In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
______________________________
No. 06-07-00043-CV
______________________________
TOM RAMSAY, Appellant
V.
TEXAS TRADING CO., INC., AND
ADM INVESTOR SERVICES, INC., Appellees
On Appeal from the 62nd Judicial District Court
Hopkins County, Texas
Trial Court No. CV37122
Before Morriss, C.J., Carter and Moseley, JJ.
Opinion by Chief Justice Morriss
Dissenting Opinion by Justice Carter
OPINION
Less than a half hour before the cattle-futures markets closed December 23, 2003, Tom
Ramsay appeared at Texas Trading Company, Inc.'s Sulphur Springs office and wanted a personal
account opened so he could sell "short" five cattle-futures contracts for his personal account through
ADM Investor Services, Inc. (ADM), Texas Trading's clearing broker in Illinois. That is the scene
Charles Dawson, the principal owner of Texas Trading, and his daughter (and then Texas Trading
employee) Liz Harper described concerning that day. That day, Ramsay reportedly indicated that
he did not have the time to sign an account agreement, so Harper reportedly delivered a form
agreement to him as he left Texas Trading's office. Later, Harper signed the form agreement for
Ramsay, though the testimony conflicts on whether he authorized that signature. Still later, pursuant
to another term of the form agreement and after numerous Ramsay-initiated trades through the newly
established account, Ramsay's position, at that time, was liquidated to cover existing losses. Ramsay
lost a large sum of money.
At the heart of this case, filed by Ramsay, is whether an agreement between Ramsay, Texas
Trading, and ADM was established based on the terms set out in that form and, if so, whether a
forum selection clause in that agreement was enforceable.
In a narrowly focused jury trial—limited to just the question of whether Ramsay had
authorized Harper to sign the agreement for him—the jury found the signature authorized. With that
jury finding, the trial court dismissed the rest of the lawsuit on the basis that the agreement's forum-
2
selection clause allowed ADM to require any related litigation to occur in Illinois. Ramsay appeals,
urging numerous issues.
We affirm the trial court's action because we hold (1) there was no abuse of discretion in
holding a separate trial on Harper's authorization to sign for Ramsay, (2) there was no error in
allowing ADM and Texas Trading to argue first and last in closing argument, (3) legally and
factually sufficient evidence supports the jury's finding that the signature was authorized, and (4) the
agreement's forum-selection clause is enforceable.
(1) There Was No Abuse of Discretion in Holding a Separate Trial on Harper's Authorization
to Sign for Ramsay
We first address the question of whether the trial court had the authority to bifurcate the
proceeding and try the signing-authority issue separately.
Procedurally, ADM filed a motion to bifurcate trial to seek a jury determination of whether
the allegedly forged signature was authorized by Ramsay. The trial court granted the motion, stating
that the first phase of trial would decide whether Ramsay's signature was authorized.
This issue is controlled by Rule 174(b) of the Texas Rules of Civil Procedure:
The court in furtherance of convenience or to avoid prejudice may order a separate
trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate
issue or of any number of claims, cross-claims, counterclaims, third-party claims, or
issues.
TEX . R. CIV . P. 174(b). The rule is exceedingly broad. Although Ramsay argues that this constitutes
an abuse of the trial court's discretion, we disagree based on the breadth of the rule. In an extensive
3
discussion of this rule, McDonald's Texas Civil Practice points out that the rule provides broad and
real discretion to order separate trials of issues. See 3 ROY W. MCDONALD & ELAINE A. GRAFTON
CARLSON , TEXAS CIVIL PRACTICE 2d § 17.27 (2000).
[W]e have said that the discretion to require severances and separate trials conferred
on trial courts by this and other Rules is 'about as broad as language could make it'.
