Johnny E. Webb, III v. Alex Rodriguez
Opinion
ACCEPTED 06-14-00102-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 4/14/2015 5:09:23 PM DEBBIE AUTREY CLERK
NO. 06-14-00102-CV FILED IN 6th COURT OF APPEALS TEXARKANA, TEXAS 4/15/2015 9:52:00 AM IN THE SIXTH COURT OF APPEALS DEBBIE AUTREY Clerk
Johnny E. Webb, III,
Appellant,
v.
Alex Rodriguez, et al.,
Appellees.
On appeal from 95 Judicial District Court, Dallas County, Texas th
Hon. Ken Molberg, Presiding Judge
APPELLEES’ RESPONSE BRIEF
Andrew K. York Bryan Stevens Mark L. Johansen Jim Moseley Barrett Lesher Rafael C. Rodriguez Gray Reed & McGraw, P.C. Hallett & Perrin, PC Gruber Hurst Elrod 1601 Elm Street 1445 Ross Avenue Johansen Hail Suite 4600 Suite 2400 Shank LLP Dallas, Texas 75201 Dallas, Texas 75202 1445 Ross Avenue Suite 2500 Dallas, Texas 75202
2570666.5 IDENTITY OF PARTIES AND COUNSEL
In accordance with Texas Rule of Appellate Procedure 38.2(a)(1)(A),
Appellees provide the following complete list of all parties to the trial court’s
judgment or order appealed from, and the names and addresses of all trial and
appellate counsel:1
Appellant/Plaintiff: Appellate & Trial Counsel:
Johnny E. Webb, III Darrell J. O’Neal Law Office of Darrell J. O’Neal TN State Bar No 20927 2129 Winchester Road Memphis, TN 38116 Telephone: (901) 345-8009 Facsimile: (901) 345-8014 domemphislaw@aol.com
Melvin Houston Melvin Houston & Associates TX State Bar No. 00796559 1776 Yorktown, Suite 350 Houston, TX 77056 Telephone: (713) 212-0600 Facsimile: (713) 212-0290 mhouston@gotellmel.com
1 Appellant’s brief did not identify Jim Moseley of Gray Reed & McGraw, P.C. as trial counsel for Appellees Lucien J. Tujague, Jr. and Dominion Gas Holdings, LP (see Reporter’s Record (“R.R.”) Vol. 4 at p. 2), and failed to identify Barrett Lesher of Hallett & Perrin, P.C. as trial counsel for Appellees IDT Energy, Inc., Shuk Holdings, LLC, and Diversegy, LLC. See Clerk’s Record (“C.R.”) 472. Messrs. Moseley and Lesher are also serving as appellate counsel for their respective clients.
-ii- 2570666.5 Appellees/Defendants: Appellate & Trial Counsel:
Lucien J. Tujague, Jr. and Andrew K. York Dominion Gas Holding, LP Jim Moseley Gray Reed & McGraw, P.C. 1601 Elm Street, Suite 4600 Dallas, TX 75201 Telephone: (214) 954-4135 Facsimile: (214) 953-1332 dyork@grayreed.com jmoseley@grayreed.com
Shuk Holdings LLC, Bryan Stevens IDT Energy Inc., and Barret Lesher Diversegy, LLC Hallet & Perrin, P.C. 1445 Ross Avenue, Suite 2400 Dallas, TX 75202 Telephone: (214) 953-0053 Facsmile: (214) 922-4142 bstevens@hallettperrin.com blesher@hallettperrin.com
Alex Rodriguez Mark L. Johansen Rafael C. Rodriguez Gruber Hurst Elrod Johansen Hail Shank LLP 1445 Ross Avenue, Suite 2500 Dallas, TX 75202 Telephone: (214) 855-6800 Facsimile: (214) 855-6808 mjohansen@ghjhlaw.com rrodriguez@ghjhlaw.com
-iii- 2570666.5 TABLE OF CONTENTS
Page
IDENTITY OF PARTIES AND COUNSEL ...................................................................... ii
TABLE OF CONTENTS................................................................................................iv
INDEX OF AUTHORITIES ......................................................................................... vii
STATEMENT OF THE CASE .........................................................................................1
STATEMENT REGARDING ORAL ARGUMENT............................................................ 2
ISSUES PRESENTED ....................................................................................................3
STATEMENT OF FACTS ...............................................................................................4
I. Background ..........................................................................................4
II. Webb’s Lawsuit Against Appellees ................................................... 4
III. Tujague and Dominion’s Motion ....................................................... 6
IV. Webb’s Conflicting Response to the Motion .................................... 7
V. Trial Court’s Hearing on the Motion ................................................ 8
SUMMARY OF THE ARGUMENT ..................................................................................9
ARGUMENTS AND AUTHORITIES .............................................................................11
I. The Trial Court Properly Dismissed Webb’s Lawsuit Based on the UPA’s Provision Requiring Webb to Bring Suit in Essex County ...............................................11
A. The Trial Court Did Not Abuse its Discretion Enforcing the UPA’s Forum–Selection Clause ....................11
-iv- 2570666.5 1. Standard of Review ........................................................11
2. Appellees Established the Validity of the UPA’s Forum-Selection Clause ..............................12
3. Webb Failed to Clearly Show the Forum-Selection Clause Should not be Enforced ....................................................................14
B. In the Alternative, the Trial Court Properly Dismissed the Suit Based on the Parties’ Agreement Selecting Venue in Another State ......................18
1. Standard of Review for Motion to Transfer Venue ..............................................................20
2. The Trial Court Correctly Granted Appellees’ Motion to Transfer Venue Because the UPA Constitutes a “Major Transaction” Under Texas Law.......................23
a. Webb’s Venue Allegation ....................................23
b. The UPA is a “Major Transaction” ...................24
c. Venue is not Proper in Dallas County Under § 15.020(c)(1) Because Webb Agreed in Writing Not to Bring Suit in Dallas County ....................25
d. Venue is Alternatively Improper in Dallas County Under § 15.020(c)(2) Because Webb Expressly Agreed To Sue in Essex County ......................................26
II. Webb Never Requested an Opportunity to Present “Rebuttal Evidence”............................................................29
-v- 2570666.5 III. The Trial Court Did Not “Transfer” Webb’s Lawsuit to New Jersey..........................................................................................31
PRAYER ....................................................................................................................33
CERTIFICATE OF COMPLIANCE ...............................................................................36
CERTIFICATE OF SERVICE .......................................................................................37
-vi- 2570666.5 INDEX OF AUTHORITIES
Cases Page
Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66 (Tex. App.—Dallas 1996, no writ) .................................................31
Airvantage, L.L.C. v. TBAN Props. #1, L.T.D., 269 S.W.3d 254 (Tex. App.—Dallas 2008, no pet.) ...............................................23
Carlile Bancshares, Inc. v. Armstrong, No. 02-14-00014-CV, Not Reported in S.W.3d, 2014 WL 3891658 (Tex. App.—Fort Worth Aug. 7, 2014, no pet.) ............................. 18 n. 14, 19 n. 14
Eckland Consultants, Inc. v. Ryder, Stilwell Inc., 174 S.W.3d 80 (Tex. App.—Houston [1st Dist.] 2004, no pet.) ................... 27 n. 20
Garza v. State and County Mut. Fire Ins. Co., No. 2-06-202-CV, Not Reported in S.W.3d, 2007 WL 1168468 (Tex. App.—Fort Worth April 19, 2007, pet. denied) ........ 20, 21, 22 n. 16, 25 n. 17
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ACCEPTED 06-14-00102-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 4/14/2015 5:09:23 PM DEBBIE AUTREY CLERK
NO. 06-14-00102-CV FILED IN 6th COURT OF APPEALS TEXARKANA, TEXAS 4/15/2015 9:52:00 AM IN THE SIXTH COURT OF APPEALS DEBBIE AUTREY Clerk
Johnny E. Webb, III,
Appellant,
v.
Alex Rodriguez, et al.,
Appellees.
On appeal from 95 Judicial District Court, Dallas County, Texas th
Hon. Ken Molberg, Presiding Judge
APPELLEES’ RESPONSE BRIEF
Andrew K. York Bryan Stevens Mark L. Johansen Jim Moseley Barrett Lesher Rafael C. Rodriguez Gray Reed & McGraw, P.C. Hallett & Perrin, PC Gruber Hurst Elrod 1601 Elm Street 1445 Ross Avenue Johansen Hail Suite 4600 Suite 2400 Shank LLP Dallas, Texas 75201 Dallas, Texas 75202 1445 Ross Avenue Suite 2500 Dallas, Texas 75202
2570666.5 IDENTITY OF PARTIES AND COUNSEL
In accordance with Texas Rule of Appellate Procedure 38.2(a)(1)(A),
Appellees provide the following complete list of all parties to the trial court’s
judgment or order appealed from, and the names and addresses of all trial and
appellate counsel:1
Appellant/Plaintiff: Appellate & Trial Counsel:
Johnny E. Webb, III Darrell J. O’Neal Law Office of Darrell J. O’Neal TN State Bar No 20927 2129 Winchester Road Memphis, TN 38116 Telephone: (901) 345-8009 Facsimile: (901) 345-8014 domemphislaw@aol.com
Melvin Houston Melvin Houston & Associates TX State Bar No. 00796559 1776 Yorktown, Suite 350 Houston, TX 77056 Telephone: (713) 212-0600 Facsimile: (713) 212-0290 mhouston@gotellmel.com
1 Appellant’s brief did not identify Jim Moseley of Gray Reed & McGraw, P.C. as trial counsel for Appellees Lucien J. Tujague, Jr. and Dominion Gas Holdings, LP (see Reporter’s Record (“R.R.”) Vol. 4 at p. 2), and failed to identify Barrett Lesher of Hallett & Perrin, P.C. as trial counsel for Appellees IDT Energy, Inc., Shuk Holdings, LLC, and Diversegy, LLC. See Clerk’s Record (“C.R.”) 472. Messrs. Moseley and Lesher are also serving as appellate counsel for their respective clients.
