Opinion
No. 563 C.D. 2014
05-08-2015
Martin T. Knight, Appellant v. Upham Downs Hunt Club, Inc., by and through Executive Committee and its Members, Peter S. Miller, John Doe, and Mary Elizabeth M. Browder
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE COHN JUBELIRER
Martin T. Knight appeals a November 19, 2013 Order of the Court of Common Pleas of Delaware County (trial court) sustaining the Preliminary Objections (POs) filed by Upham Downs Hunt Club, Inc. (Club), Peter S. Miller, and John Doe (collectively "Defendants") and striking Knight's Complaint without prejudice to file an action in an appropriate jurisdiction. On appeal, Knight contends that the trial court erred: (1) when it sustained Defendants' POs on the grounds that Knight did not respond to the POs; (2) when it sustained Defendants' POs based on lack of jurisdiction; and (3) when it held that Delaware County was an improper venue for the action. Knight also argues that, even if he failed to adequately plead personal jurisdiction and proper venue, the trial court should have given him leave to amend prior to dismissing his Complaint. We affirm.
Knight originally filed this appeal with the Superior Court; however, it was transferred from the Superior Court to this Court on February 28, 2014 pursuant to Section 762(a)(5) of the Judicial Code, which provides the Commonwealth Court with jurisdiction over "all actions or proceedings otherwise involving the corporate affairs of any corporation not-for-profit subject to Title 15 or the affairs of the members, security holders, directors, officers, or employees or agents thereof, as such." 42 Pa. C.S. § 762(a)(5).
Knight filed a four count Complaint against Defendants and Mary Elizabeth M. Browder related to the series of events that led to Knight's expulsion as a member of the Club. Specifically, Knight alleged: (1) breach of the Club's corporate bylaws; (2) breach of fiduciary duty; (3) deceit; and (4) defamation. (Compl. ¶¶ 24-98, R.R. at 9a-25a.)
Browder also filed POs to Knight's Complaint. By separate Order entered November 19, 2013 (Browder Order), the trial court sustained Browder's POs and struck Knight's claims against Browder without prejudice. (Trial Ct. Op. at 1.) However, while Knight's appeal of the Browder Order was pending before this Court, Knight and Browder reached an agreement and filed a stipulation of dismissal with this Court. By Order filed September 2, 2014, this Court dismissed Knight's appeal as to Browder only.
The factual averments set forth in Knight's Complaint are as follows. Knight, a resident of Delaware County, Pennsylvania, was one of the Club's eighteen founders when it was organized and incorporated as a not-for-profit corporation under the laws of the State of Delaware in 1986. (Compl. ¶¶ 1-2, 9, 12, R.R. at 5a-6a.) The Club's major asset is approximately 120 acres in New Castle County, Delaware, which is reserved for use by its members for primarily fishing and hunting. (Compl. ¶ 13, R.R. at 6a.) Each founding member paid a lump sum fee to acquire the property and paid annual dues thereafter. (Compl. ¶¶ 12, 15, R.R. at 6a-7a.) Eight of the Club's fourteen members are residents of Pennsylvania. (Compl. ¶ 16, Ex. 2, R.R. at 7a, 34a.)
Because Browder is no longer a party to this action, all averments related to her actions have been omitted.
Miller is a resident of Montgomery County, Pennsylvania, and serves as the President of the Club and a member of its Executive Committee. (Compl. ¶¶ 4, 18, R.R. at 5a, 7a.) On March 12, 2013, Miller sent Knight a letter attached to an email accusing Knight of several violations of the Club's rules, violations of the hunting and gaming laws of Delaware, and engaging in "certain activities which had been detrimental to the interests of the Club." (Compl. ¶ 25, R.R. at 9a.) Specifically, the letter, written on Miller's Pennsylvania office letterhead, alleged that Knight: (1) built blinds on Club property without permission or notification; (2) engaged in "extensive baiting . . . during the 2012-2013 hunting season;" (3) was disrespectful to the Club and unsportsmanlike to his fellow members; (4) brought guests on Club property on opening day of hunting season; (5) did not sign in and out when entering or leaving the Club; and (6) left decoys out after hunting. (Compl. ¶¶ 25, 30, R.R. at 9a-11a.) Several photographs that purport to depict the alleged behavior were attached to the email. (Compl. ¶¶ 26-29, R.R. at 9a-10a.) The letter also stated that Knight was entitled to a hearing on the allegations and, upon a seventy-five percent vote of the membership, he "may be requested to resign, be expelled, or that other equitable action might be taken against him." (Compl. ¶ 31, R.R. at 11a.)
