Josue Gonzalez Rodriguez v. State ( 2012 )

NUMBER 13-11-00145-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE EMEX HOLDINGS L.L.C.
On Petition for Writ of Mandamus.
MEMORANDUM OPINION
Before Justices Garza, Vela, and Perkes
Memorandum Opinion by Justice Vela1
By petition for writ of mandamus, Emex Holdings LLC (“Emex”) seeks to compel
the trial court to enforce a forum-selection clause in a joint venture agreement among
investors in a casino in Mexico. We conditionally grant mandamus relief.
1
See TEX. R. APP. P. 52.8(d) (“When denying relief, the court may hand down an opinion but is not
required to do so. When granting relief, the court must hand down an opinion as in any other case.”); id. R.
47.4 (distinguishing opinions and memorandum opinions).
I. BACKGROUND
This original proceeding arises from a dispute among investors in a casino in
Mexico City.2 Antonio Naim and Alfredo Naim (the Naims) entered a “Joint Venture
Agreement” with Entretenimiento de Mexico S.A. de C.V. (“Entretenimiento”) on October
25, 2006 regarding the construction and operation of a casino. Arturo Rojas Cardona
(“Rojas”) signed the agreement as a legal representative of Entretenimiento.
Under the Joint Venture Agreement, the Naims contributed a plot of land and
agreed to pay for and supervise the construction of the shell of the casino itself.
Entretenimiento agreed to contribute gaming permits and equipment and to construct the
interior of the casino. The Joint Venture Agreement provided that the parties would form
a new entity to own the finished casino and the land and the Naims would own 33.4
percent of that entity and Entretenimiento would own the remaining 66.6 percent. The
Joint Venture Agreement, as translated, contains a forum-selection clause which
provides:
SEVENTEEN. The parties agree that for the construction and
compliance herewith, they expressly submit themselves to the Jurisdiction
and Competence of the Common Affairs Laws and Courts seated in
Mexico, waiving to any other that may correspond to them due to their
present or future domiciles.
On May 30, 2007, the parties to the Joint Venture Agreement entered into an
“Amendment to the Joint Venture Agreement.” The Amendment ratified the Joint
Venture Agreement but modified some of its terms. According to the Amendment, the
2
This Court previously considered an appeal arising from these same proceedings. See Emex
Holdings, LLC v. Naim, No. 13-09-00591-CV, 2010 Tex. App. LEXIS 4010, at **1–2 (Tex. App.—Corpus
Christi May 27, 2010, no pet.) (mem. op.) (holding that an order granting an injunction was void where it did
not contain a trial date).
2
parties acknowledged that title to the land for the casino was indirectly held by the Naims
“as they are equal owners of Garden Group L.P. . . . [which] appears as the owner of the
premises in the corresponding notarial deeds.” Instead of transferring title to a new
entity to own the finished casino and the land, the amendment provided that the Naims
would transfer 66.6 percent of the ownership interest in Garden Group L.P. (“Garden
Group”) to one of Entretenimiento’s related companies, Emex, and Emex was to hold that
interest in escrow until the Naims’ investment was fully paid. The Amendment further
provided for the transfer of a 33.4 percent interest in a casino operating company to the
Naims. Under the Amendment, Emex agreed to execute a Pledge Agreement whereby
it would pledge its 66.6 percent interest in Garden Group in favor of the Naims to
guarantee that the Naims would recover their investment in the amount of $7,250,000. 3
The Pledge Agreement provided that the share certificates of Garden Group would be
held as security by the law firm of Torres, Cantu & Aliseda, P.C. as the trustee and escrow
agent for the 66.6 partnership interest held by Emex, but pledged to the beneficial interest
of the Naims, pending payment to the Naims of $7,250,000.
Rojas executed the Amendment as legal representative for both Entretenimiento
and Emex. The Amendment expressly states that the “parties acknowledge the
existence of a contractual relation unifying them and they ratify the commitments
contracted in the [Joint Venture Agreement] previously executed. . . .” The Amendment
expressly cancels or modifies various enumerated provisions of the Joint Venture
Agreement; however, it does not amend or otherwise reference paragraph seventeen of
the Joint Venture Agreement containing the forum-selection clause. The Amendment
3
The record evidence regarding the actual amount of this investment varies.
3
specifically provides that “[t]he parties agree and acknowledge that all other clauses of
the “AGREEMENT” not breaching the provisions herein shall remain in force until
completion hereof.”
After execution of the Amendment, but that same day, the Naims held a
partnership meeting of the Garden Group. At that meeting, the Naims transferred a 66.6
percent interest in Garden Group to Emex, as contemplated by the Amendment, and also
transferred a five percent interest in Garden Group to Sergio Seade Kuri (“Seade”) and a
2.5 percent interest in Garden Group to Elias Adam Kuri (“Adam”). The Naims and
Emex also executed the “Pledge Agreement” as contemplated by the Amendment. At
this time, the general partner of Garden Group was Gargroup L.L.C., an entity controlled
by the Naims.
