Learn About the Law
Get help with your legal needs
FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.
OMNE FINANCIAL, INC., Plaintiff-Appellee, v. SHACKS, INC. and Lee Shacks, Jr., Defendants-Appellants.
This case presents us with the question whether a contractual agreement that seeks to establish the venue of potential causes of action that might accrue after the execution of the agreement is enforceable. We hold that it is not.
Pursuant to a lease, North American Interstate, Inc., was to provide defendant Shacks, Inc., with two jukeboxes and two pool tables in return for fixed monthly payments. The lease contained a provision dictating venue for any cause of action arising under the lease:
This lease shall not be effective until signed by the Lessor at our offices. This lease shall be construed to have been executed in the State of Michigan and shall be interpreted in accordance with the law and regulations of the State of Michigan. Lessee hereby agrees to jurisdiction in Michigan in the case of any action, suit or proceeding arising out of this lease and venue shall be in the district court for the 45A Judicial District (if the damages involved are in excess of $10,000 then the circuit court for the county of Oakland). Lessee hereby acknowledges that Lessee has transacted business in the State of Michigan by entering into the lease, and that the jurisdiction, choice of law and venue provisions of this lease are specifically negotiated terms of this lease. (Emphasis added.)
Defendant Lee Shacks, Jr., personally guaranteed the payments. The lease was subsequently assigned to plaintiff.
Plaintiff filed suit in the Oakland Circuit Court alleging that defendants breached the lease agreement and guaranty by failing to make the required payments. Defendants then filed a motion to change venue on the ground that venue was improper in Oakland County. The trial court denied defendants' motion, and defendants now appeal by leave granted.
In Michigan, venue is controlled by statute. Plaintiff's suit included claims for contract damages and for return of the leased property.1 The venue statute applicable to contract claims, M.C.L. § 600.1621; M.S.A. § 27A.1621,2 reads:
Except for actions provided for in sections 1605, 1611, 1615, and 1629, venue is determined as follows:
(a) The county in which a defendant resides, 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.
(b) If none of the defendants meet 1 or more of the criteria in subdivision (a), the county in which a plaintiff resides or has a place of business, or in which the registered office of a plaintiff corporation is located, is a proper county in which to commence and try an action.
(c) An action against a fiduciary appointed by court order shall be commenced in the county in which the fiduciary was appointed.
The venue statute applicable to the recovery of tangible personal property, M.C.L. § 600.1605; M.S.A. § 27A.1605, reads:
The county in which the subject of action, or any part thereof, is situated, is a proper county in which to commence and try the following actions:
(a) the recovery of real property, or of an estate or interests therein, or for the determination in any form of such right or interest;
(b) the partition of real property;
(c) the foreclosure of all liens or mortgages on real property; and
(d) the recovery of tangible personal property.
There is no statutory provision that specifically permits parties to agree contractually to any other venue.
No Michigan cases have directly addressed the question whether parties may contractually agree to the venue of potential causes of action that might arise after execution of the contract containing the venue provision. The few cases that touch on this issue at all suggest that, where there is an existing cause of action, parties may agree to venue. See Garavaglia v. Dep't of Revenue, 338 Mich. 467, 470, 61 N.W.2d 612 (1953); Grand Trunk Western R Co. v. Boyd, 321 Mich. 693, 699-700, 33 N.W.2d 120 (1948), rev'd on other grounds, 338 U.S. 263, 70 S.Ct. 26, 94 L.Ed. 55 (1949); Nat'l Equipment Rental v. Miller, 73 Mich.App. 421, 425, 251 N.W.2d 611; (1977).3 These cases do not address the question whether such agreements are enforceable where they conflict with the statutes and court rules regarding venue, nor do they address the question whether such agreements could act as a waiver of a party's right to challenge venue.
In order to determine whether contracts regarding venue are enforceable, we must interpret the statutes that control venue. Statutory interpretation is a question of law, which we review de novo. Long v. Chelsea Community Hosp., 219 Mich.App. 578, 581-582, 557 N.W.2d 157, 219 Mich.App. 578, 557 N.W.2d 157 (1996). In interpreting statutes we must strive to effectuate the intent of the Legislature. Id. at 582, 557 N.W.2d 157. Because the venue statutes do not directly address the question whether parties may contractually agree to venue, we must look beyond the language of the statutes. We begin by exploring the purpose of the venue requirement.
