in Re: Greatamerica Leasing Corporation and Steve Louvar

NUMBER 13-09-00340-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE GREATAMERICA LEASING CORPORATION
AND STEVE LOUVAR
On Petition for Writ of Mandamus.
OPINION
Before Justices Rodriguez, Garza, and Vela
Opinion by Justice Vela1
The underlying lawsuit involves a dispute between Alberto E. Almeida, M.D., P.A.
(“AAMD”), and GreatAmerica Leasing Corporation (“GreatAmerica”) over a lease
agreement for the rental of medical equipment. By petition for writ of mandamus,
GreatAmerica and its employee, Steve Louvar, contend that the trial court abused its
discretion in refusing to enforce a forum selection clause in the lease agreement. We
conclude that the trial court erred, and we conditionally grant the requested relief.
1
See T EX . R . A PP . P . 47.4 (distinguishing opinions and m em orandum opinions).
I. BACKGROUND
AAMD leased a Cardiodynamics Bio-Z System from GreatAmerica. The parties
entered into a “Lease Agreement” providing that AAMD would make sixty-three monthly
rental payments of $851.00 plus tax. The Lease Agreement contains the following forum
selection clause:
ANY CLAIM RELATED TO THIS LEASE WILL BE
GOVERNED BY IOWA LAW AND WILL BE ADJUDICATED
IN A STATE OR FEDERAL COURT LOCATED IN CEDAR
RAPIDS, IOWA. YOU HEREBY CONSENT TO PERSONAL
JURISDICTION AND VENUE IN SUCH COURT AND WAIVE
ANY RIGHT TO TRANSFER VENUE. EACH PARTY WAIVES
ANY RIGHT TO A TRIAL BY JURY.
The Lease Agreement contains an end-of-term “purchase option” at “fair market value” and
includes Dr. Alberto E. Almeida’s personal guaranty for the required payments thereunder.
Thereafter, on October 28, 2004, the parties entered into a “Lease Amendment,”
which clarified the payment schedule as comprising three months without rental payments
and sixty monthly rental payments of $851.00 plus tax. On December 26, 2007, the parties
entered into a second “Amendment” to the Lease Agreement, which referenced thirty-three
payments of $851.00 and two months without rental payment, and increased the remaining
twenty-seven payments due to $869.20 plus tax. Both of the amendments provided that
the terms of the lease “remain in full force and effect.”
On November 25, 2008, GreatAmerica brought suit against AAMD and Dr. Alberto
E. Almeida, in Linn County, Iowa, for breach of the lease and breach of Dr. Almeida’s
personal guaranty on the lease, contending that AAMD and Dr. Almeida failed to make the
requisite monthly payments for leasing the medical equipment.
On January 13, 2009, AAMD filed suit against GreatAmerica and Louvar in the
404th Judicial District Court of Cameron County, Texas, alleging causes of action for
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breach of the lease and fraud. On February 16, 2009, GreatAmerica answered this lawsuit
and filed a “Motion to Enforce Forum Selection Clause,” seeking to dismiss the lawsuit
based on the forum selection clause contained in the Lease Agreement. Louvar filed a
special appearance. AAMD did not file a response to GreatAmerica’s motion to dismiss.
The trial court held a non-evidentiary hearing on the motion to dismiss on April 1,
2009. AAMD argued that the lease agreement was procured by fraud and, inter alia, that
GreatAmerica waived enforcement of the forum selection clause because it, unlike Louvar,
failed to file a special appearance. The trial court agreed and denied GreatAmerica’s
motion to dismiss. However, the trial court did not address Louvar's special appearance.
GreatAmerica subsequently filed a “Motion to Reconsider Motion to Dismiss and to
Enforce Forum Selection Clause,” which was heard on May 20, 2009. At the hearing, Dr.
Almeida testified generally regarding his understanding of the terms of the lease and his
allegations of fraud. With regard to the original agreement, Dr. Almeida testified that he
understood that he did not have to make rental payments for three months; that he had a
thirty-six month payment plan; and that the lease had a “dollar buyout” as a lease-to-own
provision, by which he could purchase the equipment at the end of the lease for one dollar.
Dr. Almeida testified that the original lease stated that it was for a term of sixty-three
months, but that the lease term should have been designated as thirty-six months. He
introduced emails from Louvar regarding a lease amendment, which “changed the
payments to the first 3 payments being at $0, followed by 36 payments of $851.00.” Dr.
