De Lage Landen Serv. V. Urban Partnership

• Decision Date: 12 July 2006
• Parties: DE LAGE LANDEN FINANCIAL SERVICES, INC., Appellant v. The URBAN PARTNERSHIP, LLC, Appellee.
• Court: Pennsylvania Superior Court

903 A.2d 586

DE LAGE LANDEN FINANCIAL SERVICES, INC., Appellant v. The URBAN PARTNERSHIP, LLC, Appellee.

Superior Court of Pennsylvania.

Argued March 8, 2006.

Filed July 12, 2006.

Michael J. McCaney, Jr., Blue Bell, for appellant.

Mark Pinnie, Atlanta, Ga., for appellee.

BEFORE: JOYCE, LALLY-GREEN, and KLEIN, JJ.

OPINION BY LALLY-GREEN, J.:

¶ 1 Appellant, De Lage Landen Financial Services, Inc., appeals from the order entered on August 19, 2005, granting preliminary objections filed by defendant/Appellee, The Urban Partnership, LLC ("TUP"). We affirm.

¶ 2 In this case, Appellant alleged that TUP breached a contract. Appellant also alleged that the contract contains a clause whereby TUP agreed to submit to the jurisdiction of Pennsylvania courts. TUP filed preliminary objections, alleging lack of personal jurisdiction in Pennsylvania. In support of this claim, TUP argued that the signature of a TUP representative on the contract was a forgery. TUP supplied an affidavit from Norman G. Olsen III, the alleged signer of the contract, along with supporting documentation.

¶ 3 The trial court ordered the parties to complete discovery on the forgery claim within 45 days. Appellant sent discovery requests to TUP, but TUP did not respond. Appellant did not move to compel TUP's compliance, and the trial court did not insist on compliance sua sponte. By the end of the 45-day period, the only material evidence on the forgery claim was Olsen's affidavit and supporting documentation. The court relied on the affidavit, granted the preliminary objections, and dismissed the complaint for lack of personal jurisdiction.

¶ 4 The trial court set forth the factual and procedural history of the case in greater detail, as follows:

Plaintiff De Lage Landen ("DLL") is a Michigan corporation with corporate headquarters in Wayne, Chester County, PA. Defendant is a limited liability company organized and existing under the laws of the State of Georgia, with its principal place of business in Atlanta. Plaintiff is in the business of financing leased office equipment. Plaintiff alleges that Defendant entered into a Lease Agreement with Plaintiff for the rental of office equipment on or about August 17, 2002 and then defaulted on February 1, 2004 after making seventeen (17) payments on the Lease to Plaintiff.

On or about July 11, 2002, Defendant entered into a Rental Agreement with Docuteam, Inc. for office equipment. See: Defendant's Exhibit "A." The Rental Agreement is signed by "Norman G. Olsen" as an owner. Defendant made monthly payments to Docuteam. See: Olsen Affidavit. In the fall of 2002 Docuteam advised Defendant that it was changing its "billing provider" to De Lage Landen and directed Defendant to remit payments to a new address. See: Olsen Affidavit. On December 15, 2003 Docuteam faxed to Defendant a copy of the De Lage Landen Lease Agreement. See: Defendant's Exhibit "B." The Lease is allegedly signed by "Norman Olson" on behalf of Defendant; there is no signature on behalf of De Lage Landen. By correspondence dated April 26, 2004 Defendant informed Plaintiff that the signature was not that of Mr. Olsen or anyone who works for Defendant. See: Defendant's Exhibit "C".

Procedural History

On February 14, 2005, Plaintiff filed an action for breach of contract regarding the Lease Agreement. On March 29, 2005, a "competent adult" served the Complaint on Defendant in person in Atlanta, Georgia. On April 22, 2005, Defendant filed preliminary objections raising lack of personal jurisdiction. Defendant only alleged that it had not consented to jurisdiction. However, Plaintiff filed an Answer to Defendant's Preliminary Objections pointing out that Defendant had consented to jurisdiction in Pennsylvania in paragraph 9 of the Lease. Based on the language of the Lease, we issued an Order on June 1, 2005 overruling Defendant's preliminary objections due to Defendant's consent to jurisdiction. Defendant immediately filed a Motion to Reconsider Preliminary Objection to Personal Jurisdiction.

