Vladimir Vak v. Net Matrix Solutions, Inc.

Opinion issued June 10, 2014.
In The
Court of Appeals
For The
First District of Texas
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NO. 01-13-00385-CV
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VLADIMIR VAK, Appellant
V.
NET MATRIX SOLUTIONS, INC., Appellee
On Appeal from the County Civil Court at Law No 2
Harris County, Texas
Trial Court Case No. 1019243
OPINION
This is an interlocutory appeal of an order denying Vladimir Vak’s special
appearance. Vak argues that the trial court lacks jurisdiction because his contract
with Net Matrix Solutions, Inc. does not contain a forum-selection clause and
Vak’s contacts with Texas are insufficient to establish jurisdiction. We affirm.
Background
Vladimir Vak, a resident of California, sought employment by posting his
resume online in 2012. Net Matrix, a computer consulting firm located in
Houston, found Vak’s resume and contacted him about temporary work on a
contract basis for a company located in California. Vak agreed to accept this work.
Under the parties’ written agreement, Net Matrix would make a proposal to the
California company that it retain Vak at a proposed hourly rate. Net Matrix also
bore responsibility for invoicing the California company and paying Vak for his
services. Vak would bill Net Matrix, not the California company, for his time.
The agreement included the following clause:
17. Governing Law; Venue of Litigation
This Agreement shall be governed by and construed under the laws of
the state of Texas. The parties agree that this Agreement is made in
Harris County, Texas, and that exclusive venue for all litigation
arising under or in connection with this Agreement shall be in the
courts of Harris County, Texas.
A few days after the parties entered into this agreement, Vak began working on the
project in California.
According to Net Matrix, Vak gave notice approximately two weeks later
that he was resigning from his position as a subcontractor for Net Matrix, effective
two days after the notice. Vak gave as his reason for resigning that he had received
a new job, starting the following week.
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Net Matrix sued Vak in Harris County, alleging that Vak had breached the
parties’ agreement. Vak filed a special appearance, motion to dismiss for forum
non conveniens, and, subject thereto, an original answer. The trial court denied
Vak’s special appearance, and Vak filed this interlocutory appeal.
On appeal, Vak presents one legal issue: whether the trial court properly
denied his special appearance. Vak presents two arguments to support his personal
jurisdictional challenge. First, he argues that the parties’ agreement contains a
venue-selection provision, not a forum-selection provision, and that the trial court
therefore erred in finding that it has jurisdiction over Vak. Second, Vak argues
that Net Matrix presented evidence of its unilateral acts in Texas, not acts directed
by Vak toward Texas, and thus the evidence was legally insufficient to support the
trial court’s assertion of personal jurisdiction over him.
Standards of Review
A. Personal Jurisdiction
We apply the concept of “purposeful availment” to determine whether Texas
courts have personal jurisdiction over a nonresident defendant. Michiana Easy
Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). In order for a
court to have personal jurisdiction, “it is essential in each case that there be some
act by which the defendant purposefully avails itself of the privilege of conducting
activities within the forum State, thus invoking the benefits and protections of its
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laws.” Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). Among other
requirements not relevant to this appeal, the concept of “purposeful availment”
requires that courts consider only the defendant’s contacts with the forum state, not
the unilateral activities of other parties. Id. at 785. The acts must be “‘purposeful’
rather than fortuitous.” Id. Parties “who ‘reach out beyond one state and create
continuing relationships and obligations with citizens of another state’ are subject
to the jurisdiction of the latter in suits based on their activities.” Id. (quoting
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985)). And the “defendant
must seek some benefit, advantage, or profit by ‘availing’ itself of the jurisdiction.”
Id. (citation omitted). “Merely contracting with a Texas resident does not satisfy
the minimum contacts requirement.” Blair Commc’ns, Inc. v. SES Survey Equip.
Servs., Inc., 80 S.W.3d 723, 729 (Tex. App.—Houston [1st Dist.] 2002, no pet.)
(citations omitted). “Nor is jurisdiction justified by the single fact that a contract is
payable in Texas.” Id. (citation omitted).
Further, “assumption of jurisdiction by the forum state must not offend
traditional notions of fair play and substantial justice.” Michiana, 168 S.W.3d at
795 (quoting O’Brien v. Lanpar Co., 399 S.W.2d 340, 342 (Tex. 1966)). “Factors
courts consider are the burden on the defendant, the forum state’s interest in
adjudicating the controversy, the plaintiff’s interest in obtaining efficient resolution
of the case, and the shared interest of states in furthering their respective interests.”
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Id. at 799 (citing Burger King, 471 U.S. at 477). “[W]here a defendant who
purposefully has directed his activities at forum residents seeks to defeat
jurisdiction, he must present a compelling case that the presence of some other
considerations would render jurisdiction unreasonable.” Burger King, 471 U.S. at
477.
