W.W. Collins, Jr. v. Kappa Sigma Fraternity and Philip L. Thames ( 2010 )


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  •                            COURT OF APPEALS
    SECOND DISTRICT OF TEXAS
    FORT WORTH
    NO. 2-09-305-CV
    W .W . COLLINS, JR.                                                     APPELLANT
    V.
    KAPPA SIGMA FRATERNITY                                                  APPELLEES
    AND PHILIP L. THAMES
    ------------
    FROM THE 96TH DISTRICT COURT OF TARRANT COUNTY
    ------------
    MEMORANDUM OPINION 1
    ------------
    I. Introduction
    In three issues, Appellant W .W . Collins, Jr. appeals the granting of Appellees
    Kappa Sigma Fraternity and Philip L. Thames’s motion to dismiss based on a forum
    selection clause. 2 W e reverse and remand.
    II. Factual and Procedural History
    1
     See Tex. R. App. P. 47.4.
    2
     Philip L. Thames is a Kappa Sigma Officer. From this point on, the
    appellees will be referred to collectively as “the Fraternity.”
    Collins, a 1965 initiate of Kappa Sigma Fraternity (“KSF”), filed suit against the
    Fraternity for wrongful expulsion, breach of fiduciary duty, and defamation. 3
    Subsequently, the Fraternity filed a motion to dismiss based on a forum selection
    clause contained in KSF’s “Constitution, By-Laws and Rules” (“CBR”). The provision
    at issue provided, in pertinent part, that
    [t]he sole venue for any legal proceeding brought by any member,
    chapter or Related Entity involving [KSF] or any officer or employee
    thereof shall be in the state and federal courts of and for Albemarle
    County, Virginia, or at any other such place where the Supreme
    Executive Committee in its discretion may from time to time authorize
    and publish to [KSF]. . . .
    After a hearing, the trial court granted the motion and dismissed the underlying
    suit without prejudice. This appeal followed.
    III. Standard of Review
    W e review a trial court’s determination of a motion to dismiss, including a
    motion based on a forum selection clause, for an abuse of discretion. St. Clair v.
    Brooke Franchise Corp., No. 02-06-00216-CV, 2007 W L 1095554, at *2 (Tex.
    App.—Fort W orth Apr. 12, 2007, no pet.) (mem. op.). However, to the extent that
    our review involves issues of contractual interpretation, such as the interpretation of
    a forum selection clause, the standard of review is de novo. See 
    id. 3 
    The underlying suit is based on Collins’s expulsion from KSF in January
    2003 for, among other things, violating KSF’s hazing policy. Collins, an attorney,
    consulted with two undergraduate members of KSF at Texas Christian University
    and allegedly instructed them not to cooperate with KSF’s investigation into a hazing
    incident.
    2
    IV. Plain Meaning of Forum Selection Clause
    In his first issue, Collins argues that the trial court abused its discretion by
    granting the Fraternity’s motion to dismiss because, as an ex-member, the forum
    selection clause does not apply to him. W e agree.
    A contract is ambiguous when it is susceptible to more than one reasonable
    interpretation. Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W .3d 310, 312 (Tex.
    2005). The forum selection clause in this case, however, is not susceptible to more
    than one reasonable interpretation. See, e.g., In re Int’l Profit Assocs., Inc., 274
    S.W .3d 672, 677 (Tex. 2009) (concluding that the forum selection clauses at issue
    were not susceptible to more than one reasonable interpretation because the
    clauses fixed jurisdiction and venue for judicial actions between the parties); see
    also In re Wilmer Cutler Pickering Hale & Dorr LLP, No. 05-08-01395-CV, 2008 W L
    5413097, at *4 (Tex. App.—Dallas Dec. 31, 2008, orig. proceeding [mand. denied])
    (mem. op.) (applying plain meaning rule to interpretation of forum selection clause).
    The clause specifies that “any legal proceeding brought by any member, chapter or
    Related Entity involving [KSF] or any officer or employee thereof shall be in the state
    and federal courts of and for Albemarle County, Virginia.” The only reasonable
    interpretation is that legal proceedings involving KSF, its officers, or its employees
    that are brought by members, chapters, or related entities are to be filed in
    Albemarle County, Virginia. It is undisputed that KSF expelled Collins from its
    organization in 2003 and that Collins did not file suit against the Fraternity until 2004.
    3
    Consequently, Collins was no longer a member at the time he filed suit. Thus,
    based on the plain meaning of the language, the forum selection clause is
    inapplicable to Collins.
    Moreover, when reviewed with the other provisions in section 3.5 of the CBR,
    it is clear that the provision at issue applies only to current members.
    3.5.3 Exhaustion. The remedies and procedures provided in this Rule
    and all subsections hereof must be exhausted prior to the filing or
    commencement of any legal proceeding by any member, chapter or
    Related Entity involving the Fraternity or any officer or employee thereof
    before a court having competent jurisdiction thereof.
