FORUM SELECTION CLAUSE ENFORCED BY MANDAMUS: In re International Profit Assoc. Inc. (Tex. 2009)

TEXAS SUPREME COURT GRANTS PETITION FOR MANDAMUS TO ENFORCE CONTRACTUAL FORUM-SELECTION CLAUSE

In re Int'l Profit Associates, Inc. (Tex. 2009)
No. 08-0531 (Tex. Jun. 12, 2009) (per curiam) (mandamus granted to enforce forum selection and choice-of-law clause) (methods to challenge forum selection clauses) (enforceability of forum selection clause) (sufficiency of disclosure of contractual terms)

FROM THE PER CURIAM OPINION:

In a recent case also involving IPA and the enforceability of a forum-selection clause, we explained that, as a general rule, forum-selection clauses are enforceable, and the party challenging the forum-selection clause bears a heavy burden of proof. In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 675 (Tex. 2009) (citing In re Lyon, 257 S.W.3d at 231–32).

A trial court abuses its discretion in refusing to enforce the forum-selection clause, unless the party opposing enforcement of the clause can clearly show that: (1) enforcement would be unreasonable or unjust, (2) the 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. Id. Applying this standard to the present case, we conclude that the trial court clearly abused its discretion by placing the burden of proof on IPA to demonstrate that it showed the forum-selection clause to Riddell.
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[T]he party challenging a forum-selection clause has the burden of proving the clause is invalid, and the party seeking to enforce the forum-selection clause is not obligated to prove that it specifically showed the clause to the opposing party as a condition of enforcement. Because the trial court placed the burden of proof on IPA and required the company to prove that it showed the forum-selection clause to Riddell, it clearly abused its discretion in denying IPA’s motion to dismiss. Accordingly, we conditionally grant mandamus relief and direct the trial court to vacate its order denying IPA’s motion to dismiss and enter an order granting the motion.

IN RE INTERNATIONAL PROFIT ASSOCIATES, INC., INTEGRATED BUSINESS ANALYSIS, INC., ACCOUNTANCY ASSOCIATES, LLC., INTERNATIONAL TAX ADVISORS, INC., AND HUEY MITCHELL, JR.; from Dallas County; 5th district (05-08-00809-CV, ___ SW3d ___, 06-30-08)stay order issued March 11, 2009, lifted
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus.Per Curiam Opinion
Per Curiam Opinion [pdf version of opinion on Supreme Court's website]

RELATED CONCEPTS: ENFORCEABILITY OF CONTRACTS, WAIVERS: conspicuousness requirement, knowing waiver of right to jury trial Jury waiver enforceability of arbitration agreement CONTRACT FORMATION AND ENFORCEABILITY: party has duty to read what he signs

Mandamus review of order compelling arbitration

Texas Supreme Court finds that mandamus review is not available to vacate order compelling arbitration (this time)
.... and grants mandamus relief.

In the words of Justice Brister:

"We granted oral argument to address more specifically when mandamus relief is available in connection with orders compelling arbitration. Finding it is unavailable here, we conditionally grant the writ." [against the court of appeals, which opined otherwise]

Party opposing arbitration may get its day in (appeals) court later:

Arbitration-friendly Supreme Court finds that appeal from final judgment (presumably from order confirming arbitration award) is adequate remedy, notwithstanding delay and additional costs, where trial court stayed litigation by interlocutory order pending arbitration, rather than dismissing the action with a final appealable order prior to arbitration. Court holds that immediate mandamus relief may be appropriate in another case. (Perhaps in the next Perry Homes case?)

In Re Gulf Exploration, No 07-0055 (Tex. Apr. 17, 2009)
(arbitration mandamus, mandamus against order compelling arbitration as opposed to order denying arbitration) IN RE GULF EXPLORATION, LLC, ET AL.; from Midland County; 11th district (11-06-00244-CV, 211 SW3d 828, 11-30-06)
The Court conditionally grants the petition for writ of mandamus.
Justice Scott Brister delivered the opinion of the Court.

