ACCEPTED 05-18-00915-CV FIFTH COURT OF APPEALS DALLAS, TEXAS 12/21/2018 3:08 PM LISA MATZ CLERK
No. 05-18-00915-CV IN THE COURT OF APPEALS FILED IN 5th COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS DALLAS, TEXAS AT DALLAS 12/21/2018 3:08:58 PM LISA MATZ Clerk TACMED HOLDINGS, INC., AND LORETTA YOUNG Appellants,
v.
REV RECREATION GROUP, INC. F/K/A ALLIED RECREATION GROUP Appellee.
On Appeal in Cause No. 296-02909-2017 From the 296th Judicial District Court in and for Collin County, Texas Honorable John R. Roach, Jr. of the 296th District Court, Presiding
APPELLEE’S BRIEF
THE LOWMAN LAW FIRM Christopher J. Lowman State Bar No. 12636480 Brenton M. Stanfield State Bar No. 24054593 One Allen Center 500 Dallas Street, Suite 3030 Houston, TX 77002 (713) 752-0777 (713) 752-0778 (Fax) chris@lowmanlaw.com
Counsel for Appellee
ORAL ARGUMENT REQUESTED
1 IDENTITY OF PARTIES AND COUNSEL
PARTIES IN THE UNDERLYING SUIT: Defendant/Appellee: Rev Recreation Group, Inc., f/k/a Allied Recreation Group
Plaintiff/Appellant: TACMED Holdings, Inc., and Loretta Young
TRIAL AND APPELLATE COUNSEL:
For Appellee: Christopher J. Lowman State Bar No. 12636480 THE LOWMAN LAW FIRM One Allen Center 500 Dallas Street, Suite 3030 Houston, Texas 77002 Telephone: (713) 752-0777 Facsimile: (713) 752-0778 chris@lowmanlaw.com
For Appellant:
Janice E. Cohen Texas Bar No. 04508362 Two Turtle Creek 3838 Oak Lawn Avenue Suite 750 – LB 20 Dallas, Texas 75219 Telephone: (214) 528-7977 Facsimile: (214) 528-7986 jan@janicecohenlaw.com
2 TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL ................................................. 2
TABLE OF CONTENTS ................................................................................ 3
INDEX OF AUTHORITIES........................................................................... 4
STATEMENT OF THE CASE ....................................................................... 6
ISSUES PRESENTED.................................................................................... 7
STATEMENT OF FACTS ............................................................................. 7
SUMMARY OF THE ARGUMENT ............................................................. 8
ARGUMENT .................................................................................................. 9
ISSUE 1: THE TRIAL COURT DID NOT ERR BY ENFORCING THE FORUM SELECTION CLAUSE BECAUSE ALL OF APPELLANTS’ CLAIMS ARISE UNDER THE CONTRACT CONTAINING THE FORUM SELECTION CLAUSE. ......................................................................................... 9
ISSUE 2: THE TRIAL COURT DID NOT ERR BY ENFORCING THE FORUM SELECTION CLAUSE TO REV’S BENEFIT BECAUSE REV’S ONLY LIABILITY ARISES FROM THE CONTRACT CONTAINING THE FORUM SELECTION CLAUSE AND REV, AS A NON-SIGNATORY, IS ENTITLED TO ENFORCE THE CONTRACT......................................................... 13
ISSUE 3: THE TRIAL COURT DID NOT ERR BY FINDING THE FORUM SELECTION CLAUSE BINDING ON APPELLANTS DESPITE CLAIMS OF DURESS OR FRAUD. ......................................................................................... 18
PRAYER ....................................................................................................... 25
CERTIFICATE OF SERVICE ..................................................................... 26
CERTIFICATE OF COMPLIANCE ............................................................ 26
3 INDEX OF AUTHORITIES
Deep Water Slender Wells, Ltd. v. Shell Int’l Expl. & Prod., 234 S.W.3d 679 (Tex.App.—Houston [14th Dist.] 2007, pet. denied) ............10, 11
In re ADM Investor Servs., 304 S.W.3d 371 (Tex.2010) ...............19, 20, 21, 22, 23
In re AIU Ins., 148 S.W.3d 109 (Tex.2004) .....................................................19, 23
