Harry S. Peterson Co. v. NAT. UNION FIRE INSURANCE CO. ( 1993 )

Birdsong, Presiding Judge,

concurring in part and dissenting in part.

1. I concur fully in Divisions 1 and 2 of the majority opinion, and with the conclusion in Division 4 thereof that under Georgia law, a trial court would abuse its discretion by dismissing a case on grounds of forum non conveniens.

2. I dissent as to Division 3.,

(a) Appellant asserts the trial court erred in applying Virginia law which purported to restrict venue to the county in Virginia where the construction project was situated.

“The traditional method of resolving choice-of-law issues is through a tripartite set of rules, which are lex loci contractus, lex loci delicti, and lex fori. Under the rule of lex loci contractus, the validity, nature, construction, and interpretation of a contract are governed by the substantive law of the state where the contract was made, except that where the contract is made in one state and is to be performed in another state, the substantive law of the state where the contract is performed will apply. [Cit.] Under the rule of lex loci delicti, tort cases are governed by the substantive law of the state where the tort was committed. [Cit.] Under the rule of lex fori, procedural or remedial questions are governed by the law of the forum, the state in which the action is brought.” Fed. Ins. Co. v. Nat. Distrib. Co., 203 Ga. App. 763, 765 (417 SE2d 671).

In Biddinger v. Fletcher, 224 Ga. 501, 504 (162 SE2d 414), it was held that, as between counties in the same jurisdiction, venue statutes relate to procedure, not jurisdiction. Compare Hatfield v. Leland, 143 Ga. App. 528 (239 SE2d 169). If venue is a matter of procedure in this case then under the rule of lex loci fori, procedural questions are determined by the law of the forum. However, interstate venue (venue between different counties) is a jurisdictional matter whereas municipal venue (venue between different places in the same jurisdiction) generally is a procedural matter. Tennessee Coal &c. R. Co. v. George, 233 U. S. 354, 356 (34 SC 587, 58 LE 997). The question of venue among sovereign states is thus jurisdictional rather than procedural. Tennessee Coal, supra, 233 U. S. at 356, 360. Nevertheless, the law of the forum state, in this instance Georgia, would still apply. In Tennessee Coal, supra, 233 U. S., the United States Supreme Court affirmed our judgment in Tennessee Coal &c. R. Co. v. George, 11 Ga. App. 221 (75 SE 567), holding: “The courts of the sister [s]tate trying the case would be bound to give full faith and credit to all those substantial provisions of the statute which inhered in the cause of action or which name conditions on which the right to sue depend. But venue is no part of the right; and a [s]tate cannot create a transitory cause of action and at the same time destroy the right to sue on that transitory cause of action in any court having jurisdiction. That jurisdiction is to be determined by the law of the [forum] court’s creation and cannot be defeated by the extraterritorial operation of a statute of another [s]tate, even though it created the right of action.” (Emphasis supplied.) Tennessee Coal, supra, 233 U. S. at 360; see also Nailen v. Ford Motor Co., 690 FSupp. 552, 556, n. 3 (D.C. S.D. Miss.). Thus, the United States Supreme Court concluded “a transitory cause of action can be maintained in another [s]tate even though the statute creating the cause of action provides that the action must be brought in local domestic courts.” Tennessee Coal, supra, 233 U. S. at 361. In Slaton v. Hall, 172 Ga. 675, 682-683 (3) (158 SE 747), our Supreme Court cited and applied the holdings of the United States Supreme Court and our court in the Tennessee Coal cases, and held that the trial judge did not err in striking an amendment to defendant’s answer which asserted that under Alabama law the plaintiff could sue upon a transitory cause of action only in Alabama. Accordingly, we find that Virginia could not lawfully preclude, by its statutes, the State of Georgia from exercising its own jurisdiction and applying its own rules of law in determining venue (whether venue is classified procedural in nature or, as interstate venue and jurisdictional within the meaning of Tennessee Coal, supra, 233 U. S.).

(b) Appellant asserts the trial court erred in enforcing the payment bond’s forum selection or limiting clause. The payment bond pertinently provided: “3. No suit or action shall be commenced hereunder by any claimant . . . (c) other than in a state court of competent jurisdiction in and for the county or other political subdivision of the state in which the project or any part thereof, is situated, or in the United States District Court for the district in which the project, or any part thereof, is situated, and not elsewhere.”