Venue rules are not jurisdictional. M.C.L. § 600.1601; M.S.A. § 27A.1601. Jurisdiction deals with the power of a court to hear a class of cases or the authority of a court to bind the parties. Grebner v. Oakland Co. Clerk, 220 Mich.App. 513, 516, 560 N.W.2d 351 (1996); People v. Eaton, 184 Mich.App. 649, 652-653, 459 N.W.2d 86 (1990), affd. on other grounds, 439 Mich. 919, 479 N.W.2d 639 (1992); Dogan v. Michigan Basic Property Ins. Ass'n, 130 Mich.App. 313, 320, 343 N.W.2d 532 (1983). In contrast, venue rules have been described variously as (1) ensuring “that proceedings are held in the most convenient forum,” Gross v. General Motors Corp., 448 Mich. 147, 155, 528 N.W.2d 707 (1995), (2) relating to “the convenience of the litigants,” Grand Trunk, supra at 700, 33 N.W.2d 120 (quoting Panhandle Eastern Pipe Line Co. v. Federal Power Comm., 324 U.S. 635, 636, 65 S.Ct. 821, 823, 89 L.Ed. 1241, 1242 ), and (3) “primarily a matter of convenience concerned with where the trial of an action may occur,” Kerekes v. Bowlds, 179 Mich.App. 805, 810, 446 N.W.2d 357 (1989). Although the convenience of the parties is often the primary issue in venue disputes, the Michigan Supreme Court has recognized that the venue rules also address other issues:
Courts evaluate convenience primarily in terms of the interests of the parties and any relevant witnesses. However, the primary goal is to minimize the costs of litigation not only by reducing the burdens on the parties, but also by considering the strains on the system as a whole. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256-257, 102 S.Ct. 252, 266-267, 70 L.Ed.2d 419 (1981); Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507-509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). [Gross, supra at 155, 528 N.W.2d 707.]
With this purpose in mind, we now turn to a review of the statutes and court rules governing venue.
The Michigan Supreme Court has recognized that the establishment of venue is within the Legislature's power. Coleman v. Gurwin, 443 Mich. 59, 62, 503 N.W.2d 435 (1993) (citing Barnard v. Hinkley, 10 Mich. 458, 459  ). The Legislature has passed several general venue statutes, including those at issue here, as well as M.C.L. § 600.1611; M.S.A. § 27A.1611, regarding actions on probate bonds; M.C.L. § 600.1615; M.S.A. § 27A.1615, regarding actions against governmental units; and M.C.L. § 600.1629; M.S.A. § 27A.1629, regarding tort and products liability actions. The Legislature has recently used its power to revise the venue statute for tort actions, with the intent to discourage venue shopping by plaintiffs. M.C.L. § 600.1629; M.S.A. § 27A.1629; Gross, supra at 157, 528 N.W.2d 707. The Legislature has also passed specific venue provisions regarding other actions. For instance, the statute governing child custody actions requires that “if the circuit court of this state does not have prior continuing jurisdiction over a child, the action shall be submitted to the circuit court of the county where the child resides or may be found.” M.C.L. § 722.26(2); M.S.A. § 25.312(6)(2). This requirement serves to protect the best interests of children in child custody actions. Kubiak v. Steen, 51 Mich.App. 408, 414, 215 N.W.2d 195 (1974). Thus, it is clear that the Legislature has used its power to establish venue to serve interests beyond the convenience of the parties.
