crum-forster-specialty-insurance-company-v-creekstone-builders-inc ( 2015 )

Opinion issued October 27, 2015
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00907-CV
———————————
CRUM & FORSTER SPECIALTY INSURANCE COMPANY, Appellant
V.
CREEKSTONE BUILDERS, INC., NASHVILLE CREEKSTONE, LLC,
STEPHEN KELLER, EVERETT JACKSON, AND CREEKSTONE SC I,
LLC, Appellees
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Case No. 2014-29616
OPINION
This declaratory judgment action involves an insurance coverage dispute
arising out of a construction-defects verdict obtained in South Carolina against
appellee Creekstone SC I, LLC, an insured under commercial general liability
insurance policies issued by appellant, Crum & Forster Specialty Insurance
Company (“Crum & Forster”). Prior to the trial of the construction-defects
lawsuit, Crum & Forster filed the underlying declaratory judgment action in Harris
County against Creekstone SC I, LLC and the four additional appellees—
Creekstone Builders, Inc., Nashville Creekstone, LLC, Stephen Keller, and Everett
Jackson (collectively, “Creekstone”)—seeking a declaration that it had no
coverage obligation to Creekstone under the insurance policies at issue.
Creekstone moved to dismiss the underlying action, arguing that Crum & Forster
had failed to join the plaintiff from the South Carolina construction-defects
lawsuit, a necessary party to this suit, and that the case would more appropriately
be resolved in South Carolina and thus should be dismissed on forum non
conveniens grounds. The trial court expressly granted Creekstone’s motion on
both grounds.
In two issues on appeal, Crum & Forster argues that (1) the trial court
erroneously determined that the South Carolina plaintiff was a necessary and
indispensable party to the underlying action filed in Harris County because its
interests are purely derivative of Creekstone’s, and (2) the trial court erred in
dismissing the case on forum non conveniens grounds because Creekstone offered
2
no evidence to support its argument on that basis at the hearing on Creekstone’s
motion and the facts of the case support retaining this suit in Texas.
We affirm.
Background
From 2004 to 2006, Creekstone Builders, as a developer, and Creekstone SC
I, as general contractor, renovated and converted an apartment complex in Mt.
Pleasant, South Carolina into condominium units.
In 2010, the East Bridge Lofts Property Owners Association, Inc. (“POA”)
filed suit in South Carolina state court against numerous defendants, including
Creekstone SC I, Everett Jackson, and Stephen Keller,1 and asserted several causes
of action, including negligent construction and supervision of the condominium
units (“the construction-defects suit”). Crum & Forster, which had issued
commercial general liability insurance policies to Creekstone Builders, declined to
defend Creekstone in the construction-defects suit.
On May 23, 2014, shortly before the trial in the construction-defects suit
began in South Carolina, Crum & Forster filed the underlying declaratory
judgment action in Harris County against Creekstone Builders, Nashville
Creekstone, Keller, Jackson, and Creekstone SC I (“the underlying action”). Crum
& Forster did not name the POA as a defendant. Crum & Forster alleged that it
1
Appellees Everett Jackson and Stephen Keller are the president and vice president,
respectively, of Creekstone Builders.
3
had issued two general liability insurance policies to Creekstone Builders in 2008
and 2009—both of which also included Creekstone SC I, Keller, and Nashville
Creekstone as named insureds on the policies—and that an exclusion contained in
both policies precluded coverage for the claims asserted against Creekstone in the
construction-defects suit. Crum & Forster sought a declaration that, under the two
insurance policies at issue, it had no duties or obligations to Creekstone for the
claims asserted against it. In its original petition, Crum & Forster alleged that its
“statutory home office” was located in Arizona and that its principal place of
business was located in New Jersey. It also alleged that Creekstone Builders is a
Texas corporation and does business in Texas, that Nashville Creekstone is a Texas
company with a principal place of business in Tennessee, and that Creekstone SC I
is a South Carolina company with a principal place of business in Texas.
On June 9, 2014, the South Carolina state court entered judgment in favor of
the POA and against Creekstone SC I for $22,000,000 in actual damages and
$33,000,000 in punitive damages. 2
On June 24, 2014, the POA, Creekstone SC I, and Creekstone Builders filed
suit against Crum & Forster in federal district court in South Carolina (“the federal
action”). The POA alleged that, as a judgment creditor of Creekstone SC I, it had
2
The South Carolina state court also entered judgment against Creekstone
Management, LLC and East Bridge Lofts, LLC in the construction-defects suit.
