Fassero, D., M.D. v. Hartzell, S., M.D. ( 2022 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DANIEL FASSERO, M.D. : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
SCOTT HARTZELL, M.D., ROBERT : No. 1531 MDA 2020
LAMONT, SHELLEY N. RINE, L2 REAL :
ESTATE, LLC, SHANN LIN, M.D., :
PROGRESSIVE VISION INSTITUTE, :
P.C., NATIONAL RETINA INSTITUTE, :
PLLC, AND PACIFIC APEX :
HEALTHCARE, INC. :
Appeal from the Order Entered November 3, 2020
In the Court of Common Pleas of Union County
Civil Division at No(s): 2019-0760
BEFORE: PANELLA, P.J., MURRAY, J., and STEVENS, P.J.E.*
MEMORANDUM BY PANELLA, P.J.: FILED: MAY 6, 2022
Daniel Fassero, M.D., appeals from the order transferring venue to
Northumberland County based on a forum selection clause after sustaining
the preliminary objection filed by Scott Hartzell, M.D., Robert Lamont, and
Shelley N. Rine. On appeal, Fassero raises several distinct arguments that the
trial court was precluded from transferring this case. After careful review, we
affirm.
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* Former Justice specially assigned to the Superior Court.
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As noted above, this appeal arises from a ruling on preliminary
objections. As such, the following factual background is a summary of the
facts alleged by Fassero in his complaint. Fassero became a partner with
Hartzell in the Eye Center of Central Pennsylvania (“Eye Center”) in 2007.1 At
the same time, Fassero became a partner in several independent but related
real estate holding partnerships (“BHH partnerships”) with Hartzell. The BHH
partnerships owned offices and leased them to Eye Center.
At some point after Fassero became a partner Robert Lamont was
named CEO of the various partnerships described above. Working together
and with Lamont, the two eye doctors built upon Eye Center’s existing
locations by creating two new surgical centers, the Surgery Center of Central
PA, LLC, and the Surgery Center of Allenwood, LLC. The two doctors also
became equal partners with Lamont in a new real estate holding partnership,
known as HFL Properties.
However, in 2013, Fassero learned through his wife that Lamont had a
criminal history. After his investigation uncovered that Lamont had two
separate convictions, Fassero requested that Lamont be removed as CEO.
Hartzell refused, and the relationship between Fassero and Lamont chilled.
____________________________________________
1 There were other partners involved in some of the partnerships described in
this memorandum. However, they are no longer partners, and they are not
relevant to this appeal in their individual capacities. For ease of reading, we
do not name them or address them separately.
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After this dispute, Fassero and Hartzell had frequent disagreements over
the operation of Eye Center. In 2015, Hartzell determined that he would leave
Eye Center to join a local hospital. When Hartzell told Lamont that he was
leaving Eye Center, Lamont became concerned over his future with Eye
Center. While still employed by Eye Center, Lamont began consulting a
competitor, PVI, owned by Shann Lin, M.D. Hartzell never did leave Eye
Center.
In his complaint, Fassero alleged that Lamont continued to draw a
generous salary from Progressive Vision Institute (“PVI”), and also consulted
several other competitors, specifically National Retina Institute, PLLC (“NRI”),
and Pacific Apex Healthcare, Inc. (“PAH”) over the intervening years. Fassero
also alleged that Lamont engaged the services of another Eye Center
employee, Shelley Rine, to perform medical billing for Lin while still employed
by Eye Center. Finally, Fassero alleged Hartzell conspired with Lamont to keep
these consulting arrangements secret from Fassero to the detriment of Eye
Center and Fassero.
