Stein v. Crown American Realty Trust

54 Pa. D. & C.4th 383, 2001 Pa. Dist. & Cnty. Dec. LEXIS 379
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedOctober 3, 2001
Docketno. 1016
StatusPublished

This text of 54 Pa. D. & C.4th 383 (Stein v. Crown American Realty Trust) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stein v. Crown American Realty Trust, 54 Pa. D. & C.4th 383, 2001 Pa. Dist. & Cnty. Dec. LEXIS 379 (Pa. Super. Ct. 2001).

Opinion

SHEPPARD, J.,

This opinion is submitted in support of this court’s contemporaneous order sustaining preliminary objections on the basis of improper venue.

BACKGROUND

This action was brought by plaintiffs, David S. Stein, John B. Warden III, and Robert Parsons, who purchased shares from defendant, Crown American Realty Trust, either at the time of an initial public offering (IPO), or shortly thereafter. Plaintiffs claim that Crown and Mark E. Pasquerilla, individually and on behalf of the estate of Frank J. Pasquerilla, were unjustly enriched as a result of the purchases. They allege that the August 1993 prospectus of Crown guaranteed that Crown would have sufficient earnings to maintain the same value dividend as that offered at the IPO. Instead, the plaintiffs contend that the dividend was later reduced because of alleged financial difficulties of the defendants which were not disclosed to the plaintiffs during the IPO.

On January 9, 2001, plaintiffs filed their complaint alleging common-law fraud, negligent misrepresentation, [386]*386and unjust enrichment. Plaintiffs subsequently filed an amended complaint asserting only the claim of unjust enrichment. Defendants timely filed preliminary objections to plaintiffs’ amended complaint asserting, inter aha, improper venue.

DISCUSSION

“[A] plaintiff’s choice of forum is given great weight . . . .” Masel v. Glassman, 456 Pa. Super. 41, 45, 689 A.2d 314, 316 (1997). Although a “defendant has the burden in asserting a challenge to . . . venue,” Masel at 45, 689 A.2d at 316, the trial court has discretion in deciding whether or not to transfer venue. Gale v. Mercy Catholic Medical Center, 698 A.2d 647, 650 (Pa. Super. 1997), appeal denied, 552 Pa. 696, 716 A.2d 1249 (1998).

Pa.R.C.P. 2179(3) and (4), provide, in pertinent part:1

“a personal action against a corporation or similar entity may be brought in and only in ...
“(3) the county where the cause of action arose; or
“(4) a county where a transaction or occurrence took place out of which the cause of action arose.” (emphasis added)

Here, plaintiffs assert that their cause of action for unjust enrichment arose in Philadelphia County where a [387]*387“transaction or occurrence” took place, namely the sale of stock.

In Pennsylvania, in order to state a cause of action for unjust enrichment, a plaintiff must show “benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” Wolf v. Wolf, 356 Pa. Super. 365, 374, 514 A.2d 901, 905-906 (1986); see also, Burgettstown-Smith v. Langeloth, 403 Pa. Super. 84, 588 A.2d 43 (1991). In their claim of unjust enrichment, plaintiffs argue that the focus of the court’s inquiry should be the sale of stock. “Because the claim concerns the defendants’ unjust enrichment from the sale of stock,” and since the sale of stock allegedly took place in Philadelphia County, the plaintiffs contend that venue is proper in Philadelphia County. PI. reply mem. of law at 7.

In order to determine, for venue purposes, where the cause of action arose or where a “transaction or occurrence” took place out of which the cause of action arose, Pennsylvania courts look for guidance to the specific elements of the cause of action pleaded. In Craig v. W.J. Thiele & Sons Inc, 395 Pa. 129, 134, 149 A.2d 35, 37 (1959), the Pennsylvania Supreme Court was confronted with the issue whether the place where an order was made was sufficient to constitute a “transaction or occurrence” upon which venue could be based. There, the plaintiff-truck dealer in Luzerne County placed an order with defendant, a company in Cambria County. Following an alleged breach of contract, the plaintiff filed suit in Luzerne County, the county from which plaintiff placed [388]*388the order. The court held that placing an order, one step in a series of several steps taken in the formation of a contract, constituted a mere “part of a transaction.” Id. Since a “part of a transaction” is not synonymous with “transaction or occurrence,” the court held that venue based on the placing of an order was improper. Id. To prevent future forum shopping, the court further held that a lawsuit could not proceed “in any county” where any facet of a complex transaction occurred. Id.

Recently, the principles espoused in Craig were applied by our Superior Court when it was faced with a cause of action of civil conspiracy. See Estate of Werner v. Werner, 781 A.2d 188 (Pa. Super. 2001). In Werner, the testator’s estate brought an action against the family trust and its beneficiaries for civil conspiracy. There, the plaintiffs argued that “ ‘any overt act undertaken by any conspirator in furtherance of the common design’ ” was “sufficient to establish venue wherever that overt act occurred.” Id. at 190. However, the court held that certain preliminary meetings held in Allegheny County, which later led to alleged acts of civil conspiracy in Mercer County, were too tenuous to constitute a “transaction or occurrence” for venue to be proper in Allegheny County. Id. The court transferred the action to Mercer County, where the family business was located. Id. at 192. Although Craig involved a contract action, and Werner a civil conspiracy cause of action, both courts examined the “transaction(s) or occurrence(s)” alleged to determine whether they related to the actual causes of action such that venue could properly be had. Therefore, the principles set forth in both Craig and Werner regarding venue guide this court.

[389]*389Plaintiffs first argue that pursuant to Pa.R.C.P. 2179(3) their unjust enrichment action arose in Philadelphia County because this is the situs of the sale of stock. However, the sale of stock alone is insufficient to lay proper venue in Philadelphia County. To begin with, none of the plaintiffs reside in Philadelphia County. In fact, plaintiff Parsons resides in Cambria County, plaintiff Stein in Montgomery County, and plaintiff Warden in Dauphin County. PI. resp. to defs. P.O.’s ¶30 (“admitted”). Moreover, defendant Mark Pasquerilla resides in Cambria County and the estate of Frank Pasquerilla is being probated in Cambria County. Def. P.O’s. to PI. first amend, compl. at 7. More importantly, defendant Crown is a company incorporated in Maryland and has its principal place of business in Cambria County. Id.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

ESTATE OF WERNER EX REL. WERNER v. Werner
781 A.2d 188 (Superior Court of Pennsylvania, 2001)
Battuello v. Camelback Ski Corp.
598 A.2d 1027 (Superior Court of Pennsylvania, 1991)
Kubik v. Route 252, Inc.
762 A.2d 1119 (Superior Court of Pennsylvania, 2000)
Masel v. Glassman
689 A.2d 314 (Superior Court of Pennsylvania, 1997)
Craig v. W. J. Thiele & Sons, Inc.
149 A.2d 35 (Supreme Court of Pennsylvania, 1959)
Wolf v. Wolf
514 A.2d 901 (Supreme Court of Pennsylvania, 1986)
Gale v. Mercy Catholic Medical Center Eastwick, Inc.
698 A.2d 647 (Superior Court of Pennsylvania, 1997)

Cite This Page — Counsel Stack

Bluebook (online)
54 Pa. D. & C.4th 383, 2001 Pa. Dist. & Cnty. Dec. LEXIS 379, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stein-v-crown-american-realty-trust-pactcomplphilad-2001.