August 5, 2019

The Location of a Corporation’s Registered Agent Does Not Determine Preferred Venue; Morrison v. Vasquez

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The venue within which a particular case is brought can make a great deal of difference to parties. Therefore, the question of what county is a preferred county for a lawsuit under Trial Rule 75(A) can be an important one. In this case, the Court forecloses one way for plaintiffs to expand the number of preferred counties; the location of a corporation’s registered agent no longer has any bearing on this question.

In 2017, Morrison filed a medical malpractice complaint in Indianapolis. Some of those defendants petitioned to transfer venue to Monroe County, arguing that Marion County did not meet Rule 75(A)’s preferred venue requirements. Morrison argued that Marion County was a preferred venue because the registered agent of one of the defendants, Bloomington Hospital, was in Marion County. The trial court granted defendants’ petition.

In a separate case, Noel filed a medical malpractice action against several defendants in Marion County in 2018. Again, some defendants moved to transfer venue, this time to Lawrence County, where the alleged malpractice occurred. Again, Noel argued that Marion County was a preferred county because one of the defendants, IU Health, had its registered agent in Marion County. This time the trial court denied the motion to transfer.

Each case was appealed, and each appellate panel affirmed the trial court’s decision. The Indiana Supreme Court granted transfer and consolidated the two cases into one opinion.

The Court began by discussing the statutes and caselaw governing this question. Trial Rule 75(A)(4) provides that a preferred venue for a lawsuit is the “county where [ ] the principal office of a defendant organization is located.” And the Indiana Supreme Court, applying I.C. § 23-1-24-1, held in American Family Ins. Co. v. Ford Motor Co., 857 N.E.2d 971, 972 (Ind. 2006), that “the principal office” of a corporation was the corporation’s registered office in Indiana. But that statute was repealed in 2018. The new statute defines “principal office” as the “principal executive office of an entity, whether or not the office is located in Indiana.” And it further states that designating 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 plaintiffs argued that American Family applied to their lawsuits, too. But the Court disagreed. It limited American Family to foreign corporations, but not domestic ones.

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.

The Court went on to say that the recently enacted statute applied to both foreign and domestic corporations in the future. Although the plaintiffs argued that the new statute was ineffective because it was more stringent than the trial rules, the Court disagreed.

[T]he 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 … . The only tie to Marion County is the tie created by the presence of the registered agent there. This tie has nothing to do with the rationale for the preferred venue rules. The new statutes better define principal office and provide for a preferred venue consistent with the rationale for venue rules.

Justice Slaughter again dissented. While he found that the majority’s decision “makes eminent sense” as a policy matter, he would rather “formally amend the trial rules” than to “reinterpret them by judicial fiat and with retroactive application.” Without such a change, he “would continue to follow the understanding of “principal office” that has prevailed for nearly fifty years.” Moreover, he finds that the new statute has “selfevident” conflicts with the way that the trial rules have long been interpreted.

Lessons:

  1. A corporation’s principal office for purposes of Trial Rule 75(A) is its principal executive office.
  2. The location of a corporation’s registered agent is irrelevant for the purposes of Trial Rule 75(A).