We note that venue is not governed solely by statute. The parties' choice of venue and motions for change of venue are matters of practice and procedure, which are primarily treated by court rule. See Hoffman v. Bos, 56 Mich.App. 448, 454-455, 224 N.W.2d 107 (1974). Where there is a conflict between a court rule and a statute, the court rule should prevail. Id. at 455, 224 N.W.2d 107. Pursuant to MCR 2.221, objections to venue are waived if not raised in a timely manner.4 Huhn v. DMI, Inc., 207 Mich.App. 313, 319, 524 N.W.2d 254 (1994), remanded on other grounds, 450 Mich. 904, 543 N.W.2d 308 (1995). In addition, a trial court, on its own motion, may order a change of venue where the venue of a civil action is improper. MCR 2.223.5
In addition to statutes and court rules, we must also consider the applicable case law regarding venue. In this regard, there are at least two rules articulated in case law that are not found in the statutes or court rules. First, venue is determined at the time a suit is filed. Kerekes, supra at 808, 446 N.W.2d 357; Brown v. Hillsdale Co. Road Comm., 126 Mich.App. 72, 76-78, 337 N.W.2d 318 (1983). Second, as noted above, Michigan courts have enforced agreements in which the parties stipulated a proper venue after a cause of action had arisen. Garavaglia, supra at 470, 61 N.W.2d 612; Grand Trunk, supra at 695, 700, 33 N.W.2d 120.
We decline to create a rule that allows parties to agree contractually to venue. Our decision is based on several considerations. First, we believe it would be improper to create such a rule on our own accord. The Legislature has established a rule that allows parties to consent to personal jurisdiction by contract. See M.C.L. § 600.701(3); M.S.A. § 27A.701(3), M.C.L. § 600.711(2); M.S.A. § 27A.711(2); M.C.L. § 600.745; M.S.A. § 27A.745. The Legislature has not established such a rule with regard to venue. As the Michigan Supreme Court has stated, a court “may not do on its own accord what the Legislature has seen fit not to do.” Farrington v. Total Petroleum, Inc., 442 Mich. 201, 210, 501 N.W.2d 76 (1993).
Second, allowing parties to avoid by contract the mandate of the statutory rules relating to venue would undermine the power of the Legislature. While the waiver provisions in the venue statutes 6 and court rules 7 give litigants some control regarding venue after a suit has been filed, we find no evidence that the Legislature intended to abandon its own power in favor of the parties' right to contract. To the contrary, the Legislature's continuing exercise of its power to establish venue is inconsistent with any suggestion that it has an intent to abandon that power. As noted above, the Legislature has used the venue rules to control venue shopping by plaintiffs in tort actions and to protect the best interests of children in child custody disputes. Gross, supra at 157-159, 528 N.W.2d 707; Kubiak, supra at 414, 215 N.W.2d 195; Bert v. Bert, 154 Mich.App. 208, 213-214, 397 N.W.2d 270 (1986). We do not believe that the Legislature intended to allow parties to subvert its power in this area by avoiding the effect of the statutory venue provisions by the inclusion of venue provisions in private contracts.8
Third, enforcing contractual agreements regarding venue would conflict with our court rules. Specifically, allowing parties to agree to a venue that is improper under the applicable venue statute would conflict with MCR 2.223(A)(2), which would otherwise permit a trial court to order a change of venue on its own motion.
The dissent concludes that we should enforce parties' venue agreements, relying on a freedom of contract rationale. The dissent fails to recognize that the power to establish venue lies with the Legislature, Coleman, supra at 62, 503 N.W.2d 435, not the parties. In this regard, the right of freedom of contract does not compel the recognition of a private right to fix venue any more than it compels recognition of a private right to establish subject-matter jurisdiction.9 The dissent offers no evidence that the Legislature intends to give up its venue powers. As we note above, the evidence is to the contrary. We do not believe that this Court may properly cede the Legislature's venue powers to litigants. If the Legislature wishes to give up this power, it is perfectly capable of doing so.
For the foregoing reasons, we conclude that contractual venue provisions are not binding on Michigan courts.10 For the same reasons, we conclude that such agreements do not constitute a waiver of a party's right to challenge venue, nor do they constitute a consent to a change of venue. There is no provision for contractual waiver or consent in the statutes or the court rules. In fact, the only ground for finding a waiver pursuant to the court rules is the failure to object in a timely manner. MCR 2.221. The court rules only permit a court to order a change of venue “for the convenience of parties and witnesses or when an impartial trial cannot be had where the action is pending,” MCR 2.222(A), or where venue is improper, MCR 2.223. We also note that enforcement of such agreements by construing them as a waiver or consent would effectively allow parties to circumvent the venue rules. As noted above, we find no evidence that the Legislature intended to allow parties to vary these rules contractually.
