Opinion
01-A-01-9412-CH-0056
07-19-1995
The RESOURCE COMPANY, INC., Plaintiff/Appellant, v. BRISTOL MEMORIAL HOSPITAL, d/b/a Bristol Regional Medical Center, Defendant/Appellee.
Philip N. Elbert, Neal & Harwell, Nashville, TN. Edward J. Webb, Jimmie C. Miller, Hunter, Smith & Davis, Johnson City, TN.
Rehearing Overruled Aug. 18, 1995.
Appealed from the Chancery Court of Williamson County at Franklin, Tennessee.
Philip N. Elbert, Neal & Harwell, Nashville, TN.
Edward J. Webb, Jimmie C. Miller, Hunter, Smith & Davis, Johnson City, TN.
OPINION
CANTRELL.
*1 In this action for breach of contract the trial judge dismissed the case because she found Williamson County was the wrong venue. We affirm.
I.
The Resource Company, Inc. (Resource) and Bristol Regional Medical Center (Medical Center) signed an agreement in which the Medical Center agreed to pay a fee for physicians it hired through Resource's recruiting efforts. Resource has its principal office in Brentwood, Williamson County, Tennessee. The Medical Center is located in Sullivan County, Tennessee.
On April 29, 1994, Resource filed an action in the Williamson County Chancery Court alleging that it had provided services under the contract for which the Medical Center refused to pay. The trial court granted a motion filed by the Medical Center to dismiss the action on the ground of improper venue. See Tenn. R. Civ. Proc. 12.02(3).
II.
The legislature has provided that transitory actions may be brought where the cause of action arises or where the defendant resides or is found. Tenn.Code Ann. § 20-4-101(a). The appellant argues that the cause of action arose in Williamson County where the payment for its services should have been made.
The record consists of the complaint and the affidavit of one witness for each party. On some details the affidavits conflict; but on the essential points they agree: Resource contacted the Medical Center by telephone and solicited the contract in which the Medical Center agreed to pay Resource for its services in recruiting members for the Center's medical staff; Resource sent the contract through the mail; it was executed by the Medical Center agents in Bristol and returned to Resource through the mail; Resource successfully placed one physician at the Medical Center and received the stipulated fee; Resource faxed unsolicited information on many other physicians to the Medical Center, one of whom it hired; the Medical Center disputes Resource's claim that it is due a fee. The agreement does not contain the address of either party; neither does it specify where payment is to be made. So far as the record shows, no agents of either party traveled to the home county of the other, either in consummating the contract or in performing under it.
Since the venue statute was amended in 1972 to provide that transitory actions could be brought where the cause of action arises, the courts have been called on to interpret that provision in several cases. In Mid-South Milling Co., Inc. v. Loret Farms, Inc., 521 S.W.2d 586 (Tenn.1975), the Supreme Court held that in an action for breach of warranty under Article II of the Uniform Commercial Code, the breach of warranty occurred when the seller tendered delivery to the buyer. See Tenn.Code Ann. § 47-2-725(2). Thus, the cause of action arose in the county of the buyer's place of business.
In other unreported cases involving the sale of goods, this court has held that payment is due, unless otherwise expressly provided for, at the place of delivery. See Tenn.Code Ann. § 47-2-310. Thus, the proper venue for an action to collect the balance due on a contract of sale is in the buyer's county. See Communications Systems, Inc. v. Tennessee Electric Company, Inc., Court of Appeals, filed in Jackson, August 25, 1981; Woodcraft, Inc. v. The Great Smokey Mountain Furniture Co., Court of Appeals, filed in Knoxville, November 20, 1979.
*2 In Insituform of N. America v. Miller Insituform, 695 S.W.2d 198 (Tenn.App.1985), an action to collect an account arising out of contract, this court held that the cause of action arose in the creditor's county. Quoting a Florida case, Mendez v. George Hunt, Inc., 191 So.2d 480 (Fla.App.1966), the court said, "In such cases the default and breach consist of the failure to pay the money and the cause of action accrues where the default occurred, which would necessarily be in the county where the creditor resides." In Insituform, although the debt partially arose out of a sale of goods, and would be subject to the rule in Communications Systems, Inc. and Woodcraft, the court noted that the materials were sold f.o.b. Memphis and that an officer of the plaintiff corporation filed an uncontroverted affidavit that payment of the accounts was due in Shelby County.
We think the narrow Insituform rule does not cover the facts in this case. In Insituform the claim was for a liquidated debt in which the record showed that the defendant was to make payment in Shelby County. Here, the record is silent on that crucial fact and we decline to adopt a rule saying as a matter of law that payment in all actions based on contract is due at the creditor's residence.
Instead, we hold that in this case the breach occurred where the defendant failed or refused to take the steps necessary to fulfill its part of the contract, the payment of the claim. The only place where that could have occurred is Sullivan County. Therefore, venue was properly assigned to that county.
The appellee also insists that venue issues are generally left to the trial judge's discretion. The authority it cites for that proposition, however, Tennessee Gas Transmission Company v. Oakley, 193 Tenn. 638, 249 S.W.2d 880 (1952), involved a motion for a change of venue, a matter in which the trial judge's discretion does play a large part. An original question of venue is a question of law and not one of fact.
The judgment of the court below is affirmed and the cause is remanded to the Chancery Court of Williamson County. Tax the costs on appeal to the appellant.