Almeida testified that all of his lease agreements contained lease-to-own provisions, and
further testified it would be “stupid” to lease a machine for sixty-three or thirty-six months
and then pay fair market value for it.
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With regard to his execution of the Lease Agreement, Dr. Almeida testified that “it
doesn’t look like my signature, so I don’t really remember whether that is or not.” In
response to cross examination regarding whether he was testifying that he did not sign the
Lease Agreement, Dr. Almeida stated that:
No, I really don’t remember this. I remember that there was a problem with
the original lease, that they had made a mistake in the months, and we had
the—they sent me the amendment—in the months, and also the first three
payments that were not going to be made. I was supposed to be able to skip
the first three payments. Or it was three months at—three at zero and then
36 at $851.00.
Dr. Almeida later admitted signing a lease, but he did not know if the Lease
Agreement introduced into evidence by GreatAmerica in this case was the version he
signed. He testified that he read the Lease Agreement sent to him by GreatAmerica before
signing it. When asked if he saw the forum selection clause in the Lease Agreement, he
responded:
I was not comfortable with that agreement and the way that it was written.
It was wrong. They gave us the wrong dates and the wrong leasing and
everything, so it was amended. On the amendment, I didn’t see anything
having to do with anything having to be in Iowa. And besides that, I really
believe—I believe that this company has been . . . going about this in a
fraudulent manner. They never gave me and they never would give me the
amount of what the machine was. They never showed me where the taxes
were going. I had all kinds of problems with them, and when I realized
around that time that already the lease had to be up, that’s when I started
trying to get that information.
Dr. Almeida did not recall ever asking that the forum selection clause be changed. He
testified that when the original lease term expired, GreatAmerica began sending him
correspondence stating that he owed money for the lease.
Dr. Almeida did not recall the first lease amendment or agreeing to amend the lease
as specified therein. He offered a second version of the “Lease Amendment,” largely
identical to the one offered by GreatAmerica, including the hand-written portions thereof,
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except that Dr. Almeida’s version contained a purchase option of “$1.00" at end of term
and provided a payment schedule comprising thirty-six rental payments rather than sixty-
three. This version of the “Lease Amendment” was also executed by the parties.
Dr. Almeida denied entering the second “Amendment” to the lease in 2007, stating
that he did not remember that document and the contents of the amendment itself did not
make sense. Dr. Almeida conceded that the signature on the December 2007 amendment
looked like his, but he denied that the agreement at issue was for the terms stated therein.
Following the hearing, the trial court denied GreatAmerica’s motion to reconsider
and enforce the forum selection clause.2 This original proceeding ensued. GreatAmerica
and Louvar contend that the trial court erred when it refused to enforce the forum selection
clause in the absence of any allegation or evidence that the forum selection clause itself
was procured by fraud. In response, AAMD argues solely that the forum selection clause
is invalid because it was secured by fraud.
II. STANDARD OF REVIEW
To be entitled to mandamus relief, the relator must show both that the trial court
abused its discretion and that the relator has no adequate appellate remedy. See In re
AutoNation, Inc., 228 S.W.3d 663, 667 (Tex. 2007) (orig. proceeding). Mandamus relief
is available to enforce forum-selection agreements because there is no adequate remedy
by appeal when a trial court abuses its discretion by refusing to enforce a valid
forum-selection clause that covers the dispute. In re Int'l Profit Assocs., 274 S.W.3d 672,
2
Mandam us is generally not available to contest the failure to reconsider a prior ruling because courts
are not required to reconsider prior rulings; therefore, it is not an abuse of discretion to refuse such petitions
for reconsideration. See generally Elec. Data Sys. Corp. v. Tyson, 862 S.W .2d 728, 736-37 n.5 (Tex.
App.–Dallas 1993, orig. proceeding); J.K. & Susie L. W adley Research & Inst. Blood Bank v. W hittington, 843
S.W .2d 77, 86-87 n.9 (Tex. App.–Dallas 1992, orig. proceeding); see also In re Moncivais, No. 13-08-00523-
CV, 2009 Tex. App. LEXIS 552, at **3-4 (Tex. App.–Corpus Christi Jan. 23, 2009, orig. proceeding) (m em .
op.). Accordingly, our review herein is lim ited to the trial court’s denial of GreatAm erica’s m otion to enforce
the forum selection clause.
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675 (Tex. 2009) (orig. proceeding); In re Lyon Fin. Servs., 257 S.W.3d 228, 231 (Tex.