We believe that our conclusions can be harmonized with prior case law that suggests that courts will enforce agreements relating to venue that are made after a cause of action has arisen. See Garavaglia, supra at 470, 61 N.W.2d 612; Grand Trunk, supra at 695, 700, 33 N.W.2d 120. First, we note that these cases were decided before the Revised Judicature Act was passed and, therefore, dealt with a different statutory scheme. Second, it is significant that these cases did not address whether the venues that the parties agreed to were proper under the venue statutes then in effect. Third, these cases did not address the conflict between the Legislature's power to establish venue and the parties' right to contract. Finally, the cases did not expressly state that such contracts were always enforceable.
In Garavaglia, the defendant argued that the Ingham Circuit Court was without jurisdiction because the plaintiffs did not reside there. The Court did not discuss the defendant's venue argument, but dismissed both the jurisdiction and venue issues in a single sentence: “It is sufficient to say that, prior to the institution of the suit, the parties, in conference, agreed that, for the convenience of both the department and the taxpayer, the suit should be instituted in Ingham county and that neither party would raise any question as to the jurisdiction of the court.” Garavaglia, supra at 470, 61 N.W.2d 612. In Grand Trunk, the Court only enforced the parties' contracts concerning venue after it had found that the contracts were “fair and reasonable,” were “made without fraud after a cause of action [had] accrued,” and “would serve the convenience of both parties.” Grand Trunk, supra at 699, 33 N.W.2d 120. We believe that Garavaglia and Grand Trunk are best understood as standing for the proposition that a trial court may consider a contract regarding venue to the extent that it is relevant to the factors that the court must consider in granting or denying a change of venue.11
In this case, the trial court denied defendants' motion for a change of venue without explaining its reasoning. However, it is clear from the record below that the trial court found the venue provision in the contract enforceable. To the extent it did so, the trial court erred. On remand, the trial court must consider defendants' motion in light of the statutes and court rules regarding venue. The trial court must decide whether Oakland County is a proper venue pursuant to either M.C.L. § 600.1621; M.S.A. § 27A.1621 or M.C.L. § 600.1605; M.S.A. § 27A.1605. The court may consider the parties' lease agreement only to the extent that it is relevant to the factors in those statutes. If venue in Oakland County is improper, the trial court shall order a change of venue to a county in which venue would have been proper. MCR 2.223(A). If the court determines that venue is proper in Oakland County, the suit may proceed there.12
Reversed and remanded. We do not retain jurisdiction.
I respectfully dissent. The trial court's order denying defendants' motion to change venue from Oakland County to Saginaw County on the basis of the parties' agreement was proper. Neither the venue statutes nor the court rules prohibit courts from giving effect to the intent of the parties as expressed in the contract with regard to the choice of a particular venue. The preferable approach would be to enforce the forum selection clause in the contract unless a party could show that such enforcement would be unreasonable or that the provision was the product of fraud or overreaching. Such an approach embraces the modern view of forum selection clauses as set forth in the Restatement Conflict of Laws, 2d, § 80, p. 244 (1988), and achieves the proper balance between the parties' interest in having their disputes resolved in a mutually agreeable forum and the state's interest in ensuring fairness in the plaintiff's selection of a venue.
