American Family Life Assurance of Columbus v. Virgil Ellison

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2007-IA-01610-SCT
AMERICAN FAMILY LIFE ASSURANCE OF
COLUMBUS
v.
VIRGIL ELLISON
DATE OF JUDGMENT: 08/28/2007
TRIAL JUDGE: HON. ROBERT G. EVANS
COURT FROM WHICH APPEALED: SMITH COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: SCOTT TIMOTHY ELLZEY
JAMES GRADY WYLY, III
MICHAEL FRANKLIN HELD
ATTORNEY FOR APPELLEE: EUGENE COURSEY TULLOS
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: REVERSED AND REMANDED - 02/19/2009
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
DICKINSON, JUSTICE, FOR THE COURT:
¶1. In this venue case, the question presented is whether the trial court abused its
discretion when it denied the defendant’s motion to transfer venue to Rankin County.
Because we conclude that venue is proper only in Rankin County, we reverse.
FACTS AND PROCEDURAL HISTORY
¶2. On October 10, 2003, American Family Life Assurance of Columbus (AFLAC) agents
Richard and Anita Atkinson issued a life insurance policy to Henry Myers, whose son, Virgil
Ellison, was the named beneficiary under the policy. Myers died on October 13, 2003, and
Ellison filed a claim with AFLAC for the insurance benefits. In a letter dated January 28,
2004, AFLAC refused the claim, stating “we must decline this claim and rescind this policy.”
Ellison filed a complaint in the Circuit Court of Smith County against AFLAC; Richard and
Anita Atkinson, individually; and Richard and Anita Atkinson d/b/a AFLAC/Anita Atkinson;
alleging that all “breached their duty of fair dealing and good faith owed to [Ellison] in
failing to pay the full benefits to which he is entitled . . . .”
¶3. AFLAC filed its answer and asserted improper venue as one of its affirmative
defenses. Thereafter, Richard and Anita Atkinson filed separate answers.
¶4. AFLAC filed a “Rule 82(d) Motion to Transfer,” arguing that Ellison’s complaint
“fail[ed] to establish that any alleged substantial acts or omissions or any alleged events that
caused [Ellison’s] alleged injuries occurred in Smith County, Mississippi so as to provide
venue in this [c]ourt.” AFLAC claimed venue was proper in Rankin County pursuant to
Mississippi Code Annotated Section 11-11-3, because that was where its codefendants
resided and had their principal place of business.
¶5. Ellison filed a brief in response to AFLAC’s motion to transfer venue, arguing that
venue was proper in Smith County under Mississippi Code Annotated Section 11-11-3,
because his cause of action occurred or accrued in Smith County. AFLAC responded to
Ellison’s brief by reiterating its previous arguments.
¶6. In denying AFLAC’s motion to transfer, the circuit judge stated:
My reasons for reaching that conclusion are as follows, to-wit:
1. According to the complaint, the plaintiff is a resident of Smith County,
Mississippi;
2. Proceeds from the life insurance policy alleged in the complaint were
payable to the plaintiff in Smith County; and
2
3. Failure to pay was a substantial omission and gave rise to this cause of
action, thus satisfying paragraph (1)(a)(i) of Section 11-11-3.
Thereafter, the circuit court entered its official order denying AFLAC’s motion for change
of venue. AFLAC filed a petition for interlocutory appeal, which this Court granted.
¶7. AFLAC claims the trial court erred in denying its motion to transfer venue.
Specifically, AFLAC claims that venue is not proper in Smith County, as “(1) all resident
[d]efendants reside or have their principal place of business in Rankin County, and (2) no
alleged substantial acts, omissions or events that caused claimed injury occurred in Smith
County.”
ANALYSIS
¶8. This Court will not disturb a trial court’s ruling regarding venue “unless it clearly
appears that there has been an abuse of discretion or that the discretion has not been justly
and properly exercised under the circumstances of the case.” Hedgepeth v. Johnson, 975
So. 2d 235, 237 (Miss. 2008) (quoting Hayes v. Entergy Miss., Inc., 871 So. 2d 743, 746
(Miss. 2004)).
¶9. Mississippi Code Annotated, Section 11-11-3(1)(a)(i) states:
Civil actions of which the circuit court has original jurisdiction shall be
commenced in the county where the defendant1 resides, or, if a corporation, in
the county of its principal place of business, or in the county where a
substantial alleged act or omission occurred or where a substantial event that
caused the injury occurred.
