Richman, A. v. Perelman, M. ( 2015 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
AARON RICHMAN, INDIVIDUALLY AND IN THE SUPERIOR COURT OF
DERIVATIVELY ON BEHALF OF PENNSYLVANIA
INSTITUTE OF TERRORISM RESEARCH
AND RESPONSE, INC.
Appellant
v.
MICHAEL PERELMAN
Appellee No. 953 EDA 2014
Appeal from the Order Entered on February 27, 2014
In the Court of Common Pleas of Philadelphia County
Civil Division at No.: No. 4321, July Term 2013
BEFORE: DONOHUE, J., WECHT, J., and PLATT, J.*
CONCURRING MEMORANDUM BY WECHT, J.: FILED APRIL 21, 2015
I join the learned majority’s disposition and rationale. I write
separately to clarify the grounds of my agreement. I also wish to address
Aaron Richman’s arguments that the trial court erred because it made
findings of fact based in part upon Michael Perelman’s unverified responsive
pleadings, and that the trial court should have sua sponte amended the
alignment of the parties in a way that would have established Philadelphia
County as a proper venue in which to try this case.
I agree with the majority’s implicit reliance upon Richman’s pleading
alone in finding that Richman established no factual issue precluding the
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*
Retired Senior Judge assigned to the Superior Court.
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transfer of venue to York County without further discovery and fact-finding.
Although the majority does not say it in so many words, it is clear that the
majority’s reasoning requires no reliance upon the assertions of Perelman’s
pleading. Thus, the majority neither engages in, nor endorses any trial
court engagement in, fact-finding, which is improper in resolving preliminary
objections. See Feingold v. Hendrzak, 15 A.3d 937, 941
(Pa. Super. 2011) (“When considering preliminary objections, all material
facts set forth in the challenged pleadings are admitted as true, as well as all
inferences reasonably deducible therefrom.”).
Although Richman maintains that the Institute of Terrorism Research
and Response, Inc. (“ITRR”), was headquartered in Philadelphia, his bald
assertions to that effect are called into doubt by his own pleading, read as a
whole. See Richman’s Response in Opposition to Preliminary Objections at 4
¶ 9 (citing unspecified Philadelphia clientele, marketing the Philadelphia post
office box, and use of Philadelphia bank branches in support of venue, but
citing only the sporadic leasing of temporary office space in Philadelphia as
evidence of physical presence), 7-8 ¶ 17 (denying only that “many” bills are
sent to the York County address). He further describes corporate activities
in Philadelphia that, when the assertions are read collectively, do not
establish, even on a reading most generous to Richman’s claims, that ITRR
was headquartered in any meaningful sense of that word in Philadelphia.
Rather, the substance of his pleadings, if not the legal conclusions drawn
therein, establish that ITRR’s alleged associations with Philadelphia consist of
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Richman’s and Perelman’s desire to market ITRR as a company based in a
more cosmopolitan location than the York County address registered with
Pennsylvania’s Department of State. Richman’s voluminous attachment of
various correspondence in which ITRR listed a Philadelphia address and
phone number to his pleadings is no match for his failure to assert that
Perelman conducted ITRR business anywhere but at the York County address
at which he was served and at which ITRR is registered. Furthermore, he
provides no legal authority to support the proposition that such a marketing
ploy by itself establishes that a company is headquartered in that locale
rather than at its registered address, nor is any such conclusion self-evident.
More importantly, though, the extent to which ITRR conducts business
from Philadelphia County is, at most, of limited utility in answering the
governing transaction or occurrence inquiry under Pa.R.C.P. 1006, which
rule makes no reference to the location of a plaintiff’s business or the
business of an individual defendant sued as such. See Maj. Mem. at 6-7.
The trial court and the majority both make clear, and I agree, that Rule
1006 is the rule that exclusively governs the present inquiry;
Pa.R.C.P. 2179, governing venue in suits brought against corporate
defendants, simply has no application to this case, in which the defendant
unequivocally has been sued as an individual. See Maj. Mem. at 8. Thus,
ITRR’s headquartering only bears upon venue to the extent that it anchors
the sued-upon transactions or occurrences in Philadelphia County, which
Richman must do to establish venue under Rule 1006.
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As the majority holds, Philadelphia County is a proper venue in this
matter only if Perelman adequately pleads a basis upon which the court may
find that the transactions or occurrences at issue herein occurred in
Philadelphia County. See Maj. Mem. at 9.
