in Re DAVID DAUAJARE-JOHNSON AND GABRIELA MARTINEZ DE DAUAJARE

Petition for Writ of Mandamus Conditionally Granted and Memorandum
Opinion filed July 10, 2014.
In The
Fourteenth Court of Appeals
NO. 14-14-00256-CV
IN RE DAVID DAUAJARE-JOHNSON AND GABRIELA MARTINEZ DE
DAUAJARE, Relator
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
400th District Court
Fort Bend County, Texas
Trial Court Cause No. 13-DCV-208485
MEMORANDUM OPINION
On April 2, 2014, relators David Dauajare-Johnson and Gabriela Martinez
de Dauajare filed a petition for writ of mandamus in this Court. See Tex. Gov’t
Code Ann. § 22.221; see also Tex. R. App. P. 52. In the petition, relators ask this
Court to compel the Honorable Clifford J. Vacek, presiding judge of the 400th
District Court of Fort Bend County, to vacate his February 3, 2014 order denying
their motion to dismiss for forum non conveniens. We conditionally grant the
petition.
I. BACKGROUND
Pablo Rion Y Asociados, S.A. de C.V. (PRA), a Mexican corporation, sued
David Dauajare-Johnson and his wife, Gabriela Martinez de Dauajare, dual
citizens of Mexico and the United States in Fort Bend County. David and Gabriela
own homes in both Mexico and Montgomery County.1
PRA is a private investment-banking firm, which provides financial advisory
services to mid and large size private companies. PRA specializes in mergers and
acquisitions, investitures, joint ventures, strategic alliances, private equity raisings,
and public debt offerings.
David and his brother Daniel Dauajare, owned 50.88% of TBC de Mexico,
S.A. de C.V. (TBC Mexico). TBC Mexico is the largest private label tire
distributor in Mexico. TBC International, Inc., a Delaware corporation located in
Florida, owned the remaining 49.12% of TBC Mexico’s outstanding shares. TBC
International is a wholly owned subsidiary of TBC Corporation, which is a 60%
owned subsidiary of Sumitomo Corporation of America.
On January 3, 2008, David, as a representative of the majority shareholders
of TBC Mexico, and Saul Villa McDowell of PRA signed a commercial brokerage
agreement, under which PRA was granted the exclusive right to design and
implement a strategy to sell partially or totally the equity or assets of TBC Mexico
1
David and Gabriela formerly owned a home in Fort Bend County at the time PRA’s causes of
action purportedly arose.
2
(the January 3, 2008 brokerage agreement). Under the agreement, PRA was to
receive the greater of $350,000 or a success fee based on a percentage of the
transaction price.
PRA alleged that, prior to and after entering into the January 8, 2008
brokerage agreement, David represented to PRA that he and Daniel would not
enter into direct negotiations to dispose of their interests in TBC Mexico while
PRA was working in connection with the agreement.
PRA also alleged that it worked to establish a strategy for the sale of TBC
Mexico’s equity or assets, which included locating potential purchasers. In July
2008, PRA presented TBC Mexico, David, and Daniel with three offers. One of
the offers was $76 million for 100% of TBC Mexico by PalmFund and Linzor
Capital. TBC Mexico, David, and Daniel chose the PalmFund/Linzor offer and
instructed PRA to negotiate a closing of the deal. However, in September 2008,
due to the global financial crises that temporarily reduced TBC Mexico’s sales
volume and profitability, PalmFund/Linzor reduced its offer, and negotiations were
put on hold.
In early 2010, PRA revived negotiations with PalmFund/Linzor and
obtained an offer of $41 million for TBC Mexico. TBC Mexico, David, and
Daniel refused the offer, but on April 16, 2010, David represented that they would
accept $55 million. On May 10, 2010, PalmFund/Linzor offered $55 million to
purchase TBC Mexico. David, Daniel, and TBC Mexico increased the asking
price to $60 million, and then terminated the brokerage agreement effective May
29, 2010.
3
On September 1, 2010, David and Daniel sold half of their shares of TBC
Mexico—approximately 24% of TBC Mexico’s equity—to TBC International for
$13,810,009 and were granted a put option for the other half of their shares, which
was worth at least $13,810,000 (the September 1, 2010 option agreement).
According to PRA, David and Daniel transferred control of their shares in TBC
Mexico to TBC International through a series of steps, which eventually resulted in
the dilution of their participation in TBC Mexico and increased TBC
International’s participation.
On August 9, 2013, PRA sued David and Gabriela, for breach of contract for
David’s refusal to the consummate the sale with PalmFund/Linzor for $55 million
and for selling his TBC Mexico shares to TBC International. PRA also alleged
claims for quantum meruit, unjust enrichment, promissory estoppel, and fraud.
Relators filed a motion to dismiss for forum non conveniens in favor of Mexico.
On February 3, 2014, the trial court held a hearing and stated on the record that it
was denying the motion to dismiss for forum non conveniens, and signed an order
that day.2
2
Relators also filed a motion to transfer venue, original answer, and special exceptions.
