Venue transfer arguments face justices’ scrutiny

In back-to-back oral arguments, the Indiana Supreme Court considered whether to grant transfer in two medical malpractice cases seemingly in conflict with each other. The debate: whether Indiana Code § 23-0.5-4-12 is a validly enacted statute or a nullity under the Supreme Court’s interpretation of Trial Rule 75(A)(4) regarding venue.

In part, Trial Rule 75(A) provides that a preferred venue lies in the county where “the greater percentage of individual defendants included in the complaint resides” or where “either the principal office of a defendant organization is located or the office or agency of a defendant organization.” I.C. § 23-0.5-4-12, enacted Jan.1, 2018, provides in part that “the address of the [registered] agent does not determine venue in an action or a proceeding involving the entity.”

Issues regarding that language arose before the high court Thursday in both  Morrison v. Vasquez, 107 N.E.3d 1103 (Ind. Ct. App. 2018) and  Indiana Univ. Health S. Indiana Physicians, Inc. v. Noel,  2018 WL 5813083 (Ind. Ct. App. Nov. 7, 2018). Both cases argued that preferred venue existed in Marion County because one or more of the defendants had registered agents with addresses there and that I.C. § 23-0.5-4-12 was inapplicable as a result of the high court’s former precedent in a 2006 decision in American Family Ins. Co. v. Ford Motor Co.

Two Indiana Court of Appeals panels split in their decisions, however, one finding in Morrison that Marion County was not a preferred venue under Trial Rule 75(A)(4) and that the registered agent’s address did not determine venue pursuant to Ind. Code § 23-0.5-4-12. The other concluded in Noel that preferred venue did lie in Marion County because the statute conflicted with the trial rule as interpreted by the high court in American Family, therefore nullifying the statute.   

In arguing that clear direction was needed from the high court on the issue, Morrison’s counsel, Mary A. Findling, noted that the justices have the authority to adopt or amend Trial Rule 75(A)(4). She argued that the COA’s willingness to allow the Indiana Legislature to change the meaning of the trial rule in Morrison would create a dangerous precedent going forward, potentially enabling the legislature to “enact any change to any trial rule it sees fit.”

“The legislature cannot pass a statute that takes away the Indiana Supreme Court’s authority,” Findling wrote her petition to transfer. “Today, it is still the Indiana corporation law in effect at the time the Trial Rule was adopted in 1970, not a 2018 statute, that shows the Supreme Court's intent when it adopted Trial Rule 75(A)(4).”

She further argued that Noel be held as controlling. That was similarly contended by Noel’s counsel, Sara A. Langer, who further argued that the definition of “principal office” should be reinterpreted by the high court to offer plaintiffs more options in choosing where they would prefer to proceed with their cases, versus potentially receiving an unfair jury.

Opposing counsel in Morrison, Nana Quay-Smith, contended American Family did not apply because that case relied on the 1970 version of corporation law, which included a “principal office” that was determined to be the resident office, which no longer exists.

“The very purpose for which that statute was enacted was to avoid the conundrum that exists here,” Quay-Smith argued, “which is, you use a commercial registered agent in a county that has nothing to do with your business and deem that to be a preferred venue when the preferred venue rules are designed to put the case where the claim occurred, where the defendants exist, where the principal office is, where the plaintiffs reside.”

She further contended that using a commercial registered agent under the context of American Family was completely contrary to the purpose of Trial Rule 75.

Both cases will be considered for grant of transfer, and oral arguments can be watched here.