AFFIRM; and Opinion Filed October 14, 2013.
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-12-00573-CV
CKH FAMILY LIMITED PARTNERSHIP, LTS REALTY, LP, & WALDEMAR D.
MAYA, JR. , Appellants
V.
MGD/CCP ACQUISITION, LLC & GREG KUBICEK, Appellees
On Appeal from the County Court at Law No. 4
Dallas County, Texas
Trial Court Cause No. CC-11-00382-D
MEMORANDUM OPINION
Before Justices O’Neill, Francis, and Evans
Opinion by Justice O’Neill
Appellants CKH Family Limited Partnership, LTS Realty, LP, and Waldemar D. Maya,
Jr. appeal the trial court’s motion to dismiss in favor of appellees MGD/CCP Acquisition, LLC
and Greg Kubicek. They challenge the dismissal on three grounds: (1) appellees waived any
arguments related to jurisdiction arising from the forum selection clause; (2) appellants’ consent
to jurisdiction in an Oregon court was expressly conditioned upon their claims not being subject
to arbitration; and (3) Kubicek was not a signatory to any document containing the Oregon
forum selection clause; therefore, the court erred in granting his motion to dismiss. We affirm
the trial court’s judgment.
Background
The underlying facts leading up to this lawsuit are not relevant for disposition of the
appeal. However, the following procedural background and provisions of the operating
agreement entered into between the parties will be discussed as they relate to issues raised on
appeal.
Appellants sued appellees on January 18, 2011 for intentional misrepresentation, fraud,
breach of fiduciary duty, and conspiracy involving an investment in real property located in
Oregon. In response, appellees filed an original answer subject to a special appearance. The
trial court denied appellees’ special appearance on December 7, 2011. Following the denial of
their special appearance, appellees filed a motion to quash oral depositions, a motion for
continuance, a motion to compel arbitration, and an amended answer subject to a motion to
dismiss on venue.
In their motion to dismiss on venue, appellees relied on paragraph 12.10 of the operating
agreement entered into between the parties, which states the following:
Each member hereby consents to the exclusive jurisdiction of the state and federal
courts sitting in Oregon in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement, provided such claim is not required to be arbitrated. Each member
further agrees that personal jurisdiction over him or her may be effected by
service of process by registered or certified mail and that when so made shall be
as if served upon him or her personally within the state of Oregon.
In addition, paragraph 12.11 provided that “no action at law or in equity based upon any
claim arising out of or related to this Agreement shall be instituted in any court . . . except (a) an
action to compel arbitration pursuant to this section or (b) an action to enforce an award obtained
in an arbitration proceeding, in accordance with this section.” Appellees argued, based on these
provisions, appellants agreed to venue in Oregon and such clauses are specifically enforceable in
Texas.
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The trial court granted the motion for continuance and later granted the motion to
dismiss. The trial court failed to rule on appellees’ motion to compel arbitration. This appeal
followed.
Discussion
We begin our discussion by addressing appellants’ first issue that appellees waived their
right to challenge the forum selection clause. Appellants contend that because the trial court
denied appellees’ special appearance, which made no mention of the forum selection clause,
appellees generally appeared in the trial court based upon the denial. Appellants further argue it
is irrelevant appellees later filed an amended answer subject to a motion to dismiss invoking the
forum selection clause because the trial court had already determined appellees were properly
before the court. We disagree with appellants’ waiver arguments.
A motion to dismiss is the proper mechanism to enforce a forum selection clause that
selects another state as the proper forum for litigation. Accelerated Christian Educ., Inc. v.
Oracle Corp., 925 S.W.2d 66, 70 (Tex. App.—Dallas 1996, no writ). We have held a general
appearance does not waive a party’s right to rely on a forum selection clause. See My Cafe-
CCC, Ltd v. Lunchstop, Inc., 107 S.W.3d 860, 864 (Tex. App.—Dallas 2003, no pet.). In My
Cafe-CCC, we concluded “Because a special appearance does not address forum selection
clauses, [appellee] could not waive its complaint by failing to enter a special appearance.” Id.
Thus, in the present case, even though the trial court denied appellees’ special appearance, the
same rule of law applies. Appellees did not waive the court’s jurisdiction to rule on its motion to
dismiss based on a forum selection clause simply because the trial court denied their special
appearance. Thus, we reject appellant’s argument that appellees generally appeared before a
Texas trial court. Accordingly, the trial court did not abuse its discretion by considering the
merits and ruling on appellees’ motion to dismiss. We overrule appellants’ first issue.
