Michael Nagata, Jack Van Vleit and James (Patt) Edgar v. MHWIRTH Inc.

Opinion issued March 9, 2023
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-21-00492-CV
———————————
MICHAEL NAGATA, JACK VAN VLEIT, AND JAMES (PAT) EDGAR,
Appellants
V.
MHWIRTH INC., Appellee
On Appeal from the 157th District Court
Harris County, Texas
Trial Court Case No. 2021-14261
MEMORANDUM OPINION
In this interlocutory appeal, appellants Michael Nagata, Jack Van Vleit, and
James (Pat) Edgar (collectively, appellants), appeal from the trial court’s order
denying their motions to abate the case. Nagata and Edgar also appeal from the trial
court’s order denying their special appearances. Because we conclude that we do not
have jurisdiction over an appeal from the denial of a motion to abate, we dismiss
appellants’ appeal to the extent they purport to do so. We further affirm the trial
court’s denial of Nagata’s and Edgar’s special appearances.
Background
In March 2018, appellee MHWirth Inc. and Gulf Coast Brake & Motor, Inc.
(Gulf Coast)1 entered into a written contract entitled “Stock Parts and Intellectual
Property Sale Agreement” (Agreement) concerning the sale of brake parts and
intellectual property associated with Eddy Current Brakes (ECB) owned by
MHWirth. MHWirth is an original equipment manufacturer for deepwater drilling
rigs, semisubmersible drill ships, and drilling packages offshore. Gulf Coast is an
industrial service company providing several services for electro-magnetic brake
systems used on rigs in the oil and gas drilling industry. Nagata, Van Vleit, and
Edgar are principal officers of Gulf Coast. The ECB is a draw works auxiliary brake
employed in the drilling industry and used in oil and gas operations that is “designed
1
Gulf Coast also filed an appeal from the trial court’s denial of its motion to abate.
On July 15, 2022, after briefing was filed by all parties, Gulf Coast filed a
“Suggestion of Bankruptcy and Notice of Automatic Stay,” notifying this Court that
on July 14, 2022, Gulf Coast filed a bankruptcy case under Chapter 11 of the United
States Bankruptcy Code in the United States District Court for the Western District
of Louisiana, Lafayette Division. On July 26, 2022, the Court abated this appeal
pending resolution of Gulf Coast’s bankruptcy proceedings. See TEX. R. APP. P. 8.2.
Upon receipt of MHWirth’s motion to sever Gulf Coast’s appeal from the remaining
appellants’ appeal , this Court granted the motion to sever Gulf Coast from this
appeal and reinstated the appeal on this Court’s active docket. See id. 8.3(b).
2
to slow the hook load when energized with DC voltage.” The negotiated price in the
Agreement for the parts and intellectual property was $500,000.
As part of the Agreement, appellants Nagata, Van Vleit, and Edgar signed as
personal guarantors, explicitly agreeing to be “jointly and severally liable for the
fulfilment by Buyer [Gulf Coast] of its payment obligations under this Agreement,
as if they were the principal obligor.” They also agreed to “guarantee to Seller
[MHWirth] the payment of all amounts payable by [Gulf Coast] under this
Agreement and undertake to ensure that [Gulf Coast] will perform when due all its
obligations under this Agreement.” Section 10.7 of the Agreement sets forth the
parties’ agreement regarding the governing law:
10.7 Governing Law. This Agreement shall be governed by the law
of the State of Texas, USA without regard to its conflicts-of-laws rules
or principles. The parties consent to personal jurisdiction in any action
brought in any court, federal or state, within the State of Texas, having
subject matter jurisdiction arising under this Agreement . . . .
Appellants initialed each page of the Agreement, not just the section
containing the personal guarantee, and signed the Agreement as “Personal
Guarantors,” with their signatures appearing just below the statement “the parties
hereto hereby execute this Agreement” and the signature lines for Gulf Coast and
MHWirth.
