in Re: Freightquote.com ( 2019 )

DISSENT and Opinion Filed March 1, 2019
S
Court of Appeals
In The
Fifth District of Texas at Dallas
No. 05-18-01028-CV
IN RE FREIGHTQUOTE.COM, Relator
Original Proceeding from the 95th District Court
Dallas County, Texas
Trial Court Cause No. DC-18-01862-D
DISSENTING OPINION
Opinion by Justice Whitehill
I respectfully dissent from the majority opinion because the undisputed facts and
controlling law permit only one conclusion: The parties unambiguously agreed to a contract which
incorporated by reference a valid forum selection clause requiring that this dispute be tried in
Missouri. Therefore, the trial court abused its discretion in refusing to enforce that agreement, and
mandamus lies to correct that error.
I. The Issue
This case turns on whether AMCAD’s signature on a contract immediately below the
words “CUSTOMER AGREES TO THE ORGANIZATION’S TERMS AND CONDITIONS,
WHICH CAN BE FOUND AT WWW.FREIGHTPAYCENTER.COM” incorporated by reference
the terms and conditions found at that location. The answer to that question based on accepted
contract law principles and our facts is “yes.”
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Accordingly, we should conditionally grant the petition and direct the district court to
dismiss the case against Freightquote.com without prejudice.
II. Controlling Facts
The controlling facts are straightforward and undisputed:
1. Freightquote.com “is an online transportation broker of freight services operating
throughout North America.” “FreightQuote markets its services through the internet and bases its
broker services on technology it developed for customers to compare carrier freight services.”
2. AMCAD “enrolled” as a Freightquote.com customer on May 27, 2014.
3. AMCAD sued Freightquote.com for breaching a contract between those two
parties.
4. The parties’ contract here is a bill of lading.1
5. AMCAD had 134 similar contracts with Freightquote.com before this one. Each
one relied on a website link to direct AMCAD to the terms and conditions applicable to that
transaction.
6. AMCAD initiated this contract over the phone, and Freightquote.com confirmed
the agreement with an email.
7. That confirming email contained a blue hyperlink to “Freightquote.com’s Terms
and Conditions.”
8. That same email also (i) attached a bill of lading for the shipment and (ii) directed
AMCAD to have the bill of lading ready to present to the driver at pickup.
9. AMCAD signed the bill of lading.
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Texarkana & Ft. S. Ry. Co. v. Brass, 260 S.W. 828, 829 (Tex. Comm’n App. 1924, judgm’t adopted); see Federal Express Corp. v. Tech
One Trading Co., No. 05-03-01182-CV, 2004 WL 1663964, at *1 (Tex. App.—Dallas July 19, 2004, no pet),(citing Se. Pac. Transp. Co. v. Coml.
Metals Co., 456 U.S. 336, 342 (1982)).
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10. Directly above AMCAD’s signature, the contract says: “CUSTOMER AGREES
TO THE ORGANIZATION’S TERMS AND CONDITIONS, WHICH CAN BE FOUND AT
WWW.FREIGHTPAYCENTER.COM.”
11. The terms and conditions found on that website begin by stating in large letters that
they are “Freightquote terms and conditions.”
12. Those terms and conditions define the word “Company” as used therein to be
“Freightquote.com, Inc.®” and its corporate affiliates.
13. They also (i) define the word “Customer” to be “The enrolled Customer, Shipper,
and/or Consignee” and (ii) provide that the Customer agrees “to these TERMS AND
CONDITIONS.”
14. The terms and conditions apply to all shipments scheduled by Customer:
These TERMS AND CONDITIONS shall apply to all shipments scheduled by
Customer, unless and until these TERMS AND CONDITIONS are altered or
amended by the Company.
(There is no suggestion that the terms and conditions have been altered or amended in any way
relevant to this case.)
15. The terms and conditions also contain a forum selection clause providing that any
litigation between the Company and the Customer relating to any shipment tendered pursuant to
the terms and conditions shall be filed in specified courts in Missouri.
16. And the terms and conditions stipulate that the Company is a broker only.
17. Finally, the terms and conditions state policies and procedures for handling claims
between the Company and the Customer. AMCAD’s petition states that “AMCAD cooperated
with FreightQuote and followed FreightQuote’s claim procedures” relevant to this dispute.
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III. Analysis
Texas law requires Texas courts to enforce valid forum selection clauses that encompass
disputes before those courts.
That a contract existed between AMCAD and Freightquote.com is certain: AMCAD sued
Freightquote.com for contract breach. There is only one contract between those parties at issue
here. AMCAD obviously knows who the contracting parties are. AMCAD’s signature on that
contract is not disputed. That contract says AMCAD agreed to the “Organization’s” terms and
conditions found at a specific website. Freightquote.com is the only organization that the word
“Organization” in this context could logically refer to. The contract identifies only one website to
engage for reading the applicable terms and conditions.
