in Re Mark Andy, Inc. ( 2012 )

NUMBER 13-11-00320-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE: MARK ANDY, INC.
On Petition for Writ of Mandamus.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Benavides
Memorandum Opinion by Justice Benavides1
Relator, Mark Andy, Inc. (“Mark Andy”), filed a petition for writ of mandamus in
the above cause on May 24, 2011, seeking to compel the trial court to vacate its April
20, 2011 order denying relator’s “Motion to Enforce Alternative Relief” and to enter an
order dismissing the third-party action filed against Mark Andy based on a forum
selection clause. The Court requested and received a response to the petition for writ
of mandamus from the real parties in interest, ILP, LLC (“ILP”), Ernesto Gonzalez, and
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.”);
TEX. R. APP. P. 47.4 (distinguishing opinions and memorandum opinions).
Maria Del Rosario Gonzalez, and further received a reply brief from Mark Andy. We
conditionally grant the petition for writ of mandamus.
I. BACKGROUND
By way of a purchase agreement, Mark Andy sold ILP a printing press. The
purchase agreement was signed by Ernesto Gonzalez, the president of ILP. The
purchase agreement contains a forum selection clause:
Exclusive Jurisdiction and Venue. Any action brought by either party
wherein the subject matter is this Agreement must be brought in U.S.
District Court for the Eastern District of Missouri, Eastern Division, or the
Circuit Court of St. Louis County, Missouri. Buyer [ILP] waives any
objection to jurisdiction or venue in respect of said Courts and to any
service of process issued under their authority. Buyer agrees that it may
be served by any method of process described in and authorized by the
Federal Rules of Civil Procedure, or the Missouri Rules of Civil Procedure,
as the case may be. Buyer further agrees that said Courts are the
exclusive venues for any such action.
Thereafter, ILP entered into a master lease agreement with Alliant Capital, Inc. to
finance the acquisition of the press. Gonzalez, the president of ILP, and his mother,
Maria Del Rosario Gonzalez, the vice-president of ILP, signed individual guaranty
agreements for the lease. Alliant assigned its rights under the lease to Harbor Capital,
L.L.C. (“Harbor”).
Harbor filed suit against ILP, Gonzalez, and Maria Del Rosario Gonzalez in the
389th District Court of Hidalgo County alleging that they had defaulted on obligations to
pay for the printing press. ILP and the Gonzalezes filed a third-party petition against
Mark Andy and filed counterclaims against Harbor on grounds the machinery was
defective.
Mark Andy filed a “Motion to Transfer Venue” arguing that venue was not proper
based on section 15.020 of the Texas Civil Practice and Remedies Code and the forum
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selection clause in the purchase agreement, and it requested that the action be
“dismissed and transferred to the United States District Court for the Eastern District of
Missouri, Eastern Division, and that the Court grant any further relief it deems just and
reasonable under the circumstances.”2 See TEX. CIV. PRAC. & REM. CODE ANN. § 15.020
(West Supp. 2011) (providing for mandatory venue in cases involving major
transactions). The motion specified that: (1) Texas law mandates that Hidalgo County
is not the proper venue for the third party action against relator; (2) the contract contains
a valid forum selection clause; (3) venue in Hidalgo County is improper under civil
practice and remedies code section 15.020; and (4) proper venue is in the United States
District Court for the Eastern District of Missouri. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 15.020 (West Supp. 2011).
By “Order Granting Third-Party Defendant Mark Andy, Inc.’s Motion to Transfer
Venue,” the trial court granted the motion:
Came on for consideration this day Third-Party Defendant Mark
Andy, Inc.’s Motion to Transfer Venue, and after considering the pleadings
on file, the parties’ submissions and the argument of counsel, the Court is
of the opinion that said motion should be GRANTED with respect to the
Third-Party Complaint filed against Third-Party Defendant Mark Andy, Inc.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Third-
Party Defendant Mark Andy, Inc.’s Motion to Transfer Venue is hereby
GRANTED. The Third-Party complaint against Mark Andy, Inc. is hereby
transferred to the United States District Court for the Eastern District of
2
A motion to dismiss is a proper procedural mechanism for enforcing a forum selection clause
when a party to the agreement has violated the agreement by filing suit in a non-conforming forum. See
Deep Water Slender Wells, Ltd. v. Shell Int'l Exploration & Prod., Inc., 234 S.W.3d 679, 687 (Tex. App.—
Houston [14th Dist.] 2007, pet. denied); Phoenix Network Techs. (Europe) Ltd. v. Neon Sys., 177 S.W.3d
605, 610 (Tex. App.—Houston [1st Dist.] 2005, no pet.); Accelerated Christian Educ., Inc. v. Oracle Corp.,
925 S.W.2d 66, 70 (Tex. App.—Dallas 1996, no writ); see also Welch v. Nightingale Nurses, LLC, No. 07-
08-0305-CV, 2009 Tex. App. LEXIS 3822, at **4–5 (Tex. App.—Amarillo June 2, 2009, pet. denied)
(mem. op.). Accelerated Christian expressly rejects the notion that a motion to transfer must be filed
instead of a motion to dismiss on a forum selection clause. See Accelerated Christian Educ., Inc., 925
S.W.2d at 70.
