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JOHNSON v. SUMMA CORP.

October 3, 1985

CHARLES A. JOHNSON and LUCILLE JOHNSON, h/w
v.
SUMMA CORPORATION d/b/a DESERT INN AND COUNTRY CLUB and INTERNATIONAL FOUNDATION OF EMPLOYEE BENEFIT PLANS, INC.



The opinion of the court was delivered by: DITTER

 DITTER, J.

 While attending an instructional program conducted by defendant International Foundation of Employee Benefit Plans (I.F.E.B.P.) and held at a hotel owned by Summa Corp. d/b/a Desert Inn and Country Club (Desert Inn), plaintiff Charles Johnson allegedly fell on a sidewalk abutting the Desert Inn and injured his right hip. This action followed. Presently before me is the Desert Inn's motion to dismiss for lack of personal jurisdiction. For reasons that follow, this motion will be granted.

 It is clear that once a jurisdictional defense has been properly raised, the plaintiff has the burden of demonstrating contacts with the forum state sufficient to give the court in personam jurisdiction. Compagnie de Bauxites de Guinee v. L'Union, 723 F.2d 357 (3d Cir. 1983).

 Rule 4(e) of the Federal Rules of Civil Procedure permits personal jurisdiction over a nonresident to the extent allowed under the law of the state in which the district court is held. The Pennsylvania long-arm jurisdiction provisions, 42 Pa. Cons. Stat. Ann. §§ 5301, 5322 (Purdon 1981) create a two-tiered approach for determining whether an out-of-state defendant may be subjected to the jurisdiction of a Pennsylvania tribunal. First, a Pennsylvania court may exercise jurisdiction over a corporation if the cause of action arose from the corporation's "transacting business" within the forum. *fn1" Id. § 5322(a)(1). Second, jurisdiction is proper if the corporation has been carrying on a systematic part of its general business within the Commonwealth. Id. § 5301(a)(2)(iii). The statute further provides that jurisdiction extends beyond the enumerated grounds to "the fullest extent allowed under the Constitution of the United States . . . ." Id. § 5322(b). See Controlled Metals, Inc. v. Non-Ferrous International Corp., 410 F. Supp. 339 (E.D. Pa. 1976); Hart v. McCollum, 249 Pa. Super. 267, 376 A.2d 644 (1979).

 The Pennsylvania statutory scheme mirrors the approach mandated by the due process clause of the United States Constitution. Where the defendant's forum activities give rise to the plaintiff's claim for relief, the plaintiff need only show that defendant had "minimum contacts" with the forum. See International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945). However, in situations where the plaintiff is pressing a non-forum related injury, in order to satisfy due process he must demonstrate that the defendant maintained "continuous and substantial" forum contacts. See Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984); International Shoe, 66 S. Ct. at 154; Gehling v. St. George's School of Medicine, Ltd., 773 F.2d 539 (3d Cir. 1985); Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir. 1984).

 Initially, therefore, I must determine whether the defendant's forum activities gave rise to the cause of action being asserted by the plaintiffs. Plaintiffs contend that the direct Pennsylvania contacts of Desert Inn, a Delaware corporation with its principal place of business in Nevada, consist of its maintenance of a toll-free number in the Philadelphia Yellow Pages, Mr. Johnson's receipt on February 28, 1985, of promotional material from Desert Inn, and the presence on March 27, 1984, of Desert Inn promotional advertising in a Philadelphia travel agency. Plaintiffs also rely on the Pennsylvania contacts of I.F.E.B.P., contending that I.F.E.B.P. acted as an "ostensible" or apparent agent of Desert Inn, and therefore I.F.E.B.P.'s contacts should be imputed to Desert Inn.

 Plaintiffs' argument that the action arose from the contacts of I.F.E.B.P. and should be imputed to Desert Inn also fails to withstand scrutiny. Assuming that the contacts of an agent or apparent agent can be imputed to the principal, but c. f. Nissley v. J.L.G. Indus., Inc., 306 Pa. Super. 557, 452 A.2d 865, 868 (1982), plaintiffs have failed to demonstrate either an actual or apparent agency relationship.

 In order to establish an agency, plaintiff would have to demonstrate the following: "'the manifestation by the principal that the agent shall act for him, the agent's acceptance of the undertaking and the understanding of the parties that the principal is to be in control of the undertaking.'" Scott v. Purcell, 490 Pa. 109, 117, 415 A.2d 56 (1980) (quoting Restatement (Second) of Agency § 1(1) comment b (1958)). See also Goodway Marketing v. Faulkner Advertising Assocs., 545 F. Supp. 263, 266-67 (E.D. Pa. 1982).

 Plaintiffs contend that an actual agency arose from an agreement between I.F.E.B.P., which organizes instructional labor-management seminars, and Desert Inn, whereby Desert Inn agreed to provide its facility to I.F.E.B.P. for the seminar which Mr. Johnson attended. While reservations for the seminar were to be placed through I.F.E.B.P., the agreement is silent as to how I.F.E.B.P. was to go about soliciting attendees. The most obvious shortcoming in plaintiffs' theory is a total lack of control on the part of Desert Inn to direct I.F.E.B.P.'s solicitation for the seminar. As the element of control is the touchstone of a principal-agent relationship, I cannot find that an actual agency relationship was created. See, e.g., Kelly v. U.S. Steel Corp., 170 F. Supp. 649 (W.D. Pa. 1959).

 Plaintiffs also contend that there was an apparent or "ostensible" agency relationship between I.F.E.B.P. and the Desert Inn. The test for determining whether "an agent possesses apparent authority is whether 'a man of ordinary prudence, diligence and discretion would have a right to believe that the agent possessed the authority he purported to exercise.'" Universal Computer Systems, Inc. v. Medical Servs. Ass'n, 628 F.2d 820, 823 (3d Cir. 1980) (quoting Apex Fin. Corp. v. Decker, 245 Pa. Super. 439, 369 A.2d 483, 485-86 (1976)).

 In determining whether the reasonable man would have the right to believe in the existence of an agency relationship, the proper focus is on the conduct of the alleged principal and not the agent. William B. Tanner Co. v. WIOO, Inc., 528 F.2d 262, 266 (3d Cir. 1975); Revere Press, Inc. v. Blumberg, 431 Pa. 370, 246 A.2d 407, 410 (1968). Plaintiffs have failed to offer any evidence of action or inaction on the part of Desert Inn which would allow someone to infer the existence of an agency. I thus cannot conclude that a reasonable person could believe that I.F.E.B.P. acted as an agent for Desert Inn.

 Because the record shows that the cause of action could not have arisen from either the direct or indirect Pennsylvania contacts of Desert Inn, plaintiffs must show that the Desert Inn has had continuous and substantial contact with this forum. Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 104 S. Ct. 1868, 80 L. Ed. 2d 404 ...


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