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(A
revised version of this article will appear in The Construction
Lawyer, Volume 22, No. 3, Summer 2002, published by
the American Bar Association's Forum on the Construction
Industry.)
By
John W. Ralls
Thelen Reid Brown Raysman & Steiner LLP
A
Utah-based contractor agreed to convert a fleet of vehicles
owned by Broward County, Florida, to run on natural gas.
The contractor claimed that the county breached the contract
by refusing to accept delivery of a number of natural gas
tanks. The contractor sued the county for breach of contract
in Utah state court. The county moved to dismiss on the
ground that venue was proper only in Broward County, Florida.
The trial court agreed and dismissed the action. The Utah
Supreme Court affirmed. Trillium USA, Inc. v. Board of
County Comm'rs, 2001 UT 101, 37 P.3d 1093 (2001).
The
county argued that Florida law would govern the dispute,
both under the choice of law provision in the contract and
under general choice of law principles. Under Florida law,
venue in actions against counties properly lies where the
state, agency or subdivision maintains its principal headquarters.
Carlile v. Game & Freshwater Fish Commission,
354 So.2d 362, 363-64 (Fla. 1977).
The
Utah Supreme Court rejected this argument on the ground
that venue rules are procedural, not substantive. Accordingly,
venue is governed by Utah law, not Florida law.
The
Utah Supreme Court affirmed the trial court's ruling based
on comity. Comity is a principle under which the courts
of one state give effect to the laws of another state, not
as a rule of law but out of deference and a desire to foster
cooperation. The Utah Supreme Court concluded that application
of principles of comity in the case would foster cooperation
because courts of other states would be encouraged to permit
cases brought against Utah counties to be litigated in Utah.
"If we extend comity to Broward county, this will increase
the likelihood that, in the future, other states will...
dismiss similar suits brought against Utah counties."
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For more information about the issues covered in this report, please contact John Ralls in our San Francisco office at 415-369-7210 or at jralls@thelen.com or contact your Thelen attorney. For more information about Thelen's Construction and Government Contracts Department, click here.
©2002 Thelen Reid Brown Raysman & Steiner LLP
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