At the February 23, 2014 hearing, the trial court announced that it was denying the motion to
transfer venue. PRA agreed to re-plead, adding more facts regarding the basis of liability against
Gabriela, adding specificity regarding which causes of action were pled against which defendant,
and adding more specificity regarding the fraud claim.
PRA filed a first amended original petition in which they asserted causes of action against
David for breach of the January 3, 2008 agreement, fraud, promissory estoppel, and quantum
meruit. PRA asserted a cause of action for unjust enrichment against Gabriela and alleged that
“some or all of the $13,810,000 paid to David Dauajare is being held in the United States and is
being used and enjoyed by defendant Gabriela Martinez de Dauajare. Due to community
property laws, half of the $13,810,000 is owned by Gabriela Dauajare.”
4
Relators filed their petition for writ of mandamus, asking that we compel the
trial court to vacate its February 3, 2014 order denying their motion to dismiss for
forum non conveniens, and grant the same.
II. WHICH TRANSACTION OR CONTRACT IS AT ISSUE
As an initial matter, the parties dispute which transaction or contract actually
forms the basis of PRA’s claims. The different positions form the parties’
arguments as to the forum non conveniens analysis. Relators contend the contract
at issue is the January 3, 2008 agreement that David signed as a representative of
the majority of TBC shareholders, and under which PRA would handle the sale of
David’s and Daniel’s shares of TBC Mexico. In its original petition, PRA alleged
that David “breached his contract with PRA by, among other things, refusing to
consummate the sale with PalmFund/Linzor for $55 million and entering into a
transaction for the sale of his shares to TBC International.” Therefore, according
to relators, this is a dispute between two Mexican companies that occurred in
Mexico.
PRA states that its original petition demonstrates that it is not asserting
claims against TBC Mexico for refusing to consummate the transaction. Instead,
PRA describes this as a dispute between PRA and relators regarding their
“backdoor dealings with TBC International, Inc.—a Delaware corporation
headquartered in Florida.” Therefore, according to PRA, the dispute primarily
involves David’s negotiations with TBC International regarding the purchase of
David’s and Daniel’s ownership interests in TBC Mexico—the September 10,
2010 agreement.
5
Contrary to PRA’s assertions that its original petition reflects that it is not
asserting claims for the failure to consummate the transaction with
PalmFund/Linzor, that is exactly what forms the basis of PRA’s complaint. PRA’s
breach of contract claim is clearly based on the January 3, 2008 brokerage
agreement—the contract to which PRA is a party and may sue to enforce. See
Heartland Holdings, Inc. v. U.S. Trust Co. of Tex. N.A., 316 S.W.3d 1, 7 (Tex.
App.—Houston [14th Dist.] 2010, no pet.) (“Generally, in order to enforce a
contract, a litigant must be either a party to that contract or an intended third-party
beneficiary.”). Thus, PRA’s complaints about the transfer of David’s and Daniel’s
TBC Mexico shares are really rooted in the purported breach of the January 3,
2008 brokerage agreement.
III. WHETHER THE TRIAL COURT APPLIED PERSONAL JURISDICTION PRINCIPLES
Relators claim the trial court abused its discretion and acted contrary to law
by basing its denial of their forum non conveniens motion on principles of personal
jurisdiction. See SXP Analytics, LLC, No. 14-11-01039-CV, 2012 WL 1357696(Tex. App.—Houston [14th Dist.] Apr. 13, 2012, orig. proceeding) (mem. op.)
(holding that, to the extent the trial court applied personal jurisdiction analysis
instead of forum non conveniens analysis, the trial court abused its discretion).
Relators cite to the following statement by the trial court at the February 3, 2014
hearing:
THE COURT: Well, counsel, y’all both made good arguments, but I
think that, with the defendants being residents here, citizens here, that
it’s just as convenient here as it is in Mexico, and, therefore, I’m
going to deny the motion to dismiss for forum non conveniens.
6
Thus, relators assert that the trial court treated the motion to dismiss as a
special appearance challenging personal jurisdiction, even though personal
jurisdiction was never contested, but is presumed to exist in the context of forum
non conveniens.
However, the hearing record reflects that counsel for both relators and PRA
argued about whether Mexico was a more convenient forum in accordance with the
forum non conveniens analysis. Moreover, the record does not clearly reflect that
the trial court based its ruling on personal jurisdiction principles. Even if the trial
court based its ruling on personal jurisdiction principles, the trial court, as
addressed below, abused its discretion by denying relators’ motion to dismiss
based on erroneous application of the forum non conveniens analysis.
IV. STANDARD OF REVIEW FOR FORUM NON CONVENIENS
An order denying a motion to dismiss for forum non conveniens is
reviewable on mandamus. In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 679 (Tex.
2007) (orig. proceeding). We review a trial court’s refusal to dismiss on forum
non conveniens grounds for an abuse of discretion. In re ENSCO Offshore Int’l
Co., 311 S.W.3d 921, 923 (Tex. 2010) (orig. proceeding) (per curiam). A trial
court clearly abuses its discretion if it reaches a decision so arbitrary and
unreasonable as to amount to a clear and prejudicial error of law, or if it clearly
fails to analyze the law correctly or apply the law correctly to the facts. In re
Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding)
(per curiam). An adequate remedy by appeal does not exist if the trial court
erroneously denies a motion to dismiss for forum non conveniens. In re Gen. Elec.
