Summit Industrial Construction LLC v. Utica East Ohio Midstream, LLC.

ACCEPTED
01-15-00300-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
8/3/2015 3:25:28 PM
CHRISTOPHER PRINE
CLERK

Case No. 01-15-00300-CV
________________________________
FILED IN
1st COURT OF APPEALS
IN THE COURT OF APPEALS FOR THE FIRST DISTRICTHOUSTON,
OF TEXAS TEXAS
_________________________________ 8/3/2015 3:25:28 PM
CHRISTOPHER A. PRINE
SUMMIT INDUSTRIAL CONSTRUCTION L.L.C. Clerk

Appellant

v.

UTICA EAST OHIO MIDSTREAM L.L.C.

Appellee
_________________________________

On appeal from the 190th Judicial District Court of Harris County, Texas
The Honorable Patricia J. Kerrigan Presiding
_________________________________

REPLY BRIEF OF APPELLANT
_________________________________

Oral Argument is Requested

R. Carson Fisk
State Bar No. 24043659

FORD NASSEN & BALDWIN P.C.
111 Congress Ave., Suite 1010
Austin, Texas 78701
512.236.0009 (telephone)
512.236.0682 (facsimile)
rcfisk@fordnassen.com
 TABLE OF CONTENTS

INDEX OF AUTHORITIES ................................................................................. iii 

GUIDE TO CITATIONS AND ABBREVIATIONS ............................................v 

REPLY TO UEOM FACTUAL MISSTATEMENTS .........................................1 

A.  The nature of Summit’s damages remains an open question and Summit
respectfully requests that the Court, to avoid any future confusion, not adopt
UEOM’s inaccurate description of Summit’s claim .......................................1 

B.  UEOM did, in fact, previously compensate Summit for delays......................3 

C.  Summit’s principal place of business is located in Georgia............................6 

D.  UEOM delayed Summit during the Project.....................................................7 

REPLY ARGUMENT .............................................................................................8 

I.   UEOM has broken its agreement with Ohio and has breached the Contract
regarding forum ...............................................................................................8 

II.   As the key issue in this appeal is forum, not choice of law, enjoining Summit
does not protect Texas public policy—it contravenes it ...............................12 

III.   The question of how a Texas court would rule on UEOM’s legal defense is
not resolved, therefore no ground for an injunction exists ............................16 

IV.   UEOM’s new arguments do not support a finding that Summit’s actions
were harassing and vexatious ........................................................................18 

V.   There is no threat to Texas jurisdiction .........................................................20 

VI.   A ruling in favor of UEOM will endorse the violation of law of a sister state,
is contrary to the public policy of both states, and is inconsistent with the
principle of comity .........................................................................................24 

VII.   Chapter 271 of the Texas Business and Commerce Code does not prohibit
consideration of other states’ laws.................................................................26 

i
VIII.  Texas has no true interest in this case ...........................................................27 

CONCLUSION.......................................................................................................28 

PRAYER .................................................................................................................29 

ii
 INDEX OF AUTHORITIES

Statutes

Texas

Tex. Bus. & Com. Code § 271.005(b) ..................................................................... 26

Tex. Bus. & Com. Code § 272.001(b) .................................................................9, 25

Tex. Civ. Prac. & Rem. Code § 15.11 ....................................................................... 9

Tex. Prop. Code § 53.154 .......................................................................................... 9

Tex. Prop. Code § 53.157 .......................................................................................... 9

Tex. Prop. Code § 53.175 .......................................................................................... 9

Tex. Prop. Code § 53.239 .......................................................................................... 9

Ohio

Ohio Revised Code 4113.62 ................................................... 8, 9, 12, 14, 22, 25, 26

Cases

Texas

Abor v. Black,
695 S.W.2d 564 (Tex. 1985) .................................................................................... 13

Amer. International Specialty Lines Ins. Co. v. Triton Energy Ltd.,
52 S.W.3d 337 (Tex. App.—Dallas 2001, pet. dism’d w.o.j.) ..........................18, 21

Christensen v. Integrity Ins. Co.,
719 S.W.2d 161 (Tex. 1986) .................................................................................... 22

Continental Oil & Cotton Co. v. E. Van Winkle Gin & Machine Works,
131 S.W. 415 (Tex. Civ. App. 1910, writ ref’d) ...................................................... 10

iii
Gannon v. Payne,
706 S.W.2d 304 (Tex. 1986) .................................................................................... 22

Golden Rule Ins. Co. v. Harper,
925 S.W.2d 649 (Tex. 1996) ........................................................................16, 22, 24

Great American Insurance Co. v. Laney,
488 S.W.2d 481 (Tex. Civ. App.—Fort Worth 1972) .......................................10, 22

Manufacturers Hanover Trust Co. v. Kingston Investors Corp.,
819 S.W.2d 607 (Tex. App.—Houston [1st Dist.] 1991, no writ) .......................... 18

Powell Elec. Sys. v. Hewlett Packard Co.,
356 S.W.3d 113 (Tex. App.—Houston [1st Dist.] 2011, no pet.) ............................. 2

Rouse v. Tex. Capital Bank, N.A.,
394 S.W.3d 1 (Tex. App.—Dallas 2011, no pet.) .............................................16, 27

Tenn. Gas Pipeline Co. v. Technip United States Corp.,
2008 Tex. App. LEXIS 6419 (Tex. App.—Houston [1st Dist.] Aug. 21, 2008, pet.
denied) ........................................................................................................................ 2

Zachry Constr. Corp. v. Port of Houston Auth.,
449 S.W.3d 98, 112 n. 66 (Tex. 2014)...............................................................10, 22

Ohio

Cartmell v. Rudolph Wurlitzer Co.,
18 Ohio Dec. 380 (Ohio C.P. 1907) .......................................................................... 9

Dot Systems, Inc. v. Adams Robinson Enterprises,
67 Ohio App. 3d 475 (Ohio App. 1990) .................................................................... 9

Michels Corp. v. Rockies Express Pipeline, LLC,
2015-Ohio-2218 (Ohio Ct. App., Monroe County June 5, 2015) ........................... 14

iv
 GUIDE TO CITATIONS AND ABBREVIATIONS

“Summit” means Summit Industrial Construction, LLC, the appellant.

