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In Re Automated Collection Technologies, Inc.
Citations: 156 S.W.3d 557; 48 Tex. Sup. Ct. J. 162; 2004 Tex. LEXIS 1250; 2004 WL 2754650Docket: 03-0280
Court: Texas Supreme Court; December 2, 2004; Texas; State Supreme Court
The Supreme Court of Texas addressed a case involving Automated Collection Technologies, Inc. (Automated) and Professional Systems Corporation (PSC), focusing on a contractual agreement requiring disputes to be litigated in Montgomery County, Pennsylvania. PSC sued Automated in Dallas County for unpaid services, despite the contract stipulating that any claims related to the agreement must be brought exclusively in Pennsylvania within six months. Automated responded with denials and counterclaims, later filing a motion to dismiss based on the forum-selection clause. PSC opposed the enforcement of this clause, arguing it was permissive, claiming Automated had waived its right to enforce it by seeking affirmative relief in court. The trial court denied Automated's motion to dismiss without providing reasons, leading Automated to seek mandamus relief from the Supreme Court after the court of appeals denied its petition. The Supreme Court emphasized that enforcement of forum-selection clauses is mandatory unless the opposing party demonstrates that enforcement would be unreasonable or unjust. PSC failed to provide evidence of such claims or assert the clause's invalidity. Consequently, the Supreme Court conditionally granted a writ of mandamus, instructing the trial court to enforce the forum-selection clause and dismiss the case. A five-month delay in enforcing a forum-selection clause, combined with actions such as requesting a jury trial and filing a general denial that did not challenge the clause, does not constitute a waiver of that clause. This conclusion draws from analogies to arbitration waiver cases, specifically referencing In re Bruce Terminix Co., which established that invoking judicial processes does not waive arbitration rights unless prejudice is demonstrated. PSC's claims regarding wasted resources and time do not prove prejudice stemming from Automated's actions or the delay. Furthermore, PSC's choice to pursue litigation in a different forum than agreed upon undermines its complaints about resource duplication. Consequently, the court grants Automated's petition for writ of mandamus, instructing the trial court to dismiss the case promptly, with the writ to issue if the court fails to comply. Justice MEDINA did not participate in this decision.