                IN THE COURT OF APPEALS OF TENNESSEE
                             AT NASHVILLE
                          July 8, 2003 SESSION

      TPC FACILITY DELIVERY GROUP, LLC v. DR. JAMES H.
                     LINDSEY, JR., et al.

            Direct Appeal from the Chancery Court for Williamson County.
                No. 28441 The Honorable Robert E. Lee Davies, Judge.

                          ______________________________

               NO. M2002-01909-COA-R3-CV - Filed January 30, 2004
                       ______________________________

On May 5, 1999, TPC Facility Delivery Group, LLC entered into a Preliminary Design-
Build Agreement with defendant PAMOB, LLC in connection with the construction of a
proposed medical office building in Tullahoma, Tennessee. TPC was to provide
architectural, engineering, and general contracting services under this agreement. The
initial contract provided for an additional agreement to be entered into by the parties if
the owner elected to proceed with the project beyond the Preliminary Design-Build
services. On December 18, 2001, TPC filed suit in Williamson County Chancery Court
claiming it performed additional services to PAMOB beyond those designated in the
Preliminary Agreement all of which were allegedly authorized by various defendants.
For these additional services, TPC submitted bills to PAMOB which were never paid. In
response to the complaint, the defendants filed separate motions to dismiss on the
grounds of improper venue. On May 6, 2002, the trial court heard oral arguments from
all counsel and found the motion to dismiss should be granted. On July 19, 2002, the
trial court entered its Order of Dismissal dismissing TPC’s complaint on the grounds of
improper venue. Notice of this appeal soon followed. For the reasons set forth below,
the order of the trial court dismissing the complaint for improper venue is affirmed.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

DON R. ASH , SP . J., delivered the opinion of the court, in which HIGHERS, J., and
FARMER, J., joined.

Don L. Smith and S. Joseph Welborn, Nashville, Tennessee, for the appellant, TPC
Facility Delivery Group, LLC.

Jerry Scott and John Kea, Murfreesboro, Tennessee, for the appellees, Dr. James H.
Lindsay, Jr., Dr. Ralph M. Bard, Dr. Dinesh K. Gupta, Dr. David L. Stockton, Edwin
Whitehouse, Data Control, L.L.C., and PAMOB, L.L.C.




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L. Wearen Hughes, Nashville, Tennessee, for the appellees, Dr. Gary Stevens, Dr. Martin
J. Fiala, Dr. David L. Stockton, and Dr. Ken Takegami.

Dudley M. West, Nashville, Tennessee, for the appellee, Dr. Wilburn E. George.

                                        OPINION

I.

         TPC Facility Delivery Group, LLC (“TPC”) is a Tennessee limited liability
company which provides clients with architectural, engineering, and general contracting
services. TPC’s principal place of business at all times material to this action has been in
Brentwood, Williamson County, Tennessee.
         In February or March of 1999, Defendant/Appellee Edwin R. Whitehouse (“Mr.
Whitehouse”) contacted a representative of TPC explaining he was an agent for a number
of doctors and others who were interested in obtaining design professionals and a general
contractor to build a medical office building in Tullahoma, Tennessee which is located in
Coffee County. The TPC representative, Mr. Robert Sarratt (“Mr. Sarratt”), told Mr.
Whitehouse TPC was interested in providing those services. Mr. Whitehouse later
informed Mr. Sarratt the doctors and others he represented had formed a limited liability
company, named PAMOB, LLC (“PAMOB”).
         On May 5, 1999, TPC provided PAMOB with a Preliminary Design-Build
Agreement (“Preliminary Agreement”). PAMOB’s Chief Manager, Dr. James Lindsay
(“Dr. Lindsay”), executed the Preliminary Agreement in his Tullahoma office in June and
returned it to TPC in Brentwood. Dr. Lindsay is a resident of Tullahoma, Tennessee.
         The Preliminary Agreement executed by and between the parties listed PAMOB’s
address as P.O. Box 5870, Maryville, Tennessee 37802 and TPC’s address as P.O. Box
5036 Brentwood, Tennessee. Defendant/Appellee Whitehouse maintains an office in
Maryville, Blount County, Tennessee. The Preliminary Agreement was silent as to
where payment was to be made for the services or the forum for resolution of disputes,
but it did provide that TPC’s services were in connection with construction of a proposed
“Medical Office Building” in Tullahoma, Tennessee.
         Under the terms of the Preliminary Agreement, TPC was bound to, among other
things, provide a schematic floor plan, elevation, rendering sketch, site master plan, and
narrative of the building systems. In return, PAMOB was to pay TPC $21, 600. In
addition, the parties agreed if PAMOB elected to proceed with the Project beyond the
services provided for in the Preliminary Agreement, PAMOB and TPC would enter into
an additional agreement. Article IV of the Preliminary Agreement states in pertinent
part:

