Shamoun & Norman, LLP v. Yarto International Group, LP

COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
13-11-00087-CV
SHAMOUN & NORMAN, LLP, ET AL., Appellants,
v.
YARTO INTERNATIONAL GROUP, LP AND
YIG-GP, LLC, Appellees.
13-11-00256-CV
SHAMOUN & NORMAN, LLP, ET AL., Appellants,
v.
ROBERT YARTO, ET AL., Appellees.
13-11-00281-CV
IN RE SHAMOUN & NORMAN, LLP, ET AL.
On Petition for Writ of Mandamus.
On appeal from the 332nd District Court
of Hidalgo County, Texas
OPINION ON REHEARING
Before Chief Justice Valdez and Justices Garza and Vela
Memorandum Opinion on Rehearing by Justice Garza
We grant in part and deny in part the motion for rehearing filed by
appellants/relators Shamoun & Norman, LLP, Gregory Shamoun and Brian Norman
(collectively “Shamoun”), vacate and withdraw our previous memorandum opinion and
judgment dated January 19, 2012, and issue the following in its place.
By two interlocutory appeals and a petition for writ of mandamus, Shamoun
challenges (1) the trial court’s order imposing an anti-suit injunction, and (2) its orders
denying two motions to transfer venue. We will deny the petition for writ of mandamus,
reverse the trial court’s judgment granting the anti-suit injunction, affirm the trial court’s
denial of the motions to transfer venue, and remand for further proceedings.
I. BACKGROUND
Shamoun, a law firm based in Dallas County, was sued by appellee/real party in
interest Robert Yarto on April 28, 2010 in Hidalgo County. Yarto asserted claims of
professional negligence, breach of fiduciary duty, and theft of trade secrets. Yarto’s
petition, which requested damages and injunctive relief, alleged that Shamoun
represented Yarto on several prior occasions but is “currently representing parties
adverse to [Yarto] on matters similar to those for which [it] had previously represented
[Yarto].” Yarto further alleged that Shamoun “illegally obtained confidential financial
documents and/or trade secrets belonging to [Yarto].” According to the petition,
2
Shamoun breached its fiduciary duty to Yarto by (1) “represent[ing] parties adverse to
[Yarto],” (2) “disclos[ing] confidential communications” to those adverse parties during a
2010 mediation in Travis County, and (3) “us[ing] illegally obtained documents to
[Yarto]’s detriment.” The petition also named Rhoderick Williams and Steven Winkler
as defendants.1
On April 29, 2010, Shamoun answered Yarto’s suit and filed a motion to transfer
venue. The answer contained a general denial of Yarto’s allegations and asserted
various affirmative defenses. The motion to transfer asserted that Dallas County or
Collin County was a proper venue for the litigation, and Hidalgo County was improper,
because: (1) the alleged tortious acts and omissions occurred in Dallas and/or Collin
Counties; (2) Shamoun maintains its principal place of business in those counties; and
(3) witnesses, documents, and evidence related to the case are located in those
counties.
The next day, Yarto’s suit was removed to bankruptcy court. The debtor in the
bankruptcy proceedings was YITC-GP, LLC (“YITC-GP”), a corporation set up to serve
as general partner of Yarto International Trading Group, L.P. (“YITC”). YITC and YITC-
GP, as well as two other entities, appellees/real parties in interest Yarto International
Group, L.P. (“YIG”), and YIG-GP, LLC (“YIG-GP”), were founded by Yarto but later
came to be owned and operated by Williams and Winkler.2 At the time the bankruptcy
proceedings commenced, YIG, YITC, Williams and Winkler were all represented by
Shamoun in various lawsuits involving Yarto and multiple third parties. All of those
1
Williams and Winkler are two of the adverse parties that Yarto claims Shamoun is representing
to his detriment. Williams and Winkler are not parties to the proceedings before this Court.
2
For ease of reference, YIG and YIG-GP will be referred to collectively as “YIG,” and YITC and
YITC-GP will be referred to collectively as “YITC.”
3
pending cases, along with Yarto’s suit against Shamoun, were removed to bankruptcy
court on April 30, 2010. See 28 U.S.C. § 1334(b) (stating that federal district courts
have “original but not exclusive jurisdiction of all civil proceedings . . . arising in or
related to cases under” the federal bankruptcy code); id. § 1452(a) (providing for
removal to bankruptcy court of claims related to bankruptcy cases).
Eventually, the parties agreed to settle their outstanding claims in exchange for
mutual releases. A global settlement agreement, drafted by Shamoun at the direction of
the parties, was executed on December 9, 2010. As part of the agreement, YIG agreed
to transfer certain assets to YITC; Williams and Winkler agreed to transfer ownership of
YIG to Yarto; and YITC pledged to pay more than $1.5 million in settlement payments to
various parties.3 The agreement further provided that: (1) YITC would release Yarto
from any and all claims related to the pending litigation; and (2) Yarto would release
YITC, along with its “past and present agents, representatives, officers, directors and
attorneys,” including Winkler and Williams, from any and all claims related to the
pending litigation, with one notable exception:
15. Shamoun Litigation. Nothing in this Agreement shall be construed as
a release of Shamoun by Yarto. The Parties hereby acknowledge and
agree that, with respect to any claim, lawsuit, complaint or proceeding
(whether judicial or otherwise) brought by any of the Yarto Parties [i.e.,
Yarto and YIG] . . . against Shamoun and/or any of its partners or affiliates
(in each case, a “Shamoun Claim”), (a) such Shamoun Claim shall be
brought in an appropriate state court located in Travis County, Texas, and
(b) none of the Yarto Parties . . . shall be permitted to bring a Shamoun
Claim in any court not located in Travis County, Texas. The parties
hereby acknowledge[] and agree that (y) Shamoun is and shall be
considered a third-party beneficiary[4] with respect . . . to [this] Agreement,
3
Specifically, the agreement called for YITC to make payments of $1,165,000 to JenRob
Investments, L.P., $300,000 to Compass Bank, and $312,500 to David Girault. Each of the specified
payees was involved in the pending litigation and each was a party and signatory to the settlement
agreement.
4
Shamoun was not a signatory to the settlement agreement, even though it was already a party
4
and (z) Shamoun shall have the right to directly enforce this provision . . .
on Shamoun’s own behalf.
The agreement stated that, upon execution of the settlement documents, Yarto’s suit
against Shamoun would be remanded from bankruptcy court to state district court.5 The
settlement agreement also contained the following paragraph:
27. SUBMISSION TO JURISDICTION. THE PARTIES HEREBY AGREE
THAT ANY AND ALL CLAIMS, ACTIONS, CAUSES OF ACTION, SUITS,
AND PROCEEDINGS RELATING TO THIS AGREEMENT OR THE
OTHER AGREEMENTS CONTEMPLATED HEREIN SHALL BE FILED
AND MAINTAINED ONLY IN AN APPROPRIATE STATE OR FEDERAL
COURT IN TRAVIS COUNTY, TEXAS, AND THE PARTIES HEREBY
CONSENT TO THE JURISDICTION OF SUCH COURT.
On December 1, 2010, after the settlement agreement had been negotiated but
prior to its execution, Shamoun sent a letter to Williams and Winkler addressing
Shamoun’s status theretofore as counsel of record for YIG. The letter stated:
Prior to the settlement, this firm provided services to the so-called YITC
Parties which, at the beginning, included [YIG]. Pursuant to the
Settlement Agreement, [YIG is] transferring certain assets to the YITC
parties and ownership of [YIG] will be transferred solely to the so-called
“Yarto Parties” side of the litigation. This letter is to confirm and clarify
that, this firm provided services only to the YITC Parties. With respect to
the Settlement Documents which provide that [YIG] will be transferred to
the Yarto Parties, this firm has not represented [YIG]. [YIG] further
acknowledge[s] that [it was] promptly made aware of this issue and [was]
advised of [its] right to retain separate counsel to advise [it] regarding the
YIG Settlement Documents and this letter.
[YIG] understand[s] that the YIG Settlement Documents were prepared
according to instructions of the YITC Parties and the final instructions from
the parties utilizing the YIG Settlement Documents and their attorneys at
the time of closing of the YIG Settlement Documents. No representations
have been made as to the legal effects or tax consequences of the YIG
Settlement Documents. Additionally, [YIG] acknowledge[s] that [it]
understand[s] that [Shamoun] has made no independent investigation,
to the underlying litigation at the time the agreement was reached.
5
The agreement also helpfully provided that Winkler and Williams, owners and operators of YITC
and YITC-GP, must change the names of those entities so that they do not include the word “Yarto.”
5
representation or assurance whatsoever regarding the compliance of the
contemplated transaction as evidenced by the YIG Settlement Documents
with tax, securities, or other law of the United States of America having
jurisdiction over this transaction.
[YIG] understand[s] that [Shamoun] is not employed for representation
generally or for any purpose in connection with the YIG Settlement
Documents other than that stated above. [YIG] acknowledge[s] that [it
has] read, understand[s], and hereby approve[s] of the YIG Settlement
Documents.