On March 19, 2018, Fassero filed a complaint in Northumberland County
seeking to dissolve Eye Center and other damages at docket number 2018-
489. He also filed this action in Union County on October 21, 2019, at docket
number 190760. Fassero amended his complaint on December 9, 2019. In his
Union County complaint at docket number 190760, Fassero asserted:
(1) a claim against Hartzell for breach of the Eye Center, BHH, and
HFL partnership agreements;
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(2) a claim against Hartzell and Lamont for breach of fiduciary duty
pursuant to the Eye Center, BHH, and HFL partnership
agreements;
(3) a claim against Lamont and Lin for aiding and abetting Hartzell’s
breach of fiduciary duty pursuant to the Eye Center and BHH
partnership agreements;
(4) a claim against Hartzell, Lamont, Rine, Lin, PVI, NRI, and PAH for
tortious interference with Fassero’s prospective business
relations;
(5) a claim against Hartzell, Lamont, Lin, PVI, NRI and PAH for
conversion of surgical center assets;
(6) a claim against Hartzell and Lamont for conversion of surgical
center assets;
(7) a claim against Hartzell, Lamont, Rine, Lin, PVI, NRI, and PAH for
civil conspiracy to commit the previously listed torts;
(8) a claim against Hartzell and Lamont for civil conspiracy to interfere
with Fassero’s interests in the Eye Center, BHH, and HFL
partnerships;
(9) a claim against Hartzell, Lamont, and Rine for misappropriation of
Eye Center’s trade secrets;
(10) a claim in the alternative against Hartzell, Lamont, Lin, PVI, NRI,
and PAH for unjust enrichment.
In response, the various defendants filed preliminary objections to the
Union County complaint raising a multitude of arguments. After hearing
argument on the objections, the Union County trial court held that the venue
selection clause in the Eye Center partnership agreement governed venue for
at least some of the claims raised by Fassero. As a result, the court ruled on
only the preliminary objection to venue raised by Hartzell, Lamont and Rine.
Fassero filed this timely appeal.2
On appeal, Fassero makes the following arguments:
____________________________________________
2We note that we have jurisdiction over this interlocutory appeal pursuant to
Pa.R.A.P. 311(c).
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1. The trial court committed an error of law by failing to properly
review and apply Pa.R.Civ.P. 1006 and Pa.R.Civ.P. 2179 before
summarily transferring the case to Northumberland County.
2. The trial court committed an error of law and abuse of
discretion by failing to properly resolve disputed facts
concerning proper venue under Pa.R.Civ.P. 1006 and
Pa.R.Civ.P. 1028(c)(2), which the trial court itself
acknowledged it was obligated to do during the oral argument,
and further as was agreed to by all counsel.
3. The trial court committed an error of law and abused its
discretion by concluding that the forum selection clause set
forth in the Eye Center agreement dictated venue despite the
fact that the Eye Center agreement was only signed by one of
the eight Appellees in this matter, and further despite the fact
that none of the claims raised in Appellant’s Amended
Complaint involve a breach of the provisions of the Eye Center
agreement.
4. The trial court committed an error of law and abused its
discretion by transferring Appellant’s amended complaint to
Northumberland County when the President Judge of
Northumberland County had already issued an order denying
Appellees’ Hartzell, Lamont, Rine, Lin, L2, and Pacific Apex
motion to coordinate this case with two cases currently pending
in Northumberland County based on the same arguments used
to support their preliminary objection to venue in derivation of
the coordinate jurisdiction rule and/or the doctrine Of res
judicata.
Appellant’s Brief at 21, 23, 24, 33 (unnecessary capitalization omitted).
Where, as here, we review an order transferring venue due to a venue
selection clause in a contract, our standard of review is de novo. See
Autochoice Unlimited, Inc. v. Avangard Auto Finance, Inc., 9 A.3d 1207,
1211 (Pa. Super. 2010). We must ascertain and enforce the intent of the
parties at the time of the contract as reasonably demonstrated by the
language used in their written agreement. See Liddle v. Scholze, 768 A.2d
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1183, 1185 (Pa. Super. 2001). Where the language of the contract is clear
and unambiguous, we confine our analysis to the terms as written in the
contract. See Beemus v. Interstate Nat. Dealer Servs., Inc., 823 A.2d
979, 982 (Pa. Super. 2003).