“UEOM” means Utica East Ohio Midstream, LLC, the appellee.

“CR” means the Clerk’s Record followed by the appropriate page number.

“RR” means the Reporter’s Record followed by the appropriate page number.

“UEOM Brief” means Brief of Appellee Utica East Ohio Midstream L.L.C.
followed by the appropriate page number.

The “Contract” means collectively, the Master Service Agreement executed March
15, 2014, and Contract Work Order No. PO 52066, executed on March 11, 2014.
See CR 46-176.

“Project” means the construction of the Leesville cryogenic distillation plant in
Carroll County, Ohio, which is the subject of this action.

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 REPLY TO UEOM FACTUAL MISSTATEMENTS

In its brief, UEOM makes certain factual assertions and purports to “correct”

certain allegedly “incorrect assertions” contained in Summit’s brief. In several

instances, such attempts misstate facts, which warrant clarification. Those issues

are addressed briefly below:

A. THE NATURE OF SUMMIT’S DAMAGES REMAINS AN OPEN QUESTION AND
SUMMIT RESPECTFULLY REQUESTS THAT THE COURT, TO AVOID ANY
FUTURE CONFUSION, NOT ADOPT UEOM’S INACCURATE DESCRIPTION OF
SUMMIT’S CLAIM
UEOM incorrectly states that “Summit claims that it is entitled to

consequential damages….” UEOM Brief (p. 3). Summit’s position is and has been

that its damages are direct damages, which are outside the scope of Article 17.j.,

the waiver of consequential damages clause, of the Master Services Agreement

portion of the Contract. See e.g. CR 182 (“[a]s a direct and sole result of

[UEOM]’s changes and disruptions to the agreed Contract schedule, Summit’s

work was delayed and extended….”), 183 (“[t]his [request for equitable

adjustment] is the direct result of [UEOM]’s failure to execute its core contractual

obligations….”), 193 (“[t]hese delays directly resulted in the extension of Summit's

field overhead costs….”), 194 (“[t]hese differing site conditions, coupled with the

other delays and impacts to the above-ground and underground piping scopes of

work, directly resulted in significant craft disruption and productivity loss”), 224

(“[a]s a result, Summit’s direct costs of the work were increased. Summit is

1
entitled to an equitable adjustment of the Contract price to compensate it for these

direct cost increases”), 264 (“Summit requested payment for the direct damages it

incurred as a result”), 281 (same), 302 (same).

The parties’ dispute regarding whether all or any portion of the damages

sought by Summit in this case are or are not “consequential damages” within the

meaning of Article 17.j. has never been actually presented to, considered by, or

resolved by any court. The issue of whether damages are or are not consequential

is essentially a mixed question of law and fact, not susceptible of summary

adjudication. See e.g. Tenn. Gas Pipeline Co. v. Technip United States Corp., 2008

Tex. App. LEXIS 6419, *9-10 (Tex. App.—Houston [1st Dist.] Aug. 21, 2008, pet.

denied) (parties instructed to place all evidence concerning damages before the

jury, who would be instructed to determine whether a breach occurred and, if so, to

determine the award of damages without regard to whether such damages were

precluded under the contract, and the trial court would later determine which

damages were barred as a matter of law); Powell Elec. Sys. v. Hewlett Packard

Co., 356 S.W.3d 113, 116 (Tex. App.—Houston [1st Dist.] 2011, no pet.)

(following a jury trial, the appellate court determined whether such damages were

recoverable de novo).

UEOM’s characterization of Summit’s damages as consequential is both the

fundamental underpinning of UEOM’s argument that it will suffer harm if it is

2
required to litigate in Ohio and is also indicative of a fundamental flaw in the Trial

Court’s irreparable harm analysis, as discussed further in later portions of this

brief. This issue—whether or not all or any portion of Summit’s damages are

consequential—has not been addressed, much less resolved, by any court nor,

again, is it an issue that is susceptible of summary adjudication. Accordingly,

UEOM’s repeated characterization of Summit’s damages as consequential in

connection with this appeal, as if this were an established fact and without

clarifying that this is merely UEOM’s argument on the subject (let alone not the

position of Summit), is highly inappropriate and wholly inaccurate.

Summit disputes UEOM’s characterization of Summit’s claim, and requests

that the Court not adopt UEOM’s general and inaccurate description of Summit’s

damages when issuing its decision. The nature of Summit’s damages is an open

question, which should be determined at the appropriate time as the underlying

case progresses.

B. UEOM DID, IN FACT, PREVIOUSLY COMPENSATE SUMMIT FOR DELAYS
UEOM denies that Change Order No. 5 to the Contract compensated

Summit for delay damages. See UEOM Brief (p. 8). In fact, however, UEOM

paid Summit a substantial amount in delay damages pursuant to Change Order No.

5—damages that are virtually identical in nature to the damages UEOM now seeks

to characterize as consequential and contractually barred. Pursuant to Change

3
Order No. 5, UEOM also agreed with Summit to a related extension of the

Contract schedule.

UEOM states that it denied Summit’s Request for Equitable Adjustment

(“REA”) “on the basis that Summit sought contractually barred consequential and

indirect damages.…” UEOM Brief (p. 8). UEOM makes this statement without

clarifying that, in fact, (1) UEOM issued letters and conducted meetings with

Summit regarding its delay damage claims over a period of months without once

raising this defense, (2) UEOM has never responded in writing to the REA (outside

of formal legal pleadings), and (3) the first time UEOM ever raised any issue

respecting Article 17.j. of the Master Services Agreement portion of the Contract

in connection with this Project was in the petition filed in the underlying action

seeking declaratory relief, which was prepared by its lawyers.

