NWR Georgia Construction, LLC v. Master Woodcraft Cabinetry, LLC, and MCW Industries, LLC ( 2022 )

In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
No. 06-21-00104-CV
NWR GEORGIA CONSTRUCTION, LLC, Appellant
V.
MASTER WOODCRAFT CABINETRY, LLC, AND MCW INDUSTRIES, LLC, Appellees
On Appeal from the 71st District Court
Harrison County, Texas
Trial Court No. 21-0302
Before Morriss, C.J., Stevens and Carter,* JJ.
Opinion by Chief Justice Morriss
*Jack Carter, Justice, Retired, Sitting by Assignment
OPINION
In this interlocutory appeal from the trial court’s order overruling NWR Georgia
Construction, LLC’s (NWR), special appearance’ in a lawsuit filed against it by Master
Woodcraft Cabinetry, LLC (MWC), and MCW Industries, LLC (MCW Industries), the principal
issues are whether NWR consented to personal jurisdiction in Texas and whether NWR was
subject to specific jurisdiction in Texas. Because we conclude that (1) NWR did not consent to
being sued in Texas and (2) NWR was not subject to specific jurisdiction in Texas, we reverse
the trial court’s order and remand for further proceedings.
I. Factual and Procedural Background
NWR, a Georgia limited liability company with its principal place of business in
Charlotte, North Carolina, was the general contractor for a multifamily project in Decatur,
Georgia, known as Scott Crossing. In late 2019 and early 2020, NWR subcontracted with MWC
to build cabinets for the Scott Crossing project and subcontracted with MCW Industries to install
the cabinets constructed by MWC.” In connection with the subcontracts, Rozanna Lewane, vice
president of credit for MWC, asked Casey White, vice president of construction for NWR, to
sign a credit application containing a forum-selection clause identifying Harrison County, Texas,
as the forum for resolution of any disputes. The credit application included a paragraph entitled
“Agreement,” followed by a signature line, and a separate paragraph entitled “Guaranty,”
See TEX. Civ. PRAC. & REM. CODE ANN. § 51.014(a)(7) (Supp.).
*The subcontract between NWR and MWC was labeled SC-030 while the subcontract between NWR and MCW
Industries was labeled SC-046 (collectively referred to as “the subcontracts”).
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followed by a separate signature line. The agreement section of the credit application stated, in
pertinent part:
In consideration of the extension of credit to the Purchaser by MWCC/MCW Ind.,
if credit is extended, Purchaser agrees that this transaction is consummated in
Harrison County, Texas[,] and agrees that jurisdiction and venue for any suit
arising out of any relationship between Purchaser and MWCC/MCW Ind. under
any theory of law or any cause of action shall be only in the appropriate County or
State Court in Harrison County, Texas[,] and Purchaser expressly agrees and
consents to jurisdiction and venue in said State and County. In further
consideration of the extension of credit by Seller to Purchaser, the Purchaser
expressly agrees that no removal to any United States District Court or transfer of
venue (Federal or State) shall ever be sought by Purchaser and Purchaser hereby
waives any objection to in personam jurisdiction and venue and agrees to make no
request to transfer any suit to any other Court, other than the appropriate County
or State Court in Harrison County, Texas. MWCC/MCW Ind. will not, under any
circumstances, participate in arbitration.
When he received the credit application, White emailed Lewane, stating:
Please find attached as requested. More than a credit application, this seems to
look to define legal terms that contradict the project and subcontract information.
Also there is no personal guarantee here but I have also attached the project
funding letter from PNC Bank.
If signature is required on [an] application without such info please let me know
and I can provide; otherwise I have signed our credit resume for your review and
reference.
Let me know if you have any questions or require anything further at this time to
complete these subcontracts, thanks.