Iley v. Hughes, 158 Tex. 362, 311 S.W.2d 648, 650 (1958).1
Appellant attacks the trial court's determination based on "long standing policy and practice"
against "piecemeal trials," which was also articulated by Iley. See Transp. Ins. Co. v. Moriel, 879
S.W.2d 10, 47, n.29 (Tex. 1994). Iley, however, addressed the propriety of dividing the liability
from the damages portions of lawsuits, and concluded that, based on long-standing policies of the
state, and the desire to avoid a multiplicity of suits, the two should be tried together. Even so, there
is a balance that must be struck between the ability to shorten the process and the need to avoid
piecemeal trials.
The trial court's action in first hearing the authorization issue is a reasonable procedure
suggested by the logical structure of the case. The issue of authorization was of considerable
importance in determining a critical threshold issue: whether the contract was binding on Ramsay,
and thus whether the contract's forum-selection clause could be considered for enforcement against
him. Before the court could determine whether a valid forum-selection clause would require
1
We note that the rule would not extend to authorizing separate trials of liability and damage
issues in personal injury litigation. See Iley, 311 S.W.2d at 650; 3 ROY W. MCDONALD & ELAINE
A. GRAFTON CARLSON , TEXAS CIVIL PRACTICE 2d § 17.27.
4
dismissal of the remainder of the lawsuit, it would be necessary to determine whether that clause was
part of an existing contract. Proceeding in this fashion allowed the trial court to avoid a full-blown
trial on most of the issues that would not be effectively tried in Texas, if the contract and the forum-
selection clause were enforceable. Had the jury come in with the opposite verdict, all involved
would know how to proceed most advantageously with the remainder of the trial in Texas. This is
the type of discretion contemplated by the rule. There was no error here.
(2) There Was No Error in Allowing ADM and Texas Trading to Argue First and Last in Closing
Argument
Ramsay also argues that, procedurally, the trial court erred by allowing Texas Trading and
ADM to open and conclude closing arguments. Texas Trading and ADM had asked to be placed in
that position for presentation of evidence, but the court had declined to do so, based on the
untimeliness of the motion. After evidence was presented, however, the court changed its mind and
allowed ADM and Texas Trading to argue first and last during closing arguments.
This is an issue resolved by reading two rules together. It is true that Rule 266 says the
plaintiff has the right to open and conclude both evidence and argument unless the burden of the
whole case rests on the defendant. Rule 266 opens, however, with the phrase "except as provided
in Rule 269."
Rule 269(a) of the Texas Rules of Civil Procedure states that the party having the burden of
proof on all matters submitted to the jury is entitled to open and conclude the argument. See TEX .
R. APP . P. 269(a).
5
In this case, Texas Trading and ADM had the burden of proof on all matters submitted by
the charge. Thus, under the rule, they had the right to open and conclude argument. There was no
error here.
(3) Legally and Factually Sufficient Evidence Supports the Jury's Finding That the Signature
Was Authorized
The test for legal sufficiency is "whether the evidence at trial would enable reasonable and
fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802,
827 (Tex. 2005). In making this determination, we credit favorable evidence if a reasonable
fact-finder could, and disregard contrary evidence unless a reasonable fact-finder could not. Id. So
long as the evidence falls within the zone of reasonable disagreement, we may not substitute our
judgment for that of the fact-finder. Id. at 822. The trier of fact is the sole judge of the credibility
of the witnesses and the weight to give their testimony. Id. at 819. Although we consider the
evidence in a light most favorable to the challenged findings, indulging every reasonable inference
that supports them, we may not disregard evidence that allows only one inference. Id. at 822.
When considering a factual sufficiency challenge to a jury's verdict, courts of appeals must
consider and weigh all of the evidence, not just that evidence which supports the verdict. Mar.
Overseas Corp. v. Ellis, 971 S.W.2d 402, 406–07 (Tex. 1998). A court of appeals can set aside the
verdict only if it is so contrary to the overwhelming weight of the evidence that the verdict is clearly
wrong and unjust. Id. at 407; Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). The court of appeals
is not a fact-finder. As stated above, we may not pass on the witnesses' credibility or substitute our
6
judgment for that of the jury, even if the evidence would clearly support a different result. Ellis, 971
S.W.2d at 407.
