Summary
advertising in newspaper that had some circulation in Wayne County was not “conducting business” there for venue purposes
Summary of this case from Kohring v. BallardOpinion
Docket No. 50583.
Decided November 16, 1981.
Metry, Metry Sanom, for plaintiffs.
Ready, Sullivan Ready, for defendant.
Defendant appeals by leave granted from an order of the Wayne County Circuit Court dated February 21, 1980, granting plaintiffs' motion for rehearing on defendant Gray's motion for a change of venue and denying the motion for a change of venue.
On September 26, 1979, plaintiffs filed a wrongful death action in the Wayne County Circuit Court. Saliba Saba's decedent drowned in a quarry being purchased by Gray (hereinafter defendant) from Emma Alban. The quarry was located in Monroe County. Plaintiffs averred in their complaint that defendant "was and is doing business in the County of Wayne".
On November 14, 1979, defendant filed a motion for a change of venue, contending that he did not conduct business in Wayne County within the meaning of MCL 600.1621; MSA 27A.1621. After a hearing, at which plaintiffs' attorneys did not appear, the circuit court granted the change of venue. Thereafter, defendant submitted a proposed order pursuant to GCR 1963, 522.1. Plaintiffs filed written objections to the proffered order in accordance with GCR 1963, 522.1(2). Nonetheless, the order was executed and entered on December 19, 1979.
On January 4, 1980, plaintiffs' motion for rehearing was considered. Plaintiffs argued that the order had been improperly entered because objections to the proposed order had been filed and no hearing to consider these objections and to settle the order had been conducted. The trial court reserved a ruling at this time and suggested to plaintiffs that they depose defendant within two weeks to discover if he was doing business in Wayne County. The court also stated that at least for the present, "the file will remain in Wayne County".
On February 1, 1980, the trial court determined that it would grant plaintiffs' motion for rehearing. The court indicated that in its opinion venue was properly laid in Wayne County.
Defendant first asserts that once the circuit court issued its order granting his motion for change of venue, it lost jurisdiction over the case. Thus, the subsequent order granting a rehearing and denying the change of venue was of no effect. Plaintiffs note that this claim was never raised in the trial court and assert that this Court is consequently barred from considering it.
The failure to timely raise a claim of improper venue in the lower court precludes consideration of the claim on appeal. GCR 1963, 409, Board of County Road Comm'rs of Berrien County v Marineland Development Co, 17 Mich. App. 503; 169 N.W.2d 682 (1969). In this case, however, the issue raised by plaintiff implicates more than a mere matter of venue. If the Wayne County Circuit Court had no authority to take further action in this case after the order changing venue was entered, the jurisdiction of that court was nonexistent. See MCL 600.1651; MSA 27A.1651, Sugar, Schwartz, Silver, Schwartz Tyler v Thomas, 25 Mich. App. 41; 181 N.W.2d 59 (1970). The issue of the court's jurisdiction over the subject matter of the litigation can be reached at any time. Bandfield v Wood, 104 Mich. App. 279, 281-282; 304 N.W.2d 551 (1981). This case does not involve the normal challenge to a court's subject-matter jurisdiction, namely, a claim that the court assuming jurisdiction has no legal authority to exercise judicial power over that class of cases. For instance, Bandfield, supra (Court of Claims or circuit court), Kita v Matuszak, 21 Mich. App. 421; 175 N.W.2d 551 (1970), lv den 383 Mich. 806 (1970) (Michigan circuit court or federal district court). Nonetheless, the subject-matter jurisdiction of the circuit court is under attack. Although the Wayne County Circuit Court has the authority to exercise power in wrongful death actions, it does not have the power to exercise authority over a wrongful death action pending in another county. Analyzed in the traditional terms of power to act in a class of cases, one circuit court has no power to exercise authority over cases pending in another circuit court. Thus, the Wayne County Circuit Court does not have subject-matter jurisdiction over that class of cases pending in other circuit courts in the state.
Defendant's argument that the Wayne County Circuit Court lacked jurisdiction over this case after it entered the order changing venue rests on the following excerpt from Sugar, supra, 44:
"Once venue has been changed and a different circuit assumes jurisdiction, the court assuming jurisdiction is vested with all of the authority. This is evidenced by two factors. First, the statutes indicate that the transferee court shall have all jurisdiction as if the suit were commenced there.
"`The court of the county to which the transfer is made shall thereupon have full jurisdiction of the action as though the action had been originally commenced therein.' MCL 600.1651; MSA 27A.1651).
"Secondly, the court rules indicate that upon timely motion the transferor court must divest itself of authority.