    ....
    3.5.5 Failure to Comply. In the event that legal proceedings are
    threatened or commenced in violation of or without compliance with this
    Rule and all subsections hereof, the Supreme Executive Committee
    may in its discretion summarily order the member, Chapter, or Related
    Entity covered under this Rule to dismiss such legal action and comply
    with this Rule and all subsections hereof.
    3.5.6 Sanctions. Failure or refusal to comply with the Rule and all
    subsections hereof, including, without limitation, an order by the
    Supreme Executive Committee made pursuant to subsection 3.5.5
    hereof, shall be grounds for disciplinary proceedings against such
    member, chapter or Related Entity in accordance with the [CBR]. . . .
    [Emphasis added.]
    The Fraternity, however, argues that “an expelled member is still bound by the
    terms of the constitution that bound him as an active member in connection with
    disputes arising within the association.” In other words, for all intents and purposes,
    although Collins is an ex-member, he is to be treated as a “member” when applying
    clauses within the constitution—specifically, the forum selection clause.
    4
    In support of its argument, the Fraternity cites to Dallas County Med. Soc’y v.
    Ubinas-Brache, in which the court stated:
    A member of a voluntary association is bound by a sentence of
    expulsion against him lawfully rendered by a tribunal created in
    pursuance of its constitution, and clothed with that power. . . . By
    uniting with the society, the member assents to and accepts the
    constitution, and impliedly binds himself to abide by the decision of
    such boards as that instrument may provide, for the determination of
    disputes arising within the association. The decisions of these tribunals,
    when organized under the constitution, and lawfully exercising these
    powers, though they involve the expulsion of a member, are no more
    subject to collateral attack for mere error than are the judgments of a
    court [of] law. But if the tribunal act illegally; if it declare a sentence of
    expulsion for an offense for which that penalty is not provided by the
    constitution and laws of the association; and if there be no right of
    appeal, within the association, reserved for the redress of the injury,[]
    the courts will review the proceedings, and, if found illegal, will treat
    them as null, and restore the member to his privileges as such. . . . If
    his expulsion was illegal, and if the association had refused, upon
    appeal, to set it aside, it may be that this court would have granted
    redress.
    68 S.W .3d 31, 42 (Tex. App.—Dallas 2001, pet. denied), cert. denied, 
    535 U.S. 970
    (2002) (emphasis added) (citing Screwmen’s Benevolent Ass’n v. Benson, 
    76 Tex. 552
    , 555, 13 S.W . 379, 380 (1890)).
    The Fraternity asserts that, based on the emphasized portion above, Collins,
    as an ex-member, is still bound by the terms of the CBR and, therefore, is within the
    scope of the forum selection clause. The language at issue, however, taken in
    context with the entire paragraph, states that when a member is expelled from an
    organization, that member is bound by the organization’s decision to expel him so
    long as the organization’s actions are protected under the organization’s constitution.
    5
    See 
    id. That is,
    the expelled member is bound by the organization’s constitution only
    to the extent that he is challenging the organization’s procedures for expelling him.
    See 
    id. Thus, we
    do not agree that Collins, as an ex-member, is bound by the forum
    selection clause in the CBR, which, based on the plain meaning of the language,
    applies only to members, chapters, or related entities. In other words, as Collins
    points out, although Ubinas-Brache stands for the general idea that an association
    may make and administer its own rules and that by joining the organization a
    member agrees to be bound by them, it also provides that this proposition must be
    exercised lawfully and within legal limits. See 
    id. at 41.
    Thus, Ubinas-Brache does
    not negate the common law application of the plain meaning rule to contracts and
    governing documents.
    The Fraternity also argues that Collins is bound by the forum selection clause
    under the doctrines of estoppel, quasi-estoppel, and waiver.        In support of its
    argument, the Fraternity directs our attention to the following conclusions of law
    made by the trial court:
    22. Since [Collins] seeks to enforce claimed benefits or contractual
    rights under the CBR, [Collins] is not able to avoid the obligations
    imposed on him under that same CBR.
    23. [Collins] waived any right to complain about the application to him
    of the forum selection clause contained in Rule 3.5.4 of the CBR.
    24. [Collins] is estopped to deny the application to him of the forum
    selection clause contained in Rule 3.5.4 of the CBR.
    6
    25. [Collins] is quasi-estopped to deny the application to him of the
    forum selection clause contained in Rule 3.5.4 of the CBR.
