Steve Standridge Ins., Inc. v. Langston

• Citation: 321 Ark. 331,900 S.W.2d 955
• Decision Date: 10 July 1995
• Docket Number: No. 95-310,95-310
• Parties: STEVE STANDRIDGE INSURANCE, INC., Petitioner, v. The Honorable Don LANGSTON, Circuit Judge, Respondent.
• Court: Supreme Court of Arkansas

Page 955

900 S.W.2d 955

321 Ark. 331

STEVE STANDRIDGE INSURANCE, INC., Petitioner, v. The Honorable Don LANGSTON, Circuit Judge, Respondent.

No. 95-310.

Supreme Court of Arkansas.

July 10, 1995.

Thomas B. Pryor, Fort Smith, for petitioner.

Jon R. Coleman, Jonesboro, Robert E. Hornberger, Fort Smith, for respondent.

NEWBERN, Justice.

An airplane owned by Flanco Leasing, Inc., and CCT, Inc., (the owners) was destroyed in a crash. The owners sued General Insurance Company of America (SAFECO), contending an insurance policy issued by SAFECO covered the loss. SAFECO defended on the ground that the airplane was used as a charter, an activity not covered by the policy in question. The complaint also stated an alternative negligence claim against the petitioner, Steve Standridge, Inc., (Standridge) the insurance agency which procured the policy for the owners. It was alleged that Standridge knew the status and usage of the airplane and negligently failed to obtain the proper policy.

Standridge is a citizen of Montgomery County. The action was brought in Sebastian County where SAFECO was served. Standridge contends Sebastian County is not the proper venue with respect to the claim against it, even if it is proper as to SAFECO, because there is no allegation of joint liability. The owners contend that Standridge waived the claim of improper venue, that the writ should not issue because there are facts to be determined by the Trial Court, and that the venue issue is moot because judgment has been entered against SAFECO. We agree with Standridge that there is no allegation of joint liability and that there has been no waiver. Nor do we conclude that there is a factual question to be answered by the Trial Court or that the venue issue has been entirely mooted by the judgment against SAFECO. We, therefore, issue the writ.

Issuance of a writ of prohibition is limited in most instances to cases in which there is a complete lack of jurisdiction in the trial court of the subject matter of litigation and there is no other way to halt the proceedings. Monroe Auto Equipment Co. v. Partlow, 311 Ark. 633, 846 S.W.2d 637 (1993). This Court, however, has a long history of granting the writ in favor of a party as to whom venue is improperly laid. We characterize the venue issue as one of jurisdiction of the person, the improper assertion of which, in that instance, justifies issuance of a writ of prohibition. That tradition and the reasons for it are reported and explained in Prairie Implement Co. v. Circuit Court of Prairie County, 311 Ark. 200, 844 S.W.2d 299 (1992).

1. Joint liability

Arkansas Code Ann. § 16-60-116(a) (1987) deals with venue when there are defendants residing and summoned in separate counties. It provides, "Every other action may be brought in any county in which the defendant, or one (1) of several defendants, resides or is summoned." This provision supplies the only possible basis upon which Standridge may be sued in Sebastian County in this case. Standing alone, it would seem to permit the action to be brought against SAFECO and Standridge together in Sebastian County, as there is no venue issue with respect to the action against SAFECO and the two of them are being sued together. That is not the case, however, for as we explained recently in Junction City Sch. Dist. v. Alphin, 313 Ark. 456, 855 S.W.2d 316 (1993):

Decades ago, this court added a gloss to this venue statute and held that where venue is appropriate for one defendant, it will only lie for a co-defendant when that co-defendant is jointly liable with the resident defendant. See B-W Acceptance Corp. v. Colvin, 252 Ark. 306, 478 S.W.2d 755 (1972); Barr v. Cockrill, 224 Ark. 570, 275 S.W.2d 6 (1955); Terry v. Plunkett-Jarrell Grocery Co., 220 Ark. 3, 246 S.W.2d 415 (1952); Wernimont v. State, 101 Ark. 210, 142 S.W. 194 (1911); Atkins Pickle v. Burrough-Uerling-Brasuell, 271 Ark. 897, 611 S.W.2d 775 (Ark.App.1981).

