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No. 08-0238
Supreme Court of Texas
In Re International Profit Associates, Inc.;
International Tax Advisors, Inc.; and
IPA Advisory and Intermediary Services, LLC
From the 370th Judicial District Court
Hidalgo County, Texas
Hon. Noé González, Presiding
Petition for Writ of Mandamus
J. Ken Nunley
SBN: 15135600
Chad M. Upham
SBN: 24028178
Kelly P. Rogers
SBN: 00788232
NUNLEY JOLLEY CLUCK AELVOET LLP
1580 South Main Street, Suite 200
Boerne, Texas 78006
830/816-3333
830/816-3388 (fax)
ATTORNEYS FOR RELATORS
Oral Argument Requested
Identity of Parties and Counsel
The following is a complete list of all parties, as well as the names and addresses of
all counsel.
Relators/Defendants: Counsel:
International Profit Associates, Inc. J. Ken Nunley
International Tax Advisors, Inc. SBN: 15135600
IPA Advisory and Chad M. Upham
Intermediary Services, LLC SBN: 24028178
Kelly P. Rogers
SBN: 00788232
NUNLEY JOLLEY CLUCK AELVOET LLP
1580 South Main Street, Suite 200
Boerne, Texas 78006
830/816-3333
830/816-3388 (fax)
Real Party in Interest/Plaintiff: Counsel:
McAllen TropicPak, Inc. Raymond L. Thomas
SBN: 19865350
Rebecca Vela
SBN: 24008207
KITTLEMAN, THOMAS & GONZALEZ, LLP
4900-B North 10th Street
McAllen, Texas 78504
956/686-8797
956/630-5199 (fax)
Respondent:
Hon. Noé González
370th District Court
100 North Closner, 1st Floor
Edinburg, Texas 78539
956/318-2280
956/318-2285
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Table of Contents
Page
Identity of Parties and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
Index of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
Statement of the Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
Statement of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Issue Presented
In filing this lawsuit against Relators in Texas, TropicPak violated three
forum selection clauses which established Illinois as the place of
exclusive jurisdiction and venue. The trial court clearly abused its
discretion in denying Relators’ motion to dismiss TropicPak’s claims.
The clause was broad enough to encompass TropicPak’s tort claims,
and TropicPak wholly failed to present any evidence of fraud or
overreaching. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Why This Case is Important . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1. TropicPak presented no evidence that the forum selection clause in the
contracts at issue in this case were procured through fraud . . . . . . . . . . . . 7
2. The Forum Selection Clauses are Not Ambiguous, and The Scope of the
Clauses Includes TropicPak’s Claims in this Case . . . . . . . . . . . . . . . . . . . 7
3. TropicPak presented no evidence that the interest of the witnesses or the public
renders the forum selection clauses unenforceable. . . . . . . . . . . . . . . . . . 11
4. TropicPak Failed to Prove it Would be Unreasonably Deprived of Its Day in
Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5. This Court Has Held that IPA Has No Adequate Remedy at Law . . . . . . 13
-ii-
Prayer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Certificate of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Affidavit of No Evidence from Second Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Trial court’s order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab A
Court of Appeals Ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab B
International Profit Associates, Inc. Contract . . . . . . . . . . . . . . . . . . . . . . . . Tab C
IPA Advisory & Intermediary Services, LLC Contract . . . . . . . . . . . . . . . . Tab D
International Tax Advisors, Inc. Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab E
-iii-
Index of Authorities
STATE CASES PAGE
Accelerated Christian Education v. Oracle Corp., 925 S.W.2d 66 (Tex. App. –Dallas
1996, no writ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 11
Barnette v. United Research Co., 823 S.W.2d 368 (Tex. App.–Dallas 1992,
writ denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Clark v. Power Marketing Direct, 192 S.W.3d 796 (Tex. App.–Houston [1st Dist.] 2006,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 10
CMS Partners, LTD v. Plumrose USA, Inc., 101 S.W.3d 730 (Tex. App.–Texarkana 2003,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Deep Water Slender Wells, Ltd. v. Shell Intern. Exploration, 234 S.W.3d 679, 688 (Tex.