Co., 271 S.W.3d 681, 685 (Tex. 2008) (orig. proceeding).
7
Forum non conveniens is an equitable doctrine exercised by courts to
prevent the imposition of an inconvenient forum on a litigant. Exxon Corp. v.
Choo, 881 S.W.2d 301, 302 n.2 (Tex. 1994). A trial court will exercise the
doctrine of forum non conveniens when it determines that, for the convenience of
the parties and witnesses and in the interest of justice, the action should be
instituted in another forum. Id.A defendant seeking dismissal based on forum non conveniens “‘ordinarily
bears a heavy burden in opposing the plaintiff’s chosen forum.’” Quixtar, Inc. v.
Signature Mgmt. Team, LLC, 315 S.W.3d 28, 31 (Tex. 2010) (per curiam) (quoting
Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430 (2007)).
However, a nonresident plaintiff’s (such as PRA’s) choice of forum is afforded
substantially less deference under the forum non conveniens doctrine. Id. at
31−32.
IV. FORUM NON CONVENIENS ANALYSIS
A. Whether Mexico is an Alternative Forum
In the forum non conveniens analysis, the court must first determine that an
alternative forum exists. Vinmar Trade Fin., Ltd. v. Util. Trailers de Mexico, S.A.
de C.V., 336 S.W.3d 664, 674 (Tex. App.—Houston [1st Dist.] 2010, no pet.). An
alternative forum exists when it is both available and adequate. Id.
1. Available Forum
The foreign forum is available when the entire case and all the parties can
come within the jurisdiction of that forum. Id. Relators contend that Mexico is an
available forum because (1) PRA is a Mexican corporation, with its principal place
of business in Mexico, and is subject to the jurisdiction of Mexican courts; (2)
8
relators are both citizens of Mexico; and (3) the facts alleged by PRA would give
rise to claims under Mexican law that would fall within the jurisdiction of a court
in Mexico City; and (4) relators have stipulated to jurisdiction in Mexico.
PRA does not dispute that, as a Mexican corporation, with its principal place
of business in Mexico, it comes within the jurisdiction of Mexican courts. Instead,
PRA asserts that Mexican courts do not have jurisdiction over the dispute or
Gabriela. PRA submitted the “declaration” of its Mexican law expert, Jorge Jesus
Galicia Romero. Romero testified that Mexican courts generally do not have
jurisdiction over individuals not domiciled in Mexico, unless those individuals
have agreed to submit themselves to jurisdiction in Mexico. When contracting
parties do not expressly select the place of performance of the contract, Mexican
courts only have jurisdiction over defendants who are domiciled in Mexico.
Texas courts hold that another forum is available if the defendant submits to
the jurisdiction of the other forum. See, e.g., In re BPZ Resources, Inc., 359
S.W.3d 866, 873 (Tex. App.—Houston [14th Dist.] 2012, orig. proceeding [mand.
denied]) (“We conclude that Peru is an alternate forum in which this action may be
tried based upon relators’ agreement to submit to personal jurisdiction in Peru.”);
Vinson v. Am. Bureau of Shipping, 318 S.W.3d 34, 44 (Tex. App.—Houston [1st
Dist.] 2010, pet. denied) (holding that Singapore was an available forum because
evidence showed, among other things, that defendants had conditioned the forum
non conveniens dismissal upon their submitting to the jurisdiction of Singapore
courts); Sarieddine v. Moussa, 820 S.W.2d 837, 842 (Tex. App.—Dallas 1991,
writ denied) (holding that Abu-Dhabi was an available forum because the
defendant had submitted to jurisdiction there).
9
David and Gabriela each submitted an affidavit in which they stated that
they “are willing to appear in a court in Mexico and litigate this dispute.” Because
it is undisputed that relators have agreed to submit themselves to the jurisdiction of
a Mexican court, Mexico is an available forum. To the extent the trial court
decided that Mexico is not an available forum, the trial court abused its discretion.
2. Adequate Forum
For Mexico to be an alternative forum, it must also be an adequate forum.
“[A]n 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.” Pirelli Tire, L.L.C., 247 S.W.3d at 678
(quoting Vasquez v. Bridgestone/Firestone, Inc., 325 F.3d 665, 671 (5th Cir.2003))
(internal quotations omitted). The substantive law of the foreign forum is
presumed to be adequate unless the plaintiff makes some showing to the contrary,
or unless conditions in the foreign forum made known to the court, plainly
demonstrate that the plaintiff is unlikely to obtain basic justice there. Vinmar
Trade Fin., Ltd., 336 S.W.3d at 674.
Relator’s expert, Ignacio Pinto-Leon, testified that causes of action for
breach of contract, quantum meruit, unjust enrichment, promissory estoppel, and
fraud are “regulated and an adequate remedy is provided for each” under Mexican
law. Pinto-Leon stated remedies for each of these causes of action include
“material damages and moral damages.” Material damages are awarded to make
the prevailing plaintiff whole again. Moral damages are awarded to compensate
the victim for intangible losses suffered due to the defendant’s wrongful
misconduct. There is no cap on the amount of moral damages that a party may
10
recover, but Mexican law does not provide for punitive damages in either
contractual or extra-contractual liability cases.