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We now turn to the merits of appellees’ motion to dismiss. Forum selection clauses are
enforceable in Texas provided (1) the parties have contractually consented to submit to the
exclusive jurisdiction of another state, and (2) the other state recognizes the validity of such
provisions. Id. Texas courts are not bound by the parties’ selection of a forum with regard to
any cause of action if the interests of the public and potential witnesses strongly favor
jurisdiction in a forum other than the forum the parties selected. Id. at 864–65.
We review motions to dismiss predicated on forum selection clauses for an abuse of
discretion. Stokes Interest, G.P. v. Santo-Pietro, 343 S.W.3d 441, 444 (Tex. App.—El Paso
2010, no pet). To the extent our review involves contractual interpretation of a forum selection
clause, the standard of review is de novo. Id.
In their second issue, appellants argue the trial court abused its discretion by granting
appellees’ motion to dismiss because the forum selection clause is expressly conditioned upon
those claims not subject to arbitration. Although appellees filed a motion to compel arbitration,
the trial court never ruled on it. Appellees respond whether appellants’ claims are subject to
arbitration is irrelevant to the forum selection clause analysis, and the forum selection clause
clearly states the parties agreed to submit to jurisdiction in Oregon. Again, we agree with
appellees.
“Enforcement of valid forum selection clauses, bargained for by the parties, protects their
legitimate expectations and furthers vital interests of the justice system.” Rouse v. Tex. Capital
Bank, N.A., 394 S.W.3d 1, 4 (Tex. App.—Dallas 2011, no pet.) (citing Stewart Org., Inc. v.
Ricoh Corp., 487 U.S. 22, 33 (1988)). Thus, by entering into an agreement with a forum
selection clause, the parties effectively represent to each other that the agreed forum is not so
inconvenient that enforcing the clause will deprive either party of its day in court, whether for
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cost or other reasons. See In re Laibe Corp., 307 S.W.3d 314, 316 (Tex. 2010) (orig.
proceeding).
In analyzing the forum selection clause, we turn to principles of contract interpretation.
Rouse, 394 S.W.3d at 4. Our primary objective in construing a written contract is to ascertain
and give effect to the intentions the parties have objectively manifested in the written instrument.
Id. Contract terms are given their plain, ordinary, and generally accepted meanings, and
contracts are to be construed as a whole in an effort to harmonize and give effect to all provisions
of the contract. Id.; see also Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex.
2005). If a contract can be given a certain or definite legal meaning or interpretation, it is not
ambiguous and is construed as a matter of law. Rouse, 394 S.W.3d at 4. Further, the Texas
Supreme Court has advised that, in determining whether claims fall within the scope of a forum
selection clause, the reviewing court should engage in a “common sense examination of the
claims and the forum selection clause to determine if the clause covers the claims.” In re Lisa
Laser USA, Inc., 310 S.W.3d 880, 884 (Tex. 2010) (orig. proceeding).
Appellants argue their underlying claims for intentional misrepresentation, fraud, breach
of fiduciary duty, and conspiracy do not fall within the forum selection clause because the trial
court never determined whether the claims were subject to arbitration, which was an express
condition of the operating agreement and for jurisdiction in Oregon. Section 12.10 of the
operating agreement states:
Each member hereby consents to the exclusive jurisdiction of the state and federal
courts sitting in Oregon in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement, provided such claim is not required to be arbitrated.
As correctly noted by appellees, appellants do not dispute the scope of the forum selection
clause, but rather argue the statement regarding arbitration carves out an exception. We disagree
with appellants’ interpretation.
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Appellants’ argument overlooks the fact that they initiated the underlying lawsuit rather
than filing arbitration. Black’s Law Dictionary defines “action” as a “civil or criminal judicial
proceeding” in courts of law. BLACK’S LAW DICTIONARY 28 (7th ed. 1999). Section 12.10
specifically provides that any “action” must be brought in Oregon. Accordingly, any action filed
by appellants was controlled by section 12.10.
The “provided such claim is not required to be arbitrated” clause simply acknowledges
the arbitration provision in section 12.11. This section provides the following:
Except as otherwise provided in this Agreement, any controversy or dispute
arising out of this Agreement, the interpretation of any of the provisions hereof, or
the action or inaction of any Member or Manager hereunder shall be submitted to
arbitration in Clackamas County Oregon before the American Arbitration
Association, under the commercial arbitration rules.
Black’s Law Dictionary defines “controversy” as “a disagreement or a dispute, esp. in public.”
Id. at 331. Thus, it draws the distinction between an “action” in section 12.10 and a
“controversy” requiring arbitration under section 12.11. Regardless, even drawing such a
distinction does not overcome the fact that the parties also agreed to arbitration in Oregon.
