Opinion
No. 5-06-0308
Opinion Filed: June 22, 2007.
Appeal from the Circuit Court of Madison County., No. 02-L-906, Honorable Daniel J. Stack, Judge, presiding.
Michael J. Nester, Donovan, Rose, Nester Joley, P.C., 8 East Washington Street, Belleville, IL 62220; Dwight J. Davis, S. Stewart Haskins II, Catharine B. Wooten, King Spalding, LLP, 1180 Peachtree Street, N.E., Atlanta, GA, Attorneys for Appellant.
Gail G. Renshaw, Bradley M. Lakin, Richard Burke, Gerald R. Walters, The Lakin Law Firm, P.C., 300 Evans Avenue, Wood River, IL 62095; Paul M. Weiss, Tod A. Lewis, Freed Weiss, LLC, 111 West Washington Street, Suite 1331, Chicago, IL 60602; Malik R. Diab, Phillip A. Bock, Diab Bock, LLC, 20 N. Wacker Drive, Suite 1741, Chicago, IL, Attorneys for Appellee.
The defendant, Home Depot U.S.A., Inc., doing business as The Home Depot (Home Depot), appeals the May 22, 2006, order of the circuit court of Madison County that denied its motion to dismiss on the basis of forum non conveniens. Home Depot raises two issues on appeal, which we restate as follows: (1) whether the circuit court erred in its determination that a claim under the Missouri Merchandising Practices Act (Mo. Ann. Stat. § 407.025 (West 2004)) may be pursued in Illinois and (2) whether the circuit court erred in its determination that the relevant private-and public-interest factors did not strongly favor a Missouri forum. To resolve this appeal, we must answer the following question: May an Illinois court apply the Illinois general venue statute ( 735 ILCS 5/2-101 (West 2004)) to find proper venue for a statutory cause of action created by another state that contains an embedded provision fixing venue only in certain counties within that state? For the reasons set forth below, we hold that it may not, and we reverse the order of the circuit court.
The facts necessary for our disposition of this appeal are as follows. On June 22, 2002, the plaintiff, Janet Chochorowski, individually and on behalf of others similarly situated, filed a class action complaint against Home Depot in the circuit court of Madison County. The complaint alleged that on April 27, 2002, the plaintiff, a resident of Madison County, rented a power tiller from Home Depot in Brentwood, Missouri, for an agreed price of $25 per day, plus "applicable sales and rental taxes." The Home Depot computer generated an invoice, which automatically charged the plaintiff $2.50 for a "damage waiver," although the plaintiff never requested or agreed to purchase a "damage waiver" and was not told that the "damage waiver" was an optional charge. When the plaintiff returned the power tiller, she paid the invoice in full. The complaint further alleged that Home Depot routinely and systematically charges the "damage waiver" charge to every rental customer and uniformly fails to inform customers that the "damage waiver" is an optional charge and not a part of the "applicable sales and rental taxes" that the customer is required to pay. Count I of the complaint alleged a cause of action for breach of contract, and count II alleged "statutory fraud" without citing the specific statutory provision under which it asserted a cause of action. The plaintiff later filed a first amended class action complaint that alleged unjust enrichment under count III.
By an order dated June 10, 2003, the circuit court dismissed counts I and III of the first amended complaint with prejudice, leaving count II, for "statutory fraud," as the only remaining claim. On January 30, 2004, Home Depot filed a motion for a summary judgment arguing, inter alia, that the Illinois Consumer Fraud and Deceptive Business Practices Act ( 815 ILCS 505/1 et seq. (West 2002)) does not apply to transactions that take place outside Illinois. On May 4, 2005, the circuit court denied Home Depot's motion for a summary judgment. On August 30, 2005, Home Depot filed a motion for clarification and/or reconsideration, citing Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 185 (2005), in which the Illinois Supreme Court unequivocally held that the Illinois Consumer Fraud and Deceptive Business Practices Act does not apply to fraudulent transactions that take place outside Illinois. Thereafter, the plaintiff filed a motion for leave to amend by interlineation to allege a cause of action under the Missouri Merchandising Practices Act (Mo. Ann. Stat. § 407.025 (West 2004)). The circuit court granted the motion to amend on January 27, 2006.
