Court Opinion

ID: 5710
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:08:51+00
Date Added: 2024-06-11T15:04:36.959860
License: Public Domain

United States Court of Appeals,

                                        For the Fifth Circuit.

                                            No. 92-3907

                                         Summary Calendar.

                             Seth E. KEENER, Jr., Plaintiff-Appellant,

                                                  v.

     GENERAL MOTORS CORPORATION, and Royal Insurance Company of America,
Defendants-Appellees.

                                           June 11, 1993.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before HIGGINBOTHAM, SMITH, and DeMOSS, Circuit Judges.

       DeMOSS, Circuit Judge:

                                          BACKGROUND

       On June 12, 1991, Seth E. Keener, Jr. ("Keener") was driving a 1986 Chevrolet half ton diesel

pickup truck in Baton Rouge Parish, Louisiana, when the vehicle's steering wheel sector pulled loose

from its frame causing injuries to Keener's back as he attempted to gain control of the vehicle. On

May 21, 1992, Keener filed suit in the Civil District Court of the State of Louisiana for the Parish of

Orleans (the State Court) against General Motors Corporation ("General Motors") and Royal

Insurance Company of American ("Royal"), the liability insurer for General Motors, alleging that

defects in the design and/or manufacturer of the steering column caused his injuries. Service of

citation in the State Court suit was accomplished on General Motors by serving CT Corporation, the

designated agent of General Motors for service of process, on July 7, 1992, at the offices of CT

Corporation in Orleans Parish. Service of process was acco mplished on Royal by serving the

Secretary of State of Louisiana on July 9, 1992, at the offices of the Secretary of State in the Parish

of East Baton Rouge, Louisiana. On July 28, 1992, both General Motors and Royal filed in the State

Court a declinatory exception of improper venue and peremptory exception of prescription. On July

30, 1992, both General Motors and Royal filed a notice of removal of the State Court action with the

U.S. District Court for the Eastern District of Louisiana at New Orleans (the District Court) on the
grounds that there was complete diversity of citizenship and more than $50,000 in controversy. On

August 4, 1992, General Motors and Royal filed an amended notice of removal in the District Court.

On August 17, Keener filed in the District Court a memorandum in opposition to the exception of

improper venue and peremptory exception of prescription, and on September 18, 1992, General

Motors and Royal filed in the District Court their motion for summary judgment, a memorandum in

support thereof, and a statement of uncontested material facts. On October 5, 1992, Keener filed a

memorandum in opposition to defendants' motion for summary judgment and a statement of

contested issues of material fact. The District Court took up consideration of the motion for

summary judgment without any hearing or oral argument, and on October 19, 1992, entered a

judgment "dismissing plaintiff's suit" and filed a supporting order and reasons for such summary

judgment.

                                              OPINION

       It is clear under Louisiana Law that the liberative prescription period for a cause of action

such as asserted by Keener herein is one year; and that the prescriptive period commences to run

from the day injury or damage is sustained. La.Civ.Code Art. 3492. Likewise it is clear under

Louisiana Law that the prescriptive period is interrupted "when the obligee commences action against

the obligor, in a court of competent jurisdiction and venue"; and that if an action is commenced "in

an improper venue, prescription is interrupted only as to a defendant served by process within the

prescriptive period." La.Civ.Code Ann. Art. 3462. It is undisputed that Keener's State Court suit

was filed within the prescriptive period; but neither General Motors nor Royal were served with

process during the prescriptive period. While it may or may not be material, Keener asserts in his

summary judgment memorandum that on the date of filing of his State Court suit he paid the sheriff

the fees required for effecting service of process against the defendants but "plaintiff's petition for

damages was not delivered by the clerk of court to the civil sheriff's office until July 6, 1992" which

was of course after the expiration of the prescriptive period. It is not disputed that the State Court

in Orleans Parish was a court of competent jurisdiction for Keener's law suit; but there is

considerable dispute between the parties as to whether Orleans Parish was "an improper venue" for
the State Court suit within the meaning of Article 3462.

        The general rules for venue under Louisiana Law are set forth in Article 42 of the Code of

Civil Procedure which specifies where an action against the various categories of defendants

described in the subparagraphs thereof must be brought. The subparagraphs pertinent to this case

read as follows:

        (4) A foreign corporation licensed to do business in this state shall be brought in the parish
               where its primary place of business in the state is located or in the parish designated
               as its principal business establishment in its application to do business in the state.1

        (7) A foreign or alien insurer shall be brought in the parish of East Baton Rouge.

        The general rules of venue provided in Article 42 are subject to the exceptions provided in

Articles 71 through 85, and otherwise as provided by law. La.Code Civ. Proc. Art. 43. The pertinent

exception in this case is Article 73 which specifies that an action against joint or solidary obligors may

be brought in a parish of proper venue, under Art icle 42 only, as to any obligor who is made a

defendant. It is uncontested that the allegations of Keener's State Court petition sufficiently allege

"in solido" liability between General Motors and Royal; and therefore venue would be proper as to

both General Motors and Royal if venue is proper as to either one of them. The proper venue as to

Royal is fixed by statute as being East Baton Rouge Parish, which is obviously not the parish where

the State Court action was initially filed. Therefore, the propriety of venue of Keener's State Court

action must be determined by whether or not Orleans Parish was a proper venue for an action against

General Motors.

