JEFFREY HOLLANDER V MOUNTAIN GRAND LODGE & SPA LLC
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STATE OF MICHIGAN
COURT OF APPEALS
JEFFREY HOLLANDER, JENNIFER
HOLLANDER, JOHN MARX, JUDITH MARX
BARRY FREUND, JUDITH FREUND, JEFFREY
KAPLAN, and STEPHANIE KAPLAN,
UNPUBLISHED
March 31, 2011
Plaintiffs-Appellees,
v
No. 294535
Oakland Circuit Court
LC No. 2009-101758-CB
MOUNTAIN GRAND LODGE & SPA, LLC,
BOYNE USA, INC, and BOYNE REALTY
RESORT SALES, LLC,
Defendants-Appellants,
and
G. LAMARR HOPE,
Defendant.
Before: FORT HOOD, P.J., and MURRAY and SERVITTO, JJ.
PER CURIAM.
Defendants appeal by leave granted from the trial court’s order denying the motion for
change of venue. We reverse.
“An appellate court uses the clearly erroneous standard to review a trial court’s ruling on
a motion to change venue.” Brightwell v Fifth Third Bank, 487 Mich 151, 156; 790 NW2d 591
(2010). However, issues of statutory interpretation present questions of law subject to review de
novo. Id. The primary goal of statutory interpretation is to give effect to the intent of the
Legislature as expressed in the statute. Id. at 157. “In Michigan, plaintiffs carry the burden of
establishing the propriety of their venue choice, and the resolution of a venue dispute generally
occurs before meaningful discovery has occurred.” Gross v General Motors Corp, 448 Mich
147, 155-156; 528 NW2d 707 (1995). The venue rules are designed to ensure that proceedings
are held in the most convenient forum. Id. at 155. The primary goal is to minimize the costs of
litigation by reducing the burdens on the parties and by considering the strains on the system as a
whole. Id. To survive a challenge to the propriety of venue, the plaintiff must present some
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credible factual evidence that the venue selected is proper. Provider Creditors Comm v United
American Health Care Corp, 275 Mich App 90, 94; 738 NW2d 770 (2007). The choice of
venue must be based on facts, not mere speculation. Id.
The parties do not dispute that, pursuant to MCL 600.1641(2), venue is governed by
MCL 600.1629.1 MCL 600.1629 provides, in relevant part:
(1) Subject to subsection (2), in an action based on tort or another legal
theory seeking damages for personal injury, property damage, or wrongful death,
all of the following apply:
(a) The county in which the original injury occurred and in which either of
the following applies is a county in which to file and try the action:
(i) The defendant resides, has a place of business, or conducts business in
that county.
(ii) The corporate registered office of a defendant is located in that county.
Before 1996, MCL 600.1629 provided that venue was proper in “a county in which all or part of
the cause of action arose.” Karpinski v St John Hosp-Macomb Ctr Corp, 238 Mich App 539,
544-545; 606 NW2d 45 (1999). However, the statute was amended to prevent forum shopping.
Id. By changing the location for venue from “a county in which all or part of the cause of action
arose” to “the county in which the original injury occurred,” the Legislature demonstrates its
intent to make the place where the injury transpires paramount for venue purposes. Id. at 546.
“The Legislature chose in the amended statute to adopt language that clearly and unambiguously
limits venue to the situs of the original injury when either the defendant or the plaintiff resides,
does business, or has a corporate office there.” Dimmitt & Owens Fin, Inc v Deloitte & Touche
(ISC), LLC, 481 Mich 618, 628; 752 NW2d 37 (2008).
To determine the “original injury” for purposes of venue in tort actions, “it is necessary to
identify the actual place of occurrence of the damage or injury that gives rise to the plaintiff’s
cause of action.” Dimmitt, 481 Mich at 629 (further citation omitted). For purposes of analyzing
MCL 600.1629(1), courts must examine the first injury resulting from an act or omission of a
defendant to determine where venue is proper. Id. at 630. The original injury, not the original
breach of the standard of care, determines venue. Id.
In Dimmitt, the plaintiffs filed a complaint in Wayne County, alleging that the defendants
committed malpractice when providing auditing services. Id. at 620. The defendants filed a
motion for change of venue, asserting that their auditing services had been performed at the
plaintiff’s offices located in Oakland County. Id. The Supreme Court rejected any application
1
The applicability of MCL 600.1641(1) is not before us because it was neither raised in our
Court or the trial court.
