In Re ADM Investor Services, Inc.

HOYLE, Justice,

dissenting.

I respectfully dissent. Because ADM’s conduct did not substantially invoke the judicial process, ADM did not waive enforcement of the forum selection clause. Thus, Prescott failed in her burden to establish waiver by ADM. Similarly, Prescott failed to establish that the forum selection clause should not be enforced because it is unreasonable or unjust or invalid for any other reason. The trial court then had but one proper course of action, which was to grant ADM’s motion to dismiss. Because the trial court did not proceed in that manner, the trial court abused its discretion. Therefore, I would grant ADM’s petition for writ of mandamus and order the trial court to vacate its order of February 11, 2008 in which it denied ADM’s motion to dismiss without prejudice and instead issue an order granting ADM’s motion to dismiss.

Background

Prescott, along with Lowther, opened a commodity account with ADM. In early 2004, ADM closed Prescott’s commodity account because it had a significant deficiency. As a result of the deficiency in Prescott’s account, ADM collected in excess of $100,000 from Texas Trading, because Texas Trading was responsible for the debt in its role as introducing broker. Texas Trading then filed suit against Prescott in Hopkins County, Texas. ADM was not a party to this suit. Texas Trading obtained a judgment against Prescott.

On September 11, 2007, Prescott filed suit against ADM and Texas Trading in Rains County. Texas Trading filed a motion to transfer venue and an answer. On October 18, 2007, ADM filed an answer, motion to dismiss, and motion to transfer venue. The motion to dismiss was based on a forum selection clause contained in the contract between Prescott and ADM. Next, Texas Trading requested a hearing on its motion to transfer venue, and that hearing was set for January 11, 2008. On January 7, 2008, ADM sent a letter via facsimile to Prescott’s counsel stating that ADM’s motion to transfer would not be heard on January 11, 2008, because ADM first wanted the court to hear its motion to dismiss. ADM further stated in the letter of January 7, 2008 that its motion to dismiss was set to be heard on February 8, 2008. On January 22, 2008, the trial court transferred Prescott’s case against Texas Trading from Rains County to Hopkins County. The trial court then conducted an evidentiary hearing on ADM’s motion to *823dismiss on February 8, 2008. On February 11, 2008, the trial court denied ADM’s motion to dismiss.

Mandamus-Standard of Review

Mandamus will issue if the relator establishes a clear abuse of discretion for which there is no adequate appellate remedy. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex.2004). When a trial court refuses to enforce a valid forum selection clause, there is no adequate appellate remedy. In re Lyon Fin. Services, Inc., No. 07-0486, 257 S.W.3d 228, 231-32, 2008 WL 2487092, *2-3, 2008 Tex. LEXIS 580, at *5-6 (Tex.2008) (per curiam). Thus, when reviewing a trial court’s denial of a motion to dismiss based on a forum selection clause, our focus is whether the trial court clearly abused its discretion. To determine whether the trial court clearly abused its discretion, the reviewing court must consider whether the challenged ruling or order was one compelled by the facts and circumstances or was arbitrary, unreasonable, or reached without reference to any guiding rules or principles. In re Huag, 175 S.W.3d 449, 451 (Tex.App.Houston [1st Dist.] 2005, orig. proceeding). A clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992).

Forum Selection Clause

Generally, a forum selection clause must be enforced. In re AIU Ins. Co., 148 S.W.3d 109, 111-12 (Tex.2004). A party opposing enforcement of a forum selection clause must clearly show that enforcement is unreasonable and unjust, or that the clause is invalid for some other reason such as fraud or overreaching. In re Automated Collection Technologies, Inc., 156 S.W.3d 557, 559 (Tex.2004). This is a heavy burden. See id. When the inconvenience of litigating in the chosen forum is foreseeable at the time of contracting, the party seeking to avoid the clause must establish that “trial in the contractual forum will be so gravely difficult and inconvenient that he will for all practical purposes be deprived of his day in court.” AIU Ins. Co., 148 S.W.3d at 113 (quoting M/S Bremen v. Zapata Off-Shore Co., [407 U.S. 1,] 18, 92 S.Ct. 1907, [1917, 32 L.Ed.2d 513 (1972) ]). To be found overreaching, the forum selection clause must result in unfair surprise or oppression. See Lyon Fin., 257 S.W.3d at 232-33, 2008 WL 2487092, *3-4, 2008 Tex. LEXIS 580, at *9.

