in Re Mark Fisher and Reece Boudreaux ( 2014 )

IN THE SUPREME COURT OF TEXAS
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NO. 12-0163
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IN RE MARK FISHER AND REECE BOUDREAUX, RELATORS
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ON PETITION FOR WRIT OF MANDAMUS
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Argued October 10, 2013
JUSTICE JOHNSON delivered the opinion of the Court.
After Nighthawk Oilfield Services, Ltd. acquired Richey Oilfield Construction, Inc. from
Mike Richey, the business did not go as well as the parties had hoped and Richey filed suit in Wise
County against two Nighthawk executives. In this mandamus proceeding we consider whether the
trial court abused its discretion by failing to enforce venue selection clauses in the acquisition
documents. Concluding that it did, we conditionally grant relief.
I. Background
On May 3, 2007, Mike Richey sold his interest in Richey Oilfield Construction, Inc. (Richey
Oil), an oilfield services company that he founded and operated, to Nighthawk Oilfield Services,
Ltd. (Nighthawk) for $33 million. NOSGP, L.L.C. was Nighthawk’s general partner and Mark
Fisher and Reece Boudreaux were limited partners. The transaction resulted in Richey Oil becoming
a wholly-owned Nighthawk subsidiary, with Richey remaining employed as president of Richey Oil
and becoming a limited partner in Nighthawk.
The primary agreements regarding the transaction were a Stock Purchase Agreement, an
agreement for the purchase of Richey Oil’s goodwill (the Goodwill Agreement), and a Promissory
Note. Each contained a clause naming Tarrant County as the venue for state court actions.
In the Stock Purchase Agreement, NOSROC, Inc.1 agreed to pay Richey $13 million in cash
for Richey Oil’s issued and outstanding stock. That agreement contained the following provision:
Jurisdiction; Service of Process. Any proceeding arising out of or relating to this
Agreement may be brought in the courts of the State of Texas, Tarrant County, or if
it has or can acquire jurisdiction, in the United States District Court for the Northern
District of Texas, and each of the parties irrevocably submits to the non-exclusive
jurisdiction of each such court in any such proceeding, waives any objection it may
now or hereafter have to venue or to convenience of forum, agrees that all claims in
respect of the proceeding may be heard and determined in any such court and agrees
not to bring any proceeding arising out of or relating to this Agreement in any other
court. (Emphasis added)
In the Goodwill Agreement, Richey sold his goodwill interest to Nighthawk. That interest
was defined as his “right, title and interest in and to all of [Richey’s] knowledge, experience and
rights relating to the Business, and [Richey’s] personal relationships and experience with the
customers of the Business and further including the trade name ‘Richey’ to the extent and as used
in conjunction with the Business.” The Goodwill Agreement provided that Richey would receive
$7 million in cash, a $6.5 million promissory note, and $6.5 million in Nighthawk limited
partnership interest units. The Goodwill Agreement contained the same venue selection clause as
the Stock Purchase Agreement.
1
The Stock Purchase Agreement was executed between Richey, as the seller, and NOSROC, INC., as the
purchaser. An affidavit executed by Fisher explains that NOSROC, INC. was “a corporation formed for tax reasons,
which then immediately conveyed the stock to Nighthawk pursuant to an agreement between the transaction parties.”
2
The $6.5 million promissory note (the Note) was signed by Fisher as president of Nighthawk.
It provided that “[Nighthawk]. . . irrevocably agrees that any legal proceedings in respect of this note
. . . or other writing relating hereto shall be brought in the district courts of Tarrant County, Texas,
or the United States District Court for the Northern District of Texas.”
A month after Nighthawk purchased Richey Oil, Nighthawk made a $20 million “special
distribution” to its partners. The distribution was contemplated in the Goodwill Agreement, which
provided: “[I]t has been represented to [Richey] that a distribution to the owners or holders of all
units of [Nighthawk] is anticipated to be made contemporaneously with or subsequent to the Closing
and [Richey] shall participate in such distribution on a pro rata basis.”
