The Indiana Court of Appeals has held that a statute concerning preferred venue in corporate lawsuits is void because it conflicts with an Indiana Supreme Court-adopted trial rule. The appellate court’s ruling upheld the denial of a change of venue motion in a medical malpractice case based on the statute being a nullity.
Charlene Noel filed a Marion County medical malpractice action against IU Health Southern Indiana Physicians, Inc., Dr. Carlito Sabandal and nurse practitioner Sarah Whiteman, among other defendants, alleging the malpractice that occurred at IU Bedford in Lawrence County. Noel filed the case in Marion County because that’s where IU Health’s registered agent has an address, making Indianapolis the preferred venue under Indiana Trial Rule 75(A)(4). But the defendants moved to transfer the venue to Lawrence County under Indiana Code section 23-0.5-4-12, noting the registered agent’s principal office was in Bedford.
The Marion Superior Court denied the transfer motion, prompting the instant appeal in Indiana University Health Southern Indiana Physicians, Inc., et al. v. Charlene Noel, 18A-CT-1299. In affirming the denial of the motion to transfer venue, the Court of Appeals looked to the Indiana Supreme Court case of American Family Ins. Co v. Ford Motor Co., 857 N.E.2d 971 (2006), which held that Trial Rule 75(A)(4) “establishes preferred venue in the county of the defendant organization’s registered office.”
However, on Jan. 1, I.C. 23-0.5-4-12 took effect, holding that “(t)he address of the agent does not determine venue in an action or a proceeding involving the entity.” On appeal, the defendants and the Defense Trial Counsel of Indiana, acting as amicus, argued that under the new statutory scheme, “(t)he Indiana legislature not only eliminated the legal basis for the Supreme Court’s ruling in American Family, it also affirmatively and unambiguously determined that the location of the resident agent was not a basis for preferred venue.”
But the appellate court disagreed, finding instead that I.C. 23-0.5-4-12 conflicts with Trial Rule 75 and, thus, is a nullity. Judge Robert Altice, writing for the unanimous panel on Wednesday, noted corporations are still required to ‘designate and maintain a registered agent in this state” under I.C. 23-0.5-4-1(a).
“Thus, although the statutes have changed, a corporation still must have a registered agent in Indiana authorized to receive service of process,” Altice wrote. “The address of the corporation’s registered agent more closely comports with the meaning of ‘principal office’ as the term was understood in 1970 than the current statutory definitions of ‘principal office,’ one of which was expressly rejected in American Family.”
“Laws in conflict with rules promulgated by the Court ‘have no further force or effect.’ Further, procedural rules adopted by the Court are regularly interpreted by the Court, and these cases also ‘take precedence over any conflicting statutes,’” Altice continued. “… We hold that I.C. 23-0.5-4-12 conflicts with T.R. 75(A)(4) as interpreted by the Indiana Supreme Court and that the statute is, therefore, a nullity.
“American Family remains controlling law in Indiana,” Altice said. “If the Indiana corporate community is dissatisfied with the Court’s interpretation of the rule, recourse lies with the Indiana Supreme Court Committee on Rules of Practice and Procedure, not the legislature.”