The credit application was included in the email from White to Lewane, but White had
marked a red line through the guaranty portion of the application and had not signed the
agreement portion of the application, instead writing: “N/A — All payment terms per issued
subcontracts SC-030 & SC-046,” as reflected below in the document returned to Lewane:
Bank Name Address Contact Tealaphone
See Attachment
AGREEMENT:
The term “Purchaser” os used in the AGREEMENT and below GUARANTY shall be deemed to inclede all (3). subsid . jit oo
vemnawes, affilimes, successors, assigns and relaned entines to the entiry requesting credit. If Purchaser desipes the extension of cred ba Sellez, it is agreed than in
comsidieration of the extension of credit by Muster Wood raft Cabinetry, ULC MCW Indwseries, LUC (MWOC/MICW Ted), they may impose iaterest or late chenpes:
inthe aeximum amount permitted by Texas law on any past due balances. If suit is filed by Seller to collect any amousels) due, Purchaser agrees to pay Seller alll
costs of saat and collection inchading but not lanted to measonable amomney"s fees, expenses of ievestigatios and discovery, aad comm costa. All amounts due by Seller
are ‘eet 30 days from the dave of invedee’ mad are due wed payable ot 232 Nomh Marshall Inderal Avenue, Macshadl, Texas 75671, Harrison Coumty, Texas. [pene
are not met, MWODMICW Ind. is granted the night to withhold shipmests without furtker motice. The relatioeship betwees Seller and Purchaser ond all sui betwees:
MWOC MCW Ind. aad Paschaser arising under aay theory of law or amy couse of action shall be governed ender the laws of the Sune of Texas without pegurd to any
comflict of laws proveion ie consideranies of the exmension of credit to the Purchaser by MWOCMCW Ind, if credit is exended, Purchaser agrees that this
tmmsectios is conmmmmnated i Harrison Coumy, Texas and wapecs that jerisdiction and venue for any seit arising oat of aay relationship berween Purchases amd
MWOCMCW lad. under any theery ef low or any cause of action shall be only in the appeoprian County or Star Coun is Harrison County, Texas and Purchaser
expressly agrees and coments to jurisdiction and venue a said Sone and Coumy. In farther considemtion of the extensioa of credit by Seller to Purchaser, the
Purchaser expressly agrees that no removal we any Ueded Sates Datrict Comm or transis of veawe (Federal of State) shall ever be sought by Purchaser and Purchaser
hereby waives any objection to im persomam jerisdiction ond venue and agrees to make ao request to tondfer aay suit to ay other Coun, other than the appeopeiate:
County or Ste Court i Harrison County, Tews MWCOMCW lad will net, uader any cicemennees, participate in arbirenioa The undersigned cemifies that the
above farnished informanes is tue and correct and acknowledges that this AGREEMENT shall supersede all pret agrerments aad become a pam of the teres of all
future agreements, iacluding bea not limited to any wad all sales commects, purchase orders, change orders, and'or suboontracts berwees MWCCMCW led. and
Parser. The tems of this AGREEMENT can caly be changed andor waived by o written comsert that specifically pelewemces this AGREEMENT and signed by
the 000, CEO onder CAO of MWOC/MOW Lad. Ie the evemr of an incomsimency betweem the terms and provisions of this AGREEMENT and the teres and
provinias of aay other agreements, the term aad provisiows of this AGREEMENT shall mike precedence.
N/A - All payment terms per issued subcontracts SC-030 & SC-046 12/19/2019
Sigmabure: Title
NIA Casey White - Vice President - 704-968-6361
In considerat elena a Credle to the Purchaser above by Master Weodt raft Catinetry, LLCO MCW ledusnies, LLC (MW OC MCW Ind), the amdersigned
the provisioss set forth inthe above toregoing AGREEMENT aad agrees that the provisions are incorporated inthe GUARANTY by
rr on cnecuting the GUARANTY, amd perscaa lly puamences paymests of all mvedor amounts and other amounts dec or
te become due to MWOCMCW Ind, inclitimgagasonable attorney's fees, expenses of ivestiganion and discovery and court costs onisang fom purchases of ary
The undersigned waives sotice of aeceptnce of the gaaranty and nedice of amy dethult and demand af
: nd of every obligation wad liability of such Percheser or the undersigaed This guaruey
Jension of tee, paymest, aodificution, chaage onder or additions to any connect
beween MWICOMCW Lad. aad the Purchaser, and shall apply to all future ofder Teeaggrects od Purchaser wih MWOCMCW Ind. This guarnry can oaly be
cancelled terminaaed by a writes coment signed by COG, CEO ander CAO ef MWOC/MCW Tie felanonios bemvces Gime aad M WO MCW Ind. shall
be powered aad imterpected as set forth ia the abowe AGREEMENT penuining io jerisdiction, venue trekgboice of low witkowt regard to my conflict of law
prwiion In considention of the extension of ceedia to Purchaser by MWOCMICW Lod if credit is extended,
conditions regarding suits berwees Paechaser and Seller as set foeth in the above AGREEMENT.