The letter was countersigned by Williams and Winkler as representatives of YIG.
After the settlement agreement was executed, the bankruptcy court remanded
Yarto’s suit to state district court in Hidalgo County. Yarto and Shamoun were the only
parties remaining in the pending litigation. On December 29, 2010, Yarto filed an
“Agreed Motion to Transfer Venue” in which he conceded that he “agreed in the
settlement agreement to prosecute his remaining claims against [Shamoun] solely in
Travis County, Texas.” The motion was signed by counsel for both Yarto and
Shamoun.
However, on January 19, 2011, before the trial court heard or ruled upon the
agreed motion to transfer, YIG intervened in the case. Its petition in intervention, sworn
to by Yarto as an authorized representative of YIG, asserted that Shamoun committed
professional negligence and breached its fiduciary duty by, among other things: (1)
representing parties adverse to YIG; (2) disclosing confidential communications
involving YIG; and (3) “conspir[ing] with others to divest [YIG] of valuable and lucrative
assets, leaving [YIG] devoid of all assets.” YIG additionally alleged that Shamoun
“represent[ed] [YIG] in the course of the global settlement, and extracted terms and
conditions of settlement for the benefit of [Shamoun] and to the detriment of [YIG].” The
petition stated that “[v]enue is proper as to [YIG] because all or a substantial part of the
6
acts and/or omissions complained of occurred in Hidalgo County . . . and [YIG’s] claims
arise from the same set of operative facts as [Yarto]’s claims.” YIG’s petition in
intervention sought damages as well as injunctive relief, claiming that Shamoun “ha[s]
already demonstrated the propensity to avoid this proper venue [Hidalgo County district
court] at any cost, including the filing of frivolous pleadings and proceedings.” YIG
requested an anti-suit injunction, noting that Shamoun had already brought suit against
it in Dallas County and arguing that “there is an imminent threat of irreparable harm that
[Shamoun] will, once again, attempt to avoid this proper venue by filing additional
frivolous pleadings or proceedings in one or more different venues.”
After YIG filed its petition in intervention, Shamoun filed an amended motion to
transfer arguing that the action should be transferred either to Travis County or Dallas
County. The amended motion contended that Travis was a proper venue because
Yarto “entered into a valid, binding contractual agreement to place venue in Travis
County” and “the alleged acts of which [Yarto] complains occurred, if at all, in Travis
County. . . .”
The trial court granted YIG’s request for a temporary restraining order and, after
a hearing on January 27, 2011, the trial court granted the requested temporary anti-suit
injunction. Both orders enjoined Shamoun from “filing, initiating, serving any process,
[or] continuing any litigation against [YIG and YIG-GP or their] employees, agents and
representatives in any other court or forum unless leave of this Court is first obtained.”
Shamoun appealed the temporary injunction order.6 See TEX. CIV. PRAC. & REM. CODE
ANN. § 51.014(a)(4) (West 2008) (permitting appeal from interlocutory order granting
6
Appellate cause number 13-11-00087-CV.
7
temporary injunction).
At the January 27, 2011 hearing, the trial court was advised that Yarto’s “Agreed
Motion to Transfer Venue” and Shamoun’s separately-filed motion to transfer were still
pending. A hearing was held on the venue issue on March 10, 2011. On March 31,
2011, the trial court rendered an order denying Shamoun’s motion to transfer venue,
and it later denied the “Agreed Motion to Transfer Venue” filed by Yarto. 7 Shamoun
appealed the trial court’s judgment,8 see id. § 15.003(b)(1) (West Supp. 2010)
(permitting appeal of interlocutory order determining that a plaintiff independently
established proper venue), and filed a petition for writ of mandamus.9
II. DISCUSSION
A. Anti-Suit Injunction
In appellate cause number 13-11-00087-CV, Shamoun argues that the trial court
erred by granting YIG’s request for a temporary anti-suit injunction.
1. Standard of Review
Whether to grant or deny a temporary injunction is within the trial court’s sound
discretion. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002) (citing Walling
v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993); State v. Walker, 679 S.W.2d 484, 485 (Tex.
7
On original submission, we noted that the trial court had not ruled on the “Agreed Motion to
Transfer” and that it in fact had “indicated unequivocally that it does not intend to rule on the motion.” We
therefore directed the trial court to rule on the motion. The trial court did so on February 28, 2012, and a
supplemental clerk’s record containing the trial court’s written order denying the motion was filed with this
Court on March 6, 2012.
8
Appellate cause number 13-11-00256-CV.
9
Appellate cause number 13-11-00281-CV. Shamoun filed a second petition for writ of
mandamus on March 15, 2012, appellate cause number 13-12-00179-CV, contending that the trial court
erred in apparently concluding that Yarto withdrew his consent to transfer. However, we will conclude
that the trial court was not compelled to transfer venue even if Yarto failed to withdraw his consent to
transfer. See infra section II.B.3.i and n.20. Accordingly, we will, in a separate opinion, deny Shamoun’s
petition in appellate cause number 13-12-00179-CV.
8
1984)). We will reverse an order granting injunctive relief only if the trial court abused
that discretion. Id. (citing Walling, 863 S.W.2d at 58; Walker, 679 S.W.2d at 485).
2. Applicable Law
In general, the purpose of a temporary injunction is to preserve the status quo of
the litigation’s subject matter pending a trial on the merits. Id. An anti-suit injunction, in
particular, will issue “only in very special circumstances.” Golden Rule Ins. Co. v.
Harper, 925 S.W.2d 649, 651 (Tex. 1996) (citing Christensen v. Integrity Ins. Co., 719
S.W.2d 161, 163 (Tex. 1986); Gannon v. Payne, 706 S.W.2d 304, 306 (Tex. 1986)). An
applicant for an anti-suit injunction must show that “a clear equity demands” such relief
in order to: (1) address a threat to the court’s jurisdiction; (2) prevent the evasion of
important public policy; (3) prevent a multiplicity of suits; or (4) protect a party from
vexatious or harassing litigation. Id. (citing Christensen, 719 S.W.2d at 163; Gannon,
706 S.W.2d at 307). We have stated that the majority rule in Texas is that a party
seeking an anti-suit injunction must satisfy the traditional prerequisites to injunctive relief
as well as the more specific requirements applicable only to anti-suit injunctions. See
Yarto v. Gilliland, 287 S.W.3d 83, 88 n.8 (Tex. App.—Corpus Christi 2009, no pet.)
(listing cases); see also Counsel Fin. Servs., L.L.C. v. Leibowitz, No. 13-10-00200-CV,
2011 Tex. App. LEXIS 5079, at *32–33 (Tex. App.—Corpus Christi July 1, 2011, no
pet.) (mem. op.); Freddie Records, Inc. v. Ayala, No. 13-07-00363-CV, 2009 Tex. App.
LEXIS 7681, at *12 (Tex. App.—Corpus Christi Sept. 30, 2009, no pet.) (mem. op.).10
10
Though a majority of courts have held that an anti-suit injunction applicant must meet the
traditional requirements for injunctive relief, there remains conflict and confusion over this issue. See,
e.g., Bay Fin. Sav. Bank v. Brown, 142 S.W.3d 586, 591 (Tex. App.—Texarkana 2004, no pet.) (holding
that anti-suit injunctions must also comply with requirements provided in rules of civil procedure);
Marroquin v. D & N Funding, Inc., 943 S.W.2d 112, 114 (Tex. App.—Corpus Christi 1997, no pet.)
(assessing whether a trial court erred in denying request for an anti-suit injunction by assessing whether
party had pleaded and proven a probable injury if relief was denied and a probable right to recovery);
9
Those traditional prerequisites are: (1) a cause of action against the defendant; (2) a
probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in
the interim. Butnaru, 84 S.W.3d at 204 (citing Walling, 863 S.W.2d at 57; Sun Oil Co. v.
Whitaker, 424 S.W.2d 216, 218 (Tex. 1968)).
In the context of a request for temporary injunctive relief, a probable right to
recovery and probable injury must be established by competent evidence adduced at a
hearing. Millwrights Local Union No. 2484 v. Rust Eng’g Co., 433 S.W.2d 683, 686
(Tex. 1968); see Armendariz v. Mora, 526 S.W.2d 542, 543 (Tex. 1975); see also
Compass Bank v. Barrera, No. 13-10-00529-CV, 2011 Tex. App. LEXIS 1558, at *7–8
(Tex. App.—Corpus Christi Mar. 3, 2011, no pet.) (mem. op.); McDaniel v. Connelly, No.