App.-Houston [14th Dist.] 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Holeman v. Nat’l Bus. Inst., 94 S.W.3d 91 (Tex. App.–Houston [14th Dist.] 2002, pet.
denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
In re AIU Ins. Co, 148 S.W.3d 109 (Tex. 2004) . . . . . . . . . . . . . . . . . . . . . . . 6, 12, 13, 14
In re Automated Collection Technologies Inc., 156 S.W.3d 557 (Tex. 2004) . . . . 6, 7, 14
In re AutoNation, Inc., 228 S.W.3d 663 (Tex. 2007) . . . . . . . . . . . . . . . . . . . . . . 6, 13, 14
In re GNC Franchising, Inc., 22 S.W.3d 929 (Tex. 2002) . . . . . . . . . . . . . . . . . . . . . . . . 1
In re Kyocera Wireless Corp., 162 S.W.3d 758 (Tex. App – El Paso 2005, orig.
proceeding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 12
In re Talent Tree Crystal, 2006 WL 305015 (Tex. App.–Houston [1st Dist.] 2006, orig.
proceeding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
In re Tyco Electronics Power Sys., Inc., 2005 WL 237232 (Tex. App.–Dallas 2005, orig.
proceeding) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
M/S Bremen v. Zapata Offshore Co., 407 U.S. 1; 92 S.Ct. 1907; 32 L.Ed.2d 513
-iv-
(1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 11
My Café-CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860 (Tex. App.–Dallas 2003,
no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 11
Universal Computer Consulting Holding, Inc. v. Hillcrest Ford Lincoln-Mercury, Inc.,
2005 WL 2149508 (Tex. App.–Houston [14th Dist.] 2005, orig. proceeding) . . . . . . . . . 13
FEDERAL CASES
Ronar, Inc. v. Wallace, 649 F. Supp. 310 (S.D.N.Y. 1986) . . . . . . . . . . . . . . . . . . . . . . . 9
Terra Int’l, Inc. v. Mississippi Chem. Corp., 922 F. Supp. 1334 (N.D. Iowa 1996). . 1, 11
Trafigura Beheer B.V. v. M/T Probo Elk, 2007 WL 2033336 (5th Cir. 2007, pet. for cert.
filed) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Union Steel America Co. v. M/V Sanko Spruce, 14 F.Supp.2d 682 (D.N.J. 1998) . . . . . 14
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Statement of the Case
This is a petition for writ of mandamus to compel the Respondent, Hon. Noé
González, Judge of the 370th Judicial District Court of Hidalgo County, Texas, to vacate an
order denying Relators’ Motion to Dismiss the underlying cause and grant the motion. [MR
Tab J; Apx Tab A]1 Relators are International Profit Associates, Inc.; International Tax
Advisors, Inc.; and IPA Advisory and Intermediary Services, LLC [collectively referred to
as “IPA”].
Plaintiff, McAllen TropicPak [“TropicPak”] filed suit against IPA alleging they were
negligent in the provision of professional consulting services. IPA filed a motion to dismiss
TropicPak’s suit based on the contractual forum selection clauses in the contracts TropicPak
signed with IPA. [MR Tab C] The motion was argued before Judge González, and evidence
was presented. [RR 15-27] Judge González denied the motion by written order on October
23, 2007. [MR Tab J] IPA received the orders on December 5, 2007. [MR Tab N]
IPA requested mandamus relief from the Thirteenth Court of Appeals on January 22,
2008. The court of appeals requested a response, then denied the petition on February 21,
2008. [Apx. Tab E; MR Tab M]
1
References to the Mandamus Record filed with this Petition will be abbreviated as follows: “MR
Tab X at 3" means Mandamus Record, tab X at page 3. References to the Appendix to this petition will
be abbreviated as “Apx. Tab X”.
-vi-
Statement of Jurisdiction
This Court has jurisdiction to issue a writ of mandamus under Texas Constitution
article 5, section 3, and Texas Government Code section 22.002(a).