Pretermitting whether this issue generally would be determined under the rule of lex loci contractus, thereby causing Virginia law to be applied, is whether the forum limiting clause in this contract would violate Georgia public policy. “The comity of [s]tates would not require the courts of this [s]tate to enforce a cause of action when to do this would be contrary to the established policy of the [s]tate.” Reeves v. Southern R. Co., 121 Ga. 561, 565 (49 SE 674). Thus, even if an application of the traditional tripartite set of rules pertaining to the methods of resolving choice-of-law issues “renders the law of another state applicable, the forum, within constitutional limits, is not required to give the law of another state extra[-]territorial effect. That is only done as a matter of courtesy or comity, which will not be enforced if the law of the other state contravenes the public policy of the forum.” (Emphasis supplied.) Fed. Ins. Co., supra at 766. Commercial Credit Plan v. Parker, 152 Ga. App. 409, 412-413 (263 SE2d 220) is distinguishable and not controlling; in Commercial Credit we concluded the Georgia Industrial Loan Act did not express a public policy as to a Georgia borrower but rather expressed public policy toward the assiduous regulation of and compliance by those who make certain loans in Georgia, thereby allowing the South Carolina law to be applied as a matter of comity. Notwithstanding the laws of other jurisdictions, in Georgia a provision of a contract fixing the venue of an action on the contract as to future litigation (venue limiting provision) is void, as contrary to public policy. Cartridge Rental Network v. Video Entertainment, 132 Ga. App. 748 (209 SE2d 132); Fidelity &c. Co. of Maryland v. Gainesville Iron Works, 125 Ga. App. 829 (189 SE2d 130); Davis v. Aetna Cas. &c. Co., 696 FSupp. 634, 640, n. 4. (D.C. N.D. Ga.). Such venue limiting provisions are unenforceable in Georgia. Id. Moreover, the public policy discussed in Fidelity &c. Co., supra, a case containing a venue limiting clause substantially the same as the venue limiting clause in the case at bar, “was not solely confined to the statute therein involved but was based on broad considerations of public policy against limiting venue by contract” (Cartridge, supra). Accordingly, I can only conclude that the venue limiting clause in the payment bond contract is against Georgia public policy and unenforceable in our courts. The majority would disapprove the language in Cartridge and ignore the persuasive language in Davis, supra; with this I cannot agree.

(c) As tacitly recognized by the majority, appellee skillfully importuned this court to apply certain legal principles, which actually apply to the doctrine of forum non conveniens, in the disposition of the appellate issues before this court. Other jurisdictions apply this doctrine, and on occasion it can be a great boom to judicial economy. Nevertheless, Georgia courts are not at liberty to apply this doctrine, and are obligated to liberally interpret the law so as to maximize the jurisdictional reach of the protective arms of our judicial system. The majority correctly recognizes that under existing Georgia law, a trial court would abuse its discretion by dismissing a case on the grounds of forum non conveniens. Compare Southern R. Co. v. Goodman, 259 Ga. 339 (380 SE2d 460); Gay v. Piggly Wiggly Southern, 183 Ga. App. 175, 182 (4) (358 SE2d 468); Smith v. Bd. of Regents &c. of Ga., 165 Ga. App. 565 (302 SE2d 124). Although occasionally an anomaly may result wherein a case is litigated in Georgia which perhaps could have been litigated more conveniently elsewhere, our jealous protection of our jurisdiction has withstood the test of time and has proven to be in the long-term best interests of the citizens of this state and entirely compatible with the constitutional right of access to our courts (see, e.g., Ga. Const. 1983, Art. I, Sec. I, Par. XII; OCGA § 1-2-6 (6)).

Decided July 16, 1993. Weisz & Port, Peter R. Weisz, Robert C. Port, for appellant. Hotz & Associates, J. Tyler Tippett, for appellee.

Likewise, cogent public interest considerations support the retention of a public policy which broadly rejects the limiting of venue by contract. While the immediate effect of the majority’s decision is to aid judicial economy, I am concerned that, if their judgment stands, a large number of persons in our state will have no genuine future choice but to accede to unfavorable venue selection clauses placed in contracts by those occupying unequal, superior bargaining positions.

Accordingly, I respectfully dissent as to Division 3.

I am authorized to state that Presiding Judge McMurray and Judge Blackburn join in this dissent.