On October 17, 2008, the Naims brought suit against Emex in the 332nd District
Court of Hidalgo County, Texas. On November 12, 2008, Emex filed its answer to the
lawsuit in Hidalgo County including therein a motion to dismiss based on the
forum-selection clause in the Joint Venture Agreement.
On November 26, 2008, a majority interest of the partnership of Garden Group
voted to substitute Barraka L.L.C. (“Barraka”) as the general partner. The Naims
contested this action, contending that it was void ab initio because the ownership
interests in Garden Group that they conveyed to Emex and the others did not include
voting rights or the right to receive income or enjoy other benefits of ownership.
When the trial court signed the order at issue in this original proceeding denying
Emex’s motion to dismiss, the Naims’ live pleading was the Sixth Amended Original
4
Petition. In that pleading, the Naims brought claims against Emex, Barraka, Rojas,
Seade, Adam, and Torres, Cantu & Aliseda, P.C. This pleading requests declaratory
and injunctive relief and damages for breach of fiduciary duty, violations of the Texas
Deceptive Trade Practices Act, fraud, negligent misrepresentation, breach of contract,
and defamation. The Naims sought to impose liability among the defendants through
allegations of conspiracy, concert of action, agency, and respondeat superior.
According to the allegations in the lawsuit, Emex, Barraka, Rojas, Seade, and Adam
conspired to obtain and exercise control of Garden Group without compensation to the
Naims, and never intended to pay the Naims casino revenues or rent or give them
ownership in the company which would operate the casino. The Naims further alleged
that, by fraud or mistake, Adam caused the omission of terms from the Agreement, such
as terms providing for the return of Emex’s interest in Garden Group and another term
which would have made Texas law apply to the parties’ transactions and would have
allowed suit in Texas courts.
On January 28, 2009, the Naims filed suit against Entretenimiento, Emex, Rojas,
Seade, Adam, and Jesus Hector Gutierrez Cortes in Mexico. By decision published on
July 2, 2010, a Mexican court rendered judgment in that cause. The parties to this
proceeding dispute the effect and scope of that decision.
The Hidalgo County trial court held several different hearings which directly or
indirectly involved the motion to dismiss. The trial court considered testimony from, inter
alia, hearings held on November 26, 2008, October 21, 2009, August 3, 2010, August 26,
2010, and September 27, 2010. The Naims contended that the trial court should not
5
dismiss the case because the forum-selection clause in the Joint Venture Agreement did
not apply to the Amendment or the Pledge Agreement. The Naims further contended
that Adam committed fraud in inducing them to sign the Amendment because they had
instructed Adam to apply United States and Texas law in the Amendment and he did not,
and at that time, Adam was representing all sides of the deal, thereby committing fraud by
nondisclosure and breaching his fiduciary duty to them.
By written order signed on January 12, 2011, the trial court denied Emex’s motion
to dismiss. The order states, in pertinent part:
The Court finds that the clause in question in the Joint Venture Agreement
between the Plaintiffs Naim and the non-party Entretenimiento de Mexico
S.A. de C.V. . . . does not apply to the causes of action alleged by Plaintiffs
against Emex, does not apply to the causes of action alleged against
Defendants, Barraka, Rojas, Adam, or Seade, does not apply to the
declaratory judgment and other causes of action alleged related to the
Garden Group, LP, and does not apply to the causes of action related to the
Pledge Agreement of May 30, 2007 . . . which was signed in Texas, to be
performed in Texas, and which does not include or adopt a forum-selection
clause from any other agreement. The Court further finds that exceptions
have been clearly plead and proven which render the application of the
clause to the [Amendment] . . . to be invalid because of fraud, overreaching,
or breach of fiduciary duty, because enforcement would be unreasonable,
inequitable and unjust, because to enforce it would contravene strong
public policy in Texas, and because to prosecute the subject causes of
action in Mexico would be impossible or so gravely difficult and
inconvenient that, for all practical purposes, the Plaintiffs would be deprived
of [their] day in court.
This original proceeding ensued. By three issues, with multiple sub-issues, Emex
contends that the trial court abused its discretion by: (1) refusing to enforce the
forum-selection clause; (2) determining that the forum-selection clause did not apply to
the causes of action in the Naims’ suit; and (3) determining that the Naims had proven
their affirmative defenses to enforcement of the forum-selection clause, including, inter
6
alia, that enforcement of the clause would be unreasonable or unjust or would contravene
a strong public policy, that the clause is invalid for reasons of fraud or overreaching, and
that the selected forum would be seriously inconvenient for trial.
