Turner Wayne Bogart and TMW & Associates, Inc. v. Star Building Systems, a Division of Robertson CECO II Corporation

Citation: Not availableDocket: 01-10-00446-CV

Court: Court of Appeals of Texas; March 9, 2011; Texas; State Appellate Court

Original Court Document: View Document

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On March 10, 2011, the Court of Appeals for the First District of Texas affirmed the trial court’s denial of Turner Wayne Bogart and TMW Associates, Inc.'s special appearance in a breach of contract suit filed by Star Building Systems. TMW, a California corporation, entered into a contract with Star, a Delaware corporation, to deliver metal building components for a project in California, with payment terms requiring payments to be made in Houston, Texas. The contract included a forum-selection clause consenting to jurisdiction and venue in Harris County, Texas, governed by Texas law.

Star alleged breach of contract, breach of warranty, quantum meruit, and unjust enrichment after TMW failed to pay the full amount for delivered components. The trial court found personal jurisdiction over the appellants based on their consent through the contract and the occurrence of events in Texas. Appellants argued they had no personal jurisdiction in Texas, claiming the forum-selection clause was unenforceable due to overreaching and inconvenience. Evidence included the contract, affidavits asserting California residency, shipping documents, and witness information indicating connections to California.

The trial court denied the appellants' special appearance, motion to dismiss based on forum non conveniens, and motion to abate, with the appeal focusing solely on the special appearance denial. No findings of fact or conclusions of law were provided by the trial court.

Appellants argue that the trial court incorrectly denied their special appearance, asserting they successfully negated the grounds for personal jurisdiction—consent and specific jurisdiction—and that the evidence was insufficient to support the court's order. In terms of burdens of proof, the plaintiff must initially plead sufficient allegations for personal jurisdiction, while a nonresident defendant challenging this must negate all alleged grounds to succeed. When reviewing a denial of special appearance, findings of fact are assessed for legal and factual sufficiency, with conclusions of law reviewed de novo. In the absence of explicit findings, supporting facts are implied.

The validity and enforceability of forum-selection clauses are evaluated under an abuse-of-discretion standard, which is met if the trial court acts arbitrarily or fails to apply the law correctly. Legal sufficiency challenges require the appealing party to show that evidence supports the finding as a matter of law. 

Regarding consent to jurisdiction, Star argues that appellants consented by signing a contract with a forum-selection clause specifying Texas. The appellants do not dispute entering the contract but claim the clause is unenforceable. They assert that the trial court's finding of enforceability is unsupported by sufficient evidence. Personal jurisdiction can be waived, and forum-selection clauses are generally enforceable unless a compelling reason is provided against them.

The M/S Bremen v. Zapata Off-Shore Co. case establishes that a forum-selection clause must be upheld unless there is strong opposing precedent or statute, enforcement is unreasonable or unjust, or the clause is a result of fraud or overreaching. The burden of proof lies heavily on the party challenging the clause. Appellants Bogart and TMW argue that the clause is invalid due to overreaching and unreasonable inconvenience, claiming that Texas is an inconvenient forum that would effectively deny them their day in court. However, they failed to prove these assertions. By agreeing to the clause, they indicated that Texas would not be so inconvenient as to deprive them of their rights. To avoid enforcement, they needed to demonstrate special circumstances that arose after the contract, showing that litigation in Texas would now be gravely difficult. Their evidence only indicated inconvenience, not an inability to proceed in Texas. The court noted that mere inconvenience is insufficient to invalidate a forum-selection clause. Additionally, Bogart and TMW did not establish that the clause resulted from overreaching, as they presumably read the contract before signing and did not claim ignorance of the clause. Their complaint about the clause being in tiny print did not provide evidence of fraud or oppression, thus failing to render the clause unenforceable.

Appellants failed to prove that the enforcement of the forum-selection clauses should be invalidated due to overreaching. The contract’s mandatory forum-selection clause is presumptively valid and enforceable. Without evidence demonstrating that the clause is unjust or the result of overreaching, Bogart and TMW could not establish its invalidity as a matter of law. Therefore, the trial court’s implied finding that the clause is enforceable is supported by sufficient evidence, and the court did not abuse its discretion in denying the special appearance of Bogart and TMW. Additionally, the court's denial of the special appearance could also stand on specific jurisdiction grounds, but this was not necessary to address. The trial court’s order denying the special appearance is affirmed. Appellants’ challenge regarding factual sufficiency is waived due to inadequate briefing, which did not provide a clear argument or cite relevant authority.