Six months later, Richey paid $1 million to Nighthawk at Fisher’s request. According to
Richey, Fisher related that he was seeking similar amounts from all the limited partners, Nighthawk
would treat the money as loans, and in six months the loans plus ten percent would be paid back.
Fisher claims that the other limited partners made similar contributions totaling $3.9 million, but
they agreed that those contributions would be treated as equity, not loans.
Richey asserts that when he asked Fisher to repay the $1 million as agreed, Fisher denied his
request and claimed the money was a capital contribution for which Richey would receive preferred
equity units. Richey has never been repaid the $1 million.
In connection with the acquisition, Nighthawk opened a controlled-disbursement account
so Richey Oil could access Nighthawk’s revolving line of credit. As part of that process, Richey
and Fisher executed a Deposit Account Signature Card at Bank of America that gave Richey check
signing authority. In May and June 2009, Fisher authorized Richey to pay Richey Oil vendors from
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the account. However, when Richey did so, Bank of America rejected several of the checks for
insufficient funds in the account. According to Richey, Fisher told some payees of the rejected
checks that Richey created the problem. Several payees referred their returned checks to collection
agencies, attorneys, and authorities, who sent demand letters threatening civil and criminal
prosecution. Shortly thereafter, Nighthawk and Richey Oil filed for bankruptcy.
Richey soon sued Fisher and Boudreaux in Wise County where Richey resided. He sued
both of them for breach of fiduciary duty, common law fraud, statutory fraud, and violations of the
Texas Securities Act. He sued Fisher separately for defamation, common law fraud, negligent
misrepresentation, and interference with prospective business relations related to the statements
Fisher allegedly made to him about availability of money in the Richey Oil account and
communications made to third parties regarding the returned checks. He sued Boudreaux separately
for aiding and abetting Fisher’s breaches of fiduciary duty, acts of fraud, and violations of the Texas
Securities Act.
Fisher and Boudreaux responded by moving the trial court to transfer venue to Tarrant
County or dismiss the suit pursuant to the mandatory venue selection clauses in the Stock Purchase
Agreement and the Goodwill Agreement. They also argued that Richey lacked standing to recover
damages to his reputation or goodwill because he had conveyed those rights to Nighthawk in the
Goodwill Agreement and many of his other claims belonged to Nighthawk and could only be
brought by the Nighthawk bankruptcy trustee.
The trial court denied Fisher’s and Boudreaux’s motions and pleas to the jurisdiction. They
then sought, but were denied, mandamus relief from the court of appeals. ___ S.W.3d ___ (Tex.
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App.—Fort Worth 2012, orig. proceeding). In this Court Fisher and Boudreaux (collectively,
Relators) argue that Richey lacks standing because his claims actually belong to Richey Oil or
Nighthawk and must be brought by the bankruptcy trustee; some of Richey’s claims seek recovery
of debts owed to him by Nighthawk and must be filed as claims against Nighthawk in bankruptcy
court; and the trial court abused its discretion by failing to enforce the mandatory venue agreement
under the major transaction statute, Texas Civil Practice and Remedies Code § 15.020. We will
address the contentions in turn, beginning with any challenging jurisdiction. See Rusk State Hosp.
v. Black, 392 S.W.3d 88, 95 (Tex. 2012) (noting that if a court does not have jurisdiction, its opinion
addressing any issues other than jurisdiction is advisory).
II. The Standing Challenge
Relators argue that Richey’s claims regarding mismanagement of Nighthawk’s financial
affairs belong to Nighthawk and Richey does not have standing to assert them because the
bankruptcy trustee must bring the claims on Nighthawk’s behalf so as to preserve assets for the
benefit of all partners. Richey counters that mandamus review is not available on the issue of
standing because Relators cannot show they lack an adequate remedy by appeal, but even if
mandamus review is available, he has standing because he suffered personal damages unique to him.