Issue Presented
In filing this lawsuit against Relators in Texas, TropicPak violated three forum
selection clauses which established Illinois as the place of exclusive jurisdiction and
venue. The trial court clearly abused its discretion in denying Relators’ motion to
dismiss TropicPak’s claims. The clause was broad enough to encompass TropicPak’s
tort claims, and TropicPak wholly failed to present any evidence of fraud or
overreaching..
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Why This Case is Important
This case presents an opportunity for this Court to confirm that plaintiffs that
contractually agreed to a certain forum cannot artfully plead tort or other non-contractual
claims in order to avoid the implications of the forum selection clause. This Court has not
expressly ruled on the issue of whether contractual forum selection clauses apply to tort
claims or other non-contractual claims. See In Re GNC Franchising, Inc., 22 S.W.3d 929
(Tex. 2002) (Hecht, J. dissenting from denial of petition for writ of mandamus) (noting
conflict in Texas appellate courts on issue of whether forum selection clauses apply to tort
claims). The Court has previously relied on federal law in crafting Texas law with respect
to forum selection clauses. However, federal courts have taken different approaches to the
question of whether such clauses apply to extra-contractual claims.2 The issue is unsettled,
and plaintiffs continue to argue in Texas courts that forum selection clauses do not apply to
extra-contractual claims.3 This case presents an excellent opportunity for this Court to clarify
Texas law on this important issue.
2
See Terra Int’l, Inc. v. Mississippi Chem. Corp., 922 F. Supp. 1334, 1378-80 (N.D. Iowa 1996),
noting that federal courts have applied different tests to determine whether forum selection clauses apply
to tort claims including: (1) do the tort claims ultimately depend on existence of contractual relationship?
(2) does resolution of the claims relate to interpretation of the contract? and (3) do the tort claims involve
the same operative facts as a parallel claim for breach of contract?
3
See Clark v. Power Marketing Direct, 192 S.W.3d 796, 799 (Tex. App.–Houston [1st Dist.] 2006,
orig. proceeding) (plaintiff argued clause did not apply because his claims were pre-contractual tort
claims); Deep Water Slender Wells, Ltd. v. Shell Intern. Exploration, 234 S.W.3d 679, 688 (Tex.
App.–Houston [14th Dist.] 2007).
-1-
Statement of Facts
The Defendants are three related management and tax consulting firms based in
Illinois collectively referred to herein as IPA. On March 18, 2004, Plaintiff TropicPak
entered into three contracts for consulting services with IPA. [MR Tab C; see also Apx Tabs
C, D & E]
TropicPak’s first contract, with International Profit Associates, Inc., is an agreement
for consulting services. [Apx Tab C] The second, with IPA Advisory & Intermediary
Services, LLC, is an agreement to conduct an assessment of TropicPak’s financial standing
and business operations. [Apx Tab D] The third, with International Tax Advisors, Inc., is an
agreement for consulting services with regard to tax matters. [Apx Tab E]
Each contract includes a forum-selection clause:
1. It is expressly agreed that this printed document embodies the entire agreement
of the parties in relation to the subject matter of Consulting Services to be
rendered by IPA; and that no other understanding or agreement, verbal or
otherwise, exists between the parties, except as herein expressly set forth. It
is agreed that exclusive jurisdiction and venue shall vest in the Nineteenth
Judicial District of Lake County, Illinois, Illinois law applying.
[Apx Tab C]
2. It is expressly agreed that this printed document embodies the entire agreement
between the parties in relation to the services to be rendered by Advisor; no
other understanding or agreement, verbal or otherwise, exists between the
parties, except as herein expressly set forth. No supplement, modifications, or
amendment of this Agreement shall be binding unless executed in writing and
expressly agreed to by the parties.
It is agreed that exclusive jurisdiction and venue shall vest in the Nineteenth
Judicial District of Lake County, Illinois, Illinois law applying.
-2-
[Apx Tab D]
3. It is expressly agreed that this printed document embodies the entire agreement
of the parties in relation to the subject matter of Consulting Services to be
rendered by ITA; and that no other understanding or agreement, verbal or
otherwise, exists between the parties, except as herein expressly set forth. It
is agreed that exclusive jurisdiction and venue shall vest in the Nineteenth
Judicial District of Lake County, Illinois, Illinois law applying.
