William R. Wildman, Jesse W. Lincoln and Matthew J. Bowness | Eversheds Sutherland | November 30, 2017<\/p>\n
Out-of-state contractors and design professionals working on projects in Georgia should consider including venue selection clauses in their contracts. Under O.C.G.A. \u00a7 14-2-510(b)(4), venue for tort actions lies \u201cin the county where the cause of action originated,\u201d i.e., generally in the county where the project is located. Thus, even if a contractor\u2019s primary Georgia office is located in Atlanta\u2019s Fulton or DeKalb counties, the contractor is subject to being sued in the project\u2019s county.<\/p>\n
An in-state contractor that is sued in an unfavorable venue has the statutory right to remove the suit to its home county\u2014the county in which it maintains its \u201cprincipal place of business.\u201d The Supreme Court of Georgia, however, has made it clear that out-of-state contractors\u00a0do not<\/em>\u00a0have this right.<\/p>\n In\u00a0Kingdom Retail Grp. v. Pandora Franchising,<\/em>\u00a0334 Ga. App. 812, 816 (2015)\u00a0(aff\u2019d Pandora Franchising v. Kingdom Retail Grp.<\/em>, 299 Ga. 723 (2016)), the plaintiff sued the defendant in the Superior Court of Thomas County.\u00a0Id.<\/em>\u00a0at 812. The defendant filed a notice of removal of venue, arguing that it had the right to remove the action to the Superior Court of Gwinnett County, where it \u201cmaintain[ed] its registered office as its principal place of business in the State of Georgia.\u201d\u00a0Id.<\/em>\u00a0at 813. It attached with its motion an affidavit attesting to the fact that it did \u201cnot have any other principal office or principal place of business\u00a0in the State of Georgia.\u201d Id.<\/em>at 813 (emphasis added).<\/p>\n The Superior Court conducted a hearing on the matter and then ordered that venue be removed to the Superior Court of Gwinnett County.\u00a0Id.<\/em>\u00a0at 812. The plaintiff immediately appealed.<\/p>\n On appeal, the court held that the term \u201cprincipal place of business\u201d referred to a\u00a0single<\/em>\u00a0place in the world meeting a certain standard, not to a place within Georgia meeting that standard.\u00a0Id.<\/em>\u00a0at 816. The court further held that the venue removal statute \u201callows a transfer only if a defendant\u2019s principal place of business, as defined above, is located in Georgia.\u201d\u00a0Id.<\/em>\u00a0at 817. Because the defendant\u2019s principal place of business was in Columbia, Maryland, the court held that the Superior Court had erred by ordering removal to Gwinnett County.\u00a0Id.<\/em>\u00a0at 817. It thus remanded the case to the Superior Court of Gwinnett County with instruction to remand the case back to the Superior Court of Thomas County.\u00a0Id.<\/em>\u00a0at 817.<\/p>\n The defendant subsequently appealed to the Supreme Court of Georgia.\u00a0Pandora Franchising v. Kingdom Retail Group,<\/em>\u00a0299 Ga. 723 (2016). The Supreme Court unanimously affirmed, holding that \u201cthe language of subsection (b)(4) confers the right of a company to remove an action in which venue is based upon this subsection\u00a0only<\/em>\u00a0to the county in Georgia where the defendant maintains its\u00a0worldwide<\/em>\u00a0principal place of business.\u201d\u00a0Id<\/em>. at 727 (emphasis added). The court further held that \u201c[i]f that place is not located in a Georgia county, then no right to remove is granted.\u201d\u00a0Id.<\/em>\u00a0at 727.<\/p>\n