Relators rely on Hall v. Douglas, 380 S.W.3d 860, 873 (Tex. App.—Dallas 2012, no pet.),
in which the court of appeals noted that “[a] limited partner does not have standing to sue for injuries
to the partnership that merely diminish the value of that partner’s interest.” But as that court
recognized, a partner who is “personally aggrieved” may bring claims for those injuries he suffered
directly. Id. at 872.
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Richey’s pleadings asserted that he made a $1 million payment to Nighthawk, the other
limited partners failed to make similar payments, and he suffered damages including “loss of earning
capacity, lost profits, loss of income, damage to credit reputation, lost investments,” and “other
losses.” He also alleged that he sustained injury to his character and suffered mental anguish.
When a plea to the jurisdiction is based on the pleadings, the pleadings are to be construed
liberally in favor of the plaintiff. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
(Tex. 2004). Richey’s allegations do not affirmatively negate his having been “personally
aggrieved.” Thus, given his allegations, we need not decide whether mandamus review is available
to Relators as to Richey’s standing to assert claims based on his $1 million payment because even
if it is, the record before us does not demonstrate that Relators are entitled to mandamus relief.
Relators also claim that Richey does not have standing to bring defamation claims based on
the bank’s refusal to honor Richey Oil checks. They posit that only Richey Oil has standing to bring
those claims, and since Richey is not the owner of Richey Oil, he cannot bring the claims on the
company’s behalf. See Neely v. Wilson, 418 S.W.3d 52, 72 (Tex. 2013) (noting that a corporate
entity may maintain a suit for libel). But Richey’s defamation claims are that Fisher made
defamatory statements about Richey personally by telling payees of the returned checks that Richey
caused the insufficient funds problems. Richey claimed those false statements subjected him to
criminal and civil prosecution, financial loss, and injury to his personal reputation. Thus, he alleged
injury personal to himself and has standing to bring the claims.
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III. Claims Against Nighthawk
Relators next assert that the trial court abused its discretion in refusing to dismiss for lack
of subject matter jurisdiction because Richey’s claims for deferred consideration and the unpaid $1
million loan are claims for a debt owed by Nighthawk, they must be filed against Nighthawk in
bankruptcy court. But the trial court does not lack jurisdiction over Richey’s claims against
Relators. Whether those claims should have been brought against another party (Nighthawk) is not
a question of jurisdiction requiring dismissal, but is a question of liability. Relators did not argue
in the trial court that they were the incorrect parties for Richey to bring the claims against. Relators
have not shown themselves entitled to mandamus relief on this ground.
Relators also argue that “proceeding with the debt claims against Nighthawk in the Wise
County suit violates the automatic stay in bankruptcy.” But Nighthawk is not a defendant in the
Wise County suit and the automatic bankruptcy stay does not extend to non-debtors. Reliant Energy
Servs., Inc. v. Enron Canada Corp., 349 F.3d 816, 825 (5th Cir. 2003) (noting that by its terms, the
automatic stay applies only to the debtor); Texas-Ohio Gas, Inc. v. Mecom, 28 S.W.3d 129, 144
(Tex. App.—Texarkana 2000, no pet.) (holding that the bankruptcy stay does not extend “to separate
legal entities such as corporate affiliates, partners in debtor partnerships or to codefendants in
pending litigation.” (quoting Patton v. Bearden, 8 F.3d 343, 349 (6th Cir. 1993)); see also In re
Pegasus Funds, 345 S.W.3d 175, 176 (Tex. App.—Dallas 2011, orig. proceeding). Relators argue
that the bankruptcy stay should extend to them because the stay applies to a non-debtor “when there
is such identity between the debtor and the third-party defendant that the debtor may be said to be
the real party defendant and that a judgment against the third-party defendant will in effect be a
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judgment or finding against the debtor.” See A.H. Robins Co. v. Piccinin, 788 F.2d 994, 999 (4th
Cir. 1986). Relators have not shown that this is the situation here.
IV. The Venue Selection Clauses
We next consider whether the trial court abused its discretion by refusing to transfer Richey’s
claims pursuant to venue selection clauses in the agreements under Texas Civil Practice and
Remedies Code § 15.020. Mandamus relief is specifically authorized to enforce a statutory
mandatory venue provision. TEX. CIV. PRAC. & REM. CODE § 15.0642.
