Ward v. Johnson

May 1 2012
DA 11-0615

IN THE SUPREME COURT OF THE STATE OF MONTANA
2012 MT 96

MARLA WARD,

Plaintiff and Appellant,

v.

PAUL JOHNSON, POWDER RIVER,
INC, and DOES 1-50, inclusive,

Defendants and Appellees.

APPEAL FROM: District Court of the Thirteenth Judicial District,
In and For the County of Yellowstone, Cause No. DV 11-1046
Honorable G. Todd Baugh, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Dennis P. Conner, Gregory G. Pinski; Conner & Pinski, PLLP;
Great Falls, Montana

Randy S. Laedeke, Laedeke Law Office; Billings, Montana

For Appellees:

John F. Haffey, Michael W. De Witt; Phillips Law Firm, P.C.;
Missoula, Montana (Paul Johnson)

Dan L. Spoon; Spoon Gordon Ballew, PLLP; Missoula, Montana
(Powder River, Inc.)

Submitted on Briefs: March 21, 2012

Decided: May 1, 2012

Filed:
__________________________________________
Clerk
Justice Beth Baker delivered the Opinion of the Court.

¶1 Appellant Marla Ward appeals the Thirteenth Judicial District Court’s order

granting Appellee Paul Johnson’s motion for change of venue to Pondera County, where

Johnson resides. On the basis of controlling precedent, we reverse.

¶2 We address the following issues on appeal:

¶3 1. Whether the District Court erred in granting Johnson’s motion for a change of
venue to his county of residence.

¶4 2. Whether application of Montana’s venue statutes violates Johnson’s right to
equal protection of the law.

PROCEDURAL AND FACTUAL BACKGROUND

¶5 On July 15, 2011, Ward filed suit seeking damages for personal injuries she

sustained when a gate failed to latch and struck her in the head as she was sorting horses

on Johnson’s property. She alleged claims for strict products liability and breach of

warranties against Powder River, Inc., the gate’s manufacturer. She also claimed

Johnson was negligent. Ward is a resident of Yellowstone County and filed her

complaint there. Ward’s injuries occurred in Pondera County. Powder River is a

non-resident corporation organized under the laws of the State of Idaho with its principal

place of business in Utah.

¶6 On August 29, 2011, Johnson filed a motion to change venue. Johnson argued

Pondera County was the appropriate place for trial pursuant to § 25-2-122(1), MCA, as it

was the only county where a defendant resided. Powder River neither supported nor

objected to the motion. Ward opposed the motion, asserting our decision in Nelson v.

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Cenex Inc., 2004 MT 170, 322 Mont. 54, 97 P.3d 1073, controlled and permitted Ward to

file her claim in Yellowstone County, her place of residence. The District Court, without

mentioning Nelson in its order, ruled in favor of Johnson stating Pondera County was the

only proper venue. Ward appeals.

STANDARD OF REVIEW

¶7 Whether a county designated in the complaint is a proper place for trial is a

question of law. DML, Inc. v. Fulbright, 2005 MT 204, ¶ 7, 328 Mont. 212, 119 P.3d 93.

We review de novo a District Court’s decision to transfer venue because the complaint

was not filed in the proper county. BNSF Ry. Co. v. State ex rel. Dept. of Envtl. Quality,

2010 MT 46, ¶ 7, 355 Mont. 296, 228 P.3d 1115.

DISCUSSION

¶8 1. Whether the District Court erred in granting Johnson’s motion for a change of
venue to his county of residence.

¶9 Venue is determined by the status of the parties and pleadings at the time of the

complaint or at the time the moving party appears in the action. Lockhead v. Weinstein,

2001 MT 132, ¶ 5, 305 Mont. 438, 28 P.3d 1081. Section 25-2-114, MCA, permits a

defendant to move for a change of venue when “an action is brought in a county not

designated as the proper place for trial.”

¶10 Section 25-2-118, MCA, the general rule for venue in civil actions, provides in

pertinent part:

(1) Except as provided in subsection (3) [concerning family law
matters], the proper place of trial for all civil actions is the county in which
the defendants or any of them reside at the commencement of the action.
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 (2) If none of the defendants reside in the state, the proper place of
trial for a contract action is as provided in 25-2-121(1)(b) or (2) and the
proper place of trial for a tort action is as provided in 25-2-122(2) or (3).
[Emphasis added.]