RELATED CONCEPTS: arbitration mandamus vs. interlocutory appeal of order compelling arbitration, order denying arbitration; stay vs. dismissal of suit when arbitration is compelled; abatement pending arbitration. Perry Homes v. Cull 258 SW3d 580 (Tex. 2008)(denial of right to arbitrate based on waiver finding)

Contractual Jury Waiver Enforced by Mandamus

In Re Bank of America, N.A. (Tex. 2009)
No. 07-0901 (Tex. Feb. 27, 2009) (per curiam mandamus) (contractual jury waiver enforced by mandamus in analogy to arbitration clauses, conspicuousness of waiver, knowing and voluntary waiver)

OPINION EXCERPTS:

In this contract dispute, we decide whether our holding in In re Prudential—which held that a contractual waiver of a jury trial is enforceable—creates a presumption against waiver that places the burden on the party seeking enforcement to prove that the opposing party knowingly and voluntarily agreed to waive its constitutional right to a jury trial. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 30–33 (Tex. 2004).

On interlocutory appeal, the court of appeals applied such a presumption and reversed the trial court’s enforcement order. 232 S.W.3d at 151–52. Today, we conditionally grant Bank of America’s petition for writ of mandamus to clarify that Prudential does not impose a presumption against a contractual jury waiver.

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In Prudential, we agreed with the United States Supreme Court that “arbitration and forum-selection clauses should be enforced, even if they are part of an agreement alleged to have been fraudulently induced, as long as the specific clauses were not themselves the product of fraud or coercion.” 148 S.W.3d at 134–35 (citing Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974)).

Since Prudential indicates that the same dispute resolution rule expressed by the United States Supreme Court in Scherk should apply to contractual jury-waiver provisions, the court of appeals’ analysis errs by distinguishing jury waivers from arbitration clauses, thereby imposing a stringent initial presumption against jury waivers. 232 S.W.3d at 151–52. Statutes compel arbitration if an arbitration agreement exists, see Tex. Civ. Prac. Rem. Code Sec.171.021(a) (Texas General Arbitration Act), and more importantly, “Texas law has historically favored agreements to resolve such disputes by arbitration.” In re Poly-America, L.P., 262 S.W.3d 337, 348 (Tex. 2008); see also In re. D. Wilson Constr. Co., 196 S.W.3d 774, 782–83 (Tex. 2006) (recognizing presumption favoring arbitration clauses).

We see no reason why there should be a different rule for contractual jury waivers.

We hold that Prudential does not impose a presumption against jury waivers that places the burden on Bank of America to prove that the waiver was executed knowingly and voluntarily. Therefore, we conditionally grant the petition for writ of mandamus and direct the court of appeals to vacate and withdraw the opinion and judgment of May 3, 2007, and to reinstate the trial court order enforcing the parties’ jury waiver. Tex. R. App. P. 52.8(c); see also Prudential, 148 S.W.3d at 139–140 (holding that mandamus is appropriate remedy to enforce contractual jury waivers). We are confident the court of appeals will comply, and the writ will issue only if it fails to do so.

IN RE BANK OF AMERICA, N.A.; from Tarrant County; 2nd district (02-05-00397-CV, 232 SW3d 145, 05-03-07) Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus. Per Curiam Opinion(Justice Johnson not sitting)

2008-06-20 Texas Supreme Court Issues Mandamus in Two Cases

Forum Selection Clause enforced by Mandamus

In re Lyon Financial Services, Inc. (Tex. 2008)
No. 07-0486 (Tex. June 20, 2008)(per curiam) (orig. proc.) (mandamus, forum selection clause, motion to dismiss improperly denied)

Finding no evidence in the record to overcome the presumption that the forum-selection clause included in the documents executed by the parties is valid, the Texas Supreme Court, in a per curiam opinion, concludes that the trial court abused its discretion in denying Lyon’s motion to dismiss. The Court grants the petition for writ of mandamus and orders the trial court to vacate its order denying Lyon’s motion to dismiss MNI’s suit. As is the custom, the writ is issued conditionally, pending compliance by the lower court.

IN RE LYON FINANCIAL SERVICES, INC.; from Hidalgo County; 13th district (13-07-00269-CV, ___ SW3d ___, 05-31-07) Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus. Per Curiam Opinion

No Waiver of Right to Enforce Arbitration Agreement Here

In Re Fleetwood Homes of Texas, LP (Tex. 2008)
No. 06-0943 (Tex. June 20, 2008)(per curiam) (original proceeding) (motion to compel arbitration, no waiver found, mandamus granted)

Finding that Gulf has failed to show that Fleetwood waived its contractual right to arbitrate, the Texas Supreme Court conditionally grants Fleetwood’s petition for writ of mandamus in a per curiam opinion and orders the trial court to send the parties to arbitration.