3
According to MHWirth’s petition, following the execution of the Agreement,
Gulf Coast took possession of the ECB parts in Houston, Texas and brought those
parts to its facility in Louisiana. Gulf Coast made two installment payments required
under the Agreement, totaling $150,000, but thereafter refused the additional
required installment payments to MHWirth. MHWirth alleged that on June 21, 2019,
Gulf Coast informed it that “due to the downturn of the industry and the fact that we
have not received any of the expected orders from MHWirth,” Gulf Coast was
unable to continue making payments. Thus, MHWirth alleged that Gulf Coast was
responsible for the remaining balance of the original amount of the Agreement—
$350,000—in addition to late fees and delay charges permitted under Section 5.3 of
4
the Agreement. Accordingly, on March 11, 2021, MHWirth sued Gulf Coast, along
with appellants based on their personal guarantees, for breach of contract.
In its petition, MHWirth alleged that the trial court had personal jurisdiction
over Gulf Coast and appellants pursuant to Section 10.7 of the Agreement because
“the parties consented to . . . personal jurisdiction in any action brought within the
State of Texas.”
Appellants Nagata and Edgar, who reside in Louisiana, filed special
appearances challenging the trial court’s personal jurisdiction over them. 2 Nagata
and Edgar alleged that they did not enter into any contract with MHWirth and that
to the extent there was a valid contract, the personal guarantee section of the
Agreement only obligated them to guarantee Gulf Coast’s payment obligations
under the Agreement, and did not incorporate the forum selection clause which they
contend is applicable only to Gulf Coast.
Additionally, all the appellants moved to abate the case, arguing that before
MHWirth filed the underlying suit in Texas, Gulf Coast had filed a suit against
MHWirth in Louisiana involving “identical claims,” including breach of contract,
fraud, misrepresentation, and damages. Because the “identical contractual dispute
regarding the identical basis and facts” was already pending in another forum,
2
Neither Van Vleit, who resides in Texas, nor Gulf Coast, filed a special appearance.
5
appellants requested that the trial court abate the second lawsuit, i.e., the underlying
case, filed by MHWirth.
In one order, the trial court denied Nagata’s and Edgar’s special appearances
and denied the appellants’ motions to abate. Appellants filed their notice of appeal
citing to Texas Civil Practice and Remedies Code Section 51.014(a)(7), permitting
an interlocutory appeal from the denial of a special appearance, as the basis for this
Court’s jurisdiction. See TEX. CIV. PRAC. & REM. CODE § 51.014(a)(7).
Motion to Abate
In their first issue, appellants argue that the trial court erred in denying
appellants’ motions to abate in favor of the first-filed Louisiana case given the well-
established rules on state-to-state comity. In response, MHWirth argues that we
should dismiss appellants’ appeal from the denial of the motions to abate because
neither Section 51.014 nor any other statute authorizes an interlocutory appeal from
the denial of a motion to abate. Because this raises a jurisdictional question, we
address it first.
This Court generally has jurisdiction only over appeals from final judgments
and specific interlocutory orders that the legislature has designated as appealable
orders. See CMH Homes v. Perez, 340 S.W.3d 444, 447 (Tex. 2011); see also TEX.
CIV. PRAC. & REM. CODE § 51.014; Walker Sand, Inc. v. Baytown Asphalt Materials,
Ltd., 95 S.W.3d 511, 514 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (“Appellate
6
courts have jurisdiction to consider immediate appeals of interlocutory orders only
if a statute explicitly provides appellate jurisdiction.”). We strictly apply such
statutes permitting interlocutory appeals “because they are a narrow exception to the
general rule that interlocutory orders are not immediately appealable.” CMH Homes,
340 S.W.3d at 447; Walker Sand, 95 S.W.3d at 514.
Where only a portion of an order qualifies for interlocutory review, we
generally cannot exercise jurisdiction over other portions of the order. See
Schlumberger Ltd. v. Rutherford, 472 S.W.3d 881, 891 (Tex. App.—Houston [1st
Dist.] 2015, no pet.) (dismissing appeal from partial grant of TCPA motion to
dismiss and concluding that “denial of a [TCPA] motion to dismiss does not provide
an avenue of interlocutory appeal to all other ancillary rulings contained within the
same written ‘interlocutory order’”); see also Five Star Glob., LLC v. Hulme, No.