We begin by noting that each count of Fassero’s amended complaint
references duties and obligations arising out of multiple contracts. For
example, Count I – Breach of Contract, references not only the Eye Center
partnership agreement but also the BHH, BHH II, and BHH III partnership
agreements. See Amended Complaint, 12/9/2019, at ¶¶ 111-12. Each of
these partnership agreements are independent documents, and address
forum selection independently. The Eye Center partnership agreement states
that “[a]ny controversy or claim arising out of or relating to this Agreement
shall be litigated in the Court of Common Pleas of Northumberland County,
Pennsylvania[.]” Id., at Exhibit E, ¶ 16. The BHH III and HFL partnership
agreements similarly require litigation in Northumberland County. See id., at
Exhibit D, ¶ 19 (“all questions with respect to … the rights and liabilities of the
parties hereto shall be determined … in the Court of Common Pleas of
Northumberland County, Pennsylvania.”); see id., at Exhibit I, ¶ 21 (same).
In contrast, the BHH and BHH II partnership agreements do not have venue
selection clauses. See id., at Exhibit B, ¶ 19 (providing for “all questions with
respect to … the rights and liabilities of the parties hereto shall be determined
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in accordance with the Laws of the Commonwealth of Pennsylvania.”); see
id., at Exhibit C, ¶ 19 (same).
Fassero does not contend that the forum selection clauses are invalid.
Instead, he raises several collateral objections to their enforcement. In his
first issue, Fassero argues the trial court erred in applying the venue selection
clause and overriding his chosen venue.
A venue selection clause in an arms-length agreement is presumptively
valid and will be deemed unenforceable only when: (1) the agreement was
obtained through fraud or overreaching; (2) the selected forum is so unfair
that the objecting party will be practically deprived of the opportunity to
present its case; or (3) the clause violates public policy. See Autochoice
Unlimited, Inc. v. Avangard Auto Finance, Inc., 9 A.3d 1207, 1215 (Pa.
Super. 2010).
Here, Fassero does not argue the partnership agreements, and their
respective venue selection clauses, were obtained through fraud or
overreaching. Nor does he contend the clauses violate public policy. And while
he cites to Morgan Trailer Manufacturing Co. v. Hydraroll, Ltd., 759 A.2d
926, 930 (Pa. Super. 2013) for the proposition that a court may decline to
enforce a venue selection clause under certain circumstances, the citation is
included in his third argument, not his first. Further, he does not develop any
argument that venue in Northumberland County would effectively deprive him
of an opportunity to present his case. Most likely, this is because he has
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chosen to file related complaints against Hartzell and Lamont regarding the
Eye Center in Northumberland County. Fassero’s first issue on appeal merits
no relief.
In his second issue on appeal, Fassero argues the trial court erred by
issuing its ruling without first holding a hearing. Fassero observes that he
disputed several factual averments in PVI’s preliminary objections to Fassero’s
complaint. He cites to Pa.R.Civ.P. 1006 and 1028(c)(2) to support his
contention that the trial court was required to hold a hearing on these factual
disputes before transferring the case to Northumberland County.
As noted previously, however, the trial court did not rule on any of PVI’s
preliminary objections. The trial court only ruled on Hartzell, Lamont, and
Rine’s objection based upon the forum selection clauses. The court reserved
the other objections, including PVI’s, for the Northumberland County court to
address. As we explained in our analysis of Fassero’s first issue, and will
expand upon in addressing Fassero’s third and fourth issues, we conclude the
Union County court properly transferred venue to Northumberland County
pursuant to the venue selection clauses in the Eye Center, BHH III and HFL
partnership agreements. This was a question of law based solely upon the
written partnership agreements, and no hearing was necessary for this
conclusion. Once it had reached this determination, the court properly
reserved any further decision making for the Northumberland County court.
Consequently, Fassero’s second issue on appeal merits no relief.
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In his third issue, Fassero argues the forum selection clause cannot be
enforced because other than Hartzell, the Appellees are not signatories to the
Eye Center partnership agreement.
Fassero’s argument is too narrow. While he is correct that the venue
selection clauses do not bind the defendants who are not signatories to those
agreements, he fails to acknowledge the general rules governing venue. Under
the Rules of Civil Procedure, if venue is established against a defendant for
one count of a complaint, venue is established for all counts of the complaint
asserted against that defendant. See Pa.R.Civ.P. 1006(f)(1). Similarly, if
venue is established against one defendant, it is appropriate against all
defendants the plaintiff seeks to hold jointly liable with that defendant. See
Pa.R.Civ.P. 1006(c)(1). Here, the venue selection clauses of the Eye Center,
BHH III, and HFL partnership agreements established that Northumberland
County was the appropriate venue for claims arising out of these agreements
against Hartzell.