In re AutoNation, Inc., 228 S.W.3d 663 (Tex.2007) ........................................19, 20
In re Boehme, 256 S.W.3d 878 (Tex.App.—Fort Worth 2008, orig. proceeding) ....................................................23
In re FirstMerit Bank, 52 S.W.3d 749 (Tex. 2001) ................................................16
In re International Profit Assocs., 274 S.W.3d 672 (Tex.2009) ............................................... 10, 12, 18, 19, 20, 21, 22
In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) ...........................16
In re Laibe Corp., 307 S.W.3d 314 (Tex.2010) .............................10, 18, 19, 20, 21
In re Lisa Laser USA, Inc., 310 S.W.3d 880 (Tex.2010) .......................................12
In re Lyon Fin. Servs., 257 S.W.3d 228 (Tex.2008) .......................10, 19, 20, 21, 22
In re Nationwide Ins., 494 S.W.3d 708 (Tex.2016) .........................................18, 23
In re Rubiola, 334 S.W.3d 220 (Tex. 2011) ...........................................................14
In re Vesta Ins. Group., Inc., 192 S.W.3d 759 (Tex. 2006) ...................................16
Mabon Ltd. v. Afri-Carib Enters., 29 S.W.3d 291 (Tex.App.—Houston [14th Dist.] 2000, no pet.) ..............................................10, 11
Phoenix Network Techs Ltd. v. Neon Sys., 177 S.W.3d 605 (Tex.App.—Houston [1st Dist.] 2005, no pet.) ..................9, 10, 11
4 Pinto Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d 428 (Tex. 2017) .......................................................................14, 15, 17
Ramsay v. Texas Trading Co., 254 S.W.3d 620 (Tex.App.—Texarkana 2008, pet. denied) .............................................................11
RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex.App.—Dallas 2010, no pet.)..................................................................9, 10, 12
Southwest Intelecom, Inc. v. Hotel Networks Corp., 997 S.W.2d 322,(Tex.App.—Austin 1999, pet. denied) ........................................11
Stokes Interest, G.P. v. Santo-Pietro, 343 S.W.3d 441 (Tex.App.—El Paso 2010, no pet.) .........................................................................12
5 No. 05-18-00915-CV
IN THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS
TACMED HOLDINGS, INC., AND LORETTA YOUNG Appellants,
REV RECREATION GROUP, INC. F/K/A ALLIED RECREATION GROUP Appellee.
TO THE HONORABLE JUSTICES: Appellee REV Recreation Group, Inc. f/k/a Allied Recreation Group, Inc.
(“REV”) files this APPELLEE’S BRIEF and will respectfully show as follows.
STATEMENT OF THE CASE This is a civil suit relating to Appellants’ purchase of two motor coaches
from LDRV Holdings Corp. d/b/a Lazy Days RV Center, Inc., (“LDRV”)
purchased by Appellants in Arizona. Appellants’ recitation of the Statement of the
Case accurately reflects the procedural history of this case. The trial court
correctly held that a valid and enforceable forum selection clause exists which
requires any lawsuits relating to the motor coaches be filed exclusively in Pima
6 County, Arizona. Accordingly, the trial court dismissed this Texas lawsuit without
prejudice.
ISSUES PRESENTED
ISSUE 1: THE TRIAL COURT DID NOT ERR BY ENFORCING THE FORUM SELECTION CLAUSE BECAUSE ALL OF APPELLANTS’ CLAIMS ARISE UNDER THE CONTRACT CONTAINING THE FORUM SELECTION CLAUSE.
ISSUE 2: THE TRIAL COURT DID NOT ERR BY ENFORCING THE FORUM SELECTION CLAUSE TO REV’S BENEFIT BECAUSE REV’S ONLY LIABILITY ARISES FROM THE CONTRACT CONTAINING THE FORUM SELECTION CLAUSE AND REV, AS A NON-SIGNATORY, IS ENTITLED TO ENFORCE THE CONTRACT.
ISSUE 3: THE TRIAL COURT DID NOT ERR BY FINDING THE FORUM SELECTION CLAUSE BINDING ON APPELLANTS DESPITE CLAIMS OF DURESS OR FRAUD.