-ii- 2570666.5 Appellees/Defendants: Appellate & Trial Counsel:
Lucien J. Tujague, Jr. and Andrew K. York Dominion Gas Holding, LP Jim Moseley Gray Reed & McGraw, P.C. 1601 Elm Street, Suite 4600 Dallas, TX 75201 Telephone: (214) 954-4135 Facsimile: (214) 953-1332 dyork@grayreed.com jmoseley@grayreed.com
Shuk Holdings LLC, Bryan Stevens IDT Energy Inc., and Barret Lesher Diversegy, LLC Hallet & Perrin, P.C. 1445 Ross Avenue, Suite 2400 Dallas, TX 75202 Telephone: (214) 953-0053 Facsmile: (214) 922-4142 bstevens@hallettperrin.com blesher@hallettperrin.com
Alex Rodriguez Mark L. Johansen Rafael C. Rodriguez Gruber Hurst Elrod Johansen Hail Shank LLP 1445 Ross Avenue, Suite 2500 Dallas, TX 75202 Telephone: (214) 855-6800 Facsimile: (214) 855-6808 mjohansen@ghjhlaw.com rrodriguez@ghjhlaw.com
-iii- 2570666.5 TABLE OF CONTENTS
Page
IDENTITY OF PARTIES AND COUNSEL ...................................................................... ii
TABLE OF CONTENTS................................................................................................iv
INDEX OF AUTHORITIES ......................................................................................... vii
STATEMENT OF THE CASE .........................................................................................1
STATEMENT REGARDING ORAL ARGUMENT............................................................ 2
ISSUES PRESENTED ....................................................................................................3
STATEMENT OF FACTS ...............................................................................................4
I. Background ..........................................................................................4
II. Webb’s Lawsuit Against Appellees ................................................... 4
III. Tujague and Dominion’s Motion ....................................................... 6
IV. Webb’s Conflicting Response to the Motion .................................... 7
V. Trial Court’s Hearing on the Motion ................................................ 8
SUMMARY OF THE ARGUMENT ..................................................................................9
ARGUMENTS AND AUTHORITIES .............................................................................11
I. The Trial Court Properly Dismissed Webb’s Lawsuit Based on the UPA’s Provision Requiring Webb to Bring Suit in Essex County ...............................................11
A. The Trial Court Did Not Abuse its Discretion Enforcing the UPA’s Forum–Selection Clause ....................11
-iv- 2570666.5 1. Standard of Review ........................................................11
2. Appellees Established the Validity of the UPA’s Forum-Selection Clause ..............................12
3. Webb Failed to Clearly Show the Forum-Selection Clause Should not be Enforced ....................................................................14
B. In the Alternative, the Trial Court Properly Dismissed the Suit Based on the Parties’ Agreement Selecting Venue in Another State ......................18
1. Standard of Review for Motion to Transfer Venue ..............................................................20
2. The Trial Court Correctly Granted Appellees’ Motion to Transfer Venue Because the UPA Constitutes a “Major Transaction” Under Texas Law.......................23
a. Webb’s Venue Allegation ....................................23
b. The UPA is a “Major Transaction” ...................24
c. Venue is not Proper in Dallas County Under § 15.020(c)(1) Because Webb Agreed in Writing Not to Bring Suit in Dallas County ....................25
d. Venue is Alternatively Improper in Dallas County Under § 15.020(c)(2) Because Webb Expressly Agreed To Sue in Essex County ......................................26
II. Webb Never Requested an Opportunity to Present “Rebuttal Evidence”............................................................29
-v- 2570666.5 III. The Trial Court Did Not “Transfer” Webb’s Lawsuit to New Jersey..........................................................................................31
PRAYER ....................................................................................................................33
CERTIFICATE OF COMPLIANCE ...............................................................................36
CERTIFICATE OF SERVICE .......................................................................................37
-vi- 2570666.5 INDEX OF AUTHORITIES
Cases Page
Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66 (Tex. App.—Dallas 1996, no writ) .................................................31
Airvantage, L.L.C. v. TBAN Props. #1, L.T.D., 269 S.W.3d 254 (Tex. App.—Dallas 2008, no pet.) ...............................................23
Carlile Bancshares, Inc. v. Armstrong, No. 02-14-00014-CV, Not Reported in S.W.3d, 2014 WL 3891658 (Tex. App.—Fort Worth Aug. 7, 2014, no pet.) ............................. 18 n. 14, 19 n. 14
Eckland Consultants, Inc. v. Ryder, Stilwell Inc., 174 S.W.3d 80 (Tex. App.—Houston [1st Dist.] 2004, no pet.) ................... 27 n. 20
Garza v. State and County Mut. Fire Ins. Co., No. 2-06-202-CV, Not Reported in S.W.3d, 2007 WL 1168468 (Tex. App.—Fort Worth April 19, 2007, pet. denied) ........ 20, 21, 22 n. 16, 25 n. 17
Gold’s Gym Franchising LLC v. Brewer, 400 S.W.3d 156 (Tex. App.—Dallas 2013, no pet.) ...............................................15
H2O Solutions, Ltd. v. PM Realty Group, LP, 438 S.W.3d 606 (Tex. App.—Houston [1st Dist.] Feb. 13, 2014, pet. denied) ............................................................................. 27 n. 20
Hiles v. Arnie & Co., P.C., 402 S.W.3d 820 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) ....... 19 n. 14
In re ADM Inv. Servs., Inc., 304 S.W.3d 371 (Tex.2010) .....................................................................................12
In re AIU Ins. Co., 148 S.W.3d 109 (Tex. 2004)....................................................................................12
-vii- 2570666.5 In re Automated Collection Techs., Inc., 156 S.W.3d 557 (Tex. 2004)....................................................................................12
In re AutoNation, Inc., 228 S.W.3d 663 (Tex. 2007).............................................................................. 11-12
In re Bunzl USA, Inc., 155 S.W.3d 202 (Tex. App.—El Paso 2004, orig. proceeding) ..............................14
In re Estate of Steed, 152 S.W.3d 797 (Tex. App.—Texarkana 2004, pet. denied) ..................................20
In re Fluor Enters., Inc., No. 13-11-00260-CV, 2011 WL 2463004 (Tex. App.—Corpus Christi June 13, 2011, orig. proceeding) ....................................................................... 21 n. 15, 22, 25 n. 17
In re Fort Bend County, 278 S.W.3d 842 (Tex. App.—Houston [14th Dist.] 2009, orig. proceeding) .................................................................................. 21 n. 15
In re Freestone Underground Storage, Inc., 429 S.W.3d 110 (Tex. App.—Texarkana 2014, no pet.) .............................. 19 n. 14
In re Great Lakes Dredge & Dock Co. L.L.C., 251 S.W.3d 68 (Tex. App.—Corpus Christi 2008, no pet.) .......................... 18 n. 14
In re Hubbard, No. 05-14-00608-CV, Not Reported in S.W.3d, 2014 WL 4090131 (Tex. App.—Dallas Aug. 19, 2014, orig. proceeding) ..................................... 21, 22
In re Int’l Profit Assocs., 274 S.W.3d 672 (Tex. 2009)....................................................................................11
In re Lisa Laser USA, Inc., 310 S.W.3d 880 (Tex. 2010)........................................................................ 11-12, 16
-viii- 2570666.5 In re Medical Carbon Research Inst., L.L.C., No. 14-07-00935-CV, Not Reported in S.W.3d, 2008 WL 220366 (Tex. App.—Houston [14th Dist.] Jan. 29, 2008, orig. proceeding) ............. 19 n. 14
In re Missouri Pacific R. Co., 970 S.W.2d 47 (Tex.App.—Tyler 1998, orig. proceeding)........................... 25 n. 17
In re Railroad Repair & Maint., Inc., No. 05-09-01035-CV, Not Reported in S.W.3d, 2009 WL 3531636 (Tex. App.—Dallas Nov. 2, 2009, orig. proceeding) .............................. 21 n. 15, 23
In re Team Rocket, L.P., 256 S.W.3d 257 (Tex. 2008)....................................................................................21
In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005)....................................................................................16
Jackson v. Neal, No. 13-07-00164-CV, Not Reported in S.W.3d, 2009 WL 140507 (Tex. App.—Corpus Christi Jan. 22, 2009, no pet.) ...................................... 25 n. 17
Liu v. Cici Enterprises, LP, Not Reported in S.W.3d, 2007 WL 43816 (Tex. App.—Houston [14th Dist.] Jan. 9, 2007, no pet.) ............... 18 n. 14, 19 n. 14
Marshall v. Kusch, 84 S.W.3d 781 (Tex. App.—Dallas 2002, pet. denied) ...........................................16
My Café-CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860 (Tex. App.—Dallas 2003, no pet.) ...............................................12
Ramsay v. Tex. Trading Co., Inc., 254 S.W.3d 620 (Tex. App.—Texarkana 2008, pet. denied) ......... 18 n. 14, 19 n. 14
-ix- 2570666.5 Spin Doctor Golf, Inc. v. Paymentech, L.P., 296 S.W.3d 354 (Tex. App.—Dallas 2009, pet. denied) .........................................20
