SES Products, Inc. v. Aroma Classique, LLC and Michal R. Avraham ( 2013 )


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  • Opinion issued June 6, 2013.
    In The
    Court of Appeals
    For The
    First District of Texas
    ————————————
    NO. 01-12-00219-CV
    ———————————
    SES PRODUCTS, INC., Appellant
    V.
    AROMA CLASSIQUE, LLC AND MICHAL R. AVRAHAM, Appellees
    On Appeal from the 334th District Court
    Harris County, Texas
    Trial Court Case No. 2011-41750
    MEMORANDUM OPINION
    SES Products, Inc. brought suit against Aroma Classique, LLC and Michal
    R. Avraham for fraud, fraud in the inducement, and breach of a partnership
    agreement. Avraham and Aroma Classique moved to dismiss the suit on the
    grounds that a forum-selection clause and the doctrine of forum non conveniens
    limited jurisdiction to Israel. The trial court granted the motion to dismiss, and SES
    appealed. We affirm.
    Background
    Avraham―an Israeli citizen―was the sole owner and proprietor of Aroma
    Classique―a Texas limited liability company operating a kosher coffee bar and
    café in Houston―until January 2011, when SES―an Arizona company having its
    principal place of business in Houston and an additional place of business in Tel
    Aviv, Israel―contracted to purchase fifty percent of Avraham’s interest in Aroma
    Classique. The parties executed a partnership agreement, which was drafted in
    Hebrew. The partnership agreement contains this forum-selection clause:
    The Parties hereby agree that since both Parties are Israeli nationals
    and speak Hebrew then notwithstanding the location of the
    Partnership and Joint Venture in the United States this Agreement
    shall be governed by the laws of the State of Israel and the
    international jurisdiction shall be in Israel, at the competent court in
    Tel Aviv . . . .[ 1]
    SES filed suit against Avraham and Aroma Classique, alleging that Avraham
    misrepresented that she possessed all equipment, permits, licenses, and intellectual
    1
    The parties proffered competing English-language translations of the partnership
    agreement. The translation of the forum-selection clause used here is the
    translation provided by Avraham and Aroma Classique. SES’s translation differed
    with respect to the clause’s concluding language. Whereas Avraham and Aroma
    Classique asserted that jurisdiction “shall be in Israel,” SES asserted that
    jurisdiction “would be appropriate in the court of Tel Aviv.” Because SES’s
    contention on appeal is that the trial court erred in dismissing SES’s suit based on
    the translation urged by Avraham and Aroma Classique, we need not determine
    which translation is correct.
    2
    property necessary for the operation of Aroma Classique in Houston and for the
    franchising of the business throughout the United States. SES asserted causes of
    action for fraud, fraud in the inducement, and breach of the partnership agreement.
    Avraham and Aroma Classique answered the lawsuit and filed a special
    appearance, which their counsel later withdrew. Avraham and Aroma Classique
    also moved to dismiss the lawsuit based on the forum-selection clause in the
    partnership agreement and the common-law doctrine of forum non conveniens.
    They asserted that the lawsuit should be heard in Israel. The trial court granted the
    motion to dismiss and entered the following findings of fact and conclusions of
    law:
    A. The forum where [SES] filed this suit is not the proper forum
    for this cause of action because the parties entered a contract with a
    forum-selection clause opting for any dispute to be decided by
    Israeli law in Israel. [SES’s] claims are more properly heard in a
    forum outside of Texas.
    B. An alternate forum exists in which [SES’s] cause of action may
    be tried.
    C. The alternate forum offers an adequate remedy for [SES’s]
    cause of action.
    D. Maintenance of [SES’s] cause of action in the courts of Texas
    would work a substantial injustice to the moving party.
    E. The alternate forum is more appropriate because it provides an
    adequate remedy for the cause of action and can exercise
    jurisdiction over the defendant[s] [Avraham and Aroma Classique]
    properly joined to [SES’s] claims.
    3
    F. The claims in this suit are based upon a contract between the
    parties, written in Hebrew, [in] which both parties agreed that any
    dispute be governed by the laws of Israel and under the jurisdiction
    of the courts of Israel.
    G. The balance of the private interests of the parties and the public
    interest of the state predominate in favor of [SES’s] actions being
    brought in an alternate forum, which shall include consideration of
    the extent to which an injury or death resulted from acts or
    omissions that occurred in this state.
