Pennsylvania Counseling Services vs. Deborah Yambor No. 2014-01166

Civil Action-Law-Breach of Employment Contract-Noncompete Clause-Preliminary Objections-Venue-Pa.R.C.P. Rule 1006-Plain Language-Location of Execution, Work, Payment and Alleged Breach

1. Plaintiff filed a Complaint against Defendant, a counselor formerly employed by Plaintiff at its offices located in York County, in the Lebanon County Court of Pleas, alleging that Defendant breached the noncompetition and buyout clauses of her employment contracts with Plaintiff by obtaining employment with another employer performing counseling services within four (4) miles of Defendant’s former office with Plaintiff.

2. Defendant lodged Preliminary Objections to the Complaint, asserting that Lebanon County is not the appropriate venue to lodge its Complaint against Defendant, as the employment contracts were accepted in York County, Defendant regularly performed her work duties from the office in York County and the breach of the employment contracts was alleged to have occurred in York County.

3. Pa.R.C.P. Rule 1006(e) provides that challenges to improper venue shall be raised by preliminary objection.

4. Rule 1006(a) further provides that an action against an individual may be brought in a county in which the individual may be served, in which the cause of action arose, where a transaction or occurrence took place out of which the cause of action arose or in any other county authorized by law.

5. The purpose of Rule 1006 is to permit a plaintiff to institute suit against the defendant in the county most convenient for the plaintiff and his witnesses and to ensure that the county the plaintiff has selected has a substantial relationship to the controversy between the parties and is a proper forum in which to adjudicate the dispute.

6. A plaintiff generally is afforded the choice of forum as long as the requirements of personal and subject matter jurisdiction are satisfied.

7. The Court recognized that while the initial employment contract between the parties was signed in Lebanon County during Defendant’s orientation, all subsequent employment contracts, including the most recent employment contract of March 16, 2012 that contained language indicating that this contract replaced all previous contracts, was executed by Defendant in York County.

8. When the language of a contract is clear and unambiguous, its meaning must be determined by an examination of the language of the contract itself. A court must construe the contract only as written and may not modify the plain meaning of its words.

9. The Court found that since the Defendant executed and accepted the contract of March 16, 2012 in York County, the Defendant primarily performed her work in York County, the Defendant was paid by Plaintiff in York County and the breach alleged of the contract occurred in York County, there were no transactions or occurrences out of which the cause of action arose under the employment contract sufficient to confer venue in Lebanon County.

10. Rule 1006(e) provides that if a preliminary objection to venue is sustained and there is a county of proper venue within the State, the action shall not be dismissed and shall be transferred to the appropriate court of that county, with the costs and fees of the transfer to be paid by the plaintiff.

11. Accordingly, the Court sustained Defendant’s preliminary objection challenging venue of the action in Lebanon County and directed the transfer of the action to York County, with the Plaintiff to pay any costs of the transfer.

L.C.C.C.P. No. 2014-01166, Charles T. Jones, Jr., Judge, June 29, 2015.

Frank P. Clark, Esquire, for Plaintiff

Scott A. Harper, Esquire, for Defendant

IN THE COURT OF COMMON PLEAS

OF LEBANON COUNTY, PENNSYLVANIA

CIVIL DIVISION No. 2014-01166

PENNSYLVANIA COUNSELING SERVICES, INC., Plaintiff

v.

DEBORAH YAMBOR, Defendant

ORDER

AND NOW, this 29th day of June, 2015, after careful consideration of the record, Defendant’s Amended Second Preliminary Objection is hereby GRANTED. The matter shall be transferred to York County, Pennsylvania. Plaintiff shall be responsible for all fees and costs associated with venue transfer pursuant to Pa.R.C.P. 1006(e).

BY THE COURT:

CHARLES T. JONES, JR., J.

APPEARANCES:

Frank P. Clark, Esquire For Plaintiff

Clark & Krevsky, LLC

Scott A. Harper, Esquire For Defendant

S. Harper Law Office

OPINION BY JONES, J.:

Before this Court are Defendant’s Amended Second Preliminary Objection.

FACTUAL HISTORY

Pennsylvania Counseling Services, Inc. (herein “Plaintiff”) provides counseling services in Adams, Berks, Cumberland, Dauphin, Franklin, Lancaster, Lebanon, and York Counties. Plaintiff employed Deborah Yambor (herein “Defendant”) as a Counselor/Therapist from October 6, 2008 until she voluntarily resigned as of November 1, 2013. Defendant signed employment contracts with Plaintiff on September 16, 2008; September 26, 2011; and March 3, 2012. All 3 contracts contained the following non-compete clause:

That s/he shall not engage for one year from the time of termination of his PCS affiliation for any cause (exception in clause 5), in the practice of counseling/social work or psychology by him/herself or with any other individual or group (exception: an established IRS approved tax exempt nonprofit corporation to include school district) within a radius of 45 miles of the PCS sites previously worked at regularly. If the office is closed down and ceases operations, the employees released from all points of this noncompetition clause (i.e., see point 3 of this contract).

Plaintiff’s Amended Complaint.

