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PA Bulletin, Doc. No. 98-1829

THE COURTS

PART I.  GENERAL

[231 PA. CODE CHS. 2120, 2150 AND 2170]

Proposed Amendments Governing Associations as Parties; Proposed Recommendation No. 150

[28 Pa.B. 5570]

   The Civil Procedural Rules Committee proposes that Rules of Civil Procedure 2126, 2151, 2176 and 2179 governing associations as parties be amended as set forth in the recommendation. The proposed recommendation is being submitted to the bench and bar for comments and suggestions prior to its submission to the Supreme Court.

   All communications in reference to the proposed recommendation should be sent not later than February 1, 1999 to: Harold K. Don, Jr., Esquire, Counsel, Civil Procedural Rules Committee, 5035 Ritter Road, Suite 700, Mechanicsburg, Pennsylvania 17055 or E-Mail to civil.rules @supreme.court.state.pa.us

   The Explanatory Comment which appears in connection with the proposed recommendation has been inserted by the Committee for the convenience of the bench and bar. It will not constitute part of the rules of civil procedure nor will it be officially adopted or promulgated by the Court.

Annex A

TITLE 231.  RULES OF CIVIL PROCEDURE

PART I.  GENERAL

CHAPTER 2120.  PARTNERSHIPS AS PARTIES

Rule 2126.  Definitions.

   As used in this chapter:

   ''action'' means any civil action or proceeding at law or in equity brought in or appealed to any court which is subject to these rules;

   ''firm name'' means any name, fictitious or otherwise, by which a partnership conducts business or is commonly known whether or not such name has been filed or registered;

   ''liquidator'' means any person legally engaged in winding up the affairs of a dissolved partnership;

   ''partner'' means only a general partner or a limited partner who has become subject to the liability of a general partner;

   ''partnership'' means [only] a general or limited partnership, whether it is also a registered limited liability partnership or electing partnership, and does not mean a [partnership association, registered partnership,] limited liability company, unincorporated association, joint stock company or similar association.

CHAPTER 2150.  UNINCORPORATED ASSOCIATIONS AS PARTIES

Rule 2151.  Definitions.

   As used in this chapter

   ''action'' means any civil action or proceeding at law or in equity brought in or appealed to any court which is subject to these rules;

   ''association'' means an unincorporated association conducting any business or engaging in any activity of any nature whether for profit or otherwise under a common name, but does not mean [an incorporated association, general partnership, limited partnership, registered partnership, partnership association, joint stock company or similar association] a partnership as defined in Rule 2126 or a corporation or similar entity as defined in Rule 2176.

CHAPTER 2170.  CORPORATIONS AND SIMILAR ENTITIES AS PARTIES

Rule 2176.  Definitions.

   As used in this chapter

   ''action'' means any civil action or proceeding at law or in equity brought in or appealed to any court which is subject to these rules;

   ''corporation or similar entity'' includes any public, quasi-public or private corporation, insurance association or exchange, [registered partnership, partnership association limited,] joint stock company or association, [''Massachusetts trust'',] limited liability company, professional association, business trust, or any other association which is regarded as an entity distinct from the members composing the association, but does not include the Commonwealth of Pennsylvania, a county, city, borough, town, township, school district or institution district, or a partnership as defined in Rule 2126, or an unincorporated association as defined in Rule 2151;

   ''corporate name'' means any name, real or fictitious, under which a corporation or similar entity was organized, or conducts business, whether or not such name has been filed or registered;

   ''executive officer'' means a chairman, president, vice-president, treasurer, secretary, general manager, or any like officer of a corporation or similar entity.

   ''member'' includes any shareholder in a corporation or similar entity[;

   ''executive officer'' means a chairman, president, vice-president, treasurer, secretary, general manager, or any like officer of a corporation or similar entity].

   Official Note: The term ''corporation or similar entity'' as defined above includes all associations and business entities which are regarded as separate and distinct from their members. No attempt has been made to enumerate all the various classes of private corporations falling within the definition.

Rule 2179.  Venue.

   (a)  Except as otherwise provided by an Act of Assembly or by subdivision (b) of this rule, a personal action against a corporation or similar entity may be brought in and only in

   (1)  the county where its registered office or principal place of business is located;

   (2)  a county where it regularly conducts business;

   [Official Note:  See Rule 2198.]