Stokes Interest, G.P. v. Santo-Pietro, 343 S.W.3d 441 (Tex. App.—El Paso 2010, no pet.)..............................................31
Vak v. Net Matrix Solutions, Inc., 442 S.W.3d 553 (Tex. App.—Houston [1st Dist.] 2014, no pet.) ................. 18 n. 14
Young v. Valt.X Holdings, Inc., 336 S.W.3d 258 (Tex. App.—Austin 2010, pet. dism’d) ........................................13
Statutes
28 U.S.C. § 1391(b)(1)................................................................................... 26 n. 18 28 U.S.C. § 1391(b)(2)................................................................................... 26 n. 18 28 U.S.C. § 1391(b)(3)............................................................................. 26, 26 n. 18 N.J. Stat. Ann. Const. Art. VI, § 3, ¶ 2 (1947) ........................................................25 TEX. CIV. PRAC. & REM. CODE § 15.020(a) .............................................................24 TEX. CIV. PRAC. & REM. CODE § 15.020(c) .............................................................24 TEX. CIV. PRAC. & REM. CODE § 15.063(1) .............................................................21
Rules
N.J. R. 4:3-2(a) .........................................................................................................25 N.J. R. 4:3-2(b) .................................................................................................. 25-26 Tex. R. App. 33.1(a)(1)(A) ...................................................................... 29, 30 n. 23 Tex. R. Civ. P. 87(2)(a)-(b)............................................................................... 21, 22 Tex. R. Civ. P. 87(3)(a)...................................................................... 21, 22, 25 n. 17 Tex. R. Civ. P. 87(3)(c)............................................................................................22
-x- 2570666.5 Other Authorities
1 Arthur Linton Corbin, Corbin on Contracts § 2.10 (Joseph M. Perillo rev. 1993)) .................................................................................14
Paul Yetter and Richard Ferrer, “The Evolution of Forum-Selection Clause Enforcement in Texas,” 73 Tex. Bar J. 274, 276 (2010) .............................. 19 n. 14
-xi- 2570666.5 STATEMENT OF THE CASE
Appellant Johnny E. Webb, III (“Webb”), a former member of Appellee
Diversegy, LLC (“Diversegy”), sued Appellees in connection with a Unit Purchase
Agreement through which Webb sold his membership interest to Appellee Shuk
Holdings, LLC (“Shuk”). C.R. 156-172. Appellees Lucien J. Tujague, Jr.
(“Tujague”) and Dominion Gas Holdings, LP (“Dominion”) filed a Motion to
Transfer Venue Pursuant to TEX. CIV. PRAC. & REM. CODE § 15.020, and Subject
Thereto, Alternative Motion to Dismiss Based on Forum Selection Clause (the
“Motion”). C.R. 207-219. Shuk, IDT Energy, Inc. (“IDT”), and Alex Rodriguez
(“Rodriguez”) joined in the Motion. C.R. 250-252; 253-255.2 On September 23,
2014, the trial court heard the Motion and signed an order granting it in its entirety.
The trial court’s judgment stated that “Plaintiff’s lawsuit is DISMISSED
WITHOUT PREJUDICE TO THE REFILING OF SAME in state or federal court
in Essex County, New Jersey.” Supp. C.R. 4-5.
On October 8, 2014, Webb filed a Motion for Reconsideration and to
Modify, Correct or Reform Judgment Based on New Evidence and Request for
Findings of Fact & Conclusions of Law. C.R. 422-438. The trial court heard and
denied Webb’s motion on November 12, 2014. C.R. 480. This appeal followed.
2 Shuk and IDT’s joinder was subject to their previously filed special appearance.
-1- 2570666.5 STATEMENT REGARDING ORAL ARGUMENT
Appellees believe oral argument will not significantly aid the Court’s
decisional process. The facts and legal arguments have been adequately presented
in the briefs and record. Additionally, the dispositive issue or issues have been
authoritatively decided by this and other courts of appeals. Appellees therefore
believe oral argument is unnecessary. If the Court desires oral argument, however,
Appellees desire to appear and participate.
-2- 2570666.5 ISSUES PRESENTED
Issue 1: The trial court properly granted the Motion because there was sufficient evidence to support the trial court’s ruling.
Issue 2: The trial court did not err in dismissing Webb’s lawsuit without prejudice because:
(a) that is the appropriate remedy under the circumstances of this case; and
(b) Webb waived any error.
-3- 2570666.5 STATEMENT OF FACTS
I. Background
Webb is a former member of Diversegy. C.R. 156, ¶ 3. In December 2013,
Webb, Tujague, Dominion and the majority of the other Appellees (“Defendant-
Sellers”) sold their membership interests in Diversegy to Shuk pursuant to a Unit
Purchase Agreement (“UPA”). C.R. 157, ¶ 6; C.R. 159, ¶ 21. The UPA provides
that each “Party” to the UPA, including Webb
submits to the exclusive jurisdiction of the state or federal courts located in Essex County, New Jersey, in any action or proceeding arising out of, or relating to, this Agreement, agrees that all claims in respect of the action or proceeding may be heard and determined in any such court and agrees not to bring any action or proceeding arising out of, or relating to, this Agreement in any other court.
C.R. 57, § 10.10(b). Shuk paid a total of $2 million for the membership interests.
C.R. 30, § 4.1; C.R. 160, ¶ 23.
II. Webb’s Lawsuit Against Appellees
Webb filed suit against Appellees for breach of contract, fraud, breach of
fiduciary duty and conversion in connection with the UPA. In both his Original
and First Amended Petitions, Webb alleged that he is “one of eleven (11) sellers
identified as a managing seller in the Unit Purchase Agreement . . ..” C.R. 11, ¶
15; 159-60, ¶ 22. Webb attached an executed copy of the UPA to his Original
-4- 2570666.5 Petition as “Exhibit 1.” 3 He also filed an affidavit verifying that the allegations
and information in his lawsuit were all “true and correct to the best of my
knowledge.” C.R. 171.
In his factual background, Webb claimed he had not been paid for his
membership interest. C.R. 161, ¶ 39. Webb also claimed the UPA provided for
“waterfall” payments that require Diversegy’s debts – including amounts
Diversegy allegedly owed Webb – to be paid first. C.R. 160, ¶ 29. And Webb
claimed that Tujague, Dominion and the other Defendant Sellers failed to disclose
over $250,000 in debts owed to Webb before Shuk acquired Diversegy. C.R. 161,
¶¶ 33-34.
All of Webb’s alleged causes of action relate to his position as a seller under
the UPA. Webb’s first cause of action, styled “fraud, misrepresentation and
conversion,” alleged Tujague, Dominion and the other Defendant Sellers
misrepresented information and failed to disclose information they should have in
the disclosure documents related to the transaction. C.R. 163, 164. 4 Webb’s
second cause of action – breach of contract – alleged:
3 Although Webb did not attach an executed copy of the UPA to his Amended Petition, he refers to it as “Exhibit 1” and it is apparent that he intended to do so. See e.g. C.R. 159-160, ¶¶ 22, 24-29. 4 Specifically, Webb alleged the sellers “misrepresented material facts concerning the debts and liabilities of Diversegy” and “withheld and purposely failed to disclose over $250,000.00 in debts owed to Plaintiff.” C.R. 163, ¶¶ 54-55. Webb then alleged “[t]he concealment of this information was purposeful and malicious, designed to defraud the Plaintiff,
-5- 2570666.5 Defendant Sellers breached the purchase agreement by refusing to compensate Plaintiff for the sale of his ownership shares. Further, Defendant Sellers breached the ‘waterfall’ provisions contemplated by the purchase agreement by failing to designate debts, designate and identify the bank account receiving the purchase monies, and by failing to pay all debts (including Plaintiff) before paying themselves.
C.R. 165, ¶ 66. Webb’s last cause of action – breach of fiduciary duty – asserted
Tujague, Dominion and the other Defendant-Sellers ‘had an obligation of loyalty
to the joint concern and of the utmost good faith, fairness and honesty in their
dealings with the Plaintiff as a fellow seller, member, and partner,” and that they
“breached their fiduciary duties of care and loyalty by committing the acts
described herein.” C.R. 165, ¶ 70 (emphasis added); C.R. 165, ¶ 69.
III. Tujague and Dominion’s Motion
On August 29, 2014, Webb obtained an ex parte hearing on his application
for temporary restraining order, and the trial court set a hearing on Webb’s
application for temporary injunction for September 12, 2014. C.R. 153-154. After
learning of Webb’s lawsuit, Tujague and Dominion filed the Motion and asserted
that Webb’s lawsuit must be brought in Essex County, New Jersey because
Webb’s claims arose out of, or related to, the UPA, and Webb was bound by the
other sellers, and other debtors of monies owed to them and should have been covered in the disclosure schedule and waterfall documents. (Ex. 1, 6A.6, 6B.9).” C.R. 164, ¶ 57. Finally, Webb alleged “Plaintiff has not received one dollar from the sale of Diversegy nor has his debt been identified as required by the Unit Purchase Agreement. Consequently, monies owed to him for his shares have also been converted by Defendant Sellers.” C.R. 164, ¶ 59.