    1. The private interest of the parties will be furthered by this
    matter being brought in an alternative forum.
    a. Access to sources of proof will be easier in the
    alternate forum.
    b. The enforceability of the judgment equals or is better
    in the alternate forum than in Texas.
    2. The public interests of the state would be furthered by this
    matter being considered in an alternate forum.
    a. The administrative burden on the alternate forum is
    not as great as the burden on the Texas court.
    b. The alternate forum has an interest in considering this
    matter that the court in Texas does not have.
    c. The law of the alternate forum will control the
    disposition of this case.
    H. The dismissal would not result in unreasonable duplication or
    proliferation of litigation.
    Forum Non Conveniens
    Because it is dispositive of this appeal, we begin by determining the
    propriety of the dismissal of this case based on the common-law doctrine of forum
    non conveniens. Forum non conveniens is an equitable doctrine exercised by
    4
    courts to prevent the imposition of an inconvenient jurisdiction on a litigant.
    Vinmar Trade Fin., Ltd. v. Util. Trailers de Mex., S.A. de C.V., 
    336 S.W.3d 664
    672 (Tex. App.―Houston [1st Dist.] 2010, no pet.) (citing Exxon Corp. v. Choo,
    
    881 S.W.2d 301
    , 302 (Tex. 1994)). A trial court will exercise the doctrine of forum
    non conveniens when the trial court determines that, for the convenience of the
    litigants and witnesses and in the interest of justice, the action should be instituted
    in another forum. Id.; see Quixtar Inc. v. Signature Mgmt. Team, LLC, 
    315 S.W.3d 28
    , 33 (Tex. 2010).
    The United States Supreme Court developed the framework for analyzing
    forum non conveniens in an international context in Piper Aircraft Co. v. Reyno,
    
    454 U.S. 235
    , 
    102 S. Ct. 252
    (1981). Courts must determine, first, whether an
    alternative forum exists. 
    Id. at 254
    n.22, 102 S. Ct. at 265 
    n.22. Courts consider the
    defendant’s amenability to service of process and the availability of an adequate
    remedy in the alternative forum. See id.; In re Gen. Elec. Co., 
    271 S.W.3d 681
    , 688
    (Tex. 2008) (orig. proceeding). Only if an alternative forum exists do courts
    proceed to the second inquiry: which forum is best suited to the litigation. See
    Piper 
    Aircraft, 454 U.S. at 255
    , 102 S. Ct. at 265. In this second step, courts
    consider whether the private and public interest factors set forth in Gulf Oil Corp.
    v. Gilbert weigh in favor of dismissal. 
    330 U.S. 501
    , 508−09, 
    67 S. Ct. 839
    , 843
    (1947). “[T]he ultimate inquiry is where a trial will best serve the convenience of
    5
    the parties and the interests of justice.” Koster v. Am. Lumbermens Mut. Cas. Co.,
    
    330 U.S. 518
    , 527, 
    67 S. Ct. 828
    , 833 (1947).
    The defendants―here, Avraham and Aroma Classique―bear the burden of
    proof on all elements of the forum non conveniens analysis and must establish that
    the balance of factors strongly weighs in favor of dismissal. See Vinmar Trade
    Fin., 
    Ltd., 336 S.W.3d at 672
    ; RSR Corp. v. Siegmund, 
    309 S.W.3d 686
    , 710−11
    (Tex. App.—Dallas 2010, no pet.); see also DTEX, LLC v. BBVA Bancomer, S.A.,
    
    508 F.3d 785
    , 794 (5th Cir. 2007). The burden in opposing the plaintiff’s chosen
    forum is heavy. Sinochem Int’l Co., Ltd. v. Malaysia Int’l Shipping Corp., 
    549 U.S. 422
    , 430, 
    127 S. Ct. 1184
    , 1191 (2007); Gulf 
    Oil, 330 U.S. at 508
    , 67 S. Ct. at 843
    (“[U]nless the balance is strongly in favor of the defendant, the plaintiff’s choice of
    forum should rarely be disturbed.”); 
    Quixtar, 315 S.W.3d at 31
    . Nonetheless, a
    plaintiff’s choice of forum is not dispositive. Piper 
    Aircraft, 454 U.S. at 255
    –56
    
    n.23, 102 S. Ct. at 252
    n.23; see 
    DTEX, 508 F.3d at 795
    .
