in Re Shelby Longoria ( 2015 )

Petition for Writ of Mandamus Conditionally Granted, in Part, and Denied,
in Part, and Opinion filed July 16, 2015.
In The
Fourteenth Court of Appeals
NO. 14-15-00261-CV
IN RE SHELBY LONGORIA, Relator
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
Probate Court No. 1
Harris County, Texas
Trial Court Cause No. 414270
OPINION
On March 25, 2015, relator Shelby Longoria filed a petition for writ of
mandamus in this court. See Tex. Gov’t Code Ann. § 22.221 (West 2004); see also
Tex. R. App. P. 52. In the petition, Shelby asks this court to compel the Honorable
Loyd Wright, presiding judge of Probate Court No. 1 of Harris County, to set aside
his February 18, 2015 order denying Shelby’s motion to dismiss the claims of real
party in interest, Adriana Longoria, based on a forum-selection clause. We
conditionally grant the petition for writ of mandamus, in part, and deny it, in part.
I. BACKGROUND
Eduardo Longoria, Sr., a Mexican citizen and businessman, was the father of
Shelby Longoria, Adriana Longoria, Eduardo Longoria, Jr. (“Wayo”), and Sylvia
Dorsey. In 2002, Eduardo transferred shares of his two Mexican holding
companies, Vertice Empresarial, S.A. de C.V. and Inmuebles y Terrenos, S.A. de
C.V. (the “Mexican companies”), to a trust administered by a Mexican bank.
Banca Afirme Grupo Financiero. Eduardo designated Shelby as 60% beneficiary
and Wayo 40% beneficiary of this trust, which the parties describe as the “Afirme
Trust.” At the same time, Eduardo executed a new will, naming Shelby as
executor. Eduardo also signed a “Carta de Voluntad,” or “Wish Letter,” granting
Sylvia and Adriana each $3,000,000 in cash to be distributed over time by the
Afirme Trust. In December 2002, Eduardo and Adriana executed an “Acuerdo
Privado,” or “Private Agreement,” providing that Adriana would receive
$3,000,000 from the operating cash flow generated by the Mexican companies.
Eduardo died in 2005. Dorothy Longoria, Eduardo’s wife and the mother of
the children, died in 2012. On May 6, 2013, Tommy Dorsey, Sylvia’s husband and
executor of Dorothy’s estate, sued Shelby for a demand for an accounting and
breach of fiduciary duty to Dorothy, alleging that Shelby had diverted her
community property interests to himself. Specifically, Tommy alleged, among
other things, that (1) Shelby had induced Eduardo into signing the 2002 Afirme
Trust, into which Eduardo conveyed all of his and Dorothy’s shares in the Mexican
companies and of which he made Shelby and Wayo the beneficiaries; and (2)
2
Shelby had induced Eduardo into signing the 2002 will, leaving all of Eduardo’s
remaining property to Shelby and Wayo.
On June 18, 2013, Shelby filed a will contest, alleging that Sylvia and
Adriana had exerted undue influence over Dorothy in connection with her will,
which divided Dorothy’s estate equally between Adriana and Sylvia and named
Tommy executor, and that Dorothy lacked the capacity to execute the will. Shelby
also sought the removal of Tommy as executor. On August 23, 2013, Shelby filed
a third-party petition, alleging that Sylvia and Adriana were responsible in
contribution for any damages found owing by Shelby to the estate.
Adriana answered the will contest on December 4, 2013, and filed
counterclaims against Shelby on January 6, 2014. Adriana amended her
counterclaims on December 11, 2014, February 5, 2015, and February 11, 2015.
Adriana alleged that Shelby induced Eduardo into entering the Private Agreement
and into believing that it would be a fair allocation of the estate. She also
counterclaimed for tortious interference with inheritance rights, breach of fiduciary
duty, tortious inference with the Private Agreement, breach of the obligation to
perform the Private Agreement, and breach of the agreement to pay Adriana
$100,000 upon Dorothy’s death and sought a declaration that an agreement called
the Donation Agreement is not an enforceable contract.1
On January 14, 2015, Shelby filed a motion to dismiss Adriana’s
counterclaims based on a forum-selection clause in the Private Agreement that
provides for exclusive venue in the courts of Reynosa, Tamaulipas, Mexico.
1
Adriana does not explain in her third amended petition what the Donation Agreement is
or identify the parties to it.
3
In response to the motion to dismiss, Adriana contended that (1) the forum-
selection clause does not apply to her counterclaims; (2) the forum-selection clause
is unreasonable and unjust in light of a pre-existing fiduciary relationship between
Shelby and Adriana, where the agreement was made, where the parties resided, and
the unacceptability of the Mexican forum; (3) the forum-selection clause is
unenforceable because it was procured through fraud and overreaching by Shelby;
and (4) Shelby waived his right to enforce the forum-selection clause by litigating
Adriana’s counterclaims in the trial court for a year without invoking the clause.
The trial court held a hearing on Shelby’s motion to dismiss on February 12,
2015, and signed the order denying Shelby’s motion on February 18, 2015.
II. MANDAMUS STANDARD OF REVIEW
To be entitled to mandamus relief, a relator must demonstrate (1) the trial
court clearly abused its discretion; and (2) the relator has no adequate remedy by
appeal. In re Reece, 341 S.W.3d 360, 364 (Tex. 2011) (orig. proceeding). A trial
court clearly abuses its discretion if it reaches a decision so arbitrary and
unreasonable as to amount to a clear and prejudicial error of law or if it clearly
fails to analyze the law correctly or apply the law correctly to the facts. In re
Cerberus Capital Mgmt. L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding)
(per curiam). A trial court abuses its discretion when it fails to properly interpret
or apply a forum-selection clause. In re Lisa Laser USA, Inc., 310 S.W.3d 880,
883 (Tex. 2010) (orig. proceeding) (per curiam). An appellate remedy is
inadequate when a trial court improperly refuses to enforce a forum-selection
clause because allowing the trial to go forward will vitiate and render illusory the
4
subject matter of an appeal, i.e., trial in the proper forum. Id. Thus, mandamus
relief is available to enforce an unambiguous forum-selection clause. Id.