The terms and conditions found at the designated website contain a forum selection clause,
which mandates that covered disputes be brought in specific Missouri courts. This dispute is
within that clause’s scope. No evidence in this record could support a finding that (i) the clause
imposes an impermissible burden on AMCAD, (ii) AMCAD was defrauded into agreeing to that
clause, or (iii) any other recognized ground exists for avoiding the clause.
Accordingly, the trial court clearly abused its discretion by refusing to enforce that clause
in this case.
A. Applicable Law
We stated in Bob Montgomery Chevrolet, Inc. v. Dent Zone Companies that:
When construing a contract, our primary goal is to determine the parties’ intent as
expressed in the terms of the contract. Chrysler Ins. Co. v. Greenspoint Dodge of
Hous., Inc., 297 S.W.3d 248, 252 (Tex. 2009); Coker v. Coker, 650 S.W.2d 391,
393 (Tex. 1983). Unsigned documents may be incorporated into the parties’
contract by referring in the signed document to the unsigned document. Owen v.
Hendricks, 433 S.W.2d 164, 167 (Tex. 1968). The language used to refer to the
incorporated document is not important as long as the signed document “plainly
refers” to the incorporated document. Id.; In re C & H News Co., 133 S.W.3d 642,
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645 (Tex. App.—Corpus Christi 2003, orig. proceeding). Documents incorporated
into a contract by reference become part of that contract. In re 24R, Inc., 324
S.W.3d 564, 567 (Tex. 2010) (orig. proceeding) (per curiam). When a document is
incorporated into another by reference, both instruments must be read and
construed together. In re C & H News Co., 133 S.W.3d at 645–46.
Plainly referring to a document requires more than merely mentioning the
document. See Trico Marine Servs., Inc. v. Stewart & Stevenson Technical Servs.,
Inc., 73 S.W.3d 545, 549–50 (Tex. App.—Houston [1st Dist.] 2002, mandamus
denied). The language in the signed document must show the parties intended for
the other document to become part of the agreement. See One Beacon Ins. Co. v.
Crowley Marine Servs., Inc., 648 F.3d 258, 267 (5th Cir. 2011) (citing 11 SAMUEL
WILLISTON & RICHARD A. LORD, A TREATISE ON THE LAW OF
CONTRACTS § 30:25, at 234 (4th ed. 1999) (“in order to uphold the validity of
terms incorporated by reference, it must be clear that the parties to the agreement
had knowledge of and assented to the incorporated terms”)); 17A C.J.S. Contracts
§ 402 (2011) (“For an incorporation by reference to be effective, it must be clear
that the parties to the agreement had knowledge of and assented to the incorporated
terms.”).
409 S.W.3d 181, 189 (Tex. App.—Dallas 2013, no pet.).
It does not matter that the additional terms and conditions were not physically attached to
the bill of lading itself. See LDF Constr., Inc. v. Tex. Friends of Chabad Lubavitch, Inc., 459
S.W.3d 720, 729 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (“[T]here is no requirement that
the incorporated document containing the arbitration clause must necessarily be attached to the
contract for the clause to be enforceable.”).
Furthermore, the weight of authority is that it doesn’t matter if the additional terms and
conditions are to be found on the internet instead of in a physical document. See, e.g., One Beacon
Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 269 (5th Cir. 2011) (“[U]nder admiralty
law—which generally follows the common law of contracts in resolving maritime contract
disputes—maritime contracts may validly incorporate terms from a website in the same manner
that they may incorporate by reference terms from paper documents.”); Morgantown Mach. &
Hydraulics of Ohio, Inc. v. Am. Piping Prods., Inc., No. 5:15-cv-1310, 2016 WL 705261, at *5
(N.D. Ohio Feb. 23, 2016) (“Several courts have applied traditional contract law to find terms and
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conditions located on a company’s website to be incorporated into a contract where they were
clearly referred to and could be easily located by the challenging party, especially where that party
is a commercial entity.”); Burcham v. Expedia, Inc., No. 4:07CV1963 CDP, 2009 WL 586513, at
*2 (E.D. Mo. Mar. 6, 2009) (“A customer on notice of contract terms available on the internet is
bound by those terms.”); Pentecostal Temple Church v. Streaming Faith, LLC, No. 08-554, 2008
WL 4279842, at *5 (W.D. Pa. Sept. 16, 2008) (“Plaintiff’s assertions that the [forum selection]
clause should be disregarded because the Purchase Order incorporated terms and conditions only
available on the Defendants’ website, and not provided in hard-copy to the Plaintiff, must also
fail.”); see also Dakota Foundry, Inc. v. Tromley Indus. Holdings, Inc., No. 1:11-CV-01026, 2012
WL 32440, at *6 (D.S.D. Jan. 5, 2012) (“With the widespread accessibility of the Internet,
companies are turning to posting their general terms and conditions online and incorporating them
into a physical document by reference to the Internet site where they are located. Some courts are
accepting that practice.”). We should adopt this rule.