There was evidence that company policy required personal signing of the agreement, and
Ramsay repeatedly testified that he did not authorize anyone to sign on his behalf. Liz Harper agreed
that an authorization to sign on another's behalf should also be obtained in writing, but testified that
she did sign on Ramsay's behalf. She testified that he had been in a hurry to open an account so that
he could profit from a trading opportunity personally and not make that trade in an existing joint
account he shared with another customer. She testified in detail that Ramsay had come in very late
in the trading day; that he wanted the personal account immediately; that Ramsay indicated a lack
of time to stay and sign account papers; that she handed him a form agreement for him to take with
him; and that, as he was walking out the door, he asked her to fill the papers out and sign his name
to them. Several days later, Ramsay called and asked her if the account had been opened. Harper
told him that it could not have been because he had not returned the account papers. Ramsay's
response, according to Harper, was to display irritation and to say "that he had already told me to
sign it and to just get it open." Harper continued that, when she explained a second time that Ramsay
would need to come in and sign the application, he responded by saying he did not see how he could
get to town. "He said just go ahead and sign my name. I've already told you twice. Just sign them."
She testified that she ultimately did fill out and sign the account papers as Ramsay directed her.
7
The evidence presented to the jury was in conflict. The jury made a determination, and both
legally and factually sufficient evidence supports its decision.
(4) The Agreement's Forum-Selection Clause Is Enforceable
The most challenging issue in this appeal is presented by the forum-selection clause
contained in paragraph 19 of the agreement:
All actions or proceedings arising direction, indirectly or otherwise, in connection
with, out of, related to, or from this agreement or any transaction covered hereby,
shall be governed by the law of Illinois and may, at the discretion and election of
[ADM], be litigated in a court whose situs is within Illinois.
Ramsay assails the clause, arguing that it really is a venue-selection clause that is
unenforceable as against public policy, that the clause did not provide for exclusive jurisdiction in
Illinois, and that the clause's placement of discretion in ADM was fatal to its enforceability.2
A motion to dismiss is the proper procedural mechanism for enforcing a forum-selection
clause that a party to the agreement has violated in filing suit. See In re AIU Ins. Co., 148 S.W.3d
109, 111–21 (Tex. 2004); Phoenix Network Techs. (Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605,
610 (Tex. App.—Houston [1st Dist.] 2005, no pet.). We review the trial court's granting of such a
motion for an abuse of discretion. See Phoenix Network Techs. (Europe) Ltd., 177 S.W.3d at 610.
To the extent that our review involves the construction or interpretation of an unambiguous contract,
2
Ramsay also attacks the clause on the basis that he did not sign the agreement. But, as
sufficient evidence supported the jury's determination that the agreement was signed with Ramsay's
authorization, that argument fails here.
8
however, the standard of review is de novo. See id.; Deep Water Slender Wells, Ltd. v. Shell Int'l
Exploration & Prod., Inc., 234 S.W.3d 679, 687 (Tex. App.—Houston [14th Dist.] 2007, no pet.).
In the present case, interpretation and enforceability of the forum-selection clause are the
issues presented on appeal, and are legal matters this Court reviews de novo. Fisk Elec. Co. v.
Constructors & Assocs., Inc., 888 S.W.2d 813, 814 (Tex. 1994); CMS Partners, Ltd. v. Plumrose
USA, Inc., 101 S.W.3d 730, 737 (Tex. App.—Texarkana 2003, no pet.).
We construe a contract containing a forum-selection clause as we do any contract, according
to its plain language. See Phoenix Network Techs. (Europe) Ltd., 177 S.W.3d at 615. If a contract
is worded so that it can be given a certain or definite legal meaning or interpretation, we will
construe the contract as a matter of law. Enter. Leasing Co. v. Barrios, 156 S.W.3d 547, 549 (Tex.