III. Scope of the Forum-Selection Clause
Shelby argues that most of Adriana’s claims fall within the scope of the
forum-selection clause in the Private Agreement.2
Forum-selection clauses are generally enforceable and presumptively valid.
In re Laibe Corp., 307 S.W.3d 314, 316 (Tex. 2010) (orig. proceeding) (per
curiam); In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 675 (Tex. 2009) (orig.
proceeding) (per curiam). A trial court abuses its discretion in refusing to enforce
a forum-selection clause unless the party opposing enforcement meets its heavy
burden of showing that (1) enforcement would be unreasonable or unjust; (2) the
2
Shelby contends that, as a non-signatory to the forum-selection clause, he can enforce
the clause under estoppel principles. Even though Adriana has not argued that Shelby cannot
enforce the forum-selection clause in the Private Agreement based on the fact that he is not a
signatory to the Agreement we, nonetheless, address this issue.
Equitable estoppel theories allowing non-signatories to enforce arbitration agreements
also apply to forum-selection clauses. Deep Water Slender Wells, Ltd. v. Shell Int’l Exploration
& Prod., Inc., 234 S.W.3d 679, 693−94 (Tex. App.—Houston [14th Dist.] 2007, pet. denied)
(citing Phoenix Network Techs. (Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d, 605, 622−24 (Tex.
App.—Houston [1st Dist.] 2005, no pet.)). “A person who has agreed to resolve disputes with
one party in a particular forum may be required in some circumstances to resolve related disputes
with other parties in the same forum.” Smith v. Kenda Capital, LLC, 451 S.W.3d 453, 458 (Tex.
App.—Houston [14th Dist.] 2014, no pet.). Under the theory of direct benefits estoppel, a
nonsignatory may enforce a forum-selection clause that contains other terms on which the
signatory plaintiff must rely to prosecute its claims. Id.; In re Cornerstone Healthcare Holding
Grp., Inc., 348 S.W.3d 538, 544−45 (Tex. App.—Dallas 2011, orig. proceeding). Direct benefits
estoppel applies when a signatory’s claim against a nonsignatory references or presumes the
existence of the written agreement containing the clause. Smith, 451 S.W.3d at 458. Adriana’s
claims against Shelby clearly reference or presume the existence the agreement containing the
forum-selection clause, i.e., the Private Agreement. Therefore, Shelby may enforce the forum-
selection clause in the Private Agreement to the extent that it encompasses Adriana’s claims.
5
clause is invalid for reasons of fraud or overreaching; (3) enforcement would
contravene a strong public policy of the forum where the suit was brought; or (4)
the selected forum would be seriously inconvenient for trial. Laibe Corp., 307
S.W.3d at 316; In re ADM Inv. Servs., Inc., 304 S.W.3d 371, 375 (Tex. 2010)
(orig. proceeding).
The court must first determine whether the claims fall within the scope of
the forum-selection clause. Deep Water Slender Wells, Ltd., 234 S.W.3d at
687−88. The court bases its determination on the language of the clause and the
nature of the claims purportedly subject to the forum-selection clause. Id. at 688.
If the claims fall within the scope, the court must determine whether to enforce the
clause. Id.
In construing a contract, we must ascertain and give effect to the parties’
intentions as expressed in the writing itself. Italian Cowboy Partners, Ltd. v.
Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). If a contract is
worded so that it can be given a certain or definite meaning then it is unambiguous,
and the court will construe it as a matter of law. El Paso Field Servs., L.P. v.
MasTec N. Am., Inc., 389 S.W.3d 802, 806 (Tex. 2012). If, after applying the
pertinent rules of contract construction, the contract is subject to two or more
reasonable interpretations, the contract is ambiguous. Id. The court must enforce
an unambiguous contract as a matter of law without considering parol evidence.
David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (per curiam).
The Private Agreement between Eduardo and Sylvia provides the following,
in relevant part:
6
First. Regarding “THE TRUST.” The parties recognize the
validity and scope of the “TRUST”, and in this regard they are in
agreement with all its terms and conditions, and therefore declare that
the agreement is the final and definitive will of the parties, and
therefore, they comply with all terms and agree that the shares
contributed to it are to be transferred to the designated beneficiaries.
Second. Payment to ADRIANA LONGORIA KOWALSKI. It is
the will of her father that the amount of $3,000,000.00 (three million
U.S. dollars) be delivered to his daughter ADRIANA LONGORIA
KOWALSKI, from the operating cash flow generated by the
companies represented by the shares contributed to the “TRUST”, or
by their subsidiaries, and therefore it is the obligation of EDUARDO
AND SHELBY LUIS LONGORIA KOWALSKI in the terms
mentioned below:
On the date this Agreement is signed, the balance to be delivered to
ADRIANA LONGORIA KOWALSKI, in terms of the preceding
paragraph, amounts to the sum USD $2,069,100.00 (two million
sixty-nine thousand one hundred U.S. dollars), according the
statement of account that is attached hereto.
By virtue of the foregoing, an annual amount of $150,000.00 (one
hundred fifty thousand U.S. dollars) of principal and interest will be
given to ADRIANA LONGORIA KOWALSKI, in monthly
installments of $12,500 (twelve thousand five hundred U.S. dollars)
until the complete payment of the balance referred to above. In
addition, the balance payable shall earn a normal interest rate of 75%
(seventy-five percent) of the “prime rate” published by the Wall Street
Journal.