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Missouri, Eastern Division. The remainder of Cause No. C-003-08-H
remains in this Court.
Thereafter, the court’s file was sent to the United States District Court for the Eastern
District of Missouri, Eastern Division.3 However, upon receipt, the Clerk of the United
States District Court returned the matter to the 389th District Court. By letter
accompanying the file, the Clerk informed the Hidalgo County District Clerk that:
I am returning all of the Hidalgo County District Court materials to
you with this letter. Please be advised that a new civil action may not be
initiated in the United States District Court pursuant to the order of your
court granting a transfer of venue. The Plaintiff will need to follow the
district court’s rules and meet the jurisdictional requirements for
commencing a new civil action in the United States District Court.
Mark Andy then filed a “Motion to Enforce Alternative Relief” in the 389th District
Court, seeking dismissal of the case. According to the motion, “dismissal without
prejudice (the alternative relief sought in Mark Andy’s Motion to Transfer) is the proper
relief” for a party seeking to enforce a forum selection clause. The trial court denied the
motion, based on the colloquy in the reporter’s record, premised on the fact that counsel
for Mark Andy had drafted the order of transfer and the trial court had already granted
Mark Andy’s requested relief. The order of denial recites:
After considering the motion, any response, and the arguments of
counsel, the Court is of the opinion that [relator] is not entitled to have the
third-party petition against it dismissed without prejudice based on the
“Exclusive Jurisdiction and Venue” clause. Accordingly, it is hereby
ORDERED that the Motion is DENIED.”
This original proceeding ensued. Mark Andy contends that (1) the trial court
abused its discretion by refusing to dismiss the third-party petition against it when the
3
A Texas court does not have the power to transfer a case to another state’s court. See
Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66, 70 (Tex. App.—Dallas 1996, no writ);
Tieuel v. Southern Pac. Transp. Co., 654 S.W.2d 771, 774 n.1 (Tex. App.—Houston [14th Dist.] 1983, no
writ); West v. City Nat'l Bank, 597 S.W.2d 461, 464 (Tex. Civ. App.—Beaumont 1980, no writ).
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trial court found the forum selection clause to be valid and enforceable, and (2) Mark
Andy lacks an adequate remedy by appeal. The Court requested and received a
response to the petition from the real parties in interest. The real parties in interest
contend: (1) the petition for writ of mandamus should be denied because Mark Andy
invited the trial court to err in attempting to transfer the case; and (2) the forum selection
clause cannot be enforced because the forum selected by the contract is unavailable.
The parties herein have filed several motions which are currently pending and
which we will address before reaching the merits of this proceeding.
The “Motion to Withdraw” filed by counsel for real parties in interest is
DISMISSED AS MOOT given that the trial court has granted this motion and allowed
the withdrawal of counsel. We previously granted the real parties in interest an
additional fourteen days after the trial court allowed their counsel to withdraw to either
have newly-retained counsel make an appearance in this original proceeding, or to
certify to this Court that they will proceed without counsel. More than fourteen days
have passed, but real parties in interest have neither had newly-retained counsel make
an appearance herein nor have they certified to this Court that they are proceeding
without counsel. Given that the real parties’ response to the petition has already been
filed, we conclude that the issues before us in this original proceeding are ripe for
resolution on the merits.
The two motions filed by real parties in interest prior to the trial court’s ruling on
withdrawal, the “Objection to Motion to Withdraw and Request to Postpone any Rulings
on this Case until this Motion is Resolved” and the “Reply to Mark Andy’s Response to
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Motions to Withdraw and to Postpone Ruling and Request for 30 Day Extension” are
DISMISSED AS MOOT.
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 held repeatedly
that mandamus relief is available to enforce a forum-selection clause in a contract.
See, e.g., In re Lisa Laser U.S., 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).
A trial court abuses its discretion when it fails to properly interpret or apply a
forum-selection clause. In re Lisa Laser U.S., 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.