13-08-230-CV, 2008 Tex. App. LEXIS 5119, at *2–3 (Tex. App.—Corpus Christi July 3,
2008, pet. denied) (mem. op.).11 However, a sworn petition does not constitute
Total Minatome Corp. v. Santa Fe Materials, Inc., 851 S.W.2d 336, 339 (Tex. App.—Dallas 1993, no writ)
(holding that “clear equity” justifying an anti-suit injunction requires showing of irreparable injury,
inadequate remedy at law, and probable right of recovery); but see, e.g., In re Henry, 274 S.W.3d 185,
193–94 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (op. on reh’g) (rejecting contention that a party
seeking an anti-suit injunction is also required to establish a probable right of recovery in the underlying
lawsuit, irreparable harm, and that no adequate remedy at law exists); Admiral Ins. Co. v. Atchison,
Topeka & Santa Fe Ry. Co., 848 S.W.2d 251, 258 (Tex. App.—Fort Worth 1993, writ denied) (rejecting
contention that a person seeking an anti-suit injunction must establish a probable right to recovery on the
merits). The Texas Supreme Court has not explicitly ruled on this issue; however, in 2005, the Court
addressed only the requirements specific to anti-suit injunctions in affirming the issuance of such an
injunction. See Gonzalez v. Reliant Energy, Inc., 159 S.W.3d 615, 623 (Tex. 2005).
We need not decide whether the traditional injunction requirements apply to anti-suit injunctions
because, even assuming they do not apply, YIG has still failed to meet its burden because it did not
produce any evidence on the requirements specific to anti-suit injunctions.
11
More than half a century ago, the Texas Supreme Court explained why competent evidence is
required to support a request for temporary injunction:
An applicant for a temporary injunction seeks extraordinary equitable relief. He seeks to
immobilize the defendant from a course of conduct which it may well be his legal right to
pursue. Crowded dockets, infrequent jury trial weeks, or trial tactics can often delay a
trial of a case on its merits for many months. The applicant has, and in equity and good
conscience ought to have, the burden of offering some evidence which, under applicable
rules of law, establishes a probable right of recovery. If not, no purpose is served by the
provisions of Rule 680, [Texas Rules of Civil Procedure], limiting the time for which a
restraining order granted without a hearing can operate and requiring a hearing before a
10
evidence. Millwrights Local Union No. 2484, 433 S.W.2d at 686; Rogers v. Howell, 592
S.W.2d 402, 403 (Tex. Civ. App.—Dallas 1979, writ ref’d n.r.e.); see also Compass
Bank, 2011 Tex. App. LEXIS 1558, at *9. Further, in the absence of an agreement
between the parties, the proof required to support a judgment issuing a temporary
injunction may not be made by affidavit. Millwrights Local Union No. 2484, 433 S.W.2d
at 686; but see Pierce v. State, 184 S.W.3d 303, 307 (Tex. App.—Dallas 2005, no pet.)
(holding that “a trial court may issue a temporary injunction based on affidavit testimony
admitted into evidence at the hearing thereon”) (emphasis in original). And, “remarks of
counsel during the course of a hearing are not competent evidence unless the attorney
is actually testifying.” Bay Fin. Sav. Bank, FSB v. Brown, 142 S.W.3d 586, 590 (Tex.
App.—Texarkana 2004, no pet.); see Collier Servs. Corp. v. Salinas, 812 S.W.2d 372,
377 (Tex. App.—Corpus Christi 1991, orig. proceeding); see also Compass Bank, 2011
Tex. App. LEXIS 1558, at *10.
3. Analysis
Two hearings were held on YIG’s request for injunctive relief. The first hearing
took place on January 19, 2011, the same day that YIG filed its petition in intervention
and request for injunctive relief. Counsel for YIG appeared in person and Gregory
Shamoun appeared personally by telephone. No witnesses were called, no evidence
was admitted, and the attorneys were not sworn and did not testify. Shamoun
explained to the trial court that he had not yet been served with YIG’s petition or request
for injunctive relief and so could not agree to a temporary restraining order enjoining
temporary injunction can issue. If he cannot or does not discharge his burden he is not
entitled to extraordinary relief. Writs of injunction should not issue on mere surmise.
Camp v. Shannon, 162 Tex. 515, 519, 348 S.W.2d 517, 519 (1961).
11
Shamoun from filing suit against YIG.12 The trial court granted the temporary restraining
order and scheduled a temporary injunction hearing for the following week. See TEX. R.
CIV. P. 680 (“Every restraining order shall include an order setting a certain date for
hearing on the temporary or permanent injunction sought.”).
The temporary injunction hearing took place on January 27, 2011. Counsel for
Yarto, YIG, and Shamoun all appeared in person and offered arguments. Again, no
witnesses were called and no sworn testimony was given by the attorneys. During the
course of the hearing, six documents were accepted as exhibits by the trial court. YIG
offered four documents: (1) Yarto’s motion for remand filed in bankruptcy court; (2) a
prior temporary anti-suit restraining order issued in a separate case on March 31, 2010,
which enjoined YIG, YITC, Winkler, Williams, and others from filing suit against Yarto;
(3) an order extending that temporary restraining order; and (4) a transcript of the
January 19, 2011 telephonic hearing. Counsel for Shamoun introduced: (1) Shamoun’s
December 1, 2010 letter to Williams, Winkler, and others addressing Shamoun’s status
up until that point as counsel of record for YIG; and (2) a “Partial Release Agreement”
executed by Yarto, dated December 6, 2010, in which Yarto “and his attorneys, heirs
and assigns” agreed to release Shamoun from any and all claims related to the drafting
of settlement documents, with the exception of Yarto’s then-existing claim. Other than
the “Partial Release Agreement,” which was sworn to by Yarto, none of the six
documents that were accepted by the trial court as exhibits contained sworn
12
At the January 27, 2011 temporary injunction hearing and on appeal, YIG points to Shamoun’s
reluctance to agree to a temporary restraining order as evidence that Shamoun intended to file suit
against YIG in another venue, and therefore that YIG would suffer irreparable harm if the injunction did
not issue. However, the statements made by Shamoun’s counsel at the hearing are not evidence
because Shamoun was not sworn. See Bay Fin. Sav. Bank, FSB v. Brown, 142 S.W.3d 586, 590 (Tex.
App.—Texarkana 2004, no pet.).
12
verifications. After the hearing, the trial court granted YIG’s request for a temporary
injunction barring Shamoun from filing suit against YIG in any other venue.
On appeal, Shamoun argues that the trial court erred by granting the injunction
because YIG “failed to meet any evidentiary burden placed on them” by rule or case
law. 13 We agree. As noted, an applicant for injunction must establish its probable right
to recovery and a probable injury by competent evidence adduced at a hearing.
Millwrights Local Union No. 2484, 433 S.W.2d at 686. Here, no witnesses presented
sworn testimony at either the January 11 or January 27 hearings. Moreover, the
documents which were introduced by YIG as exhibits at the January 27 hearing were
not authenticated by testimony, nor were they self-authenticating by virtue of being
sworn to or verified.14 The only “evidence” upon which the trial court based its ruling
was YIG’s sworn petition, the argument of counsel, and the six documents accepted as
exhibits at the hearing. This was, in effect, no evidence. See id.; Bay Fin. Sav. Bank,
FSB, 142 S.W.3d at 590; see also Compass Bank, 2011 Tex. App. LEXIS 1558, at *9–
10.15 Accordingly, the trial court abused its discretion by granting the anti-suit
13
At oral argument, YIG asserted that Shamoun waived this issue by failing to present it to the
trial court. See TEX. R. APP. P. 33.1. However, Shamoun’s complaint is essentially that there was legally
insufficient evidence to support the trial court’s order granting the injunction; and, “[i]n a nonjury case, a
complaint regarding the legal or factual insufficiency of the evidence . . . may be made for the first time on
appeal in the complaining party’s brief.” TEX. R. APP. P. 33.1(d). We therefore reject YIG’s contention
that the issue was waived.
14
The general rule established in Millwrights is that, in the absence of an agreement between the
parties, the proof required to support a temporary injunction may not be made by affidavit. Millwrights
Local Union No. 2484 v. Rust Eng’g Co., 433 S.W.2d 683, 686 (Tex. 1968). We note, however, that the
Dallas Court of Appeals held in 2005 that “a trial court may issue a temporary injunction based on affidavit
testimony admitted into evidence at the hearing thereon.” Pierce v. State, 184 S.W.3d 303, 307 (Tex.
App.—Dallas 2005, no pet.) (emphasis in original). We do not herein approve or disapprove of Pierce,
but instead merely note that, in any event, YIG did not introduce any affidavits or other verified documents
as evidence at either injunction hearing.
15
YIG notes that, in a 2005 memorandum opinion, this Court found evidence supporting a
temporary injunction to be sufficient, even in the absence of live testimony, where court documents had
been judicially noticed by the trial court. See Tex. Mut. Ins. Co. v. Howell, No. 13-05-026-CV, 2005 Tex.
13
injunction. See Millwrights Local Union No. 2484, 433 S.W.2d at 686; see also
Operation Rescue-Nat’l v. Planned Parenthood of Houston & Se. Tex., 975 S.W.2d 546,
560 (Tex. 1998) (“[A] trial court has no discretion to grant injunctive relief . . . without
supporting evidence.”). We sustain Shamoun’s issue in appellate cause number 13-11-
00087-CV.