This Court requested and received a response to the petition for writ of mandamus
from the Naims. The Naims assert all arguments made to the trial court in avoidance of
the forum-selection clause and further assert that recent changes in the procedural
posture of the case merit remanding this issue to the trial court for consideration of new
events. Emex filed a reply in support of its petition for writ of mandamus, and the Naims
have filed a sur-reply.
II. STANDARD OF REVIEW
Mandamus relief is available when a trial court clearly abuses its discretion and a
remedy by appeal is inadequate. In re Prudential Ins. Co. of Am., 148 S.W.3d 124,
135–36 (Tex. 2004) (orig. proceeding). The Texas Supreme Court has repeatedly held
that mandamus relief is available to enforce a forum-selection clause in a contract. See,
e.g., In re Lisa Laser USA, Inc., 310 S.W.3d 880, 883 (Tex. 2010) (orig. proceeding); In re
Laibe Corp., 307 S.W.3d 314, 316 (Tex. 2010) (orig. proceeding) (per curiam); In re ADM
Investor Servs., Inc., 304 S.W.3d 371, 374 (Tex. 2010) (orig. proceeding); In re Int’l Profit
Assocs., 286 S.W.3d 921, 922 (Tex. 2009) (orig. proceeding) (per curiam); In re Int’l Profit
Assocs., 274 S.W.3d 672, 674 (Tex. 2009) (orig. proceeding) (per curiam); In re
AutoNation, Inc., 228 S.W.3d 663, 665 (Tex. 2007) (orig. proceeding); In re AIU Ins. Co.,
148 S.W.3d 109, 115–19 (Tex. 2004) (orig. proceeding).
7
A trial court abuses its discretion when it fails to properly interpret or apply a
forum-selection clause. In re Lisa Laser USA, Inc., 310 S.W.3d at 883; In re Laibe Corp.,
307 S.W.3d at 316. Further, an appellate remedy is inadequate when a trial court
improperly refuses to enforce a forum-selection clause because allowing the trial to go
forward will “vitiate and render illusory the subject matter of an appeal,” that is, trial in the
proper forum. In re AIU Ins. Co., 148 S.W.3d at 115 (quoting Jack B. Anglin Co. v. Tipps,
842 S.W.2d at 269, 272 (Tex. 1992)); accord In re Laibe Corp., 307 S.W.3d at 316.
III. ANALYSIS
In general, forum-selection clauses should be given full effect, and subjecting a
party to trial in a forum other than the contractually chosen one amounts to “clear
harassment” and injects inefficiency in the judicial process by “enabling forum-shopping,
wasting judicial resources, delaying adjudication on the merits, and skewing settlement
dynamics.” In re Lisa Laser USA, Inc., 310 S.W.3d at 883 (quoting In re AIU Ins. Co.,
148 S.W.3d at 117). Accordingly, forum-selection clauses are generally enforceable
and presumptively valid. In re Laibe Corp., 307 S.W.3d at 316; In re Int’l Profit Assocs.,
274 S.W.3d at 675, 680. However, by allowing for exceptions when enforcement of
forum-selection clauses would be unreasonable or unjust, or seriously inconvenient, the
Texas Supreme Court has recognized that there may be “extreme circumstances” that
prevent the enforcement of forum-selection clauses, but it has not “established a
bright-line test for avoiding enforcement of forum-selection clauses.” In re ADM Investor
Servs., 304 S.W.3d at 376 (following M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 17
(1972)).
8
A trial court abuses its discretion in refusing to enforce a forum-selection clause
unless the party opposing enforcement clearly shows: (1) enforcement would be
unreasonable or unjust, (2) the clause is invalid for reasons of fraud or overreaching, (3)
enforcement would contravene a strong public policy of the forum where the suit was
brought, or (4) the selected forum would be seriously inconvenient for trial. In re Laibe
Corp., 307 S.W.3d at 316; In re ADM Investor Servs., 304 S.W.3d at 375. The burden of
proof is heavy for the party challenging enforcement. In re Laibe Corp., 307 S.W.3d at
316; In re ADM Investor Servs., 304 S.W.3d at 375.
A. APPLICABILITY
Emex contends that the forum-selection clause applies to the Naims’ claims. In
contrast, the Naims contend that the forum-selection clause is narrowly drafted to include
only the “construction” of and “compliance” with the Joint Venture Agreement and does
not apply to their claims, which arise from other transactional documents between the
parties, including the Pledge Agreement, the Limited Partnership Agreement of Garden
Group, and minutes of the partnership meeting from May 30, 2007. In reply, Emex
asserts that the Naims cannot isolate these transactional documents and have them
construed and applied without reference to the Joint Venture Agreement.
