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by: Colin E. Flora
Continuing in the vein of interesting cases from last month, today’s discussion turns the focus to the issue of venue in Indiana courts. In civil cases subject to Trial Rule 75, venue lies in every county, which means a case that is appropriate for adjudication in an Indiana state court may be filed in any county in the state. But, should a defendant so desire, if the case is not filed in a court with “preferred venue,” then it may be transferred to a “preferred venue.”
So, what is meant by “preferred venue”? Well it is not as simple as where an individual would rather the case be litigated. Instead, it is a term of art set forth by Trial Rule 75(A). Notably, there is not necessarily just one preferred venue; it is quite possible, and is often the case, that multiple preferred venues exist. The rule sets forth nine specific, concurrent criteria for preferred venue and one catchall should none of the other criteria be met.
We have addressed the issue of preferred venue once before with the question there being whether a person’s reputation constituted an intangible chattel, which would trigger preferred venue for the locus of the chattel. But, in that instance, reputation was held not to be sufficient for venue purposes.
Today, we focus on a nuanced issue that derives from a more common basis for venue: the registered agent of a business. Under Trial Rule 75, a basis for preferred venue is “the county where either the principal office of a defendant organization is located or the office or agency of a defendant organization or individual to which the claim relates or out of which the claim arose is located, if one or more such organizations or individuals are included as defendants in the complaint[.]” The Indiana Supreme Court interpreted this provision to mean that venue lies where a corporation has its registered agent as designated to the secretary of state.
And that takes us to the nuanced issue presented in CTB, Inc. v. Tunis from the Court of Appeals of Indiana. That issue is whether the logic that encompasses the registered agent with the secretary of state extends to an agent who is registered for process for different reasons. “This case involves a lawsuit against CTB, Inc., an Indiana corporation with its registered agent and office in Kosciusko County. CTB operates as a commercial motor carrier (CTB, Inc.) and broker (CTB Logistics). A federal regulation requires all commercial motor carriers and brokers to designate a process agent in every state where it operates, and CTB complied with the regulation by naming two process agents in Marion County.” The plaintiff filed suit in Marion County and asserted that it is a preferred venue by virtue of the process agents in Marion County.
In order to resolve the issue, the court of appeals looked to the Indiana Supreme Court decision that established the registered agent as sufficient:
The currently effective Rules of Trial Procedure, including Trial Rule 75, were adopted in 1970. At that time Indiana’s corporation law required that both foreign and domestic corporations maintain a “principal office in this state” where a designated resident agent for service of process could be found. It is that office to which Trial Rule 75 referred by using the same phrase to provide in subsection (4) that preferred venue lies in “the county where . . . the principal office of a defendant organization is located.” When the Business Corporation Act was adopted in 1986, what had formerly been called the “principal office in this state” was designated the “registered office.” This avoided the confusion between “principal place of business,” which means the corporate headquarters for purposes of federal diversity jurisdiction . . . and “principal office,” which means the place in Indiana where one serves the corporate registered agent. By adopting the term “registered office,” the Business Corporation Act did not intend to change the venue rules for foreign corporations. Indeed, foreign corporations qualified to do business under other laws, for example, the Financial Institutions Act, to this day are required to have a “principal office in this state.”In short, at the time the current Rules of Trial Procedure were proposed, the phrase “principal office” referred to what is currently known as the “registered office” of a foreign corporation qualified to do business in Indiana. Thus, if a foreign corporation is qualified to do business in Indiana under the Business Corporation Act, it will necessarily have a “principal office in the state”—now called a “registered office”—irrespective of where its corporate headquarters may be. Accordingly, subsection (4) of Trial Rule 75 establishes preferred venue in the county of the defendant organization’s registered office.
Based on that history, the court simply did not find the existence of process agents in Marion County necessitated by federal statute to be enough. The court determined that the argument was based on taking the words “where a designated resident agent for service of process could be found” out of context. But, in context, the conclusion was simple: the registered agent with the secretary of state is all that matters for purposes of “principal office.” And that, as the court recognized, was in Kosciusko County.
An interesting note from the case is the question of whether the substantial revision to Indiana’s corporate laws impacted the result. The court noted the change but did not substantively address the issue because neither party argued that the revisions altered the analysis. Had the issue been addressed, the outcome should not have differed. Ultimately, the analysis is not of Indiana corporate law. The key is that the court had to interpret what is meant by “principal office” in Trial Rule 75(A)(4). For that, the Indiana Supreme Court marched through the history of the business statutes to explain the shift in terminology. But a change in the statute does not necessarily mean a change to the Trial Rule. That the revised corporation law now mandates “that each corporation continuously maintain in Indiana a ‘registered office’ and ‘registered agent’ whose business office was identical with the registered office” does not alter that analysis at all. If anything, it now solidifies that there is no difference between “registered office” and “registered agent.”
One final note, for those wondering if there is some hay to be made of T.R. 75(A)(4)’s use of the word “agency,” the court of appeals dispatched that contention with ease:
In their objection to transferring venue, the [Plaintiffs] argued that CTB had an “agency” in Marion County because it designated two process agents there. For good reason, [they] did not renew this argument on appeal. This Court has held that “agency” under Trial Rule 75(A)(4) refers to a place of business or a branch office of a business. Therefore, the appointment of a process agent is insufficient to establish an “agency” under Trial Rule 75(A)(4). And even if the [Plaintiffs] could prove that CTB had an “agency” in Marion County, they must also show that their claim “relates” to or “arose” out of that agency. It is undisputed that the claim, in this case, relates to and arose out of events occurring in Kosciusko County and Stuart, Iowa. Accordingly, Marion County cannot be a preferred venue under the “agency” portion of the rule.
Join us again next time for further discussion of developments in the law.
- CTB, Inc. v. Tunis, ---N.E.3d---, No. 17A-CT-3066, 2018 Ind. App. LEXIS 85 (Ind. Ct. App. Mar. 5, 2018) (Vaidik, C.J.).
- American Family Insurance Co. v. Ford Motor Co., 857 N.E.2d 971, 972 (Ind. 2006) (Boehm, J.).
- Ind. Trial Rule 75.
- Colin E. Flora, Indiana Preferred Venue Rules: Is Reputation An Intangible Chattel?, Hoosier Litig. Blog(July 18, 2014).
*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.