Neither of these entities is a party to the underlying declaratory judgment action
brought by Crum & Forster.
4
standing to sue Crum & Forster to recover proceeds under the insurance policies at
issue. Among other claims, the POA, Creekstone SC I, and Creekstone Builders
sought a declaration that Crum & Forster was obligated to pay the full judgment in
favor of the POA and that it was required to indemnify Creekstone SC I and
Creekstone Builders.
Creekstone then filed a motion to dismiss the underlying action. Creekstone
first argued that the trial court should dismiss the underlying action because Crum
& Forster did not join the POA as a party. It argued that as the judgment creditor
in the construction-defects suit, the POA claimed an interest that would be affected
by a declaration in the underlying action and thus was a necessary and
indispensable party under Texas Rule of Civil Procedure 39 and the Texas
Declaratory Judgment Act.
Creekstone also argued that the federal action was pending in South
Carolina, that the POA was properly joined as a party to that action, and that
allowing the underlying action to proceed without the POA as a party raised the
risk of inconsistent resolution of the two competing declaratory judgment actions.
Creekstone further argued that the POA was a South Carolina entity that had no
contacts with Texas and did not do business in Texas and therefore was not
amenable to service of process in Texas. Creekstone argued that because the POA
5
was a necessary party that could not be joined in the underlying action, the trial
court was required to dismiss the case.
As another basis for dismissal, Creekstone argued that the trial court should
dismiss the underlying action pursuant to the common law doctrine of forum non
conveniens because the pending federal action in South Carolina “properly
includes all necessary parties and serves as the . . . only forum to fully, finally and
conclusively resolve the underlying controversy, a controversy which originated in
South Carolina.” Creekstone argued that South Carolina is an available and
adequate alternate forum, as Creekstone Builders, Creekstone SC I, Crum &
Forster, and the POA are all parties to the federal action and have submitted to
South Carolina’s jurisdiction. Creekstone argued that retaining the case in Texas
would “impose[] an undue burden on the parties as well as the Texas court system
in deciding an action which cannot resolve the underlying controversy in one fell
swoop.” It contended that South Carolina provides an adequate remedy because it
is the only forum that can fully adjudicate the issues among all affected parties;
retaining the case in Texas substantially prejudices Creekstone as well as the POA;
the acts or omissions that led to the claims against Creekstone in the construction
defects suit occurred in South Carolina; and the federal action in South Carolina
“properly include[s] all necessary and indispensable parties.”
6
As supporting evidence, Creekstone attached the affidavit of Amanda
Graham, the president of the POA. Graham averred that the POA is a South
Carolina entity, that its only place of business is in South Carolina, that it has no
contacts with Texas, and that it has never engaged in business in Texas. Graham
further averred that the POA’s presence is necessary because it has an interest in
the damages award that is the subject of the underlying action, but because the
POA cannot participate in the action, any coverage declaration “would
substantially prejudice the POA because it cannot protect its interest.” She averred
that the dispute “turns on South Carolina witnesses” and that a declaratory
judgment action concerning insurance coverage and involving the POA is pending
in federal court in South Carolina. Graham stated that because South Carolina is
the only state that can exercise jurisdiction over the POA, “South Carolina is the
only forum [that] can fully adjudicate all issues regarding coverage for the POA
judgment in a single action.” Creekstone also attached as evidence a copy of the
judgment in the construction-defects suit and its complaint in the federal action.
In response, Crum & Forster argued that the POA is not a necessary party to
the underlying action. It argued that the POA’s dispute with Creekstone has been
settled by the judgment in the construction-defects suit and that in the underlying
action, the interests of the POA and Creekstone are “perfectly aligned,” and thus
the POA’s presence in the suit as a party is not necessary to protect its interest in
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the judgment it received. Crum & Forster further argued that because the POA is
in privity with Creekstone, a judgment in the underlying suit concerning insurance
coverage would be res judicata to the federal action in South Carolina and would
not subject the parties to the possibility of inconsistent judgments.