UEOM seeks to resolve its inconsistent course of performance in this case

by (1) inaccurately stating that the sole purpose of Change Order No. 5 was merely

to address additional piping added to Summit’s scope of work and (2) inaccurately

implying that UEOM raised its current consequential damages defense

immediately following the assertion of Summit’s delay claims, rather than

accurately reporting that this defense was first raised by UEOM’s lawyers months

after the Project was completed. In fact, this defense was not raised until more than

six months after UEOM agreed and actually paid Summit delay damages in

4
connection with Change Order No. 5 and only after several months of written and

in-person pre-mediation negotiations concerning the additional delay claims

referenced in the REA. See CR 6; 179-181. Notably, UEOM obviously

understands that its factual contention is inaccurate, which is apparently why

UEOM does not actually deny paying Summit for delays and instead states:

“Nothing in the appellate record—save Summit’s bare allegations—supports

Summit’s contention that Change Order No. 5’s purpose was to compensate for

Utica-caused delays.” UEOM Brief (p. 8) (emphasis added). Change Order No. 5

is in the appellate record, however, as is the REA, and both confirm UEOM’s

course of performance.

Change Order No. 5, by its terms, involved a significant payment to Summit

and postponed the mechanical completion date of the Project. See CR 180. The

REA, in detail, further describes the role of Change Order No. 5 in compensating

Summit for delays. See e.g. CR 185 (referencing “the acceleration/recovery plan

reflected in Change Order No. 5” and “[t]he later-negotiated acceleration/recovery

plan, Change Order No. 5….”); 189 (noting that “[t]he delay associated with this

late-added scope was addressed in Contract Change Order No. 5….” and “Change

Order 5 represented an acknowledgement of critical delay by [UEOM], and was an

attempt by the parties to ‘re-baseline’ the Project execution plan to account for the

delays which had occurred in the form of a recovery/acceleration plan”).

5
C. SUMMIT’S PRINCIPAL PLACE OF BUSINESS IS LOCATED IN GEORGIA
UEOM attempts to characterize Summit’s Texas office as its principal place

of business or “main office.” See UEOM Brief (p. 8-10). Summit’s principal place

of business is its office in Alpharetta, Georgia. See CR 280. The personnel

managing Summit’s Pasadena, Texas office take direction from the Alpharetta

office, which is the location of Summit’s President and Chief Executive Officer

and other top executives. See CR 280. Summit’s Texas office is a satellite office.

See CR 280. UEOM’s “proof” that the Texas office was Summit’s principal place

of business or “main office” consists of (1) the fact that Summit prominently

displayed that it has a Texas office in marketing materials and (2) the fact that its

Project Manager referenced the Pasadena, Texas office in his email signature block

in late 2014, near the end of the Project. See UEOM Brief (p. 9-10). UEOM

dismisses the sworn affidavit of Summit’s President and Chief Executive Officer,

favoring marketing materials and an email signature block, but fails to

acknowledge that UEOM did not object to the affidavit in relation to the temporary

injunction hearing.

With respect to the marketing materials, Summit is a growing industrial

construction company that recently established its first permanent satellite office in

a state that has significant industrial construction developments. See CR 263.

Bringing attention to this expansion via its website is basic marketing. With respect

6
to Summit’s Project Manager, UEOM fails to report that prior to August 2014, his

office address was Alpharetta, Georgia. In fact, in June 2014 he signed the cover

letter for Change Order No. 5, which solely identified Summit’s Alpharetta,

Georgia address. See CR 179. This individual was transferred to the Texas office

after the start but before the completion of the Project. To the extent that any of

this information is even relevant to the resolution of this dispute, UEOM’s factual

assertions are inaccurate.

D. UEOM DELAYED SUMMIT DURING THE PROJECT

UEOM claims that there is no evidence “[UEOM] did not timely perform

certain work that Utica was allegedly responsible for completing before Summit’s

work could begin.” UEOM Brief (p. 11). It is unclear to Summit why UEOM

raises this issue, which is not relevant to this appeal, but it is notable that UEOM

does not deny that it delayed Summit. The reason is that UEOM, in fact, did not

provide materials, equipment, and predecessor work per the agreed Contract

schedule, and UEOM knows it. Contrary to UEOM’s assertions, this delay is

evidenced by (1) promised delivery dates for owner furnished materials contained

in Change Order No. 5 and the original Project schedule, as compared to (2) the

actual delivery dates referenced in the REA, all of which are in the appellate

record. See e.g. CR 180-181; 182-183.

7
 REPLY ARGUMENT

I. UEOM HAS BROKEN ITS AGREEMENT WITH OHIO AND HAS BREACHED THE
CONTRACT REGARDING FORUM

In its brief, UEOM alleges over and over again that Summit is attempting to

“rewrite” or “subvert” the Contract. See e.g. UEOM Brief (p. 3, 5, 12, 23, 31, 32,

47). In fact, however, there is only one party to this dispute that has violated any

agreement, and it is UEOM. Setting aside the Contract obligations UEOM failed

to perform, there is a bigger picture agreement concerning this Project that UEOM

does not want to discuss. UEOM agreed with the State of Ohio that it would

subject itself to Ohio law and to an Ohio forum in return for the benefits Ohio law

provides, both when it registered with the State of Ohio to do business in the state,

and again when it sought and obtained a permit to construct the Project in Ohio.1 It

is notable that this Contract was entirely performed in Ohio, this Project and its

related developments operate exclusively within the Ohio, and the Project is a

natural gas facility that exclusively utilizes the natural resources of Ohio. See CR

280.

Ohio Revised Code §4113.62(D)(2) unambiguously requires litigation

resulting from a contract for construction of a Project within the state of Ohio to be

1
Notably, UEOM was not registered to do business in the State of Texas with the Texas
Secretary of State’s Office until after Summit informed the Trial Court of this fact in Summit’s
Motion to Dismiss. Compare CR 300 (noting in a motion filed by Summit on March 2, 2015 that
“Utica Ohio is not registered with the Texas Secretary of State to do business in the State of
Texas”) with CR 517 (showing that UEOM’s Application for Registration of a Foreign Limited
Liability Company was not filed until March 5, 2015).

8
litigated in Ohio pursuant to Ohio law. See ORC Ann. § 4113.62(D)(2). Texas has

codified a virtually identical public policy. See Tex. Bus. & Com. Code §

272.001(b). Similarly, the Ohio Mechanic’s lien statute, just like the statutes in

Texas and other states, requires that litigation to foreclose a mechanic’s lien be

brought where the property is located. See CR 298. Texas mechanic’s lien law is

in accord. See e.g. Tex. Prop. Code §§53.154, 53.157(2), 53.175, 53.239; Tex. Civ.

