In re W. Dairy Transp.

574 S.W.3d 537

IN RE: WESTERN DAIRY TRANSPORT, L.L.C. and Jorge Hernandez, Relators.

No. 08-18-00030-CV

Court of Appeals of Texas, El Paso.

March 22, 2019

OPINION

GINA M. PALAFOX, Justice Western Dairy Transport, L.L.C., and Jorge Hernandez (Relators) have filed a mandamus petition against the Honorable Francisco X. Dominguez, Judge of the 205th District Court of El Paso County, Texas, seeking mandamus relief from Respondent’s order granting motions to compel discovery filed by Evelyn L. Lopez, individually and as next friend of H.B.Q. and X.I.Q., minor children, and on behalf of the Estate of Marcos R. Quinones, Norma Quinones, and Raul Quinones (Plaintiffs). We deny mandamus relief.

FACTUAL AND PROCEDURAL SUMMARY

Western Dairy is an authorized motor carrier located in Cabool, Missouri. On April 24, 2015, Western Dairy signed an Independent Contractor Agreement with Jorge Hernandez, a resident of El Paso, Texas, and owner of a commercial truck. By terms of their agreement, Hernandez leased his truck and provided a commercial driver to Western Dairy pursuant to applicable federal leasing regulations; while Western Dairy in turn arranged for shipments. Throughout the term of the agreement, Hernandez’s truck would be identified as being operated by Western Dairy. On the same day Hernandez signed the agreement, he hired Marcos Quinones, also a resident of El Paso, to work as a driver.

Among other terms, the Independent Contractor Agreement included a forum-selection clause stating as follows:

GOVERNING LAW AND CHOICE OF FORUM. This Agreement is to be governed by the laws of the United States and of the State of Missouri, without resort to the choice-of-law rules thereof, and CARRIER and CONTRACTOR hereby consent to the jurisdiction of the state and federal courts of Missouri. The parties further agree that any claim or dispute arising from or in connection with this Agreement or otherwise with respect to the overall relationship between the parties, whether under federal, state, local, or foreign law, shall be brought exclusively in state or federal courts located in Missouri.

On January 5, 2016, while Quinones drove the truck owned by Hernandez that was then operated under the authority of Western Dairy, he was injured and ultimately died in a trucking accident that occurred on Interstate 10 in San Antonio, Texas. At the time of his death, Quinones was survived by his wife, two children, and his parents, all of whom were residents of El Paso, Texas. Joined together as Plaintiffs, Quinones' heirs filed a negligence and wrongful death suit against Hernandez and Western Dairy in the 205th District Court of El Paso County, Texas. In their original petition, Plaintiffs alleged that Hernandez was a resident of Texas, and Western Dairy was a Delaware Corporation doing business in Texas.¹

Soon after filing general denials, Hernandez and Western Dairy jointly filed a motion to dismiss Plaintiffs' suit based on their assertion that the forum-selection clause contained in the independent contractor agreement, entered with each other, was enforceable against Plaintiffs' suit, and thereby, required that it be brought in Missouri. Along with their motion, Western Dairy and Hernandez attached affidavits from Hernandez himself, from an insurance claims representative, and from a Western Dairy representative. Hernandez’s affidavit asserted he informed Quinones about his agreement with Western Dairy including discussion of insurance benefits and about government registration and authorizations required to operate the truck. Among other things, the affidavit of Western Dairy’s representative asserted, "Western Dairy complied with all required federal and Texas state registration and authorization requirements in order to operate Hernandez’s truck interstate and within Texas[.]"

The next week, Plaintiffs filed discovery motions in which they sought to compel depositions of Hernandez and Western Dairy’s designated representative asserting they had not yet been able to be scheduled by agreement. The deposition notice served on Western Dairy’s representative included a subpoena duces tecum requesting sixty-nine items of information. Plaintiffs also sought to compel responses to interrogatories and requests for production of documents. Days later, Plaintiffs filed a motion for continuance of the motion to dismiss requesting time for completion of "reasonable discovery" to "prepare a response." Hernandez and Western Dairy jointly filed responses to Plaintiffs' motions to compel discovery asserting that discovery was not appropriate or necessary until the court ruled on their pending motion to dismiss. Rather than object on substantive grounds (e.g., requests being irrelevant, overly broad, or vague), Hernandez and Western Dairy "reserved" these objections arguing that Plaintiffs had sought discovery on the merits which was not allowed before disposition of the pending motion to dismiss.

