to be paid by the plaintiff. BY THE COURT, Charles I. Artz, Esquire John W. Jones, Esquire For the Plaintiff J. McDowell Sharpe, Esquire For the Defendants ! Kev!? A. Hess, J. :rim MED PLUS MEN'S CENTERS MANAGEMENT, Plaintiff VS. SCOTLAND FAMILY MEDICINE INC., WILLIAM J. KEATING, M.D., and KENNETH W. RICTOR, M.D., Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 97-5287 CIVIL JURY TRIAL DEMANDED IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS BEFORE BAYLEY AND HESS, JJ. OPINION AND ORDER Plaintiff, Med Plus Men's Centers ("Med Plus") is a general partnership with its principal office in Cumberland County, PA. The Defendant, Scotland Family Medicine, Inc. (the "Clinic") is a Pennsylvania corporation with its only office located in Franklin County, PA. This cause of action arises out of an alleged breach of an express written contract. Defendants filed several preliminary objections, one alleging improper venue. The parties have agreed to a stipulation of facts in order to determine whether venue is proper in Cumberland County. The facts are as follows: Med Plus initially contacted William J. Keating, M.D. and Kenneth W. Rictor, M.D. by telephone from Cumberland County about opening an impotency clinic in Franklin County. The clinic was to be wholly owned by the defendants and operated in Franklin County. Neither physician has medical privileges at any hospital outside of Franklin County, and therefore only regularly see patients at hospitals or nursing homes located in Franklin County. The plaintiff came to Franklin County to negotiate the terms of the proposed business arrangement, and presented the defendants with a written Management Services 97-5287 CIVIL Agreement (the "Agreement"). Under the Agreement Med Plus was to provide management services and visit the Clinic several times per month. A partner of Meal Plus did visit the Clinic on a regular basis between May 18', 1997 and July 31, 1997. While the contract was being negotiated, the Clinic was in operation. The defendants solicited patients through publications published in Cumberland County, among other places, and distributed in Cumberland County on the defendant's behalf by Med Plus. Apart from the Clinic operations, prior to September 1997, defendants did not regularly advertise in or solicit patients for their medical practice from Cumberland County. Of the ninety- eight patients treated at the Clinic between May and September, when this suit was filed, eleven resided in Cumberland County. Thereafter, an additional thirty-two patients were treated at the Clinic, and four of those patients resided in Cumberland County. The parties continued to negotiate during this time, but the defendants never actually signed the Agreement. However, an addendum was signed by both Med Plus and the defendants which stated that the parties to the Agreement would meet to negotiate any additional terms or modifications to the Agreement. The parties signed this addendum in Franklin County. On August 29, the parties and their attorneys met in Cumberland County to discuss additions and modifications under the addendum, but no further agreements were reached at this meeting. Med Plus filed suit in September. They allege that by signing the addendum, the defendants fully executed the Management Services Agreement, which provides that defendants would pay Med Plus fifty-percent of profits in excess of expenses. Med Plus alleges that the defendants have refused to compensate them and have therefore materially breached the Agreement. 2 97-5287 CIVIL The venue rule for corporations is set forth in 42 Pa.C.S.A. Section 2179(a) of the Rules of Civil Procedure) (a) Except as otherwise provided by an Act of Assembly or by subdivision (b) of this rule, 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; or 4) a county where a transaction or occurrence took place out of which the cause of action arose. Additionally, to determine whether venue is proper, we must determine whether the defendant "regularly conducts business'" in Cumberland County by looking at the quantity and quality of the corporate acts in Cumberland County. Masel v. Glasman, 456 Pa. Super. 41, 46, 689 A.2d 314, 317 (1997). The terms "quality" and "quantity" were defined in Shambe v. Delaware and Hudson Railroad Company, 288 Pa. 240, 135 A. 755 (1927) and clarified in Purcell v. Bryn Mawr Hospital, 525 Pa. 237, 244, 579 A.2d 1282, 1285 (1990) and Masel at 416, 689 A.2d at 317. "Quality of acts" 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, Shambe concluded that 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." Shambe at 248,135 A. at 755. ~Pa.R.C.P. 1006(b) states that venue against corporations is controlled by Rule 2179. 