B. Interlocutory Appeal of Venue Determination
In appellate cause number 13-11-00256-CV, Shamoun argues that the trial court
erred by denying its motion to transfer venue because Yarto and YIG did not
“independently establish venue as required under [Texas Civil Practice and Remedies
Code section] 15.003(a).” See TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(a).
1. Jurisdiction
Citing the Texas Supreme Court’s 2000 opinion in American Home Products
Corp. v. Clark, Yarto contends that we lack jurisdiction to consider Shamoun’s appeal
regarding venue because the statute upon which the appeal is based, section 15.003,
applies only to orders “allowing or denying intervention or joinder.” See 38 S.W.3d 92,
96 (Tex. 2000). However, the Legislature amended section 15.003 in 2003. See Act of
June 11, 2003, 78th Leg., R.S., ch. 204, § 3.03, 2003 TEX. SESS. LAW SERV. 847, 853.
Section 15.003(a) now applies to any “suit in which there is more than one plaintiff,”
whether the plaintiffs are included “by joinder, by intervention, because the lawsuit was
App. LEXIS 6950, at *22–23 (Tex. App.—Corpus Christi Aug. 25, 2005, pet. granted, judgm’t vacated
w.r.m.) (mem. op.). Here, however, the record reflects that the trial court never formally took judicial
notice of the various documents produced at the January 27, 2011 hearing. Moreover, while this Court
may take judicial notice of court documents on appeal, see Office of Pub. Util. Counsel v. Pub. Util.
Comm’n, 878 S.W.2d 598, 600 (Tex. 1994), no such request was made by any party in this case.
Accordingly, the documents cannot by themselves be considered competent evidence supporting the
temporary injunction order.
14
begun by more than one plaintiff, or otherwise.” TEX. CIV. PRAC. & REM. CODE ANN. §
15.003(a). The statute states that, in such suits,
each plaintiff must, independently of every other plaintiff, establish proper
venue. If a plaintiff cannot independently establish proper venue, that
plaintiff's part of the suit, including all of that plaintiff's claims and causes
of action, must be transferred to a county of proper venue or dismissed, as
is appropriate, unless that plaintiff, independently of every other plaintiff,
establishes that:
(1) joinder of that plaintiff or intervention in the suit by that plaintiff is
proper under the Texas Rules of Civil Procedure;
(2) maintaining venue as to that plaintiff in the county of suit does not
unfairly prejudice another party to the suit;
(3) there is an essential need to have that plaintiff's claim tried in the
county in which the suit is pending; and
(4) the county in which the suit is pending is a fair and convenient venue
for that plaintiff and all persons against whom the suit is brought.
Id. The amended statute applies to any action filed on or after September 1, 2003. Act
of June 11, 2003, 78th Leg., R.S., ch. 204, § 23.02(d), 2003 TEX. SESS. LAW SERV. 847,
899.
Subsection (b) of section 15.003 allows an interlocutory appeal of a trial court’s
determination that (1) a plaintiff did or did not independently establish proper venue, or
(2) a plaintiff that did not independently establish proper venue did not establish the four
requirements specified in subsection (a). Id. § 15.003(b).16 Other appellate courts have
concluded, and we agree, that under the revised statute, interlocutory appeals are
16
Prior to this amendment, the statute read as follows:
Any person seeking intervention or joinder, who is unable to independently establish
proper venue, or a party opposing intervention or joinder of such a person may contest
the decision of the trial court allowing or denying intervention or joinder by taking an
interlocutory appeal to the court of appeals district in which the trial court is located under
the procedures established for interlocutory appeals. . . .
Act of May 18, 2005, 74th Leg., R.S., ch. 138, § 1, 1995 TEX. SESS. LAW SERV. 978, 979 (amended 2003).
15
available for venue determinations in any case involving multiple plaintiffs. See Crown
Cent. LLC v. Anderson, 239 S.W.3d 385, 388 (Tex. App.—Beaumont 2007, pet. denied)
(permitting interlocutory appeal under section 15.003 of order denying defendants’
motion to transfer venue in case involving multiple plaintiffs); see also Thomas v.
Hoelke, No. 04-09-00771-CV, 2010 Tex. App. LEXIS 4501, at *4–5 (Tex. App.—San
Antonio June 16, 2010, no pet.) (mem. op.) (same); Siemens Corp. v. Bartek, No. 03-
04-00613-CV, 2006 Tex. App. LEXIS 3533, at *11 (Tex. App.—Austin Apr. 28, 2006, no
pet.) (mem. op.) (same); Sw. Bell Tel. Co. v. Superior Payphones, Ltd., No. 13-05-
00661-CV, 2006 Tex. App. LEXIS 1502, at *7 (Tex. App.—Corpus Christi Feb. 23,
2006, pet. dism’d by agr.) (mem. op.)17; but see Harding Bars, LLC v. McCaskill, No. 04-
11-00629-CV, 2012 Tex. App. LEXIS 799, at *4–5 (Tex. App.—San Antonio Feb. 1,
2012, no pet. h.); Basic Energy Svcs. GP, LLC v. Gomez, No. 04-10-00128-CV, 2010
Tex. App. LEXIS 5455, at *7–8 (Tex. App.—San Antonio July 14, 2010, pet. denied)
17
In Southwestern Bell Telephone Co. v. Superior Payphones, Ltd., this Court considered
whether we had jurisdiction to review an interlocutory order denying a motion to transfer. No. 13-05-
00661-CV, 2006 Tex. App. LEXIS 1502, at *5–7 (Tex. App.—Corpus Christi Feb. 23, 2006, pet. dism’d by
agr.) (mem. op.). The trial court’s order did not specify whether the motion was denied “because
appellees independently established proper venue or because they met the joinder requirements of
section 15.003(a).” Id. at *5. The appellees argued that “if the former is the basis for the court's ruling,
then we do not have jurisdiction over this appeal” but “[i]f the latter rationale is relied upon, . . . then we
may have jurisdiction over the appeal.” Id. at *5–6. In rejecting appellees’ argument, we noted that
“[s]ection 15.003(a) now applies to any ‘suit in which there is more than one plaintiff,’ whether the
plaintiffs are included ‘by joinder, by intervention, because the lawsuit was begun by more than one
plaintiff, or otherwise.’” Id. at *6 (quoting TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(a)). We therefore
concluded that “interlocutory appeals are available in all venue determinations involving multiple plaintiffs
where joinder is challenged.” Id. at *7 (emphasis added).
Although we stated in Southwestern Bell that interlocutory appeals of venue rulings are available
in cases “where joinder is challenged,” we did not intend to imply by those words that such appeals are
only available in that instance. Instead, as we recognized, the 2003 statute permits interlocutory appeals
of venue rulings “in any ‘suit in which there is more than one plaintiff,’” id. at *6 (quoting TEX. CIV. PRAC. &
REM. CODE ANN. § 15.003(a)) (emphasis added), not merely suits in which a plaintiff has been included by
joinder. It would be erroneous, then, to infer from our conclusory sentence in Southwestern Bell that,
under the 2003 statute, interlocutory appeals of venue rulings are only available “where joinder is
challenged.”
16
(mem. op.).18 We further believe that the specific language in section 15.003
authorizing an interlocutory appeal in this particular type of case trumps the more
generic language in section 15.064 stating broadly that “[n]o interlocutory appeal shall
lie from the determination [of venue questions].” TEX. CIV. PRAC. & REM. CODE ANN. §
15.064(a) (West 2002); see City of Waco v. Lopez, 259 S.W.3d 147, 153 (Tex. 2008)
18
In Gomez, as in Southwestern Bell, the trial court denied a defendant’s motion to transfer but
did not specify whether the denial was “because [each of the plaintiffs] independently established proper
venue pursuant to section 15.002 or because [the plaintiffs] met the joinder requirements pursuant to
section 15.003.” No. 04-10-00128-CV, 2010 Tex. App. LEXIS 5455, at *7 (Tex. App.—San Antonio July
14, 2010, pet. denied) (mem. op.). On appeal, the San Antonio court reversed and remanded to the trial
court for a revised order specifying the basis for the ruling, finding that “if section 15.002 is the basis for
the trial court’s ruling denying the motion to transfer venue, then we do not have jurisdiction over this
appeal. . . . On the contrary, if section 15.003 is the basis for the trial court’s ruling . . . , then we have
jurisdiction to hear the interlocutory appeal.” Id. at *7–8. In support of this conclusion, the court cited
Clark, 3 S.W.3d 57, 58 (Tex. App.—Waco 1999, no pet.), and dubiously suggested that section 15.003(c)
permits an interlocutory appeal only where a “plaintiff who was included by joinder or intervention cannot
independently establish proper venue.” Gomez, 2010 Tex. App. LEXIS 5455, at *7–8.