“Whether a court has personal jurisdiction over a nonresident defendant is a
question of law, which we review de novo.” Zinc Nacional, S.A. v. Bouche
Trucking, Inc., 308 S.W.3d 395, 397 (Tex. 2010) (citing BMC Software Belg., N.V.
v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002)). Although the existence of
personal jurisdiction is a question of law, “that determination must sometimes be
preceded by the resolution of underlying facts.” Int’l Elevator Co. v. Garcia, 76
S.W.3d 778, 781 (Tex. App.—Houston [1st Dist.] 2002, no pet.). When the trial
court has not filed findings of fact or conclusions of law, we will presume that the
court resolved all questions of fact in support of its order. Valsangiacomo v.
Americana Juice Imp., Inc., 35 S.W.3d 201, 205 (Tex. App.—Corpus Christi 2000,
pet. dism’d w.o.j.); see also Black v. Dallas Cnty. Child Welfare Unit, 835 S.W.2d
626, 630 n.10 (Tex. 1992) (citing Carter v. William Sommerville & Son, Inc., 584
S.W.2d 274, 276 (Tex. 1979)).
A plaintiff bears the initial burden of pleading allegations sufficient to bring
a nonresident defendant within the terms of the Texas long-arm statute. TEX. CIV.
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PRAC. & REM. CODE ANN. § 17.042 (West 2008); Kelly v. Gen. Interior Constr.,
Inc., 301 S.W.3d 653, 658 (Tex. 2010); Moki Mac River Expeditions v. Drugg, 221
S.W.3d 569, 574 (Tex. 2007). We can consider both a plaintiff’s pleadings and its
response to the defendant’s special appearance in determining whether the plaintiff
satisfied its burden. Touradji v. Beach Capital P’ship, L.P., 316 S.W.3d 15, 23
(Tex. App.—Houston [1st Dist.] 2010, no pet.). “Because the plaintiff defines the
scope and nature of the lawsuit, the defendant’s corresponding burden to negate
jurisdiction is tied to the allegations in the plaintiff’s pleading.” Kelly, 301 S.W.3d
at 658.
If the plaintiff pleads sufficient jurisdictional allegations, the nonresident
defendant who makes a special appearance has the burden of negating all bases of
jurisdiction in those allegations. Id.; Moki Mac, 221 S.W.3d at 574. “Once the
defendant has produced credible evidence negating all bases of jurisdiction, the
plaintiff bears the ultimate burden to establish that the Texas court has personal
jurisdiction over the defendant as a matter of law.” M.G.M. Grand Hotel, Inc. v.
Castro, 8 S.W.3d 403, 408 (Tex. App.—Corpus Christi 1999, no pet.).
If the plaintiff does not plead sufficient jurisdictional facts, the defendant
can meet its burden to negate jurisdiction by proving it is not a Texas resident.
Kelly, 301 S.W.3d at 658–59. If the plaintiff does plead sufficient jurisdictional
facts, “[t]he defendant can negate jurisdiction on either a factual or legal basis.”
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Id. at 659. Among the ways to negate jurisdiction, “the defendant can show that
even if the plaintiff’s alleged facts are true, the evidence is legally insufficient to
establish jurisdiction; the defendant’s contacts with Texas fall short of purposeful
availment; [or,] for specific jurisdiction, that the claims do not arise from the
contacts[.]” Id.
B. Forum-Selection Clauses
Texas courts must enforce forum-selection clauses in contracts between the
parties, “unless the party opposing enforcement ‘clearly show[s] that enforcement
would be unreasonable and unjust, or that the clause was invalid for such reasons
as fraud or overreaching.’” In re Automated Collection Techs., 156 S.W.3d 557,
559 (Tex. 2004, orig. proceeding) (quoting In re AIU Ins. Co., 148 S.W.3d 109,
112 (Tex. 2004, orig. proceeding)). “[F]orum-selection clauses are prima facie
valid.” Phoenix Network Techs. (Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605,
614 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (collecting cases and
discussing development of Texas law). We interpret forum-selection clauses using
contract-construction principles because “[a] forum-selection clause is a creature of
contract.” Id. at 611 (citing Sw. Intelecom, Inc. v. Hotel Networks Corp., 997
S.W.2d 322, 324 (Tex. App.—Austin 1999, pet. denied)). In doing so, “our
primary goal is to give effect to the written expression of the parties’ agreement.”
Id. at 615 (citing Sw. Intelecom, 997 S.W.2d at 324).
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Personal Jurisdiction over Vak
A. Net Matrix Satisfied its Pleading Obligation
We must first consider whether Net Matrix has met its burden of pleading
facts sufficient to demonstrate the trial court’s personal jurisdiction over Vak.