Upon receiving the letter Knight's counsel contacted Miller by email, where he gave notice to Miller that Knight was "invok[ing] his right to a hearing in accordance with the Club's Bylaws." (Compl. ¶ 40, R.R. at 12a.) Knight's counsel also communicated his dissatisfaction with the Club's failure to follow the disciplinary procedures contained in its bylaws. (Compl. ¶ 40, R.R. at 12a.) Miller did not immediately respond to the issues raised in counsel's email and, instead, called Knight's counsel about a month later to discuss the concerns. (Compl. ¶¶ 45, 46, R.R. at 13a.) During that call Miller revealed that the allegations against Knight were based on the accusations of another member. (Compl. ¶ 47, R.R. at 13a.) Miller also stated that he planned to hold a hearing on April 24, 2013, and that Knight did not have a right to counsel at that hearing. (Compl. ¶¶ 50-52, R.R. at 14a.)
Although the hearing on Knight's termination was postponed and the meeting was converted into a regular members' meeting, Knight attended the April 24, 2013 meeting, where another member admitted that it was he, and not Knight, who built the blinds. (Compl. ¶¶ 54-55, 57, R.R. at 14a-15a.) Miller, contending that he did not know the charge was false at the time, "apologized to Knight for having charged Knight with the accusation." (Compl. ¶ 58, R.R. at 15a.) Knight further learned at that meeting that the Club discovered ongoing trespassing by non-members and that fishing boats were stolen. (Compl. ¶ 59, R.R. at 15a.)
"Miller contacted Knight on or about May 4, 2013[,] and informed Knight that the Club was still going forward with a hearing on . . . June 5, 2013" to address the remaining accusations. (Compl. ¶ 60, R.R. at 15a.) Multiple emails were sent between counsel for Knight and the Club in the 24 hours prior to the hearing, where the Club's counsel stated that the Club was acting at the behest of the Delaware Fish and Wildlife Game Warden. (Compl. ¶¶ 64-67, R.R. at 16a-17a.) In light of this new information and Knight's previously communicated concerns about the process, Knight decided to not attend the June 5 hearing in Delaware. (Compl. ¶ 67, Ex. 13, R.R. at 17a, 48a, 61a-62a.) On June 19, 2013, Knight's counsel was told that twelve of the Club's members voted to expel Knight. (Compl. ¶ 68, R.R. at 17a.)
Count I of the Complaint asserts that Defendants breached the Club's corporate bylaws by holding a hearing on June 5, 2013 "notwithstanding repeated and pervasive requests by Knight . . . for full disclosure of all relevant information and . . . evidence," and by failing to follow "the clear and unambiguous protocols and procedures established under Article III" of the bylaws. (Compl. ¶¶ 69-70, R.R. at 17a.) Count II alleges that the Club and Miller breached their fiduciary duties by targeting Knight and seeking his termination without reasonable proof of the allegations, while at the same time failing to take action on more egregious violations of other members. (Compl. ¶¶ 73-75, R.R. at 19a.) Count III avers that Miller and Doe, inter alia, trumped up and fabricated allegations with the intent to deceive non-involved members, knowingly communicated false and misleading statements, and ignored meritorious issues raised by Knight in order to "dupe" other members into voting for Knight's expulsion. (Compl. ¶¶ 77, 83, 84, R.R. at 20a-22a.) Finally, Count IV asserts that Miller and Doe published defamatory material concerning Knight to other Club members, notwithstanding their knowledge that Knight "had committed no infraction of the published . . . Rules and Regulations of the Club meriting the expelling of Knight from the Club." (Compl. ¶¶ 95-97, R.R. at 24a-25a.)
Defendants jointly filed POs on September 5, 2013, along with an accompanying memorandum of law in support thereof, asserting that the trial court lacked personal jurisdiction over Doe and the Club, that Delaware County was an improper venue for all Defendants, and demurring to all counts of Knight's Complaint. (Defendants' POs at 1, R.R. at 74a.) The POs were not accompanied by a notice to plead; therefore, Knight did not file a response to the POs.