STATEMENT OF FACTS
On or about August 11, 2015, LDRV sold a 2016 Monaco Diplomat motor
home (“Monaco”) to Appellants in Tuscon, Arizona for $309,000.00. Appellants
made a down payment and travelled to Indiana to pick up the Monaco from REV’s
manufacturing plant in Decatur, Indiana. The remaining balance of the sales price
of the Monaco after a trade-in allowance, taxes, fees and a down payment were
applied was $247,200.00. Arizona Revised Statute section 44.286 requires all
retail installment contracts to be in writing. 1 Upon arrival in Indiana, and before
1 Arizona Revised Statute 44-281(12) defines “retail installment contract” as follows: (a) Means an agreement, entered into in this state, pursuant to which the title to or a lien upon the motor vehicle, which is the subject matter of a retail installment transaction, is retained or taken by a retail seller from a retail buyer as security for the buyer's obligation. (b) Includes:
7 completing the transaction, REV presented Appellants with LDRV’s standard
retail installment contract that contains the forum selection clause at issue in this
case.
The binding retail installment contract (“Contract”) provides the following
forum selection clause in paragraph 15:
“… ALL LEGAL ACTIONS BROUGHT BY PURCHASER OR SELLER RELATING TO THE VEHICLE PURCHASED OR ITS SALE, SERVICE OR USE MUST BE FILED EXCLUSIVELY IN PIMA COUNTY, ARIZONA.”
On June 16, 2017, Appellants filed this lawsuit in Collin County, Texas against
LDRV and REV alleging violations of the Texas Deceptive Trade Practices Act,
unconscionable acts, breach of warranty, and breach of contract. All of
Appellants’ claims in this lawsuit relate to the “vehicle purchased or its sale,
service or use” and are subject to the Contract’s forum selection clause.
SUMMARY OF THE ARGUMENT
REV is not a signatory to the contract. Nevertheless, REV is entitled to
enforce the forum selection clause contained in the Contract against Appellants
because the parties to the Contract clearly intended that “all legal actions brought
(i) A conditional sales contract and a contract for the bailment or leasing of a motor vehicle by which the bailee or lessee contracts to pay as compensation for its use a sum substantially equivalent to or in excess of its value and by which it is agreed that the bailee or lessee is bound to become, or has the option of becoming, the owner of the motor vehicle for no other or a nominal consideration upon full compliance with the provisions of the contract. (ii) A secondary motor vehicle finance transaction.
8 by Purchaser or Seller relating to the [Monaco] or its sale, service or use must be
filed exclusively in Pima County, Arizona” (emphasis added).
Further, Appellants’ claims against REV seek a direct benefit under the
Contract – enforcement of the warranties conferred in the sale. Because
Appellants seek to enforce a direct benefit under the Contract against REV, all
such claims against REV are covered by the Contract’s forum selection clause and
REV is entitled to enforce that clause. In addition, REV qualified as a “transaction
participant” to the Contract between Appellants and LDRV for the following
reasons: (a) REV is the manufacturer of the Monaco; (b) Appellants traveled to
REV’s manufacturing facility in Indiana to take possession of the Monaco; (c)
Appellants sued both REV and LDRV; and (d) all of Appellants claims against
REV arise under the Contract.
Finally, no exceptions apply to the enforcement of the forum selection
clause. The ruling of the trial court should be affirmed.
ARGUMENT
ISSUE 1: THE TRIAL COURT DID NOT ERR BY ENFORCING THE FORUM SELECTION CLAUSE BECAUSE ALL OF APPELLANTS’ CLAIMS ARISE UNDER THE CONTRACT CONTAINING THE FORUM SELECTION CLAUSE.
The Contract includes a clear forum-selection clause that requires mandatory
jurisdiction and venue in Pima County, Arizona. Forum-selection clauses are
contractual provisions in which parties select in advance a particular jurisdiction
9 for resolving their disputes. RSR Corp. v. Siegmund, 309 S.W.3d 686, 700
(Tex.App.—Dallas 2010, no pet.); Phoenix Network Techs. (Eur.) Ltd. v. Neon
Sys., 177 S.W.3d 605, 611 (Tex.App.—Houston [1st Dist.] 2005, no pet.).
Contractual forum-selection clauses are presumed to be valid and enforceable in
Texas. In re Laibe Corp., 307 S.W.3d 314, 316 (Tex.2010); In re International
Profit Assocs., 274 S.W.3d 672, 675 (Tex.2009); In re Lyon Fin. Servs.,
257 S.W.3d 228, 232 (Tex.2008). A motion to dismiss is the appropriate
mechanism for enforcing a forum-selection clause. RSR Corp., 309 S.W.3d at
709; Deep Water Slender Wells, Ltd. v. Shell Int’l Expl. & Prod., 234 S.W.3d 679,
687 (Tex.App.—Houston [14th Dist.] 2007, pet. denied).
