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. § 14-2-510(b)(4), venue for tort actions lies “in the county where the cause of action originated,” i.e., generally in the county where the project is located. Thus, even if a contractor’s primary Georgia office is located in Atlanta’s Fulton or DeKalb counties, the contractor is subject to being sued in the project’s county.
An in-state contractor that is sued in an unfavorable venue has the statutory right to remove the suit to its home county—the county in which it maintains its “principal place of business.” The Supreme Court of Georgia, however, has made it clear that out-of-state contractors do not have this right.
In Kingdom Retail Grp. v. Pandora Franchising, 334 Ga. App. 812, 816 (2015) (aff’d Pandora Franchising v. Kingdom Retail Grp., 299 Ga. 723 (2016)), the plaintiff sued the defendant in the Superior Court of Thomas County. Id. at 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 “maintain[ed] its registered office as its principal place of business in the State of Georgia.” Id. at 813. It attached with its motion an affidavit attesting to the fact that it did “not have any other principal office or principal place of business in the State of Georgia.” Id. at 813 (emphasis added). The Superior Court conducted a hearing on the matter and then ordered that venue be removed to the Superior Court of Gwinnett County. Id. at 812. The plaintiff immediately appealed.
On appeal, the court held that the term “principal place of business” referred to a single place in the world meeting a certain standard, not to a place within Georgia meeting that standard. Id. at 816. The court further held that the venue removal statute “allows a transfer only if a defendant’s principal place of business, as defined above, is located in Georgia.” Id. at 817. Because the defendant’s principal place of business was in Columbia, Maryland, the court held that the Superior Court had erred by ordering removal to Gwinnett County. Id. at 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. Id. at 817.
The defendant subsequently appealed to the Supreme Court of Georgia. Pandora Franchising v. Kingdom Retail Group, 299 Ga. 723 (2016). The Supreme Court unanimously affirmed, holding that “the language of subsection (b)(4) confers the right of a company to remove an action in which venue is based upon this subsection only to the county in Georgia where the defendant maintains its worldwide principal place of business.” Id. at 727 (emphasis added). The court further held that “[i]f that place is not located in a Georgia county, then no right to remove is granted.” Id. at 727.
Thus, under Kingdom Retail, out-of-state corporations cannot avail themselves of Georgia’s venue removal statute if they find themselves embroiled in litigation in an unfriendly county. Accordingly, out-of-state contractors and design professionals working on projects in Georgia should take care to include strong venue selection clauses in their contracts to avoid being sued in plaintiff-friendly counties. Such clauses should apply to all claims arising out of or relating to the contract and should specify that such claims must be brought in the contractor’s preferred venue.