Illinois Venue Statute Not Triggered By Presence Of Employee’s Home Office

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In a fact-intensive decision issued on October 22, 2020, the Illinois Supreme Court determined in Sergiu Tabirta v. James J. Cummings, et al. that the mere presence of an employee’s home office in Cook County was insufficient, by itself, to establish proper venue over his employer in the jurisdiction. Merely having an employee with a home office in the venue was insufficient under the circumstances to constitute “doing business” or maintaining an “other office” there to satisfy the requirements of Illinois’ venue statute.

The Case

Plaintiff’s underlying claims were unrelated to the employee’s home office in Cook County and instead arose out of a tractor trailer accident that occurred in Ohio between plaintiff and a truck driver employed by Gilster Mary Lee (GML). Despite the fact that the incident occurred in Ohio, the plaintiff filed a negligence action against both the driver and GML in Cook County, Ill. The driver and GML both filed motions to transfer venue pursuant to the Illinois venue statute,  735 ILCS 5/2-101, which provides that venue is proper in either (1) the county of residence of any defendant or (2) in the county where the transaction occurred. Pursuant to 735 ILCS 5/2-102(a), a corporation “is a resident of any county in which it has a registered office or other office or is doing business.” (emphasis added). The defendants argued that Cook County was an improper venue because the accident did not occur in Cook County and neither defendant was a Cook County resident.

It was undisputed that the accident took place in Ohio and that no part of the underlying transaction occurred in Cook County. The driver was not a Cook County resident and GML’s registered office was in Randolph County, Ill. Under the venue statute, then, venue could only be proper in Cook County if GML was deemed a resident there by way of having an “other office” or “doing business” in the jurisdiction.

Plaintiff argued both points, maintaining that venue was proper in Cook County because GML employed another individual, James Bolton, who maintained a home office in the county. According to plaintiff, the fact that this uninvolved employee maintained a home office in Cook County constituted an “other office” of the company and meant that GML was “doing business” there. The Circuit Court agreed, ruling in favor of the plaintiff and the appellate court affirmed the trial court’s decision.

Supreme Court Review

The Supreme Court’s review focused on the corporate residency requirements of (1) whether Bolton’s home office constituted an “other office” of GML and (2) whether corporate residency was established under the “doing business” prong of the venue statute.

“Other Office”

Relying on prior Illinois and Georgia case law, the Court adopted the definition that an “other office,” in the context of establishing venue, means a fixed place of business at which the affairs of the corporation are conducted in furtherance of a corporate activity. This “other office” may be a traditional office in which clerical activities are conducted but could also include any fixed location purposely selected to carry on an activity in furtherance of the corporation’s business activities.

Evidence from the trial court’s limited discovery showed that GML did not purposefully select a fixed location in Cook County to carry on its business activities. Rather, GML purposely selected Bolton, the individual who had extensive experience in the company’s industry, to provide service to certain customers regardless of his residence. GML did not pay any portion of Bolton’s mortgage, real estate taxes, utilities, cellphone bills, internet charges, office supplies, or any other expenses associated with his home office. The company had no ownership in Bolton’s personal residence and did not own, occupy, or lease any properties in Cook County. Nor did it ever disclose to any customers, or to the public, that Bolton’s residence was an office of GML.

The Court held that just because Bolton conducted work for GML in his home office, standing alone, was insufficient to corroborate the claim that this home office was an “other office” of GML.

“Doing Business”

The Court noted that to establish corporate residency under the “doing business” prong of the venue statute, the defendant must be conducting its usual and customary business within the county in which venue is sought. In determining this, the Court focused on the quantity or volume of business conducted by a GML in Cook County.

During the five-year period preceding plaintiff’s accident, GML’s sales to customers in Cook County never exceeded 0.47% of its total sales in any year, and in 2016, the same year of plaintiff’s accident, this number was only 0.19% of total sales. The Court was not convinced that the quantity or volume of business GML had in Cook County was sufficient enough to establish that the company intended to do business in the county.

Conclusion

In 2020, many employees made the abrupt shift from working in an office owned or leased by their employer to working remotely from home. In fact, several companies have even announced extended work-from-home policies allowing employees to work remotely, permanently. Despite the lack of clarity as to what work-life may look like following this pandemic, the holding in Tabirta should provide employers with some peace of mind that even should they consider adopting extensive work-from-home policies, they are not automatically exposing themselves to claims in foreign venues. The Tabirta Court cautioned, however, that the “examination of whether an employee’s home office meets that definition [of “other office”] must rely on the specific facts adduced in each case. A one-size solution does not fit all for purposes of [Illinois’] venue statute.”

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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