Here, the forum selection clause requires that “all legal actions… relating to
the vehicle purchased or its sale, service or use must be filed exclusively in Pima
County, Arizona”. This unambiguous language creates a mandatory forum
selection clause that must be enforced.
A forum-selection clause must be mandatory, not permissive, to be
enforceable. See Phoenix Network Techs. (Eur.) Ltd. v. Neon Sys.,
177 S.W.3d 605, 615 (Tex.App.—Houston [1st Dist.] 2005, no pet.); Mabon Ltd.
v. Afri-Carib Enters., 29 S.W.3d291, 297 (Tex.App.—Houston [14th Dist.] 2000,
no pet.). If the terms of a forum-selection clause are ambiguous, the court will
apply principles of contract law to determine the parties’ intent. See RSR Corp. v.
10 Siegmund, 309 S.W.3d 686, 700 (Tex.App.—Dallas 2010, no pet.); Phoenix
Network, 177 S.W.3d at 615.
Mandatory clauses state that a suit must be brought only in the designated
forum; that is, there must be some language explicitly excluding other
forums. Mabon Ltd., 29 S.W.3d at 297; see, e.g., Deep Water Slender Wells, Ltd. v.
Shell Int’l Expl. & Prod., 234 S.W.3d 679, 687 (Tex.App.—Houston [14th Dist.]
2007, pet. denied) (forum-selection clause that stated designated forum had
“exclusive jurisdiction” to resolve suits was mandatory); Phoenix Network,
177 S.W.3d at 615 (forum-selection clause that provided for United Kingdom as
"the venue" for suit was mandatory; use of definite article "the" indicated
exclusivity).
A permissive clause states that a suit may be brought in a designated forum;
that is, the clause does not require that the suit be brought in that forum. Ramsay v.
Texas Trading Co., 254 S.W.3d 620, 629 (Tex.App.—Texarkana 2008, pet.
denied); Mabon Ltd., 29 S.W.3d at 297. Although the term “shall” in a forum-
selection clause is generally mandatory, without other exclusive language, the
clause may be deemed permissive. See Phoenix Network, 177 S.W.3d at 615; see,
e.g., Mabon Ltd., 29 S.W.3d at 297 (forum-selection clause was permissive even
though it stated Nigeria "shall have venue"; term "shall" did not provide for
exclusive jurisdiction but instead meant only that Nigeria was an acceptable
11 forum); Southwest Intelecom, Inc. v. Hotel Networks Corp., 997 S.W.2d 322, 325-
26 (Tex.App.—Austin 1999, pet. denied) (forum-selection clause was permissive
even though it stated that agreement "shall be governed" by laws of Minnesota and
parties stipulated to jurisdiction and venue there; clause did not mandate exclusive
jurisdiction in Minnesota but instead required parties to submit to jurisdiction in
Minnesota only if suit was brought there).
Here, the Contract’s forum selection clause is not permissive. The Contract
clearly and simply states, “all legal actions… must be filed exclusively in Pima
County, Arizona”. This language specifically excludes legal action in every
jurisdiction other than Pima County, Arizona. By the terms of the Contract, this
action must be filed in Pima County, Arizona, not Collin County, Texas.
Appellants’ claims must fall within the scope of the forum selection clause
for it to be enforceable against Appellants. See In re Lisa Laser USA, Inc.,
310 S.W.3d 880, 884-85 (Tex.2010); Stokes Interest, G.P. v. Santo-Pietro,
343 S.W.3d 441, 445 (Tex.App.—El Paso 2010, no pet.); see also In re
International Profit Assocs., 274 S.W.3d 672, 677 (Tex.2009) (court should use
“common sense” approach in determining whether forum-selection clause covers
P’s claims). That is, the claims must arise from the contractual relationship
between the parties, rather than from any general obligations imposed by
12 law. See In re International Profit, 274 S.W.3d at 678; RSR Corp., 309 S.W.3d at
704.
The scope of the Contract’s forum selection clause is broad; it covers all
legal actions that relate to “the vehicle purchased or its sale, service or use”.