Prac. & Rem. Code §15.11.

The underlying declaratory judgment action, UEOM’s anti-suit injunction,

and this appeal really involve a single issue—UEOM’s ongoing refusal to follow

the procedural laws applicable to this dispute, and a single question—whether the

courts of Texas will endorse and facilitate UEOM’s misconduct or not.

It is axiomatic that a foreign corporation that voluntarily elects to conduct

business in a particular state agrees to do so in compliance with the applicable laws

of the state or states within which it conducts business. This fundamental principle

was expressly observed by Ohio courts as early as 1907:

Foreign corporations may contract in this state within the scope of
their powers, and subject to the laws of this state, in the same manner
that domestic corporations and individuals resident of this state or of
other states may.

Cartmell v. Rudolph Wurlitzer Co., 18 Ohio Dec. 380, 386 (Ohio C.P. 1907)

(emphasis added); see also Dot Systems, Inc. v. Adams Robinson Enterprises, 67

9
Ohio App. 3d 475, 481 (Ohio App. 1990) (“When a foreign corporation engages in

business in a state, that corporation may be appropriately subjected to the laws of

the state imposing conditions or restrictions upon its doing business within the

limits of such state.”) Again, Texas law is in accord. Continental Oil & Cotton

Co. v. E. Van Winkle Gin & Machine Works, 131 S.W. 415, 416 (Tex. Civ. App.

1910, writ ref’d) (“It is settled that the state has the right to prescribe conditions to

be complied with before a foreign corporation can do business in this State.”)

As UEOM tacitly admits, it is a sophisticated party and conducts its business

with the advice of counsel. See UEOM Brief (p. 21). In fact, UEOM’s in-house

attorney, Laranne Breagy, is the person who signed the Contract for UEOM. See

CR 32. Texas has long recognized the following principle regarding contracts:

As a general rule, it may properly be said that laws in existence at the
time and place of making of a contract, as well as laws then existing at
the place where the agreement is to be performed, constitute an
integral part of the contract, just as if they had been
expressly incorporated therein. Indeed, it is conclusively presumed
that the parties to the contract knew the law and contracted
with reference to it, and the agreement will therefore be construed
with regard to such laws as were then in existence.

Great American Insurance Co. v. Laney, 488 S.W.2d 481, 485-86 (Tex. Civ.

App.—Fort Worth 1972), rev’d on other grounds, 498 S.W. 2d 674 (Tex. 1973)

(quoting 13 Tex. Jur. 2d, Contracts, Sec. 165) (emphasis added); see also Zachry

Constr. Corp. v. Port of Houston Auth., 449 S.W.3d 98, 112 n. 66 (Tex. 2014)

10
(citing City of Houston v. Williams, 353 S.W.3d 128, 141 (Tex. 2011) and Wessely

Energy Corp. v. Jennings, 736 S.W.2d 624, 626 (Tex. 1987)).

Literally all of UEOM’s actions leading up to and in connection with this

litigation have been for the purpose of avoiding the Ohio forum to which it

voluntarily consented and chose to do business in. First, after receiving Summit’s

REA, UEOM denied responsibility, but proposed mediation in a successful attempt

to delay the filing of a complaint by Summit. See CR 281. Then, despite an

agreement being reached on the timing and other aspects of mediation, UEOM

filed its Texas declaratory judgment action. Compare CR 281 (noting that details

as to the mediation were reached on January 21, 2015 and mediation was

scheduled for February 17, 2015) with CR 6 (showing UEOM’s petition for

declaratory relief being filed on January 21, 2015). UEOM seeks no damages in

its Texas action, and did not serve the petition until just before the mediation. See

CR 10-11, 12. Next, UEOM obtained an ex parte temporary restraining order and

then immediately sought and obtained an injunction of Summit’s properly filed

Ohio action. Later, UEOM sought an extension of time to answer the Ohio action.

See CR 16-24. The reason for UEOM’s conduct is clear: UEOM wants to avoid, at

all costs, the Ohio jurisdiction it consented to when it elected to do business in

Ohio and when it contracted with Summit. It has done this while essentially

pretending that the Contract includes a forum selection clause requiring litigation

11
in Texas while, in fact, no such clause exists in any form.

UEOM is now brazenly seeking validation of its misconduct from the Texas

courts by arguing that it is Summit who is not following the Contract. The Court

should not endorse UEOM’s misconduct. Summit respectfully submits that

UEOM’s agreement with the State of Ohio, standing alone, is sufficient reason to

dissolve the injunction. UEOM chose to do business in Ohio, and it committed

breaches of contract in Ohio, made fraudulent representations in Ohio, failed to

pay for work performed in Ohio, and a lien has been filed on its property in Ohio.

UEOM’s election—and its conduct—make pursuit of claims in Ohio entirely

proper. Summit further submits that when UEOM’s agreement with the State of

Ohio as a permitted foreign corporation is coupled with its agreement with Summit

to accept Ohio as the forum and applicable law for the resolution of this dispute by

virtue of the incorporation of Ohio Revised Code §4113.62 into the Contract by

operation of law, dissolution of the temporary injunction and dismissal of UEOM’s

underlying declaratory judgment action is the only appropriate remedy.

II. AS THE KEY ISSUE IN THIS APPEAL IS FORUM, NOT CHOICE OF LAW, ENJOINING
SUMMIT DOES NOT PROTECT TEXAS PUBLIC POLICY—IT CONTRAVENES IT

UEOM acknowledges that the Contract does not contain a forum-selection

provision: “The contract does not have an explicit forum-selection clause.”

