Ex parte Honda Manufacturing and Development of Alabama, LLC PETITION FOR WRIT OF MANDAMUS

Rel: March 10, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter.
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may be made before the opinion is published in Southern Reporter.
ALABAMA COURT OF CIVIL APPEALS
OCTOBER TERM, 2022-2023
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_________________________
Ex parte Honda Manufacturing and Development of Alabama,
LLC
PETITION FOR WRIT OF MANDAMUS
(In re: Dennis G. Allison
v.
Honda Manufacturing and Development of Alabama, LLC)
(Etowah Circuit Court: CV-22-900164)
HANSON, Judge.
Honda Manufacturing and Development of Alabama, LLC
("Honda"), petitions this court for a writ of mandamus directing the
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Etowah Circuit Court ("the circuit court") to change the venue of the
underlying action, workers' compensation case, to Talladega County. In
the underlying action, Dennis Allison ("Dennis") allegedly sustained an
injury while working at Honda's automobile-manufacturing facility
located in Talladega County. Dennis resided in Etowah County and filed
a complaint for worker's compensation benefits against Honda in the
Etowah Circuit Court. Honda then filed its motion to transfer venue,
which the circuit court denied. For the reasons discussed herein, we grant
the petition and issue the writ.
Background
The materials submitted in support of and in opposition to the
petition for a writ of mandamus indicate the following factual
background. On April 26, 2022, Dennis sued Honda in Etowah County,
where he resided, after he sustained injuries to his lower back while
working in Honda's manufacturing facility located in Talladega County.
Dennis alleged that he was working in the line and scope of his
employment when he was injured and sought benefits under the
Alabama's Workers' Compensation Act, §25-5-1, et seq., Ala. Code 1975.
On June 15, 2022, Honda filed its motion to change venue, averring that
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Etowah County was an improper venue pursuant to § 6-3-7(a)(3), Ala.
Code 1975, because, Honda said, the events giving rise to Dennis's claim
occurred in Talladega County; its principal office in Alabama was located
in Talladega County; it sells all of its automobiles to a separate legal
entity, and it did not conduct "business by agent" in Etowah County. In
the alterative, Honda argued that if Etowah County is a proper venue,
the most convenient venue is Talladega County under the doctrine of
forum non conveniens.
In support of its contention that it did not conduct business by agent
in Etowah County, Honda attached the affidavit of Michael Gaines,
Division Leader of Honda's manufacturing planning and control division,
which provides, in pertinent part:
"1. I am the Division Leader of the Manufacturing
Planning and Control Division for Honda Development and
Manufacturing of America, LLC (hereinafter 'HDMA') the
defendant in the above matter.
"2. HDMA is a corporation that is organized and
existing under the laws of the State of Ohio. HDMA's
Alabama headquarters, principal place of business and
principal Alabama office is located at 1800 Honda Drive,
Lincoln, Talladega County, Alabama.
"3. HDMA's only manufacturing facility in the State of
Alabama is located at 1800 Honda Drive, Lincoln, Talladega
County, Alabama. The plaintiff's employment with the
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defendant was located at HDMA's manufacturing facility in
Talladega County, and any alleged work injury would have
occurred there as well.
"4. The vehicles manufactured for sale at the
manufacturing facility in Lincoln, Alabama are sold [by]
American Honda Motor Company, Inc. (hereinafter 'AHMCI').
AHMCI is a separate legal entity with its principal place of
business in Torrance, CA.
"5. HDMA is not involved in and does not control the
distribution or sale of the Honda vehicles it manufactures to
consumers anywhere in Alabama or the world. For all the
vehicles sold in Alabama and the United States, AHMCI takes
delivery, title, and possession of the vehicles and AHMCI
arranges for transportation, delivery and the sale of all
vehicles in the United States.
"6. HDMA has no relationship, contractual or otherwise,
with any Honda dealership located in Alabama, nor does
HDMA have any control over the actions, rights or obligations
of any such dealers.
"7. HDMA does have at least one vendor in Etowah
County, Alabama that provides some parts or services used in
the operation of its business or the manufacture of its
vehicles. Any services rendered or parts supplied by these
vendors or any other vendors are performed at or delivered to
the manufacturing plant at 1800 Honda Drive, Lincoln,
Talladega County, AL. HDMA does not take delivery of parts
from any vendors at any location other than 1800 Honda
Drive, Lincoln, Talladega County, AL. HDMA does not have
any ownership interests in any parts supplier in Etowah
County, Alabama and upon information and belief these
vendors are separate legal entities.