With respect to tort actions, § 25-2-122, MCA, states:

(1) Except as provided in subsections (2) through (4), the proper
place of trial for a tort action is:

(a) the county in which the defendant or any of them reside at the
commencement of the action; or

(b) the county in which the tort was committed. . . .

(2) If the defendant is a corporation incorporated in a state other
than Montana, the proper place of trial for a tort action is:

(a) the county in which the tort was committed;

(b) the county in which the plaintiff resides; or

(c) the county in which the corporation’s resident agent is located,
as required by law. [Emphasis added.]

¶11 Ward argues that § 25-2-122(2), MCA, controls here because Powder River is

incorporated in a state other than Montana. Johnson asserts that subsection is applicable

only where an out-of-state corporation is sued independently, or with another out-of-state

corporation or individual. Finding our precedent determinative, we agree with Ward that

subsection (2) allowed her to file her complaint in Yellowstone County.

¶12 In Nelson, the plaintiff filed his complaint in Lewis and Clark County, alleging

tort claims against three corporate entities and two individual defendants. Nelson, ¶ 3.

CHS, Inc., the successor-in-interest to the three corporate defendants, was incorporated

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and maintained its principal place of business in Minnesota. CHS’s registered agent in

Montana was located in Lewis and Clark County. The two individual defendants were

residents of Yellowstone County, and Nelson resided in Missoula County. The district

court denied CHS’s motion for a change of venue and this Court affirmed. Nelson, ¶ 13.

We reaffirmed that § 25-2-118(2), MCA, did not apply “where one or more of the

defendants reside[s] in Montana.” Nelson, ¶ 12 (citing Platt v. Sears, Roebuck & Co.,

222 Mont. 184, 187, 721 P.2d 336, 338 (1986)). We disagreed with CHS’s argument that

§ 25-2-122(1), MCA, required the case to be brought in the resident defendants’ county

of residence. Rejecting the contention that subsection (1) controlled because subsections

(2) and (3) “only applied where none of the defendants reside[s] in Montana,” we stated

that when § 25-2-118(2), MCA, is inapplicable, “venue must be determined according to

other venue statutes.” Nelson, ¶¶ 11-12 (emphasis added). We held that Lewis and Clark

County was a proper place for trial under § 25-2-122(2), MCA, and Nelson was “legally

correct” in filing his complaint there. Nelson, ¶ 13.

¶13 Nelson compels a similar conclusion in this case. We agree with Johnson that

Pondera County would have been a proper place for trial under § 25-2-122(1), MCA.

Nonetheless, because Powder River is incorporated in a state other than Montana, § 25-2-

122(2), MCA, also specifies a proper place for trial. Accordingly, Ward’s decision to file

her complaint in Yellowstone County was legally correct under § 25-2-122(2)(b), MCA.

¶14 Johnson attempts to distinguish Nelson by noting that in that case it was CHS, the

out-of-state corporation, that challenged venue; here, Johnson, the in-state individual

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defendant, is asserting his right to have the trial conducted in his county of residence as

provided by § 25-2-118(1), MCA. This distinction is not supported by our construction

of the statute in Nelson. Our decision there did not depend on which defendant sought a

change of venue, but on whether one or more of the defendants was a Montana resident.

¶15 We recognize the historical preference of the law for defendants to be sued in their

county of residence (See Hardenburgh v. Hardenburgh, 115 Mont. 469, 475, 146 P.2d

151, 153 (1944); McNussen v. Graybeal, 141 Mont. 571, 578-79, 380 P.2d 575, 578-79

(1963)). Johnson makes a plausible argument for construction of the venue statutes, but

it is one we already rejected in Nelson. If our holding there does not accurately reflect

the intent of the statute, it remains the prerogative of the Legislature to amend it. Certain

v. Tonn, 2009 MT 330, ¶ 18, 353 Mont. 21, 220 P.3d 384 (citing Sampson v. Natl.

Farmers Union Prop. & Cas. Co., 2006 MT 241, ¶ 20, 333 Mont. 541, 144 P.3d 797).

The Legislature has not done so; therefore our interpretation in Nelson controls.