-6- 2570666.5 UPA’s Section 10.10(b). C.R. 207-219. 5 The following day, Tujague and
Dominion requested an emergency hearing on the Motion, arguing it should be
heard on September 12 before the hearing on Webb’s application. C.R. 223-229.
At the September 12 hearing, the trial court extended the temporary
restraining order for fourteen days and granted Tujague and Dominion’s request
for an emergency hearing. R.R. Vol. 2, 36:6-21.6 The Motion, along with Shuk
and IDT’s special appearance, were scheduled for hearing on September 23. R.R.
Vol. 3, 1:12. 7
IV. Webb’s Conflicting Response to the Motion
The day before the hearing – September 22 – Webb filed a response to the
Motion. C.R. 271-275. Webb did not attach any evidence in support of his
response. Instead – after filing suit on the UPA – Webb baldly asserted that “there
is no valid written agreement” between him and Appellees, and that he “did not
authorize or agree to the contract and it is therefore not enforceable against
Plaintiff.” C.R. 271-272. These unsupported arguments contradicted the very
5 Tujague and Dominion expressly adopted and incorporated into the Motion the copy of the UPA attached to Webb’s Original Petition, and alternatively asked the trial court to take judicial notice. C.R. 208 at fn. 2. 6 Shuk and IDT’s counsel requested the trial court consider their special appearances at the September 12 hearing. R.R. Vol. 2, 4:10-17. 7 Shuk and IDT filed a joinder to the Motion, subject to their special appearances, on September 19, 2014. C.R. 250-252. Rodriguez also filed a joinder to the Motion on September 19, 2014. C.R. 253-255.
-7- 2570666.5 premise of Webb’s lawsuit, which sought the benefit of the bargain under the UPA.
Tujague and Dominion quickly prepared and filed a reply brief, attaching affidavits
of three witnesses who averred they saw Webb sign the UPA. C.R. 362-371.8
V. The Trial Court’s Hearing on the Motion
At the September 23 hearing 9, the Court questioned Webb’s counsel about
the lack of evidence to support his assertion that Webb did not sign the copy of the
UPA attached to his lawsuit:
THE COURT: Well, I guess one of the things that I’m concerned about – and we’re somewhat fixed because of Texas procedure here – is that why don’t I have a – other than the verified petition, why don’t I have on file at this time an affidavit saying I did not sign the UPA? Why don’t I have it?
MR. O’NEAL: I – I have no – I didn’t think it was necessary, Your Honor. I mean, I’ll take the hit on that.
R.R. Vol. 3, 28:9-17. The trial court signed an order dismissing Webb’s lawsuit
without prejudice to his right to refile in state or federal court in Essex County,
New Jersey. Supp. C.R. 4-5.
8 Shuk and IDT joined in Tujague and Dominion’s reply brief, again subject to their special appearances. C.R. 286-288. Rodriguez filed an affidavit in reply to Webb’s response. C.R. 299-347. 9 Shuk and IDT’s counsel requested the trial court hear the special appearances first at the September 23 hearing, but the trial court wanted to proceed with hearing the Motion. R.R. Vol. 3, 6:16-7:24. At the time that the Motion was heard, Diversegy had not yet been required to appear in the lawsuit.
-8- 2570666.5 Webb then filed a motion for reconsideration and request for findings of fact
& conclusions of law. C.R. 422-438. The trial court heard and denied Webb’s
motion on November 12, 2014. C.R. 480.
SUMMARY OF THE ARGUMENT
The trial court properly dismissed Webb’s lawsuit without prejudice to
refiling in Essex County, New Jersey. The UPA requires all claims arising out of,
or relating to, the UPA to be brought in Essex County. Appellees met their burden
of proving a valid, enforceable forum-selection clause, and Webb failed to clearly
establish that the clause should not be enforced.
Alternatively, Appellees established prima facie proof that the “major
transaction” mandatory venue provision, TEX. CIV. PRAC. & REM. CODE § 15.020,
applied to Webb’s claims, and under the provision Webb’s lawsuit is only proper
in Essex County.
Webb’s second complaint – that the trial court should have given Webb an
opportunity to respond to Appellees’ reply brief – is also without merit. Webb
never requested the opportunity to respond. Webb also could have attached the
evidence he wanted the trial court to consider to his response to the Motion. He
has made no representation that—much less an explanation why—he could not
have filed along with his response the evidence he now complains the trial court
supposedly did not allow him to present. Furthermore, Webb could have requested
-9- 2570666.5 a continuance of the September 23 hearing to allow him an opportunity to file any
rebuttal evidence. He did not do so.
Webb’s final complaint – that the trial court erred by transferring Webb’s
lawsuit to New Jersey – is fundamentally flawed. The trial court did not “transfer”
Webb’s lawsuit to New Jersey. It dismissed Webb’s lawsuit without prejudice to
Webb’s right to refile in New Jersey in accordance with the UPA. In fact, as
discussed supra, Webb’s counsel invited the trial court to dismiss the lawsuit
without prejudice.
Webb’s pleadings, his response to the Motion, his motion for
reconsideration, and now his brief before this Court, contain no explanation of how
he can use the UPA as a sword and a shield. Webb does not explain how he can
sue as a party to the UPA, based on representations that were made in the UPA or
that he claims should have been made in the UPA, seek benefit-of-the-bargain
damages based on the UPA, and yet avoid the provision in the UPA requiring his
claims be filed in Essex County. Given the pleadings, the evidence, and the
arguments made below, the trial court properly granted Appellees’ Motion and
dismissed the case without prejudice to it being refiled in Essex County.
-10- 2570666.5 ARGUMENTS AND AUTHORITIES
I. The Trial Court Properly Dismissed Webb’s Lawsuit Based on the UPA’s Provision Requiring Webb to Bring Suit in Essex County
Webb does not dispute that his claims arise under or relate to the UPA. He
also does not dispute that the UPA provides that any lawsuit arising under or
relating to the UPA must be brought in “state or federal courts located in Essex
County, New Jersey.” He simply maintains that he did not “authorize or agree to
the [UPA],” even though he seeks the benefit of the bargain thereunder. Ant.’s Br.
at 20. Thus, according to Webb, the trial court “abused its discretion by issuing a
judgment that relies on a forum-selection clause.” Ant.’s Br. at 18. Webb’s far-
fetched argument is unsupportable.
A. The Trial Court Did Not Abuse its Discretion Enforcing The UPA’s Forum-Selection Clause
1. Standard of Review “Forum-selection clauses are generally enforceable, and a party attempting
to show that such a clause should not be enforced bears a heavy burden.” In re
Int’l Profit Assocs., 274 S.W.3d 672, 675 (Tex. 2009). “In general, forum-
selection clauses should be given full effect, and subjecting a party to trial in a
forum other than the contractually chosen one amounts to ‘clear harassment . . .
injecting inefficiency by enabling forum-shopping, wasting judicial resources,
delaying adjudication on the merits, and skewing settlement dynamics . . .” In re
-11- 2570666.5 Lisa Laser USA, Inc., 310 S.W.3d 880, 883 (Tex. 2010) (quoting In re AutoNation,
Inc., 228 S.W.3d 663, 667-68 (Tex. 2007)). “[E]nforcement of forum-selection
clauses is mandatory unless the party opposing enforcement ‘clearly shows 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) (quoting In re AIU Ins. Co., 148 S.W.3d 109,
112 (Tex. 2004)).
A trial court’s decision concerning the enforcement of a forum-selection
clause is reviewed under an abuse of discretion standard. See In re ADM Inv.
Servs., Inc., 304 S.W.3d 371, 375 (Tex.2010); My Café-CCC, Ltd. v. Lunchstop,
Inc., 107 S.W.3d 860, 864 (Tex. App.—Dallas 2003, no pet.).
2. Appellees Established the Validity of the UPA’s Forum- Selection Clause
The UPA contained the following forum-selection clause:
Each of the Parties submits to the exclusive jurisdiction of the state or federal courts located in Essex County, New Jersey, in any action or proceeding arising out of, or relating to, this Agreement, agrees that all claims in respect of the action or proceeding may be heard and determined in any such court and agrees not to bring any action or proceeding arising out of, or relating to, this Agreement in any other court. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other Party with respect thereto.
-12- 2570666.5 C.R. 57, § 10.10(b). The UPA defines “Parties” as “the Company, Purchaser and
the Sellers” collectively. C.R. 21. The term “Sellers” is defined as the “Persons
listed on Schedule A” to the UPA. Id. Webb is listed on Schedule A. C.R. 64.
Thus, Webb is a “Party” to the UPA and his lawsuit is subject to the forum-
selection clause. 10
Webb’s response to the Motion effectively argued Appellees “fail[ed] to
meet the initial burden of establishing that [Webb] entered in an agreement with
Appellees” because Webb “did not agree to be bound to the purchase agreement.”