UEOM Brief (p. 4). In spite of the absence of a forum-selection clause within the

four-corners of the Contract, and despite applicable law and public policy,

12
incorporated by operation of law into the Contract, that mandates that litigation

arising out of the Contract be brought in Ohio, UEOM convinced the Trial Court to

effectively insert a Texas forum requirement and seeks to have this Court affirm

that ruling. UEOM uses its “first-filed” status as a declaratory judgment plaintiff to

bolster its request, despite the fact that UEOM is not, in reality, the actual plaintiff

in the case.2

UEOM argues that Summit’s Ohio action is a threat to Texas’ public policy

of protecting freedom of contract and enforcing contracts as written. To that end,

the order granting the anti-suit injunction, which was drafted by UEOM’s attorney,

states:

If Defendant is permitted to prosecute its Ohio lawsuit and seek
construction of the contract under Ohio law, despite the express terms
of the contract requiring construction under Texas law, their actions
are likely to result in immediate and irreparable harm to Plaintiff by
denying Plaintiff the benefit of key provisions bargained for in their
contract, and used in many other similar contracts to which Plaintiff is
a party. The probable injury that would be suffered through Plaintiff’s
loss of the benefit of these express rights under the contract is
imminent and would be an irreparable injury for which Plaintiff would
have no adequate legal remedy. Further, such actions would evade and
be a violation of Texas’s public policy interest in enforcing a contract
as written to preserve the freedom of contract. CR 668.

2
In Abor v. Black, 695 S.W.2d 564, 566 (Tex. 1985), the Texas Supreme Court supported the
dismissal of a declaratory judgment action where the suit sought a declaration of non-liability
and where the declaratory judgment suit, “deprived the real plaintiff of the traditional right to
choose the time and place of suit.”

13
The implication of this holding is that if Summit had filed first in Ohio but taken

the position that Texas law applied, then Summit’s actions would not have been an

evasion. Ultimately the outcome would have been the same; the Ohio court would

have followed Ohio Revised Code §4113.62(D) and applied Ohio law as required

by the statute. See e.g. Michels Corp. v. Rockies Express Pipeline, LLC, 2015-

Ohio-2218, *P25 (Ohio Ct. App., Monroe County June 5, 2015) (confirming that

Ohio Revised Code §4113.62 trumps a contractual choice of law clause).

Moreover, the potential application of Ohio law to this dispute is a function of

law—law to which UEOM voluntarily submitted—and not any improper action on

the part of Summit. Therefore, the real issues in this appeal are forum, comity,

and UEOM’s agreement to be bound by the laws of Ohio with respect to its actions

as a foreign corporation operating within the borders of Ohio.

Even if the Ohio statute is not considered and, further, even if UEOM’s

argument that this appeal should be decided solely on the basis of the boilerplate

choice of law provision in the Contract is followed, Summit still should not be

enjoined from pursuing legal remedies in Ohio because there was no agreement to

litigate in Texas. UEOM repeatedly claims Summit is attempting to rewrite the

Contract or use the Ohio court to rewrite the Contract. See e.g. UEOM Brief (p.

12, 13, 23, 26, 31, 35). UEOM refers to itself as a “sophisticated part[y] receiving

the advice of counsel”—counsel that executed the Contract, counsel that was

14
presumably involved in registering UEOM with the Ohio Secretary of State, and

counsel that was presumably aware of applicable Ohio law. See UEOM Brief (p.

24); CR 173. But while UEOM positions itself in this case as a champion of the

sanctity of freedom of contract, UEOM generally ignores the fact that it, as a

sophisticated party that operates under the advice of counsel, neither bargained for

nor included a forum selection clause in the Contract.

As UEOM admitted in the March 16, 2015 hearing, the Master Service

Agreement is UEOM’s standard form; UEOM drafted it. See RR 50:1-23. Despite

the absence of a forum-selection clause in its own contract form, UEOM has

sought, and been granted, an anti-suit injunction on the grounds that Summit’s

Ohio lawsuit, brought in accordance with applicable law (statutorily mandated in

this case) which was, in accordance with Texas law, incorporated by reference into

the Contract, is an evasion of Texas public policy supporting freedom of contract.

The ironic upshot of UEOM’s position is that UEOM is requesting that this

Court rewrite the Contract to include a forum-selection clause, or to alternatively

hold that, despite Texas’s recognition of the difference between choice of law and

forum, a choice of law clause acts to limit otherwise available or required forums.

UEOM is requesting this remedy without providing any legal precedent for such a

decision and in the face of the public policy of both Ohio and Texas, both of which

unambiguously declare that construction disputes should be litigated in the state in

15
which the project is located and in accordance with the law of the state where the

project is located, despite any contract provisions to the contrary. Moreover,

UEOM’s position gives absolutely no credence to the concept of comity, despite

the Texas Supreme Court’s statement that “if the principle of comity is to have any

application, a single parallel proceeding … cannot justify issuing an anti-suit

injunction." Golden Rule Ins. Co. v. Harper, 925 S.W.2d 649, 651-652 (Tex. 1996)

(citing Gannon v. Payne, 706 S.W.2d 304, 307 (Tex. 1986)). Moreover, as stated

in the Rouse decision, “In accordance with the principle of comity, Texas will

recognize the laws of other states and, in return, will expect those other states to

afford the same treatment to Texas.” Rouse v. Tex. Capital Bank, N.A., 394

S.W.3d 1, 7 (Tex. App.—Dallas 2011, no pet.) (citing K.D.F. v. Rex, 878 S.W.2d

589, 593-94 (Tex. 1994)). UEOM’s position is contrary to the policies it purports

to champion, the policies established by the Texas legislature, and the policies

established by the Texas Supreme Court and appellate courts.

III. THE QUESTION OF HOW A TEXAS COURT WOULD RULE ON UEOM’S LEGAL
DEFENSE IS NOT RESOLVED, THEREFORE NO GROUND FOR AN INJUNCTION
EXISTS

UEOM’s claim that it will be prejudiced is a legal conclusion based on

issues that have not been factually developed, and determinations that the Texas

court has not yet made. Specifically, UEOM claims that Summit’s damages are

consequential under Texas law and are, therefore, not recoverable pursuant to

16
Article 17.j. of the Master Services Agreement portion of the Contract. See CR 9,

10. UEOM’s position is disputed, and this issue has not been presented, briefed,

ruled upon or otherwise established. See CR 259. That alone implies an abuse of

discretion by the Trial Court, taking all of UEOM’s other disputed positions at face

value, because absent a finding that UEOM would receive a different result under

Ohio law, there is no evidence that an irreparable miscarriage of justice or

irreparable harm will occur. As UEOM noted in its appellate brief, there can be no

harm in applying one state’s law if there is no conflict with another state’s law. See

UEOM Brief (p. 34). Without a legal determination of whether or not the

damages sought in the REA are excluded by the Contract’s general consequential

damages waiver under Texas law,3 there was no evidence before the Trial Court

that UEOM would suffer an irreparable harm.