On November 27, 2013, the trial court sustained Defendants' POs without argument and dismissed Knight's Complaint. Because Knight chose not to respond to the POs, the trial court's ruling was based on the Complaint, the POs, and Defendants' accompanying memorandum of law. This appeal followed.
Our "review of a trial court's order sustaining preliminary objections and dismissing a complaint is limited to a determination of whether that court abused its discretion or committed an error of law." Petty v. Hospital Service Association of Northeastern Pennsylvania, 967 A.2d 439, 443 n.7 (Pa. Cmwlth. 2009). Reviewing preliminary objections involves "a question of law . . . to which our standard of review is de novo and our scope of review is plenary." Id. "When considering preliminary objections, the Court must accept as true all well-pleaded facts set forth in the complaint and inferences reasonably deducible therefrom but not conclusions of law." Tsucalas v. Holy Xenophone Monastery, 939 A.2d 1008, 1012 n.2 (Pa. Cmwlth. 2007).
Knight first argues that the trial court erred when it dismissed his Complaint because he did not file a response to Defendants' POs. Knight argues that he had no obligation to respond to Defendants' POs, which did not include a notice to plead. Instead, Knight contends the trial court should have considered the sufficiency of the claims, which Knight believes the trial court failed to do.
It is well-settled that "[p]reliminary objections should not be sustained solely on the ground that the preliminary objections are uncontested or unopposed." Joloza v. Department of Transportation, 958 A.2d 1152, 1155 (Pa. Cmwlth. 2008). Failure "to consider the sufficiency of the complaint before sustaining preliminary objections . . . without leave to amend, is an abuse of discretion." Id. Rule 1026 of the Pennsylvania Rules of Civil Procedure requires an answer to a preliminary objection only if the preliminary objection contains a notice to plead. Pa. R.C.P. No. 1026. Additionally, the note to Rule 1017 states that, "[i]t should be noted that it is only . . . when facts not of record are alleged, that an answer need be filed to a preliminary objection." Pa. R.C.P. No. 1017, expl. comment, 1991.
"There are basically two categories of preliminary objections[: t]hose raising questions of fact outside the record and those which may be determined from the facts of record." Chester Upland School District v. Yesavage, 653 A.2d 1319, 1325 (Pa. Cmwlth. 1994). The explanatory note to Rule 1028(c)(2) of the Pennsylvania Rules of Civil Procedure provides, in part, as follows:
Note: Preliminary objections raising an issue [of lack of jurisdiction, non-joinder of a party, or pendency of a prior action] cannot be determined from facts of record. In such a case, the preliminary objections must be endorsed with a notice to plead or no response will be required under Rule 1029(d). However, preliminary objections raising an issue [of failing to conform to law or rule of court, insufficient specificity of pleading, or legal insufficiency of a pleading (demurrer)] may be determined from facts of record so that further evidence is not required.Pa. R.C.P. No. 1028(c)(2), expl. note.
Contrary to Knight's contention, the trial court did consider the sufficiency of Defendants' POs and did not rest its Order solely on Knight's decision not to respond to the POs. The trial court's Order sustaining Defendants' POs provides as follows:
AND NOW, this 19th day of NOVEMBER, 2013, upon consideration of the Preliminary Objections filed on behalf of [Defendants] and no response having been filed thereto, it is hereby ORDERED that said Preliminary Objections are SUSTAINED and Plaintiff's claims against said Defendants are STRICKEN without prejudice to Plaintiff's right to maintain an action in an appropriate Jurisdiction.(Trial Ct. Order) (emphasis added.)
The plain meaning of the above text, specifically the inclusion of the phrase "upon consideration of the Preliminary Objections," is that the trial court considered the merits of the POs prior to rendering its Order. This meaning of the Order is supported by the trial court's opinion, filed pursuant to Rule 1925(a) of the Pennsylvania Rules of Appellate Procedure, in which the trial court stated:
However, Defendants' Preliminary Objections were not sustained solely because Plaintiff failed to respond. Rather, this Court undertook a review of the pleadings and record of this action in considering the merits of Defendants' Preliminary Objections. Nevertheless, the state of the record was obviously affected by Plaintiff's choice not to respond [. . .](Trial Ct. Op. at 8.)