Ant.’s Br. at 20; see also C.R. 272. Webb did not attach any evidence to his
response. C.R. 271-275. Webb’s argument belies the evidence before the trial
court.
A party seeking to enforce a contractual forum-selection provision has the
initial burden of establishing the prima facie validity of an agreement to an
exclusive forum and that the agreement applies to the claims involved. Young v.
Valt.X Holdings, Inc., 336 S.W.3d 258, 262 (Tex. App.—Austin 2010, pet.
dism’d). Webb established Appellees’ burden for them. He attached a fully-
executed copy of the UPA to his lawsuit. C.R. 18-65. He alleged that he “is one of
the founders and sellers of Diversegy, LLC, the company sold in the sales
10 Webb did not dispute that his claims arise out of, or relate to, the UPA, and therefore are within the scope of the UPA’s forum-selection clause.
-13- 2570666.5 transaction at issue in this matter.” C.R. 156, ¶ 3 (emphasis added). Webb also
alleged that as a “seller” of his membership interest in Diversegy, he was entitled
to share in certain payments from Shuk under the UPA. For example, Webb
alleged, “the purchase agreement provides that in addition to the purchase monies
described above, the sellers which also include Plaintiff, are to receive
‘contingency payments’ based on monthly revenue, after the closing, on existing
and renewed accounts.” C.R. 160, ¶ 25. Webb verified these allegations were
“true and correct to the best of my knowledge.” C.R. 171.
Appellees also provided affidavits from three witnesses who averred they
saw Webb sign the UPA in their presence, and that the copy of the UPA attached
to Webb’s lawsuit was a true and correct copy. C.R. 362-371. A party’s signature
on a written contract is “strong evidence” that the party unconditionally assented to
its terms. In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App.—El Paso 2004,
orig. proceeding) (citing 1 Arthur Linton Corbin, Corbin on Contracts § 2.10 at
168 (Joseph M. Perillo rev. 1993)). This evidence sufficiently established the
prima facie validity of the UPA’s forum-selection clause.
3. Webb Failed to Clearly Show the Forum-Selection Clause Should not be Enforced
Webb’s response to the Motion failed to attach any evidence that he did not
sign the UPA. Similarly, at the September 23 hearing Webb did not attempt to
present any evidence that he did not sign the UPA. Instead, Webb’s counsel
-14- 2570666.5 claimed at the hearing that the Webb’s Amended Petition was a “verified statement
of Mr. Webb claiming its [sic] fraudulent.” R.R. Vol. 3, 14:21-24. But Webb’s
Amended Petition does not claim that the signature appearing on his signature line
in the UPA was not his. Because Webb failed to “clearly show” the UPA’s
Section 10.10(b) should not be enforced, the trial court did not abuse its discretion
by dismissing the lawsuit without prejudice.
Moreover, Webb’s position in response to the Motion fundamentally
contradicts the allegations in his lawsuit and the relief sought. Webb sued
Appellees for breach of contract, arguing he was not paid for the sale of his
membership interest in Diversegy. C.R. 165, ¶ 66. He alleged – in his Original
Petition and his First Amended Petition – that he was a seller under the UPA. C.R.
11, ¶ 15; C.R. 159-60, ¶22. He unequivocally asked the trial court to award him
the benefit of the bargain under the UPA – payment for his shares. C.R. 160-161,
¶¶ 30; C.R. 161, ¶ 39; C.R. 164, ¶ 59; C.R. 165, ¶ 66. In fact, Webb prayed the
trial court permanently enjoin Appellees from “refusing payment of the purchase
price for Plaintiff’s ownership interest.” C.R. 169.
Foundationally, Webb’s breach of contract cause of action requires that he
prove a valid, enforceable contract exists between Webb and Appellees. Gold’s
Gym Franchising LLC v. Brewer, 400 S.W.3d 156, 162 (Tex. App.—Dallas 2013,
no pet.). Webb cannot claim Appellees owe him obligations under the UPA and
-15- 2570666.5 simultaneously assert that the UPA’s forum-selection clause does not apply to
those claims. In re Lisa Laser USA, Inc., 310 S.W.3d 880, 886 (Tex. 2010)
(“HealthTronics cannot claim that Lisa Germany has obligations to HealthTronics
under the Distribution Agreement and simultaneously claim that the forum-
selection clause does not apply to those claims”); In re Weekley Homes, L.P., 180
S.W.3d 127, 135 (Tex. 2005) (a plaintiff “cannot both have his contract and defeat
it too.”).
Webb’s other claims arise out of the same set of alleged facts and presume
Webb’s status as a party to the UPA. First, his fraud claim alleges Defendant-
Sellers materially misrepresented Diversegy’s debts in the UPA to him as a party
to the UPA. C.R. 163-164, ¶¶ 55-57. If Webb is now taking the position that he is
not a party to the UPA and that he did not sign or authorize the signing of the UPA,
then no fraud claim could exist. By not signing the UPA, no representations were
made to Webb, and Webb certainly did not act in reliance on the representations
contained in the UPA. See Marshall v. Kusch, 84 S.W.3d 781, 785 (Tex. App.—
Dallas 2002, pet. denied) (reversing trial court’s judgment for plaintiff on fraud
claim where there was no evidence that alleged misrepresentation was
communicated to plaintiff).11
11 In his affidavit filed with his motion for reconsideration, Webb averred, “The UPA was never presented to me in any form. The terms of the UPA were never disclosed to me.” C.R. 432, ¶ 7. Webb’s testimony runs counter to his lawsuit allegations of representations made to
-16- 2570666.5 Webb also alleged the Defendant-Sellers “owed Plaintiff the duty to make
full disclosure, and the duty to exercise a high degree of care to conserve company
money and pay it only to those persons entitled to receive it.” C.R. 165, ¶ 71. This
claim also hinges on Webb’s contention that he was a party to the UPA, and thus
entitled to receive payment for his shares. 12 And finally, Webb alleges “monies
owed to him for his shares have also been converted by Defendant Sellers.” C.R.
164, ¶ 59. This allegation implies that Webb sold his shares and is entitled to
proceeds from their sale under the UPA. But if Webb was not a party to the UPA,
as he contended in his response to Appellees’ Motion, he did not sell his shares and
still owns them.
The bottom line is that Webb cannot have it both ways. He cannot seek his
alleged benefit-of-the-bargain based on the UPA, and at the same time disclaim he
is a party to the UPA. When it is clear from Webb’s pleadings that he seeks a
judgment awarding him damages he claims he is owed under the UPA, the trial
court properly refused Webb’s attempt to avoid the UPA’s requirement that Webb
bring his actions in Essex County. In other words, the trial court did not abuse its
him. Those allegations were also verified. C.R. 171. These conflicting statements cannot all be correct. 12 Webb did not allege that he was a third-party beneficiary to the UPA. Further, the UPA expressly provided that it did not grant or confer any right to any third party. C.R. 55, § 10.5.
-17- 2570666.5 discretion in granting the Motion on the basis of a valid, enforceable forum-
selection clause. 13
B. In the Alternative, the Trial Court Properly Dismissed the Suit Based on the Parties’ Agreement Selecting Venue in Another State
Appellees’ Motion alternatively sought to transfer venue if the UPA’s
Section 10.10(b) was considered as a venue-selection clause, as opposed to a
forum-selection clause. 14 The trial court dismissed Webb’s case without prejudice
13 Webb did not allege or clearly show that any of the other enumerated exceptions applied barring mandatory enforcement of the UPA’s forum-selection clause. In fact, Webb acknowledged in his brief that the fraud or overreaching exception “must involve negotiation of the forum-selection clause itself,” and admits that he did not allege that he was fraudulently induced to sign the UPA. Ant.’s Br. at 21. 14 See C.R. 209 n. 5. Case law is not uniform on when a clause is forum-selection or venue- selection. This Court noted in Ramsay v. Tex. Trading Co., Inc. that “‘a “forum”-selection agreement is one that chooses another state or sovereign as the location for trial, whereas a “venue”-selection agreement chooses a particular county or court within that state or sovereign.’” 254 S.W.3d 620, 627 (Tex. App.—Texarkana 2008, pet. denied) (quoting In re Great Lakes Dredge & Dock Co. L.L.C., 251 S.W.3d 68, 73 (Tex. App.—Corpus Christi 2008, no pet.))); see also Carlile Bancshares, Inc. v. Armstrong, No. 02-14-00014-CV, Not Reported in S.W.3d, 2014 WL 3891658, at *6 (Tex. App.—Fort Worth Aug. 7, 2014, no pet.) (“A forum- selection clause is a contractual provision that selects the adjudicative body in which jurisdiction is properly invoked, while a venue-selection clause selects the geographic place of trial.”). In Armstrong, the court held that an agreement providing “VENUE FOR ANY CAUSE OF ACTION ARISING FROM THIS AGREEMENT WILL LIE IN TARRANT COUNTY, TEXAS” was a forum-selection clause. Id. In Vak v. Net Matrix Solutions, Inc., the court held that “clauses providing for exclusive venue in a particular locale are treated as forum-selection clauses.” 442 S.W.3d 553, 560 (Tex. App.—Houston [1st Dist.] 2014, no pet.). The Vak Court held the parties’ agreement for “exclusive venue for all litigation . . . shall be in the courts of Harris County, Texas” was a forum-selection clause because it “unambiguously selects a particular venue and makes it exclusive.” Id.