05-20-00940-CV, 2021 WL 3159792, at *2 (Tex. App.—Dallas July 26, 2021, no
pet.) (mem. op.) (considering interlocutory appeal to extent it challenged
appointment of receiver but dismissing remainder of appeal because appellate court
lacked jurisdiction to review trial court’s order to extent it appointed person to act
as auditor or master); Waite v. Waite, 64 S.W.3d 217, 224 n.6 (Tex. App.—Houston
[14th Dist.] 2001, pet. denied) (“When a litigant challenges both appealable and
unappealable interlocutory orders, we review the portion of an order which is
appealable and refuse to consider the portion which is not-appealable.” (internal
7
citation and quotation omitted)); but see Dallas Symphony Ass’n, Inc. v. Reyes, 571
S.W.3d 753, 760–61 & n.36 (Tex. 2019) (neither approving nor disapproving of
courts of appeals’ reasoning but noting at least one exception where Section 51.014’s
text specifically authorizes appeal from order denying motion based “in whole or in
part” on appealable ground).
Section 51.014(a)(7) authorizes an interlocutory appeal from an order that
“grants or denies the special appearance of a defendant under Rule 120a, Texas
Rules of Civil Procedure[.]” TEX. CIV. PRAC. & REM. CODE § 51.014(a)(7). Thus,
we have jurisdiction to review the trial court’s order to the extent that it denied
Nagata’s and Edgar’s special appearances. However, Section 51.014 does not extend
this Court’s jurisdiction over the trial court’s denial of appellants’ motions to abate.
Neither Section 51.014 nor any other statute provides for an interlocutory appeal
from an order denying a motion to stay or abate the trial court’s proceedings. Id.;
Walker Sand, 95 S.W.3d at 516 (holding interlocutory appeal from order denying
motion to abate was not authorized by statute and therefore appellate court lacked
jurisdiction to consider appeal); see also Progressive Cnty. Mut. Ins. Co. v.
Anderson, No. 05-10-00103-CV, 2010 WL 716426, at *1 (Tex. App.—Dallas Mar.
3, 2010, no pet.) (mem. op.) (“An order denying a motion to sever and abate is
neither (1) a final judgment or (2) an interlocutory order for which an appeal is
authorized by statute. Thus, it is not appealable.”); Bennett v. Leas, No. 13-04-362-
8
CV, 2005 WL 608289, at *1 (Tex. App.—Corpus Christi–Edinburg Mar. 17, 2005,
pet. denied) (mem. op.) (per curiam) (dismissing appeal for want of jurisdiction
because “[a]n order of abatement is not an authorized interlocutory appeal”); Lamar
Cnty. Elec. Coop. Ass’n v. Rayburn Country Elec. Coop., Inc., No. 08-01-00238-
CV, 2004 WL 241529, at *2 (Tex. App.—El Paso Feb. 10, 2004, no pet.) (mem. op.)
(rejecting argument that trial court erred in refusing to abate due to previously filed
case and holding that “review of such an order was not subject to interlocutory
appeal under the Civil Practice and Remedies Code and that such an order was
generally reviewed only on appeal from the final judgment”); cf. Peters v.
Blockbuster, Inc., 65 S.W.3d 295, 309 (Tex. App.—Beaumont 2001, no pet.)
(holding that issues related to abatement of case in deference to previously filed class
action pending in another state were not reviewable by interlocutory appeal because
trial court did not issue injunction or other appealable order).
Because appellants challenge two interlocutory rulings, only one of which is
appealable by statute, “the proper course is to dismiss that portion which is non-
appealable, and to rule on the portion from which an appeal may be taken.” Bobbitt
v. Cantu, 992 S.W.2d 709, 712 (Tex. App.—Austin 1999, no pet.); see also Five
Star Glob., 2021 WL 3159792, at *2; Schlumberger, 472 S.W.3d at 891; Waite, 64
S.W.3d at 224 n.6. Accordingly, because an interlocutory appeal is not authorized
9
from the denial of a motion to abate, we dismiss that portion of appellants’ appeal
for lack of jurisdiction.
Special Appearance
In their second issue, Nagata and Edgar argue that the trial court erred in
denying their special appearances. In support, they contend that MHWirth’s reliance
on the consent-to-jurisdiction provision in Section 10.7 of the Agreement is
misplaced because neither Nagata nor Edgar were expressly made parties to the
Agreement.
A. Standard of Review
Special appearances are governed by Texas Rule of Civil Procedure 120a,
which provides that “a special appearance may be made by any party . . . for the
purpose of objecting to the jurisdiction of the court over the person or property of
the defendant on the ground that such party or property is not amenable to process
by the courts of this State.” TEX. R. CIV. P. 120a.