¶16 Moreover, the law makes clear that where there are two or more defendants, “a

proper place of trial for any defendant is proper for all defendants.” Section 25-2-117,

MCA. This statute “is intended to apply to all venue provisions.” Weiss v. State, 219

Mont. 447, 450, 712 P.2d 1315, 1317 (1986). “[T]he right to move for a change of venue

under § 25-2-117, MCA, applies only if the action is filed in a county that is a proper

place of trial for none of the defendants.” Farmers Union Ass’n v. Paquin, 2009 MT

305, ¶ 12, 352 Mont. 390, 217 P.3d 74 (emphasis added). Since Yellowstone County is a

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proper county for trial as to defendant Powder River under § 25-2-122(2), MCA, it also is

a proper county as to Johnson.

¶17 2. Whether application of Montana’s venue statutes violates Johnson’s right to
equal protection of the law.

¶18 Johnson asserts that this application of the venue statutes would violate his right to

equal protection of the law under the Fourteenth Amendment to the United States

Constitution and Article II, Section 4 of the Montana Constitution because it treats

resident defendants differently depending on whether they are sued with a non-resident

defendant. Ward argues Johnson is prohibited from asserting this constitutional claim

because Johnson did not notify the Attorney General pursuant to M. R. App. P. 27.

Under that rule, “a party who challenges the constitutionality of any act of the Montana

legislature . . . must give notice to the supreme court and to the Montana attorney general

of the existence of the constitutional issue.” Ward contends Johnson’s failure to provide

notice denied the State an opportunity to advance a legitimate governmental interest in

maintaining the current venue statutes. For the reasons that follow, we do not rely on

Ward’s notice argument but conclude that Johnson’s constitutional rights are not violated

by application of the statutes in question.

¶19 We have analyzed a party’s constitutional arguments absent compliance with the

notice requirement in cases where the challenging party was not asserting the statute

itself was unconstitutional. Polasek v. Omura, 2006 MT 103, ¶ 20, 332 Mont. 157, 136

P.3d 519. Here, Johnson is not asserting the plain language of § 25-2-122, MCA, is

unconstitutional; rather, it is this Court’s application of the statute in multiple-defendant
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cases that allegedly violates his right to equal protection. It is also unclear whether M. R.

App. P. 27 applies when, as here, the constitutional issue is raised by the appellee in

defense of a district court’s ruling on non-constitutional grounds. Our previous cases

rejecting the constitutional claim for noncompliance with the rule did not consider this

unique situation. Boettcher v. Mont. Guaranty Fund, 2006 MT 127, ¶ 12, 332 Mont. 279,

140 P.3d 474; Weinert v. City of Great Falls, 2004 MT 168, ¶ 13, 322 Mont. 38, 97 P.3d

1079; Russell v. Masonic Home of Mont., Inc., 2006 MT 286, ¶ 20, 334 Mont. 351, 147

P.3d 216. Given the lack of clear application of the rule in this instance, we consider

Johnson’s constitutional argument on its merits.

¶20 Johnson asserts that our application of § 25-2-122(2), MCA, violates his right to

equal protection because he is compelled to defend this action in Ward’s county of

residence simply because she named a nonresident defendant in her complaint. “The

principal purpose of the Equal Protection Clause, Article II, Section 4, of the Montana

Constitution, is to ensure that persons who are citizens are not subject to arbitrary and

discriminatory state action.” Timm v. Mont. Dept. of Pub. Health & Human Servs., 2008

MT 126, ¶ 30, 343 Mont. 11, 184 P.3d 994.

¶21 The right to equal protection “does not prevent a state from adjusting its

legislation to differences in situation or forbid classification in that connection,” it merely

requires that those classifications are not arbitrarily made and have “a reasonable relation

to the subject of that particular legislation.” Ford v. Burlington N. R.R., 250 Mont. 188,

193, 819 P.2d 169, 173 (1991) (quoting Power Mfg. Co. v. Saunders, 274 U.S. 490, 493,

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47 S. Ct. 678, 679 (1927). If the “classification is neither capricious nor arbitrary, and

rests upon real differences and some reasonable consideration of difference or policy,

there is no denial of the equal protection of the law.” Powder River Co. v. State, 2002

MT 259, ¶ 79, 312 Mont. 198, 60 P.3d 357. Our review of these classifications is not

confined to the purposes advanced by the legislature or litigants, but extends to “any

possible purpose of which the court can conceive.” Satterlee v. Lumberman’s Mut. Cas.