[Apx Tab E]
TropicPak has sued IPA, alleging that in the course of providing services IPA
recommended it hire a man named David Salinas. Salinas allegedly embezzled “hundreds
of thousands of dollars” from TropicPak. [MR Tab D at 4] TropicPak asserts several causes
of action against IPA, including negligence in the provision of services, fraud and/or
fraudulent inducement, negligent misrepresentation, breach of duty of good faith and fair
dealing, and conspiracy. [MR Tab D at 5]
IPA answered and filed a motion to dismiss TropicPak’s claims based on the forum
selection clauses, attaching as exhibits the three contracts at issue. [MR Tab C] TropicPak
filed a response to IPA’s motion, attaching an affidavit from TropicPak’s president, Dolores
Rodriguez. [MR Tab E]
On May 2, 2006, the trial court conducted a hearing on IPA’s motion to dismiss. At
the hearing, the trial court sustained IPA’s objection to Rodriguez’s affidavit and instead
heard her live testimony. [RR 15-26, 27] Rodriguez affirmatively testified that she read and
signed the contracts at issue. [RR 15-16, 21-22] Rodriguez also testified that she signed the
contracts in McAllen, Texas, and that the witnesses to this case resided in Texas. [RR 15-18]
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She further testified that it was her understanding that the IPA representatives with whom she
dealt resided in Houston and Dallas. [RR 16] She testified that the IPA performed its
services in McAllen. [RR 16]
Following the May 2, 2006 hearing, the trial court did not rule on IPA’s motion to
dismiss for quite some time. IPA set the motion for a second hearing on May 15, 2007. [MR
Tab G] Following that hearing, at which no evidence was presented, the trial court signed
an order denying IPA’s motion to dismiss but the order was incorrectly dated May 29, 2006.
[MR Tab H] IPA filed a motion to enter a corrected order. [MR Tab I] The trial court then
signed a revised order denying IPA’s motion to dismiss on October 23, 2007. [MR Tab J]
On a related note, TropicPak also sued IPA employee James Gibson individually.
[MR Tab A] Gibson filed a motion to dismiss based on the forum selection clauses, and the
trial court granted that motion the same day it signed the revised order denying IPA’s motion.
[MR Tab F, K]
IPA filed a petition for writ of mandamus in the Thirteenth Court of Appeals, which
denied the petition on February 21, 2008. [Apx. Tab E, MR Tab M]
-4-
Argument
A trial court’s failure to enforce a valid forum-selection clause constitutes a clear
abuse of discretion. This Court has held that mandamus relief is available to direct a trial
court to grant a motion to dismiss based on a valid forum-selection clause because there is
no adequate remedy by appeal. In re AIU Ins. Co., 148 S.W.3d 109, 119-120 (Tex. 2004);
In re Automated Collection Technologies, Inc., 156 S.W.3d 557, 558 (Tex. 2004). Appeal
is not an adequate remedy because “[s]ubjecting a party to trial in a forum other than that
agreed upon and requiring an appeal to vindicate the rights granted in a forum selection
clause is clear harassment.” In re AutoNation, Inc., 228 S.W.3d 663 (Tex. 2007) (quoting
AIU, 148 S.W.3d at 111-12).
A party seeking to avoid a forum selection clause bears a heavy burden of proof. M/S
Bremen v. Zapata Offshore Co., 407 U.S. 1, 15; 92 S.Ct. 1907, 1916, 32 L.Ed.2d 513 (1972).
Forum selection clauses are prima facie valid. Enforcement is mandatory unless the party
opposing it clearly show[s] that: (1) enforcement would be unreasonable and unjust, (2) that
the clause is invalid for such reason as fraud and overreaching, (3) enforcement would
contravene strong Texas public policy, or (4) the contractually selected forum would be
seriously inconvenient for trial. AutoNation, 228 S.W.3d at 668 n. 15; AIU, 148 S.W.3d at
112; Bremen, 407 U.S. at 1; Automated Collection, 156 S.W.3d at 559.