* * *
Third. Final and Definitive Will of the Parties. The parties state
that this Agreement is the final and definitive will of the parties;
therefore, they are in agreement with all its terms, further stating that
there is no mistake, fraud, bad faith, or any defect of will that might
affect their understanding or decision regarding the content.
7
The TRUST’s obligation to deliver the mentioned quantities to
ADRIANA LONGORIA KOWALSKI, in the terms set forth herein,
shall continue in effect until full payment, acknowledging that, after
payment of the amounts referred to in this Agreement, ADRIANA
LONGORIA KOWALSKI shall be satisfied in relation to any present
or future obligation charged to the “TRUST” assets or to those of
Messrs. EDUARDO and SHELBY LUIS LONGORIA KOWALSKI.
Fourth. Jurisdiction and Mexican Law. This Agreement is
established under the jurisdiction and laws of the United Mexican
States. Therefore, the parties exclusively submit to the laws of
Mexico, thus they expressly waive the application of any law,
regulation, provision or rule of any jurisdiction other than Mexico,
which might correspond to them due to their residence, paternity,
citizenship, domicile, kinship or commercial relationship. Therefore,
in the event of any interpretation, dispute, or any aspect related to this
Trust, they expressly submit to the court of the city of Reynosa,
Tamaulipas, Mexico.
Likewise, the issuance of any law, regulation or provisions in
jurisdictions outside the Republic of Mexico, or any act performed
outside the national territory by any party seeking to (i) impose
restrictions on this Agreement or to impose the performance of acts
different from the purposes for which it is authorized[;] (ii) impose
taxes, duties or tax burdens other than those under Mexican Law; (iii)
expropriate, limit, confiscate, seize, dispose of, freeze or otherwise
affect the rights of the Agreement based on federal, state or municipal
laws, outside the jurisdiction of the Republic of Mexico, shall not
apply to this Agreement, in all cases the jurisdiction and laws of the
Republic of the United Mexican States being applicable under the
terms of the previous paragraph.
Having seen and read the foregoing, the parties sign it in the city of
Reynosa, Tamaulipas, on DECEMBER 17th, 2002.
The Fourth Clause of the Private Agreement contains two paragraphs that
address the choice of forum and choice of law provisions. The first paragraph
8
provides the following, with respect to the forum selected by the parties: “in the
event of any interpretation, dispute, or an aspect related to this Trust, they
expressly submit to the courts of the city of Reynosa, Tamaulipas, Mexico.”3
Adriana contends that the forum-selection clause does not apply to the
Private Agreement because it specifically applies to the Afirme Trust. Eduardo
created the Afirme Trust, into which he placed his and Dorothy’s shares of the
Mexican companies. The Third Clause of the Private Agreement expressly states
that the source of the payments made to Adriana under the Agreement was the
Afirme Trust. Adriana specifically alleged that (1) Shelby induced Eduardo into
entering various transactions that would increase his own inheritance while
decreasing the inheritances of Wayo, Sylvia, and Adriana; and (2) Shelby induced
Eduardo into entering the Private Agreement and into believing that this would be
a fair allocation of his estate. Adriana further asserted that Shelby did not make
the required payments from the Afirme Trust, but from Eduardo’s funds and then
from Dorothy’s funds after the death of Eduardo. Shelby ceased making any
payments in October 2010.
In the First Clause of the Private Agreement, Adriana recognized the scope
and validity of the Afirme Trust and that the Mexican companies held in the Trust
would be the source of money to make the payments to her under the Private
Agreement. Adriana acknowledged this in her response to the mandamus petition.
The Afirme Trust is the designated source of funds to pay Adriana under the
Private Agreement. Without the Afirme Trust, there would be no causes of action
against Shelby for interference with inheritance rights, tortious interference with
3
Emphasis added.
9
the Private Agreement, breach of his contractual obligation to perform the Private
Agreement, or breach of his fiduciary duty related to the purported trust
relationship created by the Private Agreement.
Adriana contends that, even if the forum-selection clause applies to the
Private Agreement, which she implicitly conceded would encompass her claims for
tortious interference with the Private Agreement and breach of the contractual
obligation to perform the Private Agreement, it still does not apply to her claim for
tortious interference with inheritance rights. Adriana has focused on the forum-
selection clause as applying to the Private Agreement. As explained above, the
forum-selection clause is applicable to Adriana’s claims because she would have
no grounds for her allegations without the Afirme Trust.
Moreover, courts have consistently held the language “any interpretation,
dispute, or any aspect related to” is broad. See, e.g., TGI Friday’s Inc. v. Great
Nw. Rests., Inc., 652 F. Supp. 2d 750, 759 (N.D. Tex. 2009) (“Forum selection
clauses cover claims ‘relating to’ an agreement are broad in scope.”); RSR Corp. v.
Siegmund, 309 S.W.3d 686, 701 (Tex. App.—Dallas 2010, no pet.) (“The phrase
‘relates to,’ in particular, is recognized as a very broad term.”) (internal quotes and
citations omitted); see also Young v. Valt.X Holdings, Inc., 336 S.W.3d 258, 263
(Tex. App.—Austin 2010, pet. dism’d) (holding that each fraud, breach of
fiduciary duty, and securities claim “arises under” or “relates to” the stock sale
and, therefore, was encompassed by the forum-selection clause). Adriana,
furthermore, cannot plead tort claims to avoid the application of the forum-
selection clause if those causes of action relate to the Afirme Trust. See My Café-
CCC, Ltd. v. Lunchstop, Inc., 107 S.W.3d 860, 866 (Tex. App.—Dallas 2003, no
10
pet.) (“Pleading alternative noncontractual theories of recovery will not alone
avoid a forum selection clause if those alternative claims arise out of the
contractual relations and implicate the contract’s terms.”).