On or about May 8, 2006, Home Depot filed a motion to dismiss on the basis of forum non conveniens. Home Depot attached to the motion the transcript of the plaintiff's deposition, in which the plaintiff testified that the entire transaction at issue took place in Missouri. On May 22, 2006, after briefing by the parties, oral argument was held on the motion to dismiss. At the hearing, in addition to arguing that the relevant private-and public-interest factors favored a dismissal of the action in favor of a Missouri forum, Home Depot argued that, because the Missouri statute provides for a private right of action either in the circuit court of the county in which the seller or lessor resides or in the circuit court of the county in which the transaction complained of took place (Mo. Ann. Stat. § 407.025 (West 2004)), and a corporation is only a resident of the county in which it has its registered agent (Mo. Ann. Stat. § 508.010 (West 2004)), a dismissal of the action was required.
In response to Home Depot's arguments, the plaintiff argued that the motion to dismiss was untimely because it was not filed until four years after the action had commenced. In addition, the plaintiff argued that the factors cited by the defendant did not outweigh the plaintiff's choice to bring this action in her county of residence and that an Illinois court could apply the Missouri statute because the venue provision of that statute is a procedural provision and because the language was permissive because it stated that "[a]ny person *** may bring a private civil action " (emphasis added) (M o. Ann. Stat. § 407.0 25(1) (West 2004)) in those counties previously stated. The circuit court denied Home Depot's motion to dismiss, agreeing that the venue provision was permissive and stating that Home Depot did not file any affidavits showing inconvenience. Home Depot filed a timely notice of interlocutory appeal. We have jurisdiction to address the issues on appeal pursuant to Illinois Supreme Court Rules 306(a)(2) and (a)(4) (210 Ill. 2d Rs. 306(a)(2), (a)(4)).
Home Depot's first issue on appeal is whether the circuit court erred in its determination that a claim under the Missouri Merchandising Practices Act (Mo. Ann. Stat. § 407.025 (West 2004)) may be pursued in Illinois. Although Home Depot argued this issue in the circuit court under the purview of a motion to dismiss for forum non conveniens pursuant to Illinois Supreme Court Rule 187 (134 Ill. 2d R. 187), the issue is properly argued as a motion to dismiss for improper venue under section 2-104(b) of the Illinois Code of Civil Procedure ( 735 ILCS 5/2-104(b) (West 2004)). After a review of the record, we note that although this issue was not set forth in the motion to dismiss filed in the circuit court, Home Depot made the argument regarding venue orally at the hearing on its motion to dismiss in the circuit court, the plaintiff orally responded to Home Depot's argument, and the circuit court ruled from the bench that venue was proper when it found the venue provision to be permissive. Furthermore, the plaintiff has addressed the merits of this issue both in the circuit court and on appeal, and she has claimed no prejudice. Accordingly, w e w ill treat this issue as one regarding venue, and because no dispute exists regarding the facts upon which the circuit court based its denial of Home Depot's motion to dismiss on these grounds, our standard of review is de novo. See Corral v. Mervis Industries, Inc., 217 Ill. 2d 144, 153-54 (2005).
We will first address the plaintiff's argument that the motion to dismiss was untimely. An objection of improper venue under section 2-104(b) of the Illinois Code of Civil Procedure ( 735 ILCS 5/2-104(b) (West 2004)) is waived by a defendant unless a motion is made by the defendant on or before the date upon which he or she is required to appear or within any further time that may be granted him or her to answer or move with respect to the complaint. Here, an amendment to the complaint was made on January 27, 2006. The amendment changed the cause of action under which the plaintiff was proceeding to a cause of action under the Missouri statute. It was not until this amendment was made that Home Depot had a basis to object to venue, because the venue provision upon which Home Depot relies is set forth in the Missouri statute itself (Mo. Ann. Stat. § 407.025 (West 2004)). The order granting the motion to amend did not set forth a date by which Home Depot was required to answer or file a responsive pleading to the amended complaint. Home Depot raised the issue of venue orally at the hearing on its motion to dismiss when it directed the circuit court's attention to the embedded venue provision in the Missouri statute. The plaintiff had an opportunity to respond and did not object to Home Depot raising the issue at the hearing. In addition, the circuit court addressed the merits of the venue issue from the bench when it found the venue provision to be permissive. Finally, we reiterate that both parties have fully briefed the issue of whether the venue provision must be followed by the Illinois courts. Accordingly, we find that Home Depot raised the issue in a timely manner, and neither party can claim surprise or prejudice by our addressing the venue issue on its merits.