In McCaskill, the San Antonio court determined that it did not have jurisdiction under section
15.003 to consider an interlocutory appeal of an order denying a motion to transfer because “[i]t is clear
from the motions to transfer venue that the appellants’ complaints focused primarily on the choice of
Maverick County as the county of venue and not on whether [plaintiffs] the Viescas could intervene or join
the lawsuit as plaintiffs.” Harding Bars, LLC v. McCaskill, No. 04-11-00629-CV, 2012 Tex. App. LEXIS
799, at *7 (Tex. App.—San Antonio Feb. 1, 2012, no pet.). The court cited Clark and Electronic Data
Systems Corp. v. Pioneer Electronics (USA) Inc., 68 S.W.3d 254, 257 (Tex. App.—Fort Worth 2002, no
pet.), for the proposition that section 15.003’s “limited right of appeal applies only to a trial court’s
determination that a plaintiff may or may not intervene or join in the suit.” McCaskill, 2012 Tex. App.
LEXIS 799, at *4. The court also cited Surgitek v. Abel, 997 S.W.2d 598, 601 (Tex. 1999), for the
proposition that interlocutory appellate jurisdiction lies only when the challenged order “necessarily rested
on the trial court’s determination of the propriety of joinder under section 15.003(a).” McCaskill, 2012
Tex. App. LEXIS 799, at *7–8.
We disagree with McCaskill and Gomez because those cases rely on obsolete authority. Clark,
Electronic Data Systems Corp., and Surgitek each construed the pre-2003 version of the statute.
Moreover, the current version of section 15.003(c) does not limit appeals in the manner suggested by
Gomez. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(c); Gomez, 2010 Tex. App. LEXIS 5455, at *7–
8. In particular, as noted, section 15.003(b) currently states that “[a]n interlocutory appeal may be taken
of a trial court’s determination under Subsection (a) that (1) a plaintiff did or did not independently
establish proper venue; or (2) a plaintiff that did not independently establish proper venue did or did not
establish the items prescribed by Subsections (a)(1)-(4) [i.e., the ‘joinder requirements’].” Id. § 15.003(b).
Subsection (a) applies to any suit involving more than one plaintiff. Id. § 15.003(a). And, the only way for
a plaintiff to “independently establish proper venue” in such cases is to make reference to the general,
permissive, or mandatory venue statutes. See id. § 15.001(b) (West 2002). Accordingly, the plain
language of the statute indicates that the Legislature did not intend to limit interlocutory appeals to those
cases where a plaintiff meets or fails to meet “the joinder requirements pursuant to section 15.003.”
Gomez, 2010 Tex. App. LEXIS 5455, at *7. Instead, the 2003 amendment expanded interlocutory
appellate jurisdiction under section 15.003(b) to all venue rulings in cases involving multiple plaintiffs.
17
(“In determining legislative intent, we are thus guided by the principle that a specific
statute will ordinarily prevail over a general statute when the two cannot be
reconciled.”). We conclude that we have jurisdiction over Shamoun’s appeal.
2. Applicable Law and Standard of Review
In general, plaintiffs are allowed to choose venue first, and the plaintiff’s choice
cannot be disturbed as long as suit is initially filed in a county of proper venue. Henry v.
McMichael, 274 S.W.3d 185, 190 (Tex. App.—Houston [1st Dist.] 2008, pet. denied);
Crown Cent. LLC, 239 S.W.3d at 388. A trial court must consider all venue facts pled
by the plaintiff as true unless they are specifically denied by an adverse party. TEX. R.
CIV. P. 87(3)(a). Once an adverse party specifically denies venue facts, the plaintiff
must then respond with prima facie proof of those venue facts. Id. “Prima facie proof is
made when the venue facts are properly pleaded and an affidavit, and any duly proved
attachments to the affidavit, are filed fully and specifically setting forth the facts
supporting such pleading.” Id. This prima facie proof is not subject to rebuttal, cross-
examination, impeachment, or disproof. Ruiz v. Conoco, Inc., 868 S.W.2d 752, 757
(Tex. 1993); Henry, 274 S.W.3d at 190.
“Proper venue” means: (1) the mandatory venue, as provided by subchapter B
of chapter 15 of the civil practice and remedies code or any other statute prescribing
mandatory venue; or (2) if there is no mandatory venue, the venue provided under the
general venue statute or the permissive venue provisions of subchapter C of chapter
15.19 The general venue statute states that all lawsuits shall be brought:
(1) in the county in which all or a substantial part of the events or
omissions giving rise to the claim occurred;
19
Subchapter C of chapter 15 includes, by reference, all permissive venue provisions contained
in any statute. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.038 (West 2002) (“An action governed by any
other statute prescribing permissive venue may be brought in the county allowed by that statute.”).
18
(2) in the county of defendant’s residence at the time the cause of
action accrued if defendant is a natural person;
(3) in the county of the defendant’s principal office in this state, if the
defendant is not a natural person; or
(4) if Subdivisions (1), (2), and (3) do not apply, in the county in which
the plaintiff resided at the time of the accrual of the cause of action.
TEX. CIV. PRAC. & REM. CODE ANN. § 15.002(a). Venue may be proper in more than one
county under the general, mandatory or permissive venue rules. See GeoChem Tech
Corp. v. Verseckes, 962 S.W.2d 541, 544 (Tex. 1998).
Under section 15.003(c)(1), we determine whether the trial court’s order is proper
“based on an independent determination from the record and not under either an abuse
of discretion or substantial evidence standard.” Id. § 15.003(c)(1). The trial court’s
determination that venue is proper in a particular county will be upheld on appeal if
there is any probative evidence supporting venue in the county of suit, even if the
evidence preponderates to the contrary. Henry, 274 S.W.3d at 190 (citing Chiriboga v.
State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 678 (Tex. App.—Austin 2003, no pet.)).
However, conclusive evidence to the contrary can “destroy the probative evidence.”
Chiriboga, 96 S.W.3d at 678.
3. Analysis
Shamoun contends that neither Yarto nor YIG independently established that
Hidalgo County was a proper venue for their suits. Because each plaintiff must
independently establish venue, see TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(a), we
will address Yarto and YIG separately.
i. Yarto
19
In his first amended original petition, Yarto asserts that Hidalgo County is a
proper venue for his suit under the Texas Theft Liability Act, which states in part that a
suit for theft “may be brought in the county where the theft occurred or in the county
where the defendant resides.” TEX. CIV. PRAC. & REM. CODE ANN. § 134.004 (West
2011); see id. § 15.038 (West 2002). Shamoun responds by asserting that: (1) Yarto
waived his ability to contest venue by filing the agreed motion to transfer to Travis
County on December 29, 2010; and (2) even if he did not waive his ability to contest
venue, Yarto “failed to provide . . . any venue facts establishing or suggesting that
[Shamoun] committed some act or omission in Hidalgo County.”
We first address the waiver issue. Shamoun argues that, once Yarto filed the
agreed motion to transfer, the trial court had a ministerial duty to grant that motion
pursuant to section 15.063 of the civil practice and remedies code, which provides that
a trial court “shall transfer an action to another county of proper venue” if “written
consent of the parties to transfer to any other county is filed at any time.” Id. at §
15.063(3). Shamoun further argues that the agreed motion to transfer constituted a
Rule 11 agreement establishing Travis County as a proper venue, and that the trial
court had a duty to enforce that agreement. See TEX. R. CIV. P. 11. In support of this
position, Shamoun directs us to the 1995 case of Farris v. Ray, in which the Texas
Supreme Court held that “an enforceable Rule 11 agreement consenting to transfer of
venue amounts to an express waiver of the venue issue.” 895 S.W.2d 351, 352 (Tex.
1995) (per curiam).
Because it was in writing, signed by counsel and filed with the trial court, the
agreed motion to transfer did indeed serve as a Rule 11 agreement acknowledging that
Yarto and Shamoun consented to transfer the case to Travis County. See TEX. R. CIV.
20
P. 11.20 However, as Yarto correctly notes, even when parties to a suit enter into an
unrevoked agreement regarding transfer of venue, the trial court is not bound to transfer
the cause unless it is established that the transferee court is a “proper venue.” See
TEX. CIV. PRAC. & REM. CODE ANN. § 15.063 (providing that a trial court “shall transfer an
action to another county of proper venue” if, among other things, written consent is filed
at any time) (emphasis added); Fleming v. Ahumada, 193 S.W.3d 704, 713 (Tex.
App.—Corpus Christi 2006, no pet.) (finding that, even if the parties had agreed to
transfer venue to Bexar County, the trial court could not grant the requested transfer
because Bexar County was “not a county of proper venue under any mandatory or
permissive venue provision”). Here, the agreed motion to transfer did not state that the
parties agreed that Travis County was a proper venue; it merely stated that the parties
agreed to transfer the case there.21 So the agreed motion to transfer did not, by itself,
compel the trial court to transfer the case to Travis County. Instead, transfer was
required only if proof was presented establishing proper venue in that county.
We find no such proof in the record. In an affidavit attached to Yarto’s response
to Shamoun’s motion to transfer, Yarto alleged in part that, “[d]uring the mediation of the
David E. Girault, et al. v. Rhoderick Tyrone Williams, et al. case,
Shamoun . . . presented certain confidential financial documents . . . in an attempt to
20
We note that a party has the right to revoke its consent to a Rule 11 agreement at any time
before the rendition of judgment. ExxonMobil Corp. v. Valence Operating Co., 174 S.W.3d 303, 309
(Tex. App.—Houston [1st Dist.] 2005, pet. denied) (citing Quintero v. Jim Walter Homes, Inc., 654 S.W.2d
442, 444 (Tex. 1983)); see Padilla v. La France, 907 S.W.2d 454, 460 (Tex. 1995); see also Riggins v.