Baler expressly aapece Ww all the terms ard
Signature Date
Lewane emailed White following receipt of this document, “THANKS -- CAN YOU
SIGN THE AGREEMENT PORTION,” to which White responded, “Sure thing, Please find
attached.” This time, White had signed the agreement portion of the credit application, but had
marked through it with a red line as follows:
BANK REFERENCE
Bank Name Address Contact Telephone
See Attachment
NIA - All payment terms per issued subcontracts SC-030 & SC-046
AGREEMENT:
ia the MMi aMOUN pee
Costs of Sun aed oollecnon including: bear y
are ‘wet 3 days from the date of invoice” and are due Ttepagy
are nat met, MMOD MCW Led. is granted the right to wathhe
MWOCMCW bed. under aay theory of low or ney come of mation shall be oaly in the appropiate Cail i
expecesly agrees and consears to jurisdiction aad veawe in said State and County. la further considerarica of Menage
Purchaser capressly agrees that ao revel wo aay United Suses District Count or rameter of were (Federal or Sine) shall ever a
hereby waives aay objection to in persona jurisdiction and vewwr ond agrees to make no request to mone any seid to any other Com
Conty or Some Count in Hanson County, Tews. MW OC MCW Ind. wall not, under aay circumences, participate in arbitration. The usders ete
abiwe fumished informacion is ue and comrect aad acknowledges thar this AGREEMENT stall seperscde all poor agreements and become a part of dee beriin
future wareemess, iecluding but not limited 10 my ond all soles contacts, purchase oaders, change orders, andor sebcommect: betwee MWOLMCW Ind. aaa
Purchaser. ‘The tere ofthis AGREEMENT cas only be chasged aadior waived by a wrimes coneeat that specifically references this AGREEMENT and signed by
the OOO, CEO andior CRO of MYCCIMCW Un inthe event of an meonsisiency berwcen the tone and provisions of this ACPREEMERT ond the teams and
provisions of aay other agrecmests, the ms and provisions of this AGREEMENT shall uke precedence
= Casey White Vice President 12/19/2019
Signature Tithe Date
ln considera extension of credit to the Purchaser above by Muster WoodCraft Cabinetry, LUO MCW Industries, LC (MWCCIMICW Lad 1, the endersigned
hereby consent and age lihe provisions set fords is dhe above foregoing AGREEMENT and agrees that the provisions are incorporated in the GUARANTY by
eeleseace and shall apply to the pe Tas executing the GUARANTY, ond personally guarantees: payeeenis of all woes omou: eed other amounts dec or
to become duc to MOC MCW Lod. ine: ke amemey"s fees, exposes of investigation aed discowesry ae coun costs anisieg from perches oF any
other relies berween Pancheser ad MOC The aaderigned waives notice of accepiace of the gpuareety add eocce of any default ond demand ot
every kind, napare and description as well as motioe of any dedail ern of every obligation and liabiliny of swch Purchaser or the wdersigned. This guazary
shall be a continuing guaranty and shall not be diminished of affeesed bY cree Of time, paymn, medication, chaage order or addiness be any coneect
bem MWOCMCW Und. and the Purchaser, aed shell apply oo oll Geeere orders ach of Perchser wih MWOCMCW Ind This gearanty can onby be
qnctlled ieminael by a written conieet sigeed by OO, CEO andor CFO of MOC MCW felinonship between. Guarantor and MW OCMC Enel shall
be povensed aad interpreted as set feet in the above WOREEMENT pcmaimieg jurisdiction, ‘wera shoice of law without segurd to amy conflict of Law
Provagion. le comsadcration of the extension of credit to Perchemer by MWOC/MCW lod., if ceedic om extended, expocesly agrees to alll the texas aad
conditions regarding sais between Purchaser amd Seller as sea forth in the above AGREEMENT.
Not Applicable - See Attachments
ora Tene
As indicated, White had written in red lettering that the agreement portion was “N/A”
and that “[a]ll payment terms [were] per issued subcontracts SC-030 & SC-046.” White also
emailed Lewane, along with the credit application shown above, its credit resume and a letter
from PNC Real Estate indicating that “the loan in the name of NR Decatur Crossing Property
Owner II LLC for the ‘Scott Crossing’ project [had] been closed and [was] expected available to
be drawn on.”
After the subcontracts’ were executed, the parties executed addendums to the
subcontracts. The addendum to subcontract SC-030 stated, in paragraph two, “Master
Woodcraft Cabinetry, LLC’s credit application, and approved shop drawings and approved
samples are AN integral part of this agreement and take precedence over plans, specs, and all
other contract documents.” Paragraph fourteen of the addendum stated:
The terms noted in this Addendum are binding upon both parties contrary to any
other terms expressed in the foregoing Purchase Order/Subcontract. In the event
of a conflict between contract documents, this Addendum shall govern. This
Addendum becomes effective and binding upon release of first order to
manufacturing.
The addendum to subcontract SC-030 was signed by White and Lewane on January 15, 2020, on
behalf of NWR and MWC, respectively. The addendum to subcontract SC-046 stated, in
paragraph two, “MCW Industries, LLC’s Credit application become [sic] an integral part of this
agreement.” Paragraph thirteen of that addendum stated, “This Addendum becomes effective
and binding upon commencement of work.” The addendum to subcontract SC-046 was signed
by White and Lewane on January 15, 2020, on behalf of NWR and MCW Industries,
respectively.
In March 2021, MWC and MCW Industries filed suit against NWR, alleging, in their first
amended petition, that NWR failed to pay in accordance with the subcontracts. MWC and MCW
Industries sought a declaratory judgment that NWR owed MWC $79,725.78 and owed MCW
Industries $53,061.18 and further stated a claim for quantum meruit. NWR filed a verified
special appearance, claiming that the trial court did not have general or specific personal
>The subcontracts included in the appellate record were signed by MWC and MCW Industries on January 15, 2020,
but lack NWR’s signature. Neither party disputes that they entered into legally binding subcontracts.