2004).
a. A Venue-Selection Clause?
Ramsay contends that this is not a forum-selection clause, but that it is instead a venue-
selection clause. He fails to persuade us, however, how the distinction makes any difference here.
A forum, as defined, is a place where a case may be heard by a court. Venue, as defined by the
common law, is the proper place for a lawsuit to proceed. In this context, the two concepts are
effectively interchangeable. See BLACK'S LAW DICTIONARY 680, 1591 (8th ed. 2004). By defining
a proper forum, where the action may proceed, the clause also determines the proper venue for the
action. Black's defines a forum-selection clause in nearly precisely those terms: "a contractual
9
provision in which the parties establish the place (such as the country, state, or type of court) for
specified litigation between them." Id. at 681.3
Ramsay directs our attention to Fleming v. Ahumada, 193 S.W.3d 704 (Tex. App.—Corpus
Christi 2006, no pet.), as authority for the suggestion that a venue provision cannot be the subject
of a private contract unless provided by statute. That is correct, but, those cases are in the context
of state venue provisions that set out which court (county) within this state has authority to hear a
particular case, with agreements setting venue in an improper location. This clause does not purport
to move venue from a proper to an improper location, but instead specifies the forum in which a case
will be heard, presumably in accordance with the "venue rules" of that forum.4
The Corpus Christi court has recently been confronted with the same argument and found
it to be without merit. In re Great Lakes Dredge & Dock Co. L.L.C., No. 13-07-437-CV,
3
See CNOOC Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd., 222 S.W.3d 889, 892 (Tex.
App.—Dallas 2007, pet. denied) (forum-selection clause "designates Texas as the venue and
exclusive jurisdiction for lawsuits"; see also Tri-State Bldg. Specialties, Inc. v. NCI Bldg. Sys., L.P.,
184 S.W.3d 242, 249 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (clause used term "venue"
rather than "forum").
4
We also recognize that a case from this Court, Busse v. Pacific Cattle Feeding Fund #1, Ltd.,
896 S.W.2d 807, 812–13 (Tex. App.—Texarkana 1995, pet. denied), reviewed a forum-selection
clause stating that venue would lie in one of selected Iowa counties. The meaning was clear, even
if the language could have been more carefully selected.
10
2008 WL 100505, at *3 (Tex. App.—Corpus Christi Jan. 10, 2008, orig. proceeding), discusses
differences between the two terms as used in Texas.5
"Forum" generally refers to a sovereign or a state. See Scott v. Gallagher, 209
S.W.3d 262, 264 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ("[V]enue 'refers
to the propriety of prosecuting, in a particular form, a suit on a given subject matter
with specific parties, over which the forum must, necessarily, have subject-matter
jurisdiction.'") (emphasis added). In contrast, "[a]t common law, 'venue' meant 'the
neighborhood, place, or county in which the injury is declared to have been done or
in fact declared to have happened.'" State v. Blankenship, 170 S.W.3d 676, 681 (Tex.
App.—Austin 2005, pet. ref'd) (quoting BLACK'S LAW DICTIONARY 1557 (6th ed.
1991)). In Texas, "venue" refers to the county in which suit is proper within the
forum state. Accelerated Christian Educ., Inc., 925 S.W.2d at 73; Estrada v. State,
148 S.W.3d 506, 508 (Tex. App.—El Paso 2004, no pet.). Thus, a "forum"-selection
agreement is one that chooses another state or sovereign as the location for trial,
whereas a "venue"-selection agreement chooses a particular county or court within
that state or sovereign.
Forum-selection clauses may be so broad as to require a case to be heard in a particular
country6 or state (as in this case). To suggest that this clause improperly chooses a venue in
contravention of controlling law misreads the concept.
5
As noted there, the terms, although overlapping, also have distinct legal meanings in certain
contexts, although those niceties have not been consistently observed in the reported cases.