We now turn to the merits of the venue issue. The relevant provision of the Missouri Merchandising Practices Act is as follows:
"1. Any person who purchases or leases merchandise primarily for personal, family[,] or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act[,] or practice declared unlawful by section 407.020, may bring a private civil action in either the circuit court of the county in which the seller or lessor resides or in which the transaction complained of took place, to recover actual damages." (Emphasis added.) Mo. Ann. Stat. § 407.025(1) (West 2004).
In Missouri, the residence of a corporation for venue purposes is deemed to be in the county in which its registered office is maintained. Mo. Ann. Stat. § 508.010(5)(1) (West 2004). Accordingly, Home Depot argues that under the Missouri statute, venue would be proper only in Missouri and in the county where the transaction took place or where Home Depot maintains its registered office.
At the hearing on Home Depot's motion to dismiss, the circuit court agreed with the plaintiff's argument that the venue provision in the statute is permissive because the statute provides that a person " may bring a private civil action" (emphasis added) (Mo. Ann. Stat. § 407.025(1) (West 2004)) in the aforementioned counties. We disagree with this interpretation of the statutory language. A plain reading of the statute reveals that the word "may" applies only to a person's right to file a private civil action, a right that would not otherwise exist. Accordingly, the word "may" applies only to the first five words that follow it-"bring a private civil action"-and does not render the remaining provision, which uncategorically describes where venue properly lies, permissive. This interpretation is consistent with Missouri case law interpreting this provision. See Foreman v. Discount Motors, Inc., 629 S.W.2d 635, 637 (Mo.App. 1982) (holding that because the Missouri Merchandising Practices Act creates a new right of action and at the same time prescribes the court in which the right is to be enforced, resort cannot be had to any other means than the court prescribed). Accordingly, our resolution of this issue turns on an analysis of the plaintiff's alternative argument that because venue is procedural in a conflicts-of-law analysis, an Illinois court may apply the Missouri statute despite the embedded venue provision.
Illinois follows the Restatement (Second) of Conflict of Laws (1971) (Restatement) in making choice-of-law decisions. Morris B. Chapman Associates, Ltd. v. Kitzman, 193 Ill. 2d 560, 568 (2000). Section 122 of the Restatement provides:
"A court usually applies its own local law rules prescribing how litigation shall be conducted even when it applies the local law rules of another state to resolve other issues in the case." Restatement (Second) of Conflict of Laws § 122 (1971).
The rationale for this rule is explained in Comment a to that section:
"Each state has local law rules prescribing the procedure by which controversies are brought into its courts and by which the trial of these controversies is conducted. *** The forum has compelling reasons for applying its own rules to decide such issues ***. ***
***
Enormous burdens are avoided when a court applies its own rules, rather than the rules of another state, to issues relating to judicial administration, such as the proper form of action, service of process, pleading, rules of disco very, mode of trial[,] and execution and costs." Restatement (Second) of Conflict of Laws § 122, Comment a, at 350-51 (1971). Comment b to section 122 explains further:
"The courts have traditionally approached issues falling within the scope of the rule of this Section by determining whether the particular issue was `procedural' and therefore to be decided in accordance with the forum's local law rule, or `substantive' and therefore to be decided by reference to the otherwise applicable law. These characterizations, while harm less in themselves, have led some courts into unthinking adherence to precedents that have classified a given issue as `procedural' or `substantive', regardless of what purposes were involved in the earlier classifications. Thus, for example, a decision classifying burden of proof as `procedural' for local law purposes, such as in determining the constitutionality of a statute that retroactively shifted the burden, might mistakenly be held controlling on the question whether burden of proof is `procedural' for choice-of-law purposes. To avoid encouraging errors of that sort, the rules in this Chapter [regarding areas of judicial administration] do not attempt to classify issues as `procedural' or `substantive'. Instead they face directly the question of whether the forum's rule should be applied [based on the rationale for applying local law to matters of judicial administration]." Restatement (Second) of Conflict of Laws § 122, Comment b, at 352 (1971).
It is against this backdrop that we analyze the issue before us.