The trial court issued an order setting separate hearings for the pending discovery motions followed by a second hearing for the motion to dismiss based on the forum-selection clause. Within its order setting hearings, the trial court also stated that "without reaching the merits of [Relators'] Motion to Dismiss or Plaintiffs' motions to compel discovery and depositions, it appears to the Court that, at a minimum, Plaintiffs are immediately entitled to discovery related to the limited issue of the enforceability or validity of the forum-selection clause and [Relators'] Motion to Dismiss."

After Plaintiffs issued a second round of deposition notices, Western Dairy and Hernandez filed motions to quash claiming the discovery sought exceeded the court’s prior ruling. Although the parties later conferred, they were unable to reach an agreement on their dispute over discovery. On July 27, 2017, the trial court held a hearing on these discovery motions. At the hearing, the court stated, "we're limiting the number of people that are going to be deposed and we're limiting the number of documents that are going to be gathered." The court then indicated it would order the deposition of Hernandez and a representative of Western Dairy, and additionally, it would require production of the driver qualification file required by the applicable Federal Motor Carrier Act and other related items. Following the hearing, the parties submitted proposed orders, but none was signed as they continued to disagree about the order’s language.

At a second hearing held on January 17, 2018, the trial court first heard argument then gave guidance to resolving the parties' ongoing dispute. The trial court indicated it would allow discovery at a minimum to include the driver qualification file of Quinones stating it was statutorily required to be maintained. The trial court instructed Plaintiffs to circulate a proposed order for Western Dairy and Hernandez to review and provide "some kind of response." The court indicated it would then issue its discovery ruling and set a hearing on the motion to dismiss, at least forty-five days later, to allow the parties to incorporate discovery responses in their arguments. The court also stated, "if there are complications or delays, we'll – I'll take that into account."

Eventually, on February 15, 2018, the court signed an order compelling discovery from Hernandez and Western Dairy. On this order, the signature line of the attorney representing both Hernandez and Western Dairy indicated he had approved as to form only with an explanation provided in an end note.²

Hernandez and Western Dairy then filed their petition for mandamus relief and this proceeding followed.

DISCUSSION

In their first issue, Relators contend the trial court abused its discretion in ordering them to respond to certain discovery before the court ruled on their motion to dismiss based on a forum-selection clause. Characterizing the discovery as "merits-based," Relators assert the trial court’s order requires them to answer discovery that is "simply not allowed at this juncture." In their second issue, Relators contend the burden fell on Plaintiffs to make a showing of necessity for limited discovery before the discovery sought could be compelled by the court. Viewing these issues as interrelated, we consider them together.

Mandamus Standard of Review

Mandamus will issue to correct a discovery order if the order constitutes a clear abuse of discretion and there is no adequate remedy by appeal. In re Colonial Pipeline Co. , 968 S.W.2d 938, 941 (Tex. 1998) (orig. proceeding). A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law, or if it clearly fails to correctly analyze or apply the law. In re Cerberus Capital Mgmt., L.P. , 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding).

Forum-Selection Clauses

Forum-selection clauses are contractual provisions whereby parties agree in advance to submit their disputes for resolution within a particular jurisdiction. See Burger King Corp. v. Rudzewicz , 471 U.S. 462, 472 n.14, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ; Pinto Tech. Ventures, L.P. v. Sheldon , 526 S.W.3d 428, 436 (Tex. 2017). As a general proposition, a forum-selection clause may be enforced only by and against a party to the agreement containing the clause. Pinto Tech., 526 S.W.3d at 443 (citing In re Rubiola , 334 S.W.3d 220, 224 (Tex. 2011) (orig. proceeding) (addressing whether a nonsignatory of an arbitration clause can compel arbitration against a party to the clause) ). Enforcement of these clauses depends on the contract’s language, as courts are required to "give effect to the parties' intent as expressed in the four corners of the [agreement]."

Pinto Tech. , 526 S.W.3d at 432. Forum-selection clauses are generally enforceable in Texas subject to public-policy constraints. Id.

Regardless of general enforceability, disagreements sometimes arise over who may be bound to a forum-selection clause...