"8. HDMA does not do business by agent in Etowah
County, Alabama."
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On August 31, 2022, Gaines's deposition was taken. On October 7,
2022, Dennis filed a response with supporting evidence in opposition to
Honda's motion to change venue. Dennis included parts of Gaines's
deposition which stated that Honda was in an active property-lease
arrangement with the City of Gadsden in Etowah County pursuant to
which Honda paid a total of $22,469.88 per month for the lease of a
warehouse space that stores its shipping racks and containers. According
to Gaines, the shipping racks and containers stored in Etowah County
had been previously used for shipping parts from automobile-part
manufacturers to Honda's manufacturing facility and are stored all over
North America, but, Gaines testified, the shipping racks and containers
are no longer being used by Honda. Gaines also testified that all the
automobiles that Honda produces are sold exclusively to a separate legal
entity and that Honda has no involvement in the distribution or sale of
those automobiles.
Dennis also included a tangible personal-property tax return filed
by Honda. The tax return provided that Honda pays personal-property
tax to Etowah County for the value of the items stored in the warehouse.
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On October 12, 2022, and October 21, 2022, the circuit court held a
hearing on the motion to change venue. After the hearing, the circuit
court denied Honda's motion to transfer venue on October 21, 2022.
Thereafter, Honda timely filed its petition for a writ of mandamus.
Standard of Review
"Mandamus is an extraordinary remedy. An appellate
court will grant a petition for a writ of mandamus only when
'(1) the petitioner has a clear legal right to the relief sought;
(2) the respondent has an imperative duty to perform and has
refused to do so; (3) the petitioner has no other adequate
remedy; and (4) this Court's jurisdiction is properly invoked.'
Ex parte Flint Constr. Co., 775 So. 2d 805, 808 (Ala. 2000)
(citing Ex parte Mercury Fin. Corp., 715 So. 2d 196, 198 (Ala.
1997)). Review by mandamus is not appropriate where the
petitioner has another adequate remedy, such as an appeal.
Ex parte Jackson, 780 So. 2d 681 (Ala. 2000); Ex parte
Inverness Constr. Co., 775 So. 2d 153 (Ala. 2000); Ex parte
Walters, 646 So. 2d 154 (Ala. Civ. App. 1994)."
Ex parte Amerigas, 855 So. 2d 544, 546-47 (Ala. Civ. App. 2003).
" 'The burden of proving improper venue is on the party
raising the issue and on review of an order transferring or
refusing to transfer, a writ of mandamus will not be granted
unless there is a clear showing of error on the part of the trial
judge.' Ex parte Finance America Corp., 507 So. 2d 458, 460
(Ala. 1987). In addition, this Court is bound by the record, and
it cannot consider a statement or evidence in a party's brief
that was not before the trial court. Ex parte America Res. Ins.
Co., 663 So. 2d 932, 936 (Ala. 1995)."
Ex parte Pike Fabrication, Inc., 859 So. 2d 1089, 1091 (Ala. 2002).
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Analysis
In its motion to transfer venue, Honda relied upon § 6-3-7, Ala. Code
1975, which generally governs venue in actions against corporations.1
1We note that our supreme court has applied § 6-3-2, Ala. Code
1975, the statute governing venue for individuals, to certain
partnerships. See Ex parte Miller, Hamilton, Snider & Odom, LLC, 942
So. 2d 334, 336-37 (Ala. 2006)(holding that the defendant law firm, a
limited-liablity company, was a partnership for purposes of venue and
was governed by § 6-3-2(a)(3)); Ex parte Burr & Forman, LLP, 5 So. 3d
557, 565 (Ala. 2008)(holding that venue was proper under § 6-3-2, Ala.
Code 1975, in a case involving a defendant law firm); Ex parte WMS,
LLC, 170 So. 3d 645, 650 (Ala. 2014)(holding that venue was improper
under § 6-3-2, Ala. Code 1975, because the defendant law firm and its
four members sued were not residents of the forum county and no
identifiable act or omission that caused the litigation occurred in the
forum county).