In determining whether a forum-selection clause applies to a particular case, we
consider the language in the agreement and determine whether the substance of the
plaintiff’s claims falls within the scope of the forum-selection clause. See In re Int’l Profit
Assocs., Inc., 274 S.W.3d at 677; see also Deep Water Slender Wells, Ltd. v. Shell Int’l
9
Exploration & Prod., Inc., 234 S.W.3d 679, 687 (Tex. App.—Houston [14th Dist.] 2007,
pet. denied); In re Ebay, Inc., No. 09-10-00265-CV, 2010 Tex. App. LEXIS 5340, at *4
(Tex. App.—Beaumont July 8, 2010, orig. proceeding) (mem. op. per curiam).
As stated previously, the Joint Venture Agreement contains a forum-selection
clause which specifically applies to the “construction and compliance herewith.” The
Amendment introduces Emex into the transaction and expressly provides that the
“intervention” by Emex in the Joint Venture Agreement is “specified” in the Amendment.
The Amendment expressly modifies various enumerated provisions of the Joint Venture
Agreement, but does not alter the forum-selection paragraph. The Amendment states
that the “parties acknowledge the existence of a contractual relation unifying them and
they ratify the commitments contracted in the agreement previously executed . . . .” The
Amendment further provides that “[t]he parties agree and acknowledge that all other
clauses of the [Joint Venture Agreement] not breaching the provisions herein shall remain
in force until completion hereof.” The Amendment further specifically requires the
creation of the Pledge Agreement, directs the purpose of the Pledge Agreement, and
delineates the required terms of the Pledge Agreement. The Amendment also
delineates the structure and ownership of the Garden Group. The Amendment and the
Pledge Agreement were negotiated by the parties during the course of one day and were
executed the following day, along with the meeting of the Garden Group which executed
the agreed-upon provisions of these documents.
“[A] contract can consist of more than one document.” In re Laibe Corp., 307
S.W.3d at 317. Documents pertaining to the same transaction may be read together
10
even if they are executed at different times and do not reference each other. See id.
(citing Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 832, 840, (Tex.
2000)). Courts may construe all the documents as if they were part of a single, unified
contract. See id.
Here, the Joint Venture Agreement, the Amendment, the Pledge Agreement, and
the other documents specified by the Naims pertain to the same overall transaction—that
is, the construction, financing, and ownership of a casino. The documents are self
referential and are parts of a unified transaction. Had the parties intended to nullify or
limit the existing forum-selection clause, they could have modified paragraph seventeen
just as they did with many of the other enumerated paragraphs in the Joint Venture
Agreement. Accordingly, we conclude that the forum-selection clause is applicable to
the Naims’ claims insofar as they arise from the other transactional documents involved in
the casino venture. See id.
Nevertheless, the Naims assert that the forum-selection clause does not apply to
the torts they alleged in the Texas lawsuit. In examining whether claims brought by a
plaintiff fall within the scope of a forum-selection clause, the reviewing court should
engage in a “common-sense examination of the claims and the forum-selection clause to
determine if the clause covers the claims.” In re Int’l Profit Assocs., 274 S.W.3d at 677;
see In re Lisa Laser USA, Inc., 310 S.W.3d at 884; In re Laibe Corp., 307 S.W.3d at 316.
Whether claims seek a direct benefit from a contract turns on the substance of the claim,
not artful pleading. In re Int’l Profit Assocs., 274 S.W.3d at 677. We examine whether
the claims arise from the agreement rather than other general obligations imposed by
11
law. In re Lisa Laser USA, Inc., 310 S.W.3d at 886.
In this case, the Naims would have no basis for their complaints against the
defendants in this case but for the Joint Venture Agreement and the Amendment thereto.
Accordingly, the forum-selection clause in this case applies to the torts alleged by the
Naims.
The Naims further allege that the forum-selection clause does not apply to the six
defendants in the Texas case who were not signatories to the Joint Venture Agreement:
Emex, Barraka, Rojas, Seade, Adam, and Torres, Cantu & Aliseda, and they further
contend that the presence of non-signatories precludes enforcement of the forum
selection clause. We note, however, that Emex and Rojas were both signatories to the
Amendment. With regard to Seade, Adam, and the law firm, the Texas Supreme Court
has rejected the notion that a forum-selection clause can be defeated by the presence of
non-signatories to the agreement. See In re Int’l Profit Assocs., Inc., 274 S.W.3d at 680
(“If all it takes to avoid a forum-selection clause is to join as defendants local residents
who are not parties to the agreement, then forum-selection clauses will be of little value.”);
In re FC Stone, LLC, 348 S.W.3d 548, 552 (Tex. App.—Dallas 2011, no pet.). Moreover,
the fact that the challenger might have to pursue two lawsuits—one in Mexico and one in
Texas—does not meet the standard for avoiding the forum-selection provision. See In re
Int’l Profit Assocs., Inc., 274 S.W.3d at 680; In re FC Stone, LLC, 348 S.W.3d at 552.4
4
We note that under the theory of equitable estoppel, a non-signatory defendant can invoke a
forum-selection clause if the signatory plaintiff “has sued signatory and non-signatory defendants based on
substantially interdependent and concerted misconduct by all defendants.” See Phoenix Network Techs.
(Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605, 622 (Tex. App.—Houston [1st Dist.] 2005, no pet.);
accord Deep Water Slender Wells, Ltd., 234 S.W.3d at 694.
12
Finally, we note that the Naims contended at the trial court that the forum-selection
clause was not sufficiently specific to be enforced. While forum-selection clauses may
be ambiguous, the clause at issue is specific in its terms insofar as it applies to the
“construction” of and “compliance” with the Joint Venture Agreement and selects the
courts of Mexico as its chosen forum. See Sw. Intelecom, Inc. v. Hotel Networks Corp.,
997 S.W.2d 322, 325 (Tex. App.—Austin 1999, pet. denied) (discussing potential
ambiguities in a forum-selection clause).
We conclude that the forum-selection clause applies to the Naims’ claims in this
case. Accordingly, we now turn our attention to the Naims’s affirmative defenses to the
forum-selection clause.
B. INVALID FOR REASONS OF FRAUD OR OVERREACHING
A trial court abuses its discretion in refusing to enforce a forum-selection clause
unless the party opposing enforcement clearly shows, inter alia, that the clause is invalid
for reasons of fraud or overreaching. In re Laibe Corp., 307 S.W.3d at 316; In re ADM
Investor Servs., 304 S.W.3d at 375. Fraudulent inducement to sign an agreement
containing a forum-selection clause will not bar enforcement of the clause unless the
specific clause was the product of fraud or coercion. See In re Lyon Fin. Servs., 257
S.W.3d 228, 232 (Tex. 2008) (orig. proceeding); see also In re Prudential Ins. Co. of Am.,
148 S.W.3d at 134 (stating that any provision relating to resolution of future disputes,
included as part of a larger agreement, would rarely be enforced if the provision could be
avoided by a general allegation of fraud directed at entire agreement). In other words,
the fraud or overreaching in question must involve the negotiation of the forum-selection
13
clause itself. Young v. Valt X Holdings, Inc., 336 S.W.3d 258, 266–267 (Tex.
App.—Austin 2010, pet. dism’d); see Clark v. Power Mktg. Direct, Inc., 192 S.W.3d 796,
800 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (holding that a broadly drafted
forum-selection clause encompassed claim of fraud in the inducement).
The Naims argue that the forum-selection clause is invalid for reasons of fraud or
overreaching. Specifically, the Naims contend that they had specifically instructed their
attorney, Adam, that they wanted United States and Texas law to apply to the
Amendment and they wanted the Amendment to delete the forum selection clause found
in the Joint Venture Agreement. The Naims further allege that when Adam was
purportedly acting as their attorney in this transaction, Adam was secretly representing
interests adverse to them, specifically, the opposing interests of Rojas and his brothers,
who were the principals in Emex and Entretenimiento. According to the Naims, Adam
instructed Luis Cantu and Arturo Tito Torres, who are partners in Torres Cantu & Aliseda,
how to draft the Amendment and the Pledge Agreement. Thus, the Naims assert the
forum-selection agreement was procured by mistake or fraud.
There are a number of reasons why we disagree with the Naims’ contentions.
First, the alleged fraud pertains not to the forum selection clause in the Joint Venture
Agreement, but instead to the Amendment insofar as the Naims allege that they had
instructed Adam to eliminate the forum selection requirement in the Amendment. The
Naims do not contend that the original forum selection clause was procured by fraud.
Because the Naims did not allege fraud in the inducement of the forum-selection clause in
the trial court, or fraud specific to the forum selection clause itself, the trial court could not
14
have properly refused enforcement of the forum-selection clause on the ground of fraud.
See In re FC Stone, LLC, 348 S.W.3d at 551; Young, 336 S.W.3d at 266–267; cf. In re
Prudential Ins. Co. of Am., 148 S.W.3d at 134 (enforcing jury-waiver and arbitration
clauses and stating that “[a]ny provision relating to the resolution of future disputes,
included as part of a larger agreement, would rarely be enforced if the provision could be
avoided by a general allegation of fraud directed at the entire agreement”).
Second, even if we were to assume that fraud with regard to changing the forum
selection clause in the Amendment rather than the Joint Venture Agreement obviated the
forum selection clause, we note that Alfredo Naim testified that he read the Joint Venture
Agreement before he signed it, but did not read the forum selection clause contained
therein. Alfredo further testified that he did not read the Amendment before he signed it
because he had instructed Adam to change the forum selection clause and he trusted
Adam, as his attorney, to do so.5
5
There is conflicting evidence in the record regarding whether or not Adam represented the Naims
in these transactions as their attorney and there is also conflicting evidence regarding who drafted the
Amendment. Alfredo Naim testified that Adam represented the Naims in these transactions, but was
secretly representing Rojas as part of a conspiracy to defraud the Naims from their investment in the
casino. Cantu testified that the Naims introduced Adam to him as their attorney and Adam did not deny it.
