Garfield v. Homowack Lodge, Inc.

v. 492, Commonwealth (1976); Bigley, Pa.Super. Scheetz, (1974); A.2d 802 Commonwealth bar, In the case at 268 A.2d 193 had the only but the amendment was period expired, made prescribed parties without advance notice all the in interest. Such required by April notice is Section The expressly is, therefore, of the lower court order void. order of the lower court amending appellee’s judgment is vacated and sentence imposed sentence 17, 1975, is reinstated. September on GARFIELD, Garfield, Audrey his wife Steven LODGE, INC., Appellant. HOMOWACK Superior Pennsylvania. Court of Argued Sept.

Decided Oct. Fishbein, Philadelphia,

Joel Paul for appellant. Dubin, Robert with him Morton B. Philadelphia, S. Wap- ner, Philadelphia, for appellees. WATKINS,

Before President Judge, JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.

JACOBS, Judge: an

This was taken from order of the trial court appeal objections to the in dismissing appellant’s preliminary per- sonam of the court.1 For the reasons that follow, we affirm. filed a

Appellees complaint trespass against appellant, a 13, 1975, on non-registered foreign corporation, January injured that Garfield was when he fell on alleging Stephen maintained ice rink at defectively skating appellant’s resort Glen, New York. of the Spring Service was mail to the of the by registered Secretary effected Common- appeal by 1. The court has of this virtue of the Act of P.L. No. 12 P.S. March York, in New whereupon appel- appellant and to the wealth challenging jurisdiction. objections preliminary lant filed facts: following stipulated parties The five past during approximately For each week its resort in The Jewish has advertised years, in the and distributed newspaper published Exponent, area; Philadelphia $2,000.00per year; is advertising

2. The cost of this a toll-free number telephone maintains Appellant to make area residents reservations Philadelphia for its lodge; brochures to several provides advertising

4. Appellant a ten cent referral agents pays per travel Philadelphia a travel to the by agency lodge. for customers referred fee statute2 language Pennsylvania long-arm activities in this case. In covers clearly business” for “doing jurisdic the Act defines 8309(a)(1), tional as purposes of a this Commonwealth doing any person

“The realizing for the purpose thereby of similar acts series accomplishing object.”3 benefit or otherwise pecuniary stipulated appellant continuously think the facts We through Pennsylvania newspaper, its resort advertises a toll-free number in for maintains reservations, and retains agents lodge appel- ten cent commission basis demonstrate that per on a acts in this is a series of similar Commonwealth doing lant benefit, and therefore realizing pecuniary purpose jurisdic- contacts exist for in personam hold that sufficient However, alone. language the basis of the statutory tion on exist for a of sufficient contacts finding additional reasons here. trigger jurisdiction to 284, Hotel, DiLido 215 Pa. 257 A.2d 643 Super.

In Nettis v. of on Philadel- this held that service (1969), Court 8301-8311, 14, 1972, P.L. No. §§ 2. Act of November 8301-8311. Pa.C.S. § 15, 1972, 8309(a)(1). supra, 42 Act of November Pa.C.S. phia agent who booked reservations to defendant’s on Florida hotel a ten cent commission per basis was an defendant, invalid to bring effort a non-registered for- eign corporation, jurisdiction within the the court, be- cause agent the travel was an agent of defendant. In dictum, the Court stated that insertion in a Pennsylvania of an newspaper advertisement the defendant’s Florida hotel did not constitute an introduction of business into the in personam jurisdiction allow Commonwealth so as to over a non-registered foreign corporation.

Nettis is not dispositive issue the present case it because was before decided the 1972 amendments to the Pennsylvania long-arm statute. 8309(b), Section added provides:

“In to 'addition provisions (a) subsection of this section the and venue of courts of the Com- shall all monwealth extend to foreign corporations and the powers exercised them to the fullest extent allowable under the Constitution United States.”4 The 1972 amendments to the long-arm statute were to remove designed all statutory the exercise of impediments personam decisional to juris- foreign diction over corporations. Schwartz, Proctor & Inc. Cleveland Lumber 228 Pa.Super. intended to They clearly liberalize Pennsylva- nia’s position.5 By personam extending jurisdiction to the full consistent due measure process standards by 8309(b), contacts sufficient satisfy the constitutional due process requirements are now sufficient satisfy the “doing requirement business” law. Proctor Schwartz, & supra A.2d 11.