Adriana does not address her claim for breach of the fiduciary duty that
allegedly arose prior to the existence of the Private Agreement. We, nonetheless,
address whether Adriana’s pre-contractual tort claim is subject to the forum-
selection clause. This court and other courts have held that fraud-in-the-
inducement claims can be subject to a forum-selection clause because it is a
dispute involving the parties’ agreement. See, e.g., Clark v. Power Mktg. Direct,
Inc., 192 S.W.3d 796, 799−800 (Tex. App.—Houston [14th Dist.] 2006, no pet.);
My Café-CCC, Ltd., 107 S.W.3d at 867; see also Accelerated Christian Educ. Inc.
v. Oracle Corp., 925 S.W.2d 66, 73 (Tex. App—Dallas 1996, no writ), overruled
in part on other grounds by In re Tyco Elecs. Power Sys., Inc., No. 05-04-01808-
CV, 2005 WL 237232, at *4 (Tex. App.—Dallas Feb. 2, 2005, orig. proceeding
[mand. denied]) (mem. op.) (stating that pre-contractual claims for
misrepresentations made before the execution of the contract are not excluded from
the scope of the forum-selection clause merely because the conduct took place
before the contract came into existence). This court, however, did not address
whether a forum-selection clause necessarily encompasses all pre-contractual
claims. Clark, 192 S.W.3d at 800.
As explained above, the forum-selection clause is very broad, encompassing
“any interpretation, dispute, or any aspect related to this Trust.” “When all the
claims arise out of the parties’ contractual relations and implicate the contract’s
terms, the forum selection clause will encompass all the causes of action relating to
11
the agreement.” My Café-CCC, Ltd., 107 S.W.3d at 866. Adriana claims that
Shelby had assumed a fiduciary duty to her by making payments to her from the
Mexican companies ten years prior to the execution of the Private Agreement.
Those payments then continued from the funds of the Afirme Trust. Adriana’s
pre-contractual claim for breach of fiduciary duty implicates the Afirme Trust and
is subject to the forum-selection clause. There would be no breach of fiduciary
duty without the trust.
Adriana further asserts that the forum-selection clause does not apply to her
claim for breach of the promise between Shelby and Dorothy to pay her $100,000
upon Dorothy’s death. Shelby concedes that Adriana’s claim for the breach of the
promise to pay her $100,000 upon Dorothy’s death does not fall within the scope
of the forum-selection clause.
As to her request for a declaratory judgment that the January 11, 2005
Donation Agreement is unenforceable, Adriana first pleaded her request the day
before the hearing on Shelby’s motion to dismiss. Adriana’s petition does not
explain what the Donation Agreement is, no copy of the agreement was attached to
the petition, and there was no briefing on the applicability of the forum-selection
clause to this claim. Shelby, however, contends in his mandamus petition that the
agreement bears directly on the manner in which payments would be made under
the Private Agreement. Shelby suggests the request for a declaratory judgment
was not before the court and “[t]he trial court will be able to address the proper
venue for this claim [regarding the Donation Agreement] upon receiving direction
from this Court relating to the other claims.” The trial court stated in its order that
it considered the pleadings of the parties and did not carve out any claims that were
12
not being addressed in its ruling on the motion to dismiss. We do not have enough
information from the mandamus record to determine that the forum-selection
clause encompasses Adriana’s claim that Shelby breached the Donation
Agreement.
In summary, we hold that the forum-selection clause applies to Adriana’s
claims for (1) tortious interference with inheritance rights; (2) breach of fiduciary
duty; (3) tortious interference with the Private Agreement; and (4) breach of the
contractual obligation to perform the Private Agreement. The forum-selection
clause, however, does not apply to Adriana’s claim that Shelby breached the
agreement to pay Adriana $100,000 upon Dorothy’s death and, based on this
record, we cannot say that Adriana’s claim that Shelby breached the Donation
Agreement falls within the scope of the forum-selection clause.
V. OBJECTIONS RAISED BY ADRIANA
A. Adriana’s Objections to the Mandamus Record
Adriana complains that Shelby cites, in his mandamus petition, materials
that were not presented to the trial court in connection with the motion to dismiss,
which, therefore, should not be considered in the mandamus proceeding. Adriana
refers to most of the items contained in the mandamus record filed by Shelby,
including pleadings filed by the parties, a motion to quash, the reporter’s record of
the hearing on a previously denied motion to dismiss for forum non conveniens,
and filings related to the motion to dismiss for forum non conveniens. The trial
court stated in the order that it considered, among other things, “the pleadings on
file.” Moreover, a relator must file a “certified or sworn copy of every document
that is material to the relator’s claim for relief and that was filed in any underlying
13
proceeding.” Tex. R. App. P. 52.7(a)(1). There is nothing improper about the
items Shelby included in the mandamus record, and we are not aware of any
authority for penalizing a relator for erring on the side of over-inclusion in
connection with a mandamus record. Therefore, we reject Adriana’s contention
that we cannot consider most of the items in the record in our review of the
mandamus petition.
B. Objections to Evidence Attached to the Motion to Dismiss
Adriana objected to Exhibits 3 and 3A, which were the October 15, 2002
“Banca Afirme Fideicomiso No. 194-2”, the Afirme Trust, and a certified
translation of the Afirme Trust, respectively. Johnny Carter, one of Shelby’s
attorneys, stated, in his affidavit submitted in support of Shelby’s motion to
dismiss, in relevant part:
5. Attached as Exhibit 3 is a true and correct copy of a document
dated October 15, 2002 titled “Banca Afirme Fideicomiso No. 194-2.”