    A.    Standard of Review
    A forum non conveniens determination is committed to the trial court’s
    sound discretion. 
    Quixtar, 315 S.W.3d at 31
    (quoting Piper 
    Aircraft, 454 U.S. at 257
    , 102 S. Ct. at 266). We reverse “only when there has been a clear abuse of
    discretion; where the court has considered all the relevant public and private
    interest factors, and where its balancing of these factors is reasonable, its decision
    6
    deserves substantial deference.” 
    Id. (quoting Piper
    Aircraft, 454 U.S. at 257
    , 102
    S. Ct. at 266). The mere fact that a trial judge may decide a discretionary matter in
    a different manner than an appellate judge in a similar circumstance does not
    demonstrate an abuse of discretion. 
    Id. (quoting Downer
    v. Aquamarine Operators,
    Inc., 
    701 S.W.2d 238
    , 242 (Tex. 1985)).
    B.    Adequacy of Israel as an alternative forum
    For a case to be dismissed for forum non conveniens, there must be another
    forum that could hear the case. Piper 
    Aircraft, 454 U.S. at 254
    n.22, 102 S. Ct. at
    265 
    n.22. An alternative forum exists when it is both available and adequate. Saqui
    v. Pride Cent. Am., LLC, 
    595 F.3d 206
    , 211 (5th Cir. 2010). An alternative forum
    is available when the entire case and all the parties are subject to that forum’s
    jurisdiction. Sarieddine v. Moussa, 
    820 S.W.2d 837
    , 841 (Tex. App.―Dallas 1991,
    writ denied) (quoting Quintero v. Klaveness Ship Lines, 
    914 F.2d 717
    , 727 (5th
    Cir.1990)). An alternative forum is adequate “if the parties will not be deprived of
    all remedies or treated unfairly, even though they may not enjoy the same benefits
    as they might receive in an American court.” In re Pirelli Tire, L.L.C., 
    247 S.W.3d 670
    , 678 (Tex. 2007) (quoting Vasquez v. Bridgestone/Firestone, Inc., 
    325 F.3d 665
    , 671 (5th Cir. 2003)).
    Regarding Israel as an alternative forum, the trial court found that the parties
    consented in the forum-selection clause to submit to Israel’s jurisdiction, that the
    7
    law of Israel governs, and that the law of Israel offers an adequate remedy for
    SES’s claims. SES does not challenge any of those findings on appeal. That is,
    SES does not dispute the enforceability of the forum-selection clause 2 or that Israel
    is an available forum under the clause. Neither does SES argue that the substantive
    law of Israel does not apply or that it would deprive SES of any remedy on its
    claims. SES complains that the trial court erred in dismissing its claims because
    Avraham and Aroma Classique did not satisfy their burden of showing that the
    private and public interest factors weigh in favor of Israel as the more convenient
    forum. Thus, we do not pass upon the issue of whether the trial court erred in
    determining that Israel was an adequate alternative forum, and we turn instead to
    the issue of whether the trial court acted within its sound discretion in determining
    that the balance of factors weighed in favor of dismissal.
    C.    Private and public interest factors
    In forum non conveniens dismissals, the well-known Gulf Oil factors direct
    courts to consider both public and private concerns. Gulf 
    Oil, 330 U.S. at 508
    −09,
    2
    While SES does not challenge the validity or enforceability of the forum-selection
    clause, SES does dispute the clause mandates litigation in Israel. SES contends
    that the forum-selection clause is permissive―not mandatory―because it does not
    state that jurisdiction in Israel is exclusive and therefore does not require dismissal
    of lawsuits filed in jurisdictions other than Israel. According to SES, the parties
    agreed in the forum-selection clause only to submit to proceedings in Israel despite
    any personal jurisdiction, venue, or forum non conveniens objections they might
    otherwise have. SES disputes that the parties agreed that all lawsuits must be filed
    in Israel. We do not reach the mandatory or permissive nature of the forum-
    selection clause because we conclude, for the reasons stated in this opinion, that
    dismissal was proper based on forum non conveniens.