TEX. CIV. PRAC. & REM. CODE ANN. § 17.042; Kelly, 301 S.W.3d at 658; Moki
Mac, 221 S.W.3d at 574. In doing so, we may look at both Net Matrix’s petition
and its responses to Vak’s special appearance. Touradji, 316 S.W.3d at 23.
The petition states that Vak is an individual resident of San Francisco,
California, and “has done business within the state of Texas, including the
transactions that gave rise to the claims asserted in this lawsuit.” According to the
petition, Vak signed an agreement with Net Matrix. The petition incorporated the
agreement by reference. On its face, the agreement shows that Net Matrix would
perform at least some of its obligations under the agreement in Texas. Under the
Texas long-arm jurisdiction statutes, “a nonresident does business in this state if
the nonresident contracts by mail or otherwise with a Texas resident and either
party is to perform the contract in whole or in part in this state.” TEX. CIV. PRAC.
& REM. CODE ANN. § 17.042(a) (emphasis added). The petition thus sufficiently
alleges that Vak did business in this state in connection with the parties’
agreement. Id.
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In its responses to Vak’s special appearance, Net Matrix also argued for the
application of Section 17 of the parties’ agreement, containing the selection of
Harris County as the “exclusive venue for all litigation arising under or in
connection with [the] Agreement.” These allegations also demonstrate that Vak
has personally availed himself of “the privilege of conducting activities within
[Texas], thus invoking the benefits and protections of its laws.” These allegations
provide additional support for Net Matrix’s pleading burden. Michiana, 168
S.W.3d at 784–85.
B. Vak Did Not Negate Personal Jurisdiction
The burden thus shifts to Vak to negate all bases of the trial court’s
jurisdiction. Kelly, 301 S.W.3d at 658; Moki Mac, 221 S.W.3d at 574. Vak
presents two arguments against the trial court’s ruling, but his arguments attack
alternative bases on which the trial court may have denied Vak’s special
appearance. Therefore, Vak must prevail on both arguments to meet his burden of
negating all bases of jurisdiction. Kelly, 301 S.W.3d at 658; Moki Mac, 221
S.W.3d at 574.
We first consider Vak’s argument that Section 17 of the parties’ agreement
is a venue-selection clause, not a forum-selection clause, and therefore cannot
serve to establish the trial court’s personal jurisdiction. Vak first observes that the
agreement refers to the venue—not the forum—for the litigation. Vak correctly
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observes that, “[a]lthough the terms are not always used with precision, forum and
venue are not synonymous.” Liu v. CiCi Enters., LP, No. 14–05–00827–CV, 2007
WL 43816, at *2 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (mem. op.).
“Forum pertains to the jurisdiction, generally a nation or State, where suit may be
brought.” Id. (citing Michiana, 168 S.W.3d at 784). Venue, on the other hand,
“concerns the geographic location within the forum where the case may be tried.”
Id.; see also In re Great Lakes Dredge & Dock Co., LLC, 251 S.W.3d 68, 79 (Tex.
App.—Corpus Christi 2008, orig. proceeding). Thus, when parties agree merely
that courts in a particular jurisdiction have venue or are proper venues for disputes
and do not provide that the jurisdiction has exclusive venue, the agreement does
not establish the parties’ consent to the jurisdiction of the courts in question. See,
e.g., Phoenix Network Techs., 177 S.W.3d at 615 (holding that words “shall” and
“the” in venue-selection clause established mandatory and exclusive venue,
respectively, and thus clause constituted forum-selection provision).
On the other hand, clauses providing for exclusive venue in a particular
locale are treated as forum-selection clauses. For example, in Michiana, the
Supreme Court of Texas considered a contract providing that the parties “agree
that if any dispute between us is submitted to a court for resolution, such legal
proceeding or suit shall take place in the county in which [Michiana’s principal]
offices are located,” which happened to be in Indiana. 168 S.W.3d at 781, 792.
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The Court stated that this language constituted a “forum-selection clause,” holding
that its enforcement was mandatory and that the trial court therefore lacked
jurisdiction in the absence of contacts between Michiana and Texas that would
otherwise support jurisdiction. Id. at 793–94.
This Court has also construed similar contract language as constituting a
forum-selection clause. In Phoenix Network Technologies, we considered a
contract that stated, “The parties hereby agree that this Agreement and the
provisions hereof shall be construed in accordance with English law and the venue
for resolution of any disputes arising out of this Agreement shall be the United
Kingdom.” 177 S.W.3d at 610. We held that this language constituted a forum-
selection clause by nature of its exclusivity. Id. at 615. We explained,
[T]he forum-selection clause could not more plainly require that any
disputes arising out of the . . . Agreement be litigated in the U.K. The
use of “shall” generally indicates a mandatory requirement.