6
jurisdiction and that the forum-selection clause in the credit application could not be invoked to
support jurisdiction because the clause was unambiguously stricken from the credit agreement.*
In response, MWC and MCW Industries claimed that NWR agreed to the forum-selection
clause in the credit application, claiming that White only objected to it because “all payment
terms [were] per issued subcontracts SC-030 & SC-046” and that he did not “expressly state that
any other term was not applicable.” They further argued that the forum-selection clause was
enforceable because, after the credit application was signed, NWR agreed to incorporate the
credit application into each of the subcontracts. Alternatively, MWC and MCW Industries
argued that Texas had specific jurisdiction over NWR.°
‘NWR attached the following documents to its verified special appearance:
e The unsworn declaration of its vice president and general counsel, Michael Wilson;
e The unsworn declaration of Casey White;
e A signed copy of the credit application showing both the agreement and guaranty paragraphs marked
through;
e NWR’s credit resume submitted to MWC and MCW Industries;
e PNC Real Estate’s letter indicating that the loan for the Scott Crossing project had been closed; and
e ©The e-mail chain between White and Lewane regarding the credit application.
[MWC and MCW Industries attached the following documents to its verified response to NWR’s special
appearance:
e =©The declaration of John Cathey, the executive vice president and chief financial officer of both MWC and
MCW Industries;
A blank credit application;
The e-mail chain between White and Lewane regarding the credit application;
The initial credit application with the guaranty paragraph marked through;
NWR’ s credit resume submitted to MWC and MCW Industries;
PNC Real Estate’s letter indicating that the loan for the Scott Crossing project had been closed;
The final version of the credit application signed by White, with both the agreement and guaranty
paragraphs marked through;
Subcontracts SC-030 and SC-046;
e The addendum to subcontract SC-046; and
e The addendum to subcontract SC-030.
Following a hearing, the trial court issued its order denying NWR’s verified special
appearance.
I. Standard of Review
“On appeal, we review de novo the trial court’s determination to grant or deny a special
appearance.” Hitachi Shin Din Cable, Lid. v. Cain, 106 S.W.3d 776, 781 (Tex. App.—
Texarkana 2003, no pet.). “Whether a trial court has personal jurisdiction over a nonresident
defendant is a question of law that we review de novo.” Wilco Farmers vy. Carter, 558 S.W.3d
197, 201 (Tex. App.—Texarkana 2018, no pet.) (quoting Old Republic Nat’l Title Ins. Co. v.
Bell, 549 $.W.3d 550, 558 (Tex. 2018) (citing Moncrief Oil Int’l Inc. v. OAO Gazprom, 414
S.W.3d 142, 150 (Tex. 2013))). “In a de novo review, the reviewing court conducts a review of
the record to make its own legal determinations and conclusions.” Nissan N. Am., Inc. v. Tex.
Dep’t of Motor Vehicles, 592 S.W.3d 480, 486 (Tex. App.—Texarkana 2019, no pet.) (citing
Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998)). “When no findings of fact and
conclusions of law are made by the trial court, “we infer “all facts necessary to support the
judgment and supported by the evidence.”’” Wilco Farmers, 558 S.W.3d at 201-02 (quoting
Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007) (quoting BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002))).
“Texas courts may assert in personam jurisdiction over a nonresident if (1) the Texas
long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is
consistent with federal and state constitutional due-process guarantees.” Schexnider v. E-Cig
Cent., LLC, No. 06-20-00003-CV, 2020 WL 6929872, at *4 (Tex. App.—Texarkana Nov. 25,
2020, no pet.) (mem. op.) (quoting Moki Mac, 221 S.W.3d at 574 (citing Schlobohm v. Schapiro,
784 S.W.2d 355, 356 (Tex. 1990))). “The Texas ‘long-arm statute describes what, “[i]n addition
to other acts,” may constitute doing business in this state.’” /d. (quoting Moki Mac, 221 S.W.3d
at 574). “[T]he long-arm statute’s broad doing-business language allows the statute to ‘reach as
far as the federal constitutional requirements of due process will allow.’” Moki Mac River
Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007) (quoting Guardian Royal Exch.
Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991)).
However, when “a party contractually consents to jurisdiction in a particular forum, then
the due-process and minimum-contacts analysis is unnecessary.” Guam Indus. Servs., Inc. v.
Dresser-Rand Co., 514 S.W.3d 828, 833 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (citing
Inre Fisher, 433 S.W.3d 523, 532 (Tex. 2014) (“[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.”)). “We review a trial court’s decision
whether to enforce a forum-selection clause for an abuse of discretion, except when our review
involves contractual interpretation of the forum-selection clause, for which we employ a de novo
standard of review.” /d.
As aresult, we must initially determine whether NWR consented to jurisdiction in Texas.
In the absence of such consent, we then determine whether NWR was subject to specific
jurisdiction in Texas.
Il. Analysis
A. NWR Did Not Consent to Personal Jurisdiction in Texas
MWC and MCW Industries contend that NWR consented to personal jurisdiction via the
forum-selection clause included in the credit application. “Forum-selection clauses are
contractual arrangements whereby parties agree in advance to submit their disputes for resolution
within a particular jurisdiction.” RSR Corp. v. Siegmund, 309 S.W.3d 686, 700 (Tex. App.—
Dallas 2010, no pet.) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.14 (1985);
Phoenix Network Techs. (Eur.) Lid. v. Neon Sys., Inc., 177 S.W.3d 605, 611 (Tex. App.—
Houston [1st Dist.] 2005, no pet.) (“A forum-selection clause is a creature of contract.”)).