6. Attached as Exhibit 3A is a true and correct copy of a certified
translation of Banca Afirme Fideicomiso No. 194.2.
Adriana argued that Carter did not testify that Exhibit 3 was a true and
correct copy of the original or that he had personal knowledge of the execution or
terms of the original, and, because Exhibit 3A was a translation of Exhibit 3,
Exhibit 3A could “have no better claim of authenticity than Exhibit 3.” Adriana
requested that the trial court strike and disregard Exhibits 3 and 3A.
Shelby asserts that Adriana waived her objections to Exhibits 3 and 3A
because she did not obtain a ruling from the trial court. Shelby contends that Rule
166a standards for summary judgment proceedings govern the motion to dismiss
14
for improper venue. See Tex. R. Civ. P. 166a. Courts look to cases on arbitration
for guidance on forum-selection clauses. See, e.g., Smith, 451 S.W.3d at 457
(“Reference to cases addressing the applicability of arbitration clauses is
appropriate when examining whether particular claims or parties fall within a
forum selection clause’s reach.”); In re Boehme, 256 S.W.3d 878, 884 (Tex.
App.—Houston [14th Dist.] 2008, orig. proceeding) (“In deciding whether a party
has waived a forum-selection clause, the Supreme Court has repeatedly resorted to
cases involving arbitration agreements.”).
In the arbitration context, the trial court conducts a summary proceeding to
determine the applicability of an arbitration clause based on the parties’ affidavits,
pleadings, discovery, and stipulations. In re Estate of Guerrero, No. 14-13-00580-
CV, — S.W.3d —, 2015 WL 1884068, at *3 (Tex. App.—Houston [14th Dist.]
Apr. 23, 2015, pet. filed) (en banc). The procedure is similar to a motion for
summary judgment and is subject to the same evidentiary standards. Id.
Under the summary judgment standard, copies of documents must be
authenticated to constitute competent summary judgment evidence. Id. at *6. A
properly sworn affidavit stating that the attached documents are true and correct
copies of the original authenticates the copies so they may be considered as
summary judgment evidence. Id.
A defect in the form of authentication of documents, i.e., a defect in the
affidavit attempting to authenticate the attached documents, is waived without an
objection in, and a ruling from, the trial court. Id. at *9; see also Hicks v. Humble
Oil & Ref. Co., 970 S.W.2d 90, 93 (Tex. App.—Houston [14th Dist.] 1998, pet.
denied) (“Appellants objected to Exxon’s exhibits as not being properly
15
authenticated but did not get a ruling of the trial court on any of their objections.
By failing to secure rulings on their objections to Exxon’s summary judgment
proof, appellants have waived any complaint on this appeal as to their admissibility
into evidence.”). Here, Adriana objected to the form of the authentication and,
therefore, was required to obtain a ruling on her objections.
Adriana asserts that the trial court implicitly sustained her objections by
denying Shelby’s motion to dismiss. Shelby responds that a ruling on the merits of
a summary judgment motion is not an implicit ruling on evidentiary objections to
summary judgment evidence and the prevailing party cannot avoid waiver of its
evidentiary objections by arguing that it received a favorable ruling on the merits
of the motion. See Parkway Dental Assocs., P.A. v. Ho & Huang Props., L.P., 391
S.W.3d 596, 604 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (holding that the
trial court’s granting of a summary judgment is not an implicit ruling on the
movant’s objection to the nonmovant’s summary-judgment evidence); Duncan-
Hubert v. Mitchell, 310 S.W.3d 92, 100 (Tex. App.—Dallas 2010, pet. denied)
(holding that, where movant objected to nonmovant’s evidence, it could not be
inferred that the trial court sustained movant’s objections merely by granting
summary judgment);
Even if the summary judgment procedure were not followed in the context
of a motion to dismiss for a forum-selection clause, to preserve a complaint for
appellate review, the record must show the complaint was made to the trial court
by a timely request, objection, or motion that was sufficiently specific and the trial
court (1) ruled on the request, objection, or motion either expressly or implicitly or
(2) refused to rule on the request, objection, or motion, and the complaining party
16
objected to the refusal. Tex. R. App. P. 33.1(a). There is nothing in the record to
suggest that the trial court implicitly ruled on Adriana’s objections to Shelby’s
exhibits submitted in support of his motion to dismiss. At the hearing, there was
argument concerning the Afirme Trust, but Adriana did not object to the
authentication of the Afirme Trust.
Adriana also objected to Exhibit 4 to the motion dismiss, which was the
affidavit of Shelby’s Mexican law expert, Dr. Carlos Gabuardi, and in particular
paragraph 4, subparagraphs b, c, and d, and paragraphs 11−19 because they
contained opinions of the meaning and legal effect of the ordinary terms of a
contract, which are questions of law for the court, and the parol evidence rule
prohibits the admission of extrinsic evidence that alters the terms of a written
contract. Adriana further objected that the remainder of Gabuardi’s affidavit was
irrelevant, asked the trial court to sustain her objections, and strike and disregard
Gabuardi’s affidavit.
An objection to a defect in the substance of an affidavit may be raised for the
first time on appeal. Pipkin v. Kroger Tex., L.P., 383 S.W.3d 655, 670 (Tex.
App.—Houston [14th Dist. 2012, pet. denied). The complained of portions of
Gabuardi’s affidavit are mostly his interpretations of the Private Agreement and
the forum-selection clause, which are questions of law for the court. See Akin v.
Santa Clara Land Co., Ltd., 34 S.W.3d 334, 339 (Tex. App.—San Antonio 2000,
pet. denied) (“Expert testimony regarding the legal interpretation of an
unambiguous agreement encroaches upon the trial court’s province to determine
the correct legal interpretation.”). No ruling on an objection was required to
preserve error on those portions of Gabuardi’s affidavit because they offered legal
17
conclusions. See Ramirez v. Transcon. Ins. Co., 881 S.W.2d 818, 829 (Tex.