The applicability of § 6-3-2, Ala. Code 1975, to limited-liability
companies, in general, was discussed by Justice Mitchell in Ex parte
Alabama Power Co., [Ms. 1210104, June 30, 2022] __ So. 3d __ (Ala. 2022)
(Mitchell, J., joined by Parker, C.J., and Wise, J., concurring in the
result). In Ex parte Alabama Power Co., which involved an action against
a sanitary service company, a limited-liability company, our supreme
court applied § 6-3-2, Ala. Code 1975, relying on the authorities cited by
Chief Justice Moore in Ex parte WMS, LLC, supra. However, the
statutory basis for the Ex parte WMS, LLC, line of cases treating limited-
liability companies as partnerships for venue purposes has been
undermined by the repeal and replacement of the corporate-law
provisions that underlay the authorities cited in Ex parte WMS, LLC.
See § 10A-5A-1.04(a), Ala. Code 1975 (stating that a limited-liability
company "is a separate legal entity" irrespective of tax status).
In Ex parte Alabama Power Co., supra, Justice Mitchell, in an
opinion concurring with the result, states that a suit against a limited-
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Honda avers that, because it did not conduct business by agent in Etowah
County, Etowah County is an improper venue. Honda also asserts that
even if venue is proper in Etowah County, the action should be
transferred to Talladega County under the doctrine of forum non
liability company is not a suit against its individual members either in
form or in substance. Thus, members of a limited-liability company are
not jointly and severally liable for obligations of the entity. See § 10A-5A-
3.01, Ala. Code 1975. The notion that the proper venue for an action
against limited-liability companies is governed by § 6-3-2, Ala. Code
1975, is implausible. "Allowing [a limited-liability company] to be sued
anywhere one of its members resides is a recipe for inconvenience. [A
limited-liability company] may easily have members who live far from
where it does business or from any other logical venue for a suit against
the entity." Ex parte Alabama Power Co., [Ms. 1210104, June 30, 2022]
__ So. 3d at __ n.5.
In Ex parte Blair Logistics, LLC, 157 So. 3d 951 (Ala. Civ. App.
2014) this court unanimously held that venue was proper under § 6-3-7,
Ala. Code 1975, in a case involving a limited-liability company. Our
supreme court has indicated in a more recent case that § 6-3-7, Ala. Code
1975, applies to limited-liability companies. See Ex parte Road Gear
Truck Equip., LLC, 300 So. 3d 1101 (Ala. 2019)(holding that § 6-3-7, Ala.
Code 1975, the statute governing venue for corporations, applies when
determining proper venue in cases involving limited-liability companies.
Because Ex parte WMS, LLC conflicts with Ex parte Road Gear, this
court is required to follow the later Ex parte Road Gear line of cases:
"This court is bound by the decisions of our supreme court, and, in case
of any doubt as to which decision to follow, the latest pronouncement
control." Ex parte Ocean Reef Devs. II, LLC, 84 So. 3d 900, 905 (Ala. Civ.
App. 2011); see also Gilbreath v. Eastwood Foods, Inc., 575 So. 2d 87, 88
(Ala. Civ. App. 1990), aff'd, 575 So. 29 91 (Ala. 1991).
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conveniens. Based on our resolution of Honda's first argument, we
pretermit discussion of the second argument.
Pursuant to § 25-5-81(a)(1), Ala. Code 1975, a workers'
compensation action may be filed in "the circuit court of the county which
would have jurisdiction of a civil action in tort between the parties."
Venue for a civil action against domestic corporations is governed by § 6-
3-7(a), Ala. Code 1975, which provides:
"(a) All civil actions against corporations may be brought
in any of the following counties:
"(1) In the county in which a substantial part
of the events or omissions giving rise to the claim
occurred, or a substantial part of real property
that is the subject of the action is situated; or
"(2) In the county of the corporation's
principal office in this state; or
"(3) In the county in which the plaintiff
resided, or if the plaintiff is an entity other than
an individual, where the plaintiff had its principal
office in this state, at the time of the accrual of the
cause of action, if such corporation does business
by agent in the county of the plaintiff's residence;
or
"(4) If subdivisions (1), (2), or (3) do not apply,
in any county in which the corporation was doing
business by agent at the time of the accrual of the
cause of action."
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The materials submitted to this court indicate that Honda is a
manufacturing company that manufactures automobiles at its facility in
Talladega County. Honda's principal place of business in Alabama is its
manufacturing facility located in Talladega County. Although Honda
does not maintain any corporate offices or manufacturing facilities in
Etowah County, Honda purchases parts and services from multiple
suppliers located in Etowah County and leases warehouse space in
Etowah County. Dennis is a resident of Etowah County. He was
employed as an assembly worker at Honda's manufacturing facility when
he was allegedly injured.