    
    8 67 S. Ct. at 843
    . Private considerations include: (1) the “relative ease of access to
    sources of proof”; (2) the “availability of compulsory process for attendance of
    unwilling, and the cost of obtaining attendance of willing, witnesses”; (3) the
    “possibility of view of premises, if view would be appropriate to the action”; (4)
    the “enforceability of a judgment” once obtained; and (5) “all other practical
    problems that make trial of a case easy, expeditious and inexpensive.” Id. at 
    508, 67 S. Ct. at 843
    . Public considerations include: (1) “[a]dministrative difficulties . . .
    for courts when litigation is piled up in congested centers instead of being handled
    at its origin”; (2) the burden of “jury duty . . . that ought not to be imposed upon
    the people of a community which has no relation to the litigation”; (3) “local
    interest in having localized controversies decided at home”; and (4) avoiding
    conflicts of law issues. 
    Id. at 508−09,
    67 S. Ct. at 843.
    The Texas Supreme Court made clear in Quixtar that a court of appeals
    should not conduct a de novo review of the evidence by mechanically reweighing
    each forum non conveniens 
    factor. 315 S.W.3d at 35
    ; see also O’Keefe v. Noble
    Drilling Corp., 347 Fed. Appx. 27, 30–31 (5th Cir. 2009) (“In reviewing forum
    non conveniens decisions, our duty is to review the lower court’s decision making
    process and conclusion and determine if it is reasonable; our duty is not to perform
    a de novo analysis and make the initial determination for the district court.”). The
    Quixtar court emphasized the United States Supreme Court’s purposeful refusal to
    9
    “lay down a rigid rule to govern [a trial court’s] discretion” in these cases because
    “[e]ach case turns on its 
    facts.” 315 S.W.3d at 34
    (quoting Piper 
    Aircraft, 454 U.S. at 249
    , 102 S. Ct. at 263). Giving any one factor too much weight loses much of
    the flexibility that makes the forum non conveniens doctrine so valuable. 
    Id. (citing Piper
    Aircraft, 454 U.S. at 249
    50, 102 S. Ct. at 263
    ). Admittedly, the various
    factors weighed by the trial court “may be difficult to quantify.” 
    Id. at 35.
    Regarding the proof required, the party seeking dismissal for forum non
    conveniens must provide enough information for the trial court to balance the
    parties’ interests. Piper 
    Aircraft, 454 U.S. at 258
    –59, 102 S. Ct. at 267 (holding
    sufficient affidavits describing evidentiary problems defendants would face if trial
    held in United States). However, the evidence need not be overly detailed. See,
    e.g., 
    id. (explaining that
    defendants need not “submit affidavits identifying
    witnesses they would call and the testimony these witnesses would provide if the
    trial were held in the alternative forum”); 
    Quixtar, 315 S.W.3d at 35
    (explaining
    that defendant need not provide detailed quantification of costs).
    With these principles in mind, we review the record to determine whether
    the trial court acted within its sound discretion in determining that the balance of
    the factors favored dismissal. See 
    Quixtar, 315 S.W.3d at 34
    .
    SES sued Avraham and Aroma Classique for fraud, fraud in the inducement,
    and breach of the partnership agreement. SES contends that Avraham
    10
    misrepresented matters pertaining to the operation of a café in Houston, including
    that Aroma Classique had all necessary equipment, permits, licenses, and
    intellectual property rights necessary to operate its business and to franchise the
    business throughout the United States, and that SES invested in Aroma Classique
    as a result of such misrepresentations. SES further alleges that Avraham’s
    misrepresentations constitute a breach of the parties’ partnership agreement.
    Avraham and Aroma Classique supported their motion to dismiss these
    claims for forum non conveniens with Avraham’s affidavit, the partnership
    agreement, and a demand letter sent to Avraham by Israeli counsel for SES.
    Avraham and Aroma Classique provided the original Hebrew texts of the
    partnership agreement and demand letter and English-language translations of
    those documents. Avraham’s affidavit contains a number of averments regarding
    the private interest factors: (1) Avraham is an Israeli citizen, (2) the individual
    owners of SES are Israeli citizens, (3) the parties intended by execution of the
    forum-selection clause to resolve their disputes in Israel, (4) the agreement that is
    the subject of the dispute and other supporting documents are drafted in Hebrew,
    (5) the law of Israel will govern the dispute, (6) all of the witnesses are Israeli
    citizens, and (7) any claims Avraham and Aroma Classique might have against
    SES could only be pursued in Israel. SES did not offer any evidence contradicting
    Avraham’s affidavit.
