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LLC v. Republic Services, Inc.

Court of Appeals of Tennessee, Nashville

May 12, 2017

J. ALEXANDER'S HOLDINGS, LLC
v.
REPUBLIC SERVICES, INC.

          February 21, 2017 Session

         Appeal from the Circuit Court for Davidson County No. 16C1099 Thomas W. Brothers, Judge.

         A Tennessee company brought an action in the Davidson County General Sessions Court against an Arizona company for breach of contract and negligence, seeking recovery for damage to plaintiff's restaurant, which was located in Michigan. The case was dismissed on the ground of improper venue. Plaintiff appealed to the circuit court, which granted summary judgment to defendants on the basis of improper venue, lack of personal jurisdiction, and forum non conveniens. Plaintiff appeals. We reverse the holdings that the trial court lacked personal jurisdiction over the defendant and that venue was improper; we affirm the dismissal on the ground of forum non conveniens and vacate the denial of the motion to amend the complaint.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed in Part, Vacated in Part, and Affirmed in Part

          Timothy L. Warnock and D. Andrew Curtis, Nashville, Tennessee, for the appellant, J. Alexander's Holdings, LLC.

          Marc H. Harwell, Chattanooga, Tennessee; and Jordan T. Puryear, Nashville, Tennessee, for the appellee, Republic Services, Inc.

          Richard H. Dinkins, J., delivered the opinion of the court, in which Frank G. Clement, Jr., P. J., M. S., and Andy D. Bennett, J., joined.

          OPINION

          RICHARD H. DINKINS, JUDGE.

         I. Factual and Procedural History

         This case arises from an incident in which a driver for Republic Services Inc. ("Republic"), in the process of retrieving the dumpster at a J. Alexander's restaurant in Livonia, Michigan in November 2014, allegedly hit the restaurant, causing damage. J. Alexander's Holdings, LLC ("J. Alexander's") notified Republic of the damage and requested payment but Republic did not pay. J. Alexander's filed suit against Republic in Davidson County General Sessions Court for "[b]reach of contract and negligence for property damage to Plaintiff's restaurant in the amount of $13, 800, plus attorney's fees and costs." Republic moved to dismiss the case for improper venue and, following a hearing, the court granted the motion and dismissed the case with prejudice.[1]

         J. Alexander's appealed to the circuit court and moved to amend the complaint to seek a declaratory judgment and to add a claim for punitive damages. Republic filed a "Motion for Summary Judgment and Response to Plaintiff's Motion for Leave to Amend Complaint, " in which it asked the court to deny J. Alexander's motion to amend due to futility "because venue is improper under Tenn. Code Ann. § 20-4-104" and because dismissal was warranted pursuant to the doctrine of forum non conveniens. Republic moved that summary judgment be granted on the same grounds, supporting the motion with a statement of undisputed facts and the affidavit of Matthew Marquis, Republic's Director of Operations for the Great Lakes area of Michigan. In answer to the motion for summary judgment, J. Alexander's filed a response to the statement of undisputed facts, two declarations of Mark Parkey, Executive Vice-President and Chief Financial Officer of J. Alexander's, and the declaration of Cassie Madden, its counsel. In due course, the court entered an order granting Republic's motion and dismissing the case without prejudice; the court denied J. Alexander's motion to amend "on account of futility."

         J. Alexander's filed a timely notice of appeal and articulates the following issues for our review:

1. Did the Trial Court err in granting summary judgment for lack of personal jurisdiction when Republic never raised the defense and actively participated in the litigation?
2. Did the Trial Court err in granting summary judgment for improper venue when J. Alexander's presented proof that Republic transacts business in Tennessee but does not have a registered agent in Tennessee and, thus, established that venue in Davidson County was proper pursuant to Tenn. Code Ann. §§ 20-4-104(3) and 48-15-104 and Republic presented no competent proof otherwise?
3. Did the Trial Court err in granting summary judgment pursuant to the doctrine of forum non conveniens when Republic presented no competent proof whatsoever related to the pertinent private or public factors and, as such, the Trial Court did not consider the private or public factors?
4. Did the Trial Court err in denying Plaintiff's Motion to Amend as futile?

         II. Discussion

         In the order being appealed, the court granted Republic's motion for summary judgment, holding that it did not have personal jurisdiction over Republic under the long-arm statute, Tennessee Code Annotated section 20-2-214;[2] that venue in Davidson County was improper under Tennessee Code Annotated section 20-4-104; and that dismissal was appropriate pursuant to the doctrine of forum non conveniens.

         Issues such as venue and personal jurisdiction, however, are threshold issues and therefore should be raised and decided using the procedures applicable to Rules 12.02(2) and 12.02(3) of the Tennessee Rules of Civil Procedure rather than in a motion for summary judgment under Rule 56. See Gordon v. Greenview Hosp., Inc., 300 S.W.3d 635, 643 (Tenn. 2009); [3] State v. NV Sumatra Tobacco Trading Co., 403 S.W.3d 726, 739 (Tenn. 2013). Consistent with the instruction that motions should be construed based on their substance rather than their title, Gordon, 300 S.W.3d at 643, we resolve Republic's motion as one to dismiss for lack of personal jurisdiction in accordance with Rule 12.02(2) and for improper venue in accordance with Rule 12.02(3).