A exists three-pronged test to facilitate the ad hoc factual this Court must make to analysis determine whether 15, 1972, supra, 8309(b). 4. Act of November 42 Pa.C.S. § judicial long-arm restrictive Successive construction of the statute by Pennsylvania legislative broadening courts led to amendments scope corporations. foreign over See Parise v. AAA Corp., F.Supp. (W.D.Pa.1974). Warehouse First, defendant present. contacts are requisite acting itself of the privilege availed have purposely must and pro- the benefits invoking state thus the forum within Denckla, v. 357 U.S. laws. Hanson of its tections the cause (1958). Secondly, 2 L.Ed.2d 1283 78 S.Ct. activities within from defendant’s must arise action Indus., Mohasco Mach. Co. v. Southern state. See forum Corp. Electric 1968); Regulator Cir. Inc., (6th 401 F.2d 374 (D.Conn.1968). Corp., F.Supp. Extruder Sterling must have a substantial of the defendant the acts Lastly, the exer- with the forum state make connection enough it reasonable. International Shoe over cise of 90 L.Ed. 326 U.S. S.Ct. Washington, Co. v. Indus., Inc., Mach. Co. v. Mohasco see Southern (1945); v. AAA Warehouse Corp., supra. Parise see also supra; the first instance concluding in difficulty have no We privilege availed itself of the purposely appellant that the intensive and con its within this Commonwealth acting mainte newspaper, in a its advertising Pennsylvania tinuous in number of a toll-free nance reservations, arrangements and its lodge basis for refer on a ten cent commission per agents reasons, level For the same this intensive to its resort. rals in a substan Pennsylvania provides activity by appellant to make the with the Commonwealth connection enough tial fair and reasonable over exercise under the circumstances. issues, however, would not resolve these rea-

The dissent on record that the cause of that there is no evidence soning in activities Pennsylvania. arose from action reason, concluded for this Nonetheless, our is not inquiry Court’s statement Supreme the United States light of that: Washington, supra, Co. International Shoe continuous corpo- instances which the “There have been so substantial thought within a state rate operations it on causes suit justify against a nature as and of such distinct from those entirely from arising dealings of action 318-19, 66 326 U.S. at S.Ct. activities.” We hold here that the defendant’s method of solicit ing business consisted of such substantial and continuous activities in this Commonwealth as to render it amenable to in personam jurisdiction. The stipulated the case facts of dictate this result. than focusing

Rather the solely upon injured the parties actually used solicitation methods employed by we will the Lodge, examine of intensity appel- Homowack activities in Pennsylvania lant’s and appellant’s intent that residents use its Pennsylvania advertising and solicitation facilities. Homowack Lodge provided regular advertising, a line, toll-free and Philadelphia agents the purpose obtaining Pennsylvania obvious customers for its New York These activities jurisdic- resort. control the tional rather determination than actual use appel- lant’s activities advertising by plaintiffs. injuries

Serious have been here alleged by appellees, and this Commonwealth has a definite interest in a resolving suit one brought by Aquarium of its residents. Pharmaceuticals, Inc. v. Industrial & Pressing Packaging, Inc., 358 F.Supp. 441 (E.D.Pa.1973); Schwartz, Proctor & Inc. v. Cleveland Lumber We have supra. concluded consequently that be are not to their appellees deprived of forum for the sole that reason does not a appellant registered have office in in Pennsylvania, light intensive profit solicitation for carries on in this Commonwealth. appellant reasons, For the order foregoing of the trial court dismissing appellant’s objections preliminary is affirmed.

HOFFMAN, J., a dissenting files opinion, in which VAN SPAETH, JJ., der and join. VOORT HOFFMAN, Judge, dissenting: not Appellant, foreign corporation to registered do busi- ness in contends Pennsylvania, that lower court erred in the court’s objections personam to in denying preliminary jurisdiction. More specifically, contends that appellant his insufficient to permit in contacts under the Pennsylvania “long-arm” personam therefore, order of I would reverse the agree statute.1 lower court. inju- sustained an allegedly January appellee On ice skating maintained rink improperly when he fell on ry Glen, January York. On Spring resort New appellee trespass.2 Appellee filed to an attested appellant sending copy serve attempted to the registered service of mail process by another by sending copy appel- Department State in New York.3 On filed February lant raising jurisdiction; objections preliminary question doing it was a not foreign corporation appellant alleged and, therefore, subject business under the statute. “long-arm” personam answered, parties filed and the interrogatories After to a following Appellant foreign is stipulated the facts. in York. with its of business corporation only place New to in registered Pennsylvania. is do business Appellant accident, of the the date the During years prior five $2,000 each spent per year to advertise its facilities newspaper published in The Exponent, week Jewish a in the area. also main- Philadelphia distributed Appellant number for area Philadelphia tains toll-free make desire to reservations residents who brochures to several trav- provides lodge. Finally, appellant agents in these a ten agents Philadelphia, pays el lodge. for each customer to the percent commission referred an 26, the lower entered 1976, denying court order April On followed.4 objections. appeal This appellant’s preliminary 13, seq. et of P.L. No. eff. Feb. §§ 1. Act Nov. 1973; seq. 8301 et 42 Pa.C.S. §§ court, Appellee York filed a in a New federal also ostensibly protect refus- himself the courts event jurisdiction. ed to exercise 15, 1972, supra; of § 3. See Act Nov. Pa.C.S. See, appealable. ruling question is

