Farm Bureau Mut. Ins. Co. of Arkansas v. Gadbury-Swift
| Decision Date | 14 January 2010 |
| Docket Number | No. 09–462.,09–462. |
| Citation | 2010 Ark. 6,362 S.W.3d 291 |
| Parties | FARM BUREAU MUTUAL INSURANCE COMPANY OF ARKANSAS, INC., Appellant, v. Barbara GADBURY–SWIFT, Appellee. |
| Court | Arkansas Supreme Court |
OPINION TEXT STARTS HERE
Laser Law Firm, by: Andy L. Turner and Amanda J. Andrews, Little Rock, for appellant.
Michael Hamby, Greenwood, for appellee.
Appellant Farm Bureau Mutual Insurance Company of Arkansas, Inc. (Farm Bureau), appeals from an order of the circuit judge of the Pulaski County Circuit Court in which the judge declined to hear Farm Bureau's complaint for declaratory relief under the doctrine of forum non conveniens. In the same order, the judge transferred the matter to the Logan County Circuit Court. We reverse the order of the circuit judge and remand the matter for further proceedings.
The underlying dispute in this case involves the interpretation of a homeowner-insurance contract between Farm Bureau and appellee Barbara Gadbury–Swift. Gadbury–Swift entered into a contract for homeowner insurance with Farm Bureau to insure her residence in Booneville, which is in Logan County. The policy also provided coverage for other structures on her property provided that they were not used “for farming to any extent.” On or about March 6, 2008, an out-building on Gadbury–Swift's property collapsed, as a result of a snow storm, causing damage to the building and the enclosed property, which included a tractor and two trailers. Gadbury–Swift filed an insurance claim with Farm Bureau, which Farm Bureau denied. On June 13, 2008, Farm Bureau filed a complaint for declaratory judgment in the Pulaski County Circuit Court, seeking a declaration that the damage to Gadbury–Swift's property was not a covered loss under her policy because “the building was used in whole or in part for farming and contained hay and farming equipment.” On June 17, 2008, Gadbury–Swift filed suit against Farm Bureau for breach of the insurance contract in the Logan County Circuit Court.1
On July 8, 2008, Gadbury–Swift moved to dismiss Farm Bureau's complaint in Pulaski County on grounds of improper service and improper venue and moved, in the alternative, to transfer the matter to Logan County, where her breach-of-contract claim was pending, on the basis that Logan County was a more convenient forum to litigate the dispute. Farm Bureau responded that venue was proper in Pulaski County under Arkansas Code Annotated section 16–55–213(a)(3)(B), as Pulaski County was the location of its principal office in the state.
At a subsequent hearing on Gadbury–Swift's motion, she urged that venue in the matter was proper in Logan County under Arkansas Code Annotated section 23–79–204, which relates to insurance conflicts, and that Farm Bureau's reliance on section 16–55–213(a)(3)(B) was misplaced. Farm Bureau countered that Pulaski County was the proper venue for its declaratory-judgment action under section 16–55–213(a)(3)(B) because that was the location of Farm Bureau's principal office in the state when the cause of action accrued. At the conclusion of the hearing, the circuit judge found that venue was proper in Pulaski County under section 16–55–213(a)(3)(B), but he declined to hear the case under the doctrine of forum non conveniens. In his January 16, 2009 order, the judge said:
This Court declines to hear this case, over which it has jurisdiction as it specifically finds it would be in the interest of the parties and the public to litigate this matter in another forum, namely, in the Southern District of Logan County, Arkansas, where the Defendant herein had filed a breach of contract action asserting the same facts and circumstances in a case styled Barbara Gadbury Swift v. Farm Bureau Mutual Insurance, Logan County, Southern District, Case no.: CIV–08–49–2 which is still pending. The Court finds that in light of the fact that the loss occurred in Logan County, Arkansas and although there will be witnesses from both sides, the Court finds that for the property owners and their witnesses to travel a one hundred thirty mile one way trip would be unreasonable. The issue in this case involves whether or not the property in question was utilized for farming purposes, and although the insurance company may have adjustors from the Pulaski County area, the Plaintiff will undoubtedly have several witnesses from the Logan County area. The Court also notes that the Defendant's attorney has indicated that he is requesting a site view, which would make it unduly expensive for jurors to make a two hundred sixty mile round trip for purposes of viewing the property if the Court allowed such viewing.