Romero stated in his declaration, that “severe penalties, in the form of
mandatory attorney’s fees and costs, in an amount up to twenty percent of the
amount in controversy, could potentially be imposed on a plaintiff who improperly
files a lawsuit in Mexico.” Romero quoted Articles 135 and 140 of the Civil
Procedure Code for the State of San Lius Potosi in his declaration.3 Those
provisions merely provide that the losing party pays the attorney’s fees of the
prevailing party in the litigation. As Romero explained in his declaration, Mexican
courts have jurisdiction over individuals who are not domiciled in Mexico if such
individuals have agreed to submit to the Mexican courts. Both David and Gabriela
3
Article 135 provides:
Article 135. Attorneys fees and costs shall always be awarded, whether the
parties request them or not:
I. Against the litigator who does not obtain a favorable resolution, whether in the
main case or incidental cases which may arise;
II. Against that who fails to obtain a favorable result in appeal. In this case the
award shall encompass the fees and costs for the lower and appellate procedures .
. . .”
Article 140 provides
Article 140. Under no circumstances, regardless of the works performed and
expenses incurred in a case, may the attorneys fees and costs shall exceed twenty
percent of the amount in dispute; if the matter in dispute is not a given amount,
the judge shall, as a matter of Law, reduce the amount to the referred twenty
percent calculation by having the amount or value of the case appraised by
experts.
11
have agreed to submit to the jurisdiction of the Mexican courts. Thus, such
potential “penalties” do not render Mexico an inadequate forum.
In his declaration, Romero further explained that “Mexico made express
reservations in connection with Article 23 of the Hague Convention so that they
would be consistent with its Procedural Rules which do not allow for US style
pretrial proceedings.”4 Romero stated that PRA requires the pretrial depositions of
4
Article 23 states: “A Contracting State may at the time of signature, ratification or
accession, declare that it will not execute Letters of Request issued for the purpose of obtaining
pre-trial discovery of documents as known in Common Law countries.” Article 23 of the Hague
Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, Mar. 18, 1970,
23 U.S.T., T.IA.S. No. 7444. Romero quoted the following provision in his declaration: Romero
quoted the following provision in his declaration:
Preparation of pretrial proceedings
***
In connection with article 23 of the Convention, Mexico declares that, under its
law, only letters rogatory asking for the submission and transcript of documents
can be served when and if the following requirements are met:
(1) The procedure has already started (consequently, it prohibits the
pretrial), and
(2) The documents have been reasonably identified as to date, contents,
and other relevant information; they specify those events or circumstances that
reasonably allow the requiring party that the documents so requested are known to
the person from whom they are requested, or that they are or were in the hands or
under control or safeguard of such person.
The direct relation between the evidence or the information being requested and
the pending procedure should be identified.
Relators disagree with Romero and argue that the Article 23 opt-out provision precludes
the ability of a party in another country’s court from taking a deposition of a witness in Mexico
for use in proceedings in another country because Mexico does not recognize pretrial discovery
under its civil rules, but a party can obtain discovery in the U.S. for use in a Mexican proceeding.
Therefore, according to relators, the exception would actually preclude them from taking the
12
three TBC International executives—Lawrence Day, Timothy Miller, and Terry
Trantina—who reside in the United States, and PRA’s case will be severely
compromised without those pretrial depositions. The fact that Mexico does not
provide for “U.S.-style” pretrial discovery does not render Mexico an inadequate
forum. See Pirelli Tire, L.L.C., 247 S.W.3d at 678 (holding that Mexico was an
adequate forum, even assuming that it did not provide for “American-style”
discovery, in addition to not providing a cause of action for strict liability or
survival damages, and severely restricted damages for death). Moreover, PRA
does not contradict relators’ evidence that Mexico provides adequate remedies for
PRA’s causes of action. See id.
Whether Mexico is an adequate forum is a legal question. To the extent that
the trial court held that Mexico was not adequate forum, it failed to analyze the law
correctly and abused its discretion. Therefore, we conclude that relators have
shown that Mexico is an alternative forum.
B. Gulf Oil Private Interest Factors
If there is an alternative forum, the court then considers the private and
public interest factors set forth in Gulf Oil Corp v. Gilbert, 330 U.S. 501, 508–09
(1947). Texas courts apply the Gulf Oil factors to the forum non conveniens
analysis. Quixtar, Inc., 315 S.W.3d at 33−34; Pirelli Tire, L.L.C., 247 S.W.3d at
676−77. The private interest factors 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
depositions of key, non-party fact witnesses, who are all residents of Mexico and outside the
subpoena power of the trial court.
13
possibility of a view of the premises, if a 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. Gulf Oil
Corp., 501 U.S. at 508.