Relevantly, we have held as follows:
Pennsylvania courts have interpreted a transaction or occurrence
to require that a transaction[,]and not merely some part of the
transaction, take place in the county where venue is laid because
it would lead only to confusion and a practice which we have
heretofore referred to as forum[-]shopping if the law were to
permit suit to be commenced against a defendant in any county
where any facet of a complex transaction occurred. Therefore,
parties cannot avoid the transaction requirement by
characterizing a part of a transaction as an occurrence.
Kring v. Univ. of Pittsburgh, 829 A.2d 673, 678 (Pa. Super. 2003) (citing
Craig v. W.J. Thiele & Sons, Inc., 149 A.2d 35 (Pa. 1959); Sunderland
v. R.A. Barlow Homebuilders, 791 A.2d 384, 392 (Pa. Super. 2002))
(internal quotation marks, citations, and modifications omitted; remaining
modifications added).
In Estate of Werner ex rel. Werner v. Werner, 781 A.2d 188
(Pa. Super. 2001), applying the principles set forth in Craig, this Court
reviewed a challenge to venue in connection with a claim for civil conspiracy.
The elements of civil conspiracy involve (1) a combination of two or more
persons acting with a common person to do an illegal act or a lawful act by
unlawful means or for an unlawful purpose; (2) an overt act done in
pursuance of the common purpose; and (3) actual legal damage. Id. at
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191. The appellants in that case contended that “any overt act undertaken
by any conspirator in furtherance of the common design was sufficient to
establish venue wherever the overt act occurred.” Id. (internal quotation
marks omitted). We disagreed.
Reviewing the appellants’ pleadings, we discerned that one of the
alleged occurrences was a meeting in the desired venue years before the
conspiracy at issue emerged. We held that, “[e]ven assuming arguendo that
this meeting . . . evidence[d] the beginnings of a civil conspiracy, its relation
to the underlying wrongful acts . . . [was] tenuous at best.” Id. Thus, it
constituted no more than “a mere facet of the complex transactions” alleged
by the appellants, and failed to establish a basis for venue in the county in
which it occurred. Id. at 191-92. We also held that the preparation in the
desired venue of a number of documents pertinent to the alleged conspiracy
did not suffice, without more, to establish venue, in part because the
challenged stock transactions underlying the conspiracy claim undisputedly
had not occurred in that county. Id. at 192.
In this case, setting aside Richman’s irrelevant claims regarding ITRR’s
supposed Philadelphia headquarters, but accepting the balance of his
allegations as true, he essentially alleges that the transactions upon which
his claims rest occurred in Philadelphia for three reasons: (1) some of
ITRR’s receivables were delivered to ITRR’s Philadelphia post office box and
deposited in one or more Philadelphia branches of an internationally held,
multi-state bank (with a significant proportion of receivables undisputedly
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reaching ITRR’s account by wire transfer); (2) the monies allegedly
converted by Perelman necessarily had already been drawn from, and might
in the future be drawn from, monies deposited in Philadelphia; and
(3) Perelman’s alleged removal of Richman’s authority to access ITRR’s bank
account affected his business dealings in Philadelphia.1 See Complaint at 3
¶ 8.
Richman’s claims materially sound in conversion and breach of
fiduciary duty. The breaches of fiduciary duty alleged by Richman are
couched in terms materially indistinguishable from the facts asserted in
support of Richman’s conversion claim (augmented by Richman’s claims that
Perelman improperly froze Richman out of ITRR’s corporate account). Under
Pennsylvania law, conversion occurs where one deprives another of his right
to property in, or use or possession of, a chattel, or otherwise interferes
therewith, without consent or justification. HRANEC Sheet Metal, Inc. v.
Metalico Pittsburgh, Inc., 107 A.3d 114, 119 (Pa. Super. 2014).2
Notably absent from Richman’s pleading is a clear and encompassing
connection between the elements of conversion and Philadelphia County,
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1
This last point appears only to be relevant if we privilege Richman’s
allegations that ITRR is headquartered in Philadelphia County, because
Richman’s (disputed) United States Residence does not lie in that county.
See Complaint at 2 ¶ 2 (averring that Richman’s residence is in Elkins Park,
Pennsylvania, which is located in Montgomery County).
2
Money may be the subject of a conversion claim. See Pittsburgh
Constr. Co. v. Griffith, 834 A.2d 572, 581 (Pa. Super. 2003).
