The Kansas Venue Statute Where Does a Cause of Action Arise
| Publication year | 1995 |
| Pages | 36 |
64 J. Kan. Bar Assn. September, 36 (1995). THE KANSAS VENUE STATUTE WHERE DOES A CAUSE OF ACTION ARISE
September, 1995
Copyright (c) 1995 by the Kansas Bar Association; Charles D. Lee
Venue historically has been viewed as a sort of stepchild to the family of civil procedure. It has received little attention in the Kansas appellate courts, yet the concept of venue is as old as the separation of the king's general court into the specialized courts of the Exchequer, Common Pleas, King's Bench, and Chancery. [FN1] The paucity of reported decisions in Kansas is, in part, a function of the unambiguous choices which are frequently available to plaintiffs in choosing a venue. In many instances the venue statutes provide a bright-line choice in that venue is predicated upon the residence of the defendant, [FN2] or is dictated as a result of some other unmistakable nexus such as the place the defendant is served or the transaction of business by the defendant in the county in which litigation is commenced. [FN3]
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More problematic is a determination of an appropriate venue based upon where the cause of action arose. [FN4] Before amendment of the present federal venue statute in 1990, it included a provision that permitted venue in "the judicial district ... in which the claim arose." [FN5] The concept of "where the claim arose" proved troubling to the federal courts. The phrase was "... inevitably litigation-breeding since its obvious implication is that there is one, and only one, district in which, as a matter of law, the claim must be found to have arisen." [FN6] Equally arduous for the federal judiciary was the quest for a generally accepted methodology to divine the place of venue under the statute. [FN7]
In response to these problems under the previous federal venue provision, the general plan of the venue statutes was greatly changed by amendments in 1990 to subsections (a) and (b) of 28 U.S.C. Sec. 1391. The language about the district in which the claim arose was clarified to make it clear that any district is a proper venue to the extent that a substantial part of the events giving rise to the claim occurred there. In federal-question cases, if there is not a district in which an action may otherwise be brought, it may be brought in a judicial district "in which any defendant may be found," while the corresponding provision for diversity cases, as corrected in 1992, allows suit in a district "in which the defendants are subject to personal jurisdiction at the time the action is commenced," if there is no district in which the action may otherwise be brought.
The new federal venue statute is in accord with the recommendations made long ago by the American Law Institute, [FN8] but it is not without interpretive challenges. The determination of whether a "substantial" part of the events precipitating the litigation occurred in a particular district is the primary difficulty. The new statute is, nevertheless, an improvement from its markedly more ambiguous predecessor which, like the present Kansas statute, employed "where the claim arose" language.
I. THE KANSAS COURTS
In contrast to the federal courts, the few reported decisions in Kansas that discuss venue are cursory in their treatment of the issue of where a cause of action arises for venue purposes. The most helpful Kansas case is Alliance Life Ins. Co. v. Ulysses Volunteer Fireman's Relief Assn., 215 Kan. 937, 529 P.2d 171 (1974).
Alliance was a declaratory judgment action filed in McPherson county by an insurance company seeking to determine its liability under an accidental death policy on the life of a man who was killed in an airplane crash. The defendants in the action were the assignee of the policy and the decedent's wife and children, the beneficiaries.
The insurance company was headquartered in McPherson County and the policy was issued from that office. Otherwise, all significant contacts were with Grant County: the defendants were all residents of Grant County; none of the defendants was doing business in McPherson County; and the airplane crash occurred in Grant County. The only contact that any of the principals had with McPherson County was the acceptance of the decedent's application for insurance there. While the Court took note of the significant contacts with Grant County and the relatively minimal contacts with McPherson County, it ultimately relied not upon a significant contacts analysis to determine where the cause of action arose, but rather upon a mechanistic determination that: "Venue of [the] lawsuit lay in Grant County, where the contract was to be performed and where the breach occurred." The Court limited its decision to the specific question of where a cause of action arises for breach of an insurance contract:
Under conventional and accepted legal doctrine, because the application was accepted in McPherson County the contract of insurance was 'made' in that county. (Morrison v. Hurst Drilling Co., 212 Kan. 706, 512 P.2d 438, and cases cited therein.) We take it as well settled, however, that the mere 'making' of a contract, standing alone, does not give rise to a cause of action; there must in addition be a breach. See Bruner v. Martin, 76 Kan. 862, 93 P. 165; Shearer v. Insurance Co., 106 Kan. 574, 189 P. 648; Swift v. Clay, 127 Kan. 148, 272 P. 170; Lips v. Egan, 178 Kan. 378, 285 P.2d 767. Each of those cases stands for the proposition that the place of making a contract is irrelevant to the issue of where a cause of action arises for its breach; the controlling place is that of the breach, i.e., the place where the obligor failed to fulfill his obligation. Insurance contracts are no different; in an action on a fraternal benefit certificate we held that the cause of action 'arose' here when the insured died a resident of this state and the beneficiary was a resident of this state, although the contract of insurance was written in another state. Hornick v. Catholic Slovak Union, 115 Kan. 597, 224 P. 486.
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Because its focus is narrow, the Alliance case is of limited use in addressing, as a conceptual matter, the question of where a cause of action arises. It is, however, more useful in that regard than the other Kansas case that mentions venue in the context of where the cause of action arose.
The Court in Care Display, Inc. v. Didde-Glaser, Inc., 225 Kan. 232, 589 P.2d 599 (1979), seemingly sustains the plaintiffs choice of venue in part because it perceived that the defendant transacted business in the county in which suit was filed and, in part, because it concluded, based upon a minimum contacts analysis, that the cause of action arose in that county:
Appellant next contends there was no proper venue in Morris County. The question was raised by a motion prior to trial and the Court made the following findings of fact: 1. Plaintiff and defendant, a domestic corporation, have done business prior to the questioned contract in Morris County, and were doing business in Morris County at a time after the alleged contract came into existence and when it was allegedly breached.
2. Plaintiff and defendant negotiated regarding the questioned contract in both Lyon and Morris Counties.
3. The questioned contract was to be partly performed in Morris County and the balance was to be performed out of the State of Kansas.
4. Whether the questioned contract was in existence or not, the claimed acts constituting breach thereof occurred in Morris County.
5. Defendant's letter dated Sept. 24, 1974, was conceived, written and placed in the United States Mail in Lyon County and was received by defendant in Morris County.
6. Defendant has failed to sustain its burden of proof to prove venue does not lie in Morris County."
The record adequately supports the findings of the trial court.
Alliance and Care Display are the only reported cases in Kansas that attempt to explain the circumstances under which venue is established based upon a cause of action having arisen in a particular county. Fortunately the federal courts, prior to the 1990 amendments, and the courts of many other states, have been somewhat more expansive in their discussions of the meaning of venue statutes which allow venue where the cause of action arose.
II. THE FEDERAL COURTS
The federal courts generally took one of three approaches in determining where a claim arose for venue purposes. Those approaches can be categorized as (1) the weight of contacts test; (2) the place of injury test; and (3) the substantive law test.
A. The Weight of the Contacts Test
The suggestion that a claim arose in the locale where the contacts weighed most heavily was first articulated in Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp., [FN9] an antitrust action in which the plaintiffs attempted to assert venue under the general venue statute as a supplement to the Clayton Act venue provision. [FN10] The Court found that venue was inappropriate even under the more liberal general statute because the claim did not arise in...
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