Accordingly, we discern no error or abuse of discretion by the trial court in ruling on Defendants' POs without the benefit of Knight's response.
Next, Knight argues that even if the trial court tested the legal sufficiency of his Complaint and it was left wanting, the trial court abused its discretion by not providing him leave to amend his Complaint prior to ruling on the POs. Knight contends that granting leave to amend would have allowed him to clarify the bases for jurisdiction and ensure that the trial court considered all of the reasonable inferences that arise from the attached exhibits.
Rule 1033 of the Pennsylvania Rules of Civil Procedure allows a party to amend his or her pleadings "either by filed consent of the adverse party or by leave of court." Pa. R.C.P. No. 1033. "The decision about whether to allow an amendment is within the discretion of the trial court, but such discretion is not unfettered." Burger v. Borough of Ingram, 697 A.2d 1037, 1041 (Pa. Cmwlth. 1997). Amendments to a pleading "are to be liberally permitted except where surprise or prejudice to the other party will result, or where the amendment is against a positive rule of law." Id.
Knight neither sought the consent of Defendants to amend his Complaint, nor did he request leave of the court to amend. Knight cites no authority, and we can find none, requiring a court to sua sponte order a party to amend his pleading. See Werner v. Zazyczny, 681 A.2d 1331, 1338 (Pa. 1996) (stating that "Appellant fails to cite to any case law, and we can find none, requiring a court to sua sponte order or require a party to amend his pleading"). Knight was permitted to respond to Defendants' POs or to ask for leave to amend and he, apparently, decided to rest on the merits of his Complaint. Moreover, although Knight asserts that he should have been given the chance to allege and expound upon additional facts to support personal jurisdiction over Defendants, he does not specify what additional facts he would have alleged if given the opportunity to amend. As such, we cannot find that the trial court abused its discretion in deciding to sustain the POs instead of sua sponte providing Knight leave to amend his Complaint.
We note that, pursuant to Rule 1028(c)(1) of the Pennsylvania Rules of Civil Procedure, Knight was permitted to "file an amended pleading as of course within twenty days after service of a copy of" Defendants' POs. Pa. R.C.P. No. 1028(c)(1).
The remaining issues raised in this appeal, specifically personal jurisdiction over the Defendants, were thoroughly and correctly analyzed and the matter ably disposed of in the comprehensive and well-reasoned opinion of the Honorable Christine Fizzano Cannon. Therefore, we affirm on the basis of her opinion in Knight v. Upham Downs Hunt Club, Inc., by and through Executive Committee and its Members, and Peter S. Miller and John Doe and Mary Elizabeth M. Browder, (Delaware County, No. 12-7435, filed February 21, 2014).
Knight argues on appeal that the trial court erred by sustaining the POs based on improper venue. The trial court sufficiently addressed and disposed of this issue in its opinion. We also note that this issue was not raised in Knight's Concise Statement of Errors Complained of on Appeal pursuant to Rule 1925(b) of the Pennsylvania Rules of Appellate Procedure. Pa. R.A.P. 1925(b). The Supreme Court of Pennsylvania is very clear and has consistently held that "[a]ny issues not raised in a 1925(b) statement will be deemed waived." Commonwealth v. Lord, 719 A.2d 306, 309 (Pa. 1998). Lord established a bright line rule that, regardless of the equities involved, cannot be abrogated. See Commonwealth v. Schofield, 888 A.2d 771, 774 (Pa. 2005) ("While we acknowledge the equitable appeal of granting relief in this case, we reassert our holding in Lord . . . that failure to comply with the minimal requirements of Pa. R.A.P. 1925(b) will result in automatic waiver of the issues raised."). --------
Accordingly, for the foregoing reasons, the trial court's Order sustaining Defendants' POs is affirmed.
/s/ _________
RENÉE COHN JUBELIRER, Judge ORDER
NOW, May 8, 2015, the Order of the Court of Common Pleas of Delaware County, entered in the above-captioned matter, is AFFIRMED on the basis of the opinion issued by the Honorable Christine Fizzano Cannon in Knight v. Upham Downs Hunt Club, Inc., by and through Executive Committee and its Members, and Peter S. Miller and John Doe and Mary Elizabeth M. Browder, (Delaware County, No. 12-7435, filed February 21, 2014).
/s/ _________
RENÉE COHN JUBELIRER, Judge