Adam, in contrast, testified that he never represented the Naims personally in any transaction, and was
involved in the casino transaction because he received a percentage of the venture from the Naims as
compensation for outstanding legal bills incurred by the Naims’ companies. Torres testified that neither he
nor Cantu were familiar with the contents of the Joint Venture Agreement. Torres testified that Cantu
drafted the Amendment, then, inconsistently, that Adam drafted the Amendment. Adam testified that
Cantu drafted the Amendment. Cantu testified that Adam provided him with the information that was to go
into the Amendment, and testified that he knew that the Naims wanted Texas law to apply to the
Amendment, but nevertheless Cantu did not include that in the Amendment. Cantu further conceded that
he drafted some of the terms of the Amendment, specifically those pertaining to the liability of the firm as an
escrow agent, the clause providing that all other clauses of the Joint Venture Agreement not in conflict with
the Amendment were to remain in effect, and the clause excluding fraud or bad faith in the execution of the
Amendment.
Where there are disputed areas of fact, mandamus relief is not appropriate. In re Pirelli Tire,
L.L.C., 247 S.W.3d 670, 676 (Tex. 2007) (orig. proceeding); In re Angelini, 186 S.W.3d 558, 560 (Tex.
2006) (orig. proceeding). However, the areas of factual conflict noted do not preclude mandamus relief in
15
A party who signs a document is presumed to know its contents. See In re Int’l
Profit Assocs., 286 S.W.3d at 922; EZ Pawn Corp. v. Mancias, 934 S.W.2d 87, 90 (Tex.
1996) (orig. proceeding) (per curiam); Town N. Nat’l Bank v. Broaddus, 569 S.W.2d 489,
492 (Tex. 1978); Estes v. Republic Nat’l Bank, 462 S.W.2d 273, 276 (Tex. 1970); Thigpen
v. Locke, 363 S.W.2d 247, 253 (Tex. 1962). Parties to a contract are obligated to protect
themselves by reading what they sign and, absent evidence of fraud or overreaching,
cannot be excused from the consequences of the failure to read the contract. See In re
Int’l Profit Assocs., 286 S.W.3d at 922 (“Parties who sign contracts bear the responsibility
of reading the documents they sign.”). Courts have consistently held that parties “must
exercise reasonable diligence for the protection of his or her own interests, and a failure to
do so is not excused by mere confidence in the honesty and integrity of the other party.”
TMI, Inc. v. Brooks, 225 S.W.3d 783, 795 (Tex. App.—Houston [14th Dist.] 2007, pet.
denied); see In re U.S. Home Corp., 236 S.W.3d 761, 764 (Tex. 2007) (orig. proceeding)
(per curiam) (“Like any other contract clause, a party cannot avoid an arbitration clause by
simply failing to read it.”). Accordingly, the Naims are charged with knowledge of the
forum selection clause and the contents of the Amendment. See In re Int’l Profit
Assocs., 286 S.W.3d at 922; Barnett v. Network Solutions, Inc., 38 S.W.3d 200, 204 (Tex.
App.—Eastland 2001, pet. denied) (applying this rule in the context of a forum selection
clause).
Finally, we note that the Amendment itself provides that “[t]he parties set out that in
the execution of this Agreement there was no fraud, bad faith, injury or any other cause of
this case because resolution of the disputed facts is not necessary to determine the legal issues presented
herein.
16
nullity established by the Law.” Based on the foregoing, we conclude that the Naims did
not clearly show that the forum selection clause was the product of fraud or overreaching,
and thus the trial court could not have refused to enforce the clause on this ground.
C. ENFORCEMENT WOULD CONTRAVENE A STRONG PUBLIC POLICY
A trial court abuses its discretion in refusing to enforce a forum-selection clause
unless, among other things, the party opposing enforcement clearly shows enforcement
would contravene a strong public policy of the forum where the suit was brought. In re
Laibe Corp., 307 S.W.3d at 316; In re ADM Investor Servs., 304 S.W.3d at 375. The
Naims assert that the statutes and case law of the State of Texas provide a strong public
policy against requiring a Texas escrow trust agreement and/or security agreement to be
enforced in Mexican courts, when the documents in question lack a forum-selection
clause and all the transactions are to be accomplished in Texas, by Texas lawyers,
relative to an ownership interest in a Texas Limited Partnership. However, the Naims
have presented no persuasive authority for the proposition that the presence of an
escrow trust agreement or security agreement invokes a strong public policy that would
be contravened by enforcement of the forum-selection clause. While the Naims’ claims
involve, in part, ownership and control over the Garden Group, a Texas limited
partnership, the dispute arises from the Joint Venture Agreement as modified by the
Amendment. In this regard, we note that the Texas Supreme Court has held that even
where Texas statutory provisions specify the application of Texas law, those provisions
are irrelevant to the enforceability of a forum-selection clause where no statute requires
suit to be brought or maintained in Texas. See In re AutoNation, Inc., 228 S.W.3d at 669;
17
In re AIU Ins. Co., 148 S.W.3d at 114.