Co., 2009 MT 368, ¶ 34, 353 Mont. 265, 222 P.3d 566. This standard reflects the notion

“that the drawing of lines that create distinctions is peculiarly a legislative task and an

unavoidable one.” Mass. Bd. of Ret. v. Murgia, 427 U.S. 307, 314, 96 S. Ct. 2562, 2567

(1976).

¶22 In Ford, the plaintiff was injured while working as a locomotive engineer and filed

suit in Yellowstone County against an out-of-state corporation under the Federal

Employers Liability Act. 250 Mont. at 189, 819 P.2d at 170. Burlington argued our

application of the venue statutes in FELA cases violated its right to equal protection by

permitting actions against a foreign corporation in any county, while actions against a

domestic corporation could only be brought in the county where it had its principal place

of business. 250 Mont. at 190, 819 P.2d at 171. We disagreed, noting the United States

Supreme Court’s observation that a state’s directive as to one proper forum over another

“can have no tendency to violate the guarantee of the equal protection of the laws where

in both the forums equality of the law governs and equality of administration prevails.”

Ford, 250 Mont. at 192, 819 P.2d at 171 (quoting Cincinnati Street Ry. Co. v. Snell, 193

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U.S. 30, 37, 24 S. Ct. 319, 321 (1904)). We declined to address whether there was a

rational basis for treating out-of-state corporations differently due to a “national policy”

allowing railroad workers “to sue their employer at any location where the employer does

business.” 250 Mont. at 195, 819 P.2d at 174.

¶23 On certiorari, the United States Supreme Court affirmed. It held that Montana’s

venue laws satisfied rational basis review because, in adjusting the “warring interests” of

parties with different forum preferences, states may have a number of choices, “each of

them passable under the standard tolerating some play in the joints of governmental

machinery.” Burlington N. R.R. v. Ford, 504 U.S. 648, 651, 112 S. Ct. 2184, 2186-87

(1992). It concluded that Montana rationally could have decided that “a nonresident

defendant’s interest in convenience is too slight to outweigh the plaintiff’s interest in

suing in the forum of his choice.” 504 U.S. at 652, 112 S. Ct. at 2187. The Court

explained that states must be afforded some liberty in striking a balance between these

competing interests; thus, “a State would act within its constitutional prerogatives if it

were to give so much weight to the interests of plaintiffs as to allow them to sue in the

counties of their choice under all circumstances.” 504 U.S. at 651-52, 112 S. Ct. at 2187.

Finally, the Court acknowledged that while Montana could have implemented its policy

judgment “with greater precision,” the distinctions withstood rational-basis review

because “rational distinctions may be made with substantially less than mathematical

exactitude.” 504 U.S. at 653, 112 S. Ct. at 2187 (quoting New Orleans v. Dukes, 427

U.S. 297, 303, 96 S. Ct. 2513, 2517 (1976)).

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¶24 We conclude, as in Ford, that there is a rational basis for a legislative

determination to expand a plaintiff’s venue options when there are both resident and

nonresident defendants. The legislature could have presumed that, because the

nonresident defendant will be inconvenienced regardless of where the suit is brought, the

resident defendant, rather than the plaintiff, should bear any additional burdens associated

with venue. This is not an arbitrary distinction, as a plaintiff’s interest in filing suit in the

forum of her choice is likely greater when there are multiple defendants involved in the

litigation residing both in and outside of Montana. We also note that the statute at issue

in Ford was amended by the legislature so that plaintiffs in tort actions now are afforded

only two more options for proper venue—their place of residence or where the tort was

committed—rather than any county of their choice. Section 25-2-118(2), MCA.

Accordingly, a plaintiff is not permitted to simply choose the venue farthest away from

the resident defendant and, in many instances, one of the two additional locations also

will be where the defendant resides. While a different scheme would have been

permissible, the legislature’s policy choice in this instance is not constitutionally invalid.

¶25 We conclude that the statute permitting Ward to file her action in the county of her

residence does not deprive Johnson of the equal protection of the laws. Ward filed her

complaint in a proper county. The District Court’s order granting Johnson’s motion to

change venue is reversed.

/S/ BETH BAKER

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We concur:

/S/ PATRICIA COTTER
/S/ JAMES C. NELSON
/S/ MICHAEL E WHEAT
/S/ JIM RICE

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