In sustaining its heavy burden, the party opposing enforcement of a forum selection
clause must introduce evidence in response to the motion to dismiss sufficient to constitute
a “clear showing” that the forum selection clause should be disregarded. Automated
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Collection, 156 S.W.3d at 559 (emphasis added). A party asserting “serious inconvenience”
must provide evidence showing that “trial in the contractual forum would be so gravely
difficult and inconvenient that [the party] would for all practical purposes be deprived of its
day in court.” In re Kyocera Wireless Corp., 162 S.W.3d 758, 763 (Tex. App.–El Paso 2005,
orig. proceeding) (citing Bremen, 407 U.S. at 18).
In this case, TropicPak filed a response to the motion to dismiss, and raised the
following arguments:
(1) the forum selection clause was obtained by fraud,
(2) the forum selection clause is ambiguous,
(3) the interests of the witnesses favors venue in Texas,
(4) public interest favors venue in Texas,
(5) the enforcement of the forum selection clause would deny TropicPak
its day in court because the statute of limitations allegedly expired in
Illinois.
[MR Tab E] Additionally, at the hearing TropicPak argued that the forum selection clauses
were inapplicable because its causes of action against IPA were not related to the contracts
between the parties. [RR 7, 13-14] As stated in the statement of facts, the only evidence
TropicPak presented in response to the motion to dismiss was Dolores Gonzalez’s testimony
at the hearing. [RR 15, 27]
-6-
1. TropicPak presented no evidence that the forum selection clause in the
contracts at issue in this case were procured through fraud
Gonzalez unequivocally testified that she read the contracts before she signed them.
[RR 20-23] She did not testify that she was pressured or misled into signing the contracts.
Thus, there is no evidence at all of fraud or overreaching on the part of IPA, much less the
required “clear showing” that the clauses should not be enforced. My Café-CCC, Ltd. v.
Lunchstop, Inc., 107 S.W.3d 860, 866 (Tex. App.–Dallas 2003, no pet.) (“[I]n defending the
motion to dismiss, it was incumbent upon My Café to present evidence with respect to each
of the elements of fraud in the inducement of the execution of the forum selection clause.”).
See also Holeman v. Nat’l Bus. Inst., 94 S.W.3d 91, 100 (Tex. App.–Houston [14th Dist.]
2002, pet. denied) (no evidence plaintiff was coerced or threatened or that the contract was
not freely negotiated, hence clause is not unreasonable). The trial court clearly abused its
discretion in denying the motion to dismiss based on any allegation of fraud or fraudulent
inducement.
2. The Forum Selection Clauses are Not Ambiguous, and The Scope of the
Clauses Includes TropicPak’s Claims in this Case
TropicPak argued that the forum selection clauses are ambiguous because they do not
specify whether they apply to contract or tort claims. Whether or not a forum selection
clause is ambiguous is a question of law for the court. CMS Partners, LTD v. Plumrose USA,
Incorp., 101 S.W.3d 730, 732 (Tex. App.–Texarkana 2003, no pet.). It is true that the clauses
in this case are not limited to a specific type of claim. However, the fact that the clauses are
simple and broad does not render them ambiguous.
-7-
The forum selection clauses in the three contracts are substantially similar. Loosely
quoted in context, they each provide:
This document embodies the entire agreement of the parties in relation to the
subject matter of IPA’s services; and no other agreement exists between the
parties. It is agreed that exclusive jurisdiction and venue shall vest in the
Nineteenth Judicial District of Lake County, Illinois, Illinois law applying.
[Apx Tabs B, C, D] The clauses clearly state that litigation between the parties must be
brought in the Nineteenth Judicial District Court of Lake County, Illinois. They make no
distinction between contract and tort claims. The court in Ronar, Inc. v. Wallace, 649 F.
Supp. 310, 312 (S.D.N.Y. 1986) was confronted with a similar clause which stated simply:
“The courts at Tirschenreuth, Federal Republic of Germany, shall have jurisdiction and
venue.” The plaintiff argued that the clause could not apply to tort claims. In holding that
the clause was not so limited, the court stated:
However, the terms the parties chose are very simple and very broad. Thus,
nuance provides no additional illumination. That a West German court “shall
have jurisdiction and venue” raises no distinction between contract and tort.