Hill, No. 14-09-00495-CV, 2011 Tex. App. LEXIS 8760, at *21 (Tex. App.—Houston [14th Dist.] Nov. 3,
2011, no pet. h.). The trial court’s February 28, 2012 order denying the agreed motion to transfer stated
that “both [YIG] and [Yarto] have expressed their opposition to any transfer.” However, our review of the
record reveals that Yarto never filed any paper with the trial court indicating the withdrawal or revocation
of his consent to transfer to Travis County; nor did Yarto’s counsel state at the March 10, 2011 venue
hearing that Yarto withdrew or revoked his prior consent to suit in Travis County.
21
Shamoun’s original motion to transfer, which was filed on April 29, 2010 in response to Yarto’s
petition, asserted only that Dallas County and Collin County were proper venues for Yarto’s suit.
21
extort concessions from me with this confidential information.” Yarto also made this
allegation in an affidavit attached to YIG’s response to Shamoun’s petition. In that
subsequent affidavit, Yarto makes clear that the Girault mediation took place in Travis
County. However, this lone, isolated allegation does not constitute a “substantial part”
of the events giving rise to his claims. See TEX. CIV. PRAC. & REM. CODE ANN. §
15.002(a). The bulk of Yarto’s claims, as set forth in his live petition, involve Shamoun’s
representation of parties adverse to Yarto and Shamoun’s alleged conspiracy with
Winkler and Williams to divest Yarto of his interest in YITC. Even the specific allegation
referred to above, regarding the presentation of confidential documents at a Travis
County mediation, does not form the primary factual basis for any single claim but rather
is ancillary to Yarto’s theft cause of action. Other than this insubstantial assertion by
Yarto, no party provided any evidence that “all or a substantial part of the events or
omissions giving rise to the claim” occurred in Travis County. In fact, Yarto’s live
petition did not allege that any part of the events giving rise to his claims occurred in
that county. We therefore conclude the trial court was not compelled to grant Yarto and
Shamoun’s agreed motion to transfer on this basis.
We next address Shamoun’s contention that Yarto “failed to provide . . . any
venue facts establishing or suggesting that [Shamoun] committed some act or omission
in Hidalgo County.” Yarto’s live petition alleged that his former employee Veronica
Flores, “acting as an agent” of Shamoun, stole certain confidential financial documents
(which Yarto calls “the trade secret documents”) that were contained on Yarto’s
computer servers situated in Hidalgo County. Shamoun specifically denied this
allegation in its answer and in its motion to transfer, thereby placing the burden on Yarto
22
to produce prima facie proof of these alleged venue facts. See TEX. R. CIV. P. 87(3)(a).
Yarto did so by submitting an affidavit stating, in relevant part, as follows:
I maintain a computer server in Hidalgo County for Jenrob Investments,
LP (“Jenrob”), a business in which I am a partner, and the managing
partner. The trade secret documents were stored on the Jenrob server in
Hidalgo County. The documents were taken from the Jenrob Server
located in Hidalgo County. Veronica Flores, who was a resident of
Hidalgo County at the time and former employee of Jenrob, had the
access codes/passwords to obtain access to the Jenrob computer system.
At all times in committing this theft, Veronica Flores was apparently acting
as an agent of Shamoun & Norman. The stolen data was located in
Hidalgo County, and was stolen from Hidalgo County. Additionally,
Shamoun & Norman conspired with others, including Veronica Flores, to
steal this data from JenRo[b]. In stealing this data from JenRob, Veronica
Flores aided and abetted Shamoun & Norman in the breach of its fiduciary
duty to me. The documents were not stolen from me in Travis County, as
neither I nor my counsel brought said documents, nor had said documents
in their possession, when we went to Travis County for mediation.
Shamoun provided an affidavit by Flores which denied these allegations.
Specifically, Flores stated in her affidavit that she “never took any documents from any
JenRob server when [she] left JenRob,” she “never took or stole any of JenRob’s
documents or other information,” she “never provided any of JenRob’s documents to
Rhod Williams or Steve Winkler,” and she “never acted as the agent of [Shamoun].”
Brian Norman also provided an affidavit in which he stated:
Neither I nor my firm have ever had access to a computer belonging to
[YIG] or Yarto in Hidalgo County. The documents to which Yarto refers
were in the possession of Rhod[e]rick Williams and he obtained them from
[YITC]’s computer in Collin County. Williams brought the documents at
issue to mediation and none of Shamoun & Norman, LLP or any of its
attorneys had anything to do with the presentation of such documents to
the mediator.
Norman additionally averred that “Veronica Flores is not and has never been an agent
or employee of [Shamoun]” and that “no data was stolen and certainly not stolen from
any computer in Hidalgo County.”
23
Shamoun argues that the allegations made by Yarto in his affidavit do not
constitute prima facie proof of venue facts because they are mere conjecture. We
disagree. Yarto swore in the affidavit that the facts stated therein “are based upon my
own personal knowledge, and they are true.” Moreover, even though Flores and
Norman categorically denied Yarto’s allegations, prima facie proof of venue facts by
affidavit “is not subject to rebuttal, cross-examination, impeachment, or even disproof.”
Ruiz, 868 S.W.2d at 757. And, though probative venue evidence is susceptible to being
“destroyed” by conclusive evidence to the contrary, see Chiriboga, 96 S.W.3d at 678, no
such countervailing evidence was adduced by Shamoun here. The denials sworn to by
Flores and Norman contradict Yarto’s account but they do not conclusively disprove it.
The trial court was therefore required to accept the venue facts alleged in Yarto’s
petition and supported by affidavit. Ruiz, 868 S.W.2d at 757; Henry, 274 S.W.3d at 190.
Those facts include Yarto’s accusation that Flores committed theft of property situated
in Hidalgo County while acting as an agent of Shamoun. Accordingly, venue for Yarto’s
suit against Shamoun is proper in that county under the Texas Theft Liability Act. See
TEX. CIV. PRAC. & REM. CODE ANN. § 134.004; see also id. § 15.038.
Shamoun’s issue in appellate cause number 13-11-00256-CV is overruled as it
relates to Yarto.
ii. YIG
Unlike Yarto, YIG did not join in the agreed motion to transfer to Travis County,
and there is no suggestion that YIG ever consented in any way to transfer. The only
question, therefore, is whether YIG established that Hidalgo County was a proper venue
for its suit under the applicable rules. In its appeal, Shamoun argues only that YIG
failed to present prima facie proof establishing its alleged venue facts; it does not
24
contend on appeal that the application of any mandatory venue provision renders
Hidalgo County an improper venue.22 Therefore, in our consideration of this issue, we
will determine only whether YIG met its burden to establish venue under the general or
permissive venue statutes. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 15.002(a)(1)–(4),
15.031–.039.
YIG made various factual allegations in its petition in intervention. Shamoun filed
a response on February 22, 2011 that generally denied all of YIG’s allegations.
However, “global” or “general” denials of venue allegations do not suffice as “specific”
denials under the rules of civil procedure. Rodriguez v. Printone Color Corp., 982
S.W.2d 69, 71 (Tex. App.—Houston [1st Dist.] 1998, pet. denied) (“[S]tatements such
as ‘Defendant specifically denies those venue facts pleaded in Plaintiff’s Petition’ do not
constitute a ‘specific denial’ as required by [Texas Rule of Civil Procedure] 87.”)
(quoting Maranatha Temple, Inc. v. Enter. Prods. Co., 833 S.W.2d 736, 740 (Tex.
App.—Houston [1st Dist.] 1992, writ denied)); see TEX. R. CIV. P. 87(3)(a); see also In re
Socorro Indep. Sch. Dist., No. 13-09-00500-CV, 2010 Tex. App. LEXIS 2126, at *9
(Tex. App.—Corpus Christi Mar. 22, 2010, orig. proceeding) (mem. op.). Shamoun’s
amended motion to transfer also failed to specifically deny YIG’s venue allegations.
Instead, that motion argued exclusively that transfer was warranted either: (1) to Travis
County because it is a mandatory venue, or (2) to Dallas County because that is the
county of defendants’ residence and place of business.
Because Shamoun never properly denied YIG’s venue allegations, the trial court
was required to consider them as true. See TEX. R. CIV. P. 87(3)(a). YIG’s allegations
22
That issue, raised in Shamoun’s petition for writ of mandamus, will be addressed infra section
II.C.