Defendant regularly worked at Plaintiff’s York City office at 128 N. George St., York, Pennsylvania. Defendant is currently employed by GSC Counseling Associates, LLC (herein “GSC”). Plaintiff believes GSC is not a non-profit agency and provides counseling services. GSC’s office is at 2575 Eastern Blvd, York, Pennsylvania. This is four (4) miles from Plaintiff’s York Office where Defendant formerly worked.

The contracts between Plaintiff and Defendant also contained buy-out provisions which allow former employees to pay to be released from the non-compete clause. The buy-out provision states:

Should the employee choose to work within the for-profit and or private practice competitive arena within said 45 mile radius within one year of termination; employee has the option to negate and void this noncompetition clause with a contract buy-out. Said buy-out shall serve as compensation to Employer for ongoing competitive costs which may include but be not limited to lost revenue for transferred clients to Employee’s new working environment, Employee’s knowledge of referral sources, business and insurance practices gained in employment training, and potentially continued managed care provider credentialing status achieved during PCS employment. It is agreed that this contract buyout option shall amount to 30% of the most recent 12 months of gross pay at time of negotiation or $4,000.00 whichever is greater. Payment shall be due upon termination unless otherwise extended by mutual written agreement.

Plaintiff’s Amended Complaint.

Plaintiff’s Amended Complaint alleges that Plaintiff has made demand for the buyout payment to Defendant, that Defendant acknowledged her obligation to pay Plaintiff, and that Defendant has refused to pay Plaintiff.

PROCEDURAL HISTORY

Plaintiff filed a Complaint for Breach of Contract on June 25, 2014. Defendant filed Preliminary Objections on July 28, 2014. Plaintiff filed an Amended Complaint on August 13, 2014. Defendant filed a Second Preliminary Objection on September 4, 2014. Plaintiff filed a Preliminary Objection to Defendant’s Second Preliminary Objection on September 18, 2014. The matter was scheduled for Oral Argument for October 31, 2014. Oral Argument was held before this Court on October 31, 2014. On November 12, 2014, this Court sustained Plaintiff’s Preliminary Objections and granted Defendant twenty (20) days to filed Amended Second Preliminary Objections.

Defendant filed an Amended Second Preliminary Objection on November 24, 2014. Plaintiff filed a Preliminary Objection to Defendant’s Amended Second Preliminary Objection on December 10, 2014. The matter was scheduled for the January 30, 2015 Argument Court. Plaintiff filed a Motion for Continuance on December 31, 2014. The Court granted Plaintiff’s Motion on January 7, 2015. The matter was scheduled for the February 27, 2015 Argument Court for oral argument. Due to a scheduling conflict with the Court, the parties agreed to submit the matter on briefs. This Court overruled Plaintiff’s Preliminary Objection to Strike Defendant’s Amended Second Preliminary Objection on March 2, 2015.

The Court deferred ruling on Defendant’s Amended Second Preliminary Objection based on venue and directed the parties to schedule an evidentiary hearing before this Court or produce depositions on this issue within thirty (30) days. The parties scheduled an Evidentiary Hearing for May 12, 2015. At the end of the Hearing, the Court directed the parties to file a Stipulation and all of the Contracts signed by Defendant relating to her employment with Plaintiff. The parties filed the Stipulation and the Contracts on June 11, 2015. The matter is now ripe for disposition.

STANDARD OF REVIEW

Preliminary objections should be sustained only in cases that are clear and free from doubt. Baker v. Brennan, 213 A.2d 362 (Pa. 1965). The test for preliminary objections is whether it is clear and free from doubt from all of the facts pleaded that the pleader will be unable to prove facts legally sufficient to establish his right to relief. Firing v. Kephart, 353 A.2d 833 (Pa. 1976). To determine whether preliminary objections have been properly sustained, the court must consider as true all of the well-pleaded material facts set forth in the complaint and all reasonable inferences that may be drawn from those facts. Feingold v. Bell of Penn., 383 A.2d 791 (Pa. 1977).

DISCUSSION

Defendant’s Amended Second Preliminary Objection alleges that Lebanon County is not the proper venue for this suit because the Employment Contract was accepted in York County; Defendant regularly worked out of the York Office; and the alleged cause of action, breach of contract, occurred in York County. Plaintiff’s Amended Complaint does not say where the employment contract was formed. The Amended Complaint does state that Defendant was employed and worked for Plaintiff in York County and alleges that Defendant breached the non-compete clause of the Employment Contract in York County.

The Rules of Civil Procedure state the following regarding venue:

(a) Except as otherwise provided by subdivisions (a.1), (b) and (c) of this rule, an action against an individual may be brought in and only in a county in which

(1) the individual may be served or in which the cause of action arose or where a transaction or occurrence took place out of which the cause of action arose or in any other county authorized by law, or

Note: For a definition of transaction or occurrence see Craig v. W. J. Thiele & Sons, Inc., 395 Pa. 129, 149 A.2d 35 (1959).

(2) the property or a part of the property which is the subject matter of the action is located provided that equitable relief is sought with respect to the property.

