In re Express Delivery Enter.

1

IN RE: EXPRESS DELIVERY ENTERPRISE LLC, RELATOR

No. 12-23-00088-CV

Court of Appeals of Texas, Twelfth District, Tyler

July 21, 2023

ORIGINAL PROCEEDING

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

MEMORANDUM OPINION

Greg Neeley Justice

Express Delivery Enterprise, LLC (Express) filed this original proceeding in which it challenges Respondent's refusal to dismiss the claims against Express when the parties entered a contractual agreement to litigate any dispute under the contract in an Idaho court.^[1] We conditionally grant the writ.

Background

Express is a shipping broker. In September 2022, Real Party in Interest Rogers & Doty Enterprises, LLC d/b/a Redline Transport (Redline), a trucking company, sued Express under the Texas Uniform Declaratory Judgment Act. According to Redline's petition, Redline hired Kristin's Dispatch Services (KDS) to "find and secure freight" for Redline and dispatch its truckers (dispatch agreement).^[2] Redline's agreement with KDS authorized KDS to perform certain services for Redline. KDS's owner, Kristin Alexander, signed a transportation agreement with Express on August 6, 2020, purportedly on behalf of Redline, but the agreement identifies Roll Out Logistics, Inc. as the carrier. Redline alleged that Alexander signed the agreement on behalf of Roll Out, but later took the position that she signed that agreement on behalf of Redline as its agent. Redline alleges that Alexander never showed the transportation agreement to anyone at Redline, obtained approval from Redline before she entered the agreement, nor did she provide Redline with a copy of the agreement. Redline further alleges that it subsequently received a letter from Express demanding that Redline pay twenty percent of the value of each load Redline carried for a company known as Diamond C based on a non-solicitation clause in the transportation agreement. Redline sought a declaratory judgment that it is not a party to the transportation agreement and alternatively, that it did not breach the agreement and/or is not obligated to pay Express under the agreement.

On October 24, Express filed a motion to dismiss and motion to sever, arguing that a forum selection clause in the transportation agreement identified Idaho as the proper forum.^[3]Express also requested severance of Redline's claims against it from those against KDS. Respondent denied the motion to dismiss without an evidentiary hearing, and further denied Express's motion for reconsideration. This proceeding followed.

Prerequisites to Mandamus

Mandamus is an extraordinary remedy. In re Sw. Bell Tel. Co L.P., 235 S.W.3d 619, 623 (Tex. 2007) (orig proceeding). A writ of mandamus will issue only when the relator has no adequate remedy by appeal and the trial court committed a clear abuse of discretion. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding). The relator has the burden of establishing both prerequisites. In re Fitzgerald 429 S.W.3d 886, 891 (Tex. App.-Tyler 2014, orig. proceeding.).

A trial court's determination of the validity of a forum-selection clause is a question of law subject to de novo review by an appellate court. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003); Clark v. Power Mktg. Direct, Inc., 192 S.W.3d 796, 798 (Tex. App.-Houston [1st Dist.] 2006, no pet.). And a trial court abuses its discretion when it fails to properly interpret or apply a forum-selection clause. In re Lisa Laser USA, Inc., 310 S.W.3d 880, 884 (Tex. 2010) (orig. proceeding).^[4] An appellate remedy is inadequate when a trial court improperly refuses to enforce a forum-selection clause because allowing the trial to go forward will "vitiate and render illusory the subject matter of an appeal"-i.e., trial in the proper forum. Id. Thus, mandamus relief is available to enforce an unambiguous forum-selection clause in a contract. Id.; see In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding). However, in determining whether the trial court abused its discretion in resolving underlying factual matters or matters committed to the trial court's discretion, we may not substitute our judgment for that of the trial court and may not disturb the trial court's decision unless it is shown to be arbitrary and unreasonable. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992) (orig. proceeding). Therefore, to show an abuse of discretion in those matters, the relator must establish that the trial court could reasonably have reached only one decision and it did not do so. Id. at 840.

Forum-Selection Clause

Express contends that Respondent abused his discretion by denying its motion to dismiss because Redline is bound by the transportation agreement, Redline's lawsuit is a dispute under the transportation agreement, the transportation agreement's forum selection clause mandates that suit be brought in Idaho, and the forum selection clause must be enforced.