Crum & Forster also argued that Creekstone failed to carry its burden of
proof to demonstrate entitlement to dismissal on forum non conveniens grounds, as
it did not attach to its motion to dismiss any evidence addressing the factors
considered in a forum non conveniens analysis. Crum & Forster attached copies of
the insurance policies at issue to its response, and these policies indicated that
Creekstone Builders, the named insured under the policies, has a Houston address
and that Crum & Forster’s broker for the policies is also located in Houston.
Creekstone filed a reply and argued that injured third parties, such as the
POA, are “proper participants in declaratory actions brought by insurers to deny
coverage.” Creekstone further argued that it is not in privity with the POA and that
any judgment in the underlying action could not be res judicata to the federal
action, a suit in which the POA has been properly joined, because under the
Declaratory Judgments Act, a person may not be prejudiced by a declaratory
judgment action to which it was not a party.
With respect to its forum non conveniens argument, Creekstone argued that
access to witnesses, discovery, and other sources of proof is easier in South
8
Carolina because the property damage occurred there, and the judgment in the
construction-defects suit was entered there, and, thus, litigation expenses would be
lower in South Carolina relative to Texas. Creekstone argued that discovery is in
progress in the federal action in South Carolina, that the dispute is based on a
South Carolina lawsuit, that the insurance policies at issue apply to a South
Carolina entity, that the courts in Harris County are far busier than in South
Carolina, and that the burden of jury duty would be more appropriately placed on
the citizens of South Carolina. Creekstone again argued that South Carolina is the
only forum that can “fully adjudicate the issues amongst all ‘affected’ parties,
resolving all existing controversies with finality,” and thus, “in a single South
Carolina action, there would exist no possibility of inconsistent adjudications,
which best serves judicial economy.” Creekstone did not attach any additional
evidence to its reply, nor did it present any evidence at the hearing on its motion.
The trial court expressly granted Creekstone’s motion to dismiss on both of
the grounds raised: that Crum & Forster failed to join a necessary and
indispensable party to the action and that the doctrine of forum non conveniens
permitted dismissal of the action. Crum & Forster requested findings of fact and
conclusions of law, but the trial court did not file findings and conclusions. This
appeal followed.
9
Forum Non Conveniens
In its second issue, Crum & Forster contends that the trial court erred in
dismissing the underlying action on forum non conveniens grounds because
(1) Creekstone failed to meet its burden of proof to offer evidence on the issue, and
(2) the balance of private and public interest factors weighs in favor of retaining
the suit in Texas.
A. Common-Law Forum Non Conveniens Analysis
A forum non conveniens determination is “committed to the sound
discretion of the trial court.” Quixtar, Inc. v. Signature Mgmt. Team, LLC, 315
S.W.3d 28, 31 (Tex. 2010) (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235,
257, 102 S. Ct. 252, 266 (1981)). When the trial court has considered all of the
relevant public and private interest factors and its balancing of these factors is
reasonable, the court’s ruling “deserves substantial deference.” Id. An appellate
court should not conduct a de novo review of the trial court’s ruling by reweighing
each of the factors. Brenham Oil & Gas, Inc. v. TGS-NOPEC Geophysical Co., —
S.W.3d —, No. 01-13-00349-CV, 2015 WL 4591788, at *15 (Tex. App.—Houston
[1st Dist.] July 30, 2015, no pet. h.).
Ordinarily, a defendant seeking dismissal based on forum non conveniens
grounds “bears a heavy burden in opposing the plaintiff’s chosen forum.” Quixtar,
315 S.W.3d at 31 (quoting Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp.,
10
549 U.S. 422, 430, 127 S. Ct. 1184, 1191 (2007)); Vinmar Trade Fin., Ltd. v. Util.
Trailers de Mexico, S.A. de C.V., 336 S.W.3d 664, 672 (Tex. App.—Houston [1st
Dist.] 2010, no pet.) (“The defendants bear the burden of proof on all elements of
the forum non conveniens analysis and must establish that the balance of factors
strongly favors dismissal.”). However, the doctrine affords “substantially less
deference” to a non-resident plaintiff’s forum choice. Quixtar, 315 S.W.3d at 31
(quoting In re Pirelli Tire, L.L.C., 247 S.W.3d 670, 675 (Tex. 2007) (plurality
op.)). Before a case is dismissed on forum non conveniens grounds, the defendant
must demonstrate that an adequate alternative forum is available to adjudicate the
dispute. Richardson v. Newman, 439 S.W.3d 538, 543 (Tex. App.—Houston [1st
Dist.] 2014, no pet.) (citing Piper Aircraft, 454 U.S. at 254 n.22, 102 S. Ct. at 265);
see also Brenham Oil & Gas, 2015 WL 4591788, at *16 (“The party seeking
dismissal bears the initial burden of showing that the proposed alternative forum is
available and adequate.”).