It confers jurisdiction and venue over all litigation arising between the parties
in the course of their dealings.
Id. Similarly, in this case, the forum selection clauses confer jurisdiction and venue over all
litigation arising between TropicPak and IPA in the course of their dealings.
These contracts are the basic source of any duty IPA owes TropicPak. The contracts
themselves specify that no other understanding or agreements exist between the parties
outside of the contracts. There is no evidence suggesting that the forum selection clauses
were not intended to apply to all claims arising from the contractual relationship. When the
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relationship of two parties is contractual, “[p]leading alternate noncontractual theories of
recovery will not alone avoid a forum selection clause if those alternate claims arise out of
the contractual relations and implicate the contract’s terms.” Accelerated Christian
Education v. Oracle Corp., 925 S.W.2d 66, 72 (Tex. App.–Dallas 1996, no writ); see also
Clark v. Power Marketing Direct, 192 S.W.3d 796, 799 (Tex. App.–Houston [1st Dist.] 2006,
no pet.) (forum selection clause broad in scope, covered pre-contractual tort claim of
fraudulent inducement).
In this case TropicPak pled that:
1. TropicPak and IPA entered into a series of professional service contracts;
2. During the course of the engagement, IPA made a series of recommendations
and provided advice to TropicPak.
[MR Tab D at 4] At the hearing, Gonzalez testified that her main complaint in this lawsuit
against IPA is related to their advice to hire David Salinas. [RR 23] She further testified that
she believed their recommendation was provided pursuant to the contracts she signed with
them for the provision of consulting services. [RR 26 (“I thought it was part of the
contract.”)]
TropicPak’s causes of action based on negligence, fraud, fraudulent inducement,
negligent misrepresentation, breach of duty of good faith and fair dealing and conspiracy all
relate to IPA’s recommendation to hire David Salinas. Because it is undisputed that IPA’s
recommendation to hire Salinas was made during the course of performance of contractual
duties, TropicPak’s causes of action directly arise from the contractual relationship and are
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subject to the forum selection clauses.
There is no evidence, and no clear showing, that TropicPak’s causes of action fall
outside the scope of the forum selection clauses. Under the Bremen and Shute standards
adopted by the this Court, forum selection clauses must be enforced unless the opposing party
can clearly show enforcement would be unreasonable and unjust. TropicPak failed to meet
this stringent standard – they offered no evidence showing that any cause of action in this
case does not fall within the broad scope of the forum selection clauses in these contracts;
in fact, the evidence presented by their witness shows that her causes of action arise from the
performance of contractual services.4 Barnette v. United Research Co., 823 S.W.2d 368, 370
(Tex. App.–Dallas 1992, writ denied) (claims for wrongful termination, age discrimination,
intentional infliction of emotional distress, fraudulent inducement and detrimental reliance
arose out of the contractual relationship and implicate terms of employment contract); My
Café-CCC, Ltd., 107 S.W.3d at 866 (claims for fraud, fraudulent inducement); Accelerated
Christian, 925 S.W.2d at 72 (claims for breach of contract, Deceptive Trade Practices Act
violations, negligent misrepresentation, breach of warranty, fraud, promissory estoppel, and
gross negligence). This Court should grant the petition for writ of mandamus in this case and
hold that unless the clause expressly states otherwise, valid forum selection clauses apply to
any claim arising from or depending on the existence of a contractual relationship regardless
4
Federal courts have held that forum selection clauses apply to tort claims in the following
instances: (1) tort claims ultimately depend on existence of contractual relationship, or (2) resolution of
the claims relates to interpretation of the contract, or (3) tort claims involve the same operative facts as a
parallel claim for breach of contract. Terra Int’l, Inc. v. Mississippi Chem. Corp., 922 F. Supp. 1334,
1378-80 (N.D. Iowa 1996). All of TropicPak’s claims fall within these three categories.