2008) (orig. proceeding) (per curiam); see also In re AIU Ins. Co., 148 S.W.3d 109, 115-20
(Tex. 2004) (orig. proceeding).
III. ANALYSIS
Forum selection clauses are generally enforceable, and a party attempting to show
that such a clause should not be enforced bears a heavy burden to prove the clause is
invalid. In re Int'l Profit Assocs., No. 08-0531, 2009 Tex. LEXIS 391, at *4 (Tex. June 12,
2009) (orig. proceeding) (per curiam); Lyon Fin. Servs., 257 S.W.3d at 232; AIU Ins. Co.,
148 S.W.3d at 113. A trial court must presume that a mandatory forum-selection clause
is valid and enforceable. See Int’l Profit Assocs., 274 S.W.3d at 680; In re Boehme, 256
S.W.3d 878 (Tex. App.–Houston [14th Dist.] 2008, orig. proceeding). A trial court abuses
its discretion if it refuses to enforce a forum-selection clause unless the party opposing
enforcement clearly shows that: (1) the clause is invalid for reasons of fraud or
overreaching; (2) enforcement would be unreasonable or unjust; (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. Int’l Profit Assocs., 2009 Tex.
LEXIS 391, at **4-5; Lyon Fin. Servs., 257 S.W.3d at 231-32. Our focus herein is limited
to the sole ground alleged by AAMD for avoidance of the forum selection clause: fraud.
The Texas Supreme Court expounded on the circumstances in which a forum
selection clause can be invalidated by fraud in In re GNC Franchising, Inc., 22 S.W.3d 929
(Tex. 2000) (orig. proceeding):
In Scherk v. Alberto-Culver Co., the United States Supreme Court clarified
the fraud exception to enforceability mentioned in Bremen to require that the
forum-selection clause itself must be fraudulently induced, and not merely
the agreement of which it was one provision. Although one Texas court has
reached a contrary conclusion, any other rule would permit the party to a
contract to escape a forum-selection provision merely by asserting a
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misrepresentation relating to some aspect of the agreement. Scherk is
clearly the only practical rule.
Id. at 930 (internal footnotes omitted) (discussing Scherk v. Alberto Culver Co., 417 U.S.
506, 519 n.14 (1974) and The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-15 (1972)).
Accordingly, fraud may invalidate a forum-selection clause, but only if the inclusion of that
clause, as opposed to the signing of the entire contract, was the product of fraud. See id.
AAMD’s proffered documentary evidence and Dr. Almeida’s testimony concern
allegations of fraud on the part of GreatAmerica and Louvar with regard to the substantive
provisions of the lease itself, specifically, the terms and conditions of payment and the
purchase-to-own contingency. AAMD offers no evidence of fraud, misrepresentation, or
overreaching on the part of GreatAmerica or Louvar in inducing AAMD to agree to the
inclusion of the forum selection clause in the agreement. Dr. Almeida specifically testified
that he read the Lease Agreement and, through his testimony, conceded his awareness
of the forum selection clause. None of the evidence adduced by AAMD shows or indicates
that the forum selection clause itself is invalid because it was secured by fraud.
Unless there is a showing that the alleged fraud or misrepresentation induced the
party opposing a forum selection clause to agree to inclusion of that clause in a contract,
a general claim of fraud or misrepresentation as to the entire contract does not affect the
validity of the forum selection clause. See generally id. In the instant case, there was no
evidence indicating that the forum selection clause itself was fraudulently induced, and
accordingly, the trial court abused its discretion in failing to enforce the forum selection
agreement entered by the parties. See id.; Lyon Fin. Servs., 257 S.W.3d at 232.
IV. CONCLUSION
The Texas Supreme Court has held that a trial court must enforce a mandatory
forum-selection clause and that the failure to do so constitutes an abuse of discretion. See
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AIU Ins. Co., 148 S.W.3d at 111-12. Because AAMD did not satisfy its burden of
demonstrating that the forum selection clause was invalidated by fraud, the trial court must
enforce the forum selection clause. Accordingly, we conditionally grant the petition for writ
of mandamus and order the trial court to: (1) vacate its order denying the motion to
enforce and dismiss; and (2) sign an order granting the motion to dismiss. The writ will
issue only in the event the trial court fails to do so.
Justice Rose Vela
Opinion delivered and filed
this 27th day of August, 2009.
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