On appeal we review de novo the trial court’s determination to grant or deny
a special appearance. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801,
806 (Tex. 2002). A plaintiff bears the initial burden of pleading sufficient allegations
to establish personal jurisdiction over a defendant. BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 793 (Tex. 2002). However, when a nonresident
defendant challenges jurisdiction through a special appearance, the defendant must
10
negate all grounds for personal jurisdiction alleged by the plaintiff in order to prevail.
See id. We review all evidence in the record to determine if the nonresident
defendant negated all possible grounds. N803RA, Inc. v. Hammer, 11 S.W.3d 363,
366 (Tex. App.—Houston [1st Dist.] 2000, no pet.) (citing Kawasaki Steel Corp. v.
Middleton, 699 S.W.2d 199, 203 (Tex. 1985)).
When reviewing a trial court’s order denying a special appearance, we review
the court’s findings of fact for legal and factual sufficiency and its conclusions of
law de novo. BMC Software, 83 S.W.3d at 794. Absent issuance of findings of fact
and conclusions of law, as here, all facts necessary to support the order and supported
by the evidence are implied. Id. at 795.
Two requirements must be met before a Texas court can exercise personal
jurisdiction over a nonresident defendant. First, the Texas long-arm statute must
authorize the exercise of jurisdiction, and second, the exercise of jurisdiction must
be consistent with the guarantees of due process. Coleman, 83 S.W.3d at 806; Tri-
State Bldg. Specialties, Inc. v. NCI Bldg. Sys., L.P., 184 S.W.3d 242, 248 (Tex.
App.—Houston [1st Dist.] 2005, no pet.).
With respect to personal jurisdiction, federal due process requires two things.
First, the nonresident defendant must have purposefully established such minimum
contacts with the forum state that the defendant could reasonably anticipate being
sued there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76 (1985). Second,
11
if the nonresident defendant has purposefully established minimum contacts with the
forum, the exercise of personal jurisdiction must also comport with traditional
notions of fair play and substantial justice. Id. at 476. Only in rare cases, however,
will a Texas court’s exercise of personal jurisdiction not comport with fair play and
substantial justice when the nonresident defendant has purposefully established
minimum contacts with the forum state. Guardian Royal Exch. Assur., Ltd. v.
English China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991).
B. Consent to Jurisdiction
Personal jurisdiction is a waivable right and a party can expressly or implicitly
consent to personal jurisdiction through a forum selection clause or a consent-to-
jurisdiction clause. Burger King, 471 U.S. at 472 n.14; Abacan Tech. Servs. Ltd. v.
Glob. Marine Int’l Servs. Corp., 994 S.W.2d 839, 843 (Tex. App.—Houston [1st
Dist.] 1999, no pet.). When parties freely enter into agreements with forum selection
clauses, the clause is prima facie valid and enforceable unless the opponent
establishes a compelling reason not to enforce it. See M/S Bremen v. Zapata Off–
Shore Co., 407 U.S. 1, 10 (1972). Enforcement of a forum selection clause is
mandatory absent a showing 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., Inc., 156 S.W.3d 557, 559 (Tex. 2004) (orig.
proceeding) (per curiam) (quoting In re AIU Ins. Co., 148 S.W.3d 109, 112 (Tex.
12
2004)). The party challenging the forum selection clause bears a “heavy burden of
proof.” M/S Bremen, 407 U.S. at 17.
The forum selection clause, or consent-to-jurisdiction clause, contained in
Section 10.7 of the Agreement at issue here, provides: “The parties consent to
personal jurisdiction in any action brought in any court, federal or state, within the
State of Texas, having subject matter jurisdiction over this Agreement.”
C. Application
Nagata and Edgar contend that Section 10.7 does not apply to them because
they were not explicitly made “parties” to the Agreement. Rather, they argue, the
language of the Agreement, including numerous references to “either party” or “the
other party,” indicates that it was entered into only between Gulf Coast and
MHWirth such that Section 10.7 applies only to those two entities. We disagree.
“Forum-selection clauses are creatures of contract” and interpreted under
traditional contract principles. Rieder v. Woods, 603 S.W.3d 86, 94 (Tex. 2020)
(quoting Pinto Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d 428, 443 (Tex. 2017)).