In the Memorandum of Law filed on May 27, 2005, which we had not seen prior to drafting our Order filed on June 1, 2005, Defendant alleged that the signature on the Lease on behalf of Defendant was a forgery. On June 14, 2005 Defendant filed a Memorandum in Support of the Motion for Reconsideration. On June 20, 2005 Plaintiff filed an Answer and Memorandum in Opposition to Defendant's Motion for Reconsideration. In light of the new allegation of forgery, we vacated the Order on June 22, 2005 and directed the parties to produce a record on the issue by August 8, 2005. By correspondence dated August 1, 2005, Defendant submitted the Affidavit of Norman G. Olsen III, along with Exhibits "A" through "D." On August 5, 2005, Plaintiff filed its Memorandum of Law in support of personal jurisdiction. Our Order of August 19, 2005 sustaining Defendant's objections was based on the entire record produced by both parties prior to the deadline set in the June 22, 2005 Order. However, Plaintiff submits on appeal that we erred by relying on the record produced by the parties and by not requiring Defendant to answer Plaintiff's interrogatories sent to Defendant on June 30, 2005.

N.T., 10/25/2005, at 1-3.¹

¶ 5 Appellant raises two issues on appeal:

I. Where on a contract containing a personal jurisdiction clause a party in preliminary objections claims forgery of its signature offering only an affidavit in support thereof, did the trial court err in finding the affidavit sufficient evidence to sustain preliminary objections on the claim of forgery?

II. Did the trial court err in holding that the non-moving party on preliminary objections should be placed in the position of assuming a burden of producing evidence it does not control?

Appellant's Brief at 4.²

¶ 6 First, Appellant argues that the trial court accepted an unreasonably low measure of proof (the Olsen affidavit) in determining that the signature was forged.

¶ 7 "Our standard of review of an order of the trial court overruling [or granting] preliminary objections is to determine whether the trial court committed an error of law. When considering the appropriateness of a ruling on preliminary objections, the appellate court must apply the same standard as the trial court." Mar-Eco, Inc. v. T & R & Sons Towing & Recovery, Inc., 837 A.2d 512, 514 (Pa.Super.2003). Those substantive legal standards are as follows:

When preliminary objections, if sustained, would result in the dismissal of an action, such objections should be sustained only in cases which are clear and free from doubt. Moreover, 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. A defendant making a challenge to the court's personal jurisdiction has, as the moving party, the burden of supporting its objection to jurisdiction.

King v. Detroit Tool Co., 452 Pa.Super. 334, 682 A.2d 313, 314 (1996) (citations omitted); see also Pa.R.C.P. 1028(c)(2) ("the court shall determine promptly all preliminary objections. If an issue of fact is raised, the court shall consider evidence by deposition or otherwise."). This Court set forth additional procedural rules as follows:

Of particular significance in the instant case, is the rule that the mere allegation in preliminary objections that there is a lack of in personam jurisdiction over a defendant does not place a burden on the plaintiff to negate such allegations. When a defendant challenges the court's assertion of personal jurisdiction, that defendant bears the burden of supporting such objections to jurisdiction by presenting evidence. Holt Hauling and Warehousing Systems, Inc. v. Aronow Roofing Co., 309 Pa.Super. 158, 454 A.2d 1131 (1983). [Footnote: The burden of proof only shifts to the plaintiff after the defendant has presented affidavits or other evidence in support of its preliminary objections challenging jurisdiction.] In Holt Hauling, our court instructed that when a fact issue is raised by preliminary objections regarding in personam jurisdiction, the court is to take evidence and may not reach a determination based upon controverted facts, even if the parties fail to provide such evidence themselves.

Gall v. Hammer, 420 Pa.Super. 512, 617 A.2d 23, 24 (1992).

¶ 8 The instant case involves an allegation of forgery. Generally, "when the issue of a forgery is raised, the [party claiming forgery] has the burden of proving the existence of a forgery by clear and convincing evidence. Also, we note that because forgery presents an issue of fact, the resolution of the issue necessarily turns on the court's assessment of the witnesses' credibility." In re Estate of Presutti, 783 A.2d 803, 805 (Pa.Super.2001) (citations omitted).

¶ 9 Thus, the question becomes whether the Olsen affidavit and supporting documents provided clear and convincing evidence of forgery. As noted above, we bear in mind that: (1) TUP has the burden of proof; and (2) the evidence should be viewed in the light most favorable to Appellant as the non-moving party. King; Presutti.

¶ 10 The affidavit states, in relevant part, that Olsen signed a Partnership Program Agreement with Docuteam on July 11, 2002. Olsen Affidavit at ¶ 5. The signature on that agreement reads, "Norman G. Olsen."³ Affidavit Exhibit A, R.R. 30a.

¶ 11 The affidavit further states that in the fall of 2002, TUP received notice that Docuteam had changed their billing provider to DeLage Landen. According to Olsen, TUP was reassured "that the terms and conditions of TUP's agreement with Docuteam would remain the same." Affidavit at ¶ 7. In December 2003, TUP asked Docuteam to replace its copy machine with a smaller machine. Docuteam rejected that request, stating that "it was contrary to the terms of our lease." Id. at ¶¶ 8-9. At that point, Docuteam faxed a copy of the DeLage Landen Lease Agreement to TUP for the first time. Id. at ¶ 9.

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