Day on Torts
In J. Alexander’s Holdings, LLC v. Republic Services, Inc., No. M2016-01526-COA-R3-CV (Tenn. Ct. App. May 12, 2017), the Court of Appeals affirmed dismissal based on the ground of forum non conveniens.
Plaintiff restaurant had contracted with defendant for waste removal at some of its locations. The incident from which this case arose happened at a restaurant in Livonia, Michigan, where “in the process of retrieving the dumpster” at plaintiff’s restaurant location a driver for defendant allegedly hit the restaurant and caused damage. Total damages? $13,800 (plus attorneys’ fees and costs).
Plaintiff filed its complaint in the Davidson County General Sessions Court in Tennessee for breach of contract and negligence. Defendant moved for dismissal based on improper venue, which the sessions court granted. Plaintiff appealed to the circuit court, where the case was eventually dismissed based on improper venue and forum non conveniens. This appeal followed.
On appeal, the Court first examined whether the Tennessee court had personal jurisdiction over defendant. “Personal jurisdiction may be obtained by service of process under the Tennessee long-arm statute if, and only if, the non-resident defendant has such minimum contacts with this state that maintenance of the suit does not offend traditional notions of fair play and substantial justice.” (internal citations and quotations omitted). Personal jurisdiction can either be specific—“when a plaintiff’s cause of action is based on the defendant’s activities in or contacts with the forum state”—or general. Since the accident at issue in this case did not occur in Tennessee, the Court examined whether defendant was subject to general personal jurisdiction here.
Defendant argued that the contract for the specific restaurant location at issue here was executed in Michigan, that the accident occurred in Michigan, and that defendant “is not currently registered to do business in the State of Tennessee, nor does it transact business in the State of Tennessee.” Plaintiff, on the other hand, asserted that defendant and plaintiff were parties to five agreements, four of which concerned restaurant locations in Tennessee; that these four agreements were negotiated by a broker in Tennessee; that all five contracts were signed by plaintiff’s representative in Nashville, Tennessee; that defendant had provided regular waste management services to plaintiff’s Tennessee locations; that the invoices for the four Tennessee contracts were sent to Franklin, Tennessee; and that the billing address on all five contracts was a post office box in Franklin, Tennessee.
In its brief personal jurisdiction analysis, the Court specifically noted that the payments for the services in both Tennessee and Michigan were made in Tennessee. Based on these facts, the Court held that “[t]he contracts within Tennessee engendered through the contractual relationship are continuous and systematic…and are sufficient to give the court general personal jurisdiction over [defendant].”
Next, the Court looked at venue. Having found that the “contracts present in the record show that [defendant] has transacted business in Tennessee,” the Court turned to Tenn. Code Ann. § 20-4-104(3)(B). That statute, in conjunction with § 48-15-104(b), “operates to make the Secretary of State the registered agent for [defendant] because [defendant] does not have a registered agent in this state. Because the Secretary of State’s office is in Davidson County, venue is proper in Davidson County.”
Finally, the Court addressed defendant’s assertion of forum non conveniens. “Generally speaking, forum non conveniens deals with the discretionary power of the court to decline to exercise a possessed jurisdiction whenever, because of varying factors, it appears that the controversy may be more suitably or conveniently tried elsewhere.” (internal citation omitted). When considering this doctrine, a court must first look at whether it has jurisdiction over the parties and whether there is at least one other forum where the plaintiff could bring the case. A court must also weigh a variety of factors, which include enforceability of a judgment, access to proof, “availability of compulsory process for attendance of unwilling [witnesses], and the cost of obtaining attendance of willing [witnesses],” and any other practical considerations. (internal citation omitted). A court should also consider factors related to the public interest, such as the interest in having “localized controversies decided at home.” (internal citation omitted).
In this case, defendant filed an affidavit stating that the incident occurred in Michigan, and that “all witnesses and evidence concerning the alleged accident are located in Livonia, Michigan.” The Court pointed out that plaintiff “did not file any countervailing proof on this point,” instead only asserting that it intended to call witnesses from its corporate headquarters in Nashville. The Court of Appeals affirmed dismissal based on forum non conveniens, finding that the trial court “applied the relevant law and considered the private factors as well as the public factors,” and that “[t]he determination that Michigan is a more favorable jurisdiction to adjudicate this case is supported by the record and consistent with applicable law.”
In its order, the Court of Appeals also reversed the trial court’s refusal to allow plaintiff to amend its complaint to add a claim for punitive damages and declaratory judgment. While the trial court deemed the amendment futile, the Court of Appeals “determined that the order denying the amendment should be vacated in order to permit [plaintiff] to pursue these claims should they choose to bring the action in Michigan.”
While a defendant asserting the ground of forum non conveniens faces a high burden, this case shows that such a dismissal is possible when the incident at issue occurred in a state other than Tennessee. Plaintiffs’ lawyers can learn from this case that, if possible under the facts, more must be done to oppose an effort to change venue for convenience of the parties. The plaintiff here did not respond to defendant’s assertions that all evidence and witnesses were in Michigan other than to say that they intended to call some corporate officers from Nashville as witnesses. If you are faced with a motion to dismiss due to forum non conveniens, try to be as specific as possible in your responses when arguing that the forum you selected is appropriate.
Finally, one has to wonder whether the juice will be worth the squeeze here. There is $13,800 at issue. The case has been fully briefed and argued before at least two courts and argued (and maybe briefed) in the General Sessions Court. I guess there is hope that if the plaintiff ultimately wins the fee shifting provision of the contract will apply (I haven’t seen it so I don’t know if it applies to negligence claims or not) but I expect defendant will argue that all of the money spent on fees to keep venue in Tennessee is not recoverable by plaintiff (it lost) but should be offset against any fees accessible against defendant on merits (since it won the venue fight).