J. Alexander's Holdings, LLC v. Republic Services, Inc. ( 2017 )

05/12/2017
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
February 21, 2017 Session
J. ALEXANDER’S HOLDINGS, LLC v. REPUBLIC SERVICES, INC.
Appeal from the Circuit Court for Davidson County
No. 16C1099 Thomas W. Brothers, Judge
___________________________________
No. M2016-01526-COA-R3-CV
___________________________________
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
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.
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.
OPINION
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?
1
In general sessions court, the parties filed several pleadings in addition to the warrant that initiated the
case; those pleadings were included in the circuit court record and as part of the record in this appeal.
2
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.
2
Though the statute is not referenced in the order, the court cited the statute in its oral ruling.
3
Our Supreme Court in Gordon stated:
“Unlike Tenn. R. Civ. P. 12.02(6) motions for failure to state a claim that are supported
or opposed by matters outside the pleadings and Tenn. R. Civ. P. 12.03 motions for
judgment on the pleadings, Tenn. R. Civ. P. 12.02(2) [and 12.02(3)] motions are not
converted to motions for summary judgment when either or both parties submit matters
outside the pleadings either in support of or in opposition to the motion.”
Gordon, 300 S.W.3d at 642 (citing Chenault v. Walker, 36 S.W.3d 45, 55 (Tenn. 2001); see also Tenn. R.
Civ. P. 12.02.
3
Ohio 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
4
Tennessee Code Annotated section 20-2-214 states:
(a) Persons who are nonresidents of this state and residents of this state who are outside
the state and cannot be personally served with process within this state are subject to the
jurisdiction of the courts of this state as to any action or claim for relief arising from:
(1) The transaction of any business within this state;
(2) Any tortious act or omission within this state;
(3) The ownership or possession of any interest in property located within this
state;
(4) Entering into any contract of insurance, indemnity or guaranty covering any
person, property or risk located within this state at the time of contracting;
(5) Entering into a contract for services to be rendered or for materials to be
furnished in this state;
(6) Any basis not inconsistent with the constitution of this state or of the United
States;
(7) Any action of divorce, annulment or separate maintenance where the parties
lived in the marital relationship within this state, notwithstanding one party's
subsequent departure from this state, as to all obligations arising for alimony,
4
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 non-
resident 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 the action.’” First Cmty. Bank,
N.A. 489 S.W.3d at 383 (quoting Gordon, 300 S.W.3d at 646).
There are two types of personal jurisdiction: general and specific. The exercise of
general personal jurisdiction “is appropriate when the plaintiff’s cause of action does not
arise from and is not related to the defendant’s contacts with the forum state”; specific
personal jurisdiction applies “when a plaintiff’s cause of action is based on the
defendant’s activities in or contacts with the forum state.” Gordon, 300 S.W.3d at 648.
Inasmuch as the incident giving rise to this suit occurred when the truck hit the restaurant
in Michigan, it does not arise out of or relate to Republic’s contacts with Tennessee;
accordingly, we resolve this issue as a matter of general jurisdiction.
custody, child support or marital dissolution agreement, if the other party to the
marital relationship continues to reside in this state.
(b) As used in this section, “person” includes corporations and all other entities that
would be subject to service of process if present in this state.
(c) Any such person shall be deemed to have submitted to the jurisdiction of this state
who acts in the manner described in subsection (a) through an agent or personal
representative.
5
Our holding on this issue also addresses Republic’s argument that the defense was waived.
5
A succinct statement of the analysis we employ to resolve this issue is set forth in
First Cmty. Bank, N.A. v. First Tennessee Bank, N.A:
. . . [T]he appropriate determination of whether a nonresident corporation
may be subject to general personal jurisdiction in Tennessee is whether the
corporation has continuous and systematic contacts with Tennessee so
substantial as to render the corporation “essentially at home” here in such a
way which does not offend traditional notions of fair play and substantial
justice. The determination of whether a nonresident defendant’s contacts
are substantial enough to give rise to general jurisdiction is “extremely fact
dependent” and “entails a careful, non-mechanical evaluation of the facts
with particular focus on the nonresident defendant’s contacts with the
forum state.”
489 S.W.3d 369 at 385 (internal citations omitted).
In its statement of undisputed facts, Republic relied upon the statements in
Matthew Marquis’ affidavit that the contract for the Livonia, Michigan restaurant was
“between J. Alexander’s Restaurant and Republic Services, Inc., d/b/a/ Allied Waste
Services” and was executed in Pontiac, Michigan on August 30, 2011; that Republic “is
not currently registered to do business in the State of Tennessee, nor does it transact
business in the State of Tennessee”; and that “[t]he alleged accident that is the subject of
the lawsuit occurred at Plaintiff’s restaurant in Livonia, Michigan.”
In response, J. Alexander’s filed the declarations of Mark Parkey, which state that
he signed five agreements between J. Alexander’s and Republic for waste removal
services, one for services at the Livonia, Michigan restaurant and four for services in
Tennessee; that the four Tennessee agreements “[were] negotiated on behalf of J.