A. Section 15.020–Major Transactions
Relators assert that by its plain language —“Notwithstanding any other provisions of this
title”—Texas Civil Practice and Remedies Code § 15.020 overrides other venue provisions and
required the trial court to enforce the venue agreements. Section 15.020 applies to a “major
transaction,” which is defined as a transaction evidenced by a written agreement and which involves
$1 million or more:
(c) Notwithstanding any other provision of this title, an action arising from a major
transaction may not be brought in a county if:
(1) the party bringing the action has agreed in writing that an action
arising from the transaction may not be brought in that county, and
the action may be brought in another county of this state or in another
jurisdiction; or
(2) the party bringing the action has agreed in writing that an action
arising from the transaction must be brought in another county of this
state or in another jurisdiction, and the action may be brought in that
other county, under this section or otherwise, or in that other
jurisdiction.
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Id. § 15.020(c). Richey argues that section 15.020 and the venue selection clause in the Goodwill
Agreement do not apply for the following reasons: (1) his tort claims do not “arise from” the
purchase of Richey Oil; (2) the only agreement that relates to Richey’s claims is the Partnership
Agreement which has no forum or venue selection clause; (3) the contractual venue selection clause
is permissive, not mandatory; and (4) venue is mandatory in Wise County under the statutory
provision requiring a suit for libel or slander to be brought in the county where the plaintiff resided
at the time of the accrual of the cause of action. See id. § 15.017. We address the arguments in turn.
B. Does Section 15.020 Apply?
The parties do not dispute that the Richey Oil acquisition, which included the sale of
Richey’s goodwill, constitutes a “major transaction” as defined by section 15.020. Richey urges,
however, that section 15.020 does not apply because his claims against Relators are not claims
“arising from” the purchase of Richey Oil; rather, he asserts, his claims arise from the operation or
management of Nighthawk. We have not previously addressed when an action “arises from” a
major transaction under section 15.020, but we have previously addressed similar issues as to forum
selection agreements.
In In re International Profit Assocs., 274 S.W.3d 672 (Tex. 2009) (per curiam), we analyzed
whether a forum selection clause in a contract applied to tort claims between the contracting parties.
In determining whether the claims were within the scope of the clauses, we called for a “common-
sense” examination of the substance of the claims made to determine if they “arise” from the
contract. Id. at 677. We explained that a court should consider whether a claimant seeks a direct
benefit from a contract and whether the contract or some other general legal obligation establishes
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the duty at issue. Id. We concluded that no matter how the claimant characterized or pleaded the
claims, the tort claims in that case—including fraud and negligent misrepresentation—“arise from
the contractual relationship between the parties, not from obligations imposed by law.” Id. at 678.
In Lisa Laser, 310 S.W.3d 880, we applied the same type of analysis to determine the scope
of a forum selection clause and whether it applied to the plaintiffs’ contract claims. In that case,
HealthTronics had a contract with Lisa Laser for exclusive distribution rights of certain medical
devices. Id. at 882. The agreement also provided HealthTronics with rights of first refusal to
distribute new products if certain requirements were met. Id. An exhibit to the agreement provided
that the terms and conditions that followed, including a California forum selection clause that
applied to “any dispute arising out of this agreement,” applied to sales by Lisa Laser to
HealthTronics. Id. HealthTronics sued Lisa Laser in Travis County for breach of contract, alleging
that Lisa Laser breached its obligation to afford HealthTronics the first right to distribute new
products, and for tortious interference with a contract. Id. Lisa Laser sought mandamus relief after
the trial court denied its motion to dismiss based on the forum selection clause. Id. at 882-83.