In Barr v. Cockrill, supra, we explained that the joint liability must be "common liability of the defendants on the same cause of action." Although the claims in this case arise from the same transaction or occurrence, i.e., the insuring of the airplane, they are not joint liability claims, and they state different causes of action.

2. Waiver

A claim of improper venue may be waived if there is a failure to object. Davis v. Reed, 316 Ark. 575, 873 S.W.2d 524 (1994). Standridge objected at the outset of the litigation and has not relented. A waiver may also occur, however, if the party objecting to venue seeks affirmative relief in the action with respect to which the venue objection has been made. Thompson v. Dunlap, 244 Ark. 178, 424 S.W.2d 360 (1968). SAFECO attempted to remove this case to a United States District Court, contending that Standridge had been fraudulently joined as a party solely to defeat federal jurisdiction. The United States District Court ultimately remanded the case to the Sebastian Circuit Court after finding that removal was not warranted.

While the case was before the United States District Court, Standridge apparently did not contend that removal to the federal court was improper due to improper state court venue. In addition, Standridge moved for summary judgment in the federal court.

Our conclusion is that neither the failure to press the state court venue issue in the federal court nor the request for affirmative relief there caused a waiver of the venue issue in the Sebastian Circuit Court proceedings.

The owners cite two cases which state that, for there to be proper removal, the state court must have jurisdiction that can be conferred to the federal court; thus it is necessary for the federal district court to determine if venue was proper in the state proceedings. Still v. Missouri Pacific Railroad Co., 335 F.Supp. 78 (1971); Cobb v. National Lead Co., 215 F.Supp. 48 (1963). From these cases, the owners conclude that Standridge was obliged to raise the state court venue issue to the federal court.

In response, Standridge points out that the federal court determined that removal was improper, and remanded the case to the Sebastian Circuit Court. Accordingly, regardless of what took place in federal court, the state proceedings essentially "picked up where they left off," which was just after Standridge filed its motion to dismiss. In support of this argument, Standridge cites B-W Acceptance Corp. v. Colvin, supra, where we said:

We cannot agree with respondent that petitioner's removal of the case to the United States District Court or its subsequent remand had the effect of waiving the question now raised as to venue. Upon remand, the case stood in the state court in the same position it would have had it never been removed, and it was the duty of the state court to proceed as if it had never been removed.

See also Trinity Universal Insurance Co. v. Robinson, 227 Ark. 482, 299 S.W.2d 833 (1957).

In addition, Standridge calls our attention to the fact that the federal court, after finding that Montgomery County was within the Western District, declared the venue issue moot. Standridge argues that this ruling effectively foreclosed consideration of the issue during the removal proceedings.

In Allstate Ins. Co. v. Bourland, 296 Ark. 488, 758 S.W.2d 700 (1988), we said:

Allstate has been unable to cite, and we have been unable to find, any case in which there was a remand from the federal to the state court where it was held that a state court must treat a pleading filed in the federal court as having been filed in the state court for any purpose.

That case, coupled with the B-W Acceptance Corp. and Trinity Universal Insurance cases, indicates that whatever happens in a federal court has no bearing on the proceedings in state court once the case has been remanded after an unsuccessful removal attempt.

3. Fact issue

The owners argue that, while ruling on Standridge's motion to dismiss, the Trial Court resolved a factual dispute in that he determined the "legal effect of the facts." Under these circumstances, they contend that a writ of prohibition is not a proper remedy, citing Porter Foods Inc. v. Brown, 281 Ark. 148, 661 S.W.2d 388 (1983), and Twin City Lines, Inc. v. Cummings, 212 Ark. 569, 206 S.W.2d 438 (1947).

In the Twin City Lines case a factual dispute existed because certain evidence was in direct conflict. Helen Pearce was killed in a bus accident while riding on a bus owned by Twin City Lines. The administrator of her estate filed a negligence action against Twin City Lines in Benton Circuit Court. The applicable venue statute provided that such an action might be brought either in the county where the accident happened or the county where the deceased resided at the time of her death. At the hearing on Twin City Lines' motion to dismiss for improper venue, there was a factual dispute concerning the decedent's residence. The administrator offered proof that the decedent resided in Benton County. Twin City lines presented evidence that her true residence was Sebastian County. The Trial Court found that she resided in Benton County, and therefore, venue in Benton Circuit Court was proper. As it was necessary for the Trial Court to decide a question of fact to determine the proper venue, we held that...