25
included a claim that Shamoun breached its fiduciary duties by “represent[ing YIG] in
the course of the global settlement, and extract[ing] terms and conditions of settlement
for the benefit of [Shamoun] (who were representing [YIG]) and to the detriment of
[YIG].” YIG later alleged that its intervention in Yarto’s suit is proper; that “maintaining
venue [in Hidalgo County] as to [YIG] does not unfairly prejudice [Shamoun]”; that “there
is an essential need to have [YIG’s] claims tried in” Hidalgo County; and that Hidalgo
County “is a fair and convenient forum for all parties.” See TEX. CIV. PRAC. & REM. CODE
ANN. § 15.003(a)(1)–(4). Moreover, Yarto stated in his affidavit that “[t]he Settlement
Agreement was sent to me in Hidalgo County” and “[t]he Settlement was signed by me
in Hidalgo County.” These allegations, taken as true, constitute probative evidence that
a “substantial part of the events or omissions giving rise to [YIG’s] claim occurred” in
Hidalgo County. Therefore, the trial court did not err in denying Shamoun’s motion to
transfer YIG’s suit. See Henry, 274 S.W.3d at 190 (citing Chiriboga, 96 S.W.3d at 678).
We overrule Shamoun’s issue in appellate cause number 13-11-00256-CV as it
relates to YIG.
C. Petition for Writ of Mandamus
In appellate cause number 13-11-00281-CV, Shamoun asks that we issue a writ
of mandamus compelling the trial court to: (1) grant Shamoun’s motion to transfer; and
(2) grant the agreed motion to transfer filed by Yarto. Shamoun specifically alleges that
Yarto and YIG consented to the venue transfer by entering into the settlement
agreement and, in the case of Yarto, by filing an agreed motion to transfer. See TEX.
CIV. PRAC. & REM. CODE ANN. § 15.020(b) (West Supp. 2010); see also id. § 15.063(3)
(West 2002).
1. Standard of Review
26
Ordinarily, mandamus will issue only to correct a clear abuse of discretion for
which the remedy by appeal is inadequate. In re Prudential Ins. Co. of Am., 148 S.W.3d
124, 135–36 (Tex. 2004) (orig. proceeding). The Texas Supreme Court has held that,
“[g]enerally, an appellate remedy is adequate even though it involves delay and more
expense than obtaining an extraordinary writ” and that “venue determinations as a rule
are not reviewable by mandamus.” In re Masonite Corp., 997 S.W.2d 194, 197 (Tex.
1999); In re Mendoza, 83 S.W.3d 233, 236 (Tex. App.—Corpus Christi 2002, orig.
proceeding); see also TEX. CIV. PRAC. & REM. CODE ANN. § 15.002(c) (West 2002) (“A
court’s ruling or decision to grant or deny a transfer under Subsection (b) [providing for
transfer based on the non-mandatory venue provisions of subchapters A or C of chapter
15] is not grounds for appeal or mandamus and is not reversible error.”); In re Gibbs,
No. 13-08-00134-CV, 2008 Tex. App. LEXIS 2327, at *2 (Tex. App.—Corpus Christi
Apr. 1, 2008, orig. proceeding) (mem. op.) (per curiam) (“We lack jurisdiction to issue
writs of mandamus to supervise or correct incidental trial rulings when there is an
adequate remedy by appeal . . . . Incidental rulings include venue determinations.”).
However, an exception to this rule exists for the mandatory venue provisions
contained in subchapter B of chapter 15 of the civil practice and remedies code. See
TEX. CIV. PRAC. & REM. CODE ANN. §§ 15.011–.020 (West Supp. 2010). Mandamus
relief is available when a trial court erroneously denies enforcement of one of those
provisions. Id. § 15.0642 (“A party may apply for a writ of mandamus with an appellate
court to enforce the mandatory venue provisions of this chapter.”). Moreover, when
enforcement of a mandatory venue provision is sought, the relator need not show that it
has an inadequate remedy by appeal. In re Tex. Ass’n of Sch. Bds., Inc., 169 S.W.3d
27
653, 657 (Tex. 2005) (orig. proceeding) (citing In re Mo. Pac. R.R. Co., 998 S.W.2d 212,
216 (Tex. 1999) (orig. proceeding)).
2. Applicable Law
In general, the fixing of venue by contract is invalid. In re Great Lakes Dredge &
Dock Co., 251 S.W.3d 68, 76 (Tex. App.—Corpus Christi 2008, orig. proceeding) (citing
Fid. Union Life Ins. Co. v. Evans, 477 S.W.2d 535, 537 (Tex. 1972)). An exception to
that general rule appears in section 15.020 of the civil practice and remedies code,
which states that contractual venue selection clauses may be enforceable in cases
involving “major transactions.” TEX. CIV. PRAC. & REM. CODE ANN. § 15.020. A “major
transaction” is “a transaction evidenced by a written agreement under which a person
pays or receives, or is obligated to pay or entitled to receive, consideration with an
aggregate stated value equal to or greater than $1 million.” Id. § 15.020(a).23 Section
23
The definition of “major transaction” excludes transactions “entered into primarily for personal,
family, or household purposes, or to settle a personal injury or wrongful death claim . . . .” TEX. CIV. PRAC.
& REM. CODE ANN. § 15.020(a) (West Supp. 2010). Moreover, the mandates of section 15.020 are not
applicable where: (1) the agreement regarding venue was unconscionable at the time that it was made;
(2) the agreement regarding venue is voidable under chapter 272 of the business and commerce code,
relating to construction and repairs of improvements to real estate; or (3) venue is established under a
statute other than title 2 of the civil practice and remedies code. Id. § 15.020(d).
It is undisputed that these caveats do not apply, with one exception: YIG contends that the
agreement regarding venue was unconscionable at the time it was made. We disagree. All parties to the
December 9, 2010 agreement were sophisticated business entities and were represented by competent
counsel throughout the settlement negotiations. Though YIG complains that Shamoun was representing
it at the time the settlement was reached, the December 1, 2010 letter sent by Shamoun to YIG clearly
advised YIG that Shamoun’s representation of YIG had in fact ceased. Moreover, an agreement to
litigate in a forum in which the parties had already participated in mediation is not inherently unfair. We
find that the venue selection clauses in the December 9, 2010 settlement agreement were not
unconscionable at the time they were made. See In re Poly-America, L.P., 262 S.W.3d 337, 348–49
(Tex. 2008) (orig. proceeding) (“Unconscionability is to be determined in light of a variety of factors, which
aim to prevent oppression and unfair surprise; in general, a contract will be found unconscionable if it is
grossly one-sided.”) (citing RESTATEMENT (SECOND) OF CONTRACTS § 208, cmt. a (1979) (“The
determination that a contract or term is or is not unconscionable is made in the light of its setting,
purpose, and effect. Relevant factors include weaknesses in the contracting process like those involved
in more specific rules as to contractual capacity, fraud, and other invalidating causes; the policy also
overlaps with rules which render particular bargains or terms unenforceable on grounds of public
policy.”)). Whether venue was in fact proper is a separate matter that will be fully addressed herein.
28
15.020 is one of the mandatory venue provisions contained in chapter 15 of the civil
practice and remedies code and is therefore enforceable by mandamus. See id. §
15.0642.
3. Analysis
In its petition for writ of mandamus, Shamoun contends that the settlement
agreement executed on December 9, 2010, evidenced a “major transaction” as defined
by the statute. We agree. The agreement was in writing and called for a party to the
agreement, YITC, to make settlement payments totaling $1,777,500. The amounts of
the payments were explicitly set forth in the agreement. Cf. In re Togs Energy, Inc., No.
05-09-01018-CV, 2009 Tex. App. LEXIS 7949, at *2 (Tex. App.—Dallas Oct. 13, 2009,
orig. proceeding) (mem. op.) (concluding that section 15.020 did not apply because
agreement did not state the value of consideration). Yarto contends that section 15.020
does not apply to him because, although the agreement provided for payments in
excess of $1 million to be made, Yarto “neither paid nor received $1 million from
anyone.” However, the statute does not require that a party to the potentially
transferred lawsuit be obligated to pay or entitled to receive $1 million or more in
consideration; instead, it merely requires that “a person” be obligated to pay or entitled
to receive such consideration. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.020(a).
Moreover, though the statute does not define “person,” the Texas Supreme Court has
implied that transactions solely between corporate entities may be subject to section
15.020. See In re Tex. Ass’n of Sch. Bds., Inc., 169 S.W.3d at 657–58 (holding that
section 15.020 was not applicable to suit arising from insurance contract between
29
corporate entities only because insurance coverage limits could not be included in the
“aggregate stated value” of consideration).24
We must next determine whether the actions brought by Yarto and YIG,
respectively, “ar[ose] from” the transaction evidenced by the December 9, 2010
agreement. See TEX. CIV. PRAC. & REM. CODE ANN. § 15.020(b).
Yarto’s claims were first brought several months before the global settlement
agreement was finalized. In a 2008 memorandum opinion, the Fourteenth Court of
Appeals held that “[i]t would be erroneous to conclude that venue of a suit is fixed by
agreement under section 15.020(b) when the claimed agreement was not executed until
weeks after suit was filed.” In re Medical Carbon Research Institute, L.L.C., No. 14-08-
00104-CV, 2008 Tex. App. LEXIS 2518, at *4 (Tex. App.—Houston [14th Dist.] Apr. 9,
2008, orig. proceeding) (mem. op.) (per curiam). We agree with that court’s reasoning.