App.—Houston [14th Dist.] 1994, writ denied) (holding that “[a]n objection to an
affidavit on the grounds that it states only a legal conclusion is one that relates to a
defect of substance,” which may be raised for the first time on appeal).
Even though Adriana did not waive her objections to Gabuardi’s affidavit,
we need not address her objections in light of the well-settled rules for contract
construction. We have considered the interpretation of the forum-selection clause
as a question of law, reviewing the trial court’s interpretation de novo, without
considering parol evidence. See David J. Sacks, P.C., 266 S.W.3d at 450.
VI. ADRIANA’S DEFENSES TO THE ENFORCEABILITY OF THE FORUM-SELECTION
CLAUSE
A. Whether the Forum-Selection Clause is Unreasonable or Procured by
Fraud
Adriana argues the forum-selection clause in the Private Agreement is
unreasonable because it contravenes a pre-existing and overarching fiduciary
relationship between Shelby and her and it was procured by fraud. Adriana claims
a confidential relationship arose between Shelby and her, prior to the execution of
the Private Agreement, because Shelby had assumed the obligation to make
payments to her from the revenue of the Mexican companies he had been
managing for a number of years. According to Adriana, because informal
fiduciary relationships are not recognized in Mexico, the application of the forum-
selection clause and the choice-of-law clause4 would deprive her of rights, which
4
The choice-of-law clause was not the subject of Shelby’s motion to dismiss.
18
had vested prior to the Private Agreement’s existence. Adriana claims that Shelby,
in his role as a fiduciary, failed to make her aware of the Private Agreement’s
negating a potential cause of action. Also based on this claimed fiduciary
relationship, Adriana asserts that she was fraudulently induced into executing the
forum-selection clause.
No duty of disclosure arises without evidence of a confidential relationship.
Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 674−75 (Tex. 1998). A failure to
disclose information may constitute fraud where there is a duty to disclose.
Bradford v. Vento, 48 S.W.3d 749, 754−55 (Tex. 2001). “Fraudulent inducement
to sign an agreement containing a dispute resolution agreement such as an
arbitration clause or forum-selection clause will not bar enforcement of the clause
unless the specific clause was the product of fraud or coercion.” Lyon Fin. Servs.,
Inc., 257 S.W.3d 228, 232 (Tex. 2008) (orig. proceeding) (per curiam). The fraud
or overreaching in question must involve the negotiation of the forum-selection
clause itself. Young, 336 S.W.3d at 266−67.
However, a party who signs a contract is presumed to know its contents and
its legal effects. Profits Assocs., Inc., 286 S.W.3d at 923; Mo. Pac. R.R. Co. v.
Lely Dev. Corp., 86 S.W.3d 787, 791 (Tex. App.—Austin 2002, pet. dism’d). A
party cannot avoid a contract clause by simply failing to read it. In re U.S. Home
Corp., 236 S.W.3d 761, 764 (Tex. 2007) (orig. proceeding) (per curiam).
Evidence that a party concealed a forum-selection clause combined with evidence
proving that concealment was part of an intent to defraud a party may be sufficient
to invalidate the clause.” Profits Assocs., Inc., 286 S.W.3d at 923.
19
Adriana, in her affidavit in support of her response to Shelby’s motion to
dismiss, claimed that “Shelby discouraged me from reading the ACUERDO
PRIVADO. He did not say to me that it contained a clause saying that I submitted
to the courts of the city of Reynosa, Tamaulipas, Mexico in the event of any
interpretation, dispute, or other aspect of the ACUERDO PRIVADO, or words to
that effect, and I have had no such understanding, either when I signed it or since
then.” Adriana does not claim that Shelby prevented her from reading the forum-
selection clause. An allegation that Shelby merely “discouraged” her from reading
the Private Agreement before she signed it is not sufficient to establish fraud. See
id. at 923−24 (rejecting relator’s argument that forum-selection clause was
procured by fraud or overreaching because relator was not shown the clause); U.S.
Home Corp., 236 S.W.3d at 764 (holding there was no evidence of fraud as
relators conceded that no one prevented them from reading the back-side of a
single sheet contract that contained the arbitration clause).
Moreover, Eduardo and Adriana agreed that the Private Agreement was the
“final and definitive will of the parties” and there was “no mistake, fraud, bad faith
or any defect of will that might affect their understanding or decision regarding the
content.” See In re Emex Holdings, LLC, No. 13-11-00145-CV, 2013 WL
1683614, at *8 (Tex. App.—Corpus Christi Apr. 18, 2013, orig. proceeding [mand.
denied]) (mem. op. en banc) (noting that the parties stated in the agreement that
there was no fraud, bad faith, injury, or any other cause of nullity established by
law and holding that the real parties had not clearly shown that the forum-selection
clause was the product of fraud or overreaching).
20
Here, Adriana’s claim that she trusted Shelby as fiduciary to tell her that the
forum-selection clause would negate a potential cause of action for breach of
fiduciary duty in Mexico, does not render a forum-selection clause unenforceable.
See id. (holding parties, who did not read the forum-selection clause before signing
the agreement because they had instructed the attorney to change the clause and
trusted him to do so, were charged with knowledge of the forum-selection clause).
Not being able to bring certain causes of action in the designated forum is not a
reason to avoid enforcement of a forum-selection clause. Lyon Fin. Servs., Inc.,
257 S.W.3d at 234 (holding inability to assert a claim for usury under Pennsylvania
law did not create a public policy reason to deny enforcement of the forum-
selection clause).