UEOM bears the burden to establish irreparable harm in support of its

request for an injunction but it demonstrably did not carry that burden, even if this

Court accepts UEOM’s other erroneous arguments. A conjectural injury is not

enough. As this Court has stated:

The law is well settled that a trial court abuses its discretion in
granting a temporary injunction unless it is clearly established by the
facts that one seeking such relief is threatened with an actual
irreparable injury if the injunction is not granted. Moreover, an

3
UEOM’s position appears to be that Summit’s damages are recoverable under Ohio law,
whether or not Summit’s damages are ultimately characterized as consequential or direct.

17
 injunction will not lie to prevent injury that is purely conjectural.

Manufacturers Hanover Trust Co. v. Kingston Investors Corp., 819 S.W.2d 607,

611 (Tex. App.—Houston [1st Dist.] 1991, no writ). UEOM failed to meet its

burden and, accordingly, the Trial Court abused its discretion in issuing the

temporary injunction.

IV. UEOM’S NEW ARGUMENTS DO NOT SUPPORT A FINDING THAT SUMMIT’S
ACTIONS WERE HARASSING AND VEXATIOUS

In attempting to support the finding of harassing and vexatious action by

Summit, UEOM relies upon a single aspect of the Triton decision implying that the

Texas defendant’s attempt in that case to proceed to summary judgment very

quickly after it filed suit in California and its refusal to grant the Texas plaintiff

additional time to “develop the case” was the basis for the Court’s finding of

harassing and vexatious behavior. See UEOM Brief (p. 36). However, in the very

next sentence of its opinion, the Court in Triton focused on the fact that the Texas

defendant had violated its contract by bringing the second California suit in

contravention of the parties’ contractual forum selection clause: “The trial court

found that rather than submitting to the jurisdiction of the Texas court and abiding

by its decision, as the insurance policy required, AISLIC filed suit in California

and proceeded to race to judgment there.” Am. Int’l Specialty Lines Ins. Co. v.

Triton Energy Ltd., 52 S.W.3d 337, 342 (Tex. App.—Dallas 2001, pet. dism’d

18
w.o.j.). There is no express forum selection clause in this Contract, a fact which

distinguishes this case from the facts presented in the Triton and Rouse decisions

relied upon so heavily by UEOM.

Moreover, Summit has not done anything to accelerate the Ohio action,

despite the fact that Ohio is the proper forum, and has instead merely notified the

Ohio court of UEOM’s injunction so as to avoid an involuntary dismissal for want

of prosecution. Instead of pursuing relief in Ohio, Summit has pursued this appeal.

Summit’s notice of temporary restraining order filed with the Ohio court was

neither harassing nor vexatious, by any reasonable standard. UEOM obtained its

ex parte temporary restraining order in the underlying case on February 19, 2015.

See CR 15. Weeks later, on March 13, 2015, neither UEOM nor the Trial Court

had informed the Ohio court of the fact that Summit had been enjoined from

pursuing the Ohio action. Summit’s local counsel in Ohio, having duties to that

court independent of its duties to Summit, filed the notice of temporary restraining

order informing the Ohio court of what had occurred while asking absolutely

nothing of the Ohio court. See RR (Ex. 14). UEOM takes the position that simply

informing the Ohio court as to the events occurring in the Texas action (and even

the existence of the Texas action), when UEOM was unwilling to do so, amounts

to harassing and vexatious conduct. UEOM’s concern with and objection to having

the Ohio court even informed of the existence of the injunctive relief sought and

19
obtained by UEOM merely illustrates the extent to which UEOM is prepared to go

to avoid the Ohio forum it is legally committed to.

Indeed, if Summit’s notice to the Ohio court informing it that Summit was

enjoined from proceeding was deemed to be harassing and vexatious and a

violation of the temporary restraining order, particularly under circumstances in

which UEOM did not notify the Ohio court itself, the result would be an incredibly

unjust situation wherein UEOM could file any request or motion in Ohio that it

wanted, Summit would be precluded from responding by the injunction obtained

by UEOM, and Summit’s counsel would be exposed to potential contempt claims

in Texas for responding and malpractice claims in Ohio for not responding. This

scenario could also result in Summit’s lien rights and other causes of action being

dismissed with prejudice for want of prosecution. This result is neither necessary

nor desired, even in the very narrow circumstances where an anti-suit injunction is

warranted; circumstances that are not present in this case. Summit’s conduct

leading up to and in addressing the temporary injunction has been anything but

harassing and vexatious.

V. THERE IS NO THREAT TO TEXAS JURISDICTION

UEOM urges the Court to follow the conclusions of Rouse and Triton

without recognizing the major differences between those cases and this case, most

importantly (1) the fact that both cases involved second-filed lawsuits where the

20
forum for disputes was governed by contract, and (2) the fact that neither of those

cases involved a party filing suit in Texas in violation of another state’s law to

which it knowingly and voluntarily consented (to its benefit), as UEOM did here.

In the section of the Triton opinion addressing threat to jurisdiction, the

Triton court specifically focused on the violation of the contract’s forum selection

clause, stating:

The trial court found that AISLIC had undercut its contractual
promise by pursuing the California Lawsuit, and concluded that
having made that agreement and them having gotten here first,
whether they should or shouldn’t have, that’s it. And you can’t
undercut that by running off to another forum. I think that this -- the
other case therefore becomes a threat to my jurisdiction. It wouldn’t
otherwise be, but it does become one.

Triton, 52 S.W.3d at 342. The court specifically tied the contractual promise

respecting forum to the threat to jurisdiction. See Triton, 52 S.W.3d at 342.