Courts strive to give effect to the parties’ intent as expressed in the language they
chose. Id. “Contract terms cannot be viewed in isolation, however, because doing so
distorts meaning.” Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d
882, 889 (Tex. 2019). Accordingly, courts must examine the contract as a whole to
harmonize and give effect to all of its provisions so that none are rendered
13
meaningless. Id.; Pinto Tech. Ventures, 526 S.W.3d at 443 (quoting Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005)). We give the contract’s
terms their plain, ordinary, and generally accepted meanings unless the contract
itself shows that they were used in a technical or different sense. Pathfinder Oil, 574
S.W.3d at 889; Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d
296, 305 (Tex. 2015); Valence Operating, 164 S.W.3d at 662.
Here, the clause at issue states: “The parties consent to personal jurisdiction
in any action brought in any court, federal or state, within the State of Texas, having
subject matter jurisdiction over this Agreement.” The Agreement does not define
“party” or “parties.” Therefore, we apply the plain meaning of “party.” Black’s Law
Dictionary defines “party” as “[s]omeone who takes part in a transaction.” Party,
BLACK’S LAW DICTIONARY (11th ed. 2019). The transaction here was the sale of the
parts and equipment from MHWirth to Gulf Coast, as memorialized in the
Agreement, which included the personal guaranty of Nagata and Edgar.
Furthermore, the last page of the Agreement states: “IN WITNESS
WHEREOF, the parties hereto do hereby execute this Agreement in several
counterparts, each of which shall be considered as an original, effective as of the
date first hereinabove written.” Immediately below this phrase are the signature
blocks for MHWirth, Gulf Coast, and each of the three guarantors. Thus, the plain
language of the Agreement indicates that the parties to the Agreement are those who
14
execute, i.e., sign, the Agreement. See Execute, BLACK’S LAW DICTIONARY (11th ed.
2019) (defining execute as “[t]o make (a legal document) valid by signing”).
MHWirth, Gulf Coast, and each of the three guarantors executed the Agreement.
Thus, they are all “parties” to the Agreement. Although we recognize that the
Agreement includes certain provisions that refer to “either party” or “other party,”
this inartful drafting does not make the Agreement ambiguous or subject to more
than one reasonable interpretation, especially when reading the Agreement as a
whole, as we must. See Pathfinder Oil, 574 S.W.3d at 889; Pinto Tech. Ventures,
526 S.W.3d at 443; Valence Operating, 164 S.W.3d at 662; see also Guggenheim
Corp. Funding, LLC v. Valerus Compression Servs., L.P., 465 S.W.3d 673, 681
(Tex. App.—Houston [14th Dist.] 2015, pet. denied) (“Likewise, lack of clarity or
even inartful drafting will not alone render an agreement ambiguous.” (citing In re
D. Wilson Constr. Co., 196 S.W.3d 774, 781 (Tex. 2006)).
Viewing the Agreement as a whole, as we must, demonstrates that each of the
three guarantors initialed every page of the Agreement, not just the page containing
the guaranty provisions, and that their initials appeared under the initials for
representatives of MHWirth and Gulf Coast.
Moreover, Section 6.2 of the Agreement states:
Specifically GUARANTORS, on an irrevocable and unconditional
basis, expressly waiving the benefits of division and discussion and
order, guarantee to [MHWirth] the payment of all amounts payable by
[Gulf Coast] under this Agreement and undertake to ensure that [Gulf
15
Coast] will perform when due all its obligations under this Agreement.
(Emphasis added).
Thus, it is clear under the language of this provision that Nagata and Edgar, as
guarantors, unconditionally guaranteed not only the “payment of all amounts
payable by [Gulf Coast] under th[e] Agreement,” but also the performance of “all
[of Gulf Coast’s] obligations under th[e] Agreement.”
This Court considered a similar situation in Halabu v. Petroleum Wholesale,
L.P., No. 01-07-00614-CV, 2008 WL 2186466 (Tex. App.—Houston [1st Dist.]