6
A clause stating that any suits would be taken in the United Kingdom found
sufficient—although it did not specify which of the various subdivisions of the UK was to be the site
of any suit. Phoenix Network Techs. (Europe) Ltd., 177 S.W.3d at 619.
11
b. A One-Way Clause?
Ramsay argues that, because this clause is not mandatory as to both parties under all
circumstances, it is not enforceable.7 Of the arguments raised, this one has the most viability. He
relies most directly on language found in a footnote in Phoenix Network Technologies (Europe) Ltd.,
which states:
The other threshold matter required by the Texas courts-of-appeals test—that the
proponent show that the parties contractually agreed on an exclusive forum—adds
nothing to the M/S Bremen and Shute test and is consistent with it. If the parties have
not agreed to an exclusive forum, then the clause to which they agreed is not a
forum-selection clause in the first place.
See 177 S.W.3d 605, 624, n.6. In this argument, Ramsay addresses (what was until 2004) a fairly
unsettled area of the law. He argues that, because the clause does not contain language requiring
both parties, in all circumstances, to file suit only in a particular forum, it is not a mandatory
agreement to have the case heard in a particular forum; thus, it is not a valid forum-selection clause.
Formerly, forum-selection clauses were enforceable in Texas based on a determination of
whether (1) the parties had contractually consented to submit to the exclusive jurisdiction of another
state, and (2) the other state recognized the validity of such provisions. CMS Partners, Ltd., 101
S.W.3d at 732; Sw. Intelecom, Inc. v. Hotel Networks Corp., 997 S.W.2d 322, 324 (Tex.
App.—Austin 1999, pet. denied); Accelerated Christian Educ., Inc. v. Oracle Corp., 925 S.W.2d
66, 70 (Tex. App.—Dallas 1996, no writ).
7
The cases discuss several fashions in which a clause may be inadequate, of which the most
common by far is the situation where the proposed forum is not adequately defined.
12
In a series of recent cases, the Texas Supreme Court has reconsidered the appropriate review
to determine whether forum-selection clauses should be enforced. See Michiana Easy Livin'
Country, Inc. v. Holten, 168 S.W.3d 777, 793 (Tex. 2005); In re Automated Collection Techs., Inc.,
156 S.W.3d 557, 559 (Tex. 2004); AIU Ins. Co., 148 S.W.3d 109. As a result, enforcement of
forum-selection clauses is mandatory unless the party opposing enforcement "clearly show[s] that
enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as
fraud or overreaching." Automated Collection Techs., Inc., 156 S.W.3d at 559; see Holten, 168
S.W.3d at 793; AIU, 148 S.W.3d at 112; Boyes v. Morris Polich & Purdy, L.L.P., 169 S.W.3d 448,
458 (Tex. App.—El Paso 2005, no pet.).8
In AIU, the court held that enforcement of forum-selection clauses is mandatory unless the
party opposing enforcement "clearly show[s] that enforcement would be unreasonable and unjust,
or that the clause was invalid for such reasons as fraud or overreaching." AIU Ins. Co., 148 S.W.3d
109. In Automated Collection Technologies, the court recognized the possibility that, in some
circumstances, the clause might be invalid and unenforceable, but did not explain what might cause
such invalidity. See Automated Collection Techs., Inc., 156 S.W.3d at 559.
8
Enforcement of a forum-selection clause would be unreasonable and unjust if
(1) enforcement of the clause would contravene a strong public policy of the forum in which suit was
filed or (2) the balance of convenience is strongly in favor of litigation in the forum in which suit
was filed, and litigation in the forum identified in the clause would be so manifestly and gravely
inconvenient to the resisting party that the resisting party effectively would be deprived of a
meaningful day in court. See M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 19 (1972); AIU Ins.
Co., 148 S.W.3d at 111–12; Deep Water Slender Wells, Ltd., 234 S.W.3d at 693.