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notwithstanding his more strained averments to that effect. Nothing in
Richman’s pleading asserts an act undertaken by Perelman that occurred in,
or was materially connected to, Philadelphia County. Indeed, Richman does
not aver that Perelman took any affirmative steps in service of his alleged
wrong-doing in Philadelphia County, instead concentrating on Philadelphia as
the situs of the injury, which, Richman contends, furnishes a sufficient basis
to establish venue. See, e.g., Brief for Richman at 15 (citing Action
Indust., Inc., v. Wiedeman, 346 A.2d 798 (Pa. Super. 1975)) (“For the
purposes of assessing venue, tort causes of action, such as conversion, arise
where injury is inflicted.”).
It is true that Richman alleges connections between the conversion
and moneys that flowed through the Philadelphia post office box, but that,
by itself, would be only one aspect of the complained-of acts. As well,
because Richman does not allege that Perelman deliberately targeted those
monies as opposed to other monies belonging to the corporation and
situated in a national bank,3 any connection at all between the conversion
and Philadelphia is partial and at least as attenuated as the connections
upon which the venue argument that we rejected in Werner was based.
Consequently, even reading Richman’s complaint entirely in isolation from
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3
This is germane due to the absence of dispute that a significant
volume of receivables arrives in ITRR’s account by wire transfer,
fundamentally a mechanism with scant geographical association.
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Perelman’s responsive pleadings, Richman fails to satisfy our time-honored
principle that all—or at the very least all of the critical—aspects of the sued-
upon transactions must have occurred in the venue in which the plaintiff
seeks to pursue his claims.
Werner is not at odds with Action Industries, at least not as they
apply to this case. It is true that the latter case suggested that the locus of
the injury in a conversion case may establish a basis for venue in that
county. See Action Industries, 346 A.2d at 805. Although there may be
a degree of tension between these interrelated precepts, in the instant case
there is no affirmative allegation that ITRR’s or Richman’s alleged injuries
were suffered in Philadelphia County. With respect to ITRR as plaintiff, the
above discussion makes clear why ITRR’s injuries cannot fairly be said to
have arisen in Philadelphia County, where it was anchored solely by certain
banking transactions and a post office box set up primarily for marketing
purposes. Similarly, Richman’s injuries cannot be situated in Philadelphia
County, given his at best sporadic conduct of business there and his avowed
residence in Montgomery County.
This analysis also dispenses with Richman’s contention that Perelman’s
failure to provide a verification in support of his preliminary objections
effectively obviated his stated objections to venue. See Brief for Richman at
11-12. Even if, as Richman contends, Perelman’s failure to verify his
pleading obligated the trial court to deem all of Richman’s averments to
have been admitted, our analysis would lead to the same place. That
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analysis requires no recourse to Perelman’s averments; it stands on no other
ground than Richman’s own allegations. It is also worth noting that the
proper response to an unverified pleading is to be ventured by preliminary
objections. Neither did Richman file preliminary objections to Perelman’s
preliminary objections nor did he raise the lack of a verification in his
response in opposition to Perelman’s preliminary objections. Consequently,
any such challenge was waived for purposes of appellate review. See Gen.
Mills, Inc., v. Snavely, 199 A.2d 540, 544 (Pa. Super. 1964) (holding that,
where the trial court sua sponte raised problems associated with a
verification but the responding party had made no such objection, the
verification issue was waived under Pa.R.C.P. 1032).
Finally, I wish to emphasize that, at no time before the trial court or
this Court has Richman argued that the trial court erred in declining to allow
him to amend his complaint to set forth additional allegations in support of
venue. The closest he has come is to suggest that the trial court could have
amended the caption to realign ITRR as a defendant, thus bringing
Rule 2179 into the equation in such a way as to establish venue in
Philadelphia. See Brief for Richman at 20-21. He has failed to establish any
legal basis upon which the trial court was bound to do so, and acknowledges
that he did not seek such relief from the trial court in the first instance.
Consequently, these arguments, too, are waived. See Pa.R.A.P. 302(a)
(“Issues not raised in the lower court . . . cannot be raised for the first time
on appeal.”).
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For all the foregoing reasons, Richman’s arguments are unavailing.
Consequently, I join the learned majority’s disposition, and its reliance upon
Richman’s failure to plead a sufficient nexus between the complained-of
transactions and occurrences and Philadelphia County.
Judge Donohue joins this concurring memorandum.
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