We note that there is no specific rule in the Restatement regarding venue. Although section 123 provides that "[t]he local law of the forum determines which of its courts, if any, may entertain an action on a claim involving foreign elements," Comment a to that section makes clear that this rule governs the power of the forum to determine which of its courts, whether in law, equity, probate, or admiralty, is "competent to hear a particular case over which the state has judicial jurisdiction." Restatement (Second) of Conflict of Laws § 123, Comment a, at 353 (1971). Section 123 does not govern the particular choice-of-law question at issue in this case, which is whether an Illinois court may apply its own general venue statute ( 735 ILCS 5/2-101 (West 2004)) to find proper venue for a statutory cause of action created by another state that contains an embedded provision fixing venue only in certain counties within that state.
The plaintiff's reliance on Williams v. Illinois State Scholarship Comm'n, 139 Ill. 2d 24 (1990), is misplaced. Although Williams contains a statement that statutory venue requirements are procedural only and have no relation to the power of a court to decide the merits of the case, the Illinois Supreme Court in Williams held that courts cannot generally interfere with the legislature's province in determining whether venue is proper. Williams, 139 Ill. 2d at 41. At no time have Illinois courts characterized the embedded venue provision of another state's statute, which creates a private cause of action not available at common law, as one of judicial administration or "procedure" that can be circumvented by the Illinois general venue statute. Accordingly, this issue is one of first impression in Illinois, and one that must be analyzed on its own merits to avoid the "unthinking adherence to precedents that have classified a given issue as `procedural' or `substantive' " (Restatement (Second) Conflict of Law s § 12 2, Comment b, at 352 (1971)) that section 122 of the Restatement seeks to avoid. After careful consideration of this choice-of-law issue in light of the rationale expressed in section 122 of the Restatement, we conclude that while, as a general rule, an Illinois court may apply the Illinois general venue statute to causes of action in which another state's law will provide the rule of decision, when a venue requirement is incorporated into a statute of another state that creates a private cause of action, that venue requirement constitutes an integral part of the substantive right that was created by the statute and our courts may not use our general venue law to circumvent the venue limitation so provided. To hold that venue is categorically a matter of judicial administration to which Illinois courts always apply Illinois law, even when considering a statutory cause of action created in another state which is limited to specific venue in that state, would in no way advance the rationale behind the Restatement's rule that the law of the forum governs ordinary matters of judicial administration. Consequently, there is no compelling reason for an Illinois court to apply the Illinois general venue statute to find proper venue to adjudicate a claim under the Missouri statute. This is further highlighted by the fact that the Illinois Supreme Court has held that the Illinois Consumer Fraud and Deceptive Business Practices Act ( 815 ILCS 505/1 et seq. (West 2002)) does not apply to the transaction at issue because it did not occur in Illinois. See Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 185 (2005). In addition, there is no burden on judicial administration to be avoided by our holding.
Finally, we are not persuaded that we should treat a venue provision which is embedded into another state's statute any differently than we would treat a venue provision embedded in an Illinois statute. Section 1-108(b) of the Illinois Code of Civil Procedure provides, "In proceedings in which the procedure is regulated by statutes other than those contained in this Act, such other statutes control to the extent to which they regulate procedure but Article II of this Act applies to matters of procedure not regulated by such other statutes." 735 ILCS 5/1-108(b) (West 2004). Thus, we do not apply our general venue statute to statutory causes of action where the statute creating the right contains a venue provision, and there is no reason to treat a statutory cause of action created in another state any differently. To hold otherwise is to circumvent the intent of the legislature of that other state, which chose to condition the right it created on a particular venue or particular venues.
Because we find that the circuit court erred in denying Home Depot's oral motion to dismiss for improper venue, we decline to address the merits of the forum non conveniens argument. For the reasons set forth above, we reverse the order of the circuit court that denied Home Depot's motion to dismiss.
Reversed.
STEWART, J., concurs.
I agree that the action must be dismissed, but not for the reasons expressed in the majority opinion. As I review this case, I find that the only issue properly before us is the propriety of the circuit court's ruling denying Home Depot's motion to dismiss on the ground of interstate forum non conveniens. As to that issue, I would reverse the circuit court and enter an order dismissing the action under the doctrine of interstate forum non conveniens and further provide, pursuant to Supreme Court Rule 187(c)(2) (134 Ill. 2d R. 187(c)(2)), that if the plaintiff elects to file the action in another forum within six months of the dismissal, the defendant shall accept service of process and shall waive a statute-of-limitations defense in the other forum and that the cause of action would be reinstated for further proceedings in the Madison County circuit court should the defendant refuse to abide by these conditions.