Other courts reach the opposite conclusion. In Liu v. Cici Enterprises, LP, the court held an agreement providing “that venue for any proceeding relating to or arising out of this agreement shall be Dallas County, Texas” was a venue-selection clause. No. 14-05-00827-CV, Not Reported in S.W.3d, 2007 WL 43816, at *3 (Tex. App.—Houston [14th Dist.] Jan. 9, 2007,
-18- 2570666.5 no pet.); see also In re Medical Carbon Research Inst., L.L.C., No. 14-07-00935-CV, Not Reported in S.W.3d, 2008 WL 220366, at *1 (Tex. App.—Houston [14th Dist.] Jan. 29, 2008) (orig. proceeding) (provision stating that “any Claims shall be decided exclusively by and in the state or federal courts sitting in Travis County, Texas” was a venue-selection clause). Indeed, this Court stated in Ramsay that although the terms “have distinct legal meanings in certain contexts . . . those niceties have not been consistently observed in the reported cases.” Ramsay, 254 S.W.3d at 627 n. 5.
The UPA’s Section 10.10(b) should be characterized as a forum-selection clause for two reasons. First, the parties agreed “to the exclusive jurisdiction of the state or federal courts located in Essex County, New Jersey . . . and agree[d] not to bring any action or proceeding arising out of, or relating to, this Agreement in any other court.” C.R. 57, § 10.10(b) (emphasis added). Thus, under Vak it is a forum-selection clause. See also Armstrong, 2014 WL 3891658, at *6. Second, Section 10.10(b) is a forum-selection clause because it selects another jurisdiction, not a different county in Texas. This dichotomy has been suggested by at least one commentator:
To this day, some Texas courts of appeals decisions continue to rely on the somewhat awkward distinction between contractual agreements selecting an in- state locale, which Texas courts continue to refuse to enforce, and those that select an out-of-state locale, which are widely enforced. In drawing a distinction between these types of agreements, some recent court of appeals decisions have labeled clauses selecting in-state locales “venue-selection clause[s].”
Paul Yetter and Richard Ferrer, “The Evolution of Forum-Selection Clause Enforcement in Texas,” 73 Tex. Bar J. 274, 276 (2010). Both Liu and Medical Carbon Research involved defendants seeking to dismiss the case in one Texas county because the agreements attached venue in another Texas county. In fact, the Liu Court noted it was not “presented with a contract specifying a venue in a foreign nation or state. Such cases raise questions not presented here, such as whether the selection of a foreign venue necessarily implies the selection of a particular forum.” 2007 WL 43816, at *2 n.2. The Ramsay Court alluded to this distinction when it noted that venue-selection cases “are in the context of state venue provisions that set out which court (county) within this state has authority to hear a particular case, with agreements setting venue in an improper location.” Ramsay, 254 S.W.3d at 627; see also id. at n. 4 (“We also recognize that a case from this Court, Busse v. Pacific Cattle Feeding Fund #1, Ltd., 896 S.W.2d 807, 812-13 (Tex. App.—Texarkana 1995, pet. denied), reviewed a forum-selection clause stating that venue would lie in one of selected Iowa counties.”).
Moreover, although some courts of appeals state that venue-selection clauses are generally unenforceable unless the contract is a “major transaction” under TEX. CIV. PRAC. & REM. CODE § 15.020, Hiles v. Arnie & Co., P.C., 402 S.W.3d 820, 828 (Tex. App.—Houston [14th Dist.] 2013, pet. denied), this Court in In re Freestone Underground Storage, Inc., noted that “venue selection clauses are mandatory absent a showing that enforcement would be unreasonable or unjust or a showing that the clause was invalid due to fraud or overreaching.” 429 S.W.3d 110, 112 n. 3 (Tex. App.—Texarkana 2014, no pet.). Thus, if the UPA contains a
-19- 2570666.5 to it be refiled in Essex County. Thus, the trial court determined the facts
supporting Appellees’ Motion presented an issue of forum selection. Appellees
agree, but in the alternative contend the trial court properly dismissed the case
based on the terms of the UPA as a venue-selection clause.
1. Standard of Review for Motion to Transfer Venue
“In reviewing a venue decision, the appellate court must conduct an
independent review of the entire record . . . to determine whether any probative
evidence supports the trial judge’s venue decision.” Spin Doctor Golf, Inc. v.
Paymentech, L.P., 296 S.W.3d 354, 357 (Tex. App.—Dallas 2009, pet. denied).
The appellate court reviews the evidentiary record in the light most favorable to the
venue ruling. Garza v. State and County Mut. Fire Ins. Co., No. 2-06-202-CV,
Not Reported in S.W.3d, 2007 WL 1168468, at *3 (Tex. App.—Fort Worth April
19, 2007, pet. denied). “If there is any probative evidence in the entire record that
venue was proper, [the court of appeals] must uphold the trial judge’s ruling.” Id.;
Spin Doctor Golf, Inc., 296 S.W.3d at 357. This is true even if the preponderance
of the evidence is to the contrary. In re Estate of Steed, 152 S.W.3d 797, 804 (Tex.
App.—Texarkana 2004, pet. denied).
venue-selection clause, the trial court’s judgment should be affirmed under Freestone for the same reasons discussed in Section I.A, supra.
Alternatively, as set forth in Section I.B, the UPA is a “major transaction” under TEX. CIV. PRAC. & REM. CODE § 15.020, and dismissal was proper based on Section 10.10(b)’s venue- selection clause.
-20- 2570666.5 The plaintiff is given the first choice regarding venue by filing the lawsuit.
In re Team Rocket, L.P., 256 S.W.3d 257, 259 (Tex. 2008). The defendant may
challenge the venue selection, “and a court must ‘transfer an action to another
county of proper venue if . . . the county in which the action is pending is not a
proper county.’” Id. (quoting TEX. CIV. PRAC. & REM. CODE § 15.063(1)).
All venue facts, when properly pleaded, shall be taken as true unless
specifically denied by the adverse party. Tex. R. Civ. P. 87(3)(a). If the defendant
objects to the plaintiff’s choice of venue through a motion to transfer venue, the
question of proper venue is raised. Garza, 2007 WL 1168468, at *2. A motion to
transfer venue must show either (a) the county where the action is pending is not a
proper county; or (b) mandatory venue of the action is prescribed in another
county. In re Hubbard, No. 05-14-00608-CV, Not Reported in S.W.3d, 2014 WL
4090131, at *1 (Tex. App.—Dallas Aug. 19, 2014, orig. proceeding).
Once the defendant specifically denies the plaintiff’s pleaded venue facts,15
the burden is on the plaintiff to prove that venue is maintainable in the county of
suit. Garza, 2007 WL 1168468, at *2; Tex. R. Civ. P. 87(2)(a)-(b). The plaintiff
15 Appellees were not required to specifically deny the general venue facts in Webb’s Amended Petition because Appellees asserted that Webb’s lawsuit was subject to a mandatory venue provision. In re Fluor Enters., Inc., No. 13-11-00260-CV, 2011 WL 2463004, at *4 n. 2 (Tex. App.—Corpus Christi June 13, 2011, orig. proceeding); In re Fort Bend County, 278 S.W.3d 842, 845 (Tex. App.—Houston [14th Dist.] 2009, orig. proceeding); In re Railroad Repair & Maint., Inc., No. 05-09-01035-CV, Not Reported in S.W.3d, 2009 WL 3531636, at *5- 6 (Tex. App.—Dallas Nov. 2, 2009, orig. proceeding).
-21- 2570666.5 must make prima facie proof that venue is proper in the county where the plaintiff
initiated the lawsuit in order to meet this burden. Id.; Tex. R. Civ. P. 87(3)(a).
Prima facie proof is made when the venue facts are properly pleaded and an
affidavit and any duly proved attachments to the affidavit fully and specifically
setting forth the facts supporting such pleading are filed. Id.
If the plaintiff meets this burden, the defendant must plead venue facts that
plaintiff’s lawsuit is subject to a mandatory venue provision. Tex. R. Civ. P.
87(2)(a), 87(3)(a), 87(3)(c); In re Fluor Enters., Inc., 2011 WL 2463004, at *3.
The trial court must assume all properly pleaded venue facts are true unless
specifically denied by the plaintiff. Tex. R. Civ. P. 87(3)(a); In re Fluor Enters.,
Inc., 2011 WL 2463004, at *4 (defendant’s mandatory venue facts were taken as
true where plaintiff did not specifically deny them). 16 If a venue fact is specifically
denied, the defendant must make prima facie proof of the venue fact. Tex. R. Civ.
P. 87(3)(a). If the defendant makes its prima facie proof, the action must be
transferred. In re Hubbard, 2014 WL 4090131, at *1.
16 See also Garza, 2007 WL 1168468, at *3 (“But if a defendant properly challenges venue and asserts venue facts, and the plaintiff never specifically denies those venue facts, they are taken as true.”).
-22- 2570666.5 2. The Trial Court Correctly Granted Appellees’ Motion to Transfer Venue Because the UPA Constitutes a “Major Transaction” Under Texas Law
The UPA constitutes a “major transaction” under TEX. CIV. PRAC. & REM.