B. Application to Facts
The undisputed mandamus record establishes that AMCAD contacted Freightquote.com to
arrange for shipping AMCAD’s goods to AMCAD’s customer. That contact resulted in a bill of
lading contract between AMCAD and Freightquote.com for that purpose. That bill of lading is
the contract on which AMCAD bases its contract breach claims against Freightquote.com. And it
is that same contract that created the relationship on which AMCAD bases its tort claims against
Freightquote.com.
The bill of lading plainly (i) refers to the additional terms and conditions and (ii) tells
AMCAD where to find them. The contract also plainly expresses AMCAD’s unmistakable
agreement to those terms and conditions.
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Not only does the record establish that AMCAD agreed to the terms and conditions, but
the record also establishes that Freightquote.com is the contract’s counter-party. Given that there
is only one bill of lading involved in this case in which Freightquote.com is the defendant and that
Freightquote.com sent that bill of lading to AMCAD, the only logical conclusion is that the word
“Organization” in this context refers to only Freightquote.com.
Furthermore, the website confirms that Freightquote.com is the “Organization” referred to
in the bill of lading by labeling the terms and conditions as “Freightquote terms and conditions.”
Additionally, the facts establish that AMCAD is the Customer and that Freightquote.com
is the Company as the terms and conditions define and use those terms. AMCAD is the Customer
that contracted with Freightquote the Company for Freightquote to arrange for shipping to deliver
AMCAD’s goods.
AMCAD cannot reasonably argue that it could not anticipate having to engage a website
to find the applicable terms and conditions; it was doing business with an entity named
“Freightquote.com.”
Moreover, AMCAD knew from day one that Freightquote.com’s terms and conditions
were to be found by visiting a website location. That fact was stated in the initial Customer
Enrollment and was repeated 134 more times before signing the specific bill of lading in this case.
That it successfully completed six prior entirely web-based transactions with Freightquote.com
proves AMCAD’s ability to successfully navigate that platform.
And AMCAD could not have missed the reference to the website link to the terms and
conditions—AMCAD’s signature agreeing to be bound by them appears right below the reference
to those terms and conditions and the website link.
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Nor can AMCAD reasonably argue that the web-link reference to “Freightpaycenter.com”
somehow misled AMCAD and nullifies AMCAD’s agreement to the terms and conditions found
by following the link. The relevant terms and conditions could have resided on any website with
any name and any web-address so long as Freightquote.com gave AMCAD the correct address to
get to that website. It did.
There was only one link and only one website specified for AMCAD to follow. AMCAD
could not have gotten lost and ended up with a different set of terms and conditions by following
that path. These facts and result are the same as if AMCAD agreed to be bound by a set of terms
and conditions contained in a specific folder located on a specific desk in a specific AMCAD
office.
AMCAD does not deny that its claims and litigation against Freightquote.com fall within
the forum selection clause’s scope if the parties’ contract includes that clause.
As discussed above, it matters not that the terms and conditions were not physically
attached to the bill of lading or were on a website.
Because the only logical conclusion is that the parties’ contract incorporated by reference
the terms and conditions found on the specified website, the trial court abused its discretion by
refusing to enforce the forum selection clause included in those terms and conditions.
C. Bob Montgomery Chevrolet does not compel a different conclusion.
Bob Montgomery Chevrolet, Inc. v. Dent Zone Companies is distinguishable because,
unlike the present case, the contract there did not say that the parties agreed to the terms and
conditions written on the website. Instead, in that case we wrote:
We conclude the referring language in this case, “Additional benefits, qualifications
and details of the PDR LINX Service Program are available for your review at our
website: http://www.linxmanager.com/pdf/CRCTermsConditions. pdf,” does not
indicate the parties intended to incorporate the internet document. Instead, the
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language indicates the internet document contained informative but noncontractual
material about the PDR LINX Service Program.
Id. at 193. Assuming, as we must, that Dent Zone was correctly decided on its particular facts, the
different, more direct language in the present case plainly states the parties’ unambiguous
agreement to the terms and conditions stated at the designated website. Thus, Dent Zone’s specific
holding does not apply to the specific contract before us. Instead, we should follow Dent Zone’s
general principles quoted above.
D. Conclusion
Although allowed sparingly and as an extraordinary remedy, mandamus relief exists to
remedy situations where a trial court clearly abuses its discretion and the relator has no adequate
appellate remedy, such as where a trial court declines to enforce a valid forum selection clause
covering a dispute before it.
The record here conclusively establishes that (i) the parties plainly agreed to governing,
written terms and conditions residing at a specific and readily accessible website; (ii) those terms
and conditions contain a valid forum selection clause requiring that certain disputes be litigated in
designated Missouri courts; and (iii) the parties’ present dispute falls within that clause’s scope.
That being so, existing Texas law requires our courts to respect and enforce the parties’ contract.
Because the trial court declined to so, mandamus relief is proper in this case.
IV. Disposition
Accordingly, we should grant relator’s petition and direct the trial court to dismiss this case
without prejudice with mandamus to issue only if the trial court does not do so within fifteen days.
/Bill Whitehill/
BILL WHITEHILL
JUSTICE
181028DF.P05
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