Requiring extensive investigation to produce evidence for the dismissal
hearing would defeat the purpose of the request for this type of dismissal. Quixtar,
Inc., 315 S.W.3d at 34. However, there needs to be enough information to enable
the trial court to balance the interests of the parties. Id. It not necessary for the
movant to prove that each Gulf Oil factor strongly favors dismissal. Id. at 33. The
court of appeals’ review does not encompass mechanically re-weighing the Gulf
Oil factors. Id. at 35.
1. Relative Ease of Access to Sources of Proof
Addressing the first factor—the relative ease of access to sources of proof—
relators assert most of the documents and witnesses relevant to PRA’s performance
under the January 3, 2008 brokerage agreement, the termination of the agreement,
the payments made by TBC Mexico to PRA, and various negotiations with
PalmFund/Linzor are located in Mexico. David stated in his affidavit that the
documents related to PRA’s work under the January 3 brokerage agreement, and
the September 1, 2010 transaction between the shareholders of TBC Mexico, to
which he would have access as an employee of TBC Mexico, are located at TBC
Mexico’s corporate headquarters in Mexico. Moreover, hard copies of the
documents would be in file cabinets, and electronic documents, including emails,
are stored on servers in that office. The majority of those documents are the
property of TBC Mexico. Communications regarding the PalmFund/Linzor
14
negotiations were sent from representatives of PalmFund/Linzor located in Mexico
or Chile to PRA and TBC Mexico’s offices in Mexico. The majority of PRA’s
communications with David were sent and received in Mexico. Many of the
communications, which were transmitted via email are in Spanish and would need
to be translated into English to be used in this case.
PRA contends that the relevant documents—those related to the transaction
transferring David’s and Daniel’s share of TBC Mexico to TBC International—are
in English and Spanish. Those documents include emails between David and TBC
International executives, who do not speak Spanish, and do not need translating if
the case stays in Texas.
David testified in his interrogatory responses that he has a laptop; PRA,
without citing evidence, asserts that, “presumably,” David can access his emails
and other relevant documents. Relators state that even if the documents related to
the transactions among TBC Mexico shareholders were relevant, those documents
have already been provided to PRA through Florida’s equivalent of a Rule 202
action.5 PRA does not dispute that it has already obtained the documents regarding
the sale of David’s and Daniel’s shares to TBC International.
According to the evidence presented by relators, most of the relevant
evidence is located in Mexico and is in Spanish. The cost of translating the
documents into English would be an extra expense.6
5
See Tex. R. Civ. P. 202 (providing for presuit depositions).
6
See DTEX, LLC v. BBVA Bancomer, S.A., 508 F.3d 785, 799 (5th Cir. 2007) (“Most of
the documents are in Spanish; obtaining and translating these documents would be burdensome,
time-consuming, and costly in this forum.”); Benz Grp. v. Barreto, 404 S.W.3d 92, 98 (Tex.
App.—Houston [1st Dist.] 2013, no pet.) (observing that “many of the relevant documents are
15
However, the relative ease of the access to sources of proof is a fact
question, and the trial court could have found that this factor did not favor
dismissal. We are prohibited from re-weighing this factor. See Quixtar, Inc., 315
S.W.3d at 35. Therefore, we cannot conclude that the trial court abused its
discretion if it found that the first private interest factor does not favor dismissal.
2. The Availability of Compulsory Process for Attendance of Unwilling
Witnesses, and the Cost of Obtaining Attendance of Willing Witnesses
As to the second factor—the availability of compulsory process for
attendance of unwilling witnesses, and the cost of obtaining attendance of willing
witnesses—relators contend that there are non-party witnesses they want to call at
trial, but who are in Mexico and outside the trial court’s subpoena power. See
ENSCO Offshore Int’l, Co., 311 S.W.3d at 926 (noting lack of compulsory process
in Texas (citing Tex. R. Civ. P. 176.3)). David stated in his affidavit that all of the
PRA representatives, with whom he had communications related to the January 3,
2008 brokerage agreement, are residents of Mexico. Pablo Rion and Saul Villa
McDowell, both of PRA, are residents of Mexico. Cipriano Santisteban, the
individual at PalmFund/Linzor with whom David had most of his communications
regarding the offer to purchase TBC Mexico, also resides in Mexico. Daniel, who
is a shareholder and officer of TBC Mexico, resides in Mexico, and has knowledge
of the negotiations related to the brokerage agreement, its performance, the
written in Portuguese, and litigation in Texas would require the additional expense of their
translation in English”); Vinmar Trade Fin., Ltd., 336 S.W.3d at 678 (“[T]he record shows that
many of the aforementioned documents are in Spanish, underlying communications in this case
were in Spanish, and the representatives of the three alleged co-conspirators are Spanish-
speaking. Thus, it also logically follows that litigating the case in Texas would necessitate the
expense of translation.”).
16
negotiations with PalmFund/Linzor, and the September 1, 2010 transaction among
the TBC Mexico shareholders. Finally, David testified that none of the people who
represented TBC International in the transaction among the existing TBC Mexico
shareholders are located in Texas.