Alexander’s by a broker located in Franklin, Tennessee”; that all of the agreements were
signed by him on behalf of J. Alexander’s at the Nashville office of J. Alexander’s; that
“Republic Services provided and provides on a regular basis, waste management services
to J. Alexander’s restaurants in Tennessee”; and that “Republic sent invoices for services
provided under each of these [four] contracts to Franklin, Tennessee for payment by J.
Alexanders.”6 Four of the agreements, including the agreement for the Livonia,
Michigan restaurant, are on a form prepared by and bearing the logo of Allied Waste
Services;7 the billing address listed on all five agreements is the same post office box in
Franklin, Tennessee.
6
The agreement for the Livonia, Michigan restaurant is attached to the affidavit of Mr. Marquis while the
four agreements for the Tennessee restaurants are attached to the declaration of Mr. Parkey.
7
In his affidavit, Mr. Marquis states that Republic does business as Allied Waste Services.
6
This evidence establishes that the parties had a contractual relationship whereby
Republic was to provide waste removal services at J. Alexander’s restaurants in
Tennessee and Michigan, and that payment for such services would be made in
Tennessee. The contacts within Tennessee engendered through the contractual
relationship are continuous and systematic, as prescribed by First Cmty. Bank, N.A., and
are sufficient to give the court general personal jurisdiction over Republic.8
B. Venue
“Venue is the personal privilege of a defendant to be sued in particular counties; it
may be waived and is waived by a defendant who defends upon the merits without first
interposing an objection to improper venue.” Kane v. Kane, 547 S.W.2d 559, 560 (Tenn.
1977). Venue in this case is governed by Tennessee Code Annotated section 20-4-104,
which reads:
For all civil actions, if the defendant is not a natural person, the action shall
be brought in:
(1) The county where all or a substantial part of the events or omissions
giving rise to the cause of action accrued;
(2) The county where any defendant organized under the laws of this state
maintains its principal office; or
(3)(A) If the defendant is not organized under the laws of this state, the
county where the defendant's registered agent for service of process is
located; or
(B) If the defendant does not maintain a registered agent within this
state, the county where the person designated by statute as the
defendant's agent for service of process is located.
Tenn. Code Ann. § 20-4-104.
J. Alexander’s argues, consistent with section 20-4-104(3)(B), that venue is proper
in Davidson County because Republic transacts business in Tennessee but does not have
a registered agent in Tennessee; citing the same statute, Republic argues that venue in
Davidson County is not proper.
8
While Republic argues in its brief that “The Tennessee Contracts are between Appellant and other
corporate entities [of Republic Services] which are separate and distinct from Republic [Services, Inc.],
and registered and authorized to do business in Tennessee,” there is no citation to proof in the record to
support this statement and, from our review of the record, we find none.
7
There is no dispute that Republic was not organized under Tennessee law;
however, the contracts present in the record show that Republic has transacted business in
Tennessee. Under this circumstance, Tennessee Code Annotated section 20-4-104(3)(B),
read in conjunction with section 48-15-104(b),9 operates to make the Secretary of State
the registered agent for Republic because Republic does not have a registered agent in
this state. Because the Secretary of State’s office is in Davidson County, venue is proper
in Davidson County.
C. Forum Non Conveniens
“Generally speaking, forum non conveniens deals with the discretionary power of
the court to decline to exercise a possessed jurisdiction whenever, because of varying
factors, it appears that the controversy may be more suitably or conveniently tried
elsewhere.” Pantuso, 485 S.W.3d at 887 (quoting Zurick, 426 S.W.2d at 769). With
respect to the doctrine of forum non conveniens, the Tennessee Supreme Court, in Zurick
v. Inman, stated that “courts of general jurisdiction in Tennessee have inherent power to
apply the doctrine of forum non conveniens as a ground for refusal to exercise jurisdiction
over a cause of action arising beyond the boundaries of Tennessee.” 426 S.W.2d at 771.
This doctrine “places a high burden on the defendant seeking dismissal; indeed,
‘unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum
should rarely be disturbed.’ ” Pantuso 485 S.W.3d at 887–88 (quoting Zurick, 426
S.W.2d at 772). The application of the doctrine is a matter within the trial court’s
discretion, and our review on appeal is limited to whether there has been an abuse of
discretion. Id.
In Pantuso, this court discussed the doctrine of forum non conveniens at length:
[T]he Zurick Court set out a comprehensive test for determining whether
the doctrine of forum non conveniens requires dismissal of an action in
favor of another, more suitable forum. First, the doctrine “presupposes the
court has jurisdiction of both the parties and the subject-matter.” Zurick,
9
That statute reads as follows:
(b) Whenever a domestic or foreign corporation authorized to do business in this state
fails to appoint or maintain a registered agent in this state, whenever its registered agent
cannot be found with reasonable diligence, whenever a foreign corporation shall transact
business or conduct affairs in this state without first procuring a certificate of authority to
do so from the secretary of state, or whenever the certificate of authority of a foreign
corporation shall have been withdrawn or revoked, then the secretary of state shall be an
agent of such corporation upon whom any such process, notice or demand may be served.
