In absence of statutory exception, defendant must be sued in county of residence

Schmitt and Abernethy entered into a contract. The contract did not state where performance was to occur, but payment was to be made to Abernethy in Johnson County.  When Schmitt breached, Abernethy sued in Johnson County. Schmitt moved to transfer venue to Woodbury County, his county of residence.

In Abernethy v. Schmitt, No. 15-0661 (May 11, 2016), the Iowa Court of Appeals agreed with Schmitt. A contract to pay at a particular place does not amount to a requirement that performance was to occur at that place. Thus, the venue was not dictated by the place of the contract’s performance—the place of performance was not stated.

Rather, the Court of Appeals applied Iowa Code section 616.17, “Personal actions, except as otherwise provided, must be brought in a county in which some of the defendants actually reside.” Breach of contract suits, as personal actions, are governed by Section 616.17. As Schmitt resided in Woodbury County, his motion to change venue should have been granted.

Moreover, pursuant to Iowa Rule of Civil Procedure 1.808(1), “the [district] court shall order the change of venue at plaintiff’s costs, which may include reasonable compensation for defendant’s trouble and expense, including attorney’s fees, in attending in the wrong county.”  Thus, the court in Schmitt should have considered granting Schmitt’s request for attorney’s fees, including time spent on the appeal.

The lesson to contracting parties that wish to litigate in a certain venue is to have the contract specifically state where performance is to occur. Alternatively, contracting parties should be ready to pursue collections suits in the county where the defendant resides.

For questions regarding Abernethy v. Schmitt, No. 15-0661 (May 11, 2016) or commercial litigation, contact Mollie Pawlosky.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.