    Conclusions of law may not be challenged for factual sufficiency, but they may
    be reviewed to determine their correctness based upon the facts. AMX Enters.,
    L.L.P. v. Master Realty Corp., 283 S.W .3d 506, 519 (Tex. App.—Fort W orth 2009,
    no pet.) (op. on reh’g); Dominey v. Unknown Heirs & Legal Representatives of
    Lokomski, 172 S.W .3d 67, 71 (Tex. App.—Fort W orth 2005, no pet.).
    1. Estoppel and Quasi-Estoppel
    In its motion to dismiss, the Fraternity argued that “since [Collins] seeks to
    enforce claimed benefits under the contract, [Collins] should not be able to avoid the
    obligations imposed on him under that same contract.”
    Estoppel by contract is a form of quasi-estoppel premised on the concept that
    a party to a contract will not be permitted to take a position inconsistent with its
    provisions, to the prejudice of another. See Johnson v. Structured Asset Servs.,
    L.L.C, 148 S.W .3d 711, 721–22 (Tex. App.—Dallas 2004, no pet.); see also Eckland
    Consultants, Inc. v. Ryder, Stilwell Inc., 176 S.W .3d 80, 87 (Tex. App.—Houston [1st
    Dist.] 2004, no pet.) (stating that the doctrine of quasi estoppel applies when it would
    be unconscionable to allow a party to maintain a position inconsistent with one in
    which it had acquiesced, or from which it had accepted a benefit).
    7
    W e note that under the doctrine of estoppel, even if Collins is estopped from
    challenging the existence, validity, or effect of the CBR, he is not estopped from
    asking the court to enforce the CBR in accordance with its plain language. In other
    words, assuming that the CBR is a valid contract between the Fraternity and Collins,
    and that Collins is bound by what is written in the CBR, the CBR must be enforced
    based on its plain language. See Jamestown Partners, L.P. v. City of Fort Worth,
    83 S.W .3d 376, 381 (Tex. App.—Fort W orth 2002, pet. denied) (stating that the
    agreement will be enforced as the parties have made it, without regard to whether
    they contracted wisely). That being said, we previously concluded that the CBR’s
    forum selection clause, based on its plain language, does not apply to ex-members.
    More simply put, Collins, as a member of KSF, agreed to be bound by the
    CBR. The CBR’s forum selection clause stated that members were required to file
    suit in Albemarle County, Virginia. The clause, however, did not state that ex-
    members were also required to file suit in Albemarle County, Virginia. Thus, Collins,
    as an ex-member, is not asserting a right inconsistent with a position that he took as
    a member. Accordingly, estoppel does not apply.
    2. Waiver
    The Fraternity also argued in its motion to dismiss that Collins “waived any
    right to complain about the Virginia forum by agreeing to the valid forum selection
    clause.” In its findings of fact, the trial court found that (1) Collins was a 1965 initiate
    of KSF; (2) the forum selection clause was part of the 2001, 2003, 2005, and 2007
    8
    CBR; (3) the forum selection clause contained in the CBR is presumptively valid; (4)
    the CBR constituted a contract between KSF and Collins; (5) Collins was expelled
    from KSF in 2003; and (6) Collins filed suit in 2004. Based on these facts, the trial
    court concluded that Collins “waived any right to complain about the Virginia forum
    by agreeing to be bound by the CBR and any amendments and/or changes thereto
    when he became a member of KSF.”
    Collins, however, only agreed to be bound by the forum selection clause to the
    extent provided for in the CBR when he was a member. As such, based on the plain
    meaning of the clause’s language in both the 2001 and 2003 CBR, the forum
    selection clause only applied to members, chapters, and related entities. Thus,
    when Collins was a member, he was bound by the forum selection clause; however,
    when Collins became an ex-member, the clause no longer applied. Accordingly, as
    an ex-member, Collins has not waived his rights to complain about the Virginia
    forum.
    Because Collins is no longer a member, and because the doctrines of
    estoppel, quasi-estoppel, and waiver do not apply, we conclude that the forum
    selection clause does not apply to Collins. Therefore, the trial court abused its
    discretion by granting the Fraternity’s motion to dismiss. Accordingly, we sustain
    Collins’s first issue. 4
    4
     Because we sustain Collins’s first issue, we need not address his second
    and third issues, which provide further arguments as to why the trial court abused
    its discretion by granting the Fraternity’s motion to dismiss, and we need not reach
    the Fraternity’s cross-issues. See Tex. R. App. P. 47.1.
    9
    V. Conclusion
    Having sustained Collins’s dispositive issue, we reverse the trial court’s
    judgment and remand for further proceedings consistent with this opinion.
    BOB MCCOY
    JUSTICE
    PANEL: LIVINGSTON, C.J.; DAUPHINOT and MCCOY, JJ.
    DELIVERED: April 22, 2010
    10
    

Document Info

Docket Number: 02-09-00305-CV

Filed Date: 4/22/2010

Precedential Status: Precedential

Modified Date: 10/16/2015