13
Under the earlier cases, it was recognized that such clauses are valid if contractually agreed
to by the parties, and that would seem to remain a necessary adjunct to our determination. Barnett
v. Network Solutions, Inc., 38 S.W.3d 200, 203 (Tex. App—Eastland 2001, pet. denied); Sw.
Intelecom, Inc., 997 S.W.2d at 324; Accelerated Christian Educ., Inc., 925 S.W.2d at 70.
Ramsay does not suggest that the subject matter of the underlying lawsuit is outside the scope
of the agreement or that it cannot be determined which forum is named. The issue raised is whether
this language requires litigation to proceed in that forum—because it leaves discretion to ADM to
decide whether to litigate in Illinois. The fact that the clause might be enforced at the election of
ADM, however, is not a matter that has not previously, in isolation, been considered a controlling
question. There are reported cases in which similar language has been enforced without qualm or
comment by the courts.
An example of this type of language is found in Accelerated Christian Educ., Inc., 925
S.W.2d at 69, 70–71. In that case, the court considered the following forum-selection clause and
found it sufficient to require suit to proceed as chosen under the clause.
[I]f [Accelerated] brings the action, it shall be instituted in one of the courts specified
in subparagraph (a) above. Oracle may institute legal action in any appropriate
jurisdiction.
The clause thus allowed one party, at its election, to choose one of several courts in which to begin
litigation, while allowing the other party to institute action wherever "appropriate." That clause
14
provided a far greater degree of discretion than allowed in the contract clause in this case, but was
nevertheless treated as mandatory and enforceable.
c. Permissive Forum?
The clause states that "all actions or proceedings . . . shall be governed by the law of Illinois
and may, at the discretion and election of ADM, be litigated in a court . . . within Illinois." Does this
provide only an additional location where litigation might proceed, perhaps in a situation where the
forum might not otherwise be available, rather than a mandatory requirement? Or does it mean that
ADM may choose to require litigation to proceed in Illinois, making such choice binding?
One might attempt to understand this provision as a "permissive forum selection clause,"
under which the parties thereby consent to the jurisdiction of a particular forum but do not require
the parties to file suit or litigate there. The phrase "permissive forum selection clause" appears to
have been coined, defined, and first used in Texas in a law review article. See Paul Hartman Cross
and Hubert Oxford, IV, "FLOATING " FORUM SELECTION AND CHOICE OF LAW CLAUSES, 48 S. Tex.
L. Rev. 125 (2006). The phrase seemed to grow out of an effort to distinguish permissive from
mandatory clauses, "which provide that all litigation must, shall, or is to be filed in that forum." Id.
at 131.
The only case cited to support this concept is Southwest Intelecom, Inc., 997 S.W.2d 322.
In that case, the court summarized three cases, Accelerated Christian Education, Greenwood, and
Barnett, each of which contained absolute command language that any legal action would be brought
15
or instituted in a stated forum or court. In Southwest Intelecom, though, the Austin court reviewed
a clause that read as follows:
8.9 Applicable Law.
This Agreement shall be governed by the laws of the State of Minnesota. The Parties
stipulate to jurisdiction and venue in Ramsey County, Minnesota, as if this
Agreement were executed in Minnesota.
In its analysis, the Austin court focused on the fact that the clause mandated which law would apply
and that the parties stipulated only that jurisdiction and venue in the named forum were proper. The
court used the dictionary definition of "stipulate" to determine that the parties' intent was to "arrange
or settle definitely" that jurisdiction was proper and available in Minnesota and that the provision
merely "settle[d] any question of whether the courts of that state have jurisdiction." Id. at 326. Thus,
the court concluded, the clause did not provide Minnesota courts with exclusive jurisdiction to hear
all disputes arising from the agreement, and declined to find the clause to be mandatory.9
A similarly imprecise clause is discussed in Mabon Ltd. v. Afri-Carib Enterprises, Inc., 29
S.W.3d 291, 297 (Tex. App.—Houston [14th Dist.] 2000, no pet.):
It is also agreed between the parties [that] because of the multi-state and multi-
country jurisdiction involved due to the locations of the principals, banks and
depositories, etc., the laws of . . . Nigeria will apply and the Federal District of
Nigeria shall have venue.