97-5287 CIVIL This analysis allows us to determine whether the county has a substantial relationship to the controversy. "'Substantial relationship' is nothing more than synonymous language for minimum contacts, which, in turn, bears directly on the meaning of 'regularly doing business' ... Subsection (a)(2) provides for general jurisdiction, while the remaining provisions of Rule 2179 form the basis of special jurisdiction covering the legal domicile and acts of the corporate enterprise." Purcell at 246, 579 A.2d at 1286. Venue is improper if there is not a substantial relationship between the county and the controversy. In Purcell the trial court had dismissed objections to venue, holding that venue was proper in Philadelphia County, concluding, in mm, that Bryn Mawr regularly conducted business there. The court was satisfied that requirements for venue had been met because Bryn Mawr: a) had contractual affiliations with residency programs of teaching hospitals in Philadelphia; b) recruited and employed medical residents from Philadelphia teaching hospitals; c) purchased goods and services from businesses in Philadelphia; d) maintained and paid for advertisements listing the hospital in the Philadelphia yellow pages and maintains and pays for advertisements in the telephone directory of Philadelphia County; e) placed continuous advertisements in the Philadelphia Inquirer; and f) accepted a portion of its income from residents of Philadelphia County. In an opinion without dissent, the Supreme Court held that there was an insufficient nexus with Philadelphia County for the purpose of conferring venue. Similarly, we find that Cumberland County is not a county where the defendant regularly conducts business. The only contacts Scotland Family Medicine had with Cumberland County 97-5287 CIVIL were minimal: A small percentage of their patients came from Cumberland County and they advertised their business through Med Plus in Cumberland County. "Mere solicitation of business in a particular county does not amount to conducting business." Purcell at 247, 579 A.2d at 1287. These contacts are not of sufficient quality or quantity to make Cumberland County the proper place of venue for this cause of action. On the other hand, that the defendants conducted business in Franklin County is undisputed. The contract in dispute was negotiated in Franklin County, and the addendum was signed there. Therefore, Franklin County is also the only place that it could be said "where a transaction or occurrence took place out of which the cause of action arose." Our courts have held that, in a breach of contract action in which failure to make payment is alleged, venue will be proper in the county where payment is due. Lucas v. Paul C. Harman, 273 Pa. Super. 422, 417 A.2d 720 (1980). The stipulation filed in this case provides that: 20. Other than the agreement attached as Exhibit (A) to the Complaint, no agreement governed where payment would be made to the Plaintiff. First, we note that the underlying cause of action concerns the actual existence of a contract and not the breach of an agreement by failure to make payment. The complaint itself alleges that the defendants have expressly disaffirmed the existence of a contract and have engaged in a course of "freezing out" the plaintiff. Second, the. agreement of the parties (Exhibit (A) referred to above) provides that, to the extent that the plaintiff would share in profits or revenues of the clinic, this would be done by the opening of bank accounts from which, presumably, profits would be 5 97-5287 CIVIL withdrawn. Paragraph 30 of the complaint acknowledges the mutual agreement on the part of the parties that the Franklin County defendants would be the ones to open the accounts. Not only, therefore, is there no suggestion that payment was to be made in Cumberland County, but an inference can be drawn to the contrary. Thus, Lucas has no application to this case. This case should be transferred to Franklin County and we will do so without addressing the other legal issues in this case. ORDER AND NOW, this / 23" day of July, 1998, it is directed that this matter be transferred to Franklin County, Pennsylvania. The costs and fees for transfer and removal of the record to be paid by the plaintiff. Charles I. Artz, Esquire John W. Jones, Esquire For the Plaintiff J. McDowell Sharpe, Esquire For the Defendants BY THE COURT, / / :rlm