“Contractual forum-selection clauses are generally enforceable in Texas.” Jn re
Nationwide Ins. Co. of Am., 494 S$.W.3d 708, 712 (Tex. 2016) (orig. proceeding) (citing Jn re
ALU Ins. Co., 148 S.W.3d 109, 112 (Tex. 2004) (orig. proceeding)). “Forum-selection clauses
are typically considered material and therefore require express assent to become binding.” Long
Island Pipe, Inc. v. QT Trading, LP, No. 01-18-00012-CV, 2018 WL 3353015, at *6 (Tex.
App.—Houston [1st Dist.] July 10, 2018, no pet.) (mem. op.) (quoting J.D. Fields, Inc. v. Indep.
Enters., Inc., No. 4:12-CV-2605, 2012 WL 5818229, at *7 (S.D. Tex. Nov. 13, 2012)). We
therefore examine the evidence to determine whether the parties expressly assented to the forum-
selection clause, thus making it part of the subcontracts agreed to by the parties.
We determine whether the parties agreed to the forum-selection clause by using ordinary
principles of contract interpretation. Siegmund, 309 S.W.3d at 700. As outlined above, the
evidence reflects that Lewane, on behalf of MWC and MCW Industries, asked White, on behalf
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of NWR, to sign a credit application that provided that the “transaction [was] consummated in
Harrison County,” that “jurisdiction and venue for any suit arising out of any relationship”
between NWR and MWC/MCW Industries “shall be only in the appropriate County or State
Court in Harrison County, Texas,” and that NWR “expressly agree[d] and consent[ed] to
jurisdiction and venue in said State and County.” Rather than signing the application, White
responded that the document submitted to NWR was “[m]Jore than a credit application” and that
it “define[d] legal terms that contradict[ed] the project and subcontract information.” White then
asked Lewane to let him know whether “signature [was] required on the application without such
info.” White then stated, “[O]therwise, I have signed our credit resume.”
A long-standing rule of Texas common law is that “an acceptance is effective only if it
matches the material terms of the offer to which it responds.” Amedisys, Inc. v. Kingwood Home
Health Care, LLC, 437 S.W.3d 507, 512 (Tex. 2014) (citing United Concrete Pipe Corp. v. Spin-
Line Co., 430 S.W.2d 360, 364 (Tex. 1968)). If an attempted acceptance changes or qualifies a
material term from the offer, the attempt operates as a rejection and counteroffer. /d. at 514. As
applicable here, the evidence shows that MWC and MCW Industries extended an offer to NWR
to enter into an agreement regarding forum, as included in the credit application. NWR rejected
the offer to sign the credit application as presented and thereby did not expressly agree to the
forum-selection clause within the application. That rejection operated as a counteroffer because
White agreed either to sign the application “without such information” or to rely solely on its
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signed credit resume.° Lewane responded by asking White to sign the “agreement portion” of
the application, which included the forum-selection clause. White did so, but only after marking
through the entire “agreement portion” of the application and only after noting at the top of the
document that it was “N/A - All payment terms per issued subcontracts SC-030 & SC-046.”
Although MWC and MCW Industries contend that, by this language, White only disagreed with
the payment terms rather than with the entirety of the “agreement” section of the credit
application, White also struck the entire agreement portion of the credit application before
signing it, as indicated above. This amounted to a rejection of the “agreement” portion of the
application, including the forum-selection clause contained within the agreement. See G.D.
Holdings, Inc. v. H.D.H. Land & Timber, L.P., 407 S.W.3d 856, 861 (Tex. App.—Tyler 2013, no
pet.) (finding that parties did not have meeting of minds on essential contract term when term
pertaining to earnest money was struck). Nevertheless, the parties entered into the subcontracts
in the absence of NWR’s express assent to the terms of the credit application. ’
Despite this fact, MWC and MCW Industries contend that the credit application became a
valid and binding part of each subcontract based on the language of each addendum—as recited
above—which purported to incorporate the credit agreement. To the extent that MWC and
MCW Industries contend that the original, pre-negotiated, unmarked credit application was
°In his unsworn declaration, White explained that “NWR was not willing to agree to Plaintiffs’ terms on their credit
application and would only sign the application “without such info.”” White further explained that, after Lewane
asked that he sign the agreement portion, he “marked out the terms and conditions in red as set forth on Exhibit 2-1
and sent the same to Ms. Lewane.”
7Whether NWR’s actions are interpreted as a counteroffer or an outright rejection of the terms of the credit
agreement—given the fact that it expressly struck through the language of the agreement—the result is the same:
the absence of NWR’s express assent to the credit agreement. See Long Island Pipe, Inc., 2018 WL 3353015, at *6.
12
incorporated into the subcontracts, we reject this argument as our sister court rejected a similar
argument in Long Island Pipe, 2018 WL 3353015, at *1.
