Hills & Dales General Hospital v. Pantig

812 N.W.2d 793, 295 Mich. App. 14
CourtMichigan Court of Appeals
DecidedDecember 6, 2011
DocketDocket No. 298237
StatusPublished
Cited by13 cases

This text of 812 N.W.2d 793 (Hills & Dales General Hospital v. Pantig) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hills & Dales General Hospital v. Pantig, 812 N.W.2d 793, 295 Mich. App. 14 (Mich. Ct. App. 2011).

Opinion

Per Curiam.

Hills and Dales General Hospital brought this action against the Huron Medical Center and two physicians, claiming that all three violated a covenant not to compete. Not surprisingly, Hills and Dales elected to file suit in Tuscola County, its home turf. The Huron Medical Center maintains its principal place of business in nearby Huron County and strenuously objected to the Tuscola County venue. The circuit court found that Huron Medical’s partial ownership of two Tuscola County-based health-care businesses justified Hills and Dales’ venue selection. We reverse and remand.

i

In 2007, Hills and Dales hired defendants Avelina M. Oxholm-Dababneh, D.O., and Liberata J. Pantig, M.D., “to [17]*17provide medical services in the field of Internal Medicine at the Hospital[.]” Both doctors signed employment agreements containing identical covenants not to compete. The covenant provided that “[i]n the event of separation from Hills & Dales General Hospital, Physician will not practice medicine within a 35-mile radius of Cass City, Michigan, unless this requirement is waived in writing by the hospital.” In July 2009, Hills and Dales filed suit in Tuscola County against Oxholm-Dababneh, Pantig, and Huron Medical, averring that Huron Medical had recruited and employed Oxholm-Dababneh and Pantig in violation of the covenant.

In August 2009, Huron Medical and Oxholm-Dababneh timely answered the complaint and concomitantly filed a motion for change of venue to Huron County. A few days later, Pantig removed the matter to federal court, invoking federal-question jurisdiction. Hills and Dales moved to remand the case to the state court; Huron Medical and Oxholm-Dababneh joined in Pantig’s removal petition. On October 26, 2009, Judge Thomas L. Ludington of the United States District Court for the Eastern District of Michigan granted Hills and Dales’ remand motion.

When the case returned to the Tuscola Circuit Court, the parties spent several months fighting legal battles unconnected with venue. In January 2010, Hills and Dales finally responded to defendants’ venue motion, and on May 3, 2010, the circuit court entertained oral argument concerning venue.1 The parties focused their dispute on whether Huron Medical could be sued in Tuscola County.2 In support of its venue selection, Hills [18]*18and Dales pointed out that Huron Medical “conducted business” in two “joint ventures” located in Tuscola County, Thumb MRI Center L.L.C. and Thumb Area Dialysis Center, a nonprofit corporation. Huron Medical countered that Thumb MRI and Thumb Area Dialysis “are separate legal entities” in which Huron Medical merely held stock. Huron Medical’s counsel queried, “If stockholders could be dragged in for venue, do you hold any GM stock? Can you be sued in Wayne County? Do you hold any stock in Perrigo? Can you be sued in Allegan County? I think not.”

In a written opinion and order, the circuit court denied the motion for change of venue, reasoning:

Tuscola County is an appropriate venue since Huron Medical conducts business in Tuscola County. Huron Medical advertises in Tuscola County as well as provides medical care as part of Thumb MRI and Thumb Area Dialysis — both located in Tuscola County. Furthermore, the motion for change of venue is not timely under MCR 2.221. Defendants filed answers already and cannot claim that the motion is based on facts that could not with reasonable diligence have been known. Therefore Defendants have waived an objection to venue.

This Court granted Huron Medical and Oxholm-Dababneh’s application for leave to appeal. Hills & Dales Gen Hosp v Pantig, unpublished order of the Court of Appeals, entered June 29, 2010 (Docket No. 298237). Pantig cross-appealed.

ii

We first consider the timeliness of defendants’ venue motion by reviewing de novo the circuit court’s interpretation and application of the relevant court rule. Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008). MCR 2.221(A) provides, “A motion for change of [19]*19venue must be filed before or at the time the defendant files an answer.” Huron Medical and Oxholm-Dababneh filed their motion to change venue on August 14, 2009, the same day they answered the complaint. We decline plaintiffs invitation to hold that defendants waived their venue challenge by failing to more expeditiously schedule the motion for hearing. The removal proceedings initiated by Pantig accounted for a substantial portion of the delay in obtaining a venue ruling from the circuit court. After the federal court remanded the case, unsuccessful settlement efforts consumed additional time. While we encourage early resolution of venue disputes, Huron Medical and Oxholm-Dababneh filed their motion with their answer, in accordance with MCR 2.221(A). Thus, the circuit court erred by finding defendants’ change of venue motion untimely.

hi

We now turn to the propriety of Tuscola County venue. We review for clear error a circuit court’s decision to grant or deny a motion to change venue. Shock Bros, Inc v Morbark Industries, Inc, 411 Mich 696, 698-699; 311 NW2d 722 (1981). Clear error exists when some evidence supports the circuit court’s finding, but a review of the entire record leaves this Court with the definite and firm conviction that the circuit court made a mistake. Schadewald v Brulé, 225 Mich App 26, 41; 570 NW2d 788 (1997).

The parties agree that MCL 600.1621(a) governs whether Hills and Dales selected a proper venue. The statute provides that venue is proper in “[t]he 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.” Huron Medical’s registered office is situated in Huron County, where the [20]*20hospital maintains a place of business. Hills and Dales contends that Huron Medical’s participation in two Tuscola County-based medical enterprises, the Thumb Area Dialysis Center and the Thumb MRI Center L.L.C., qualifies as “conducting business” in Tuscola County. Huron Medical owns an 8 percent interest in Thumb Area Dialysis and a 10 percent interest in Thumb MRI. According to its website, Thumb Area Dialysis “is a joint venture between Bay Regional Medical Center, Hills & Dales General Hospital, Huron Medical Center, MidMichigan Health and Scheurer Hospital.” Several of the same hospitals also own shares in Thumb MRI.

Ascertaining proper venue in a case involving a natural person presents little difficulty. A person’s residence is generally easy to establish, as are the locations of a person’s business activities. But determining venue in an action against a corporation can be troublesome. As Justice Felix Frankfurter observed: “When the litigants are natural persons the conceptions underlying venue present relatively few problems in application. But in the case of corporate litigants these procedural problems are enmeshed in the wider intricacies touching the status of a corporation in our law.” Neirbo Co v Bethlehem Shipbuilding Corp, Ltd, 308 US 165, 168; 60 S Ct 153; 84 L Ed 167 (1939).

A corporation is its own “person” under Michigan law, an entity distinct and separate from its owners, even when a single shareholder holds ownership of the entire corporation. Jones v Martz & Meek Constr Co, Inc, 362 Mich 451, 455; 107 NW2d 802 (1961); Bourne v Muskegon Circuit Judge, 327 Mich 175, 191; 41 NW2d 515 (1950);

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Bluebook (online)
812 N.W.2d 793, 295 Mich. App. 14, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hills-dales-general-hospital-v-pantig-michctapp-2011.