Tenn. Code Ann. § 48-15-104(b).
8
426 S.W.2d at 771. Next, there must exist “at least one forum other than
the forum chosen where the plaintiff may bring his cause of action, and it is
necessary the trial court determine such other forum is available.” Id. at
772. If an alternative forum is established, the court must then consider the
private interests of the litigants, which may include the enforceability of
any judgment obtained; “ ‘the relative ease of access to sources of proof;
availability of compulsory process for attendance of unwilling, and the cost
of obtaining attendance of willing, witnesses; possibility of view of
premises, if view would be appropriate to the action; and all other practical
problems that make trial of a case easy, expeditious and inexpensive.’ ” Id.
(quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S. Ct. 839, 843, 91
L. Ed. 1055 (1947)). In considering these factors, the court must “weigh
relative advantages and obstacles to fair trial.” Zurick, 426 S.W.2d at 771
(quoting Gilbert, 330 U.S. at 508, 67 S. Ct. 839). The Court explained that
in considering these factors, the court’s purpose is to ensure that “the
plaintiff may not, by choice of an inconvenient forum, ‘vex,’ ‘harass,’ or
‘oppress’ the defendant by inflicting upon him expense or trouble not
necessary to his own right to pursue his remedy.” Zurick, 426 S.W.2d at
772 (quoting Gilbert, 330 U.S. at 508, 67 S. Ct. 839).
In addition to the private factors outlined above, the Zurick Court held that
courts must also consider any applicable public factors. According to the
Court:
Administrative difficulties follow for courts when litigation is
piled up in congested centers instead of being handled at its
origin. Jury duty is a burden that ought not to be imposed
upon the people of a community which has no relation to the
litigation. In cases which touch the affairs of many persons,
there is reason for holding the trial in their view and reach
rather than in remote parts of the country where they can
learn of it by report only. There is a local interest in having
localized controversies decided at home. There is an
appropriateness, too, in having the trial of a diversity case in a
forum that is at home with the state law that must govern the
case, rather than having a court in some other forum untangle
problems in conflict of laws, and in law foreign to itself.
Zurick, 426 S.W.2d at 772 (quoting Gilbert, 330 U.S. at 508, 67 S. Ct. 839).
Pantuso 485 S.W.3d at 888–89.
9
The cause of action in the instant case arose when the truck hit the J. Alexander’s
restaurant in Livonia, Michigan. We have determined that Republic is subject to personal
jurisdiction in Tennessee and that venue is proper in Davidson County. The parties do
not dispute that the Davidson County Circuit Court has subject matter jurisdiction and J.
Alexander’s does not argue that an alternative available forum does not exist in
Michigan. Thus, the first two criteria of Pantuso are met.
Contending that Republic “presented no facts or competent proof in favor of its
position,” J. Alexander’s argues that the trial court did not weigh the public and private
factors discussed in Pantuso. We do not agree. The proof in the record pertinent to these
factors consists of the affidavit of Matthew Marquis, who stated, “The alleged accident
that is the subject of the lawsuit occurred at Plaintiff’s restaurant in Livonia, Michigan,
and all witnesses and evidence concerning the alleged accident are located in Livonia,
Michigan.” J. Alexander’s did not file any countervailing proof on this point but asserted
that it “intends to call witnesses at trial that are located at its corporate headquarters,
located in Nashville, Tennessee.”
In announcing its ruling, the court discussed the private factors and determined
that all dictated in favor of Michigan as the forum jurisdiction; the court also held,
without discussion, that the public factors favored Michigan. Upon the record before us,
the court applied the relevant law and considered the private factors as well as the public
factors. The determination that Michigan is a more favorable jurisdiction to adjudicate
this case is supported by the record and is consistent with applicable law; the court did
not abuse its discretion in dismissing this case pursuant to the doctrine of forum non
conveniens.
D. Motion to Amend
J. Alexander’s also appeals the denial of the motion to amend the complaint. The
proposed amendment sought an award of punitive damages and a declaratory judgment
that “Republic’s breach of the Agreement and failure to correct the damage caused to the
Restaurant allows J. Alexander’s to terminate the Agreement immediately without
penalty.” The claims sought to be added are not germane to our disposition of this
appeal; however, we cannot conclude that the amendment would be “futile,” as held by
the trial court. In light of our disposition of this case, we have determined that the order
denying the amendment should be vacated in order to permit J. Alexander’s to pursue
these claims should they choose to bring the action in Michigan.
10
III. CONCLUSION
For the foregoing reasons, we reverse the judgment holding that the trial court
lacked personal jurisdiction and that venue was improper; we affirm the judgment
dismissing the case on the basis of forum non conveniens; and we vacate the denial of J.
Alexander’s motion to amend.
RICHARD H. DINKINS, JUDGE
11