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III. APPLICABLE LAW
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 into the judicial process by “enabling forum-
shopping, wasting judicial resources, delaying adjudication on the merits, and skewing
settlement dynamics." In re Lisa Laser U.S. Inc., 310 S.W.3d at 883. 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, unjust, or seriously inconvenient, the Texas Supreme Court has
recognized that there may be “extreme circumstances” that prevent the enforcement of
forum selection clauses. In re ADM Investor Servs., 304 S.W.3d at 376. There is not a
bright-line test for avoiding enforcement of forum-selection clauses. Id.
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.
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IV. INVITED ERROR
Real parties in interest contend that Mark Andy invited error in requesting that the
case be transferred. According to their theory, Mark Andy prepared the order
transferring the case to Missouri, and the trial court signed the order granting Mark Andy
its requested relief. Real parties thus contend that “a litigant must be careful when
asking what he wishes for; should the trial court grant it, and the litigant is wrong, he
cannot complain on appeal.”
“The invited error doctrine applies to situations where a party requests the court
to make a specific ruling, then complains of that ruling on appeal.” In re Dep't of Family
& Protective Servs., 273 S.W.3d 637, 646 (Tex. 2009); see Tittizer v. Union Gas Corp.,
171 S.W.3d 857, 862 (Tex. 2005) ("[A] party cannot complain on appeal that the trial
court took a specific action that the complaining party requested, a doctrine commonly
referred to as 'the invited error' doctrine."); see also Holland v. Wal-Mart Stores, Inc., 1
S.W.3d 91, 94–95 (Tex. 1999). In the instant case, Mark Andy is not complaining that
the trial court granted its request to transfer the case. Rather, Mark Andy is instead
asserting error with regard to what it asked the trial court to do—dismiss the case—but
the trial court did not do. This is not invited error. See In re Dep't of Family & Protective
Servs., 273 S.W.3d at 646.
V. UNAVAILABLE FORUM
Real parties in interest contend that the trial court’s denial of the motion to
dismiss was warranted because there is no available forum in Missouri. They assert
that the enforcement of a forum selection clause is a “component of the doctrine of
forum non conveniens,” and that under the forum non conveniens doctrine, the trial
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court should not grant a motion to dismiss when an alternative forum does not exist.
Real parties cite Tullis v. Georgia-Pacific Corporation in support of their arguments
regarding the law applicable under a forum non conveniens analysis. See 45 S.W.3d
118, 130 (Tex. App.—Fort Worth 2000, no pet.)
Leaving aside the validity of real parties’ contention regarding the application of
forum non conveniens law to a forum selection clause,4 we conclude that the record
before us lacks evidence that an alternative forum does not exist. The letter from the
Clerk of the United States District Court for the Eastern District of Missouri, Eastern
Division merely refused to accept the transfer and informed the parties that real parties
needed to follow the appropriate procedures to initiate a lawsuit in that court. The
record contains no other evidence pertaining to this issue. Accordingly, we conclude
that the trial court could not have refused to dismiss the case on this basis.
VI. CONCLUSION
As stated previously, 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. Real parties in interest herein have not shown that this case
presents the “extreme circumstances” that prevent the enforcement of forum selection
clauses. In re ADM Investor Servs., 304 S.W.3d at 376. There is not a bright-line test
for avoiding enforcement of forum-selection clauses. Id. Moreover, real parties in
4
While dismissals based on forum non conveniens and forum selection clauses may be
somewhat analagous, see, e.g., In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 679 (Tex. 2007) (orig.
proceeding) (noting that erroneous denial of a forum non conveniens motion is analogous to the denial of
a motion to dismiss based on a forum selection clause in concluding there is no adequate remedy on
appeal for such denials), the substantive law underlying these matters is distinct. Compare, e.g., Quixtar
Inc. v. Signature Mgmt. Team, LLC, 315 S.W.3d 28, 31–35 (Tex. 2010) (discussing the law applicable to
motions to dismiss based on forum non conveniens grounds), with In re Lisa Laser U.S., Inc., 310 S.W.3d
880, 883 (Tex. 2010) (orig. proceeding) (discussing the law applicable to motions to dismiss based on
forum selection clauses).
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interest have not met their “heavy” burden to clearly show that (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. See 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. Accordingly, we
conclude that the trial court abused its discretion in failing to dismiss the third-party
action against Mark Andy. We conditionally grant the petition for writ of mandamus and
direct the trial court to vacate its order denying Mark Andy’s motion to dismiss and grant
the motion to dismiss without prejudice. We are confident the trial court will comply, and
the writ will issue only if it fails to do so.
________________________
GINA M. BENAVIDES,
Justice
Delivered and filed the
29th day of February, 2012.
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