"`Upon determination that venue is improperly laid, the court must order the change.' 2 Honigman Hawkins, Michigan Court Rules Annotated (2d ed), Committee Notes, p 274.
"On the basis of the foregoing it is our holding that when the transferor court granted a change of venue, it thereupon lost jurisdiction over all matters undecided before it and the transferee court then became vested with jurisdiction and authority to act on all pending matters."
Plaintiffs argue that the excerpt from Sugar does not apply to this case. They argue that the order changing venue was executed and entered in violation of GCR 1963, 522.1(2) and was thus void ab initio. GCR 1963, 522.1(2) provides:
"If the judgment or order has not been signed under the preceding provisions hereof, within five days after the granting of the judgment or order, any party may serve a copy of a proposed judgment or order upon the other parties or their attorneys together with a notice to them that the proposed judgment or order will be submitted to the judge for signing if no written objections thereto are filed with the clerk of the court within five days and file the original thereof together with a proof of service of same upon the other parties with said clerk. If no written objections are filed within five days, the clerk shall submit the proposed judgment or order to the judge who shall then sign the same if, in his determination, it comports with his decision. If the proposed judgment or order does not comport with the decision of the judge, the parties shall thereupon be notified by the clerk, under the direction of the judge, to appear before the judge at a date certain for settlement thereof. If written objections are filed, the clerk shall thereupon notify the party, who filed the proposed judgment or order with the clerk, who shall thereupon notice the judgment or order for settlement before the judge within five days after receiving such notice from the clerk." (Emphasis supplied.)
In this case, plaintiffs did file written objections to the entry of the proposed order changing venue. However, the clerk apparently did not notify defendant to notice the order for settlement. As GCR 1963, 522.1(2) is written, its literal command was violated by the failure to hold a settlement hearing before the trial judge. At the same time, we note that the apparent intention behind the rule was not implicated by the clerk's failure to properly follow it. The purpose of GCR 1963, 522.1(2) is to ensure that only orders comporting with the judge's decision are entered. Plaintiffs do not now contend, nor did they argue below, that the order granting the change of venue did not comport with the judge's decision. Instead, they contend that the decision was incorrect. In our opinion, GCR 1963, 522.1(2) should not be looked upon as a rule providing for a rehearing of the substantive merits of the underlying issue. We believe that the reference to "written objections" in the last sentence of GCR 1963, 522.1(2) is correctly construed as meaning written objections stating that the order does not comport with the court's decision.
If plaintiffs' view of the rule prevailed, we could expect claims that a judgment was void because the losing party filed objections to the entry of the decree merely asserting that the court's decision was wrong. GCR 1963, 522.1(2), if taken literally, would require a settlement hearing under these circumstances. Moreover, the burden would actually be placed on the winning party to do the work necessary to have a hearing. A literal construction of the rule, then, would give the losing party an opportunity for rehearing and force the burden of arranging for the rehearing on the winning party.
Assuming, arguendo, that the clerk is required to literally adhere to GCR 1963, 522.1(2), without regard to the nature of the written objections, the order granting a change of venue entered in this cause was still valid. GCR 1963, 522.1 does not state that the clerk's failure to comply with the edicts of the rule invalidates any order or judgment entered in violation thereof. The Michigan Supreme Court had occasion to consider a similar problem in Brashers v Jefferson, 402 Mich. 399, 400-402; 263 N.W.2d 243 (1978). In Brashers, GCR 1963, 102, prior to its amendment in April, 1979, was under consideration. This rule provided that an original summons shall expire 180 days after the complaint is filed. GCR 1963, 102.5 stated that the clerk of the court shall "automatically" enter an order of dismissal after the expiration of the 180-day period. Despite this language, the Court in Brashers held that unless the clerk actually took the mandated action of entering an order of dismissal, the summons was still in full force and effect. Analogizing from the Brashers decision, we believe that where the clerk does not take the mandated action under GCR 1963, 522.1, and the trial court signs the proposed decree, that order or judgment is entirely valid.
Plaintiffs also argue that, to the extent the order changing venue can be deemed valid, GCR 1963, 528.1, allowing for the correction of clerical mistakes in a judgment or order, authorizes the court's subsequent decision to reverse itself. We disagree. There was no clerical error in the order, rather, the court simply changed its mind concerning how the venue issue should be resolved.