May 22, 2008, no pet.) (mem. op.). There, Petroleum and USA Travel entered into
a “Fuel Marketing Location Agreement” (FMLA) whereby Petroleum agreed to sell
motor fuels to USA Travel delivered to its place of business in Amarillo, Texas. Id.
at *1. The FMLA contained a provision that stated that the agreement “shall be
construed under and in accordance with the laws of the State of Texas, and all
obligations of the parties created hereunder are performable in Harris County,
Texas.” Id. The bottom of each page of the FMLA was initialed “SH” and page
eleven of the agreement, entitled “GUARANTEE,” contained a personal guarantee
of payment and performance of the FMLA. It was signed, with the signature block
reading “SHAMIL HALABU.” Id. Petroleum sued Halabu for breach of contract,
alleging that he had personally guaranteed the contract between Petroleum and USA
Travel Center, and premising jurisdiction on the forum selection clause in the
FMLA. Id. at *3. Halabu filed a special appearance in the trial court, asserting that
16
it lacked personal jurisdiction over him because the guarantee was not part of the
FMLA and denying that he had signed the guarantee. Id. Based on the evidence
before the trial court, which included the original signed FMLA that included the
forum selection clause, and “SH” initials on each page, as well as the signed
guarantee agreement guaranteeing “payment and performance of the FMLA,” this
Court affirmed the trial court’s denial of Halabu’s special appearance concluding
that the evidence supported the trial court’s implied finding that Halabu consented
to jurisdiction in Texas. Id. at *1, 3.
In a similar context involving similar language in a guaranty agreement, the
Amarillo Court of Appeals concluded that the guarantors consented to jurisdiction
in Lubbock County, Texas and, therefore, the trial court correctly denied the
guarantors’ special appearances. See Initiatives Healthcare, Inc. v. DivLend Equip.
Leasing, LLC, No. 07-12-00480-CV, 2013 WL 9541476, at *4–5 (Tex. App.—
Amarillo Oct. 31, 2013, no pet.) (mem. op.). In Initiatives Healthcare, DivLend
Equipment Leasing, LLC (DivLend) entered into a lease agreement with Healthcare
of Florence, LLC (Healthcare of Florence), located in Arizona, to lease medical and
hospital equipment. Id. at *1. The equipment lease between DivLend and Healthcare
of Florence contained a forum selection clause, or consent-to-jurisdiction clause,
providing that any suit between the parties would be heard in Lubbock County,
Texas. Id. at *2. DivLend conditioned the execution of the lease agreement on the
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execution of certain limited and unlimited guaranty agreements. Id. Each guaranty
agreement “absolutely and unconditionally guarant[eed] to [DivLend] the prompt
payment in full when due of all payments of rent and all other amounts payable by
the Lessee to the Lessor and the performance by the Lessee of all of the Lessee’s
other obligations under the Lease.” Id. After Healthcare of Florence allegedly
breached the lease, DivLend sought to enforce the guaranty agreements in Texas. Id.
The guarantors filed special appearances, to which DivLend responded that the
guarantors voluntarily consented to jurisdiction in Lubbock County under the terms
of the lease. Id. at *3. The guarantors, in contrast, argued that the consent-to
jurisdiction clause in the lease agreement was ineffective as a waiver of the right to
object to personal jurisdiction in a suit based on the guaranty agreements. Id. The
trial court denied the guarantors’ special appearances. Id. at *1.
The Court of Appeals affirmed. In affirming, the court found the following
significant:
• the lease agreement and guaranty agreements were executed
contemporaneously;
• the guaranty agreements expressly referenced the lease agreement;
• the lease agreement contained an express clause governing the parties’ choice
of law as well as the forum for dispute resolution—Lubbock County, Texas;
and
• Healthcare of Florence signed the lease agreement and “each guarantor
guaranteed prompt payment to DivLend in the event of default and
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performance of all of [Healthcare of Florence’s] other obligations under the
Lease.”
Id. at *4. Accordingly, the court held that the record supported the trial court’s
implied finding that each guarantor consented to jurisdiction in Lubbock County,
Texas. Id. at *5. In a concurring opinion, Chief Justice Quinn noted, as the majority
did, that each guaranty included a passage whereby the guarantor agreed to
guarantee the payment of “rent and all other amounts payable . . .” as well as the
“performance by the Lessee of all of the Lessee’s other obligations under the Lease.”
Id. at *5 (Quinn, J., concurring). “Agreeing within the lease to adjudicate all claims
in Texas is no less of an ‘obligation’ imposed on the lessee than the obligation to
pay rent for the items leased. Consequently, the guarantors were also bound to
perform that obligation.” Id.
