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Webb-Benjamin, LLC v. International Rug Group, LLC

Superior Court of Pennsylvania

June 28, 2018

WEBB-BENJAMIN, LLC, A PENNSYLVANIA LIMITED LIABILITY COMPANY, Appellant
v.
INTERNATIONAL RUG GROUP, LLC, D/B/A INTERNATIONAL RETAIL GROUP, A CONNECTICUT LIMITED LIABILITY COMPANY

          Appeal from the Order Entered September 7, 2017 in the Court of Common Pleas of Westmoreland County, Civil Division at No(s): 2865 of 2017

          BEFORE: STABILE, J., MUSMANNO, J., and FORD ELLIOTT, P.J.E.

          OPINION

          MUSMANNO, J.

         Webb-Benjamin, LLC ("WB"), a Pennsylvania Limited Liability Company, appeals from the Order sustaining the Preliminary Objections filed by International Rug Group, LLC, d/b/a International Retail Group ("IRG"), a Connecticut Limited Liability Company, and dismissing WB's Complaint. We reverse and remand for further proceedings.

         WB is a Pennsylvania company that provides assistance and support in arranging and administering home furnishing sale events. Complaint, 7/25/17, at ¶ 3. IRG is a Connecticut company, registered to do business in Pennsylvania, that arranges and administers sales events for sellers of home furnishings. Id. at ¶ 4. In 2016, WB contracted with IRG to retain a client, Eisenbergs' Fine Furniture of Calgary ("Eisenbergs"), for IRG, and to render services related to a furniture sale for Eisenbergs in Calgary, Canada (the "Eisenbergs sale"), in exchange for commissions on the furnishings sold. IRG agreed to make weekly payments to WB, based on a percentage of gross sales, and a single payment at the conclusion of the Eisenbergs sale, based on a percentage of gross profits. In January 2017, the parties "ended their relationship" and "agreed … that WB would be entitled to its agreed-upon sales commission for the duration of the Eisenbergs [e]vent." Id. At ¶ 8. Subsequently, on February 25, 2017, IRG registered to do business in Pennsylvania as a foreign association. Following the conclusion of the Eisenbergs sale in May 2017, IRG failed to pay WB for the outstanding agreed upon commissions from the sale.

         WB filed a Complaint, and subsequently an Amended Complaint, against IRG in the Court of Common Pleas of Westmoreland County, Pennsylvania, alleging breach of contract. IRG filed Preliminary Objections, alleging that (1) Pennsylvania lacked personal jurisdiction over IRG;[1] (2) WB's Complaint lacked sufficient factual specificity; and (3) WB's breach of contract claim is legally deficient. The trial court sustained IRG's Preliminary Objection as to lack of jurisdiction, and dismissed the case. The trial court found that 42 Pa.C.S.A. § 5301 does not provide jurisdiction over claims that are based on events that occurred prior to a foreign association's registration in Pennsylvania. See Trial Court Order, 9/6/17, at 2-3. The trial court held that because the "incidents forming the basis of [WB's suit]" occurred prior to IRG's registration, the court had no jurisdiction over WB's claims against IRG. Id. The trial court did not address the remaining Preliminary Objections. WB filed a timely appeal.

         WB's issues on appeal are as follows:

1. Where a foreign entity is registered to do business in Pennsylvania when the plaintiff files its complaint, whether the trial court can assert general, personal jurisdiction over such entity under the foreign registration provisions of 42 Pa.C.S.A. §[]5301(a)(2)(i) with respect to acts, transactions or omissions occurring prior to such foreign registration?
2. Where a foreign entity is registered to do business in Pennsylvania when the plaintiff's cause of action arose, whether the trial court has sufficient basis to assert general, personal jurisdiction over such entity[, ] under the foreign registration provisions of 42 Pa.C.S.A. §[]5301(a)(2)(i)[, ] where such cause of action is related to transactions occurring prior to such foreign registration?
3. Where a foreign entity is registered to do business in Pennsylvania, whether the trial court has sufficient basis to assert general, personal jurisdiction over such entity under the foreign registration provisions of 42 Pa.C.S.A. §[]5301(a)(2)(i) with respect to a cause of action arising [out] of acts, transactions or omissions occurring both before and after such foreign registration?

Brief for Appellant at 4-5.

When deciding a motion to dismiss for lack of personal jurisdiction[, ] the court must consider the evidence in the light most favorable to the non-moving party. This Court will reverse the trial court's decision regarding preliminary objections only where there has been an error of law or an abuse of discretion. Once the moving party supports its objections to personal jurisdiction, the burden of proving personal jurisdiction is upon the party asserting it. Courts must resolve the question of personal jurisdiction based on the circumstances of each particular case.

Mendel v. Williams, 53 A.3d 810, 816-17 (Pa. Super. 2012) (citation omitted).

         WB asserts that the Pennsylvania court has general personal jurisdiction, pursuant to 42 Pa.C.S.A. § 5301, [2] based on IRG's registration as a foreign association in Pennsylvania. Brief for Appellant at 9-11. WB argues that the text of 42 Pa.C.S.A. § 5301 makes no mention of precluding claims that are based on events that occurred prior to the foreign association's registration in Pennsylvania. See Brief for Appellant at 9-19. Further, WB argues that following IRG's registration in Pennsylvania, (1) the Eisenbergs ...


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