   (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.

   (b)  An action upon a policy of insurance against an insurance company, association or exchange, either incorporated or organized in Pennsylvania or doing business in this Commonwealth, may be brought

   (1)  in a county designated in Subdivision (a) of this rule; or

   (2)  in the county where the insured property is located; or

   (3)  in the county where the plaintiff resides, in actions upon policies of life, accident, health, disability, and live stock insurance or fraternal benefit certificates.

Explanatory Comment

   Recommendation No. 150 proposes amendment of Rules 2126, 2151 and 2176 providing definitions governing associations as parties. The recommendation also proposes a technical amendment by deleting an obsolete note to Rule 2179, the venue rule governing corporations and similar entities.

Partnerships as Parties

   The proposed revision to Rule 2176 defining the term ''partnership'' continues to provide that ''partnership means a general or limited partnership'' and adds new language: ''whether it is also a registered limited liability partnership or electing partnership''. The reference to a registered limited liability partnership and an electing partnership is derived from Section 8311(b) of the Associations Code, ''Partnership defined''.

   The proposed revision excludes from the definition ''limited liability company, unincorporated association, joint stock company or similar association''. The reference to a limited liability company is new and takes into account Act No. 126 of 1994 which added Chapter 89 relating to limited liability companies to Title 15 of the Consolidated Statutes, the Associations Code. However, the limited liability company is included in the proposed revision to the definition of ''corporation or similar entity'' found in Rule 2176.

   As revised, the exclusionary language no longer contains the terms ''partnership association and registered partnership''. The latter term is presently found in all three of the definition rules. As stated in Goodrich-Amram 2d § 2176:3, a registered partnership ''meant a limited liability partnership formed in compliance with the special Acts of Assembly, now repealed, relating to the formation of such partnerships.''

Unincorporated Associations as Parties

   The term ''association'' as used in Rule 2151 et seq. is not the broad term found in the title of the ''Associations Code''. Rather, it has the limited meaning as defined in Rule 2151. The basic definition continues unchanged: ''an unincorporated association conducting any business or engaging in any activity of any nature whether for profit or otherwise under a common name. . . .'' However, the definition excludes certain types of ''associations'' as used in the broader sense of that term. Whereas the present rule excludes from the definition ''an incorporated association, general partnership, limited partnership, registered partnership, partnership association, joint stock company or similar association,'' the proposed revision simply states that ''unincorporated association'' does not include ''a partnership as defined in Rule 2126 or a corporation or similar entity as defined in Rule 2176.''

Corporation or Similar Entity

   Rule 2176 is revised in two respects. First, the term ''executive officer'' is merely put in its rightful place alphabetically in the list of definitions but it is not otherwise changed. Second, the term ''corporation or similar entity'' is revised to include the terms ''limited liability company, professional association and business trust''.

   The addition of ''business trust'' includes within the definition of corporation or similar entity a ''trust subject to Chapter 95 (relating to business trusts).'' The addition of ''professional association'' includes a professional association as defined in Section 9302 of the Associations Code, i.e., ''a professional association organized under the Act of August 7, 1961 (P. L. 941, No. 416), known as the Professional Association Act. . . .''

   The addition of a ''limited liability company to the definition is in accord with the Source Note to Section 8906 of the Associations Code which states:

Notwithstanding the policy of Chapter 89 that a limited liability company is a form of partnership entity, for purposes of the Pennsylvania Rules of Civil Procedure a limited liability company will probably be deemed a ''corporation or similar entity'' under Pa.R.C.P. 2176, rather than a ''partnership'' under Pa.R.C.P. 2126 or an ''association'' under Pa.R.C.P. 2151.

   Three types of associations have been deleted from the definition. The deletion of the term ''registered partnership'' was previously mentioned under the comment to Rule 2156. The reference to ''Massachusetts Trust'' has been deleted as obsolete. The term ''partnership association limited'' has been deleted as well. Goodrich-Amram § 2176:3 states that the term, ''as used in these rules at the time of their adoption, meant a limited liability partnership association formed in compliance with the special Acts of Assembly, now repealed, relating to the formation of such associations.''

By the Civil Procedural Rules Committee

EDWIN L. KLETT,   
Chairperson

[Pa.B. Doc. No. 98-1829. Filed for public inspection November 6, 1998, 9:00 a.m.]


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