The “central focus” of a forum non conveniens inquiry is convenience.
Quixtar, 315 S.W.3d at 33 (quoting Piper Aircraft, 454 U.S. at 249, 102 S. Ct. at
262). “The doctrine permits courts to dismiss a claim based on practical
considerations that affect litigants, witnesses, and the justice system.” Brenham
Oil & Gas, 2015 WL 4591788, at *15. In determining whether to dismiss a case
on forum non conveniens grounds, a court must consider the public and private
11
interest considerations set out in the United States Supreme Court’s decision in
Gulf Oil Corp. v. Gilbert. Gulf Oil, 330 U.S. 501, 508–09, 67 S. Ct. 839, 843
(1947) (enumerating public and private interest factors to be considered in forum
non conveniens determinations); Quixtar, 315 S.W.3d at 33; Brenham Oil & Gas,
2015 WL 4591788, at *16 (“Once a court has determined that there is an adequate
alternative forum that may hear the cause, it must weigh private- and public-
interest factors to determine whether forum non conveniens dismissal is
appropriate.”).
Private interest considerations include: (1) the relative ease of access to
sources of proof; (2) the availability of compulsory process for attendance of
unwilling witnesses and the cost of obtaining attendance of willing witnesses;
(3) the possibility of a view of the premises, if such a view would be appropriate
for the cause of action; (4) the enforceability of a judgment once obtained; and
(5) all other practical problems that make trial of a case easy, expeditious, and
inexpensive. Quixtar, 315 S.W.3d at 33 (quoting Gulf Oil, 330 U.S. at 508, 67 S.
Ct. at 843). Public interest considerations include: (1) the administrative
difficulties for courts when litigation occurs in “congested centers” instead of
being handled “at its origin”; (2) the burden of jury duty imposed upon a
community with no relation to the litigation; (3) the local interest in having
12
localized controversies decided at home; and (4) avoiding conflicts of law issues.
Id. at 33–34 (quoting Gulf Oil, 330 U.S. at 508–09, 67 S. Ct. at 843).
B. Failure to Introduce Evidence at Hearing
Crum & Forster first argues that we must reverse the trial court’s ruling on
Creekstone’s motion to dismiss for forum non conveniens because Creekstone had
the burden of proof but offered no supporting evidence at the hearing on its
motion. Specifically, Crum & Forster argues that because a hearing on a forum
non conveniens motion is an evidentiary hearing, “a trial court abuses its discretion
if it dismisses a case based on forum non conveniens if the movant fails to
introduce evidence at the hearing.”
As support, Crum & Forster cites the Dallas Court of Appeals’ decision in
Seung Ok Lee v. Ki Pong Na, 198 S.W.3d 492 (Tex. App.—Dallas 2006, no pet.).
In Seung Ok Lee, a divorce case which involved a competing action for divorce
filed in South Korea, the defendant “filed a plea in abatement in the trial court
requesting the case be abated until the conclusion of the Korean suit.” Id. at 494.
The defendant offered no supporting evidence at the hearing on the plea, although
the trial court took judicial notice of its file, which included a copy of the petition
filed in the Korean suit. Id. The trial court subsequently dismissed the case on
forum non conveniens grounds. Id. The Dallas court stated, “There must be some
evidence in the record that allows the trial court to balance the [forum non
13
conveniens] factors and determine whether they weigh strongly in favor of trying
the case in another forum,” and noted that “[u]nsubstantiated, conclusory
allegations in a motion or in argument by counsel are insufficient.” Id. at 495
(citing Elkins v. Stotts-Brown, 103 S.W.3d 664, 669 (Tex. App.—Dallas 2003, no
pet.), and McCain v. NME Hosps., Inc., 856 S.W.2d 751, 757 (Tex. App.—Dallas
1993, no writ)).