        We could find no Louisiana cases interpreting the concept of "primary place of business in the

State" as added to Article 42(4) by the amendment in 1990.2 In our view the plain language of

subparagraph (4) states that there are two parishes where venue would be proper against a foreign

corporation: First, the parish "where its primary place of business in the state is located", or secondly,

   1
    Prior to its amendment in 1990 subparagraph (4) read as follows: "(4) A foreign corporation
licensed to do business in this state shall be brought in the parish where its principal business
establishment in the state is located, as designated in its application to do business in the state;"
   2
    Spott v. Otis Elevator Co., 601 So. 2d 1355 (La.1992) was decided after the amendment of
Art. 42(4) in 1990 but did not address the meaning of "primary place of business".
"the parish designated as its principal business establishment in its application to do business in the

state." By amending subparagraph (4) in 1990, the Louisiana Legislature obviously intended for the

phrase "primary place of business" to mean something different from "principal business establishment

in its application to do business in the state"; otherwise there would have been no necessity for the

amendment. The only evidence tendered by General Motors and Royal in support of their contention

that Orleans Parish was not a proper venue for the action against General Motors, was a certificate

from the Secretary of State of Louisiana dated July 21, 1992, which certifies that General Motors

filed an application for Certificate of Authority in the Secretary of State's office on December 29,

1941, that no Certificate of Withdrawal has been issued; and that "the records of this office indicate

the principal business establishment in Louisiana is Indust rial Park, City of Shreveport, Parish of

Caddo, State of Louisiana, 71130." (Emphasis added) Nothing in the certificate from the Secretary

of State's office speaks to the "primary place of business" of General Motors. In their statement of

uncontested material facts General Motors and Royal stated:

       (4) General Motors Corporation is a Delaware corporation whose principal place of business
       within Louisiana is Caddo Parish. (Emphasis added)

       In their memorandum in support of their motion for summary judgment, General Motors and

Royal state:

       Under La.C.C.P. Art. 42(4) General Motors' primary place of business in the state is Caddo
       Parish. See Exhibit 1 evidencing the fact that Caddo Parish is designated as General Motors
       principal business establishment in its application to do business in the state. (Emphasis
       added)

       In several other places in their memorandum, General Motors and Royal use the phrase,

"principal place of business" as the defining terms where a corporation may be sued. In effect

therefore, General Motors and Royal contend that the two separate parts of Article 42(4) should be

treated as one and the same definition; and utilize parts of each definition to come up with the

blended term of "principal place o f business" as the relevant test. We do not agree with this

construction of Article 42(4). We think the two parts of subparagraph (4) are separate and distinct;

and the mere fact that General Motors designated Caddo Parish as where its "principal business

establishment" is located does not constitute proof that Caddo Parish is also its "primary place of
business" in Louisiana.

        Likewise, we think the District court misinterpreted Article 42(4) in its "order and reasons"

filed in support of its judgement. The District Court clearly and expressly deals with the part of

Article 42(4) relating to the principal business establishment of the corporation as designated in its

application to do business, but nowhere does the court address the first part of Article 42(4) relating

to the "primary place of business in the state." In effect the court reads Article 42(4) as it was prior

to the 1990 amendment and determines that Caddo Parish is the only proper venue for a suit against

General Motors because "General Motors designated Caddo Parish as its principal business

establishment in its 1941 application to do business in Louisiana."

        In his statement of Contested Issues of Material Fact, Keener stated:

        1. Orleans Parish is the primary place of business of General Motors Corporation.

We find no affidavit or other summary judgment evidence which addresses the factual issues of (i)

whether or not General Motors had an office of any kind in Orleans Parish, and (ii) if it did, whether

that office was the primary place of business of General Motors in Louisiana.

        If the issue and remedy before the court were change of venue under Louisiana law, the

burden of proof would be on Keener to show proper venue in Orleans Parish. That issue and remedy

has been mooted by the election of General Motors and Royal to remove the case to the District

court. The real remedy before the court is dismissal because of prescription; and in that context, the

critical issue is "improper venue" in Orleans Parish, as to which the burden of proof falls on General

Motors and Royal because it is an essential element of the relief they seek.

        We conclude therefore, that the trial judge erred in granting summary judgment to General

Motors and Royal on the grounds of prescription when the key element of the impropriety of venue

was contested and unresolved by the summary judgment evidence.

        Since the subject may well come up again on remand, we take this occasion to indicate some

preliminary thoughts on what constitutes a "primary place of business." Keener made the argument

that Orleans Parish should be considered to be the "primary place of business" of General Motors

because the office of CT Corporation, its designated agent for service of process, was located in
Orleans Parish. Keener also inferred that the "registered office" of General Motors was the office of

CT Corporation in Orleans Parish; but there is no express indication of that in the record. Other

subparagraphs of Article 42 clearly indicate that the Louisiana Legislature knows how to refer to

either the "registered office" or the "office of the registered agent" of a corporation, and none of those

words were used in subparagraph (4). Consequently we doubt that the mere fact the office of the

registered agent was in Orleans Parish or that the "registered office" of General Motors was in

Orleans Parish would be sufficient by themselves to establish that Orleans Parish was where the

"primary place of business" of General Motors is located.

        Accordingly, we REVERSE and REMAND this cause to the trial court for further

proceedings consistent herewith.