This interlocutory appeal is taken from an order denying Home Depot's motion to dismiss for interstate forum non conveniens, pursuant to Supreme Court Rule 306(a)(2) (210 Ill. 2d R. 306(a)(2)). Home Depot has not argued that venue is improper. Home Depot has argued that a claim under the Missouri Merchandising Practices Act (Mo. Rev. Stat. § 407.025 (2004)) may not be pursued in an Illinois court because a provision in the Missouri statute expressly requires that the action be brought in a Missouri circuit court, but Home Depot has provided no supporting authority other than an unpublished decision by the Iowa Appellate Court, which does not constitute controlling authority in Iowa (Iowa Ct. R. 6.14(5)) or in Illinois (166 Ill. 2d R. 23(e)). In addition, Home Depot has raised an issue that is ill-defined. The issue could be interpreted as a preface to the forum non conveniens argument, or it could be one that asks whether the Illinois court lacks subject matter jurisdiction or whether the Illinois court should decline to exercise jurisdiction under the doctrine of abstention ( Todt v. Ameritech Corp., 327 Ill. App. 3d 359, 372, 763 N.E.2d 389, 401 (2002)). Home Depot has not clearly defined the issue and it has not provided pertinent legal authorities in support of its arguments as required under Supreme Court Rule 341(e)(7) (210 Ill. 2d R. 341(e)(7)). After considering the jurisdictional statement and the nature of the relief sought, it appears that the issue w as raise d as a preface to the forum non conveniens argument, rather than as a stand-alone issue. In any event, it is imprudent and unnecessary to speculate further on this matter because the order denying the forum non conveniens motion is the only issue properly before us.
Under the doctrine of forum non conveniens, a court may decline jurisdiction of a case "if it appears that another forum can better serve the convenience of the parties and the ends of justice." Gridley v. State Farm Mutual Automobile Insurance Co., 217 Ill. 2d 158, 169, 840 N.E.2d 269, 277 (2005). In determining whether the doctrine applies, "the trial court must balance private[-]interest factors affecting the convenience of the litigants and the public[-]interest factors affecting the administration of the courts." Gridley, 217 Ill. 2d at 169-70, 840 N.E.2d at 277.
In this case, the private-interest factors do not heavily favor one forum over the other, but the public-interest factors overwhelmingly support a dismissal in favor of the Missouri forum. The interest in deciding localized controversies locally favors the Missouri forum. The cause of action at issue is not a personal injury case and it has no roots in common law. The cause of action was created by a Missouri statute, and the action will be governed under the substantive laws of Missouri. The case involves allegedly deceptive merchandising practices that occurred in Missouri or that arose from conduct in Missouri. A provision of the statute requires the clerk of the court in which the action is brought to inform the Attorney General of Missouri that the action has been commenced and to mail a copy of the judgment or decree that is entered in the action. Mo. Rev. Stat. § 407.025(7) (2004). The action is clearly designed to protect consumers against unlawful merchandising practices that occur in or arise from the State of Missouri, and the residents of Missouri and the Attorney General of Missouri have a superior interest in determining whether violations have occurred and, if so, the appropriate remedy. Since Missouri has a significant connection to the litigation, it is not unfair to impose the burden and expense of a trial and jury duty on the citizens of Missouri. In addition, it should be noted that a cause of action under the Missouri Merchandising Practices Act permits a party to seek an award of punitive damages. The State of Missouri may place a lien to the extent of 50% on any punitive damages award for contribution to the Missouri Tort Victims' Compensation Fund. Mo. Rev. Stat. § 537.675(3) (2000). Under the total circumstances of this case, the balance of factors demonstrates that Missouri represents a more convenient forum for the resolution of this case. Accordingly, I would find that the trial court abused its discretion in denying Home Depot's motion to dismiss on the grounds of interstate forum non conveniens.
Honorable Stephen L. Spomer, J., Honorable Bruce D. Stewart, J., Concurs, Honorable James K. Donovan, J., Specially Concurs.