The Dallas court ultimately reversed the trial court’s order dismissing the
case on forum non conveniens grounds, holding that the trial court abused its
discretion by dismissing the case “without sufficient evidence to balance the
appropriate factors.” Id. The court did not, however, hold that, in ruling on a
forum non conveniens motion, the trial court could only consider evidence
admitted at the hearing on the motion; instead, it held that there “must be some
evidence in the record” that would allow the court to make a ruling on the forum
non conveniens factors. Id. at 495 (emphasis added).
In making a forum non conveniens determination, the trial court is not
required to consider only evidence admitted at an evidentiary hearing on the
motion. See Vinmar Trade Fin., 336 S.W.3d at 676 (“Regarding the adequacy of
proof, a forum non conveniens movant must provide enough information to enable
the trial court to balance the parties’ interests.”); see also Quixtar, 315 S.W.3d at
34 (“[R]equiring an ‘extensive investigation’ to produce evidence for the dismissal
14
hearing ‘would defeat the purpose’ of the request for this type of dismissal
altogether. Obviously, there needs to be enough information ‘to enable the District
Court to balance the parties’ interests.’”) (quoting Piper Aircraft, 454 U.S. at 258–
59, 102 S. Ct. at 267).
Instead, the trial court may consider any evidence properly before it,
including evidence attached to the defendant’s forum non conveniens motion. See,
e.g., Vinmar, 336 S.W.3d at 669, 674–75 (considering, when determining whether
Mexico was adequate alternative forum, declaration of Mexican attorney attached
as evidence to defendants’ forum non conveniens motion); see also Michiana Easy
Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 782 (Tex. 2005) (stating, in special
appearance context, “While we have generally encouraged oral hearings when
arguments may be helpful, both the Legislature and this Court have discouraged
oral presentation of testimony and evidence when they can be fairly submitted in
writing. Counsel can almost always direct the trial court’s attention to pertinent
deposition excerpts, discovery responses, or affidavits in less time than it takes to
recreate them in open court.”).
Here, although Creekstone did not present any evidence at the hearing on its
forum non conveniens motion, it did attach evidence to its motion, and, thus,
evidence relevant to the forum non conveniens inquiry was before the trial court at
the time it made its determination. We conclude that Creekstone’s failure to
15
present evidence at the hearing is not automatically fatal to its ability to meet its
forum non conveniens burden, and we consider the evidence present in the record
when reviewing the trial court’s ruling. Cf. Benz Grp. v. Barreto, 404 S.W.3d 92,
97 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (indicating that we must
consider only evidence that was before trial court at time it made its forum non
conveniens ruling).
C. Analysis of Forum Non Conveniens Factors
Crum & Forster does not challenge the trial court’s implied finding that
South Carolina is an adequate and available forum to determine this dispute. See
Vinmar Trade Fin., 336 S.W.3d at 674 (“For a case to be dismissed for forum non
conveniens, there must be another forum that could hear the case. An alternative
forum exists when it is both available and adequate.”); RSR Corp. v. Siegmund,
309 S.W.3d 686, 710 (Tex. App.—Dallas 2010, no pet.) (“If the defendant
demonstrates another available forum exists, the plaintiff must then prove the
available forum is inadequate.”). We therefore turn to whether the trial court erred
in determining that the balance of private and public interest factors weighs in
favor of dismissal of the underlying action.
1. Private Interest Factors
As stated above, the private interest factors include: (1) the relative ease of
access to sources of proof; (2) the availability of compulsory process for
16
attendance of unwilling witnesses and the cost of obtaining attendance of willing
witnesses; (3) the possibility of a view of the premises, if such a view would be
appropriate for the action; (4) the enforceability of a judgment once obtained; and
(5) all other practical problems that make trial of a case easy, expeditious, and
inexpensive. Quixtar, 315 S.W.3d at 33 (quoting Gulf Oil, 330 U.S. at 508, 67 S.
Ct. at 843). A defendant moving for dismissal on forum non conveniens grounds
is not required to prove that each factor strongly favors dismissal of the case. Id.