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of a reliance theory for purposes of determining venue, concluding that a present injury, not a
potential injury was dispositive:
At the time of plaintiffs’ reliance, plaintiffs suffered only a potential injury,
namely that their investment decisions based on defendants’ negligence might
turn out to be poor ones that might injure plaintiffs. The original injury did not
occur until plaintiffs allegedly suffered an actual injury as a result of their
reliance on defendants’ services. The first actual injury plaintiffs allegedly
suffered occurred when Dimmitt could not satisfy its financial obligations and
was forced to liquidate its assets. Both plaintiffs’ principal places of business are
in Oakland County, and, therefore, the alleged original injury was suffered in
Oakland County. Accordingly, venue was properly laid in Oakland County. [Id.
at 631-632 (footnotes omitted, emphasis in original).]
In the present case, plaintiffs purchased hotel rooms at defendants’ resort as an
investment opportunity. The resort is located in Charlevoix County. According to the
complaint, the negotiations for the sale took place at the realty office next to the hotel, which was
under construction at the time, with additional negotiations occurring over the telephone.
Plaintiffs asserted that defendants misrepresented the occupancy rates and projected profits.
Further, plaintiffs alleged that defendants would deeply discount blocks of their own vacant
rooms in an attempt to generate revenue through concessions at the expense of investor
purchased hotel rooms. Defendants filed a motion for change of venue, asserting that the
original injury occurred in Charlevoix County, the location of the resort. Plaintiffs opposed the
motion for change of venue, alleging that plaintiffs lived and managed their investments in
Oakland County, and therefore, the damage to their investment portfolios occurred in Oakland
County. Plaintiff further asserted that federal securities law afforded potential plaintiffs liberal
choice in their selection of the forum court. The trial court denied defendants’ motion for change
of venue, concluding that the “first original injury took place when plaintiff suffered financial
harm to their real estate portfolio, which plaintiffs managed in Oakland County[.]”
In Yono v Carlson, 283 Mich App 567, 568; 770 NW2d 400 (2009), the plaintiffs, a
manager of a building project in Leelanau County and the corporate entities, filed suit against the
defendants, a reporter for a newspaper printed solely in Leelanau County and the publisher, for
defamation for statements concerning the construction project. The plaintiff was a resident of
Livingston County and filed suit there, asserting that the publication damaged plaintiffs’
reputation there. The defendants filed a motion for change of venue, asserting that the original
injury occurred in Leelanau County. Id. at 568-569. This Court reviewed the law of other
jurisdictions regarding defamation to conclude that the injury occurred in the county in which it
was first printed and issued. Id. at 571-572. However, this Court also noted that:
Defendant Leelanau Enterprise, Inc., has its corporate registered office in
Leelanau County. It also prepares and prints its newspaper solely in Leelanau
County. In fact, even though plaintiffs claim that the people who cancelled their
purchase agreements for the Bay View project were not located in Leelanau
County, the project is located in Leelanau County and that is where the economic
loss was first experienced. Thus, the original injury occurred in Leelanau County.
[Id. at 572.]
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Applying the above principles to the facts at issue, we conclude that the trial court clearly erred
in denying defendants’ motion for change of venue. Brightwell, 487 Mich at 156. Venue is now
limited to the situs of the original injury, Dimmitt, 481 Mich at 628, because of the Legislature’s
intention to limit forum shopping, Karpinsky, 238 Mich App at 545. An original injury is the
first injury resulting from an act or omission by a defendant or the actual place of occurrence of
the damage or injury that gives rise to plaintiff’s cause of action. Dimmitt, 481 Mich at 629-630.
Here, the original injury occurred in Charlevoix County where defendants allegedly rented other
rooms to the detriment of plaintiffs’ investment rooms, and thus where defendants’ received
rental income that, according to plaintiffs, should have been allocated to their rooms. The
original injury therefore occurred in Charlevoix County where the plaintiffs did not obtain the
rental income that was brought in but otherwise diverted to another room. Although plaintiffs
may feel the consequences of the economic losses in Oakland County where they manage their
portfolios, the original injury is where the economic loss was first experienced. Yono, 283 Mich
App at 572.2
Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.
/s/ Karen M. Fort Hood
/s/ Christopher M. Murray
/s/ Deborah A. Servitto
2
We also reject plaintiffs’ assertion that federal securities law regarding liberal venue choices
should be applied. Michigan statutory and case law govern this case.
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