Based on these findings, the judge ordered that Farm Bureau's declaratory-judgment action be transferred from the Pulaski County Circuit Court to the Southern District of the Logan County Circuit Court and that all pleadings in the matter be consolidated into Gadbury–Swift's case that was already pending there.2 Farm Bureau appealed from that order on February 6, 2009.3
Farm Bureau's issue on appeal is that the circuit judge erred by declining to hear its petition for declaratory relief and by transferring the matter to Logan County under the doctrine of forum non conveniens. More specifically, Farm Bureau contends that established precedent prohibits a circuit judge from declining to hear a case under the doctrine of forum non conveniens, when proper venue has been established by a diligent party. Farm Bureau further contends that intrastate application of the doctrine is prohibited by prior case law, and it refers this court to Hicks v. Wolfe, 228 Ark. 406, 307 S.W.2d 784 (1957), as authority for that principle. In the alternative, Farm Bureau maintains that the circuit judge's decision was based on insufficient evidence. Gadbury–Swift responds that the circuit judge's decision was authorized by Arkansas Code Annotated section 16–4–101(d), which concerns inconvenient forums, and that the judge's decision is otherwise appropriate under the law of forum non conveniens.
This court has formally recognized the doctrine of forum non conveniens, which allows a circuit court to decline to hear a matter even though the court has jurisdiction to do so. See Running v. Southwest Freight Lines, Inc., 227 Ark. 839, 303 S.W.2d 578 (1957), overruled on other grounds, Malone & Hyde, Inc. v. Chisley, 308 Ark. 308, 825 S.W.2d 558 (1992). The doctrine is generally applied in situations where it would be in the interests of the parties and the public to try the case in another forum. Wal–Mart Stores, Inc. v. United States Fid. & Guar. Co., 77 Ark.App. 217, 76 S.W.3d 895 (2002) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)). By Act 101 of 1963, our general assembly codified the doctrine as part of the Interstate and International Procedure Act:
INCONVENIENT FORUM. When the court finds that in the interest of substantial justice the action should be heard in another forum, the court may stay or dismiss the action in whole or in part on any conditions that may be just.
Ark.Code Ann. § 16–4–101(D) (Repl.1999).
This court has expressed four factors to be considered in determining whether to apply the doctrine of forum non conveniens: (1) the convenience to each party in obtaining documents or witnesses; (2) the expense involved to each party; (3) the condition of the trial court's docket, and (4) any other facts or circumstances affecting a just determination. E.g., Life of Am. Ins. Co. v. Baker–Lowe–Fox Ins. Mktg., Inc., 316 Ark. 630, 873 S.W.2d 537 (1994). Application of the doctrine lies within the sound discretion of the circuit judge and will not be disturbed on appeal absent a showing of an abuse of that discretion. See, e.g., Harvey v. Eastman Kodak Co., 271 Ark. 783, 610 S.W.2d 582 (1981).
Farm Bureau, relying on Hicks v. Wolfe, asserts that a circuit judge cannot decline to hear a case under the doctrine of forum non conveniens based on his finding that another county within the state provides a more convenient forum for the dispute because to do so would be to usurp the General Assembly's power to establish venue.
In Hicks v. Wolfe, this court reviewed a trial court's application of the doctrine of forum non conveniens to two actions arising from a traffic accident in Scott County, which involved three parties. The first vehicle was owned by Lonnie Hicks and driven by his son of the same name. The second vehicle was owned by Arkansas Motor Freight Lines, Inc., and the third vehicle was owned by Hargis Canneries, Inc. On the same day as the accident, Hicks and his son filed suit in Scott County, where the accident had occurred, while Arkansas Motor Freight Lines, Inc., filed suit in Sebastian County, where it and the Hickses were domiciled.4
The Hickses later moved to dismiss the Sebastian County action on the basis that venue had been fixed in Scott County because they had been the first parties to obtain service on the other parties. Arkansas Motor Freight Lines and Hargis Canneries similarly moved to dismiss the Scott County action. The same judge presided over both the Sebastian and Scott County Circuit Courts, and after hearing the motions in both cases together, he ruled that Sebastian County was the more convenient forum for the lawsuit under the doctrine of forum non conveniens. His reasoning was that none of the parties resided in Scott County, that a jury trial could be had quicker in Sebastian County, and that Sebastian County had a greater financial capacity to hear the case. Accordingly, the circuit judge dismissed the Scott County action.
On appeal, the question before this court in Hicks was whether the doctrine of forum non conveniens applied “between Counties in this State.” Hicks, 228 Ark. at 411, 307 S.W.2d at 787. In holding that it did not, this court cited United States v. National City Lines, 334 U.S. 573, 68 S.Ct. 1169, 92 L.Ed. 1584 (1948), for the proposition that the doctrine of forum non...
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