9
Another case cited in the article, My Café CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860,
866 (Tex. App.—Dallas 2003, no pet.), is inapposite. The focus there was whether the clause
encompassed all causes of action relating to the agreement.
16
The court compared this clause to those in several federal cases and concluded that, just because the
clause said that a court had venue, it did not exclude the possibility of another forum also being
proper. The court used the reasoning of Southwest Intelecom, concluding that, without explicit
language providing for exclusive jurisdiction in Nigeria, the parties did not contractually consent to
submit to exclusive jurisdiction in Nigeria.
In examining this particular clause to determine its meaning, we must consider several factors
and apply applicable tests.
If the written instrument is so worded that it can be given a certain or definite legal
meaning or interpretation, then it is not ambiguous and the court will construe the
contract as a matter of law. A contract, however, is ambiguous when its meaning is
uncertain and doubtful or it is reasonably susceptible to more than one meaning.
Whether a contract is ambiguous is a question of law for the court to decide by
looking at the circumstances present when the contract was entered. When a contract
contains an ambiguity, the granting of a motion for summary judgment is improper
because the interpretation of the instrument becomes a fact issue.
Coker v. Coker, 650 S.W.2d 391, 393–94 (Tex. 1983).
Obviously, since the contract was on a form provided by ADM, ADM is responsible for its
wording. We acknowledge the long-standing general rule that, where an instrument is open to two
reasonable constructions, it will be construed against its author. Houston Pipe Line Co. v. Dwyer,
374 S.W.2d 662, 665 (Tex. 1964); Universal C. I. T. Credit Corp. v. Daniel, 243 S.W.2d 154 (Tex.
1951). That rule applies, however, only where, after the ordinary rules of interpretation have been
applied, the agreement remains ambiguous. Daniel, 243 S.W.2d at 157. The primary goal in
17
construing the meaning of a contract is to ascertain and give effect to the parties' intent as expressed
in the contract. See Ideal Lease Serv., Inc. v. Amoco Prod. Co., 662 S.W.2d 951, 953 (Tex. 1983).
We also consider another legal maxim: "No single provision taken alone will be given
controlling effect; rather, all the provisions must be considered with reference to the whole
instrument." J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003), citing Myers v. Gulf
Coast Minerals Mgmt. Corp., 361 S.W.2d 193, 196 (Tex. 1962); Citizens Nat'l Bank v. Tex. & P.
Ry. Co., 136 Tex. 333, 150 S.W.2d 1003, 1006 (1941).
The real question here is whether Ramsay contracted to allow ADM to choose whether any
lawsuit between them would proceed in Illinois. To answer that question, we consider that the
contract was drafted by ADM and not by Ramsay, we accept our responsibility to construe an
unambiguous contract, and we look at the entire sentence (not just the word "may"). When we do
those things, we come to an inescapable conclusion: Ramsay did contract to give ADM that choice.
The language allows ADM to require the litigation of any action to proceed solely in Illinois.
Despite Ramsay's suggestions otherwise, he has provided us with no authority suggesting that this
type of discretion in one party renders the clause invalid or unenforceable.
We agree that the use of the word "may" in this clause, while intending mandatory effect, is
unfortunate. The word ordinarily suggests a conditional or possible result rather than a mandatory
one. Although we agree that the word "may" makes interpretation of this clause challenging, we find
from the context that the parties intended to make the forum mandatory once ADM made its
18
choice.10 Otherwise, the words giving ADM discretion to choose would mean nothing. In this
context, the term "mandatory" does not exclude the ability to contract for discretion in one party,
which, if exercised, would make the provision mandatory on others to the contract.