Additionally, the forum-selection clause provides that “the venue” for
suit will be in the U.K., not “a” venue for suit. Use of the definite
article indicates that the parties intended for the U.K. to be the
exclusive venue.
Id. at 615 (citations omitted). “[C]ourts have had little trouble interpreting
provisions like the one here—which provide that disputes be litigated in a
particular place, rather than that a particular place be the proper venue—to
designate an exclusive, and thus valid, forum.” Id. at 615–16 (collecting cases).
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Like the contracts in Michiana and Phoenix Network Technologies, Vak’s
agreement with Net Matrix unambiguously selects a particular venue and makes it
exclusive. The agreement requires that “exclusive venue for all litigation arising
under or in connection with this Agreement shall be in the courts of Harris County,
Texas.” (emphasis added). To read this as Vak suggests, as not constituting Vak’s
consent to the jurisdiction of Harris County courts, would be to ignore the term
“exclusive” entirely. Vak argues that this interpretation is incorrect under Texas
law.
First, he argues that by reading Section 17 as a forum-selection clause this
Court would be adding a term to the agreement. See Fortis Benefits v. Cantu, 234
S.W.3d 642, 649 (Tex. 2007) (courts must not rewrite parties’ agreement). But
Vak does not explain the relevance of this principle to the language here, nor does
he provide any alternative explanation for the agreement’s use of the term
“exclusive venue.” Contrary to Vak’s position, our construction of the agreement
gives meaning to all of its terms. See, e.g., SA-OMAX 2007, L.P. v. Certain
Underwriters at Lloyd’s, London, 374 S.W.3d 594, 598 (Tex. App.—Dallas 2012,
no pet.) (courts must prefer interpretations of contracts that give meaning to all of
their terms).
Vak also argues that courts treat language similar to that in Section 17 as
constituting a venue-selection clause, not a forum-selection clause. As support, he
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relies primarily upon Global Packaging, Inc. v. Superior Court of Orange County,
196 Cal. App. 4th 1623 (Cal. Ct. App. 2011). In that case, a California Court of
Appeal held that a contract, parts of which were missing from the record, did not
contain a forum-selection clause when it specified that “[a]ny controversy or
claims arising out of or relat [ ] to this Agreement shall be venued only in the state
or federal court in and [ ] (a) Orange County, California or (b) the jurisdiction in
which the Software is located . . . .” 196 Cal. App. 4th at 1627 (brackets indicate
text which was cut off in copy of agreement before California court). The Global
Packaging court held that such language did not imply the defendant’s consent to
personal jurisdiction. Id. at 1634–35. But the clause in that case was not exclusive
to a single location; it provided for at least two proper venues. Id. Moreover, it
did not include language that the agreement “was made” in the particular forum.
In contrast, Vak’s employment agreement recites that it “was made” in Harris
County, Texas. Such a recital fixes a jurisdictional fact in the forum. See TEX.
CIV. PRAC. & REM. CODE ANN. § 17.042(a) (nonresident does business in Texas if
he contracts with Texas resident and either party is to perform in whole or in part
in Texas). Like the contracts in Michiana and Phoenix Network Technologies, the
particular language of the contract before us controls our decision.
Vak also argues that Luxury Travel Source v. American Airlines, LLC, 276
S.W.3d 154 (Tex. App.—Fort Worth 2008, no pet.), requires us to treat Section 17
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as a venue-selection clause, rather than a forum-selection clause. In Luxury Travel,
the airline accused travel agencies of improperly buying and selling frequent flyer
miles. Id. at 159. None of the travel agencies had offices in Texas, however, so
each filed a special appearance, each of which the trial court denied. Id. at 160. In
concluding that the trial court lacked personal jurisdiction over some of the
defendants, the appellate court observed that the forum-selection clause was
binding only on lawsuits brought against the airline, not those suits brought by the
airline. See id. at 165–66. In contrast, the forum-selection clause between Vak
and Net Matrix controls suits by either party to the contract.
Vak has failed to negate the first basis of jurisdiction upon which the trial
court’s decision could have rested, namely the presence of a forum-selection
clause. He does not argue that the trial court’s exercise of jurisdiction on this basis
is inconsistent with traditional notions of fair play and substantial justice. See, e.g.,
Burger King, 471 U.S. at 477; Michiana, 168 S.W.3d at 798. He therefore has
failed to demonstrate that the trial court erred in denying his special appearance,
and we do not reach his second argument, that he does not have sufficient
minimum contacts with Texas to confer personal jurisdiction over him upon the
trial court.
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Conclusion
We affirm the decision of the trial court.
Harvey Brown
Justice
Panel consists of Justices Keyes, Bland, and Brown.
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