HealthTronics argued that the forum selection clause only applied to part of the contract, that is,
sales transactions between it and Lisa Laser. Id. at 884. Applying the reasoning from International
Profit Associates, we concluded that Lisa Laser’s obligation, if any, to inform HealthTronics of new
products and to offer it a right of first refusal to distribute those products “only arises from the
Distribution Agreement.” Id. at 884-86. The obligations were not imposed under general law, they
would not exist but for the agreement, and therefore they arose out of the agreement. Id. at 886. We
concluded that the forum selection clause itself applied more broadly than to mere sales transactions
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because it applied to “any dispute arising out of” the agreement and the trial court erred in refusing
to enforce the forum selection clause. Id. at 887.
Turning to the case at hand, we see no reason to deviate from the type of analysis we used
in International Profit Associates and Lisa Laser. Similarly to our method of analysis in those cases,
we will use a common-sense examination of the substance of the claims to determine whether the
statute applies. See Int’l Profit Assocs., 274 S.W.3d at 677.
Richey alleged in his live pleadings that “[a] substantial part of the acquisition was deferred
consideration in the form of a $6,500,000 Promissory Note.” He further alleged that he suffered
substantial damages caused by Relators’ authorization of the $20 million special distribution and
that “[t]he effect of the distribution was to severely impair [Nighthawk’s] ongoing operations and
ultimately to render [Nighthawk] insolvent and incapable of continuing its business and affairs.”
Richey brought a claim for breach of fiduciary duty related to that $20 million distribution of
Nighthawk assets. He alleged that his damages included “benefit of the bargain losses.” And in a
response to Relators’ supplemental motion to dismiss in the trial court, he explained that he sought
damages for “the loss of the promissory note issued [to] him individually.”
Applying a common-sense analysis, we conclude that Richey in substance is seeking to
recover the $6.5 million owed to him under the Note and for actions flowing directly from the
acquisition and actions anticipated to flow from it.
First, the Note was consideration for his transfer of goodwill and was specifically provided
for under the Goodwill Agreement. His claim for Nighthawk’s failure to pay the Note, regardless
of whether it is labeled as a breach of fiduciary duty claim or otherwise, arises from that major
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transaction. See id. (considering the substance of claims such as breach of the duty of good faith and
fair dealing to determine whether a forum selection clause applied). Richey’s complaint that he lost
the benefit of his bargain depends on the Goodwill Agreement and Nighthawk’s agreement in it to
pay part of the purchase price by means of the $6.5 million note. See Lisa Laser, 310 S.W.3d at 886
(holding that a forum selection clause applied to a claim that would have no basis but for the
agreement containing the clause). Because Richey’s claims substantively arise from commitments
in the Goodwill Agreement, we disagree with his claim that the only agreement that relates to his
claims is the Partnership Agreement.
Richey asserts that his claims actually arise from Relators’ post-acquisition conduct and,
therefore, do not “arise from or relate to the Note.” Rather, he argues that the Note is merely a
source of reference for measuring his damages. He also argues that because he did not sign the
Note, he is not bound by the venue selection clause in it. We disagree that these assertions mean
section 15.020 is inapplicable. First, section 15.020 does not require that an action arise out of a
specific agreement. Rather, it applies to an action “arising from a major transaction” if the party
bringing the action has agreed in writing that the action will be brought in a certain jurisdiction.
TEX. CIV. PRAC. & REM. CODE § 15.020(a) (emphasis added). And as set out above, Richey signed
the Goodwill Agreement specifying that claims arising out of or relating to it would be brought in
Tarrant County. Richey’s claim based on the unpaid note arises out of that major transaction
regardless of whether Richey signed the Note or whether his claim “arises” specifically out of the
Note.
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Second, we disagree with Richey’s claim that he merely references the Note to measure his
damages. Richey cites Carr v. Main Carr Development, LLC, 337 S.W.3d 489, 498 (Tex.
App.—Dallas 2011, pet. denied), in which the court held that a non-signatory cannot be compelled
to arbitrate when his claims merely “touch matters” covered by a contract containing an arbitration
clause, yet the claims do not actually rely on the contractual terms. Id. In that case the court of
appeals explained that claims must be brought on a contract if liability must be determined by
reference to the contract, and the determination of whether a party seeks the benefit of a contract
turns on the substance of the claim. Id. (citing In re Weekley Homes, L.P., 180 S.W.3d 127, 131-32
(Tex. 2005)).