With respect to the appearance of witnesses at trial, PRA contends that the
three TBC International executives are in Florida, and their depositions could not
be obtained for use in a trial in Mexico because Mexico has chosen to exempt itself
from the Hague Convention allowing for pretrial discovery. But if the trial were
held in Texas, PRA could obtain the depositions of the Florida witnesses in Florida
with a letters rogatory.
PRA further asserts that relators have not shown that Daniel, who is a U.S.
resident and owns property in the U.S., will not appear voluntarily at a trial in
Texas. As to Cipriano Santisteban, PRA produced an agreement for him to appear
in Texas.7 As to Saul Villa McDowell, PRA’s counsel stated in an affidavit that
“PRA agrees to pay for either: (1) defendant’s counsel (1 lawyer) to fly to Mexico
to depose Mr. McDowell; or (2) the flight and expense incurred in connection with
Mr. McDowell appearing in Texas to provide testimony in this matter.”
7
The agreement signed by Cipriano Santisteban states:
Upon plaintiff[’s] or defendants’ request, I agree to voluntarily appear in
Texas, at a mutually convenient time and place, to provide sworn testimony in the
litigation styled Pablo Rion y Asociados, S.A. de C.V. v. David Dauajare and
Gabriela Martinez de Dauajare, pending in the 400th Judicial District Court of
Fort Bend County, Texas.
A request for my appearance may be communicated through plaintiff’s
counsel, Daniel W. Jackson.
17
The witnesses who live in Florida are no more within the subpoena power of
the trial court in Texas than are the witnesses in Mexico.8 See Tex. R. Civ. P.
176.3. PRA has failed to explain what relevant testimony the TBC International
executives would provide in the underlying case. PRA does not explain by what
procedure Cipriano Santisteban’s agreement to appear and testify in Texas
litigation is enforceable, particularly when the Texas trial court does not have
subpoena power over Santisteban. Nor does PRA show how its agreement to pay
the expense of bringing Saul McDowell to Texas is enforceable for the same
reasons as to Santisteban.
Most of the relevant witnesses are in Mexico, and are not subject to the trial
court’s subpoena power in Texas. Nor are the three TBC International executives
subject to the trial court’s subpoena power. Whether witnesses are subject to
compulsory process is a question of law, and the trial court abused its discretion to
the extent that it concluded the Mexican witnesses or Florida witnesses were
subject to compulsory process in Texas. The second private interest factor favors
of dismissal.
3. The Possibility of a View of the Premises, if a View Would be Appropriate
to the Action
As to the third factor—the possibility of a view of the premises, if a view
would be appropriate to the action—relators argue that an inspection of TBC
Mexico’s operations by the parties’ experts would be required. According to
8
Relators contend that the Hague Convention allows testimony for use in a Mexican
proceeding to be taken from non-party witnesses located in the United States. Relators state that
the court of appeals in Vinmar sets forth how a party in a Mexican court can obtain the testimony
of a witness living in a foreign country. See 336 S.W.3d at 677. Vinmar, however, quoted the
expert opinion of one of the parties, who explained the procedure. Id.18
relators, because PRA alleges that its efforts to secure a higher offer price from
PalmFund/Linzor allowed David and Daniel to enhance the value of TBC Mexico
before entering into the restructuring agreement with TBC International, the
parties’ discovery and evidentiary presentations on the valuation of TBC Mexico
are at issue. TBC Mexico only has operations in Mexico, and sending a U.S.
expert to Mexico, or bringing a Mexican expert to Texas, would be expensive.
PRA complains that relators did not address the third factor in the trial court,
but waited to address it in their petition for writ of mandamus, and requests that
this court disregard relators’ argument in support of this factor. Relator waived
their argument on this factor by not raising it in the trial court. See In re Advance
Payroll Funding, Inc., 254 S.W.3d 710, 714 (Tex. App.—Dallas 2008, orig.
proceeding) (holding that arguments not presented to the trial court will not be
considered in a petition for writ of mandamus).
PRA, however, presented no evidence on this factor. Instead, PRA’s
counsel argued at the hearing that “There no evidence to potentially review
somewhere else, like a land deal, where we’d have to go kick the dirt and look at a
building.”
With neither party having presented evidence on the third private interest
factor, it does not weigh in favor of dismissal of the case or keeping it in Texas.
4. The Enforceability of a Judgment Once Obtained
As to the fourth factor—the enforceability of a judgment once obtained—
neither relators nor PRA address this factor. Therefore, the fourth private interest
factor does not weigh in favor of either dismissal of the case or keeping it in Texas.
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5. All Other Practical Problems that Make Trial of a Case, Easy, Expeditious,
and Inexpensive
As to the fifth factor—all other practical problems that make trial of a case
easy, expeditious, and inexpensive—PRA, relying on arguments of trial counsel at
the hearing, contends that if this case is maintained in Fort Bend County, it would
be easy to get depositions out of the three executives in Florida, whereas in
Mexico, PRA would not be able to subpoena these primary witnesses. As
discussed above, the Florida witnesses are not subject to the Texas trial court’s
subpoena power. See Tex. R. Civ. P. 176.3.
