Cynthia Morrison, individually and on behalf of Ernest Morrison v. Ricardo Vasquez, M.D. Indiana University Health Southern Indiana Physicians, Inc. v. Charlene Noel
Cynthia Morrison, individually and on behalf of Ernest Morrison v. Ricardo Vasquez, M.D. Indiana University Health Southern Indiana Physicians, Inc. v. Charlene Noel
Opinion of the Court
Both of the cases before us today present the same issue. That is, whether for the purposes of determining preferred venue pursuant to Trial Rule 75(A)(4), an organization with a location in the State of Indiana is considered to have a "principal office" at the address of its registered agent. Finding that a domestic organization's actual principal office and not the location of its registered agent is the appropriate preferred venue, we affirm the trial court in Morrison and reverse the trial court in Noel . Further, we hold that in light of new business corporation statutes, the location of the registered agent no longer determines preferred venue for either domestic or foreign corporations.
Facts and Procedural History
In December 2017, Cynthia Morrison filed a complaint against various defendants for medical malpractice in Marion County. Some of those defendants filed a petition to transfer venue to Monroe County pursuant to Indiana Trial Rule 75(A) arguing that Marion County does not meet the preferred venue requirements. For her part, Morrison argued that Marion County is a county of preferred venue because the registered agent of Bloomington Hospital, one of the defendants, is in Marion County. The trial court grant defendants' motion to transfer venue from Marion County, where IU Health has its registered agent, to Monroe County where defendant has its actual principal place of business. The Court of Appeals affirmed.
In February 2018, Charlene Noel also filed a medical malpractice action against several defendants in Marion County because the defendants' registered agents are located there. Defendants then filed a motion to transfer venue to Lawrence County where the alleged malpractice occurred. Here the trial court denied defendants' motion to transfer venue to Lawrence County, where defendant has its actual principal place of business, and instead, left the matter pending in Marion county, where IU Health has its registered agent. The Court of Appeals affirmed.
These two Court of Appeals opinions are in conflict with one another and we write a consolidated opinion regarding both to clear up the confusion.
Standard of Review
Interpretation of our trial rules is a question of law that we review
de novo.
State v. Holtsclaw,
Discussion
Indiana Trial Rule 75(A) provides a list of preferred venues for initiating a suit. One those is the "county where [ ] the principal office of a defendant organization is located." T.R. 75(A)(4). In 2006, this Court issued an opinion in
American Family Ins. Co. v. Ford Motor Co
.,
American Family
and
CTB
were premised on business corporation law. Specifically, Indiana Code section 23-1-24-1 (2014), required each corporation to continuously maintain in Indiana a "registered office" and "registered agent" whose business office was identical to the registered office. However, effective January 1, 2018, that section was repealed and new legislation promulgated.
See
The designation or maintenance in Indiana of a registered agent does not by itself create the basis for personal jurisdiction over the represented entity in Indiana. The address of the agent does not determine venue in an action or a proceeding involving the entity.
The
CTB
panel acknowledged these revisions but declined to consider their impact, as neither party before the court argued that the revisions were applicable.
CTB
,
In Morrison , the Court of Appeals found that the revisions discussed above came into play. That is, the court applied Indiana Code section 23-0.5-4-12 which provides that "[t]he address of the agent does not determine venue..." However, in Noel , the court found this statute conflicted with American Family's interpretation of Trial Rule 75 and therefore, it determined the statute was a nullity and ineffective.
Plaintiffs in both cases here argue that the rule set forth in American Family / CTB means that in their suits, Marion County is the preferred venue because that is where at least some of the defendants' registered agents are located. However, we decline to apply American Family to the facts and circumstances of these cases. As discussed above, American Family focused on foreign corporations. Because these corporations do not have a principal place of business in this State, it makes sense to use the office of the registered agent as a preferred venue. However, for domestic corporations this rule makes little sense. As defendants aptly point out, following this rule means that almost all corporations in Indiana would fall under Marion County as the preferred venue because this is where commonly used registered agent CT Corporation is located. CTB applied the rule from American Family to both domestic and foreign corporations without analysis about domestic corporations. Also, CTB's registered agent was in the same county as its physical office unlike the facts and circumstances here. Thus, we decline to apply American Family or CTB to the present cases, where the corporations at issue are domestic and the registered agent is in a different county than the actual principal executive office of the corporation.