1
The term “the defendant” also extends to and embraces the plural. See Miss. Code Ann. §
1-3-33 (Rev. 2005).
3
Miss. Code Ann. § 11-11-3(1)(a)(i) (Rev. 2004). Thus, according to the plain language of
the statute, Ellison may set venue in either: (1) the county where the defendant resides; (2)
the county of a corporation’s principal place of business; or (3) the county “where a
substantial alleged act or omission occurred or where a substantial event that caused the
injury occurred.”
¶10. It is undisputed that the Atkinsons (who are defendants) reside in Rankin County, and
that AFLAC’s principal place of business is outside Mississippi. Thus, pursuant to the plain
language of the statute, the action must be commenced in Rankin County, unless Ellison can
show that a “substantial act or omission” or a “substantial event causing the injury” occurred
in Smith County. However, in searching the record for activity which occurred in Smith
County, we find only that Ellison was in Smith County when he was informed of the denial
of insurance benefits. We previously have held that simply experiencing the effects of an act
or omission in a county is insufficient to establish venue. See Med. Assurance Co. v. Myers,
956 So. 2d 213 (Miss. 2007) (“receipt of information in [the plaintiff-insured’s county of
residence] is a passive function of his presence there and is not a substantial event causing
the damages he claims”). Therefore, according to the plain language of section 11-11-
3(1)(a)(i), venue is proper only in Rankin County.
¶11. In addressing the concerns raised by our learned colleagues in the dissent, we agree
that the Atkinsons failed to raise the defense of improper venue and, thus, waived it. We do
not agree, however, that the defense belongs exclusively to the Atkinsons, nor do we agree
that their waiver acted to completely remove them from the action as far as determining
proper venue for the case. Although we have not squarely faced this question before, the
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Oklahoma Supreme Court has, and it framed the issue well, stating: “The fact that one of
several defendants submits to the jurisdiction of the court does not change the venue of the
cause of action. It is merely a waiver of that defendant’s personal right to demand a trial of
the case in the county where the venue is fixed by statute.” City of Cleveland v. Cheatham,
285 P.2d 205, 207 (Okla. 1955) (emphasis added).
¶12. Thus, the dissent’s decision to analyze this case under paragraph (b) is incorrect, as
the venue of the “cause of action” is proper in Rankin County under paragraph (a). We
disagree with the dissent’s claim that our holding “renders the Atkinsons’ waiver
ineffectual,” as they did effectively waive their personal right to require a transfer of venue
to Rankin County.
¶13. Finally, the dissent incorrectly reads Mississippi Rule of Civil Procedure 12(h)(1) as
conferring an exclusive right on a particular defendant to assert a defense, and that one
defendant may waive the defense on behalf of all defendants. Nothing in the rule or our
jurisprudence suggests such an interesting interpretation.
CONCLUSION
¶14. For the reasons stated above, we reverse the trial court’s denial of AFLAC’s motion
to transfer venue and remand this case to the trial court with instructions to transfer it to the
Circuit Court of Rankin County.
¶15. REVERSED AND REMANDED.
WALLER, C.J., CARLSON, P.J., LAMAR AND PIERCE, JJ., CONCUR.
GRAVES, P.J., SPECIALLY CONCURS WITH SEPARATE WRITTEN OPINION.
RANDOLPH, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY
KITCHENS AND CHANDLER,JJ.
5
GRAVES, PRESIDING JUSTICE, SPECIALLY CONCURRING:
¶16. Today the majority reaches a conclusion that is consistent with Mississippi Code
Section 11-11-3 and this Court’s prior interpretations of that statute. However, because the
majority’s decision fails to address the relevant legal precedent, I must specially concur.
Since the venue statute was amended relatively recently, there are only a few cases from this
Court regarding its interpretation. Most pertinent to today’s decision are this Court’s
decisions in Baptist Memorial Hospital-DeSoto, Inc. v. Bailey, 919 So. 2d 1 (Miss. 2005),
and Medical Assurance Company v. Myers, 956 So. 2d 213 (Miss. 2007). The majority cites
Myers once and ignores Bailey entirely despite the fact that Bailey and Myers require that
we reach the result reached by the majority today. Although we are bound by these prior
decisions, I disagree with the legal analyses and outcomes in both those cases.