The majority reasons that because contractual forum selection clauses designating a particular venue are not expressly permitted by the Legislature, such clauses must of necessity be prohibited. This reverses the proper order of things. The rule is that citizens can contract with respect to particular things unless the Legislature determines that contracts regarding such matters are contrary to public policy. The Legislature has not forbidden persons from agreeing to a specific venue for future disputes. The majority's approach cannot be reconciled with the fundamental principle that individuals are free to contract as they see fit in the absence of a specific statutory or constitutional prohibition.1 Although the Legislature has seen fit to expressly permit individuals to contractually consent to personal jurisdiction, M.C.L. § 600.701(3); M.S.A. § 27A.701(3), M.C.L. § 600.711(2); M.S.A. § 27A.711(2), M.C.L. § 600.745; M.S.A. § 27A.745, it does not follow a fortiori from such express permission with regard to jurisdiction that contractual agreements with respect to venue are therefore not permitted. Had the Legislature intended to prohibit parties from contractually agreeing to venue in advance, it certainly could have done so, as demonstrated by the statutes cited by the majority limiting a plaintiff's choice of venue in probate and tort actions.2 The Legislature having imposed no such limitations with regard to venue provisions, we should conclude that there are none.
The majority contends that such agreements would abrogate a court's authority with regard to venue under the court rules; however, that is not the case. The relevant question in a contract case is whether, under the circumstances, a court should exercise its authority with regard to venue to give effect to the legitimate expectations of the parties as manifested in their voluntary agreement regarding the particular court in which certain actions must be brought. See MCR 2.222(A) and 2.223(A)(2); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9, 12, 92 S.Ct. 1907, 1913, 1914, 32 L.Ed.2d 513 (1972); Restatement, supra. There are compelling reasons why a freely negotiated agreement with respect to venue should be given full effect.3
As the majority notes, “the primary goal [of statutes and court rules establishing venue] is to minimize the costs of litigation not only by reducing the burdens on the parties, but also by considering the strains on the system as a whole.” Gross v. General Motors Corp., 448 Mich. 147, 155, 528 N.W.2d 707 (1995). Yet, the majority's decision moves the law in just the opposite direction. It increases the costs of litigation and burdens on the parties, at least as the parties themselves saw the matter as reflected in their contract. The lease in this case expressly provided that the jurisdiction, choice of law, and venue provisions were specifically negotiated terms. Thus, it must be concluded that the parties took the venue provisions into account when determining the other terms of the lease. The reduced burden on plaintiff as a result of the parties' agreement with regard to venue was presumably reflected in the amount of the lease payments. The majority has not only rewritten the express terms of the contract at issue, but has utterly failed to support its claim that the enforcement of forum selection clauses, such as the one at issue, will result in a strain on the judicial system. On the contrary, enforcing such provisions would encourage certainty in contracting and reduce the cost of litigation by enabling the parties to avoid venue disputes in advance. Thus, employing the modern view that supports enforcement of such provisions will further the goals of the Legislature and the courts by reducing the burden on the parties and the strains on the legal system.
As the majority correctly recognizes, statutes and court rules relating to venue are procedural in nature and are primarily concerned with the convenience of the litigants. MCR 2.222(A); Gross, supra at 155, 528 N.W.2d 707; Kerekes v. Bowlds, 179 Mich.App. 805, 810, 446 N.W.2d 357 (1989); 77 Am. Jur. 2d, Venue, § 47, pp. 654-655. “[V]enue is simply the location of trial, and its determination should only concern the selection of a fair and convenient location where the merits of a dispute can be adjudicated.” Gross, supra at 156, 528 N.W.2d 707. There is simply no reason why parties should not be able to stipulate in advance to the location of trial. Whatever inconvenience defendants would suffer as a result of being forced to litigate in Oakland County was clearly foreseeable at the time of contracting; both parties voluntarily decided that Oakland County would be an acceptable venue and, as discussed above, that decision formed an integral part of the contract. The majority offers no reasoning that would justify allowing defendants to avoid the consequences of their informed agreement. Although the majority fears that allowing such agreements might somehow “undermine the Legislature's power,” it would do so no more than agreements with regard to jurisdiction. Furthermore, there is no reason to assume that the statutes cited by the majority that permit a party to consent contractually to personal jurisdiction were not also intended to permit a party to consent to personal jurisdiction with regard to a particular court within the state. M.C.L. § 600.745(2)(b); M.S.A. § 27A.745(2)(b) expressly directs courts to consider whether the forum chosen by the parties “is a reasonably convenient place for the trial of the action.”