Reading the clause as a whole, we conclude it provides ADM with the discretion to decide
whether litigation must proceed in a court in Illinois. The agreement allows ADM to decide whether
it would allow litigation to proceed in Texas, in this case, or to require it to proceed in Illinois.11 The
clause covers all litigation. We hold that it is a forum-selection clause adequate to support the trial
court's decision to dismiss the litigation in Texas.12
Under the controlling precedents on forum-selection clauses, the parties' bargained-for
agreement merits judicial respect. This dispute should be heard in Illinois, as chosen by ADM,
pursuant to the contract between the parties. See In re AutoNation, Inc., 228 S.W.3d 663, 669 (Tex.
2007).
10
We also note that any question of whether ADM waived that right by its action or inaction
is not an issue before us in this case.
11
We also note that, according to the pleadings, ADM's principal place of business is in
Illinois, and there is no suggestion that the forum itself would fit within the limitations placed on
forum-selection clauses on the ground that it was somehow unreasonable or unjust on that basis.
12
Ramsay also briefly argues that the clause was unenforceable because of overreaching by
Texas Trading and ADM, but that is based on alleged wrongdoing by them and alleged lack of
evidence to show that Ramsay's signature was authorized. As we have found, sufficient evidence
supports that conclusion regarding Ramsay's signature. Overreaching is not shown.
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We affirm the judgment of the trial court.
Josh R. Morriss, III
Chief Justice
DISSENTING OPINION
Because I believe the forum-selection clause is permissive and not mandatory, I dissent to
the majority opinion. The clause states that "all actions or proceedings . . . shall be governed by the
law of Illinois and may, at the discretion and election of ADM, be litigated in a court . . . within
Illinois." Does this language necessarily mean that all litigation between these parties was required
to be conducted in Illinois? Or does this mean that Illinois "may" be selected by ADM as a place of
proper jurisdiction?
The difficulty with the majority opinion is the attempt to explain that "may" really means
"shall." One entering this contract with full knowledge that the contract was entered in Texas,
Ramsay was a Texas resident, all transactions would be made through the local office in Texas, the
corporations were licensed to do business in Texas, would properly believe that, if litigation resulted
from this contract, jurisdiction of the litigation would necessarily lie in Texas. Illinois appears to
have no significant contacts other than ADM's location. Further, one could logically believe that
entering the contract in question gave ADM a right that it would not otherwise have—it could no
longer argue that Illinois did not have jurisdiction in the event ADM elected to file suit there.
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Consequently, the clause was not meaningless. The fact that the parties agree that litigation between
them may, if elected by ADM, be conducted in Illinois does not place the parties on notice that no
other state has jurisdiction of their litigation.
I believe this case is similar to Southwest Intelecom, Inc. v. Hotel Networks Corp., 997
S.W.2d 322 (Tex. App.—Austin 1999, pet. denied), where the parties stipulated "to jurisdiction" in
Minnesota. Just as the majority opinion states here, in Southwest Intelecom, Inc., the trial court
interpreted the jurisdiction clause to provide for exclusive jurisdiction in Minnesota courts "because
the provision would be meaningless . . ." Id. at 326. But the Austin court held that interpreting the
provision to mean that both parties agreed to jurisdiction and venue in Minnesota (but not
exclusively) enabled the appellee to sue in its headquarters state without worrying about
jurisdictional issues. Without the jurisdiction clause, it was doubtful that a Minnesota court would
have been unable to exercise jurisdiction since that state had little contact.
I believe this clause is similar to that in Southwest Intelecom, Inc., and should be interpreted
as providing permissive, not exclusive, jurisdiction in Illinois. For these reasons, I respectfully
dissent to the majority opinion.
Jack Carter
Justice
Date Submitted: April 2, 2008
Date Decided: May 5, 2008
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