Crum & Forster argues that the underlying action “involves a simple
[insurance] coverage dispute with limited ‘sources of proof’ needed beyond the
policy and the pleadings” in the underlying action. Furthermore, it contends that
resolution of the underlying action requires minimal witnesses and would rely
primarily on the depositions of corporate representatives, who are “either located
in Texas, or, if outside Texas, in locations other than” South Carolina. Crum &
Forster also argues that because a judgment obtained in Texas is equally
enforceable in South Carolina, the private interest factors either weigh in favor of
retaining the case in Texas or are neutral.
In arguing that the trial court’s dismissal was proper, Creekstone points to
the following evidence in the record: the pleadings and judgment in the
construction-defects suit; court filings in both the underlying action and the federal
17
action; Amanda Graham’s affidavit on behalf of the POA; and the insurance
policies at issue. Creekstone argues:
[T]hese documents establish access to witnesses, discovery and other
sources of proof is easier in South Carolina because (a) the
“occurrence” at issue arose in South Carolina; (b) the “property
damage” at issue is within South Carolina; (c) the “work” at issue was
performed in South Carolina; (d) Crum negotiated the “claim” at issue
in South Carolina; (e) the [the construction-defects suit] against
Creekstone SC[] I, LLC was “tried” in South Carolina; and (f) the
“judgment” against Creekstone SC I, LLC was entered in South
Carolina. Because this case stems from matters decided in South
Carolina, involving South Carolina witnesses and South Carolina
sources of proof, it naturally follows litigation-related expenses will
be lower in South Carolina as opposed to Texas.
The parties agree that Crum & Forster, which has a home office in Arizona and a
principal place of business in New Jersey, is a non-resident plaintiff and that
Creekstone Builders, one of the five defendants in the underlying action, is a Texas
entity. Although Crum & Forster alleged in its original petition in the underlying
action that Creekstone SC I was organized under the laws of South Carolina but
had a principal place of business in Texas, Creekstone alleged in the federal action,
which it attached as evidence to its motion to dismiss, that Creekstone SC I “is a
South Carolina limited liability company.”
Ordinarily, a defendant seeking dismissal on forum non conveniens grounds
“bears a heavy burden in opposing the plaintiff’s chosen forum,” but the doctrine
affords “substantially less deference” to the forum choice of a non-resident
plaintiff. Quixtar, 315 S.W.3d at 31; Vinmar Trade Fin., 336 S.W.3d at 678.
18
“There is a connection to Texas when one of the parties is a Texas resident and at
least some justification for the burden to Texans of providing judicial resources for
the dispute.” Quixtar, 315 S.W.3d at 33. Here, Creekstone Builders is a Texas
entity, and Crum & Forster’s broker for the insurance policies at issue was located
in Texas. However, Crum & Forster itself, the plaintiff in the underlying action, is
not a resident of Texas. Thus, its forum choice is entitled to “substantially less
deference” than if it were a Texas resident. See id. Moreover, the one defendant in
the underlying action that is a party to the judgment in the construction-defects
suit, Creekstone SC I, is a South Carolina entity.
Creekstone attached the affidavit of Amanda Graham, the president of the
POA, to its motion to dismiss. Graham averred that the condominiums that were
the subject of the construction-defects suit are located in South Carolina, that the
POA obtained a judgment in South Carolina against Creekstone SC I, that the
“dispute turns on South Carolina witnesses,” that South Carolina is the only state
that can exercise jurisdiction over all parties interested in the outcome of the
insurance coverage dispute, and that a suit concerning insurance coverage is also
pending in South Carolina federal court and involves the POA, Creekstone SC I,
Creekstone Builders, and Crum & Forster. It is clear from the record that at least
some of Creekstone’s sources of proof and witnesses are located in South Carolina,
and Crum & Forster’s employees who are witnesses for this dispute will likely be
19
required to travel regardless of whether trial is held in Texas or South Carolina, as
its principal place of business is in New Jersey. Creekstone was not required to
submit detailed lists of the witnesses that it plans to call or the evidence that it
plans to introduce at trial, nor was it required to present to the trial court a “detailed
quantification of costs” of litigating in the two respective forums. See Quixtar, 315
S.W.3d at 34; Vinmar Trade Fin., 336 S.W.3d at 677–78 (noting that defendants
“did not specifically quantify the expense of litigation in either forum” but
concluding that record still provided sufficient evidence for appellate court to
determine that trial court did not abuse its discretion in impliedly determining that
balance of private interest factors weighed in favor of dismissal).