IN RE FLEETWOOD HOMES OF TEXAS, L.P. AND FLEETWOOD ENTERPRISES, INC.; from Walker County; 10th district (10-06-00312-CV, ___ SW3d ___, 10-25-06) Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court conditionally grants the petition for writ of mandamus.

The Bob Perry Case: Supreme Court Turns Arbitration-Averse for the Occasion

Q: When does the Texas Supreme Court NOT like arbitration?

A: When the consumer wants it (and wins). - After all, the purpose of arbitration is to protect business against aggrieved consumers and against the greedy plaintiff's bar.

Austin Supremos - über-eager for years to force common folk like consumers and workers to arbitrate rather than litigate their complaints against businesses and employers (even in the absence of their written consent to an arbitration clause) - overturns arbitration award in favor of home owners who had brought claim against builder and warranty company for lousy home construction and had prevailed in arbitration. Court holds that the plaintiffs deserved it because they (i.e., their evil lawyers) had employed discovery to research their claims prior to demanding arbitration, and had thus forfeited the right to arbitrate ... or so the reasoning goes. Both the trial court and the court of appeals had opined otherwise.

The unilateral right to enforce arbitration clauses

Perry Homes v. Cull, No. 05-0882 (Tex. May 2, 2008)(Opinion by Scott A. Brister) (trial court should not have enforced plaintiffs' contractual right to compel arbitration, and erred in confirming the award)

Full case style and details: PERRY HOMES, A JOINT VENTURE, HOME OWNERS MULTIPLE EQUITY, INC., AND WARRANTY UNDERWRITERS INSURANCE COMPANY v. ROBERT E. CULL, AND S. JANE CULL; from Tarrant County; 2nd district (02-04-00052-CV, 173 S.W.3d 565, 08-31-05)

Disposition by the Supreme Court: The Court reverses the court of appeals' judgment, vacates the arbitration award, and remands the case to the trial court. Justice Brister delivered the opinion of the Court, in which Justice Hecht, Justice O'Neill, Justice Wainwright, and Justice Medina joined, and in which Chief Justice Jefferson, Justice Green, Justice Johnson, and Justice Willett joined as to parts I-V.

Justice O'Neill delivered a concurring opinion.

Justice Johnson wrote an opinion concurring and dissenting in part, which was joined by Chief Justice Jefferson and Justice Green

Justice Willett delivered an opinion concurring in part and dissenting in part.

The Opinion in appellate court below: Perry Homes v. Cull, 02-04-00052-CV, (Tex.App.- Fort Worth, Aug 31, 2005, pet . filed)

Appellees Robert and Jane Cull (“the Culls”) sued Appellants Perry Homes, A Joint Venture (“Perry Homes”), Home Owners Multiple Equity, Inc. d/b/a Home/RWC of Texas (“HOME”), and Warranty Underwriters Insurance Company (“WUIC”) for the faulty construction of their home. Approximately a year after filing suit, the Culls filed a motion to compel arbitration. Although Appellants opposed arbitration, the trial court granted the Culls’ motion to compel arbitration. After arbitration was completed, the Culls filed a motion to confirm the arbitration award, and Appellants filed a motion to vacate or alternatively to modify the arbitration award. In its final judgment, the trial court confirmed the arbitration award. In six issues, Appellants now generally argue that the trial court erred by compelling the parties to participate in arbitration, confirming the resulting arbitration award, and denying Appellants’ motion to vacate or modify that award. Because we hold that (1) the Culls did not waive arbitration, (2) the arbitrator was not evidently partial, (3) the arbitrator did not act in manifest disregard of the law, and (4) the Culls did not fail to meet their summary judgment burden, but (5) the trial court did err by failing to modify its award of post-judgment interest that was awarded in addition to the interest in the arbitration award, we affirm the trial court’s judgment as modified.

Related terms and links: arbitration clause, arbitration award consumer law homeowner law residential construction law and litigation Recent Texas abitration case law decisions from the Texas Supreme Court (Tex. 2007) Arbitration appellate decisions from the Houston Courts of Appeals Other Opinions by Texas Supreme Court Justice Scott A. Brister