Appellants even conceded in oral argument that had appellees requested arbitration in Oregon,
they would agree to arbitration as provided in section 12.11. However, they argued they should
not be forced to go to trial in Oregon. Based on a plain reading of the forum selection clause and
the arbitration clause, we simply cannot agree. It is clear the parties envisioned that all claims,
whether brought before a court or an arbitration panel, must only be filed in Oregon.
In reaching this conclusion, we are not persuaded by appellants’ argument that appellees
were required to obtain a ruling on their motion to compel arbitration from the trial court.
Appellants cannot argue their claims were “required to be arbitrated” when they never sought
arbitration, and if appellees chose not to have their motion to compel ruled upon, that was their
right. See, e.g., Perry Homes v. Cull, 258 S.W.3d 580, 593 (Tex. 2008) (“Like any other contract
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right, arbitration can be waived if the parties agree instead to resolve a dispute in court.”).
Accordingly, we overrule appellants’ second issue.
In their third issue, appellants argue the trial court erred by granting appellee Kubicek’s
motion to dismiss because he is not a signatory to any agreement containing an Oregon forum
selection clause, and their allegations against Kubicek arose out of misrepresentations he
individually made in Texas prior to the creation of any agreement with a forum selection clause.
Again, we cannot agree.
Courts should apply equitable estoppel when a signatory to the contract containing the
forum selection clause raises allegations of substantially interdependent and concerted
misconduct by both non-signatories and one or more signatories to the contract. See Deep Water
Slender Wells, Ltd. v. Shell Int’l Exploration & Prod., Inc., 234 S.W.3d 679, 694 (Tex. App.—
Houston [14th Dist.] 2007, pet. denied). Moreover, the Texas Supreme Court has rejected the
notion that a forum selection clause can be defeated by the presence of non-signatories to the
agreement. See In re Int’l Profit Assoc., Inc., 274 S.W.3d 672, 680 (Tex. 2009) (orig.
proceeding) (“If all it takes to avoid a forum-selection clause is to join as defendants local
residents who are not parties to the agreement, then forum-selection clauses will be of little
value.”); In re Emex Holdings, L.L.C., No. 13-11-00145-CV, 2013 WL 1683614, at *6 (Tex.
App.—Corpus Christi Apr. 18, 2013, orig. proceeding) (holding forum selection clause applied
to non-signatories).
Here, the trial court stated on the record during a hearing “that the pleadings of the
plaintiffs make claims against the defendant substantially interdependent, specifically the fact
that they allege misrepresentation and fraud against all defendants, breach of fiduciary duties,
and conspiracy.” The trial court continued, “There is really no way for the Court to grant a
motion to dismiss only as to the LLC without also doing it as to Mr. Kubicek.” We agree.
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Despite appellants’ arguments to the contrary, they have made no effort to differentiate
their claims against Kubicek and MGD/CCP. In their pleadings, they state “Defendants made
misrepresentations of material fact” regarding investments; “Defendants” committed fraud and
breached their fiduciary duty; and “Defendants intentionally conspired to falsely represent to
Plaintiffs the investment [at] issue.” Moreover, appellants repeatedly state Kubicek met with
them “individually and on behalf of Defendant MGD/CCP Acquisition, LLC.” Thus, even
though Kubicek was not a signatory to the operating agreement containing the forum selection
clause, the causes of action raised by appellants against him are substantially interdependent on
the alleged misconduct of him and MDG/CCP in the underlying real estate transaction that was a
part of the formation of the operating agreement containing the forum selection clause.
Accordingly, Kubicek was entitled to rely on and enforce the forum selection clause. The trial
court did not abuse its discretion in granting his motion to dismiss. Appellants’ third issue is
overruled.
Conclusion
Having overruled appellants’ issues, we affirm the trial court’s judgment.
/Michael J. O'Neill/
MICHAEL J. O’NEILL
JUSTICE
120573F.P05
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
CKH FAMILY LIMITED PARTNERSHIP, On Appeal from the County Court at Law
LTS REALTY, LP, & WALDEMAR D. No. 4, Dallas County, Texas
MAYA, JR., Appellants Trial Court Cause No. CC-11-00382-D.
Opinion delivered by Justice O’Neill.
No. 05-12-00573-CV V. Justices Francis and Evans participating.
MGD/CCP ACQUISITION, LLC & GREG
KUBICEK, Appellees
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.
It is ORDERED that appellees MGD/CCP ACQUISTION, LLC & GREG KUBICEK
recover their costs of this appeal from appellants CKH FAMILY LIMITED PARTNERSHIP,
LTS REALTY, LP, & WALDMAR D. MAYA, JR.
Judgment entered this 14th day of October, 2013.
/Michael J. O'Neill/
MICHAEL J. O’NEILL
JUSTICE
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