Dennis argues that venue is proper in Etowah County under § 6-3-
7(a)(3) because he is a resident of Etowah County and because, he alleges,
Honda "does business by agent" there. Relying on Ex parte Road Gear
Truck Equipment, LLC, 300 So. 3d 1101 (Ala. 2019)(plurality opinion),
Dennis argues that Honda "does business by agent" in Etowah County
because it leases a warehouse space in Etowah County for storing
shipping racks and containers; it pays personal property taxes to the
Etowah County Revenue Commissioner based on the value of the racks
and containers stored in the warehouse space it leases; and it has
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multiple suppliers in Etowah County that provide parts and services to
Honda's manufacturing facility.
In Ex parte Road Gear, supra, the plaintiff filed her action in
Marshall County because that was where she resided and, she argued,
the defendant conducted business by agent in Marshall County. The
defendant argued that it did not conduct business by agent in Marshall
County because its principal place of business was in Franklin County;
all the design, manufacturing, and testing of its products occurred in
Franklin County; it did not have any real property or maintain any
records or files in Marshall County; it did not directly market to
consumers in Marshall County; and all of its transactions ended at the
point of sale in Franklin County. Our supreme court stated that "[f]or
more than a century, this Court has held that the sale of products is
typically a function for which a manufacturing business is created," Ex
parte Road Gear, 300 So. 3d at 1110, and held that the defendant did
conduct business by agent in Marshall County because the "evidence
reveal[ed] that customers [were] able to purchase [the defendant's] truck
parts at the [agent's] store by ordering them through [the defendant's]
catalog." Ex parte Road Gear, 300 So. 3d at 1113.
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Further, in Ex parte Road Gear, our supreme court discussed Ex
parte Mercedes-Benz U.S. International, Inc., 290 So. 3d 402 (Ala. 2019),
and its applicability to that case. In Ex parte Mercedes-Benz, our
supreme court held that an automobile manufacturer, whose principal
place of business was located in Tuscaloosa County, was not "doing
business by agent" in Jefferson County even though it purchased
essential supplies for its manufacturing business from a supplier in
Jefferson County. 290 So. 3d at 405. Our supreme court further
determined that the automobile manufacturer "was created to
manufacture automobiles," which occurred in Tuscaloosa County and
that "[b]y contracting with its suppliers of automotive parts … [the
automobile manufacturer was] exercising a corporate power that [was]
'merely a necessary incident' to its business of manufacturing
automobiles; it [was] not exercising a business function for which it was
created." Ex parte Mercedes-Benz, 290 So. 3d at 406 (quoting Farmers' &
Ginners' Cotton Oil Co. v. Baccus, 207 Ala. 75, 77, 92 So. 4, 5 (1921)).
In Ex parte Road Gear, supra, our supreme court concluded that
the "holding in Ex parte Mercedes-Benz turned on the distinction
between 'incidental' act of purchasing supplies and [the automobile
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manufacturer's] core purpose of manufacturing automobiles," 300 So. 3d
at 110, and stated:
"We conclude that the Mercedes Benz Court's analysis
with respect to the purchase of supplies in relation to a
manufacturer's corporate purpose has no application in this
case because, as [the plaintiff] observes, "this case involves
the sale of [the defendant's] products in [Marshall C]ounty."
… For more than a century, this Court has held that the sale
of products is typically a function for which a manufacturing
business is created. In International Cotton-Seed Oil Co. v.
Wheelock, 124 Ala. 367, 370-71, 27 So. 517, 518 (1900), the
Court explained:
" 'Not every act done within the corporate
powers will constitute the business meant by the
[venue] statute. In Sullivan v. Timber Co., [103
Ala. 371, 15 So. 941 (1894)], this court, construing
this statute, approved the test laid down in Beard
v. Publishing Co., 71 Ala. 60 [(1881)], where in
defining the acts of business meant by the
constitutional requirements of foreign
corporations doing business in this State it was
said: "There must be a doing of some of the works
or an exercise of some of the functions for which
the corporation was created to bring the case
within the clause." In applying that test it may not
always be easy to distinguish between acts done in
the exercise of corporate functions and those done
merely within corporate powers. In the case at bar
the chartered purposes of the defendant are not
disclosed by the record except as they may be
inferred from the business in which it was
engaged. From the proof on that subject it appears
that the sale of its products is as much an exercise
of defendant's corporate function as is their
manufacture. The disposition of products is
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ordinarily a function necessary to the continued
operations of a manufacturing corporation."