       If the Owner elects to proceed with the Project beyond the Preliminary Design-
       Build services provided in this Agreement, the Owner and Contractor shall enter
       into an additional agreement for the completion of the design and construction of
       the Project.

       TPC claims it performed additional services to PAMOB beyond those designated


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in the Preliminary Agreement all of which were allegedly authorized by various
defendants. No additional written agreement was ever signed by the parties. For these
alleged additional services, TPC submitted bills to PAMOB which were never paid.
        On December 18, 2001, TPC filed suit in Williamson County Chancery Court. In
its complaint, TPC characterized the additional services as being authorized pursuant to
(1) an extension of the Preliminary Agreement, (2) a second oral contract entered into in
September 1999, or (3) an implied-in-fact contract. The theories of recovery set forth by
TPC in the complaint are breach of contract, breach of the implied duty of good faith and
fair dealing, unjust enrichment, breach of an implied-in-fact contract, promissory
estoppel, negligent misrepresentation, and trespass to chattels.
        The defendants filed separate motions to dismiss the complaint on the grounds of
improper venue. The parties do not dispute that the Preliminary Agreement is silent as to
venue. Furthermore, the parties agree the complaint states a claim for a transitory action
as opposed to a local action. On May 6, 2002, the trial court heard oral arguments from
all counsel and found a motion to dismiss should be granted and that the case should be
dismissed due to improper venue. On July 19, 2002, the trial court entered its Order of
Dismissal dismissing TPC’s complaint on the grounds of improper venue stating that
“based on pleadings, arguments of counsel, and the entire record it appeared that the
proper venue for the action was Coffee County where the project giving rise to the
complaint was to be built and where virtually all of the defendants reside, there being no
defendant residing in Williamson County.” TPC filed a timely Notice of Appeal of the
trial court’s Order of Dismissal on July 25, 2002.

II.

        The sole issue for this court’s consideration on appeal is whether the trial court
correctly ruled venue in this cause of action was improper in Williamson County. The
issue presented is a question of law. Consequently, the scope of review is de novo with
no presumption of correctness. See, Union Carbide Corp. v. Huddleston, 854 S.W.2d
87, 91 (Tenn. 1993). This case deals with a transitory action.1 Venue for transitory
actions is governed by Tenn. Code Ann. § 20-4-101(a), which provides:

                  In all civil actions of a transitory nature, unless venue is
                  otherwise expressly provided for, the action may be brought
                  in a county where the cause of action arose or in a county where
                  the defendant resides or is found. (emphasis added)

     Under the contract in this case venue was not expressly provided for. There is no
common county in which all the defendants reside2, and TPC argues Williamson County

1
   Action s are either local or transitory in nature, and the subject matter of the action d etermines its
classificatio n. See generally, Burns v. Duncan, 133 S.W .2d 1 000 (Te nn. 19 39); State ex rel. Logan v.
Graper, 4 S.W.2d 955 (T enn. 1927). Transitory actions are causes of action which could have arisen
anywhere. Curtis v. Garrison, 364 S.W.2d 933 (Tenn. 1963). Local actions, on the other hand, refer to or
affect real prop erty.
2
   For purp oses o f venue, the residence of a co rporation is its principa l place of business. See, Five Star
Express Inc. v. Davis, 866 S.W .2d 944 (T enn. 1993).