Appellants’ claims clearly fall within this broad language and a common sense
reading of the forum selection clause in the Contract and Plaintiffs’ Third
Amended Petition make it clear that Appellants’ claims fall within the scope. Each
and every factual allegation centers on Appellants’ complaints about the Monaco,
LDRV and REV’s representations during the sale of the Monaco, LDRV and
REV’s attempts to service and repair the Monaco, and damages arising from
Appellants’ attempted use of the Monaco. Appellants’ Third Amended Petition
states explicitly “Young will show that REV Group… breached its contract to
provide goods that are merchantable and fit for the purpose for which they are
intended.” The only contract between the parties is the Contract, which contains
the forum selection clause.
ISSUE 2: THE TRIAL COURT DID NOT ERR BY ENFORCING THE FORUM SELECTION CLAUSE TO REV’S BENEFIT BECAUSE REV’S ONLY LIABILITY ARISES FROM THE CONTRACT CONTAINING THE FORUM SELECTION CLAUSE AND REV, AS A NON-SIGNATORY, IS ENTITLED TO ENFORCE THE CONTRACT.
A. The Parties’ Chosen Language is Key.
REV is not a signatory to the Contract. Nevertheless, REV is entitled to
enforce the forum selection clause contained in the Contract against Appellants
13 because the parties declared that “all legal actions brought by Purchaser or Seller
relating to the [Monaco] or its sale, service or use must be filed exclusively in
Pima County, Arizona” (emphasis added), and Appellants’ legal action against
REV relates to the Monaco.
Further, Appellants’ claims against REV seek a direct benefit under the
Contract. Because Appellants’ seek to enforce a direct benefit under the Contract
against REV – the manufacturer’s warranties conferred to Appellants under the
Contract – they are bound by the Contract’s forum selection clause.
Whether a forum selection clause applies depends on the intent of the
parties, as expressed in the Contract, and the factual allegations undergirding the
party’s claims rather than the legal causes of action asserted. In re Rubiola, 334
S.W.3d 220, 224-225 (Tex. 2011); See also Pinto Tech. Ventures, L.P. v. Sheldon,
526 S.W.3d 428, 437-441 (Tex. 2017) (forum selection clause in shareholder’s
agreement was enforceable against shareholders’ non-contract tort claims because
tort claims would not have existed but for the existence of the shareholder’s
agreement).
It is clear that the intent expressed in the Contract is that “all legal actions”
relating to the Monaco, whether brought by Appellants or LDRV, must be brought
in Pima County, Arizona. Appellants factual allegations against REV relate to the
14 “Monaco, or its sale, service or use” and so the forum selection clause applies and
REV, whether a signatory or not, is entitled to enforce it.
LDRV’s reasoning for including such a far-reaching provision is obvious,
where, as here, “artful pleading” can destroy the preferred forum by adding non-
signatories while maintaining a “legal action” that centers on Appellants’
complaints about the Monaco. See Pinto Tech., 526 S.W.3d at 437; In re Int’l
Profit Assocs., Inc., 274 S.W.3d 672, 677 (Tex. 2009) (orig. proceeding) (quoting
Ginter ex. rel. Ballard v. Belcher, Pindergast & Laporte, 536 F.3d 439, 444 (5th
Cir. 2008) (preventing avoidance of forum selection clause with “artful pleading”
the reason for looking at the intent of the parties and the factual allegations rather
than the legal causes of action asserted).
The intent of the contracting parties clearly require Appellants’ to bring legal
action against LDRV in Pima County, Arizona, to the extent that legal action
relates to the Monaco. However, Appellant contends that because it non-suited
LDRV at the trial court, REV can no longer enforce the Contract’s forum selection
clause. Despite Appellants’ nonsuit of LDRV, this case substantially revolves
around LDRV’s alleged acts or omissions. Appellants’ Third Amended Petition
speaks extensively of LDRV’s alleged misconduct. As a dealer, LDRV interacted
directly with Appellants. Appellants cite LDRV’s alleged misrepresentations to
induce Appellants to purchase the Monaco as grounds for voiding the Contract.
15 LDRV will undoubtedly supply most of the witnesses in this case. Appellants’ 11th
hour non-suit of LDRV to avoid application of the forum selection clause will not
prevent LDRV from being dragged into this litigation regarding the “sale, service
or use” of the Monaco in Texas either as a party or by proxy – called as witnesses
by both parties to testify about the virtually all of the facts of this case.