Federal courts, employing the modern view of forum selection clauses, have not distinguished between contractual provisions designating a particular court and those specifying a particular jurisdiction. See M/S Bremen, supra (upholding a forum selection clause stating that disputes were to be resolved in the High Court of Justice in London, England), Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 591-593, 111 S.Ct. 1522, 1527, 113 L.Ed.2d 622 (1991) (applying the holding in M/S Bremen to uphold a forum selection clause stating that disputes were to be resolved in Florida courts), Milk ‘N’ More, Inc. v. Beavert, 963 F.2d 1342 (C.A.10, 1992) (applying the holding in M/S Bremen to uphold the portion of a forum selection clause stating that “venue shall be proper under this agreement in Johnson County, Kansas”), and Restatement Conflict of Laws, 2d, § 80, supra at 244 (discussing agreements concerning the place or court where the parties' disputes shall be resolved). This rationale makes sense when one considers that forum selection clauses regarding jurisdiction and those designating a particular venue differ only in regard to the specificity with which the parties identify the chosen forum. In either case, the same considerations arise when determining the enforceability of the contractual provision, e.g., whether the agreement is reasonable or the result of fraud or overreaching. M/S Bremen, supra, 407 U.S. at 10, 15, 92 S.Ct. at 1913, 1916; Restatement, supra at 244. Indeed, these are the same factors that courts have been directed to take into account when assessing the enforceability of agreements regarding jurisdiction. M.C.L. § 600.745(2)(c); M.S.A. § 27A.745(2)(c). It is this approach that achieves the proper balance, giving the parties the maximum amount of contractual freedom while ensuring that the state's interest in preserving fairness is respected. The majority's result not only seriously encroaches on freedom of contract but, as has been discussed, is counterproductive because it deprives parties of a valuable tool in reducing the cost of litigation.
Moreover, there is no principled excuse for distinguishing between those agreements that are reached after a cause of action arises and those that are negotiated in advance pursuant to a contract. In Garavaglia v. Dep't of Revenue, 338 Mich. 467, 470, 61 N.W.2d 612 (1953), our Supreme Court upheld an agreement regarding venue that was entered into before suit was filed but after the cause of action arose. If, as the majority argues, venue is controlled exclusively by statute and court rule and is fixed at the time suit is filed, the agreement in that case should have been held to be invalid, because according to statute venue was properly laid elsewhere. Id. at 470, 61 N.W.2d 612. The majority points to no authority or reasoning that would justify different treatment for forum selection clauses on the basis of whether the agreement was entered into before or after the cause of action arose.
In every case in which Michigan courts have considered the question, the broader federal view has been adopted. In Grand Trunk Western R. Co. v. Boyd, 321 Mich. 693, 699-700, 33 N.W.2d 120 (1948), rev'd 338 U.S. 263, 70 S.Ct. 26, 94 L.Ed. 55 (1949), our Supreme Court adopted the modern view with regard to forum selection clauses. However, consistent with the reasoning above, the decision was reversed by the United States Supreme Court because the Federal Employers Liability Act, 45 U.S.C.§ 56, expressly forbade such agreements as applied to claims under the act. 338 U.S. at 265-266, 70 S.Ct. at 27. Similarly, this Court adopted the reasoning of Nat'l Equipment Rental, Ltd., v. Szukhent, 375 U.S. 311, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964), in Nat'l Equipment Rental, Ltd., v. Miller, 73 Mich.App. 421, 426, 251 N.W.2d 611 (1977). The fact that the federal approach was followed in both these cases and in Garavaglia, supra, inescapably leads to the conclusion that the modern view of forum selection clauses should form the basis for today's decision.
In my opinion, the trial court acted within its authority when it found that venue was proper in Oakland County on the basis of the parties' freely negotiated agreement. For these reasons, I would affirm the trial court's order denying defendants' motion to change venue.
1. Apparently, plaintiff has recovered this property. However, because venue is determined at the time a suit is filed, venue may still be proper pursuant to the statute governing recovery of tangible personal property. See Brown v. Hillsdale Co. Road Comm., 126 Mich.App. 72, 76-78, 337 N.W.2d 318 (1983).