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is the proper venue because it is the county where the cause of action arose. In order to
decide where a cause of action arose, a court must first determine from the plaintiff’s
allegations the type of action it is dealing with. See, Mid-South Milling Co., Inc., v.
Loret Farms, Inc., 521 S.W.2d 586, 588 (Tenn. 1975)(quoting and adopting the
language from the court of appeals opinion in the case).
         TPC claims the complaint states a cause of action to collect a debt and as such the
cause of action necessarily arose in the county of the creditor, TPC. In support of this
proposition, TPC relies on Insituform of North America, Inc. v. Miller Insituform,
Inc., 695 S.W.2d 198 (Tenn. Ct. App. 1985). Insituform involved a two-count complaint
against defendant. In the first count, plaintiff sought to recover $25,433.30 representing
monies due and owing it by defendant for materials purchased and equipment rented
from plaintiff. The second count of the complaint alleged a breach by defendant of a
sublicense agreement between plaintiff and defendant in which the plaintiff sought
damages for accrued earned royalties, as well as minimum royalties, under the sublicense
agreement. In discussing the first count of plaintiff’s complaint, the court found the
gravamen of the action was one to collect a debt and held the cause of action arose in
Shelby County, the creditor’s county. Id. at 200. Quoting a Florida case, Mendez v.
George Hunt, Inc., 191 So. 2d 480 (Fla. App. 1966), the court said, “In such cases the
default and breach consist of the failure to pay the money and the cause of action accrues
where the default occurred, which would necessarily be in the county where the creditor
resides.” The factors that led the court to the conclusion that payment was due in the
creditor’s county were: all notices pursuant to the licensing agreement were to be given
to the plaintiff in Shelby County, the material sold was priced F.O.B. Memphis, and
accounts owing were due and payable in Shelby County.
         The Insituform court then went on to discuss count two of the complaint noting
that it “seeks damages in the form of unpaid royalties for the alleged breach of the
sublicense agreement by defendant.” On a close reading of the complaint, the court
agreed with defendant’s contention the breach in this count would have likely occurred in
Rutherford County where the contract was signed. However, the court found that count
two could be properly joined with count one, the primary count, a suit on a debt owed.
Venue was therefore proper in the creditor’s county where the cause of action for a
collection of a debt owing arose.
         In a more recent case dealing with the question of venue in a transitory action, the
rule in Insituform is characterized as “narrow,” and this court has declined to adopt a rule
saying as a matter of law that payment in all actions based on contract is due at the
creditor’s residence. Resource Company, Inc. v. Bristol Memorial Hospital, 1995
Tenn. App. LEXIS 489 *5 (Tenn. Ct. App. July 19, 1995). In Resource, the court
affirmed the trial court’s dismissal of an action to recover payment for services rendered
under a contract based upon improper venue. The plaintiff and defendant had signed an
agreement in which defendant agreed to pay a fee for physicians it hired through
plaintiff’s recruiting efforts. The plaintiff was located in Williamson County while the
defendant was located in Sullivan County. Plaintiff filed a complaint in the Williamson
County Chancery Court alleging that it had provided services under the contract for
which the defendant refused to pay. The trial court granted a motion to dismiss the
action on the ground of improper venue.
         On appeal, the court held the breach occurred, and the cause of action arose,