Further, we find that the new statutes are applicable to both foreign and domestic corporations and that these statutes do not conflict with our trial rules. Trial Rule 75(A)(4) does not state anything regarding a registered agent; instead, it provides that the location of a "principal office" is a preferred venue. It is the definition of "principal office" that decides the outcome here. Pursuant to Indiana Code section 23-0.5-1.5-29, a corporation's principal office is no longer tied to the registered agent for either domestic or a foreign corporations doing business in Indiana. Also, Indiana Code section 23-0.5-4-12 provides that the registered agent location does not determine venue. American Family was premised on statutory provisions that were not simply amended to change terminology: they have been completely repealed and replaced. Accordingly, it is no longer controlling law.
Morrison argues that Indiana Code section 23-0.5-4-12 is ineffective because it is more stringent than the trial rules. Trial Rule 75(D) provides, in relevant part:
Any provision of these rules and any special or general statute relating to venue, the place of trial or the authority of the court to hear the case shall be subject to this rule, and the provisions of any statute fixing more stringent rules thereon shall be ineffective.
However, what Morrison is really arguing is that the new statute is more stringent than American Family's interpretation of the prior statutes. As discussed above, American Family did not analyze the prior statutes with an eye towards domestic corporations and as such, even if the prior statutes were not repealed and replaced, American Family does not apply to domestic corporations. Additionally, the trial rules provide that preferred venue lies (among other places), where the principal office of defendant is. The statute does not preclude Morrison from filing in Monroe County where that principal office is. Filing in Monroe County rather than Marion County is consistent with the purpose of our venue rules:
Preferred venue is located in counties where information is readily available, where relevant land and personal property can be found, where witnesses can be easily brought to court, and where the litigants reside or hold office. Reliable preferred venue rules increase judicial efficiency because a judge can focus on the merits of a dispute rather than its relocation to a more convenient forum. Litigants likewise benefit from relative certainty about the preferred forum and from the savings in time and expense that such rules provide.
Randolph County v. Chamness
,
Finally, Morrison also argues the new statutes are not applicable to her because she filed her complaint prior to its enactment. She further argues the statute is not retroactive. However, while Morrison may have filed her complaint prior to the enactment, preferred venue was not determined by the trial court until after enactment.
Conclusion
We hold that a domestic organization's actual principal office and not the location of its registered agent is the appropriate preferred venue. Further, we hold that in light of new business corporation statutes that define "principal office" and provide that the registered agent's location does not determine venue, the location of the registered agent no longer determines preferred venue for either domestic or foreign corporations. We affirm the trial court in Morrison and reverse the trial court in Noel and remand both for further proceedings.
Rush, C.J., Massa and Goff, JJ., concur.
Slaughter, J., dissents with separate opinion.
In Morrison , one of the defendant physicians resides in Marion County, but works in Monroe County. Trial Rule 75(A)(1) provides for preferred venue where the "greater percentage" of individual defendants reside. Such is not the case here.
Morrison filed her complaint on December 1, 2017. Ind. Code section 23-0.5-4-12 became effective January 1, 2018.
See
Dissenting Opinion
The Court holds that a defendant organization's "principal office" for preferred-venue purposes should be the county where it maintains its headquarters, not where its registered agent is located. As a policy matter, that outcome makes eminent sense to me, especially in light of recent changes to Indiana's business-organizations law. I am unable to join the Court's opinion, however, because the better way to effectuate that policy change is by formally amending our trial rules and not reinterpreting them by judicial fiat with retroactive application. But until that happens-until we amend our rules to provide for such change-I would continue to follow the understanding of "principal office" that has prevailed for nearly fifty years. On this record, that means both plaintiffs should be able to proceed with their respective suits in Marion County. Thus, I would affirm the trial court in Noel and reverse in Morrison .
Since 1970, litigants and lower courts have understood "principal office" in Trial Rule 75 to refer to the location of a defendant organization's registered agent. Years later, we reinforced this understanding in
American Family Insurance Company v. Ford Motor Company
,
Nothing in Rule 75 compels today's decision. The rule nowhere says "principal office" means something different depending on an organization's foreign or domestic status. What prompts today's about-face, rather, is a 2018 legislative change that now defines "principal office" to refer to an organization's "principal executive office".
As we have long held, our rules governing the practice and procedure in our courts prevail over any conflicting statute. "On matters of procedure, to the extent a statute is at odds with our rule, the rule governs."
Garner v. Kempf
,
Reference
- Full Case Name
- Cynthia MORRISON, Individually and on Behalf of Ernest Morrison, Deceased, Appellant (Plaintiff), v. Ricardo VASQUEZ, M.D., Et Al., Appellee (Defendant). Indiana University Health Southern Indiana Physicians, Inc., Et Al., Appellants (Defendants), v. Charlene Noel, Appellee (Plaintiff).
- Cited By
- 9 cases
- Status
- Published