Moreover, Adriana has not shown any evidence that Shelby knew that she
would not be able to maintain claims for breach of fiduciary duty based on an
informal confidential relationship under Mexican law. A claim based on the
failure to disclose information necessarily presumes that the party with the duty to
speak has knowledge of the facts. Cf. Four Bros. Boat Works, Inc. v. Tesoro
Petroleum Cos., 217 S.W.3d 653, 670 (Tex. App.—Houston [14th Dist.] 2006, pet.
denied) (stating that the failure to disclose information does not constitute fraud
unless there is a duty to disclose information). Shelby had no duty to disclose facts
of which he was not aware. See HTM Rests., Inc. v. Goldman Sachs & Co., 797
S.W.2d 326, 329 (Tex. App.—Houston [14th Dist.] 1990, writ denied) (“A party
cannot be guilty of fraudulently or intentionally concealing facts of which he is not
aware. Although silence can be a form of misrepresentation, the duty to speak
does not arise until the silent party is aware of the facts.”) (citations omitted).
21
Adriana has not shown that Shelby had a duty to disclose to her the forum-
selection and choice-of-law provisions in the Private Agreement and their
consequences. Adriana further has not demonstrated that the forum-selection and
choice-of-law provisions were procured by fraud or overreaching.
B. Whether Reynosa, Tamaulipas, Mexico is a Seriously Inconvenient
Forum
Adriana further contends that the forum-selection clause is unenforceable as
seriously inconvenient such that she will be denied her day in court because the
specified forum—Reynosa, Tamaulipas, Mexico—is “one of the most dangerous
places in the world.” When inconvenience in litigating in the chosen forum is
foreseeable at the time of contracting, the challenger must show that the 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. ADM Inv. Servs., Inc., 304
S.W.3d at 375. “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 cost or other reasons.” Int’l Profit Assocs., Inc., 274 S.W.3d at 680.
Adriana agrees that financial difficulties and inconvenience to the witnesses are not
sufficient to avoid application of the forum-selection clause, but asserts that the
dangerous conditions in Reynosa render the forum seriously inconvenient. See
Lyon Fin. Servs., Inc., 257 S.W.3d at 254; In re Zotec Partners, LLC, 353 S.W.3d
533, 537 (Tex. App.—San Antonio 2011, orig. proceeding).
Relying on forum-non-conveniens cases, Shelby contends that purported
dangerous conditions are not sufficient to avoid enforcement of a forum-selection
22
clause in the absence of evidence that such conditions have an adverse impact on
the operation of the judiciary.5 Shelby presented uncontroverted evidence that
Adriana, Sylvia, and Tommy have hired attorneys and filed claims against him in
Tamaulipas, Adriana’s Mexican law expert has handled litigation in Tamaulipas,
and Reynosa has a fully functioning court system. Adriana responds that forum
non conveniens cases are not applicable in the forum-selection clause analysis. We
disagree. There is no reason not to consider forum non conveniens cases, which
have addressed whether political unrest or other conditions render the alternative
forum inadequate.
5
See, e.g., Paolicelli v. Ford Motor Co., 289 Fed. App’x 387, 391 (11th Cir. 2008)
(“absent evidence the political unrest has affected the Columbian judicial system or would affect
litigation of this case, this fact is not sufficient to outweigh the other factors that weigh in favor
of dismissal”); Rustal Trading US, Inc. v. Makki, 17 Fed. App’x 331, 337 (6th Cir. 2001)
(holding political unrest in a foreign jurisdiction did not render the forum inadequate absent
some showing that the unrest had had an adverse effect on the judicial system there); Transunion
Corp v. PepsiCo, Inc., 811 F.2d 127, 129 (2d Cir. 1987) (holding there had been no showing that
political unrest in the Philippines had an adverse impact on the judicial system); Miralda v.
Tidewater, Inc., Civ. A. No. 11-1170, 2012 WL 3637845, at *4 (E.D. La. Aug. 23, 2012)
(observing that several federal appellate courts had uniformly concluded that political unrest of
the alternative forum had not per se rendered the forum inadequate in the forum non conveniens
context absent some showing that this unrest negatively affected the judicial system of the
country or the litigation at issue); Morales v. Ford Motor Co., 313 F. Supp. 2d 672, 682 (S.D.
Tex. 2004) (rejecting contention that political situation in Venezuela would make trial in U.S.
more convenient because of “paucity of evidence and information submitted to the court” on the
issue); In re Bridgestone/Firestone, Inc., Tires Prods. Liability Litig., 190 F. Supp. 2d 1125,
1143−44 (S.D. Ind. 2002) (considering physical threats to litigants and witnesses arising from
then current volatile political situation in Columbia—“of particular interest [was] the fact that, in
the recent past, judicial officers have been the targets of guerilla violation”—to be a factor
weighing in favor of retaining jurisdiction); In re BPZ Res., Inc., 359 S.W.3d 866, 879 (Tex.
App.—Houston [14th Dist.] 2012, orig. proceeding [mand. denied]) (holding that political unrest
alone, was insufficient to establish that Peru was an inconvenient forum)
23
Under these circumstances, Adriana has not shown that litigating in Reynosa
is so gravely difficult and inconvenient that she will for all practical purposes be
deprived of her day in court.
C. Waiver of the Right to Enforce the Forum-Selection Clause
Adriana asserts that Shelby has waived his right to enforce the forum-
selection clause. Adriana pleaded four of her six counterclaims on January 9,
2014, and added two claims in her amended pleadings on December 11, 2014,
February 5, 2015, and February 11, 2015. Shelby litigated those four original
causes of action for a year, including pleading affirmative defenses based on Texas
law, before seeking dismissal of Adriana’s claims pursuant to the forum-selection
clause.