We conclude that the Naims have not clearly shown enforcement would
contravene a strong public policy of the forum where the suit was brought. See In re
Laibe Corp., 307 S.W.3d at 316.
D. SELECTED FORUM WOULD BE SERIOUSLY INCONVENIENT FOR TRIAL
A trial court abuses its discretion in refusing to enforce a forum-selection clause
unless the party opposing enforcement clearly shows, inter alia, that the selected forum
would be seriously inconvenient for trial. In re Laibe Corp., 307 S.W.3d at 316; In re
ADM Investor Servs., 304 S.W.3d at 375. The Texas Supreme Court has noted that
“[b]y entering into an agreement with a forum-selection clause, the parties effectively
represent to each other that the agreed forum is not so inconvenient that enforcing the
clause will deprive either party of its day in court, whether for cost or other reasons.” Int’l
Profit Assocs., Inc., 274 S.W.3d at 680; see In re Lyon Fin. Servs, 257 S.W.3d at 234; see
In re ADM Investor Servs., 304 S.W.3d at 375; see also In re Ebay, Inc., 2010 Tex. App.
LEXIS 5340, at *6.
When inconvenience in litigating in the chosen forum is foreseeable at the time of
contracting, the challenger must “show that trial in the contractual forum will be so gravely
difficult and inconvenient that he will for all practical purposes be deprived of his day in
court.’” In re ADM Investor Servs., 304 S.W.3d at 375; (quoting M/S Bremen, 407 U.S. at
18). Thus, forum-selection clauses can be avoided if the chosen forum is so
inconvenient that enforcing the clause would produce an unjust result. In re ADM
Investor Servs., 304 S.W.3d at 375; In re Lyon Fin. Servs., 257 S.W.3d at 233; In re FC
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Stone, LLC, 348 S.W.3d at 552. In this regard, the mere inconvenience to witnesses is
not sufficient to overcome a forum-selection clause. See In re Int’l Profit Assocs., Inc.,
274 S.W.3d at 679–80; In re AIU Ins. Co., 148 S.W.3d at 113–14. Moreover, conclusory
statements are insufficient to establish such inconvenience. In re Laibe Corp., 307
S.W.3d at 318; In re ADM Investor Servs., 304 S.W.3d at 375; Lyon, 257 S.W.3d at 234
(“If merely stating that financial and logistical difficulties will preclude litigation in another
state suffices to avoid a forum-selection clause, the clauses are practically useless.”).
In connection with this issue, the Naims have asserted that they are unable to
assert some of their causes of action in Mexico and will be unable to obtain some of the
legal remedies available in the United States. The Naims asserted in the trial court that,
while their causes of action may have corollaries or similarities under Mexican law, their
specific legal theories are not the same and their remedies or damages would be
significantly different such that they would be, for all practical purposes, deprived of their
day in court. The Naims supported these allegations with an affidavit and testimony
during a hearing from attorney Luis H. Cantu regarding some of the applicable
distinctions in law, such as the lack of causes of action for fraud and breach of fiduciary
duty in Mexico, and an affidavit from Antonio Naim regarding the underlying facts of the
lawsuit and their inability to pursue some of the causes of action in Mexico. However,
the Texas Supreme Court has held that the inability to assert a claim recognized by Texas
law in another state does not create a reason to deny enforcement of a forum-selection
clause. See In re Lyon Fin. Servs., 257 S.W.3d at 234; see also Tau Kappa Epsilon v.
USA Bus Charter, Inc., No. 03-10-00768-CV, 2011 Tex. App. LEXIS 5946, at *22 (Tex.
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App.—Austin July 28, 2011, orig. proceeding) (mem. op.). Accordingly, we conclude
that the Naims have not clearly shown that litigating in Mexico would deprive them of their
day in court so as to bar enforcement of the forum-selection clause.