4. An order on 311; Act of March P.L. 42 Pa.C.S. See also Pa.R.A.P. Rule 15; no. 12 P.S. 8302,5 to 42 Pa.C.S. According foreign corporation in this “which shall have done business Commonwealth any authority without a certificate of to do so from procuring statute, as shall be required by of State Department to have conclusivelypresumed designated Department as its true and lawful authorized to attorney accept State action within any arising

. service of this 83096 defines the acts which Commonwealth.” Pa.C.S. § constitute business” under the “doing “long- arm” statute:

“(a) General shall constitute Any following rule.— for the of this ‘doing purposes chapter: business’ “(1) doing person The this Commonwealth of a by any acts for the purpose thereby realizing series of similar object. benefit or otherwise an pecuniary accomplishing . The of a act in this Commonwealth for “(2) doing single realizing benefit or other- purpose thereby pecuniary with the intention of accomplishing object initiating wise such acts. a series of The of merchandise or into

“(3) shipping directly indirectly this through or Commonwealth.

“(4) any profession business or within this engaging Commonwealth, or not such business requires approval by license or Commonwealth or of its any agencies. use or real

“(5) ownership, possession any property this situate within Commonwealth. Exercise of full constitutional over

“(b) power foreign to the provisions (a) addition of subsection corporations.—In and venue of jurisdiction of this section the courts of the to all foreign shall extend corporations Commonwealth exercised them to the fullest extent allowed by the powers under the Constitution of United States.” 15, 1972, supra; 42 5. Act of Nov. Pa.C.S. § 15, 1972, supra; 42 6. Act of Nov. Pa.C.S. §

401 8309(b) “long-arm has made the reach” of the Section statute co-extensive with the “long-arm reach” the due clause of the Four- permitted by process teenth Amendment to the United States Constitution. See Schwartz, Proctor & Inc. v. Cleveland Lumber (1974);7 323 A.2d 11 cf. Kitzinger Gimbel Brothers, Alliance, Ltd., 240 Pa.Super. Inc. v. Textile I will consider whether Accordingly, appellant has sufficient contacts with to make it amenable to service of in this constitutionally state.8 310, 316,

International Co. v. Washington, Shoe U.S. (1945), the classic test for provides determining S.Ct. court can exercise in constitutionally personam whether a over a jurisdiction foreign, non-registered corporation: “. . . due that in order to process requires only subject if he be not judgment personam, present' a defendant to a forum, he have certain minimum territory within of the suit does contacts with it such maintenance fair play jus- offend ‘traditional notions of and substantial ” However, Denckla, 235, 253, tice.’ in Hanson U.S. (1958), Supreme 2 L.Ed.2d 1283 Court S.Ct. that, in each that there be some stated “it is essential case which the defendant avails itself of the purposefully act activities within the forum privilege conducting State protections thus the benefits and of its laws.” invoking has noted that “these decisions provide only Our Court framework under the broad formula of ‘fair and sub- play of whether or justice’ stantial determination not the corporation ‘minimum contacts’ of a with a foreign particu- make the corporation lar state are sufficient to constitution- Co., supra, provides 7. Proctor & Schwartz v. Cleveland Lumber exposition Pennsylvania “long-arm” of the evolution of the detailed statute. 8309(a)(1) Appellee does not contend that either 42 Pa.C.S. or (a)(2) personam appellant. over Because I confers process, incorporated by conclude that federal due 42 Pa.C.S. 8309(b), permit personam on the facts of does not case, apply. this I do not decide whether these other subsections 402 amenable to that state must

