Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Wednesday, April 18, 2012

Enforceability of Forum Selection Clauses in Texas

   
CONTRACTUAL CHOICE OF TEXAS AS FORUM FOR LITIGATION
  
Forum selection clauses are enforceable in Texas if the parties have contractually consented to submit to the exclusive jurisdiction of Texas. See In re Cornerstone Healthcare Holding Group, Inc., 348 S.W.3d 538, 540 (Tex. App.-Dallas 2011, orig. proceeding); Falk & Fish, L.L.P. v. Pinkston's Lawnmower & Equipment., Inc., 317 S.W.3d 523, 525 (Tex. App.-Dallas 2010, no pet.); My Café-CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860, 864 (Tex. App.-Dallas 2003, no pet.). We review a trial court's ruling concerning the validity and enforceability of a forum selection clause for an abuse of discretion. See Cornerstone, 348 S.W.3d at 540; Falk, 317 S.W.3d at 526. A trial court does not abuse its discretion if it bases its decision on conflicting evidence. My Café, 107 S.W.3d at 864.
  
SOURCE: DALLAS COURT OF APPEALS - 05-10-01385-CV – 4/2/12
 
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SuperMedia sued appellees in Dallas County alleging that appellees failed to pay SuperMedia as promised and owed over $173,000 under all their advertising agreements. In its petition, SuperMedia alleged that jurisdiction was proper in Dallas County because the terms and conditions contained a forum selection clause designating Dallas County as a proper venue for lawsuits arising under the contracts. SuperMedia attached a copy of each of the Applications to its petition, but it attached only one copy of the Terms and Conditions, a copy dated December 2006, containing what it contended was a forum selection clause.         Appellees filed a joint special appearance arguing that the trial court did not have jurisdiction. They disputed the existence of a forum selection clause and argued that they had no contacts that made them amenable to suit in Texas. See Falk & Fish, L.L.P. v. Pinkston's Lawnmower & Eqpt., Inc., 317 S.W.3d 523, 526 (Tex. App.-Dallas 2010, no pet.). The trial court granted the special appearance. SuperMedia appeals the trial court's ruling.

[…]
 
In issues one and two, SuperMedia argues that the trial court abused its discretion by not enforcing the forum selection clause. We disagree.
 
SuperMedia alleged in its petition that appellees executed 17 different Applications, each of which contained a forum selection clause designating Dallas County as a proper forum for lawsuits arising under the Applications. SuperMedia alleged that the forum selection clause was a provision in a separate document entitled terms and conditions, and that each Application referred to those terms and conditions as being attached to the Application. SuperMedia attached one copy of the December 2006 Terms and Conditions to its petition. The December 2006 Terms and Conditions contained the following provision:

SECTION 19. GOVERNING LAW. Advertiser and Publisher agree that this Application and all disputes relating to this Application will be governed by and interpreted according to the State of Texas as applied to agreements entered into and to be performed entirely within Texas between residents. Venue as to any action or proceeding initiated by either party will be proper in Dallas County, Texas.
  
We conclude that the petition satisfied SuperMedia's initial burden to plead facts sufficient to bring the defendant within the reach of the Texas long-arm statute. See Boothe, 329 S.W.3d at 120. The burden then shifted to appellees to negate the forum selection clause as a basis for personal jurisdiction. See id. Appellees filed a special appearance disputing the existence of a forum selection clause in each of the 17 Applications.
  
At the hearing on appellees' special appearance, appellees pointed out that 16 of the 17 Applications referred to an attached document containing terms and conditions, including allegedly a forum selection clause, but that none of the Applications SuperMedia included in its petition had the terms and conditions attached to it. Appellees also pointed out that the last Application contained terms and conditions incorporated into the Application itself, rather than in a separate document, and those terms and conditions did not contain a forum selection clause. We conclude that appellees satisfied their burden to negate the forum selection clause as a basis for asserting personal jurisdiction by showing that the terms and conditions referred to in 16 of the Applications were missing and that the last Application did not contain a forum selection clause. See Boothe, 329 S.W.3d at 120.
  
The burden then shifted to SuperMedia to prove as a matter of law that the court had jurisdiction. See id. SuperMedia presented evidence that it contended showed that each Application contained a forum selection clause. Its corporate representative, Vanessa Andros, testified generally that the December 2006 Terms and Conditions applied to all the advertising agreements with appellees. She did not explain, however, how those terms and conditions could apply to the Applications dated before December 2006, specifically, the Applications dated in October and November 2006. Andros also testified specifically that the December 2006 Terms and Conditions applied to the Applications dated March 20, 2007, May 15, 2007, September 13, 2007, December 4, 2007, and February 4, 2008. But she also testified that over the years SuperMedia made changes to the terms and conditions that applied to these Applications. Although she characterized the changes as “minor tweaking” and said that up until December 2008, “things were not changing that much,” she conceded that she did not have personal knowledge about what specific terms and conditions appellees received when they signed each of the Applications.
   
Based on this evidence, we conclude that SuperMedia did not establish as a matter of law that each of the 17 Applications contained a forum selection clause designating Dallas County as a proper forum. See Boothe, 329 S.W.3d at 120. This is one ground upon which the trial court could have based its decision to grant the special appearance. Accordingly, we conclude that the trial court did not err by granting appellees' special appearance.         We resolve appellant's first and second issues against it. We do not need to reach issue three, which addresses the doctrine of forum non conveniens. We affirm the trial court's order granting appellees' special appearance.
  
                                                          ELIZABETH LANG-MIERS
                                                          JUSTICE
  
SOURCE: DALLAS COURT OF APPEALS - 05-10-01385-CV – 4/2/12

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