¶17. In Bailey, the plaintiff sued the defendants (a corporation and an individual doctor)
for medical malpractice in Quitman County. Bailey, 919 So. 2d at 1. The defendants sought
to transfer venue to DeSoto County. Id. The individual defendant resided in Tennessee, and
the corporate defendant had its principal place of business in DeSoto County. Id. at 2. The
alleged malpractice also occurred in DeSoto County. Id. The plaintiff, however, resided in
Quitman County. Id. at 1-2. The plaintiff asserted that because the individual defendant in
the case was a nonresident, the venue statute 2 allowed the plaintiff to sue in his county of
residence. This Court rejected that argument and concluded that because the corporate
defendant’s principal place of business was located in DeSoto County, Mississippi, the
2
At the time, the venue statute included similar, but not identical, language to that in the
current version of Mississippi Code 11-11-3(1)(a)-(b). See Bailey, 919 So. 2d at 3.
6
plaintiff could not bring suit in his county of residence. Id. at 4. This Court stated that “the
Legislature never intended an interpretation of the venue statutes that would allow a resident
defendant to be sued in the plaintiff’s county of residence simply because a non-resident
defendant, be it an individual or a corporation[,] is joined in the same suit.” Id. at 3. The
Court further stated that “[t]he reasoning and logic in Capital City Ins[urance] Co[mpany]
control the case sub judice.” Id. (citing Capital City Ins. Co. v. G.B. “Boots” Smith Corp.,
889 So. 2d 505 (Miss. 2004)). The Court then quoted Capital City Insurance Company:
“The additional option of suing in the plaintiff’s home county is not available to a plaintiff
when a resident defendant is sued.” Bailey, 919 So. 2d at 4 (quoting Capital City Ins. Co.,
889 So. 2d at 516-17). Therefore, this Court concluded that venue was proper in DeSoto
County and not in Quitman County. Bailey, 919 So. 2d at 4.
¶18. In Myers, the plaintiff, Dr. Ronald V. Myers, sued the defendant insurance company
in Holmes County, alleging that it had wrongfully refused to renew the insurance policy
covering Dr. Myers’ medical clinics. Myers, 956 So. 2d at 214. The defendant moved to
transfer the case to Madison County, which was the location of the defendant’s principal
place of business. Id. at 215, 217. Holmes County was the county 1) in which Dr. Myers
completed his insurance application, 2) from which he paid an insurance premium under his
policy, 3) from which he communicated with the defendant about his insurance policy, 4) in
which he received the denial letter, and 5) in which one of his insured clinics was located.
Id. at 218. This Court held that under Mississippi Code Section 11-11-3, venue was proper
in Madison County, and not in Holmes County. Id. at 220. This Court reasoned that
although the plaintiff “experienced being uninsured in Holmes County . . . this could be the
7
result of substantial acts, omissions, or injury-causing events which occurred in Madison
County alone.” Id. at 219. Thus, this Court held that venue was only proper in Madison
County and was, therefore, improper in Holmes County. Id. at 220.
Table 1
Case Counties Involved Mississippi Supreme Court’s Ruling
Bailey Quitman and DeSoto Venue Proper in DeSoto County
Myers Holmes and Madison Venue Proper in Madison County
¶19. This Court held in Bailey that a plaintiff may not bring suit in his or her county of
residence when one of the defendants is domiciled in Mississippi, despite the involvement
of a nonresident defendant. Bailey, 919 So. 2d at 3. This Court held in Myers that merely
experiencing the effects of a substantial act, omission, or event that occurred in a different
county is insufficient to establish proper venue. Myers, 956 So. 2d at 219. On the basis of
these two cases and the plain language of Mississippi Code Section 11-11-3, this case should
be transferred to Rankin County. The analyses and outcomes in Bailey and Myers reflect a
strict and unyielding interpretation of the language in Section 11-11-3. Although I do not
agree that this Court properly and fairly applied the venue statute in Bailey and Myers, stare
decisis requires that we reverse the trial court’s denial of AFLAC’s motion to transfer venue.
Therefore, I specially concur.
8
RANDOLPH, JUSTICE, DISSENTING:
¶20. The “Answer and Affirmative Defenses” of in-state defendants Richard and Anita
Atkinson unquestionably failed to assert the defense of improper venue.3 See Miss. R. Civ.
P. 12(b)(3). In failing to do so, the Atkinsons waived said defense. See Miss. R. Civ. P.
12(h)(1). The Atkinsons’ failure to contest venue would not foreclose AFLAC from
asserting its separate defense of improper venue; however, in determining the efficacy of
AFLAC’s motion, the Court’s analysis of Mississippi Code Annotated Section 11-11-3(1)
should not be restricted to subsection (1)(a). In short, in examining the propriety of the
improper venue defense, the Court should consider the venue rights of the complaining
defendant(s). To hold otherwise erroneously renders the Atkinsons’ waiver ineffectual, in
contravention of Mississippi Rule of Civil Procedure 12(h)(1). See Stevens v. Lake, 615 So.