2. The language we quote is that of the statute as amended by 1995 P.A. 161, which took effect just after the suit in this case was filed. However, the amendments were essentially grammatical and did not change the substance of the statute.
3. We note that the panel in Nat'l Equipment Rental discussed this issue in dicta and simply relied on Garavaglia and Grand Trunk. Nat'l Equipment Rental, supra at 425, 251 N.W.2d 611.
4. This rule is consistent with the corresponding statute. M.C.L. § 600.1651; M.S.A. § 27A.1651.
5. MCR 2.223 provides, in part:If the venue of a civil action is improper, the court(1) shall order a change of venue on timely motion of a defendant, or(2) may order a change of venue on its own initiative with notice to the parties and opportunity for them to be heard on the venue question.If venue is changed because the action was brought where venue was not proper, the action may be transferred only to a county in which venue would have been proper.
6. M.C.L. § 600.1651; M.S.A. § 27A.1651.
7. MCR 2.221(C).
8. For example, had the parties in Bert agreed to venue before the cause of action arose, the agreement clearly would not have been enforceable. There, the child moved out of state just before a child custody action was filed. The panel in Bert properly held that venue was improper in the child's former county of residence. The panel noted that such a finding was “necessary to safeguard the child's interests in having the action brought in the county of the child's residence.” Bert, supra at 214, 397 N.W.2d 270.
9. Parties may not stipulate subject-matter jurisdiction. Redding v. Redding, 214 Mich.App. 639, 643, 543 N.W.2d 75 (1995).
10. We recognize that other jurisdictions have addressed similar issues with varying results. See, generally, anno: Validity of contractual provision limiting place or court in which action may be brought, 31 A.L.R.4th 404. However, because our holding in this case is controlled by the intent of the Michigan Legislature and by our construction of Michigan statutes and court rules, we do not find any of these cases persuasive.
11. The relevance of the contract will depend on the degree to which the original agreement addressed these factors and on the nature and extent of any changes in the parties' situations between the time the contract was signed and the time the suit is filed. An example may be helpful. A hypothetical contract might state: “The parties agree that X is a mutually convenient forum, and that both parties conduct business in X.” Assuming a cause of action arose and was covered under the venue provisions of M.C.L. § 600.1621; M.S.A. § 27A.1621, such a contract would be essentially conclusive with respect to both the propriety and convenience of venue X on the day the contract was signed. Thus, in the absence of any other relevant considerations, a cause of action arising under that contract and filed on the day the contract was signed should proceed in venue X. However, the contract might be of little relevance with respect to these issues in an action filed years later, because the parties' circumstances might have changed.
12. Defendants' only objection to venue was that it was improper in Oakland County, and they requested only a change of venue pursuant to MCR 2.223. Thus, defendants have waived any challenge to venue under MCR 2.222.
1. See, e.g., Dep't of Navy v. Federal Labor Relations Authority, 295 U.S. App.D.C. 239, 248, 962 F.2d 48 (1992) [cited with approval in Port Huron Ed. Ass'n v. Port Huron Area School Dist., 452 Mich. 309, 319, 550 N.W.2d 228 (1996) ]:Because of the fundamental policy of freedom of contract, the parties are generally free to agree to whatever specific rules they like, and in most circumstances it is beyond the competence of the Authority, the National Labor Relations Board or the courts to interfere with the parties' choice.
2. Such limitations are justified in view of the fact that parties in such cases generally do not have either the opportunity or the capacity to negotiate and agree in advance to the most convenient venue.
3. It should be noted in advance that the analysis would be different in a situation where the parties to the contract were not on an equal bargaining basis or the terms were not subject to negotiation, such as in a contract of adhesion.
NEFF, P.J., concurred.
Response sent, thank you
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes visit FindLaw's Learn About the Law.
Docket No: Docket No. 190550.
Decided: November 14, 1997
Court: Court of Appeals of Michigan.
Search our directory by legal issue
Enter information in one or both fields (Required)
FindLaw for Legal Professionals
Search our directory by legal issue
Enter information in one or both fields (Required)