B. Direct Estoppel supports enforcement of the forum selection clause.
Texas courts utilize a “direct estoppel” theory when analyzing whether a
non-signatories to an agreement containing forum selection clauses are entitled to
enforce those clauses. See In re FirstMerit Bank, 52 S.W.3d 749, 755 (Tex. 2001);
In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 741 (Tex. 2005) (analysis
applied to arbitration provisions, which are a type of forum selection clause). A
litigant who sues based on a contract subjects itself to the terms of that contract. In
re FirstMerit Bank, 52 S.W.3d at 755.
Nonparty defendants to a contract can be subjected to the terms of a
contract, and can enforce the contract, if their liability primarily stems from the
contract that contains a forum selection clause, but not if the liability arises from
general legal obligations. In re Vesta Ins. Group., Inc., 192 S.W.3d 759, 761 (Tex.
2006). REV’s only legal obligations to Appellants are the warranties conferred to
Appellants under the Contract when Appellants purchased the Monaco. REV’s
liability does not arise from general legal obligations.
16 Appellants’ claims against REV are alleged violations of the Texas
Deceptive Trade Practices Act, unconscionable acts, breach of warranty, and
breach of contract. Nevertheless, regardless of the legal claims plead, Appellants’
claims against REV are fundamentally founded on the Contract between
Appellants and LDRV and the warranties conferred by REV to Appellants under
the Contract. Appellants would have no claim against REV without Appellants’
entering into the Contract with LDRV for the purchase of the Monaco in Tucson,
Arizona. Appellants should be estopped from sidestepping the forum selection
clause while seeking to enforce their rights under the Contract that contains it.
C. REV Qualifies as a “Transaction Participant”
Texas courts also recognize that transaction participants can enforce a forum
selection clause even when they themselves are not parties to the contract. Pinto
Tech., 526 S.W.3d at 444-445. Transaction participants are parties closely related
to the contractual relationship such that the non-signatory’s enforcement of the
forum selection clause would be foreseeable. Id. In order to enforce the forum
selection clause, the transaction participant must establish that its enforcement of
comports with the expectations of the parties who contracted. Id.
Here, there can be no doubt that REV is a transaction participant. REV is
the manufacturer of the Monaco. Appellant contracted with LDRV to purchase the
Monaco, but traveled to REV’s manufacturing facility in Indiana to take
17 possession and consummate the transaction. REV was sued along with LDRV,
and most of the allegations in Appellants’ pleadings relate to LDRV’s alleged acts
and omissions. All of Appellants’ rights to sue under the warranty were conferred
in the Contract. As a result, it is foreseeable that REV would seek to enforce the
forum selection clause contained in the Contract against Appellants and this
comports with Appellants’ legitimate expectations. Accordingly, the trial court did
not err in enforcing the forum selection clause.
ISSUE 3: THE TRIAL COURT DID NOT ERR BY FINDING THE FORUM SELECTION CLAUSE BINDING ON APPELLANTS DESPITE CLAIMS OF DURESS OR FRAUD.
If Appellants’ claims fall within the scope of the forum-selection clause, the
court must enforce the clause unless Appellants can show an exception to
enforcement or that REV waived the forum selection clause by substantially
invoking judicial process. Appellants have a heavy burden of proof in opposing
the forum selection clause. In re Laibe Corp., 307 S.W.3d at 316; In re
International Profit, 274 S.W.3d at 675. Appellants must clearly show that (1)
enforcement of the clause would be unreasonable and unjust, (2) the clause is
invalid because of fraud or overreaching, (3) enforcement would contravene a
strong Texas public policy, or (4) the selected forum is seriously inconvenient for
trial. In re Nationwide Ins., 494 S.W.3d 708, 712 (Tex.2016); In re ADM Investor
18 Servs., 304 S.W.3d 371, 375 (Tex.2010); In re Lyon Fin. Servs., 257 S.W.3d 228,
231-32 (Tex.2008). None of these exceptions apply here.