CODE § 15.020. Webb agreed that any lawsuit arising out of or relating to the UPA
must be brought in Essex County, New Jersey, and shall not be brought in any
other county. Thus, even if the Court determines Section 10.10(b) is a venue-
selection clause, the trial court did not err in granting Appellees’ motion to transfer
venue because venue is improper in Dallas County under §§15.020(c)(1) or (c)(2).
a. Webb’s Venue Allegation
Webb alleged venue was proper in Dallas County “because the actions
complained of herein all occurred in Dallas County.” C.R. 156, ¶ 2. Although
Webb did not specifically cite the governing venue statute, it is apparent from his
factual allegation that he asserted venue was proper under TEX. CIV. PRAC. & REM.
CODE § 15.002(a)(1), a general venue statute. “It is clear that ‘mandatory venue
provisions trump permissive ones,’” and thus Webb’s venue choice under TEX.
CIV. PRAC. & REM. CODE § 15.002, a permissive venue statute, must yield to the
mandatory provision in Section 15.020 if venue is proper thereunder. In re
Railroad Repair & Maint., Inc., 2009 WL 3531636, at *4 (quoting Airvantage,
L.L.C. v. TBAN Props. #1, L.T.D., 269 S.W.3d 254, 257 (Tex. App.—Dallas 2008,
no pet.)).
-23- 2570666.5 b. The UPA is a “Major Transaction”
Texas Civil Practice and Remedies Code § 15.020(c) states:
Notwithstanding any other provision of this title, an 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.
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.”
TEX. CIV. PRAC. & REM. CODE § 15.020(a). As Webb alleged, and as reflected in
the UPA – a written agreement to which Webb is a signing party – Shuk was
obligated to pay at least $2 million for the purchase of the membership interests in
Diversegy. C.R. 160, ¶ 23; C.R. 30, § 4.1. Thus, the UPA constitutes a “major
transaction” for purposes of Section 15.020(a).
-24- 2570666.5 c. Venue is not Proper in Dallas County Under § 15.020(c)(1) Because Webb Agreed in Writing Not to Bring Suit in Dallas County
The UPA’s express language meets the requirements of TEX. CIV. PRAC. &
REM. CODE § 15.020(c)(1). Section 10.10(b) states that each “Party” to the UPA
“agrees not to bring any action or proceeding arising out of, or relating to, this
Agreement in any other court” except state or federal court in Essex County, New
Jersey. C.R. 57.
Webb’s claims may also be brought in state or federal court in Essex County
under their respective general venue statutes.17 Webb alleged that IDT Energy,
Inc. and Shuk Holdings, LLC, have their principal offices in Newark, New Jersey.
C.R. 158, ¶¶ 10-11. Newark is located in Essex County. Venue would lie in Essex
County if Webb filed in state court pursuant to New Jersey Rules of Court (“N.J.
R.”) 4:3-2. The Superior Court of New Jersey is a court of general jurisdiction in
all causes. N.J. Stat. Ann. Const. Art. VI, § 3, ¶ 2 (1947). Venue for civil actions
in the Superior Court generally lie in the county in which the cause of action arose,
“or in which any party to the action resides at the time of its commencement.” N.J.
R. 4:3-2(a). For purposes of New Jersey’s venue statute, “a corporation shall be
17 Webb did not dispute at the trial court that his lawsuit may be brought in state or federal court in Essex County. Because Webb does not deny these venue facts, the Court must consider them true. Tex. R. Civ. P. 87(3)(a); In re Fluor Enters., Inc., 2011 WL 2463004, at *4; Jackson v. Neal, No. 13-07-00164-CV, Not Reported in S.W.3d, 2009 WL 140507, at *4 (Tex. App.— Corpus Christi Jan. 22, 2009, no pet.); Garza, 2007 WL 1168468, at *5; In re Missouri Pacific R. Co., 970 S.W.2d 47, 53 (Tex. App.—Tyler 1998, orig. proceeding).
-25- 2570666.5 deemed to reside in the county in which its registered office is located or in any
county in which it is actually doing business.” Id., 4:3-2(b). Because IDT and
Shuk maintain their principal offices in Newark, as Webb alleges, venue lies in
New Jersey Superior Court for Essex County. C.R. 158, ¶¶ 10-11.
Venue also lies in federal court action pursuant to either 28 U.S.C. §
1391(b)(3) because IDT and Shuk are subject to personal jurisdiction in the federal
courts because they maintain their principal places of business in Newark, New
Jersey. 18 The United States District Court for the District of New Jersey maintains
a courthouse in Newark. 19
d. Venue is Alternatively Improper in Dallas County Under § 15.020(c)(2) Because Webb Expressly Agreed to Sue in Essex County
The UPA likewise comports with TEX. CIV. PRAC. & REM. CODE §
15.020(c)(2) because it expressly states that Webb must bring his lawsuit in Essex
County. Section 10.10(b) provided that each Party “submits to the exclusive
jurisdiction of the state or federal courts located in Essex County, New Jersey, in
18 Venue would not be proper under 28 U.S.C. § 1391(b)(1) because not all of the Defendants in this case are residents of New Jersey. Furthermore, there was no evidence presented at the trial court that a substantial part of the events or omissions giving rise to Webb’s claims occurred in Essex County. 28 U.S.C. § 1391(b)(2). Thus, venue would be proper under 28 U.S.C. § 1391(b)(3). Appellees acknowledge, however, that federal subject matter jurisdiction would be lacking if Webb refiled his lawsuit in the United States District Court for the District of New Jersey without modifying the parties or his alleged causes of action. If Webb did modify either, it is possible that federal subject matter jurisdiction may exist. 19 http://www.njd.uscourts.gov/court-info/court-locations/newark
-26- 2570666.5 any action or proceeding arising out of, or relating to, this Agreement, [and] agrees
that all claims in respect of the action or proceeding may be heard and determined
in any such court.” As set forth supra, Webb may bring his lawsuit in Essex
County.
Thus, the only issue is whether Webb agreed in writing to Section 10.10(b).
Assuming that Webb properly specifically denied this venue fact – which
Appellees dispute20 – Appellees presented the trial court with prima facie proof
that Webb signed the UPA in the presence of Tujague and the majority of the other
Defendant-Sellers. C.R. 363, ¶ 4; C.R. 368, ¶ 3; C.R. 371, ¶ 4. The trial court
expressed its concerns with the lack of evidence to support Webb’s bald assertion
that he did not sign the UPA:
THE COURT: . . . You said there’s no evidentiary response to that proof. And to me, that is more significant than what you’ve just told me. I mean, is that the case?
*****
20 Appellees asserted at the trial court that Webb could not specifically deny the UPA applies to him. Webb’s repeated self-characterizations as a “seller,” “co-seller,” and “fellow seller,” combined with his allegation that his membership interest in Diversegy was sold and that he has not received payment for the sale of his interest, constitute judicial admissions that bar Webb from taking the position that he did not sign the UPA. H2O Solutions, Ltd. v. PM Realty Group, LP, 438 S.W.3d 606, 617 (Tex. App.—Houston [1st Dist.] Feb. 13, 2014, pet. denied). The doctrine of quasi-estoppel precludes Webb from now asserting that he did not sign the UPA, because it would be unconscionable to allow Webb to take a position inconsistent to the one he already acquiesced – namely, that Webb is a “seller” under the UPA and asserts a breach of contract claim seeking payment for his membership interest. Eckland Consultants, Inc. v. Ryder, Stilwell Inc., 174 S.W.3d 80, 87 (Tex. App.—Houston [1st Dist.] 2004, no pet.).
-27- 2570666.5 THE COURT: Well, I guess one of the things that I’m concerned about – and we’re somewhat fixed because of Texas procedure here – is that why don’t I have a – other than the verified petition, why don’t I have on file at this time an affidavit saying I did not sign the UPA? Why don’t I have it?
R.R. Vol. 3, 13:16-19, 28:9-14. In fact, the trial court expressed its concerns over
Webb’s inconsistent positions during the hearing on his motion for
reconsideration:
MR. MOSELEY: . . . I’m still trying to figure out how you have a breach of contract claim on a contract that you didn’t sign.
THE COURT: Well, that is problematic . . .
THE COURT: Well, what -- signature aside --
MR. O’NEAL: And I’ll --
THE COURT: -- because Mr. Moseley just pointed out something that was troubling to me, not necessarily because I personally agree with it because I disagree with some of the Supreme Court authority that talks about it, but how -- how can you, in fact, rely upon a claim of breach of contract that you claim you didn’t sign?
R.R. Vol. 4, 21:9-12, 21:23-22:7. Reviewing the entire record and evidence in the
light most favorable to the trial court’s venue ruling, there is probative evidence to
support the trial court’s grant of the Motion based on §§ 15.020(c)(1) and (c)(2). It
is apparent that the trial court, in denying Webb’s motion for reconsideration,
-28- 2570666.5 considered the entire record – which included Webb’s pleadings. The trial court’s
ruling should be affirmed.
II. Webb Never Requested an Opportunity to Present “Rebuttal Evidence” Webb contends the trial court erred by relying on the evidence attached to
Appellees’ reply brief without giving him “an equal opportunity to respond.”