Moreover, most of the relevant evidence is located in Mexico and is in
Spanish. The need to translate documents into English will add to the cost, time,
and burden of trying the case in Texas. See DTEX, LLC, 508 F.3d at 801(explaining that the fact that most of the documents were in Spanish would have to
be translated if the case proceeded in Texas weighed in favor of dismissal in favor
of the Mexican forum under the fifth factor); Benz Grp., 404 S.W.3d at 98
(observing in application of private interest factors that translation of documents
from Portugese into English would be an additional expense if the case were
litigated in Texas). Also, most of the relevant witnesses are located in Mexico,
which adds to cost and burden of trying this case in Texas. See DTEX, LLC, 508
F.3d at 801 (concluding that the burden of having two American witnesses testify
in Mexico was far less than the costs and burdens of having the many Mexican
witnesses travel to Texas and weighed in favor of dismissal in favor of the
Mexican forum under the fifth factor); ENSCO Offshore Int’l Co., 311 S.W.3d at
926 (observing, in application of the fifth factor, that the cost of airfare from
Singapore or Australia to Dallas was five times more expensive than the cost of
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airfare between Australia and Singapore, and the travel time between Australia and
Singapore was five hours compared to over twenty hours for travel between
Australia or Singapore and Dallas). The additional cost and burden of translating
Spanish documents into English for trial in Texas and having Mexican witnesses
travel to Texas to appear at trial, assuming they would be willing to appear, renders
trial in Mexico easier and more expeditious and less expensive.
Whether the witnesses are subject to compulsory process in Texas is a
question of law. As addressed above, to the extent that the trial court held that the
Mexican and Florida witnesses are subject to the trial court’s subpoena power, it
abused its discretion. However, whether trial would be easy, expeditious, and
inexpensive because evidence is located in Mexico and would have to be translated
into English and it would cost more for witnesses located in Mexico to attend trial
is a fact issue, and the trial court did not abuse its discretion if it found that this did
not favor dismissal. Given this posture, the fifth private interest factor is neutral,
neither favoring nor disfavoring dismissal.
C. Gulf Oil Public Interest Factors
We now turn our attention to the public interest factors, which include: (1)
administrative difficulties flowing from court congestion; (2) the burden of jury
duty imposed on the citizens of the community with no relation to the litigation;
(3) local interest in having localized controversies decided at home; and (4) the
avoidance of unnecessary problems in conflicts of law, or in the application of
foreign law. Gulf Oil, 330 U.S. at 508–09. Based on relators’ assertion that the
fourth factor is the most important, we address it first.
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1. Avoiding Conflicts of Law Issues
Relators assert that the most significant public interest factor in this case is
the fourth factor—choice of law.9 Relators contend the forum non conveniens
analysis favors conducting the trial in a court that is familiar with the law that will
govern the case. See Gulf Oil, 330 U.S. at 509 (“There is an appropriateness, too,
in having the trial of a diversity case in a forum that is at home with the state law
that must govern the case, rather than having a court in some other forum untangle
problems in conflict of laws, and in law foreign to itself.”). Relators, thus, assert
that application of the “most significant relationship test” dictates the application
of Mexican law to PRA’s claims. See Duncan v. Cessna Aircraft Co., 665 S.W.2d
414, 421 (Tex. 1984) (applying RESTATEMENT (SECOND) OF CONFLICT OF LAWS
§ 6).10 In Duncan, the court adopted the most significant contacts method for
9
We cannot place emphasis on any one factor. See Quixtar, Inc., 315 S.W.3d at 34. “If
‘central emphasis were placed on any on factor, the forum non conveniens doctrine would lost
much of the flexibility that makes it so valuable.’” Id. (quoting Piper Aircraft Co. v. Reyno, 454
U.S. 235, 249−50 (1981)).
10
Section 6 of Restatement (Second) Conflicts of Law provides:
(1) A court, subject to constitutional restrictions, will follow a statutory directive
of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the
applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those
states in the determination of the particular issue,
(d) the protection of justified expectations,
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resolving conflicts of law in all cases “‘except those contract cases in which the
parties have agreed to a valid choice of law clause.’” Fairmont Supply Co. v.
Hooks Indus., Inc., 177 S.W.3d 529, 537 n.6 (Tex. App.—Houston [1st Dist.]
2005, pet. denied) (quoting Duncan, 665 S.W.3d at 421)).
Relators assert that the January 3, 2008 brokerage agreement was written,
executed, and performed in Mexico, not in Texas or anywhere else in the U.S. The
subject of the contract—TBC Mexico—is a Mexican company that operates
exclusively in Mexico. PRA is a Mexican corporation and David is a Mexican
citizen.
PRA, on the other hand, contends that Texas law applies because the dispute
is between a Mexican company and Texas residents concerning the sale of one of
the Texas resident’s stock to a Delaware corporation headquartered in Florida, and
includes David’s negotiations with TBC International concerning the purchase of
David’s and Daniel’s ownership interest in TBC Mexico.
This dispute is based on the breach of the January 3, 2008 brokerage
agreement, which was between Mexican parties and performed in Mexico.
