SCI Shared Res. v. Echovita, Inc.

679 S.W.3d 193

SCI SHARED RESOURCES, LLC and DM Afinnity, Inc., Appellants

v.ECHOVITA, INC., Appellee

NO. 14-22-00077-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinions filed August 22, 2023

Rehearing and Rehearing En Banc Denied December 14, 2023

On Appeal from the 125th District Court, Harris County, Texas, Trial Court Cause No. 2021-44024

William J. Boyce, William Peter Maines, Jeffrey Todd Bentch, Mitchell R. Austin, Houston, for Appellant.

Erin Rinehart, William Allen Gage Jr., John L. Dagley, Houston, for Appellee.

Panel consists of Justices Spain, Poissant, and Wilson

OPINION

Randy Wilson, Justice

The plaintiffs in the court below appeal the trial court’s order granting the special appearance of the only defendant, Echovita, Inc., a Canadian corporation. Under two issues, the appellants argue that (1) the trial court erred by concluding that a forum-selection clause in which Echovita consented to personal jurisdiction in courts in Harris County, Texas, was illusory; and (2) the trial court erred by concluding that the court could not exercise personal jurisdiction over Echovita based on specific jurisdiction. Finding merit in the second argument but not in the first, we reverse and remand.

I. Factual and Procedural Background

Appellant/plaintiff SCI Shared Resources, LLC ("SCI") is a Delaware limited liability company with its principal place of business in Houston, Texas. Appellant/plaintiff DM Affinity, Inc. ("DM") is a Delaware corporation with its principal place of business in Houston, Texas. SCI and DM (collectively, the "SCI Parties") own and operate a network of funeral homes in the United States and offer in memoriam related goods and services. The SCI Parties operate and maintain websites located at these URLs: www. dignitymemorial.com and www.rosehills. com (collectively, the "Dignity Memorial Websites"). The Dignity Memorial Websites contain information about the various services that the SCI Parties and their affiliates offer, such as funerals, obituaries, flowers, cremations, and burials. The Dignity Memorial Websites also make available a searchable database of obituaries originating from the SCI Parties’ clients or from funeral homes in the SCI Parties’ network.

Defendant/appellee Echovita, Inc. is a Canadian corporation with its principal place of business in Quebec City, Canada. According to Echovita, the company centralizes and aggregates publicly available obituary information and categorizes it by city on its website, echovita.com, thus allowing millions of visitors to the website, for free, to search for obituaries of loved ones who have died, receive obituaries and memorials, and express their sympathies.

The SCI Parties filed suit against Echovita alleging that the Dignity Memorial Websites contain Terms of Service available by hyperlink on every webpage on these websites. The SCI Patties contend that visitors who access, use, browse, or submit any content or material on the Dignity Memorial Websites are subject to the Terms of Service. According to the SCI Parties, the Terms of Service prohibit any visitor or user of the Dignity Memorial Websites from (1) using any information on these websites for commercial purposes, or (2) reproducing or publishing any content from the Dignity Memorial Websites without the consent of the SCI Parties. The SCI Parties allege that Paco LeClerc¹ is the sole director and officer of Echovita and that "[p]rior to Echovita, [LeClerc] owned and operated similar websites located at URLs www.afterlife.com and www.everhere.com," The SCI Parties claim that, like the SCI Parties, Echovita provides "various obituary-related services to customers in Canada and the United States, including selling condolence flowers, funeral prints, virtual candles, and planting in memoriam trees."

The SCI Parties contend that Echovita has continuously and knowingly engaged in the "scraping, copying, reproduction, and misappropriation of obituary information on the Dignity Memorial Websites in direct violation of the Terms of Service."² According to the SCI Parties, Echovita uses this information to reproduce obituaries on its own website and create virtual animated candles and condolence flowers for purchase. The SCI Parties claim that Echovita reproduces obituaries on Echovita’s website from the Dignity Memorial Websites with egregious errors or incomplete information about the deceased.