Here, Richey’s claims do more than “touch matters” included in the Goodwill Agreement
and the Note. Liability for failure to pay him on the Note must be determined by reference to those
agreements. See id. And when an injury is to the subject matter of a contract, the action is
ordinarily “on the contract.” Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991)
(emphasis added).
C. Is the Venue Selection Clause Mandatory?
Richey next argues that even assuming his claims arise from Nighthawk’s purchase of
Richey Oil, section 15.020 is inapplicable because he did not agree in writing that an action arising
from the transaction “must” be brought in Tarrant County or “may not be brought” in Wise County.
He claims that the acquisition documents and the Note include permissive, not mandatory venue
selection clauses. He references the Goodwill Agreement’s provisions that “any proceeding arising
out of or relating to this Agreement may be brought in the courts of the State of Texas, Tarrant
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County, or if it has or can acquire jurisdiction, in the United States District Court for the Northern
District of Texas” and that the parties “submit[] to the non-exclusive jurisdiction of each such court,”
and “the proceeding may be heard and determined in any such court.” (Emphasis added). Richey
argues that this permissive language controls over the mandatory language providing that each of
the parties “agrees not to bring any proceeding arising out of or relating to this Agreement in any
other court.” He asserts that finding the clause mandatory would render all of the permissive
language meaningless. Relators counter that the permissive language applies to consent to
jurisdiction, but the mandatory language applies to require venue. We agree with Relators.
The beginning of the jurisdiction clause at issue here provides that “[a]ny proceeding arising
out of or relating to this Agreement may be brought in the courts of the State of Texas, Tarrant
County . . . and each of the parties irrevocably submits to the non-exclusive jurisdiction of each such
court in any such proceeding.” Objections to personal jurisdiction may be waived, so a litigant may
consent to the personal jurisdiction of a court through a variety of legal arrangements. Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985). For example, a contractual “consent-to-
jurisdiction clause” subjects a party to personal jurisdiction, making an analysis of that party’s
contacts with the forum for personal jurisdiction purposes unnecessary. RSR Corp. v. Siegmund, 309
S.W.3d 686, 704 (Tex. App.—Dallas 2010, no pet.) (concluding a contract provision that claims
“may be heard” in Dallas courts was a “consent-to-jurisdiction” clause and the trial court erred by
granting the defendant’s special appearance); see Ramsay v. Tex. Trading Co., 254 S.W.3d 620, 629
(Tex. App.—Texarkana 2008, pet. denied) (explaining that a permissive forum selection clause is
one under which the parties consent to the jurisdiction of a particular forum but do not require suit
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to be filed there); see also Granados Quinones v. Swiss Bank Corp. (Overseas), S.A., 509 So. 2d
273, 274 (Fla. 1987) (“Permissive clauses constitute nothing more than a consent to jurisdiction and
venue in the named forum.”).
The provision here providing that the parties irrevocably submit to the non-exclusive
jurisdiction of the courts in Tarrant County is a consent-to-jurisdiction clause. But the parties not
only submitted themselves to jurisdiction of the Tarrant County courts, each party also “irrevocably
. . . agree[d] not to bring any proceeding arising out of or relating to this Agreement in any other
court.” Our primary goal in construing this contractual language is to determine the parties’ intent
as reflected by the language they used. El Paso Field Servs., L.P. v. Mastec N. Am., Inc., 389
S.W.3d 802, 805 (Tex. 2012). The contract reflects intent that the parties submit to the jurisdiction
of the state or federal courts in Tarrant County and that they will not file suit “arising out of or
relating to this Agreement” anywhere else. The requirement that if the parties file suit it will be in
Tarrant County is not diluted by their agreement to submit to jurisdiction there, and we disagree with
Richey’s position that construing the venue selection clause as mandatory would render his
agreement to submit to personal jurisdiction in Tarrant County meaningless. Simply put, Richey
clearly agreed in the Goodwill Agreement that an action arising from that transaction must be
brought in Tarrant County. See TEX. CIV. PRAC. & REM. CODE § 15.020(c).