In that case, Long Island Pipe placed an order for pipe with Merfish Trading. After the
order was placed, Merfish informed Long Island that it was first required to sign a credit
application, certain terms and conditions, and a personal guarantee contained within a “New
Account Document Packet.” /d. at *2. The terms and conditions portion of the packet included
a forum-selection clause. /d Merfish then indicated that it only needed the signed credit
application, but the signature line was located at the bottom of the terms and conditions of sale,
indicating that the credit application and the terms and conditions constituted a single document.
Id. Jn response, Long Island sent Merfish its company credit application and trade references.
Id. Merfish responded that it still required a credit application from Long Island. Jd. When
Long Island did not provide the signed credit application, Merfish again requested the signed
application. /d. at *3. Long Island responded stating that its order should be canceled if the
signed credit application was required. /d. Following a telephone discussion, Long Island sent
Merfish a completed, but unsigned, credit application. Merfish then supplied the requested pipe
and invoiced Long Island for each shipment. Each invoice included the statement, “Our general
terms & conditions apply to this transaction.” /d. at *3-4. When Long Island did not pay in full,
Merfish filed suit. /d. Merfish asserted that the trial court had personal jurisdiction over Long
Island because the invoices incorporated Merfish’s standard terms and conditions, including the
forum-selection clause. /d.
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Long Island filed a special appearance, stating that the forum-selection clause was part of
the terms and conditions of the credit application, which it had expressly rejected. /d. Applying
provisions of the Texas Business and Commerce Code, the court concluded that Long Island
offered to buy the pipe on the express condition that it did not have to sign the credit application.
By shipping the pipe without receiving a signed credit application, the court concluded that
Merfish accepted Long Island’s counteroffer. /d. at *6. The court further concluded that,
because forum-selection clauses are material and require express assent to become binding, the
language on the invoices submitted by Merfish did not incorporate the forum-selection clause
into the contract. /d.
Even though this case is different than Long Island Pipe in that NWR signed the
subcontract addendums, which purported to incorporate the credit application, NWR never
assented to the terms of the credit application and, in fact, had expressly rejected it. MWC and
MCW Industries’ contention that, by signing the addendums, NWR revived the original,
unmarked, pre-negotiated credit application, including the forum-selection clause, ignores the
realities of the parties’ negotiations regarding the credit application and NWR’s repeated refusal
to agree to it. NWR’s repeated rejection of the terms of the credit application containing the
forum-selection clause indicates that NWR never intended the forum-selection clause to become
part of the subcontracts.
Assuming, without deciding, that the language in the addendums was sufficient to
incorporate the credit application into the subcontracts, we conclude that only the final,
negotiated credit agreement marked through by White was so incorporated. This was not a futile
14
act, as the negotiated credit application provided MWC and MCW Industries with information to
determine NWR’s credit worthiness.*®
Because NWR did not assent to the forum-selection clause in the credit application and
because the original agreement portion of the credit application was not incorporated into the
subcontracts via the addendums, we conclude that NWR did not consent to personal jurisdiction
in Texas.
B. NWR Was not Subject to Specific Jurisdiction in Texas
MWC and MCW Industries’ First Amended Original Petition includes the following
jurisdictional allegations:?
Defendant, NWR Georgia Construction, LLC (“Shaw”), engages or has engaged
in business in this state, but does not maintain a regular place of business or a
designated agent for service of process. This lawsuit arises out of business done
in this state and to which said Defendant is a party. Therefore, under Section
17.044 of the Texas Civil Practice and Remedies Code,!'®! substituted service on
Defendant should be made by serving the Secretary of State of Texas... .
The first page of the credit application indicated that trade references and banking references were attached. The
evidence indicates that the actual documents attached to the credit application included NWR’s credit resume as
well as a letter from PNC Real Estate Banking confirming that the loan for the Scott Crossing Project had closed and
was available to be drawn on.
°We recite only those allegations that do not rely on the forum-selection clause in the credit application.
Section 17.044(b) the Texas Civil Practice and Remedies Code states:
The secretary of state is an agent for service of process on a nonresident who engages in business
in this state, but does not maintain a regular place of business in this state or a designated agent for
service of process, in any proceeding that arises out of the business done in this state and to which
the nonresident is a party.
TEX. Civ. PRAC. & REM. CODE ANN. § 17.044(b).
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.... Wenue in Harrison County is proper in this cause because the parties have
agreed in writing that venue is proper here and only here, or, in the alternative, all
or a substantial part of the events giving rise to the claim occurred in Harrison
County 114
.... The Defendant applied for credit in Harrison County, Texas[,] and the
Plaintiffs agreed to extend credit to the Defendant. .. . The Defendant entered into
contracts with MWCC to buy cabinets on credit and with MCW for cabinet
installation ....
“A nonresident defendant’s forum-state contacts may give rise to two types of personal
jurisdiction.” Moki Mac, 221 S.W.3d at 575 (citing BMC Software, 83 S.W.3d at 795-96). “If
the defendant has made continuous and systematic contacts with the forum, general jurisdiction
is established whether or not the defendant’s alleged liability arises from those contacts.” Jd.