A party may waive the right to enforce a forum-selection clause. Boehme,
256 S.W.3d at 884. In determining waiver of a forum-selection clause, the court
may look to arbitration cases for guidance. Id. The test for waiver of an
arbitration clause is whether (1) the party seeking arbitration has “substantially
invoked the judicial process,” and (2) the party resisting arbitration suffered actual
prejudice as a result. Id.
Waiver is primarily a function of intent and requires either the intentional
relinquishment of a known right or intentional conduct inconsistent with claiming
that right. Crosstex Energy Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 393−94
(Tex. 2014). Whether a party has substantially invoked the judicial process
depends on the totality of the circumstances. Richmont Holdings, Inc. v. Superior
Recharge Sys., L.L.C., 445 S.W.3d 573, 575 (Tex. 2015) (per curiam).
24
Adriana contends that Shelby substantially invoked the judicial process by
deposing her and serving her with written discovery requests and by having his
own deposition taken and responding to Adriana’s discovery requests. These
limited actions do not establish that Shelby substantially invoked the judicial
process such that he waived his right to enforce the forum-selection clause. See In
re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 763−64 (Tex. 2006) (orig. proceeding)
(per curiam) (holding the relators did not substantially invoke the judicial process
by serving requests for disclosure, noticing four depositions, and sending a request
for production); In re AIU Ins. Co., 148 S.W.3d 109, 121 (Tex. 2004) (orig.
proceeding) (holding the relator did not waive enforcement of the forum-selection
clause by filing answer, requesting a jury, and paying the jury fee; Boehme, 256
S.W.3d at 885 (holding that deposing three witnesses, producing two witnesses for
deposition, exchanging documents, and participating in a temporary injunction
hearing did not constitute waiver of forum-selection clause).
Adriana also asserts that she has been prejudiced by Shelby’s delay in
seeking to enforce the forum-selection clause. Mere delay in moving to enforce
the forum-selection clause does not constitute waiver. Cf. Richmont Holdings,
Inc., 455 S.W.3d at 576 (holding that moving to compel arbitration nineteen
months after lawsuit was filed was not waiver of right to arbitrate); Vesta Ins. Grp.,
Inc., 192 S.W.3d at 763−64 (holding that moving to compel arbitration two years
after lawsuit was filed was not waiver of right to arbitrate).
Adriana contends that Shelby gained an advantage in this litigation by
questioning her at her deposition about the Private Agreement and payments made
pursuant to it. Shelby responds that he had been seeking to take Adriana’s
25
deposition since June 2013, several months prior to Adriana filing her
counterclaims. Shelby’s counsel questioned Adriana about the Private Agreement
because Adriana had initiated changes to Dorothy’s will due to her dissatisfaction
with the payments she received pursuant to the Private Agreement. Adriana cannot
show prejudice from any discovery requests to which she responded as she chose
to litigate in a forum not agreed to by the parties. See In re Automated Collection
Techs., Inc., 156 S.W.3d 557, 560 (Tex. 2004) (orig. proceeding) (per curiam)
(holding that real party in interest could not show prejudice from any duplication
of time or efforts in litigating case where it had initiated proceedings in a forum
other that the one to which it had contractually agreed).
Adriana further argues that she suffered prejudice by Shelby’s delay in
invoking the forum-selection clause because the one-year statute of limitations in
Mexico will limit her recovery of damages. Shelby points out that, because the last
payment Adriana received under the Private Agreement was in October 2010, the
delay from January 2014 to January 2015 is immaterial for limitations purposes in
Mexico. Moreover, Adriana is complaining of the choice-of-law provision in the
Private Agreement, which is not the subject matter of the trial court’s order or this
original proceeding. Adriana has not shown that she has been prejudiced by
Shelby’s delay in seeking to enforce the forum-selection clause. Therefore,
Adriana has not established that Shelby waived his right to enforce the forum-
selection clause.
VII. CONCLUSION
We hold that Adriana’s claims for tortious interference with inheritance
rights, breach of fiduciary duty, tortious interference with the Private Agreement,
26
and breach of the contractual obligation to perform the Private Agreement fall
within the scope of the forum-selection clause, but Adriana’s claims for breach of
the agreement to pay her $100,000 upon Dorothy’s death and breach of the
Donation Agreement do not. We further hold that Adriana has not established that
the forum-selection clause was procured as a result of overreaching or fraud, that
Reynosa, Taumalipas is a seriously inconvenient forum, or that Shelby waived his
right to enforce the clause.
Thus, the trial court abused its discretion by denying Shelby’s motion to
dismiss based on the forum-selection clause contained in the Private Agreement as
to Adriana’s claims for tortious interference with inheritance rights, breach of
fiduciary duty, tortious interference with the Private Agreement, and breach of the
contractual obligation to perform the Private Agreement, and Shelby does not have
an adequate remedy by appeal. The trial court did not abuse its discretion by
denying Shelby’s motion to dismiss as to Adriana’s claims for breach of the
agreement to pay her $100,000 upon Dorothy’s death and breach of the Donation
Agreement.
Accordingly, we conditionally grant the petition for writ of mandamus, in
part, and direct the trial court to vacate its February 18, 2015 order to the extent
that it denies Shelby’s motion to dismiss as to Adriana’s claims for tortious
interference with inheritance rights, breach of fiduciary duty, tortious interference
with the Private Agreement, and breach of the contractual obligation to perform the
Private Agreement, and dismiss those claims. We deny the remainder of the
petition as to Adriana’s claims for breach of the agreement to pay her $100,000
27
upon Dorothy’s death and breach of the Donation Agreement. The writ will issue
only if the trial court fails to act in accordance with this opinion.
/s/ Tracy Christopher
Justice
Panel consists of Justices Christopher, Donovan, and Brown.
28