We conclude that the trial court had sufficient evidence before it such that it
could reasonably determine that the private interest factors weighed in favor of
dismissing the case to be heard in South Carolina.
2. Public Interest Factors
The public interest considerations include: (1) the administrative difficulties
involved when litigation “pile[s] up in congested centers instead of being handled
at its origin”; (2) the burden of jury duty upon the people of a community with no
relation to the litigation; (3) the local interest in having localized controversies
decided at home; and (4) avoiding conflicts of law issues. Quixtar, 315 S.W.3d at
33–34. A defendant is not required to present evidence demonstrating that each of
20
the public interest factors weighs in favor of dismissal. See id. at 35 (noting that
court of appeals, in concluding that dismissal was not appropriate, “apparently
reasoned that Quixtar’s failure to demonstrate any choice of law issues or docket
congestion problems weighed against Michigan as a more favorable forum” and
ultimately holding that court of appeals “did not give the trial court’s decision
appropriate deference”).
Crum & Forster argues that “the core issue here is an insured’s right to
indemnification under certain insurance policies, which were issued in Texas to
Texas companies and residents,” and, thus, there is “no question that Texas has the
primary interest in adjudicating” this dispute. Crum & Forster is correct that
Creekstone Builders is a Texas entity and that Crum & Forster’s broker involved in
issuing the policies is located in Houston. As a result, Texas does have an interest
in adjudicating this dispute, and there is at least some justification for retaining the
case in Texas. See Quixtar, 315 S.W.3d at 33 (“There is a connection to Texas
when one of the parties is a Texas resident and at least some justification for the
burden to Texas of providing judicial resources for the dispute.”).
However, one of the defendants in this case, Creekstone SC I, the only
defendant in the underlying action that is also a party to the judgment rendered in
the construction-defects suit, is a South Carolina entity, and the insurance coverage
dispute that is the focus of the underlying action arose solely because of the
21
defective condominium construction that occurred in South Carolina. Creekstone
Builders, the Texas entity, is not a party to the construction-defects judgment and
therefore is not liable for that judgment. Thus, although this case does involve a
connection to Texas, it is more appropriately characterized as a South Carolina
controversy. See Quixtar, 315 S.W.3d at 35 (noting that although Texas has
interest in protecting citizens from Quixtar’s wrongful conduct, dispute was
ultimately business dispute between two Michigan corporations, key meeting took
place in Michigan, and Quixtar’s actions that allegedly resulted in injury occurred
in Michigan); Vinmar Trade Fin., 336 S.W.3d at 679–80 (noting that fraud
occurred in context of Texas company’s transactions in Mexico with Mexican
companies and thus dispute was “more properly characterized as a Mexican
controversy”). Although Texas does have an interest in this dispute, South
Carolina has a greater interest and a greater relation to the litigation such that the
burden of jury duty is more appropriately placed on the citizens of South Carolina
as opposed to Texas.
Moreover, we note that an insurance coverage dispute is also pending in
South Carolina federal court, that the POA is a party to that action, and that Crum
& Forster, the defendant in that action, has not contested jurisdiction in the South
Carolina federal court. Thus, the trial court’s decision to dismiss the underlying
22
action promotes judicial economy by reducing the multiplicity of suits related to
the same controversy.
We conclude that the trial court had sufficient evidence before it such that it
could reasonably determine that the balance of public interest factors also weighed
in favor of dismissing the underlying action. We therefore hold that Creekstone
met its forum non conveniens burden and that the trial court did not abuse its
discretion by dismissing the underlying action on forum non conveniens grounds.
We overrule Crum & Forster’s second issue. 3
Conclusion
We affirm.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Massengale, and Lloyd.
3
Because we hold that the trial court did not err by granting Creekstone’s motion to
dismiss the underlying action on forum non conveniens grounds, and we thus
affirm the trial court’s judgment dismissing the underlying action, we need not
address Crum & Forster’s first issue regarding whether the trial court erred by
granting Creekstone’s motion to dismiss for failure to join a necessary party.
23