There was no contractual promise by Summit to submit to a forum of

UEOM’s choosing in this case. And despite UEOM’s repeated attempts to portray

Summit’s Ohio action as “seeking” to have the case adjudicated using Ohio law,

the fact is that the potential application of Ohio law to this dispute is a function of

law—law to which UEOM voluntarily submitted—and not any action on the part

of Summit. Summit has not undercut any agreement. By contrast, UEOM has

undercut its agreement with the State of Ohio to subject itself to Ohio law, and also

undercut its agreement with Summit when it filed the underlying Texas action

21
before mediation that it proposed and later when it sought to restrain Summit from

proceeding in the required Ohio forum.

In fact, as previously established, Texas courts adhere to the principle that

the law of the place where a contract is to be performed is incorporated into and

forms a part of a contract as if it was expressly set forth in the agreement. See

Laney, 488 S.W.2d at 485-86; Zachry, 449 S.W.3d at 112 n. 66. Applying this

well-established Texas law, the decisions in Rouse and Triton actually mandate a

decision in favor of Summit, as it is UEOM that is violating the Contract’s implicit

forum-selection provision as established by Ohio Revised Code §4113.62.

UEOM’s entire appellate argument respecting these two decisions, when

considered in conjunction with the fact that Ohio Revised Code §4113.62 is

incorporated into the Contract by operation of law, mandates a ruling in favor of

Summit and a dismissal of the Texas action. The only court whose jurisdiction has

been threatened is the Ohio court.

Moreover, the idea that the Ohio court could, without any indication that it

intends to, attempt to issue pre-emptive rulings on issues before the Texas court

could adjudicate them has been rejected by the Texas Supreme Court as a threat to

jurisdiction in Gannon, Christensen, and Golden Rule, which all involved second-

filed parallel actions. See Gannon v. Payne, 706 S.W.2d 304, 307 (Tex. 1986);

Christensen v. Integrity Ins. Co., 719 S.W.2d 161, 163-164 (Tex. 1986); Golden

22
Rule Ins. Co. v. Harper, 925 S.W.2d 649, 651 (Tex. 1996). By contrast, in Rouse,

the aggrieved defendant in the second-filed Oklahoma suit filed a motion to

dismiss and, later, a motion for judgment on the pleadings or, in the alternative, a

stay of claims, both of which were based on the contract forum-selection clause

and both of which were denied by the Oklahoma court. Based on these facts, the

Rouse court stated: “[D]espite TCB’s requests, the Oklahoma trial court and the

Oklahoma Supreme Court declined to stay or abate the claims against TCB in the

Oklahoma suit. Because of this refusal to act, the trial court could reasonably

conclude that Oklahoma was not a cooperative jurisdiction.” Rouse, 394 S.W.3d at

8 (emphasis added).

Notably, all of this analysis turned on the presence of a forum-selection

clause requiring that suit be brought in Texas. In this case, the only forum-selection

clause is imposed by law and mandates that Ohio is the proper forum. There is no

forum-selection clause pursuant to which the parties agreed to a Texas forum.

Moreover, the Ohio court has taken no action in this case similar to that

taken by the Oklahoma court in Rouse. Since UEOM filed its answer, UEOM has

made no attempts to have the case dismissed or stayed. The Ohio case was filed in

early February 2015, and UEOM filed its answer on or around March 20, 2015.

Since then the only communications from the Ohio court to the parties has been in

an attempt to set up an initial status conference, which would occur at the earliest

23
sometime in August 2015. UEOM’s own lack of action in Ohio and the speed of

the court in the Ohio action are not consistent with UEOM’s argument that there is

a threat to jurisdiction.

The Supreme Court of Texas has made short work of all three of the anti-suit

injunction cases it has heard in the past thirty years. In the most recent case,

Golden Rule, the plaintiff in the first-filed Texas action involved a Texas widower

suing the defendant insurance company to recover the costs of the deceased

spouse’s medical care in Texas. See Golden Rule, 925 S.W.2d at 650. The

insurance company, after first attempting to change venue within the state, filed a

declaratory judgment action in Illinois, requiring the plaintiff-widower to engage in

duplicative litigation. See Golden Rule, 925 S.W.2d at 650. Even under the much

more compelling facts of Golden Rule (no statute requiring litigation in a particular

state, no voluntary submission to Illinois law by the plaintiff-widower, no contract

performance in Illinois), the Texas Supreme Court overturned the anti-suit

injunction against the insurance company in a brief, three-page decision based

upon comity considerations; considerations UEOM simply ignores.

VI. A RULING IN FAVOR OF UEOM WILL ENDORSE THE VIOLATION OF LAW OF A
SISTER STATE, IS CONTRARY TO THE PUBLIC POLICY OF BOTH STATES, AND IS
INCONSISTENT WITH THE PRINCIPLE OF COMITY

Both Ohio and Texas recognize their respective state’s interest in having

construction disputes litigated locally, and have determined that this public policy

24
is important enough to statutorily codify. See ORC Ann. § 4113.62(D)(2); Tex.

Bus. & Com. Code § 272.001(b). Ohio Revised Code §4113.62 mandates UEOM

bring its action in Ohio. UEOM exists for the sole purpose of doing business in

Ohio, as its name (Utica East Ohio Midstream) suggests. It owns property in Ohio,

contracted to build facilities in Ohio, and its sole business purpose is to avail itself

of and profit from Ohio natural resources. As an attorney-represented company,

UEOM knew or should have known about Ohio Revised Code §4113.62 at the

time its attorney executed the Contract and at the time it registered to do business

as a foreign corporation in Ohio. When disputes arose and Summit submitted its

REA, UEOM promptly suggested mediation. Then prior to mediation, and despite

claiming no actual damages, UEOM surreptitiously filed a declaratory judgment

action in Texas, and later moved to enjoin Summit’s properly filed Ohio action.

This whole case is a calculated attempt by the non-aggrieved party to avoid

jurisdiction it is legally required to submit to and which it voluntarily agreed to

submit to.