         The trial court's decisions on motions to dismiss for lack of personal jurisdiction and venue are questions of law, which are reviewed de novo. S. Constructors, Inc. v. Loudon Cnty. Bd. Of Educ., 58 S.W.3d 706, 710 (Tenn. 2001) (venue); First Cmty. Bank, N.A. v. First Tennessee Bank, N.A., 489 S.W.3d 369, 382 (Tenn. 2015), cert. denied sub nom. Fitch Ratings, Inc. v. First Cmty. Bank, N.A., 136 S.Ct. 2511, 195 L.Ed.2d 841 (2016) (personal jurisdiction). In considering such motions, a trial court is not limited to the pleadings, but may consider affidavits and other evidence filed in support of or in opposition to the motion. NV Sumatra Tobacco Trading Co., 403 S.W.3d at 739; Thomas v. Mayfield, No. M2000-02533-COA-R3-CV, 2004 WL 904080, at *7 (Tenn. Ct. App. Apr. 27, 2004); Humphreys v. Selvey, 154 S.W.3d 544, 550 (Tenn. Ct. App. 2004); Manufacturers Consolidation Serv., Inc. v. Rodell, 42 S.W.3d 846, 854-55 (Tenn. Ct. App. 2000)). The allegations of the nonmoving party's affidavits are taken as true and all factual disputes are resolved in its favor. Humphreys, 154 S.W.3d at 548-49 (venue); NV Sumatra Tobacco Trading Co., 403 S.W.3d at 739 (personal jurisdiction). The court must determine "that the [plaintiff] has shown, by a preponderance of the evidence, that Tennessee courts may properly exercise jurisdiction over [the defendant]." NV Sumatra Tobacco Trading Co., 403 S.W.3d at 739. Similarly, when venue is challenged, it is the plaintiff's ultimate burden to demonstrate that venue is proper. Cohn Law Firm v. YP Se. Advert. & Publ'g, LLC, No. W2014-01871-COA-R3-CV, 2015 WL 3883242, at *3 (Tenn. Ct. App. June 24, 2015).

         Application of the doctrine of forum non conveniens is a matter of discretion, and we review a trial court's decision in that regard under the abuse of discretion standard. Zurick v. Inman, 426 S.W.2d 767, 772 (Tenn. 1968); Pantuso v. Wright Med. Tech. Inc., 485 S.W.3d 883, 888 (Tenn. Ct. App. 2015), perm. app. denied (Jan. 14, 2016). A court abuses its discretion when it causes an injustice to the party challenging the decision by (1) applying an incorrect legal standard, (2) reaching an illogical or unreasonable decision, or (3) basing its decision on a clearly erroneous assessment of the evidence. Konvalinka v. Chattanooga-Hamilton Cnty. Hosp. Auth., 249 S.W.3d 346, 358 (Tenn. 2008).

         A. Personal Jurisdiction

         As an initial matter, we address J. Alexander's argument that the court erred in considering the issue of personal jurisdiction sua sponte because Republic did not assert it as a defense. The record belies this assertion. In the motion to dismiss filed in the general sessions court, Republic cited Tennessee Code Annotated section 20-2-214, [4] the Tennessee long-arm statute, in support of its argument that Republic was not subject to the jurisdiction of Tennessee courts because the claim did not arise under the circumstances specified at section 20-2-214(a)(1) and (2); it reiterated this argument in the memorandum in support of the motion for summary judgment it filed in the circuit court. In its oral ruling on that motion, the court noted that J. Alexander's had not responded to Republic's argument in that regard. Thus, the record shows that the court did not raise the issue of personal jurisdiction sua sponte; consequently, we proceed to address the question of whether the court had personal jurisdiction over Republic.[5]

         Personal jurisdiction "refers to the court's authority to adjudicate the claim as to the person, " Landers v. Jones, 872 S.W.2d 674, 675 (Tenn. 1994) (citing Cooper v. Reynolds, 77 U.S. 308 (1870); Turpin v. Conner Bros. Excavating Co., Inc., 761 S.W.2d 296, 297 (Tenn.1988). Personal jurisdiction may be obtained by service of process under the Tennessee long-arm statute (Tenn. Code Ann. § 20-2-214(a)) "if, and only if, the nonresident defendant has such minimum contacts with this state that maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Landers, 872 S.W.2d at 675 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); J.I. Case Corp. v. Williams, 832 S.W.2d 530, 531 (Tenn. 1992)).

         Plaintiff's burden to show personal jurisdiction "is ordinarily not a heavy one, because personal jurisdiction need only be demonstrated by a preponderance of the evidence." Id. "When the issue of personal jurisdiction arises, due process obligates the courts to ascertain whether it is 'fair and substantially just to both parties to have the case tried in the state where the plaintiff has chosen to bring ...


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