(citing BMC Software, 83 S.W.3d at 796).
Conversely, “specific jurisdiction ‘may be asserted when the defendant’s forum contacts
are isolated or sporadic, but the plaintiff's cause of action arises out of those contacts with the
state.” Spir Star AG v. Kmich, 310 S.W.3d 868, 873 (Tex. 2010) (quoting 4 CHARLES ALAN
WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 1067.5 (3d ed. 2002)). “In
such cases, ‘we focus on the “relationship among the defendant, the forum[,] and the
litigation.”’” Jd. (alteration in original) (quoting Moki Mac, 221 S.W.3d at 575-76). “Specific
jurisdiction is appropriate when (1) the defendant’s contacts with the forum state are purposeful,
and (2) the cause of action arises from or relates to the defendant’s contacts.” /d. (citing
Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009)). “For a
‘lA lthough we read these venue allegations broadly, MWC and MCW Industries do not allege, nor have they ever
alleged, that NWR is subject to general jurisdiction in Texas.
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Texas forum to properly exercise specific jurisdiction in this case, (1) [NWR] must have made
minimum contacts with Texas by purposefully availing itself of the privilege of conducting
activities here, and (2) [NWR’s] liability must have arisen from or [be] related to those contacts.”
Moki Mac, 221 S.W.3d at 576.
In determining whether a nonresident defendant purposefully availed itself of the
privilege of doing business in Texas, we consider “only the defendant’s contacts with the forum
..., not the unilateral activity of another party or third person.” Moki Mac, 221 S.W.3d at 575.
We likewise consider whether the contacts relied on are “purposeful rather than random,
fortuitous, or attenuated.” Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333,
339 (Tex. 2009). “Finally, the defendant must seek some benefit, advantage or profit by availing
itself of the jurisdiction.” Jd. “The purpose of a minimum contacts analysis is to protect a
nonresident defendant from being haled into court when its relationship with the forum state is
too attenuated to support jurisdiction.” Jnternet Advertising Grp., Inc. v. Accudata, Inc, 301
S.W.3d 383, 388 (Tex. App.—Dallas 2009, no pet.) (citing Am. Type Culture Collection, Inc. v.
Coleman, 83 S.W.3d 801, 806 (Tex. 2002)). Our examination of these factors leads us to
conclude that NWR did not purposefully avail itself of the privilege of conducting activities in
Texas.
It is undisputed that NWR is a Georgia company with its principal place of business in
North Carolina. It is also undisputed that NWR does not maintain a place of business in Texas
and does not have employees or agents in this state and that it is not required to maintain a
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registered agent for service in Texas.'* MWC and MCW Industries do not contend that NWR’s
forum contacts give rise to general jurisdiction in Texas. Instead, the parties join issue on
whether NWR is subject to specific jurisdiction in Texas.
NWR entered into subcontracts with MWC and MCW Industries, both of which are
Texas companies. The subcontract with MWC provided that MWC would build cabinets for
NWR while the subcontract with MCW Industries provided that MCW Industries would install
the cabinets after they had been constructed. Contrary to the allegations of MWC and MCW
Industries, though, the cabinets were not constructed on credit, as the credit application had been
expressly rejected.
While it is true that NWR contracted with Texas companies MWC and MCW Industries,
we observe “that an individual’s contract with an out-of-state party a/one [cannot] automatically
establish sufficient minimum contacts in the other party’s home forum.” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 478 (1985). To evaluate purposeful availment in the context of a
contract, we look to such factors as “prior negotiations and contemplated future consequences,
along with the terms of the contract and the parties’ actual course of dealing.” Jd. at 479.
It is apparent from the record that prior negotiations took place regarding the credit
application, as previously explained. Those negotiations led to the execution of the subcontracts
“Tn his unsworn declaration, Michael Wilson, the vice president and general counsel of NWR, stated:
NWR is a limited liability company that is incorporated in Georgia and maintains its principal
place of business in Charlotte, North Carolina. NWR does not conduct any business in Texas,
does not own or lease personal or real property located in Texas, does not advertise in Texas, does
not maintain a personal or business office, place of business or other facilities or residences in
Texas, does not maintain a telephone listing or mailing address in Texas, does not maintain any
officers, directors, or employees in Texas, and no owners of NWR live in Texas. NWR has never
applied for or received a loan of money in Texas and does not maintain bank accounts in Texas,
and does not owe or pay taxes in Texas.
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in the absence of agreement on the forum-selection clause in the credit application. From those
negotiations, we observe that, because NWR determined not to agree to the forum-selection
language in the credit application, it did not wish to be haled into a Texas Court. See Siskind v.
Villa Found. for Educ., Inc., 642 8.W.2d 434, 437 (Tex. 1982). More importantly, though, is the
fact that both subcontracts included identical arbitration provisions and choice of law provisions.