ally be inevitably hoc case-by-case made on ad basis and not the applica- Campbell tion of a mechanical rule. v. 336 Triangle Corp., (E.D.Pa.1972).” Schwartz, 1002 Proctor F.Supp. & Inc. v. Cleveland Lumber 228 at 323 A.2d supra, Pa.Super. Brothers, v. Gimbel Kitzinger at See also Inc. v. Textile Ltd., Industries, Wiedeman, Alliance Action Inc. v. supra; However, Pa.Super. 236 we have certain developed guidelines determining “mini- present given “First, mum contacts” are case. have defendant must availed itself of the purposefully privi- within the lege acting forum state thus invoking protections Denckla, benefits and of its laws. Hanson v. the cause of action supra. Secondly, must arise from de- fendant’s activities within forum state. See Southern Indus., Inc., Mach. Co. v. Mohasco (6th 401 F.2d 374 Cir. 1968); Electric Regulator Corp. Sterling Extruder Corp., (D.Conn.1968). 550 the acts of F.Supp. Lastly, defendant must have substantial connection with enough the forum state to make the exercise of over it reasonable. International Shoe Co. v. Washington, supra; Indus., Inc., see Southern Mach. Co. v. Mohasco supra; see In-Flight Corp. Air, Inc., also Devices Van Dusen 466 F.2d (6th 1972); Kourkene BBR, Inc., Cir. v. American (9th 1963).” Schwartz, F.2d 769 Cir. Proctor & supra, 15; 323 A.2d at accord Kitzinger v. Gimbel Brothers, Ltd., Inc. v. Textile Alliance supra; Action Indus- tries, supra. See also Trachtman v. T.M.S. Realty Services, 393 F.Supp. (E.D.Pa.1975). Financial The second test requires that the cause action arise from the defendant-corporation’s activities within the forum case, In instant state. .the record shows that appellant advertised in a Philadelphia newspaper, that it had arrange- ments with travel Philadelphia agents, and that it main- tained a toll-free number for Philadelphia area However, residents to make reservations. the record gives no indication whatsoever that read the appellee newspaper ads, booked reservations through Philadelphia agen- secure accom- number to or used the toll-free cy, short, there no factual basis a supporting In is modations. arose from appellant’s that the cause of action contention within Pennsylvania.9 activities failure to establish his cause Despite appellee’s activities within appellant’s Pennsylvania, arose from action of due process into the constitutional boundaries inquiry my Co. v. Washington, In International Shoe is not terminated. 318-19, 66 at Court Supreme 326 at S.Ct. supra, U.S. in which “. . . there have been instances noted that: within a state were operations continuous corporate such a nature as to suit justify substantial and of thought so of action from arising dealings entirely it on causes against Benguet also Perkins v. from those activities.” See distinct Co., 72 342 S.Ct. 96 Mining Consolidated U.S. Mills, 458 Pa. 329 A.2d 247 (1952); 485 Bork v. L.Ed. Laws, 2nd, Thus, I Restatement, Conflict (1974); activities in Pennsylva- must determine and continuous nature. were of a substantial nia Consolidated Benguet Mining supra, In Perkins in an court against foreign suit Ohio plaintiff brought and seeking payments damages dividend mining corporation 120,000 failed to issue shares of corporation because the mined in the properties due to him. The corporation stock II, World War During company’s Islands. Philippine halted by occupation there were operations completely The Japanese. president company, the islands and sharehold- general manager principal who was also the test, application I of this of the second do not decide 9. Because satisfy activities in this case would the first and third whether the in Proctor Schwartz v. Cleveland Lumber tests enunciated & Co. injuries any opinion as to whether Nor do I intimate sustained skating accident in New York can be said to arise from advertise- ice Pennsylvania newspapers upon by plain- ments in read relied issues; split have tiff. These are troublesome courts over their Cruises, proper Compare Mulhern v. Holland America resolution. Hotel, Inc., (D.N.H.1975); F.Supp. with Schaffer v. Granit (1975). Young, N.J.Super. See also Scheldt v. 1968); (3rd Supply v. Tractor 389 F.2d 58 Cir. Shern Co. Grand Forks, Outfitters, (D.N.D.1974); F.Supp. 1331 Safari Inc. v. Ct., Superior 448 P.2d 783 Colo. he discharged to his home in Ohio. There his er, returned manager president by maintaining as general duties of the limited war- systematic supervision continuous and his For he held di- company. example, time activities of home, his he carried on corre- meetings company rectors’ he maintained two bank accounts for company spondence, funds, and he distributed and funds to salary payments The served the purchases machinery. plaintiff cover in Ohio while these manager performing president-general Court held that these activities were Supreme duties. enough permit and continuous Ohio courts to substantial over the foreign corporation. in personam assert Mills, plaintiff Virginia In Bork v. collided with a supra, defendant, a hauler. Plaintiff filed by freight truck owned in the Court of Common Pleas of complaint Philadelphia, to secure over defendant under attempted Plaintiff the statute. made an uncontroverted “long-arm” that the defendant had hauled for hire freight allegation within various counties. The Court Pennsylvania Supreme allegation note that such an sufficed to invoke the “long- so as to the action to be permit by arm” statute instituted upon Secretary service Commonwealth. How- ever, the Court held that: “. . . since complaint [the] of that their cause action occurred in Virginia makes clear of business which any and did not arise out Mills does within Commonwealth, must also appellants allege that Mills’ activities are continuous and substantial hauling freight to the court to exercise enough permit over him with to an respect unrelated cause of 458 Pa. at 329 A.2d at 249.10 The uncontro- action.” freight verted for hire within allegation hauling various this satisfy counties did test. Hotel, our in Nettis v. DiLido Finally, Court (1969), confronted a factual situation to the one before us. presently almost identical Plaintiff’s Mills, defendant, supra, 10. While Bork v. an concerns individual Benguet Mining supra, Perkins Consolidated makes clear that Restatement, applies corporations as well. See also the same rule to Laws, 2d, Conñict of § while injured staying Miami, wife was defendant-hotel in Florida. She sued the Court of Common Pleas of Phila- make attempted to service of delphia by hand- to a ing copy Philadelphia agent, one Robert Plaintiff maintained Siegel. that was Siegel of the DiLido Hotel. The DiLido agent Hotel advertised in The Jewish Exponent. advertisement contained Sie- number, gel’s telephone but not his name. If ar- Siegel Hotel, for a to ranged person stay at DiLido he received a ten commission on percent person’s food and hotel however, bill. had no Siegel, power bind the DiLido nor he subject Hotel was control any the hotel. Siegel did not make the arrangements stay plaintiff’s wife at defendant-hotel.