Applying the section 6 factors, Mexico has an interest in deciding a dispute
between its own citizens, particularly where the performance of the subject contact
was to be in Mexico. Mexico has an interest in regulating parties doing business in
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
RESTATEMENT (SECOND) OF CONFLICTS OF LAWS § 6.
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Mexico. There is better predictability and uniformity in the result if the Mexican
courts apply Mexican law.
The application of the section 6 factors favors the application of Mexican
law to the underlying case, and a Mexican court is better suited to hear this dispute
in which Mexican law applies. One court of appeals has recognized that even the
possibility that foreign law applies to a dispute is sufficient to warrant dismissal on
forum non conveniens grounds. See Vinmar 336 S.W.3d at 679 (noting that the
federal courts have taken the position that the possibility of the application of
federal law is sufficient to warrant dismissal on forum non conveniens).
We conclude that Mexican law applies to the underlying dispute. Whether
the claims are governed by the laws of Mexico or the laws of Texas is a legal
question. Therefore, to the extent the trial court held that Texas law applied to this
case after conducting an analysis under the “most significant relationship test,” the
trial court abused its discretion for failing to analyze the law correctly. Therefore,
the fourth public interest factor favors of dismissal.
2. Administrative Difficulties
As to the first factor—administrative difficulties flowing from court
congestion—PRA’s counsel stated at the hearing, without presenting evidence on
this factor, that the trial court has done a “wonderful job” of processing cases, that
Fort Bend County has a new courthouse, and the electronic filing system is up and
running. Similarly, relators offered no evidence on this factor. The public interest
in minimizing administrative difficulties weighs in favor of dismissal in favor of a
Mexican forum due to the likely application of Mexican law. See DTEX, LLC, 508
F.3d at 802 (holding that, although the record contained no information as to
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relative court congestion, the public interest in minimizing administrative
difficulties weighed in favor of dismissal because of the likely application of
Mexican law, among other things). Even assuming the trial court concluded there
would be no court congestion by keeping this case in Fort Bend, because Mexican
law applies as a matter of law, this factor favors dismissal.
3. The Burden of Jury Duty Imposed on the Citizens of Community with No
Relation to the Litigation & Local Interest in Having Localized Controversies
Decided at Home
With regard to the second and third factors, this is essentially a Mexican
dispute with no relation to Texas. The citizens of Texas should not have to bear
the burden of hearing this dispute involving a Mexican contract to be performed in
Mexico by Mexican citizens. See Pirelli Tire, 247 S.W.3d at 676 (“[I]t is
fundamentally unfair to burden the people of Texas with the cost of providing
courts to hear cases that have no significant connection to the State.”). “Dismissal
based on forum non conveniens is appropriate when there are sufficient contacts
between the defendant and the forum state to confer personal jurisdiction on the
trial court, but the case itself has only insignificant connections to the forum.” SXP
Analytics, LLC, 2012 WL 1357696, at *2. The fact that David and Gabriela are
also U.S. citizens residing even a majority of the time in Texas does not bear on
the relation of the subject matter of the litigation to Texas. See ENSCO Offshore
Int’l Co., 311 S.W.3d at 927 (“[T]he fact that the trial court has jurisdiction over
the defendants because their offices are in Dallas is a separate issue from the
whether the case should be dismissed on forum non conveniens grounds.”).
Therefore, Texas does not have sufficient interest in hearing this dispute. To the
extent the trial court held that this case has a relationship to Texas—a question of
25
law—the trial court abused its discretion, and the second and third public interest
factors favor of dismissal.
The trial court abused its discretion to the extent that it found the second
private interest factor (the availability of compulsory process) and all the public
interest factors did not favor dismissal because the trial court failed to analyze the
law correctly or apply the law correctly to the facts. It was not necessary for
relators to prove that each Gulf Oil factor strongly favors dismissal, but there needs
to be enough information to enable the court to balance the interests of the parties.
Quixtar, Inc., 315 S.W.3d at 33−34. Each case turns on its own facts. Id. at 34.
Under the specific facts of this case, we conclude that the Gulf Oil private and
public interest factors favor dismissal in favor of a Mexican forum. Therefore, the
trial court abused its discretion in holding otherwise.
V. CONCLUSION
In sum, we hold that Mexico is an alternative forum because it is both
available and adequate and that the trial court abused its discretion by concluding
otherwise. We further hold that the trial court abused its discretion in finding that
the Gulf Oil factors favored keeping the case in Texas. Therefore, we conclude
that the trial court abused its discretion by not granting relators’ motion to dismiss
for forum non conveniens. Moreover, relators do not have an adequate remedy by
appeal. See In re Gen. Elec. Co., 271 S.W.3d at 685 (stating an adequate remedy
by appeal does not exist when the trial court erroneously denies a motion to
dismiss for forum non conveniens).
Accordingly, we conditionally grant relators’ petition for writ of mandamus
and direct the trial court to vacate its February 3, 2014 order denying relators’
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motion to dismiss for forum non conveniens and to dismiss the case on forum non
conveniens. The writ issue only if the trial court fails to act in accordance with this
opinion.
/s/ Tracy Christopher
Justice
Panel consists of Justices Christopher, Jamison, and McCally.
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