Richey also asserts that when a venue provision such as the one involved here includes the
term “non-exclusive,” it is not mandatory, even if the provision includes other language reflecting
that it is mandatory. Richey cites two cases in support of his assertion that use of the phrase “non-
exclusive jurisdiction” makes a venue selection clause only permissive. See Sauder v. Rayman, 800
15
So. 2d 355, 359 (Fla. Dist. Ct. App. 2001); W. Ref. Yorktown, Inc. v. BP Corp. N. Am. Inc., 618 F.
Supp. 2d 513, 520-21 (E.D. Va. 2009). But in neither of those cases did the courts’ holdings rely
exclusively on the phrase “non-exclusive.” In Sauder, the court held that the phrase “non-exclusive
jurisdiction” in a forum selection clause was permissive while the phrase “all actions . . . shall be
litigated” in the same clause was mandatory. 800 So. 2d at 359. Because the entire clause did not
foreclose multiple interpretations, the court concluded the trial court’s order finding the provision
permissive was not clearly erroneous. Id. And in Western Refining Yorktown, the forum selection
clause did not contain the phrase non-exclusive jurisdiction. Rather, the clause provided that an
action to enforce the contract “shall” be brought in “the federal or state courts located in Cook
County in the State of Illinois on a non-exclusive basis.” 618 F. Supp. 2d at 519. The phrase “non-
exclusive basis,” the court held, meant that filing suit in the courts in Cook County was not
mandatory. Id. at 523.
We do not consider these cases determinative. Rather, we conclude that where the phrase
“non-exclusive jurisdiction” is in a venue selection clause that also includes language reflecting
intent that the venue choice is mandatory, the non-exclusive language does not necessarily control
over the mandatory language. We agree with the court’s decision in Muzumdar v. Wellness
International Network, Ltd., 438 F.3d 759, 762 (7th Cir. 2006) where the court rejected a party’s
contention that the phrase “non-exclusive jurisdiction”—which the court noted required the parties
to submit to personal jurisdiction—rendered a forum selection clause permissive. There the court
concluded that it could not “find that a provision which requires appellants to submit to the
‘non-exclusive’ jurisdiction of Texas courts somehow undermines a very strongly worded forum
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selection clause containing mandatory language: ‘SHALL BE PROPER ONLY’ or ‘SHALL BE
PROPER’ in Dallas County, Texas.” Id. Similarly, the phrase “non-exclusive jurisdiction” in the
Goodwill Agreement does not control over the plainly worded mandatory language.
D. Venue in Wise County
Finally, Richey argues that venue in Wise County is proper even if it is not mandatory, so
the trial court did not err by denying Relators’ motion to dismiss. First, Richey points to Texas Civil
Practice and Remedies Code § 15.017 which provides that:
A suit for damages for libel, slander, or invasion of privacy shall be brought and can
only be maintained in the county in which the plaintiff resided at the time of the
accrual of the cause of action, or in the county in which the defendant resided at the
time of filing suit, or in the county of the residence of defendants, or any of them, or
the domicile of any corporate defendant, at the election of the plaintiff.
TEX. CIV. PRAC. & REM. CODE § 15.017. He asserts that because he resided in Wise County at the
time his cause of action for defamation accrued, this mandatory provision applies.
We have already concluded that section 15.020 applies, mandating that Richey’s actions
must be brought in Tarrant County. Venue may be proper in multiple counties under mandatory
venue rules, and the plaintiff is generally afforded the right to choose venue when suit is filed.
Wilson v. Tex. Parks & Wildlife Dep’t, 886 S.W.2d 259, 260 (Tex. 1994). But in this case, the
language of section 15.020 applies to an action arising from a major transaction “[n]otwithstanding
any other provision of this title.” TEX. CIV. PRAC. & REM. CODE § 15.020(c). This indicates that
the Legislature intended for it to control over other mandatory venue provisions. See Molinet v.