Our Court held that service made upon Siegel could not bind the DiLido Hotel because he was not its “agent”. 2180(a)(2); Pa.R.C.P. P.S. See also Miller Kiamesha-Concord, Inc., 420 Pa. 218 A.2d However, stated, dictum, we also that the DiLido Hotel was not “doing business” Pennsylvania; we reached this conclusion on the basis of the due process clause of the Fourteenth Amendment of the federal constitution. “In the case, instant no substantial contact or ties to the State established. Defendant has no branch offices in Pennsylvania, own, lease, nor does it maintain or otherwise office, control any or assets property within the Commonwealth. It has no paid employees operating exclu- in its behalf in sively Pennsylvania. There is a lack of evidence of that quantity quality business sufficient to hold the defendant as business doing within the Common- wealth.” Supra 295-96, 215 Pa.Super. at 257 A.2d at 649.11

I do not now decide whether the dictum on due process in contained Nettis should be approved or disapproved. Net-

tis involved thé application the “minimum contacts” test bar, appellant In the case at it is likewise true that has no branch own, lease, maintain, offices in nor does it or otherwise office, any property, control or assets within the Commonwealth. Appellant paid employees operating exclusively no Pennsylva- has nia. situation; a close factual we are now very applying test stringent requiring showing

much more of “substan- and continuous business” within when tial is sued on a cause of action foreign corporation unrelated to However, activities here. our discussion in its Nettis as to the defendant’s activities constituted “minimum makes it clear that the DiLido Hotel very contacts” did not on “substantial and continuous” business within Penn- carry in the case at The activities bar do not sylvania. vary any Moreover, from those in Nettis. do not significant way they range the extensive activities carried on in approach officials in by corporate forum state Perkins v. Benguet I Mining supra. Accordingly, Consolidated would hold not conduct the “substantial does and contin- Pennsylvania necessary permit per- uous” business over a when a foreign corporation sonam cause unrelated to its activities here is Appel- of action involved. should be dismissed. lee’s dis- SPAETH, JJ., VAN der in this join VOORT and senting opinion.

COMMONWEALTH PERDIE, Appellant. Pearlie Superior Pennsylvania. Court of

Submitted Dec.

Decided Oct.

Case Details

Case Name: Garfield v. Homowack Lodge, Inc.

Court Name: Superior Court of Pennsylvania

Date Published: Oct 6, 1977

Citation: 378 A.2d 351

Docket Number: 1598

Court Abbreviation: Pa. Super. Ct.