The SCI Parties contend that Echovita accepted and agreed to the Terms of Service as an enforceable and binding contract between Echovita and the SCI Parties. The SCI Parties alleged a single claim against Echovita for breach of contract based on Echovita’s alleged breaches of paragraphs 5 and 6 of the Terms of Service. The SCI Parties claim that they have suffered and continue to suffer irreparable injury as a result of Echovita’s breaches of contract. The SCI Parties did not seek to recover monetary damages; instead, they applied for a temporary restraining order, temporary injunction, and permanent injunction against Echovita. Section 19 of the Terms of Service contains a clause in which, subject to section 18, website users "consent and submit to personal jurisdiction in the state and federal courts located in Harris County, Texas" ("Forum Selection Clause"). The SCI Parties contend that pursuant to the Forum Selection Clause, users of the Dignity Memorial Websites consent to personal jurisdiction in the state and federal courts in Harris County, Texas, and we presume for the sake of argument that this contention is correct. The SCI Parties alleged in their live pleading that the trial court may assert personal jurisdiction over Echovita (1) because Echovita consented to personal jurisdiction in the Forum Selection Clause, and (2) because Echovita purposefully availed itself of the privileges and benefits of conducting business in Texas by targeting Texas residents for commercial purposes.

Echovita timely filed a special appearance contesting personal jurisdiction and submitted evidence. The SCI Parties opposed the special appearance and submitted evidence. Echovita argued that the Forum Selection Clause is illusory and unenforceable, and Echovita does not have minimum contacts with Texas sufficient to support the trial court’s exercise of personal jurisdiction over it. After a hearing, the trial court signed an order granting Echovita’s special appearance without specifying the grounds for its ruling. The SCI Parties have timely appealed.

II. Issues and Analysis

On appeal, the SCI Parties argue under two issues that: (1) the trial court erred by concluding that the Forum Selection Clause was illusory or otherwise unenforceable to allow the trial court to assert personal jurisdiction over Echovita; and (2) the trial court erred by concluding that the court could not exercise personal jurisdiction over Echovita based on specific jurisdiction.³

A. Did the trial court err by concluding that the Forum Selection Clause was illusory?

[1–5] In their petition the SCI Parties alleged that Echovita accepted and agreed to the Terms of Service as an enforceable and binding contract between Echovita and the SCI Parties. For the purposes of this appeal, we presume that this is so. In construing contracts, our primary concern is to ascertain and give effect to the intentions of the parties as expressed in the contract. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). To ascertain the parties’ true inten- tions, we examine the entire agreement in an effort to harmonize and give effect to all provisions of the contract so that none will be rendered meaningless. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 652 (Tex. 1999). Whether a contract is ambiguous is a question of law for the court. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation. Id. However, when a written contract is worded so that it can be given a certain or definite legal meaning or interpretation, it is unambiguous, and the court construes it as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003).

[6] The trial court impliedly concluded that the Forum Selection Clause was illusory and thus that Echovita did not consent to personal jurisdiction pursuant to it. Under their first issue the SCI Parties argue that the trial court erred in this conclusion because the Terms of Service expressly state that any unilateral change to the Terms of Service by one of the SCI Parties does not apply retroactively. Section 1 of the Terms of Service provides as follows:

1. GENERAL AGREEMENT. This website is offered by Dignity Memorial Network, Inc. and its parents and affiliates (collectively the "Company"). Our website and all use of it are governed by the following [Terms of Service]. By viewing, using, accessing, browsing or submitting any content or material on or to this site, you agree to this [Terms of Service] as a binding legal agreement between you and the Company to the fullest extent permitted by applicable law. You further agree that the Company shall have the right to alter or amend the [Terms of Service] or any other guidelines or policies at any time, with or without advance notice to you. You agree that each visit you make to this website and your continued use of our website shall confirm that you have read, accepted and agreed to be bound by such modifications of the [Terms of Service]. (emphasis added).

Under the unambiguous language of the Terms of Service the Company has the right to amend or terminate the Terms of Service at any time and without advance notice to Echovita. State and federal courts applying Texas law hold that a contract is illusory if one party has the power to unilaterally make amendments to the contract that apply retroactively to events that occurred before the amendment. See ...