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of whether that claim is a tort or a contract claim.
3. TropicPak presented no evidence that the interest of the witnesses or the
public renders the forum selection clauses unenforceable
In its response to the motion to dismiss, TropicPak argued that the “interest of the
witnesses” precluded enforcement of the forum selection clauses. [MR Tab E at 4-5]
TropicPak also argued that “public interest” precluded enforcement of the clauses. [Id at 5-6]
Other than showing through Delores Rodriguez’s testimony at the hearing that all her
witnesses resided in Texas, TropicPak presented no other evidence to support its arguments.
The trial court in this situation had no discretion to refuse to enforce the forum selection
clauses.
In AIU, this Court enforced a New York forum selection clause over the plaintiff’s
arguments that the witnesses lived in Texas, that Texas law applied and that Texas had a
strong public interest in having the issues litigated in Texas. 148 S.W.3d at 112, 114.
TropicPak’s arguments in this case are identical to those made by the plaintiff in AIU and
must be rejected. TropicPak offered no evidence to show that litigation in Illinois would be
a hardship other than its testimony that the witnesses live in Texas. “[C]onclusory statements
[regarding hardship of litigating in a different forum]” do not “‘clearly show that
enforcement [of the forum selection clause] would be unreasonable and unjust, or that the
clause was invalid for such reasons as fraud or overreaching.” In re Tyco Electronics Power
Sys., Inc., 2005 WL 237232 (Tex. App.–Dallas 2005, orig. proceeding). Merely showing that
potential witnesses reside in Texas does not sufficiently establish that it would be seriously
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inconvenient to pursue litigation in Illinois. Kyocera, 162 S.W.3d at 767.
Having failed to meet its heavy burden of showing that litigation in Illinois would be
so inconvenient or burdensome that it will be effectively deprived of its day in court,
TropicPak is not entitled to avoid the contractual forum selection clauses. Universal
Computer Consulting Holding, Inc. v. Hillcrest Ford Lincoln-Mercury, Inc., 2005 WL
2149508, *5 (Tex. App.–Houston [14th Dist.] 2005, orig. proceeding) (mem. op.) (Hillcrest
offered no evidence that arbitrating in Michigan would be so inconvenient or burdensome
that it will be effectively “deprived of its day in court.”)
There is no fundamental Texas public interest implicated in this case which would
render the forum selection clauses unenforceable. As this Court noted in AIU and
AutoNation, no statute requires this suit to be brought and maintained in Texas. AutoNation,
228 S.W.3d at 669. This Court’s recent rulings regarding forum selection clauses emphasize
that the public policy of this State now strongly favors the established federal-law preference
in favor of enforcing forum-selection clauses. In re Talent Tree Crystal, 2006 WL 305015
(Tex. App.–Houston [1st Dist.] 2006, orig. proceeding) (mem. op.).
4. TropicPak Failed to Prove it Would be Unreasonably Deprived of Its Day
in Court
In its response to the motion to dismiss, TropicPak argued, without presenting
evidence, that enforcement of the forum selection clauses would deprive it of its day in court
because the statute of limitations to file this claim in Illinois has allegedly expired. [MR Tab
E at7]
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TropicPak presented no evidence to support this allegation. Hence, it failed to meet
its heavy burden to “clearly show” that enforcement of the forum selection clause would be
unreasonable or unjust. Trafigura Beheer B.V. v. M/T Probo Elk, 2007 WL 2033336 (5th Cir.
2007 pet. for cert. filed). Furthermore, it is disingenuous of TropicPak to argue that
enforcement would be unreasonable or unjust, when its own conduct created these
circumstances – they chose to ignore the forum selection clauses in filing suit in Texas. See
Union Steel America Co. v. M/V Sanko Spruce, 14 F. Supp. 2d 682, 695 (D.N.J. 1998)
(unreasonableness “does not hinge on whether a clause is unreasonable in light of present
circumstances created by plaintiff’s failure to file in the correct forum.”). The trial court had
a mandatory duty to enforce the forum selection clause in spite of TropicPak’s conclusory
and unproven allegation that suit in Illinois would be time-barred at this point.