E. ENFORCEMENT WOULD BE UNREASONABLE OR UNJUST
A trial court abuses its discretion in refusing to enforce a forum-selection clause
unless the party opposing enforcement clearly shows, among other things, that
enforcement would be unreasonable or unjust. In re Laibe Corp., 307 S.W.3d at 316; In
re ADM Investor Servs., 304 S.W.3d at 375. The Naims contend that enforcement of the
forum-selection clause would be unreasonable or unjust because in light of the rulings
made by the Mexican trial court in the related Mexican lawsuit, “it would be impossible to
enforce the Texas Pledge Agreement in question in Mexico[’s] courts and they would not
have jurisdiction over such [a] Texas security transaction related to a Texas limited
Partnership interest.” The Naims thus conclude that litigating the matters in the Texas
lawsuit would be “impossible or so gravely difficult and inconvenient that it would be for all
practical purposes deprived of its day in court.” We have already found this argument to
be without merit, and accordingly, need not address it again. See TEX. R. APP. P. 47.1,
47.4.
F. CHANGED CIRCUMSTANCES
Citing Henderson v. Floyd, 891 S.W.2d 252 (Tex. 1995) (per curiam), the Naims
contend that we should not direct the trial court to enforce the forum-selection clause
because the trial court should be given the opportunity to consider recent changes in the
procedural posture of this case, specifically including the effect of a “final judgment”
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issued by the highest court of appeals in Mexico. The Naims contend, inter alia, that
they have recently filed their seventh amended petition dropping some of the claims
raised in their earlier petition because the Mexican courts have finally determined that
Emex failed to pay back the Naims’ initial investment as required by the agreements and
that the Naims are owed $7.25 million. The Naims argue that they have already
obtained a Mexican judgment on the issues of construction and compliance with the Joint
Venture Agreement and Amendment, leaving only “enforcement” of the Pledge
Agreement in Texas.
In Henderson, the Texas Supreme Court conditionally granted mandamus relief
directing the trial court to vacate its order denying a motion for disqualification of counsel.
Id. at 255. However, the court specifically noted that the real party in interest contended
that the relator waived his right to disqualify counsel by failing to move to stay the
proceedings while the motion for rehearing was pending. Id. at 254–55. The court held
that the real party’s “contention involves factual assertions that should be addressed in
the first instance by the district court, and our opinion today does not preclude the district
court from considering changed circumstances which would cast relator’s motion for
disqualification in a different light,” but “[a]bsent such circumstances, however, [counsel
is] disqualified.” Id. at 255.
While Henderson stands for the proposition that there may be instances where it is
appropriate to allow the trial court to consider new factual assertions or changed
circumstances, we do not believe that this doctrine has a necessary application in this
case. The trial court has already held multiple hearings on the issue of enforcement of
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the forum-selection clause and has issued its order. Moreover, expecting the trial court
to consider the effect of parallel proceedings during the pendency of hearings and
proceedings regarding the enforcement of a forum-selection clause is effectively like
asking the trial court to hit a moving target. Such a course of action runs contrary to a
fundamental tenet of appellate practice which requires us to review the actions of the trial
court based on the record before the court at the time it made its ruling. See Axelson,
Inc. v. McIlhany, 798 S.W.2d 550, 556 (Tex. 1990) (orig. proceeding) (concluding that
where evidence and rule changes were not presented to the trial court, they did “not form
a basis for us to find that the trial court abused its discretion in this mandamus
proceeding”); Sabine OffShore Serv., Inc. v. City of Port Arthur, 595 S.W.2d 840, 841
(Tex. 1979) (original proceeding) (holding that in an original proceeding the appellate
court may not consider evidence that was not part of the record before the trial court
except to decide its own jurisdiction); In re Taylor, 113 S.W.3d 385, 392 (Tex.
App.—Houston [1st Dist.] 2003, orig. proceeding) (“We will not consider exhibits that were
not part of the trial court record at the time of the hearing on the motion that is the subject
of this original proceeding.”); see also Methodist Hosps. v. Tall, 972 S.W.2d 894, 898
(Tex. App.—Corpus Christi 1998, no pet.) (“It is axiomatic that an appellate court reviews
actions of a trial court based on the materials before the trial court at the time it acted.”).
Accordingly, we deny the Naims’ request to dismiss or deny the petition for writ of
mandamus in order to allow the trial court to consider the current procedural posture of
the case.
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IV. CONCLUSION
We hold that the Naims failed to overcome the presumption of validity of the
forum-selection clause. See In re Lyon Fin. Servs., Inc., 257 S.W.3d at 321–32. Under
these circumstances, the trial court had no discretion to refuse Emex’s request to enforce
the parties’ contract. There is no adequate remedy by appeal when a trial court refuses
to enforce a forum-selection clause. See In re AIU Ins. Co., 148 S.W.3d at 115.
Accordingly, we conditionally grant mandamus relief. We are confident that the trial
court will promptly vacate its order of January 12, 2011, and proceed to enforce the
parties’ forum-selection clause in accordance with this opinion. The writ of mandamus
will issue only if the trial court fails to comply.
ROSE VELA, JUSTICE
Dissenting Memorandum Opinion
by Justice Garza
Delivered and filed the
21st day of June, 2012.
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