    11
    Avraham’s affidavit provided the trial court with minimal information with
    which to balance the private interest factors. First, SES’s petition alleges that
    Avraham resides in Houston, Aroma Classique is a Texas limited liability
    company having its principal place of business in Houston, SES has its principal
    place of business in Houston, and the café the parties sought to operate jointly is
    located in Houston. Avraham did not dispute any of those allegations; she stated in
    her affidavit only that she and the individual owners of SES are Israeli citizens.
    She did not make any statement regarding her residence.3 Second, Avraham did
    not assist the trial court in determining the access to sources of proof or the
    expense of securing witness testimony. She stated that all of the witnesses are
    Israeli citizens, but she did not indicate whether the witnesses lived in Israel and
    would be required to travel or whether they would require an English-language
    translator to testify before a Texas jury. Neither did she make any averment that
    other sources of proof are available only in Israel. Finally, her assertion that any
    claims she or Aroma Classique may have against SES can only be pursued in Israel
    is not supported by any underlying facts regarding what those claims might be or
    why they would not be available in Texas. But see 
    Quixtar, 315 S.W.3d at 35
    (criticizing appellate court for considering defendant’s failure to raise choice of
    law issues as factor weighing against dismissal). On the other hand, although SES
    3
    We note that Avraham is described as a dual citizen of the United States and Israel
    in the special appearance filed and then withdrawn by Avraham.
    12
    did not bear the burden of proof, it did not identify any witnesses, documents, or
    other proof that would be unavailable if the lawsuit were to proceed in Israel.
    Regarding the public interest factors, we note that there is no evidence of the
    trial court’s case load or administrative burden and that Texas jurors certainly have
    some interest in resolving a dispute between companies operating in Texas.
    However, Avraham pointed to important facts that make Texas a less convenient,
    and perhaps more expensive, forum than Israel―the controlling document and
    other correspondence were drafted in Hebrew and the law of Israel governs the
    case. SES’s demand letter was sent to Avraham in Hebrew by an attorney in Israel.
    The demand letter characterizes Avraham’s relationship with Pillsbury Israel as
    one of the main reasons SES invested in Aroma Classique, and raises issues
    concerning whether Avraham misrepresented that she was “the sole representative
    in Texas for marketing part of the bakery products line of the Pillsbury company
    from Israel” and held exclusive licensing and franchising rights from Pillsbury
    Israel. It logically follows that litigating SES’s claims in Texas necessitates the
    expense of translation of documents and retention of Israeli law experts. Citing
    federal authorities, this Court has previously noted that “‘[e]ven the possibility that
    foreign law applies to a dispute is sufficient to warrant dismissal on forum non
    conveniens grounds.’” Vinmar Trade 
    Fin., 336 S.W.3d at 679
    (quoting Warter v.
    Boston Secs., S.A., 
    380 F. Supp. 2d 1299
    , 1315 (S.D. Fla. 2004), and citing Sigalas
    13
    v. Lido Maritime, Inc., 
    776 F.2d 1512
    , 1519 (11th Cir. 1985) (indicating that need
    to untangle conflicts of law problems weighs in favor of dismissal), and Proyectos
    Orchimex de Costa Rica, S.A. v. E.I. du Pont de Nemours & Co., 
    896 F. Supp. 1197
    , 1204 (M.D. Fla. 1995) (concluding that possibility that foreign law applies
    weighs strongly in favor of dismissal)). The fact that the parties consented to
    submit to Israel’s jurisdiction also favors dismissal of SES’s claims. Cf. In re Int’l
    Profit Assocs., Inc., 
    274 S.W.3d 672
    , 680 (Tex. 2009) (observing that, by agreeing
    to forum-selection clause, parties represent that agreed forum is not so
    inconvenient to deprive parties of their day in court).
    This record establishes that Israel is an available and adequate forum.
    Although Avraham and Aroma Classique’s evidentiary showing under the private
    interest factors could have been stronger, we bear in mind that the Gulf Oil factors
    provide for a flexible inquiry, with no one factor being dispositive. Given the
    evidence of the public interest factors, the trial court’s balancing of all the factors
    was reasonable. See 
    Quixtar, 315 S.W.3d at 33
    ; Piper 
    Aircraft, 454 U.S. at 249
    50, 102 S. Ct. at 263
    . We conclude that the trial court’s dismissal of the case based
    on forum non conveniens was not an abuse of discretion.
    14
    Conclusion
    We affirm the trial court’s judgment.
    Harvey Brown
    Justice
    Panel consists of Chief Justice Radack and Justices Higley and Brown.
    15