5. This Court Has Held that IPA Has No Adequate Remedy at Law
TropicPak and IPA have contractually agreed to a forum for these disputes. This
Court has stated that subjecting IPA “to a forum other than that agreed upon and requiring
an appeal to vindicate the rights granted in a forum-selection clause is clear harassment.”
AIU, 148 S.W.3d at 117. Under the Court’s decisions, as a matter of law there is no adequate
remedy by appeal for failure to enforce a forum-selection clause. Id., Automated Collection
Technologies, 156 S.W.3d at 558; AutoNation, 228 S.W.3d at 667-68. Relators have no
adequate remedy by appeal, and are thus entitled to mandamus relief.
Prayer
For the reasons stated, Relators pray that this Court issue a writ of mandamus ordering
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Respondent, the Honorable Noé González,, to vacate his October 23, 2007 order denying
Relators’ Motion to Dismiss, and ordering Respondent to dismiss the claims in this case.
Relators also request any other relief to which they may be justly entitled, either in equity or
in law.
Respectfully submitted,
NUNLEY JOLLEY CLUCK AELVOET LLP
1580 South Main Street; Suite 200
Boerne, Texas 78006
830/816-3333
830/816-3388 (fax)
____________________________________
J. KEN NUNLEY
SBN: 15135600
CHAD M. UPHAM
SBN: 24028178
KELLY P. ROGERS
SBN: 00788232
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Certificate of Service
This is to certify that a true and correct copy of this petition for writ of mandamus and
a true and correct copy of the mandamus record has been served via telecopier and/or
certified mail, return receipt requested, as follows:
Raymond L. Thomas
Rebecca Vela
KITTLEMAN, THOMAS & GONZALEZ, LLP
4900-B North 10th Street
McAllen, Texas 78504
Hon. Noé González
370th District Court
100 North Closner, 1st Floor
Edinburg, Texas 78539
on this the ____day of March, 2008.
__________________________________
Kelly Putney Rogers
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Verification
State of Texas §
§
Kendall County §
Before me, the undersigned notary, on this day personally appeared Kelly
Putney Rogers, a person whose identity is known to me. After I administered
an oath to her, upon her oath, she said the following:
1. “My name is Kelly Putney Rogers and I am capable of
making this affidavit, and the facts in this affidavit are true
and correct.
2. I am an attorney for the Relators. All the documents included
with the petition for writ of mandamus are true copies.”
Signed this ____ day of March, 2008.
_________________________________
Kelly Putney Rogers
Sworn to and Subscribed before me by Kelly Putney Rogers on March __,
2008.
_________________________________
Notary Public in and for
the State of Texas
My Commission Expires:
_______________
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AFFIDAVIT OF NO EVIDENCE IN SUPPORT OF
PETITION FOR WRIT OF MANDAMUS
State of Texas §
§
County of Kendall §
Before me, the undersigned notary, on this day personally appeared Chad M.
Upham, a person whose identity is known to me. After I administered an oath to
him, upon his oath he said the following:
1. “My name is Chad M. Upham, I am capable of making this affidavit.
The facts stated in this affidavit are within my personal knowledge
and are true and correct.
2. I am an attorney for the Relators in the above styled case and filed a
Motion to Dismiss on May 15, 2007.
3. There were two hearings on the Motion to Dismiss which is the basis
of this Mandamus Petition. Evidence was presented at the first
hearing on May 2, 2006. No evidence was presented at the second
hearing on May 15, 2007. The record from the 2006 hearing is being
filed with this petition.
Signed this ____ day of January, 2008.
_________________________________
Chad M. Upham
Sworn to and Subscribed before me by Chad M. Upham on January __,
2008.
_________________________________
Notary Public in and for
the State of Texas
My Commission Expires: ______________
Appendix
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Trial court’s order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab A
Court of Appeals Ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab B
International Profit Associates, Inc. Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab C
IPA Advisory & Intermediary Services, LLC Contract . . . . . . . . . . . . . . . . . . . . . . Tab D
International Tax Advisors, Inc. Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tab E
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