Applicable Law

A contractual forum-selection clause is generally enforceable in Texas. Nationwide Ins. Co. of Am., 494 S.W.3d at 712. The party seeking to enforce a contractual forum-selection clause carries the initial burden of establishing that the parties entered into an agreement designating an exclusive forum, and the agreement applies to the claims involved, or in other words, that the claims come within the clause's scope. Sullivan v. Microsoft Corp., 618 S.W.3d 926, 931 (Tex. App.-El Paso 2021, no pet.). Where a party seeks to enforce a forum-selection clause against a non-signatory, that party has the additional burden to prove the theory upon which it relies to bind the non-signatory to the contract. Lujan v. Alorica, 445 S.W.3d 443, 449 (Tex. App.-El Paso 2014, no pet.). A forum-selection clause in an agreement may bind a nonsignatory if the party seeking enforcement can show that the nonsignatory is bound by that agreement under recognized contract or agency principles. Carlile Bancshares, Inc. v. Armstrong, No. 02-14-00014-CV, 2014 WL 3891658, at *7 (Tex. App.-Fort Worth Aug. 7, 2014, no pet.) (mem. op.); see also In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig. proceeding) (listing such principles as (1) incorporation by reference; (2) assumption; (3) agency; (4) alter ego; (5) equitable estoppel; and (6) third-party beneficiary).

If the party seeking enforcement establishes these prerequisites, the forum-selection clause is presumed valid and enforceable, and the burden then shifts to the party opposing enforcement to make a "strong showing" overcoming the presumption. Sullivan, 618 S.W.3d at 931. Under this framework, the trial court abuses its discretion by refusing to enforce a forum selection clause "absent clear evidence that '(1) enforcement would be unreasonable or unjust, (2) the clause is invalid for reasons of fraud or overreaching, (3) enforcement would contravene a strong public policy of the forum where the suit was brought, or (4) the selected forum would be seriously inconvenient for trial.'" Nationwide Ins. Co. of Am., 494 S.W.3d at 712 (quoting In re Lyon Fin. Servs., Inc., 257 S.W.3d 228, 231-32 (Tex. 2008) (per curiam)); Pappie v. Batra, No. 14-21-00290-CV, 2022 WL 1671100, at *9 (Tex. App.-Houston [14th Dist.] May 26, 2022, no pet.) (mem. op.). This is a heavy burden to overcome. Rieder v. Woods, 603 S.W.3d 86, 93 (Tex. 2020). Absent these circumstances, a trial court should enforce a mandatory forum-selection clause by granting a motion to dismiss. Nationwide Ins. Co. of Am., 494 S.W.3d at 712.

Trial courts often look to cases on arbitration for guidance involving forum-selection clauses. Pinto Tech. Ventures, LP v. Sheldon, 526 S.W.3d 428, 437 (Tex. 2017). A trial court conducts a summary proceeding to determine the applicability of an arbitration clause based on the parties' affidavits, pleadings, discovery, and stipulations. In re Longoria, 470 S.W.3d 616, 630 (Tex. App.-Houston [14th Dist.] 2015, no pet.). The procedure is similar to a motion for summary judgment and is subject to the same evidentiary standards. Id.; see also HMT Tank Serv. LLC v. Am. Tank & Vessel, Inc., 565 S.W.3d 799, 805-06 (Tex. App.-Houston [14th Dist.] 2018, no pet.) ("[A]ttempted enforcement of a forum-selection clause involves an evidentiary showing by one or multiple parties[.]"). A trial court may summarily decide whether an arbitration or forum-selection clause applies based solely on the parties' submissions; however, if the material facts necessary to determine the issue are controverted, by an opposing affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine the disputed material facts. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992).^[5]

Applicable Facts

The dispatch agreement between Redline and Alexander states that Redline "desires to retain Kristin's Dispatch Services by executing a limited Power of Attorney form to find and secure freight for [Redline] and dispatch [Redline's] equipment." The services Redline wished Alexander to perform included (1) locating, negotiating, and booking of freight, (2) handling all broker/shipper paperwork, (3) dispatching and following up loads until completed, and (4) 24/7 support. The parties limited the power of attorney to the "specific purpose of contracting loads of freight to be hauled by Redline Transport" and gave KDS authority to

…do and perform all and every act and thing whatsoever necessary to be done in and about the specific and limited terms (set out herein) as fully, to all intents and purposes as might or could be done if personally present, with full power of substitution and revocation, hereby ratifying and confirming all that said attorney shall

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