In Count II – Breach of Fiduciary Duty, Fassero alleged that Hartzell
breached his fiduciary duty to Fassero arising from, among other sources, the
Eye Center, BHH III, and HFL partnership agreements. See Amended
Complaint, 12/9/2019, at ¶¶ 128-132. Therefore, venue in Northumberland
County was established against Hartzell for purposes of Count II. Under
Pa.R.Civ.P. 1006(f)(1), venue in Northumberland County was therefore
established against Hartzell for all claims in the complaint against Hartzell.
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In Count VII – Civil Conspiracy, Fassero alleged that “[a]ll [d]efendants”
engaged in a civil conspiracy to “effectuate the breaches of fiduciary duty …
and other tortious conduct set forth above[.]” See id., at pp. 45-6. Fassero
sought “judgment … against all [d]efendants, jointly, severally, or jointly and
severally[,]” under Count VII. See id., at p. 51. As noted above, venue in
Northumberland County was established against Hartzell pursuant to Count I.
Therefore, under Pa.R.Civ.P. 1006(c)(1), venue was established in
Northumberland County for all defendants. Fassero’s third argument on
appeal merits no relief.
Finally, Fassero argues that the trial court violated the law of the case
doctrine and the doctrine of res judicata when it transferred the case to
Northumberland County. Fassero premises this argument on the fact that a
Northumberland County Judge denied Hartzell’s motion to coordinate this case
with the case filed by Fassero in Northumberland County.
Initially, we note that while Fassero obliquely references res judicata in
his statement of the issue, he does not cite to any authority or otherwise
develop the issue in his brief. His argument focuses entirely on the issue of
the coordinate jurisdiction rule. While both res judicata and the coordinate
jurisdiction are commonly classified as a part of the law of the case doctrine,
they are not the same.
The doctrine of res judicata is an independent and distinct legal issue
from the law of the case doctrine. “The doctrine of res judicata holds that a
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final valid judgment upon the merits by a court of competent jurisdiction bars
any future suit between the same parties or their privies on the same cause
of action.” Khalil v. Cole, 240 A.3d 996, 1000 (Pa. Super. 2020) (citation
omitted). In contrast, the coordinate jurisdiction rule prevents judges from
making rulings contrary to those previously made by a judge of coordinate
jurisdiction. See Rellick-Smith v. Rellick, 261 A.3d 506, 510 (Pa. 2021). As
res judicata applies only in situations where there has been a valid final
judgment, Fassero has waived any claim that the order at issue here violated
the doctrine of res judicata.
We now turn to Fassero’s claim that the trial court violated the
coordinate jurisdiction rule. The coordinate jurisdiction rule provides that,
“upon transfer of a matter between trial judges of coordinate jurisdiction, the
transferee court may not alter the resolution of a legal question previously
decided by the transferor court.” Commonwealth v. Starr, 664 A.2d 1326,
1331 (Pa. 1995) (citation omitted). The coordinate jurisdiction rule is “based
on a policy of fostering the finality of pre-trial applications in an effort to
maintain judicial economy and efficiency.” Id. (citation omitted).
The trial court here sustained a preliminary objection and transferred
venue. In contrast, the court in Northumberland County had previously denied
a motion for coordination under Pa.R.Civ.P. 213.1(c). Rule 213.1(c) requires
a trial court to consider multiple factors when determining whether to
coordinate cases from separate counties. See Wohlsen/Crow v. Pettinato
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Associated Contractors & Eng’rs, Inc., 666 A.2d 701, 703 (Pa. Super.
1995). However, the existence of a venue selection clause is not one of the
factors listed, or fairly suggested by the list, in Rule 213.1(c). As such, the
Northumberland County court did not rule on the applicability of the venue
selection clause, and the Union County court did not violate the coordinate
jurisdiction rule.
In summary, we conclude that none of Fassero’s arguments on appeal
merit relief. We therefore affirm the order transferring this case to
Northumberland County.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/6/2022
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