2d 1177, 1183 (Miss. 1993) (“statutes which conflict with rules adopted by the Court are
void”) (citations omitted). As the Atkinsons’ waiver negates the applicability of Mississippi
Code Annotated Section 11-11-3(1)(a) in the case sub judice, I disagree with my learned
colleague’s analysis that the circuit court abused its discretion in denying AFLAC’s motion
to transfer venue and respectfully dissent.
¶21. Mississippi Rule of Civil Procedure 12(b) states, in pertinent part, that:
[e]very defense, in law or fact, to a claim for relief in any pleading, whether
a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the
responsive pleading thereto if one is required, except that the following
defenses may at the option of the pleader be made by motion:
(1) Lack of jurisdiction over the subject matter,
3
However, both included the Mississippi Rule of Civil Procedure 12(b)(6) defense of
“[f]ailure to state a claim upon which relief can be granted . . . .” Miss. R. Civ. P. 12(b)(6).
9
(2) Lack of jurisdiction over the person,
(3) Improper venue,
(4) Insufficiency of process,
(5) Insufficiency of service of process,
(6) Failure to state a claim upon which relief can be granted,
(7) Failure to join a party under Rule 19.
Miss. R. Civ. P. 12(b) (emphasis added). Mississippi Rule of Civil Procedure 12(g) adds
that:
[i]f a party makes a motion under this rule but omits therefrom any defense or
objection then available to him which this rule permits to be raised by motion,
he shall not thereafter make a motion based on the defense or objection so
omitted, except a motion as provided in subdivision (h)(2) hereof on any of the
grounds there stated.
Miss. R. Civ. P. 12(g) (emphasis added). Furthermore, Mississippi Rule of Civil Procedure
12(h)(1) states:
[a] defense of lack of jurisdiction over the person, improper venue,
insufficiency of process, or insufficiency of service of process is waived (A)
if omitted from a motion in the circumstances described in subdivision (g), or
(B) if it is neither made by a motion under this rule nor included in a
responsive pleading or an amendment thereof permitted by Rule 15(a) to be
made as a matter of course.
Miss. R. Civ. P. 12(h)(1) (emphasis added). See also Miss. R. Civ. P. 12(h)(1) cmt. (“[a]
party who by motion invites the court to pass upon a threshold defense should bring forward
all the specified defenses he then has and thus allow the court to do a reasonably complete
job. The waiver reinforces the policy of Rule 12(g) forbidding successive motions.”).
10
Accordingly, under Mississippi Rule of Civil Procedure 12, Richard and Anita Atkinson
waived their defense of improper venue.4
¶22. This Court has stated that “the Legislature never intended an interpretation of the
venue statutes that would allow a resident defendant to be sued in the plaintiff’s county of
residence simply because a non-resident defendant, be it an individual or a corporation[,] is
joined in the same suit.” Baptist Mem’l Hosp.-DeSoto Inc. v. Bailey, 919 So. 2d 1, 3 (Miss.
2005). However, in Bailey, the in-state defendant (Baptist Memorial) filed a motion to
transfer venue, which was then joined by the out-of-state defendant (Dr. Winston Craig
Clark). See id. at 1-2. Likewise, in the subsequent decisions of Medical Assurance
Company of Mississippi v. Myers, 956 So. 2d 213 (Miss. 2007), Adams v. Baptist Memorial
Hospital-DeSoto, Inc., 965 So. 2d 652 (Miss. 2007),5 and Hedgepeth v. Johnson, 975 So.
2d 235, 237 (Miss. 2008), the individual defendant or multiple defendants each sought
transfer of venue. By contrast, in the case sub judice, the motion to transfer venue was filed
only by the out-of-state defendant (AFLAC) and was never joined by the in-state defendants
(Richard and Anita Atkinson).6 Without question, Richard and Anita Atkinson, had they
timely and properly pursued their rights by asserting the defense, were entitled to transfer
4
In fact, it was not until August 16, 2007, more than ten months after Ellison’s
complaint was filed in Smith County, that either Richard or Anita Atkinson made any
assertion regarding venue. When they did, it was merely by joining AFLAC’s rebuttal brief.