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where defendant allegedly failed or refused to take the steps necessary to fulfill its part of
the contract, i.e. the payment of the claim. The failure or refusal to make payment took
place where defendant had its business, and accordingly, venue was properly assigned to
the defendant’s county. The court distinguished the claim for a liquidated debt in
Insituform from the facts in Resource pointing out that in Insituform the record showed
the defendant was to make payment in Shelby County. In Resource, the record was silent
on where the defendant was to make payment.
        In another recent case concerning venue in a transitory action, Jonesboro
Drywall & Plaster Co., Inc., v. Kirby, 1995 Tenn. App. LEXIS 756 (Tenn. Ct. App.
November 28, 1995), the Eastern Section of this court affirmed the dismissal of
plaintiff’s breach of contract action against the defendant for improper venue. Here the
plaintiff and defendant entered into a contract for the construction of a residence in North
Carolina. When a dispute arose between the parties, the plaintiff filed a breach of
contract complaint seeking damages for consequential expenses incurred by plaintiff in
subcontracting with another party to complete the work, reimbursement for materials
provided to defendant, and reimbursement for plaintiff’s own expenses in completing the
work. Plaintiff’s principal place of business was located in Washington County,
Tennessee while the defendant’s principal place of business was located in Hamilton
County, Tennessee. Plaintiff filed the complaint in the county where it resided arguing
that Washington County was the county in which the cause of action arose. Like TPC in
the present case, the plaintiff in Jonesboro relied on the rule from Insituform. In
distinguishing the facts in Jonesboro from those in Insituform, the court explained that,
while plaintiff had its principal place of business in Washington County, the contract did
not stipulate that payments were to be made in Washington County. The contract was
signed in Boone County, North Carolina, and all the work was to take place there.
Furthermore, all of the materials for the project were purchased in North Carolina. .
Based on these factors, the court found the plaintiff’s principal place of business did not
serve as a focal point for the contract and the cause of action arose in North Carolina.
        It is the opinion of this court that based on our reading of these cases the trial
court correctly decided venue did not lie in Williamson County and properly dismissed
the complaint for improper venue. First, we cannot conclude, as TPC urges, the primary
count of the complaint states a cause of action to collect a debt. The complaint does
allege a breach of the covenant to pay by PAMOB under the theory the original contract
had been extended or alternatively a second contract had been entered into, but it is not
characterized as a debt owed. Unlike the complaint in Insituform, TPC does not claim a
specific amount owed but instead seeks an unspecified amount of damages. While
finding the complaint stated a cause of action to collect a debt would necessarily require
that venue be proper in the county of the creditor, this court has declined to adopt a rule
saying as a matter of law that payment in all actions based on contract is due at the
creditor’s residence. See, Resource, 1995 Tenn. App. LEXIS 489 (Tenn. Ct. App.
1995). Unlike Insituform, the contract in the present case fails to expressly state where
payments are due. Furthermore, the factors which led the court in Insituform to the
conclusion that payment on a liquidated debt was due in the creditor’s county--all notices
pursuant to the licensing agreement were to be given to the plaintiff in Shelby County,
the material sold was priced F.O.B. Memphis, and the accounts owing were due and



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payable in Shelby County--are not present in this case.3
        Instead, it appears Coffee County, not Williamson County, would be the focal
point of the dispute in the present case. The Preliminary Agreement was negotiated and
entered into in Coffee County. The agreement does not state that payment is to be made
in Williamson County and is in fact silent as to where payments were to be made by
PAMOB, as well as to the forum for resolution of any disputes between the parties. The
subject matter of the Preliminary Agreement was preparative services for the
construction of a medical office building located in Coffee County, and much of the
performance due under the contract necessarily had to be done on the site in Coffee
County. Under the terms of the contract, the initial payment by PAMOB of $10,000 was
due at the execution of the Preliminary Agreement which took place in Coffee County.
TPC presented the initial schematic design plans to members of PAMOB in defendant
Lindsay’s office in Coffee County. The contract makes no reference to any payments or
activities to take place in Williamson County. Furthermore, no defendant is a resident of
Williamson County, and in fact, each of the defendants reside or are substantially
connected to Coffee County. Based on these facts, the present case is closely analogous
to Jonesboro and leads to the conclusion that the cause of action against PAMOB arose,
for purposes of venue, in Coffee County. In this instance, the breach of contract
occurred, and the cause of action arose, when PAMOB allegedly failed or refused to take
the steps necessary to fulfill its part of the contract, i.e. the payment of the claim. As in
Resource, the failure or refusal to make payment took place where defendant had its
business, and accordingly, venue would lie in Coffee County.

III.

        Accordingly, for the reasons set out above, the order of the trial court dismissing
the complaint for improper venue is affirmed. Costs of this appeal are assessed against
plaintiff TPC.



                                                                  ______________________________
                                                                  DON R. ASH, SPECIAL JUDGE




3
   TP C argues that it sent invoices from its Williamson County office, payments on the initial contract were
mad e to its office in W illiamson Co unty, and all amo unts billed were d ue and payab le there as well. W hile
this is mentioned in an affidavit filed with plaintiff’s response to defendant’s motion to dismiss, the
Preliminary A greem ent is silent on these m atters, and T PC failed to plead this in its com plaint.

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