In Re Kyocera Wireless Corp.

162 S.W.3d 758, 2005 Tex. App. LEXIS 2813, 2005 WL 850427
CourtCourt of Appeals of Texas
DecidedApril 12, 2005
Docket08-04-00348-CV
StatusPublished
Cited by5 cases

This text of 162 S.W.3d 758 (In Re Kyocera Wireless Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Kyocera Wireless Corp., 162 S.W.3d 758, 2005 Tex. App. LEXIS 2813, 2005 WL 850427 (Tex. Ct. App. 2005).

Opinion

OPINION

ANN CRAWFORD McCLURE, Justice.

At issue in this mandamus proceeding is the enforceability of a forum-selection clause in a contract between a Texas defendant/third party plaintiff and a California third party defendant. Because we conclude the clause is enforceable, we conditionally grant relief.

FACTUAL SUMMARY

In 2003, Kyocera Wireless Corporation entered into a business relationship with Hecmma, Inc. to assemble battery packs for Kyocera cellular telephones. Hecmma is an electronics manufacturing services *761 company which performs different types of assembly processes. It assembles component parts obtained from twenty vendors into several different models of batteries used in Kyocera phones. As part of its normal product development process, Kyocera’s engineering department evaluated various suppliers of battery pack components, including battery cells, and it included Coslight USA, Inc. 1 on the list of approved suppliers of battery cells. Between April 2003 and May 2004, Kyocera issued fifty-nine purchase orders to Hecm-ma for battery packs used in Kyocera phones. Because of Hecmma’s tight financial condition, Kyocera agreed to pay the purchase orders “net 10” rather than the customary “net 30” or “net 60,” meaning that Kyocera paid Hecmma a mere ten days after receiving a shipment. Although Kyocera paid approximately forty of the fifty-nine purchase orders, it refused to pay the rest. Hecmma contends Kyocera refused to pay the outstanding invoices due to battery pack failures. 2 These defective battery packs were shipped back to Hecmma.

Each purchase order issued by Kyocera contained a forum-selection clause providing that all disputes arising in connection with the agreement would be governed by California law and heard only by a court of competent jurisdiction in San Diego County, California. Kyocera has a manufacturing plant in San Diego and its principal place of business is in San Diego. Hecm-ma is a Texas Corporation with its principal place of business in El Paso. Through a subcontractor, the company has access to manufacturing facilities in Cuidad Juarez, Mexico.

In July 2003, Hecmma began production of the Model 7135 cellular phone battery packs for Kyocera. According to Hecmma’s executive vice-president, Manuel Rivera, Kyocera specified Coslight as the supplier of the cell. In October 2003, Kyocera notified the United States Consumer Product Safety Commission of a safety issue with the Model 7135 battery packs. 3 In January 2004, Kyocera initiated a voluntary recall of 140,000 defective battery packs. Following an internal investigation and independent testing performed by Motorola Product Test Services, Kyocera concluded that the battery pack failures resulted from defective battery cells provided by Coslight. Coslight refused to accept responsibility and insisted that the batteries failed due to a defect in the design of Kyocera’s phones. Kyoc-era then asked Hecmma to assist with the recall. Hecmma agreed to allow Kyocera to offset its payments to Hecmma by $25,000 per week to cover the costs of the recall. In March 2004, Kyocera returned about 37,000 of the Model 7135 battery packs to Hecmma. Hecmma claims that Kyocera instructed it to stop using Cos-light battery cells and to refuse payment on the outstanding amounts Hecmma owed to Coslight.

On April 13, 2004, Coslight filed suit against Hecmma in El Paso County for breach of contract, alleging that Hecmma failed to pay invoices associated with a number of purchase orders issued in 2003. In May, Kyocera returned an additional 18,000 Model 7135 battery packs to Hecm- *762 ma and ended its business relationship with the company. On May 28, Hecmma answered Coslight’s suit and filed a third party petition against Kyocera alleging breach of contract. Hecmma later amended its pleadings against Kyocera to add causes of action based on misappropriation of trade secrets/unfair competition, fraud/misrepresentation, and indemnity/contribution. On June 17, 2004, Kyoc-era filed a motion to dismiss Hecmma’s suit based on the forum-selection clause contained in the purchase orders. It also contended that it had been improperly joined in the action. In July 2004, Kyoc-era filed suit against Hecmma in United States District Court in San Diego 4 but the parties agreed to stay that litigation until November 30, 2004 in order to give the Texas court an opportunity to rule on Kyocera’s motion to dismiss. 5 Following a hearing, the trial court denied Kyocera’s motion to dismiss without specifying the basis for its ruling. Kyocera filed a petition seeking a writ of mandamus requiring the trial judge to dismiss Hecmma’s suit against it.

FORUM-SELECTION CLAUSE

Kyocera contends it is entitled to mandamus relief because: (1) Hecmma did not carry its burden of showing that the forum-selection clause is unenforceable and (2) Kyocera does not have an adequate remedy by appeal.

Standard of Review

Mandamus will lie only to correct a clear abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992)(orig.proceeding). Moreover, there must be no other adequate remedy at law. Id. An appellate court rarely interferes with a trial court’s exercise of discretion. A clear abuse of discretion warranting correction by mandamus occurs when a court issues a decision which is without basis or guiding principles of law. See Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985)(orig.proceeding). With respect to resolution of factual issues or matters committed to the trial court’s discretion, the reviewing court may not substitute its judgment for .that of the trial court. Walker, 827 S.W.2d at 839-40. The relator must therefore establish that the trial court could reasonably have reached only one decision. Id. Even if the reviewing court would have decided the issue differently, it cannot disturb the trial court’s decision unless it is shown to be arbitrary and unreasonable. Id. With respect to a trial court’s determination of the legal principles controlling its ruling, the standard is much less deferential. A clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion, and may result in appellate reversal by extraordinary writ. Walker, 827 S.W.2d at 840.

An appellate court will deny mandamus relief if another remedy, usually appeal, is available and adequate. Street v. Second Court of Appeals, 715 S.W.2d 638, 639-40 (Tex.1986)(orig.pro-ceeding). Mandamus will not issue where there is “a clear and adequate remedy at law, such as a normal appeal.” Walker, 827 S.W.2d at 840, quoting State v. Walker, 679 S.W.2d 484, 485 (Tex.1984).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
162 S.W.3d 758, 2005 Tex. App. LEXIS 2813, 2005 WL 850427, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kyocera-wireless-corp-texapp-2005.