5
Adams is further distinguished insofar as it involved a medical malpractice claim, thereby
implicating Mississippi Code Annotated Section 11-11-3(3). This Court determined that subsection
was clear and, therefore, “[r]egardless of Goldstrike’s joinder as a defendant, the only proper venue
for a suit against medical providers is the county in which the alleged act or omission occurred.”
Adams, 965 So. 2d at 656.
6
Other than joining the rebuttal brief filed by AFLAC. See footnote 2 supra.
11
venue. However, their failure to seek this relief constitutes waiver as to them. See ¶ 21
supra.
¶23. AFLAC asserted that it was entitled to a change of venue, because its co-defendants
were entitled to a change of venue. Undoubtedly, as provided in City of Cleveland v.
Cheatham, 285 P.2d 205 (Okla. 1955), relied upon by the majority, “each defendant had a
right to object, that right being personal to the respective defendants.” Id. at 207. However,
in Cheatham, the City prevailed on its independent right to change venue pursuant to 12
O.S.1951 § 133, not on the independent right of its waiving co-defendant.7 A codefendant
such as AFLAC can no more avail itself of Richard and Anita Atkinson’s waived defense of
improper venue than they could any other defense under Mississippi Rule of Civil Procedure
12(b).8 Given Richard and Anita Atkinson’s waiver of the improper-venue defense, the
Court’s analysis of Mississippi Code Annotated Section 11-11-3(1) should focus on the
complaining defendant, AFLAC. This is not a new rule, but rather the application of
Mississippi Rule of Civil Procedure 12(h)(1) regarding the waiver of improper venue in a
multiple-defendant context. The waiver of improper venue by one defendant does not
constitute a waiver as to all defendants. See Gardner v. Int’l Harvester Co., 499 N.E.2d 430,
7
12 Oklahoma Statute Section 133 states, in pertinent part, that “[a]ctions for the following
causes must be brought in the county where the cause, or some part thereof arose: . . . [a]n action
against a public officer for an act done by him in virtue, or under color, of his office, or for neglect
of his official duties.” 12 O.S.1951 § 133. Therefore, the residence of the waiving codefendant is
of no consequence under said statute. Rather, the legal standing of the codefendant as a “public
officer” acting “in virtue, or under color, of his office” alone necessitates venue “in the county where
the cause, or some part thereof arose . . . .” Id.
8
Likewise, a defendant may not avail itself of a codefendant’s waived motion for time,
answer, or affirmative defenses, for that matter. See Miss. R. Civ. P. 6-8.
12
431 (Ill. 1986) (“waiver of improper venue by one defendant does not necessarily bind other
defendants.”); Cheatham, 285 P. 2d at 207.9 However, on a case-by-case basis, this Court
should examine the propriety of venue under Mississippi Code Annotated Section 11-11-3(1)
as it relates to the complaining defendant(s), in accord with Mississippi Rule of Civil
Procedure 12. See Stevens, 615 So. 2d at 1183 (“statutes which conflict with rules adopted
by the Court are void.”).
¶24. While the circuit court’s stated reasons for denying the motion to transfer may or may
not be accurate,10 its ultimate disposition is proper. See Cucos, Inc v. McDaniel, 938 So. 2d
238, 247 (Miss. 2006) (quoting Accredited Sur. & Cas. Co. v. Bolles, 535 So. 2d 56, 60
(Miss. 1988)) (“[i]t is well established in our jurisprudence that the right result reached for
the wrong reason will not be disturbed on appeal.”). Given the Atkinsons’ waiver of the
improper-venue defense; that AFLAC’s principal place of business is in Georgia; and the
otherwise limited record,11 the Court should look to Mississippi Code Annotated Section 11-
11-3(1)(b) for application of the proper rule. When “venue in a civil action against a
nonresident defendant cannot be asserted under paragraph (a) . . . , a civil action against a
nonresident may be commenced in the county where the plaintiff resides or is domiciled.”
Miss. Code Ann. § 11-11-3(1)(b) (Rev. 2005) (emphasis added). By permitting venue in the
county where Ellison resided, I cannot conclude that the circuit court’s denial of AFLAC’s
9
Gardner did not discuss whether venue rights vested in the waiving defendants are
otherwise proper for the non-waiving defendants.
10
See Majority Opinion at ¶ 6.
11
See Majority Opinion at ¶ 10.
13
“Rule 82(d) Motion to Transfer” was an abuse of discretion. See Hedgepeth, 975 So. 2d at
237. Therefore, I respectfully dissent.
KITCHENS AND CHANDLER, JJ. JOIN THIS OPINION.
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