The arbitration provision in each subcontract provided, in pertinent part:
Any claim or dispute between the Subcontractor and the Contractor shall, at the
sole option of the Contractor be determined in accordance with any disputes
procedure set forth in the Contract Documents, or at the sole option of Contractor,
by litigation or binding arbitration in accordance with the American Arbitration
Association’s (“AAA”) Construction Industry Arbitration Rules, then in effect,
and Subcontractor shall be bound by such determination and shall comply fully
with the same. Mediation of any claim or dispute shall be conducted prior to
litigation or arbitration. At the sole option of Contractor, any such mediation
shall also be conducted in accordance with the Mediation Rules of the AAA then
in effect; provided, however, that the mediation itself may be conducted by a
mediator agreed to by the Contractor and Subcontractor without the need to use
the AAA. Such mediation shall be conducted within thirty (30) days of a request
by contractor... . No claim, dispute, mediation, arbitration or litigation, shall
interfere with the progress of the Work, and Subcontractor shall proceed with the
Work despite the existence of any claim, dispute, mediation, arbitration or
litigation. .. . The location of any mediation or arbitration proceeding shall be, at
Contractor ’s sole discretion, the Project location or in Charlotte, North Carolina.
(Emphasis added). Each subcontract also provided that “[t]he validity, interpretation and
performance of its Subcontract shall be in accordance with the laws of the State of Georgia.”
“TC]hoice-of-law provisions should not be ignored in considering whether a defendant
399
has ‘purposefully invoked the benefits and protections of a State’s laws.’” Michiana Easy Livin’
Country, Inc. v. Holton, 168 S.W.3d 777, 792 (Tex. 2005) (quoting Burger King, 471 US. at
482). NWR’s deletion of the forum-selection clause in the credit application is some evidence
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that it did not anticipate local jurisdiction, and its “insertion of a clause designating a foreign
forum suggests that no local availment was intended.” Jd. at 792; see J.A. Riggs Tractor Co. v.
Bentley, 209 S.W.3d 322, 332 (Tex. App.—Texarkana 2006, no pet.) (forum-selection clause
indicated that Riggs anticipated suit elsewhere and was “not availing itself of the benefit of
Texas’ laws”); see also EnerQuest Oil & Gas, L.L.C. v. Antero Resources Corp., No. 02-18-
00178-CV, 2019 WL 1583921, at *6 (Tex. App.—Fort Worth Apr. 11, 2019, pet. dism’d) (mem.
op.) (agreement containing Oklahoma forum-selection clause and Delaware choice-of-law clause
suggest that EnerQuest “purposefully avoided” Texas). We, therefore, conclude that the
inclusion of a Georgia choice-of-law provision and Georgia (project location) or Charlotte, North
Carolina, forum-selection clause in each of the subcontracts indicates that NWR did not attempt
to avail itself of the benefits of Texas’ laws.
Although each of the subcontracts required MWC and MCW Industries to make
application for monthly progress payments to NWR in Charlotte, North Carolina (email,
overnight, or hand delivery), the subcontracts did not provide for a place of payment. “When a
contract requires the payment of money but does not specify where the payment is to be made,
the place of payment is the domicile of the payor.” Accudata, Inc., 301 S.W.3d at 389 (citing
Buffet Partners, L.P. v. Sheffield Square, L.L.C., 256 §.W.3d 920, 922 (Tex. App.—Dallas 2008,
no pet.)).
Finally, there is no evidence in the record of where the subcontracts were performed.
Even assuming MWC constructed the cabinets in Texas (to be installed on location in Georgia
by MCW Industries), that fact is not outcome determinative. Rather, the “minimum-contacts
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analysis focuses solely on the actions and reasonable expectations of the defendant.” Turner
Schilling, L.L.P. v. Gaunce Mgmt., Inc., 247 §.W.3d 447, 456 (Tex. App.—Dallas 2008, no pet.)
(quoting Michiana, 168 S.W.3d at 790) (concluding that other party’s performance of contractual
duties in Texas does not constitute purposeful contact by defendant in Texas); see also Moncrief
Oil Int’l vy. OAO Gazprom, 481 F.3d 309, 312 (Sth Cir. 2007) (contracting with resident of forum
state, combined with contract performance by resident party in forum state, did not establish
minimum contacts when non-resident defendant did not perform any of its own contractual
obligations in forum state, contract did not require performance there, and purpose of contract
centered in Russia). Here, the contract did not require performance in Texas, and the purpose of
the contract was centered in Georgia.
Based on the foregoing analysis, we conclude that MWC and MCW Industries have not
shown that NWR purposefully availed itself of the privilege of conducting activities within
Texas and is thus not subject to specific jurisdiction here. See Michiana, 168 S.W.3d at 784—
85,8
As a result of our analysis, we need not determine whether MWC and MCW Industries’ causes of action arise
from contacts within this state.
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Il. Conclusion
Because NWR did not consent to personal jurisdiction in Texas and because it is not
subject to specific jurisdiction here, we reverse the trial court’s order and remand for further
proceedings.
Josh R. Morriss, III
Chief Justice
Date Submitted: December 30, 2021
Date Decided: March 1, 2022
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