Waiver

When addressing waiver of a forum selection clause, arbitration cases are analogous. Automated Collection Technologies, 156 S.W.3d at 559. Like any other contract right, a forum selection clause can be waived if the parties agree instead to resolve a dispute in Texas courts. See Perry Homes v. Cull, 258 S.W.3d 580, 593, 2008 WL 1922978, at *6, 51 Tex. Sup.Ct. J. 819, 2008 Tex. LEXIS 423, at *28 (Tex. May 2, 2008) (not yet released for publication) (discussing waiver of arbitration rights). A party waives a forum selection clause by substantially invoking the judicial process. See id., 2008 WL 1922978 at *4, at *18. We begin with a strong presumption against waiver. See id. Waiver is a legal question decided on a case by case basis by reviewing the totality of the circumstances. See id., 2008 WL 1922978, at *5, at *23; In re Fleetwood Homes of Tex., L.P., No. 06-0943, 257 S.W.3d 692, 693, 2008 WL 2487094, at *1, 2008 Tex. LEXIS 579, at *2 (Tex. June 20, 2008) (per cu-riam). Those circumstances include: 1) when the movant knew of the forum selection clause, 2) how much discovery has been conducted, 3) who initiated it, 4) whether it related to the merits rather *824than the forum selection clause’s applicability, 5) how much of it would be useful in the other forum, and 6) whether the mov-ant sought judgment on the merits. See id., 2008 WL 1922978, at *5, at *23-24. The waiver of a forum selection clause can be implied from a party’s unequivocal conduct, but in close cases, the “strong presumption against waiver” governs. See id., 2008 WL 1922978, at *6, at *28. Additionally, the party opposing the enforcement of the forum selection clause must establish that it suffered prejudice as a result of the actions constituting waiver. Automated Collection Technologies, 156 S.W.3d at 559.

The Texas Supreme Court has decided against waiver when a party delayed five months in seeking enforcement of a forum selection clause, requested a jury trial, paid a jury fee, and filed a general denial that did not raise the forum selection issue. AIU Ins. Co., 148 S.W.3d at 120-21 (“We have held that [five months], and indeed far longer, delays are not a waiver of an arbitration clause, and there is no sound basis for applying a different rule to the genre of forum-selection clauses ....”) (internal citations omitted). Similarly, the Texas Supreme Court has decided against waiver when a party delayed four months in seeking enforcement of a forum selection clause, filed general and special denials that did not raise the forum selection issue, brought counterclaims, served requests for disclosure, twenty-eight requests for production, twenty-five requests for admissions, and nine interrogatories, and filed a motion to compel discovery responses. Automated Collection Technologies, 156 S.W.3d at 558-60.

Here, although the majority finds that AJDM waived enforcement of the forum selection clause, ADM committed far fewer actions that “substantially invoked the judicial process.” ADM immediately raised the forum selection issue by fifing a motion to dismiss in its initial responsive pleading. Although ADM waited almost four months to have its motion to dismiss heard, there is no evidence in the record that it conducted any discovery or sought any relief, much less judgment on the merits, from the trial court in the interim. Instead, Prescott simply focuses on the actions of a codefendant in obtaining a transfer of venue as her basis for arguing that ADM waived enforcement of the forum selection clause. As it relates to ADM’s actions, all that was shown was a delay of almost four months to obtain a hearing on its motion to dismiss and a lack of objection to a code-fendant’s motion to transfer venue. Under these facts, Prescott failed to clearly demonstrate that ADM substantially invoked the judicial process, and thus, ADM did not waive enforcement of the forum selection clause.

Unjust, Unreasonable, or Overreaching

Although not relied upon by the majority, Prescott further argues that ADM’s motion to dismiss based on the forum selection clause is improper because requiring Prescott to proceed in Illinois would be unjust and unreasonable. Finally, Prescott argues that the forum selection clause is overreaching.

Prescott has failed in her heavy burden to establish that the forum selection clause is unjust or unreasonable. While certainly a trial in Texas is more convenient for a Texas resident, nothing in the record establishes that Prescott could not proceed in Illinois. In fact, “[b]y 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 cost or other reasons.” Lyon Fin., No. 07-0486, 257 S.W.3d 228, 234, *8252008 WL 2487092, at *5, 2008 Tex. LEXIS 580, at *13. Because Prescott failed to present evidence that a trial in Illinois would for all practical purposes deprive her of her day in court, ADM’s motion to dismiss could not be denied as unjust or unreasonable.

Similarly, Prescott has failed to establish that the clause is overreaching. Prescott read the contract prior to signing it, and she does not argue that she was unaware of the forum selection clause in the contract. Prescott presented no evidence of overreaching or trickery by ADM. Instead, the evidence simply shows a transaction in which ADM offered to do business on a specified basis and Prescott accepted. Because Prescott presented no evidence that the forum selection clause results in unfair surprise or oppression, ADM’s motion to dismiss could not be denied as overreaching.

Conclusion

Because Prescott failed to carry her burden to establish waiver by ADM, the unjustness and unreasonableness of the forum selection clause, or overreaching by ADM in obtaining Prescott’s agreement to the clause, the trial court had but one option, which was to grant the motion to dismiss. In denying ADM’s motion to dismiss, the trial court abused its discretion, and ADM is entitled to mandamus. Because the majority has concluded otherwise, I respectfully dissent.