There is no precedent supporting UEOM’s desired outcome: specifically, an

anti-suit injunction imposed by a Texas court to facilitate attempts of a foreign

corporation to avoid the jurisdiction of the courts of another state to which the

foreign corporation voluntarily submitted. It would be poor policy, wholly

inconsistent with the concept of comity, for Texas courts to facilitate and endorse

25
such actions. The result would be to encourage parties to race to the courthouse

and to encourage other state courts and litigants to thwart the Texas public policy

set forth in Chapter 272 of the Texas Business and Commerce Code. It would also

open the door to other states treating Texas in a similar manner.

UEOM attempts to support its stance with inconsistent positions. In its

brief, UEOM characterizes forum selection as merely procedural: all it does is “set

a ZIP code.” UEOM Brief (p. 30). Yet the entire basis of the irreparable harm

UEOM claims it would suffer in the absence of the anti-suit injunction would

result from litigating in the Ohio forum. UEOM also presumes, apparently, that an

Ohio court is simply incapable of correctly determining the controlling law, and

then apply it correctly. The fact is, however, that any claim that the loss of the

benefit of the choice of law clause would harm UEOM if litigation in Ohio were to

continue is a function of law that UEOM voluntarily submitted itself to, not action

by Summit. See ORC Ann. § 4113.62(D)(1).

VII. CHAPTER 271 OF THE TEXAS BUSINESS AND COMMERCE CODE DOES NOT
PROHIBIT CONSIDERATION OF OTHER STATES’ LAWS

UEOM suggests that Chapter 271 precludes this Court from considering any

public policy-based outcome in favor of Summit. See UEOM Brief (p. 23).

However, Ohio Revised Code §4113.62 is a law, not merely a public policy. Even

UEOM, while championing the cause of freedom of contract, acknowledges that

other statutes, particularly Chapter 272 of the Texas Business and Commerce

26
Code, override the right of freedom of contract protected in Chapter 271. See

UEOM Brief (p. 23) (recognizing that “Chapter 272 is an exception to Chapter

271….”). Chapter 271 does not prohibit the consideration of other Texas statutes

regarding choice-of-law, nor does it prohibit consideration of sister states’ statutes

regarding choice-of-law. Recognizing the statutes of other states is consistent with

the principle of comity as stated in the Rouse decision: “In accordance with the

principle of comity, Texas will recognize the laws of other states and, in return,

will expect those other states to afford the same treatment to Texas.” Rouse, 394

S.W.3d at 7.

VIII. TEXAS HAS NO TRUE INTEREST IN THIS CASE

Finally, Texas has no true interest in this case, save its interest in preserving

and protecting the public policies established by Chapter 272 of the Texas

Business and Commerce Code. The parties did not contract for Texas—or any

state—as the forum for dispute resolution. UEOM has not established that the

application of Ohio law will result in a different result than the application of

Texas law in this case. More fundamentally, UEOM knowingly agreed to the

application of Ohio law and to an Ohio forum when it contracted for construction

of a project located in Ohio. Summit filed its affidavit for mechanic’s lien in Ohio,

as it was required to do, on property located in Ohio. See CR 233-234. UEOM, as

alleged by Summit, made fraudulent representations in connection with the

27
execution of Change Order No. 5, such representations being made in Ohio,

Colorado, and Georgia. See CR 43, 282. While Summit has a satellite office in

Texas, and UEOM subcontracted management of construction to another company

that does work in Texas, the entirety of the contracted for work occurred in Ohio

and the facility will operate in Ohio utilizing Ohio employees, will generate Ohio

(not Texas) taxes, and will develop, consume and sell Ohio natural resources.

Trying the case in Texas imposes a burden on Texas taxpayers with no

corresponding benefit.

CONCLUSION

The Trial Court has determined that, for a project and transaction that had no

real connection to Texas with no mandated forum contained in the applicable

contract, Texas is the sole appropriate forum, even when the wrongful acts

complained of and resulting damages occurred outside of Texas and the wronged

party was required by law to file suit elsewhere. Summit did what it was required

to do—file suit in Ohio, where the construction project was located, which was

done pursuant to a codified public policy, also shared by Texas, that provides that

disputes involving construction projects should be resolved within the borders of

the state where the project is located. Summit’s interest in litigating its contract,

tort, statutory, and equitable claims in the state where UEOM’s acts and omissions

occurred and the Project is located is consistent with applicable law, public policy,

28
and common sense. There was no threat to the Trial Court’s jurisdiction, no

evasion of important public policy by Summit, no multiplicity of suits, and no

vexatious or harassing litigation conduct. The totality of circumstances negates the

possibility that a clear equity justified the Trial Court’s issuance of the temporary

injunction. In short, the Trial Court abused its discretion in issuing the temporary

injunction. As such, the ruling should be reversed.

PRAYER

Summit requests that this Court reverse the order of the Trial Court and

render an order denying Plaintiff Utica East Ohio Midstream, L.L.C.’s Application

for Anti-Suit Injunctive Relief, and Summit prays for such other and further relief at

law and equity to which it may show itself justly entitled.

Respectfully submitted,

FORD NASSEN & BALDWIN, P.C.
111 Congress Ave., Suite 1010
Austin, Texas 78701
512.236.0009 (telephone)
512.236.0682 (facsimile)
rcfisk@fordnassen.com

By: /s/ R. Carson Fisk
R. Carson Fisk
State Bar No. 24043659

Attorney for Appellant

29
 CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing has been served
pursuant to the Texas Rules of Appellate Procedure via the electronic filing
manager, if the email address of the party or attorney to be served is on file with
the electronic filing manager, or via first class mail, if the email address of the
party or attorney to be served is not on file with the electronic filing manager to the
following person(s) on August 3, 2015:

Counsel for Utica East Ohio Midstream, L.L.C.
Nicholas D. Stepp, Scott D. Marrs, Andrew B. McGill, and Scott R. Davis
Beirne Maynard and Parsons L.L.P.
1300 Post Oak Blvd., Suite 2500
Houston, Texas 77056

By: /s/ R. Carson Fisk
R. Carson Fisk

CERTIFICATE OF COMPLIANCE

In compliance with Rule 9.4(i)(3) of the Texas Rules of Appellate Procedure, I
hereby certify that there are 7,483 words in the foregoing document.

By: /s/ R. Carson Fisk
R. Carson Fisk

30