Ant.’s Br. at 25. This argument fails for several reasons. 21
First, Webb did not request the opportunity to present “rebuttal evidence” at
the hearing, nor did he request a continuance of the hearing to provide him an
opportunity to timely file affidavits or other evidence in response to Appellees’
reply brief. In fact, Webb’s brief does not cite to any part of the record where he
made either request, or where the trial court denied his request. Webb waived the
error by failing to make either or both of these requests and by failing to obtain a
ruling. Tex. R. App. P. 33.1(a)(1)(A).22
Second, any evidence Webb complains the trial court should have allowed
him to file was evidence that Webb could have filed in his response to the Motion.
21 Webb relies on Tex. R. Civ. P. 87 to support his argument, yet acknowledges that Rule 87 cannot support his argument because “the parties are not dealing in this case with a move from one Texas county to another, rather the parties are litigating a forum-selection clause that will facilitate a move from one state to another.” Ant.’s Br. at 27. 22 Webb’s argument ignores his own motion for reconsideration, which attached the very evidence he claims was not considered. If the trial court did not give Webb “an equal opportunity to respond,” then the affidavits attached to his motion for reconsideration were never part of the record below and never considered by the trial court. This is another example of Webb taking inherently inconsistent positions in this case.
-29- 2570666.5 Webb had pleaded—and still pleads—that he is a seller under the UPA, and he
attached to his Original Petition a copy of the UPA containing what purports to be
his signature. Webb also sought benefit of the bargain damages in his live
pleading – the alleged failure to pay Webb the purchase price for his membership
interest. Based in part on these facts, Appellees’ Motion contained an explicit
statement that Webb had signed the UPA, and thus was bound by Section 10.10(b).
C.R. 211 (“As Webb alleges, and as reflected in the UPA – a written agreement to
which Webb is a signing party . . .”). And it was Webb—in his response to the
Motion—that first raised the contention that he did not sign the UPA. Therefore,
Webb knew, or at the very least should have known, that in the face of his
pleadings and exhibits his response to Motion needed to attach evidence supporting
his contention that he did not sign the UPA. Instead, Webb’s response contained
the bare contention—unsupported by any explanation at all or by any evidence —
that he did not sign the UPA. 23
Lastly, at the hearing on Appellees’ Motion, in Webb’s motion for
reconsideration, at the hearing on that motion, and now in his brief, Webb has
presented no explanation as to why he could not have obtained and filed in his
response to the Motion the evidence he now complains he was prevented from 23 Webb did not object at the trial court that the affidavits attached to Appellees’ reply brief were untimely, and therefore waived any argument about the timeliness of the reply brief and affidavits. Tex. R. App. 33.1(a)(1)(A). To the extent Webb complains about a lack of opportunity to respond to that evidence because it was filed the day of the hearing, Webb created the timing problem by filing his response the day before the hearing.
-30- 2570666.5 presenting to the trial court. Rather, Webb’s counsel admitted at the hearing on
Appellees’ Motion that he “didn’t think it was necessary.” R.R. Vol. 3, 28:15-16.
The trial court did not abuse its discretion in granting Appellees’ Motion and
dismissing the case.
III. The Trial Court Did Not “Transfer” Webb’s Lawsuit to New Jersey
Webb’s final complaint is that the trial court “abused its discretion” by
dismissing Webb’s lawsuit without prejudice because the trial court “does not
have the express statutory authority to transfer a case to another state’s
jurisdiction.” Ant.’s Br. at 28 (emphasis added). This argument is completely
misplaced. The trial court did not transfer the lawsuit. It dismissed it. Dismissal
is the proper procedural remedy when a court finds a valid and enforceable forum-
selection clause that requires a lawsuit to be brought in another state. Stokes
Interest, G.P. v. Santo-Pietro, 343 S.W.3d 441, 444 (Tex. App.—El Paso 2010, no
pet.); Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d 66, 70 (Tex.
App.—Dallas 1996, no writ). Webb agrees this is a correct statement of Texas
law. Ant.’s Br. at 29.
If the UPA’s provision is a venue-selection clause, Appellees agree that
there is nothing in the Texas Rules of Civil Procedure or the Texas Civil Practice
and Remedies Code that expressly permits a Texas court to transfer a case to
another state. But, again, that is not what the trial court did here. Rather, the trial
-31- 2570666.5 court dismissed Webb’s lawsuit. Supp. C.R. 4-5. The case was not transferred to a
particular court. The trial court’s order did not prejudice Webb’s right to re-file his
lawsuit in state or federal court in Essex County. It is up to Webb, if he chooses to
proceed with his lawsuit, to file in the appropriate court in Essex County.
The trial court’s procedural remedy – dismissal without prejudice – properly
invokes the Legislature’s intent under TEX. CIV. PRAC. & REM. CODE §§
15.020(c)(1) and (c)(2). The Legislature repeatedly used the phrase “in another
jurisdiction” in the statute. The Legislature clearly contemplated motions
challenging the plaintiff’s choice of venue where the plaintiff’s claims arise from a
“major transaction” containing a clause requiring suit to be filed outside of Texas –
like the UPA. Had the Legislature intended for Section 15.020 to apply only to
“major transactions” involving venue-selection clauses that choose a Texas county
as the place of venue, it would have excluded the phrase from the statute.
Moreover, dismissal comports with the parties’ agreement and intent under
the UPA – that no action shall be brought in any county other than Essex County.
To accept Webb’s argument, and remand the case to Dallas County because the
trial court lacked authority to invoke that procedural remedy, would nullify the
parties’ agreement.
Finally, Webb cannot complain about the trial court’s dismissal remedy
because he invited it. At the September 23 hearing, the trial court verbally
-32- 2570666.5 indicated it was going to grant the Motion and asked whether the Court should
transfer Webb’s lawsuit to New Jersey or dismiss the lawsuit without prejudice to
Webb’s right to refile in New Jersey. R.R. Vol. 3, 29:8-14. Webb’s counsel
immediately responded, “Yeah, Your Honor. I don’t think that the statute does
provide a provision for you to transfer it. I think I would ask that if you’re going to
dismiss it, dismiss it without prejudice to allow me --.” R.R. Vol. 3, 29:15-18.
Webb has no right to complain because the trial court did exactly what his counsel
requested.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellees pray that this Court
affirm the trial court’s order dismissing Webb’s lawsuit without prejudice, and for
all further relief the Court deems necessary. 24
24 Shuk and IDT alternatively pray that in the event the Court reverses and remands such order be without waiver of their special appearances.
-33- 2570666.5 Respectfully submitted,
GRAY REED & McGRAW
By: /s/ Andrew K. York ANDREW K. YORK State Bar No. 24051554 JIM MOSELEY State Bar No. 14569100
1601 Elm Street, Suite 4600 Dallas, Texas 75201 (214) 954-4135 (214) 953-1332 (Fax)
ATTORNEYS FOR APPELLEES LUCIEN TUJAGUE, JR., AND DOMINION GAS HOLDINGS, LP
HALLETT & PERRIN, PC
By: /s/ Bryan P. Stevens (with permission) BRYAN P. STEVENS State Bar No. 24051387 BARRETT C. LESHER State Bar No. 24070137
1445 Ross Avenue, Suite 2400 Dallas, Texas 75202 (214) 983-0053 (214) 922-4142 (Fax)
ATTORNEYS FOR APPELLEES SHUK HOLDINGS, LLC, IDT ENERGY, INC., and DIVERSEGY LLC
-34- 2570666.5 GRUBER HURST ELROD JOHANSEN HAIL SHANK LLP
By: /s/ Mark L. Johansen (with permission) MARK L. JOHANSEN State Bar No. 10670240 RAFAEL C. RODRIGUEZ State Bar No. 24081123
1445 Ross Avenue, Suite 2500 Dallas, Texas 75202 (214) 855-6800 (214) 855-6808 (Fax)
ATTORNEYS FOR APPELLEE ALEX RODRIGUEZ
-35- 2570666.5 CERTIFICATE OF COMPLIANCE
In accordance with Tex. R. App. P. 9.4(i)(3), I hereby certify that Appellants’ response brief contains 8,258 words based upon the word count provided by Microsoft Word that was used to prepare the document.
/s/ Andrew K. York ANDREW K. YORK
-36- 2570666.5 CERTIFICATE OF SERVICE
Pursuant to Tex. R. App. P. 9.5(b)(1), I hereby certify that on April 14, 2015, a true and correct copy of Appellants’ brief was forwarded to the persons listed below electronically through the electronic filing manager if the email address of the person is on file with the electronic filing manager, or by email if the email address is not on file.
Melvin Houston Melvin Houston & Associates 1776 Yorktown St., Suite 350 Houston, Texas 77056 mhouston@gotellmel.com
Darrell J. O’Neal 2129 Winchester Road Memphis, Tennessee 38116 domemphislaw@aol.com
Bryan Stevens Barrett Lesher Hallett & Perrin, PC 1445 Ross Avenue, Suite 2400 Dallas, Texas 75202 bstevens@hallettperrin.com blesher@hallettperrin.com
Mark L. Johansen Rafael C. Rodriguez Gruber Hurst Elrod Johansen Hail Shank LLP 1445 Ross Avenue, Suite 2500 Dallas, Texas 75202 mjohansen@ghjhlaw.com rrodriguez@ghjhlaw.com
-37- 2570666.5
Johnny E. Webb, III v. Alex Rodriguez (Johnny E. Webb, III v. Alex Rodriguez) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.