(1) Unjust or Unreasonable
Appellants must show that enforcement of the clause would be unreasonable
and unjust. In re Laibe Corp., 307 S.W.3d at 316; In re ADM Investor,
304 S.W.3d at 375; In re International Profit, 274 S.W.3d at 675; In re
AutoNation, Inc., 228 S.W.3d 663, 668 (Tex.2007); In re AIU Ins.,
148 S.W.3d 109, 112 (Tex.2004). Enforcement is unreasonable and unjust only in
extreme or exceptional circumstances. See In re ADM Investor, 304 S.W.3d at 376.
There is nothing in Appellants’ pleadings or in the evidence presented that in any
way indicates that extreme or exceptional circumstances exist in this case.
Appellants chose LDRV’s dealership in Tucson, Arizona, to purchase the
Monaco and then traveled to Indiana to take delivery. Signing a written retail
installment contract was legally required to consummate the purchase. Appellants
signed and agreed to a forum selection clause fixing the forum in Tucson, Arizona.
There is nothing extreme or exceptional about the circumstances of this transaction
so as to make enforcement of the forum selection clause unjust or unreasonable.
Appellants chose to purchase a motor home at a dealership in Pima County,
Arizona. It is neither unreasonable nor unjust to litigate any subsequent disputes in
that same county.
19 (2) Fraud or Overreach
In the alternative, Appellants must show that the forum selection clause is
invalid because it is the result of fraud or overreaching. In re Laibe Corp.,
307 S.W.3dat 316; In re ADM Investor, 304 S.W.3d at 375; In re Lyon Fin.,
257 S.W.3d at 231-32; In re AutoNation, Inc., 228 S.W.3d at 668. Fraud, in a
forum-selection clause context, is shown by proving the usual elements of
fraud. See In re International Profit, 274 S.W.3d at 678. The claim of fraud must
relate to the forum-selection clause itself, not to the contract as a whole. See In re
Lyon Fin., 257 S.W.3d at 232.
Appellants have argued that the contract itself was an “extra hurdle” that
Appellants had to comply with before finalizing the purchase of the Monaco. On
the contrary, Arizona law requires a written retail installment contract be signed.
LDRV forwarded their standard retail installment contract to REV in Indiana so
that REV could present it to Appellant for the purpose of consummating the
purchase of the Monaco as required by law. Far from being a “hurdle”, the
Contract was a legal requirement for the transaction and conferred to Appellants
the very warranty rights under which they now sue.
Arizona Revised Statute section 44-286(A)(2) requires all retail installment
contracts contain the following notice to buyers: “Notice to the buyer: 1. Do not
sign this contract before you read it or if it contains any blank spaces. 2. You are
20 entitled to an exact copy of the contract you sign.” The Contract contains this
notice and it is conspicuously placed above the signature line of the agreement in
bold and all capital letters. In addition, the Contract contains an additional
disclosure immediately above the signature line that reads:
By signing below, buyer acknowledges having read the terms and conditions of this agreement (front and back), agrees to them, and acknowledges receiving a fully completed copy of this agreement.
Appellants signed the Contract subject to these clear and conspicuous notices and
should be barred from claiming the forum selection clause contained in the
Contract was procured by fraud.
The courts analyze claims of overreaching by determining whether a forum-
selection clause results in unfair surprise or oppression to the party opposing it. In
re International Profit, 274 S.W.3d at 678; see In re Lyon Fin., 257 S.W.3d at 232-
33. Appellants purchased the Monaco from a dealer located in Pima County,
Tucson, Arizona. Appellants cannot reasonably claim surprise or oppression when
the Contract stipulates that legal actions related to the Monaco must be brought in
Pima County, Arizona.
(3) Against Public Policy.
In the alternative, Appellants must show that enforcement of the clause
would contravene a strong Texas public policy. In re Laibe Corp., 307 S.W.3d at
316; In re ADM Investor, 304 S.W.3d at 375; In re International Profit,
21 274 S.W.3d at 675; In re Lyon Fin., 257 S.W.3d at 231-32. There are no public
policy grounds for refusing to enforce the forum selection clause contained in the
Contract. REV does not have substantial connections to Texas. REV is located in
Decatur, Indiana. LDRV has no dealerships in Texas, owns no property in Texas,
has no employees in Texas, is not a licensed motor vehicle dealer by the Texas
DMV, did not sell the Monaco to Appellants in Texas, and did not service or repair
the Monaco in Texas. Accordingly, there are no public policy reasons that support
this Texas lawsuit over the contractually agreed situs of Pima, Arizona.