Venue is to be determined by examining the facts existing at the time the cause of
action accrued. TEX. CIV. PRAC. & REM. CODE ANN. § 15.006 (West 2002). Yarto filed
suit on April 28, 2010, more than seven months before the settlement agreement was
executed on December 9, 2010. The facts at the time of the accrual of Yarto’s cause of
action therefore did not include the existence of a settlement agreement containing
venue selection provisions. See id. It follows that Yarto’s claims did not “arise from” the
transaction evidenced by that agreement, and section 15.020 does not apply to Yarto’s
claims.25
24
The statute is ambiguous in that it does not state whether one single party must be obligated to
pay or entitled to receive more than $1 million, or if multiple obligations between various parties may be
aggregated in order to reach the $1 million amount. In any event, assuming without deciding that the
former construction of the statute is correct, the agreement at issue qualifies as a “major transaction”
because one single party—YITC—was obligated to pay the entire $1,777,500 in consideration.
25
Shamoun argues that Yarto waived his ability to oppose transfer to Travis County by filing the
30
On the other hand, YIG’s petition in intervention was filed on January 19, 2011,
several weeks after the settlement agreement was executed. Although YIG’s petition
raised many of the same allegations as those originally raised by Yarto, YIG’s principal
complaint against Shamoun is that Shamoun “represent[ed] [YIG] in the course of the
global settlement, and extracted terms and conditions of settlement for the benefit of
[Shamoun] and to the detriment of [YIG].” Accordingly, YIG’s claim “ar[ose] from” the
settlement agreement.
But this observation does not end our inquiry, because the major transaction
statute does not apply to all suits arising out of major transactions. Instead, subsections
(b) and (c) of the statute restrict the operation of the statute to limited circumstances.
First, subsection (b) states that “[a]n action arising from a major transaction shall
be brought in a county if the party against whom the action is brought has agreed in
writing that a suit arising from the transaction may be brought in that county.” Id. §
15.020(b) (emphasis added). Here, “the party against whom the action is brought”—
i.e., Shamoun—did not agree in writing that “a suit arising from” a major transaction may
be brought in Travis County. Shamoun was not a signatory or party to the settlement
agreement, and so it cannot be said to have “agreed in writing” as to venue in that
agreement, regardless of whether Shamoun is considered a third-party beneficiary to
that agreement. And, although counsel for Shamoun signed the written “Agreed Motion
to Transfer Venue” filed by Yarto, we have already held that Yarto’s suit did not “arise
December 29, 2010 agreed motion to transfer. See Farris v. Ray, 895 S.W.2d 351, 352 (Tex. 1995). We
do not find this argument persuasive because, regardless of what position Yarto may have taken in the
trial court, Shamoun still failed to show that a mandatory venue statute compelled transfer of Yarto’s
claims. Therefore, Shamoun is not entitled to mandamus relief on those grounds.
31
from” a major transaction. See id. Subsection (b) therefore does not apply to YIG’s
claims.
Next, subsection (c) of the statute states that “[a]n action arising from a major
transaction may not be brought in a county” if:
(1) the party bringing the action has agreed in writing that an action
arising from the transaction may not be brought in that county, and
the action may be brought in another county of this state or in
another jurisdiction; or
(2) the party bringing the action has agreed in writing that an action
arising from the transaction must be brought in another county of
this state or in another jurisdiction, and the action may be brought
in that other county, under this section or otherwise, or in that other
jurisdiction.
Id. § 15.020(c) (emphasis added).
We first examine the applicability of subsection (c)(2). Here, “the party bringing
the action”—i.e., YIG—agreed in section 27 of the settlement agreement that “ANY
AND ALL CLAIMS . . . RELATING TO THIS AGREEMENT . . . SHALL BE FILED AND
MAINTAINED ONLY IN AN APPROPRIATE STATE OR FEDERAL COURT IN TRAVIS
COUNTY, TEXAS.” This is a written agreement that “an action arising from” the major
transaction “must be brought” in Travis County. See id. § 15.020(c)(2). Accordingly,
subsection (c)(2) will compel the transfer of YIG’s suit if and only if “the action may be
brought in [Travis County], under this section or otherwise. . . .” Id. § 15.020(c)(2)
(emphasis added).
We cannot conclude that YIG’s action “may be brought” in Travis County. As
noted, the general venue statute states that all lawsuits shall be brought “in the county
in which all or a substantial part of the events or omissions giving rise to the claim
occurred,” or in the county of the defendant’s residence or principal office. Id. §
32
15.002(a). The principal complaint against Shamoun contained in YIG’s petition in
intervention is that Shamoun “represent[ed] [YIG] in the course of the global settlement,
and extracted terms and conditions of settlement for the benefit of [Shamoun] and to the
detriment of [YIG].” However, YIG does not allege, and the record does not reveal, that
at least a “substantial part” of the actions taken by Shamoun as alleged by YIG occurred
in Travis County. See id. § 15.002(a)(1).26 Though the 2010 mediation occurred in
Travis County, YIG’s pleadings do not state implicitly or explicitly that any part of
Shamoun’s allegedly tortious acts or omissions took place at that mediation. Moreover,
Travis County is not the location of Shamoun’s principal place of business, nor is it the
county of residence of either Shamoun’s or YIG’s principals. See id. § 15.002(a)(2)–(4).
Travis County is therefore not a proper venue under the general venue statute, and so it
cannot be said that YIG’s action “may be brought” there. See id. § 15.020(c)(2).
Subsection (c)(2) does not apply.
We turn finally to subsection (c)(1) of section 15.020, under which an action
arising from a major transaction may not be brought in a particular county if “the party
bringing the action has agreed in writing that an action arising from the transaction may
not be brought in that county, and the action may be brought in another county of this
state or in another jurisdiction.” Id. § 15.020(c)(1). The settlement agreement was in
writing and was executed by the party bringing the action—i.e., YIG—and contained two
sections under which YIG arguably agreed that “an action arising from the transaction
may not be brought” in Hidalgo County, the county where suit was filed. Section 15 of
the agreement stated that “none of the Yarto Parties [including YIG]. . . shall be
26
We note that YIG’s petition in intervention, in contrast with Yarto’s live petition, did not allege
that Shamoun “disclosed confidential communications” in Travis County.
33
permitted to bring a Shamoun Claim in any court not located in Travis County, Texas.”
A “Shamoun claim” is defined as “any claim, lawsuit, complaint or proceeding (whether
judicial or otherwise) brought by [Yarto or YIG] . . . against Shamoun and/or any of its
partners or affiliates.” Thus, a “Shamoun claim” may or may not also be “an action
arising from the transaction.” As previously noted, YIG also agreed in section 27 of the
settlement agreement that “ANY AND ALL CLAIMS . . . RELATING TO THIS
AGREEMENT . . . SHALL BE FILED AND MAINTAINED ONLY IN AN APPROPRIATE
STATE OR FEDERAL COURT IN TRAVIS COUNTY, TEXAS.” Though this section
specifies Travis County as the only suitable venue for an action arising out of the
transaction, it does not explicitly state that such an action must not be brought in any
particular county.
Assuming, without deciding, that these sections constitute written agreements by
YIG that “an action arising from the transaction” may not be brought in Hidalgo County,
we nevertheless find that subsection (c)(1) is inapplicable. That subsection applies only
when “the action may be brought in another county of this state or in another
jurisdiction.” Id. “Another county,” in the context of subsection (c)(1), clearly means a
county that has not been excluded as a proper venue under the pertinent written
agreement. See id. Here, sections 15 and 27 of the settlement agreement purport to
exclude all counties other than Travis County as venues for suit, and so subsection
(c)(1) will apply only if YIG’s suit “may be brought” in Travis County. We have already
concluded that it may not. Therefore, subsection (c)(1) does not apply.
As noted, mandamus will generally issue to correct a venue ruling only if a
mandatory venue provision located in subchapter B of chapter 15 of the civil practice
and remedies code applies. See id. § 15.0642; In re Masonite Corp., 997 S.W.2d at
34
197. The major transaction statute, section 15.002, is the only mandatory venue
provision invoked by Shamoun in its petition for writ of mandamus. Because we have
concluded that section 15.002 does not apply to either Yarto’s or YIG’s suits, Shamoun
is not entitled to a writ of mandamus compelling the trial court to transfer venue to
Travis County.
III. CONCLUSION
In appellate cause number 13-11-00087-CV, we reverse the trial court’s
judgment granting YIG’s request for a temporary anti-suit injunction, and we remand the
cause for further proceedings consistent with this opinion. In appellate cause number
13-11-00256-CV, we affirm the trial court’s judgment denying Yarto and Shamoun’s
agreed motion to transfer. Finally, in appellate cause number 13-11-00281-CV, we
deny Shamoun’s petition for writ of mandamus.
DORI CONTRERAS GARZA
Justice
Delivered and filed the
31st day of May, 2012.
35