…

(e) Improper venue shall be raised by preliminary objection and if not so raised shall be waived. If a preliminary objection to venue is sustained and there is a county of proper venue within the State the action shall not be dismissed but shall be transferred to the appropriate court of that county. The costs and fees for transfer and removal of the record shall be paid by the plaintiff.

Pa. R.C.P. 1006(a) & (e). As the moving party, Defendant has the burden of proof. See Alumbaugh v. Wallace Business Forms, Inc., 226 Pa.Super. 511 (1973). Defendant must show that venue in Lebanon County is not proper. Alleging that venue is also proper in another county is not sufficient.

The purpose of the rule is “to permit a plaintiff to institute suit against the defendant in the county most convenient for him and his witnesses and to assure that the county selected ha[s] a substantial relationship to the controversy between the parties and [is] thereby a proper forum to adjudicate the dispute.” County Construction Co. v. Livengood Construction Corp., 393 Pa 39, 44 (1958) (speaking of Pa.R.C.P. 2179, venue for Corporations). “A plaintiff generally is given the choice of forum so long as the requirements of personal and subject matter jurisdiction are satisfied.” Purcell v. Bryn Mawr Hospital, 525 Pa. 237, 243 (1990).

[Venue] either is or it is not [proper]. In Caplan v. Keystone Weaving Mills, Inc., 431 Pa. 407, 246 A.2d 384, 386 (1968), the Pennsylvania Supreme Court stated that when we review a trial court’s “order ruling upon the propriety of the venue chosen by the plaintiff … we recognize no difference procedurally between a claim that the action was instituted before the wrong tribunal and a claim that the action was brought before a court lacking competence to entertain it.” If, as decided by the trial court in this case, venue in Washington County is improper, then it is of no import that Appellant instituted this action in that forum, as the trial court had no jurisdiction to hear the case. See id. (stating that “objections to venue have been treated by this Court as raising a question of jurisdiction”).

Kring v. University of Pittsburgh, 829 A.2d 673, 676 (Pa.Super. 2003).

The cause of action in this matter is an alleged breach of an employment contract, specifically the non-compete and buy-out clauses of the contract. The breach of contract occurred in York County. However, the action may be brought in any county “where a transaction or occurrence took place out of which the cause of action arose.” Pa.R.C.P. 1006(a)(1). The formation of the contract is a “transaction or occurrence” out of which the cause of action arose, making the situs of the formation a proper venue. See Craig v. W.J. Thiele & Sons, Inc., 395 Pa. 129, 132 (1959). Plaintiff alleges that the Defendant breached multiple Employment Contracts. At the Evidentiary Hearing, Defendant admitted that the first Contract was signed in Lebanon County during orientation. Defendant testified that all of the subsequent Contracts were signed in York County and sent back to Plaintiff. However, the last Employment Contract signed by Defendant on March 16, 2012 contains the following language hand written at the top of the contract: “This contract replaces all previous contracts.” Defendant believes this phrase was written on the Contract when it was sent to her by Plaintiff; she did not write it.

“A basic tenet of contract law is that when the language of a contract is clear and unambiguous its meaning must be determined by an examination of the content of the contract itself.” Chamberlin, 693 A.2d at 972. “The court must construe the contract only as written and may not modify the plain meaning of the words under the guise of interpretation.” McMahon v. McMahon, 417 Pa.Super. 592, 600 (1992) (citing Trump v. Trump, 351 Pa.Super. 205, 209 (1985)).

The language at the top of the March 16, 2012 contract clearly states that the parties intended this contract to replace all the previous contracts. The Court is required to give weight to the plain meaning of the language of a contract where the language is unambiguous. This means that Plaintiff can only base the breach of contract on this most recent contract between PCS and Defendant. The final Employment Contract, which contains the non-compete and buy-out clauses, was signed by Defendant in York County. The original Employment Contract, which was signed in Lebanon County, was superseded by the subsequent contracts.

The Court must now determine whether venue in Lebanon County is proper based solely on the March 16, 2012 Employment Contract. “It is appropriate in analyzing whether a ‘transaction or occurrence’ took place in a given county to examine the nature of the claim asserted and the elements constituting the cause of action.” Deyarmin v. Consolidated Rail Corporation, 931 A.2d 1, 13 (Pa. Super. 2007). The Amended Complaint alleges that Defendant breached the Employment Contract by obtaining employment that violated a non-compete clause of the Contracts and that Defendant refused to abide by the buy-out provision of the Contracts. The Complaint does not allege where any of the Contracts were actually accepted by Defendant.

Based on the testimony of Defendant at the Evidentiary Hearing, Defendant accepted the final Employment Contract in York County. Defendant worked predominately in York County, Defendant was paid in York County, and the alleged breach occurred in York County. This Court finds that there were no transactions or occurrences out of which the cause of action arose under the final Employment Contract sufficient to establish venue in Lebanon County. Therefore, Defendant’s Amended Second Preliminary Objection is granted. The case shall be transferred to York County. Plaintiff shall pay the cost of transfer. See Pa.R.C.P. 1006(e).

CONCLUSION

For the reasons set forth above, Defendant’s Amended Second Preliminary Objection based on venue is granted. An Order will be entered consistent with the foregoing.