Here, the Agreement and the guarantees were not simply executed
contemporaneously—the guarantees were contained in the Agreement itself. And
Nagata and Edgar initialed each page of the Agreement, including the page
containing Section 10.7, and executed the Agreement as “parties.” Like Halabu and
Initiatives Healthcare, the Agreement contained an express clause consenting to the
personal jurisdiction of Texas courts. Sections 6.1 and 6.2 explicitly reference “this
Agreement” and Gulf Coast’s obligations thereunder. Perhaps most importantly, in
Section 6.2 Nagata and Edgar guaranteed not just the “payment of all amounts
payable by [Gulf Coast] under this Agreement,” but also the performance of “all [of
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Gulf Coast’s] obligations under this Agreement,” which would include the consent
to jurisdiction in Texas. See Initiatives Healthcare, 2013 WL 9541476, at *4;
Halabu, 2008 WL 2186466, at *1, 3.
Based on the above, including the presence of Nagata’s and Edgar’s initials
on each page of the Agreement, the incorporation of the guaranty into the Agreement
itself, Nagata’s and Edgar’s signatures as “parties” at the conclusion of the
Agreement, and Nagata’s and Edgar’s unconditional guarantee of not just the
“payment of all amounts payable by [Gulf Coast] under this Agreement,” but also
the performance of “all [of Gulf Coast’s] obligations under this Agreement,” we hold
that the evidence supports the trial court’s implied finding that Nagata and Edgar
consented to personal jurisdiction in Texas. See Initiatives Healthcare, 2013 WL
9541476, at *4; Halabu, 2008 WL 2186466, at *1, 3.
Finally, Nagata and Edgar argue that even if the forum selection clause
applied to them, enforcement of it would offend due process or be unreasonable and
unjust because the case should be abated in favor of the first-filed Louisiana case.
See M/S Bremen, 407 U.S. at 10 (forum selection clauses “are prima facie valid and
should be enforced unless enforcement is shown by the resisting party to be
‘unreasonable’ under the circumstances”). However, a court must enforce the forum
selection clause unless the resisting party makes a “strong showing” that: (1) its
enforcement would be unreasonable and unjust; (2) the clause was the product of
20
fraud or overreaching; (3) enforcement would contravene the strong public policy of
the forum where the suit was filed; or (4) trial in the chosen forum would be seriously
inconvenient. See id. at 15–16; Rieder, 603 S.W.3d at 93.
Edgar and Nagata failed to carry their burden to demonstrate that the forum
selection clause should not be enforced. Although they contend that forcing them to
defend themselves in Texas would be unreasonable and unjust because this case
should have been abated in favor of the Louisiana case, the evidence submitted in
connection with their special appearances indicates that they are not parties to the
Louisiana action, only Gulf Coast and MHWirth are parties. Further, even if they
were parties, the fact that two lawsuits might result from the application of a forum
selection clause does not meet the standard for avoiding the forum selection
provision. See In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 680 (Tex. 2009) (orig.
proceeding) (per curiam) (“Next, assuming Tropicpak’s argument that if the clauses
are enforced, it will have to pursue two suits—one against IPA in Illinois and one
against Salinas in Texas—is correct, that is not the type of unusual and special
circumstances that show litigating in the contracted-for forum will be so gravely
difficult and inconvenient Tropicpak will be deprived of its day in court.”); In re FC
Stone, LLC, 348 S.W.3d 548, 552 (Tex. App.—Dallas 2011, orig. proceeding)
(“However, the fact that Williams might have to pursue two lawsuits—one in Illinois
21
and one in Texas—does not meet the standard for avoiding the forum-selection
provision.”).
Because the evidence supports the trial court’s implied finding that Nagata
and Edgar consented to personal jurisdiction in Texas, and they have failed to show
that the forum selection clause should not be enforced, we conclude that the trial
court did not err in denying their special appearances.
We overrule Nagata and Edgar’s second issue.
Conclusion
We dismiss for lack of jurisdiction appellants Michael Nagata, Jack Van Vleit,
and James Edgar’s appeal from the trial court’s order to the extent it denies their
motions to abate. We affirm the trial court’s order to the extent it denies Nagata’s
and Edgar’s special appearances.
Amparo Guerra
Justice
Panel consists of Justices Landau, Countiss, and Guerra.
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