(4) Serious Inconvenience
In the alternative, Appellants must show that the selected forum would be
seriously inconvenient such that enforcement of the clause would deprive
Appellants of their day in court. In re Laibe Corp., 307 S.W.3d at 316-17; In re
ADM Investor, 304 S.W.3d at 375; e.g., In re Lyon Fin., 257 S.W.3d at 233-34
(Pennsylvania was not such an inconvenient forum that enforcing forum selection
clause would produce an “unjust result”). Appellants must show that special and
unusual circumstances have developed that would make litigation in the selected
forum extremely difficult and inconvenient. E.g., In re International Profit,
274 S.W.3d at 680 (witnesses’ residences in location other than where suit was
brought was not special or unusual circumstance).
22 There are no special or unusual circumstances that make litigation in Pima
County, Arizona inconvenient for Appellants. On the contrary, litigation in Collin
County, Texas, a jurisdiction in which neither defendants nor Appellants have any
substantial connection, would be seriously inconvenient for all parties. Almost all
of the witnesses with knowledge of the facts of this case are located in Pima
County, Arizona, or Indiana. Under these facts, it would be inconvenient for the
court not to honor the forum selection clause contained in the Contract.
(5) Waiver
Finally, the only remaining alternative is for Appellants to show that REV
waived their right to rely on the clause by substantially invoking judicial process
causing prejudice to Plaintiff. See In re Nationwide Ins., 494 S.W.3d at 712; In re
AIU Ins., 148 S.W.3d at 121; In re Boehme, 256 S.W.3d 878, 884 (Tex.App.—Fort
Worth 2008, orig. proceeding). By filing an answer and motion to dismiss, REV
has not waived its right to rely on the forum selection clause contained in the
Contract. In re ADM Investor, 304 S.W.3d at 374 (filing answer and motion to
transfer venue at same time as motion to dismiss based on forum-selection clause
did not substantially invoke judicial).
The Contract contains a valid and enforceable mandatory forum selection
clause that requires all legal actions related to the Monaco or its sale, service or use
to be brought in Pima County, Arizona. Appellants’ claims fall within the scope of
23 the forum selection clause. No exception or waiver applies because the forum
selection clause is not unreasonable or unjust, was not procured by fraud and is not
an overreach, is not against public policy, is not a serious inconvenience for
Appellants, and REV has not waived its right to enforce the clause. Therefore, the
trial court did not err in enforcing the forum selection clause.
CONCLUSION
Appellants and LDRV declared that “all legal actions” related to the
Monaco must be brought in Pima County, Arizona. Appellants are seeking a direct
benefit under the Contract by suing to enforce the REV warranties conferred to
them under the Contract. Accordingly, REV is entitled to enforce the terms of the
Contract against Appellants and require Appellants to bring this legal action in
Pima County, Arizona. The trial court’s judgment that the case be dismissed for
improper forum should be upheld.
24 PRAYER
For the reasons set forth above, REV prays that this Honorable Court affirm
the trial court’s Order of Dismissal.
Respectfully submitted,
THE LOWMAN LAW FIRM
By: /s/ Christopher J. Lowman Christopher J. Lowman State Bar Number 12636480 Brenton M. Stanfield State Bar Number 24054593 One Allen Center 500 Dallas Street, Suite 3030 Houston, Texas 77002-4705 Telephone: (713) 752-0777 Telecopier: (713) 752-0778 E-mail: chris@lowmanlaw.com
Attorneys for Appellee REV Recreation Group, Inc. f/k/a Allied Recreation Group, Inc.
25 CERTIFICATE OF SERVICE
I certify that the foregoing document was electronically filed with the
Clerk of the Court using the electronic case filing system of the Court. I also
certify that a true and correct copy of the foregoing was served via e-service
on the following counsel of record on December 21, 2018.
Janice E. Cohen Texas Bar No. 04508362 Two Turtle Creek 3838 Oak Lawn Avenue Suite 750 – LB 20 Dallas, Texas 75219 Telephone: (214) 528-7977 Facsimile: (214) 528-7986 jan@janicecohenlaw.com
/s/ Christopher J. Lowman Christopher J. Lowman
CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limitations of Rule 9.4 because
it contains 4500 words, excluding the portions of the brief exempted by Texas
Rule of Appellate Procedure 9.4(i)(1).