300 So. 3d at 1109-10.
The analysis in Ex parte Road Gear, supra, with respect to the sale
of a defendant's products in relation to a manufacturer's corporate
function and purpose, has no application in this case because this case
involves the leasing of a warehouse space; paying personal-property tax
based on the value of the property stored in that warehouse; and having
suppliers in a county where Honda has no manufacturing facility or
principal place of business. The Ex parte Road Gear defendant did not
present any evidence indicating that it sold its products in mass to large
retail chain stores. Rather, the testimony presented indicated that the
Ex parte Road Gear defendant provided catalogs of its products to
consumers in the forum county. In contrast, Honda does not have a target
market in Etowah County, and it does not direct the arrival of its
automobiles to Etowah County.
The facts in the present case are more closely aligned with the facts
in Ex parte Mercedes-Benz, in which the automobile-manufacturing
company did not "do business by agent" in the county were the plaintiff
resided, even though it purchased supplies from a supplier in that county.
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Here, Honda leases a warehouse space, pays personal property taxes, and
has suppliers in a county where it does not have a manufacturing facility
or a principal place of business. Honda's activities in Etowah County
were merely a necessary incident of its business. Cf. Ex parte Tyson
Chicken, Inc., 72 So. 3d 1 (Ala. 2011) (holding that workers' compensation
action was not proper in county where employee resided despite
corporation placing product in the stream of commerce at retail locations
in that county, hiring employees who reside in that county, and having
an agent for service of process in the forum county); Ex parte
Greenetrack, Inc., 25 So. 3d 449, 454 (Ala. 2009) (holding that bus service
transporting gaming customers from Pickens County to Greene County,
where gaming facility was located, was incidental to corporate business
functions and therefore did not constitute doing business in Pickens
County as those words were used in the venue statute, even though
gaming facility also had employees in Pickens County and advertised
there); Ex parte City Stores Co., 287 Ala. 385, 252 So. 2d 45 (1971)
(holding that department store did not do business in county other than
county in which it operated retail business even though it delivered
parcels into surrounding counties and advertised in television and
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newspapers which reached surrounding counties); Ex parte R.E.
Garrison Trucking, Inc., 241 So. 3d 15 (Ala. Civ. App. 2017) (holding that
trucking company did not do business in forum county and, therefore,
venue was improper in employee's workers' compensation action against
company, when employee impermissibly allowed truck drivers to park
company trucks on property in the forum county and employee's
recruitment of other truck drivers for the company was incidental to
company's corporate business functions).
In addition, Honda sells the automobiles it manufactures
exclusively to a separate legal entity, and it is not involved in the
distribution or sale of those automobiles. See Ex parte Mercedes-Benz,
290 So. 3d at 407 (rejecting the plaintiff's contention that the automobile-
manufacturing company did business in Jefferson County because "some
of the vehicles it manufactures are eventually sold to the public at
dealerships in Jefferson County[,]" when there was no evidence
indicating that the automobile-manufacturing company was involved in
the retail sale of any of its manufactured automobiles; instead, all
automobiles it manufactured were sold to a separate legal entity).
"It is well-established that '[a] corporation "does
business" in a county for purposes of § 6-3-7[, Ala. Code 1975,]
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if, with some regularity, it performs there some business
functions for which it was created.' See Ex parte SouthTrust
Bank of Tuscaloosa Cty., N.A., 619 So. 2d 1356, 1358 (Ala.
1993); Ex parte Joiner, 486 So. 2d 402, 403 (Ala. 1986); and
Ex parte Jim Skinner Ford, Inc., 435 So. 2d 1235, 1237 (Ala.
1983). This principle is based on a long recognized distinction
between the exercise of corporate powers that are 'merely a
necessary incident' to a corporation's business and 'the
exercise of functions for which the corporation was created.'
Farmers' & Ginners' Cotton Oil Co. v. Baccus, 207 Ala. 75, 77,
92 So. 4, 5 (1921)."
Ex parte Mercedes-Benz, 290 So. 3d at 406. The contact that Honda has
with Etowah County is "merely a necessary incident" to its business and
not the exercise of functions for which Honda was created, i.e.,
manufacturing vehicles.
Honda has demonstrated a clear legal right to have the underlying
action transferred to the Talladega Circuit Court. We grant the petition
and direct the circuit court to vacate its order denying the motion to
change venue and to enter an order transferring the underlying action to
the Talladega Circuit Court.
PETITION GRANTED; WRIT ISSUED.
Thompson, P.J., and Moore and Fridy, JJ., concur.
Edwards, J., concurs in the result, without opinion.
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