Kimbrell, 356 S.W.3d 407, 413-14 (Tex. 2011) (holding that the phrase “notwithstanding any other
law” indicates a legislative intent that the provision prevail over conflicting law).
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Next, Richey alternatively argues that if section 15.017 does not apply, venue is proper in
Wise County under the general venue statute because a substantial part of the events giving rise to
his claim occurred there. See TEX. CIV. PRAC. & REM. CODE § 15.002(a)(1) (providing that a lawsuit
shall be brought in various enumerated places including “in the county in which all or a substantial
part of the events or omissions giving rise to the claim occurred”). He cites Acker v. Denton
Publishing, 937 S.W.2d 111, 115 (Tex. App.—Fort Worth 1996, no writ) for the proposition that
if a plaintiff’s choice of venue is proper, it is reversible error for a trial court to transfer venue even
if the county of transfer would also have been proper if chosen by the plaintiff. But Acker did not
address whether a case should be transferred when a mandatory venue provision for a different
county was applicable. And we long ago explained that “[i]f the plaintiff’s chosen venue rests on
a permissive venue statute and the defendant files a meritorious motion to transfer based on a
mandatory venue provision, the trial court must grant the motion.” Wichita Cnty. v. Hart, 917
S.W.2d 779, 781 (Tex. 1996) (emphasis added). The permissive venue statute does not control over
the mandatory venue provision applicable in this case.
V. The Remainder of Richey’s Claims
Having determined that Richey’s claims seeking his benefit of the bargain losses arose out
of a major transaction, we conclude that all of Richey’s claims against Relators must be transferred
to Tarrant County because Texas Civil Practice and Remedies Code § 15.004 provides that:
In a suit in which a plaintiff properly joins two or more claims or causes of action
arising from the same transaction, occurrence, or series of transactions or
occurrences, and one of the claims or causes of action is governed by the mandatory
venue provisions . . ., the suit shall be brought in the county required by the
mandatory venue provision.
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It is not necessary for us to analyze Richey’s claims to determine whether they arise from the same
transaction, occurrence, or series of transactions: the parties affirmatively assert that they do.
VI. Inconsistency Among Agreements
Finally, Richey asserts that because Relators argue that this case is also governed by forum
selection clauses providing that suit be brought in Chicago, New York, and Illinois, the
inconsistency among all the agreements creates an ambiguity so suit should proceed in Richey’s
choice of venue. We disagree.
In order to finance the acquisition of Richey Oil, Nighthawk entered into credit agreements
with LaSalle Business Credit, L.L.C. and D.B. Zwirn Special Opportunities Fund, L.P., which
contained clauses requiring suit be brought in Chicago and New York, respectively. Richey
acknowledges he was not a party to either of those agreements. Richey also signed a Subordination
Agreement in which he agreed that the $6.5 million note was subordinate to the security interests
of LaSalle Business Credit and D.B. Zwirn. The Subordination Agreement provided that any
litigation in connection with that agreement shall be venued in New York. But Relators were not
parties to that agreement.
Relators also argue that a deposit agreement with Bank of America, requiring suits regarding
the Richey Oilfield account be brought in Illinois, applies to Richey’s claims against them. But
Richey did not bring claims against Relators regarding the Richey Oil bank account. He claimed
that Fisher made defamatory statements to check payees about Richey’s being responsible for the
checks not being able to be cashed. Relators do not explain how these claims arise out of the deposit
agreement with Bank of America.
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We disagree that there is any ambiguity as to which clause should apply to Richey’s claims
against Relators. Richey’s claims arise out of and would not exist but for the acquisition
agreements. The venue selection clauses in those agreements apply.
VII. Conclusion
The trial court abused its discretion by failing to enforce the mandatory venue selection
clauses in the Stock Purchase Agreement and Goodwill Agreement. We conditionally grant relief.
We direct the trial court to vacate its order denying Relators’ motion to transfer venue and to grant
the motion. The writ will only issue if the trial court fails to comply with our directive.
________________________________________
Phil Johnson
Justice
OPINION DELIVERED: February 28, 2014
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