In our opinion, the Wayne County Circuit Court lost jurisdiction over further proceedings in this action when the judge executed the order granting the change of venue. The fact that the file had not actually been shipped to Monroe County is immaterial. Following the entry of the order, defendant would have been within his rights to file motions or further documents in Monroe County. This does not mean that a party can never obtain a rehearing of a court's decision to grant a change of venue. The transferor court may enter an order granting the change of venue effective a reasonable number of days (such as 20) from the date the order is entered. See GCR 1963, 408. During this interim period, the transferor court would continue to have jurisdiction over the case and, if a motion for rehearing was made within this period, the trial court would be empowered to reverse its earlier decision.
Defendant may have had some difficulty getting the Monroe County Circuit Court clerk to accept any documents. However, by right, if defendant presented a certified copy of the order changing venue, the clerk could not properly refuse the documents.
Defendant also maintains that the Wayne County Circuit Court erred in concluding that he conducted business in Wayne County. MCL 600.1621(a); MSA 27A.1621(a) provides:
"The county in which a defendant resides, or has a place of business, or conducts business, or in which the registered office of a defendant corporation is located, is a proper county in which to commence and try an action."
We have been unable to uncover any cases specifically construing what is meant by conducting business within the meaning of MCL 600.1621(a); MSA 27A.1621(a). However, this provision was rewritten and basically replaced MCL 600.1625; MSA 27A.1625, in 1976. Formerly, MCL 600.1625(b); MSA 27A.1625(b) provided:
MCL 600.1625; MSA 27A.1625 was repealed contemporaneously with the revision of MCL 600.1621(a); MSA 27A.1621(a). Both changes were embodied in the venue statute by 1976 PA 375, effective January 1, 1977.
"[B]oth domestic and foreign corporations are established in any county in which the corporation (i) has its principal place of business, (ii) has its registered office, (iii) has a place of business if a plaintiff is established therein, or (iv) is doing business if a plaintiff is established therein."
In Frees v Southern Michigan Cold Storage Co, 43 Mich. App. 756; 204 N.W.2d 782 (1972), this Court held that the term "doing business" excluded acts which are merely incidental to the business in which the company is ordinarily engaged. In Frees, the Court determined that a warehouser of fruits and vegetables in Oceana County was not doing business in Muskegon County by purchasing parts used to maintain its refrigeration equipment in Muskegon County.
We believe that the term "conducts business" in MCL 600.1621(a); MSA 27A.1621(a) should be interpreted in accordance with the term "doing business" as formerly used in MCL 600.1625; MSA 27A.1625. In the instant case, defendant testified that he was the owner of Perry Gray and Associates, located in Monroe County. Perry Gray and Associates has been granted the right to use the name Earl Keim Realty and has been assigned an area in which to do business pursuant to an agreement with Earl Keim, Incorporated. This area is located entirely in Monroe County. In return for the use of the Earl Keim name and certain other services, defendant pays 5% of the gross residential sales from his realty business to Earl Keim, Incorporated.
Gray further stated that he advertised in the Monroe Evening News and the Toledo Blade. Both newspapers have some circulation in Wayne County.
Gray also indicated that there is an understanding among realtors using the Keim name that if one of them is approached by a particular buyer or seller located outside of his assigned area, such person is to be referred to the Keim realtor in the local area in which the property is situated. If such a referral results in a commission, the referring broker receives some portion thereof. However, Gray stated that he has received only one referral from a Wayne County broker. Furthermore, he indicated that he has never sold a property located outside of Monroe County.
Based on the foregoing, we do not believe defendant can be properly characterized as conducting business in Wayne County. Defendant has restricted his real estate agency activities to properties located in Monroe County. The fact that two newspapers in which defendant advertises have some circulation inside Wayne County does not mean he is conducting business in that county. Almost any newspaper useful as an advertising medium within the county in which the business is actually conducted will have some incidental circulation outside the county. Defendant has received one referral from an Earl Keim agent in Wayne County and may receive others in the future. However, this is due to the fact that Keim agents restrict their realty activities to particular locales. The referral in question was of a person interested in Monroe County realty, the location in which defendant conducts his business. If the Earl Keim referral system was deemed sufficient to find defendant doing business in Wayne County, any county in which an Earl Keim office existed could also be a place of proper venue. Such a holding would defeat the purpose behind the venue statute, viz., that an action should be instituted in a county in which the defendant has some real presence such as might be shown by systematic or continuous business dealings inside the county.
The result would be different if the suit was against Earl Keim, Incorporated, as opposed to an independent agent using the Keim name. Keim's contract with each of the individual realtors would place it within the scope of the "conducts business" language of MCL 600.1621(a); MSA 27A.1621(a).
Reversed and remanded for proceedings consistent with this opinion. Defendant-appellant may tax costs.